S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3715
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 7, 2023
                                ___________
 
 Introduced  by  M. of A. PAULIN, OTIS, FAHY -- read once and referred to
   the Committee on Corporations, Authorities and Commissions
 
 AN ACT to amend  the  not-for-profit  corporation  law  and  the  public
   authorities law, in relation to the applicability of open meetings and
   freedom of information laws to certain not-for-profit corporations

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section  104  of  the  not-for-profit  corporation  law  is
 amended by adding a new paragraph (h) to read as follows:
   (H)  THE  DEPARTMENT  SHALL TRANSMIT ELECTRONICALLY TO THE AUTHORITIES
 BUDGET OFFICE A COPY OF EVERY  CERTIFICATE  OF  INCORPORATION  FILED  OR
 DELIVERED  WHERE  THE INCORPORATOR HAS INDICATED ON THE CERTIFICATE THAT
 HE OR SHE IS FILING SAID CERTIFICATE ON THE BEHALF OR AT THE BEHEST OF A
 MUNICIPAL CORPORATION, STATE OR LOCAL AUTHORITY, OR DISTRICT.
   § 2. Subparagraph 2-b of paragraph (a) of section 402 of the  not-for-
 profit  corporation  law, as added by chapter 23 of the laws of 2014, is
 amended to read as follows:
   (2-b) If it is not formed to engage in any activity or for any purpose
 requiring consent or approval of any state official, department,  board,
 agency  or  other body, OR DOES NOT REQUIRE CONSENT PURSUANT TO SUBPARA-
 GRAPH (2) OR (3) OF PARAGRAPH (W) OF SECTION 404 (APPROVALS, NOTICES AND
 CONSENTS) a statement that no such consent or approval is required. Such
 statement shall be deemed conclusive  for  purposes  of  filing  by  the
 department  of  state.  If  subsequent  to submitting the certificate of
 incorporation for filing, the corporation plans to engage in any  activ-
 ity  requiring  consent or approval pursuant to section 404 [(approvals]
 (APPROVALS, notices and consents) of this chapter, the corporation shall
 obtain such consent or approval and accordingly amend its certificate of
 incorporation pursuant to article eight of this chapter.
   § 3. Paragraph (a) of section 402 of  the  not-for-profit  corporation
 law is amended by adding a new subparagraph 9 to read as follows:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04263-01-3
              

