Enacts the New York state senior housing opportunities partnership act and establishes a state senior housing opportunities partnership authority

1. Definitions. Key definitions include: * Bank is any bank that has a market capitalization (determined by multiplying the number of shares times the current market price), of less than $2 billion. * "Senior" is a person sixty years of age or older who is the head of a household. The section allows rental or ownership of a project to be restricted to persons 60 years old and their spouses. * Senior housing opportunities partnership financing instrument is any financing instrument, including bank loan, bonds, notes, or credit enhancement for a senior housing opportunities development corporation for a senior housing opportunities facility. * Senior housing opportunities facility is a facility or project that is or is to be 50% or more owned or occupied by seniors. The definition includes NORCs, market-rate independent living, and adult homes, plus all ancillary recreational, educational, cultural, office, etc., facilities in connection with the activities of the senior facility. It also includes scattered site housing, or housing units scattered throughout an area which is broadly defined by traditional neighborhood or community boundaries, and where appropriate, bounded by major natural or man- made physical boundaries, such as bodies of water, railroad lines, or limited access highways.

2. Creates The New York State Senior Housing Opportunities Partnership Authority to finance or collaborate in the financing of senior housing opportunities facility projects. The authority is empowered to make loans or provide credit for loans, or provide other financing instruments. The authority has seven directors, of whom six are appointed by the governor with the advice and consent of the senate. Two are appointed on recommendation of the temporary president of the senate, and two on recommendation of the speaker of the assembly. Each director shall at the time of appointment have had at least five years experience in finance, as an officer in an entity, and/or as a developer of senior housing or other projects for seniors with a development cost in excess of five million dollars. Directors serve for terms of six years. The director of the New York State office for the aging serves as ex officio member, and also as chairman and CEO of the authority. For purposes of the public officers law, the authority is a state agency, and its directors officers of the authority. The authority may have two persons loaned as staff from the office for the aging, plus administrative-secretarial support staff as required and such counsel, and professional consultants as required on a contract basis. Four directors constitute a quorum for transaction of business. The authority is given power to conduct meetings by televideo or teleconference, or by telephone conference, provided that at least three members of the board shall be physically present.

3. Power of the Authority. Powers are the standard powers of an authority (to sue and be sued, have a seal, etc). for the development of projects in an amount not to exceed the cost of such project. The section requires that the authority be the last approval, after the banks have approved the project. The authority may also sell a credit enhancement, letter of credit, or other credit device to help the development of a project to a bank, consortium of banks, or a senior housing opportunities development corporation at an appropriate and competitive market rate. To provide maximum flexibility in financing arrangements, this section also allows the authority to contract out management and operations of a project which it owns (e.g., through default, title change, or taking of debt).

4. Miscellaneous provisions. Allows the authority to create additional authorities with the same board, and declares the authority a political subdivision or agent of the state for purposes of IRS revenue rulings or revenue procedure, including revenue ruling 63-20 and revenue procedure 82-26 and successors and amendments.

5. Revolving fund. This section creates a revolving fund for financing projects and creating a corpus allocation. Monies in the fund consist of federal grants, moneys appropriated by the state legislature and payments of principal and interest by senior housing opportunity corporations. Monies in the fund may be used to * making loans for projects at market or below market rates; * buy or refinance debt at market or below market rates; * guarantee or purchase insurance or other credit enhancement for senior housing opportunity corporation bonds and notes or other senior housing opportunities partnership financing instruments; provide a source of revenue or security for payment of principal and interest on bonds or notes issued by the authority if the proceeds of the sale of such bonds or notes will be deposited in the fund; * provide interest rate subsidies from investment earnings on corpus allocations to subsidize loans to senior housing opportunity corporations made from the proceeds of the authority's bonds or notes; * using investment earnings on moneys in the fund to pay the costs of the authority of administering and managing the program.

6. Audits. Requires the authority to arrange for any audits required by law for the purpose of issuing its bonds or notes or otherwise to provide financial assistance to senior housing opportunity corporations. 7. Default. Allows the authority to notify the comptroller in the event of a default who will withhold any payments of state aid or local assistance otherwise payable and to take any action permitted by law to recover such amount.

8. Issuance and sale of loan recipient bonds and notes. Allows a recipient of a loan from the authority to validly issue its notes or bonds to the authority, as evidence of its obligation to repay such loan.

9. Co-operation and assistance of other agencies. Allows officers and employees of other agencies and local governments to make available studies, surveys, plans, data and other materials in their possession and to serve at the request of the authority on advisory committees.

10. Notes and bonds of the authority. Allows the authority to issue bonds and notes with several standard restrictions, requires that the state is not able on notes or bonds of the authority.

11. Reserve funds and appropriations. Allows the authority to create debt service reserve funds.

12. Agreement of the state. The state agrees not to limit or alter the rights of bondholders.

13. Right of state to require redemption of bonds. Allows the state to defease bonds prior to maturity.

14. Remedies of noteholders and bondholders. In the event of default by the authority for a period of thirty days, the holders of 25% in aggregate principal amount of the notes or bonds of such issue then outstanding may have a trustee appointed to represent the holders of such notes or bonds for the purposes herein provided, who can bring suit and take other action to collect on the default.

15. Notes and bonds as legal investment.

16. Exemption from taxation; payments in lieu of taxes. Real property owned by the authority is exempt from any taxation, special ad valorem levy and special assessment, but shall be subject to a payment in lieu of taxes. The authority is required to pay no fees or taxes, whether state or local.

17. Actions against the authority. The complaint must be commenced with- in one year after the cause of action has accrued. The rate of interest to be paid by the authority upon any judgment for which it is liable shall not exceed four per centum per annum.

18. Severability.

Justification

The ability to finance housing for seniors in New York is a growing concern. The state is graying, even as the number and kinds of financial instruments available for development has become more limited. Further, there is less opportunity for the state to act as partner and facilitator in projects. This legislation is intended to close those gaps. It opens a new development tool for financing senior housing, providing new credit instruments, and uniquely taking advantage of the expertise of small-cap banks in this state to act as a filter for projects. The powers of the authority have intentionally been made as flexible as possible, so as to recognize and facilitate different forms of financing arrangements.

Prior legislative history

2007-08: A.9907 - Referred to Aging 2005-06: A.2301 - Referred to Aging

Fiscal implications

To be determined.

Effective date

This act shall take effect immediately.