S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8659
 
                             I N  S E N A T E
 
                               July 1, 2020
                                ___________
 
 Introduced  by Sen. GAUGHRAN -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 AN ACT to amend the public authorities law and the not-for-profit corpo-
   ration law, in relation to reviews by the authority budget office  and
   granting  the  authorities  budget office the authority to commence an
   action or special proceeding  to  annul  the  corporate  existence  or
   dissolve  a corporation that has acted beyond its capacity or power or
   to restrain it from carrying on unauthorized activities
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  The  public  authorities  law  is amended by adding a new
 section 8 to read as follows:
   § 8. REPORTS OF  PUBLIC  AUTHORITIES  BY  AUTHORITIES  BUDGET  OFFICE;
 RECOMMENDATIONS  FOR  CORRECTIVE ACTION. WHENEVER THE AUTHORITIES BUDGET
 OFFICE ISSUES A LETTER OR REPORT REGARDING THE ACTIVITIES AND OPERATIONS
 OF ANY PUBLIC AUTHORITY, THE HEAD OF  THE  PUBLIC  AUTHORITY  WHICH  THE
 LETTER OR REPORT WAS ABOUT SHALL SUBMIT A WRITTEN RESPONSE TO THE LETTER
 OR  REPORT WITHIN THIRTY DAYS OF THE RECEIPT OF THE LETTER OR REPORT. IF
 THE LETTER OR REPORT MAKES RECOMMENDATIONS FOR CORRECTIVE  ACTION,  SUCH
 HEAD  SHALL  REPORT WITHIN ONE HUNDRED EIGHTY DAYS AFTER RECEIPT THEREOF
 TO THE AUTHORITIES BUDGET OFFICE WHAT STEPS WERE TAKEN TO IMPLEMENT SUCH
 RECOMMENDATIONS, AND, WHERE RECOMMENDATIONS WERE  NOT  IMPLEMENTED,  THE
 REASONS  THEREFOR. FAILURE TO COMPLY WITH THE PROVISIONS OF THIS SECTION
 SHALL MAKE THE AUTHORITY DELINQUENT IN ITS REPORTING REQUIREMENTS.
   § 2. Subdivision 3 of section 2800 of the public authorities  law,  as
 amended  by  chapter  766  of  the  laws  of 2005, is amended to read as
 follows:
   3. Every financial  report  submitted  under  this  section  shall  be
 approved  by the board and shall be certified, UNDER PENALTY OF PERJURY,
 in writing by the chief executive officer and the chief financial  offi-
 cer  of  such  authority  that  based on the officer's knowledge (a) the
 information provided therein is accurate, correct and does  not  contain
 any  untrue  statement  of material fact; (b) does not omit any material
 fact which, if omitted, would  cause  the  financial  statements  to  be
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD15673-02-0

