§ 85-a. Selection of tenants and occupants. 1. The dwellings in a
housing company project, other than a mutual project, shall be available

(a) If such project was completed or acquired on or after July first,
nineteen hundred fifty-five, for persons or families whose probable
aggregate annual income at the time of admission does not exceed seven
times the rental (including the value or cost to them of heat, light,
water and cooking fuel) of the dwellings to be furnished such persons or
families, except that in the case of persons or families with three or
more dependents, such ratio shall not exceed eight to one;

(b) If such project was completed prior to July first, nineteen
hundred fifty-five, for persons or families whose probable aggregate
annual income at the time of admission does not exceed seven times the
rental (including the value or cost to them of heat, light, water and
cooking fuel) of the dwellings to be furnished such persons or families,
except that in the case of persons or families with three or more
dependents, such ratio shall not exceed eight to one;

(c) In the event that the income of a person or family residing in a
project increases and the ratio to the rental of the dwelling becomes
greater than prescribed by law for admission or in this subdivision,
whichever is greater, and the income is not more than fifty per centum
above the income so prescribed for admission to the dwelling and such
increased income continues for a period of three months or more, the
housing company may permit such person or family to continue to remain
in occupancy provided the housing company is convinced that such person
or family cannot secure other safe and sanitary dwelling accommodations,
or by reason of other facts the removal of such person or family from
the project would occasion other undue hardship to such person or
family. However, such person or family shall pay a rental surcharge in
accordance with a schedule of surcharges promulgated by the company with
the approval of the commissioner and in no event shall such removal be
effected against any person or family which was in occupancy prior to
July first, nineteen hundred eighty-three;

(d) In the event that the ratio of the income of a person or family to
the rental of the dwelling becomes greater than that prescribed by law
for admission or in this subdivision, whichever is greater, and is more
than fifty per centum above the income so prescribed for admission to
the dwelling and such increased income continues for a period of three
months, the housing company shall require such person or family to
remove from the dwelling and may take such steps, including summary
proceedings, as are necessary to effect the removal of the person or
family. A three months' period shall be given such person or family to
find new accommodations. Pending removal from the dwelling, such person
or family shall pay a rental surcharge in accordance with a schedule
promulgated by the company with the approval of the commissioner. In no
event shall a removal otherwise authorized by this paragraph be effected
against any person or family which was in occupancy prior to July first,
nineteen hundred eighty-three.

2. The dwellings in any mutual housing company project shall be
available

(a) In the case of such projects constructed or acquired on or after
July first, nineteen hundred fifty-five, for such persons or families
whose probable aggregate annual income during the period of occupancy
does not exceed, the greater of (i) the median income for such persons
or families for the metropolitan statistical area in which the project
is located, or if a project is located outside a metropolitan
statistical area, the median income for such persons or families for the
county in which the project is located, as most recently determined by
the United States department of housing and urban development, in which
case any person or family becoming eligible for admission pursuant to
this subparagraph shall pay, from the time of admission, a rental
surcharge as provided for in subdivision three of this section, computed
on the basis of the income limitations applicable to such persons or
families in the absence of this subparagraph, or (ii) seven times the
rental (including the value or cost to them of heat, light, water and
cooking fuel) of the dwellings to be furnished such persons or families,
except that in the case of persons or families with three or more
dependents, such ratio shall not exceed eight to one. For the purpose of
determining the eligibility of tenant cooperators in a mutual housing
company project, there shall be added to the total annual carrying
charges an amount equal to six per centum of the investment of a person
or family in the equity obligations of such housing company and, to the
extent authorized by the commissioner or the supervising agency as the
case may be, the value or cost to them of repainting and the replacement
of fixtures and appliances;

