New York Arts and Cultural Affairs Law
The council on the arts shall be prohibited from issuing grants to an organization unless such organization is incorporated as a nonprofit organization either in the state or, if an organization is incorporated elsewhere, such organization must be registered to do business in the state through the department of state and must have its principal place of business located within the state. Grant recipients shall also be prohibited from using grant funding received from the council on the arts to fund components of an organizations budget that are not directed towards programs in the state. If an organization is found to have violated this section, they shall (1) be required to reimburse back to the council on the arts, all monies received under the particular grant within thirty days or face a fine to be determined by the department of state, and
(2) not be allowed to reapply for future funding until they provide proof to the council on the arts of their subsequent filing of articles of incorporation with the department of state in New York.