Monday, March 9, 2009

1 NEW YORK STATE SENATE 2 3 4 THE STENOGRAPHIC RECORD 5 6 7 8 9 ALBANY, NEW YORK 10 March 9, 2009 11 3:22 p.m. 12 13 14 REGULAR SESSION 15 16 17 18 SENATOR ERIC T. SCHNEIDERMAN, Acting President 19 ANGELO J. APONTE, Secretary 20 21 22 23 24

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(518) 371-8910 1 P R O C E E D I N G S 2 ACTING PRESIDENT SCHNEIDERMAN: 3 The Senate will please come to order. 4 I ask everyone present to rise and 5 recite with me the Pledge of Allegiance to our 6 Flag. 7 (Whereupon, the assemblage recited 8 the Pledge of Allegiance to the Flag.) 9 ACTING PRESIDENT SCHNEIDERMAN: 10 The invocation today will be delivered by the 11 Reverend R. Adam Forno, pastor of the Parish 12 of St. John the Evangelist and St. Joseph in 13 Rensselaer, New York. 14 REVEREND FORNO: Good afternoon. 15 T.S. Eliot has written, and I 16 quote: "Lord, shall we not bring our gifts to 17 Your service? Shall we not bring to Your 18 service all our powers for life, dignity, 19 order and grace? The Lord of Creation wishes 20 to employ our gifts in creating anew." 21 Mindful of those timely words, my 22 friends, let us pray. 23 Sovereign Lord, when the fabric of 24 our society is being frayed by a recession,

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(518) 371-8910 1 deep in our relationship with You, draw the 2 men and women of this Senate into a healing 3 communion with You that will give them the 4 assurance of Your unqualified love. 5 You've given us magnificent 6 promises to claim. You've told us that if we 7 wait on You, You will renew our strength. You 8 have assured us that You can use our minds to 9 think clearly in response to Your inspiration 10 for right choices. 11 Gracious God, may the work of these 12 budget hearings this week give life to the 13 dreams of rescuing the poor, the unemployed, 14 and those within our state whose lives are 15 shattered by the trials of this time. 16 Allow doors closed by habit and 17 routine to be opened by the challenge of 18 change for real growth and the nobility of 19 renewed prosperity. 20 Lastly, grant these, Your servants, 21 courage, patience, wisdom and strength to 22 speak the truth as he or she knows it. May 23 none feel the pangs of unspoken convictions, 24 and may all be assured that whatever is done

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(518) 371-8910 1 with total trust in You and respect for those 2 served will not lack Your blessing. 3 We ask this of You, our good and 4 gracious God who lives and reigns forever and 5 ever. Amen. 6 Thank you. 7 ACTING PRESIDENT SCHNEIDERMAN: 8 Thank you. 9 The reading of the Journal. 10 The Secretary will read. 11 THE SECRETARY: In Senate, 12 Friday, March 6, the Senate met pursuant to 13 adjournment. The Journal of Thursday, 14 March 5, was read and approved. On motion, 15 Senate adjourned. 16 ACTING PRESIDENT SCHNEIDERMAN: 17 Without objection, the Journal stands approved 18 as read. 19 Presentation of petitions. 20 Messages from the Assembly. 21 Messages from the Governor. 22 Reports of standing committees. 23 Reports of select committees. 24 Communications and reports from

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(518) 371-8910 1 state officers. 2 Motions and resolutions. 3 Senator Sampson. 4 SENATOR SAMPSON: Mr. President, 5 on page number 5 I offer the following 6 amendments to Calendar Number 4, Senate Print 7 134A, and I ask that this bill retain its 8 place on the Third Reading Calendar. 9 ACTING PRESIDENT SCHNEIDERMAN: 10 So ordered. Thank you. 11 Senator Klein. 12 SENATOR KLEIN: Mr. President, 13 are there any substitutions at the desk? 14 ACTING PRESIDENT SCHNEIDERMAN: 15 Yes, there are. 16 The Secretary will read. 17 THE SECRETARY: On page 9, 18 Senator Huntley moves to discharge, from the 19 Committee on Judiciary, Assembly Bill Number 20 2003 and substitute it for the identical 21 Senate Bill Number 2225, Third Reading 22 Calendar 73. 23 And on page 10, Senator Adams moves 24 to discharge, from the Committee on Racing,

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(518) 371-8910 1 Gaming and Wagering, Assembly Bill Number 2 4750A and substitute it for the identical 3 Senate Bill Number 2363, Third Reading 4 Calendar 81. 5 ACTING PRESIDENT SCHNEIDERMAN: 6 Substitutions ordered. 7 Senator Klein. 8 SENATOR KLEIN: Mr. President, on 9 behalf of Senator Stachowski, I move that the 10 following bill be discharged from its 11 committee and be recommitted with instructions 12 to strike the enacting clause: Senate Bill 13 2842. 14 ACTING PRESIDENT SCHNEIDERMAN: 15 So ordered. 16 Senator Klein, that was so good, 17 let's go again. 18 SENATOR KLEIN: Mr. President, 19 can we please move to a noncontroversial 20 reading of the calendar. 21 ACTING PRESIDENT SCHNEIDERMAN: 22 The Secretary will read. 23 THE SECRETARY: Calendar Number 24 67, by Member of the Assembly Peralta,

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(518) 371-8910 1 Assembly Print Number 259, an act to amend the 2 Banking Law, in relation to multiple branches. 3 ACTING PRESIDENT SCHNEIDERMAN: 4 Read the last section. 5 THE SECRETARY: Section 2. This 6 act shall take effect immediately. 7 ACTING PRESIDENT SCHNEIDERMAN: 8 Call the roll. 9 (The Secretary called the roll.) 10 ACTING PRESIDENT SCHNEIDERMAN: 11 Announce the results. 12 THE SECRETARY: Ayes, 53. 13 ACTING PRESIDENT SCHNEIDERMAN: 14 The bill is passed. 15 THE SECRETARY: Calendar Number 16 70, by Senator Sampson, Senate Print 1759, an 17 act to amend the New York City Civil Court 18 Act, in relation to commencement. 19 SENATOR LIBOUS: Lay it aside, 20 please. 21 ACTING PRESIDENT SCHNEIDERMAN: 22 The bill is laid aside. 23 The Secretary will continue to 24 read.

