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S05870 Summary:

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S05870 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          5870
 
                               2015-2016 Regular Sessions
 
                    IN SENATE
 
                                      June 9, 2015
                                       ___________
 
        Introduced  by  Sen.  RANZENHOFER -- read twice and ordered printed, and
          when printed to be committed to the Committee on Rules
 
        AN ACT to amend the not-for-profit corporation law,  the  education  law
          and   the   mental  hygiene  law,  in  relation  to  making  technical
          corrections to provisions of law relating to charitable corporations
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  Subparagraph  10  of  paragraph (a) of section 112 of the
     2  not-for-profit corporation law, as added by chapter 549 of the  laws  of
     3  2013, is amended to read as follows:
     4    (10)  To  enjoin,  void or rescind any related party transaction, [or]
     5  seek [additional] damages [or] and other appropriate remedies, in law or
     6  equity, in addition to any actions  pursuant  to  section  715  (Related
     7  party transactions) of this chapter.
     8    §  2.  Paragraph  (d) of section 304 of the not-for-profit corporation
     9  law, as amended by chapter 168 of the laws of 1982, is amended  to  read
    10  as follows:
    11    (d) Any designated post-office address to which the secretary of state
    12  shall mail a copy of process served upon him or her as agent of a domes-
    13  tic  corporation  formed  under  article four of this chapter or foreign
    14  corporation, shall continue until the filing of a certificate under this
    15  chapter directing the mailing to a different post-office address.
    16    § 3. Subparagraph 2 of paragraph (b) and paragraph (d) of section  404
    17  of  the  not-for-profit corporation law, subparagraph 2 of paragraph (b)
    18  as added by section 4 of part D of chapter 58 of the laws  of  2006  and
    19  paragraph (d) as amended by chapter 549 of the laws of 2013, are amended
    20  to read as follows:
    21    (2)  A  corporation  whose statement of purposes specifically includes
    22  the establishment or operation of a child day care center, as that  term
    23  is  defined  in section three hundred ninety of the social services law,
    24  shall [provide] mail a certified copy of  the  certificate  of  incorpo-
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11504-01-5
        S. 5870                             2
 
     1  ration,  each  amendment thereto, and any certificate of merger, consol-
     2  idation or dissolution involving such corporation to the office of chil-
     3  dren  and  family  services  within  thirty  days   after   receipt   of
     4  confirmation  of  the  filing  of  such  certificate, amendment, merger,
     5  consolidation or dissolution with the department of state. This require-
     6  ment shall also apply to any foreign corporation filing  an  application
     7  for  authority  under section thirteen hundred four of this chapter, any
     8  amendments thereto, and any surrender of  authority  or  termination  of
     9  authority in this state of such corporation.
    10    (d)  Every  corporation  whose  certificate  of incorporation includes
    11  among its purposes the operation of a school; a college,  university  or
    12  other  entity providing post secondary education; a library; or a museum
    13  or historical society shall have endorsed thereon or annexed thereto the
    14  approval of the commissioner of education, or in the case of  a  college
    15  or a university, the written authorization of the Regents of the univer-
    16  sity  of the state of New York. Any other corporation the certificate of
    17  incorporation of which includes a purpose for which a corporation  might
    18  be  chartered  by the regents of the university of the State of New York
    19  shall [provide] mail a certified copy of  the  certificate  of  incorpo-
    20  ration  to  the  commissioner of education within thirty [business] days
    21  after [the corporation receives  confirmation  from  the  department  of
    22  state  that  the certificate has been accepted for] receipt of confirma-
    23  tion of filing.
    24    § 4. Section 606 of the not-for-profit corporation law, as amended  by
    25  chapter 549 of the laws of 2013, is amended to read as follows:
    26  § 606. Waivers of notice.
    27    Notice of meeting need not be given to any member who submits a waiver
    28  of  notice,  in person or by proxy, whether before or after the meeting.
    29  Waiver of notice may be written or electronic. If  written,  the  waiver
    30  must  be  executed  by  the  member  or the member's authorized officer,
    31  director, employee, or agent by signing such waiver or  causing  his  or
    32  her  signature  to  be  affixed  to such waiver by any reasonable means,
    33  including, but not limited to facsimile signature.  If  electronic,  the
    34  transmission  of  the  waiver  must  be  sent by electronic mail and set
    35  forth, or be submitted with, information from which it can reasonably be
    36  determined that the transmission  was  authorized  by  the  member.  The
    37  attendance  of  any  member at a meeting, in person or by proxy, without
    38  protesting prior to the conclusion of the meeting the lack of notice  of
    39  such meeting, shall constitute a waiver of notice by him or her.
    40    §  5.  Paragraphs  (a)  and  (c)  of section 614 of the not-for-profit
    41  corporation law, paragraph (a) as amended by chapter 549 of the laws  of
    42  2013, are amended to read as follows:
    43    (a) Whenever, under this chapter, members are required or permitted to
    44  take any action by vote, such action may be taken without a meeting upon
    45  the  consent  of  all  of  the  members  entitled to vote thereon, which
    46  consent shall set forth the action so taken. Such consent may be written
    47  or electronic. If written, the consent must be executed by the member or
    48  the member's authorized officer, director, employee or agent by  signing
    49  such  consent  or  causing  his  or  her signature to be affixed to such
    50  [waiver] consent by any reasonable means including but  not  limited  to
    51  facsimile  signature.    If  electronic, the transmission of the consent
    52  must be sent by electronic mail and set forth,  or  be  submitted  with,
    53  information  from  which it can reasonably be determined that the trans-
    54  mission was authorized by  the  member.  This  paragraph  shall  not  be
    55  construed  to alter or modify any provision in a certificate of incorpo-
    56  ration not inconsistent  with  this  chapter  under  which  the  written
        S. 5870                             3
 
