S T A T E O F N E W Y O R K
________________________________________________________________________
3715
2023-2024 Regular Sessions
I N A S S E M B L Y
February 7, 2023
___________
Introduced by M. of A. PAULIN, OTIS, FAHY -- read once and referred to
the Committee on Corporations, Authorities and Commissions
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:
Section 1. Section 104 of the not-for-profit corporation law is
amended by adding a new paragraph (h) to read as follows:
(H) THE DEPARTMENT SHALL TRANSMIT ELECTRONICALLY TO THE AUTHORITIES
BUDGET OFFICE A COPY OF EVERY CERTIFICATE OF INCORPORATION FILED OR
DELIVERED WHERE THE INCORPORATOR HAS INDICATED ON THE CERTIFICATE THAT
HE OR SHE IS FILING SAID CERTIFICATE ON THE BEHALF OR AT THE BEHEST OF A
MUNICIPAL CORPORATION, STATE OR LOCAL AUTHORITY, OR DISTRICT.
§ 2. Subparagraph 2-b of paragraph (a) of section 402 of the not-for-
profit corporation law, as added by chapter 23 of the laws of 2014, is
amended to read as follows:
(2-b) If it is not formed to engage in any activity or for any purpose
requiring consent or approval of any state official, department, board,
agency or other body, OR DOES NOT REQUIRE CONSENT PURSUANT TO SUBPARA-
GRAPH (2) OR (3) OF PARAGRAPH (W) OF SECTION 404 (APPROVALS, NOTICES AND
CONSENTS) a statement that no such consent or approval is required. Such
statement shall be deemed conclusive for purposes of filing by the
department of state. If subsequent to submitting the certificate of
incorporation for filing, the corporation plans to engage in any activ-
ity requiring consent or approval pursuant to section 404 [(approvals]
(APPROVALS, notices and consents) of this chapter, the corporation shall
obtain such consent or approval and accordingly amend its certificate of
incorporation pursuant to article eight of this chapter.
§ 3. Paragraph (a) of section 402 of the not-for-profit corporation
law is amended by adding a new subparagraph 9 to read as follows:
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04263-01-3
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(9) A STATEMENT WHETHER THE CORPORATION IS BEING INCORPORATED ON THE
BEHALF OR AT THE BEHEST OF ANY MUNICIPAL CORPORATION, STATE OR LOCAL
AUTHORITY, OR DISTRICT. IF SO, THE INCORPORATOR SHALL IDENTIFY SUCH
MUNICIPAL CORPORATION, STATE OR LOCAL AUTHORITY, OR DISTRICT.
§ 4. Section 404 of the not-for-profit corporation law is amended by
adding a new paragraph (w) to read as follows:
(W) EVERY CERTIFICATE OF INCORPORATION WHICH INCLUDES ANY OF THE
FOLLOWING SHALL HAVE ENDORSED THEREON OR ANNEXED THERETO THE CONSENT OF
THE DIRECTOR OF THE AUTHORITIES BUDGET OFFICE:
(1) INCLUDES AMONG ITS PURPOSES THE RELIEVING AND REDUCING OF UNEM-
PLOYMENT, PROMOTING AND PROVIDING FOR ADDITIONAL AND MAXIMUM EMPLOYMENT,
BETTERING AND MAINTAINING JOB OPPORTUNITIES, INSTRUCTING OR TRAINING
INDIVIDUALS TO IMPROVE OR DEVELOP THEIR CAPABILITIES FOR SUCH JOBS,
CARRYING ON SCIENTIFIC RESEARCH FOR THE PURPOSE OF AIDING A COMMUNITY OR
GEOGRAPHICAL AREA BY ATTRACTING NEW INDUSTRY TO THE COMMUNITY OR AREA OR
BY ENCOURAGING THE DEVELOPMENT OF, OR RETENTION OF, AN INDUSTRY IN THE
COMMUNITY OR AREA, AND LESSENING THE BURDENS OF GOVERNMENT AND ACTING IN
THE PUBLIC INTEREST, OR ANY ABBREVIATION OR DERIVATIVE THEREOF IN A
CONTEXT THAT INDICATES OR IMPLIES THAT THE CORPORATION IS FORMED FOR ANY
OF THE ABOVE PURPOSES;
(2) INDICATES THAT ONE OR MORE INDIVIDUALS WHO SERVE AS OFFICERS OR
EMPLOYEES OF ANY MUNICIPAL CORPORATION, STATE OR LOCAL AUTHORITY, OR
DISTRICT SHALL: (I) SELECT EITHER A MAJORITY OF THE CORPORATION'S BOARD
OF DIRECTORS OR THE CORPORATION'S CHIEF EXECUTIVE OFFICER; (II) CONSTI-
TUTE A MAJORITY OF THE VOTING STRENGTH THAT SELECTS EITHER A MAJORITY OF
THE CORPORATION'S BOARD OF DIRECTORS OR THE CORPORATION'S CHIEF EXECU-
TIVE OFFICER; OR (III) SERVE AS: (A) A MAJORITY OF THE CORPORATION'S
BOARD OF DIRECTORS; OR (B) IN HIS OR HER OFFICIAL CAPACITY, THE CORPO-
RATION'S CHIEF EXECUTIVE OFFICER; OR (C) IN HIS OR HER OFFICIAL CAPACI-
TY, A DIRECTOR IN THE CORPORATION; OR
(3) INDICATES THAT SUCH CORPORATION IS BEING INCORPORATED ON THE
BEHALF OR AT THE BEHEST OF ANY MUNICIPAL CORPORATION, STATE OR LOCAL
AUTHORITY, OR DISTRICT.
