S T A T E   O F   N E W   Y O R K
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                                  7218

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                             April 28, 2015
                               ___________

Introduced by M. of A. McDONALD -- read once and referred to the Commit-
  tee on Ways and Means

AN  ACT to amend the state finance law and the real property tax law, in
  relation to creating the New York state home  ownership  savings  plan
  and creating a property tax exemption relating thereto

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. This act shall be known and may be cited as the  "New  York
state home ownership savings plan".
  S  2. The state finance law is amended by adding a new section 97-j to
read as follows:
  S 97-J. 1. THE PURPOSE OF THE NEW YORK STATE  HOME  OWNERSHIP  SAVINGS
PLAN  IS  TO  ATTRACT  INDIVIDUALS  TO RESIDE AND REMAIN IN THE STATE BY
AUTHORIZING THE ESTABLISHMENT OF HOME  OWNERSHIP  SAVINGS  ACCOUNTS  AND
PROVIDING  GUIDELINES  FOR  THE MAINTENANCE OF SUCH ACCOUNTS IN ORDER TO
ENABLE INDIVIDUALS AND COUPLES TO RECEIVE A  REFUNDABLE  TAX  CREDIT  TO
HELP THEM SAVE TOWARD THE PURCHASE OF A FIRST HOME IN NEW YORK STATE.
  2. AS USED IN THIS SECTION:
  (A)  "ASSETS  OF THE PLAN" MEANS ALL CONTRIBUTIONS MADE INTO THE PLAN,
ANY TRANSFERS MADE INTO THE PLAN  UNDER  THIS  SECTION  AND  ALL  INCOME
EARNED  THEREFROM AND ON ASSETS SUBSTITUTED THEREFOR, WHETHER OR NOT THE
ASSETS OF THE PLAN ARE IN THE FORM OF QUALIFIED INVESTMENTS.
  (B) "COUPLE" MEANS INDIVIDUALS WHO HAVE COHABITED FOR A PERIOD  OF  AT
LEAST  FIVE  YEARS IN A CONJUGAL RELATIONSHIP REGARDLESS OF WHETHER THEY
ARE MARRIED.
  (C) "COMPTROLLER" MEANS THE COMPTROLLER OF THE STATE OF NEW YORK.
  (D) "CONTRIBUTION" MEANS THE AMOUNT OF MONEY PAID BY AN INDIVIDUAL  TO
A  FINANCIAL  ORGANIZATION  AS  A  PAYMENT INTO A HOME OWNERSHIP SAVINGS
PLAN.
  (E) "FINANCIAL ORGANIZATION" MEANS A FINANCIAL INSTITUTION  AUTHORIZED
TO  DO  BUSINESS IN THE STATE OF NEW YORK AND (I) WHICH IS AN AUTHORIZED