 A. 3715                             2
 
   (9)  A  STATEMENT WHETHER THE CORPORATION IS BEING INCORPORATED ON THE
 BEHALF OR AT THE BEHEST OF ANY MUNICIPAL  CORPORATION,  STATE  OR  LOCAL
 AUTHORITY,  OR  DISTRICT.  IF  SO,  THE INCORPORATOR SHALL IDENTIFY SUCH
 MUNICIPAL CORPORATION, STATE OR LOCAL AUTHORITY, OR DISTRICT.
   §  4.  Section 404 of the not-for-profit corporation law is amended by
 adding a new paragraph (w) to read as follows:
   (W) EVERY CERTIFICATE OF  INCORPORATION  WHICH  INCLUDES  ANY  OF  THE
 FOLLOWING  SHALL HAVE ENDORSED THEREON OR ANNEXED THERETO THE CONSENT OF
 THE DIRECTOR OF THE AUTHORITIES BUDGET OFFICE:
   (1) INCLUDES AMONG ITS PURPOSES THE RELIEVING AND  REDUCING  OF  UNEM-
 PLOYMENT, PROMOTING AND PROVIDING FOR ADDITIONAL AND MAXIMUM EMPLOYMENT,
 BETTERING  AND  MAINTAINING  JOB  OPPORTUNITIES, INSTRUCTING OR TRAINING
 INDIVIDUALS TO IMPROVE OR DEVELOP  THEIR  CAPABILITIES  FOR  SUCH  JOBS,
 CARRYING ON SCIENTIFIC RESEARCH FOR THE PURPOSE OF AIDING A COMMUNITY OR
 GEOGRAPHICAL AREA BY ATTRACTING NEW INDUSTRY TO THE COMMUNITY OR AREA OR
 BY  ENCOURAGING  THE DEVELOPMENT OF, OR RETENTION OF, AN INDUSTRY IN THE
 COMMUNITY OR AREA, AND LESSENING THE BURDENS OF GOVERNMENT AND ACTING IN
 THE PUBLIC INTEREST, OR ANY ABBREVIATION  OR  DERIVATIVE  THEREOF  IN  A
 CONTEXT THAT INDICATES OR IMPLIES THAT THE CORPORATION IS FORMED FOR ANY
 OF THE ABOVE PURPOSES;
   (2)  INDICATES  THAT  ONE OR MORE INDIVIDUALS WHO SERVE AS OFFICERS OR
 EMPLOYEES OF ANY MUNICIPAL CORPORATION, STATE  OR  LOCAL  AUTHORITY,  OR
 DISTRICT  SHALL: (I) SELECT EITHER A MAJORITY OF THE CORPORATION'S BOARD
 OF DIRECTORS OR THE CORPORATION'S CHIEF EXECUTIVE OFFICER; (II)  CONSTI-
 TUTE A MAJORITY OF THE VOTING STRENGTH THAT SELECTS EITHER A MAJORITY OF
 THE  CORPORATION'S  BOARD OF DIRECTORS OR THE CORPORATION'S CHIEF EXECU-
 TIVE OFFICER; OR (III) SERVE AS: (A) A  MAJORITY  OF  THE  CORPORATION'S
 BOARD  OF  DIRECTORS; OR (B) IN HIS OR HER OFFICIAL CAPACITY, THE CORPO-
 RATION'S CHIEF EXECUTIVE OFFICER; OR (C) IN HIS OR HER OFFICIAL  CAPACI-
 TY, A DIRECTOR IN THE CORPORATION; OR
   (3)  INDICATES  THAT  SUCH  CORPORATION  IS  BEING INCORPORATED ON THE
 BEHALF OR AT THE BEHEST OF ANY MUNICIPAL  CORPORATION,  STATE  OR  LOCAL
 AUTHORITY, OR DISTRICT.
   THE DIRECTOR SHALL MAKE SUCH INQUIRY INTO THE PURPOSES OF THE PROPOSED
 CORPORATION AS HE OR SHE SHALL DEEM ADVISABLE.
   §  5.  Paragraph (a) of section 1411 of the not-for-profit corporation
 law, as amended by chapter 847 of the laws of 1970, is amended  to  read
 as follows:
   (a) Purposes.
   This  section  shall  provide  an  additional  and alternate method of
 incorporation or reincorporation of not-for-profit corporations for  any
 of  the  purposes set forth in this paragraph and shall not be deemed to
 alter, impair or diminish the purposes, rights, powers or privileges  of
 any  corporation heretofore or hereafter incorporated under this section
 or under the stock or business corporation  laws.  Corporations  may  be
 incorporated  or  reincorporated  under  this  section as not-for-profit
 local development corporations operated for the  exclusively  charitable
 or public purposes of relieving and reducing unemployment, promoting and
 providing for additional and maximum employment, bettering and maintain-
 ing job opportunities, instructing or training individuals to improve or
 develop  their  capabilities  for  such  jobs,  carrying  on  scientific
 research for the purpose of aiding a community or geographical  area  by
 attracting  new  industry to the community or area or by encouraging the
 development of, or retention of, an industry in the community  or  area,
 and  lessening the burdens of government and acting in the public inter-
 est, and any one or more counties, cities,  towns  or  villages  of  the
 A. 3715                             3
 
