A03190 Summary:

BILL NOA03190
 
SAME ASSAME AS S03349
 
SPONSOREpstein
 
COSPNSRGottfried, Simon, Carroll, Steck, Frontus, Seawright, Barron, Perry, Dickens, Taylor, Bronson, Richardson, Hunter, De La Rosa, Kim, Barnwell, Anderson, Rozic, Kelles, Niou, Forrest, Mamdani, Gallagher, Cruz, Gonzalez-Rojas, Zinerman, Rodriguez
 
MLTSPNSR
 
 
Relates to suspending rent payments for certain tenants due to the state of emergency declared by Executive Order No. 202, where they have lost earned income or were forced to close their place of business; requires landlords to accept 20 percent or one-third of contractual rent each month; requires the superintendent of the department of financial services to establish and implement an interim commercial rent relief program to support covered tenants and landlords impacted by the COVID-19 pandemic.
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A03190 Actions:

BILL NOA03190
 
01/22/2021referred to small business
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A03190 Committee Votes:

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A03190 Floor Votes:

There are no votes for this bill in this legislative session.
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A03190 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A3190
 
SPONSOR: Epstein
  TITLE OF BILL: An act to suspend rent payments for certain tenants in response to the outbreak of coronavirus   SUMMARY OF PROVISIONS: Section 1 of the bill defines the terms used throughout the act. Section 2 of the bill establishes that covered tenants (not-for-profits and small businesses with 25 or fewer employees) that have been forced to close or whose business activities have been substantially curtailed resulting in a loss of income as a result of government-ordered COVID-related restrictions are responsible for rent payments up to 20 percent of their income or one third of their contractual rent, whichev- er is less. This section of the bill also prescribes the system by which such payments may be authorized, and establishes that payments made pursuant to the act may be raised as a defense to a non-payment proceed- ing. Section 3 of the bill directs Empire State Development (ESD) to estab- lish a commercial rent relief program to support covered tenants and landlords impacted by COVID-19 and provides that at least $500,000,000 in funds, including but not limited to funding received from the federal government, be allocated for such program. The process by which certain landlords may apply for relief is established. Section 4 of the bill provides that no court may accept a petition for proceedings for non-payment or to recover possession of real property rented by covered tenants for at least 30 days following the expiration of state of emergency. Section 5 provides the effective date.   JUSTIFICATION: For many small businesses and non-profits, rent payments even in a favorable economic climate present a burden. During the unprecedented economic downturn caused by the COVID-19 pandemic, these tenants are suffering as a result of state mandates forcing them to close and/or curtail their operations. With reduced revenues, meeting rent demands in full have become impossible for many small businesses and non-profits, posing an existential threat. This bill offers a framework for sharing the burden of this crisis among tenants, landlords, and government.   PRIOR LEGISLATIVE HISTORY: S.8865 of 2020 (Hoylman): Died in Rules A.10901 (Epstein): Died in Small Business   FISCAL IMPLICATIONS: To be determined.   EFFECTIVE DATE: This act shall take effect immediately and shall be deemed to have been in full force and effect on and after March 7, 2020.
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A03190 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          3190
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 22, 2021
                                       ___________
 
        Introduced  by M. of A. EPSTEIN, GOTTFRIED, SIMON, CARROLL, STECK, FRON-
          TUS, SEAWRIGHT, BARRON, PERRY, DICKENS, TAYLOR,  BRONSON,  RICHARDSON,
          HUNTER,  DE LA ROSA,  KIM,  BARNWELL,  ANDERSON, ROZIC, KELLES -- read
          once and referred to the Committee on Small Business
 
        AN ACT to suspend rent payments for certain tenants in response  to  the
          outbreak of coronavirus
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. For the purposes of this act:
     2    (a) "actual income" means for a not-for-profit  corporation  employing
     3  twenty-five  or less full-time employees or full-time equivalent employ-
     4  ees or for a small business incorporated and  resident  in  this  state,
     5  independently owned and operated, not dominant in its field, and employs
     6  twenty-five  or less full-time employees or full-time equivalent employ-
     7  ees, all revenue, including emergency federal, state  or  local  assist-
     8  ance,  or  any  other  form of income that  may be used to pay rent, but
     9  excluding restricted grants;
    10    (b) "landlord" means the person or entity to  whom  a  covered  tenant
    11  owes rent;
    12    (c)  "rent"  means the amount charged in consideration for the use and
    13  occupancy of real property pursuant to a written or oral  rental  agree-
    14  ment or statute;
    15    (d)  "state  of  emergency"  means  the state of emergency declared by
    16  executive order 202 that began on March 7, 2020 and any  further  amend-
    17  ments  or  modifications,  and  as  may  be further extended pursuant to
    18  section 28 of the executive law;
    19    (e) "covered tenant" includes a tenant that is a not-for-profit corpo-
    20  ration employing twenty-five or less full-time  employees  or  full-time
    21  equivalent  employees, or a tenant that is a small business incorporated
    22  and resident in this state, independently owned and operated, not  domi-
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD02356-02-1