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06708-01-5
              

A. 7218                             2

FIDUCIARY TO ACT AS A TRUSTEE PURSUANT TO THE PROVISIONS OF  AN  ACT  OF
CONGRESS  ENTITLED  "EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974" AS
SUCH PROVISIONS MAY BE AMENDED FROM TIME TO TIME, OR AN INSURANCE COMPA-
NY; AND
  (II)  (1)  IS  LICENSED  OR  CHARTERED  BY THE DEPARTMENT OF FINANCIAL
SERVICES;
  (2) IS CHARTERED BY AN AGENCY OF THE FEDERAL GOVERNMENT;
  (3) IS SUBJECT TO THE JURISDICTION AND REGULATION  OF  THE  SECURITIES
AND EXCHANGE COMMISSION OF THE FEDERAL GOVERNMENT; OR
  (4) IS ANY OTHER ENTITY OTHERWISE AUTHORIZED TO ACT IN THIS STATE AS A
TRUSTEE  PURSUANT  TO  THE  PROVISIONS  OF  AN  ACT OF CONGRESS ENTITLED
"EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974" AS SUCH PROVISIONS MAY
BE AMENDED FROM TIME TO TIME.
  (F) "HOMEOWNERSHIP SAVINGS PLAN" MEANS AN ARRANGEMENT ENTERED INTO  BY
AN  INDIVIDUAL  AND A FINANCIAL ORGANIZATION UNDER WHICH PAYMENT IS MADE
BY THE INDIVIDUAL TO THE FINANCIAL ORGANIZATION OF AN AMOUNT OF MONEY AS
A PAYMENT UNDER THE  ARRANGEMENT  TO  BE  USED,  INVESTED  OR  OTHERWISE
APPLIED  BY  THE  FINANCIAL ORGANIZATION FOR THE PURPOSE OF PROVIDING TO
THE INDIVIDUAL AS THE PLANHOLDER UNDER  THE  ARRANGEMENT  AN  AMOUNT  OF
MONEY  TO  BE USED BY THE INDIVIDUAL FOR THE PURCHASE BY HIM OR HER OF A
QUALIFYING ELIGIBLE HOME.
  (G) "INDIVIDUAL" MEANS A PERSON OTHER THAN A TRUST OR  CORPORATION  AS
DEFINED BY THE TAX LAW.
  (H)  "PLANHOLDER" MEANS AN INDIVIDUAL EIGHTEEN YEARS OF AGE OR OVER TO
WHOM, UNDER THE PLAN, A SINGLE PAYMENT IS AGREED TO BE PAID.  PLANHOLDER
DOES  NOT INCLUDE AN INDIVIDUAL TO WHOM UNDER A PLAN A SINGLE PAYMENT IS
AGREED TO BE PAID AS A CONSEQUENCE OF THE DEATH OF ANOTHER INDIVIDUAL.
  (I) "ELIGIBLE HOME" MEANS:
  (I) A DETACHED HOUSE;
  (II) A SEMI-DETACHED HOUSE;
  (III) A TOWNHOUSE;
  (IV) A SHARE OR SHARES OF THE CAPITAL STOCK OF A  CO-OPERATIVE  CORPO-
RATION  IF THE SHARE OR SHARES ARE ACQUIRED FOR THE PURPOSE OF ACQUIRING
THE RIGHT TO INHABIT A HOUSING UNIT OWNED BY THE CORPORATION;
  (V) A CONDOMINIUM UNIT;
  (VI) A RESIDENTIAL DWELLING THAT IS A DUPLEX, TRIPLEX OR A FOURPLEX;
  (VII) A MOBILE HOME THAT COMPLIES WITH THE PRESCRIBED STANDARDS AND IS
SUITABLE FOR YEAR ROUND PERMANENT RESIDENTIAL OCCUPATION;
  (VIII) A PARTIAL OWNERSHIP INTEREST AS A  TENANT  IN  COMMON  OF  REAL
PROPERTY,  IF  THE  OWNERSHIP  INTEREST  WAS ACQUIRED FOR THE PURPOSE OF
ACQUIRING THE RIGHT TO INHABIT A HOUSING UNIT FORMING PART OF  THE  REAL
PROPERTY; OR
  (IX) ANY OTHER RESIDENTIAL PROPERTY AS MAY BE PRESCRIBED.
  (J) "OWNERSHIP OF AN ELIGIBLE HOME" MEANS:
  (I)  IN  THE  CASE  OF AN ELIGIBLE HOME AS PRESCRIBED IN SUBPARAGRAPHS
(I), (II), (III) OR (VI) OF PARAGRAPH (I) OF THIS SUBDIVISION, THE INDI-
VIDUAL HAS AN OWNERSHIP INTEREST IN THE ELIGIBLE HOME AND OWNS  A  FREE-
HOLD  ESTATE  IN THE LAND SUBJACENT TO THE ELIGIBLE HOME OTHER THAN AS A
MORTGAGEE OR IS A LESSEE OF THE LAND SUBJACENT TO THE ELIGIBLE HOME;
  (II) IN THE CASE OF AN ELIGIBLE HOME THAT IS A CONDOMINIUM  UNIT,  THE
INDIVIDUAL  IS AN OWNER OF THE UNIT AND COMMON ELEMENTS WITHIN THE MEAN-
ING OF NEW YORK STATE LAW;
  (III) IN THE CASE OF AN ELIGIBLE HOME IN THE FORM OF A SHARE OR SHARES
OF THE CAPITAL STOCK OF A CO-OPERATIVE CORPORATION  THE  INDIVIDUAL  HAS
ACQUIRED,  JOINTLY WITH ANOTHER PERSON OR OTHERWISE, THE SHARE OR SHARES
TO ENABLE THE INDIVIDUAL TO ACQUIRE A RIGHT TO  OCCUPY  A  HOUSING  UNIT

