S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5317
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              April 25, 2019
                                ___________
 
 Introduced  by  Sen.  RIVERA -- read twice and ordered printed, and when
   printed to be committed to the Committee on Housing, Construction  and
   Community Development
 
 AN  ACT  to  amend  the administrative code of the city of New York, the
   emergency tenant protection act of nineteen seventy-four and the emer-
   gency housing rent control law, in relation  to  tenant  responses  to
   applications for a major capital improvement rent increase
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph 1 of subdivision  g  of  section  26-405  of  the
 administrative  code  of the city of New York is amended by adding a new
 subparagraph (g-1) to read as follows:
   (G-1) WHERE AN  APPLICATION  FOR  A  MAJOR  CAPITAL  IMPROVEMENT  RENT
 INCREASE  HAS  BEEN  FILED,  A TENANT SHALL HAVE ONE HUNDRED TWENTY DAYS
 FROM THE DATE OF MAILING OF A NOTICE OF A PROCEEDING IN WHICH TO  ANSWER
 OR  REPLY. THE CITY RENT AGENCY SHALL PROVIDE ANY RESPONDING TENANT WITH
 THE REASONS FOR THE CITY RENT AGENCY'S APPROVAL OR DENIAL OF SUCH APPLI-
 CATION; OR
   § 2. Paragraph 6 of subdivision c of section 26-511 of the administra-
 tive code of the city of New York, as amended by section 29 of part A of
 chapter 20 of the laws of 2015, is amended to read as follows:
   (6) provides criteria whereby the commissioner may act  upon  applica-
 tions  by  owners  for  increases  in  excess  of the level of fair rent
 increase established under this law provided, however, that such  crite-
 ria  shall  provide  (a) as to hardship applications, for a finding that
 the level of fair rent increase is not sufficient to enable the owner to
 maintain approximately the same average annual net income  (which  shall
 be  computed  without regard to debt service, financing costs or manage-
 ment fees) for the three year period ending on or within six  months  of
 the  date  of  an application pursuant to such criteria as compared with
 annual net income, which prevailed on the average over the period  nine-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD00496-01-9

 S. 5317                             2
 
 teen  hundred  sixty-eight  through nineteen hundred seventy, or for the
 first three years of operation if the building was completed since nine-
 teen hundred sixty-eight or for the first three  fiscal  years  after  a
 transfer of title to a new owner provided the new owner can establish to
 the  satisfaction  of  the commissioner that he or she acquired title to
 the building as a result of a bona fide sale of the entire building  and
 that  the new owner is unable to obtain requisite records for the fiscal
 years nineteen hundred  sixty-eight  through  nineteen  hundred  seventy
 despite  diligent  efforts to obtain same from predecessors in title and
 further provided that the new owner can provide financial data  covering
 a  minimum  of  six  years under his or her continuous and uninterrupted
 operation of the building to meet the three year to three  year  compar-
 ative  test  periods  herein provided; and (b) as to completed building-
 wide major capital improvements, for a finding  that  such  improvements
 are deemed depreciable under the Internal Revenue Code and that the cost
 is  to  be amortized over an eight-year period for a building with thir-
 ty-five or fewer housing accommodations, or a  nine-year  period  for  a
 building  with  more  than  thirty-five  housing accommodations, for any
 determination issued by the division of housing  and  community  renewal
 after  the  effective  date  of  the  rent  act of 2015, based upon cash
 purchase price exclusive of interest  or  service  charges.    WHERE  AN
 APPLICATION  FOR  A  MAJOR  CAPITAL  IMPROVEMENT  RENT INCREASE HAS BEEN
 FILED, A TENANT SHALL HAVE ONE HUNDRED TWENTY  DAYS  FROM  THE  DATE  OF
 MAILING  OF  A  NOTICE  OF A PROCEEDING IN WHICH TO ANSWER OR REPLY. THE
 STATE DIVISION OF  HOUSING  AND  COMMUNITY  RENEWAL  SHALL  PROVIDE  ANY
 RESPONDING TENANT WITH THE REASONS FOR THE DIVISION'S APPROVAL OR DENIAL
 OF  SUCH APPLICATION. Notwithstanding anything to the contrary contained
 herein, no hardship increase granted pursuant to this  paragraph  shall,
 when added to the annual gross rents, as determined by the commissioner,
 exceed  the sum of, (i) the annual operating expenses, (ii) an allowance
 for management services as determined by the commissioner, (iii)  actual
 annual  mortgage debt service (interest and amortization) on its indebt-
 edness to a lending institution, an insurance company, a retirement fund
 or welfare fund which is operated under the supervision of  the  banking
 or  insurance  laws  of  the state of New York or the United States, and
 (iv) eight and one-half percent of that portion of the fair market value
 of the property which exceeds the unpaid principal amount of  the  mort-
 gage  indebtedness  referred to in subparagraph (iii) of this paragraph.
 Fair market value for the purposes of this paragraph shall be six  times
 the  annual gross rent. The collection of any increase in the stabilized
 rent for any apartment pursuant to this paragraph shall not  exceed  six
 percent  in  any  year from the effective date of the order granting the
 increase over the rent set forth in the schedule of  gross  rents,  with
 collectability  of any dollar excess above said sum to be spread forward
 in similar increments and added to the stabilized rent as established or
 set in future years;
   § 3. Subdivision d of section 6 of section 4 of  chapter  576  of  the
 laws  of 1974, constituting the emergency tenant protection act of nine-
 teen seventy-four, is amended by adding a new paragraph (3-a) to read as
 follows:
   (3-A) AN APPLICATION FOR A MAJOR CAPITAL IMPROVEMENT RENT INCREASE HAS
 BEEN FILED, A TENANT SHALL HAVE ONE HUNDRED TWENTY DAYS FROM THE DATE OF
 MAILING OF A NOTICE OF A PROCEEDING IN WHICH TO  ANSWER  OR  REPLY.  THE
 STATE  DIVISION  OF  HOUSING  AND  COMMUNITY  RENEWAL  SHALL PROVIDE ANY
 RESPONDING TENANT WITH THE REASONS FOR THE DIVISION'S APPROVAL OR DENIAL
 OF SUCH APPLICATION; OR

