NY State Assembly Bill 2009-A11088

Assembly Bill A11088

2009-2010 Legislative Session

Authorizes the comptroller and each examiner of municipal affairs to examine the financial affairs of certain organizations controlled by local government entities

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Archive: Last Bill Status - In Assembly 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
May 25, 2010	reported referred to ways and means
May 13, 2010	referred to local governments

co-Sponsors

2009-A11088 (ACTIVE) - Details

See Senate Version of this Bill:: S7907
Current Committee:: Assembly Ways And Means
Law Section:: General Municipal Law
Laws Affected:: Amd §34, Gen Muni L

2009-A11088 (ACTIVE) - Summary

Authorizes the comptroller and each examiner of municipal affairs to examine the financial affairs of certain organizations controlled by local government entities.

2009-A11088 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:A11088

TITLE  OF BILL:   An act to amend the general municipal law, in relation
to audits by the state comptroller of certain  organizations  controlled
by local government entities

PURPOSE:    This bill would expand the State Comptroller's express audit
authority to include auditing organizations that are controlled by local
government entities.

SUMMARY OF PROVISIONS:  This bill would amend section 34 of the  General
Municipal  Law  to  authorize  the State Comptroller to examine into the
financial affairs of local government subsidiary organizations. The term
local government subsidiary organization" would mean  any  organization,
other  than  an entity already subject to audit by the Comptroller, that
is controlled by one or  more  municipal  corporations  or  other  local
government  entities.  subject  to audit by the Comptroller' pursuant to
the General Municipal Law. The circumstances under which an organization
is considered to be under the control of one or  more  municipal  corpo-
rations  or  other  local  government entities would include, but not be
limited to, any situation where municipal or local government  officials
select or serve as either a majority of the organization's highest poli-
cy-making body or the organization's chief executive officer.

JUSTIFICATION:   In recent years, municipal corporations and other local
government entities have relied on a variety  of  separate  and  legally

distinct organizations to perform various functions (e.g. local develop-
ment  corporations  organized  under  Section 1411 of the Not-For-Profit
Corporation Law; a limited liability company organized under the Limited
Liability Company Law; a  for-profit  corporation  apparently  organized
under the Business Corporation Law). Under current law, when a municipal
corporation or other local government entity has a financial or business
relationship with another legally distinct organization, the Comptroller
may  examine  that  relationship,  but  only  as part of an audit of the
municipal corporation or other local government  entity.  Even,  in  the
context  of  such an audit, there is no authority for the Comptroller to
look beyond the financial  or  business  relationship,  to  examine  the
organizations overall finances and operations.

Similarly,  there  is  no express authority for the Comptroller to sepa-
rately audit the overall finances or operations of such an organization.
This bill would expand the  Comptroller's  express  audit  authority  to
include  audits  of  such  organizations  having a financial or business
relationship with a municipal  corporation  or  other  local  government
entity,  but  only  when the organization is under the control of one or
more municipal corporations or other local government entities.

This expansion of the Comptroller's audit authority is necessary promote
and increase transparency in municipal and local government finances and
operations because an - organization that is  under  the  control  of  a
municipal corporation or local government entity functions as an instru-
mentality  of  that  municipal  corporation  or local government entity.

Thus, in order to fully understand- the financial  condition  and  oper-
ations  of  a municipal corporation or other local government entity, it
is necessary to examine the finances  and  operations  of  organizations
controlled  by  the municipal corporation or local government entity. To
avoid creating incentives or disincentives to the use of any  particular
type  of  organization, this bill would apply to every type of Organiza-
tion that is under the control of a municipal corporation or other local
government entity, except an organization already subject  to  audit  by
the Comptroller.

The Comptroller urges the passage of this legislation.

2009-A11088 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  11088

                          I N  A S S E M B L Y

                              May 13, 2010
                               ___________

Introduced  by  M. of A. HOYT, MORELLE -- (at request of the State Comp-
  troller) -- read once and referred to the Committee on  Local  Govern-
  ments

AN  ACT to amend the general municipal law, in relation to audits by the
  state comptroller of certain organizations controlled by local govern-
  ment entities