A. 7218                             3

OWNED  BY THE CO-OPERATIVE CORPORATION, THE INDIVIDUAL AND THE CO-OPERA-
TIVE CORPORATION HAVE ENTERED INTO AN ENFORCEABLE OCCUPANCY AGREEMENT IN
RESPECT OF THE HOUSING UNIT, AND THE INDIVIDUAL IS  ENTITLED  TO  VACANT
POSSESSION  OF  THE HOUSING UNIT UNDER THE TERMS OF THE OCCUPANCY AGREE-
MENT;
  (IV) IN THE CASE OF AN ELIGIBLE HOME THAT IS A  MOBILE  HOME  SUITABLE
FOR  YEAR-ROUND PERMANENT RESIDENTIAL OCCUPATION, THE INDIVIDUAL, EITHER
ALONE OR JOINTLY WITH ANOTHER PERSON, HAS COMPLETED THE PURCHASE OF  THE
MOBILE  HOME,  THE  MOBILE HOME IS SITUATED ON A FOUNDATION, WHICH MEETS
THE PRESCRIBED STANDARDS, ON THE LAND WHERE IT IS TO BE  INHABITED,  AND
THE  LAND  IS  OWNED  BY  THE INDIVIDUAL, JOINTLY WITH ANOTHER PERSON OR
OTHERWISE, OR IS OCCUPIED BY THE INDIVIDUAL UNDER  A  LICENSE  OR  LEASE
THAT PERMITS THE INDIVIDUAL TO LOCATE THE MOBILE HOME ON THE LAND AND TO
OCCUPY IT AS A YEAR-ROUND RESIDENCE;
  (V)  IN THE CASE OF AN ELIGIBLE HOME REFERRED TO IN SUBPARAGRAPH (VII)
OF PARAGRAPH (I) OF THIS SUBDIVISION,  THE  INDIVIDUAL  HAS  ACQUIRED  A
FREEHOLD  ESTATE IN THE REAL PROPERTY, OTHER THAN AS A MORTGAGEE, AND IS
ENTITLED TO VACANT POSSESSION OF SAID HOUSING UNIT;
  (VI) IN THE CASE OF AN ELIGIBLE HOME OF A PRESCRIBED CLASS OR  NATURE,
OR  OWNED  BY  A MEMBER OF A PRESCRIBED CLASS OF PERSONS, THE PRESCRIBED
TERMS AND CONDITIONS ARE MET;
  (VII) IN THE CASE OF A GIFT OR INHERITANCE, A PERSON WHO  ACQUIRES  AN
OWNERSHIP  INTEREST  IN  AN  ELIGIBLE HOME BY GIFT FROM THE OWNER OF THE
INTEREST OR BY REASON OF THE DEATH OF THE OWNER OF THE INTEREST SHALL BE
DEEMED TO OWN THE ELIGIBLE HOME FOR THE PURPOSES OF THIS SECTION ON  THE
EARLIEST DATE ON OR AFTER THE DATE OF THE GIFT OR THE DEATH ON WHICH THE
PERSON  RESIDES  IN  THE  ELIGIBLE HOME IS ENTITLED TO POSSESSION OF THE
