NY State Senate Bill 2019-S7744

Senate Bill S7744

2019-2020 Legislative Session

Establishes the New York title guaranty program and the New York title guaranty corporation; repealer

download bill text pdf

Archive: Last Bill Status - In Senate Committee Corporations, Authorities And Commissions Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Feb 12, 2020	referred to corporations, authorities and commissions

2019-S7744 (ACTIVE) - Details

Current Committee:: Senate Corporations, Authorities And Commissions
Law Section:: Public Authorities Law
Laws Affected:: Add Art 10-D Title 4 §§3974 & 3975, Pub Auth L; add §92-j, St Fin L; rpld Art 64, Ins L
Versions Introduced in Other Legislative Sessions:: 2021-2022: S2761
2023-2024: S4539

2019-S7744 (ACTIVE) - Summary

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.

2019-S7744 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S7744

SPONSOR: RAMOS
 
TITLE OF BILL:

An act to amend the public authorities law and the state finance law, in
relation to establishing the New York title guaranty program; to estab-
lish the New York title guaranty commission; and to repeal certain
provisions of the insurance law relating thereto

 
PURPOSE OR GENERAL IDEA OF BILL:

Establishes the New York title guaranty program and the New York title
guaranty corporation; repealer.

 
SUMMARY OF PROVISIONS:

Section 1: The legislature finds and declares that a state title guaran-
ty program promotes land title stability and a low-cost mechanism to
provide for guarantees of real property titles in New York State

§ 2. Amends Article 10-D of the public authorities law by adding a new
title 4, Section 3974 and Section 3975, which creates the New York title
guaranty program offering guarantees of real property titles in the
state. Lists the New York title guaranty corporation as the authorized
entity to administer the program, establishes duties and responsibil-
ities.

§ 3. Amends the state finance law by adding a new section 92-j to 17,
establishing the "title guaranty fund" and joint custody for the New
York title guaranty corporation and the state comptroller.

 
JUSTIFICATION:

Title insurance protects holders from a financial loss related to
defects in a title of property. For example,if a past owner of a proper-
ty had a lien on their property that is not known about by the current
property holder, the current titleholder would be protected by title
insurance. There are two policies in the mix at a closing:  the lender's
policy, which is required, and an optional owner's policy.

New York has one of the highest title insurance premiums in the country.
While other states offer a flat rate, title insurance in New York can be
fraught with high costs.New York lacks a modern and centralized system
to record title insurance to help protect homeowners and other property
owners.

In response, this legislation establishes the New York Title Guaranty
Program and Corporation, which is charged with overseeing and adminis-
tering fair and equitable title insurance regulations. The Corporation
will create a fixed rate of charge for title insurance and include a
premium for state administrative costs. Also, attorneys and abstractors
who use title insurance will be held accountable, and consequently, must
pay a fee and be registered with the state.  Additionally, the state
will establish a statewide electronic database of all real property in
the state with all title information included. All attorneys and
abstractors will have access to this public database.

 
LEGISLATIVE HISTORY:
New Bill

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None

 
EFFECTIVE DATE:
This act shall take effect January 1, 2021. Effective immediately, the
addition, amendment and/or repeal of any rule or regulation necessary
for the implementation of this act on its effective date are authorized
to be made and completed on or before such effective date.

2019-S7744 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7744
 
                             I N  S E N A T E
 
                             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:
 
