Bill Text: NY S05115 | 2013-2014 | General Assembly | Amended
Bill Title: Prohibits officers and family members of such officers of public charities from receiving compensation; requires reasonable compensation when allowed; sets certain compensation; establishes the state board training consortium; establishes the state board training consortium fund; increases certain filing fees to fund the state board training consortium fund.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2014-06-20 - COMMITTED TO RULES [S05115 Detail]
Download: New_York-2013-S05115-Amended.html
S T A T E O F N E W Y O R K ________________________________________________________________________ 5115--A 2013-2014 Regular Sessions I N S E N A T E May 10, 2013 ___________ Introduced by Sen. MARCELLINO -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations -- recommitted to the Committee on Investi- gations and Government Operations in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the executive law and not-for-profit corporation law, in relation to prohibiting certain individuals from receiving compen- sation from public charities; requires reasonable compensation when allowed; establishes the state board training consortium; and to amend the state finance law, in relation to establishing the state board training consortium fund THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: 1 Section 1. Section 63 of the executive law is amended by adding a new 2 subdivision 17 to read as follows: 3 17. MAKE INQUIRY INTO ANY DOCUMENTS PREPARED UNDER SECTION SEVEN 4 HUNDRED TWENTY-SEVEN OF THE NOT-FOR-PROFIT CORPORATION LAW FOR COMPLI- 5 ANCE WITH THAT SECTION, BUT NOT MORE THAN ANNUALLY, AND RESPOND TO ANY 6 INQUIRY REFERRED TO UNDER SUCH SECTION SEVEN HUNDRED TWENTY-SEVEN OFFI- 7 CIALLY WITHIN NINETY DAYS OF RECEIPT. 8 S 2. Subparagraph 12 of paragraph (a) of section 202 of the not-for- 9 profit corporation law is amended to read as follows: 10 (12) To elect or appoint officers, employees and other agents of the 11 corporation, define their duties, fix their reasonable compensation and 12 the reasonable compensation of directors, and to indemnify corporate 13 personnel. Such compensation shall be commensurate with services 14 performed AND SUBJECT, WHERE APPLICABLE, TO SECTION SEVEN HUNDRED TWEN- 15 TY-SEVEN (COMPENSATION OF EXECUTIVES). 16 S 3. Section 701 of the not-for-profit corporation law is amended by 17 adding a new paragraph (c) to read as follows: EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD05072-06-4 S. 5115--A 2 1 (C) AN EMPLOYEE OR A SPOUSE, DOMESTIC PARTNER, SIBLING (BY WHOLE OR 2 HALF BLOOD), SPOUSE OR DOMESTIC PARTNER OF A SIBLING (BY WHOLE OR HALF 3 BLOOD), CHILD, GRANDCHILD, GREAT-GRANDCHILD, AND SPOUSE OR DOMESTIC 4 PARTNER OF A CHILD, GRANDCHILD, AND GREAT-GRANDCHILD OF THE EMPLOYEE AT 5 A PUBLIC CHARITY, AS THAT TERM MAY BE DEFINED BY THE INTERNAL REVENUE 6 SERVICE FROM TIME-TO-TIME, MAY NOT QUALIFY TO SIT ON THE BOARD OF DIREC- 7 TORS OF THE CORPORATION WHERE THEY ARE EMPLOYED REGARDLESS OF ANY STATE- 8 MENT TO THE CONTRARY IN THE CERTIFICATE OF INCORPORATION OR BYLAWS OF 9 THE CORPORATION. THE CERTIFICATE OF INCORPORATION OR THE BYLAWS MAY, 10 HOWEVER, PROVIDE FOR AN EMPLOYEE AT A PUBLIC CHARITY, AS THAT TERM MAY 11 BE DEFINED BY THE INTERNAL REVENUE SERVICE FROM TIME-TO-TIME, TO BE 12 EX-OFFICIO, A NON-VOTING MEMBER OF THE BOARD OF DIRECTORS. 13 S 4. Paragraph (a) of section 702 of the not-for-profit corporation 14 law, as amended by chapter 549 of the laws 2013, is amended to read as 15 follows: 16 (a) [The] FOR NOT-FOR-PROFIT CORPORATIONS WITH ANNUAL GROSS RECEIPTS 17 IN AN AMOUNT THAT WOULD TRIGGER AN AUDIT BY A CERTIFIED PUBLIC ACCOUNT- 18 ANT, THE number of directors constituting the entire board shall be not 19 less than FIVE, OTHERWISE THE ENTIRE BOARD SHALL NOT BE LESS THAN three. 20 Subject to such limitation, such number may be fixed by the by-laws or 21 by action of the members or of the board under the specific provisions 22 of a by-law allowing such action, or by any number within a range set 23 forth in the by-laws. [If] FOR NOT-FOR-PROFIT CORPORATIONS WITH ANNUAL 24 GROSS RECEIPTS EQUAL TO OR ABOVE TWO HUNDRED FIFTY THOUSAND DOLLARS, IF 25 not otherwise fixed under this paragraph, the number shall be FIVE, 26 OTHERWISE IT SHALL BE three. 