Relates to activities engaged in by neighborhood preservation companies

BILL NUMBER:A8113A

Title of bill

An act to amend the private housing finance law, in relation to activities engaged in by neighborhood preservation companies

Purpose of the bill: This bill amends articles 16 and 17 of the Private Housing Finance Law (PHFL). Summary of provisions: Section 1 of the bill amends subdivision 5 of section 902 of the PHFL to permit a neigh- borhood preservation company that is operating within a designated neighborhood in a municipality to expand its service area to include unserved areas of the municipality.

Section 2 of the bill amends section 902 of the PHFL to define a "compelling public purpose" which would permit the division of housing and community renewal to exceed contract funding caps in order to expand a neighborhood preservation company' s service area to include unserved areas of the municipality.

Section 3 of the bill amends subdivision 4 of section 903 of the PHFL to authorize the division to exceed the applicable limit on the annual contract amount if it is determined that such additional funding will address a compelling public purpose.

Section 4 of the bill amends section 1002 of the PHFL to define a "compelling public purpose" which would permit the division of housing and community renewal to exceed contract funding caps in order to expand a rural preservation corporation's service area to include unserved rural areas.

Section 5 of the bill amends subdivision 4 of section 1003 of the PHFL to authorize the division to exceed the applicable limit on the annual contract amount if it is determined that such additional funding will address a compelling public purpose.

Section 6 of the bill sets forth the effective date.

Existing law: Currently, the law caps the funds a rural or neighborhood preservation company can receive in any one fiscal year and restricts a neighborhood preservation company's service area to a geographically defined neighborhood of a municipality.

Prior legislative history: Article 16 was enacted in 1977 and article 17 was enacted in 1980.

Statement in support: The proposed amendments will improve the effec- tiveness of these programs by providing the division with the discretion to exceed annual funding caps to address a compelling public purpose and to expand a neighborhood preservation company's service area to include unserved areas of the municipality. A compelling public purpose includes (i) the merger or consolidation of two or more preservation companies or corporations where the pre-existing service areas of all merged or consolidated companies and corporations remain served following the

merger or consolidation, and such action results in more efficient and cost effective delivery of services or (2) service to an area unserved by an existing company or corporation to promote the health, safety and welfare of a service area.

Budget implications: None, this could be implemented with the funds currently available for these programs.

Effective date: This act shall take effect immediately.