§ 60 — Housing project repair fund

§ 60. Housing project repair fund. 1. As used in this section, (a) the\nterm "current economic rent" shall mean the rent or carrying charges\ndetermined by the commissioner to be sufficient, together with monies\navailable to the company from the state, the federal government, or any\nother source, to provide for the payment of (i) all current mortgage\ninterest, fees, charges, and amortization, (ii) all current real\nproperty taxes and water and sewer charges, or payments in lieu thereof,\n(iii) all other current operating expenses of the project, and (iv) all\ncurrent payments into reserve funds required by the commissioner;\nprovided, however, that any payments required for reserves for\nreplacements shall be in an amount which on an aggregate annual basis is\nnot less than six-tenths of one percent of the cost for constructing\nsuch project as determined by the commissioner, except that in the case\nof a project receiving payments pursuant to this section which otherwise\nwould be made from such reserve for replacements, the commissioner shall\ntake such payments into account in determining the necessary amount of\npayments to reserves for replacements; and\n (b) the term "total economic rent" shall mean the sum of the current\neconomic rent, as defined in paragraph (a) of this subdivision, plus an\namount sufficient to amortize all mortgage repayment arrearages,\nincluding fees and charges, and all real property tax arrearages,\nincluding applicable interest, if any, and all water and sewer charge\narrearages, including applicable interest, if any, of the company.\n 2. The agency shall create and establish a special fund, to be known\nas the housing project repair fund and shall pay into such fund all\nmonies appropriated and made available to the agency by the state for\nthe purposes of such fund and any other monies which may be made\navailable to the agency for the purposes of such fund from any other\nsource or sources.\n 3. Monies held in the housing project repair fund may be used by the\nagency to provide for the correction of construction-related problems in\nhousing projects financed by the agency by means of the necessary\nrepair, reconstruction or replacement of any of the facilities or site\nconditions, the cost of which was included in the project cost and which\nform an integral part of the project, and for such other purposes which\nmay be necessary to effectuate the provisions of this section. A\nconstruction-related problem shall mean any deficiency or defect in the\ndesign, construction or site preparation of a project, its buildings,\nutilities and grounds; provided, however, a deficiency which results\nfrom conformance to design and construction standards in effect at the\ntime of such construction shall not constitute such a construction\nrelated problem. The agency shall not expend monies from the fund as\npayment to any housing company for the correction of a\nconstruction-related problem unless the following conditions have been\nmet:\n a. The agency has either (1) received a certification by an\nindependent consultant with appropriate qualifications engaged by the\nagency certifying (i) the scope and total cost of the corrective work\nrequired to be performed at the project after taking into consideration\nemergency conditions, if any, which may exist, and such other factors as\nmay be appropriate; (ii) the cost effectiveness of alternative methods\nof performing the corrective work; and (iii) the extent to which the\ncorrective work to be performed results from a construction-related\nproblem, or (2) equivalent findings have been made in arbitration or\nother fact finding procedures established by agreement between a housing\ncompany, the commissioner and the agency; and\n b. The agency has found and determined that (i) the projected annual\naggregate rent revenues for the project and any other monies available\nto the company from the state or federal government or any other source\nas certified by the commissioner constitute current economic rent, or\n(ii) a mortgage modification agreement has been entered into with the\nhousing company which operates the project, after consultation with the\ncommissioner and in accordance with the guidelines approved by the\ndirector of the budget. Such a mortgage modification agreement shall be\nentered into only in the event that the agency projects that the\nimposition of total economic rent will require the company to vary\nrental rates or carrying charges by an amount that exceeds the rental\nrates or carrying charges of a company in effect immediately prior to\nthe date of such a modification by the greater of twenty percentum or\nten dollars per room per month. A mortgage modification agreement may\npermit the variation of rental rates or carrying charges over a period\nagreed upon by the agency and the housing company not to exceed\nseventy-five months from the effective date of the initial variation