N.Y. Not-for-Profit Corporation Law § 1411: Local development corporations

§ 1411. Local development corporations.

(a) Purposes.

This section shall provide an additional and alternate method of

incorporation or reincorporation of not-for-profit corporations for any

of the purposes set forth in this paragraph and shall not be deemed to

alter, impair or diminish the purposes, rights, powers or privileges of

any corporation heretofore or hereafter incorporated under this section

or under the stock or business corporation laws. Corporations may be

incorporated or reincorporated under this section as not-for-profit

local development corporations operated for the exclusively charitable

or public purposes of relieving and reducing unemployment, promoting and

providing for additional and maximum employment, bettering and

maintaining job opportunities, instructing or training individuals to

improve or develop their capabilities for such jobs, carrying on

scientific research for the purpose of aiding a community or

geographical area by attracting new industry to the community or area or

by encouraging the development of, or retention of, an industry in the

community or area, and lessening the burdens of government and acting in

the public interest, and any one or more counties, cities, towns or

villages of the state, or any combination thereof, or the New York job

development authority in exercising its power under the public

authorities law to encourage the organization of local development

corporations, may cause such corporations to be incorporated by public

officers or private individuals or reincorporated upon compliance with

the requirements of this section, and it is hereby found, determined and

declared that in carrying out said purposes and in exercising the powers

conferred by paragraph (b) such corporations will be performing an

essential governmental function.

(b) Type of corporation.

A local development corporation is a charitable corporation under this

chapter.

(c) Powers.

In furtherance of its purposes set forth in paragraph (a) but not for

any other purposes, a local development corporation incorporated or

reincorporated under this section shall have the following powers: to

construct, acquire, rehabilitate and improve for use by others

industrial or manufacturing plants in the territory in which its

operations are principally to be conducted, to assist financially in

such construction, acquisition, rehabilitation and improvement, to

maintain such plants for others in such territory, to disseminate

information and furnish advice, technical assistance and liaison with

federal, state and local authorities with respect thereto, to acquire by

purchase, lease, gift, bequest, devise or otherwise real or personal

property or interests therein, to borrow money and to issue negotiable

bonds, notes and other obligations therefor, and notwithstanding section

510 (Disposition of all or substantially all assets) without leave of

the court, to sell, lease, mortgage or otherwise dispose of or encumber

any such plants or any of its real or personal property or any interest

therein upon such terms as it may determine and, in connection with

loans from the New York job development authority, to enter into

covenants and agreements and to comply with all the terms, conditions

and provisions thereof, and otherwise to carry out its corporate

purposes and to foster and encourage the location or expansion of

industrial or manufacturing plants in the territory in which the

operations of such corporation are principally to be conducted,

provided, however, that no such corporation shall attempt to influence

legislation by propaganda or otherwise, or participate or intervene,

directly or indirectly, in any political campaign on behalf of or in

opposition to any candidate for public office.

(d) Purchase or lease of real property owned by a county, city, town

or village.

(1) The local legislative body of a county, city, town or village or,

if there is a board of estimate in a city, then the board of estimate,

may by resolution determine that specifically described real property

owned by the county, city, town or village is not required for use by

such county, city, town or village and authorize the county, city, town

or village to sell or lease such real property to a local development

corporation incorporated or reincorporated under this article; provided,

however, that title to such land be not declared inalienable as a forest

preserve or a parkland.

(2) Notwithstanding the provisions of any general, special or local

law, charter or ordinance to the contrary, such sale or lease may be

made without appraisal, public notice, (except as provided in

subparagraph (4)) or public bidding for such price or rental and upon

such terms as may be agreed upon between the county, city, town or

village and said local development corporation; provided, however, that

in case of a lease the term may not exceed ninety-nine years and

provided, further, that in cities having a population of one million or

more, no such sale or lease shall be made without the approval of a

majority of the members of the borough improvement board of the borough

in which such real property is located.

(3) Before any sale or lease to a local development corporation

incorporated or reincorporated under this article shall be authorized, a

public hearing shall be held by the local legislative body, or by the

board of estimate, as the case may be, to consider the proposed sale or

lease.

(4) Notice of such hearing shall be published at least ten days before

the date set for the hearing in such publication and in such manner as

may be designated by the local legislative body, or the board of

estimate as the case may be.

* (5) A local development corporation, incorporated or reincorporated

under this section, which purchases or leases real property from a

county, city, town or village, shall not, without the written approval

of the county, city, town or village, use such real property for any

purpose except the purposes set forth in the certificate of

incorporation or reincorporation of said local development corporation.

In the event such real property is used in violation of the restrictions

of this paragraph, the attorney-general may bring an action or special

proceeding to enjoin the unauthorized use. With respect to the Orange

County Funding Corporation, the independent monitor appointed pursuant

to paragraph (a) of subdivision three of section nine hundred twelve-b

of the general municipal law may also bring an action or special

proceeding to enjoin the unauthorized use of any real property purchased

or leased by such corporation in violation of the restrictions of this

paragraph.