ELIGIBLE HOME OR ACQUIRES THE OWNERSHIP INTEREST IN THE  ELIGIBLE  HOME.
THIS  DEFINITION  DOES  NOT INCLUDE AN OWNERSHIP INTEREST ACQUIRED UNDER
THE TERMS OF AN AGREEMENT ENFORCEABLE BY OR AGAINST THE  PERSON  LEGALLY
OR BENEFICIALLY ENTITLED TO THE INTEREST IMMEDIATELY FOLLOWING THE DEATH
OF THE OWNER OF THE INTEREST;
  (VIII)  IN  THE  CASE OF A DEEMED OWNER OF AN ELIGIBLE HOME, THE COMP-
TROLLER MAY DEEM AN INDIVIDUAL TO HAVE  OWNED  AN  ELIGIBLE  HOME  AT  A
PARTICULAR  TIME  IF OWNERSHIP WAS AT THAT TIME VESTED IN A PERSON UNDER
THE TERMS OF AN EXPRESS OR IMPLIED TRUST BY WHICH THE  PERSON  HELD  THE
PROPERTY  FOR THE BENEFIT OF THE INDIVIDUAL, EITHER ALONE OR WITH ONE OR
MORE OTHER PERSONS, AND THE COMPTROLLER IS OF THE OPINION THAT THE INDI-
VIDUAL EXERCISED EFFECTIVE CONTROL, EITHER ALONE OR  WITH  ONE  OR  MORE
OTHER PERSONS, OVER THE ELIGIBLE HOME.
  3.  (A)  THE  COMPTROLLER SHALL IMPLEMENT THE PLAN UNDER THE TERMS AND
CONDITIONS ESTABLISHED BY THIS SECTION AND A MEMORANDUM OF UNDERSTANDING
RELATING TO ANY TERMS OR CONDITIONS NOT OTHERWISE EXPRESSLY PROVIDED FOR
IN THIS SECTION.
  (B) IN FURTHERANCE OF SUCH IMPLEMENTATION  THE  MEMORANDUM  OF  UNDER-
STANDING  SHALL  ADDRESS  THE  AUTHORITY AND RESPONSIBILITY OF THE COMP-
TROLLER AND THE CORPORATION TO:
  (I) DEVELOP AND IMPLEMENT THE PLAN IN A  MANNER  CONSISTENT  WITH  THE
PROVISIONS  OF THIS SECTION THROUGH RULES AND REGULATIONS ESTABLISHED IN
ACCORDANCE WITH THE STATE ADMINISTRATIVE PROCEDURE ACT;
  (II) ENGAGE THE SERVICES  OF  CONSULTANTS  ON  A  CONTRACT  BASIS  FOR
RENDERING PROFESSIONAL AND TECHNICAL ASSISTANCE AND ADVICE;
  (III)  MAKE  CHANGES  TO THE PLAN REQUIRED FOR THE PARTICIPANTS IN THE
PLAN TO OBTAIN ANY ELIGIBLE FEDERAL OR STATE BENEFITS OR TREATMENT UNDER
ANY LEGISLATION;