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(518) 371-8910 1 THE SECRETARY: Calendar Number 2 71, by Senator Stachowski, Senate Print 1946, 3 an act to amend the Real Property Law, in 4 relation to clarifying information. 5 SENATOR LIBOUS: Lay it aside, 6 please. 7 ACTING PRESIDENT SCHNEIDERMAN: 8 The bill is laid aside. 9 The Secretary will continue to 10 read. 11 THE SECRETARY: Calendar Number 12 73, substituted earlier by Member of the 13 Assembly Weisenberg, Assembly Print Number 14 2003, an act to amend the Surrogate's Court 15 Procedure Act. 16 ACTING PRESIDENT SCHNEIDERMAN: 17 Read the last section. 18 THE SECRETARY: Section 2. This 19 act shall take effect immediately. 20 ACTING PRESIDENT SCHNEIDERMAN: 21 Call the roll. 22 (The Secretary called the roll.) 23 ACTING PRESIDENT SCHNEIDERMAN: 24 Announce the results.

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(518) 371-8910 1 THE SECRETARY: Ayes, 55. 2 ACTING PRESIDENT SCHNEIDERMAN: 3 The bill is passed. 4 Senator Klein, that completes the 5 noncontroversial reading of the calendar. 6 SENATOR KLEIN: Mr. President, at 7 this time can we move to a reading of the 8 controversial calendar. 9 ACTING PRESIDENT SCHNEIDERMAN: 10 If the Secretary will please ring the bells, 11 members are all asked to come to the chamber 12 for the controversial reading of the calendar. 13 The Secretary will read. 14 THE SECRETARY: Calendar Number 15 70, by Senator Sampson, Senate Print 1759, an 16 act to amend the New York City Civil Court 17 Act. 18 ACTING PRESIDENT SCHNEIDERMAN: 19 Read the last section. 20 SENATOR DeFRANCISCO: 21 Explanation, please. 22 ACTING PRESIDENT SCHNEIDERMAN: 23 An explanation has been requested, Senator 24 Sampson.

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(518) 371-8910 1 SENATOR SAMPSON: Thank you very 2 much, Mr. President. 3 This bill just asks that if there's 4 going to be commencement of a small claims 5 action, that it be done by certified mail with 6 return receipt, basically to allow those 7 individuals -- just dealing with a due process 8 issue because in small claims court there have 9 been numerous motions to vacate default 10 judgments that have been instituted against 11 individuals, and as a result basically 12 clogging the system, especially the small 13 claims system, with respect to individuals 14 receiving default judgments who never got 15 served at all. 16 Because if in fact they had moved 17 and these documents weren't forwarded to their 18 forwarding address, they would have a 19 judgement against them and you wouldn't know 20 about it until someone executed it against 21 you. If somebody tried to restrain your bank 22 account, at that point in time in time you 23 would know that you have a default against you 24 and your bank account has already been

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(518) 371-8910 1 restrained. 2 We're just trying to enhance the 3 due process notice with respect to small 4 claims actions. 5 ACTING PRESIDENT SCHNEIDERMAN: 6 Thank you. 7 Senator DeFrancisco. 8 SENATOR DeFRANCISCO: Would 9 Senator Sampson yield to a question? 10 ACTING PRESIDENT SCHNEIDERMAN: 11 Senator Sampson, will you yield for a 12 question? 13 SENATOR SAMPSON: Yes, I will. 14 SENATOR DeFRANCISCO: This bill 15 only applies to New York City civil courts; 16 correct? 17 SENATOR SAMPSON: Yes. 18 SENATOR DeFRANCISCO: Do you know 19 what the procedure is with respect to small 20 claims proceedings, for example, in city 21 courts upstate or town and village courts with 22 respect to the notice? Does that notice 23 currently simply notice by mail, regular mail? 24 SENATOR SAMPSON: At this point

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(518) 371-8910 1 in time, I'm not certain with respect to that, 2 Senator. Through you, Mr. President. 3 ACTING PRESIDENT SCHNEIDERMAN: 4 Thank you. 5 SENATOR DeFRANCISCO: May I ask 6 another question? 7 ACTING PRESIDENT SCHNEIDERMAN: 8 Senator Sampson, would you continue to yield? 9 SENATOR SAMPSON: Yes. 10 SENATOR SALAND: Mr. President, 11 I'm having a very difficult time hearing. Can 12 we please have a little bit of order? I can 13 only hear Senator DeFrancisco and not hear 14 Senator Sampson. 15 ACTING PRESIDENT SCHNEIDERMAN: 16 Thank you. 17 If everyone would try to keep 18 conversations outside, please. 19 Senator DeFrancisco. 20 SENATOR DeFRANCISCO: I guess the 21 only other question is I think the procedure 22 now is the same in all these other courts for 23 small claims proceedings; namely, simply 24 notice by way of regular mail.

