New York State Legislative Developments for Tax Exempt Organizations / Associations | Hodgson Russ LLP

This Client Alert highlights two recent legislative developments applicable to nonprofits in New York State.

NY 172-b Executive Law Amendment: Repeal of NYS DOS Filing Requirements

Governor Hochul enacted Law S4817a / A1141a on November 12, 2021. Law S4817a amended New York Executive Law 172-b, partially repealing the controversial and binding requirement that certain organizations register with the Bureau of New York State Attorney General’s charities (the “Office of Charities”) also file specified documentation with the New York State Department (the “NYS DOS”). duplicate declarations, Executive Law 172-ba has come under significant criticism as it forced organizations to publicly disclose previously confidential information about their donors on their 990 forms (i.e., donor disclosure lists of Schedule B) to the NYS DOS, but did not require that the information provided be kept confidential.Now, following the repeal, most nonprofits are no longer required to file with the NYS DOS. It should be noted, however, that non-profit organizations that were required to register and file annual returns of Form CHAR500 with the Charities Bureau are still required to do so. For more information on the Charities Office filing requirement, please see our previous alerts (May 14, 2021 and November 10, 2021).

It is important to note that organizations subject to Executive Act 172-e and 172-f are still required to file with the NYS DOS, in addition to filing with the Charities Bureau. Executive Law 172-e applies to 501 (c) (3) charities that make an in-kind donation of $ 10,000 or more to 501 (c) (4) social welfare organizations that spend $ 15,000 or more over a twelve month period for New York State, county or local state government lobbying and lobbying expenses constitute at least 3% of total 501 (c) (4) revenue. Executive Law 172-f applies to certain 501 (c) (4) welfare organizations that spend $ 10,000 or more over a twelve month period on “covered communications”. A “covered communication” is transmitted to 500 or more members of the general public, and “refers to and advocates for or against a clearly identified elected, executive or administrative body or legislative body regarding sponsorship, support, opposition or the outcome of any draft law, pending legislation, rule, regulation, hearing or decision, or argue for or against the action of an elected official, executive or administrative body or legislative body.

New York Not-for-Profit Corporations Act Amendment: Electronic Membership Meetings

Governor Hochul enacted Law S1182 / A01237 on November 8, 2021, which amended Section 603 (a) of the New York Not-for-Profit Corporations Act, making the possibility of membership meetings permanent. remotely using electronics and / or audiovisual communication technologies.

Prior to the amendment, the law only allowed electronic meetings during the state of disaster emergency (from March 7, 2020) as stated in Executive Decree 202. The amendment, however, removes this limitation temporal and makes permanent the capacity of the board of directors of a non-profit organization. of the directors to authorize the holding of partial or exclusive meetings of members by electronic communication, at the discretion of the board, unless the certificate of incorporation or the by-laws of the organization do not otherwise prohibit. As was the case with the emergency allowance, this allowance remains subject to certain conditions. More specifically, the board of directors must take reasonable steps to:

  • Verify that each person participating electronically is a member or an agent of a member;
  • Provide each electronically participating member a reasonable opportunity to participate in the meeting, including an opportunity to propose, object and vote on a specific action to be taken by members, and to see, read or hear the proceedings of the meeting substantially at the same time as these procedures; and,
  • Record and keep a record of all votes or other actions taken by electronic communication during the meeting.

While the COVID pandemic has presented unique challenges for nonprofits, these legislative developments will hopefully bring some administrative relief and increased efficiency.

Hodgson Russ LLP professionals will continue to monitor relevant developments and issue updates as information becomes available.


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