Bill Text: NY S07744 | 2019-2020 | General Assembly | Introduced
Bill Title: Establishes the New York title guaranty program to provide title insurance for real property within the state and establishes the New York title guaranty corporation to implement the New York title guaranty program.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2020-02-12 - REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS [S07744 Detail]
Download: New_York-2019-S07744-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 7744 IN SENATE February 12, 2020 ___________ Introduced by Sen. RAMOS -- 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 and the state finance law, in relation to establishing the New York title guaranty program; to establish the New York title guaranty commission; and to repeal certain provisions of the insurance law relating thereto The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Legislative findings. The legislature finds and declares 2 that a state title guaranty program promotes land title stability and a 3 low-cost mechanism to provide for guarantees of real property titles in 4 New York state. The title guaranty corporation established by this act 5 will facilitate developers', homebuyers', and mortgage lenders' partic- 6 ipation and add to the integrity of the land-title transfer system in 7 the state. 8 § 2. Article 10-D of the public authorities law is amended by adding a 9 new title 4 to read as follows: 10 TITLE 4 11 NEW YORK TITLE GUARANTY PROGRAM 12 Section 3974. New York title guaranty program. 13 3975. New York title guaranty corporation. 14 § 3974. New York title guaranty program. (a) There is hereby created the 15 New York title guaranty program to initiate and operate a program which 16 shall offer guaranties of real property titles in this state. The 17 program shall be authorized and administered by a new state corporation 18 entitled the New York title guaranty corporation. The corporation shall 19 determine the terms, conditions, and form of the guaranty contract. The 20 corporation shall fix a charge for the guaranty in an amount sufficient 21 to permit the program to operate on a self-sustaining basis, including 22 payment of administrative costs and the maintenance of an adequate 23 reserve against claims under the New York title guaranty program. 24 (b) A title guaranty or gap coverage issued under this program is an 25 obligation of the corporation only and claims are payable solely and EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD11568-03-0S. 7744 2 1 only out of the moneys, assets, and revenues of the title guaranty fund 2 established and held by the corporation and are not an indebtedness or 3 liability of the state. The state shall not be liable on any guaranty or 4 gap coverage. 5 (c) The corporation shall consult with the department of financial 6 services in developing a guaranty contract and developing any other 7 feature of the program with which the department of financial services 8 may have special expertise. 9 (d) Each participating attorney and abstractor may be required to pay 10 an annual participation fee to be eligible to participate in the New 11 York title guaranty program. The fee, if any, shall be set by the corpo- 12 ration. 13 (e) The participation of abstractors and attorneys shall be in accord- 14 ance with rules established by the corporation and adopted by the 15 program pursuant to the state administrative procedure act, including 16 rules for the payment of reasonable fees and costs of necessary 17 services. 18 (1) (A) Each participant shall at all times maintain liability cover- 19 age in amounts approved by the corporation. Upon payment of a claim by 20 the corporation, the corporation shall be subrogated to the rights of 21 the claimant against all persons relating to the claim. 22 (B) Additionally, the state, through the corporation, shall establish 23 and maintain a statewide electronic database of real property throughout 24 the state. All instruments affecting real property in the state which 25 have heretofore been recorded in the office of a county clerk or other 26 municipal office shall be recorded in the statewide electronic database 27 of real property. The corporation may undertake additional methods to 28 obtain real property title information for purposes of creating and 29 maintaining a comprehensive statewide electronic database of real prop- 30 erty. The statewide electronic database of real property shall be 31 accessible to participating abstractors and attorneys under terms deter- 32 mined by the corporation, and the corporation may provide access to all 33 or portions of the database to the public. 34 (2) The corporation may waive the requirements of this subdivision 35 pursuant to an application of an attorney or abstractor which shows that 36 the requirements impose a hardship to the attorney or abstractor and 37 that the waiver clearly is in the public interest or is absolutely 38 necessary to ensure availability of title guaranties throughout the 39 state. 40 (f) Prior to the issuance of a title guaranty, the corporation shall 41 require evidence that an abstract of title to the real property in ques- 42 tion has been brought up-to-date and certified by a participating 43 abstractor in a form approved by the corporation and a title opinion 44 issued by a participating attorney in the form approved by the corpo- 45 ration stating the attorney's opinion as to the title. The corporation 46 shall require evidence of the abstract being brought up-to-date and the 47 abstractor shall retain evidence of the abstract as determined by the 48 corporation. The information obtained may be included in the statewide 49 electronic database. 