Committee Activity in Review

As published in the NY Business Law Journal:


The Committee held a meeting on November 8, 2016. The following matters were discussed:

Report on Pending NPRA Amendments—The first item discussed was the proposed amendments to the Non-Profit Revitalization Act (“NPRA”). Since the 2016 legislative session ended in June 2016, our Committee members were active in following up on the amendments to the NPRA that passed in June. These amendments would make significant improvements to some of the unforeseen difficulties of the original NPRA and were developed with considerable input by this Committee and other key groups in New York, including our counterpart committee from the New York City Bar Association, the Lawyers Alliance of New York, the Non-Profit Coordinating Committee of New York, and the New York State Law Revision Commission. Committee members, including Mike de Freitas from our Committee, and NYSBA’s governmental relations director, Ron Kennedy, continued contact with those groups and met with counsel to the Governor to provide information on the NPRA and the amendments. The amendments had not been submitted to the Governor at the time of the meeting but were submitted on November 16, 2016.

Incorporation Issues Under Existing Law—Gary Trechel and Richard DiGiovanni, staff counsel with the Department of State, discussed practice issues under the Not-for-Profit Corporation Law, including the use of corporate indicators in names, the specification of purposes in the certificate of incorporation, and the status of former “Type D” corporations under the NPRA. Mr. Trechel noted that the NPRA amendments greatly reduced the number of filing issues. 

501(c)(4) Corporations and Lobbying—Mike Cooney discussed recent developments regarding 501(c)(4) social welfare organizations, including a case in New York in which it was held that a 501(c)(4) organization’s solicitation activity was subject to Article 7-A of the Executive Law (which governs charitable solicitations). He also discussed the broad ethics bill in the last legislature, S. 8160, which included a requirement for broad disclosure of donors by organizations that happen to spend a small amount on lobbying. 

Religious Corporations Law—Mike de Freitas and Alyssa Gross discussed the state of the Religious Corporations Law. It has been amended only in a few isolated respects over the years and in various areas is still outdated and/or does not match prevailing practice. Among the more problematic issues is the almost exclusive statutory requirement for the congregation governance model, as opposed to a board-led or pastor-led model. 

Incorporation in Other Jurisdictions—Daniel Kurtz joined the meeting and led a discussion regarding the trend of incorporating outside New York. He noted that, although one of the purposes of the NPRA was to make the New York law more hospitable, the result had been the opposite. There was a general discussion about the growing trend to incorporate in Delaware and possible ramifications for not doing so.

The Committee will continue to study the above is-sues. Committee members were urged to make further suggestions for discussion topics for the upcoming January meeting. The meeting was duly adjourned.

- Michael de Freitas, Secretary of the Meeting;Fred Attea, Chair


The Not-for-Profit Corporations Law Committee continued to collaborate with the State Law Revision Com-mission, the New York City Bar Association, the Lawyers Alliance for New York, and the Nonprofit Coordinating Committee of New York to identify aspects of the Non-Profit Revitalization Act of 2013 needing improvement. The Committee’s view is that although the Act significantly improved many aspects of corporate structures and transactions, parts of the Act present challenges and problems in implementation that could be alleviated without impairing the overall purposes of the Act. The group’s efforts over the winter and spring culminated in a consensus proposal addressing independent directors, related party transactions, and committees. We also engaged with the Attorney General’s Charities Bureau and legislators. A bill based on our proposal was introduced in the 2016 session (S.7913/A10365).

In our Spring meeting, the Committee also discussed common problems practitioners encounter in advising not-for-profit corporations and the emerging trend of forming non-profits in other jurisdictions, primarily Delaware, including the related topic of re-incorporating existing non-profits in another state. Finally, the Committee discussed possible issues or subjects that could or should be addressed by the Committee in the future, including other parts of the Not-for-Profit Corporation Law that need attention and other New York statutes that apply to non-profits, such as the Religious Corporations Law. 

- Frederick Attea, Chair 


The Not-for-Profit Corporations Law Committee has been working with the Lawyers Alliance for New York, the Non-Profit Coordinating Committee of New York, the New York Law Revision Commission and the New York City Bar Association to consider possible changes to the Nonprofit Revitalization Act (“Act”) with a view to eliminating unintended consequences of the Act that do not appear to further its objectives. These groups have now reached out to legislative subcommittees and the Charities Bureau to achieve a consensus over the possible revisions which they believe to be in the public interest. The interaction of these groups has been constructive and our Committee believes that they will resolve many of the most problematic issues created by the Act. The Committee also believes that beyond these major changes there needs to be an ongoing modernization of the Not-for-Profit Corporation Law to deal with issues not addressed by the Act. The Committee will have a panel discussion at the winter meeting of the Business Section of the New York State Bar Association to review these proposals for change and new issues that need to be addressed.

- Frederick Attea, Chair


the Act provided long-overdue reforms, there has been difficulty in complying with certain of its provisions and unintended consequences of other provisions. The Committee has been working with many groups including The Lawyers’ Alliance for New York, the Law Revision Commission, the New York City Bar Association and the Nonprofit Coordinating Committee of New York to assess the impact of the Non-Profit Revitalization Act and to provide suggestions for statutory amendments to eliminate some of the problems and to clarify ambiguities. These efforts have recently culminated in suggestions for amendments to the Not-for- Profit Corporation Law that have been presented to the appropriate legislative committee chairpersons.

- Frederick Attea, Chair


After a struggle lasting more than ten years, members of the Business Law Section of the New York State Bar Association, working with other members of NYSBA and the NYSBA staff, were able to secure passage of the Non-profit Revitalization Act last year, upgrading the New York Not-for-Profit Corporation Law. Our members who were active in the effort noted that there was no single “home” within NYSBA for attorneys working for, or providing legal services to, not-for-profit corporations. After consultations with NYSBA executive officers an to meet that perceived need, our Executive Committee has established a new standing committee to focus on the legal needs and interests of not-for profit corporations. The inaugural Chair of the committee is Frederick Attea, Esq., of Phillips Lytle in Buffalo, who was instrumental in the effort to secure passage of the statute last year. If you work for or provide services to not-for-profit corporations, r if you are otherwise interested in the legal affairs of such corporations, we invite you to join the committee. If you want to join the committee, send an e-mail to Membership in this and all other Business Law Section committees is free to all members of the Section.

- Jay L. Hack, Outgoing Section Chair