New York State Assembly

 
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A10654 Summary:

A10654 Actions:

A10654 Committee Votes:

Committee:CORPORATIONS, AUTHORITIES AND COMMISSIONS   Chair:Paulin      
DATE:05/31/2018AYE/NAY:24/0  Action: Favorable refer to committee Codes        
Paulin
Aye
Lawrence
Aye
Cook
Excused
Blankenbush
Aye
Galef
Aye
Friend
Aye
Jenne
Aye
Malliotakis
Aye
Rodriguez
Aye
Palmesano
Aye
Abinanti
Aye
Montesano
Aye
Quart
Aye
Lalor
Aye
Otis
Aye
Rozic
Aye
Kim
Aye
Buchwald
Aye
Seawright
Aye
Dilan
Aye
Richardson
Absent
De La Rosa
Aye
Pheffer Amato
Aye
Vanel
Aye
Carroll
Aye
Espinal
Aye

Committee:CODES   Chair:Lentol      
DATE:06/05/2018AYE/NAY:22/0  Action: Favorable refer to committee Rules        
Lentol
Aye
Curran
Aye
Schimminger
Aye
Giglio
Aye
Pretlow
Aye
Montesano
Aye
Cook
Aye
Morinello
Aye
Cymbrowitz
Aye
Palumbo
Aye
Titus
Aye
Garbarino
Aye
O'Donnell
Aye
Lavine
Aye
Perry
Aye
Zebrowski
Aye
Abinanti
Aye
Weprin
Aye
Mosley
Aye
Hevesi
Aye
Fahy
Aye
Seawright
Aye

Committee:RULES   Chair:Heastie      
DATE:06/13/2018AYE/NAY:29/0  Action: Favorable         
Heastie
Aye
Kolb
Aye
Gottfried
Aye
Oaks
Aye
Lentol
Aye
Butler
Aye
Gantt
Excused
Crouch
Aye
Nolan
Aye
Finch
Aye
Weinstein
Aye
Barclay
Aye
Hooper
Excused
Raia
Aye
Ortiz
Aye
Hawley
Aye
Pretlow
Aye
Cook
Aye
Glick
Aye
Morelle
Aye
Aubry
Aye
Englebright
Aye
Dinowitz
Aye
Colton
Aye
Magnarelli
Aye
Perry
Aye
Galef
Aye
Paulin
Aye
Titus
Aye
Peoples-Stokes
Aye
Benedetto
Aye

A10654 Floor Votes:

A10654 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          10654
 
                   IN ASSEMBLY
 
                                      May 10, 2018
                                       ___________
 
        Introduced by M. of A. PAULIN -- read once and referred to the Committee
          on Corporations, Authorities and Commissions
 
        AN  ACT  to amend the not-for-profit corporation law, in relation to the
          regulation of key persons
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  Paragraph  (a)  and  subparagraph  4  of paragraph (b) of
     2  section 715-b of the not-for-profit corporation law, as amended by chap-
     3  ter 466 of the laws of 2016, are amended to read as follows:
     4    (a) Except as provided in paragraph (c) of this section, the board  of
     5  every  corporation  that  has  twenty or more employees and in the prior
     6  fiscal year had annual revenue in excess of one  million  dollars  shall
     7  adopt,  and oversee the implementation of, and compliance with, a whist-
     8  leblower policy to protect from retaliation persons who report suspected
     9  improper conduct. Such policy shall provide that no  director,  officer,
    10  key  person,  employee  or  volunteer of a corporation who in good faith
    11  reports any action or suspected action taken by  or  within  the  corpo-
    12  ration that is illegal, fraudulent or in violation of any adopted policy
    13  of the corporation shall suffer intimidation, harassment, discrimination
    14  or  other  retaliation  or, in the case of employees, adverse employment
    15  consequence.
    16    (4) A requirement that a copy of the  policy  be  distributed  to  all
    17  directors,  officers,  key  persons,  employees  and  to  volunteers who
    18  provide substantial services to the corporation. For  purposes  of  this
    19  subdivision,  posting  the policy on the corporation's website or at the
    20  corporation's offices in a conspicuous location accessible to  employees
    21  and  volunteers  are  among the methods a corporation may use to satisfy
    22  the distribution requirement.
    23    § 2. Section 716 of the not-for-profit corporation law, as amended  by
    24  chapter 549 of the laws of 2013, is amended to read as follows:
    25  § 716. Loans to directors [and], officers and key persons.
    26    No  loans,  other  than  through the purchase of bonds, debentures, or
    27  similar obligations of the type customarily sold in public offerings, or
    28  through ordinary deposit of funds in a bank, shall be made by  a  corpo-
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD15305-01-8
        A. 10654                            2
 
