senate Bill S7762

Signed By Governor
2013-2014 Legislative Session

Authorizes certain corporations with both charitable and business purposes to elect to be a non-charitable corporation

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Archive: Last Bill Status - Signed by Governor


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Aug 11, 2014 signed chap.321
Aug 01, 2014 delivered to governor
Jun 18, 2014 returned to senate
passed assembly
ordered to third reading rules cal.424
substituted for a10053
Jun 17, 2014 referred to corporations, authorities and commissions
delivered to assembly
passed senate
ordered to third reading cal.1480
committee discharged and committed to rules
Jun 05, 2014 referred to corporations, authorities and commissions

Votes

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S7762 - Bill Details

See Assembly Version of this Bill:
A10053
Law Section:
Not-for-Profit Corporation

S7762 - Bill Texts

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Authorizes certain corporations with both charitable and business purposes to elect to be a non-charitable corporation.

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BILL NUMBER:S7762

TITLE OF BILL: An act relating to authorizing certain corporations to
elect to be a non-charitable corporation

PURPOSE OR GENERAL IDEA OF BILL:

To clarify the authority of the corporation formed pursuant to Chapter
880 of the Laws of New York of 1937, TIAA Board of Overseers
("Overseers") and the corporation formed pursuant to Chapter 124 of
the Laws of New York of 1952, College Retirement Equities Fund ("CREF"
and, together with Overseers, the "affected corporations").

SUMMARY OF SPECIFIC PROVISIONS:

This bill provides that on or after July 1, 2014, TIAA Board of
Overseers and College Retirement Equities Fund, New York
Not-for-Profit corporations, may elect to be non-charitable
corporations under the Not-for-Profit Corporation Law by providing
written notice of such election to the Attorney General and certifying
in such written notice that it is not exempt from federal income tax,
and does not solicit or receive charitable contributions, or accept
receipt of donations of assets, for charitable purposes. Such notice
shall be accompanied by the approval of a justice of the supreme
court, and ten days' written notice of the application for such
approval shall be given to the Attorney General.

The affected corporations will be subject to the provisions of Section
513 (Administration of Assets Received for Specific Purposes) and
Section 908 (Merger or Consolidation of Business and Not-for-Profit
Corporations) of the Not-for-Profit Corporation Law as non-charitable
corporations, provided that any merger with a business corporation
shall require (a) a supreme court order approving the plan of merger
or consolidation, or (b) Attorney General approval of the plan of
merger or consolidation. In addition, the affected corporations shall
be subject to all other provisions of Articles 1, 5, 6, 7, 8, 9 and 10
of the Not-for-Profit Corporation Law that would have been applicable
to the corporations were they charitable corporations.

JUSTIFICATION:

It has come to the attention of the state legislature that the
affected corporations do not solicit or receive charitable
contributions, nor accept receipt of donations of assets, for
charitable purposes. Pursuant to the Non-Profit Revitalization Act,
the affected corporations, which are currently Type B not-for-profit
corporations, would automatically be deemed to be "charitable
corporations." This characterization may create unintended
consequences as neither affected corporation is structured as a
charity. The bill allows the affected corporations to elect to be
"non-charitable corporations" with court approval and notice to the
New York Attorney General. In addition, the bill provides that the
affected corporations will, after such an election, remain subject to
the enumerated provisions of the Not-for-Profit Corporation Law as if
they were charitable corporations, while preserving the affected
corporations' ability to take certain actions that would have been
permissible had such affected corporations converted to Type C


not-for-profit corporations prior to the enactment of the Non-Profit
Revitalization Act.

PRIOR LEGISLATIVE HISTORY:

New bill

FISCAL IMPLICATIONS:

None

EFFECTIVE DATE:

Immediately.

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

                                  7762

                            I N  S E N A T E

                              June 5, 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 relating to authorizing certain corporations to  elect  to  be  a
  non-charitable corporation

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

  Section 1.  On or after July 1, 2014, any corporation formed  pursuant
to  chapter  880  of the laws of 1937 or chapter 124 of the laws of 1952
may elect, notwithstanding that it may have both charitable and business
purposes and notwithstanding subdivision (c) of section 201 of the  not-
for-profit  corporation  law,  to be a non-charitable corporation under,
and as defined in section 102 of the not-for-profit corporation law,  by
providing  written  notice  of such election to the attorney general and
certifying in such written notice that it is  not  exempt  from  federal
income  tax,  but  rather  is  taxable  as a corporation pursuant to the
United States internal revenue code of 1986, as amended,  and  does  not
solicit  or  receive  charitable  contributions,  or  accept  receipt of
donations of assets, for charitable purposes, as contemplated by article
7-A of the executive law and section 8-1.4 of the  estates,  powers  and
trusts  law, and regulations adopted thereunder. Every such notice shall
have endorsed thereon or annexed thereto the approval of  a  justice  of
the  supreme  court of the judicial district in which the office of such
corporation is located. Ten days' written notice of the application  for
such  approval  shall  be given to the attorney general. Any such corpo-
ration will be subject to the provisions of section 513 and section  908
of  the  not-for-profit corporation law as a non-charitable corporation,
provided that no certificate shall be filed pursuant to section  908  of
the  not-for-profit  corporation  law  unless  (a) the supreme court has
granted an order approving the  plan  of  merger  or  consolidation  and
authorizing  the  filing of the certificate as provided in section 907-a
of the not-for-profit corporation law as  if  such  section  applied  to
mergers  and consolidations effected pursuant to section 908 of the not-
for-profit corporation law, or (b) the attorney general has approved the

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15511-01-4

S. 7762                             2

plan of merger or consolidation and authorized the filing of the certif-
icate as provided in section 907-b of the not-for-profit corporation law
as if such section applied to mergers and consolidations effected pursu-
ant to section 908 of the not-for-profit corporation law. In addition to
the  foregoing  requirements, any such corporation shall also be subject
to all other provisions of articles 1, 5, 6, 7, 8, 9 and 10 of the  not-
for-profit corporation law that would have been applicable to the corpo-
ration  were  it a charitable corporation. Nothing in this section shall
be deemed to modify the charter of, or prevent any  future  modification
of the charter of, any corporation formed pursuant to chapter 880 of the
laws  of  1937  or  chapter 124 of the laws of 1952, as such charter may
have been amended from time to time since the enactment of  chapter  880
of the laws of 1937 or chapter 124 of the laws of 1952, as applicable.
  S 2. This act shall take effect immediately.

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