S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6746
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                                May 8, 2023
                                ___________
 
 Introduced  by  Sen.  RYAN  --  read twice and ordered printed, and when
   printed to be committed to the Committee on Corporations,  Authorities
   and Commissions
 
 AN ACT to amend the public authorities law and the not-for-profit corpo-
   ration  law,  in  relation to reviews by the authorities budget office
   and granting the authorities budget office the authority  to  commence
   an  action  or  special proceeding to annul the corporate existence or
   dissolve a corporation that has acted beyond its capacity or power  or
   to restrain it from carrying on unauthorized activities
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The public authorities law  is  amended  by  adding  a  new
 section 8 to read as follows:
   §  8.  REPORTS  OF  PUBLIC  AUTHORITIES  BY AUTHORITIES BUDGET OFFICE;
 RECOMMENDATIONS FOR CORRECTIVE ACTION. WHENEVER THE  AUTHORITIES  BUDGET
 OFFICE ISSUES A LETTER OR REPORT REGARDING THE ACTIVITIES AND OPERATIONS
 OF  ANY  PUBLIC  AUTHORITY,  THE  HEAD OF THE PUBLIC AUTHORITY WHICH THE
 LETTER OR REPORT WAS ABOUT SHALL SUBMIT A WRITTEN RESPONSE TO THE LETTER
 OR REPORT WITHIN THIRTY DAYS OF THE RECEIPT OF THE LETTER OR REPORT.  IF
 THE  LETTER  OR REPORT MAKES RECOMMENDATIONS FOR CORRECTIVE ACTION, SUCH
 HEAD SHALL REPORT WITHIN ONE HUNDRED EIGHTY DAYS AFTER  RECEIPT  THEREOF
 TO THE AUTHORITIES BUDGET OFFICE WHAT STEPS WERE TAKEN TO IMPLEMENT SUCH
 RECOMMENDATIONS,  AND,  WHERE  RECOMMENDATIONS WERE NOT IMPLEMENTED, THE
 REASONS THEREFOR. FAILURE TO COMPLY WITH THE PROVISIONS OF THIS  SECTION
 SHALL MAKE THE AUTHORITY DELINQUENT IN ITS REPORTING REQUIREMENTS.
   §  2.  Subdivision 3 of section 2800 of the public authorities law, as
 amended by chapter 766 of the laws  of  2005,  is  amended  to  read  as
 follows:
   3.  Every  financial  report  submitted  under  this  section shall be
 approved by the board and shall be certified, UNDER PENALTY OF  PERJURY,
 in  writing by the chief executive officer and the chief financial offi-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11219-01-3
              

