NY State Senate Bill 2015-S8001

Senate Bill S8001

2015-2016 Legislative Session

Authorizes sale or mortgage of certain real property of religious corporation without leave of supreme court

download bill text pdf

Archive: Last Bill Status - In Senate Committee Corporations, Authorities And Commissions 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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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jun 03, 2016	referred to corporations, authorities and commissions

2015-S8001 (ACTIVE) - Details

Current Committee:: Senate Corporations, Authorities And Commissions
Law Section:: Religious Corporations Law
Laws Affected:: Amd §12, Rel Corp L
Versions Introduced in Other Legislative Sessions:: 2017-2018: S2935
2019-2020: S1895
2021-2022: S2567
2023-2024: S229

2015-S8001 (ACTIVE) - Summary

Authorizes a religious corporation to sell real property where consideration paid therefor and fair market value thereof is less than $200,000, and mortgage real property when such mortgage secures debt of less than $200,000, without leave of supreme court.

2015-S8001 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S8001

 TITLE OF BILL :  An act to amend the religious corporations law, in
relation to the sale, mortgage and lease of real property of a
religious corporation

 SUMMARY OF PROVISIONS :

This bill amends Section 12 of the Religious Corporations Law to
provide an exemption to the current requirement for court approval of
the sale, mortgage or lease of property owned by a religious
corporation. This exemption would only apply to the sale of real
property whose fair market value and actual sale price do not exceed
$200,000.00 or to the mortgage of real property where such mortgage
secures a debt of less than $200,000.00.

 EXISTING LAW :

Section 12(1) of the Religious Corporations Law requires that a
religious corporation intending to sell, mortgage or lease (for a
period of more than five (5) years) first must submit a petition to
the Supreme Court of the judicial district or the County Court of the
county in which the corporation has its office or principal place of
operation. The court then gives a minimum fifteen (15) day notice of
hearing on the transaction to the Attorney General and any other
member, officer or creditor of the corporation that the court may

choose. A "show-cause" hearing is then held at which any party may
appear and argue why the petition should not be granted.  Once
satisfied that the consideration and terms of the transaction are fair
& reasonable, the court may authorize the sale, lease or other
disposition of the property.

 JUSTIFICATION :

This process is a difficult, time-consuming and an expensive process
for churches and other religious organizations That are trying to
dispose of or encumber relatively modest properties.  Exempting
transactions under $200,000.00 enables these organizations to conduct
routine business efficiently and economically while still insuring
large amount transactions receive the scrutiny of the court.

 LEGISLATIVE HISTORY :

2010 - S.4163 Reported and Committed to Finance
2009 - S.4163 Referred to Corporations, Authorities and Commissions
2008 - S.1591 Passed Senate
2007 - S.1591 Passed Senate
2006 - S.2497-A Passed Senate

 FISCAL IMPLICATIONS :

There are no fiscal implications to the State but may save the courts
time and money.

 EFFECTIVE DATE :
This act shall take effect immediately.

2015-S8001 (ACTIVE) - Bill Text download pdf

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

                                  8001

                            I N  S E N A T E

                              June 3, 2016
                               ___________

Introduced  by Sen. GALLIVAN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Corporations,  Authorities
  and Commissions

AN ACT to amend the religious corporations law, in relation to the sale,
  mortgage and lease of real property of a religious corporation

