Bill Text: NY S01421 | 2023-2024 | General Assembly | Introduced
Bill Title: Creates the New York title guaranty authority to initiate and operate a program which shall offer guaranties of real property titles in this state.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2024-01-03 - REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS [S01421 Detail]
Download: New_York-2023-S01421-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 1421 2023-2024 Regular Sessions IN SENATE January 11, 2023 ___________ Introduced by Sen. COMRIE -- read twice and ordered printed, and when printed to be committed to the Committee on Corporations, Authorities and Commissions AN ACT to amend the public authorities law, in relation to creating the New York title guaranty authority The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Article 10-D of the public authorities law is amended by 2 adding a new title 4 to read as follows: 3 TITLE 4 4 NEW YORK TITLE GUARANTY AUTHORITY 5 Section 3974. Short title. 6 3975. New York title guaranty authority. 7 3976. Administration of the authority. 8 3977. General powers of the authority. 9 3978. Special powers of the authority. 10 3979. New York title guaranty fund. 11 3980. Participating attorneys. 12 § 3974. Short title. This act shall be known and may be cited as the 13 "New York Title Guaranty Authority Act". 14 § 3975. New York title guaranty authority. 1. There is hereby created 15 the New York title guaranty authority, to initiate and operate a program 16 which shall offer guaranties of real property titles in this state. The 17 authority shall be a corporate governmental agency and instrumentality 18 of the state constituting a public benefit corporation. 19 2. In accordance with the provisions of this title, the authority may 20 issue bonds only to finance costs, including the funding of bonds issued 21 by the authority to finance costs, and fund reserves to secure such 22 bonds. 23 3. The authority and its corporate existence shall continue until 24 terminated by law, provided, however, that no such termination shall EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD03537-01-3S. 1421 2 1 take effect so long as the authority shall have bonds or other obli- 2 gations outstanding unless adequate provision has been made for the 3 payment thereof. 4 § 3976. Administration of the authority. 1. The authority shall be 5 administered by seven directors appointed by the governor, of whom two 6 members shall be appointed upon the recommendation of the temporary 7 president of the senate and two members shall be appointed upon the 8 recommendation of the speaker of the assembly. The powers as set forth 9 in the by-laws of the board shall be established and vested in and be 10 exercised by the members of the authority at an initial meeting duly 11 called and held and four members shall constitute a quorum. 12 2. The members of the New York title guaranty authority board shall 13 receive no compensation for their services but shall be reimbursed for 14 actual and necessary expenses incurred in the performance of their 15 duties. 16 3. Notwithstanding any inconsistent provision of any general, special 17 or local law, ordinance, resolution or charter, no officer, member or 18 employee of the state of New York, any city, county, town or village, 19 any governmental entity operating any public school or college, any 20 school district or any other public agency or instrumentality which 21 exercises governmental powers under the laws of the state, shall forfeit 22 his or her office or employment by reason of his or her acceptance of 23 appointment as a director, officer or employee of the authority, nor 24 shall service as such director, officer or employee of the authority be 25 deemed incompatible or in conflict with such office or employment. 26 4. Four directors shall constitute a quorum for the transaction of any 27 business or the exercise of any power of the authority. No action shall 28 be taken by the authority except pursuant to a favorable vote of at 29 least four directors participating in a meeting at which such action is 30 taken. 31 5. The authority shall appoint a treasurer and may appoint officers 32 and agents as it may require and prescribe their duties. 33 § 3977. General powers of the authority. Except as otherwise limited 34 by this title, the authority shall have the following powers in addition 35 to those specially conferred elsewhere in this title, subject only to 36 agreements with bondholders: 37 1. to sue and be sued; 38 2. to have a seal and alter the same at pleasure; 39 3. to make and alter by-laws for its organization and management and, 40 subject to agreements with its bondholders, to make and alter rules and 41 regulations governing the exercise of its powers and fulfillment of its 42 purposes under this title; 43 4. to make and execute contracts and all other instruments or agree- 44 ments necessary or convenient to carry out any powers and functions 45 expressly given in this title; 46 5. to commence any action to protect or enforce any right conferred 47 upon it by any law, contract or other agreement; 48 6. to borrow money and issue bonds, or to refund the same, and to 49 provide for the rights of the holders of its bonds; 50 7. as security for the payment of the principal of and interest on any 51 bonds issued by it pursuant to this title and any agreements made in 52 connection therewith and for its obligations under bond facilities, to 53 pledge all or any part of its revenues or assets; 54 8. to accept gifts, grants, loans or contributions of funds or finan- 55 cial or other aid in any form from the county, state or federal govern- 56 ment or any agency or instrumentality thereof, or from any other sourceS. 