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SECTION 60
Housing project repair fund
Private Housing Finance (PVH) CHAPTER 44-B, ARTICLE 3
§ 60. Housing project repair fund. 1. As used in this section, (a) the
term "current economic rent" shall mean the rent or carrying charges
determined by the commissioner to be sufficient, together with monies
available to the company from the state, the federal government, or any
other source, to provide for the payment of (i) all current mortgage
interest, fees, charges, and amortization, (ii) all current real
property taxes and water and sewer charges, or payments in lieu thereof,
(iii) all other current operating expenses of the project, and (iv) all
current payments into reserve funds required by the commissioner;
provided, however, that any payments required for reserves for
replacements shall be in an amount which on an aggregate annual basis is
not less than six-tenths of one percent of the cost for constructing
such project as determined by the commissioner, except that in the case
of a project receiving payments pursuant to this section which otherwise
would be made from such reserve for replacements, the commissioner shall
take such payments into account in determining the necessary amount of
payments to reserves for replacements; and

(b) the term "total economic rent" shall mean the sum of the current
economic rent, as defined in paragraph (a) of this subdivision, plus an
amount sufficient to amortize all mortgage repayment arrearages,
including fees and charges, and all real property tax arrearages,
including applicable interest, if any, and all water and sewer charge
arrearages, including applicable interest, if any, of the company.

2. The agency shall create and establish a special fund, to be known
as the housing project repair fund and shall pay into such fund all
monies appropriated and made available to the agency by the state for
the purposes of such fund and any other monies which may be made
available to the agency for the purposes of such fund from any other
source or sources.

3. Monies held in the housing project repair fund may be used by the
agency to provide for the correction of construction-related problems in
housing projects financed by the agency by means of the necessary
repair, reconstruction or replacement of any of the facilities or site
conditions, the cost of which was included in the project cost and which
form an integral part of the project, and for such other purposes which
may be necessary to effectuate the provisions of this section. A
construction-related problem shall mean any deficiency or defect in the
design, construction or site preparation of a project, its buildings,
utilities and grounds; provided, however, a deficiency which results
from conformance to design and construction standards in effect at the
time of such construction shall not constitute such a construction
related problem. The agency shall not expend monies from the fund as
payment to any housing company for the correction of a
construction-related problem unless the following conditions have been
met:

a. The agency has either (1) received a certification by an
independent consultant with appropriate qualifications engaged by the
agency certifying (i) the scope and total cost of the corrective work
required to be performed at the project after taking into consideration
emergency conditions, if any, which may exist, and such other factors as
may be appropriate; (ii) the cost effectiveness of alternative methods
of performing the corrective work; and (iii) the extent to which the
corrective work to be performed results from a construction-related
problem, or (2) equivalent findings have been made in arbitration or
other fact finding procedures established by agreement between a housing
company, the commissioner and the agency; and

b. The agency has found and determined that (i) the projected annual
aggregate rent revenues for the project and any other monies available
to the company from the state or federal government or any other source
as certified by the commissioner constitute current economic rent, or
(ii) a mortgage modification agreement has been entered into with the
housing company which operates the project, after consultation with the
commissioner and in accordance with the guidelines approved by the
director of the budget. Such a mortgage modification agreement shall be
entered into only in the event that the agency projects that the
imposition of total economic rent will require the company to vary
rental rates or carrying charges by an amount that exceeds the rental
rates or carrying charges of a company in effect immediately prior to
the date of such a modification by the greater of twenty percentum or
ten dollars per room per month. A mortgage modification agreement may
permit the variation of rental rates or carrying charges over a period
agreed upon by the agency and the housing company not to exceed
seventy-five months from the effective date of the initial variation in
rental rates or carrying charges so as to result in the imposition of a
current economic rent level at a date no later than the beginning of the
seventy-sixth month, and shall make provision for the payment by the
housing company of all current real property taxes and water and sewer
charges, or payments in lieu thereof, and for the payment by the housing
company of (i) all real property tax arrearages, including applicable
interest, if any, over a period not to exceed fifteen years from the
effective date of the initial variation in rental rates or carrying
charges, (ii) all water and sewer charge arrearages, including
applicable interest, if any, over a period not to exceed fifteen years
from the effective date of the initial variation in rental rates or
carrying charges, (iii) all mortgage repayment arrearages, including
fees and charges, over a period not to exceed the scheduled date of the
expiration of the mortgage repayment period pursuant to the provisions
of the original mortgage and (iv) any mortgage repayment deficiencies
accumulated during the term of the mortgage modification agreement over
a period not to exceed ten years from the expiration of such agreement.

4. Monies shall not be available from the fund to reimburse a housing
company for work performed or contracted on account of which such
housing company has received a credit against monies otherwise payable
to the agency as mortgage repayments prior to the effective date of this
section, nor for work required to maintain, or correct deficiencies or
defects in, construction performed or contracted for by a municipality
or public utility, nor for work for which federal monies are available
as determined by the commissioner, and the agency shall not expend
monies beyond those required to meet the portion of the cost of
correction of a condition which constitutes a construction-related
problem, as determined by the agency; provided, however, that monies
from the fund may be used to pay for the costs associated with the
hiring of an independent consultant engaged by the agency to effectuate
the purposes of this section and for otherwise administering the
provisions of this section.