 state,  or  any  combination  thereof,  or  the New York job development
 authority in exercising its power under the public  authorities  law  to
 encourage  the organization of local development corporations, may cause
 such corporations to be incorporated by public officers or private indi-
 viduals  or reincorporated upon compliance with the requirements of this
 section, and it is hereby found, determined and declared that in  carry-
 ing  out  said  purposes and in exercising the powers conferred by para-
 graph (b) such corporations will be performing an essential governmental
 function. A NOT-FOR-PROFIT CORPORATION MAY NOT INCORPORATE OR REINCORPO-
 RATE UNDER THIS SECTION IF ITS SOLE CORPORATE PURPOSE IS  FOR  LESSENING
 THE BURDENS OF GOVERNMENT AND ACTING IN THE PUBLIC INTEREST.
   §  6.  Subparagraph 2 of paragraph (d) of section 1411 of the not-for-
 profit corporation law is amended to read as follows:
   (2) Notwithstanding the provisions of any general,  special  or  local
 law,  charter  or  ordinance  to the contrary, such sale or lease may be
 made without appraisal (EXCEPT AS MAY BE NECESSARY IN REGARD TO SUBPARA-
 GRAPH (4) OF THIS PARAGRAPH), public notice[,] (except  as  provided  in
 subparagraph (4) OF THIS PARAGRAPH), or public bidding for such price or
 rental  and  upon  such  terms as may be agreed upon between the county,
 city, town or village and said local development corporation;  provided,
 however,  that  in case of a lease the term may not exceed [ninety-nine]
 TWENTY-FIVE years and provided, further, that in cities having  a  popu-
 lation of one million or more, no such sale or lease shall be made with-
 out the approval of a majority of the members of the borough improvement
 board of the borough in which such real property is located.
   §  7.  Subparagraph 4 of paragraph (d) of section 1411 of the not-for-
 profit corporation law is amended to read as follows:
   (4) Notice of such hearing shall be published at least  [ten]  TWENTY-
 ONE  days before the date set for the hearing in such publication and in
 such manner as may be designated by the local legislative body,  or  the
 board  of estimate as the case may be. SUCH NOTICE SHALL ALSO INCLUDE: A
 DESCRIPTION OF THE PROPERTY AT ISSUE; THE VALUE OF THE PROPOSED  CONSID-
 ERATION TO BE RECEIVED FROM THE SALE OR LEASE; THE ESTIMATED FAIR MARKET
 VALUE  OF  THE ASSET; AND A STATEMENT OF THE INTENDED USE OR DISPOSITION
 OF THE PROPERTY BY THE LOCAL DEVELOPMENT CORPORATION.
   § 8. Paragraph (i) of section 1411 of the  not-for-profit  corporation
 law is amended to read as follows:
   (i)  CONTRACTS  BETWEEN  A MUNICIPAL CORPORATION, PUBLIC AUTHORITY, OR
 DISTRICT AND A LOCAL DEVELOPMENT CORPORATION.
   ANY CONTRACT OR OTHER AGREEMENT BETWEEN  A  LOCAL  DEVELOPMENT  CORPO-
 RATION  AND A MUNICIPAL CORPORATION, STATE AUTHORITY OR LOCAL AUTHORITY,
 OR DISTRICT FOR ONE OR MORE OF THE PURPOSES ENUMERATED IN PARAGRAPH  (A)
 OF THIS SECTION SHALL: (1) CAUSE THE LOCAL DEVELOPMENT CORPORATION TO BE
 DEFINED  AS A LOCAL AUTHORITY PURSUANT TO SUBDIVISION TWO OF SECTION TWO
 OF THE PUBLIC AUTHORITIES LAW; (2)  PROVIDE  FOR  THE  MUNICIPAL  CORPO-
 RATION,  STATE AUTHORITY OR LOCAL AUTHORITY, OR DISTRICT TO RECEIVE FAIR
 AND ADEQUATE CONSIDERATION; (3) BE SUBJECT TO THE REQUIREMENTS OF  ARTI-
 CLE  FIVE-A  OF  THE  GENERAL  MUNICIPAL LAW; AND (4) HAVE A TERM NOT TO
 EXCEED TWENTY-FIVE YEARS, SUBJECT TO ONE OR MORE SUBSEQUENT RENEWALS FOR
 A TERM NOT TO EXCEED TWENTY-FIVE YEARS EACH UPON THE MUTUAL  CONSENT  OF
 THE  PARTIES;  PROVIDED  HOWEVER THAT A CONTRACT WITH A MUNICIPAL CORPO-
 RATION SHALL NOT BE USED TO FINANCE THE  MUNICIPAL  CORPORATION'S  OPER-
 ATIONS OR TO ACQUIRE OR IMPROVE AN ASSET FOR USE OF THE MUNICIPAL CORPO-
 RATION.
   (J)  Effect of section.
 A. 3715                             4
 
