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History
- Referred to corporations, authorities and commissions
- Referred to corporations, authorities and commissions
Companion bill
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Certificates of incorporation of not-for-profit corporations to include conflict of interest certification and education requirement certification
In Assembly Committee · Corporations, Authorities And Commissions · Sponsor Matthew Titone
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
Title of bill
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 corporation 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 obligations to the corporation
Purpose
Require certificates of incorporation of not-for-profit corporations to include conflict of interest certification and education requirement certification.
Summary of provisions
Section one amends subdivision (a) of section 402 of the not-for-profit corporation law by adding paragraphs (9) and (10).
Justification
Not-for-profit organizations provide valuable services to people and communities throughout New York State. To ensure that government funding and charitable contributions given to such entities are spent appropriately there needs to be accountability. This measure proposes to make sure that not-for-profits have a conflict of interest policy and that its executive officers take a course that will instruct them in their fiduciary responsibilities.
According to the Urban Institute National Center for Charitable Statistics, Not-for-profit organizations in New York State increased 40.7% from 69,545 to 97,864 through 1996 to 2006. Out of the 97,864 organizations, 60,264 are New York State public charities registered with the Internal Revenue Service (including registered congregations) representing over $120 billion in revenue and over $185 billion in assets.
This bill would require certification that the initial directors have included in their bylaws a conflict of interest policy that prohibits directors and executive officers from being involved in decisions that involve business between the corporation and another not-for-profit which the officer or director, his or her spouse and certain family members is a director or officer and requires each director or executive officer to certify that they are not affiliated with another not-for-profit that they are doing business with. If there is an affiliation, then there must be immediate disclosure.
The bill also requires executive officers of a not-for-profit within six months of the date of incorporation and then every two years thereafter, to attend and complete a course at least three hours in length, conducted by an attorney or certified public accountant to instruct them on their fiduciary responsibilities as officers of the corporation. The completion of the course must be documented as part of the corporate books and records.
Legislative history
2008: S.7731 - Referred to Corporations/A.11376 - Referred to Corporations
Fiscal implications
None.
Effective date
January 1, 2010.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.