Bill Text: NY S04339 | 2021-2022 | General Assembly | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Relates to the applicability of open meetings and freedom of information laws to certain not-for-profit corporations.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2022-06-01 - referred to ways and means [S04339 Detail]

Download: New_York-2021-S04339-Amended.html

---

                STATE OF NEW YORK
        ________________________________________________________________________

                                         4339--A

                               2021-2022 Regular Sessions

                    IN SENATE

                                    February 3, 2021
                                       ___________

        Introduced  by  Sen. SKOUFIS -- read twice and ordered printed, and when
          printed to be committed to the Committee on Corporations,  Authorities
          and   Commissions  --  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 subdivision (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. Subdivision 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 subpara-
    14  graph (2) or (3) of paragraph (w) of section four hundred four  of  this
    15  article,  a statement that no such consent or approval is required. Such
    16  statement shall be deemed conclusive  for  purposes  of  filing  by  the
    17  department  of  state.  If  subsequent  to submitting the certificate of
    18  incorporation for filing, the corporation plans to engage in any  activ-
    19  ity  requiring  consent  or approval pursuant to section 404 (approvals,
    20  notices and consents) of this chapter, the corporation shall obtain such
    21  consent or approval and accordingly amend its  certificate  of  incorpo-
    22  ration pursuant to article eight of this chapter.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08161-03-1
        S. 4339--A                          2

     1    §  3.  Paragraph  (a) of section 402 of the not-for-profit corporation
     2  law is amended by adding a new subparagraph 9 to read as follows:
     3    (9)  A  statement whether the corporation is being incorporated on the
     4  behalf or at the behest of any municipal  corporation,  state  or  local
     5  authority,  or  district.  If  so,  the incorporator shall identify such
     6  municipal corporation, state or local authority, or district.
     7    § 4. Section 404 of the not-for-profit corporation law is  amended  by
     8  adding a new paragraph (w) to read as follows:
     9    (w)  Every  certificate  of  incorporation  which  includes any of the
    10  following shall have endorsed thereon or annexed thereto the consent  of
    11  the director of the authorities budget office:
    12    (1)  includes  among  its purposes the relieving and reducing of unem-
    13  ployment, promoting and providing for additional and maximum employment,
    14  bettering and maintaining job  opportunities,  instructing  or  training
    15  individuals  to  improve  or  develop  their capabilities for such jobs,
    16  carrying on scientific research for the purpose of aiding a community or
    17  geographical area by attracting new industry to the community or area or
    18  by encouraging the development of, or retention of, an industry  in  the
    19  community or area, and lessening the burdens of government and acting in
    20  the  public  interest,  or  any  abbreviation or derivative thereof in a
    21  context that indicates or implies that the corporation is formed for any
    22  of the above purposes;
    23    (2) indicates that one or more individuals who serve  as  officers  or
    24  employees  of  any  municipal  corporation, state or local authority, or
    25  district shall: (i) select either a majority of the corporation's  board
    26  of  directors or the corporation's chief executive officer; (ii) consti-
    27  tute a majority of the voting strength that selects either a majority of
    28  the corporation's board of directors or the corporation's  chief  execu-
    29  tive  officer;  or  (iii)  serve as: (A) a majority of the corporation's
    30  board of directors; or (B) in his or her official capacity,  the  corpo-
    31  ration's  chief executive officer; or (C) in his or her official capaci-
    32  ty, a director in the corporation; or
    33    (3) indicates that such  corporation  is  being  incorporated  on  the
    34  behalf  or  at  the  behest of any municipal corporation, state or local
    35  authority, or district.
    36    The director shall make such inquiry into the purposes of the proposed
    37  corporation as he or she shall deem advisable.
    38    § 5. Paragraph (a) of section 1411 of the  not-for-profit  corporation
    39  law,  as  amended by chapter 847 of the laws of 1970, is amended to read
    40  as follows:
    41    (a) Purposes.
    42    This section shall provide  an  additional  and  alternate  method  of
    43  incorporation  or reincorporation of not-for-profit corporations for any
    44  of the purposes set forth in this paragraph and shall not be  deemed  to
    45  alter,  impair or diminish the purposes, rights, powers or privileges of
    46  any corporation heretofore or hereafter incorporated under this  section
    47  or  under  the  stock  or business corporation laws. Corporations may be
    48  incorporated or reincorporated  under  this  section  as  not-for-profit
    49  local  development  corporations operated for the exclusively charitable
    50  or public purposes of relieving and reducing unemployment, promoting and
    51  providing for additional and maximum employment, bettering and maintain-
    52  ing job opportunities, instructing or training individuals to improve or
    53  develop  their  capabilities  for  such  jobs,  carrying  on  scientific
    54  research  for  the purpose of aiding a community or geographical area by
    55  attracting new industry to the community or area or by  encouraging  the
    56  development  of,  or retention of, an industry in the community or area,
        S. 4339--A                          3