   Corporations  incorporated  or reincorporated under this section shall
 be organized and operated exclusively for  the  purposes  set  forth  in
 paragraph  (a)  OF  THIS  SECTION, shall have, in addition to the powers
 otherwise conferred by law, the powers conferred  by  paragraph  (c)  OF
 THIS SECTION and shall be subject to all the restrictions [and], limita-
 tions  AND  OBLIGATIONS imposed by [paragraph] PARAGRAPHS (e) [and para-
 graph], (g) AND (I) OF THIS SECTION.   In so far as  the  provisions  of
 this  section  are  inconsistent  with  the provisions of any other law,
 general or special, the provisions of this section shall be  controlling
 as to corporations incorporated or reincorporated hereunder.
   §  9.  Subdivision  2  of  section 2 of the public authorities law, as
 amended by chapter 257 of the laws  of  2011,  is  amended  to  read  as
 follows:
   2. "local authority" shall mean (a) a public authority or public bene-
 fit  corporation  created by or existing under this chapter or any other
 law of the state of New York whose members do not hold a civil office of
 the state, are not appointed by the governor or  are  appointed  by  the
 governor specifically upon the recommendation of the local government or
 governments;  (b) a not-for-profit corporation, OTHER THAN A FIRE CORPO-
 RATION, STATEWIDE ASSOCIATION OF LOCAL GOVERNMENTS OR  LOCAL  OFFICIALS,
 OR  BUSINESS  IMPROVEMENT  DISTRICT,  affiliated  with, sponsored by, or
 created by a county, city, town  or  village  government;  (c)  a  local
 industrial developmental agency or authority or other local public bene-
 fit  corporation;  (d)  an affiliate of such local authority; [or] (e) a
 land bank corporation created pursuant to article sixteen  of  the  not-
 for-profit  corporation  law; OR (F) A NOT-FOR-PROFIT CORPORATION, OTHER
 THAN A FIRE CORPORATION OR STATEWIDE ASSOCIATION OF LOCAL GOVERNMENTS OR
 LOCAL OFFICIALS, OR BUSINESS IMPROVEMENT DISTRICT, THAT (I)  HAS  ISSUED
 OR  HAS THE AUTHORITY TO ISSUE TAX EXEMPT DEBT OR (II) PROVIDES STATE OR
 MUNICIPAL TAX EXEMPTIONS THROUGH ITS PARTICIPATION IN A  PROJECT  UNDER-
 TAKEN IN FURTHERANCE OF ITS PURPOSES.
   FOR  THE  PURPOSES  OF  PARAGRAPH (B) OF THE OPENING PARAGRAPH OF THIS
 SUBDIVISION, "AFFILIATED WITH, SPONSORED BY, OR  CREATED  BY  A  COUNTY,
 CITY, TOWN OR VILLAGE GOVERNMENT" SHALL ALSO INCLUDE, BUT NOT BE LIMITED
 TO,  ENTITIES:   (A) WHERE ONE OR MORE INDIVIDUALS WHO SERVE AS OFFICERS
 OR EMPLOYEES OF ANY COUNTY, CITY, TOWN, VILLAGE:   (I) SELECT  EITHER  A
 MAJORITY  OF  THE NOT-FOR-PROFIT CORPORATION'S BOARD OF DIRECTORS OR THE
 NOT-FOR-PROFIT CORPORATION'S CHIEF EXECUTIVE OFFICER; (II) CONSTITUTE  A
 MAJORITY  OF  THE  VOTING STRENGTH THAT SELECTS EITHER A MAJORITY OF THE
 NOT-FOR-PROFIT CORPORATION'S BOARD OF  DIRECTORS  OR  THE  CORPORATION'S
 CHIEF  EXECUTIVE  OFFICER; OR (III) SERVE AS: (1) A MAJORITY OF THE NOT-
 FOR-PROFIT CORPORATION'S BOARD OF DIRECTORS; OR (2) IN HIS OR HER  OFFI-
 CIAL CAPACITY, THE NOT-FOR-PROFIT CORPORATION'S CHIEF EXECUTIVE OFFICER;
 OR (3) IN HIS OR HER OFFICIAL CAPACITY, A DIRECTOR IN THE NOT-FOR-PROFIT
 CORPORATION;  OR  (B)  WHICH PAY STAFF OF A STATE OR LOCAL GOVERNMENT OR
 STATE OR  LOCAL  AUTHORITY  TO  PROVIDE  ADMINISTRATIVE  OR  OPERATIONAL
 SUPPORT.
   §  10.  The  public authorities law is amended by adding a new section
 2829 to read as follows:
   § 2829. STATE AND LOCAL AUTHORITIES SUBJECT TO THE OPEN  MEETINGS  AND
 FREEDOM  OF  INFORMATION  LAWS. ALL STATE AND LOCAL AUTHORITIES, AS SUCH
 TERMS ARE DEFINED IN SECTION TWO OF THIS CHAPTER, AS WELL AS ALL SUBSID-
 IARIES AND AFFILIATES OF SUCH STATE AND LOCAL AUTHORITIES, AS SUCH TERMS
 ARE DEFINED IN SECTION TWO OF THIS CHAPTER,  SHALL  BE  SUBJECT  TO  THE
 PROVISIONS OF ARTICLES SIX AND SEVEN OF THE PUBLIC OFFICERS LAW RELATING
 TO  THE  FREEDOM OF INFORMATION AND OPEN MEETINGS LAWS RESPECTIVELY. ALL
 A. 3715                             5
 
 STATE AND LOCAL AUTHORITIES, AS WELL AS ALL SUBSIDIARIES AND  AFFILIATES
 OF  SUCH  STATE AND LOCAL AUTHORITIES, SHALL, TO THE EXTENT PRACTICABLE,
 STREAM ALL OPEN MEETINGS AND PUBLIC HEARINGS ON  ITS  WEBSITE  IN  REAL-
 TIME,  POST VIDEO RECORDINGS OF ALL OPEN MEETINGS AND PUBLIC HEARINGS ON
 ITS WEBSITE WITHIN FIVE BUSINESS DAYS OF  THE  MEETING  OR  HEARING  AND
 MAINTAIN SUCH RECORDINGS FOR A PERIOD OF NOT LESS THAN FIVE YEARS.
   §  11.  This act shall take effect on the thirtieth day after it shall
 have become a law; provided, however, that the  provisions  of  subpara-
 graph  2  of paragraph (d) and paragraph (i) of section 1411 of the not-
 for-profit corporation law, as amended by sections six and eight of this
 act shall not apply retroactively to contracts or agreements  between  a
 local  development  corporation  and  a  municipal corporation, state or
 local authority, or district entered into prior to the effective date of
 this act.