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(518) 371-8910 1 And I guess my only other question 2 is would you think it would be appropriate, 3 Senator Sampson, as the sponsor, to also have 4 the same due process reforms with respect to 5 other courts that deal with the same type of 6 small claims in other jurisdictions? 7 SENATOR SAMPSON: Through you, 8 Mr. President, good question. I think this 9 would be applicable, but I will definitely 10 look into it, Senator DeFrancisco. 11 ACTING PRESIDENT SCHNEIDERMAN: 12 Thank you. 13 Any other Senators wish to be 14 heard? 15 Senator Saland. 16 SENATOR SALAND: Thank you, 17 Mr. President. I will apologize if I asked 18 some of the same questions. I simply had a 19 very difficult time hearing Senator Sampson, 20 and I couldn't hear his last response to 21 Senator DeFrancisco's question. 22 If I may, on the bill. And then I 23 would like Senator Sampson, if he might, to 24 yield.

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(518) 371-8910 1 My understanding of small claims 2 proceedings is that they're intended to be 3 expedited, inexpensive, and trying to take 4 what is by definition a small claim, getting 5 it into the court as quickly as is possible, 6 and resolving these matters without resort to 7 pleadings, discovery -- to move these things 8 along. 9 And one of the ways by which that's 10 accomplished is by providing notice by 11 ordinary mail. And when I look at what 12 Senator Sampson is proposing to do here, he's 13 eliminating the ordinary mail portion, which 14 under the existing language basically created 15 the presumption. If the mail was not returned 16 within 21 days, there was a presumption -- I 17 underscore presumption -- of service. And at 18 the same time, the party was to be served by 19 certified mail, the defendant, return receipt 20 requested. 21 Under this scheme, what will happen 22 will be that your next-door neighbor has a 23 complaint that he or she wants resolved, they 24 go to small claims court, the person who they

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(518) 371-8910 1 would like to get some modest amount of money 2 back -- $500, $1,000, whatever the amount may 3 be, whatever the underlying claim may be -- 4 would now, under this, be served by certified 5 mail, return receipt requested. And all the 6 individual who's the defendant has to do is 7 not sign for the mail. Simply don't sign the 8 return receipt, and the small claims 9 proceeding can never be initiated. 10 There's no jurisdiction unless you 11 want to attempt to go through the bother of 12 personal service, which in part defeats the 13 whole idea of the small claims proceeding. 14 The ordinary mail piece is 15 different from everything else we do by way 16 initiating a proceeding in any other court in 17 this state. And again, it's because it is 18 small claims, trying to resolve these claims 19 as inexpensively and as swiftly as possible 20 and not lawyering it to death. 21 So in this particular instance, 22 what we're doing here is effectively gutting 23 small claims in the City of New York through 24 these particular courts. Because there's

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(518) 371-8910 1 nobody who is going to accept a certified 2 mail, return receipt requested, letter from a 3 court. They're simply not going to accept it. 4 So the bottom line is is that all 5 of those little claims that some of your 6 friends may have brought in court, some people 7 you know may have brought in court, under this 8 will never see the light of day. 9 Now, I have enormous regard for 10 Senator Sampson. And I would suggest that 11 what Senator Sampson might want to do -- and 12 far be it from me, but if your concern is that 13 the ordinary mail process is being abused, why 14 not expand the period of time for the 15 presumption for ordinary mail beyond the 16 current 21 days? 17 You will leave Lord only knows how 18 many claimants with absolutely no remedy 19 unless they're going to hire a lawyer. And 20 you can't hire a lawyer for a small claim 21 because (A) the lawyer won't take it and (B) 22 if he or she did, it would exhaust the amount 23 of the claim. 24 So you're going to leave people

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(518) 371-8910 1 without a remedy in these courts in the City 2 of New York, a remedy that will still be 3 available, fortunately, for small claims 4 courts outside of the City of New York but not 5 inside the City of New York. 6 So I would certainly urge my 7 colleagues to vote in opposition to this. I 8 believe that it will cause far more harm than 9 it would do good. You would wind up 10 protecting a lot of people and causing 11 enormous pain to others. 12 ACTING PRESIDENT SCHNEIDERMAN: 13 Thank you. 14 Any other Senator wish to be heard? 15 Senator Ranzenhofer. 16 SENATOR RANZENHOFER: Will 17 Senator Sampson yield for a question, 18 Mr. President? 19 ACTING PRESIDENT SCHNEIDERMAN: 20 Senator Sampson, will you yield for a 21 question? 22 SENATOR SAMPSON: Yes. 23 SENATOR RANZENHOFER: Kind of 24 following up a little on what Senator Saland

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(518) 371-8910 1 said, if a court sends the certified letter 2 and the person on the receiving end doesn't 3 sign the letter, how do you start the small 4 claims action? 5 SENATOR SAMPSON: Well, if the 6 person -- 7 ACTING PRESIDENT SCHNEIDERMAN: 8 Hold on, Senator Sampson, just for a moment. 9 Could I ask the sergeants to keep 10 the doors closed. It is a little loud in 11 here. Thank you. 12 Senator. 13 SENATOR SAMPSON: With respect to 14 that, through you, Mr. President, if the 15 person does not sign for that certificate and 16 refuses to sign it, there is a refusal. And 17 therefore the individual -- there's a record 18 of note that it was refused. 19 At that point in time, then, the 20 individual who's in the process of starting 21 the action can then go to the court and ask 22 for an additional service process if the 23 individual refused. 24 And at this point in time, if he

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(518) 371-8910 1 continues to refuse, the individual can then 2 start the action and thus, if he doesn't 3 appear in court, they then can get a default 4 judgment. Once they obtain the default 5 judgment, then it makes it difficult for the 6 person who refused it initially to go and 7 vacate the default judgment. 8 As Senator Saland was talking 9 about, we want to make the small claims 10 courts -- it's supposed to be a swift process. 11 But small claims court, particularly in 12 New York City, has been inundated with motions 13 to vacate default judgments against 14 individuals who claim they never received mail 15 in the first place. 16 By just sending them a first-class 17 mail, there is no record of saying this mail 18 was actually delivered. You just place a 19 first-class stamp on the envelope and you send 20 it off. There's no record. 21 But with certified mail, there is a 22 record that this individual did receive it. 23 If he doesn't receive it and they leave the 24 green slip in the envelope, he then has to go