5. Notwithstanding any other provision of this section the agency
shall allocate fifteen per centum of the monies from the fund as payment
to housing companies financed by the agency or the state for energy
conservation improvements or tenant health and safety improvements
provided that the following conditions are met:

a. The agency has received a certification from the commissioner that
energy saving or other modifications to the project will either (i)
result in savings projected over a seven year term or (ii) rectify an
imminent threat to tenant health and safety, and there is no alternative
source of funding to make such modifications.

b. The agency has reviewed the findings of the commissioner and is in
agreement with such findings.

c. The agency has determined that the requirements of paragraph b of
subdivision three of this section have been satisfied.

d. The agency has determined that a plan for performing energy
conservation or tenant health and safety improvements as submitted by
the housing company is the most cost-effective alternative available to
the housing company.

The agency shall apportion such allocations among housing companies in
an equitable manner and shall not make any such allocation in a given
year to a housing company which will, in such year, receive ten percent
or more of the monies available in the fund for the correction of
construction-related problems.

6. To assist in the administration of this section, the agency is
authorized to request the assistance of and utilize the services of any
state department, agency, board, commission or public benefit
corporation, and any such department, agency, board, commission or
public benefit corporation is authorized to provide such assistance and
service.

7. Nothing contained in this section or in the administration or
application hereof shall be construed as creating any private right of
action on the part of any persons, firm or corporation against the state
of New York, the agency, the division of housing and community renewal,
or any officer or employee thereof based upon a construction-related
problem and neither the certification or finding of the existence of a
construction-related problem as provided in this section nor the
implementation of the provisions of this section may be asserted as a
defense by way of answer, counterclaim, or otherwise in any action or
proceeding brought to enforce the provisions of a mortgage or any
related agreement made by the agency with respect to a project, or
brought by the commissioner with respect to a project, or brought by the
commissioner to enforce any of the provisions of this chapter or any
order made by him pursuant to this chapter. In any case where monies
held in the housing project repair fund have been expended to provide
for the correction of any construction-related problem, the agency shall
accede to any and all rights and remedies which the housing company on
whose behalf such payment was made may have against any third party with
respect to any such construction-related problem to the extent of such
payment.

8. Notwithstanding any other provisions of this section, no monies
shall be expended from the housing project repair fund unless the agency
has submitted a plan to the director of the budget and the comptroller
describing the work required to repair the construction-related or other
problem, or problems, which also describes the method to be used for the
awarding of contracts for such work, and the director of the budget and
the comptroller have approved the plan and all contracts let pursuant
thereto as being in accordance with the provisions of this section and
in accordance with subdivision two of section one hundred twelve of the
state finance law. In addition, no monies shall be expended from the
housing project repair fund unless the director of the budget has
approved a plan detailing the scheduling of the work to be performed to
repair any such construction-related or other problem or problems and
the scheduling of the payments for total cost of the work to be
performed. In addition, no monies in excess of the total cost of any
corrective work certified in accordance with paragraph a of subdivision
three of this section shall be expended from such fund without the
approval of the director of the budget.

9. Notwithstanding any other law, no monies shall be provided pursuant
to this section unless a company shall require the tenants and occupants
residing in the housing project or projects to submit an annual income
affidavit as prescribed by the commissioner or the supervising agency,
as the case may be, together with proper documentation as and if
prescribed by the commissioner or the supervising agency, as the case
may be. Upon submission of such affidavit and documentation, if any, the
company shall assess such tenant or occupant the rental surcharge, if
applicable, prescribed pursuant to section thirty-one of this chapter on
the basis of the verified income of such tenant or occupant. If the
tenant or occupant shall fail to submit such affidavit and
documentation, or if such verification shall result in a disagreement
caused by understatement of income and the tenant shall have failed to
correct such original affidavit and documentation on forms specified by
the commissioner within sixty days of notification by certified mail by
the commissioner addressed to the tenant, the commissioner shall so
notify the company. Thereupon, the company shall assess such tenant or
occupant the maximum rental surcharge permitted pursuant to section
thirty-one of this chapter, and provided further, that the company, with
the approval of the commissioner or the supervising agency, as the case
may be, may proceed to remove said tenant or occupant from occupancy on
the ground that said tenant or occupant has materially misrepresented
income. The failure of the tenant to accurately verify such income shall
be prima facie evidence that such material misrepresentation was made by
the tenant. The provisions of any other law to the contrary
notwithstanding, solely for the purpose of verification of income, the
commissioner or the supervising agency, as the case may be, may contract
with the department of taxation and finance for services performed by
such department in verifying income information forwarded by a company,
the commissioner, or the supervising agency to such department. Nothing
contained herein shall be construed to authorize the commissioner to
contract with such department to provide any income information
whatsoever and such agreement shall be limited solely to the
verification of income information. No officer or employee of the
division of housing and community renewal, the supervising agency, or a
company shall be subject to any civil or criminal liability by reason of
his forwarding to the department of taxation and finance of any income
information pursuant to this subdivision, unless (i) such information is
knowingly and willfully materially misrepresented by such officer or
employee or (ii) such information is knowingly and willfully divulged to
any person, except in the discharge of such officer's or employee's
duties solely for the purpose of verification of income, for any reason
whatsoever. The commissioner or the supervising agency as the case may
be, shall promulgate rules and regulations to effect the provisions of
this subdivision. The provisions of the state freedom of information act
shall not apply to any income information obtained by a company, the
commissioner, or the supervising agency, as the case may be, pursuant to
the provisions of this subdivision.