Bill Text: NY A04632 | 2011-2012 | General Assembly | Introduced
Bill Title: Creates the insurer fund for underserved neighborhood/rural area development corporation; provides that such corporation shall operate in accordance with a plan of operation; provides that the corporation shall be governed by a board of sixteen directors; requires certain insurers to invest a portion of their assets in underserved neighborhoods and rural areas of the state.
Spectrum: Strong Partisan Bill (Democrat 25-2)
Status: (Introduced - Dead) 2012-09-04 - enacting clause stricken [A04632 Detail]
Download: New_York-2011-A04632-Introduced.html
S T A T E O F N E W Y O R K ________________________________________________________________________ 4632 2011-2012 Regular Sessions I N A S S E M B L Y February 4, 2011 ___________ Introduced by M. of A. P. RIVERA, RAMOS, SPANO, CAMARA, SCHROEDER, PEOPLES-STOKES, COOK -- Multi-Sponsored by -- M. of A. ARROYO, BOYLAND, GANTT, HEASTIE, JEFFRIES, V. LOPEZ, McKEVITT, ORTIZ, PERRY, J. RIVERA, TITONE, TITUS -- read once and referred to the Committee on Insurance AN ACT to amend the insurance law and the public authorities law, in relation to the creation of the insurer fund for underserved neighborhood/rural area development corporation THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: 1 Section 1. The insurance law is amended by adding a new section 1415 2 to read as follows: 3 S 1415. INSURER FUND FOR UNDERSERVED NEIGHBORHOOD/RURAL AREA DEVELOP- 4 MENT. (A) FOR THE PURPOSES OF THIS SECTION: 5 (1) "IFUND CORPORATION", "CORPORATION" OR "IFUND" SHALL MEAN THE 6 INSURER FUND FOR UNDERSERVED NEIGHBORHOOD/RURAL AREA DEVELOPMENT CORPO- 7 RATION; 8 (2) "QUALIFIED INVESTMENT" SHALL INCLUDE ANY LOAN, THE PURCHASE OF ANY 9 LOAN, THE PURCHASE OF ANY ASSET, THE EXTENSION OF CREDIT AND THE 10 PURCHASES OF EQUITY: 11 (A) TO OR FROM COMMUNITY DEVELOPMENT CORPORATIONS, NON-PROFIT INTERME- 12 DIARIES QUALIFIED UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE 13 WHICH PACKAGE LOANS AND ADMINISTER LOAN FUNDS AND QUALIFIED COMMUNITY 14 DEVELOPMENT ENTITIES AS DEFINED IN SECTION 450(A) OF THE INTERNAL REVEN- 15 UE CODE AND REGULATIONS HEREUNDER; 16 (B) TO FINANCE OR FACILITATE THE FINANCING OF SINGLE- OR MULTI-FAMILY 17 HOUSING AFFORDABLE TO PERSONS OF LOW AND MODERATE INCOME, FAMILY FARMS, 18 SMALL BUSINESSES AND OTHER COMMUNITY DEVELOPMENT ACTIVITIES APPROVED BY 19 THE SUPERINTENDENT THAT REVITALIZE OR STABILIZE UNDERSERVED AREAS, 20 CERTIFIED CAPITAL COMPANIES AS DEFINED IN SECTION ELEVEN OF THE TAX LAW, 21 COMMUNITY SERVICE FACILITIES, INCLUDING CHILD CARE, EDUCATIONAL, HEALTH EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD00278-01-1 A. 4632 2 1 OR SOCIAL SERVICES TARGETING UNDERSERVED AREAS, THE DEVELOPMENT, ESTAB- 