Senate Bill S5315B

2013-2014 Legislative Session

Prohibits certain employees of a not-for-profit corporation from serving on the corporation's governing board or from hiring family members

download bill text pdf

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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Actions

View Actions

Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jun 20, 2014	committed to rules
Jun 16, 2014	amended on third reading 5315b
May 14, 2014	advanced to third reading
May 13, 2014	2nd report cal.
May 12, 2014	1st report cal.605
Jan 08, 2014	referred to corporations, authorities and commissions
Jun 14, 2013	print number 5315a
Jun 14, 2013	amend and recommit to corporations, authorities and commissions
May 16, 2013	referred to corporations, authorities and commissions

Votes

- May 12, 2014 - Corporations, Authorities And Commissions Committee Vote
  S5315B
  
  Aye
  
  6
  
  Nay
  
  0
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  
  0
  - - Corporations, Authorities And Commissions Committee Vote: May 12, 2014
      
      aye (6)
      
      Flanagan
      
      Larkin
      
      Martins
      
      Perkins
      
      Ranzenhofer
      
      Squadron

Bill Amendments

Original

B (Active)

2013-S5315 - Details

Current Committee:: Senate Rules
Law Section:: Not-for-Profit Corporation Law
Laws Affected:: Amd §602, N-PC L
Versions Introduced in Other Legislative Sessions:: 2015-2016: S5310
2017-2018: S6221

2013-S5315 - Summary

Prohibits certain employees of a not-for-profit corporation from serving on the corporation's governing board or from hiring family members.

2013-S5315 - Sponsor Memo

                                BILL NUMBER:S5315

TITLE OF BILL:  An act to amend the not-for-profit corporation law, in
relation to prohibiting certain employees of a not-for-profit
corporation from serving on the corporation's governing board or from
hiring family members

PURPOSE:

This legislation requires not-profit-corporations to have in their
by-laws policies regarding employees involvement on governing boards,
the hiring of family members of both employees and governing board
members, and the handling of issues arising from conflicts of business
interests. It also provides oversight of these by-laws by the State
Attorney General.

SUMMARY OF PROVISIONS:

Section 1: Amends Section 602 of the not-for-profit corporation law by
adding four new paragraphs as follows:

(g) requires by-laws of a not-for-profit corporation to contain a
policy on:

1. employees serving on a governing body, their voting rights, recusal
from decisions of the governing body and the percentage of the

membership of the governing that must be independent of the
organization

2. hiring of family members of employees and governing body members

3. Conflict of interest covering business interests

(h) Requires all by-laws in this section to be available for review by
the Attorney General upon request

(i) Prohibits employees of the not-for-profit corporation from:

1. Serving as Chair of the organization's governing board

2. Serving as a voting member of the organization's governing board

(j) Prohibits any person related to any executive or member of a
governing body by blood or marriage shall be employed by the
organization except with approval of two-thirds of the members of the
governing body.

Section 2: Effective date one year after it shall have become law.

JUSTIFICATION:

This legislation is intended to close current loopholes in State law
and provide a streamlined and fair system across the board for all
not-for-profit corporations in New York State while also providing
safeguards that can be reviewed by the Attorney General.


This legislation will provide for more oversight of these boards and
their actions to ensure that taxpayers funds are not misappropriated
and boards are operating properly and legally.

LEGISLATIVE HISTORY:

New Bill.

FISCAL IMPLICATIONS:

None to State.

EFFECTIVE DATE:

This act shall take effect one year after it shall have become a law.

2013-S5315 - Bill Text download pdf

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

                                  5315

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              May 16, 2013
                               ___________

Introduced  by  Sen.  MARCELLINO  -- 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
  prohibiting  certain  employees  of  a not-for-profit corporation from
  serving on the corporation's governing board  or  from  hiring  family
  members

