Senate Bill S7583

2011-2012 Legislative Session

Prohibits municipalities from forming limited liability companies to finance operations or acquisitions of assets

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Archive: Last Bill Status - In Senate Committee Rules 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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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jun 05, 2012	referred to rules

2011-S7583 (ACTIVE) - Details

See Assembly Version of this Bill:: A7510
Current Committee:: Senate Rules
Law Section:: Limited Liability Company Law
Laws Affected:: Amd §§102 & 201, add §202-a, Lim Lil L; amd §§101.00 & 176.00, Loc Fin L; amd §§102, 204 & 1411, N-PC L
Versions Introduced in 2013-2014 Legislative Session:: S4240, A3631

2011-S7583 (ACTIVE) - Summary

Prohibits municipalities from forming limited liability companies to finance operations or acquisitions of assets.

2011-S7583 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S7583

TITLE OF BILL:
An act
to amend the limited liability company law and the
not-for-profit corporation
law, in relation to the purposes, powers and duties of limited
liability companies, and local
development corporations and other not-for-profit corporations; and
to amend the local finance law,
in relation to loans of credit and the exclusivity of such law

PURPOSE:
To limit and regulate the use of local development
corporations ("LDCs"), limited liability companies ("LLCs") and
certain other private entities by local governments.

SUMMARY OF PROVISIONS:
Section 1 of this bill adds a new Subdivision
(r-1) to Section 102 of the Limited Liability Company Law to define
the term "municipality" for the purposes of such law.

Section 2 of this bill amends Section 201 of the Limited Liability
Company Law to expressly prohibit the formation of LLCs to finance
directly or indirectly over a period of time a municipality's
operations, or the acquisition or improvement of an asset by or for

the use of a municipality.

Section 3 of this bill adds a new Section 202-a to the Limited
Liability Company Law to provide that, with certain exceptions, a LLC
shall not participate in any transaction or series of related
transactions involving the payment of money over a period of time by
or on behalf of a municipality located in this State and having as a
purpose the direct or indirect financing of the municipality's
operations or the acquisition or improvement of an asset by or for
the use of the municipality.

Section 4 of this bill amends Subdivision 1 of Paragraph a of Section
101.00 of the Local Finance Law to clarify that no municipality,
school district or district corporation shall guarantee or assume the
indebtedness or obligations of any not-for-profit corporation or LLC
formed by, on behalf of, for the benefit of, or under the control of
the municipality, school district or district corporation.

Section 5 of this bill amends Section 176.00 of the Local Finance Law
to provide that the Local Finance Law shall be the exclusive law
governing the manner in which municipalities, school districts and
district corporations finance over a period of time their operations
and the acquisition or improvement of an asset by or for the use of a
municipality, school district or district corporation, unless
expressly or specifically otherwise provided by general or special law.

Section 6 of this bill adds a new Subparagraph 19 to Paragraph (a) of
Section 102 of the Not-For-Profit Corporation Law to define the term
"municipality" for the purposes of such law.

Section 7 of this bill amends Section 204 of the Not-For-Profit
Corporation Law to provide that no corporation to which the
Not-For-Profit Corporation Law applies shall participate in any
transaction or series of related transactions involving the payment
of money over a period of time by or on behalf of a municipality and
having as a purpose the direct or indirect financing of the
municipality's operations or the acquisition or improvement of an
asset by or for the use of the municipality.

Section 8 of this bill amends Paragraphs (a), (c), (d) and (i) of
Section 1411 of the Not-For-Profit Corporation Law to:

o provide that no LDC shall participate in any sale or lease of real
property, or generally any other transaction or series of related
transactions involving the payment of money over a period of time by
or on behalf of a municipality and having as a purpose the direct or
indirect financing of the municipality's operations or the
acquisition or improvement of an asset by or for the use of the
municipality;

o in instances when a municipality caused the formation of the LDC,
prohibit any additional compensation for board members, other
officers and employees of LDCs if those individuals serve or have
served as officers or employees of the municipality;

o require that any contract between a local government and an LDC be
for fair and adequate consideration, subject to the requirements of
Article 5-A of the General Municipal Law; and

o require that the public notice of any sale or lease of municipally
owned real property to an LDC include a description of the property
to be sold or leased, the estimated full market value of the
property, the consideration to be received by the municipality, and a
statement of the intended use or disposition of the property by the
LDC.