   Section 1. Legislative findings. The legislature  finds  and  declares
 that  a state title guaranty program promotes land title stability and a
 low-cost mechanism to provide for guarantees of real property titles  in
 New  York  state. The title guaranty corporation established by this act
 will facilitate developers', homebuyers', and mortgage lenders'  partic-
 ipation  and  add  to the integrity of the land-title transfer system in
 the state.
   § 2. Article 10-D of the public authorities law is amended by adding a
 new title 4 to read as follows:
                                   TITLE 4
                      NEW YORK TITLE GUARANTY PROGRAM
 SECTION 3974. NEW YORK TITLE GUARANTY PROGRAM.
         3975. NEW YORK TITLE GUARANTY CORPORATION.
 § 3974. NEW YORK TITLE GUARANTY PROGRAM. (A) THERE IS HEREBY CREATED THE
 NEW YORK TITLE GUARANTY PROGRAM TO INITIATE AND OPERATE A PROGRAM  WHICH
 SHALL  OFFER  GUARANTIES  OF  REAL  PROPERTY  TITLES  IN THIS STATE. THE
 PROGRAM SHALL BE AUTHORIZED AND ADMINISTERED BY A NEW STATE  CORPORATION
 ENTITLED THE NEW YORK TITLE GUARANTY CORPORATION.  THE CORPORATION SHALL
 DETERMINE  THE TERMS, CONDITIONS, AND FORM OF THE GUARANTY CONTRACT. THE
 CORPORATION SHALL FIX A CHARGE FOR THE GUARANTY IN AN AMOUNT  SUFFICIENT
 TO  PERMIT  THE PROGRAM TO OPERATE ON A SELF-SUSTAINING BASIS, INCLUDING
 PAYMENT OF ADMINISTRATIVE COSTS  AND  THE  MAINTENANCE  OF  AN  ADEQUATE
 RESERVE AGAINST CLAIMS UNDER THE NEW YORK TITLE GUARANTY PROGRAM.
   (B)  A  TITLE GUARANTY OR GAP COVERAGE ISSUED UNDER THIS PROGRAM IS AN
 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.
                                                            LBD11568-03-0

