S T A T E   O F   N E W   Y O R K
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                                  4163

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                             April 15, 2009
                               ___________

Introduced by Sen. AUBERTINE -- read twice and ordered printed, and when
  printed  to be committed to the Committee on Corporations, Authorities
  and Commissions

AN ACT to amend the religious corporations law, in relation to the sale,
  mortgage and lease of real property of a religious corporation

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1. Subdivisions 1 and 9 of section 12 of the religious corpo-
rations law, subdivision 1 as amended by chapter 244 of the laws of 1981
and subdivision 9 as amended by chapter 962 of the  laws  of  1969,  are
amended to read as follows:
  1. (A) A religious corporation shall not sell, mortgage or lease for a
term  exceeding five years any of its real property without applying for
and obtaining leave of the  court  therefor  pursuant  to  section  five
hundred  eleven of the not-for-profit corporation law as that section is
modified by paragraph (d-1) of [subsection] SUBDIVISION one  of  section
two-b of this chapter, except that a religious corporation may execute a
purchase  money mortgage or a purchase money security agreement creating
a security interest in personal property purchased by it without obtain-
ing leave of the court therefor.
  (B) NOTWITHSTANDING THE PROVISIONS OF PARAGRAPH (A) OF  THIS  SUBDIVI-
SION, ANY SOLVENT RELIGIOUS CORPORATION MAY SELL ANY OF ITS REAL PROPER-
TY WITHOUT A COURT ORDER IN THE FOLLOWING CIRCUMSTANCES:
  (I)  THE  RELIGIOUS CORPORATION SHALL HAVE AND MAINTAIN IN ITS RECORDS
AN APPRAISAL REPORT PREPARED BY A PROFESSIONAL APPRAISER  AND  DATED  OR
UPDATED  WITHIN NINETY DAYS OF THE SALE SHOWING THE FAIR MARKET VALUE TO
BE LESS THAN TWO HUNDRED THOUSAND DOLLARS;
  (II) THE SALE SHALL BE AN ARM'S LENGTH TRANSACTION FOR A CASH  CONSID-
ERATION  AT  THE FAIR MARKET VALUE OF THE PROPERTY WHICH SHALL BE WITHIN
TEN PERCENT OF THE APPRAISED VALUE;

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08237-01-9

              

