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Sponsors
Senator · Senate District 61
No co-sponsors yet.
History
- Committed to rules
- Advanced to third reading
- 2nd report cal.
- 1st report cal.1022
- Print number 5370b
- Amend (t) and recommit to corporations, authorities and commissions
- Referred to corporations, authorities and commissions
- Print number 5370a
- Amend and recommit to corporations, authorities and commissions
- Referred to corporations, authorities and commissions
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Relates to an employee of a not-for-profit corporation serving as chair of the board
In Assembly Committee · Corporations, Authorities And Commissions · Sponsor James F. Brennan
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 an employee of a not-for-profit corporation serving as chair of the board
Purpose or general idea of bill
To establish certain procedures to allow the board of a not-for-profit corporation to approve the appointment of an employee of the corporation to serve as chairperson of its board of directors.
Summary of specific provisions
Section one - would allow an employee of a nonprofit corporation to serve as chairperson of the board of directors provided that the appointment is approved by two-thirds of the entire board and sets forth in writing the reasons for approval. The bill further adds that such employee/chairperson shall not be considered an "independent director" for the purposes of the not-for-profit corporation law.
Section two - of the bill provides that this act shall take effective on the same date and in the same manner as section 73 of Chapter 549 of the Laws of 2013, takes effect. The effective date of section 73 has been extended by Chapter 81 of the Laws of 2014 and Chapter 388 of the Laws of 2015, and the effective date is January 1, 2017.
Justification
In 2013, the legislature passed and the Governor approved the Not-For-Profit Revitalization Act of 2013. One of its provisions (§ 712(f) of the NFP Corporation Law) prohibited an employee of the corporation from serving as chairperson of the board of directors.
After enactment of this statute, it came to the attention of the legislature that this provision would create hardship for certain nonprofit organizations, such as public interest groups with student board members and trade associations. In 2014 and 2015 the legislature agreed to postpone implementation of this provision to study this issue.
This bill strikes a balance by giving a nonprofit corporation the flexibility to elect an employee to serve as chairperson provided that a super-majority of the entire board approves the appointment, and that such board action and the reasons therefore are fully documented.
Prior legislative history
In 2014, the Governor approved Chapter 81 of the Laws of 2014 to postpone the effective date of subdivision "f' of § 712 of the NFP Corporation Law. The effective date of section 712 subdivision "f' has been extended by Chapter 81 of the Laws of 2014 and Chapter 388 of the Laws of 2015.
Fiscal implications
None
Effective date
This act shall take effect on the same date and in the same manner as section 73 of Chapter 549 of the Laws of 2013, takes effect. The effective date of section 73 has been extended by Chapter 81 of the Laws of 2014 and Chapter 388 of the Laws of 2015, and the effective date is January 1, 2017.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.