 S. 5317                             3
 
   § 4. Subparagraph 7 of the second undesignated paragraph of  paragraph
 (a)  of  subdivision  4 of section 4 of chapter 274 of the laws of 1946,
 constituting the emergency housing  rent  control  law,  as  amended  by
 section  32  of  part A of chapter 20 of the laws of 2015, is amended to
 read as follows:
   (7)  there has been since March first, nineteen hundred fifty, a major
 capital improvement required for the operation, preservation or  mainte-
 nance  of  the structure; which for any order of the commissioner issued
 after the effective date of the rent  act  of  2015  the  cost  of  such
 improvement  shall  be amortized over an eight-year period for buildings
 with thirty-five or fewer units or a nine year period for buildings with
 more than thirty-five units, PROVIDED, HOWEVER, WHERE AN APPLICATION FOR
 A MAJOR CAPITAL IMPROVEMENT RENT INCREASE HAS BEEN FILED, A TENANT SHALL
 HAVE ONE HUNDRED TWENTY DAYS FROM THE DATE OF MAILING OF A NOTICE  OF  A
 PROCEEDING  IN  WHICH  TO ANSWER OR REPLY. THE STATE DIVISION OF HOUSING
 AND COMMUNITY RENEWAL SHALL  PROVIDE  ANY  RESPONDING  TENANT  WITH  THE
 REASONS FOR THE DIVISION'S APPROVAL OR DENIAL OF SUCH APPLICATION; or
   §  5.  This  act shall take effect on the ninetieth day after it shall
 have become a law; provided that:
   (a) the amendments to section 26-405 of the city  rent  and  rehabili-
 tation  law  made  by section one of this act shall remain in full force
 and effect only as long as the public emergency requiring the regulation
 and control of residential rents and evictions continues, as provided in
 subdivision 3 of section 1 of the local emergency housing  rent  control
 act;
   (b)  the  amendments to section 26-511 of chapter 4 of title 26 of the
 administrative code of the city of New York made by section two of  this
 act  shall  expire  on  the  same date as such law expires and shall not
 affect the expiration of such law as provided under  section  26-520  of
 such law;
   (c) the amendments to section 6 of the emergency tenant protection act
 of  nineteen seventy-four made by section three of this act shall expire
 on the same date as such act expires and shall not affect the expiration
 of such act as provided in section 17 of chapter  576  of  the  laws  of
 1974; and
   (d)  the amendments to section 4 of the emergency housing rent control
 law made by section four of this act shall expire on the  same  date  as
 such  law  expires  and  shall  not affect the expiration of such law as
 provided in subdivision 2 of section 1 of chapter 274  of  the  laws  of
 1946.