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S02727 Summary:

BILL NOS02727A
 
SAME ASNo Same As
 
SPONSORSKOUFIS
 
COSPNSR
 
MLTSPNSR
 
Amd 104, 402, 404 & 1411, N-PC L; amd 2, add 2829, Pub Auth L
 
Relates to the applicability of open meetings and freedom of information laws to certain not-for-profit corporations.
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S02727 Actions:

BILL NOS02727A
 
01/24/2023REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS
05/23/2023REPORTED AND COMMITTED TO FINANCE
05/24/2023AMEND AND RECOMMIT TO FINANCE
05/24/2023PRINT NUMBER 2727A
05/30/2023COMMITTEE DISCHARGED AND COMMITTED TO RULES
05/30/2023ORDERED TO THIRD READING CAL.1364
06/05/2023PASSED SENATE
06/05/2023DELIVERED TO ASSEMBLY
06/05/2023referred to ways and means
06/07/2023substituted for a3715a
06/07/2023ordered to third reading rules cal.619
01/03/2024died in assembly
01/03/2024returned to senate
01/03/2024REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS
03/05/2024REPORTED AND COMMITTED TO FINANCE
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S02727 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         2727--A
 
                               2023-2024 Regular Sessions
 
                    IN SENATE
 
                                    January 24, 2023
                                       ___________
 
        Introduced  by  Sen. SKOUFIS -- read twice and ordered printed, and when
          printed to be committed to the Committee on Corporations,  Authorities
          and  Commissions -- reported favorably from said committee and commit-
          ted to the Committee on Finance -- committee discharged, bill amended,
          ordered reprinted as amended and recommitted to said committee

        AN ACT to amend  the  not-for-profit  corporation  law  and  the  public
          authorities law, in relation to the applicability of open meetings and
          freedom of information laws to certain not-for-profit corporations
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Section  104  of  the  not-for-profit  corporation  law  is
     2  amended by adding a new paragraph (h) to read as follows:
     3    (h)  The  department  shall transmit electronically to the authorities
     4  budget office a copy of every  certificate  of  incorporation  filed  or
     5  delivered  where  the incorporator has indicated on the certificate that
     6  he or she is filing said certificate on the behalf or at the behest of a
     7  municipal corporation, state or local authority, or district.
     8    § 2. Subparagraph 2-b of paragraph (a) of section 402 of the  not-for-
     9  profit  corporation  law, as added by chapter 23 of the laws of 2014, is
    10  amended to read as follows:
    11    (2-b) If it is not formed to engage in any activity or for any purpose
    12  requiring consent or approval of any state official, department,  board,
    13  agency  or other body, or does not require consent pursuant to paragraph
    14  (w) of section 404 (Approvals, notices and consents) of this  article  a
    15  statement  that  no such consent or approval is required. Such statement
    16  shall be deemed conclusive for purposes of filing by the  department  of
    17  state.  If subsequent to submitting the certificate of incorporation for
    18  filing, the corporation  plans  to  engage  in  any  activity  requiring
    19  consent  or  approval  pursuant  to section 404 [(approvals] (Approvals,
    20  notices and consents) of this [chapter] article, the  corporation  shall
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD04263-03-3

