BILL NUMBER: S9576
SPONSOR: BAILEY
 
TITLE OF BILL:
An act to amend the private housing finance law, in relation to
elections involving board members, by-law amendments, or dissolution,
reconstitution or conversion of mutual housing companies
 
PURPOSE OF THE GENERAL IDEA OF THE BILL:
To improve the fairness, transparency, and participation in the gover-
nance of mutual housing companies by requiring secure voting procedures,
clarifying eligibility for board service, and establishing a reasonable
quorum threshold for large developments.
 
SUMMARY OF PROVISIONS:
Section 1 of the bill amends subdivisions 1 and 5 of section 13-c of the
private housing finance law and adds a new subdivision 6, which reads as
follows:
Require that all shareholder votes concerning the election of board
members, by-law amendments, dissolution, reconstitution, conversion of a
mutual housing company, and certain special assessments be conducted by
secret ballot, and authorize such ballots to be cast electronically
through a neutral third party or in person, with absentee voting permit-
ted as provided by law.
Replace references to "tenants" with "shareholders" to clarify voting
eligibility; Provide that no otherwise eligible person shall be disqual-
ified from being a candidate for, or serving on, a board of directors
solely based on arrears, unless such arrears exceed two months of main-
tenance at the time of nomination, except where otherwise permitted
pursuant to duly approved by-laws; and
Establish that, for mutual housing companies with one thousand or more
shareholders, a quorum for the election of board members shall be twen-
ty-five percent of shareholders entitled to vote.
Section 2 of the bill provides that this act shall take effect imme-
diately.
 
JUSTIFICATION:
This bill improves the administration and governance of mutual housing
companies by establishing clear, uniform standards for shareholder
voting, board eligibility, and quorum requirements.
The bill authorizes the use of secure electronic voting administered by
a neutral third party and requires the use of secret ballots for speci-
fied corporate actions. These provisions promote the integrity, accessi-
bility, and confidentiality of shareholder voting.
The bill also clarifies eligibility standards for service on boards of
directors by providing that arrears shall not serve as the sole basis
for disqualification unless such arrears exceed two months of mainte-
nance at the time of nomination, while preserving the ability of housing
companies to adopt alternative standards through duly approved by-laws.
In addition, the bill establishes a 25 percent quorum requirement for
board elections in mutual housing companies with one thousand or more
shareholders, ensuring that elections may proceed while maintaining
meaningful shareholder participation.
This bill would promote fair and efficient governance practices in mutu-
al housing companies without imposing any fiscal impact on the state.
 
LEGISLATIVE HISTORY:
New bill.
 
FISCAL IMPLICATIONS:
None to the state.
 
EFFECTIVE DATE:
This act shall take effect immediately.