2 LISHMENT OR OPERATION OF HEALTH INFORMATION TECHNOLOGY, AND THE ENVIRON- 3 MENTAL CLEANUP OR REDEVELOPMENT OF INDUSTRIAL SITES IN AN UNDERSERVED 4 AREA; AND 5 (C) IN NEW YORK STATE AND LOCAL GOVERNMENT AGENCY BONDS THAT PRIMARILY 6 BENEFIT UNDERSERVED AREAS IN AN AMOUNT THAT, IN THE AGGREGATE, DOES NOT 7 EXCEED TEN PERCENT OF THE INVESTMENT CAPITAL OF THE CORPORATION; 8 (3) "LOW AND MODERATE INCOME" SHALL MEAN PERSONS OR FAMILIES WHICH 9 HAVE INCOMES THAT DO NOT EXCEED EIGHTY PERCENT OF THE MEDIAN INCOME FOR 10 THE METROPOLITAN STATISTICAL AREA, IF A PERSON OR FAMILY IS LOCATED IN 11 SUCH AN AREA, OR THE STATEWIDE NONMETROPOLITAN STATISTICAL AREA, IF A 12 PERSON OR FAMILY IS LOCATED OUTSIDE A METROPOLITAN STATISTICAL AREA; 13 (4) "MEMBER" SHALL MEAN A MEMBER OF THE CORPORATION; 14 (5) "UNDERSERVED AREAS" SHALL MEAN: (A) AREAS OF THE STATE WHICH QUAL- 15 IFY AS "DISTRESSED" OR "HIGHLY DISTRESSED" PURSUANT TO THE GENERAL 16 MUNICIPAL LAW; OR (B) AREAS OF THE STATE WITH A MAJORITY OF RESIDENTS OF 17 LOW OR MODERATE INCOME; 18 (6) "FAMILY FARM" SHALL MEAN A FARM WHICH IS THE PRIMARY SOURCE OF 19 INCOME FOR INDIVIDUALS RESIDING AT THE SAME ADDRESS AND RELATED BY 20 CONSANGUINITY, AFFINITY OR ADOPTION AND WHICH HAS GROSS SALES OF FARM 21 PRODUCTS OF LESS THAN FIVE HUNDRED THOUSAND DOLLARS ANNUALLY; 22 (7) "SMALL BUSINESSES" SHALL HAVE THE SAME MEANING AS DESCRIBED IN 23 SECTION ONE HUNDRED THIRTY-ONE OF THE ECONOMIC DEVELOPMENT LAW; 24 (8) "OPERATING EXPENSES" SHALL MEAN THE EXPENSES THE CORPORATION 25 INCURS IN THE ACCOMPLISHMENT OF ITS PURPOSE; 26 (9) "INVESTMENT CAPITAL" SHALL MEAN THE FUNDS CONTRIBUTED TO THE 27 CORPORATION BY ITS MEMBERS IN ORDER TO MAKE QUALIFIED INVESTMENTS PURSU- 28 ANT TO ITS PLAN OF OPERATIONS; AND 29 (10) "HEALTH INFORMATION TECHNOLOGY" SHALL MEAN TECHNOLOGY USED TO: 30 ELECTRONICALLY SHARE PATIENT INFORMATION; IMPROVE CARE COORDINATION; 31 PROMOTE EFFICIENCIES IN THE DELIVERY OF, OR PAYMENT FOR, CARE; OR 32 ENHANCE OUTCOMES, PATIENT SELF-MANAGEMENT AND/OR QUALITY, OR OTHER MEANS 33 OF IMPROVING INTEROPERABILITY AND/OR INTERCONNECTEDNESS OF HEALTH CARE 34 PROVIDERS, CONSUMERS AND/OR PAYERS. 35 (B)(1) THE INSURER FUND FOR UNDERSERVED NEIGHBORHOOD/RURAL AREA DEVEL- 36 OPMENT CORPORATION IS HEREBY ESTABLISHED CONSISTING OF ALL INSURERS 37 AUTHORIZED TO WRITE AND ENGAGED IN WRITING, WITHIN THIS STATE, ON A 38 DIRECT BASIS, ANY OF THE TYPES OF INSURANCE DESCRIBED IN PARAGRAPHS ONE 39 THROUGH TEN, TWELVE THROUGH SEVENTEEN AND NINETEEN THROUGH THIRTY OF 40 SUBSECTION (A) OF SECTION ONE THOUSAND ONE HUNDRED THIRTEEN OF THIS 41 CHAPTER. EVERY SUCH INSURER SHALL BE AND SHALL REMAIN A MEMBER OF THE 42 CORPORATION AS A CONDITION OF ITS AUTHORITY TO CONTINUE TO TRANSACT SUCH 43 TYPES OF INSURANCE IN THIS STATE AND SHALL CONTRIBUTE ITS PROPORTIONAL 44 SHARE OF THE INVESTMENT CAPITAL AND OPERATING EXPENSES OF THE CORPO- 45 RATION. 