     1  consent  of  less  than  all  of the members is sufficient for corporate
     2  action.
     3    (c)  When  there are no members of record, such action may be taken on
     4  the written consent signed by a majority in interest of the  subscribers
     5  for capital certificates whose subscriptions have been accepted or their
     6  successors  in interest or, if no subscription has been accepted, on the
     7  written consent signed by the incorporator or a majority of the incorpo-
     8  rators. When there are two or more incorporators, if any dies or is  for
     9  any  reason  unable  to act, the other or others may act. If there is no
    10  incorporator able to act, any person for whom an incorporator was acting
    11  as agent may act in his or her stead, or if such other person also  dies
    12  or  is for any reason unable to act, his or her legal representative may
    13  act.
    14    § 6. Paragraph (c) of section 711 of  the  not-for-profit  corporation
    15  law,  as  amended by chapter 549 of the laws of 2013, is amended to read
    16  as follows:
    17    (c) Notice of a meeting need not be given to any  alternate  director,
    18  nor  to  any  director  who submits a waiver of notice whether before or
    19  after the meeting, or who attends the meeting without protesting,  prior
    20  thereto  or  at its commencement, the lack of notice to him. Such waiver
    21  of notice may be written or electronic. If written, the waiver  must  be
    22  executed  by  the  director  signing  such  waiver or causing his or her
    23  signature to be affixed to such waiver by any reasonable means including
    24  but not limited to facsimile signature. If electronic, the  transmission
    25  of  the  [consent] waiver must be sent by electronic mail and set forth,
    26  or be submitted with, information from which it can reasonably be deter-
    27  mined that the transmission was authorized by the director.
    28    § 7. Paragraph (a) of section 909 of  the  not-for-profit  corporation
    29  law,  as  amended by chapter 549 of the laws of 2013, is amended to read
    30  as follows:
    31    (a) If the purposes of any  constituent  or  consolidated  corporation
    32  would  require the approval or consent of any governmental body or offi-
    33  cer or any other person or body under section  404  (Approvals,  notices
    34  and  consents) of this chapter no certificate of merger or consolidation
    35  shall be filed pursuant to this article unless such approval or  consent
    36  is endorsed thereon or annexed thereto. A corporation whose statement of
    37  purposes specifically includes the establishment or operation of a child
    38  day care center, as that term is defined in section three hundred ninety
    39  of the social services law, shall [provide] mail a certified copy of any
    40  certificate of merger or consolidation involving such corporation to the
    41  office  of children and family services within thirty days after receipt
    42  of confirmation of the filing of such merger or consolidation  with  the
    43  department of state.
    44    §  8.  Subparagraph 8 of paragraph (a) of section 1003 of the not-for-
    45  profit corporation law, as amended by chapter 549 of the laws  of  2013,
    46  is amended to read as follows:
    47    (8)  A statement that prior to delivery of such certificate of dissol-
    48  ution to the department of state for filing, the plan of dissolution and
    49  distribution of assets has been approved by the attorney general or by a
    50  justice of the supreme court, if such approval is required  pursuant  to
    51  section  1002  (Authorization  of  plan)  of this article. A copy of the
    52  approval of the attorney general or of the court order shall be attached
    53  to the certificate of dissolution. In the case of a  corporation,  other
    54  than  a corporation incorporated pursuant to article 15 (Public cemetery
    55  corporations), having no assets to distribute, or having  no  assets  to
    56  distribute  other  than  a  reserve  not  to exceed twenty-five thousand
        S. 5870                             4
 
