senate Bill S809

2013-2014 Legislative Session

Creates the New York title guaranty authority

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 09, 2013 referred to corporations, authorities and commissions

S809 - Bill Details

See Assembly Version of this Bill:
A750
Current Committee:
Senate Corporations, Authorities And Commissions
Law Section:
Public Authorities Law
Laws Affected:
Add Art 10-D Title 4 §§3974 - 3980, Pub Auth L
Versions Introduced in Previous Legislative Sessions:
2011-2012: S3569, A2015
2009-2010: S6290, A9445A

S809 - Bill Texts

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Creates the New York title guaranty authority to initiate and operate a program which shall offer guaranties of real property titles in this state.

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BILL NUMBER:S809

TITLE OF BILL:
An act
to amend the public authorities law, in relation to creating
the New York title guaranty authority

PURPOSE OR GENERAL IDEA OF BILL:
It creates the New York Title Guaranty Authority.

SUMMARY OF SPECIFIC PROVISIONS:
Section 1: Article 10-D of the public authorities law is amended by
adding a new title 4.

§3975. Section 2: The authority may issue bonds only to finance costs.
including the funding of bonds issued by the authority to finance
costs, and fund reserves to secure such bonds.

§3975, Section 3: The authority and its corporate existence shall
continue until terminated by law, but not so long as the authority
shall have bonds or other outstanding obligations in less adequate
provisions for repayment have been made.

§3976, Section 1: The authority shall be administered by seven
directors appointed by the governor, of whom two members shall be
recommended by the president of the senate, and two members shall be
recommended by the speak of the assembly.

§3976, Section 2: The members of the authority board shall receive no
compensation for their services.

§3976, Section 3: Outlines conflicts that would prevent an individual
from becoming a director, officer. or employee of the authority.

§3976, Section 4: Four directors shall constitute a quorum for the
transaction of business or the exercise of any power of the authority.

§3976, Section 5: The authority shall appoint a treasurer and may
appoint other offices.

§3977. Sections 1-11: The authority shall have the powers to do the
following, in addition to those conferred elsewhere in the title.
subject only to agreement with bondholders:

1.) to sue and be sued; to make and alter by-laws;
2.) to have a seal and alter it;
3.) to make and execute contracts and other agreements;
4.) to act to protects any right conferred to it by law or contract;
5.) to borrow money and issue bonds;
7.) to pledge all or any of its revenues or assets for the payment of
principal and interest on bonds;
8.) to accept gifts, grants. loans and aid from the county state or
federal government;
9.) to invest any funds held in reserves or sinking funds. or those
not required for immediate use in approved financial instruments;
10.) to appoint officers and employees as required, and determine


duties, qualifications, and compensation;
11.) to do all things necessary to carry out its purposes, but the
authority may not hold legal title, or have any interest in real
property.

§3978, The authority shall offer guaranties of real property titles in
New York State and shall fix a price for that guarantee.

§3979, Section 1: A title guaranty fund shall be created.

§3979, Section 2: A title guaranty is an obligation of the authority
only and payable solely out of the authorities funds. The state
cannot be liable for such obligations.

§3979, Section 3: The authority shall consult with the insurance
department in developing guaranty contracts.

§3980, Section 1; Participating attorneys may be required to pay an
annual fee set by the authority.

§3980, Section 2: The participation of abstractors and attorneys shall
be in accordance with rules set by the board. participants shall
maintain liability insurance, and shall own or lease an up to date
abstract title plant. The authority may waive these requirements upon
a showing of hardship.

§3980, Section 3; Prior to the issuance of a title guaranty, the
authority shall require evidence that an abstract of title to the
property in question is up to date.

§3980, Section 4: The attorney rendering the title opinion shall be
authorized to issue a title guaranty certificate subject to the rules
of the authority.