46 (2) THE CORPORATION SHALL BE A FOR-PROFIT CORPORATION CONSTITUTING A 47 LEGAL ENTITY SEPARATE AND DISTINCT FROM ITS MEMBERS. ALL FUNDS AND 48 RESERVES OF THE CORPORATION SHALL BE SEPARATELY HELD AND INVESTED. IT 49 SHALL MAINTAIN COMPLETE ACCOUNTS OF ALL MONIES RECEIVED AND ALL LOSSES 50 AND EXPENSES INCURRED IN CONNECTION WITH ITS OPERATIONS. 51 (3) THE PURPOSE OF THE CORPORATION SHALL BE TO PROMOTE THE ECONOMIC 52 WELFARE AND HEALTH AND WELL-BEING OF THE CITIZENS OF THIS STATE THROUGH 53 QUALIFIED INVESTMENTS IN UNDERSERVED AREAS OF THE STATE. 54 (C) (1) THE CORPORATION SHALL OPERATE IN ACCORDANCE WITH A PLAN OF 55 OPERATION, WHICH PROVIDES FOR THE ACCOMPLISHMENT OF ITS PURPOSE. ON OR A. 4632 3 1 BEFORE APRIL FIRST, TWO THOUSAND TWELVE, THE CORPORATION SHALL SUBMIT 2 SUCH PLAN OF OPERATIONS FOR APPROVAL BY THE SUPERINTENDENT. 3 (2) SUCH PLAN SHALL INCLUDE: 4 (A) A PRELIMINARY ASSESSMENT OF ALL MEMBERS FOR INITIAL OPERATING 5 EXPENSES NECESSARY TO COMMENCE OPERATIONS, ESTABLISH NECESSARY FACILI- 6 TIES AND MANAGE THE AFFAIRS OF THE CORPORATION; 7 (B) ONGOING MECHANISMS FOR THE ASSESSMENT AND COLLECTION OF PROPOR- 8 TIONAL MEMBER CONTRIBUTIONS TOWARDS THE OPERATING EXPENSES AND INVEST- 9 MENT CAPITAL OF THE CORPORATION PURSUANT TO PARAGRAPHS THREE AND FOUR OF 10 THIS SUBSECTION AND THE PAYMENT OR DISTRIBUTION OF INCOME ON SUCH 11 INVESTMENTS TO MEMBERS; 12 (C) A METHOD FOR THE SOLICITATION, REVIEW AND SELECTION OF QUALIFIED 13 INVESTMENTS BY THE CORPORATION WHICH SHALL INCLUDE, BUT NOT BE LIMITED 14 TO: 15 (I) THE CONVENING OF SIX MEETINGS ANNUALLY IN LOCAL COMMUNITIES, 16 (II) THE DEVELOPMENT OF AN INFRASTRUCTURE TO EFFECTIVELY DISPERSE AND 17 DEPLOY INVESTMENT CAPITAL THROUGHOUT THE STATE, 18 (III) THE HIRING OF STAFF TO WORK WITH COMMUNITY GROUPS TO IDENTIFY 19 LOCAL INVESTMENT OPPORTUNITIES, AND 20 (IV) THE IDENTIFICATION OF UNMET INSURANCE NEEDS IN UNDERSERVED AREAS 21 AND THE DEVELOPMENT OF STRATEGIES TO DELIVER, PROVIDE, DEVELOP, MARKET 22 OR TAILOR INSURANCE PRODUCTS TO MEET THOSE NEEDS THROUGH THE EFFORTS OF 23 THE MEMBERS OF THE CORPORATION; 24 (D) A PROCESS, SUBJECT TO APPROVAL BY THE SUPERINTENDENT, BY WHICH 25 MEMBERS MAY APPLY FOR AND RECEIVE A CREDIT AGAINST REQUIRED INVESTMENT 26 CAPITAL CONTRIBUTIONS FOR QUALIFIED INVESTMENTS MADE DIRECTLY RATHER 27 THAN THROUGH THE CORPORATION; 28 (E) ANNUAL GOALS FOR THE COMMITMENT OF A SIGNIFICANT AMOUNT OF INVEST- 29 MENT CAPITAL; 30 (F) A PROCESS, SUBJECT TO APPROVAL BY THE SUPERINTENDENT, UNDER WHICH 31 FOREIGN MEMBERS OF THE CORPORATION MAY APPLY FOR AND RECEIVE A CREDIT 32 AGAINST REQUIRED INVESTMENT CAPITAL CONTRIBUTIONS FOR A QUALIFIED 33 