N.Y. Public Authorities Law § 2897: Disposal of public authority property

§ 2897. Disposal of public authority property. 1. Supervision and

direction. Except as otherwise provided in this section, the contracting

officer designated by each public authority shall have supervision and

direction over the disposition of property of such public authority.

2. Custody and control. The custody and control of the property of a

public authority, pending its disposition, and the disposal of such

property, shall be performed by the public authority in possession

thereof or by the commissioner of general services when so authorized

under this section.

3. Method of disposition. Subject to section twenty-eight hundred

ninety-six of this title, any public authority may dispose of property

for not less than the fair market value of such property by sale,

exchange, or transfer, for cash, credit, or other property, with or

without warranty, and upon such other terms and conditions as the

contracting officer deems proper, and it may execute such documents for

the transfer of title or other interest in property and take such other

action as it deems necessary or proper to dispose of such property under

the provisions of this section. Provided, however, that no disposition

of real property, or any interest in real property, shall be made unless

an appraisal of the value of such property has been made by an

independent appraiser and included in the record of the transaction,

and, provided further, that no disposition of any other property, which

because of its unique nature or the unique circumstances of the proposed

transaction is not readily valued by reference to an active market for

similar property, shall be made without a similar appraisal.

4. Sales by the commissioner of general services. When it shall be

deemed advantageous to the state, any public authority may enter into an

agreement with the commissioner of general services where under such

commissioner may dispose of property of such public authority under

terms and conditions agreed to by the public authority and the

commissioner of general services. In disposing of any such property of a

public authority, the commissioner of general services shall be bound by

the terms of this title and references to the contracting officer shall

be deemed to refer to such commissioner.

5. Validity of deed, bill of sale, lease, or other instrument. A deed,

bill of sale, lease, or other instrument executed by or on behalf of any

public authority, purporting to transfer title or any other interest in

property of a public authority under this title shall be conclusive

evidence of compliance with the provisions of this title insofar as

concerns title or other interest of any bona fide grantee or transferee

who has given valuable consideration for such title or other interest

and has not received actual or constructive notice of lack of such

compliance prior to the closing.

6. Bids for disposal; advertising; procedure; disposal by negotiation;

explanatory statement. a. All disposals or contracts for disposal of

property of a public authority made or authorized by the contracting

officer shall be made after publicly advertising for bids except as

provided in paragraphs c and f of this subdivision.

b. Whenever public advertising for bids is required under paragraph a

of this subdivision:

(i) the advertisement for bids shall be made at such time prior to the

disposal or contract, through such methods, and on such terms and

conditions as shall permit full and free competition consistent with the

value and nature of the property;

(ii) all bids shall be publicly disclosed at the time and place stated

in the advertisement; and

(iii) the award shall be made with reasonable promptness by notice to

the responsible bidder whose bid, conforming to the invitation for bids,

will be most advantageous to the state, price and other factors

considered; provided, that all bids may be rejected when it is in the

public interest to do so.

c. Disposals and contracts for disposal of property may be negotiated

or made by public auction without regard to paragraphs a and b of this

subdivision but subject to obtaining such competition as is feasible

under the circumstances, if:

(i) the personal property involved has qualities separate from the

utilitarian purpose of such property, such as artistic quality,

antiquity, historical significance, rarity, or other quality of similar

effect, that would tend to increase its value, or if the personal

property is to be sold in such quantity that, if it were disposed of

under paragraphs a and b of this subdivision, would adversely affect the

state or local market for such property, and the estimated fair market

value of such property and other satisfactory terms of disposal can be

obtained by negotiation;

(ii) the fair market value of the property does not exceed fifteen

thousand dollars;

(iii) bid prices after advertising therefor are not reasonable, either

as to all or some part of the property, or have not been independently

arrived at in open competition;

(iv) the disposal will be to the state or any political subdivision,

and the estimated fair market value of the property and other

satisfactory terms of disposal are obtained by negotiation; or

(v) under those circumstances permitted by subdivision seven of this

section; or

(vi) such action is otherwise authorized by law.

d. (i) An explanatory statement shall be prepared of the circumstances

of each disposal by negotiation of:

(A) any personal property which has an estimated fair market value in

excess of fifteen thousand dollars;

(B) any real property that has an estimated fair market value in

excess of one hundred thousand dollars, except that any real property

disposed of by lease or exchange shall only be subject to clauses (C)

and (D) of this subparagraph;

(C) any real property disposed of by lease, if the estimated annual

rent over the term of the lease is in excess of fifteen thousand

dollars;

(D) any real property or real and related personal property disposed

of by exchange, regardless of value, or any property any part of the

consideration for which is real property.