     1  dollars for the purpose of paying ordinary  and  necessary  expenses  of
     2  winding  up  its  affairs  including  attorney  and accountant fees, and
     3  liabilities not in excess of ten thousand dollars at the time of dissol-
     4  ution, a statement that a copy of the plan of dissolution which contains
     5  the  statement  prescribed  by  paragraph  (b)  of section 1001 (Plan of
     6  dissolution and distribution of assets) has been  duly  filed  with  the
     7  attorney general, if required.
     8    §  9.  Subparagraphs  7  and 9 of paragraph (a) of section 1304 of the
     9  not-for-profit corporation law, subparagraph 7 as renumbered by  chapter
    10  590  of  the  laws of 1982 and subparagraph 9 as amended by section 8 of
    11  part D of chapter 58 of the  laws  of  2006,  are  amended  to  read  as
    12  follows:
    13    (7) If it is to have a registered agent, [his] the name and address of
    14  the agent within this state and a statement that the registered agent is
    15  to be its agent upon whom process against it may be served.
    16    (9)  Any  provision  required  by  any governmental body or officer or
    17  other person or body as a condition for giving the consent  or  approval
    18  required for the filing of such application for authority, provided such
    19  provision  is not inconsistent with this chapter or any other statute of
    20  this state. A corporation whose statement of purposes to be conducted in
    21  this state specifically includes the establishment  or  operation  of  a
    22  child  day care center, as that term is defined in section three hundred
    23  ninety of the social services law, shall provide a certified copy of any
    24  application for authority  and  any  amendment  thereto  involving  such
    25  corporation  to the office of children and family services within thirty
    26  days after receipt of confirmation of the filing of such application  or
    27  amendment with the department of state.
    28    §  10.  Paragraph c of subdivision 4 of section 216-a of the education
    29  law, as amended by chapter 549 of the laws of 2013, is amended  to  read
    30  as follows:
    31    c.  The  following  provisions  of  the not-for-profit corporation law
    32  shall not apply to education corporations:  section  one  hundred  five,
    33  section  one hundred fourteen, paragraph (a) of section two hundred one,
    34  paragraphs (b) and (c) of section two hundred two, section  two  hundred
    35  five,  section  three  hundred  one,  section three hundred two, section
    36  three hundred three, article four except paragraphs (b) through  (p)  of
    37  section  four  hundred  four and section four hundred five, section five
    38  hundred nine, [section five hundred twenty-one to  the  extent  that  it
    39  refers  to  paragraph  (d)  of section seven hundred six,] article eight
    40  except section eight hundred four, section nine hundred  seven,  section
    41  one thousand twelve and article fourteen.
    42    §  11.  Subdivision (b) of section 16.32 of the mental hygiene law, as
    43  amended by chapter 549 of the laws  of  2013,  is  amended  to  read  as
    44  follows:
    45    (b) No loans, other than through the purchase of bonds, debentures, or
    46  similar obligations of the type customarily sold in public offerings, or
    47  through ordinary deposit of funds in a bank, shall be made by a not-for-
    48  profit corporation which is certified as a provider of services pursuant
    49  to  this article to its employee who receives an annual salary in excess
    50  of thirty thousand dollars, or to any other corporation,  firm,  associ-
    51  ation or other entity in which such employee is a director or officer or
    52  employee  or  holds a direct or indirect substantial financial interest,
    53  except a loan by one corporation incorporated  as  a  charitable  corpo-
    54  ration  as  defined  in  paragraph (a) of section one hundred two (Defi-
    55  nitions) of the not-for-profit corporation law to another [type B] char-
    56  itable corporation, or a loan for a temporary or emergency purpose which
        S. 5870                             5
 
