S T A T E O F N E W Y O R K
________________________________________________________________________
7039
2017-2018 Regular Sessions
I N A S S E M B L Y
March 29, 2017
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Introduced by M. of A. TITONE -- read once and referred to the Committee
on Corporations, Authorities and Commissions
AN ACT to amend the not-for-profit corporation law, in relation to
requiring certificates of incorporation of not-for-profit corporations
to include certifications that the initial directors of the corpo-
ration shall commit to the inclusion in the corporation bylaws of a
conflict of interest policy and shall include in the corporate bylaws
a requirement that the directors and officers of the corporation shall
comply with education requirements regarding their fiduciary obli-
gations to the corporation
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraph (a) of section 402 of the not-for-profit corpo-
ration law is amended by adding two new subparagraphs 9 and 10 to read
as follows:
(9) A CERTIFICATION THAT THE INITIAL DIRECTORS OF THE CORPORATION HAVE
INCLUDED IN THE CORPORATE BYLAWS, AND WILL ABIDE BY, A CONFLICT OF
INTEREST POLICY WHICH: (I) PROHIBITS THE DIRECTORS AND EXECUTIVE OFFI-
CERS OF THE CORPORATION FROM BEING INVOLVED IN DECISIONS RELATING TO
BUSINESS BETWEEN THE CORPORATION AND ANY OTHER NOT-FOR-PROFIT CORPO-
RATION OF WHICH THE OFFICER OR DIRECTOR, HIS OR HER SPOUSE OR ANY OTHER
DISQUALIFIED PERSON IS A DIRECTOR OR OFFICER; AND (II) REQUIRES EACH
DIRECTOR AND EXECUTIVE OFFICER OF THE CORPORATION TO CERTIFY TO THE
CORPORATION THAT HE OR SHE IS NOT AFFILIATED WITH ANOTHER NOT-FOR-PROFIT
CORPORATION WHICH MAY DO BUSINESS WITH THE CORPORATION OR, IF HE OR SHE
IS OR BECOMES SO AFFILIATED, TO PROMPTLY DISCLOSE TO THE CORPORATION THE
EXISTENCE OF SUCH AFFILIATION. AS USED HEREIN "DISQUALIFIED PERSON"
MEANS THE FAMILY OF A DIRECTOR OR EXECUTIVE OFFICER, INCLUDING SUCH
PERSON'S SPOUSE, PARENT, SIBLING, CHILD, GRANDCHILD, GREAT-GRANDCHILD,
AND THE SPOUSE OF ANY SIBLING, CHILD, GRANDCHILD OR GREAT-GRANDCHILD.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09211-01-7
A. 7039 2
(10) A CERTIFICATION THAT THE EXECUTIVE OFFICERS OF THE CORPORATION
HAVE INCLUDED IN THE CORPORATE BYLAWS, AND WILL ABIDE BY, A REQUIREMENT
THAT: (I) THE EXECUTIVE OFFICERS OF THE CORPORATION SHALL, WITHIN SIX
MONTHS OF THE DATE OF INCORPORATION AND EVERY TWO YEARS THEREAFTER,
ATTEND AND COMPLETE A COURSE, AT LEAST THREE HOURS IN LENGTH, CONDUCTED
BY AN ATTORNEY OR CERTIFIED PUBLIC ACCOUNTANT, WHICH COURSE SHALL
INSTRUCT SUCH OFFICERS IN THEIR FIDUCIARY RESPONSIBILITIES AS OFFICERS
OF THE CORPORATION; AND (II) THAT THE CORPORATION SHALL MAINTAIN, AS
PART OF THE CORPORATE BOOKS AND RECORDS, A RECORD OF THE DATE, LOCATION
AND LENGTH OF THE COURSES ATTENDED BY THE EXECUTIVE OFFICERS, INCLUDING
THE NAMES OF THE ATTENDEES, THE COURSE PRESENTER AND THE SPONSORING
EDUCATION PROVIDER ENTITY, AND THE SIGNATURES OF THE OFFICERS WHO
ATTENDED THE PROGRAM.
§ 2. This act shall take effect January 1, 2018.