27 S 5. Paragraph (a) of section 706 of the not-for-profit corporation 28 law is amended to read as follows: 29 (a) Except as limited in paragraph (c) OF THIS SECTION, any or all of 30 the directors may be removed for cause, WHICH IS EITHER A VIOLATION OF 31 THE BY-LAWS, THE DUTY OF DIRECTORS AND OFFICERS OF SECTION SEVEN HUNDRED 32 SEVENTEEN (COMPENSATION OF EXECUTIVES), OR AS OTHERWISE DEFINED IN THE 33 BYLAWS IN THE WRITTEN CONFLICT OF INTEREST POLICY OF THE CORPORATION, by 34 vote of the members, or by vote of the directors provided there is a 35 quorum of not less than a majority present at the meeting of directors 36 at which such action is taken. 37 S 6. Paragraph (b) of section 708 of the not-for-profit corporation 38 law, as amended by chapter 549 of the laws of 2013, is amended to read 39 as follows: 40 (b) Unless otherwise restricted by the certificate of incorporation or 41 the by-laws, any action required or permitted to be taken by the board 42 or any committee thereof may be taken without a meeting if all members 43 of the board or the committee consent to the adoption of a resolution 44 authorizing the action, WHERE SAID WRITING, OR UNANIMOUS CONSENT IN LIEU 45 OF A MEETING, IS DELIVERED, SUBMITTED AND SIGNED SEPARATELY BY ALL 46 MEMBERS OF THE BOARD OR THE COMMITTEE AND SUBMITTED BY ELECTRONIC-MAIL, 47 OR OTHER ELECTRONIC MEANS WITH AN ELECTRONIC RETURNED RECEIPT, OR SIMI- 48 LAR MESSAGE ATTACHED, DEMONSTRATING THAT THE UNANIMOUS CONSENT IN LIEU 49 OF A MEETING WAS INDEED DELIVERED PROPERLY. Such consent may be written 50 or electronic. If written, the consent must be executed by the director 51 by signing such consent or causing his or her signature to be affixed to 52 such consent by any reasonable means including, but not limited to, 53 facsimile signature. If electronic, the transmission of the consent 54 must be sent by electronic mail and set forth, or be submitted with, 55 information from which it can reasonably be determined that the trans- 56 mission was authorized by the director. The resolution and the written S. 5115--A 3 1 consents thereto by the members of the board or committee shall be filed 2 with the minutes of the proceedings of the board or committee. 3 S 7. Paragraphs (b) and (d) of section 711 of the not-for-profit 4 corporation law are amended to read as follows: 5 (b) The by-laws may prescribe what shall constitute notice of meeting 6 of the board, OR WAIVER OF NOTICE, AND MAY BE DELIVERED VIA ELECTRONIC- 7 MAIL, OR OTHER ELECTRONIC MEANS WITH AN ELECTRONIC RETURNED RECEIPT, OR 8 SIMILAR MESSAGE ATTACHED, DEMONSTRATING THAT THE NOTICE, OR WAIVER OF 9 NOTICE, WAS INDEED DELIVERED PROPERLY. A notice, or waiver of notice, 10 need not specify the purpose of any regular or special meeting of the 11 board, unless required by the by-laws. 12 (d) A majority of the directors present, whether or not a quorum is 13 present, may adjourn any meeting to another time and place. If the 14 by-laws so provide, notice of any adjournment of a meeting of the board 15 to another time or place shall be given to the directors who were not 16 present at the time of the adjournment, AND MAY BE DONE BY 17 ELECTRONIC-MAIL, OR OTHER ELECTRONIC MEANS WITH AN ELECTRONIC RETURNED 18 RECEIPT, OR SIMILAR MESSAGE ATTACHED, DEMONSTRATING THAT THE NOTICE, OR 19 WAIVER OF NOTICE, WAS INDEED DELIVERED PROPERLY, and, unless such time 20 and place are announced at the meeting, to the other directors. 21 S 8. Subparagraph 3 of paragraph (a) of section 712 of the not-for- 22 profit corporation law, as amended by chapter 549 of the laws of 2013, 23 is amended to read as follows: 24 (3) The fixing of compensation of the directors OR OFFICERS for serv- 25 ing on the board or on any committee, AND THE FIXING OF COMPENSATION FOR 26 KEY EMPLOYEES, AS THAT TERM MAY BE DEFINED BY THE INTERNAL REVENUE 27 SERVICE FROM TIME-TO-TIME, OR OTHER AGENTS OF THE CORPORATION AT ANY 28 TIME. 29 S 9. Paragraph (a) of section 713 of the not-for-profit corporation 30 law is amended to read as follows: 31 (a) The board may elect or appoint a president, one or more vice-pre- 32 sidents, a secretary and a treasurer, and such other officers as it may 33 determine, or as may be provided in the by-laws. These officers may be 34 designated by such alternate titles as may be provided in the certif- 35 icate of incorporation or the by-laws. [Any] NO two or more offices may 36 be held by the same person[, except the offices of president and secre- 37 tary, or the offices corresponding thereto]. 