NY State Senate Bill 2015-S5370B

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 17, 2016	committed to rules
May 25, 2016	advanced to third reading
May 24, 2016	2nd report cal.
May 23, 2016	1st report cal.1022
May 19, 2016	print number 5370b
May 19, 2016	amend (t) and recommit to corporations, authorities and commissions
Jan 06, 2016	referred to corporations, authorities and commissions
May 28, 2015	print number 5370a
May 28, 2015	amend and recommit to corporations, authorities and commissions
May 14, 2015	referred to corporations, authorities and commissions

Votes

- May 23, 2016 - Corporations, Authorities And Commissions Committee Vote
  S5370B
  
  Aye
  
  6
  
  Nay
  
  0
  
  Aye with Reservations
  
  1
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  
  0
  - - Corporations, Authorities And Commissions Committee Vote: May 23, 2016
      
      aye (6)
      
      Amedore
      
      Larkin
      
      Ortt
      
      Perkins
      
      Ranzenhofer
      
      Squadron
      
      aye wr (1)
      
      Martins

Bill Amendments

Original

B (Active)

2015-S5370 - Details

See Assembly Version of this Bill:: A10205
Current Committee:: Senate Rules
Law Section:: Not-for-Profit Corporation Law
Laws Affected:: Amd §713, N-PC L

2015-S5370 - Summary

Relates to an employee of a not-for-profit corporation serving as chair of the board.

2015-S5370 - Sponsor Memo

                                BILL NUMBER:S5370

TITLE OF BILL:

An act to amend the not-for-profit corporation law, in relation to
corporations serving as chair of a board

PURPOSE OR GENERAL IDEA OF BILL:

To provide an exception to the prohibition on not-for-profit employees
serving as chairperson of the board of directors of the corporation.

SUMMARY OF SPECIFIC PROVISIONS:

Section one: Provides an exception to the prohibition on
not-for-profit employees serving as chairperson of the board of
directors of the corporation.

Section two of the bill establishes the effective date.

JUSTIFICATION:

Paragraph (f) of section 713 of the Not-For-Profit Law was added in
the Not-For-Profit Revitalization Act of 2013 and will become
effective on January 1, 2016.

The intent of paragraph (f) was to prevent employees of a
not-for-profit corporation from serving as chair of the
not-for-profit's board of directors. Some not-for-profit corporations
have a governance structure where the chair is an employee of the
corporation and this prohibition would be an undue hardship for such
entities.

This amendment would require that the board of directors be aware of
the potential for compromised board oversight, discuss alternative
options, and to document on what basis they have chosen to authorize
an employee to serve as chairperson. Such basis must be sent to the
Attorney General within a certain period of time of such a board
decision.

This bill, if enacted, would still provide a disincentive for an
employee to act as a chairperson of the board of directors but would
provide flexibility to the not-for-profit community to allow for such
a governance structure while maintaining Attorney General oversight
for entities that choose to have an employee act as chair of the board
of directors

PRIOR LEGISLATIVE HISTORY:

This is a new bill.

FISCAL IMPLICATIONS:

None

EFFECTIVE DATE:


This act shall take effect on January 1, 2016.

2015-S5370 - Bill Text download pdf

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

                                  5370

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                              May 14, 2015
                               ___________

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
  corporations serving as chair of a board

  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,  as added by chapter 549 of the laws of 2013, is amended to
read as follows:
  (f) No employee of the corporation shall serve as chair of  the  board
or  hold  any other title with similar responsibilities UNLESS THE BOARD
APPROVES SUCH EMPLOYEE SERVING AS CHAIR OF THE BOARD BY A MAJORITY  VOTE
OF  THE WHOLE BOARD AND CONTEMPORANEOUSLY DOCUMENTS IN WRITING THE BASIS
FOR THE BOARD APPROVAL INCLUDING THE BOARD'S CONSIDERATION  OF  ALTERNA-
TIVE  OPTIONS.  THE  CONTEMPORANEOUSLY DOCUMENTED BASIS OF SUCH APPROVAL
SHALL BE PROVIDED TO THE ATTORNEY GENERAL  WITHIN  SIXTY  DAYS  OF  SUCH
APPROVAL IN WRITTEN OR ELECTRONIC FORM.
  S  2.  This  act  shall  take  effect on the same date and in the same
manner as paragraph (f) of section 713 of the not-for-profit corporation
law, takes effect, pursuant to chapter 549  of  the  laws  of  2013,  as
amended.