THE DIRECTOR SHALL MAKE SUCH INQUIRY INTO THE PURPOSES OF THE PROPOSED
CORPORATION AS HE OR SHE SHALL DEEM ADVISABLE.
§ 5. Paragraph (a) of section 1411 of the not-for-profit corporation
law, as amended by chapter 847 of the laws of 1970, is amended to read
as follows:
(a) Purposes.
This section shall provide an additional and alternate method of
incorporation or reincorporation of not-for-profit corporations for any
of the purposes set forth in this paragraph and shall not be deemed to
alter, impair or diminish the purposes, rights, powers or privileges of
any corporation heretofore or hereafter incorporated under this section
or under the stock or business corporation laws. Corporations may be
incorporated or reincorporated under this section as not-for-profit
local development corporations operated for the exclusively charitable
or public purposes of relieving and reducing unemployment, promoting and
providing for additional and maximum employment, bettering and maintain-
ing job opportunities, instructing or training individuals to improve or
develop their capabilities for such jobs, carrying on scientific
research for the purpose of aiding a community or geographical area by
attracting new industry to the community or area or by encouraging the
development of, or retention of, an industry in the community or area,
and lessening the burdens of government and acting in the public inter-
est, and any one or more counties, cities, towns or villages of the
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state, or any combination thereof, or the New York job development
authority in exercising its power under the public authorities law to
encourage the organization of local development corporations, may cause
such corporations to be incorporated by public officers or private indi-
viduals or reincorporated upon compliance with the requirements of this
section, and it is hereby found, determined and declared that in carry-
ing out said purposes and in exercising the powers conferred by para-
graph (b) such corporations will be performing an essential governmental
function. A NOT-FOR-PROFIT CORPORATION MAY NOT INCORPORATE OR REINCORPO-
RATE UNDER THIS SECTION IF ITS SOLE CORPORATE PURPOSE IS FOR LESSENING
THE BURDENS OF GOVERNMENT AND ACTING IN THE PUBLIC INTEREST.
§ 6. Subparagraph 2 of paragraph (d) of section 1411 of the not-for-
profit corporation law is amended to read as follows:
(2) Notwithstanding the provisions of any general, special or local
law, charter or ordinance to the contrary, such sale or lease may be
made without appraisal (EXCEPT AS MAY BE NECESSARY IN REGARD TO SUBPARA-
GRAPH (4) OF THIS PARAGRAPH), public notice[,] (except as provided in
subparagraph (4) OF THIS PARAGRAPH), or public bidding for such price or
rental and upon such terms as may be agreed upon between the county,
city, town or village and said local development corporation; provided,
however, that in case of a lease the term may not exceed [ninety-nine]
TWENTY-FIVE years and provided, further, that in cities having a popu-
lation of one million or more, no such sale or lease shall be made with-
out the approval of a majority of the members of the borough improvement
board of the borough in which such real property is located.
