NY State Senate Bill 2021-S9047

Senate Bill S9047

2021-2022 Legislative Session

Modernizes provisions of law relating to members, directors and officers to align with current practices, streamline procedures and eliminate unnecessary regulatory burdens

download bill text pdf

Archive: Last Bill Status Via A9969 - Passed Senate

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

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jun 01, 2022	returned to assembly passed senate 3rd reading cal.1825 substituted for s9047
Jun 01, 2022	substituted by a9969 ordered to third reading cal.1825 committee discharged and committed to rules
May 05, 2022	referred to corporations, authorities and commissions

Votes

- Jun 1, 2022 - Floor Vote
  A9969
  
  63
  
  Aye
  
  0
  
  Nay
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Floor Vote: Jun 1, 2022
      
      aye (63)
      
      Addabbo Jr.
      
      Akshar
      
      Bailey
      
      Biaggi
      
      Borrello
      
      Boyle
      
      Breslin
      
      Brisport
      
      Brooks
      
      Brouk
      
      Cleare
      
      Comrie
      
      Cooney
      
      Felder
      
      Gallivan
      
      Gaughran
      
      Gianaris
      
      Gounardes
      
      Griffo
      
      Harckham
      
      Helming
      
      Hinchey
      
      Hoylman-Sigal
      
      Jackson
      
      Jordan
      
      Kaminsky
      
      Kaplan
      
      Kavanagh
      
      Kennedy
      
      Krueger
      
      Lanza
      
      Liu
      
      Mannion
      
      Martucci
      
      Mattera
      
      May
      
      Mayer
      
      Myrie
      
      O'Mara
      
      Oberacker
      
      Ortt
      
      Palumbo
      
      Parker
      
      Persaud
      
      Ramos
      
      Rath III
      
      Reichlin-Melnick
      
      Ritchie
      
      Rivera
      
      Ryan
      
      Salazar
      
      Sanders Jr.
      
      Savino
      
      Sepúlveda
      
      Serino
      
      Serrano
      
      Skoufis
      
      Stavisky
      
      Stec
      
      Stewart-Cousins
      
      Tedisco
      
      Thomas
      
      Weik
  Jun 1, 2022 - Rules Committee Vote
  S9047
  
  21
  
  Aye
  
  0
  
  Nay
  
  0
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Rules Committee Vote: Jun 1, 2022
      
      aye (21)
      
      Addabbo Jr.
      
      Bailey
      
      Biaggi
      
      Boyle
      
      Breslin
      
      Comrie
      
      Gallivan
      
      Gianaris
      
      Griffo
      
      Kennedy
      
      Krueger
      
      Lanza
      
      Liu
      
      Mayer
      
      O'Mara
      
      Ortt
      
      Parker
      
      Ritchie
      
      Savino
      
      Sepúlveda
      
      Stewart-Cousins

2021-S9047 (ACTIVE) - Details

See Assembly Version of this Bill:: A9969
Law Section:: Not-for-Profit Corporation Law
Laws Affected:: Amd §§614, 705 & 708, N-PC L

2021-S9047 (ACTIVE) - Summary

Modernizes provisions of law relating to members, directors and officers to align with current practices, streamline procedures and eliminate unnecessary regulatory burdens.

2021-S9047 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S9047

SPONSOR: COMRIE
 
TITLE OF BILL:

An act to amend the not-for-profit corporation law, in relation to
modernizing such law to align with current practices, streamlining
procedures, and eliminating unnecessary regulatory burdens

 
PURPOSE:

Relates to the modernization of not-for-profit law to align with current
industry practices related to board member voting and increased usage of
electronic portal technology.

 
SUMMARY OF PROVISIONS:

Section 1. Amends paragraph (a) of section 614 of the not-for-profit
'corporation law to explicitly allow unanimous consent of members to act
without a meeting by electronic means in addition to "electronic mail".

Section 2. Amends paragraph (c) on section 705 of the not-for-profit

corporation law to allows for a director apponted or elected to fill a
vacancy to hold office until the end of the term the director as
appointed or elected to fill.

Section 3. Amends paragraph (b) of section 7C8 of the not-for-profit
corporation law to explicitly allow unanimous consent of the Board to
act .without a meeting by electronic means in addition to "electronic
mail".

Section 4. Amends paragraph (d) of section 708 of the not-for-profit
corporation law to clarify language ensuring that conflicted directors
who leave a meeting are still present for purposes of a quorum.

Section 5 is the ettective date.

 
JUSTIFICATION:

Certain technical fixes to New York's Not-for-Profit Corporation Law
(N-PCL) are needed to account for modern technology and to align with
current practices of not-for-profits. Organizations routinely use vari-
ous electronic portals to collect votes because it is more efficient
than collecting votes by email. This bill would update the law to
explicitly state that the use of such other electronic means is permis-
sible.