in\nrental rates or carrying charges so as to result in the imposition of a\ncurrent economic rent level at a date no later than the beginning of the\nseventy-sixth month, and shall make provision for the payment by the\nhousing company of all current real property taxes and water and sewer\ncharges, or payments in lieu thereof, and for the payment by the housing\ncompany of (i) all real property tax arrearages, including applicable\ninterest, if any, over a period not to exceed fifteen years from the\neffective date of the initial variation in rental rates or carrying\ncharges, (ii) all water and sewer charge arrearages, including\napplicable interest, if any, over a period not to exceed fifteen years\nfrom the effective date of the initial variation in rental rates or\ncarrying charges, (iii) all mortgage repayment arrearages, including\nfees and charges, over a period not to exceed the scheduled date of the\nexpiration of the mortgage repayment period pursuant to the provisions\nof the original mortgage and (iv) any mortgage repayment deficiencies\naccumulated during the term of the mortgage modification agreement over\na period not to exceed ten years from the expiration of such agreement.\n 4. Monies shall not be available from the fund to reimburse a housing\ncompany for work performed or contracted on account of which such\nhousing company has received a credit against monies otherwise payable\nto the agency as mortgage repayments prior to the effective date of this\nsection, nor for work required to maintain, or correct deficiencies or\ndefects in, construction performed or contracted for by a municipality\nor public utility, nor for work for which federal monies are available\nas determined by the commissioner, and the agency shall not expend\nmonies beyond those required to meet the portion of the cost of\ncorrection of a condition which constitutes a construction-related\nproblem, as determined by the agency; provided, however, that monies\nfrom the fund may be used to pay for the costs associated with the\nhiring of an independent consultant engaged by the agency to effectuate\nthe purposes of this section and for otherwise administering the\nprovisions of this section.\n 5. Notwithstanding any other provision of this section the agency\nshall allocate fifteen per centum of the monies from the fund as payment\nto housing companies financed by the agency or the state for energy\nconservation improvements or tenant health and safety improvements\nprovided that the following conditions are met:\n a. The agency has received a certification from the commissioner that\nenergy saving or other modifications to the project will either (i)\nresult in savings projected over a seven year term or (ii) rectify an\nimminent threat to tenant health and safety, and there is no alternative\nsource of funding to make such modifications.\n b. The agency has reviewed the findings of the commissioner and is in\nagreement with such findings.\n c. The agency has determined that the requirements of paragraph b of\nsubdivision three of this section have been satisfied.\n d. The agency has determined that a plan for performing energy\nconservation or tenant health and safety improvements as submitted by\nthe housing company is the most cost-effective alternative available to\nthe housing company.\n The agency shall apportion such allocations among housing companies in\nan equitable manner and shall not make any such allocation in a given\nyear to a housing company which will, in such year, receive ten percent\nor more of the monies available in the fund for the correction of\nconstruction-related problems.\n 6. To assist in the administration of this section, the agency is\nauthorized to request the assistance of and utilize the services of any\nstate department, agency, board, commission or public benefit\ncorporation, and any such department, agency, board, commission or\npublic benefit corporation is authorized to provide such assistance and\nservice.\n 7. Nothing contained in this section or in the administration or\napplication hereof shall be construed as creating any private right of\naction on the part of any persons, firm or corporation against the state\nof New York, the agency, the division of housing and community renewal,\nor any officer or employee thereof based upon a construction-related\nproblem and neither the certification or finding of the existence of a\nconstruction-related problem as provided in this section nor the\nimplementation of the provisions of this section may be asserted as a\ndefense by way of answer, counterclaim, or otherwise in any action or\nproceeding brought to enforce the provisions of a mortgage or any\nrelated agreement made by the agency with respect to a project, or\nbrought by the commissioner with respect to a project, or brought by the\ncommissioner to enforce any of the provisions of this chapter or any\norder made by him pursuant to this chapter. In any case where monies\nheld in the housing project repair fund have been expended to provide\nfor the correction of any construction-related problem, the agency shall\naccede to any and all rights and remedies which the housing company on\nwhose behalf such payment was made may have against any third party with\nrespect to any such construction-related problem to the extent of such\npayment.