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(518) 371-8910 1 to his post office box to pick up that letter. 2 In this day and age, an individual 3 doesn't know whether it's coming from small 4 claims court or any court. Most of the times 5 most individuals will go to the post office, 6 give them their identification, and ask for 7 the certified mail. 8 SENATOR RANZENHOFER: Another 9 question through you, Mr. President. 10 ACTING PRESIDENT SCHNEIDERMAN: 11 Thank you. 12 Senator Sampson, will you continue 13 to yield? 14 SENATOR SAMPSON: Of course. 15 SENATOR RANZENHOFER: How do you 16 know if the person is simply not living there 17 anymore and therefore is not signing it or the 18 person is refusing? How does the court who is 19 sending this out, how would the court know 20 that? 21 SENATOR SAMPSON: Through you, 22 Mr. President. Well, the court would know 23 that with respect to when the document comes 24 back indicating that it has not been

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(518) 371-8910 1 delivered, either it has been refused by the 2 person it has been addressed to. The 3 plaintiff at that point in time can therefore 4 ask the court for additional means of service 5 with respect to that individual. 6 SENATOR RANZENHOFER: Another 7 question through you, Mr. President. 8 ACTING PRESIDENT SCHNEIDERMAN: 9 Thank you. 10 Senator Sampson, will you yield for 11 another question? 12 SENATOR SAMPSON: Of course. 13 SENATOR RANZENHOFER: What 14 exactly does the person have to do when they 15 go back into court to ask for another method 16 of service? Do they then have to ask for 17 personal service, or can they ask for ordinary 18 mail? Is that specified in the bill, what's 19 the next step? 20 SENATOR SAMPSON: Through you, 21 Mr. President, it's not specified in the bill. 22 But at that point in time the other service 23 methods within the CPLR would apply. 24 SENATOR RANZENHOFER: Another

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(518) 371-8910 1 question if I may, Mr. President. 2 ACTING PRESIDENT SCHNEIDERMAN: 3 Thank you. 4 Senator Sampson, will you continue 5 to yield? 6 SENATOR SAMPSON: Of course. 7 SENATOR RANZENHOFER: Does that 8 mean that the person would then have to ask 9 for -- if it's through the CPLR, you just 10 can't mail a regular letter, so you then have 11 to hire a process server to go out and 12 personally serve that person? 13 SENATOR SAMPSON: Through you, 14 Mr. President. To answer the question, most 15 of the time the court system is the one who, 16 especially in New York City, performs the 17 service with respect to small claims actions. 18 SENATOR RANZENHOFER: Would that 19 be the city marshal, then? If I may, 20 Mr. President. I'm just still a little 21 confused over how the actual notice is going 22 to be mailed out by the court. 23 The person has to go back to the 24 court and ask for another method of service

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(518) 371-8910 1 which is going to be performed by the court. 2 Is that going to be personally served? Or is 3 that going to be -- what's the next method of 4 service after the certified mail does not 5 work? 6 SENATOR SAMPSON: Through you, 7 Mr. President. Whichever means that the court 8 sees as justified or that individual can work 9 with the court to determine. The individual 10 could take it upon themselves if they want to 11 hire a process server to seek personal 12 service. 13 SENATOR RANZENHOFER: Another 14 question. 15 ACTING PRESIDENT SCHNEIDERMAN: 16 Senator Sampson, will you continue to yield? 17 SENATOR SAMPSON: Yes. 18 SENATOR RANZENHOFER: Through 19 small claims, normally the person doesn't do 20 that, it's the court that actually does the 21 service. So I'm still not sure whether or not 22 the court is then going to provide for service 23 or the individual is going to provide for 24 service, and who's going to pay for the

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(518) 371-8910 1 additional service. 2 I'm still not sure how the system 3 actually works. I mean, I know the problem 4 you're trying to solve, and I'm trying to 5 figure out how you don't create a problem 6 going the other way. 7 SENATOR SAMPSON: Through you, 8 Mr. President. Usually the litigant pays for 9 the form of service with respect to the fees 10 that they give in small claims court. 11 SENATOR RANZENHOFER: Okay. And 12 one more question. 13 ACTING PRESIDENT SCHNEIDERMAN: 14 Senator Sampson, will you yield for another 15 question? 16 SENATOR SAMPSON: Of course. 17 SENATOR RANZENHOFER: In the 18 CPLR, if the certified mailing doesn't work, 19 can they then use ordinary mail? Because I 20 don't think that's provided for in the CPLR. 21 SENATOR SAMPSON: I'm not certain 22 what is provided for, but I know the 23 parameters of the CPLR does provide alternate 24 means of service.