 S. 6746                             2
 
 cer of such authority that based on  the  officer's  knowledge  (a)  the
 information  provided  therein is accurate, correct and does not contain
 any untrue statement of material fact; (b) does not  omit  any  material
 fact  which,  if  omitted,  would  cause  the financial statements to be
 misleading in light of the circumstances under which such statements are
 made; and (c) fairly presents in all  material  respects  the  financial
 condition and results of operations of the authority as of, and for, the
 periods  presented  in  the financial statements.  A KNOWING AND WILLFUL
 VIOLATION OF THIS SECTION SHALL CONSTITUTE PERJURY IN THE THIRD DEGREE.
   § 3. Subdivision 2 of section 2824 of the public authorities  law,  as
 added by section 766 of the laws of 2005, is amended to read as follows:
   2.  (A) Individuals appointed to the board of a public authority shall
 participate in state approved training regarding their legal, fiduciary,
 financial and ethical responsibilities  as  directors  of  an  authority
 within  one  year of appointment to a board. Board members shall partic-
 ipate in such continuing training as may be required to remain  informed
 of  best  practices,  regulatory  and  statutory changes relating to the
 effective oversight of the management and financial activities of public
 authorities and to adhere to the highest standards of responsible gover-
 nance.
   (B) EXCEPT AS OTHERWISE PROVIDED IN THIS CHAPTER, A MEMBER IN NON-COM-
 PLIANCE WITH THE REQUIREMENTS SET FORTH IN THIS SECTION SHALL BE SUBJECT
 TO THE ENFORCEMENT POWERS OF THE AUTHORITIES  BUDGET  OFFICE,  INCLUDING
 BUT  NOT  LIMITED TO REMOVAL FROM THE BOARD OF SAID PUBLIC AUTHORITY. IF
 AN INDIVIDUAL APPOINTED TO THE BOARD OF  A  PUBLIC  AUTHORITY  DOES  NOT
 COMPLETE THEIR STATE APPROVED TRAINING PURSUANT TO PARAGRAPH (A) OF THIS
 SUBDIVISION  THE AUTHORITY BUDGET OFFICE SHALL NOTIFY SAID INDIVIDUAL OF
 THEIR OFFICIAL SUSPENSION AS A BOARD MEMBER. THE SUSPENSION SHALL BE FOR
 A PERIOD OF THREE MONTHS AND SHALL COMMENCE  WITH  RECEIPT  OF  OFFICIAL
 NOTICE  OF  THE SUSPENSION BY THE AUTHORITIES BUDGET OFFICE. THE SUSPEN-
 SION SHALL BE TERMINATED  IF  SUCH  INDIVIDUAL  COMPLETES  THE  REQUIRED
 TRAINING  WITHIN  THE  THREE MONTH SUSPENSION PERIOD. IF SUCH INDIVIDUAL
 FAILS TO COMPLETE THE REQUIRED TRAINING WITHIN THE THREE  MONTH  SUSPEN-
 SION  PERIOD,  THE  AUTHORITIES  BUDGET OFFICE MAY REMOVE THE INDIVIDUAL
 FROM THE PUBLIC AUTHORITY BOARD.
   (C) AN INDIVIDUAL THAT HAS BEEN REMOVED FROM A PUBLIC AUTHORITY  BOARD
 BY  THE  AUTHORITIES  BUDGET  OFFICE  PURSUANT  TO PARAGRAPH (B) OF THIS
 SUBDIVISION, MAY ONLY BE REINSTATED TO THAT PUBLIC AUTHORITY BOARD  ONCE
 THEY PROVIDE THE AUTHORITIES BUDGET OFFICE WITH OFFICIAL NOTICE CONFIRM-
 ING  THE TRAINING REQUIREMENTS SET FORTH IN PARAGRAPH (A) OF THIS SUBDI-
 VISION HAVE BEEN MET.
   § 4. Section 104 of the not-for-profit corporation law is  amended  by
 adding a new paragraph (h) to read as follows:
   (H) IF AN INSTRUMENT WHICH IS DELIVERED TO THE DEPARTMENT OF STATE FOR
 FILING  RELATES  TO  A  NOT-FOR-PROFIT  CORPORATION  CREATED PURSUANT TO
 SECTION FOURTEEN HUNDRED ELEVEN OF THIS CHAPTER OR TO AN ENTITY THAT MAY
 BE DEEMED A LOCAL AUTHORITY AS DEFINED BY SUBDIVISION TWO OF SECTION TWO
 OF THE PUBLIC AUTHORITIES LAW, THE   DEPARTMENT OF STATE  SHALL  REVIEW,
 MAKE, CERTIFY AND TRANSMIT ELECTRONICALLY A COPY OF EACH SUCH INSTRUMENT
 RELATING TO LOCAL ECONOMIC DEVELOPMENT TO THE AUTHORITIES BUDGET OFFICE.
   §  5.  Paragraphs  (i)  and  (j)  of subdivision 2 of section 6 of the
 public authorities law, as added by chapter 506 of the laws of 2009, are
 amended and a new paragraph (k) is added to read as follows:
   (i) compel any authority which is deemed to be in non-compliance  with
 this title and title one of this article or article nine of this chapter
 S. 6746                             3
 
 to  submit  to  the  authorities budget office a detailed explanation of
 such failure to comply; [and]
   (j)  commence  a special proceeding in supreme court, when it does not
 receive from a state or local authority upon request information, books,
 records or other documentation necessary to perform its duties,  seeking
 an order directing the production of the same[.]; AND
   (K)  COMMENCE  AN  ACTION OR SPECIAL PROCEEDING TO ANNUL THE CORPORATE
 EXISTENCE OR DISSOLVE A CORPORATION THAT HAS ACTED BEYOND  ITS  CAPACITY
 OR POWER OR TO RESTRAIN IT FROM CARRYING ON UNAUTHORIZED ACTIVITIES.
   §  6.  This  act shall take effect on the ninetieth day after it shall
 have become a law.