A. 7218                             4

  (IV) CHARGE, IMPOSE,  AND  COLLECT  ADMINISTRATIVE  FEES  AND  SERVICE
CHARGES IN CONNECTION WITH ANY AGREEMENT, CONTRACT OR TRANSACTION RELAT-
ING TO THE PLAN;
  (V) DEVELOP MARKETING PLANS AND PROMOTION MATERIAL;
  (VI) ESTABLISH THE METHODS BY WHICH THE FUNDS HELD IN SUCH ACCOUNTS BE
DISBURSED;
  (VII)  ESTABLISH  THE  METHOD BY WHICH FUNDS SHALL BE ALLOCATED TO PAY
FOR ADMINISTRATIVE COSTS; AND
  (VIII) DO ALL THINGS NECESSARY AND PROPER TO CARRY OUT THE PURPOSES OF
THIS SECTION.
  4. (A) THE COMPTROLLER SHALL IMPLEMENT  THE  PROGRAM  THROUGH  USE  OF
FINANCIAL  ORGANIZATIONS AS ACCOUNT DEPOSITORIES AND MANAGERS. UNDER THE
PROGRAM, INDIVIDUALS MAY ESTABLISH ACCOUNTS  DIRECTLY  WITH  AN  ACCOUNT
DEPOSITORY.
  (B) THE COMPTROLLER MAY SOLICIT PROPOSALS FROM FINANCIAL ORGANIZATIONS
TO  ACT AS DEPOSITORIES AND MANAGERS OF THE PROGRAM. FINANCIAL ORGANIZA-
TIONS SUBMITTING PROPOSALS  SHALL  DESCRIBE  THE  INVESTMENT  INSTRUMENT
WHICH  WILL BE HELD IN ACCOUNTS. THE COMPTROLLER SHALL SELECT AS PROGRAM
DEPOSITORIES AND MANAGERS THE FINANCIAL  ORGANIZATION,  FROM  AMONG  THE
BIDDING  FINANCIAL ORGANIZATIONS THAT DEMONSTRATES THE MOST ADVANTAGEOUS
COMBINATION, BOTH TO POTENTIAL PROGRAM PARTICIPANTS AND THIS  STATE,  OF
THE FOLLOWING FACTORS:
  (I) FINANCIAL STABILITY AND INTEGRITY OF THE FINANCIAL ORGANIZATION;
  (II) THE SAFETY OF THE INVESTMENT INSTRUMENT BEING OFFERED;
  (III)  THE  ABILITY  OF  THE INVESTMENT INSTRUMENT TO TRACK INCREASING
COSTS OF THE HOUSING MARKET;
  (IV) THE ABILITY OF THE FINANCIAL ORGANIZATION TO SATISFY  RECORDKEEP-
ING AND REPORTING REQUIREMENTS;
  (V)  THE  FINANCIAL  ORGANIZATION'S PLAN FOR PROMOTING THE PROGRAM AND
THE INVESTMENT IT IS WILLING TO MAKE TO PROMOTE THE PROGRAM;
  (VI) THE FEES, IF ANY, PROPOSED TO BE CHARGED TO PERSONS  FOR  OPENING
ACCOUNTS;
  (VII)  THE  MINIMUM INITIAL DEPOSIT AND MINIMUM CONTRIBUTIONS THAT THE
FINANCIAL ORGANIZATION WILL REQUIRE;
  (VIII) THE ABILITY OF BANKING ORGANIZATIONS TO ACCEPT ELECTRONIC WITH-
DRAWALS, INCLUDING PAYROLL DEDUCTION PLANS; AND
  (IX) OTHER BENEFITS TO THE STATE OR  ITS  RESIDENTS  INCLUDED  IN  THE
PROPOSAL, INCLUDING FEES PAYABLE TO THE STATE TO COVER EXPENSES OF OPER-
ATION OF THE PROGRAM.
  (C)  THE COMPTROLLER MAY ENTER INTO A CONTRACT WITH A FINANCIAL ORGAN-
IZATION. SUCH FINANCIAL ORGANIZATION MANAGEMENT MAY PROVIDE ONE OR  MORE
TYPES OF INVESTMENT INSTRUMENT.
  (D)  THE  COMPTROLLER  MAY SELECT MORE THAN ONE FINANCIAL ORGANIZATION
FOR THE PROGRAM.
  (E) A MANAGEMENT CONTRACT SHALL INCLUDE, AT A MINIMUM, TERMS REQUIRING
THE FINANCIAL ORGANIZATION TO:
  (I) TAKE ANY ACTION REQUIRED TO KEEP THE PROGRAM  IN  COMPLIANCE  WITH
REQUIREMENTS  OF  THIS  SECTION  AND  ANY  ACTIONS  NOT  CONTRARY TO ITS
CONTRACT TO MANAGE THE PROGRAM TO QUALIFY AS A QUALIFIED  "HOMEOWNERSHIP
SAVINGS PLAN" AS DEFINED BY THIS SECTION;
  (II)  KEEP  ADEQUATE RECORDS OF EACH ACCOUNT, KEEP EACH ACCOUNT SEGRE-
GATED FROM EACH OTHER ACCOUNT, AND  PROVIDE  THE  COMPTROLLER  WITH  THE
INFORMATION  NECESSARY  TO  PREPARE  THE  STATEMENTS  REQUIRED  BY  THIS
SECTION;

