Assembly Speaker Sheldon Silver and Corporations, Authorities and Commissions Chair James Brennan, Judiciary Committee Chair Helene Weinstein and Government Operations Committee Chair Steve Englebright today announced the passage of the Nonprofit Revitalization Act of 2013.

This legislation (A.8072, Brennan) provides sweeping measures to address concerns about nonprofit oversight and accountability as well as eliminates obsolete and onerous regulations that hindered their efficient administration in New York State.

"Nonprofit corporations provide a whole range of welcome and needed services that enhance the quality of life in communities across the state," said Silver. "This bill would enhance the effectiveness of these organizations through regulatory relief. It also would provide governance and oversight provisions to prevent fraud and improve public trust."

"The burdens New York law currently places on nonprofits are too high, and the need for clearer guidance on governance is great," said Brennan. "I am looking forward to the enactment of these comprehensive and forward looking measures that will cut the regulatory red tape while at the same time providing the right balance of oversight without overburdening the operations of nonprofit organizations."

The Nonprofit Revitalization Act of 2013 is supported by Attorney General Eric Schneiderman, who called for an overhaul of the state's nonprofit regulations, which have not been updated in more than 40 years.

A range of governance and oversight issues that relate to nonprofits and charitable trusts are addressed in the bill with provisions that would:

• require conflict of interest policies to be adopted by all nonprofit corporations;
• impose closer scrutiny of related-party transactions between nonprofits and entities that directors, officers or key employees own;
• mandate the adoption of whistleblower policies for nonprofits that have 20 or more employees and over $1 million in annual revenue; and
• establish comprehensive disclosure requirements for officers, directors and key employees.

"Nonprofits in our state are unnecessarily burdened with requirements that mandate multi-level reviews by government agencies and the courts," said Weinstein. "With the passage of this comprehensive legislation, we will now streamline these regulations without sacrificing oversight so that nonprofits and the courts can focus time and resources on their core missions."

"This legislation is very comprehensive and provides much needed common-sense solutions that would rein in abuse and remove burdensome and unnecessary regulations. Equally important, it will strengthen the operations of nonprofits and their ability to deliver vital services to the public," said Englebright.

The bill streamlines and modernizes a number of laws affecting nonprofits, including measures that would:

• reduce the incorporation types from four to two in order to encourage more nonprofit corporations to incorporate in New York State and not other states;
• allow the Attorney General (AG) to approve mergers and dissolutions instead of the Supreme Court;
• permit the use of websites to post such announcements as the appointment of a corporation's receiver, the resignation of a receiver and notices of corporate board meetings;
• authorizes the use of email to submit documents to the AG and for corporate board actions such as proxies, waivers and consents;
• approve the use of video-conference technology for board meetings; and
• establish that non-substantial real estate transactions can be approved with only a majority of the board or committee approval, instead of requiring a 2/3 approval of the board.

In addition, the bill would simplify mergers of education and religious corporations, eliminate various incorporation fees and requires independent audits of all nonprofits that solicit donations from the public or government.

The Nonprofit Revitalization Act of 2013 is also supported by the New York State Bar Association and the New York State Law Review Commission.