JUSTIFICATION:
Title insurance guarantees homebuyers against claims of prior liens
against property they intend to purchase. Like other forms of
insurance, it is regulated by New York State. Currently, title
insurance is available only through private entities and costs
citizens an average of $1.2 billion, in order to guarantee payments
of $50 million, according to 2007 statistics. Because title insurance
is a requirement of home purchase, citizens must accept the prices
set by private industry, but that require the approval of the New
York State Insurance Department. New York State should take a greater
interest in protecting citizens from the overpricing of something the
state requires of home buyers. For example, the State of Iowa has
prohibited the private sale of title insurance, allowing the
government to set rates and ensure that its citizens are offered
standard price. Reform of the current New York State system, and the
establishment of a public authority to continuously research,
administer, and oversee title insurance issuance and rates, could
preserve the legal and social benefits of guaranteed title while
saving New Yorkers hundreds of millions of dollars annually.

PRIOR LEGISLATIVE HISTORY:
S.3569 2011: Held in Authorities, Corporations, and Commissions
S.6290 2010: Held in Authorities, Corporations, and Commissions


Committee.

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
This act shall take effect immediately.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                   809

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by  Sen.  ADAMS  -- 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, in relation to creating the
  New York title guaranty authority

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  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 AUTHORITY
SECTION 3974. SHORT TITLE.
        3975. NEW YORK TITLE GUARANTY AUTHORITY.
        3976. ADMINISTRATION OF THE AUTHORITY.
        3977. GENERAL POWERS OF THE AUTHORITY.
        3978. SPECIAL POWERS OF THE AUTHORITY.
        3979. NEW YORK TITLE GUARANTY FUND.
        3980. PARTICIPATING ATTORNEYS.
  S 3974. SHORT TITLE. THIS ACT SHALL BE KNOWN AND MAY BE CITED  AS  THE
"NEW YORK TITLE GUARANTY AUTHORITY ACT".
  S  3975. NEW YORK TITLE GUARANTY AUTHORITY. 1. THERE IS HEREBY CREATED
THE NEW YORK TITLE GUARANTY AUTHORITY, TO INITIATE AND OPERATE A PROGRAM
WHICH SHALL OFFER GUARANTIES OF REAL PROPERTY TITLES IN THIS STATE.  THE
AUTHORITY  SHALL  BE A CORPORATE GOVERNMENTAL AGENCY AND INSTRUMENTALITY
OF THE STATE CONSTITUTING A PUBLIC BENEFIT CORPORATION.
  2. IN ACCORDANCE WITH THE PROVISIONS OF THIS TITLE, THE AUTHORITY  MAY
ISSUE BONDS ONLY TO FINANCE COSTS, INCLUDING THE FUNDING OF BONDS ISSUED
BY  THE  AUTHORITY  TO  FINANCE  COSTS, AND FUND RESERVES TO SECURE SUCH
BONDS.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02920-01-3