38 S 10. Paragraph (a) of section 713 of the not-for-profit corporation 39 law, as amended by chapter 549 of the laws of 2013, is amended to read 40 as follows: 41 (a) The board may elect or appoint a chair or president, or both, one 42 or more vice-presidents, a secretary and a treasurer, and such other 43 officers as it may determine, or as may be provided in the by-laws. 44 These officers may be designated by such alternate titles as may be 45 provided in the certificate of incorporation or the by-laws. [Any] NO 46 two or more offices may be held by the same person[, except the offices 47 of president and secretary, or the offices corresponding thereto]. 48 S 11. Section 713 of the not-for-profit corporation law is amended by 49 adding a new paragraph (g) to read as follows: 50 (G) AN OFFICER OR A SPOUSE, DOMESTIC PARTNER, SIBLING (BY WHOLE OR 51 HALF BLOOD), SPOUSE OR DOMESTIC PARTNER OF A SIBLING (BY WHOLE OR HALF 52 BLOOD), CHILD, GRANDCHILD, GREAT-GRANDCHILD, AND SPOUSE OR DOMESTIC 53 PARTNER OF A CHILD, GRANDCHILD, AND GREAT-GRANDCHILD OF THE OFFICER AT A 54 PUBLIC CHARITY, AS THAT TERM MAY BE DEFINED BY THE INTERNAL REVENUE 55 SERVICE FROM TIME-TO-TIME, MAY NOT RECEIVE COMPENSATION OR REMUNERATION 56 OF ANY KIND WHATSOEVER, EXCEPT TO BE REIMBURSED FOR REASONABLE EXPENSES S. 5115--A 4 1 IN THE FULFILLMENT OF THEIR DUTIES TOWARD THE CORPORATION, WHERE SAID 2 PROHIBITION CANNOT BE CONTRAVENED IN THE CERTIFICATE OF INCORPORATION OR 3 BY-LAWS OF THE CORPORATION. 4 S 12. Paragraph (d) of section 715 of the not-for-profit corporation 5 law, as amended by chapter 549 of the laws of 2013, is amended to read 6 as follows: 7 (d) Unless otherwise provided in the certificate of incorporation or 8 the by-laws, the board shall have authority to fix the compensation of 9 directors OF A PRIVATE FOUNDATION, AS THAT TERM MAY BE DEFINED BY THE 10 INTERNAL REVENUE SERVICE FROM TIME-TO-TIME, for services in any capaci- 11 ty. AT NO TIME MAY THE DIRECTORS OF A PUBLIC CHARITY, AS THAT TERM MAY 12 BE DEFINED BY THE INTERNAL REVENUE SERVICE FROM TIME-TO-TIME, RECEIVE 13 COMPENSATION OR REMUNERATION OF ANY KIND WHATSOEVER, EXCEPT TO BE REIM- 14 BURSED FOR REASONABLE EXPENSES IN THE FULFILLMENT OF THEIR DUTIES TOWARD 15 THE CORPORATION, WHERE SAID PROHIBITION CANNOT BE CONTRAVENED IN THE 16 CERTIFICATE OF INCORPORATION OR BY-LAWS OF THE CORPORATION. 17 S 13. Paragraph (e) of section 715 of the not-for-profit corporation 18 law, as amended by chapter 549 of the laws of 2013, is amended to read 19 as follows: 20 (e) The fixing of salaries of officers[, if not done in or pursuant to 21 the by-laws, shall require the affirmative vote of a majority of the 22 entire board unless a higher proportion is set by the certificate of 23 incorporation or by-laws] IN PUBLIC CHARITIES, AS THAT TERM MAY BE 24 DEFINED BY THE INTERNAL REVENUE SERVICE FROM TIME-TO-TIME, IS STRICTLY 25 PROHIBITED. 26 S 14. Paragraph (a) of section 717 of the not-for-profit corporation 27 law, as amended by chapter 490 of the laws of 2010, is amended to read 28 as follows: 29 (a) Directors and officers shall discharge the duties of their respec- 30 tive positions in good faith and with the care an ordinarily prudent 31 person in a like position would exercise under similar circumstances. 32 The factors set forth in subparagraph one of paragraph (e) of section 33 552 (Standard of conduct in managing and investing an institutional 34 fund), if relevant, must be considered by a governing board delegating 35 investment management of institutional funds pursuant to section 514 36 (Delegation of investment management). For purposes of this paragraph, 37 the term institutional fund is defined in section 551 (Definitions). 38 FURTHERMORE, ANY COMPENSATION PROVIDED TO DIRECTORS, OFFICERS, EMPLOYEES 39 AND OTHER AGENTS OF THE CORPORATION MUST BE REASONABLE AND, WHERE APPLI- 40 CABLE, IS SUBJECT TO SECTION SEVEN HUNDRED TWENTY-SEVEN (COMPENSATION OF 41 EXECUTIVES). 42 S 15. Paragraph (a) of section 719 of the not-for-profit corporation 43 law is amended by adding a new subparagraph 6 to read as follows: 44 (6) THE PROVISION OF EXCESSIVE COMPENSATION TO DIRECTORS, OFFICERS, 45 KEY EMPLOYEES, AS THAT TERM MAY BE DEFINED BY THE INTERNAL REVENUE 46 SERVICE FROM TIME-TO-TIME, AND OTHER AGENTS OF THE CORPORATION IN 47 VIOLATION OF SECTION SEVEN HUNDRED TWENTY-SEVEN (COMPENSATION OF EXECU- 48 TIVES), WHERE APPLICABLE. 