§ 33. Limited dividends. No stockholder in any company formed hereunder shall receive any dividend in any one year in excess of six per centum per annum except that when in any preceding year dividends in the amount prescribed in the certificate of incorporation shall not have been paid on the said stock, the stockholders shall be entitled to the payment of any deficiency without interest out of any surplus earned in any succeeding years. § 34. Time of payment of subscription to stock. Subscriptions to the shares of a corporation formed hereunder shall be paid at such times and in such instalments as the board of directors and the board may require. If any default shall be made in the payment of any instalment as so required, the board of directors may enforce said subscription by appropriate action and upon their failure so to do said subscription may be enforced by the board. At the option of the board of directors with the consent of the board, the board may upon such default declare the shares and all previous payments thereon forfeited, after the expiration of twenty days from the service on the defaulting stockholder personally, or by mail directed to him at his address as shown on the books of the company, of a written notice requiring him to make payment within twenty days from the service of the notice at a place specified therein and stating that, in case of failure to do so, his shares and all previous payments thereon will be forfeited. Such shares if forfeited may be reissued or reoffered for subscription. If a receiver of the corporation has been appointed, all unpaid subscriptions shall be paid at such times and in such instalments as such receiver or the court may direct. § 35. Consideration for issuance of stocks and bonds. No limited dividend housing company shall issue shares of stock except for money, and in no event shall the stock so issued be less than the total of one-third of the actual cost of any project or projects undertaken under article two of this chapter. If the actual cost of said project or projects shall be different from the estimated total cost thereof, the capital stock of the limited dividend housing company may be increased or decreased, as the case may be, by filing a certificate to such effect in the offices where its original certificate of incorporation was filed, together with the certificate of the board of the approval of such change. § 36. Minimum amount of stock. The entire amount to be paid in cash by the stockholders of a limited dividend housing company shall be equivalent to at least one-third of the total cost of any one project or projects, approved by the board. § 37. Exchange of stock for income debenture certificates. Whenever the board shall approve, the directors of limited dividend housing companies organized hereunder may offer to its stockholders the privilege of exchanging their stock in such quantities and at such times as may be approved by the board, for income debenture certificates, bearing no greater interest than five and one-half per centum per annum. In no event shall there be exchanged for such certificates more than ninety per centum of the entire stock of the company. If stockholders owning more than ninety per centum of the entire stock of the company shall elect to make such exchange, they shall be entitled to exchange such part of their respective stockholdings as ninety shall bear to the total per centum of the stock so offered for exchange. § 38. Limitations. No public limited dividend housing company shall: 1. Acquire any real property or interest therein unless it shall first have obtained from the board a certificate that such acquisition is necessary or convenient for the public purpose defined in this act. 2. Sell, transfer or assign any real property except (a) to another public limited dividend housing company formed under this article, and (b) without first having obtained the consent of the board, and (c) for a price not in excess of the cost of the said property less any amounts paid in amortization of the first lien or the redemption of income debenture certificates on the buildings plus so much of the limited dividends on the stock of the said company from date of issue as shall have been unpaid and accrued interest on the first mortgage and income debenture certificates thereof. 3. Pay interest returns on its first lien at a higher rate than five per centum per annum or upon its income debenture certificates at a rate higher than five and one-half per centum per annum. 4. Issue its stock or bonds covering any project undertaken by it in an amount greater in the aggregate than the total actual final cost of such project, including the lands, improvements, interest and other carrying charges during construction. 5. Mortgage any real property without first having obtained the consent of the board. 6. Issue any securities or evidences of indebtedness without first having obtained the approval of the board. 7. Use any building acquired by it for other than housing purposes, except where zoning laws permit stores, in which event only the floor at grade or street level may be used for that purpose. 8. Charge or accept any rental for housing accommodations in any building constructed, acquired, operated or managed by it in excess of the prices prescribed by the board, which, except as provided in section twenty-one of this act, shall not be in excess of the following prices per month per room: In New York county, twelve and one-half dollars; in the counties of Kings and Bronx, eleven dollars; in other counties within the city of New York and in cities of the first class throughout the state, other than New York city, ten dollars; and elsewhere in the state where such areas exist, nine dollars; provided that a bath room shall not be counted as a room for the purpose of the foregoing calculations. 9. Enter into contracts for the construction of housing projects, or for the payment of salaries to officers or employees except subject to the inspection and revision of the board and under such regulations as the board may from time to time prescribe. 10. Voluntarily dissolve without first having obtained the consent of the board. 11. Make any guaranty pursuant to section nineteen of the stock corporation law, without the approval of the board. § 39. Tax exemptions. 1. Any public limited dividend housing company formed hereunder shall be exempt from the payment of any and all franchise, organization, income, mortgage recording and other taxes to the state and all fees to the state or its officers. 