§ 124 — Participation by certain corporations

New York § 124

• Jurisdiction: New York
• Law PVH: Private Housing Finance
• Art. 5: Redevelopment Companies

Text

§ 124. Participation by certain corporations. One or more insurance\ncompanies shall have the power to organize, or cause to be organized, a\nredevelopment company formed pursuant to the provisions of this article,\nand to purchase for cash or to receive and hold in exchange for\nproperty, and to own and control, the stock or the income debenture\ncertificates or both of any redevelopment company and shall also have\npower to invest, singly or jointly, in a bond and first mortgage or in\nan issue of bonds secured by mortgage or trust indenture constituting a\nfirst lien upon any project as provided in this article. An insurance\ncompany, however, which owns stock or income debenture certificates of a\nredevelopment company and also owns bonds or a bond and mortgage or an\ninterest in a bond and mortgage of the same redevelopment company shall\nnot, without the consent of the supervising agency, sell all or any part\nof such bonds or such bond and mortgage or of its interest in such bond\nand mortgage unless it shall simultaneously sell such stock and such\nincome debenture certificates owned by it.\n Notwithstanding any other provision of law, an insurance company or\ncompanies operating a redevelopment project or owning all of the stock\nof a redevelopment company are hereby expressly authorized to enter into\ncontracts contemplated by this article and to agree by contract with the\nmunicipality not to sell, assign, or otherwise transfer such project or\nthe stock, income debentures or mortgage bonds of such redevelopment\ncompany during the period of tax exemption provided for by the contract\npursuant to this article without the consent of the local legislative\nbody of the municipality. An insurance company or companies owning all\nof the stock of a redevelopment company are hereby expressly authorized\nto make such capital contributions to any such redevelopment company, in\ncash or by cancellation of securities or otherwise, as may be necessary\nto enable such redevelopment company to comply with all conditions\nprecedent to its dissolution and conveyance of its property in\naccordance with section one hundred twenty-three of this article, and\nupon dissolution of such a redevelopment company, to acquire the\nproject, complete the same if not theretofore completed, and own and\noperate the same as a permanent investment for such period as it or they\nmay deem desirable either directly or through acquisition and ownership\nof the capital stock of any corporation which may acquire title to the\nproject pursuant to subdivision one of section one hundred twenty-three.\n An insurance company, instead of investing its funds in the stock and\ndebentures or other obligations of a redevelopment company, may through\ndirect ownership and/or lease acquire, own, construct, manage or operate\nas an investment for such period as it may deem desirable, one or more\nprojects, in which event the provisions of subsection one of section one\nhundred twelve of this article applicable to redevelopment companies\nshall be applicable to such insurance company in its operations with\nrespect to any such project but not otherwise. Said provisions and the\nensuing provision of this section shall cease to be applicable to any\nsuch project and to such insurance company in its operations with\nrespect to such project after termination of any tax exemption granted\npursuant to section one hundred twenty-five of this article with respect\nto such project, whether such termination shall be by expiration or by\nany other cause, or in the event that prior thereto the insurance\ncompany elects to pay the municipality the total of all accrued taxes\nfor which such exemption was granted and received, together with\ninterest at the rate of five per centum per annum. If any such project\nshall be sold by an insurance company, the tax exemption with respect to\nsuch project shall thereupon cease and terminate unless the local\nlegislative body shall otherwise provide.\n Until the termination of any tax exemption granted pursuant to section\none hundred twenty-five of this article or until the provisions of this\narticle shall otherwise cease to be applicable:\n 1. An insurance company shall be entitled to earn and retain annually\non a cumulative basis in respect of each project operated by it\nhereunder, before depreciation but after providing for all expenses,\ntaxes and assessments attributable to such project or to the income\ntherefrom, a sum equal to but not exceeding six per centum of the total\nactual final cost of the project as defined by subdivision two of\nsection one hundred twelve of this article.\n 2. Separate accounts shall be kept for each project operated by an\ninsurance company.\n 3. If the income from any such project for any year, after all\nexpenses, taxes and assessments attributable thereto or to the income\ntherefrom, shall be in excess of six per centum of the total actual\nfinal cost of such project as defined by subdivision two of section one\nhundred twelve of this article, such excess shall be credited to a\nspecial reserve account.\n 4. If the income from any such project for any year, after all\nexpenses, taxes and assessments attributable thereto or to the income\ntherefrom shall be less than six per centum of such total actual final\ncost, such deficiency shall be charged against such special reserve\naccount.\n The amount of any accrued taxes and interest thereon paid by an\ninsurance company pursuant to the second paragraph of section one\nhundred twenty-five of this article may be charged against such special\nreserve account. An amount equal to any balance remaining to the credit\nof such special reserve account on the termination of the period of tax\nexemption shall be paid into the general fund of the municipality. If\nany project shall be conveyed to an insurance company in accordance with\nsubdivision five of section one hundred twenty-three of this article, an\namount equal to all accrued and unpaid interest, amortization and\ndividends on the stock and evidences of indebtedness of the\nredevelopment company theretofore accumulated in accordance with section\none hundred seven of this article shall be charged against the special\nreserve account except to the extent included in total actual final\ncost, and any remaining cash surplus derived from earnings remaining in\nthe treasury of the redevelopment company shall be transferred to such\ninsurance company and shall be credited by it to the special reserve\naccount provided for in this section applicable to such project.\n Except as specifically provided herein this article shall not be\ndeemed to limit or restrict any power or authority granted to insurance\ncompanies or to any other corporation or to any fiduciary by any other\nprovision of law heretofore or hereafter enacted.\n