     1  will further the health and welfare of  the  employee  so  long  as  the
     2  purpose  and  amount  of  such loan are disclosed to and approved by the
     3  board of directors of such agency. Such disclosure shall be  filed  with
     4  the secretary of the corporation and entered in the minutes of the meet-
     5  ing,  and,  if  approved  by  such  board, such disclosure shall also be
     6  forwarded in writing to the commissioner and to the director of communi-
     7  ty services of each local governmental unit that has,  at  the  time  of
     8  such  disclosure,  a contract with such corporation for the rendition of
     9  services pursuant to article forty-one of this chapter. A loan  made  in
    10  violation  of  this section shall be a violation of the duty to the not-
    11  for-profit corporation of the directors or officers  authorizing  it  or
    12  participating  in it, but the obligation of the borrower with respect to
    13  the loan shall not be affected thereby.
    14    § 12. Subdivision (b) of section 31.31 of the mental hygiene  law,  as
    15  amended  by  chapter  549  of  the  laws  of 2013, is amended to read as
    16  follows:
    17    (b) No loans, other than through the purchase of bonds, debentures, or
    18  similar obligations of the type customarily sold in public offerings, or
    19  through ordinary deposit of funds in a bank, shall be made by a not-for-
    20  profit corporation which is licensed as a provider of services  pursuant
    21  to  this article to its employee who receives an annual salary in excess
    22  of thirty thousand dollars, or to any other corporation,  firm,  associ-
    23  ation or other entity in which such employee is a director or officer or
    24  employee  or  holds a direct or indirect substantial financial interest,
    25  except a loan by one corporation incorporated  as  a  charitable  corpo-
    26  ration  as  defined  in  paragraph (a) of section one hundred two (Defi-
    27  nitions) of the not-for-profit corporation law to another [type B] char-
    28  itable corporation, or a loan for a temporary or emergency purpose which
    29  will further the health and welfare of  the  employee  so  long  as  the
    30  purpose  and  amount  of  such loan are disclosed to and approved by the
    31  board of directors of such agency. Such disclosure shall be  filed  with
    32  the secretary of the corporation and entered in the minutes of the meet-
    33  ing,  and,  if  approved  by  such  board, such disclosure shall also be
    34  forwarded in writing to the commissioner and to the director of communi-
    35  ty services of each local governmental unit that has,  at  the  time  of
    36  such  disclosure,  a contract with such corporation for the rendition of
    37  services pursuant to article forty-one of this chapter. A loan  made  in
    38  violation  of  this section shall be a violation of the duty to the not-
    39  for-profit corporation of the directors or officers  authorizing  it  or
    40  participating  in it, but the obligation of the borrower with respect to
    41  the loan shall not be affected thereby.
    42    § 13. Severability. If any clause,  sentence,  paragraph,  section  or
    43  part  of  this act shall be adjudged by any court of competent jurisdic-
    44  tion to be invalid, the judgment shall not affect, impair, or invalidate
    45  the reminder thereof, but shall be confined  in  its  operation  to  the
    46  clause,  sentence,  paragraph, section or part thereof directly involved
    47  in the controversy in which the judgment shall have been rendered.
    48    § 14. This act shall take effect immediately.