BILL NUMBER: S6165
SPONSOR: SKOUFIS
 
TITLE OF BILL:
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
 
PURPOSE:
The purpose of this bill is to impose greater transparency and account-
ability on those not-for-profit corporations that engage in municipal
economic development and function as an instrument and subsidiary of
local government.
 
SUMMARY OF PROVISIONS:
Section 1: Adds a new subdivision (h) to section 104 of the not-for-pro-
fit corporation law, which would require the Department of State to
transmit to the Authorities Budget Office a copy of any filed certified
of incorporation, which indicates such a Certificate has been filed on
behalf or at the behest of a municipal corporation, public authority or
district.
Section 2: Amends section 402 of the not-for-profit corporation law by
requiring those wishing to file certificates of incorporation to note
whether they have received the relevant consent of the Authorities Budg-
et Office, if applicable.
Section 3: Amends section 402 of the not-for-profit corporation law by
adding subparagraph 9 to include a statement whether the corporation is
being incorporated.
Section 4: Amends section 404 of the not-for-profit corporation law by
requiring those wishing to incorporate certain types of corporations,
such as those corporations where a majority of the board elected offi-
cials of any municipal corporation to appoint members to obtain the
consent of the Authorities Budget Office prior to filing certificates of
incorporation.
Section 5: Amends subparagraph 2 of paragraph (d) of section 1411 of the
not-for-profit corporation law by making a technical change to account
for changes added in Section 8 of this bill.
Section 6: Amends subparagraph 4 of paragraph (d) of section 1411 of the
not-for-profit corporation law by making a technical change to account
for changes added in Section 8 of this bill.
Section 7: Amends paragraph (i) of section 1411 of the not-for-profit
corporation law by requiring, regarding the mandatory public hearing to
consider the sale or lease of municipal property to a local development
corporation, that such advanced notice of said meeting is given 21 days
in advance of the hearing; describe the property at issue; describe the
proposed consideration for the sale; include an estimated fair market
value of the property at issue; and include a statement of the intended
use of the property by the corporation.
Section 8: Amend subdivision 1 and 2 of section 2 of the public authori-
ties, law by expanding the definition of "local authority" to include
certain not-for-profit corporations, such as those corporations where a
majority of board members are appointed by elected officials of any
municipal corporation or those which pay staff of a local or state
government to provide administrative support.
Section 9: Amends the public authorities law by adding a new section,
2829, which would subject all state and local authorities to the open
meetings law and freedom of information laws, as well as require such
authorities to stream their meeting in real-time.
Section 10: Sets Effective Date.
 
JUSTIFICATION:
Local development corporations (LDCs), as well as other types of not-for
profit corporations like Health Research Incorporated, are often used by
governments as a means to indirectly finance government operations and
projects. These LDCs and similar private entities, however, are exempt
from many of the constitutional and statutory provisions that guide the
operations and financial transactions conducted by local governments,
despite how, as a practical matter, they often function as an instrument
and subsidiary of local government.
While such organizations mostly do great work in developing their local
economies and serve an essential quasi-governmental role, reports from
the Authorities Budget Office, the State Comptroller, and good govern-
ment groups have exposed that LDCs and other non-profits are too
frequently used solely to circumvent these constitutional and statutory
restrictions that apply to projects directly undertaken by a local
government, as well as to circumvent transparency and public scrutiny
laws through such entities status as private organizations. This lack of
transparency, accountability, and restraint has significantly wasted
taxpayer dollars and public resources.
When organizations rely on taxpayer resources to operate, they should be
subject to strong oversight and be held accountable. With such entities
holding presently around $20 billion in outstanding debt, New York's
taxpayers deserve far more accountability and responsibility for how
their money is being spent and leveraged by such entities. To protect
the interests of the taxpayer, our localities, and the state, this bill
seeks to subject these LDCS and other similar not-for-profits to greater
governmental accountability and public transparency, as well as to reign
in some of their more problematic activities.
 
LEGISLATIVE HISTORY:
Senate
2021: S4339B, Amend and Recommit to Corporations, Authorities, and
Commissions
2022: S4339B, Passed Senate
2023: S2727B, Passed Senate
2024: S2727B, Passed Senate
Assembly
2021: A4575B, Amend and Recommit to Rules
2022: A45758, Ordered to Third Reading
2023: A3715C, Ordered to Third Reading Rules
2024: A3715C, Referred to Ways and Means
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect on the thirtieth day after it shall have
become a law; provided, however, that the provisions of subparagraph 2
of paragraph (d) and paragraph (i) of section 1411 of the not-for-profit
corporation law, as amended by sections five and seven 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.

Statutes affected:
S6165: 2829 public authorities law