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(518) 371-8910 1 SENATOR RANZENHOFER: Thank you. 2 Thank you, Mr. President. 3 ACTING PRESIDENT SCHNEIDERMAN: 4 Thank you. 5 Any other Senator wish to be heard? 6 Hearing none, the debate is closed. 7 The Secretary will please ring the 8 bell. 9 Read the last section. 10 THE SECRETARY: Section 2. This 11 act shall take effect immediately. 12 ACTING PRESIDENT SCHNEIDERMAN: 13 Call the roll. 14 (The Secretary called the roll.) 15 ACTING PRESIDENT SCHNEIDERMAN: 16 Announce the results. 17 THE SECRETARY: Those recorded in 18 the negative on Calendar Number 70 are 19 Senators Bonacic, Griffo, Hannon, Larkin, 20 Leibell, Libous, Little, Marcellino, Morahan, 21 Nozzolio, Ranzenhofer, Saland, Seward, Skelos 22 and Young. Also Senator Winner. 23 Ayes, 46. Nays, 16. 24 ACTING PRESIDENT SCHNEIDERMAN:

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(518) 371-8910 1 The bill is passed. 2 The Secretary will continue to 3 read. 4 THE SECRETARY: Calendar Number 5 71, by Senator Stachowski, Senate Print 1946, 6 an act to amend the Real Property Law. 7 ACTING PRESIDENT SCHNEIDERMAN: 8 Read the last section. 9 SENATOR SALAND: Explanation. 10 ACTING PRESIDENT SCHNEIDERMAN: 11 Senator Stachowski, an explanation has been 12 requested. 13 SENATOR STACHOWSKI: This bill is 14 a result of three years of work by the 15 Anti-Flipping Task Force in the City of 16 Buffalo that is chaired by myself and 17 Assemblyman Hoyt. 18 In Buffalo, there's a lot of 19 illegal house flipping. And one of the ways 20 that flippers continue to do business even 21 after they're identified -- and they usually 22 pick up these houses at the auction -- is they 23 will form a new LLC, sign the line on the form 24 with an illegible signature, and have a P.O.

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(518) 371-8910 1 box for the address. 2 So all this bill does is ask for 3 the name of the fiduciary person in the LLC, 4 an actual phone number and an actual place of 5 business that they work out of, so that when 6 the fines and problems with the house after 7 they bought it start to roll up, there's 8 someplace to contact them. 9 Because currently the building 10 inspectors have pointed out to us, time and 11 again, that there is no place to contact these 12 people because they send the notices to the 13 P.O. box that is no longer valid and they 14 can't find the person because the signature is 15 illegible. And so that this would be a simple 16 change that would help us deal better with 17 this problem. 18 It's been a significant problem in 19 Buffalo. They're starting to get a handle on 20 it through changes in the way the auction is 21 done, by identifying people at the auction. 22 This would also put a fine -- if the person 23 didn't put the proper name and they caught up 24 with them, there would be a fine on the

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(518) 371-8910 1 transfer. So obviously they'd catch them at 2 that point. 3 I know there's some concern about 4 membership in the LLC. But hopefully 5 everybody would understand, in this day of 6 information and an age where you can get 7 information on almost anybody, why you 8 wouldn't want a contact person when you're 9 buying a property in the city -- there is no 10 reason to hide having a contact person, an 11 address to reach them at and a phone number 12 where to contact them at. 13 But if there's a problem with those 14 three things, then I'd be anxious to hear what 15 it is. 16 ACTING PRESIDENT SCHNEIDERMAN: 17 Thank you. 18 Senator Saland. 19 SENATOR SALAND: Thank you. 20 Mr. President, would Senator 21 Stachowski yield? 22 ACTING PRESIDENT SCHNEIDERMAN: 23 Senator Stachowski, will you yield for a 24 question?

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(518) 371-8910 1 SENATOR STACHOWSKI: Yes, I will. 2 SENATOR SALAND: Senator 3 Stachowski, I think from your explanation -- 4 well, based on your explanation, would you 5 care to share with me or, for that matter, all 6 of our colleagues whether your intent is that 7 for all of these entities that you've 8 enumerated -- associations, joint stock 9 companies, limited liability companies -- is 10 it your intent that one member or one 11 principal or one partner be the sole signatory 12 and the only disclosed individual for whatever 13 that entity might be? 14 SENATOR STACHOWSKI: That's our 15 intent. We don't plan on knowing who every 16 member of the LLC is, who every member of the 17 corporation that buys it is. We just want to 18 make sure we have one person that is the 19 fiduciarily responsible person, at least in 20 this transaction, who will sign and be able to 21 be contacted. And that's the person that 22 would be the contact person whose place of 23 business would be -- it might be their lawyer. 24 SENATOR SALAND: If Senator

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(518) 371-8910 1 Stachowski would continue to yield. 2 ACTING PRESIDENT SCHNEIDERMAN: 3 Senator Stachowski, will you yield for another 4 question? 5 SENATOR STACHOWSKI: Yes, I will. 6 SENATOR SALAND: Thank you. 7 This is just a draftsmanship 8 question. I notice that in 9A, beginning on 9 line 15 and 16 -- as distinguished from 10 subpart B, beginning on 18 and running through 11 19 -- you have different categories enumerated 12 for those people responsible to sign the 5217, 13 which we used to call the old E&A form. 14 Is there a reason why, for example, 15 in (A) you have an individual in a limited 16 liability company and then go to on to 17 enumerate society, association, joint stock 18 company, and so on, and in (B) you don't 19 enumerate all of those categories, you omit 20 the individual and limited liability company? 21 SENATOR STACHOWSKI: I believe, 22 Senator, that that's the way the law is. I'm 23 not certain on that. I will be happy to get 24 back to you.