        S. 2727--A                          2
 
     1  obtain such consent or approval and accordingly amend its certificate of
     2  incorporation pursuant to article eight of this chapter.
     3    §  3.  Paragraph  (a) of section 402 of the not-for-profit corporation
     4  law is amended by adding a new subparagraph 9 to read as follows:
     5    (9) A statement whether the corporation is being incorporated  on  the
     6  behalf  or  at  the  behest of any municipal corporation, state or local
     7  authority, or district. If so,  the  incorporator  shall  identify  such
     8  municipal corporation, state or local authority, or district.
     9    §  4.  Section 404 of the not-for-profit corporation law is amended by
    10  adding a new paragraph (w) to read as follows:
    11    (w) Every certificate of  incorporation  which  includes  any  of  the
    12  following  shall have endorsed thereon or annexed thereto the consent of
    13  the director of the authorities budget office:
    14    (1) indicates that one or more individuals who serve  as  officers  or
    15  employees  of  any  municipal  corporation, state or local authority, or
    16  district shall: (i) select either a majority of the corporation's  board
    17  of  directors or the corporation's chief executive officer; (ii) consti-
    18  tute a majority of the voting strength that selects either a majority of
    19  the corporation's board of directors or the corporation's  chief  execu-
    20  tive  officer;  or  (iii)  serve as: (A) a majority of the corporation's
    21  board of directors; or (B) in his or her official capacity,  the  corpo-
    22  ration's chief executive officer; or
    23    (2)  indicates  that  such  corporation  is  being incorporated on the
    24  behalf or at the behest of any municipal  corporation,  state  or  local
    25  authority, or district.
    26    The director shall make such inquiry into the purposes of the proposed
    27  corporation as he or she shall deem advisable.
    28    §  5.  Paragraph (a) of section 1411 of the not-for-profit corporation
    29  law, as amended by chapter 847 of the laws of 1970, is amended  to  read
    30  as follows:
    31    (a) Purposes.
    32    This  section  shall  provide  an  additional  and alternate method of
    33  incorporation or reincorporation of not-for-profit corporations for  any
    34  of  the  purposes set forth in this paragraph and shall not be deemed to
    35  alter, impair or diminish the purposes, rights, powers or privileges  of
    36  any  corporation heretofore or hereafter incorporated under this section
    37  or under the stock or business corporation  laws.  Corporations  may  be
    38  incorporated  or  reincorporated  under  this  section as not-for-profit
    39  local development corporations operated for the  exclusively  charitable
    40  or public purposes of relieving and reducing unemployment, promoting and
    41  providing for additional and maximum employment, bettering and maintain-
    42  ing job opportunities, instructing or training individuals to improve or
    43  develop  their  capabilities  for  such  jobs,  carrying  on  scientific
    44  research for the purpose of aiding a community or geographical  area  by
    45  attracting  new  industry to the community or area or by encouraging the
    46  development of, or retention of, an industry in the community  or  area,
    47  and  lessening the burdens of government and acting in the public inter-
    48  est, and any one or more counties, cities,  towns  or  villages  of  the
    49  state,  or  any  combination  thereof,  or  the New York job development
    50  authority in exercising its power under the public  authorities  law  to
    51  encourage  the organization of local development corporations, may cause
    52  such corporations to be incorporated by public officers or private indi-
    53  viduals or reincorporated upon compliance with the requirements of  this
    54  section,  and it is hereby found, determined and declared that in carry-
    55  ing out said purposes and in exercising the powers  conferred  by  para-
    56  graph (b) such corporations will be performing an essential governmental

        S. 2727--A                          3
 
     1  function. A not-for-profit corporation may not incorporate or reincorpo-
     2  rate  under  this section if its sole corporate purpose is for lessening
     3  the burdens of government and acting in the public interest.
     4    §  6.  Subparagraph 2 of paragraph (d) of section 1411 of the not-for-
     5  profit corporation law is amended to read as follows:
     6    (2) Notwithstanding the provisions of any general,  special  or  local
     7  law,  charter  or  ordinance  to the contrary, such sale or lease may be
     8  made without appraisal (except as may be necessary in regard to subpara-
     9  graph (4) of this paragraph), public notice[,] (except  as  provided  in
    10  subparagraph (4) of this paragraph), or public bidding for such price or
    11  rental  and  upon  such  terms as may be agreed upon between the county,
    12  city, town or village and said local development corporation;  provided,
    13  however,  that  in case of a lease the term may not exceed [ninety-nine]
    14  twenty-five years and provided, further, that in cities having  a  popu-
    15  lation of one million or more, no such sale or lease shall be made with-
    16  out the approval of a majority of the members of the borough improvement
    17  board of the borough in which such real property is located.
    18    §  7.  Subparagraph 4 of paragraph (d) of section 1411 of the not-for-
    19  profit corporation law is amended to read as follows:
    20    (4) Notice of such hearing shall be published at least  [ten]  twenty-
    21  one  days before the date set for the hearing in such publication and in
    22  such manner as may be designated by the local legislative body,  or  the
    23  board  of estimate as the case may be. Such notice shall also include: a
    24  description of the property at issue; the value of the proposed  consid-
    25  eration to be received from the sale or lease; the estimated fair market
    26  value  of  the asset; and a statement of the intended use or disposition
    27  of the property by the local development corporation.
    28    § 8. Paragraph (i) of section 1411 of the  not-for-profit  corporation
    29  law is amended to read as follows:
    30    (i)  Contracts  between  a municipal corporation, public authority, or
    31  district and a local development corporation.
    32    Any contract or other agreement between  a  local  development  corpo-
    33  ration  and a municipal corporation, state authority or local authority,
    34  or district for one or more of the purposes enumerated in paragraph  (a)
    35  of this section shall: (1) cause the local development corporation to be
    36  defined  as a local authority pursuant to subdivision two of section two
    37  of the public authorities law; (2)  provide  for  the  municipal  corpo-
    38  ration,  state authority or local authority, or district to receive fair
    39  and adequate consideration; (3) be subject to the requirements of  arti-
    40  cle  five-A  of  the  general  municipal law; and (4) have a term not to
    41  exceed twenty-five years, subject to one or more subsequent renewals for
    42  a term not to exceed twenty-five years each upon the mutual  consent  of
    43  the  parties;  provided  however that a contract with a municipal corpo-
    44  ration shall not be used to finance the  municipal  corporation's  oper-
    45  ations or to acquire or improve an asset for use of the municipal corpo-
    46  ration.
    47    (j)  Effect of section.
    48    Corporations  incorporated  or reincorporated under this section shall
    49  be organized and operated exclusively for  the  purposes  set  forth  in
    50  paragraph  (a)  of  this  section, shall have, in addition to the powers
    51  otherwise conferred by law, the powers conferred  by  paragraph  (c)  of
    52  this section and shall be subject to all the restrictions [and], limita-
    53  tions  and  obligations imposed by [paragraph] paragraphs (e) [and para-
    54  graph], (g) and (i) of this section.   In so far as  the  provisions  of
    55  this  section  are  inconsistent  with  the provisions of any other law,