These amendments in Section 8 of the bill would apply to both newly
formed and existing LDCs.

Section 9 of this bill provides that this act shall take effect
immediately and shall apply to any transaction occurring on or after
the effective date of this act.

PRIOR LEGISLATIVE HISTORY:
New bill.

JUSTIFICATION:

As a rule, local governments lack specific statutory
authority to create private entities. One exception to the rule is
found in Section 1411 of the Not-For-Profit Corporation Law. which
authorizes counties. cities, towns and villages to create LDCs. There
are currently 279 known LDCs operating in the State. It is not clear
how many of these LDCs were created for or at the behest of a local
government.

With limited exceptions, the governing body of a county, city, town or
village may determine that any real property owned by the
municipality is no longer required for municipal use and authorize
the sale or lease of the property to an LDC. The sale or lease may be
made without appraisal, public notice, or public bidding, although
the municipality is required to hold a public hearing at least 10
days before the sale or lease is authorized. The LDC must use the
property for the purposes set forth in its certificate of
incorporation unless the LDC obtains written approval from the
municipality to use the property for another purpose.

Limitations and Transparency

The primary purpose of this bill is to limit the use of LDCs, LLCs and
other not-for-profit corporations by local governments by, among
other things, expressly prohibiting the use of these private entities
to directly or indirectly finance a municipality's operations or the
acquisition or improvement of an asset by or for the use of a
municipality, with limited exceptions. For those transactions that do
not fall within the prohibition, the bill would help ensure that
transactions between an LDC and a municipality are done in the best
interests of the municipality and conducted, at "arm's length," and
not undertaken to avoid statutory or constitutional restrictions
applicable to municipal transactions. For example, the bill would
provide that any contract between an LDC and a municipality provide
for the municipality to receive fair and adequate consideration,
making clear that the constitutional gift prohibition in Article
VIII, § I of the State Constitution may not be contravened in the
context of a municipal contract with an LDC.

Similarly, so that an LDC is not used as a vehicle to avoid municipal
procurement rules, the bill would provide that contracts between
municipalities and LDCs are subject to the municipal contracting
requirements of Article 5-A of the General Municipal Law. To
facilitate periodic review and re-evaluation by municipal governing
boards of leases and other contracts with LDCs, the bill would limit
the term of such agreements (except for real property lease
agreements) to five years, subject to subsequent renewals, each up to
five years, upon mutual consent of the parties.

In transactions involving the sale or lease of municipal real property
to an LDC, the bill would provide for increased transparency by
requiring the notice of public hearing to include the estimated fair
market value of the property, the consideration to be received

by the municipality. and a statement of the intended use or
disposition of the property by the LDC.

The amendments to the Local Finance Law in this bill would clarify
that a guarantee or assumption of the debt of an LDC, LLC or other
not-for-profit corporation formed by, on behalf of, for the benefit
of, or controlled by, a local government constitutes an unauthorized
loan of credit by the local government. This would ensure that the
dicta in Summers v. City of Rochester,
60 A.D.3d 1271,875 N.Y.S.2d
658, (N.Y. App. Div.
4th Dep't 2009), is not used as precedent to justify a local
government's agreement to guarantee or assume the debt of such a
private entity. In addition, these changes would make clear that the
issuance of bonds and notes under the Local Finance Law is intended
to be the exclusive means for local governments to finance over time
their operations and the acquisition of or improvement of an asset
for use by or for the local government, unless expressly and
specifically otherwise provided for in a general or special law.

We are mindful that many LDCs have been determined by the Authorities
Budget Office to be "local authorities" and, therefore, subject to
requirements of the Public Authorities Accountability Act of 2005
(Chapter 766 of the Laws of 2005, as amended by Chapters 505 and 506
of the Laws of 2009). However, the reforms in that Act did not
address the concerns that would be addressed in this bill, such as
the use of LDCs to finance municipal operations and assets.

The Comptroller urges the passage of this proposed legislation.

BUDGET IMPLICATIONS:
This bill has no significant fiscal impact.

EFFECTIVE DATE:
This bill would take effect
immediately and would
apply to any transaction occurring on or after the effective date of
this act.

