N.Y. Public Authorities Law § 2827-a: Subsidiaries of public authorities

§ 2827-a. Subsidiaries of public authorities. 1. Notwithstanding any

law to the contrary, no state authority shall hereafter have the power

to organize any subsidiary corporation unless the legislature shall have

enacted a law granting such state authority such power for the

organization of a specific corporation, provided, however, that a state

authority may organize a subsidiary corporation pursuant to the

following requirements:

a. the purpose for which the subsidiary corporation shall be organized

shall be for a project or projects which the state authority has the

power to pursue pursuant to its corporate purposes;

b. the primary reason for which the subsidiary corporation shall be

organized shall be to limit the potential liability impact of the

subsidiary's project or projects on the authority or because state or

federal law requires that the purpose of a subsidiary be undertaken

through a specific corporate structure; and

c. the subsidiary corporation shall make the reports and other

disclosures as are required of state authorities, unless the subsidiary

corporation's operations and finances are consolidated with those of the

authority of which it is a subsidiary.

2. In such cases where a state authority has the power to organize a

subsidiary corporation pursuant to subdivision one of this section, the

state authority shall file, no less than sixty days prior to the

formation of such subsidiary, notice to the authorities budget office,

the governor, the comptroller, and the legislature that it will be

creating a subsidiary.

3. Subsidiary corporations formed under subdivision one of this

section shall not have the authority to issue bonds, notes or other

debts, provided, however, that such subsidiary corporations may issue

notes or other debt to the public authority of which it is a subsidiary.

No such debt issued by the subsidiary to its parent authority shall in

total exceed, at any time, a principal amount of five hundred thousand

dollars or, during the nine months after the formation of the

subsidiary, one million dollars.

4. The certificate of incorporation or other document filed to

organize a subsidiary corporation under this section shall state that

the state authority is the person organizing the corporation.

5. Provided, however, that nothing in this section shall be construed

to grant an authority the power to create a subsidiary where the

authority does not otherwise have the power to do so.

6. On or before the first day of January, two thousand eleven, and

annually on such day thereafter, any subsidiary public benefit

corporation, in cooperation with its parent public benefit corporation,

shall provide to the chair and ranking minority member of the senate

finance committee, the chair and ranking minority member of the assembly

ways and means committee, and each chair and ranking member of the

assembly and senate committees on corporations, authorities and

commissions a report on the subsidiary public benefit corporation. Such

report shall include for each subsidiary:

a. The complete legal name, address and contact information of the

subsidiary;

b. The structure of the organization of the subsidiary, including the

names and titles of each of its members, directors and officers, as well

as a chart of its organizational structure;

c. The complete bylaws and legal organization papers of the

subsidiary;

d. A complete report of the purpose, operations, mission and projects

of the subsidiary, including a statement of justification as to why the

subsidiary is necessary to continue its operations for the public

benefit for the people of the state of New York; and

e. Any other information the subsidiary public benefit corporation

deems important to include in such report.

7. Notwithstanding any inconsistent provision of this section,

paragraph b of subdivision one and subdivision three of this section

shall not apply to an entity established in article ten-c of this

chapter; provided, however, that no such public benefit corporation

shall have the power to organize a subsidiary for the purpose of:

a. evading the requirements of an existing collective bargaining

agreement; or

b. replacing or removing a certified employee organization.