What's happening
This bill requires state public authorities to obtain legislative approval before forming any subsidiary corporations.
Why it matters
Strengthens legislative oversight. By requiring state public authorities to get explicit legislative approval before creating subsidiaries, the bill increases democratic accountability and transparency in how these entities expand their operations.
Closes loopholes for subsidiary formation. The bill removes existing exceptions that allowed authorities to form subsidiaries for certain projects or to limit liability, meaning all future subsidiaries—regardless of purpose—must be individually approved by law.
Potentially slows down authority actions. This change could make it harder or slower for public authorities to respond to new opportunities or challenges that might require a subsidiary structure, as they must now wait for legislative action.
Continues reporting requirements. Any subsidiaries that do get approved must still adhere to the same reporting and disclosure standards as their parent authorities, maintaining a level of public scrutiny over their operations.
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Who cares
Headline styles
Legislature Must Approve Subsidiaries
Plain English, a few words. Used as the page title.
Sponsors
7 Co-sponsors
1 Multi-sponsor
History
- Referred 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.
Legislature Must Approve Subsidiaries
In Senate Committee · Corporations, Authorities And Commissions · Sponsor Michael H. Ranzenhofer
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3089
2019-2020 Regular Sessions
IN ASSEMBLY
January 28, 2019
Introduced by M. of A. COLTON, ZEBROWSKI, ABINANTI, JAFFEE, BRONSON -- Multi-Sponsored by -- M. of A. McDONOUGH -- read once and referred to the Committee on Corporations, Authorities and Commissions
AN ACT to amend the public authorities law, in relation to prohibiting the formation of a subsidiary of a public authority without prior permission of the legislature
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 1 of section 2827-a of the public authorities law, as added by chapter 506 of the laws of 2009, is amended to read as follows:
1. Notwithstanding any law to the contrary, no state authority shall hereafter have the power to organize any subsidiary corporation unless the legislature shall have enacted a law granting such state authority such power for the organization of a specific corporation[, provided, however, that a state authority may organize a subsidiary corporation pursuant to the following requirements:
a. the purpose for which the subsidiary corporation shall be organized shall be for a project or projects which the state authority has the power to pursue pursuant to its corporate purposes;
b. the primary reason for which the subsidiary corporation shall be organized shall be to limit the potential liability impact of the subsidiary's project or projects on the authority or because state or federal law requires that the purpose of a subsidiary be undertaken through a specific corporate structure; and
c. the]. Any subsidiary corporation shall make the reports and other disclosures as are required of state authorities, unless the subsidiary corporation's operations and finances are consolidated with those of the authority of which it is a subsidiary.
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01731-01-9
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.