49 S 16. Paragraph (d) of section 719 of the not-for-profit corporation 50 law is amended by adding a new subparagraph 6 to read as follows: 51 (6) UPON REIMBURSEMENT TO THE CORPORATION OF THE AMOUNT OF ANY EXCES- 52 SIVE COMPENSATION PROVIDED IN VIOLATION OF SECTION SEVEN HUNDRED TWEN- 53 TY-SEVEN (COMPENSATION OF EXECUTIVES), TO BE SUBROGATED TO THE RIGHTS OF 54 THE CORPORATION AGAINST A DIRECTOR, OFFICER, KEY EMPLOYEE, AS THAT TERM 55 MAY BE DEFINED BY THE INTERNAL REVENUE SERVICE FROM TIME-TO-TIME, OR 56 OTHER AGENT WHO RECEIVED THE EXCESSIVE COMPENSATION. S. 5115--A 5 1 S 17. Clauses (A) and (B) of subparagraph 1 of paragraph (a) of 2 section 720 of the not-for-profit corporation law, as amended by chapter 3 549 of the laws of 2013, is amended to read as follows: 4 (A) The neglect of, [or] THE failure to perform, or ANY other 5 violation of his OR HER duties in the management and disposition of 6 corporate assets committed to his OR HER charge. 7 (B) The acquisition by himself OR HERSELF, transfer to others, loss or 8 waste of corporate assets due to any neglect of, [or] THE failure to 9 perform, or ANY other violation of his OR HER duties, INCLUDING 10 VIOLATIONS OF SECTION SEVEN HUNDRED TWENTY-SEVEN (COMPENSATION OF EXECU- 11 TIVES), PURSUANT TO SECTION SEVEN HUNDRED SEVENTEEN (DUTY OF DIRECTORS 12 AND OFFICERS). 13 S 18. The not-for-profit corporation law is amended by adding a new 14 section 727 to read as follows: 15 S 727. COMPENSATION OF EXECUTIVES. 16 (A) DEFINITIONS. FOR THE PURPOSES OF THIS SECTION, UNLESS OTHERWISE 17 EXPRESSLY STATED OR CONTEXT CLEARLY REQUIRES: 18 (1) "COMPENSATION" MEANS THE AGGREGATE VALUE OF ECONOMIC BENEFITS 19 CONFERRED IN EXCHANGE FOR THE PERFORMANCE OF SERVICES THAT ARE INCLUDED 20 FOR PURPOSES OF DETERMINING REASONABLENESS UNDER SECTION 26 U.S.C. 4958, 21 AS FURTHER SPECIFIED IN 26 CFR S53.4958-4(B)(II)(B), OR SUCCEEDING 22 PROVISIONS. 23 (2) "EXECUTIVE" MEANS ANY PERSON IN A POSITION TO EXERCISE SUBSTANTIAL 24 INFLUENCE OVER THE AFFAIRS OF A PROVIDER OF SERVICES, THAT DOES NOT SIT 25 ON THE GOVERNING BODY OF THE TAX-EXEMPT ORGANIZATION AS REFERENCED IN 26 26 U.S.C. S4958(F)(1)(A) AND FURTHER SPECIFIED IN 26 CFR S53.4958-3(C), OR 27 SUCCEEDING PROVISIONS. 28 (3) "FAMILY MEMBER" MEANS A SPOUSE, DOMESTIC PARTNER, SIBLING (BY 29 WHOLE OR HALF BLOOD), SPOUSE OR DOMESTIC PARTNER OF A SIBLING (BY WHOLE 30 OR HALF BLOOD), CHILD, GRANDCHILD, GREAT-GRANDCHILD, AND SPOUSE OR 31 DOMESTIC PARTNER OF A CHILD, GRANDCHILD, AND GREAT-GRANDCHILD. 32 (B) COMPENSATION EXCHANGED BY A NOT-FOR-PROFIT CORPORATION FOR THE 33 PERFORMANCE OF SERVICES BY AN EXECUTIVE MUST NOT BE EXCESSIVE AND THE 34 GOVERNING BODY (I.E., THE BOARD OF DIRECTORS, BOARD OF TRUSTEES, OR 35 EQUIVALENT CONTROLLING BODY) SHALL CONSIDER FACTORS INCLUDING, BUT NOT 36 LIMITED TO: COMPENSATION LEVELS PAID BY SIMILARLY SITUATED NOT-FOR-PRO- 37 FIT CORPORATIONS AS DEFINED IN SECTION ONE HUNDRED TWO (DEFINITIONS); 38 THE AVAILABILITY OF SIMILAR SERVICES IN THE GEOGRAPHIC AREA OF THE 39 APPLICABLE PROVIDER OF SERVICES; CURRENT COMPENSATION SURVEYS COMPILED 40 BY INDEPENDENT FIRMS; AND ACTUAL WRITTEN OFFERS FROM SIMILAR INSTI- 41 TUTIONS COMPETING FOR THE SERVICES OF THE APPLICABLE EXECUTIVE. 42 FOR THE PURPOSES OF THIS SECTION, WHETHER AN ORGANIZATION IS SIMILARLY 43 SITUATED SHALL BE DETERMINED BASED ON FACTORS INCLUDING, BUT NOT LIMITED 44 TO: GROSS ANNUAL REVENUE; GEOGRAPHIC LOCATION; AND THE DIVERSITY AND 45 COMPLEXITY OF PROGRAMS. 46 (C) ANNUAL COMPENSATION EXCHANGED BY A NOT-FOR-PROFIT CORPORATION FOR 47 THE PERFORMANCE OF SERVICES BY AN EXECUTIVE SHALL BE CONSIDERED REASON- 48 ABLE IF IT FALLS AT OR BELOW THE LEVEL I OF THE FEDERAL GOVERNMENT'S 49 RATES OF BASIC PAY FOR THE EXECUTIVE SCHEDULE PROMULGATED BY THE UNITED 50 STATES OFFICE OF PERSONNEL MANAGEMENT AND NO OTHER ACTION UNDER THIS 51 SECTION NEEDS TO BE TAKEN. 52 (D) ANNUAL COMPENSATION EXCHANGED BY A NOT-FOR-PROFIT CORPORATION FOR 53 THE PERFORMANCE OF SERVICES BY AN EXECUTIVE THAT DOES EXCEED LEVEL I OF 54 THE FEDERAL GOVERNMENT'S RATES OF BASIC PAY FOR THE EXECUTIVE SCHEDULE 55 SHALL BE PRESUMED TO NOT BE EXCESSIVE IF EACH OF THE FOLLOWING FOUR 56 CONDITIONS OCCUR: S. 5115--A 6 1 (1) THE COMPENSATION IS APPROVED IN ADVANCE BY THE GOVERNING BODY 2 (I.E., THE BOARD OF DIRECTORS, BOARD OF TRUSTEES, OR EQUIVALENT CONTROL- 3 LING BODY) OF THE NOT-FOR-PROFIT CORPORATION THAT IS COMPOSED ENTIRELY 4 OF INDIVIDUALS WHO DO NOT HAVE A CONFLICT OF INTEREST WITH RESPECT TO 5 THE COMPENSATION ARRANGEMENT. 