N.Y. Private Housing Finance Law § 36-a: Additional powers of municipalities

§ 36-a. Additional powers of municipalities. In addition to any other

powers granted to a municipality by law, and notwithstanding the

provisions of any other law, a municipality acting by its local

legislative body shall have power:

1. To undertake, plan, develop, construct or enter into contracts for

the planning, development or construction of, or to own one or more

projects or any part thereof, or to engage in one or more of such

activities in respect to one or more projects or any part thereof. For

any of the purposes of this subdivision, a municipality may contract

either with a housing company incorporated under this article or with a

housing development fund company incorporated pursuant to article eleven

of this chapter.

2. (a) Acquire by purchase, gift, devise, lease, condemnation or

otherwise, in accordance with the provisions of the appropriate general,

special or local law applicable to the acquisition of real or personal

property by such municipality, real or personal property or any interest

therein necessary for or incidental to a project, including but not

limited to air rights, and easements or other rights of user necessary

for the use and development of such air rights, to be developed as air

rights sites for a project; provided, however, that the acquisition of

any air rights over railroad tracks, rights of way or facilities and

easements or other rights of user necessary for the use and development

of such air rights are to be subject to the provision of section

fifty-one-a of the railroad law. The acquisition of real property

pursuant to a plan shall in every case be deemed to be and constitute a

continuous rather than separate takings.

(b) Property so acquired by a municipality shall be exempt from

taxation until sold, leased for a term not exceeding ninety-nine years

or otherwise disposed of in accordance with the provisions of this

section; provided however, that any such municipality shall have the

power and authority, with respect to such property, to pay or transfer,

out of funds available to it for the effectuating of such program or

project annual sums in lieu of taxes to any taxing jurisdiction

providing services to the project area, or to the part or portion

thereof within such taxing jurisdiction, in order that no such taxing

jurisdiction shall suffer an inequitable loss of revenue by virtue of

such project; provided, further, that the amount so paid or transferred

for any year with respect to any such property shall not exceed the

lesser of (1) the sum last levied for the benefit of such taxing

jurisdiction as an annual tax on such property prior to the time of its

acquisition for project purposes or (2) such amount as shall be approved

by the commissioner pursuant to such rules, regulations, limitations and

conditions as he may prescribe, as an eligible and proper charge against

such project. Upon the sale, lease or disposition of such property to

any person, firm or corporation, not entitled to an exemption from

taxation or entitled to only a partial tax exemption such property shall

immediately become subject to taxation in whole or in part, as the case

may be, and shall be taxed pro rata for the unexpired portion of the

taxable year.

As used in this paragraph, the term "taxing jurisdiction" means any

municipal corporation or district corporation, including any school

district or any special district, having the power to levy or collect

taxes and benefit assessments upon real property, or in whose behalf

such taxes or benefit assessments may be levied or collected.

3. To sell or lease for a term not exceeding ninety-nine years any

such project, or part thereof, at any stage before or at the date of or

after the physical completion of such project, to a company which will

undertake, plan, construct, own, manage or operate such project in

accordance with the plan and the provisions of this article. In the

event of a sale or lease of any such project prior to the physical

completion thereof, the municipality may agree to complete and may

complete construction and development of such project or cause the same

to be completed. Any such sale or lease may be made without public

bidding, public sale or public offering pursuant to such negotiated

contract, agreement or lease, containing such provisions, limitations,

requirements, terms and conditions, price or rental as the governing

body of the municipality may deem necessary or desirable to effectuate

the plan and the public policy and public purposes described in sections

eleven and eleven-a of this article.

4. Notwithstanding the provisions of section thirty-three of this

article the real property in a project sold or leased as provided in

this section, when the transfer thereunder becomes effective, shall be

exempt from local and municipal taxes, other than assessments for local

improvements to such extent as may be granted by the local legislative

body of the municipality. The tax exemption shall operate and continue

so long as capital loans of the company to which such project shall have

been sold or leased or any additional loan the proceeds of which are

primarily used for the residential portion of the project, which

additional loan is approved by the commissioner or the supervising

agency are outstanding.

Notes, bonds, mortgages and other obligations of such a company are

declared to be issued for a public purpose and to be public

instrumentalities and, together with interest thereon, shall be exempt

from tax.

5. The provisions of section thirteen of this article requiring the

approval by the commissioner of housing of the persons incorporating a

limited-profit housing company and the provisions of section fourteen of

this article requiring the consent of the commissioner of housing to the

filing of the certificate of incorporation of such a company in the

office of the secretary of state and the amendment thereof shall not

apply to a corporation created pursuant to this article on a cooperative

basis for the purchase or lease of a project pursuant to this section;

nor shall any of the provisions of this article conferring upon the

commissioner of housing any powers in respect of limited-profit housing

companies apply to such a corporation. The application of this

subdivision shall be limited to corporations undertaking a project with

the aid of a municipal loan under this article.

6. A project or part of a project sold or leased to a housing company

pursuant to the provisions of this section thirty-six-a shall be owned

or operated by such housing company in accordance with the provisions of

this article and in accordance with an agreement of sale or lease to be

entered into by the municipality and such housing company. Each such

agreement shall contain, in addition to such other terms and conditions

as may lawfully be agreed upon by the parties, the following provisions,

which shall be subject to any approvals which may be required by this

article:

(a) Establishing a schedule of maximum rents which may be charged by

the housing company.

(b) Prescribing the method by which tenants are to be selected for the

project and criteria of tenant eligibility.

(c) Any such agreement of lease may provide for the transfer of title

of the real property so leased to the housing company at the end of the

term or lease.

7. A housing company shall have the power, in addition to any other

powers under this article to enter into and carry out the provisions of

any agreement authorized under this section or under section

twenty-three-a or twenty-three-b of this article, and to enter into and

carry out agreements in order to obtain insurance by the federal

government of a mortgage for the purpose of refinancing all or any part

of a mortgage loan pursuant to section twenty-three of this article.

8. Any project that received a tax exemption under this section may,

upon the expiration of the tax exemption period, be granted an

additional tax exemption period of up to fifty years, or until such time

as the project is no longer operated under the restrictions and for the

purposes set forth in this article, whichever is sooner.