S. 4163                             2

  (III) THE GOVERNING BODY OF THE RELIGIOUS CORPORATION SHALL HAVE GIVEN
NOTICE FOR NOT LESS THAN THIRTY DAYS TO THE MEMBERS OF THE  CONGREGATION
SERVED  BY  THE RELIGIOUS CORPORATION IN A MANNER LIKELY TO BE SEEN BY A
MAJORITY OF SUCH MEMBERS INCLUDING BUT NOT LIMITED TO PUBLICATION IN ANY
BULLETIN,  NEWSLETTER,  OR SIMILAR DOCUMENT NORMALLY DISTRIBUTED TO SUCH
MEMBERS; AND
  (IV) A CERTIFICATE OF COMPLIANCE WITH THE REQUIREMENTS OF  THIS  PARA-
GRAPH  EXECUTED BY THE PERSON OR PERSONS EXECUTING THE DEED ON BEHALF OF
THE RELIGIOUS CORPORATION  UNDER  THE  PENALTIES  OF  PERJURY  SHALL  BE
ATTACHED  TO  AND  RECORDED WITH THE DEED; AND WITH RESPECT TO RELIGIOUS
CORPORATIONS SUBJECT TO SUBDIVISION  TWO,  THREE,  FOUR,  FIVE,  FIVE-A,
FIVE-B,  OR FIVE-C OF THIS SECTION, SUCH CERTIFICATE SHALL HAVE ENDORSED
THEREON THE CONSENT OF THE CHURCH AUTHORITY OR AUTHORITIES WHOSE CONSENT
WOULD BE REQUIRED UNDER SUCH SUBDIVISIONS OF  THIS  SECTION  BEFORE  THE
FILING OF AN APPLICATION TO THE COURT.
  (C)  NOTWITHSTANDING  THE PROVISIONS OF PARAGRAPH (A) OF THIS SUBDIVI-
SION, ANY SOLVENT RELIGIOUS CORPORATION MAY MORTGAGE  ANY  OF  ITS  REAL
PROPERTY WITHOUT A COURT ORDER IN THE FOLLOWING CIRCUMSTANCES:
  (I)  THE  RELIGIOUS CORPORATION SHALL HAVE AND MAINTAIN IN ITS RECORDS
AN APPRAISAL REPORT PREPARED BY A PROFESSIONAL APPRAISER  AND  DATED  OR
UPDATED WITHIN NINETY DAYS OF THE MORTGAGE SHOWING THE FAIR MARKET VALUE
TO BE LESS THAN TWO HUNDRED THOUSAND DOLLARS;
  (II)  THE MORTGAGE SHALL BE AN ARM'S LENGTH TRANSACTION WITH A MORTGA-
GEE LICENSED TO MAKE MORTGAGE LOANS IN THE STATE FOR AN ADVANCE OF  CASH
IN A PRINCIPAL AMOUNT NOT MORE THAN TWO HUNDRED THOUSAND DOLLARS;
  (III) THE GOVERNING BODY OF THE RELIGIOUS CORPORATION SHALL HAVE GIVEN
NOTICE  FOR NOT LESS THAN THIRTY DAYS TO THE MEMBERS OF THE CONGREGATION
SERVED BY THE RELIGIOUS CORPORATION IN A MANNER LIKELY TO BE SEEN  BY  A
MAJORITY OF SUCH MEMBERS INCLUDING BUT NOT LIMITED TO PUBLICATION IN ANY
BULLETIN,  NEWSLETTER,  OR SIMILAR DOCUMENT NORMALLY DISTRIBUTED TO SUCH
MEMBERS; AND
  (IV) A CERTIFICATE OF COMPLIANCE WITH THE REQUIREMENTS OF  THIS  PARA-
GRAPH  EXECUTED BY THE PERSON OR PERSONS EXECUTING THE DEED ON BEHALF OF
THE RELIGIOUS CORPORATION  UNDER  THE  PENALTIES  OF  PERJURY  SHALL  BE
ATTACHED  TO  AND  RECORDED WITH THE MORTGAGE; AND WITH RESPECT TO RELI-
GIOUS CORPORATIONS  SUBJECT  TO  SUBDIVISION  TWO,  THREE,  FOUR,  FIVE,
FIVE-A,  FIVE-B,  OR FIVE-C OF THIS SECTION, SUCH CERTIFICATE SHALL HAVE
ENDORSED THEREON THE CONSENT OF  THE  CHURCH  AUTHORITY  OR  AUTHORITIES
WHOSE  CONSENT WOULD BE REQUIRED UNDER SUCH SUBDIVISIONS OF THIS SECTION
BEFORE THE FILING OF AN APPLICATION TO THE COURT.
  9. If a sale, mortgage or lease for a term exceeding five years of any
real property of any such religious corporation WITH RESPECT TO WHICH  A
COURT  ORDER WAS REQUIRED UNDER SUBDIVISION ONE OF THIS SECTION has been
heretofore or shall be hereafter  made  and  a  conveyance  or  mortgage
executed  and  delivered  without  the authority of a court of competent
jurisdiction, obtained as required by law, or not in accordance with its
directions, the court may,  thereafter,  upon  the  application  of  the
corporation,  or  of  the grantee or mortgagee in any such conveyance or
mortgage or of any person claiming through or under any such grantee  or
mortgagee  upon  such  notice to such corporation, or its successor, and
such other person or persons as may be interested in such  property,  as
the  court may prescribe, confirm said previously executed conveyance or
mortgage, and order and direct the execution and delivery of a confirma-
tory deed or mortgage, or the recording of such  confirmatory  order  in
the office where deeds and mortgages are recorded in the county in which
the  property  is  located; and upon compliance with the said order such

S. 4163                             3

original conveyance or mortgage shall be as valid and of the same  force
and  effect  as  if  it  had  been  executed  and  delivered  after  due
proceedings had in accordance with the statute and the direction of  the
court.    But  no  confirmatory order may be granted unless the consents
required in the first part of this section for a  Protestant  Episcopal,
Roman Catholic, Presbyterian church or an incorporated African Methodist
Episcopal  Zion  church  or an incorporated United Methodist church have
first been given by the prescribed authority thereof,  either  upon  the
original application or upon the application for the confirmatory order.
  S  2.  This act shall take effect immediately and shall apply to sales
and mortgages of real property occurring on or after the effective  date
of this act.