6 (A) FOR THE PURPOSES OF DETERMINING WHETHER THE REQUIREMENTS OF THIS 7 PARAGRAPH HAVE BEEN MET WITH RESPECT TO A SPECIFIC COMPENSATION ARRANGE- 8 MENT, AN INDIVIDUAL IS NOT INCLUDED IN THE GOVERNING BODY WHEN IT IS 9 REVIEWING A TRANSACTION IF THAT INDIVIDUAL MEETS WITH OTHER MEMBERS ONLY 10 TO ANSWER QUESTIONS, AND OTHERWISE RECUSES HIMSELF OR HERSELF FROM THE 11 MEETING AND IS NOT PRESENT DURING DEBATE AND VOTING ON THE COMPENSATION 12 ARRANGEMENT. 13 (B) A MEMBER OF THE GOVERNING BODY DOES NOT HAVE A CONFLICT OF INTER- 14 EST WITH RESPECT TO A COMPENSATION ARRANGEMENT ONLY IF THE MEMBER: 15 (I) IS NOT AN EXECUTIVE PARTICIPATING IN, OR ECONOMICALLY BENEFITING 16 FROM, THE COMPENSATION ARRANGEMENT; 17 (II) IS NOT IN AN EMPLOYMENT RELATIONSHIP SUBJECT TO THE DIRECTION OR 18 CONTROL OF ANY EXECUTIVE, OR THE FAMILY MEMBER OF ANY EXECUTIVE, PARTIC- 19 IPATING IN OR ECONOMICALLY BENEFITING FROM THE COMPENSATION ARRANGEMENT; 20 (III) DOES NOT RECEIVE COMPENSATION OR OTHER PAYMENT SUBJECT TO 21 APPROVAL BY ANY EXECUTIVE, OR THE FAMILY MEMBER OF ANY EXECUTIVE, 22 PARTICIPATING IN OR ECONOMICALLY BENEFITING FROM THE COMPENSATION 23 ARRANGEMENT; 24 (IV) HAS NO MATERIAL FINANCIAL INTEREST AFFECTED BY THE COMPENSATION 25 ARRANGEMENT; AND 26 (V) DOES NOT APPROVE A TRANSACTION PROVIDING ECONOMIC BENEFITS TO ANY 27 EXECUTIVE, OR THE FAMILY MEMBER OF ANY EXECUTIVE, PARTICIPATING IN THE 28 COMPENSATION ARRANGEMENT, WHO IN TURN HAS APPROVED OR WILL APPROVE A 29 TRANSACTION PROVIDING ECONOMIC BENEFITS TO THE MEMBER. 30 (2) (A) THE GOVERNING BODY OBTAINED AND RELIED UPON APPROPRIATE DATA 31 AS TO COMPARABILITY PRIOR TO MAKING ITS DETERMINATION AND GIVEN THE 32 KNOWLEDGE AND EXPERTISE OF ITS MEMBERS, IT HAS INFORMATION SUFFICIENT TO 33 DETERMINE WHETHER THE COMPENSATION ARRANGEMENT IN ITS ENTIRETY IS 34 REASONABLE. RELEVANT INFORMATION INCLUDES, BUT IS NOT LIMITED TO: 35 COMPENSATION LEVELS PAID BY SIMILARLY SITUATED NOT-FOR-PROFIT CORPO- 36 RATIONS AS DEFINED IN SECTION ONE HUNDRED TWO (DEFINITIONS); THE AVAIL- 37 ABILITY OF SIMILAR SERVICES IN THE GEOGRAPHIC AREA OF THE APPLICABLE 38 PROVIDER OF SERVICES; CURRENT COMPENSATION SURVEYS COMPILED BY INDEPEND- 39 ENT FIRMS; AND ACTUAL WRITTEN OFFERS FROM SIMILAR INSTITUTIONS COMPETING 40 FOR THE SERVICES OF THE APPLICABLE EXECUTIVE. 41 (B) FOR PURPOSES OF THIS PARAGRAPH, CONTROL BY AN APPLICABLE NOT-FOR- 42 PROFIT CORPORATION MEANS: 43 (I) IN THE CASE OF A STOCK CORPORATION, OWNERSHIP (BY VOTE OR VALUE) 44 OF MORE THAN FIFTY PERCENT OF THE STOCK IN SUCH CORPORATION; 45 (II) IN THE CASE OF A PARTNERSHIP, OWNERSHIP OF MORE THAN FIFTY 46 PERCENT OF THE PROFITS INTERESTS OR CAPITAL INTERESTS IN THE PARTNER- 47 SHIP; 48 (III) IN THE CASE OF A NONSTOCK ORGANIZATION (I.E., AN ENTITY IN WHICH 49 NO PERSON HOLDS A PROPRIETARY INTEREST), THAT AT LEAST FIFTY PERCENT OF 50 THE DIRECTORS OR TRUSTEES OF THE NOT-FOR-PROFIT CORPORATION ARE EITHER 51 REPRESENTATIVES (INCLUDING TRUSTEES, DIRECTORS, AGENTS, OR EMPLOYEES) 52 OF, OR DIRECTLY OR INDIRECTLY CONTROLLED BY, AN APPLICABLE TAX-EXEMPT 53 ORGANIZATION; OR 54 (IV) IN THE CASE OF ANY OTHER ENTITY, OWNERSHIP OF MORE THAN FIFTY 55 PERCENT OF THE BENEFICIAL INTEREST IN THE ENTITY. S. 5115--A 7 1 (3) THE GOVERNING BODY ADEQUATELY DOCUMENTED THE BASIS FOR ITS DETER- 2 MINATION CONCURRENTLY WITH MAKING THAT DETERMINATION. 3 (A) FOR A DECISION TO BE DOCUMENTED ADEQUATELY, THE WRITTEN OR ELEC- 4 TRONIC RECORDS OF THE GOVERNING BODY MUST NOTE: 5 (I) THE TERMS OF THE TRANSACTION THAT WAS APPROVED, AND THE DATE IT 6 WAS APPROVED; 7 (II) THE MEMBERS OF THE GOVERNING BODY WHO WERE PRESENT DURING DEBATE 8 ON THE TRANSACTION THAT WAS APPROVED, AND THOSE WHO VOTED ON IT; 9 (III) THE COMPARABILITY DATA OBTAINED AND RELIED UPON BY THE GOVERNING 10 BODY, AND HOW THE DATA WAS OBTAINED; AND 11 (IV) ANY ACTIONS TAKEN WITH RESPECT TO CONSIDERATION OF THE TRANS- 12 ACTION BY ANYONE WHO IS OTHERWISE A MEMBER OF THE GOVERNING BODY BUT WHO 13 HAD A CONFLICT OF INTEREST WITH RESPECT TO THE TRANSACTION. 14 (B) IF THE GOVERNING BODY DETERMINES THAT THE EXECUTIVE'S COMPENSATION 15 FOR A SPECIFIC ARRANGEMENT IS HIGHER OR LOWER THAN THE RANGE OF COMPAR- 16 ABILITY DATA OBTAINED, THE GOVERNING BODY MUST RECORD THE BASIS FOR ITS 17 DETERMINATION. FOR A DECISION TO BE DOCUMENTED CONCURRENTLY RECORDS MUST 18 BE PREPARED BEFORE THE LATER OF THE NEXT MEETING OF THE GOVERNING BODY 19 OR SIXTY DAYS AFTER THE FINAL ACTION OR ACTIONS OF THE GOVERNING BODY 20 ARE TAKEN. RECORDS MUST BE REVIEWED AND APPROVED BY THE GOVERNING BODY 21 AS REASONABLE, ACCURATE AND COMPLETE WITHIN A REASONABLE TIME PERIOD 22 THEREAFTER. 