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(518) 371-8910 1 But I believe that's the way it is 2 written. That's why it stated that way, with 3 the change being one person, and that we get 4 the address of one person representing these 5 various possibilities. 6 SENATOR SALAND: I just -- I 7 think inadvertently or intentionally -- 8 ACTING PRESIDENT SCHNEIDERMAN: 9 Senator Saland, are you asking Senator 10 Stachowski to yield? 11 SENATOR SALAND: Just on the 12 bill. 13 ACTING PRESIDENT SCHNEIDERMAN: 14 On the bill. Thank you. 15 SENATOR SALAND: Whether it's 16 inadvertently or perhaps intentionally, you're 17 creating two different universes under both of 18 those subparagraphs. They include 19 substantially all of the same entities. And 20 for whatever reason, you omit from the second 21 subparagraph, paragraph B, an individual and a 22 limited liability company. And I'm not quite 23 sure that that doesn't in some fashion impede 24 your ability to accomplish as thoroughly that

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(518) 371-8910 1 which you hope to do. 2 Thank you. 3 ACTING PRESIDENT SCHNEIDERMAN: 4 Thank you. 5 Any other Senator wish to be heard? 6 Senator Winner. 7 SENATOR WINNER: Will Senator 8 Stachowski yield for a couple of questions? 9 ACTING PRESIDENT SCHNEIDERMAN: 10 Senator, will you yield? 11 SENATOR STACHOWSKI: Yes, I will. 12 ACTING PRESIDENT SCHNEIDERMAN: 13 Senator Winner. 14 SENATOR WINNER: Mr. President, 15 through you. Senator Stachowski, can you tell 16 me what the fee currently charged by the 17 county clerk to record the real property tax 18 form that you're intending to have -- 19 SENATOR STACHOWSKI: No, actually 20 I can't. 21 SENATOR WINNER: You can't? 22 Okay. 23 Do you know whether or not the form 24 currently contains a provision for an

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(518) 371-8910 1 affidavit? 2 SENATOR STACHOWSKI: The form, 3 I'm not sure it does. 4 I think the problem is in this 5 particular form that we're speaking about, 6 RP5217, all it has is a place for a signature 7 and they can use a P.O. box as an address. 8 Which is the source of our problem in Buffalo 9 currently. 10 SENATOR WINNER: So now -- 11 ACTING PRESIDENT SCHNEIDERMAN: 12 Senator Winner, are you asking Senator 13 Stachowski to yield? 14 SENATOR WINNER: Thank you, 15 Mr. President. 16 Through you, Mr. President, could 17 Senator Stachowski tell us whether or not 18 there's currently on that form a provision for 19 an affidavit and whether or not the form will 20 now have to be revised? 21 SENATOR STACHOWSKI: I don't 22 believe there's a provision for an affidavit 23 now, Senator. 24 But what we found in Buffalo is we

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(518) 371-8910 1 make people that buy property at the auction 2 now have an affidavit, the City of Buffalo 3 does. And the reason they do that is because 4 of all the house flipping and the problems 5 that we had subsequent to that. 6 Now, before this becomes a problem 7 in everybody else's area -- and I would take 8 you back to I think it was a year ago, maybe 9 two, Senator Farley had a bill expanding the 10 MBBA program across the state. And it was a 11 great success in Schenectady, and it was a 12 great success in a few other places. It was a 13 terrible failure in Buffalo. 14 As a matter of fact, they had to 15 work out a plan on how to get those properties 16 back from that company, because from the day 17 they were purchased to the day they finally 18 started getting them back, all they did was 19 get worse and worse because they couldn't sell 20 them. Because too many properties are always 21 available on the auction. 22 So the terrible hardship of doing 23 an affidavit that you actually represent this 24 group that's buying the house I think is well

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(518) 371-8910 1 worth the benefit to the people that live next 2 door to that house that might run down or 3 might be sold illegally or might be in a bad 4 situation and you're just going to walk away 5 from it and it's going to take a few more 6 years before we catch up to it. 7 So I don't think adding an 8 affidavit plus the signature is a terrible 9 hardship or a great cost. 10 SENATOR WINNER: Would Senator 11 Stachowski yield for another question? 12 ACTING PRESIDENT SCHNEIDERMAN: 13 Senator, will you yield again? 14 SENATOR STACHOWSKI: Yes, I will. 15 SENATOR WINNER: Senator -- 16 through you, Mr. President -- do you know 17 whether or not the form that you're now 18 requiring to be revised and the affidavit that 19 you're now going to be provided will be able 20 to be done on the same page? Or will there 21 have to be another page attached to the form? 22 SENATOR STACHOWSKI: Senator, I'm 23 guessing that it might take a page for the 24 affidavit. It just might.

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(518) 371-8910 1 But I know that the main part of 2 this is to make sure that we get a name and 3 address where they do business, and a phone 4 number, and then the affidavit would be saying 5 that this is actually -- verifying that that's 6 a real name, a real address, and a real phone 7 number. 8 SENATOR WINNER: Would Senator 9 Stachowski yield to another question? 10 ACTING PRESIDENT SCHNEIDERMAN: 11 Senator Stachowski, will you yield for another 12 question? 13 SENATOR STACHOWSKI: Sure. 14 SENATOR WINNER: Through you, 15 Mr. President, would the Senator indicate to 16 us whether or not he believes that it will be 17 permissible, in the event that there's another 18 page, for the county clerk or the State of 19 New York to now entice or grab another fee 20 from the person who is filing that page, which 21 fee is totally unrelated, as you would know, 22 to any kind of costs that are associated with 23 filing that document but is another burden on 24 the part of the real property purchaser,

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(518) 371-8910 1 particularly the individuals out there who are 2 not these bad LLCs or flippers, as you would 3 indicate, but might be just plain old grandma 4 and grandpa who want to transfer a house to 5 their grandchildren or whatever and now will 6 be faced with another fee or another burden 7 that you're imposing upon them because you're 8 not limiting what you're asking to do just to 9 those bad people that you're trying to get at? 10 SENATOR STACHOWSKI: Well, 11 unfortunately, there's no way we can stop any 12 municipality from increasing fees whenever 13 that they'd like. And the same thing with the 14 state, as you see by various budgets that both 15 you and I have seen through all the years that 16 we have been here. 17 But we would hope that nobody would 18 add one, other than the fee that you get if 19 they find out, as they're filing the 20 paperwork, that you gave them bad information 21 and there was a fee that we had in there for 22 that. Other than that, I don't see any reason 23 for additional fees. 24 But I can't predict the future. I

