[From the U.S. Government Printing Office, www.gpo.gov]






                         New York Department of State
          Division of Coastal Resources and Waterfront Revitalization





                        @Hazardous Property Disclosure


                           ï¿½309 Project of Special Merit












                               Draft Law Revisions
              to the Office of Ocean and Coastal Resources Management
                              National Ocean Service
                  National Oceanic and Atmospheric Administration
                           U.S. Department of Commerce

                                    June 1994










           DOS 94-7                  AN ACT to amend the executive law, the
                                          environmental conservation law, the
                                          real property law, chapter 535 of
                                          the laws     of   1945   relating to
                                          authorizing and providing for the
                                          construction of erosion arresting
                                          public works to restore and protect
                                          the lands along the Atlantic ocean,
                                          the banking law and the tax law, in
                                          relation to coastal flooding and
                                          erosion

          The People of the State of New York, represented in Senate and

          Assembly, do enact as follows:

    1          Section 1. Subdivision 5 of section 912 of the executive law,

    2     as amended by chapter 366 of the laws of 1986, is amended to read

    3     as follows:

    4          5. To minimize damage to natural resources and property from

    5     flooding and erosion, including proper location of new land

    6     development away from coastal hazard areas_,__, protection of

    7     beaches, dunes, barrier islands, bluffs and other critical coastal

    8     and inland waterway features, [and] use of non-structural measures,

    9     whenever possible and maintenance of existing shorelines in coastal

   10     hazard areas where there are significant levels of development,

   11     public infrastructure, and public investment.

   12          ï¿½2. Subdivision 5 of section 34-0102 of the environmental

   13     conservation law, as added by chapter 841 of the laws of 1981, is

   14     amended to read as follows:

   15          S. Publicly- financed structures to minimize erosion damage

   16     should be utilized only where necessary to protect human life,

   17     maintain existing shorelines where there are siqnificant levels of

   18     existing development, public infrastructure, and public investment

   19     [in] , or new development which requires a location within the









    1    erosion hazard area or adjdcent coastal waters to be able to

    2    function. Both publicly and privately financed erosion protective

    3    structures should be designed to minimize damage to other man-made

    4    property or to natural protective features or to other natural

    5    resources; long term costs of such structures should be carefully

    6    weighed against public benefits before construction is undertaken.

    7         ï¿½3. The real property law is amended by adding a new section

    8    333-b to read as follows:


    9         333-b. Lands in coastal erosion hazard areas; disclosure.

   10         Any verson, firm, company, partnership or corporation off eripZ

   11    to sell real proverty located. in an area identified         by the

   12    commissioner of the department of environmental conservation as a

   13    coastal erosion hazard area pursuant to section 34-0104 of the

   14    environmental conservation law or as an area of sipecial flood

   15    hazard pursuant to section 36-0103          of   the    environmental

   16    conservation law shall provide written notice in the contract of

   17    sale to the prospective 1purchaser or the prospective purchaser's

   18    agent, stating as follows: "This proverty is located in an area

   19    identified as a Coastal Erosion Hazard Area or an area of special

   20    flood hazard and activities or develonment may be recrulated or

   21    prohibited ipursuant    to  article   thirty-four   or    thirty-six,

   22    respectively, of the Environmental Conservation Law.          Further

   23    inf ormation regarding  this property    can be obtained f rom the

   24    nearest office of the   New York State Department of Environmental

   25    Conservation." Such notice shall be T)rinted or written in a size

   26    eaual to at least ten point ty-pe in any contract of sale of real

   27    i)roperty located in a coastal erosion hazard area or area of










    1     special flood hazard. Failure to iprovide such notice shall, at the.

    2     option of the prosipective purchaser or the -orosvective -ourchaser's

    3     agent, result in cancellation of the contract of sale without any

    4     penalty or obligation at any time prior to transfer of title by

    5     mailing a notice of cancellation to the address of the r)erson

    6     offering to sell said real T)roperty. If the contract is canceled,

    7     any -oavments made thereunder shall be returned within ten business

    8     days following receiipt of the cancellation notice.

    9          2.   Any prosi)ective or actual purchaser who has suffered a

   10     loss due to a violation of this section is entitled to recover any

   11     actual damages incurred from the person offering to sell or selling

   12     said real T)roiperty.   In addition, the court may award to the

   13     prosvective or actual purchaser reasonable attorney fees and court


   14     costs.




   15          ï¿½4. Section 2 of chapter 535 of the laws of 1945, relating to

   16     authorizing and providing for the construction of erosion arresting

   17     public works to restore and protect the lands along the Atlantic

   18     ocean, as amended by chapter 941 of the laws of 1970, is amended to

   19     read as follows:

   20          2.   Construction costs; contracts; apportionment.