A. 7218                             5

  (III) COMPILE AND TOTAL INFORMATION CONTAINED IN  STATEMENTS  REQUIRED
TO  BE  PREPARED UNDER THIS SECTION AND PROVIDE SUCH COMPILATIONS TO THE
COMPTROLLER;
  (IV)  IF  THERE  IS  MORE  THAN ONE PROGRAM MANAGER, PROVIDE THE COMP-
TROLLER WITH SUCH INFORMATION NECESSARY  TO  DETERMINE  COMPLIANCE  WITH
THIS SECTION;
  (V)  PROVIDE  THE  COMPTROLLER OR HIS DESIGNEE ACCESS TO THE BOOKS AND
RECORDS OF THE PROGRAM MANAGER TO THE EXTENT NEEDED TO DETERMINE COMPLI-
ANCE WITH THE CONTRACT;
  (VI) HOLD ALL ACCOUNTS FOR THE BENEFIT OF THE ACCOUNT OWNER;
  (VII) BE AUDITED AT LEAST ANNUALLY  BY  A  FIRM  OF  CERTIFIED  PUBLIC
ACCOUNTANTS SELECTED BY THE PROGRAM MANAGER AND THAT THE RESULTS OF SUCH
AUDIT BE PROVIDED TO THE COMPTROLLER;
  (VIII)  PROVIDE  THE COMPTROLLER WITH COPIES OF ALL REGULATORY FILINGS
AND REPORTS MADE BY IT DURING THE TERM OF  THE  MANAGEMENT  CONTRACT  OR
WHILE  IT  IS  HOLDING  ANY ACCOUNTS, OTHER THAN CONFIDENTIAL FILINGS OR
REPORTS THAT WILL NOT BECOME PART OF THE PROGRAM.  THE  PROGRAM  MANAGER
SHALL  MAKE  AVAILABLE  FOR REVIEW BY THE COMPTROLLER THE RESULTS OF ANY
PERIODIC EXAMINATION OF SUCH MANAGER BY ANY STATE  OR  FEDERAL  BANKING,
INSURANCE,  OR  SECURITIES  COMMISSION,  EXCEPT  TO THE EXTENT THAT SUCH
REPORT OR REPORTS MAY NOT BE DISCLOSED UNDER APPLICABLE LAW OR THE RULES
OF SUCH COMMISSION; AND
  (IX) ENSURE THAT ANY DESCRIPTION OF THE PROGRAM, WHETHER IN WRITING OR
THROUGH THE USE OF ANY MEDIA, IS  CONSISTENT  WITH  THE  MARKETING  PLAN
DEVELOPED IN COMPLIANCE WITH THIS SECTION.
  (F)  THE  COMPTROLLER  MAY PROVIDE THAT AN AUDIT SHALL BE CONDUCTED OF
THE OPERATIONS AND FINANCIAL POSITION  OF  THE  PROGRAM  DEPOSITORY  AND
MANAGER  AT  ANY  TIME IF THE COMPTROLLER HAS ANY REASON TO BE CONCERNED
ABOUT THE FINANCIAL POSITION, THE RECORDKEEPING PRACTICES, OR THE STATUS
OF ACCOUNTS OF SUCH PROGRAM DEPOSITORY AND MANAGER.
  (G) DURING THE TERM OF ANY CONTRACT WITH A PROGRAM MANAGER, THE  COMP-
TROLLER SHALL CONDUCT AN EXAMINATION OF SUCH MANAGER AND ITS HANDLING OF
ACCOUNTS.    SUCH  EXAMINATION SHALL BE CONDUCTED AT LEAST BIENNIALLY IF
SUCH MANAGER IS NOT OTHERWISE SUBJECT TO  PERIODIC  EXAMINATION  BY  THE
SUPERINTENDENT  OF  FINANCIAL  SERVICES,  THE  FEDERAL DEPOSIT INSURANCE
CORPORATION OR OTHER SIMILAR ENTITY.
  (H) (I) IF SELECTION OF A FINANCIAL ORGANIZATION AS A PROGRAM  MANAGER
OR DEPOSITORY IS NOT RENEWED, AFTER THE END OF ITS TERM:
  (1) ACCOUNTS PREVIOUSLY ESTABLISHED AND HELD IN INVESTMENT INSTRUMENTS
AT SUCH FINANCIAL ORGANIZATION MAY BE TERMINATED;
  (2) ADDITIONAL CONTRIBUTIONS MAY BE MADE TO SUCH ACCOUNTS;
  (3)  NO  NEW  ACCOUNTS MAY BE PLACED WITH SUCH FINANCIAL ORGANIZATION;
AND
  (4) EXISTING ACCOUNTS HELD BY SUCH DEPOSITORY SHALL REMAIN SUBJECT  TO
ALL OVERSIGHT AND REPORTING REQUIREMENTS ESTABLISHED BY THE COMPTROLLER.
  (II)  IF  THE  COMPTROLLER  TERMINATES  A  FINANCIAL ORGANIZATION AS A
PROGRAM MANAGER OR DEPOSITORY, HE OR SHE SHALL TAKE CUSTODY OF  ACCOUNTS
HELD  BY SUCH FINANCIAL ORGANIZATION AND SHALL SEEK TO PROMPTLY TRANSFER
SUCH ACCOUNTS TO ANOTHER FINANCIAL ORGANIZATION THAT IS  SELECTED  AS  A
PROGRAM MANAGER OR DEPOSITORY AND INTO INVESTMENT INSTRUMENTS AS SIMILAR
TO THE ORIGINAL INSTRUMENTS AS POSSIBLE.
  (I)  THE  COMPTROLLER MAY ENTER INTO SUCH CONTRACTS AS IT DEEMS NECES-
SARY AND PROPER FOR THE IMPLEMENTATION OF THE PROGRAM.
  5. (A) THE TERMS OF THE PLAN DO NOT PERMIT ANY PAYMENT  TO  THE  PLAN-
HOLDER OF ANY ASSET OF THE PLAN EXCEPT BY WAY OF:

A. 7218                             6

  (I)  A  SINGLE PAYMENT OF ALL OF THE ASSETS OF THE PLAN TO THE COMMIS-
SIONER OF HOUSING TO HOLD THE ASSETS OF THE PLAN AS  TRUST  PROPERTY  IN
TRUST  FOR THE PLANHOLDER AND THE STATE JOINTLY AND TO LEGALLY REPRESENT
THE PLANHOLDER IN THE PURCHASE BY THE PLANHOLDER OF A QUALIFYING  ELIGI-
BLE HOME, OR
  (II)  A  SINGLE PAYMENT OF ALL THE ASSETS OF THE PLAN, LESS THE AMOUNT
TO BE WITHHELD BY THE FINANCIAL ORGANIZATION  OR  THE  AMOUNT,  IF  ANY,
DIRECTED  BY  THE COMPTROLLER TO THE PLANHOLDER OR TO THE LEGAL PERSONAL
REPRESENTATIVE OF THE PLANHOLDER UPON THE DEATH OF THE PLANHOLDER.
  (B) THE TERMS OF THE PLAN REQUIRE THE FINANCIAL ORGANIZATION TO  WITH-
HOLD AND REMIT TO THE COMPTROLLER ANY AMOUNT REQUIRED UNDER THIS SECTION
ON  ANY  PAYMENT OF ASSETS OF THE PLAN TO THE PLANHOLDER OR TO THE LEGAL
PERSONAL REPRESENTATIVE OF THE PLANHOLDER ON THE DEATH OF THE  PLANHOLD-
ER.
  (C) THE TERMS OF THE PLAN PROVIDE THAT THE FINANCIAL ORGANIZATION WILL
ACCEPT  REPAYMENT OF ASSETS INTO THE PLAN FROM A COMMISSIONER OF HOUSING
TO WHOM ASSETS OF THE PLAN WERE PAID.
  (D) THE TERMS OF THE PLAN PROVIDE THAT THE PAYMENT TO  THE  PLANHOLDER
IS  NOT CAPABLE IN WHOLE OR IN PART OF SURRENDER, ASSIGNMENT OR TRANSFER
EXCEPT AS PERMITTED BY AN ELECTION UNDER THIS SECTION.
  (E) THE PLANHOLDER IS AT LEAST EIGHTEEN YEARS OF AGE AND A RESIDENT OF
NEW YORK AT THE TIME OF ENTERING INTO THE PLAN.
  (F) THE PLANHOLDER SHALL BE ELIGIBLE FOR THIS PROGRAM IF  THEY  ARE  A
FIRST TIME HOMEBUYER AS DEFINED UNDER THE FEDERAL SONYMA PROGRAM AND (I)
HAS  NOT  HAD  ANY OWNERSHIP INTEREST IN HIS OR HER PRIMARY RESIDENCE AT
ANY TIME DURING THE THREE YEARS PRIOR TO THE DATE OF MAKING AN  APPLICA-
TION,  AND  (II)  AT  THE  TIME OF MAKING THE APPLICATION DOES NOT OWN A
VACATION OR INVESTMENT HOME. THIS DEFINITION INCLUDES  RESIDENCES  OWNED
IN THE UNITED STATES AND ABROAD.
  (G)  THE  TERMS OF THE PLAN PROHIBIT ANY AMENDMENT TO THE TERMS OF THE
PLAN:
  (I) THAT WOULD RESULT IN THE TERMS OF THE PLAN AS AMENDED  FAILING  TO
COMPLY WITH THIS SECTION;
  (II)  THAT  WOULD PERMIT OR REQUIRE ANY PERSON TO DO ANYTHING CONTRARY
TO THIS SECTION; OR
  (III) THAT WOULD PREVENT OR PROHIBIT ANY PERSON  FROM  DOING  ANYTHING
REQUIRED BY THIS SECTION TO BE DONE.
  (H) THE TERMS OF THE PLAN PROVIDE THAT ON THE DEATH OF THE PLANHOLDER,
THE  FINANCIAL  ORGANIZATION  SHALL TRANSFER OR DISTRIBUTE ALL ASSETS OF
THE PLAN, LESS ANY AMOUNT REQUIRED BY THIS SECTION TO  BE  WITHHELD  AND
REMITTED TO THE COMPTROLLER, IN ACCORDANCE WITH THIS SECTION.
  (I)  THE  TERMS  OF THE PLAN PROHIBIT THE HOLDING OF THE ASSETS OF THE
PLAN IN ANY FORM OTHER THAN QUALIFIED INVESTMENTS.
  (J) THE PLAN INCLUDES A PROVISION DENYING THE  FINANCIAL  ORGANIZATION
ANY  RIGHT  OF  SET-OFF  AS REGARDS THE ASSETS OF THE PLAN IN CONNECTION
WITH ANY DEBT OR OBLIGATION TO THE FINANCIAL ORGANIZATION THAT THE PLAN-
HOLDER UNDER THE PLAN OWES OR MAY THEREAFTER OWE.
  (K) THE TERMS OF THE PLAN INCLUDE THE ACKNOWLEDGMENT BY THE PLANHOLDER
THAT HE OR SHE UNDERSTANDS THAT THE AMOUNT OF  A  TAX  CREDIT,  IF  ANY,
AVAILABLE  WITH  RESPECT  TO  CONTRIBUTIONS MADE TO THE PLAN IN ANY YEAR
DEPEND ON THE PLANHOLDER'S LEVEL OF INCOME FOR THAT YEAR  AND  THAT  THE
PROVISIONS OF THIS SECTION APPLY EVEN IF THE PLANHOLDER MAY NOT BE ENTI-
TLED TO A TAX CREDIT IN ANY YEAR.
  (L) THE TERMS OF THE PLAN CONTAIN THE CONSENT OF THE PLANHOLDER TO THE
RELEASE  TO THE COMPTROLLER OF ALL INFORMATION OBTAINED BY THE FINANCIAL
ORGANIZATION  WITH  RESPECT  TO  THE  PLAN,  THE  PLANHOLDER   AND   THE

