NY State Senate Bill 2021-S711

Senate Bill S711

2021-2022 Legislative Session

Relates to the corporate membership of housing development fund companies and corporations

download bill text pdf

Archive: Last Bill Status - In Senate Committee Corporations, Authorities And Commissions Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 05, 2022	referred to corporations, authorities and commissions
Jan 06, 2021	referred to corporations, authorities and commissions

2021-S711 (ACTIVE) - Details

See Assembly Version of this Bill:: A3739
Current Committee:: Senate Corporations, Authorities And Commissions
Law Section:: Not-for-Profit Corporation Law
Laws Affected:: Amd §601, N-PC L
Versions Introduced in 2019-2020 Legislative Session:: S7019, A9711

2021-S711 (ACTIVE) - Summary

Relates to the corporate membership of housing development fund companies and corporations.

2021-S711 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S711

SPONSOR: KAPLAN
 
TITLE OF BILL:

An act to amend the not-for-profit corporation law, in relation to the
corporate membership of housing development fund companies and corpo-
rations

 
PURPOSE OR GENERAL IDEA OF BILL:

Seeks to correct unintended change that prevents a housing development
fund corporation from being the only member of a charitable nonprofit
corporation.

 
SUMMARY OF PROVISIONS:

Section 1 amends Paragraph (a) of section 601 of the not-for-profit law,
as amended by chapter 411 of the laws of 2018 to clarify that a housing
development fund company or corporation incorporated pursuant to section
573 of the private housing finance law may have a public corporation,

authority, or housing company as its sole member, provided it is
composed of the chair and duly appointed and elected commissioners or
directors of such body.

Section 2 is the effective date.

 
JUSTIFICATION:

When the original law was enacted its goal was to prevent sole individ-
uals from being the only member of a charitable nonprofit corporation,
this was intended to prevent an unscrupulous individual from preventing
an individual member of a not for profit from using a charity for their
personal benefit. Unfortunately, the drafting of this new law did not
take into account housing authorities.

In order for housing authorities to take advantage of tax credits, it
must form a not for profit housing development fund company organized
under article XI of the Private Housing Finance Law. This not for profit
status is important for the sales tax exemption. DHCR reviews proper
documentation, disclosures and deliverables, reviews and at its
discretion approves the formation of a specific housing development fund
corporation. This formation is necessary for the successful creation and
implementation of affordable housing statewide.

The existence of these charitable nonprofit corporations, was not
considered under the passage of Chapter 411 of the Laws of 2018, and as
such this fix is needed to protect these entities.

 
PRIOR LEGISLATIVE HISTORY:

S. 7019/A. 9711 of 2019/20; Advanced to Third Reading Calendar

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2021-S711 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    711
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 6, 2021
                                ___________
 
 Introduced  by  Sen.  KAPLAN -- read twice and ordered printed, and when
   printed to be committed to the Committee on Corporations,  Authorities
   and Commissions
 
 AN  ACT  to amend the not-for-profit corporation law, in relation to the
   corporate membership of housing development fund companies and  corpo-
   rations
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph (a) of section 601 of the  not-for-profit  corpo-
 ration law, as amended by chapter 411 of the laws of 2018, is amended to
 read as follows:
   (a)  A  corporation  shall have one or more classes of members, or, in
 the case of a charitable corporation, may have no members, in which case
 any such provision for classes of members or for no members shall be set
 forth in the certificate of incorporation or the by-laws.  Corporations,
 joint-stock  associations, unincorporated associations and partnerships,
 as well as any other person without limitation, may be members, provided
 however, that effective July first, two  thousand  nineteen,  no  corpo-
 ration except a corporation that has no members, shall have a membership
 comprised  of  fewer than three persons. A corporation may have a corpo-
 ration, joint-stock association, unincorporated association or  partner-
 ship  as  a  sole  member, if such corporation, joint-stock association,
 unincorporated association or partnership is owned or controlled  by  no
 fewer than three persons. NOTWITHSTANDING ANY OTHER PROVISION OF LAW SET
 FORTH  IN  THIS  PARAGRAPH, A HOUSING DEVELOPMENT FUND COMPANY OR CORPO-
 RATION INCORPORATED PURSUANT TO SECTION FIVE  HUNDRED  SEVENTY-THREE  OF
 THE PRIVATE HOUSING FINANCE LAW MAY HAVE A PUBLIC CORPORATION, AUTHORITY
 (WHETHER  FEDERAL  OR STATE HOUSING AUTHORITY), MUNICIPAL CORPORATION OR
 HOUSING COMPANY AS ITS SOLE MEMBER, PROVIDED  SUCH  HOUSING  DEVELOPMENT
 FUND  COMPANY  OR  CORPORATION  IS  COMPOSED  OF  THE CHAIR AND THE DULY
 APPOINTED AND ELECTED COMMISSIONERS OR DIRECTORS OF SUCH  PUBLIC  CORPO-
 RATION, AUTHORITY, MUNICIPAL CORPORATION OR HOUSING COMPANY.

   § 2. This act shall take effect immediately.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01670-01-1

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