 S. 7744                             2
 
 ONLY  OUT OF THE MONEYS, ASSETS, AND REVENUES OF THE TITLE GUARANTY FUND
 ESTABLISHED AND HELD BY THE CORPORATION AND ARE NOT AN  INDEBTEDNESS  OR
 LIABILITY OF THE STATE. THE STATE SHALL NOT BE LIABLE ON ANY GUARANTY OR
 GAP COVERAGE.
   (C)  THE  CORPORATION  SHALL  CONSULT WITH THE DEPARTMENT OF FINANCIAL
 SERVICES IN DEVELOPING A GUARANTY  CONTRACT  AND  DEVELOPING  ANY  OTHER
 FEATURE  OF  THE PROGRAM WITH WHICH THE DEPARTMENT OF FINANCIAL SERVICES
 MAY HAVE SPECIAL EXPERTISE.
   (D) EACH PARTICIPATING ATTORNEY AND ABSTRACTOR MAY BE REQUIRED TO  PAY
 AN  ANNUAL  PARTICIPATION  FEE  TO BE ELIGIBLE TO PARTICIPATE IN THE NEW
 YORK TITLE GUARANTY PROGRAM. THE FEE, IF ANY, SHALL BE SET BY THE CORPO-
 RATION.
   (E) THE PARTICIPATION OF ABSTRACTORS AND ATTORNEYS SHALL BE IN ACCORD-
 ANCE WITH RULES ESTABLISHED  BY  THE  CORPORATION  AND  ADOPTED  BY  THE
 PROGRAM  PURSUANT  TO  THE STATE ADMINISTRATIVE PROCEDURE ACT, INCLUDING
 RULES FOR  THE  PAYMENT  OF  REASONABLE  FEES  AND  COSTS  OF  NECESSARY
 SERVICES.
   (1)  (A) EACH PARTICIPANT SHALL AT ALL TIMES MAINTAIN LIABILITY COVER-
 AGE IN AMOUNTS APPROVED BY THE CORPORATION. UPON PAYMENT OF A  CLAIM  BY
 THE  CORPORATION,  THE  CORPORATION SHALL BE SUBROGATED TO THE RIGHTS OF
 THE CLAIMANT AGAINST ALL PERSONS RELATING TO THE CLAIM.
   (B) ADDITIONALLY, THE STATE, THROUGH THE CORPORATION, SHALL  ESTABLISH
 AND MAINTAIN A STATEWIDE ELECTRONIC DATABASE OF REAL PROPERTY THROUGHOUT
 THE  STATE.  ALL  INSTRUMENTS AFFECTING REAL PROPERTY IN THE STATE WHICH
 HAVE HERETOFORE BEEN RECORDED IN THE OFFICE OF A COUNTY CLERK  OR  OTHER
 MUNICIPAL  OFFICE SHALL BE RECORDED IN THE STATEWIDE ELECTRONIC DATABASE
 OF REAL PROPERTY.  THE CORPORATION MAY UNDERTAKE ADDITIONAL  METHODS  TO
 OBTAIN  REAL  PROPERTY  TITLE  INFORMATION  FOR PURPOSES OF CREATING AND
 MAINTAINING A COMPREHENSIVE STATEWIDE ELECTRONIC DATABASE OF REAL  PROP-
 ERTY.    THE  STATEWIDE  ELECTRONIC  DATABASE  OF REAL PROPERTY SHALL BE
 ACCESSIBLE TO PARTICIPATING ABSTRACTORS AND ATTORNEYS UNDER TERMS DETER-
 MINED BY THE CORPORATION, AND THE CORPORATION MAY PROVIDE ACCESS TO  ALL
 OR PORTIONS OF THE DATABASE TO THE PUBLIC.
   (2)  THE  CORPORATION  MAY  WAIVE THE REQUIREMENTS OF THIS SUBDIVISION
 PURSUANT TO AN APPLICATION OF AN ATTORNEY OR ABSTRACTOR WHICH SHOWS THAT
 THE REQUIREMENTS IMPOSE A HARDSHIP TO THE  ATTORNEY  OR  ABSTRACTOR  AND
 THAT  THE  WAIVER  CLEARLY  IS  IN  THE PUBLIC INTEREST OR IS ABSOLUTELY
 NECESSARY TO ENSURE AVAILABILITY  OF  TITLE  GUARANTIES  THROUGHOUT  THE
 STATE.
   (F)  PRIOR  TO THE ISSUANCE OF A TITLE GUARANTY, THE CORPORATION SHALL
 REQUIRE EVIDENCE THAT AN ABSTRACT OF TITLE TO THE REAL PROPERTY IN QUES-
 TION HAS BEEN  BROUGHT  UP-TO-DATE  AND  CERTIFIED  BY  A  PARTICIPATING
 ABSTRACTOR  IN  A  FORM  APPROVED BY THE CORPORATION AND A TITLE OPINION
 ISSUED BY A PARTICIPATING ATTORNEY IN THE FORM APPROVED  BY  THE  CORPO-
 RATION  STATING  THE ATTORNEY'S OPINION AS TO THE TITLE. THE CORPORATION
 SHALL REQUIRE EVIDENCE OF THE ABSTRACT BEING BROUGHT UP-TO-DATE AND  THE
 ABSTRACTOR  SHALL  RETAIN  EVIDENCE OF THE ABSTRACT AS DETERMINED BY THE
 CORPORATION.  THE INFORMATION OBTAINED MAY BE INCLUDED IN THE  STATEWIDE
 ELECTRONIC DATABASE.
   (G)  THE  ATTORNEY  RENDERING  A  TITLE OPINION SHALL BE AUTHORIZED TO
 ISSUE A TITLE GUARANTY CERTIFICATE SUBJECT TO THE RULES  OF  THE  CORPO-
 RATION.
   (H)  THE  CORPORATION  SHALL ADOPT RULES AND REGULATIONS NECESSARY FOR
 THE IMPLEMENTATION OF THE NEW YORK TITLE GUARANTY PROGRAM AS ESTABLISHED
 BY THIS ARTICLE.