S. 809                              2

  3. THE AUTHORITY AND ITS  CORPORATE  EXISTENCE  SHALL  CONTINUE  UNTIL
TERMINATED  BY  LAW,  PROVIDED,  HOWEVER, THAT NO SUCH TERMINATION SHALL
TAKE EFFECT SO LONG AS THE AUTHORITY SHALL HAVE  BONDS  OR  OTHER  OBLI-
GATIONS  OUTSTANDING  UNLESS  ADEQUATE  PROVISION  HAS BEEN MADE FOR THE
PAYMENT THEREOF.
  S  3976.  ADMINISTRATION  OF  THE AUTHORITY. 1. THE AUTHORITY SHALL BE
ADMINISTERED BY SEVEN DIRECTORS APPOINTED BY THE GOVERNOR, OF  WHOM  TWO
MEMBERS  SHALL  BE  APPOINTED  UPON  THE RECOMMENDATION OF THE TEMPORARY
PRESIDENT OF THE SENATE AND TWO MEMBERS  SHALL  BE  APPOINTED  UPON  THE
RECOMMENDATION  OF  THE SPEAKER OF THE ASSEMBLY. THE POWERS AS SET FORTH
IN THE BY-LAWS OF THE BOARD SHALL BE ESTABLISHED AND VESTED  IN  AND  BE
EXERCISED  BY  THE  MEMBERS  OF THE AUTHORITY AT AN INITIAL MEETING DULY
CALLED AND HELD AND FOUR MEMBERS SHALL CONSTITUTE A QUORUM.
  2. THE MEMBERS OF THE NEW YORK TITLE GUARANTY  AUTHORITY  BOARD  SHALL
RECEIVE  NO  COMPENSATION FOR THEIR SERVICES BUT SHALL BE REIMBURSED FOR
ACTUAL AND NECESSARY EXPENSES  INCURRED  IN  THE  PERFORMANCE  OF  THEIR
DUTIES.
  3.  NOTWITHSTANDING ANY INCONSISTENT PROVISION OF ANY GENERAL, SPECIAL
OR LOCAL LAW, ORDINANCE, RESOLUTION OR CHARTER, NO  OFFICER,  MEMBER  OR
EMPLOYEE  OF  THE  STATE OF NEW YORK, ANY CITY, COUNTY, TOWN OR VILLAGE,
ANY GOVERNMENTAL ENTITY OPERATING ANY  PUBLIC  SCHOOL  OR  COLLEGE,  ANY
SCHOOL  DISTRICT  OR  ANY  OTHER  PUBLIC AGENCY OR INSTRUMENTALITY WHICH
EXERCISES GOVERNMENTAL POWERS UNDER THE LAWS OF THE STATE, SHALL FORFEIT
HIS OR HER OFFICE OR EMPLOYMENT BY REASON OF HIS OR  HER  ACCEPTANCE  OF
APPOINTMENT  AS  A  DIRECTOR,  OFFICER OR EMPLOYEE OF THE AUTHORITY, NOR
SHALL SERVICE AS SUCH DIRECTOR, OFFICER OR EMPLOYEE OF THE AUTHORITY  BE
DEEMED INCOMPATIBLE OR IN CONFLICT WITH SUCH OFFICE OR EMPLOYMENT.
  4. FOUR DIRECTORS SHALL CONSTITUTE A QUORUM FOR THE TRANSACTION OF ANY
BUSINESS  OR THE EXERCISE OF ANY POWER OF THE AUTHORITY. NO ACTION SHALL
BE TAKEN BY THE AUTHORITY EXCEPT PURSUANT TO  A  FAVORABLE  VOTE  OF  AT
LEAST  FOUR DIRECTORS PARTICIPATING IN A MEETING AT WHICH SUCH ACTION IS
TAKEN.
  5. THE AUTHORITY SHALL APPOINT A TREASURER AND  MAY  APPOINT  OFFICERS
AND AGENTS AS IT MAY REQUIRE AND PRESCRIBE THEIR DUTIES.
  S  3977.  GENERAL POWERS OF THE AUTHORITY. EXCEPT AS OTHERWISE LIMITED
BY THIS TITLE, THE AUTHORITY SHALL HAVE THE FOLLOWING POWERS IN ADDITION
TO THOSE SPECIALLY CONFERRED ELSEWHERE IN THIS TITLE,  SUBJECT  ONLY  TO
AGREEMENTS WITH BONDHOLDERS:
  1. TO SUE AND BE SUED;
  2. TO HAVE A SEAL AND ALTER THE SAME AT PLEASURE;
  3.  TO MAKE AND ALTER BY-LAWS FOR ITS ORGANIZATION AND MANAGEMENT AND,
SUBJECT TO AGREEMENTS WITH ITS BONDHOLDERS, TO MAKE AND ALTER RULES  AND
REGULATIONS  GOVERNING THE EXERCISE OF ITS POWERS AND FULFILLMENT OF ITS
PURPOSES UNDER THIS TITLE;
  4. TO MAKE AND EXECUTE CONTRACTS AND ALL OTHER INSTRUMENTS  OR  AGREE-
MENTS  NECESSARY  OR  CONVENIENT  TO  CARRY OUT ANY POWERS AND FUNCTIONS
EXPRESSLY GIVEN IN THIS TITLE;
  5. TO COMMENCE ANY ACTION TO PROTECT OR ENFORCE  ANY  RIGHT  CONFERRED
UPON IT BY ANY LAW, CONTRACT OR OTHER AGREEMENT;
  6.  TO  BORROW  MONEY  AND  ISSUE BONDS, OR TO REFUND THE SAME, AND TO
PROVIDE FOR THE RIGHTS OF THE HOLDERS OF ITS BONDS;
  7. AS SECURITY FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON ANY
BONDS ISSUED BY IT PURSUANT TO THIS TITLE AND  ANY  AGREEMENTS  MADE  IN
CONNECTION  THEREWITH  AND FOR ITS OBLIGATIONS UNDER BOND FACILITIES, TO
PLEDGE ALL OR ANY PART OF ITS REVENUES OR ASSETS;