2011-S7583 (ACTIVE) - Bill Text download pdf

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

                                  7583

                            I N  S E N A T E

                              June 5, 2012
                               ___________

Introduced  by  COMMITTEE  ON  RULES  --  (at request of the State Comp-
  troller) -- read twice and ordered printed, and  when  printed  to  be
  committed to the Committee on Rules

AN ACT to amend the limited liability company law and the not-for-profit
  corporation  law,  in  relation  to the purposes, powers and duties of
  limited liability companies, and local  development  corporations  and
  other not-for-profit corporations; and to amend the local finance law,
  in relation to loans of credit and the exclusivity of such law

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

  Section 1. Section 102 of the limited liability company law is amended
by adding a new subdivision (r-1) to read as follows:
  (R-1) "MUNICIPALITY" MEANS  A  COUNTY,  CITY,  TOWN,  VILLAGE,  SCHOOL
DISTRICT,  BOARD OF COOPERATIVE EDUCATIONAL SERVICES, COMMUNITY COLLEGE,
PUBLIC LIBRARY OR LIBRARY DISTRICT, DISTRICT CORPORATION, TOWN OR COUNTY
IMPROVEMENT DISTRICT, OR OTHER  SPECIAL  DISTRICT  ESTABLISHED  FOR  THE
PURPOSE OF CARRYING ON, PERFORMING OR FINANCING ONE OR MORE IMPROVEMENTS
OR  SERVICES  FOR  BENEFITED  PROPERTIES  OR PROPERTY OWNERS WITHIN SUCH
SPECIAL DISTRICT.
  S 2. Section 201 of the limited liability company law  is  amended  to
read as follows:
  S  201.  Purpose. A limited liability company may be formed under this
chapter for any lawful business purpose or purposes except: (A) to do in
this state any business for which another statute specifically  requires
some  other  business  entity or natural person to be formed or used for
such business; OR (B) TO FINANCE DIRECTLY OR INDIRECTLY OVER A PERIOD OF
TIME A MUNICIPALITY'S OPERATIONS OR THE ACQUISITION OR IMPROVEMENT OF AN
ASSET BY OR FOR THE USE OF A MUNICIPALITY.
  S 3. The limited liability company law is  amended  by  adding  a  new
section 202-a to read as follows:
  S  202-A.  LIMITATION  ON  POWERS.  NOTWITHSTANDING  THE PROVISIONS OF
SECTION TWO HUNDRED TWO OF THIS ARTICLE,  A  LIMITED  LIABILITY  COMPANY
SHALL  NOT  PARTICIPATE  IN  ANY TRANSACTION OR SERIES OF RELATED TRANS-
ACTIONS INVOLVING THE PAYMENT OF MONEY OVER A PERIOD OF TIME  BY  OR  ON