23 (4) THE COMPENSATION PROVIDED TO THE EXECUTIVE BY THE GOVERNING BODY 24 DOES NOT EXCEED THE HIGHEST COMPENSATION PROVIDED BY A SIMILARLY SITU- 25 ATED ORGANIZATION FOR SIMILAR SERVICES, AS IDENTIFIED IN THE COMPARABIL- 26 ITY DATA, BY MORE THAN TWENTY PERCENT. 27 (E) IF THE FOUR CONDITIONS OF PARAGRAPH (D) OF THIS SECTION ARE SATIS- 28 FIED, THEN THE PERSON OR ENTITY BRINGING AN ACTION FOR RELIEF PURSUANT 29 TO THIS SECTION MAY REBUT THE PRESUMPTION THAT ARISES UNDER PARAGRAPH 30 (D) OF THIS SECTION ONLY IF IT DEVELOPS SUFFICIENT CONTRARY EVIDENCE TO 31 REBUT THE PROBATIVE VALUE OF THE COMPARABILITY DATA RELIED UPON BY THE 32 GOVERNING BODY. WITH RESPECT TO ANY FIXED PAYMENT, REBUTTAL EVIDENCE IS 33 LIMITED TO EVIDENCE RELATING TO FACTS AND CIRCUMSTANCES EXISTING ON THE 34 DATE THE PARTIES ENTER INTO THE CONTRACT PURSUANT TO WHICH THE PAYMENT 35 IS MADE (EXCEPT IN THE EVENT OF SUBSTANTIAL NONPERFORMANCE). WITH 36 RESPECT TO ALL OTHER PAYMENTS, REBUTTAL EVIDENCE MAY INCLUDE FACTS AND 37 CIRCUMSTANCES UP TO AND INCLUDING THE DATE OF PAYMENT. 38 (F) A NOT-FOR-PROFIT IS PROHIBITED FROM, AND MAY THUS BE REFERRED TO 39 THE ATTORNEY GENERAL FOR FURTHER INQUIRY TO BE OFFICIALLY RESPONDED TO 40 WITHIN NINETY DAYS OF RECEIPT, BY THE PERSON OR ENTITY BRINGING AN 41 ACTION FOR RELIEF PURSUANT TO THIS SECTION: (1) ENGAGING IN ANY ACT THAT 42 THE INTERNAL REVENUE SERVICE DETERMINES CONSTITUTES AN "EXCESS BENEFIT 43 TRANSACTION" UNDER SECTION 4958 OF THE INTERNAL REVENUE CODE; OR (2) 44 ENGAGING IN ANY ACT THAT WOULD CONSTITUTE AN "EXCESS BENEFIT TRANS- 45 ACTION" UNDER THE STANDARDS OF SECTION 4958 OF THE INTERNAL REVENUE 46 CODE. 47 S 19. Section 104-A of the not-for-profit corporation law, as added by 48 chapter 591 of the laws of 1982, paragraphs (a), (c), (d), (e), (g), 49 (l), (m), (n) and (p) as amended by chapter 166 of the laws of 1991 and 50 paragraph (r) as amended by chapter 198 of the laws of 1984, is amended 51 to read as follows: 52 S 104-A. Fees. 53 Except as otherwise provided, the department of state shall collect 54 the following fees pursuant to this chapter: S. 5115--A 8 1 (a) For filing a certificate of type of not-for-profit corporation 2 pursuant to section one hundred thirteen of this [chapter] ARTICLE, 3 thirty dollars. 4 (b) For the reservation of a corporate name pursuant to section three 5 hundred three of this chapter, ten dollars. 6 (c) For the resignation of a registered agent for service of process 7 pursuant to section three hundred five of this chapter, thirty dollars. 8 (d) For service of process on the secretary of state pursuant to 9 section three hundred six or three hundred seven of this chapter, forty 10 dollars. If the service is in an action brought solely to recover a sum 11 of money not in excess of two hundred dollars and the process is so 12 endorsed, or the process is served on behalf of a county, city, town or 13 village or other subdivision of the state, ten dollars. 14 (e) For filing a certificate of incorporation pursuant to section four 15 hundred two of this chapter, [seventy-five] EIGHTY-FIVE dollars. 16 (f) For filing a certificate of amendment pursuant to section eight 17 hundred three of this chapter, [thirty] FORTY dollars. 18 (g) For filing a certificate of change pursuant to section eight 19 hundred three-A of this chapter, [twenty] THIRTY dollars. 20 (h) For filing a restated certificate of incorporation pursuant to 21 section eight hundred five of this chapter, [thirty] FORTY dollars. 22 (i) For filing a certificate of merger or consolidation pursuant to 23 section nine hundred four of this chapter, [thirty] FORTY dollars. 24 (j) For filing a certificate of merger or consolidation of domestic 25 and foreign corporations pursuant to section nine hundred six of this 26 chapter, [thirty] FORTY dollars. 27 (k) For filing a certified copy of an order of approval of the 28 supreme court pursuant to section nine hundred seven of this chapter, 29 thirty dollars. 30 (l) For filing a certificate of dissolution pursuant to section one 31 thousand three of this chapter, thirty dollars. 32 (m) For filing a certificate of annulment of dissolution pursuant to 33 section one thousand twelve of this chapter, [thirty] FORTY dollars. 34 (n) For filing an application by a foreign corporation for authority 35 to do business in New York state pursuant to section thirteen hundred 36 four of this chapter, one hundred [thirty-five] FORTY-FIVE dollars. 