S. 809                              3

  8. TO ACCEPT GIFTS, GRANTS, LOANS OR CONTRIBUTIONS OF FUNDS OR  FINAN-
CIAL  OR OTHER AID IN ANY FORM FROM THE COUNTY, STATE OR FEDERAL GOVERN-
MENT OR ANY AGENCY OR INSTRUMENTALITY THEREOF, OR FROM ANY OTHER  SOURCE
AND  TO EXPEND THE PROCEEDS FOR ANY OF ITS CORPORATE PURPOSES IN ACCORD-
ANCE WITH THE PROVISIONS OF THIS TITLE;
  9.  SUBJECT  TO  THE  PROVISIONS  OF ANY CONTRACT WITH BONDHOLDERS, TO
INVEST ANY FUNDS HELD IN RESERVES OR SINKING FUNDS,  OR  ANY  FUNDS  NOT
REQUIRED  FOR  IMMEDIATE  USE  OR DISBURSEMENT, AT THE DISCRETION OF THE
AUTHORITY, IN (A) OBLIGATIONS OF THE STATE OR THE UNITED STATES  GOVERN-
MENT, (B) OBLIGATIONS THE PRINCIPAL AND INTEREST OF WHICH ARE GUARANTEED
BY THE STATE OR THE UNITED STATES GOVERNMENT, (C) CERTIFICATES OF DEPOS-
IT,  WHETHER  NEGOTIABLE  OR NON-NEGOTIABLE, AND BANKER'S ACCEPTANCES OF
ANY OF THE FIFTY LARGEST BANKS IN THE UNITED STATES WHICH BANK,  AT  THE
TIME  OF INVESTMENT, HAS AN OUTSTANDING UNSECURED, UNINSURED AND UNGUAR-
ANTEED DEBT ISSUE RANKED IN EITHER OF THE TWO HIGHEST RATING  CATEGORIES
OF TWO NATIONALLY RECOGNIZED INDEPENDENT RATING AGENCIES, (D) COMMERCIAL
PAPER  OF  ANY  BANK OR CORPORATION CREATED UNDER THE LAWS OF EITHER THE
UNITED STATES OR ANY STATE OF THE UNITED STATES WHICH COMMERCIAL  PAPER,
AT  THE  TIME  OF THE INVESTMENT, HAS RECEIVED THE HIGHEST RATING OF TWO
NATIONALLY RECOGNIZED INDEPENDENT RATING  AGENCIES,  (E)  BONDS,  DEBEN-
TURES,  OR  OTHER EVIDENCES OF INDEBTEDNESS, ISSUED OR GUARANTEED AT THE
TIME OF THE INVESTMENT BY THE  FEDERAL  NATIONAL  MORTGAGE  ASSOCIATION,
FEDERAL  HOME  LOAN MORTGAGE CORPORATION, STUDENT LOAN MARKETING ASSOCI-
ATION, FEDERAL FARM CREDIT SYSTEM, OR ANY OTHER UNITED STATES GOVERNMENT
SPONSORED AGENCY, PROVIDED THAT AT THE TIME OF THE INVESTMENT SUCH AGEN-
CY RECEIVES, OR ITS OBLIGATIONS RECEIVE, ANY OF THE THREE HIGHEST RATING
CATEGORIES OF TWO NATIONALLY RECOGNIZED INDEPENDENT RATING AGENCIES, (F)
ANY BONDS OR OTHER OBLIGATIONS OF ANY STATE  OR  THE  UNITED  STATES  OF