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

                                                           LBD10634-08-2

S. 7583                             2

BEHALF  OF  A MUNICIPALITY LOCATED IN THIS STATE AND HAVING AS A PURPOSE
THE DIRECT OR INDIRECT FINANCING OF THE MUNICIPALITY'S OPERATIONS OR THE
ACQUISITION OR IMPROVEMENT OF AN ASSET BY OR FOR THE USE OF THE  MUNICI-
PALITY. PROVIDED, HOWEVER, THAT NOTHING IN THIS SECTION SHALL PROHIBIT A
LIMITED LIABILITY COMPANY FROM ENTERING INTO A TRUE LEASE WITH A MUNICI-
PALITY,  ENTERING  INTO  AN  INSTALLMENT  PURCHASE  CONTRACT PURSUANT TO
SECTION ONE HUNDRED NINE-B OF THE GENERAL MUNICIPAL  LAW  OR  PURCHASING
BONDS OR NOTES ISSUED PURSUANT TO THE LOCAL FINANCE LAW.
  S  4.  Subdivision  1  of  paragraph  a of section 101.00 of the local
finance law, as amended by chapter 200 of the laws of 1960,  is  amended
to read as follows:
  1.  Give  or loan its credit to or in aid of any individual, or public
or private corporation or association, or private  undertaking,  INCLUD-
ING,  BUT  NOT  LIMITED TO, GUARANTEEING OR ASSUMING THE INDEBTEDNESS OR
OBLIGATIONS OF  ANY  NOT-FOR-PROFIT  CORPORATION  OR  LIMITED  LIABILITY
COMPANY  FORMED  BY,  ON  BEHALF  OF,  FOR  THE BENEFIT OF, OR UNDER THE
CONTROL OF THE MUNICIPALITY, SCHOOL DISTRICT OR DISTRICT CORPORATION, or
  S 5. Section 176.00 of the local finance law, as  amended  by  chapter
837 of the laws of 1945, is amended to read as follows:
  S  176.00  Local  finance  law  to  be the exclusive law. A. Except as
otherwise provided in this article,  all  statutes,  local  laws,  ordi-
nances,  rules  and  regulations,  insofar as they relate to the matters
herein contained, are hereby superseded, it being the legislative intent
that this chapter shall constitute the exclusive law on such matters.
  B. UNLESS EXPRESSLY AND SPECIFICALLY OTHERWISE PROVIDED IN  ANY  OTHER
GENERAL LAW OR IN A SPECIAL LAW, THE PROVISIONS OF THIS CHAPTER SHALL BE
THE  EXCLUSIVE  LAW GOVERNING THE MANNER IN WHICH MUNICIPALITIES, SCHOOL
DISTRICTS AND DISTRICT CORPORATIONS FINANCE OVER A PERIOD OF TIME  THEIR
OPERATIONS  AND THE ACQUISITION OR IMPROVEMENT OF AN ASSET BY OR FOR THE
USE OF A MUNICIPALITY, SCHOOL DISTRICT OR DISTRICT CORPORATION.
  S 6. Paragraph (a) of section 102 of  the  not-for-profit  corporation
law is amended by adding a new subparagraph 19 to read as follows:
  (19)  "MUNICIPALITY"  MEANS  A  COUNTY,  CITY,  TOWN,  VILLAGE, SCHOOL
DISTRICT, BOARD OF COOPERATIVE EDUCATIONAL SERVICES, COMMUNITY  COLLEGE,
PUBLIC LIBRARY OR LIBRARY DISTRICT, DISTRICT CORPORATION, TOWN OR COUNTY
IMPROVEMENT  DISTRICT,  OR  OTHER  SPECIAL  DISTRICT ESTABLISHED FOR THE
PURPOSE OF CARRYING ON, PERFORMING OR FINANCING ONE OR MORE IMPROVEMENTS
OR SERVICES FOR BENEFITED PROPERTIES  OR  PROPERTY  OWNERS  WITHIN  SUCH
SPECIAL DISTRICT.
  S  7.  Section 204 of the not-for-profit corporation law is amended to
read as follows:
S 204. Limitation on activities.
  Notwithstanding any other provision  of  this  chapter  or  any  other
general  law,  a  corporation  of any type or kind to which this chapter
applies shall: (A) conduct no activities for pecuniary profit or  finan-
cial  gain,  whether  or  not  in furtherance of its corporate purposes,
except to the extent that such activity supports its other lawful activ-
ities then being conducted; AND (B) NOT PARTICIPATE IN  ANY  TRANSACTION
OR  SERIES OF RELATED TRANSACTIONS INVOLVING THE PAYMENT OF MONEY OVER A
PERIOD OF TIME BY OR ON BEHALF OF A MUNICIPALITY AND HAVING AS A PURPOSE
THE DIRECT OR INDIRECT FINANCING OF THE  MUNICIPALITY'S  OPERATIONS,  OR
THE  ACQUISITION  OR  IMPROVEMENT  OF  AN ASSET BY OR FOR THE USE OF THE
MUNICIPALITY, PROVIDED, HOWEVER, THAT  NOTHING  IN  THIS  SECTION  SHALL
PROHIBIT SUCH A CORPORATION FROM ENTERING INTO A TRUE LEASE WITH A MUNI-
CIPALITY  OR  PURCHASING  BONDS  OR  NOTES  ISSUED PURSUANT TO THE LOCAL
FINANCE LAW.

