Bill Text: NY S00560 | 2025-2026 | General Assembly | Introduced

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Bill Title: Provides for a transfer fee of 75% of the fair market value in dissolution or sales of a rental project or mutual company.

Spectrum: Partisan Bill (Democrat 6-0)

Status: (Introduced) 2025-01-08 - REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT [S00560 Detail]

Download: New_York-2025-S00560-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                           560

                               2025-2026 Regular Sessions

                    IN SENATE

                                       (Prefiled)

                                     January 8, 2025
                                       ___________

        Introduced by Sens. KRUEGER, BAILEY, HOYLMAN-SIGAL, LIU, SERRANO, STAVI-
          SKY  -- read twice and ordered printed, and when printed to be commit-
          ted to the Committee on Housing, Construction and  Community  Develop-
          ment

        AN ACT to amend the private housing finance law, in relation to windfall
          profits  on  the dissolution or first sale of rental companies and the
          dissolution and/or reconstitution of mutual companies

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1. Subdivision 2 of section 35 of the private housing finance
     2  law, as amended by chapter 229 of the laws of 1989, is amended  to  read
     3  as follows:
     4    2.  A  company  aided by a loan made after May first, nineteen hundred
     5  fifty-nine, may voluntarily  be  dissolved,  sold  and/or  reconstituted
     6  without the consent of the commissioner or of the supervising agency, as
     7  the  case  may  be,  not less than twenty years after the occupancy date
     8  upon the payment in full of  the  remaining  balance  of  principal  and
     9  interest due and unpaid upon the mortgage or mortgages [and], of any and
    10  all  expenses  incurred in effecting such voluntary dissolution and of a
    11  transfer fee equal to seventy-five percent of the fair market  value  in
    12  the  case  of  dissolution  or sales price on the first sale of a rental
    13  project, or, in the case of a mutual company seventy-five percent of the
    14  sales price on each first sale thereafter for market value by a  selling
    15  shareholder.  The  proceeds  of  the transfer fees are to be paid into a
    16  fund held by the New York city housing development corporation  and  the
    17  New York state housing finance agency for the following purposes:
    18    (a)  to  continue  to  subsidize  the  development  for as long as the
    19  purchaser of a rental development remains in the Mitchell-Lama program;

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD01716-01-5
        S. 560                              2

     1    (b) for the city or state to purchase the land and to lease  the  land
     2  to the tenants and convert the project to a limited profit mutual compa-
     3  ny, with a ninety-nine year lease;
     4    (c)  for repair loans at zero percent interest to fund necessary capi-
     5  tal improvements for as long as the company remains in the Mitchell-Lama
     6  program;
     7    (d) for each year that the company remains as a limited profit  compa-
     8  ny,  to  forgive  one-thirtieth of the principal of any repair loan each
     9  year;
    10    (e) for the subsidization of other limited profit  housing  companies;
    11  and
    12    (f) for the development of other affordable housing.
    13    §  2.  This  act  shall take effect on the sixtieth day after it shall
    14  have become a law.