BILL NUMBER:A9538
TITLE OF BILL: An act to amend the not-for-profit corporation law, in
relation to adopting a prudent management of institutional funds stand-
ard; and to amend a chapter of the laws of 2010 amending the not-for-
profit corporation law and other laws relating to adopting a prudent
management of institutional funds standard, in relation to the effec-
tiveness thereof
PURPOSE OR GENERAL IDEA OF BILL: To clarify portions of a chapter of the
laws of 2010
SUMMARY OF SPECIFIC PROVISIONS: Section 1 of the bill moves the existing
definition of "donor" contained in a chapter of the laws of 2010 to the
definitions section.
Section 2 amends the existing paragraph (d) of section 553 of the not-
for-profit corporation law as added by a chapter of the laws of 2010 to
establish that a rebuttable presumption of imprudence where the appro-
priation for expenditure in any year greater than 7% of the fair market
value of an endowment fund, calculated on the basis of market values
determined at least quarterly and averaged over a period of not less
than 3 years immediately preceding the year in which the appropriation
for expenditure is made. This presumption applies only to gift instru-
ments made on or after January next succeeding the effective date of
this act. It does not apply to any appropriation for expenditure permit-
S T A T E O F N E W Y O R K
________________________________________________________________________
9538
I N A S S E M B L Y
January 13, 2010
___________
Introduced by M. of A. BING -- read once and referred to the Committee
on Corporations, Authorities and Commissions
AN ACT to amend the not-for-profit corporation law, in relation to
adopting a prudent management of institutional funds standard; and to
amend a chapter of the laws of 2010 amending the not-for-profit corpo-
ration law and other laws relating to adopting a prudent management of
institutional funds standard, in relation to the effectiveness thereof
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 551 of the not-for-profit corporation law, as added
by a chapter of the laws of 2010 amending the not-for-profit corporation
law and other laws relating to adopting a prudent management of institu-
tional funds standard, as proposed in legislative bills numbers S.4778-A
and A.7907-B, is amended by adding a new paragraph (a-1) to read as
follows:
(A-1) "DONOR" MEANS THE PERSON WHO GRANTS OR TRANSFERS PROPERTY TO AN
INSTITUTION PURSUANT TO A GIFT INSTRUMENT, OR A PERSON DESIGNATED IN THE
APPLICABLE GIFT INSTRUMENT TO ACT IN THE PLACE OF THE DONOR, BUT DOES
NOT OTHERWISE INCLUDE THE PERSON'S EXECUTORS, HEIRS, SUCCESSORS,
ASSIGNS, TRANSFEREES, OR DISTRIBUTEES.
S 2. Paragraphs (d) and (e) of section 553 of the not-for-profit
corporation law, as added by a chapter of the laws of 2010 amending the
not-for-profit corporation law and other laws relating to adopting a
prudent management of institutional funds standard, as proposed in
legislative bills numbers S.4778-A and A.7907-B, are relettered para-
graphs (e) and (f) and a new paragraph (d) is added to read as follows:
(D) UNLESS STATED OTHERWISE IN THE GIFT INSTRUMENT, THE APPROPRIATION
FOR EXPENDITURE IN ANY YEAR OF AN AMOUNT GREATER THAN SEVEN PERCENT OF
THE FAIR MARKET VALUE OF AN ENDOWMENT FUND, CALCULATED ON THE BASIS OF
MARKET VALUES DETERMINED AT LEAST QUARTERLY AND AVERAGED OVER A PERIOD
OF NOT LESS THAN THREE YEARS IMMEDIATELY PRECEDING THE YEAR IN WHICH THE
APPROPRIATION FOR EXPENDITURE IS MADE, CREATES A REBUTTABLE PRESUMPTION
OF IMPRUDENCE. FOR AN ENDOWMENT FUND IN EXISTENCE FOR FEWER THAN THREE
YEARS, THE FAIR MARKET VALUE OF THE ENDOWMENT FUND MUST BE CALCULATED
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
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