A. 7218                             7

PLANHOLDER'S  SPOUSE  OR COMMON-LAW PARTNER, IF ANY, FOR THE PURPOSES OF
THIS SECTION AND THE OPERATION OF THE PLAN.
  6.  NO  TAX  CREDIT  SHALL  BE  ISSUED TO INDIVIDUALS OR COUPLES WHOSE
INCOME EXCEEDS THE MAXIMUM INCOME LIMITS ESTABLISHED BY THE STATE OF NEW
YORK MORTGAGE AGENCY.
  7. (A) NOTHING IN THIS SECTION SHALL BE CONSTRUED TO:
  (I) GIVE ANY DESIGNATED BENEFICIARY ANY RIGHTS OR LEGAL INTEREST  WITH
RESPECT  TO  AN ACCOUNT UNLESS THE DESIGNATED BENEFICIARY IS THE ACCOUNT
OWNER;
  (II) GUARANTEE THAT A DESIGNATED BENEFICIARY WILL BE QUALIFIED  FOR  A
HOME LOAN;
  (III)  CREATE  STATE  RESIDENCY  FOR  AN INDIVIDUAL MERELY BECAUSE THE
INDIVIDUAL IS A DESIGNATED BENEFICIARY; OR
  (IV) GUARANTEE THAT AMOUNTS SAVED PURSUANT  TO  THE  PROGRAM  WILL  BE
SUFFICIENT  TO  COVER  THE QUALIFIED HOME OWNERSHIP EXPENSES OF A DESIG-
NATED BENEFICIARY.
  (B) (I) NOTHING IN THIS SECTION SHALL CREATE OR BE CONSTRUED TO CREATE
ANY OBLIGATION OF THE COMPTROLLER, THE STATE, OR ANY AGENCY  OR  INSTRU-
MENTALITY OF THE STATE TO GUARANTEE FOR THE BENEFIT OF ANY ACCOUNT OWNER
OR DESIGNATED BENEFICIARY WITH RESPECT TO:
  (1) THE RATE OF INTEREST OR OTHER RETURN ON ANY ACCOUNT; AND
  (2) THE PAYMENT OF INTEREST OR OTHER RETURN ON ANY ACCOUNT.
  (II)  THE  COMPTROLLER AND THE CORPORATION BY RULE OR REGULATION SHALL
PROVIDE THAT EVERY CONTRACT, APPLICATION, DEPOSIT SLIP, OR OTHER SIMILAR
DOCUMENT THAT MAY BE USED  IN  CONNECTION  WITH  A  CONTRIBUTION  TO  AN
ACCOUNT  CLEARLY  INDICATE  THAT THE ACCOUNT IS NOT INSURED BY THE STATE
AND NEITHER THE PRINCIPAL DEPOSITED NOR THE INVESTMENT RETURN IS GUARAN-
TEED BY THE STATE.
  S 3. The real property tax law is amended  by  adding  a  new  section
421-o to read as follows:
  S 421-O. EXEMPTION FOR PROPERTIES PURCHASED IN TARGET AREAS WITH A NEW
YORK  STATE HOME OWNERSHIP SAVINGS PLAN. 1. RESIDENTIAL PROPERTIES WHICH
HAVE BEEN PURCHASED IN TARGET AREAS THROUGH A NEW YORK STATE HOME OWNER-
SHIP PLAN PURSUANT TO SECTION NINETY-SEVEN-J OF THE  STATE  FINANCE  LAW
SHALL BE EXEMPT FROM ALL LOCAL AND MUNICIPAL TAXES.
  2. FOR THE PURPOSES OF THIS SECTION "TARGET AREAS" SHALL HAVE THE SAME
MEANING AS DEFINED BY THE STATE OF NEW YORK MORTGAGE AGENCY.
  3.  (A)  APPLICATIONS  FOR EXEMPTION UNDER THIS SECTION SHALL BE FILED
WITH THE ASSESSORS BETWEEN FEBRUARY FIRST AND  MARCH  FIFTEENTH  OF  THE
CALENDAR  YEAR AND THE ASSESSORS SHALL CERTIFY TO THE COLLECTING OFFICER
THE AMOUNT OF EXEMPTION FROM LOCAL AND MUNICIPAL TAXES.
  (B) THE ASSESSOR AND LOCAL HOUSING AGENCY  MAY  PROMULGATE  RULES  AND
REGULATIONS  TO CARRY OUT THE PROVISIONS OF THIS SECTION AND MAY REQUIRE
PAYMENT OF A REASONABLE FILING FEE.
  S 4. This act shall take effect immediately.