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(518) 371-8910 1 can't say what the county executives of any 2 county are going to do. I don't think people 3 that are legitimately buying a house would 4 mind putting their name, address and phone 5 number on, because it wouldn't be a hardship 6 to them. They wouldn't mind signing an 7 affidavit saying yes, this is me. And I don't 8 think they'd have any problem with this. 9 And I don't foresee counties, 10 unless they have some bad way of doing 11 budgeting, adding another fee. But hopefully 12 they wouldn't, because this wouldn't require 13 them to. 14 And based on all the papers that 15 you sign when you buy a piece of property, I 16 don't think one more is going to make a 17 difference. 18 SENATOR WINNER: Would the 19 Senator yield to another question? 20 ACTING PRESIDENT SCHNEIDERMAN: 21 Senator Stachowski, will you yield for another 22 question? 23 SENATOR STACHOWSKI: Absolutely. 24 SENATOR WINNER: Senator, are you

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(518) 371-8910 1 aware that the fee that's associated with this 2 particular document is a fee that's levied by 3 you and me and the State of New York, not by 4 the county executives, and that as a result, 5 even now Governor Paterson is proposing to 6 increase this fee? 7 SENATOR STACHOWSKI: Well, I know 8 that that fee -- if that's the question, I 9 know that fee is used for the EPF, if I'm not 10 mistaken. And he doesn't want to use it for 11 that anymore, but we'd still like to use it 12 for that. 13 And I don't know if it's going to 14 be increased yet or not. Hopefully it won't 15 be. 16 But the fact is, as I said, 17 legislators can do it. Usually local 18 governments will decide they want to increase 19 a fee and some of them, they have to come to 20 us to get permission to increase. I know that 21 in Erie County the buses once stopped because 22 they didn't want to do a transfer tax and 23 dedicate the money to the mass transit 24 association in that county.

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(518) 371-8910 1 So I am aware of those things. And 2 hopefully that won't happen in this case. 3 SENATOR WINNER: Thank you, 4 Senator. 5 On the bill real briefly. 6 ACTING PRESIDENT SCHNEIDERMAN: 7 Senator Winner, on the bill. 8 SENATOR WINNER: Obviously we've 9 seen the costs of transferring real property 10 in this state increase at an absolutely 11 alarming basis for things like transfer taxes, 12 fees for the real property tax report, fees 13 associated with all types of numerous 14 requirements that we impose upon them. 15 And what will happen is that 16 instead of getting after a good purpose like 17 Senator Stachowski is indicating, which are 18 some people who may be flipping properties and 19 hiding their identity, this bill goes well 20 beyond that laudable goal and impacts upon the 21 ordinary homeowner, ordinary real property 22 purchaser, and will inevitably increase their 23 costs at that closing and will add to the 24 burden that they experience within that

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(518) 371-8910 1 closing and that real property transfer. 2 And so if this legislation were 3 tightened up to limit it specifically to 4 making sure that the identity of LLC 5 responsible fiduciary representatives is 6 identified and sworn to, then that would be 7 acceptable. But there's no reason to impose 8 that burden on the small individual homeowner 9 who is merely trying to unload their property 10 in a very, very difficult climate. 11 I'm going to vote in the 12 opposition. 13 ACTING PRESIDENT SCHNEIDERMAN: 14 Senator Stachowski. 15 SENATOR STACHOWSKI: On the bill. 16 ACTING PRESIDENT SCHNEIDERMAN: 17 Senator Stachowski, on the bill. 18 SENATOR STACHOWSKI: There is no 19 increase of a fee to anybody that's unloading 20 their property. There's no increase of a fee 21 on anybody that's buying a property. The only 22 time there's an increase to the fee is if the 23 clerk finds out in the transfer, based on the 24 form, that the information wasn't provided.

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(518) 371-8910 1 So that any increase in fees, I 2 don't know where they're coming from. But the 3 fact is, it's not existent in this bill. To 4 say it is is disingenuous. It's okay to do 5 it, but it's disingenuous. 6 The fact is this bill just asks for 7 a name, a printed, legible name, a phone 8 number, a real address. And to help fight a 9 very serious problem, especially in my 10 community. 11 We've worked on this problem for 12 three years. We've been making some headway. 13 At one time -- we're even getting help from 14 people like eBay. At one time, it was easier 15 to sell a house on eBay than it was to sell an 16 autographed baseball card, because for an 17 autographed baseball card you needed a lot of 18 documentation. To sell a house, you needed a 19 picture, an address, and any kind of 20 description you wanted to have, and people 21 from all over the world could buy a house in 22 Buffalo. 23 And I can tell you that the place 24 where we had the first press conference was

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(518) 371-8910 1 off of Broadway, which is now in Senator 2 Thompson's district. It was a house that was 3 in very bad shape in the front, but if you 4 took the time to walk around the back, there 5 wasn't a back end to the house. You could see 6 right into the house. It was in unbelievable 7 shape. 8 And the person that bought it got a 9 description -- and now the business community 10 there is an older community, it's got a couple 11 of stores. But they built a K Mart and they 12 closed it before the time this happened. And 13 the description was on eBay was: "House near 14 busy business section, just off bus route, not 15 far from the lake." 16 So you think you're moving in 17 someplace in a beautiful community with a 18 nice, thriving business section and you're 19 just a short either drive or walk to the lake. 20 You were far from the lake. You 21 were in kind of a rundown neighborhood, and a 22 neighborhood that the neighbors were trying to 23 save because they wanted their houses to be 24 worth more and they didn't want to move, but