 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10810-01-5

2015-S5370A - Details

See Assembly Version of this Bill:: A10205
Current Committee:: Senate Rules
Law Section:: Not-for-Profit Corporation Law
Laws Affected:: Amd §713, N-PC L

2015-S5370A - Summary

Relates to an employee of a not-for-profit corporation serving as chair of the board.

2015-S5370A - Sponsor Memo

2015-S5370A - Bill Text download pdf

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

                                 5370--A

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                              May 14, 2015
                               ___________

Introduced  by  Sen.  RANZENHOFER -- 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
  corporations serving as chair of a board

  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, as added by chapter 549 of the laws of 2013, is  amended  to
read as follows:
  (f)  No  employee of the corporation shall serve as chair of the board
or hold any other title with similar responsibilities UNLESS  THE  BOARD
APPROVES  SUCH EMPLOYEE SERVING AS CHAIR OF THE BOARD BY A MAJORITY VOTE
OF THE WHOLE BOARD AND CONTEMPORANEOUSLY DOCUMENTS IN WRITING THE  BASIS
FOR  THE  BOARD APPROVAL INCLUDING THE BOARD'S CONSIDERATION OF ALTERNA-
TIVE OPTIONS; PROVIDED, HOWEVER, THAT NO SUCH EMPLOYEE SHALL BE  CONSID-
ERED AN INDEPENDENT DIRECTOR.
  S  2.  This  act  shall  take  effect on the same date and in the same
manner as paragraph (f) of section 713 of the not-for-profit corporation
law, takes effect, pursuant to chapter 549  of  the  laws  of  2013,  as
amended.




 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10810-03-5

2015-S5370B (ACTIVE) - Details

See Assembly Version of this Bill:: A10205
Current Committee:: Senate Rules
Law Section:: Not-for-Profit Corporation Law
Laws Affected:: Amd §713, N-PC L

2015-S5370B (ACTIVE) - Summary

Relates to an employee of a not-for-profit corporation serving as chair of the board.

2015-S5370B (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S5370B

 TITLE OF BILL :

An act to amend the not-for-profit corporation law, in relation to an
employee of a not-for-profit corporation serving as chair of the board

 PURPOSE OR GENERAL IDEA OF BILL :

To establish certain procedures to allow the board of a not-for-profit
corporation to approve the appointment of an employee of the
corporation to serve as chairperson of its board of directors.

 SUMMARY OF SPECIFIC PROVISIONS :

Section one - would allow an employee of a nonprofit corporation to
serve as chairperson of the board of directors provided that the
appointment is approved by two-thirds of the entire board and sets
forth in writing the reasons for approval.  The bill further adds that
such employee/chairperson shall not be considered an "independent
director" for the purposes of the not-for-profit corporation law.

Section two - of the bill provides that this act shall take effective
on the same date and in the same manner as section 73 of Chapter 549
of the Laws of 2013, takes effect. The effective date of section 73
has been extended by Chapter 81 of the Laws of 2014 and Chapter 388 of

the Laws of 2015, and the effective date is January 1, 2017.

 JUSTIFICATION :

In 2013, the legislature passed and the Governor approved the
Not-For-Profit Revitalization Act of 2013. One of its provisions (§
712(f) of the NFP Corporation Law) prohibited an employee of the
corporation from serving as chairperson of the board of directors.