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

  Section 1. Section  602  of  the  not-for-profit  corporation  law  is
amended  by  adding four new paragraphs (g), (h), (i) and (j) to read as
follows:
  (G) THE BY-LAWS OF A NOT-FOR-PROFIT CORPORATION SHALL CONTAIN A POLICY
ON:
  (1) EMPLOYEES SERVING ON SUCH GOVERNING  BODY,  THEIR  VOTING  RIGHTS,
RECUSAL  FROM DECISIONS OF THE GOVERNING BODY, AND THE PERCENTAGE OF THE
MEMBERSHIP OF THE GOVERNING BODY THAT MUST BE INDEPENDENT OF THE  ORGAN-
IZATION;
  (2)  HIRING OF FAMILY MEMBERS OF EMPLOYEES AND GOVERNING BODY MEMBERS;
AND
  (3) CONFLICT OF INTEREST COVERING BUSINESS INTERESTS.
  (H) ALL BY-LAWS REQUIRED IN THIS SECTION SHALL BE AVAILABLE FOR REVIEW
BY THE ATTORNEY GENERAL UPON REQUEST.
  (I) EMPLOYEES OF A NOT-FOR-PROFIT CORPORATION ARE PROHIBITED FROM:
  (1) SERVING AS THE CHAIR OF SUCH ORGANIZATION'S GOVERNING BODY; AND
  (2) SERVING AS A VOTING MEMBER OF SUCH ORGANIZATION'S GOVERNING BODY.
  (J) NO PERSON WHO IS RELATED TO ANY  EXECUTIVE  OR  ANY  MEMBER  OF  A
GOVERNING  BODY BY BLOOD OR MARRIAGE SHALL BE EMPLOYED BY SUCH ORGANIZA-
TION, EXCEPT WITH THE APPROVAL OF  TWO-THIRDS  OF  THE  MEMBERS  OF  THE
GOVERNING BODY.
  S  2. This act shall take effect one year after it shall have become a
law.

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

                                                           LBD10937-01-3

2013-S5315A - Details

Current Committee:: Senate Rules
Law Section:: Not-for-Profit Corporation Law
Laws Affected:: Amd §602, N-PC L
Versions Introduced in Other Legislative Sessions:: 2015-2016: S5310
2017-2018: S6221

2013-S5315A - Summary

Prohibits certain employees of a not-for-profit corporation from serving on the corporation's governing board or from hiring family members.

2013-S5315A - Sponsor Memo

                                BILL NUMBER:S5315A

TITLE OF BILL:  An act to amend the not-for-profit corporation law, in
relation   to   prohibiting  certain  employees  of  a  not-for-profit
corporation from serving on the corporation's governing board or  from
hiring family members

PURPOSE:

This  legislation  requires  not-profit-corporations  to have in their
by-laws policies regarding employees involvement on governing  boards,
the  hiring  of family members of both employees and governing.  board
members, and the handling of issues arising from conflicts of business
interests. It also provides oversight of these by-laws  by  the  State
Attorney General.

SUMMARY OF PROVISIONS:

Section 1: Amends Section 602 of the not-for-profit corporation law by
adding four new paragraphs as follows:

(g)  requires  by-laws  of  a  not-for-profit corporation to contain a
policy on:

1. employees serving on a governing body and  the  percentage  of  the
membership  of  the  governing  body  that  must be independent of the

organization

2. hiring of family members of employees and governing body members

3. Conflict of interest covering business interests

(h) Requires all by-laws in this section to be available for review by
the Attorney General upon request

(i) Prohibits employees of the not-for-profit corporation from:

1. Serving as Chair of the organization's governing board

2. Serving as a voting member of the organization's governing board

(j) Prohibits any person related to  any  executive  or  member  of  a
governing  body  by  blood  or  marriage  shall  be  employed  by  the
organization except with approval of two-thirds of the members of  the
governing body.

Section 2: Effective date one year after it shall have become law.

JUSTIFICATION:

This  legislation  is intended to close current loopholes in State law
and provide a streamlined and fair system across  the  board  for  all
not-for-profit  corporations  in  New  York State while also providing
safeguards that can be reviewed by the Attorney General.


This legislation will provide for more oversight of these  boards  and
their  actions  to ensure that taxpayers funds are not misappropriated
and boards are operating properly and legally.

LEGISLATIVE HISTORY:

New Bill.

FISCAL IMPLICATIONS:

None to State.

EFFECTIVE DATE:

This act shall take effect one year after it shall have become a law.