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(518) 371-8910 1 they wanted to be rid of houses like that. 2 And the fact that you could sell them so easy 3 on eBay, that's what happened. 4 I can give you one more quick 5 example, only because the colorfulness of the 6 story is worth it. I get a call from an 7 Australian television station. They were 8 coming in because a man from Australia bought 9 a house on a street in Buffalo called May 10 Street. It's about a block in from Bailey 11 Avenue in a section that is a transitional 12 neighborhood, which makes it rougher because 13 there's a lot of bad actors as well as people 14 who are moving in and a lot of older people 15 that refuse to move out. 16 This house was a house that had -- 17 probably every house on either side was not 18 occupied. This particular house had no water, 19 no electricity. We went up to it -- a guy 20 from Australia bought it under a similar 21 description: "Wonderful house, just off main 22 thoroughfare, near business section." 23 The building inspector that was 24 with us went up and knocked on the door; there

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(518) 371-8910 1 was somebody living in there. He was paying 2 rent to a guy that called himself a business 3 manager. They had trouble with him again. 4 The building inspector reacted immediately, 5 shaking his head because he had to write this 6 guy up again for posing as a property manager. 7 And the poor guy was a guy that was 8 up in Buffalo from Katrina. And he was paying 9 rent and heating the place with a kerosene 10 heater, which -- it was February -- he was 11 fortunate he's alive, either from burning 12 himself to death or some other mishap. 13 And so things like that are going 14 on, and we're trying to get a handle on it. 15 This is just another tool to help the task 16 force continue in its fight to get people to 17 say Buffalo is no longer a desirable place to 18 try to do illegal flipping. 19 There's nothing wrong with 20 legitimate flipping of houses, because those 21 are people that buy a house at an auction, fix 22 it up, and sell it to somebody that then can 23 live there. We're talking about people who 24 buy a house at an auction, don't do anything

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(518) 371-8910 1 to it, sell it -- as a matter of fact, before 2 we made some changes, a house that was going 3 to be condemned but Buffalo didn't condemn it 4 because they had no way of demolishing it, 5 they would be able to buy a house that was in 6 that kind of condition and be able to sell it 7 to somebody else under a false pretense. 8 So we're trying to get a handle on 9 that, make our communities better, let the 10 people that live there fight back and keep 11 their neighborhoods. This is just another 12 tool, and I hope my colleagues will vote for 13 it. 14 Thank you, Mr. President. 15 ACTING PRESIDENT SCHNEIDERMAN: 16 Thank you, Senator Stachowski. 17 Any other Senator wish to be heard 18 on the bill? 19 Hearing none, debate is closed. 20 The Secretary will please ring the 21 bells. 22 Read the last section. 23 THE SECRETARY: Section 2. This 24 act shall take effect on the 180th day.

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(518) 371-8910 1 ACTING PRESIDENT SCHNEIDERMAN: 2 Call the roll. 3 (The Secretary called the roll.) 4 ACTING PRESIDENT SCHNEIDERMAN: 5 Announce the results. 6 THE SECRETARY: In relation to 7 Calendar Number 71: Ayes, 61. Nays, 1. 8 Senator Winner recorded in the negative. 9 ACTING PRESIDENT SCHNEIDERMAN: 10 The bill is passed. 11 Senator Klein, that completes the 12 controversial reading of the calendar. 13 SENATOR KLEIN: Mr. President, 14 would you please recognize Senator 15 Hassell-Thompson for a brief announcement. 16 ACTING PRESIDENT SCHNEIDERMAN: 17 It is my pleasure to recognize Senator 18 Hassell-Thompson for an announcement. 19 SENATOR HASSELL-THOMPSON: Thank 20 you, Mr. President. 21 Just briefly, the Senate Majority 22 will have a conference immediately following 23 today's session. 24 ACTING PRESIDENT SCHNEIDERMAN:

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(518) 371-8910 1 In Room 332, perhaps? 2 SENATOR HASSELL-THOMPSON: In 3 Room 332. 4 ACTING PRESIDENT SCHNEIDERMAN: 5 Thank you, Senator Hassell-Thompson. 6 There will be a conference of the 7 Majority in Room 332 immediately following 8 session. 9 Senator Volker. 10 SENATOR VOLKER: Mr. President, 11 some people have noticed that I seem to be a 12 little early with the Irish garb, and that's 13 because tonight is the Irish-American 14 Legislators' party. And at the usual place, 15 the Hibernian Hall. 16 And we'd love to have anybody that 17 has anything to do that's legal to come and 18 party with us. 19 So that's tonight at 7 o'clock. 20 ACTING PRESIDENT SCHNEIDERMAN: 21 Seven o'clock. Thank you, Senator Volker. 22 Senator Klein. 23 SENATOR KLEIN: Mr. President, is 24 there any further business at the desk?

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(518) 371-8910 1 ACTING PRESIDENT SCHNEIDERMAN: 2 Senator Klein, the desk is clear. 3 But members are reminded that there 4 will be a joint session of the Legislature at 5 noon tomorrow in the Assembly chamber for the 6 election of four Regents. Attendance by all 7 members of the house is strongly encouraged. 8 Senator Klein. 9 SENATOR KLEIN: There being none, 10 Mr. President, I move that we adjourn until 11 tomorrow, March 10th, at 4:00 p.m. 12 Again, as you said, Mr. President, 13 the joint session will resume at 12:00 noon. 14 ACTING PRESIDENT SCHNEIDERMAN: 15 There being no further business to come before 16 the Senate, on motion, the Senate stands 17 adjourned until Tuesday, March 10th, at 18 4:00 p.m. 19 (Whereupon, at 4:12 p.m., the 20 Senate adjourned.) 21 22 23 24

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(518) 371-8910