After enactment of this statute, it came to the attention of the
legislature that this provision would create hardship for certain
nonprofit organizations, such as public interest groups with student
board members and trade associations. In 2014 and 2015 the legislature
agreed to postpone implementation of this provision to study this
issue.

This bill strikes a balance by giving a nonprofit corporation the
flexibility to elect an employee to serve as chairperson provided that
a super-majority of the entire board approves the appointment, and
that such board action and the reasons therefore are fully documented.

 PRIOR LEGISLATIVE HISTORY :

In 2014, the Governor approved Chapter 81 of the Laws of 2014 to
postpone the effective date of subdivision "f' of § 712 of the NFP
Corporation Law. The effective date of section 712 subdivision "f' has
been extended by Chapter 81 of the Laws of 2014 and Chapter 388 of the
Laws of 2015.

 FISCAL IMPLICATIONS :

None

 EFFECTIVE DATE :
This act shall take effect on the same date and in the same manner as
section 73 of Chapter 549 of the Laws of 2013, takes effect. The
effective date of section 73 has been extended by Chapter 81 of the
Laws of 2014 and Chapter 388 of the Laws of 2015, and the effective
date is January 1, 2017.

2015-S5370B (ACTIVE) - Bill Text download pdf

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

                                 5370--B

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                              May 14, 2015
                               ___________

Introduced  by  Sen.  RANZENHOFER -- 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 -- committee discharged, bill
  amended, ordered reprinted as amended and recommitted to said  commit-
  tee

AN  ACT  to  amend the not-for-profit corporation law, in relation to an
  employee of a not-for-profit corporation serving as chair of the board

  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, as added by chapter 549 of the laws of 2013, is  amended  to
read as follows:
  (f)  No  employee of the corporation shall serve as chair of the board
or hold any other title with similar responsibilities UNLESS  THE  BOARD
APPROVES  SUCH EMPLOYEE SERVING AS CHAIR OF THE BOARD BY TWO-THIRDS VOTE
OF THE ENTIRE BOARD AND CONTEMPORANEOUSLY DOCUMENTS IN WRITING THE BASIS
FOR THE BOARD APPROVAL; PROVIDED, HOWEVER, THAT NO SUCH  EMPLOYEE  SHALL
BE CONSIDERED AN INDEPENDENT DIRECTOR.
  S  2.  This  act  shall  take  effect on the same date and in the same
manner as section 73 of chapter 549 of the laws of 2013, takes effect.



 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10810-06-6

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Senate Bill S5370B

Sponsored By

Archive: Last Bill Status - In Senate Committee Rules Committee

Actions

Votes

May 23, 2016 - Corporations, Authorities And Commissions Committee Vote

Corporations, Authorities And Commissions Committee Vote: May 23, 2016

Bill Amendments

2015-S5370 - Details

2015-S5370 - Summary

2015-S5370 - Sponsor Memo

2015-S5370 - Bill Text download pdf

2015-S5370A - Details

2015-S5370A - Summary

2015-S5370A - Sponsor Memo

2015-S5370A - Bill Text download pdf

2015-S5370B (ACTIVE) - Details

2015-S5370B (ACTIVE) - Summary

2015-S5370B (ACTIVE) - Sponsor Memo

2015-S5370B (ACTIVE) - Bill Text download pdf

Comments

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Sponsored By

Michael H. Ranzenhofer

Archive: Last Bill Status - In Senate Committee Rules Committee

Actions

Votes

Bill Amendments

2015-S5370 - Details

2015-S5370 - Summary

2015-S5370 - Sponsor Memo

2015-S5370 - Bill Text download pdf

2015-S5370A - Details

2015-S5370A - Summary

2015-S5370A - Sponsor Memo

2015-S5370A - Bill Text download pdf

2015-S5370B (ACTIVE) - Details

2015-S5370B (ACTIVE) - Summary

2015-S5370B (ACTIVE) - Sponsor Memo

2015-S5370B (ACTIVE) - Bill Text download pdf

Comments