\n 8. Notwithstanding any other provisions of this section, no monies\nshall be expended from the housing project repair fund unless the agency\nhas submitted a plan to the director of the budget and the comptroller\ndescribing the work required to repair the construction-related or other\nproblem, or problems, which also describes the method to be used for the\nawarding of contracts for such work, and the director of the budget and\nthe comptroller have approved the plan and all contracts let pursuant\nthereto as being in accordance with the provisions of this section and\nin accordance with subdivision two of section one hundred twelve of the\nstate finance law. In addition, no monies shall be expended from the\nhousing project repair fund unless the director of the budget has\napproved a plan detailing the scheduling of the work to be performed to\nrepair any such construction-related or other problem or problems and\nthe scheduling of the payments for total cost of the work to be\nperformed. In addition, no monies in excess of the total cost of any\ncorrective work certified in accordance with paragraph a of subdivision\nthree of this section shall be expended from such fund without the\napproval of the director of the budget.\n 9. Notwithstanding any other law, no monies shall be provided pursuant\nto this section unless a company shall require the tenants and occupants\nresiding in the housing project or projects to submit an annual income\naffidavit as prescribed by the commissioner or the supervising agency,\nas the case may be, together with proper documentation as and if\nprescribed by the commissioner or the supervising agency, as the case\nmay be. Upon submission of such affidavit and documentation, if any, the\ncompany shall assess such tenant or occupant the rental surcharge, if\napplicable, prescribed pursuant to section thirty-one of this chapter on\nthe basis of the verified income of such tenant or occupant. If the\ntenant or occupant shall fail to submit such affidavit and\ndocumentation, or if such verification shall result in a disagreement\ncaused by understatement of income and the tenant shall have failed to\ncorrect such original affidavit and documentation on forms specified by\nthe commissioner within sixty days of notification by certified mail by\nthe commissioner addressed to the tenant, the commissioner shall so\nnotify the company. Thereupon, the company shall assess such tenant or\noccupant the maximum rental surcharge permitted pursuant to section\nthirty-one of this chapter, and provided further, that the company, with\nthe approval of the commissioner or the supervising agency, as the case\nmay be, may proceed to remove said tenant or occupant from occupancy on\nthe ground that said tenant or occupant has materially misrepresented\nincome. The failure of the tenant to accurately verify such income shall\nbe prima facie evidence that such material misrepresentation was made by\nthe tenant. The provisions of any other law to the contrary\nnotwithstanding, solely for the purpose of verification of income, the\ncommissioner or the supervising agency, as the case may be, may contract\nwith the department of taxation and finance for services performed by\nsuch department in verifying income information forwarded by a company,\nthe commissioner, or the supervising agency to such department. Nothing\ncontained herein shall be construed to authorize the commissioner to\ncontract with such department to provide any income information\nwhatsoever and such agreement shall be limited solely to the\nverification of income information. No officer or employee of the\ndivision of housing and community renewal, the supervising agency, or a\ncompany shall be subject to any civil or criminal liability by reason of\nhis forwarding to the department of taxation and finance of any income\ninformation pursuant to this subdivision, unless (i) such information is\nknowingly and willfully materially misrepresented by such officer or\nemployee or (ii) such information is knowingly and willfully divulged to\nany person, except in the discharge of such officer's or employee's\nduties solely for the purpose of verification of income, for any reason\nwhatsoever. The commissioner or the supervising agency as the case may\nbe, shall promulgate rules and regulations to effect the provisions of\nthis subdivision. The provisions of the state freedom of information act\nshall not apply to any income information obtained by a company, the\ncommissioner, or the supervising agency, as the case may be, pursuant to\nthe provisions of this subdivision.\n