     1  ration  to  its directors [or], officers or key persons, or to any other
     2  corporation, firm, association or other entity in which one or  more  of
     3  its directors [or], officers or key persons are directors [or], officers
     4  or  key  persons or hold a substantial financial interest, except a loan
     5  by one charitable corporation to another charitable corporation. A  loan
     6  made  in  violation  of this section shall be a violation of the duty to
     7  the corporation of the directors or officers authorizing it  or  partic-
     8  ipating  in  it,  but the obligation of the borrower with respect to the
     9  loan shall not be affected thereby.
    10    § 3. Section 717 of the not-for-profit corporation law, paragraph  (a)
    11  as  amended  by  chapter  490  of  the laws of 2010 and paragraph (b) as
    12  amended by chapter 734 of the laws  of  1988,  is  amended  to  read  as
    13  follows:
    14  § 717. Duty of directors [and], officers and key persons.
    15    (a)  Directors  [and],  officers  and  key persons shall discharge the
    16  duties of their respective positions in good faith and with the care  an
    17  ordinarily  prudent person in a like position would exercise under simi-
    18  lar circumstances. The factors set forth in subparagraph  one  of  para-
    19  graph  (e) of section 552 (Standard of conduct in managing and investing
    20  an institutional fund), if relevant, must be considered by  a  governing
    21  board  delegating  investment management of institutional funds pursuant
    22  to section 514 (Delegation of investment  management)  For  purposes  of
    23  this  paragraph,  the  term institutional fund is defined in section 551
    24  (Definitions).
    25    (b) In discharging their duties, directors  [and],  officers  and  key
    26  persons,  when  acting in good faith, may rely on information, opinions,
    27  reports or statements including financial statements and other financial
    28  data, in each case prepared or presented by: (1) one or more officers or
    29  employees of the corporation, whom the director believes to be  reliable
    30  and  competent in the matters presented, (2) counsel, public accountants
    31  or other persons as to matters which the directors [or], officers or key
    32  persons believe to be within such person's professional or expert compe-
    33  tence or (3) a committee of the board upon which they do not serve, duly
    34  designated in accordance with a provision of the certificate of incorpo-
    35  ration or the bylaws, as to matters  within  its  designated  authority,
    36  which  committee  the directors [or], officers or key persons believe to
    37  merit confidence, so long as in so relying they shall be acting in  good
    38  faith  and  with  that degree of care specified in paragraph (a) of this
    39  section.  Persons shall not be considered to be acting in good faith  if
    40  they  have  knowledge concerning the matter in question that would cause
    41  such reliance to be unwarranted. Persons who  so  perform  their  duties
    42  shall  have  no  liability  by  reason of being or having been directors
    43  [or], officers or key persons of the corporation.
    44    § 4. Section 718 of the not-for-profit corporation law, as amended  by
    45  chapter 549 of the laws of 2013, is amended to read as follows:
    46  § 718. List of directors [and], officers and key persons.
    47    (a)  If  a  member  or  creditor of a corporation, in person or by his
    48  attorney or agent, or a representative of the district  attorney  or  of
    49  the  secretary  of state, the attorney general, or other state official,
    50  makes a written demand on a corporation to inspect a current list of its
    51  directors [and], officers and key persons, the corporation shall, within
    52  two business days after receipt of the demand and for a  period  of  one
    53  week  thereafter,  make  the  list  available for such inspection at its
    54  office during usual business hours.
    55    (b) Upon refusal by the corporation to make  a  current  list  of  its
    56  directors  [and],  officers  and  key  persons available, as provided in
        A. 10654                            3
 
     1  paragraph (a) of this section, the person making a demand for such  list
     2  may  apply, ex parte, to the supreme court at a special term held within
     3  the judicial district where the office of the corporation is located for
     4  an  order  directing  the  corporation  to make such list available. The
     5  court may grant such order or take such other action as it may deem just
     6  and proper.
     7    § 5. Section 720-a of the not-for-profit corporation law, as added  by
     8  chapter 220 of the laws of 1986, is amended to read as follows:
     9  § 720-a. Liability  of  directors,  officers  [and],  trustees  and  key
    10             persons.
    11    Except as provided  in  sections  seven  hundred  nineteen  and  seven
    12  hundred  twenty  of  this  chapter,  and except any action or proceeding
    13  brought by the attorney general or, in the case of a  charitable  trust,
    14  an  action  or  proceeding against a trustee brought by a beneficiary of
    15  such trust, no person serving without compensation as a director,  offi-
    16  cer,  key  person or trustee of a corporation, association, organization
    17  or trust described in section 501 (c) (3) of the United States  internal
    18  revenue  code shall be liable to any person other than such corporation,
    19  association, organization or trust based solely on his or her conduct in
    20  the execution of such office unless the conduct of such director,  offi-
    21  cer,  key person or trustee with respect to the person asserting liabil-
    22  ity constituted gross negligence or was intended to cause the  resulting
    23  harm  to  the  person  asserting  such  liability.  For purposes of this
    24  section, such a director, officer, key person or trustee  shall  not  be
    25  considered  compensated solely by reason of payment of his or her actual
    26  expenses incurred in attending meetings or otherwise in the execution of
    27  such office.
    28    § 6. This act shall take effect immediately.