2013-S5315A - Bill Text download pdf

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

                                 5315--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              May 16, 2013
                               ___________

Introduced  by  Sen.  MARCELLINO  -- read twice and ordered printed, and
  when printed to be committed to the Committee on Corporations, Author-
  ities and Commissions -- committee discharged, bill  amended,  ordered
  reprinted as amended and recommitted to said committee

AN  ACT  to  amend  the  not-for-profit  corporation law, in relation to
  prohibiting certain employees of  a  not-for-profit  corporation  from
  serving  on  the  corporation's  governing board or from hiring family
  members

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

  Section  1.  Section  602  of  the  not-for-profit  corporation law is
amended by adding four new paragraphs (g), (h), (i) and (j) to  read  as
follows:
  (G)  THE  BY-LAWS  OF  A  NOT-FOR-PROFIT  CORPORATION  SHALL CONTAIN A
PROVISION ON:
  (1) EMPLOYEES SERVING ON SUCH GOVERNING BODY AND THE PERCENTAGE OF THE
MEMBERSHIP OF THE GOVERNING BODY THAT MUST BE INDEPENDENT OF THE  ORGAN-
IZATION;
  (2)  HIRING OF FAMILY MEMBERS OF EMPLOYEES AND GOVERNING BODY MEMBERS;
AND
  (3) CONFLICT OF INTEREST COVERING BUSINESS INTERESTS.
  (H) ALL BY-LAWS REQUIRED IN THIS SECTION SHALL BE AVAILABLE FOR REVIEW
BY THE ATTORNEY GENERAL UPON REQUEST.
  (I) EMPLOYEES OF A  NOT-FOR-PROFIT  CORPORATION  ARE  PROHIBITED  FROM
SERVING  AS  THE  CHAIR  OF  SUCH ORGANIZATION'S GOVERNING BODY AND FROM
SERVING AS A VOTING MEMBER OF SUCH ORGANIZATION'S GOVERNING BODY.
  (J) NO PERSON WHO IS RELATED TO THE CHIEF EXECUTIVE OR ANY MEMBER OF A
GOVERNING BODY BY BLOOD OR MARRIAGE SHALL BE EMPLOYED BY SUCH  ORGANIZA-
TION,  EXCEPT  WITH  THE  APPROVAL  OF  TWO-THIRDS OF THE MEMBERS OF THE
GOVERNING BODY.
  S 2. This act shall take effect one year after it shall have become  a
law.

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

                                                           LBD10937-02-3

2013-S5315B (ACTIVE) - Details

Current Committee:: Senate Rules
Law Section:: Not-for-Profit Corporation Law
Laws Affected:: Amd §602, N-PC L
Versions Introduced in Other Legislative Sessions:: 2015-2016: S5310
2017-2018: S6221

2013-S5315B (ACTIVE) - Summary

Prohibits certain employees of a not-for-profit corporation from serving on the corporation's governing board or from hiring family members.

2013-S5315B (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S5315B

TITLE OF BILL:  An act to amend the not-for-profit corporation law, in
relation to prohibiting certain employees of a not-for-profit
corporation from serving on the corporation's governing board or from
hiring family members

PURPOSE: This legislation requires not-profit-corporations to have in
their by-laws policies regarding employees involvement on governing
boards, the hiring of family members of both employees and governing
board members, and the handling of issues arising from conflicts of
business interests. It also provides oversight of these by-laws by the
State Attorney General.

SUMMARY OF PROVISIONS:

Section 1: Amends Section 602 of the not-for-profit corporation law by
adding four new paragraphs as follows:

(g) requires by-laws of a not-for-profit corporation to contain a
policy on:

1. employees serving on a governing body and the percentage of the
membership of the governing body that must be independent of the
organization

2. hiring of family members of employees and governing body members

3. Conflict of interest covering business interests

(h) Requires all by-laws in this section to be available for review by
the Attorney General upon request

(i) Prohibits employees of the not-for-profit corporation from:

1. Serving as Chair of the organization's governing board

2. Serving as a voting member of the organization's governing board

(j) Prohibits any person related to any executive or member of a
governing body by blood or marriage shall be employed by the
organization except with approval of two-thirds of the members of the
governing body.

(k) These provisions do not apply to cemetery corporations formed
under Article 15

Section 2:Effective date one year after it shall have become law.

JUSTIFICATION:  This legislation is intended to close current
loopholes in State law and provide a streamlined and fair system
across the board for all not-for-profit corporations in New York State
while also providing safeguards that can be reviewed by the Attorney
General.  This legislation will provide for more oversight of these
boards and their actions to ensure that taxpayers funds are not
misappropriated and boards are operating properly and legally.


LEGISLATIVE HISTORY: New Bill.

FISCAL IMPLICATIONS:  None to State.

EFFECTIVE DATE: This act shall take effect one year after it shall
have become a law.

