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.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8121
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 authorities 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 trans-
parency and accountability to taxpayers.
PRIOR LEGISLATIVE HISTORY:
2021-2022:S977/A2631
2019-2020: S8659/A10745
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall become
law.
STATE OF NEW YORK
________________________________________________________________________
8121
2023-2024 Regular Sessions
IN ASSEMBLY
October 13, 2023
___________
Introduced by M. of A. THIELE, OTIS, BRONSON -- read once and referred
to the Committee on Corporations, Authorities and Commissions
AN ACT to amend the public authorities law and the not-for-profit corpo-
ration law, in relation to reviews by the authorities 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,
20 in writing by the chief executive officer and the chief financial offi-
21 cer of such authority that based on the officer's knowledge (a) the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD11219-01-3
A. 8121 2
1 information provided therein is accurate, correct and does not contain
2 any untrue statement of material fact; (b) does not omit any material
3 fact which, if omitted, would cause the financial statements to be
4 misleading in light of the circumstances under which such statements are
5 made; and (c) fairly presents in all material respects the financial
6 condition and results of operations of the authority as of, and for, the
7 periods presented in the financial statements. A knowing and willful
8 violation of this section shall constitute perjury in the third degree.
9 § 3. Subdivision 2 of section 2824 of the public authorities law, as
10 added by section 766 of the laws of 2005, is amended to read as follows:
11 2. (a) Individuals appointed to the board of a public authority shall
12 participate in state approved training regarding their legal, fiduciary,
13 financial and ethical responsibilities as directors of an authority
14 within one year of appointment to a board. Board members shall partic-
15 ipate in such continuing training as may be required to remain informed
16 of best practices, regulatory and statutory changes relating to the
17 effective oversight of the management and financial activities of public
18 authorities and to adhere to the highest standards of responsible gover-
19 nance.
20 (b) Except as otherwise provided in this chapter, a member in non-com-
21 pliance with the requirements set forth in this section shall be subject
22 to the enforcement powers of the authorities budget office, including
23 but not limited to removal from the board of said public authority. If
24 an individual appointed to the board of a public authority does not
25 complete their state approved training pursuant to paragraph (a) of this
26 subdivision the authority budget office shall notify said individual of
27 their official suspension as a board member. The suspension shall be for
28 a period of three months and shall commence with receipt of official
29 notice of the suspension by the authorities budget office. The suspen-
30 sion shall be terminated if such individual completes the required
31 training within the three month suspension period. If such individual
32 fails to complete the required training within the three month suspen-
33 sion period, the authorities budget office may remove the individual
34 from the public authority board.
35 (c) An individual that has been removed from a public authority board
36 by the authorities budget office pursuant to paragraph (b) of this
37 subdivision, may only be reinstated to that public authority board once
38 they provide the authorities budget office with official notice confirm-
39 ing the training requirements set forth in paragraph (a) of this subdi-
40 vision have been met.
41 § 4. Section 104 of the not-for-profit corporation law is amended by
42 adding a new paragraph (h) to read as follows:
43 (h) If an instrument which is delivered to the department of state for
44 filing relates to a not-for-profit corporation created pursuant to
45 section fourteen hundred eleven of this chapter or to an entity that may
46 be deemed a local authority as defined by subdivision two of section two
47 of the public authorities law, the department of state shall review,
48 make, certify and transmit electronically a copy of each such instrument
49 relating to local economic development to the authorities budget office.
50 § 5. Paragraphs (i) and (j) of subdivision 2 of section 6 of the
51 public authorities law, as added by chapter 506 of the laws of 2009, are
52 amended and a new paragraph (k) is added to read as follows:
53 (i) compel any authority which is deemed to be in non-compliance with
54 this title and title one of this article or article nine of this chapter
55 to submit to the authorities budget office a detailed explanation of
56 such failure to comply; [and]
A. 8121 3
1 (j) commence a special proceeding in supreme court, when it does not
2 receive from a state or local authority upon request information, books,
3 records or other documentation necessary to perform its duties, seeking
4 an order directing the production of the same[.]; and
5 (k) commence an action or special proceeding to annul the corporate
6 existence or dissolve a corporation that has acted beyond its capacity
7 or power or to restrain it from carrying on unauthorized activities.
8 § 6. This act shall take effect on the ninetieth day after it shall
9 have become a law.