INVESTMENT IT MADE IN ITS STATE OF DOMICILE EITHER DIRECTLY OR THROUGH 34 AN ENTITY FORMED FOR THE PURPOSE OF MAKING QUALIFIED INVESTMENTS; 35 (G) A MEANS TO PUBLICIZE THE PURPOSE OF THE CORPORATION IN UNDERSERVED 36 AREAS AND AMONG ENTITIES WHICH INVEST IN UNDERSERVED AREAS, AND WITH 37 FEDERAL AND STATE AGENCIES ENGAGED IN AFFORDABLE HOUSING PRODUCTION AND 38 ECONOMIC REVITALIZATION ACTIVITIES; AND 39 (H) A CORPORATE FISCAL YEAR THAT COMMENCES ON JULY FIRST OF EACH YEAR. 40 (3) EVERY MEMBER OF THE CORPORATION SHALL PARTICIPATE IN ITS OPERATING 41 EXPENSES IN THE PROPORTION THAT THE NET DIRECT PREMIUMS OF THE MEMBER 42 WRITTEN DURING THE PRECEDING CALENDAR YEAR BEARS TO THE AGGREGATE NET 43 DIRECT PREMIUMS WRITTEN IN THIS STATE BY ALL MEMBERS OF THE CORPORATION. 44 EACH MEMBER'S PARTICIPATION IN THE CORPORATION SHALL BE DETERMINED ANNU- 45 ALLY ON THE BASIS OF SUCH NET DIRECT PREMIUMS WRITTEN DURING THE PRECED- 46 ING CALENDAR YEAR, AS REPORTED IN THE ANNUAL STATEMENTS AND OTHER 47 REPORTS FILED BY THE MEMBER WITH THE SUPERINTENDENT. 48 (4) (A) FOR THE FISCAL YEAR OF THE CORPORATION BEGINNING JULY FIRST, 49 TWO THOUSAND TWELVE, EACH MEMBER SHALL CONTRIBUTE TO THE INVESTMENT 50 CAPITAL OF THE CORPORATION AN AMOUNT NOT LESS THAN AN AMOUNT EQUAL TO 51 ONE HUNDRED MILLION DOLLARS MULTIPLIED BY A FRACTION, THE NUMERATOR OF 52 WHICH IS THE CAPITAL AND SURPLUS OR SURPLUS TO POLICYHOLDERS MAINTAINED 53 BY SUCH MEMBER FOR THE PRECEDING CALENDAR YEAR AND THE DENOMINATOR OF 54 WHICH IS THE AGGREGATE CAPITAL AND SURPLUS OR SURPLUS TO POLICYHOLDERS 55 MAINTAINED BY ALL OF THE MEMBERS OF THE CORPORATION FOR THE PRECEDING 56 CALENDAR YEAR. A. 4632 4 1 (B) FOR THE FISCAL YEAR OF SUCH CORPORATION BEGINNING JULY FIRST, TWO 2 THOUSAND THIRTEEN, EACH MEMBER SHALL CONTRIBUTE TO THE INVESTMENT CAPI- 3 TAL OF THE CORPORATION AN AMOUNT NOT LESS THAN TWO HUNDRED FIFTY MILLION 4 DOLLARS MULTIPLIED BY THE FRACTION DESCRIBED IN SUBPARAGRAPH (A) OF THIS 5 PARAGRAPH. FOR ALL FISCAL YEARS COMMENCING AFTER JULY FIRST, TWO THOU- 6 SAND FOURTEEN, EACH MEMBER SHALL CONTRIBUTE AN AMOUNT NOT LESS THAN THE 7 SAME FRACTION DESCRIBED IN SUBPARAGRAPH (A) OF THIS PARAGRAPH MULTIPLIED 8 BY, AT THE DISCRETION OF THE BOARD OF DIRECTORS OF THE CORPORATION, (I) 9 FIVE HUNDRED MILLION DOLLARS; OR (II) ONE PERCENT OF THE AGGREGATE NET 10 DIRECT PREMIUMS WRITTEN BY ALL OF THE MEMBERS OF THE CORPORATION IN THE 11 PRECEDING CALENDAR YEAR; OR (III) FIVE ONE-HUNDREDTHS OF ONE PERCENT OF 12 THE CAPITAL AND SURPLUS OR SURPLUS TO POLICYHOLDERS OF ALL OF THE 13 MEMBERS OF THE CORPORATION IN THE PRECEDING CALENDAR YEAR. THE CORPO- 14 RATION MAY REQUEST FROM THE SUPERINTENDENT, AND IF APPROVED BY THE 15 SUPERINTENDENT, MAY ADOPT IN ITS BY-LAWS AND PLAN OF OPERATIONS, STAND- 16 ARDS WHICH