AMERICA  OR  OF ANY POLITICAL SUBDIVISION THEREOF OR ANY AGENCY, INSTRU-
MENTALITY OR LOCAL GOVERNMENTAL UNIT OF  ANY  SUCH  STATE  OR  POLITICAL
SUBDIVISION WHICH BONDS OR OTHER OBLIGATIONS, AT THE TIME OF THE INVEST-
MENT,  HAVE  RECEIVED ANY OF THE THREE HIGHEST RATINGS OF TWO NATIONALLY
RECOGNIZED INDEPENDENT RATING AGENCIES,  (G)  ANY  REPURCHASE  AGREEMENT
WITH  ANY BANK OR TRUST COMPANY ORGANIZED UNDER THE LAWS OF ANY STATE OF
THE UNITED STATES OF AMERICA OR  ANY  NATIONAL  BANKING  ASSOCIATION  OR
GOVERNMENT  BOND  DEALER REPORTING TO, TRADING WITH, AND RECOGNIZED AS A
PRIMARY DEALER BY THE FEDERAL RESERVE BANK OF NEW YORK, WHICH  AGREEMENT
IS  SECURED  BY ANY ONE OR MORE OF THE SECURITIES DESCRIBED IN PARAGRAPH
(A), (B) OR (E) OF THIS SUBDIVISION WHICH SECURITIES SHALL AT ALL  TIMES
HAVE  A  MARKET VALUE OF NOT LESS THAN THE FULL AMOUNT OF THE REPURCHASE
AGREEMENT AND BE DELIVERED TO ANOTHER BANK OR  TRUST  COMPANY  ORGANIZED
UNDER  THE  LAWS  OF  NEW YORK STATE OR ANY NATIONAL BANKING ASSOCIATION
DOMICILED IN NEW YORK STATE, AS CUSTODIAN, AND  (H)  REVERSE  REPURCHASE
AGREEMENTS  WITH  ANY  BANK OR TRUST COMPANY ORGANIZED UNDER THE LAWS OF
ANY STATE OF THE UNITED STATES OF AMERICA OR ANY NATIONAL BANKING  ASSO-
CIATION OR GOVERNMENT BOND DEALER REPORTING TO, TRADING WITH, AND RECOG-
NIZED AS A PRIMARY DEALER BY THE FEDERAL RESERVE BANK OF NEW YORK, WHICH
AGREEMENT  IS  SECURED BY ANY ONE OR MORE OF THE SECURITIES DESCRIBED IN
PARAGRAPH (A), (B) OR (E) OF THIS SUBDIVISION WHICH SECURITIES SHALL  AT
ALL  TIMES  HAVE  A MARKET VALUE OF NOT LESS THAN THE FULL AMOUNT OF THE
REPURCHASE AGREEMENT AND BE DELIVERED TO ANOTHER BANK OR  TRUST  COMPANY
ORGANIZED UNDER THE LAWS OF NEW YORK STATE OR ANY NATIONAL BANKING ASSO-
CIATION DOMICILED IN NEW YORK STATE, AS CUSTODIAN;
  10.  TO  APPOINT SUCH OFFICERS AND EMPLOYEES AS IT MAY REQUIRE FOR THE
PERFORMANCE OF ITS DUTIES AND TO FIX AND DETERMINE THEIR QUALIFICATIONS,
DUTIES, AND COMPENSATION, AND TO RETAIN OR EMPLOY COUNSEL, AUDITORS  AND