(b) In the case of such projects constructed prior to July first,
nineteen hundred fifty-five, for such persons or families whose probable
aggregate annual income during the period of occupancy does not exceed,
the greater of (i) the median income for such persons or families for
the metropolitan statistical area in which the project is located, or if
a project is located outside a metropolitan statistical area, the median
income for such persons or families for the county in which the project
is located, as most recently determined by the United States department
of housing and urban development, in which case any person or family
becoming eligible for admission pursuant to this subparagraph shall pay,
from the time of admission, a rental surcharge as provided for in
subdivision three of this section, computed on the basis of the income
limitations applicable to such persons or families in the absence of
this subparagraph, or (ii) seven times the rental (including the value
or cost to them of heat, light, water and cooking fuel) of the dwellings
to be furnished such persons or families, except that in the case of
persons or families with three or more dependents, such ratio shall not
exceed eight to one; provided, however, that, in the discretion of the
commissioner upon application of the mutual housing company, the income
limitations set forth in paragraph (a) of this subdivision shall be
applicable to such projects, and, in such case, investment in the equity
obligations of such housing companies shall include: the value of the
stock of said housing company at time of purchase; all moneys paid
towards the rental of the dwellings which are allocated to the reduction
of the principal amount of the mortgage loan secured by a mortgage lien
on the real property of the housing company; and all accruals to equity,
approved by the commissioner, resulting from capital improvements;

(c) The limitations as to income contained hereinabove in paragraphs
(a) and (b) of this subsection shall not apply in mutual housing company
projects after the period of municipal tax exemption of such project has
expired, and provided the commissioner has waived his rights over the
control of rentals and selection of tenants under this article;

(d) No occupant whose income increases shall be compelled to vacate
the project unless the ratio of his income to rental of the dwelling
becomes greater by fifty per centum or more than is prescribed by law at
the time of admission or in this subdivision, whichever is greater, and
unless at the same time he shall be discharged from all liability on any
note, bond or other evidence of indebtedness relating thereto, and there
shall be repaid to such person by the housing company all sums paid to
such company for or on account of the purchase of stock or income
debentures as a condition of such occupancy. The housing company may,
with the approval of the commissioner, permit such occupant whose income
increases and the ratio of income to rental of the dwelling becomes
greater by fifty per centum or more than is prescribed by law at the
time of admission or in this subdivision, whichever is greater, to
occupy the dwelling for not more than three years from the time such
increase in income first accrues unless such occupancy is extended with
the approval of the commissioner. In no event shall a removal otherwise
authorized by this paragraph be effected against any person or family
which has been in occupancy prior to July first, nineteen hundred
eighty-three. However, such occupant shall pay a rental surcharge in
accordance with a schedule of surcharges promulgated by the company with
the approval of the commissioner.

3. Twenty-five per centum of rental surcharges collected pursuant to
this section on account of rentals payable prior to July first, nineteen
hundred eighty-three shall be paid by the company to the municipality
which has granted tax exemption pursuant to section ninety-three of this
article as a credit against the grant of tax exemption, the value of
such tax exemption and of such credit to be determined on an individual
dwelling unit basis. In the event that such tax exemption has not been
granted, or in the event the period of tax exemption has expired, or in
the event that a sum equal to the total of all accrued taxes as to
individual dwelling units where such tax exemption was granted have been
paid to the municipality, the excess, if any, of surcharges and all
surcharges imposed after June thirtieth, nineteen hundred eighty-three
shall be applied to the expenses of operation and management as approved
by the commissioner.

4. The commissioner may approve or disapprove an application for a
lease in accordance with the income limits prescribed herein and, where
there is discrimination in violation of section six hundred two of this
chapter, may compel a housing company to grant a lease or renewal
thereof to a person or family as a tenant in the project.

5. The "probable aggregate annual income" means the annual income of
the chief wage earner of the family plus all other income of members of
the family over the age of twenty-one years, plus a proportion of the
income of members under the age of twenty-one years to be determined by
the commissioner, excluding therefrom a deduction of fifteen thousand
dollars from the income of secondary wage earners of the family or a
larger deduction if approved by the commissioner or the supervising
agency, as the case may be, except that the company, as approved by the
commissioner, may exclude a proportion of the income of other members of
the family over the age of twenty-one years for the purpose of
determining eligibility for admission or continued occupancy, or for
establishing the rental of such family, or for all such purposes.

6. A company may rent one or more dwelling units to a social services
official or duly authorized agency, as defined in section three hundred
seventy-one of the social services law, for the operation of agency
boarding homes or group homes or to any public agency as defined in
section four hundred sixty-one of the general municipal law, which
provides residences and social services to dependent aged persons.