   21          The cost of preparing plans, specifications, cost estimates,

   22     engineering and inspection services shall be deemed to be a part of

   23     the cost of construction. Such construction shall be subject to

   24     any consent or approval required under or pursuant to federal law

   25     or order, which consent shall be obtained by the commissioner of

   26     the department of environmental conservation.      All such works or









    I     improvements shall be constructed by contract let by the said

    2     commissioner [of conservation] in the manner provided by the public

    3     buildings law, or by forces of the department of environmental

    4     conservation, or partly by such contract and partly by such forces.

    5     However, if the commissioner (of conservation] deems it to be in

    6     the interest of the public, the commissioner may contract with the

    7     municipality or municipalities affected (a) to have the employees

    8     thereof prepare plans, specifications, cost estimates, engineering

    9     and inspection  services, (b) to have the forces and equipment

   10     thereof perform such work of construction, and (c) to purchase the

   11     material; upon such terms as the commissioner            may deem

   12     advantageous to the state. Such municipality or municipalities are

   13     hereby authorized to enter into such contract in order to restore,

   14     control and prevent economic and recreational losses. The cost of

   15     construction of any such works or improvements shall be paid in the

   16     first instance by the state frorn moneys appropriated therefor and

   17     upon completion of such construction and certification by the state

   18     comptroller of the total cost thereof, the municipality or

   19     municipalities affected shall reimburse the state to the extent of

   20     [thirty] fifty per centum. of such cost.   Upon the adoption of a

   21     resolution by the affirmative vote of a majority of the members of

   22     the governing boards or bodies of such municipalities, any two or

   23     more of such municipalities may, by agreement, approved by the

   24     state comptroller and without further authorization, participate in

   25     the cost of such construction. For the purpose of reimbursing the

   26     state for [thirty] fifty per centum. of the cost of such

   27     construction which is hereby declared to be a specific object or









    1    purpose, and not a class of or different objects or purposes, such

    2    municipality or municipalities may and are hereby authorized to

    3    raise the amount certified by the state comptroller by general tax

    4    upon all taxable real property located therein, or by special

    5    assessment upon the real property benefitted thereby, or partly by

    6    such general tax and partly by such special assessment or by the

    7    issuance of obligations pursuant to the local finance law provided,

    8    however, that (a) in towns of the second class any resolution

    9    authorizing the issuance of serial bonds for such object or purpose

   10    shall be subject to permissive referendum only, or such resolution

   11    may be subject to a referendum only, or such resolution may be

   12    subject to a referendum by the finance board of the town on its own

   13    motion, in the manner prescribed in article seven of the town law,

   14    as amended, from time to time; (b) notwithstanding the provisions

   15    of section one hundred seven of the local finance law no down

   16    payment shall be required; and (c) the period of probable

   17    usefulness of such object or purpose shall be governed by the type

   18    of work or improvements, as follows:

   19          (1)  Construction work of steel, stone, or concrete, thirty

   20    years;

   21          (2)  Construction work of wood, or partly wood, twenty years;

   22    and

   23          (3) Dredging work, fill work, dune restoration or other work

   24    or improvements, to which items (1) and (2) above, do not apply,

   25    five years. The period of probable usefulness for such dredging,

   26    fill, dune restoration or other work or improvements shall apply

   27    even though easements on land on which such work is done have a









    1    duration of less than five years. In the event of failure of such

    2    municipality or municipalities to raise or to pay to the state

    3    [thirty] fifty per centum of the cost of construction or any

    4    portion thereof within six months of the certification of costs by

    5    the state comptroller, the state comptroller shall cause to be

    6    withheld from state-collected, locally-shared taxes, to which the

    7    municipality or municipalities would otherwise be entitled, a sum

    8    sufficient to reimburse the state for any amount remaining unpaid,

    9    together with interest on any such unpaid amount at the rate of two

   10    per centum, per annum. from the date of such certification by the

   11    state comptroller.   Such moneys so withheld, including interest,

   12    shall be credited against the amount payable to the state by such

   13    municipality or municipalities on account of such construction.

   14         ï¿½5. Section 103 of the banking law is amended by adding a new

   15    subdivision 3 to read as follows:

   16         3. Make any loan upon the security of real egtate located

   17    within a special flood hazard area designated by the federal

   18    emergency management acrency, unless such real estate has been

   19    insured against the full cash amount of any loss resulting either

   20    from flood, the rising of the waters of an adlacent waterbody, or

   21    erosion, or has been insured against any such loss to the maximum

   22    extent possible under the national flood insurance program, and a v
                                                                           Lly

   23    such insurance shall remain in force and effect throughout the term


   24    of the loan.