 S. 7744                             3
 
   § 3975. NEW YORK TITLE GUARANTY  CORPORATION.  1.    THERE  IS  HEREBY
 ESTABLISHED  THE NEW YORK TITLE GUARANTY CORPORATION FOR THE IMPLEMENTA-
 TION OF THE NEW YORK TITLE GUARANTY PROGRAM.  THE CORPORATION SHALL BE A
 BODY CORPORATE AND POLITIC CONSTITUTING A  PUBLIC  BENEFIT  CORPORATION.
 THE  PRESIDENT OF THE CORPORATION SHALL BE NOMINATED BY THE GOVERNOR AND
 CONFIRMED BY THE SENATE. THE BOARD OF DIRECTORS SHALL CONSIST OF  TWELVE
 MEMBERS  AS  FOLLOWS:  THE  PRESIDENT  OF THE CORPORATION, OR HIS OR HER
 DESIGNEE, WHO SHALL SERVE AS THE CHAIRPERSON OF THE BOARD; THREE MEMBERS
 APPOINTED BY THE GOVERNOR; THREE  MEMBERS  APPOINTED  BY  THE  TEMPORARY
 PRESIDENT  OF  THE SENATE; THREE MEMBERS APPOINTED BY THE SPEAKER OF THE
 ASSEMBLY; ONE MEMBER APPOINTED BY THE MINORITY LEADER OF THE SENATE; AND
 ONE MEMBER APPOINTED BY THE MINORITY LEADER OF THE ASSEMBLY.  ONE OF THE
 GOVERNOR'S APPOINTEES SHALL SERVE AN INITIAL TERM OF TWO YEARS;  ONE  OF
 THE  GOVERNOR'S  APPOINTEES  SHALL SERVE AN INITIAL TERM OF THREE YEARS;
 AND ONE OF THE GOVERNOR'S APPOINTEES SHALL SERVE AN INITIAL TERM OF FOUR
 YEARS. ONE OF THE APPOINTEES OF THE TEMPORARY PRESIDENT  OF  THE  SENATE
 AND  ONE  OF  THE  APPOINTEES OF THE SPEAKER OF THE ASSEMBLY SHALL SERVE
 INITIAL TERMS OF TWO YEARS; AND TWO APPOINTEES OF THE  TEMPORARY  PRESI-
 DENT  OF  THE  SENATE  AND TWO APPOINTEES OF THE SPEAKER OF THE ASSEMBLY
 SHALL SERVE INITIAL TERMS OF FOUR YEARS. THE APPOINTEES OF THE  MINORITY
 LEADER OF THE SENATE AND THE MINORITY LEADER OF THE ASSEMBLY SHALL SERVE
 INITIAL  TERMS OF TWO YEARS. THEREAFTER, ALL TERMS SHALL BE FOR A PERIOD
 OF FOUR YEARS. IN THE EVENT OF A VACANCY  OCCURRING  IN  THE  OFFICE  OF
 TRUSTEE  BY  DEATH,  RESIGNATION OR OTHERWISE, THE RESPECTIVE APPOINTING
 OFFICER SHALL APPOINT A SUCCESSOR WHO SHALL HOLD OFFICE  FOR  THE  UNEX-
 PIRED PORTION OF THE TERM.
   2.  ON  OR  BEFORE  OCTOBER 1, 2020, THE NEW YORK TITLE GUARANTY BOARD
 SHALL PROVIDE THE GOVERNOR AND THE LEGISLATURE A PLAN FOR THE  IMPLEMEN-
 TATION OF THE NEW YORK TITLE GUARANTY PROGRAM.
   3.  TO  THE  MAXIMUM EXTENT FEASIBLE, THE STATE DEPARTMENT OF TAXATION
 AND FINANCE, THE DEPARTMENT OF FINANCIAL  SERVICES,  THE  DEPARTMENT  OF
 HOUSING AND COMMUNITY RENEWAL, AND THE DEPARTMENT OF FINANCE OF THE CITY
 OF NEW YORK SHALL PROVIDE THE BOARD WITH SUCH FACILITIES, ASSISTANCE AND
 DATA  AS WILL ENABLE THE BOARD TO CARRY OUT THE POWERS AND DUTIES OF THE
 CORPORATION.  ADDITIONALLY, TO THE MAXIMUM EXTENT  FEASIBLE,  ALL  OTHER
 AGENCIES  OF  THE STATE OR SUBDIVISIONS THEREOF SHALL, AT THE REQUEST OF
 THE CHAIRPERSON PROVIDE THE BOARD WITH SUCH FACILITIES, ASSISTANCE,  AND
 DATA  AS WILL ENABLE THE BOARD TO CARRY OUT THE POWERS AND DUTIES OF THE
 CORPORATION.
   4. THE PRESIDENT SHALL HAVE THE AUTHORITY TO APPOINT SUCH OFFICERS AND
 EMPLOYEES AS IT MAY REQUIRE FOR THE PERFORMANCE OF  THE  DUTIES  OF  THE
 CORPORATION  AND  TO FIX AND DETERMINE THEIR QUALIFICATIONS, DUTIES, AND
 COMPENSATION, AND TO RETAIN OR  EMPLOY  COUNSEL,  AUDITORS  AND  PRIVATE
 FINANCIAL  CONSULTANTS  AND OTHER SERVICES ON A CONTRACT BASIS OR OTHER-
 WISE FOR RENDERING PROFESSIONAL,  BUSINESS  OR  TECHNICAL  SERVICES  AND
 ADVICE.
   §  3. The state finance law is amended by adding a new section 92-j to
 read as follows:
   § 92-J. TITLE GUARANTY FUND. 1. THERE IS  HEREBY  ESTABLISHED  IN  THE
 JOINT  CUSTODY  OF THE NEW YORK TITLE GUARANTY CORPORATION AND THE STATE
 COMPTROLLER A SPECIAL FUND TO BE KNOWN AS THE "TITLE GUARANTY FUND".
   2. THE TITLE GUARANTY FUND SHALL CONSIST OF ALL MONEYS COLLECTED  FROM
 THE  NEW YORK TITLE GUARANTY PROGRAM COLLECTED PURSUANT TO TITLE FOUR OF
 ARTICLE TEN-D OF THE PUBLIC AUTHORITIES LAW, AND ALL OTHER MONEYS  CRED-
 ITED  OR  TRANSFERRED  THERETO FROM ANY OTHER FUND OR SOURCE PURSUANT TO
 LAW.