S. 7583                             3

  S 8. Paragraphs (a), (c), (d) and (i) of section 1411 of the  not-for-
profit  corporation  law, paragraph (a) as amended by chapter 847 of the
laws of 1970, are amended and a new paragraph (d-1) is added 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
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.
  (c) Powers.
  In  furtherance of its purposes set forth in paragraph (a) but not for
any other purposes, a  local  development  corporation  incorporated  or
reincorporated  under  this section shall have the following powers:  to
construct, acquire, rehabilitate and improve for use  by  others  indus-
trial  or  manufacturing plants in the territory in which its operations
are  principally  to  be  conducted,  to  assist  financially  in   such
construction,  acquisition,  rehabilitation and improvement, to maintain
such plants for others in such territory, to disseminate information and
furnish advice, technical assistance and liaison with federal, state and
local authorities with respect thereto, to acquire by  purchase,  lease,
gift,  bequest,  devise or otherwise real or personal property or inter-
ests therein, to borrow money and to issue negotiable bonds,  notes  and
other obligations therefor, and notwithstanding section 510 (Disposition
of all or substantially all assets) without leave of the court, to sell,
lease,  mortgage  or otherwise dispose of or encumber any such plants or
any of its real or personal property or any interest therein  upon  such
terms  as  it  may  determine and, in connection with loans from the New
York job development authority, to enter into covenants  and  agreements
and to comply with all the terms, conditions and provisions thereof, and
otherwise  to carry out its corporate purposes and to foster and encour-
age the location or expansion of industrial or manufacturing  plants  in
the territory in which the operations of such corporation are principal-
ly  to  be conducted, provided, however, that no such corporation shall:
(1) attempt to influence legislation  by  propaganda  or  otherwise,  or

S. 7583                             4

participate  or  intervene,  directly  or  indirectly,  in any political
campaign on behalf of or in  opposition  to  any  candidate  for  public
office;  (2)  PARTICIPATE IN ANY TRANSACTION OR SERIES OF RELATED TRANS-
ACTIONS  INVOLVING  THE  PAYMENT OF MONEY OVER A PERIOD OF TIME BY OR ON
BEHALF OF A MUNICIPALITY AND HAVING AS A PURPOSE THE DIRECT OR  INDIRECT
FINANCING  OF  THE  MUNICIPALITY'S  OPERATIONS,  OR  THE  ACQUISITION OR
IMPROVEMENT OF AN ASSET BY OR FOR THE USE OF THE MUNICIPALITY, PROVIDED,
HOWEVER, THAT NOTHING IN THIS SECTION SHALL PROHIBIT A LOCAL DEVELOPMENT
CORPORATION FROM ENTERING INTO A  TRUE  LEASE  WITH  A  MUNICIPALITY  OR
PURCHASING  BONDS OR NOTES ISSUED PURSUANT TO THE LOCAL FINANCE LAW; AND
(3) IN THE CASE OF A LOCAL DEVELOPMENT CORPORATION, THE INCORPORATION OF
WHICH WAS CAUSED BY A COUNTY, CITY, TOWN  OR  VILLAGE,  PROVIDE  COMPEN-
SATION TO A PERSON WHO SERVES AS A DIRECTOR, OFFICER OR EMPLOYEE OF SUCH
CORPORATION WHEN THE PERSON SERVES OR HAS SERVED WITHIN THE PREVIOUS TWO
YEARS AS AN OFFICER OR EMPLOYEE OF SUCH COUNTY, CITY, TOWN OR VILLAGE.
  (d)   Purchase or lease of real property owned by a county, city, town
or village.
  (1)  The local legislative body of a county,  city,  town  or  village
[or,  if there is a board of estimate in a city, then the board of esti-
mate,] may by resolution  determine  that  specifically  described  real
property  owned by the county, city, town or village is not required for
use by such county, city, town or  village  and  authorize  the  county,
city,  town  or  village  to sell or lease such real property to a local
development corporation incorporated or reincorporated under this  arti-
cle;  provided,  however,  that:  (I) title to such land be not declared
inalienable as a forest preserve or a parkland; AND (II)  THAT  NO  SUCH
SALE  OR  LEASE SHALL HAVE AS A PURPOSE THE DIRECT OR INDIRECT FINANCING
OVER A PERIOD OF TIME OF THE OPERATIONS OF THE  COUNTY,  CITY,  TOWN  OR
VILLAGE, OR THE ACQUISITION OR IMPROVEMENT OF AN ASSET BY OR FOR THE USE
OF THE COUNTY, CITY, TOWN OR VILLAGE.
  (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, public notice, (except as provided in subpara-
graph (4)) or public  bidding  for  [such  price  or  rental]  FAIR  AND
ADEQUATE  CONSIDERATION  and upon such OTHER 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 years and provided, further, that in cities having a
population of one million or more, no such sale or lease shall  be  made
without  the  approval  of  a  majority  of  the  members of the borough
[improvement] board of the  borough  in  which  such  real  property  is
located.
  (3)    Before  any  sale  or  lease to a local development corporation
incorporated or reincorporated under this article shall be authorized, a
public hearing shall be held by the local legislative body[, or  by  the
board of estimate, as the case may be,] to consider the proposed sale or
lease.
  (4)    Notice  of  such  hearing  shall be published at least ten 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 INCLUDE A DESCRIPTION
OF  THE  REAL PROPERTY PROPOSED TO BE SOLD OR LEASED, AND A STATEMENT OF
(I) THE ESTIMATED FAIR MARKET VALUE OF THE REAL PROPERTY PROPOSED TO  BE
SOLD  OR  LEASED,  (II)  THE CONSIDERATION TO BE RECEIVED BY THE COUNTY,
CITY, TOWN OR VILLAGE ON ACCOUNT OF SUCH SALE  OR  LEASE,  AND  (III)  A