     1  and lessening the burdens of government and acting in the public  inter-
     2  est,  and  any  one  or  more counties, cities, towns or villages of the
     3  state, or any combination thereof,  or  the  New  York  job  development
     4  authority  in  exercising  its power under the public authorities law to
     5  encourage the organization of local development corporations, may  cause
     6  such corporations to be incorporated by public officers or private indi-
     7  viduals  or reincorporated upon compliance with the requirements of this
     8  section, and it is hereby found, determined and declared that in  carry-
     9  ing  out  said  purposes and in exercising the powers conferred by para-
    10  graph (b) such corporations will be performing an essential governmental
    11  function. A not-for-profit corporation may not incorporate or reincorpo-
    12  rate under this section if its sole corporate purpose is  for  lessening
    13  the burdens of government and acting in the public interest.
    14    §  6.  Subparagraph 2 of paragraph (d) of section 1411 of the not-for-
    15  profit corporation law is amended to read as follows:
    16    (2) Notwithstanding the provisions of any general,  special  or  local
    17  law,  charter  or  ordinance  to the contrary, such sale or lease may be
    18  made without appraisal (except as may be necessary in regard to subpara-
    19  graph (4) of this paragraph), public notice[,] (except  as  provided  in
    20  subparagraph (4) of this paragraph), or public bidding for such price or
    21  rental  and  upon  such  terms as may be agreed upon between the county,
    22  city, town or village and said local development corporation;  provided,
    23  however,  that  in case of a lease the term may not exceed [ninety-nine]
    24  five years and provided, further, that in cities having a population  of
    25  one  million  or  more,  no such sale or lease shall be made without the
    26  approval of a majority of the members of the borough  improvement  board
    27  of the borough in which such real property is located.
    28    §  7.  Subparagraph 4 of paragraph (d) of section 1411 of the not-for-
    29  profit corporation law is amended to read as follows:
    30    (4) Notice of such hearing shall be published at least  [ten]  twenty-
    31  one  days before the date set for the hearing in such publication and in
    32  such manner as may be designated by the local legislative body,  or  the
    33  board  of estimate as the case may be. Such notice shall also include: a
    34  description of the property at issue; the value of the proposed  consid-
    35  eration to be received from the sale or lease; the estimated fair market
    36  value  of  the asset; and a statement of the intended use or disposition
    37  of the property by the local development corporation.
    38    § 8. Paragraph (i) of section 1411 of the  not-for-profit  corporation
    39  law is amended to read as follows:
    40    (i)  Contracts  between  a municipal corporation, public authority, or
    41  district and a local development corporation.
    42    Any contract or other agreement between  a  local  development  corpo-
    43  ration  and a municipal corporation, state authority or local authority,
    44  or district for one or more of the purposes enumerated in paragraph  (a)
    45  of this section shall: (1) cause the local development corporation to be
    46  defined  as a local authority pursuant to subdivision two of section two
    47  of the public authorities law; (2)  provide  for  the  municipal  corpo-
    48  ration,  state authority or local authority, or district to receive fair
    49  and adequate consideration; (3) be subject to the requirements of  arti-
    50  cle  five-A  of  the  general  municipal law; and (4) have a term not to
    51  exceed five years, subject to one or more subsequent renewals for a term
    52  not to exceed five years each upon the mutual consent  of  the  parties;
    53  provided  however that a contract with a municipal corporation shall not
    54  be used to finance the municipal corporation's operations or to  acquire
    55  or improve an asset for use of the municipal corporation.
    56    (j)  Effect of section.
        S. 4339--A                          4

