Senate Bill S6690

                                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.