(ii) Each such statement shall be transmitted to the persons entitled

to receive copies of the report required under section twenty-eight

hundred ninety-six of this title not less than ninety days in advance of

such disposal, and a copy thereof shall be preserved in the files of the

public authority making such disposal.

e. Disposals and contracts for disposal of real property by the canal

corporation may be made by negotiated sale rather than public auction

provided that all of the following conditions have been satisfied:

(i) The canal corporation has determined that: such real property is

no longer necessary or useful to the purposes of the canal corporation;

disposal of such real property complies with all applicable provisions

of the canal law; and disposal of such real property is in the best

interest of the canal corporation;

(ii) An appraisal of the fair market value of such property has been

made by an independent appraiser and included in the record of the

transaction;

(iii) The fair market value of such real property is greater than

fifteen thousand dollars but not greater than seventy-five thousand

dollars;

(iv) Such real property was improved prior to April first, nineteen

hundred ninety-two under a municipal permit or a permit issued pursuant

to section one hundred of the canal law, thereby creating an

encroachment on canal corporation real property;

(v) The purchaser of such real property is, or will be, the owner of

the improvement that either fully or partially encroaches on canal

corporation real property; and

(vi) The consideration paid for such real property will be not less

than the fair market value of the real property exclusive of the value,

fair market or otherwise, of the encroaching improvements.

f. Notwithstanding anything to the contrary in this section, disposals

for use of the thruway authority's fiber optic system, or any part

thereof, may be made through agreements based on set fees that shall not

require public auction, provided that:

i. the thruway authority has determined the disposal of such property

complies with all applicable provisions of this chapter;

ii. the thruway authority has determined that disposal of such

property is in the best interest of the thruway authority;

iii. the set fees established by the thruway authority for use of the

fiber optic system, or part thereof, shall be based on an independent

appraisal of the fair market value of the property; and

iv. any public authority, state agency, municipality, not-for-profit

hospital organized under section forty-three hundred one of the

insurance law, public library, or institution of higher education

located in New York state shall be required only to pay the actual cost

of providing for use of the fiber optic system, but not exceeding the

fair market value determined pursuant to subparagraph (iii) of this

paragraph. For purposes of this paragraph, "public authority" shall

refer to entities defined in section two of the public authorities law.

For purposes of this paragraph, "institution of higher education" shall

refer to entities as defined in subdivisions two and three of section

six hundred one of the education law.

Disposals of the fiber optic system, or any part thereof, through

agreements based on set fees shall not require the explanatory

statements required by this section. Any disposal of property, contract

for disposal of property or agreement made pursuant to this paragraph

shall not be deemed valid and enforceable unless it shall first have

been approved by both the comptroller and the attorney general.

7. Disposal of property for less than fair market value. a. No asset

owned, leased or otherwise in the control of a public authority may be

sold, leased, or otherwise alienated for less than its fair market value

except if:

(i) the transferee is a government or other public entity, and the

terms and conditions of the transfer require that the ownership and use

of the asset will remain with the government or any other public entity;

(ii) the purpose of the transfer is within the purpose, mission or

governing statute of the public authority; or

(iii) in the event a public authority seeks to transfer an asset for

less than its fair market value to other than a governmental entity,

which disposal would not be consistent with the authority's mission,

purpose or governing statutes, such authority shall provide written

notification thereof to the governor, the speaker of the assembly, and

the temporary president of the senate, and such proposed transfer shall

be subject to denial by the governor, the senate, or the assembly.

Denial by the governor shall take the form of a signed certification by

the governor. Denial by either house of the legislature shall take the

form of a resolution by such house. The governor and each house of the

legislature shall take any such action within sixty days of receiving

notification of such proposed transfer during the months of January

through June, provided that if the legislature receives notification of

a proposed transfer during the months of July through December, the

legislature may take any such action within sixty days of January first

of the following year. If no such resolution or certification is

performed within sixty days of such notification of the proposed

transfer to the governor, senate, and assembly, the public authority may

effectuate such transfer. Provided, however, that with respect to a

below market transfer by a local authority that is not within the

purpose, mission or governing statute of the local authority, if the

governing statute provides for the approval of such transfer by the

executive and legislative branches of the political subdivision in which

such local authority resides, and the transfer is of property obtained

by the authority from that political subdivision, then such approval

shall be sufficient to permit the transfer.

b. In the event a below fair market value asset transfer is proposed,

the following information must be provided to the authority board and

the public:

(i) a full description of the asset;

(ii) an appraisal of the fair market value of the asset and any other

information establishing the fair market value sought by the board;

(iii) a description of the purpose of the transfer, and a reasonable

statement of the kind and amount of the benefit to the public resulting

from the transfer, including but not limited to the kind, number,

location, wages or salaries of jobs created or preserved as required by

the transfer, the benefits, if any, to the communities in which the

asset is situated as are required by the transfer;

(iv) a statement of the value to be received compared to the fair

market value;

(v) the names of any private parties participating in the transfer,

and if different than the statement required by subparagraph (iv) of

this paragraph, a statement of the value to the private party; and

(vi) the names of other private parties who have made an offer for

such asset, the value offered, and the purpose for which the asset was

sought to be used.

c. Before approving the disposal of any property for less than fair

market value, the board of an authority shall consider the information

described in paragraph b of this subdivision and make a written

determination that there is no reasonable alternative to the proposed

below-market transfer that would achieve the same purpose of such

transfer.