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

  Section 1. Subdivisions 1 and 9 of section 12 of the religious  corpo-
rations law, subdivision 1 as amended by chapter 555 of the laws of 2015
and  subdivision  9  as  amended by chapter 962 of the laws of 1969, are
amended to read as follows:
  1. (A) A religious corporation shall not sell, mortgage or lease for a
term exceeding five years any of its real property without applying  for
and obtaining leave of the court or the attorney general therefor pursu-
ant to section five hundred eleven of the not-for-profit corporation law
as  that  section  is  modified by paragraph (d-1) of subdivision one of
section two-b of this chapter or section five hundred  eleven-a  of  the
not-for-profit  corporation law, except that a religious corporation may
execute a purchase money mortgage or a purchase money security agreement
creating a security interest in personal property purchased by it  with-
out obtaining leave of the court therefor.
  (B)  NOTWITHSTANDING  THE PROVISIONS OF PARAGRAPH (A) OF THIS SUBDIVI-
SION, ANY SOLVENT RELIGIOUS CORPORATION MAY SELL ANY OF ITS REAL PROPER-
TY WITHOUT A COURT ORDER IN THE FOLLOWING CIRCUMSTANCES:
  (I) THE RELIGIOUS CORPORATION SHALL HAVE AND MAINTAIN IN  ITS  RECORDS
AN  APPRAISAL  REPORT  PREPARED BY A PROFESSIONAL APPRAISER AND DATED OR
UPDATED WITHIN NINETY DAYS OF THE SALE SHOWING THE FAIR MARKET VALUE  TO
BE LESS THAN TWO HUNDRED THOUSAND DOLLARS;
  (II)  THE SALE SHALL BE AN ARM'S LENGTH TRANSACTION FOR A CASH CONSID-
ERATION AT THE FAIR MARKET VALUE OF THE PROPERTY WHICH SHALL  BE  WITHIN
TEN PERCENT OF THE APPRAISED VALUE;
  (III) THE GOVERNING BODY OF THE RELIGIOUS CORPORATION SHALL HAVE GIVEN
NOTICE  FOR NOT LESS THAN THIRTY DAYS TO THE MEMBERS OF THE CONGREGATION
SERVED BY THE RELIGIOUS CORPORATION IN A MANNER LIKELY TO BE SEEN  BY  A

