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 Paragraph (f) of section 713 of the not-for-profit corpo- 2 ration law is REPEALED. 3 S 2.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.