50 (g) The attorney rendering a title opinion shall be authorized to 51 issue a title guaranty certificate subject to the rules of the corpo- 52 ration. 53 (h) The corporation shall adopt rules and regulations necessary for 54 the implementation of the New York title guaranty program as established 55 by this article.S. 7744 3 1 § 3975. New York title guaranty corporation. 1. There is hereby 2 established the New York title guaranty corporation for the implementa- 3 tion of the New York title guaranty program. The corporation shall be a 4 body corporate and politic constituting a public benefit corporation. 5 The president of the corporation shall be nominated by the governor and 6 confirmed by the senate. The board of directors shall consist of twelve 7 members as follows: the president of the corporation, or his or her 8 designee, who shall serve as the chairperson of the board; three members 9 appointed by the governor; three members appointed by the temporary 10 president of the senate; three members appointed by the speaker of the 11 assembly; one member appointed by the minority leader of the senate; and 12 one member appointed by the minority leader of the assembly. One of the 13 governor's appointees shall serve an initial term of two years; one of 14 the governor's appointees shall serve an initial term of three years; 15 and one of the governor's appointees shall serve an initial term of four 16 years. One of the appointees of the temporary president of the senate 17 and one of the appointees of the speaker of the assembly shall serve 18 initial terms of two years; and two appointees of the temporary presi- 19 dent of the senate and two appointees of the speaker of the assembly 20 shall serve initial terms of four years. The appointees of the minority 21 leader of the senate and the minority leader of the assembly shall serve 22 initial terms of two years. Thereafter, all terms shall be for a period 23 of four years. In the event of a vacancy occurring in the office of 24 trustee by death, resignation or otherwise, the respective appointing 25 officer shall appoint a successor who shall hold office for the unex- 26 pired portion of the term. 27 2. On or before October 1, 2020, the New York title guaranty board 28 shall provide the governor and the legislature a plan for the implemen- 29 tation of the New York title guaranty program. 30 3. To the maximum extent feasible, the state department of taxation 31 and finance, the department of financial services, the department of 32 housing and community renewal, and the department of finance of the city 33 of New York shall provide the board with such facilities, assistance and 34 data as will enable the board to carry out the powers and duties of the 35 corporation. Additionally, to the maximum extent feasible, all other 36 agencies of the state or subdivisions thereof shall, at the request of 37 the chairperson provide the board with such facilities, assistance, and 38 data as will enable the board to carry out the powers and duties of the 39 corporation. 40 4. The president shall have the authority to appoint such officers and 41 employees as it may require for the performance of the duties of the 42 corporation and to fix and determine their qualifications, duties, and 43 compensation, and to retain or employ counsel, auditors and private 44 financial consultants and other services on a contract basis or other- 45 wise for rendering professional, business or technical services and 46 advice. 47 § 3. The state finance law is amended by adding a new section 92-j to 48 read as follows: 49 § 92-j. Title guaranty fund. 1. There is hereby established in the 50 joint custody of the New York title guaranty corporation and the state 51 comptroller a special fund to be known as the "title guaranty fund". 52 2. The title guaranty fund shall consist of all moneys collected from 53 the New York title guaranty program collected pursuant to title four of 54 article ten-D of the public authorities law, and all other moneys cred- 55 ited or transferred thereto from any other fund or source pursuant to 56 law.S. 7744 4 1 3. The moneys in such fund shall be available for payment of any and 2 all costs and expenditures incurred in performing any of the work 3 required in administering the New York title guaranty program pursuant 4 to title four of article ten-D of the public authorities law, including 5 claims, necessary reserves, staffing, administrative costs and expenses 6 incidental and appurtenant thereto. 7 4. Moneys in the title guaranty fund shall be kept separately from and 8 shall not be commingled with any other moneys in the joint or sole 9 custody of the New York title guaranty corporation and the state comp- 10 troller. 11 § 4. Article 64 of the insurance law is REPEALED. 12 § 5. Any title policy which was issued prior to the effective date of 13 this act pursuant to article 64 of the insurance law shall be continued 14 to be governed by such article solely for the purposes of administering, 15 reserving for and paying claims on such pre-existing policies, under the 16 oversight and enforcement of the department of financial services. 17 § 6. This act shall take effect January 1, 2021. Effective immediate- 18 ly, the addition, amendment and/or repeal of any rule or regulation 19 necessary for the implementation of this act on its effective date are 20 authorized to be made and completed on or before such effective date.
