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A02631 Summary:

BILL NOA02631A
 
SAME ASSAME AS S00977-A
 
SPONSORThiele
 
COSPNSROtis
 
MLTSPNSR
 
Add §8, amd §§2800, 2824 & 6, Pub Auth L; amd §104, N-PC L
 
Relates to reviews by the authorities budget office; grants the authorities budget office the authority to commence an action or special proceeding to annul the corporate existence or dissolve a corporation that has acted beyond its capacity or power; makes related provisions.
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A02631 Actions:

BILL NOA02631A
 
01/19/2021referred to corporations, authorities and commissions
03/11/2021amend and recommit to corporations, authorities and commissions
03/11/2021print number 2631a
05/19/2021reported referred to codes
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A02631 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A2631A
 
SPONSOR: Thiele
  TITLE OF BILL: An act to amend the public authorities law and the not-for-profit corpo- ration law, in relation to reviews by the authority budget office and granting the authorities budget office the authority to commence an action or special proceeding to annul the corporate existence or dissolve a corporation that has acted beyond its capacity or power or to restrain it from carrying on unauthorized activities   PURPOSE OR GENERAL IDEA OF BILL: To increase oversight powers of the Authorities Budget Office.   SUMMARY OF PROVISIONS: Section 1. Requires that a public authority publish a response to recom- mendations made by the Authorities Budget Office in any reports or letters within 30 days of receiving such recommendations. If the Author- ities Budget Office makes recommendations for corrective action, the authority had 180 days to respond detailing the corrective actions taken, and if not, why the recommendations were not implemented. Failure to comply will make the authority delinquent in its reporting require- ments. Section 2. Makes the knowing and willful submission of a false financial report to the Authorities Budget Office perjury in the third degree. Section 3. Allows the Authorities Budget Office to remove authority board members that fail to complete state mandated training. Any board member that has not completed their mandated training would be notified of their suspension for three months for failure to complete their training. The suspension ends when the person completes the training, unless they fail to complete it before the three months, at which time the person would be removed from the board. The individual could be reinstated if they complete the training. Section 4. Directs the Department of State to notify the Authorities Budget Office of the creation of any new non-profit local development corporations. Section 5. Provides the Authorities Budget Office power to commence an action or proceeding to annul the corporate existence or dissolve a corporation that has acted beyond its capacity or power, or restrain it from carrying on unauthorized activities. Section 6. Effective Date.   JUSTIFICATION: Public authorities and public benefit corporations are corporate instru- ments of the State created by the Legislature to further public inter- ests. In New York, these authorities are responsible for the develop- ment, operation and maintenance of critical public infrastructure, including bridges, roads utilities and parks. The public deserves assurances that these entities are acting in their best interests. This legislation provides more oversight powers to the Authorities Budget Office to improve public authority governance and create greater transparency and accountability to taxpayers.   PRIOR LEGISLATIVE HISTORY: 2020: S8659/A10745   FISCAL IMPLICATIONS: None.   EFFECTIVE DATE: This act shall take effect on the ninetieth day after it shall become law.
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A02631 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         2631--A
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 19, 2021
                                       ___________
 
        Introduced by M. of A. THIELE -- read once and referred to the Committee
          on  Corporations, Authorities and Commissions -- committee discharged,
          bill amended, ordered reprinted as amended  and  recommitted  to  said
          committee
 
        AN ACT to amend the public authorities law and the not-for-profit corpo-
          ration  law, in relation to reviews by the authority budget office and
          granting the authorities budget office the authority  to  commence  an
          action  or  special  proceeding  to  annul  the corporate existence or
          dissolve a corporation that has acted beyond its capacity or power  or
          to restrain it from carrying on unauthorized activities
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. The public authorities law  is  amended  by  adding  a  new
     2  section 8 to read as follows:
     3    §  8.  Reports  of  public  authorities  by authorities budget office;
     4  recommendations for corrective action. Whenever the  authorities  budget
     5  office issues a letter or report regarding the activities and operations
     6  of  any  public  authority,  the  head of the public authority which the
     7  letter or report was about shall submit a written response to the letter
     8  or report within thirty days of the receipt of the letter or report.  If
     9  the  letter  or report makes recommendations for corrective action, such
    10  head shall report within one hundred eighty days after  receipt  thereof
    11  to the authorities budget office what steps were taken to implement such
    12  recommendations,  and,  where  recommendations were not implemented, the
    13  reasons therefor. Failure to comply with the provisions of this  section
    14  shall make the authority delinquent in its reporting requirements.
    15    §  2.  Subdivision 3 of section 2800 of the public authorities law, as
    16  amended by chapter 766 of the laws  of  2005,  is  amended  to  read  as
    17  follows:
    18    3.  Every  financial  report  submitted  under  this  section shall be
    19  approved by the board and shall be certified, under penalty of  perjury,
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD03819-03-1