37 (o) For filing a certificate of amendment of an application for 38 authority by a foreign corporation pursuant to section thirteen hundred 39 nine of this chapter, [thirty] FORTY dollars. 40 (p) For filing a certificate of change of application for authority by 41 a foreign corporation pursuant to section thirteen hundred ten of this 42 chapter, [twenty] THIRTY dollars. 43 (q) For filing a certificate of surrender of authority pursuant to 44 section thirteen hundred eleven of this chapter, thirty dollars. 45 (r) For filing a statement of the termination of existence of a 46 foreign corporation pursuant to section thirteen hundred twelve of this 47 chapter, thirty dollars. There shall be no fee for the filing by an 48 authorized officer of the jurisdiction of incorporation of a foreign 49 corporation of a certificate that the foreign corporation has been 50 dissolved or its authority or existence has been otherwise terminated or 51 cancelled in the jurisdiction of its incorporation. 52 (s) For filing any other certificate or instrument, thirty dollars. 53 S 20. The not-for-profit corporation law is amended by adding a new 54 section 116 to read as follows: 55 S 116. STATE BOARD TRAINING CONSORTIUM. S. 5115--A 9 1 (A) NOT-FOR-PROFIT BOARD MEMBERS ARE ENTRUSTED WITH THE OVERALL 2 MANAGEMENT AND OVERSIGHT OF NON-PROFITS AND HAVE LEGAL AND ETHICAL OBLI- 3 GATIONS TO KEEP THEMSELVES FULLY INFORMED REGARDING THEIR ORGANIZATION, 4 ITS FINANCES AND ITS OVERALL OPERATION AND IN ASSURING THAT PROGRAM 5 STAFF AND ADMINISTRATION EFFECTIVELY CARRY OUT THE ORGANIZATION'S 6 MISSION. THE STATE BOARD TRAINING CONSORTIUM IS INTENDED TO EMPOWER 7 BOARD MEMBERS OF NOT-FOR-PROFIT ORGANIZATIONS WHO CONTRACT WITH THE 8 STATE OF NEW YORK WITH THE INFORMATION AND TOOLS NECESSARY TO CARRY OUT 9 THEIR VERY IMPORTANT RESPONSIBILITIES, ROLES AND OBLIGATIONS. THE STATE 10 BOARD TRAINING CONSORTIUM WILL BE A COMPREHENSIVE STATE-WIDE TRAINING 11 EFFORT, DELIVERED REGIONALLY, IN-PERSON, TOGETHER WITH A NUMBER OF 12 TAILORED AGENCY SPECIFIC ONSITE TRAININGS, SOME VIRTUAL WEBINARS, AND 13 THE LIKE, AND STATE WORKFORCE TRAININGS ON THE SAME OR SIMILAR SUBJECTS. 14 ANY TRAINING CONDUCTED UNDER THE AUSPICES OF THE STATE BOARD TRAINING 15 CONSORTIUM WILL BE FREE TO VERIFIED MEMBERS OF NOT-FOR-PROFIT BOARDS OF 16 DIRECTORS WHO CONTRACT WITH THE STATE OF NEW YORK. 17 (1) FEES GENERATED FROM THE TEN DOLLAR INCREASE IN THE FILING FEES 18 ASSOCIATED WITH CERTIFICATES OF INCORPORATION, AMENDMENT, CHANGE, MERGER 19 OR CONSOLIDATION, ANNULMENT OF DISSOLUTION, AUTHORITY BY A FOREIGN 20 CORPORATION, AN AMENDMENT OF SAME OR A CHANGE IN THE AUTHORITY OF A 21 FOREIGN CORPORATION, SHALL BE USED TO FUND THE STATE BOARD TRAINING 22 CONSORTIUM. 23 (2) SAID FEES SHALL BE MAINTAINED IN THE STATE BOARD TRAINING CONSOR- 24 TIUM FUND, AS ESTABLISHED BY SECTION NINETY-SEVEN-J OF THE STATE FINANCE 25 LAW, TO SUPPORT THE STATE BOARD TRAINING CONSORTIUM ESTABLISHED BY THIS 26 SECTION. 27 (B) THE STATE BOARD TRAINING CONSORTIUM SHALL BE ADMINISTERED BY THE 28 DEPARTMENT OF STATE THROUGH A CONTRACT UNDER COUNSEL'S OFFICE. A QUALI- 29 FIED NOT-FOR-PROFIT CORPORATION WILL BE CONTRACTED WITH BY THE DEPART- 30 MENT OF STATE TO PROVIDE THE TRAINING AND ASSOCIATED SERVICES DELIVERED 31 UNDER THE STATE BOARD TRAINING CONSORTIUM, TOGETHER WITH MANAGING ALL 32 DAY-TO-DAY OPERATIONS, MARKETING EFFORTS, CURRICULUM UPDATES, PRINTING 33 AND RECORD-KEEPING. THE CONTRACT SHALL HAVE A FIVE YEAR TERM, RENEWABLE 34 FOR THREE ADDITIONAL YEARS, AND A STANDARD REQUEST FOR PROPOSALS/REQUEST 35 FOR QUALIFICATIONS PROCESS WILL BE UTILIZED AT THE INCEPTION OF EACH 36 CONTRACT. 37 (1) THE COMMISSIONERS OF THE OFFICE FOR PEOPLE WITH DEVELOPMENTAL 38 DISABILITIES, OFFICE OF MENTAL HEALTH, OFFICE OF ALCOHOLISM AND 39 SUBSTANCE ABUSE SERVICES, OFFICE OF CHILDREN AND FAMILY SERVICES, AND 40 DEPARTMENT OF HEALTH, HAVING PRIOR EXPERIENCE IN THE STATE BOARD TRAIN- 41 ING CONSORTIUM AS ADMINISTERED BY OFFICE OF ALCOHOLISM AND SUBSTANCE 42 ABUSE SERVICES, AND THE DEPARTMENT OF HEALTH, AIDS INSTITUTE, SHALL 43 JOINTLY: 44 (I) DEVELOP A CONTRACT FOR THE STATE BOARD TRAINING CONSORTIUM ALONG 45 THE LINES ALREADY PROMULGATED BY THEIR AGENCIES; 46 (II) ESTABLISH UNIFORM PROCEDURES TO MONITOR ATTENDANCE AT TRAININGS 47 CONDUCTED UNDER THE STATE BOARD TRAINING CONSORTIUM AND IN REPORTING THE 48 SAME TO THE ATTENDING BOARDS OF DIRECTORS. 