S. 809                              4

PRIVATE  FINANCIAL CONSULTANTS AND OTHER SERVICES ON A CONTRACT BASIS OR
OTHERWISE FOR RENDERING PROFESSIONAL, BUSINESS OR TECHNICAL SERVICES AND
ADVICE; AND, IN TAKING SUCH ACTIONS, THE AUTHORITY  SHALL  CONSIDER  THE
FINANCIAL IMPACT ON THE COUNTY; AND
  11.  TO DO ANY AND ALL THINGS NECESSARY OR CONVENIENT TO CARRY OUT ITS
PURPOSES AND EXERCISE THE POWERS EXPRESSLY GIVEN  AND  GRANTED  IN  THIS
TITLE;  PROVIDED,  HOWEVER,  SUCH AUTHORITY SHALL UNDER NO CIRCUMSTANCES
ACQUIRE, HOLD OR TRANSFER TITLE TO, LEASE, OWN  BENEFICIALLY  OR  OTHER-
WISE,  MANAGE, OPERATE OR OTHERWISE EXERCISE CONTROL OVER ANY REAL PROP-
ERTY, ANY IMPROVEMENT TO REAL PROPERTY OR  ANY  INTEREST  THEREIN  OTHER
THAN  A  LEASE OR SUBLEASE OF OFFICE SPACE DEEMED NECESSARY OR DESIRABLE
BY THE AUTHORITY.
  S 3978. SPECIAL POWERS OF THE AUTHORITY.   THE NEW  YORK  STATE  TITLE
GUARANTY  AUTHORITY BOARD SHALL OFFER GUARANTIES OF REAL PROPERTY TITLES
IN THIS STATE. THE TERMS, CONDITIONS AND FORM OF THE GUARANTY  CONTRACTS
SHALL  BE  FORMS  APPROVED BY THE AUTHORITY.   THE AUTHORITY 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 TITLE GUARANTY PROGRAM.
  S 3979. NEW YORK TITLE GUARANTY FUND.   1. A TITLE  GUARANTY  FUND  IS
CREATED. FUNDS COLLECTED UNDER THIS PROGRAM SHALL BE PLACED IN THE TITLE
GUARANTY  FUND  AND  ARE AVAILABLE TO PAY ALL CLAIMS, NECESSARY RESERVES
AND ALL ADMINISTRATIVE COSTS OF THE TITLE GUARANTY  PROGRAM.  MONEYS  IN
THE FUND SHALL NOT REVERT TO THE GENERAL FUND AND INTEREST ON THE MONEYS
IN  THE  FUND  SHALL  REQUIRE  COSTS OF TITLE INSURANCE TO BE SUFFICIENT
ENOUGH TO INCLUDE FIFTY MILLION DOLLARS ANNUALLY FOR AFFORDABLE HOUSING,
FIFTY MILLION DOLLARS ANNUALLY TO ENSURE  THAT  THE  STATE'S  ROADS  AND
BRIDGES  ARE  IN  A STATE OF GOOD REPAIR, FIFTY MILLION DOLLARS ANNUALLY
FOR THE PURPOSE OF A STAR REBATE PROGRAM AND OTHER SUCH PURPOSES AS  MAY
BE REQUIRED BY THE LEGISLATURE AND THE GOVERNOR.
  2. A TITLE GUARANTY, CLOSING PROTECTION LETTER, OR GAP COVERAGE ISSUED
UNDER THIS PROGRAM IS AN OBLIGATION OF THE AUTHORITY ONLY AND CLAIMS ARE
PAYABLE  SOLELY  AND ONLY OUT OF THE MONEYS, ASSETS, AND REVENUES OF THE
TITLE GUARANTY FUND AND ARE NOT AN  INDEBTEDNESS  OR  LIABILITY  OF  THE
STATE.  THE  STATE  IS  NOT  LIABLE  ON ANY GUARANTY, CLOSING PROTECTION
LETTER, OR GAP COVERAGE.
  3. THE AUTHORITY SHALL CONSULT WITH THE INSURANCE DEPARTMENT IN DEVEL-
OPING A GUARANTY CONTRACT ACCEPTABLE TO THE SECONDARY MARKET AND  DEVEL-
OPING ANY OTHER FEATURE OF THE PROGRAM WITH WHICH THE INSURANCE DIVISION
MAY HAVE SPECIAL EXPERTISE. THE INSURANCE DEPARTMENT SHALL ESTABLISH THE
AMOUNT  FOR A LOSS RESERVE FUND. EXCEPT AS PROVIDED IN THIS SECTION, THE
TITLE GUARANTY PROGRAM IS NOT SUBJECT TO THE JURISDICTION  OF  OR  REGU-
LATION BY THE INSURANCE DEPARTMENT.
  S  3980.  PARTICIPATING ATTORNEYS.  1. EACH PARTICIPATING ATTORNEY AND
ABSTRACTOR MAY BE REQUIRED TO PAY AN  ANNUAL  PARTICIPATION  FEE  TO  BE
ELIGIBLE  TO PARTICIPATE IN THE TITLE GUARANTY PROGRAM. THE FEE, IF ANY,
SHALL BE SET BY THE AUTHORITY, SUBJECT TO THE APPROVAL OF THE BOARD.
  2. THE PARTICIPATION OF ABSTRACTORS AND ATTORNEYS SHALL BE IN  ACCORD-
ANCE WITH RULES ESTABLISHED BY THE BOARD.
  A. (1) EACH PARTICIPANT SHALL AT ALL TIMES MAINTAIN LIABILITY COVERAGE
IN  AMOUNTS  APPROVED  BY THE AUTHORITY.  UPON PAYMENT OF A CLAIM BY THE
AUTHORITY THE AUTHORITY SHALL BE SUBROGATED TO THE RIGHTS OF THE  CLAIM-
ANT AGAINST ALL PERSONS RELATING TO THE CLAIM.
  (2)  ADDITIONALLY, EACH PARTICIPATING ABSTRACTOR IS REQUIRED TO OWN OR
LEASE, AND  MAINTAIN  AND  USE  IN  THE  PREPARATION  OF  ABSTRACTS,  AN

