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A00634 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A634
 
SPONSOR: Perry
  TITLE OF BILL: An act to amend the estates, powers and trusts law and the executive law, in relation to requiring not-for-profit and exempt organizations and trustees to report annually whether or not moneys were spent to pay judgments or settle accusations related to harassment, assault or abuse allegedly committed by officers, directors, employees or agents of the organizations or trustees   PURPOSE: Requires all charitable organizations to incorporate a disclosure state- ment in the organization's .annual financial report filed with the attorney general as to whether or not any organization's funds were spent for satisfying judgments or settlements related to allegations of sexual harassment, sexual assault or child abuse committed by officers, directors, employees, agents, or trustee of an organization.   SUMMARY OF SPECIFIC PROVISIONS: Section one of the bill amends § 8-1.4 of the estates, powers and trusts law by adding a new paragraph (t) which: (1) Requites the provisions of this paragraph to apply to a designated "trustee", as defined in paragraph (a). of this section consistent with the federal and state constitution. (2) Requires a designated trustee to file an annual disclosure statement with the attorney general, subject to perjury, that show whether the funds entrusted to such trustee were expended during the preceding fiscal year for the purpose of satisfying any judgment or settlement related to allegations of sexual harassment, sexual assault, or child abuse committed by an officer, director, employee, trustee or agent of the trustee of an not-for-profit organization. Failure to timely file such disclosure statement will result in default for the same fines and penalties as those that: are applicable to failure by a trustee to time- ly file the trustee's annual financial report. Section two of the bill amends § 172-b of the executive law by adding a new subdivision 9 which: (a) Requires that the provisions of this subdivision apply to certain "charitable organizations" and entities as defined. (b) Requires charitable organizations and entities to file annually as prescribed by the attorney general, a disclosure statement, subject to perjury, that avers whether or not any of the funds entrusted to such charitable organization or entity were expended during the preceding fiscal year for the purpose of satisfying any judgment or settlement related to allegations of sexual harassment, sexual assault, or child abuse committed by an officer, director, employee, or agent of the char- itable organization or entity. Failure to file or timely file such statement subjects the charitable organization or entity to the same fines and penalties as those that are applicable to failure by a chari- table organization or entity to file or timely file an annual financial report. Section three of the bill provides the effective date.   JUSTIFICATION: Charitable organizations are often entrusted with the care and safety of our children. Thirty to forty percent of pedophiles are family friends or trusted adults. Recent developments in child abuse scandals involving members of the Catholic. Church highlight the need for accountability mechanisms to protect children involved with similar organizations. Such crimes do not only harm children, they also burden taxpayers. Annual direct federal costs including medical, police, court, and social services costs for adjudicating child abuse cases are estimated at approximately $24 billion. If these crimes are. defended by not-for-pro- fit organizations, which are exempt from paying taxes, the government and taxpayers bear the financial . burden and have a right to know. This bill will ensure the transparency of judgments and settlements for not for profit organizations which are entrusted with the care of our state's children by requiring full disclosure of such judgments and settlements to the state attorney general.   PRIOR LEGISLATIVE HISTORY: 2015-2016:A.4866 -Referred to Judiciary 2013-2014:A.4095 -Referred to Judiciary 2011-2012:A.3172 -Referred to Judiciary 2009-2010:A.3408 -Referred to Judiciary 2007-2008:A.5219 -Referred to Judiciary 2005-2006:A.8044-A- Referred to Judiciary   FISCAL IMPLICATIONS: None   EFFECTIVE DATE: One hundred twentieth day after becoming law, provided, however, that effective immediately, the addition, amendment and/or repeal of any rules or regulations necessary for the implementation of this act on its effective date is authorized and directed to be made and completed by the state attorney general on or before such effective date.
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