BILL NUMBER: S8939

SPONSOR: BROOKS
 
TITLE OF BILL:

An act to amend the town law, in relation to the acquisition of real
property by eminent domain

 
PURPOSE:

The purpose of this bill is to afford all Towns and Improvement
Districts throughout New York State conditional condemnation enabling
them to take the same approach in acquiring private utilities as now
enjoyed by the water authorities in City of New York

 
SUMMARY OF PROVISIONS:

Section 1. amends section 64 of the town law by adding a new subdivision
2-b which provides 'conditional condemnation' to towns.

Section 2. amends section 215 of the town law by adding a new subdivi-
              

sion 5-a which provides 'conditional condemnation' to improvement
districts

Section 3. is the enacting clause

 
JUSTIFICATION:

In the 1990s, legislation was enacted that granted water authorities
much more flexibility in an eminent domain/condemnation proceeding seek-
ing acquisition of a private water utility. Water authorities were
granted the power to conduct a "conditional condemnation".  Simply stat-
ed, if the condemnation judge sets a valuation much higher than antic-
ipated, the water authorities can walk away without cost.  "Conditional
condemnation" is not currently available to Article 13 improvement
districts or Article 12 town water districts.

The original statute establishing the Water Authority of Western Nassau
indicates that it was initially formed in 1990 SCWA was established much
earlier than that.

Please note that the original enabling legislation for Western Nassau
provided "basic condemnation" rights under Section 1198 f subdivision 5:
Powers of the authority. This subdivision 5 parallels subdivision 5 of
Town Law Section 215 which governs the condemnation powers of the Massa-
pequa Water District ("MWD"). It also parallels subdivision 2 of Town
Law Section 64 governing the condemnation rights of the Town of Hemp-
stead Water Department. All three paragraphs provide "simple" condemna-
tion under the Eminent Domain Proceedings Law ("EDPL").

In "Basic" condemnation, under the EDPL, once a condemnation "map or
filing" is made in Supreme Court, there is no turning back. Legal title
vests immediately in the municipality. The only thing remaining to do
for the condemnation judge is to determine a final valuation (subject to
appeal) which establishes the "fair value" to be paid for the condemned
property.

Water authorities recognized that "basic or simple" condemnation works
well if the property sought is a water easement or even two acres for a
new well. "Fair market" valuations are fairly straight-forward for these
basic acquisitions. However, substantial valuation difficulties arise
when the water authorities seek to acquire a private water system
comprised of land, equipment, facilities and the "intangible component
of a going business". By virtue of these complex issues, no one could
accurately predict what a condemnation judge would do.

Consequently, during the early 1990s, Water Authorities persuaded the
Legislature to give them a right to undertake a "conditional condemna-
tion". This would "balance" the right of the private utility to get a
fair price. At the same time, title would not automatically vest at the
filing of the condemnation proceeding under the EDPL.  Instead, these
new statutes give the authority the right to "withdraw" from the condem-
nation proceeding- without cost- should the ultimate valuation by the
condemnation court prove to costly. See, Saratoga Water Services v.
Saratoga County Water Authority, 83 NY2d, 205 (Ct. App . 1994) at 212.

Modeled after General City law Section 20(2), the Saratoga Court of
Appeals affirmed the constitutionality of Saratoga's conditional condem-
nation legislation. The conditional condemnation language approved by
the Court of Appeals is now included in two separate (identical) stat-
utes enacted for Western Nassau (1992) and for SCWA (1994) (both
enclosed as Exhibit E). Please note that these standalone statutes were
enacted after the authorities were originally established. Conditional
condemnation authority is also incorporated directly in the enabling
legislation for the North Shore Water Authority at page 20, section
114-S (copy enclosed as Exhibit F, see last page).

From all of the above, if MWD is to entertain a formal condemnation of
the Eastern Massapequa portion of the NYAW service area and/or if the
Town of Hempstead Water Department also entertains a formal condemnation
of the southwestern portion of the NYAW service area, both need similar
"conditional condemnation" legislation which would allow them to with-
draw from the proceeding if the valuation goes too high.

This legislation should be adopted as it benefits all Towns and Improve-
ment Districts throughout New York State enabling them to take the same
approach in acquiring private utilities as now enjoyed by the water
authorities in City of New York.

Finally, the "conditional condemnation" should be provisioned upon a
successful permissive referendum required under Town Law Section
209-e(3) conducted after the Town Board approves the annexation of the
new area to be serviced by either municipality.

 
FISCAL IMPLICATIONS:

None

 
EFFECTIVE DATE:
This act shall take effect immediately.