S. 7583                             5

STATEMENT  OF  THE  INTENDED USE OR DISPOSITION OF SUCH REAL PROPERTY BY
THE LOCAL DEVELOPMENT CORPORATION.
  (5)    A local development corporation, incorporated or reincorporated
under this section, which purchases or leases real property from a coun-
ty, city, town or village, shall not, without the  written  approval  of
the  county,  city,  town  or  village,  use  such real property for any
purpose except the purposes set forth in  the  certificate  of  incorpo-
ration or reincorporation of said local development corporation.  In the
event  such  real  property  is used in violation of the restrictions of
this paragraph, the attorney-general may  bring  an  action  or  special
proceeding to enjoin the unauthorized use.
  (D-1) CONTRACTS WITH MUNICIPALITIES.
  ANY  CONTRACT  OR  OTHER  AGREEMENT BETWEEN A LOCAL DEVELOPMENT CORPO-
RATION AND A MUNICIPALITY SHALL: (I) PROVIDE  FOR  THE  MUNICIPALITY  TO
RECEIVE FAIR AND ADEQUATE CONSIDERATION, (II) BE SUBJECT TO THE REQUIRE-
MENTS OF ARTICLE FIVE-A OF THE GENERAL MUNICIPAL LAW, (III) EXCEPT FOR A
REAL  PROPERTY  LEASE  AGREEMENT,  HAVE A TERM NOT TO EXCEED FIVE YEARS,
SUBJECT TO ONE OR MORE RENEWALS FOR A TERM NOT TO EXCEED FIVE YEARS UPON
THE MUTUAL CONSENT OF THE PARTIES, AND (IV) BE MADE FOR A PROPER MUNICI-
PAL PURPOSE, WHICH SHALL NOT INCLUDE THE DIRECT  OR  INDIRECT  FINANCING
OVER  A  PERIOD OF TIME OF THE MUNICIPALITY'S OPERATIONS OR THE ACQUISI-
TION OR IMPROVEMENT OF AN ASSET BY OR FOR THE USE OF THE MUNICIPALITY.
  (i) Effect of section.
  Corporations incorporated or reincorporated under this  section  shall
be  organized  and  operated  exclusively  for the purposes set forth in
paragraph (a), shall have, in addition to the powers otherwise conferred
by law, the powers conferred by paragraph (c) and shall  be  subject  to
all  the  restrictions and limitations imposed by [paragraph] PARAGRAPHS
(C), (D), (D-1), (e) and [paragraph] (g).  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.
  S  9.    This act shall take effect immediately and shall apply to any
transaction occurring on or after such effective date.

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Senate Bill S7583

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Archive: Last Bill Status - In Senate Committee Rules Committee

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2011-S7583 (ACTIVE) - Details

2011-S7583 (ACTIVE) - Summary

2011-S7583 (ACTIVE) - Sponsor Memo

2011-S7583 (ACTIVE) - Bill Text download pdf

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