What's happening
This bill corrects tax-related errors in the Not-for-Profit Corporation Law and Religious Corporations Law made by the Nonprofit Revitalization Act.
Why it matters
Clarifies legal references for mergers involving foreign not-for-profits. The bill updates cross-references in the Not-for-Profit Corporation Law to ensure that legal procedures for serving process and suing foreign corporations after a merger are accurate, helping avoid confusion and potential legal disputes.
Removes outdated or incorrect tax-related provisions. By eliminating references to sections of law that were incorrectly cited or no longer exist (such as section 511-a), the bill ensures that religious corporations follow the correct process when selling, mortgaging, or leasing property, reducing administrative errors and potential legal challenges.
Improves compliance and efficiency for religious and nonprofit entities. By fixing these statutory errors, the bill helps religious corporations and nonprofits more easily navigate property transactions in line with current law, ensuring smoother interactions with courts and the attorney general.
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Who cares
Headline styles
Fix Nonprofit Tax Mistakes
Plain English, a few words. Used as the page title.
Sponsors
Senator · Senate District 14
No co-sponsors yet.
History
- Committed to rules
- Advanced to third reading
- 2nd report cal.
- 1st report cal.211
- Referred to corporations, authorities and commissions
- Returned to senate
- Died in assembly
- Referred to corporations, authorities and commissions
- Delivered to assembly
- Passed senateVote 45–17
- Advanced to third reading
- 2nd report cal.
Show 2 earlier actions
- 1st report cal.785
- Referred to corporations, authorities and commissions
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5720
2019-2020 Regular Sessions
IN SENATE
May 13, 2019
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 and the religious corporations law, in relation to the correction of tax errors made by the nonprofit revitalization act
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Clause (D) of subparagraph 2 of paragraph (d) of section 906 of the not-for-profit corporation law, as amended by chapter 1058 of the laws of 1971, is amended to read as follows:
(D) An agreement that the surviving or consolidated foreign corporation may be served with process in this state in any action or special proceeding for the enforcement of any liability or obligation of any domestic corporation or of any foreign corporation, previously amenable to suit in this state, which is a constituent corporation in such merger or consolidation, and an agreement that the surviving or consolidated foreign corporation may be sued in this state in respect of any property transferred or conveyed to it as provided in paragraph [(c)] (b) of section 907 (Approval by the supreme court), or the use made of such property, or any transaction in connection therewith.
§ 2. Subdivision 1 of section 12 of the religious corporations law, as amended by chapter 555 of the laws of 2015, is amended to read as follows:
1. A religious corporation shall not sell, mortgage or lease for a term exceeding five years any of its real property without applying for and obtaining leave of the court or the attorney general therefor pursuant to section five hundred eleven of the not-for-profit corporation law as that section is modified by paragraph (d-1) of subdivision one of section two-b of this chapter [or section five hundred eleven-a of the not-for-profit corporation law], except that a religious corporation may
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11699-02-9
S. 5720 2
execute a purchase money mortgage or a purchase money security agreement creating a security interest in personal property purchased by it without obtaining leave of the court therefor.
§ 3. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the not-for-profit corporation law and the religious corporations law, in relation to the correction of tax errors made by the nonprofit revitalization act
Summary of major provisions
Section one would correct an obvious error in Not-for-Profit Corporation Law section 906(a) (1)(D) to change the cross reference from paragraph (c) of section 607 to paragraph (b). There is no paragraph (c).
Section two would amend Religious Corporations Law section 12.1 to delete a reference to section 511-a of the Not-for-Profit Corporation l law. Section 12.1 was amended to add the phrase proposed to be deleted by Section 17 Chapter 555 of the 2015 Laws.
Section three provides the effective date.
Justification
Prior to its amendment, Section 12.1 was unequivocal in requiring court approval of any religious corporation's proposed sale, lease or mortgage of "any of its real property" (subject to certain minor exceptions), pursuant to Not-for-Profit corporation Law Section 511 which in turn provides for the Attorney General approval in the Court's discretion.
Moreover, under Religious Corporations Law Section 2-b (d-1), which "borrows" certain provisions of the Not-for-Profit Corporation Law, the churches specified therein are exempt even from the Section 511 Court approval requirement.
Religious Corporation Law section 2-b.1 establishes in general the primacy of the Religious Corporation Law over the Not-for-Profit Corpo- ration Law.
The purpose of Not-for-Profit Corporation Law Section 511-a was to provide for not-for-profit corporations the alternative of Attorney General approval for Court approval.
As amended by Section 17 of Chapter 555 of the 2015 Laws, Sections 12.1 and 2-b(d-1) are in conflict.
As the annotators of 2018 McKinney's Not-for-Profit Corporation Law pocket part concluded:
Given the primacy afforded to the RCL, the mandatory breadth of section 12, the public policy favoring the protection of religious corporation property and the exemption of hierarchical (as contrasted with congrega- tional) churches from the Attorney General notice requirement, the better view would seem to be that NPCL section 511-a should be inappli- cable to the hierarchical religious corporations (and perhaps even to congregational ones)....The RCL should be amended to delete the amend- ment made by Chapter 555.
Legislative history
New Bill; May of 2019. FISCAL IMPLICATIONS:
None.
Effective date
Immediate.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.