 S. 8659                             2
 
 misleading in light of the circumstances under which such statements are
 made;  and  (c)  fairly  presents in all material respects the financial
 condition and results of operations of the authority as of, and for, the
 periods  presented  in  the financial statements.  A KNOWING AND WILLFUL
 VIOLATION OF THIS SECTION SHALL CONSTITUTE PERJURY IN THE THIRD DEGREE.
   § 3. Subdivision 2 of section 2824 of the public authorities  law,  as
 added by section 766 of the laws of 2005, is amended to read as follows:
   2.  (A) Individuals appointed to the board of a public authority shall
 participate in state approved training regarding their legal, fiduciary,
 financial and ethical responsibilities  as  directors  of  an  authority
 within  one  year of appointment to a board. Board members shall partic-
 ipate in such continuing training as may be required to remain  informed
 of  best  practices,  regulatory  and  statutory changes relating to the
 effective oversight of the management and financial activities of public
 authorities and to adhere to the highest standards of responsible gover-
 nance.
   (B) EXCEPT AS OTHERWISE PROVIDED IN THIS CHAPTER, A MEMBER IN NON-COM-
 PLIANCE WITH THE REQUIREMENTS SET FORTH IN THIS SECTION SHALL BE SUBJECT
 TO THE ENFORCEMENT POWERS OF THE AUTHORITIES  BUDGET  OFFICE,  INCLUDING
 BUT  NOT  LIMITED TO REMOVAL FROM THE BOARD OF SAID PUBLIC AUTHORITY. IF
 AN INDIVIDUAL APPOINTED TO THE BOARD OF  A  PUBLIC  AUTHORITY  DOES  NOT
 COMPLETE THEIR STATE APPROVED TRAINING PURSUANT TO PARAGRAPH (A) OF THIS
 SUBDIVISION  THE AUTHORITY BUDGET OFFICE SHALL NOTIFY SAID INDIVIDUAL OF
 THEIR OFFICIAL SUSPENSION AS A BOARD MEMBER. THE SUSPENSION SHALL BE FOR
 A PERIOD OF THREE MONTHS AND SHALL COMMENCE  WITH  RECEIPT  OF  OFFICIAL
 NOTICE  OF  THE SUSPENSION BY THE AUTHORITIES BUDGET OFFICE. THE SUSPEN-
 SION SHALL BE TERMINATED  IF  SUCH  INDIVIDUAL  COMPLETES  THE  REQUIRED
 TRAINING  WITHIN  THE  THREE MONTH SUSPENSION PERIOD. IF SUCH INDIVIDUAL
 FAILS TO COMPLETE THE REQUIRED TRAINING WITHIN THE THREE  MONTH  SUSPEN-
 SION  PERIOD,  THE  AUTHORITIES  BUDGET OFFICE MAY REMOVE THE INDIVIDUAL
 FROM THE PUBLIC AUTHORITY BOARD.
   (C) AN INDIVIDUAL THAT HAS BEEN REMOVED FROM A PUBLIC AUTHORITY  BOARD
 BY  THE  AUTHORITIES  BUDGET  OFFICE  PURSUANT  TO PARAGRAPH (B) OF THIS
 SUBDIVISION, MAY ONLY BE REINSTATED TO THAT PUBLIC AUTHORITY BOARD  ONCE
 THEY PROVIDE THE AUTHORITIES BUDGET OFFICE WITH OFFICIAL NOTICE CONFIRM-
 ING  THE TRAINING REQUIREMENTS SET FORTH IN PARAGRAPH (A) OF THIS SUBDI-
 VISION HAVE BEEN MET.
   § 4. Section 104 of the not-for-profit corporation law is  amended  by
 adding a new paragraph (h) to read as follows:
   (H) IF AN INSTRUMENT WHICH IS DELIVERED TO THE DEPARTMENT OF STATE FOR
 FILING  RELATES  TO  MUNICIPAL ECONOMIC DEVELOPMENT, IS A NOT-FOR-PROFIT
 CORPORATION CREATED PURSUANT TO SECTION FOURTEEN HUNDRED ELEVEN OF  THIS
 CHAPTER OR IF SUCH INSTRUMENT MAY BE DEEMED A LOCAL AUTHORITY AS DEFINED
 BY  SUBDIVISION  TWO  OF  SECTION TWO OF THE PUBLIC AUTHORITIES LAW, THE
 DEPARTMENT OF STATE SHALL REVIEW, MAKE, CERTIFY AND  TRANSMIT  ELECTRON-
 ICALLY  A COPY OF EACH SUCH INSTRUMENT RELATING TO LOCAL ECONOMIC DEVEL-
 OPMENT TO THE AUTHORITIES BUDGET OFFICE.
   § 5. Paragraphs (i) and (j) of subdivision  2  of  section  6  of  the
 public authorities law, as added by chapter 506 of the laws of 2009, are
 amended and a new paragraph (k) is added to read as follows:
   (i)  compel any authority which is deemed to be in non-compliance with
 this title and title one of this article or article nine of this chapter
 to submit to the authorities budget office  a  detailed  explanation  of
 such failure to comply; [and]
   (j)  commence  a special proceeding in supreme court, when it does not
 receive from a state or local authority upon request information, books,

 S. 8659                             3
 
 records or other documentation necessary to perform its duties,  seeking
 an order directing the production of the same[.]; AND
   (K)  COMMENCE  AN  ACTION OR SPECIAL PROCEEDING TO ANNUL THE CORPORATE
 EXISTENCE OR DISSOLVE A CORPORATION THAT HAS ACTED BEYOND  ITS  CAPACITY
 OR POWER OR TO RESTRAIN IT FROM CARRYING ON UNAUTHORIZED ACTIVITIES.
   §  6.  This  act shall take effect on the ninetieth day after it shall
 have become a law.