S T A T E O F N E W Y O R K
________________________________________________________________________
7838
I N S E N A T E
June 13, 2014
___________
Introduced by Sen. RANZENHOFER -- read twice and ordered printed, and
when printed to be committed to the Committee on Corporations, Author-
ities and Commissions
AN ACT to amend the not-for-profit corporation law, in relation to inde-
pendent directors and related party transactions; and repealing
certain provisions of such law relating thereto
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraph (f) of section 713 of the not-for-profit corpo-
ration law is REPEALED.
S 2. Subparagraphs 21 and 24 of paragraph (a) of section 102 of the
not-for-profit corporation law, as added by chapter 549 of the laws of
2013, are amended to read as follows:
(21) "Independent director" means a director who: (i) is not, and has
not been within the last three years, an employee of the corporation or
an affiliate of the corporation, and does not have a relative who is, or
has been within the last three years, a key employee of the corporation
or an affiliate of the corporation; (ii) has not received, and does not
have a relative who has received, in any of the last three fiscal years,
more than ten thousand dollars in direct compensation from the corpo-
ration or an affiliate of the corporation (other than reimbursement for
expenses reasonably incurred as a director or reasonable compensation
for service as a director as permitted by paragraph (a) of section 202
(General and special powers)); and (iii) is not a current employee of or
does not have a substantial financial interest in, and does not have a
relative who is a current officer of or has a substantial financial
interest in, any entity that has made payments to, or received payments
from, the corporation or an affiliate of the corporation for property or
services in an amount which, in any of the last three fiscal years,
exceeds the lesser of twenty-five thousand dollars or two percent of
such entity's consolidated gross revenues. For purposes of this subpara-
graph, "payment" does not include charitable contributions, MEMBERSHIP
DUES OR PREMIUM PAYMENTS.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD15576-01-4
S. 7838 2
(24) "Related party transaction" means any transaction, agreement or
any other arrangement, THE APPROVAL OF WHICH WOULD COME BEFORE THE BOARD
IN THE ORDINARY COURSE OF BUSINESS, in which a related party has a
financial interest and in which the corporation or any affiliate of the
corporation is a participant.
S 3. This act shall take effect immediately; provided, however, that
section two of this act shall take effect on the same date and in the
same manner as section 29 of chapter 549 of the laws of 2013, takes
effect.