   25         ï¿½6. . Subdivision 1 of section 174 of the banking law, as

   26.   amended by chapter 111 of the laws of 1960, is amended to read as

   27    follows:









    1          1.   No private banker shall:

    2          (a) Purchase with funds held by him as a private banker any

    3     real estate except a plot upon which there is or may be erected a

    4     building suitable for the convenient transaction of his business;

    5     nor make a loan of such funds upon the security of real estate, if

    6     such real estate is unimproved, in excess of two-thirds, and if

    7     such real estate is improved by a building or buildings or is to be

    8     improved by a building or buildings in the process of construction,

    9     the major portion of which building or buildings is used or in the

   10     case of a building under construction is to be used, for

   11     residential, business, manufacturing or agricultural purposes, in

   12     excess of three-fourths, of the appraised value of such real

   13     estate, or in an amount which when added to the amount. unpaid upon

   14     prior mortgages, liens and encumbrances upon such real estate

   15     exceeds such real estate is subject to prior mortgage, lien or

   16     encumbrance and the amount unpaid upon such prior mortgage, lien or

   17     encumbrance or the aggregate amount unpaid upon all prior

   18     mortgages, liens and encumbrances exceeds ten per centum of the

   19     permanent capital of such private banker.

   20          (b) Make any loan upon the security of real estate located

   21     within a special flood hazard area desicTnated by the federal


   22     emergency manacrement agency, unless such real estate has been


   23     insured against the full cash amount of any loss resulting either

   24     from flood, the rising of the waters of an adlacent waterbody, or

   25     erosion, or has been insured against any such loss to the maximum

   26     extent T)ossible under the national flood insurance program, and au

   27     such insurance shall remain in force and effect throughout the term











    1    of the loan.




    2         ï¿½7. Subdivision 6 of section 202 of banking law, as amended

    3    by chapter 360 of the laws of 1984, is amended to read as follows:

    4         6.   No foreign banking corporation licensed pursuant to

    5    article two of this chapter to maintain one or more branches in

    6    this state shall in this state [make]:

    7          (a) Make any loan for the purpose of financing the purchase of

    8    or refinancing an existing ownership interest in certificates of

    9    stock or other evidence of an ownership interest in, and a

   10    proprietary lease from, a corporation or partnership formed for the

   11    purpose of the cooperative ownership of real estate, unsecured

   12    except to the extent of an assignment or transfer of the stock

   13    certificates or other evidence of ownership interest of the

   14    borrower and the proprietary lease within ninety days from the

   15    making of the loan, which shall exceed the same maximum per cent of

   16    the purchase price or, in the case of a refinancing, the appraised

   17    value of such certificates of stock or other evidence of an

   18    ownership interest as is permitted to be made on real estate

   19    improved by a single family residence occupied by the owner and

   20    which shall fail to provide for full repayment of principal and

   21    interest within the same number of years as a loan secured by real

   22    estate as hereinabove described; provided that such loan shall be

   23    subject to such regulations as the banking board may from time to

   24    time promulgate. Notwithstanding any other provision of law, the

   25    maximum rate of interest which may be charged, taken or received

   26    upon any loan or forbearance made pursuant to this subdivision may









    1    exceed the rate of interest prescribed by the banking board in

    2    accordance with section fourteen-a of this chapter by no more than

    3    one and one-half per centum. per annum.

    4          (b) Make any loan upon the security of real estate located

    5    within a sipecial flood hazard area desicrnated by the federal


    6    emercrency management acrency, unless such real estate has been

    7    insured against the full cash amount of any loss resulting either

    8    from flood, the rising of the waters of an adlacent waterbody, or

    9    erosion, or has been insured agginst any such loss to the maximum

   10    extent possible under the national flood insurance program, and any

   11    such insurance shall remain in force and effect throughout the term


   12    of the loan.

   13          ï¿½8. Section 235 of the banking law is amended by adding a new

   14    subdivision 6-b to read as follows:


   15          6-b. No savings bank shall make any loan upon the security of

   16    real estate located within a spgcial flood hazard area designated

   17    by the federal emergency managemgnt agenc     unless such real estate

   18    has been insured acrainst the full cash amount of any loss resulting

   19    either from flood, the rising of the waters of an adlacent

   20    waterbody, or erosion, or has been insured against any such loss to

   21    the maximum extent possible under the national flood insurance

   22    program, and any such insurance shall remain in force and effect

   23    throuc[hout the term of the loan.