Additionally, replacement directors can only be elected by the board to
hold office until the next annual members or directors meeting.  Some
practitioners consider this procedure problematic when the board is
classified and a directorship of a class that ends after the next annual
meeting needs to be filled. This bill would amend this section to
provide that vacancies are to be filled for.the remainder of an unex-
pired term, but also allow a board to select a different period that
concludes at an annual meeting in order to rebalance uneven class sizes
ar achieve other objectives.

Finally, under the N-PCL an action is only approved if a quorum is pres-
ent at the time of the vote. In some instances, a meeting begins with a
quorum, but one or more directors must leave the meeting due to
conflicts, which may result in disrupting the quorum. This bill clari-
fies that conflicted directors who leave a meeting do not disturb the
quorum-These minor technical fixes to the current law will allow nonpro-
fits to operate more efficiently.

 
LEGISLATIVE HISTORY:

New Bill.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
Immediately.

2021-S9047 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9047
 
                             I N  S E N A T E
 
                                May 5, 2022
                                ___________
 
 Introduced  by  Sen.  COMRIE -- read twice and ordered printed, and when
   printed to be committed to the Committee on Corporations,  Authorities
   and Commissions
 
 AN  ACT  to  amend  the  not-for-profit  corporation law, in relation to
   modernizing such law to align  with  current  practices,  streamlining
   procedures, and eliminating unnecessary regulatory burdens

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph (a) of section 614 of the  not-for-profit  corpo-
 ration law, as amended by chapter 358 of the laws of 2015, is amended to
 read as follows:
   (a) Whenever, under this chapter, members are required or permitted to
 take any action by vote, such action may be taken without a meeting upon
 the  consent  of  all  of  the  members  entitled to vote thereon, which
 consent shall set forth the action so taken. Such consent may be written
 or electronic. If written, the consent must be executed by the member or
 the member's authorized officer, director, employee or agent by  signing
 such  consent  or  causing  his  or  her signature to be affixed to such
 consent by any reasonable means including but not limited  to  facsimile
 signature.  If  electronic, the transmission of the consent must be sent
 by electronic mail OR OTHER  ELECTRONIC  MEANS  and  set  forth,  or  be
 submitted  with,  information from which it can reasonably be determined
 that the transmission was authorized by the member. This paragraph shall
 not be construed to alter or modify any provision in  a  certificate  of
 incorporation not inconsistent with this chapter under which the written
 consent  of  less  than  all  of the members is sufficient for corporate
 action.
   § 2. Paragraph (c) of section 705 of  the  not-for-profit  corporation
 law is amended to read as follows:
   (c)  [A] UNLESS OTHERWISE PROVIDED IN THE CERTIFICATE OF INCORPORATION
 OR BYLAWS, A director elected or appointed to fill a vacancy IN AN UNEX-
 PIRED TERM shall hold office until the [next annual meeting at which the
 election of directors is in the regular order of business]  END  OF  THE
 TERM  WHICH THE DIRECTOR WAS ELECTED OR APPOINTED TO FILL, OR FOR A TERM
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD15478-02-2
 S. 9047                             2
 
 TO BE DETERMINED BY THE BOARD WHICH ENDS AT AN ANNUAL  MEETING,  SUBJECT
 TO  THE LIMITATIONS ON TERMS OF OFFICE IN PARAGRAPH (B) OF SECTION SEVEN
 HUNDRED THREE OF THIS ARTICLE, and until his  successor  is  elected  or
 appointed and qualified.
   §  3.  Paragraph  (b) of section 708 of the not-for-profit corporation
 law, as amended by chapter 549 of the laws of 2013, is amended  to  read
 as follows:
   (b) Unless otherwise restricted by the certificate of incorporation or
 the  by-laws,  any action required or permitted to be taken by the board
 or any committee thereof may be taken without a meeting if  all  members
 of  the  board  or the committee consent to the adoption of a resolution
 authorizing the action. Such consent may be written  or  electronic.  If
 written,  the  consent  must be executed by the director by signing such
 consent or causing his or her signature to be affixed to such consent by
 any reasonable means including, but not limited to, facsimile signature.
 If electronic, the transmission of the consent must be sent by electron-
 ic mail OR OTHER ELECTRONIC MEANS and set forth, or be  submitted  with,
 information  from  which it can reasonably be determined that the trans-
 mission was authorized by the director. The resolution and  the  written
 consents thereto by the members of the board or committee shall be filed
 with the minutes of the proceedings of the board or committee.
   §  4.  Paragraph  (d) of section 708 of the not-for-profit corporation
 law, as amended by chapter 555 of the laws of 2015, is amended  to  read
 as follows:
   (d) Except as otherwise provided in this chapter, the vote of a major-
 ity  of  the  directors  present at the time of the vote, if a quorum is
 present at such time, shall be the act of the board. Directors  who  are
 present  at  a  meeting  but  not present at the time of a vote due to a
 conflict of interest or related party transaction shall be determined to
 be present at the time of the vote  for  purposes  of  [this  paragraph]
 DETERMINING IF A QUORUM IS PRESENT AT SUCH TIME.
   § 5. This act shall take effect immediately.

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