Bill S7762-2013

Authorizes certain corporations with both charitable and business purposes to elect to be a non-charitable corporation

Authorizes certain corporations with both charitable and business purposes to elect to be a non-charitable corporation.

Details

Actions

  • Aug 11, 2014: SIGNED CHAP.321
  • Aug 1, 2014: DELIVERED TO GOVERNOR
  • Jun 18, 2014: returned to senate
  • Jun 18, 2014: passed assembly
  • Jun 18, 2014: ordered to third reading rules cal.424
  • Jun 18, 2014: substituted for a10053
  • Jun 17, 2014: referred to corporations, authorities and commissions
  • Jun 17, 2014: DELIVERED TO ASSEMBLY
  • Jun 17, 2014: PASSED SENATE
  • Jun 17, 2014: ORDERED TO THIRD READING CAL.1480
  • Jun 17, 2014: COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • Jun 5, 2014: REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS

Meetings

Calendars

Votes

VOTE: COMMITTEE VOTE: - Rules - Jun 16, 2014
Ayes (22): Skelos, Libous, Bonacic, Carlucci, Farley, Flanagan, Hannon, Larkin, LaValle, Marcellino, Maziarz, Nozzolio, Seward, Valesky, Little, Stewart-Cousins, Breslin, Dilan, Krueger, Montgomery, Perkins, Espaillat
Ayes W/R (2): Parker, Gianaris
Excused (1): Hassell-Thompson

Memo

BILL NUMBER:S7762

TITLE OF BILL: An act relating to authorizing certain corporations to elect to be a non-charitable corporation

PURPOSE OR GENERAL IDEA OF BILL:

To clarify the authority of the corporation formed pursuant to Chapter 880 of the Laws of New York of 1937, TIAA Board of Overseers ("Overseers") and the corporation formed pursuant to Chapter 124 of the Laws of New York of 1952, College Retirement Equities Fund ("CREF" and, together with Overseers, the "affected corporations").

SUMMARY OF SPECIFIC PROVISIONS:

This bill provides that on or after July 1, 2014, TIAA Board of Overseers and College Retirement Equities Fund, New York Not-for-Profit corporations, may elect to be non-charitable corporations under the Not-for-Profit Corporation Law by providing written notice of such election to the Attorney General and certifying in such written notice that it is not exempt from federal income tax, and does not solicit or receive charitable contributions, or accept receipt of donations of assets, for charitable purposes. Such notice shall be accompanied by the approval of a justice of the supreme court, and ten days' written notice of the application for such approval shall be given to the Attorney General.

The affected corporations will be subject to the provisions of Section 513 (Administration of Assets Received for Specific Purposes) and Section 908 (Merger or Consolidation of Business and Not-for-Profit Corporations) of the Not-for-Profit Corporation Law as non-charitable corporations, provided that any merger with a business corporation shall require (a) a supreme court order approving the plan of merger or consolidation, or (b) Attorney General approval of the plan of merger or consolidation. In addition, the affected corporations shall be subject to all other provisions of Articles 1, 5, 6, 7, 8, 9 and 10 of the Not-for-Profit Corporation Law that would have been applicable to the corporations were they charitable corporations.

JUSTIFICATION:

It has come to the attention of the state legislature that the affected corporations do not solicit or receive charitable contributions, nor accept receipt of donations of assets, for charitable purposes. Pursuant to the Non-Profit Revitalization Act, the affected corporations, which are currently Type B not-for-profit corporations, would automatically be deemed to be "charitable corporations." This characterization may create unintended consequences as neither affected corporation is structured as a charity. The bill allows the affected corporations to elect to be "non-charitable corporations" with court approval and notice to the New York Attorney General. In addition, the bill provides that the affected corporations will, after such an election, remain subject to the enumerated provisions of the Not-for-Profit Corporation Law as if they were charitable corporations, while preserving the affected corporations' ability to take certain actions that would have been permissible had such affected corporations converted to Type C

not-for-profit corporations prior to the enactment of the Non-Profit Revitalization Act.

PRIOR LEGISLATIVE HISTORY:

New bill

FISCAL IMPLICATIONS:

None

EFFECTIVE DATE:

Immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 7762 IN SENATE June 5, 2014 ___________
Introduced by Sen. RANZENHOFER -- read twice and ordered printed, and when printed to be committed to the Committee on Corporations, Author- ities and Commissions AN ACT relating to authorizing certain corporations to elect to be a non-charitable corporation THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. On or after July 1, 2014, any corporation formed pursuant to chapter 880 of the laws of 1937 or chapter 124 of the laws of 1952 may elect, notwithstanding that it may have both charitable and business purposes and notwithstanding subdivision (c) of section 201 of the not- for-profit corporation law, to be a non-charitable corporation under, and as defined in section 102 of the not-for-profit corporation law, by providing written notice of such election to the attorney general and certifying in such written notice that it is not exempt from federal income tax, but rather is taxable as a corporation pursuant to the United States internal revenue code of 1986, as amended, and does not solicit or receive charitable contributions, or accept receipt of donations of assets, for charitable purposes, as contemplated by article 7-A of the executive law and section 8-1.4 of the estates, powers and trusts law, and regulations adopted thereunder. Every such notice shall have endorsed thereon or annexed thereto the approval of a justice of the supreme court of the judicial district in which the office of such corporation is located. Ten days' written notice of the application for such approval shall be given to the attorney general. Any such corpo- ration will be subject to the provisions of section 513 and section 908 of the not-for-profit corporation law as a non-charitable corporation, provided that no certificate shall be filed pursuant to section 908 of the not-for-profit corporation law unless (a) the supreme court has granted an order approving the plan of merger or consolidation and authorizing the filing of the certificate as provided in section 907-a of the not-for-profit corporation law as if such section applied to mergers and consolidations effected pursuant to section 908 of the not- for-profit corporation law, or (b) the attorney general has approved the
plan of merger or consolidation and authorized the filing of the certif- icate as provided in section 907-b of the not-for-profit corporation law as if such section applied to mergers and consolidations effected pursu- ant to section 908 of the not-for-profit corporation law. In addition to the foregoing requirements, any such corporation shall also be subject to all other provisions of articles 1, 5, 6, 7, 8, 9 and 10 of the not- for-profit corporation law that would have been applicable to the corpo- ration were it a charitable corporation. Nothing in this section shall be deemed to modify the charter of, or prevent any future modification of the charter of, any corporation formed pursuant to chapter 880 of the laws of 1937 or chapter 124 of the laws of 1952, as such charter may have been amended from time to time since the enactment of chapter 880 of the laws of 1937 or chapter 124 of the laws of 1952, as applicable. S 2. This act shall take effect immediately.

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