N.Y.
Public Authorities Law Section 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; andc.
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; ande.
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 10-C (New York Health Care Corporations)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; orb.
replacing or removing a certified employee organization.
Source:
Section 2827-A — Subsidiaries of public authorities, https://www.nysenate.gov/legislation/laws/PBA/2827-A (updated Sep. 22, 2014; accessed Dec. 21, 2024).