     1    Corporations  incorporated  or reincorporated under this section shall
     2  be organized and operated exclusively for  the  purposes  set  forth  in
     3  paragraph  (a)  of  this  section, shall have, in addition to the powers
     4  otherwise conferred by law, the powers conferred  by  paragraph  (c)  of
     5  this section and shall be subject to all the restrictions [and], limita-
     6  tions  and  obligations imposed by [paragraph] paragraphs (e) [and para-
     7  graph], (g) and (i) of this section.   In so far as  the  provisions  of
     8  this  section  are  inconsistent  with  the provisions of any other law,
     9  general or special, the provisions of this section shall be  controlling
    10  as to corporations incorporated or reincorporated hereunder.
    11    §  9.  Subdivision  2  of  section 2 of the public authorities law, as
    12  amended by chapter 257 of the laws  of  2011,  is  amended  to  read  as
    13  follows:
    14    2. "local authority" shall mean (a) a public authority or public bene-
    15  fit  corporation  created by or existing under this chapter or any other
    16  law of the state of New York whose members do not hold a civil office of
    17  the state, are not appointed by the governor or  are  appointed  by  the
    18  governor specifically upon the recommendation of the local government or
    19  governments;  (b) a not-for-profit corporation, other than a fire corpo-
    20  ration, statewide association of local governments or  local  officials,
    21  or  business  improvement  district,  affiliated  with, sponsored by, or
    22  created by a county, city, town  or  village  government;  (c)  a  local
    23  industrial developmental agency or authority or other local public bene-
    24  fit  corporation;  (d)  an affiliate of such local authority; [or] (e) a
    25  land bank corporation created pursuant to article sixteen  of  the  not-
    26  for-profit  corporation  law; or (f) a not-for-profit corporation, other
    27  than a fire corporation or statewide association of local governments or
    28  local officials, or business improvement district, that (i)  has  issued
    29  or  has the authority to issue tax exempt debt or (ii) provides state or
    30  municipal tax exemptions through its participation in a  project  under-
    31  taken in furtherance of its purposes.
    32    For  the  purposes  of  paragraph (b) of the opening paragraph of this
    33  subdivision, "affiliated with, sponsored by, or  created  by  a  county,
    34  city, town or village government" shall also include, but not be limited
    35  to,  entities:   (a) where one or more individuals who serve as officers
    36  or employees of any county, city, town, village:   (i) select  either  a
    37  majority  of  the not-for-profit corporation's board of directors or the
    38  not-for-profit corporation's chief executive officer; (ii) constitute  a
    39  majority  of  the  voting strength that selects either a majority of the
    40  not-for-profit corporation's board of  directors  or  the  corporation's
    41  chief  executive  officer; or (iii) serve as: (1) a majority of the not-
    42  for-profit corporation's board of directors; or (2) in his or her  offi-
    43  cial capacity, the not-for-profit corporation's chief executive officer;
    44  or (3) in his or her official capacity, a director in the not-for-profit
    45  corporation;  or  (b)  which pay staff of a state or local government or
    46  state or  local  authority  to  provide  administrative  or  operational
    47  support.
    48    §  10.  The  public authorities law is amended by adding a new section
    49  2829 to read as follows:
    50    § 2829. State and local authorities subject to the open  meetings  and
    51  freedom  of  information  laws. All state and local authorities, as such
    52  terms are defined in section two of this chapter, as well as all subsid-
    53  iaries and affiliates of such state and local authorities, as such terms
    54  are defined in section two of this chapter,  shall  be  subject  to  the
    55  provisions of articles six and seven of the public officers law relating
    56  to  the  freedom of information and open meetings laws respectively. All
        S. 4339--A                          5

     1  state and local authorities, as well as all subsidiaries and  affiliates
     2  of  such  state and local authorities, shall, to the extent practicable,
     3  stream all open meetings and public hearings on  its  website  in  real-
     4  time,  post video recordings of all open meetings and public hearings on
     5  its website within five business days of  the  meeting  or  hearing  and
     6  maintain such recordings for a period of not less than five years.
     7    §  11.  This act shall take effect on the thirtieth day after it shall
     8  have become a law; provided, however, that the provisions  of  paragraph
     9  (i)  of  section  1411 of the not-for-profit corporation law, as amended
    10  pursuant to section eight of this act shall not apply  retroactively  to
    11  contracts  or  agreements  between a local development corporation and a
    12  municipal corporation, state or local  authority,  or  district  entered
    13  into prior to the effective date of this act.