S. 809                              5

UP-TO-DATE  ABSTRACT TITLE PLANT INCLUDING TRACT INDICES FOR REAL ESTATE
FOR EACH COUNTY IN WHICH ABSTRACTS ARE PREPARED FOR REAL PROPERTY TITLES
GUARANTEED BY THE DIVISION. THE TRACT INDICES SHALL CONTAIN A  REFERENCE
TO  ALL  INSTRUMENTS AFFECTING THE REAL ESTATE WHICH ARE RECORDED IN THE
OFFICE OF THE COUNTY RECORDER, AND SHALL COMMENCE NOT  LESS  THAN  FORTY
YEARS  PRIOR  TO  THE DATE THE ABSTRACTOR COMMENCES PARTICIPATION IN THE
TITLE GUARANTY PROGRAM.  HOWEVER,  A  PARTICIPATING  ATTORNEY  PROVIDING
ABSTRACT  SERVICES  CONTINUOUSLY FROM NOVEMBER TWELFTH, NINETEEN HUNDRED
EIGHTY-SIX, TO THE DATE OF APPLICATION,  EITHER  PERSONALLY  OR  THROUGH
PERSONS  UNDER THE ATTORNEY'S SUPERVISION AND CONTROL IS EXEMPT FROM THE
REQUIREMENTS OF THIS SUBPARAGRAPH.
  B. THE AUTHORITY MAY WAIVE THE REQUIREMENTS OF THIS  SECTION  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.
  3. PRIOR TO THE ISSUANCE OF A  TITLE  GUARANTY,  THE  AUTHORITY  SHALL
REQUIRE  EVIDENCE  THAT AN ABSTRACT OF TITLE TO THE PROPERTY IN QUESTION
HAS BEEN BROUGHT UP-TO-DATE AND CERTIFIED BY A PARTICIPATING  ABSTRACTOR
IN  A  FORM  APPROVED BY AUTHORITY RULES AND A TITLE OPINION ISSUED BY A
PARTICIPATING ATTORNEY IN THE FORM APPROVED IN  THE  RULES  STATING  THE
ATTORNEY'S OPINION AS TO THE TITLE. THE AUTHORITY SHALL REQUIRE EVIDENCE
OF THE ABSTRACT BEING BROUGHT UP-TO-DATE AND THE ABSTRACTOR SHALL RETAIN
EVIDENCE OF THE ABSTRACT AS DETERMINED BY THE BOARD.
  4. THE ATTORNEY RENDERING A TITLE OPINION SHALL BE AUTHORIZED TO ISSUE
A TITLE GUARANTY CERTIFICATE SUBJECT TO THE RULES OF THE AUTHORITY.
  S 2. This act shall take effect immediately.

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