ESTABLISH A MINIMUM AMOUNT OF CAPITAL AND SURPLUS OR SURPLUS 17 TO POLICYHOLDERS FOR PARTICIPATION IN THE CORPORATION. THE SUPERINTEN- 18 DENT MAY ALSO WAIVE PARTICIPATION FOR AN INSURER OTHERWISE OBLIGATED TO 19 PARTICIPATE AS A MEMBER OF THE CORPORATION, IF THE SUPERINTENDENT DETER- 20 MINES THAT THE FINANCIAL CONDITION OF THE INSURER IS SUCH THAT PARTIC- 21 IPATION IN THE CORPORATION WOULD BE DETRIMENTAL TO THE POLICYHOLDERS OF 22 THE INSURER. 23 (D) (1) THE CORPORATION SHALL BE GOVERNED BY A BOARD OF SIXTEEN DIREC- 24 TORS. THE GOVERNOR, OR HIS OR HER DESIGNEE, THE SPEAKER OF THE ASSEMBLY, 25 OR HIS OR HER DESIGNEE, AND THE TEMPORARY PRESIDENT OF THE SENATE, OR 26 HIS OR HER DESIGNEE, SHALL SERVE AS EX-OFFICIO MEMBERS. EIGHT DIRECTORS, 27 FOUR REPRESENTING INSURERS ENGAGED IN TRANSACTING THE TYPES OF INSURANCE 28 DESCRIBED IN PARAGRAPHS ONE AND TWO OF SUBSECTION (A) OF SECTION ONE 29 THOUSAND ONE HUNDRED THIRTEEN OF THIS CHAPTER AND FOUR REPRESENTING 30 INSURERS ENGAGED IN TRANSACTING OTHER TYPES OF INSURANCE DESCRIBED IN 31 SUCH SUBSECTION, SHALL BE ELECTED BY CUMULATIVE VOTING BY ALL THE 32 MEMBERS OF THE CORPORATION, WHOSE VOTES SHALL BE WEIGHTED IN ACCORDANCE 33 WITH EACH MEMBER'S NET DIRECT PREMIUMS WRITTEN DURING THE PRECEDING 34 CALENDAR YEAR. FIVE DIRECTORS SHALL REPRESENT CONSUMERS AND SHALL HAVE 35 DEMONSTRATED EXPERTISE IN COMMUNITY DEVELOPMENT AND INVESTMENTS. OF 36 THESE FIVE DIRECTORS, ONE SHALL BE APPOINTED BY THE GOVERNOR, TWO SHALL 37 BE APPOINTED BY THE TEMPORARY PRESIDENT OF THE SENATE AND TWO SHALL BE 38 APPOINTED BY THE SPEAKER OF THE ASSEMBLY. 39 (2) THE DIRECTORS SHALL SERVE WITHOUT COMPENSATION BUT SHALL BE REIM- 40 BURSED FOR THEIR ACTUAL AND NECESSARY EXPENSES INCURRED IN THE PERFORM- 41 ANCE OF THEIR DUTIES UNDER THIS ARTICLE. 42 (E) (1) THE CORPORATION SHALL ANNUALLY FILE A STATEMENT IN THE OFFICE 43 OF THE SUPERINTENDENT AND WITH THE GOVERNOR, THE SPEAKER OF THE ASSEMBLY 44 AND THE TEMPORARY PRESIDENT OF THE SENATE ON OR BEFORE THE FIRST DAY OF 45 SEPTEMBER. THE STATEMENT SHALL BE IN A FORM APPROVED BY AND CONTAIN 46 INFORMATION PRESCRIBED BY THE SUPERINTENDENT WITH RESPECT TO ITS TRANS- 47 ACTIONS, CONDITION, OPERATIONS AND AFFAIRS DURING THE PRECEDING YEAR AND 48 SHALL BE MADE AVAILABLE TO THE PUBLIC ELECTRONICALLY AND IN PUBLISHED 49 FORM AT NO COST. 50 (2) THE SUPERINTENDENT MAY, AT ANY TIME, REQUIRE THE CORPORATION TO 51 FURNISH ADDITIONAL INFORMATION WITH RESPECT TO ITS TRANSACTIONS, CONDI- 52 TION OR ANY MATTER CONNECTED THEREWITH WHICH HE OR SHE CONSIDERS TO BE 53 MATERIAL AND WHICH WILL ASSIST HIM OR HER IN EVALUATING THE SCOPE, OPER- 54 ATION AND IMPACT OF THE CORPORATION'S INVESTMENTS AND SHALL PERFORM, OR 55 ARRANGE FOR THE PERFORMANCE OF, AN AUDIT OF THE CORPORATION'S AFFAIRS ON 56 AN