 S. 7744                             4

   3. THE MONEYS IN SUCH FUND SHALL BE AVAILABLE FOR PAYMENT OF  ANY  AND
 ALL  COSTS  AND  EXPENDITURES  INCURRED  IN  PERFORMING  ANY OF THE WORK
 REQUIRED IN ADMINISTERING THE NEW YORK TITLE GUARANTY  PROGRAM  PURSUANT
 TO  TITLE FOUR OF ARTICLE TEN-D OF THE PUBLIC AUTHORITIES LAW, INCLUDING
 CLAIMS,  NECESSARY RESERVES, STAFFING, ADMINISTRATIVE COSTS AND EXPENSES
 INCIDENTAL AND APPURTENANT THERETO.
   4. MONEYS IN THE TITLE GUARANTY FUND SHALL BE KEPT SEPARATELY FROM AND
 SHALL NOT BE COMMINGLED WITH ANY OTHER  MONEYS  IN  THE  JOINT  OR  SOLE
 CUSTODY  OF  THE NEW YORK TITLE GUARANTY CORPORATION AND THE STATE COMP-
 TROLLER.
   § 4. Article 64 of the insurance law is REPEALED.
   § 5. Any title policy which was issued prior to the effective date  of
 this  act pursuant to article 64 of the insurance law shall be continued
 to be governed by such article solely for the purposes of administering,
 reserving for and paying claims on such pre-existing policies, under the
 oversight and enforcement of the department of financial services.
   § 6. This act shall take effect January 1, 2021.  Effective immediate-
 ly, the addition, amendment and/or repeal  of  any  rule  or  regulation
 necessary  for  the implementation of this act on its effective date are
 authorized to be made and completed on or before such effective date.

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