1421 3 1 and to expend the proceeds for any of its corporate purposes in accord- 2 ance with the provisions of this title; 3 9. subject to the provisions of any contract with bondholders, to 4 invest any funds held in reserves or sinking funds, or any funds not 5 required for immediate use or disbursement, at the discretion of the 6 authority, in (a) obligations of the state or the United States govern- 7 ment, (b) obligations the principal and interest of which are guaranteed 8 by the state or the United States government, (c) certificates of depos- 9 it, whether negotiable or non-negotiable, and banker's acceptances of 10 any of the fifty largest banks in the United States which bank, at the 11 time of investment, has an outstanding unsecured, uninsured and unguar- 12 anteed debt issue ranked in either of the two highest rating categories 13 of two nationally recognized independent rating agencies, (d) commercial 14 paper of any bank or corporation created under the laws of either the 15 United States or any state of the United States which commercial paper, 16 at the time of the investment, has received the highest rating of two 17 nationally recognized independent rating agencies, (e) bonds, deben- 18 tures, or other evidences of indebtedness, issued or guaranteed at the 19 time of the investment by the federal national mortgage association, 20 federal home loan mortgage corporation, student loan marketing associ- 21 ation, federal farm credit system, or any other United States government 22 sponsored agency, provided that at the time of the investment such agen- 23 cy receives, or its obligations receive, any of the three highest rating 24 categories of two nationally recognized independent rating agencies, (f) 25 any bonds or other obligations of any state or the United States of 26 America or of any political subdivision thereof or any agency, instru- 27 mentality or local governmental unit of any such state or political 28 subdivision which bonds or other obligations, at the time of the invest- 29 ment, have received any of the three highest ratings of two nationally 30 recognized independent rating agencies, (g) any repurchase agreement 31 with any bank or trust company organized under the laws of any state of 32 the United States of America or any national banking association or 33 government bond dealer reporting to, trading with, and recognized as a 34 primary dealer by the Federal Reserve Bank of New York, which agreement 35 is secured by any one or more of the securities described in paragraph 36 (a), (b) or (e) of this subdivision which securities shall at all times 37 have a market value of not less than the full amount of the repurchase 38 agreement and be delivered to another bank or trust company organized 39 under the laws of New York state or any national banking association 40 domiciled in New York state, as custodian, and (h) reverse repurchase 41 agreements with any bank or trust company organized under the laws of 42 any state of the United States of America or any national banking asso- 43 ciation or government bond dealer reporting to, trading with, and recog- 44 nized as a primary dealer by the Federal Reserve Bank of New York, which 45 agreement is secured by any one or more of the securities described in 46 paragraph (a), (b) or (e) of this subdivision which securities shall at 47 all times have a market value of not less than the full amount of the 48 repurchase agreement and be delivered to another bank or trust company 49 organized under the laws of New York state or any national banking asso- 50 ciation domiciled in New York state, as custodian; 51 10. to appoint such officers and employees as it may require for the 52 performance of its duties and to fix and determine their qualifications, 53 duties, and compensation, and to retain or employ counsel, auditors and 54 private financial consultants and other services on a contract basis or 55 otherwise for rendering professional, business or technical services andS. 1421 4 1 advice; and, in taking such actions, the authority shall consider the 2 financial impact on the county; and 3 11. to do any and all things necessary or convenient to carry out its 4 purposes and exercise the powers expressly given and granted in this 5 title; provided, however, such authority shall under no circumstances 6 acquire, hold or transfer title to, lease, own beneficially or other- 7 wise, manage, operate or otherwise exercise control over any real prop- 8 erty, any improvement to real property or any interest therein other 9 than a lease or sublease of office space deemed necessary or desirable 10 by the authority. 