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

                                                           LBD02306-02-6

S. 8001                             2

MAJORITY OF SUCH MEMBERS INCLUDING BUT NOT LIMITED TO PUBLICATION IN ANY
BULLETIN,  NEWSLETTER,  OR SIMILAR DOCUMENT NORMALLY DISTRIBUTED TO SUCH
MEMBERS; AND
  (IV)  A  CERTIFICATE OF COMPLIANCE WITH THE REQUIREMENTS OF THIS PARA-
GRAPH EXECUTED BY THE PERSON OR PERSONS EXECUTING THE DEED ON BEHALF  OF
THE  RELIGIOUS  CORPORATION  UNDER  THE  PENALTIES  OF  PERJURY SHALL BE
ATTACHED TO AND RECORDED WITH THE DEED; AND WITH  RESPECT  TO  RELIGIOUS
CORPORATIONS  SUBJECT  TO  SUBDIVISION  TWO,  THREE, FOUR, FIVE, FIVE-A,
FIVE-B, OR FIVE-C OF THIS SECTION, SUCH CERTIFICATE SHALL HAVE  ENDORSED
THEREON THE CONSENT OF THE CHURCH AUTHORITY OR AUTHORITIES WHOSE CONSENT
WOULD  BE  REQUIRED  UNDER  SUCH SUBDIVISIONS OF THIS SECTION BEFORE THE
FILING OF AN APPLICATION TO THE COURT.
  (C) NOTWITHSTANDING THE PROVISIONS OF PARAGRAPH (A) OF  THIS  SUBDIVI-
SION,  ANY  SOLVENT  RELIGIOUS  CORPORATION MAY MORTGAGE ANY OF ITS REAL
PROPERTY WITHOUT A COURT ORDER IN THE FOLLOWING CIRCUMSTANCES:
  (I) THE RELIGIOUS CORPORATION SHALL HAVE AND MAINTAIN IN  ITS  RECORDS
AN  APPRAISAL  REPORT  PREPARED BY A PROFESSIONAL APPRAISER AND DATED OR
UPDATED WITHIN NINETY DAYS OF THE MORTGAGE SHOWING THE FAIR MARKET VALUE
TO BE LESS THAN TWO HUNDRED THOUSAND DOLLARS;
  (II) THE MORTGAGE SHALL BE AN ARM'S LENGTH TRANSACTION WITH A  MORTGA-
GEE  LICENSED TO MAKE MORTGAGE LOANS IN THE STATE FOR AN ADVANCE OF CASH
IN A PRINCIPAL AMOUNT NOT MORE THAN TWO HUNDRED THOUSAND DOLLARS;
  (III) THE GOVERNING BODY OF THE RELIGIOUS CORPORATION SHALL HAVE GIVEN
NOTICE FOR NOT LESS THAN THIRTY DAYS TO THE MEMBERS OF THE  CONGREGATION
SERVED  BY  THE RELIGIOUS CORPORATION IN A MANNER LIKELY TO BE SEEN BY A
MAJORITY OF SUCH MEMBERS INCLUDING BUT NOT LIMITED TO PUBLICATION IN ANY
BULLETIN, NEWSLETTER, OR SIMILAR DOCUMENT NORMALLY DISTRIBUTED  TO  SUCH
MEMBERS; AND
  (IV)  A  CERTIFICATE OF COMPLIANCE WITH THE REQUIREMENTS OF THIS PARA-
GRAPH EXECUTED BY THE PERSON OR PERSONS EXECUTING THE DEED ON BEHALF  OF
THE  RELIGIOUS  CORPORATION  UNDER  THE  PENALTIES  OF  PERJURY SHALL BE
ATTACHED TO AND RECORDED WITH THE MORTGAGE; AND WITH  RESPECT  TO  RELI-
GIOUS  CORPORATIONS  SUBJECT  TO  SUBDIVISION  TWO,  THREE,  FOUR, FIVE,
FIVE-A, FIVE-B, OR FIVE-C OF THIS SECTION, SUCH CERTIFICATE  SHALL  HAVE
ENDORSED  THEREON  THE  CONSENT  OF  THE CHURCH AUTHORITY OR AUTHORITIES
WHOSE CONSENT WOULD BE REQUIRED UNDER SUCH SUBDIVISIONS OF THIS  SECTION
BEFORE THE FILING OF AN APPLICATION TO THE COURT.
  9. If a sale, mortgage or lease for a term exceeding five years of any
real  property of any such religious corporation WITH RESPECT TO WHICH A
COURT ORDER WAS REQUIRED UNDER SUBDIVISION ONE OF THIS SECTION has  been
heretofore  or  shall  be  hereafter  made  and a conveyance or mortgage
executed and delivered without the authority of  a  court  of  competent
jurisdiction, obtained as required by law, or not in accordance with its
directions,  the  court  may,  thereafter,  upon  the application of the
corporation, or of the grantee or mortgagee in any  such  conveyance  or
mortgage  or of any person claiming through or under any such grantee or
mortgagee upon such notice to such corporation, or  its  successor,  and
such  other  person or persons as may be interested in such property, as
the court may prescribe, confirm said previously executed conveyance  or
mortgage, and order and direct the execution and delivery of a confirma-
tory  deed  or  mortgage, or the recording of such confirmatory order in
the office where deeds and mortgages are recorded in the county in which
the property is located; and upon compliance with the  said  order  such
original  conveyance or mortgage shall be as valid and of the same force
and  effect  as  if  it  had  been  executed  and  delivered  after  due
proceedings  had in accordance with the statute and the direction of the

S. 8001                             3

court.  But no confirmatory order may be  granted  unless  the  consents
required  in  the first part of this section for a Protestant Episcopal,
Roman Catholic, Presbyterian church or an incorporated African Methodist
Episcopal  Zion  church  or an incorporated United Methodist church have
first been given by the prescribed authority thereof,  either  upon  the
original application or upon the application for the confirmatory order.
  S  2.  This act shall take effect immediately and shall apply to sales
and mortgages of real property occurring on or after the effective  date
of this act.

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