ANNUAL BASIS. A. 4632 5 1 S 2. Subdivision 1 of section 2426 of the public authorities law, as 2 amended by chapter 354 of the laws of 1984, is amended to read as 3 follows: 4 1. "Financial institution". Any bank, trust company, national bank, 5 savings bank, state or federal savings and loan association, or state or 6 federal credit union, insurance company, pension fund or retirement 7 system of any corporation, association, OR any other entity which is 8 owned or controlled by any one or more of the above, provided the same 9 is supervised by or responsible to any agency of the federal government, 10 the state, any department thereof or the governing body of any city, 11 town or village of the state or any other entity approved by the agency 12 or any one or more of the above when lawfully acting as a trustee or 13 otherwise in a fiduciary capacity. The term "financial institution" 14 shall also include the New York state housing finance agency and the New 15 York state urban development corporation, the New York city housing 16 development corporation, the New York city department of housing preser- 17 vation and development, THE INSURER FUND FOR UNDERSERVED 18 NEIGHBORHOOD/RURAL AREA DEVELOPMENT CORPORATION and any person who is 19 approved as a mortgage lender by the federal housing administration for 20 purposes of insurance issued by such administration or licensed by the 21 state of New York as a mortgage banker. 22 S 3. The opening paragraph of subdivision 2 of section 2428 of the 23 public authorities law, as amended by chapter 354 of the laws of 1984, 24 is amended to read as follows: 25 The agency shall limit its insurance on a rehabilitation or preserva- 26 tion loan to an amount not in excess of fifty per centum of the 27 outstanding principal indebtedness, provided, however, that the agency 28 may insure an amount not in excess of seventy-five per centum of the 29 outstanding principal indebtedness of a rehabilitation loan if it shall 30 find, pursuant to rules or regulations which it shall establish that the 31 extent of rehabilitation is sufficient to justify such additional insur- 32 ance, provided further, however, that the agency may insure an amount 33 equal to the full outstanding principal indebtedness when the loan has 34 been made by a public benefit corporation of the state of New York which 35 public benefit corporation has issued or will issue bonds or notes, some 36 or all of the proceeds of which bonds or notes were used or will be used 37 to make such loan, or when the loan has been made by a public employee 38 pension fund OR WHEN A QUALIFIED INVESTMENT IS MADE BY THE INSURER FUND 39 FOR UNDERSERVED NEIGHBORHOOD/RURAL AREA DEVELOPMENT CORPORATION. 40 S 4. This act shall take effect immediately.