11 § 3978. Special powers of the authority. The New York state title 12 guaranty authority board shall offer guaranties of real property titles 13 in this state. The terms, conditions and form of the guaranty contracts 14 shall be forms approved by the authority. The authority shall fix a 15 charge for the guaranty in an amount sufficient to permit the program to 16 operate on a self-sustaining basis, including payment of administrative 17 costs and the maintenance of an adequate reserve against claims under 18 the title guaranty program. 19 § 3979. New York title guaranty fund. 1. A title guaranty fund is 20 created. Funds collected under this program shall be placed in the title 21 guaranty fund and are available to pay all claims, necessary reserves 22 and all administrative costs of the title guaranty program. Moneys in 23 the fund shall not revert to the general fund and interest on the moneys 24 in the fund shall require costs of title insurance to be sufficient 25 enough to include fifty million dollars annually for affordable housing, 26 fifty million dollars annually to ensure that the state's roads and 27 bridges are in a state of good repair, fifty million dollars annually 28 for the purpose of a STAR rebate program and other such purposes as may 29 be required by the legislature and the governor. 30 2. A title guaranty, closing protection letter, or gap coverage issued 31 under this program is an obligation of the authority only and claims are 32 payable solely and only out of the moneys, assets, and revenues of the 33 title guaranty fund and are not an indebtedness or liability of the 34 state. The state is not liable on any guaranty, closing protection 35 letter, or gap coverage. 36 3. The authority shall consult with the department of financial 37 services in developing a guaranty contract acceptable to the secondary 38 market and developing any other feature of the program with which the 39 insurance division may have special expertise. The department of finan- 40 cial services shall establish the amount for a loss reserve fund. Except 41 as provided in this section, the title guaranty program is not subject 42 to the jurisdiction of or regulation by the department of financial 43 services. 44 § 3980. Participating attorneys. 1. Each participating attorney and 45 abstractor may be required to pay an annual participation fee to be 46 eligible to participate in the title guaranty program. The fee, if any, 47 shall be set by the authority, subject to the approval of the board. 48 2. The participation of abstractors and attorneys shall be in accord- 49 ance with rules established by the board. 50 a. (1) Each participant shall at all times maintain liability coverage 51 in amounts approved by the authority. Upon payment of a claim by the 52 authority the authority shall be subrogated to the rights of the claim- 53 ant against all persons relating to the claim. 54 (2) Additionally, each participating abstractor is required to own or 55 lease, and maintain and use in the preparation of abstracts, an up-to- 56 date abstract title plant including tract indices for real estate forS. 1421 5 1 each county in which abstracts are prepared for real property titles 2 guaranteed by the division. The tract indices shall contain a reference 3 to all instruments affecting the real estate which are recorded in the 4 office of the county recorder, and shall commence not less than forty 5 years prior to the date the abstractor commences participation in the 6 title guaranty program. However, a participating attorney providing 7 abstract services continuously from November twelfth, nineteen hundred 8 eighty-six, to the date of application, either personally or through 9 persons under the attorney's supervision and control is exempt from the 10 requirements of this subparagraph. 11 b. The authority may waive the requirements of this section pursuant 12 to an application of an attorney or abstractor which shows that the 13 requirements impose a hardship to the attorney or abstractor and that 14 the waiver clearly is in the public interest or is absolutely necessary 15 to ensure availability of title guaranties throughout the state. 16 3. Prior to the issuance of a title guaranty, the authority shall 17 require evidence that an abstract of title to the property in question 18 has been brought up-to-date and certified by a participating abstractor 19 in a form approved by authority rules and a title opinion issued by a 20 participating attorney in the form approved in the rules stating the 21 attorney's opinion as to the title. The authority shall require evidence 22 of the abstract being brought up-to-date and the abstractor shall retain 23 evidence of the abstract as determined by the board. 24 4. The attorney rendering a title opinion shall be authorized to issue 25 a title guaranty certificate subject to the rules of the authority. 26 § 2. This act shall take effect immediately.