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Section  34  of  the general municipal law, as amended by
chapter 233 of the laws of 2006, is amended to read as follows:
  S 34. Powers and duties of examiners.  1.  The  comptroller  and  each
examiner  of  municipal  affairs  shall  have  power to examine into the
financial affairs of every such municipal corporation, industrial devel-
opment agency, district, [fire company as defined in section two hundred
four-a of this chapter,] agency and activity [and], ANY FIRE COMPANY  AS
DEFINED  IN  SECTION  TWO  HUNDRED FOUR-A OF THIS CHAPTER, AND ANY OTHER
ORGANIZATION, EXCEPT A PUBLIC CORPORATION, THAT IS DIRECTLY OR INDIRECT-
LY CONTROLLED BY ONE OR MORE OF ANY SUCH MUNICIPAL CORPORATIONS,  INDUS-
TRIAL DEVELOPMENT AGENCIES, DISTRICTS OR AGENCIES. AN ORGANIZATION SHALL
BE  DEEMED  UNDER  THE  CONTROL  OF  ONE OR MORE MUNICIPAL CORPORATIONS,
INDUSTRIAL DEVELOPMENT AGENCIES, DISTRICTS OR AGENCIES WHEN, AMONG OTHER
CIRCUMSTANCES, THE LAW  OR  DOCUMENTS  ESTABLISHING  THE  ORGANIZATION'S
INTERNAL GOVERNANCE PROVIDE FOR ONE OR MORE OFFICERS OR EMPLOYEES OF ANY
SUCH  MUNICIPAL  CORPORATION, INDUSTRIAL DEVELOPMENT AGENCY, DISTRICT OR
AGENCY, ACTING IN THEIR OFFICIAL CAPACITIES, TO: (A) SELECT  A  MAJORITY
OF  A  QUORUM  OF  THE  ORGANIZATION'S HIGHEST POLICY-MAKING BODY OR THE
ORGANIZATION'S CHIEF EXECUTIVE OFFICER; (B) CONSTITUTE A MAJORITY OF THE
VOTING STRENGTH THAT SELECTS EITHER A MAJORITY OF A QUORUM OF THE ORGAN-
IZATION'S HIGHEST POLICY-MAKING BODY OR THE ORGANIZATION'S CHIEF  EXECU-
TIVE  OFFICER;  OR  (C)  SERVE EX OFFICIO AS EITHER: (I) A MAJORITY OF A
QUORUM OF THE ORGANIZATION'S HIGHEST POLICY-MAKING BODY; (II) THE ORGAN-
IZATION'S CHIEF EXECUTIVE OFFICER; OR (III) A PARTNER IN  THE  ORGANIZA-
TION.  AN ORGANIZATION UNDER THE CONTROL OF ONE OR MORE MUNICIPAL CORPO-
RATIONS, INDUSTRIAL DEVELOPMENT AGENCIES, DISTRICTS  OR  AGENCIES  SHALL

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.

                                                           LBD17014-01-0

A. 11088                            2

ALSO INCLUDE ANY OTHER ORGANIZATION THAT IS CONTROLLED BY SUCH ORGANIZA-
TION.
  2. IN CONNECTION WITH ANY EXAMINATION AUTHORIZED BY SUBDIVISION ONE OF
THIS  SECTION,  THE  COMPTROLLER  AND EACH EXAMINER OF MUNICIPAL AFFAIRS
SHALL HAVE POWER to administer an oath to any person whose testimony may
be required, and to compel the appearance and attendance of such  person
for  the  purpose  of  any  such  examination and investigation, and the
production of books and papers. In the case of a municipal  corporation,
industrial  development agency, or school district, no such person shall
be compelled to appear or be examined elsewhere than within such munici-
pal corporation, industrial development agency, or school  district.  In
the  case  of  any district other than a school district, no such person
may be compelled to appear or be examined elsewhere than within the town
or one of the towns  in  which  such  district  or  portion  thereof  is
located. In the case of an urban renewal agency, no such person shall be
compelled  to  appear  or  be examined outside the municipal corporation
wherein such agency is established. In the case of a  fire  company,  no
such person shall be compelled to appear or be examined outside the area
served  by the company. In the case of an activity, no such person shall
be compelled to appear outside the area served by the activity.  IN  THE
CASE  OF  AN  ORGANIZATION  UNDER  THE  CONTROL OF ONE OR MORE MUNICIPAL
CORPORATIONS, INDUSTRIAL DEVELOPMENT AGENCIES, DISTRICTS OR AGENCIES, NO
SUCH PERSON SHALL BE COMPELLED TO APPEAR OR TO BE EXAMINED  OUTSIDE  THE
COUNTY IN WHICH THE ORGANIZATION HAS ITS PRINCIPAL HEADQUARTERS. Willful
false swearing in such examination shall be perjury and shall be punish-
able as such.
  S 2. This act shall take effect immediately.

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Assembly Bill A11088

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