        S. 2727--A                          4
 
     1  general or special, the provisions of this section shall be  controlling
     2  as to corporations incorporated or reincorporated hereunder.
     3    §  9.  Subdivision  2  of  section 2 of the public authorities law, as
     4  amended by chapter 257 of the laws  of  2011,  is  amended  to  read  as
     5  follows:
     6    2. "local authority" shall mean (a) a public authority or public bene-
     7  fit  corporation  created by or existing under this chapter or any other
     8  law of the state of New York whose members do not hold a civil office of
     9  the state, are not appointed by the governor or  are  appointed  by  the
    10  governor specifically upon the recommendation of the local government or
    11  governments;  (b) a not-for-profit corporation, other than a fire corpo-
    12  ration, statewide association of local governments or  local  officials,
    13  or  business  improvement  district,  affiliated  with, sponsored by, or
    14  created by a county, city, town  or  village  government;  (c)  a  local
    15  industrial developmental agency or authority or other local public bene-
    16  fit  corporation;  (d)  an affiliate of such local authority; [or] (e) a
    17  land bank corporation created pursuant to article sixteen  of  the  not-
    18  for-profit  corporation  law; or (f) a not-for-profit corporation, other
    19  than a fire corporation or statewide association of local governments or
    20  local officials, or business improvement district, that (i)  has  issued
    21  or  has the authority to issue tax exempt debt or (ii) provides state or
    22  municipal tax exemptions through its participation in a  project  under-
    23  taken in furtherance of its purposes.
    24    For  the  purposes  of  paragraph (b) of the opening paragraph of this
    25  subdivision, "affiliated with, sponsored by, or  created  by  a  county,
    26  city, town or village government" shall also include, but not be limited
    27  to,  entities:   (a) where one or more individuals who serve as officers
    28  or employees of any county, city, town, village:   (i) select  either  a
    29  majority  of  the not-for-profit corporation's board of directors or the
    30  not-for-profit corporation's chief executive officer; (ii) constitute  a
    31  majority  of  the  voting strength that selects either a majority of the
    32  not-for-profit corporation's board of  directors  or  the  corporation's
    33  chief  executive  officer; or (iii) serve as: (1) a majority of the not-
    34  for-profit corporation's board of directors; or (2) in his or her  offi-
    35  cial capacity, the not-for-profit corporation's chief executive officer;
    36  or  (b) which pay staff of a state or local government or state or local
    37  authority to provide administrative or operational support.
    38    § 10. The public authorities law is amended by adding  a  new  section
    39  2829 to read as follows:
    40    §  2829.  State and local authorities subject to the open meetings and
    41  freedom of information laws. All state and local  authorities,  as  such
    42  terms are defined in section two of this chapter, as well as all subsid-
    43  iaries and affiliates of such state and local authorities, as such terms
    44  are  defined  in  section  two  of this chapter, shall be subject to the
    45  provisions of articles six and seven of the public officers law relating
    46  to the freedom of information and open meetings laws  respectively.  All
    47  state  and local authorities, as well as all subsidiaries and affiliates
    48  of such state and local authorities, shall, to the  extent  practicable,
    49  stream  all  open  meetings  and public hearings on its website in real-
    50  time, post video recordings of all open meetings and public hearings  on
    51  its  website  within  five  business  days of the meeting or hearing and
    52  maintain such recordings for a period of not less than five years.
    53    § 11. This act shall take effect on the thirtieth day after  it  shall
    54  have  become  a  law; provided, however, that the provisions of subpara-
    55  graph 2 of paragraph (d) and paragraph (i) of section 1411 of  the  not-
    56  for-profit corporation law, as amended by sections six and eight of this

        S. 2727--A                          5
 
     1  act  shall  not apply retroactively to contracts or agreements between a
     2  local development corporation and  a  municipal  corporation,  state  or
     3  local authority, or district entered into prior to the effective date of
     4  this act.
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