        A. 2631--A                          2
 
     1  in  writing by the chief executive officer and the chief financial offi-
     2  cer of such authority that based on  the  officer's  knowledge  (a)  the
     3  information  provided  therein is accurate, correct and does not contain
     4  any  untrue  statement  of material fact; (b) does not omit any material
     5  fact which, if omitted, would  cause  the  financial  statements  to  be
     6  misleading in light of the circumstances under which such statements are
     7  made;  and  (c)  fairly  presents in all material respects the financial
     8  condition and results of operations of the authority as of, and for, the
     9  periods presented in the financial statements.   A knowing  and  willful
    10  violation of this section shall constitute perjury in the third degree.
    11    §  3.  Subdivision 2 of section 2824 of the public authorities law, as
    12  added by section 766 of the laws of 2005, is amended to read as follows:
    13    2. (a) Individuals appointed to the board of a public authority  shall
    14  participate in state approved training regarding their legal, fiduciary,
    15  financial  and  ethical  responsibilities  as  directors of an authority
    16  within one year of appointment to a board. Board members  shall  partic-
    17  ipate  in such continuing training as may be required to remain informed
    18  of best practices, regulatory and  statutory  changes  relating  to  the
    19  effective oversight of the management and financial activities of public
    20  authorities and to adhere to the highest standards of responsible gover-
    21  nance.
    22    (b) Except as otherwise provided in this chapter, a member in non-com-
    23  pliance with the requirements set forth in this section shall be subject
    24  to  the  enforcement  powers of the authorities budget office, including
    25  but not limited to removal from the board of said public  authority.  If
    26  an  individual  appointed  to  the  board of a public authority does not
    27  complete their state approved training pursuant to paragraph (a) of this
    28  subdivision the authority budget office shall notify said individual  of
    29  their official suspension as a board member. The suspension shall be for
    30  a  period  of  three  months and shall commence with receipt of official
    31  notice of the suspension by the authorities budget office.  The  suspen-
    32  sion  shall  be  terminated  if  such  individual completes the required
    33  training within the three month suspension period.  If  such  individual
    34  fails  to  complete the required training within the three month suspen-
    35  sion period, the authorities budget office  may  remove  the  individual
    36  from the public authority board.
    37    (c)  An individual that has been removed from a public authority board
    38  by the authorities budget office  pursuant  to  paragraph  (b)  of  this
    39  subdivision,  may only be reinstated to that public authority board once
    40  they provide the authorities budget office with official notice confirm-
    41  ing the training requirements set forth in paragraph (a) of this  subdi-
    42  vision have been met.
    43    §  4.  Section 104 of the not-for-profit corporation law is amended by
    44  adding a new paragraph (h) to read as follows:
    45    (h) If an instrument which is delivered to the department of state for
    46  filing relates to  a  not-for-profit  corporation  created  pursuant  to
    47  section fourteen hundred eleven of this chapter or to an entity that may
    48  be deemed a local authority as defined by subdivision two of section two
    49  of  the  public  authorities law, the  department of state shall review,
    50  make, certify and transmit electronically a copy of each such instrument
    51  relating to local economic development to the authorities budget office.
    52    § 5. Paragraphs (i) and (j) of subdivision  2  of  section  6  of  the
    53  public authorities law, as added by chapter 506 of the laws of 2009, are
    54  amended and a new paragraph (k) is added to read as follows:
    55    (i)  compel any authority which is deemed to be in non-compliance with
    56  this title and title one of this article or article nine of this chapter

        A. 2631--A                          3
 
     1  to submit to the authorities budget office  a  detailed  explanation  of
     2  such failure to comply; [and]
     3    (j)  commence  a special proceeding in supreme court, when it does not
     4  receive from a state or local authority upon request information, books,
     5  records or other documentation necessary to perform its duties,  seeking
     6  an order directing the production of the same[.]; and
     7    (k)  commence  an  action or special proceeding to annul the corporate
     8  existence or dissolve a corporation that has acted beyond  its  capacity
     9  or power or to restrain it from carrying on unauthorized activities.
    10    §  6.  This  act shall take effect on the ninetieth day after it shall
    11  have become a law.
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