2013-S5315B (ACTIVE) - Bill Text download pdf

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

                                 5315--B
    Cal. No. 605

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              May 16, 2013
                               ___________

Introduced  by  Sen.  MARCELLINO  -- read twice and ordered printed, and
  when printed to be committed to the Committee on Corporations, Author-
  ities and Commissions -- committee discharged, bill  amended,  ordered
  reprinted  as amended and recommitted to said committee -- recommitted
  to the Committee  on  Corporations,  Authorities  and  Commissions  in
  accordance  with Senate Rule 6, sec. 8 -- reported favorably from said
  committee, ordered to first and second  report,  ordered  to  a  third
  reading,  amended  and  ordered  reprinted, retaining its place in the
  order of third reading

AN ACT to amend the  not-for-profit  corporation  law,  in  relation  to
  prohibiting  certain  employees  of  a not-for-profit corporation from
  serving on the corporation's governing board  or  from  hiring  family
  members

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

  Section 1. Section  602  of  the  not-for-profit  corporation  law  is
amended by adding five new paragraphs (g), (h), (i), (j) and (k) to read
as follows:
  (G)  THE  BY-LAWS  OF  A  NOT-FOR-PROFIT  CORPORATION  SHALL CONTAIN A
PROVISION ON:
  (1) EMPLOYEES SERVING ON SUCH GOVERNING BODY AND THE PERCENTAGE OF THE
MEMBERSHIP OF THE GOVERNING BODY THAT MUST BE INDEPENDENT OF THE  ORGAN-
IZATION;
  (2)  HIRING OF FAMILY MEMBERS OF EMPLOYEES AND GOVERNING BODY MEMBERS;
AND
  (3) CONFLICT OF INTEREST COVERING BUSINESS INTERESTS.
  (H) ALL BY-LAWS REQUIRED IN THIS SECTION SHALL BE AVAILABLE FOR REVIEW
BY THE ATTORNEY GENERAL UPON REQUEST.
  (I) EMPLOYEES OF A  NOT-FOR-PROFIT  CORPORATION  ARE  PROHIBITED  FROM
SERVING  AS  THE  CHAIR  OF  SUCH ORGANIZATION'S GOVERNING BODY AND FROM
SERVING AS A VOTING MEMBER OF SUCH ORGANIZATION'S GOVERNING BODY.

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

                                                           LBD10937-04-4

S. 5315--B                          2

  (J) NO PERSON WHO IS RELATED TO THE CHIEF EXECUTIVE OR ANY MEMBER OF A
GOVERNING BODY BY BLOOD OR MARRIAGE SHALL BE EMPLOYED BY SUCH  ORGANIZA-
TION,  EXCEPT  WITH  THE  APPROVAL  OF  TWO-THIRDS OF THE MEMBERS OF THE
GOVERNING BODY.
  (K)  NOTWITHSTANDING  ANY PROVISION TO THE CONTRARY, THE PROVISIONS OF
PARAGRAPHS (G), (I) AND (J) OF THIS SECTION SHALL NOT APPLY TO  CEMETERY
CORPORATIONS THAT MUST COMPLY WITH ARTICLE FIFTEEN OF THIS CHAPTER.
  S  2. This act shall take effect one year after it shall have become a
law.

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Senate Bill S5315B

Sponsored By

Archive: Last Bill Status - In Senate Committee Rules Committee

Actions

Votes

May 12, 2014 - Corporations, Authorities And Commissions Committee Vote

Corporations, Authorities And Commissions Committee Vote: May 12, 2014

Bill Amendments

2013-S5315 - Details

2013-S5315 - Summary

2013-S5315 - Sponsor Memo

2013-S5315 - Bill Text download pdf

2013-S5315A - Details

2013-S5315A - Summary

2013-S5315A - Sponsor Memo

2013-S5315A - Bill Text download pdf

2013-S5315B (ACTIVE) - Details

2013-S5315B (ACTIVE) - Summary

2013-S5315B (ACTIVE) - Sponsor Memo

2013-S5315B (ACTIVE) - Bill Text download pdf

Comments

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Sponsored By

Carl L. Marcellino

Archive: Last Bill Status - In Senate Committee Rules Committee

Actions

Votes

Bill Amendments

2013-S5315 - Details

2013-S5315 - Summary

2013-S5315 - Sponsor Memo

2013-S5315 - Bill Text download pdf

2013-S5315A - Details

2013-S5315A - Summary

2013-S5315A - Sponsor Memo

2013-S5315A - Bill Text download pdf

2013-S5315B (ACTIVE) - Details

2013-S5315B (ACTIVE) - Summary

2013-S5315B (ACTIVE) - Sponsor Memo

2013-S5315B (ACTIVE) - Bill Text download pdf

Comments