Relates to disposal of real property to cure encroachments

BILL NUMBER:S6690A

Title of bill

An act to amend the public authorities law, in relation to the disposal of real property to cure encroachments

Purpose of the bill

This bill would amend the Public Authorities Law ("PAL") in relation to the disposal of canal real property to cure encroachments.

Summary of provisions

Section 1 of the bill would amend PAL §2897(6) by adding a new paragraph (e) to permit the Canal Corporation ("Corporation") to dispose of real property by negotiated sale rather than public auction provided that all of the following criteria are met: (i) the Corporation determines that the property is no longer necessary or useful and that disposal is in the best interest of the Corporation; (ii) an appraisal of the fair market value has been made by an independent appraiser and included in the record of the transaction; (iii) the fair market value of the property is greater than $15,000 but not greater than $75,000; (iv) the property was improved before April 1, 1992 under a municipal permit or a permit issued under Canal Law § 100, thereby creating an encroachment; (v) the purchaser is or will be the owner of the improvement that either fully or partially encroaches; and (vi) the purchase price will be not less than the fair market value of the property, not including the value of the encroachment.

Section 2 of the bill provides for an immediate effective date.

Existing law

PAL § 2897(6) requires public advertising for bids for property with a fair market value that exceeds $15,000 except in certain situations.

Prior legislative history

This is a new bill.

Statement in support

This bill would create a narrowly tailored exception to the general requirement that the Corporation's lands must be sold through public auction. Before coming under the jurisdiction of the New York State Thruway Authority, the Corporation was under the jurisdiction of DOT. DOT could rely on Public Lands Law

§ 50 which permits the Office of General Services to sell abandoned canal lands by private sale (with no limitation on value). This bill would give the Corporation the authority to dispose of burdened

property using the same basic approach but with the limitation that such parcels must be valued at no more than $75,000.

The Corporation has encountered situations where individuals or businesses have occupied and improved land belonging to the Corporation, either inadvertently or pursuant to a permit granted under Canal Law § 100. It receives numerous requests each year to sell small parcels to the owners of such improvements who want to clear title to their property. If the value of the desired parcel exceeds $ 15,000, the Corporation is required to advertise the availability of such property and seek bids. Such a process is often a wasteful use of resources, because such property is unlikely to have any other interested bidders.

Some owners have asked if they may purchase the smallest portion of canal property necessary to own the land under their encroachment as a way to stay below the $ 15,000 threshold for public bidding. But such transactions could leave the Corporation with irregular and unmarketable parcels for which it would remain responsible and liable, and would therefore not be in the best interest of the Corporation.

Fiscal implications

None to State.

Effective date

The bill has an immediate effective date.