N.Y. Private Housing Finance Law § 124: Participation by certain corporations

§ 124. Participation by certain corporations. One or more insurance

companies shall have the power to organize, or cause to be organized, a

redevelopment company formed pursuant to the provisions of this article,

and to purchase for cash or to receive and hold in exchange for

property, and to own and control, the stock or the income debenture

certificates or both of any redevelopment company and shall also have

power to invest, singly or jointly, in a bond and first mortgage or in

an issue of bonds secured by mortgage or trust indenture constituting a

first lien upon any project as provided in this article. An insurance

company, however, which owns stock or income debenture certificates of a

redevelopment company and also owns bonds or a bond and mortgage or an

interest in a bond and mortgage of the same redevelopment company shall

not, without the consent of the supervising agency, sell all or any part

of such bonds or such bond and mortgage or of its interest in such bond

and mortgage unless it shall simultaneously sell such stock and such

income debenture certificates owned by it.

Notwithstanding any other provision of law, an insurance company or

companies operating a redevelopment project or owning all of the stock

of a redevelopment company are hereby expressly authorized to enter into

contracts contemplated by this article and to agree by contract with the

municipality not to sell, assign, or otherwise transfer such project or

the stock, income debentures or mortgage bonds of such redevelopment

company during the period of tax exemption provided for by the contract

pursuant to this article without the consent of the local legislative

body of the municipality. An insurance company or companies owning all

of the stock of a redevelopment company are hereby expressly authorized

to make such capital contributions to any such redevelopment company, in

cash or by cancellation of securities or otherwise, as may be necessary

to enable such redevelopment company to comply with all conditions

precedent to its dissolution and conveyance of its property in

accordance with section one hundred twenty-three of this article, and

upon dissolution of such a redevelopment company, to acquire the

project, complete the same if not theretofore completed, and own and

operate the same as a permanent investment for such period as it or they

may deem desirable either directly or through acquisition and ownership

of the capital stock of any corporation which may acquire title to the

project pursuant to subdivision one of section one hundred twenty-three.

An insurance company, instead of investing its funds in the stock and

debentures or other obligations of a redevelopment company, may through

direct ownership and/or lease acquire, own, construct, manage or operate

as an investment for such period as it may deem desirable, one or more

projects, in which event the provisions of subsection one of section one

hundred twelve of this article applicable to redevelopment companies

shall be applicable to such insurance company in its operations with

respect to any such project but not otherwise. Said provisions and the

ensuing provision of this section shall cease to be applicable to any

such project and to such insurance company in its operations with

respect to such project after termination of any tax exemption granted

pursuant to section one hundred twenty-five of this article with respect

to such project, whether such termination shall be by expiration or by

any other cause, or in the event that prior thereto the insurance

company elects to pay the municipality the total of all accrued taxes

for which such exemption was granted and received, together with

interest at the rate of five per centum per annum. If any such project

shall be sold by an insurance company, the tax exemption with respect to

such project shall thereupon cease and terminate unless the local

legislative body shall otherwise provide.

Until the termination of any tax exemption granted pursuant to section

one hundred twenty-five of this article or until the provisions of this

article shall otherwise cease to be applicable:

1. An insurance company shall be entitled to earn and retain annually

on a cumulative basis in respect of each project operated by it

hereunder, before depreciation but after providing for all expenses,

taxes and assessments attributable to such project or to the income

therefrom, a sum equal to but not exceeding six per centum of the total

actual final cost of the project as defined by subdivision two of

section one hundred twelve of this article.

2. Separate accounts shall be kept for each project operated by an

insurance company.

3. If the income from any such project for any year, after all

expenses, taxes and assessments attributable thereto or to the income

therefrom, shall be in excess of six per centum of the total actual

final cost of such project as defined by subdivision two of section one

hundred twelve of this article, such excess shall be credited to a

special reserve account.

4. If the income from any such project for any year, after all

expenses, taxes and assessments attributable thereto or to the income

therefrom shall be less than six per centum of such total actual final

cost, such deficiency shall be charged against such special reserve

account.

The amount of any accrued taxes and interest thereon paid by an

insurance company pursuant to the second paragraph of section one

hundred twenty-five of this article may be charged against such special

reserve account. An amount equal to any balance remaining to the credit

of such special reserve account on the termination of the period of tax

exemption shall be paid into the general fund of the municipality. If

any project shall be conveyed to an insurance company in accordance with

subdivision five of section one hundred twenty-three of this article, an

amount equal to all accrued and unpaid interest, amortization and

dividends on the stock and evidences of indebtedness of the

redevelopment company theretofore accumulated in accordance with section

one hundred seven of this article shall be charged against the special

reserve account except to the extent included in total actual final

cost, and any remaining cash surplus derived from earnings remaining in

the treasury of the redevelopment company shall be transferred to such

insurance company and shall be credited by it to the special reserve

account provided for in this section applicable to such project.

Except as specifically provided herein this article shall not be

deemed to limit or restrict any power or authority granted to insurance

companies or to any other corporation or to any fiduciary by any other

provision of law heretofore or hereafter enacted.