2. Bonds and mortgages and the income debenture certificates of all companies incorporated hereunder are declared to be instrumentalities of the state, issued for public purposes and shall, together with interest thereon, be exempt from taxation. The dividends on the stock of said companies shall be exempt from taxation by the state. Any municipality in which the projects authorized under article two or* this chapter are located is authorized to exempt the buildings and improvements created in connection with such projects from local taxation, and should said municipality exempt such buildings and improvements from such taxation, the buildings and improvements of said company shall to the extent of such exemption be exempt from any and all state taxes. But such exemption of said buildings and improvements from taxation by the municipality and state shall not extend to buildings erected after January first, nineteen hundred and thirty-seven. § 40. Mortgages and mortgage bonds. Any company formed under this article may, subject to the approval of the board, borrow funds and secure the repayment thereof by bond and mortgage or by an issue of bonds under trust indenture. Each mortgage and/or issue of bonds by a company formed hereunder shall relate only to a single specified project and no other and said bonds shall be secured by first mortgage upon all of the real property of which said project consists. First lien bonds of such company when secured by a mortgage not exceeding two-thirds of the appraised value or estimated cost, whichever be the less, of said project as certified by the board, are hereby declared securities in which all public officers and bodies of the state and of the municipal subdivisions, all insurance companies and associations, all savings banks and saving institutions, including saving and loan associations, executors, administrators, guardians, trustees and all other fiduciaries in the state may properly and legally invest the funds within their control. The bonds so issued and secured and the mortgage indenture relating thereto, may be so drawn that a first or senior interest and a second or junior interest therein may be acquired by different investors. In such event, only the first or senior interest therein shall be deemed securities in which such officers, bodies, corporations, associations and fiduciaries, may invest the funds within their control. Such bonds and mortgages may contain such other clauses and provisions as shall be approved by the board, including the right to assignment of rents and entry into possession in case of default; but the operation of the housing *So in original. [Evidently should be "of."] projects in the event of such entry shall be subject to the regulations of the board under this act. Provisions for the amortization of the bonded indebtedness of companies formed under this article shall be subject to the approval of the board. § 41. Surplus. The surplus of companies formed hereunder shall be limited to an amount equal to twelve per centum of the outstanding capital stock and income debenture certificates thereof and the amount of the net earnings transferable to surplus in any year shall be subject to the approval of the board. On dissolution of any public limited dividend housing company, the stockholders shall in no event receive more than the par value of their stock plus accumulated, accrued and/or unpaid dividends; and any remaining surplus shall be paid into the gen'eral fund of the state of New York. § 42. Reduction of rentals. Should the gross receipts of any company formed hereunder from the operation of any project undertaken pursuant to article two of this chapter exceed (a) operating and management expenses; (b) taxes, if any; (c) interest on mortgages and income debenture certificates; (d) dividends; (e) authorized transfer to surplus, the balance shall be applied to the reduction of rentals, provided that the amount available for this purpose shall be entirely so applied within one year after it becomes available. The charges for operation and maintenance may include insurance and reserves essential to the management of the property or necessary to meet requirements 'for depreciation and amortization of bonded indebtedness but the amount set aside therefor shall be subject to the approval of the board. § 43. Foreclosure. In any foreclosure action the board shall be made made a party defendant; and such board shall take all steps in such action necessary to protect the interest of the public therein, and no costs shall be awarded against the board. Foreclosure shall not be decreed unless the court to which application therefor is made shall be satisfied that the interests of the holder or holders of the first lien or first lien bonds can not be adequately secured or safeguarded except by the sale of the property. In any such proceeding, the court shall be authorized to make an order increasing the rentals to be charged for the housing accommodations in the project involved in such foreclosure, but not exceeding the maximum rentals fixed herein, or appoint a receiver of the property or grant such other and further relief as may be reasonable and proper. In the event of a foreclosure sale or other judicial sale, the property shall except as provided in the next succeeding paragraph of this section to be sold only to a public limited dividend housing corporation organized under this act, unless the court shall find that the interest on the bonds can not be earned under the restrictions imposed by this and the preceding sections and that the proceeding was brought in good faith. In such event the property shall be sold free of all restrictions imposed by this act. 2. Notwithstanding the foregoing provisions of this section, wherever it shall appear that a corporation, subject to the super vision either of the state insurance department or the state banking department, shall have loaned on a mortgage which is a first lien upon any such property such corporation shall have all the remedies available to a mortgagee under the laws of the state of New York. ARTICLE 4 PRIVATE LIMITED DIVIDEND COMPANIES Section 50. Private limited dividend companies; organization. 51. Powers; exemptions. § 50. Private limited dividend housing companies; organization. Three or more persons may become a private limited dividend housing company for the purpose of carrying out a project or projects to be authorized by the board in accordance with article two of this act, by making, signing, acknowledging and filing a certificate which shall contain all of the provisions required under section thirty of this act. § 51. Powers; exemptions. Private limited dividend housing companies shall be subject to the provisions of sections ten to twenty-one, inclusive, sections thirty-one to thirty-seven, inclusive, subdivisions three to eleven, inclusive, of section thirty-eight and sections thirty-nine to forty-two, inclusive, of this act, except that (a) Private limited dividend housing companies are authorized to sell, assign, convey and otherwise dispose of real property owned by them; but no private limited dividend housing company shall sell, assign or convey any real property owned, operated or managed by it or any right, title or interest therein, except upon notice to the board of the terms of such sale, transfer or assignment and unless and until the board shall consent thereto; (b) The provisions exempting the buildings and improvements of such companies from taxation shall apply only so long as such property is owned, managed and operated by one of said companies; (c) Said companies shall not under any circumstances have or exercise the power of eminent domain or acquire its property otherwise than by purchase or gift; (d) The securities of a private limited dividend housing company are not to be deemed instrumentalities of the state, but they and the income therefrom shall nevertheless be exempt from any taxation by the state. ARTICLE 5 MISCELLANEOUS PROVISIONS Section 60. Definition of term “board”. 61. Appropriation. § 60. Definition of term "board". When used in this chapter, unless otherwise expressly stated or the context or subject matter otherwise requires, "board" means the board of housing which is |