* NB Effective until May 3, 2030

* (5) A local development corporation, incorporated or reincorporated

under this section, which purchases or leases real property from a

county, city, town or village, shall not, without the written approval

of the county, city, town or village, use such real property for any

purpose except the purposes set forth in the certificate of

incorporation or reincorporation of said local development corporation.

In the event such real property is used in violation of the restrictions

of this paragraph, the attorney-general may bring an action or special

proceeding to enjoin the unauthorized use.

* NB Effective May 3, 2030

(e) Certificate of incorporation.

In addition to the requirements of section 402 (Certificate of

incorporation; contents) the certificate of incorporation or

reincorporation of a local development corporation incorporated or

reincorporated under this article shall state (1) that all income and

earnings of such corporation shall be used exclusively for its corporate

purposes or accrue and be paid to the New York job development

authority, (2) that no part of the income or earnings of such

corporation shall inure to the benefit or profit of, nor shall any

distribution of its property or assets be made to any member or private

person, corporate or individual, or any other private interest, except

that the certificate of incorporation or reincorporation may authorize

the repayment of loans and may also authorize the repayment of

contributions (other than dues) to the local development corporation but

only if and to the extent that any such contribution may not be

allowable as a deduction in computing taxable income under the internal

revenue code of nineteen hundred fifty-four, (3) that if such

corporation accepts a mortgage loan or loans from the New York job

development authority, such corporation shall be dissolved in accordance

with the provisions of paragraph (g) upon the repayment or other

discharge in full by such corporation of all such loans.

(f) Exemption of income from taxation.

The income and operations of corporations incorporated or

reincorporated under this section shall be exempt from taxation.

(g) Dissolution.

Upon the dissolution of any local development corporation incorporated

or reincorporated under this section no member or private person,

corporate or individual, or other private interest, shall be entitled to

any distribution or division of its remaining funds and other property

and rights and interests in property, and the balance thereof, after the

payment of all debts and liabilities of the corporation of whatsoever

kind and nature, (including the payment of loans and contributions the

repayment of which has been authorized in its certificate of

incorporation or reincorporation) shall be distributed to one or more

counties, cities, towns or villages within the territory designated in

its certificate of incorporation or reincorporation as the territory in

which its operations are principally to be conducted, for furtherance of

the purposes set forth in paragraph (a), or to the New York job

development authority, as shall be provided by said corporation or by

order of the supreme court of the state of New York pursuant to section

1008 (Jurisdiction of supreme court to supervise dissolution and

liquidation).

(h) Corporations heretofore incorporated.

Any corporation heretofore incorporated under the membership

corporations law or this chapter, or under the stock or business

corporation law for any of the purposes set forth in paragraph (a) of

this section may amend its certificate of incorporation and be

reincorporated as a local development corporation organized under this

section by making and filing in the office of the secretary of state a

certificate, stating the name of such corporation, and, if it has been

changed, the name under which it was originally incorporated, the date

of its incorporation, the names and post-office addresses of its members

or of the holders of record of all of the outstanding shares of such

corporation entitled to vote with relation to the proceedings provided

for in the certificate and that such corporation has elected to become

and be a local development corporation organized and operated under and

by virtue of this section. Such certificate shall be either (1)

subscribed in person or by proxy by all of the members or the holders of

record of all of the outstanding shares of such corporation entitled to

vote with relation to such proceedings and shall have annexed an

affidavit of the secretary or an assistant secretary that the persons

who have executed the certificate, in person or by proxy, constitute all

of the members or the holders of record of all of the outstanding shares

of the corporation entitled to vote with relation to the proceedings

provided for in the certificate, or (2) subscribed by the president or a

vice president and the secretary or an assistant secretary and shall

have annexed an affidavit of such officers stating that they have been

authorized to execute and file such certificate by the votes, cast in

person or by proxy, of all of the members or of the holders of record of

all of the outstanding shares of such corporation entitled to vote with

relation to such proceedings at the meeting at which such votes were

cast, and that such votes were cast at a meeting of members or

stockholders held on a date specified, upon notice pursuant to section

605 (Notice of meeting of members) or to section 605 of the Business

Corporation Law. Every certificate filed under this paragraph 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 the

corporation is to be located. A reincorporation pursuant to this

paragraph shall not effect a dissolution of the corporation, but shall

be deemed a continuation of its corporate existence, without affecting

its then existing property rights or liabilities, or the liabilities of

its members or officers as such, but thereafter it shall have only such

rights, powers and privileges, and be subject only to such other duties

and liabilities, as a corporation created for the same purposes under

this article.

(i) Effect of section.

Corporations incorporated or reincorporated under this section shall

be organized and operated exclusively for the purposes set forth in

paragraph (a), shall have, in addition to the powers otherwise conferred

by law, the powers conferred by paragraph (c) and shall be subject to

all the restrictions and limitations imposed by paragraph (e) and

paragraph (g). In so far as the provisions of this section are

inconsistent with the provisions of any other law, general or special,

the provisions of this section shall be controlling as to corporations

incorporated or reincorporated hereunder.