7. (a) For the purpose of enabling lower income elderly persons to
continue in occupancy without paying rentals in excess of a fair
proportion of their income, any municipality having a population of less
than one million is authorized to make and to contract to make periodic
payments to a company in an amount not exceeding the difference between
the rent or carrying charges for the dwellings occupied by such lower
income persons and one-third of their net probable aggregate annual
income, where such rent or carrying charges exceed such one-third of
income; provided that the aggregate amount of periodic payments to be
made in accordance with contracts entered into by the municipality
during any fiscal year thereof pursuant to this subdivision, subdivision
nine of section thirty-one, section one hundred twenty-six and section
five hundred seventy-seven-a of this chapter shall not exceed the
aggregate amount of all real property taxes paid or payable during such
fiscal year by all companies organized pursuant to this article, article
II, article V and article XI of this chapter and the aggregate estimated
receipts of all such companies in such fiscal year from rental
surcharges collected or to be collected pursuant to this chapter.

(b) Such payments shall be made only on account of a person or family
in occupancy where the head of the household is sixty-two years of age
or older and is not a recipient of public assistance pursuant to the
social services law, and where the net probable aggregate annual income
of the person or family in occupancy does not exceed six thousand five
hundred dollars a year. Notwithstanding the provisions of subdivision
twenty-nine of section two of this chapter net probable aggregate annual
income as used in this subdivision shall mean annual income of family
members from all sources after deduction of federal, state and city
income taxes; provided that any municipality may provide that increases
in benefits under the social security act which take effect after such
person or family has assumed occupancy shall not be taken into account.

(c) A company having a contract with the municipality pursuant to this
subdivision may not collect from persons or families in occupancy on
whose account such payments are made any rentals in excess of the
amounts specified in such contract.

8. Notwithstanding the provisions of this section, persons or families
with two or more dependents whose probable aggregate annual income does
not exceed one hundred twenty-five percent of the limitations as to
income applicable without reference to this subdivision, shall also be
eligible for admission to the project on the understanding that any
person or family becoming eligible by reason hereof, shall pay from the
time of admission a rental surcharge computed on the basis of the income
ratios applicable to such person or family in the absence of this
subdivision. In applying the provisions of paragraphs (c) and (d) of
subdivision one and of paragraph (d) of subdivision two of this section
to a family becoming eligible by reason of this subdivision, the "ratio
prescribed by law" shall mean such ratio as would be prescribed in the
absence of this subdivision.

9. Notwithstanding the provisions of this section or any law to the
contrary, any limited dividend mutual housing company which:

(a) owns or operates a project or projects that are located in the
county of Queens and were constructed or acquired prior to July first,
nineteen hundred sixty-five; and

(b) did not receive a loan, construction subsidy, mortgage, mortgage
guarantee or any other form of financial assistance from the state of
New York or from any state agency, authority or public benefit
corporation created by the state; and

(c) is no longer required to pay rental surcharges to the municipality
in which it is located; and

(d) has commenced paying real property taxes on the value of the land
and improvements pursuant to a resolution adopted by the governing body
of the municipality in which it is located; and

(e) has determined, by a two-thirds vote of the directors of the
housing company taken on or before July first of each year that rental
surcharges based on incomes of persons or families residing in the
project, as specified in this article or any other provision of law, are
not required for the purpose of maintaining or operating said project or
projects. Any such vote shall be preceded by a timely notice to the
project's shareholders that such vote will take place;
shall be excused from undertaking a survey of the aggregate and
individual annual incomes of persons or families residing in such
project or projects constructed or acquired by such housing company, and
shall not be required to impose rental surcharges based on the incomes
of such persons or families.

10. A housing company shall accept federal reimbursement under section
eight of the Housing and Community Development Act of 1974 in lieu of
such amount in rent payment for a person qualifying under such act and
residing in a project of such company. A housing company shall not
reject an applicant for an apartment solely on the basis that all or
part of the rent shall be paid under section eight of the Housing and
Community Development Act of 1974.