   24          ï¿½9.   Subdivision 4 of section 380 of the banking law is

   25    amended by  adding a new paragraph (c) to read as follows:

   26          (c) Relating to -real estate located within a sipecial flood

   .27   hazard area designate.d by the federal emergency manacrement acrency,










    1    unless such real estate has been insured against the full cash

    2    amount of any loss resulting either from flood, the rising of the

    3    waters of an adlacent waterbody, or erosion, or has been insured

    4    acrainst any such loss to the maximum extent ipossible under the

    5    national flood insurance vrocrram, and any such insurance shall

    6    remain in force and effect throughout the term of the loan.

    7         ï¿½10. Section 454 of the banking law is amended by adding a new

    8    subdivision 11-a to read as follows:


    9         11-a. Make any loan upon the security of real estate located

   10    within a special flood hazard area as designated by the federal

   11    emergency management acrency, unless such real estate has been

   12    insured against the full cash amount of any loss resulting either

   13    from flood, the rising of the waters of an adjacent waterbody, or

   14    erosion, or has been insured against any such loss to the maximum

   15    extent T)ossible under the national flood insurance iprogram, and any

   16    such insurance shall remain in force and effect throughout the term


   17    of the loan.

   18         ï¿½11. Section 509 of the banking law is amended by adding a

   19    new subdivision 5 to read as follows:


   20         5.   Make any loan upon the security of real estate located

   21    within a special flood hazard area as designated by the federal

   22    emercrency management agency, unless such real estate has been

   23    insured against the full cash amount of any loss resulting either

   24    from flood, the rising of the waters of an adiacent waterbody, or

   25    erosion, or has been insured against any such loss to the maximum

   26    extent possible under the national flood insurance T)rogram, and any

   27    such insurance shall remain in force and effect throughout the term











    I    of the loan.

    2         ï¿½12. Section 595-a of the banking law is amended by adding a

    3    new subdivision 4 to read as follows:

    4         4. Mortgages in coastal erosion hazard areas. No licensee

    5    under this article shall make any loan uvon the security of real

    6    estate located within a special flood hazard area as designated by

    7    the federal emergency management agency, unless such real estate

    8    has been insured against the full cash amount of any loss regulting

    9    either from flood, the rising of the waters of an adlacent

   10    waterbody, or erosion, or has been insured against any such loss to

   11    the maximum extent possible under the national flood insurance

   12    1program, and any such insurance shall remain in force and effect

   13    throughout the term of the loan,--

   14         913. Article 2 of the banking law is amended by adding a new


   15    section 14-f to read as follows:


   16         14-f. Escrow of flood insurance 1premiums and fees.

   17         1. Any mortgacre lendinq institution which recruires the

   is    escrowing of taxes, insurance premiums, fees or any other charges

   19    for a loan secured by real estate, shall recTuire the escrowing of

   20    all premiums and fees for flood insurance for real estate located

   21    within a special -flood hazard area desicrnated by the federal

   22    emergency management aqency.      Premiums and fees paid to the

   23    mortgage lending institution shall be r)aid in a manner sufficient

   24    to make 1payments as due for the duration of the loan. Upon receint

   25    of the i)remiums and fees, the mortgage lending institution shall

   26    deposit such 1premiums and fees in an escrow account on behalf of

   27    the borrower.   UT)on receilpt of notice from the director of the










    1    federal emergency agency or the insurance T)rovider that insurance

    2    premiums are due, the mortgage lending institution shall pay fr

    3    the escrow account to the provider of the insurance, the amount of


    4    insurance 1premiums owed.

    5         2. No mortcracre lending institution shall imipose a service

    6    charge in connection with the maintenance of an escrow account

    7    unless provision therefor was expressly made in a loan contract

    8    executed prior to the effective date of this section.

    9         3. The banking board shall have the power, by a three-fifths

   10    vote of all its members, to adopt such regulations as it shall deem

   11    necessary or appropriate to implement the Provisions of this

   12    section.

   13         ï¿½14. Subsection (c) of section 615 of the tax law is amended

   14    by adding a new paragraph 4 to read as follows:

   15         (4) any loss e,,&perienced by a structure constructed or

   16    substantially reconstructed- after the effective date      of this

   17    chapter in a flood hazard area designated as a 'IV" zQne on a flood

   18    insurance rate may prepared by the federal emergency management

   19    agency or within a coastal erosion hazard area as identified by the

   20    commissioner of environmental conservation pursuant to section 34-

   21    0104 of the environmental conservation law, which is attributable

   22    to a disaster occurring in an area subsecruently determined by the

   23    president of the united states to warrant assistance by the federal

   24    government under the disaster relief act of 1974, to the extent

   25    that such expenses and 1premiums are deductible in determining

   26    federal taxable income.

   27         ï¿½15. This act shall take effect immediately.






                                                                                                                              OAA COASTAL SERVICES CTR LIBRARY

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