Title 9 Part 1648

The purpose of the periodic subsidies paid by the State to a local agency under a contract for State aid is to assist in achieving and maintaining the low rent character of a project, in accordance with the Public Housing Law. The State subsidy is therefore paid against the operating deficit of a project incurred subsequent to the date of substantial completion.

The Public Housing Law places the following limitations on the payment of State subsidies:

The State subsidies actually paid will vary each year with the operating deficit of a project, but no State subsidy may be paid in excess of the maximum amount stipulated in the Public Housing Law. The maximum amount of State subsidy payable in any one year on any one project cannot exceed a sum equal to the largest annual interest charge on funds borrowed from the State to finance such project, exclusive of funds borrowed for working capital, plus one per cent of the project cost. However, where all or any part of the funds necessary to finance the project are borrowed from sources other than the State, or Federal government the State subsidy may equal but cannot exceed the largest annual interest charge on all borrowed funds, plus one per cent of the project cost or three and one-half per cent of the project cost whichever is less.

The law provides that no State subsidy shall be available for any project unless and until the municipality in which such project is situated shall contract to make subsidies to such project in an amount at least equal to subsidy contracted to be made by the State. However, all or any part of such municipal subsidy may be in the form of exemption from local or municipal taxes to the extent specified in section 73 of the law. In practice, these provisions mean that the local subsidy, including the tax exemption subsidy, must at all times match the State subsidy but may at times exceed it.

State subsidies are payable on an annual basis out of moneys appropriated therefor by the State legislature. Time is of the essence in submitting requisitions for State subsidies (see Subpart 1648-3), particularly where such subsidies are required in connection with debt service.

State subsidies are payable over a fixed period of years not exceeding the life of the project, but in any event not exceeding 50 years. The period of years over which the State subsidy is payable will, ordinarily, be stated in the contract for State aid. The fixed period of years over which the State subsidy is payable commences on the date of substantial completion of the project, as determined by the commissioner.

The purpose of local subsidies, like that of State subsidies, is to assist in achieving and maintaining the low rent character of a project. All or part of a local subsidy may be in the form of tax exemption (see § 1648-2.2, below) but the aggregate local subsidy for a given year, whether in the form of tax exemption or cash, or both, must at least equal the State subsidy, as where the value of tax exemption is in excess of the amount required to match the State subsidy or where the operating deficit is in excess of the maximum State subsidy, or where the municipality is bound by special provisions of the loan and subsidy contract, to pay a minimum annual cash subsidy.

Where a loan and subsidy contract specifically so provides, a municipality will be required to pay a local cash subsidy, in the minimum amount specified in the contract, regardless of the value of the tax exemption subsidy. Local cash subsidies may also be required under other circumstances, as where the value of the tax exemption is not sufficient to match the State subsidy, or where the operating deficit is in excess of the maximum State subsidy.

Requisitions for advance of subsidy to meet a debt service payment shall be submitted to the division at least 45 days prior to the date the debt service payment is due to be made to the Comptroller. Each subsidy requisition for debt service shall consist of the following documents and schedules in the indicated number of copies:

Item Number

Housing Subsidy Voucher, form HSV 1 original and 2 conformed copies

Forecast of Cash Requirements

original and 2 copies

Subsidy schedule, form DH-910, sheet

1 only

original only

Requisitions for advance of subsidy to meet an operating deficit, which advance may also simultaneously anticipate a need for funds to meet a debt service payment, shall consist of the following schedules and documents in the indicated number of copies:

Item Number

Housing Subsidy Voucher, form HSV 1 original and 2 conformed copies

Subsidy Schedule, form DH-910,

sheets 1 and 2

Original only

Uniform Balance Sheet, as at the end

of the most recent calendar quarter

Original and duplicate

Statement of Income and Expense for

the fiscal year on form DH-621

Original and 2 copies

The housing subsidy voucher is a printed form supplied by the division and is shown as Exhibit 1 of Appendix S-13. Each subsidy requisition submitted shall include a housing subsidy voucher, in an original and two conformed copies, executed by the duly authorized officer of the local agency. Housing subsidy vouchers shall be numbered consecutively in the order that subsidy requisitions are made. The amount of the subsidy installment requested shall agree with the forecast of cash requirements (see § 1648-3.6) if the subsidy requisition is to meet a debt service payment and with item 38, column (1) of the subsidy schedule (see § 1648-3.7) if the subsidy requisition is to meet an operating deficit.

Local agencies are advised to consult with the division before preparing or submitting subsidy requisitions applicable to the year in which the project is declared substantially completed. Special problems may arise in connection with such requisitions, inasmuch as the first fiscal year of operations will ordinarily be a short year of less than 12 months.

Entry (1):

Debit: Account 1112, Administration fund $XXX

Credit: Account 2250, Prepaid State of New York Subsidies $XXX

Entry (2):

Debit: Account 2250, Prepaid State of New York Subsidies $XXX

Credit: Account 1141, Accrued Subsidies, State of New York $XXX

Entry (3):

Debit: Account 2250, Prepaid State of New York Subsidies $XXX

Credit: Account 3810, State of New York Subsidy $XXX

Entry (4):

Debit: Account 1141, Accrued Subsidies, State of New York $XXX

Credit: Account 3810, State of New York Subsidy $XXX

Simultaneously with the entries recording the State and local cash subsidies (if any) taken into revenue for the fiscal year, the value of the tax exemption subsidy for the year (see § 1648-3.6) shall be recorded by a journal entry, as follows:

Debit: Memo Account, Subsidies—Tax Exemption (Cumulative) $XXX

Credit: 3830, Local Tax Exemption Subsidy (Annual) $XXX