60 - Housing project repair fund.
§ 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 availableto 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.