        A. 3190                             2
 
     1  nant  in  its field, and employs twenty-five or less full-time employees
     2  or full-time equivalent employees; and
     3    (f)  "covered period" means March 7, 2020 until the date on which none
     4  of the provisions that closed or otherwise restricted public or  private
     5  businesses  or  places of public accommodation, or required postponement
     6  or cancellation of all non-essential gatherings of individuals  of   any
     7  size,  for  any  reason  in Executive Orders 202.3, 202.4, 202.5, 202.6,
     8  202.7, 202.8, 202.10, 202.11, 202.13 or 202.14, as extended by Executive
     9  Orders 202.28 and 202.31 and as further extended by any future Executive
    10  Order, issued in response to the COVID-19 pandemic continue to apply  in
    11  the county in which the covered tenant is located.
    12    § 2. (a) (i) Notwithstanding any other provision of law, rule or regu-
    13  lation  to  the  contrary, any covered tenant in the state that has been
    14  forced to close their place of business, or  whose  business  activities
    15  have  been  substantially  curtailed  resulting in a loss of income as a
    16  result of government ordered restrictions in response to the outbreak of
    17  coronavirus disease 2019  (COVID-19),  shall  be  responsible  for  rent
    18  payments  up to twenty percent of the covered tenant's actual income for
    19  the thirty days prior to the date such rent  was  due  or  one-third  of
    20  their contractual rent, whichever is less, per month for the duration of
    21  the  covered  period through one hundred eighty days following the final
    22  day of the covered period.  A landlord of a covered tenant  shall  waive
    23  twenty percent of the contractual rent per month for the duration of one
    24  hundred eighty days following the final day of the covered period.
    25    (ii)  Where  a  covered  tenant is authorized to pay an amount that is
    26  less than their contractual or statutory rent pursuant to this act,  the
    27  covered tenant shall provide the landlord and the department of economic
    28  development with a sworn affidavit affirming the covered tenant's actual
    29  income  for the thirty days prior to the date such rent was due for each
    30  month for which the tenant is seeking a reduced payment of rent  due  to
    31  loss  of  income  as  a  result  of  government  ordered restrictions in
    32  response to the outbreak of coronavirus disease  2019  (COVID-19).  Upon
    33  the verification of such statement by the commissioner of the department
    34  of  economic development or his or her agent, such payment shall absolve
    35  the covered tenant of any further obligation to pay rent and any differ-
    36  ence between the rent that would have been contractually or  statutorily
    37  owed  and  the  amount  paid pursuant to this paragraph shall be waived,
    38  except where a covered tenant later  receives  additional  income,  such
    39  rent obligations shall be recalculated.
    40    (iii)  In a summary proceeding for the non-payment of rent under arti-
    41  cle 7 of the real property actions and proceedings law, a covered tenant
    42  may raise a payment made pursuant to this act as a defense  to  non-pay-
    43  ment. If the amount of the covered tenant's actual income is in dispute,
    44  the  court  shall review documentation of the covered tenant's income in
    45  camera, unless otherwise deemed necessary by the court.  Notwithstanding
    46  any  other  provision  of law to the contrary customary documentation of
    47  income shall constitute prima facie evidence  of  the  covered  tenant's
    48  actual  income  and  shall  be  presumptively admissible in such summary
    49  proceeding.
    50    (b) Any covered tenant whose lease expires during the  covered  period
    51  shall  have  the option of extending such lease under the terms existing
    52  prior to the expiration of the lease for a period of up to  one  hundred
    53  eighty days after the expiration of the state of emergency.
    54    (c)  Late  fees,  interest or other penalties shall not be collectable
    55  for rent accrued during the existence of the state of emergency.

        A. 3190                             3
 
     1    § 3. (a) The commissioner of the department of economic development is
     2  hereby authorized and directed to establish  and  implement  an  interim
     3  commercial  rent relief program to support covered tenants and landlords
     4  impacted by the COVID-19 pandemic. Such program  shall  be  provided  at
     5  least  $500,000,000, including but not limited to monies that have  been
     6  allocated to the state of New York by the federal government.
     7    (b) Notwithstanding any other law to the contrary, a landlord that has
     8  lost rental income pursuant to this act and has not been  fully  compen-
     9  sated  by emergency federal, state or local assistance, may apply to the
    10  department of economic development for relief. The commissioner  of  the
    11  department of economic development may, upon satisfaction of the veraci-
    12  ty  of  the landlord's application and to the extent possible, authorize
    13  the distribution of funds, including but not limited to any unrestricted
    14  federal emergency assistance monies provided to the state that have  not
    15  otherwise  been  obligated,  to  any  such landlord in the amount of the
    16  balance of rental income lost after the twenty percent of the contractu-
    17  al rent waived by the landlord and any amount paid by a  covered  tenant
    18  pursuant to section two of this act.
    19    (c)  The  commissioner of the department of economic development shall
    20  promulgate rules and regulations to effectuate the  provisions  of  this
    21  act.    The  regulations  promulgated pursuant to this subdivision shall
    22  include provisions designed to ensure full access to  the  services  and
    23  financial assistance required under this section by individuals for whom
    24  English is not the primary language.
    25    §  4.  Notwithstanding  any  other law to the contrary, no court shall
    26  accept for filing a petition to commence a  new  summary  proceeding  to
    27  recover possession of real property under article 7 of the real property
    28  actions  and  proceedings  law  for  non-payment  of rent due to loss of
    29  income as a result of government ordered restrictions in response to the
    30  outbreak of coronavirus disease 2019 (COVID-19) for at least thirty days
    31  following the expiration of the state of emergency; provided any statute
    32  of limitations applicable to such summary proceedings  shall  be  tolled
    33  for  thirty  days;  provided  further,  however,  that  the tenant shall
    34  provide a sworn affidavit affirming the covered tenant's loss of  income
    35  as  a  result  of  government  ordered  restrictions  in response to the
    36  outbreak of coronavirus disease 2019 (COVID-19).  In no event shall late
    37  or reduced rent payments during the state of  emergency  constitute  the
    38  basis  for  a  summary holdover proceeding for the chronic nonpayment of
    39  rent.
    40    § 5. This act shall take effect immediately and  shall  be  deemed  to
    41  have been in full force and effect on and after March 7, 2020.
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