§ 7. Subparagraph 4 of paragraph (d) of section 1411 of the not-for-
profit corporation law is amended to read as follows:
(4) Notice of such hearing shall be published at least [ten] TWENTY-
ONE days before the date set for the hearing in such publication and in
such manner as may be designated by the local legislative body, or the
board of estimate as the case may be. SUCH NOTICE SHALL ALSO INCLUDE: A
DESCRIPTION OF THE PROPERTY AT ISSUE; THE VALUE OF THE PROPOSED CONSID-
ERATION TO BE RECEIVED FROM THE SALE OR LEASE; THE ESTIMATED FAIR MARKET
VALUE OF THE ASSET; AND A STATEMENT OF THE INTENDED USE OR DISPOSITION
OF THE PROPERTY BY THE LOCAL DEVELOPMENT CORPORATION.
§ 8. Paragraph (i) of section 1411 of the not-for-profit corporation
law is amended to read as follows:
(i) CONTRACTS BETWEEN A MUNICIPAL CORPORATION, PUBLIC AUTHORITY, OR
DISTRICT AND A LOCAL DEVELOPMENT CORPORATION.
ANY CONTRACT OR OTHER AGREEMENT BETWEEN A LOCAL DEVELOPMENT CORPO-
RATION AND A MUNICIPAL CORPORATION, STATE AUTHORITY OR LOCAL AUTHORITY,
OR DISTRICT FOR ONE OR MORE OF THE PURPOSES ENUMERATED IN PARAGRAPH (A)
OF THIS SECTION SHALL: (1) CAUSE THE LOCAL DEVELOPMENT CORPORATION TO BE
DEFINED AS A LOCAL AUTHORITY PURSUANT TO SUBDIVISION TWO OF SECTION TWO
OF THE PUBLIC AUTHORITIES LAW; (2) PROVIDE FOR THE MUNICIPAL CORPO-
RATION, STATE AUTHORITY OR LOCAL AUTHORITY, OR DISTRICT TO RECEIVE FAIR
AND ADEQUATE CONSIDERATION; (3) BE SUBJECT TO THE REQUIREMENTS OF ARTI-
CLE FIVE-A OF THE GENERAL MUNICIPAL LAW; AND (4) HAVE A TERM NOT TO
EXCEED TWENTY-FIVE YEARS, SUBJECT TO ONE OR MORE SUBSEQUENT RENEWALS FOR
A TERM NOT TO EXCEED TWENTY-FIVE YEARS EACH UPON THE MUTUAL CONSENT OF
THE PARTIES; PROVIDED HOWEVER THAT A CONTRACT WITH A MUNICIPAL CORPO-
RATION SHALL NOT BE USED TO FINANCE THE MUNICIPAL CORPORATION'S OPER-
ATIONS OR TO ACQUIRE OR IMPROVE AN ASSET FOR USE OF THE MUNICIPAL CORPO-
RATION.
(J) Effect of section.
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Corporations incorporated or reincorporated under this section shall
be organized and operated exclusively for the purposes set forth in
paragraph (a) OF THIS SECTION, shall have, in addition to the powers
otherwise conferred by law, the powers conferred by paragraph (c) OF
THIS SECTION and shall be subject to all the restrictions [and], limita-
tions AND OBLIGATIONS imposed by [paragraph] PARAGRAPHS (e) [and para-
graph], (g) AND (I) OF THIS SECTION. In so far as the provisions of
this section are inconsistent with the provisions of any other law,
general or special, the provisions of this section shall be controlling
as to corporations incorporated or reincorporated hereunder.
§ 9. Subdivision 2 of section 2 of the public authorities law, as
amended by chapter 257 of the laws of 2011, is amended to read as
follows:
2. "local authority" shall mean (a) a public authority or public bene-
fit corporation created by or existing under this chapter or any other
law of the state of New York whose members do not hold a civil office of
the state, are not appointed by the governor or are appointed by the
governor specifically upon the recommendation of the local government or
governments; (b) a not-for-profit corporation, OTHER THAN A FIRE CORPO-
RATION, STATEWIDE ASSOCIATION OF LOCAL GOVERNMENTS OR LOCAL OFFICIALS,
OR BUSINESS IMPROVEMENT DISTRICT, affiliated with, sponsored by, or
created by a county, city, town or village government; (c) a local
industrial developmental agency or authority or other local public bene-
fit corporation; (d) an affiliate of such local authority; [or] (e) a
land bank corporation created pursuant to article sixteen of the not-
for-profit corporation law; OR (F) A NOT-FOR-PROFIT CORPORATION, OTHER
THAN A FIRE CORPORATION OR STATEWIDE ASSOCIATION OF LOCAL GOVERNMENTS OR
LOCAL OFFICIALS, OR BUSINESS IMPROVEMENT DISTRICT, THAT (I) HAS ISSUED
OR HAS THE AUTHORITY TO ISSUE TAX EXEMPT DEBT OR (II) PROVIDES STATE OR
MUNICIPAL TAX EXEMPTIONS THROUGH ITS PARTICIPATION IN A PROJECT UNDER-
TAKEN IN FURTHERANCE OF ITS PURPOSES.
