Bill Text: NY S03436 | 2015-2016 | General Assembly | Introduced

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Bill Title: Relates to independent directors and related party transactions.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2016-01-06 - REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS [S03436 Detail]

Download: New_York-2015-S03436-Introduced.html

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                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         3436
                              2015-2016 Regular Sessions
                                   I N  S E N A T E
                                   February 9, 2015
                                      ___________
       Introduced  by  Sen.  RANZENHOFER -- read twice and ordered printed, and
         when printed to be committed to the Committee on Corporations, Author-
         ities and Commissions
       AN ACT to amend the not-for-profit corporation law, in relation to inde-
         pendent  directors  and  related  party  transactions;  and  repealing
         certain provisions of such law relating thereto
         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section 1. Paragraph (f) of section 713 of the  not-for-profit  corpo-
    2  ration law is REPEALED.
    3    S  2.  Subparagraphs  21 and 24 of paragraph (a) of section 102 of the
    4  not-for-profit corporation law, as added by chapter 549 of the  laws  of
    5  2013, are amended to read as follows:
    6    (21)  "Independent director" means a director who: (i) is not, and has
    7  not been within the last three years, an employee of the corporation  or
    8  an affiliate of the corporation, and does not have a relative who is, or
    9  has  been within the last three years, a key employee of the corporation
   10  or an affiliate of the corporation; (ii) has not received, and does  not
   11  have a relative who has received, in any of the last three fiscal years,
   12  more  than  ten  thousand dollars in direct compensation from the corpo-
   13  ration or an affiliate of the corporation (other than reimbursement  for
   14  expenses  reasonably  incurred  as a director or reasonable compensation
   15  for service as a director as permitted by paragraph (a) of  section  202
   16  (General and special powers)); and (iii) is not a current employee of or
   17  does  not  have a substantial financial interest in, and does not have a
   18  relative who is a current officer of  or  has  a  substantial  financial
   19  interest  in, any entity that has made payments to, or received payments
   20  from, the corporation or an affiliate of the corporation for property or
   21  services in an amount which, in any of  the  last  three  fiscal  years,
   22  exceeds  the  lesser  of  twenty-five thousand dollars or two percent of
   23  such entity's consolidated gross revenues. For purposes of this subpara-
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD08529-01-5
       S. 3436                             2
    1  graph, "payment" does not include charitable  contributions,  MEMBERSHIP
    2  DUES OR PREMIUM PAYMENTS.
    3    (24)  "Related  party transaction" means any transaction, agreement or
    4  any other arrangement, THE APPROVAL OF WHICH WOULD COME BEFORE THE BOARD
    5  IN THE ORDINARY COURSE OF BUSINESS, in  which  a  related  party  has  a
    6  financial  interest and in which the corporation or any affiliate of the
    7  corporation is a participant.
    8    S 3. This act shall take effect immediately.