49 (2) THE COMMISSIONERS OF OTHER AGENCIES, INCLUDING BUT NOT LIMITED TO 50 THE OFFICE FOR THE AGING, DEPARTMENT OF AGRICULTURE AND MARKETS, COUNCIL 51 ON THE ARTS, OFFICE OF COURT ADMINISTRATION, DIVISION OF CRIMINAL 52 JUSTICE SERVICES, EMPIRE STATE DEVELOPMENT, DEPARTMENT OF ENVIRONMENTAL 53 CONSERVATION, OFFICE OF GENERAL SERVICES, NEW YORK STATE CANAL CORPO- 54 RATION AND THE OFFICE OF TEMPORARY AND DISABILITY ASSISTANCE SHALL 55 ESTABLISH PROCEDURES TO MONITOR ATTENDANCE AT TRAININGS CONDUCTED UNDER S. 5115--A 10 1 THE STATE BOARD TRAINING CONSORTIUM AND IN REPORTING THE SAME TO THE 2 ATTENDING BOARDS OF DIRECTORS. 3 (C) ALL NOT-FOR-PROFIT CORPORATIONS THAT CONTRACT WITH THE STATE OF 4 NEW YORK MAY ATTEND THE STATE BOARD TRAINING CONSORTIUM TRAININGS FREE 5 OF CHARGE. 6 S 21. The state finance law is amended by adding a new section 97-j to 7 read as follows: 8 S 97-J. STATE BOARD TRAINING CONSORTIUM FUND. 1. THERE IS HEREBY 9 ESTABLISHED IN THE JOINT CUSTODY OF THE COMMISSIONER OF TAXATION AND 10 FINANCE AND THE COMPTROLLER A FUND TO BE KNOWN AS THE "STATE BOARD 11 TRAINING CONSORTIUM FUND." 12 2. SUCH FUND SHALL CONSIST OF FEES GENERATED FROM THE TEN DOLLAR 13 INCREASE IN FILING FEES IN PARAGRAPHS (E), (F), (G), (H), (I), (J), (M), 14 (N), (O) AND (P) OF SECTION ONE HUNDRED FOUR-A OF THE NOT-FOR-PROFIT 15 CORPORATION LAW, ASSOCIATED WITH CERTIFICATES OF INCORPORATION, AMEND- 16 MENT, CHANGE, MERGER OR CONSOLIDATION, ANNULMENT OF DISSOLUTION, AUTHOR- 17 ITY BY A FOREIGN CORPORATION, AN AMENDMENT OF SAME OR A CHANGE IN THE 18 AUTHORITY OF A FOREIGN CORPORATION, PROMULGATED BY THE CHAPTER OF THE 19 LAWS OF TWO THOUSAND FOURTEEN THAT ADDED THIS SECTION, AND ALL OTHER 20 MONEYS CREDITED OR APPROPRIATED FOR TRANSFER THERETO FROM ANY OTHER FUND 21 OR SOURCE ACCORDING TO LAW. 22 3. MONEYS IN THE STATE BOARD TRAINING CONSORTIUM FUND SHALL BE KEPT 23 SEPARATE AND SHALL NOT BE COMMINGLED WITH ANY OTHER MONEYS IN THE CUSTO- 24 DY OF THE STATE COMPTROLLER. MONEYS IN THE FUND MAY BE INVESTED BY THE 25 COMPTROLLER PURSUANT TO THE PROVISIONS OF SECTION NINETY-EIGHT-A OF THIS 26 ARTICLE AND ANY INCOME RECEIVED BY THE COMPTROLLER FROM SUCH INVESTMENTS 27 SHALL BE ADDED TO AND BECOME PART OF, AND SHALL BE USED FOR THE PURPOSES 28 OF SUCH FUND. ALL DEPOSITS OF SUCH MONEY SHALL, IF REQUIRED BY THE COMP- 29 TROLLER, BE SECURED BY OBLIGATIONS OF THE UNITED STATES OR OF THE STATE 30 OF MARKET VALUE EQUAL AT ALL TIMES TO THE AMOUNT OF THE DEPOSIT AND ALL 31 BANKS AND TRUST COMPANIES ARE AUTHORIZED TO GIVE SUCH SECURITIES FOR 32 SUCH DEPOSITS. 33 4. MONEYS IN THE FUND, FOLLOWING APPROPRIATION BY THE LEGISLATURE, 34 SHALL BE ALLOCATED UPON A CERTIFICATE OF APPROVAL OF AVAILABILITY BY THE 35 DIRECTOR OF THE BUDGET SOLELY FOR THE PURPOSES SET FORTH IN THIS 36 SECTION. 37 5. ALL MONEYS IN THE FUND SHALL BE MADE AVAILABLE PURSUANT TO APPRO- 38 PRIATION FOR USE IN FUNDING THE STATE BOARD TRAINING CONSORTIUM ESTAB- 39 LISHED PURSUANT TO SECTION ONE HUNDRED SIXTEEN OF THE NOT-FOR-PROFIT 40 CORPORATION LAW. 41 S 22. Absent explicit language expressly and unequivocally stating a 42 legislative intent to the contrary, all provisions of this act are irre- 43 futably presumed to operate in a wholly prospective manner. Provisions 44 shall be considered to operate retroactively, and therefore in violation 45 of this act, if applied in such a manner as to alter, change, affect, 46 impair or defeat any rights, obligations, duties or interests accrued, 47 incurred or conferred prior to the effective date of this act. Further- 48 more, the provisions of this act shall neither apply to, nor be applied 49 based upon the occasion of, acts occurring prior to it becoming law. 50 S 23. This act shall take effect on the one hundred eightieth day 51 after it shall have become a law; provided that: 52 (a) the amendments to sections 702, 708, 712, 715 and 720 of the not- 53 for-profit corporation law made by sections four, six, eight, twelve, 54 thirteen and seventeen of this act shall take effect on the same date 55 and in the same manner as sections 67, 68, 70, 74 and 78, respectively, 56 of chapter 549 of the laws of 2013, take effect; S. 5115--A 11 1 (b) the amendments to section 713 of the not-for-profit corporation 2 law made by section ten of this act shall take effect on the same date 3 and in the same manner as section 73 of chapter 549 of the laws of 2013, 4 takes effect; and 5 (c) the amendments to paragraph (a) of section 104-A of the not-for- 6 profit corporation law made by section nineteen of this act shall not 7 affect the repeal of such paragraph and shall be deemed repealed there- 8 with.