FOR THE PURPOSES OF PARAGRAPH (B) OF THE OPENING PARAGRAPH OF THIS
SUBDIVISION, "AFFILIATED WITH, SPONSORED BY, OR CREATED BY A COUNTY,
CITY, TOWN OR VILLAGE GOVERNMENT" SHALL ALSO INCLUDE, BUT NOT BE LIMITED
TO, ENTITIES: (A) WHERE ONE OR MORE INDIVIDUALS WHO SERVE AS OFFICERS
OR EMPLOYEES OF ANY COUNTY, CITY, TOWN, VILLAGE: (I) SELECT EITHER A
MAJORITY OF THE NOT-FOR-PROFIT CORPORATION'S BOARD OF DIRECTORS OR THE
NOT-FOR-PROFIT CORPORATION'S CHIEF EXECUTIVE OFFICER; (II) CONSTITUTE A
MAJORITY OF THE VOTING STRENGTH THAT SELECTS EITHER A MAJORITY OF THE
NOT-FOR-PROFIT CORPORATION'S BOARD OF DIRECTORS OR THE CORPORATION'S
CHIEF EXECUTIVE OFFICER; OR (III) SERVE AS: (1) A MAJORITY OF THE NOT-
FOR-PROFIT CORPORATION'S BOARD OF DIRECTORS; OR (2) IN HIS OR HER OFFI-
CIAL CAPACITY, THE NOT-FOR-PROFIT CORPORATION'S CHIEF EXECUTIVE OFFICER;
OR (3) IN HIS OR HER OFFICIAL CAPACITY, A DIRECTOR IN THE NOT-FOR-PROFIT
CORPORATION; OR (B) WHICH PAY STAFF OF A STATE OR LOCAL GOVERNMENT OR
STATE OR LOCAL AUTHORITY TO PROVIDE ADMINISTRATIVE OR OPERATIONAL
SUPPORT.
§ 10. The public authorities law is amended by adding a new section
2829 to read as follows:
§ 2829. STATE AND LOCAL AUTHORITIES SUBJECT TO THE OPEN MEETINGS AND
FREEDOM OF INFORMATION LAWS. ALL STATE AND LOCAL AUTHORITIES, AS SUCH
TERMS ARE DEFINED IN SECTION TWO OF THIS CHAPTER, AS WELL AS ALL SUBSID-
IARIES AND AFFILIATES OF SUCH STATE AND LOCAL AUTHORITIES, AS SUCH TERMS
ARE DEFINED IN SECTION TWO OF THIS CHAPTER, SHALL BE SUBJECT TO THE
PROVISIONS OF ARTICLES SIX AND SEVEN OF THE PUBLIC OFFICERS LAW RELATING
TO THE FREEDOM OF INFORMATION AND OPEN MEETINGS LAWS RESPECTIVELY. ALL
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STATE AND LOCAL AUTHORITIES, AS WELL AS ALL SUBSIDIARIES AND AFFILIATES
OF SUCH STATE AND LOCAL AUTHORITIES, SHALL, TO THE EXTENT PRACTICABLE,
STREAM ALL OPEN MEETINGS AND PUBLIC HEARINGS ON ITS WEBSITE IN REAL-
TIME, POST VIDEO RECORDINGS OF ALL OPEN MEETINGS AND PUBLIC HEARINGS ON
ITS WEBSITE WITHIN FIVE BUSINESS DAYS OF THE MEETING OR HEARING AND
MAINTAIN SUCH RECORDINGS FOR A PERIOD OF NOT LESS THAN FIVE YEARS.
§ 11. This act shall take effect on the thirtieth day after it shall
have become a law; provided, however, that the provisions of subpara-
graph 2 of paragraph (d) and paragraph (i) of section 1411 of the not-
for-profit corporation law, as amended by sections six and eight of this
act shall not apply retroactively to contracts or agreements between a
local development corporation and a municipal corporation, state or
local authority, or district entered into prior to the effective date of
this act.