§ 1411 — Local development corporations

New York § 1411

• Jurisdiction: New York
• Law NPC: Not-for-Profit Corporation
• Art. 14: Special Not-for-profit Corporations

Text

§ 1411. Local development corporations.\n (a) Purposes.\n This section shall provide an additional and alternate method of\nincorporation or reincorporation of not-for-profit corporations for any\nof the purposes set forth in this paragraph and shall not be deemed to\nalter, impair or diminish the purposes, rights, powers or privileges of\nany corporation heretofore or hereafter incorporated under this section\nor under the stock or business corporation laws. Corporations may be\nincorporated or reincorporated under this section as not-for-profit\nlocal development corporations operated for the exclusively charitable\nor public purposes of relieving and reducing unemployment, promoting and\nproviding for additional and maximum employment, bettering and\nmaintaining job opportunities, instructing or training individuals to\nimprove or develop their capabilities for such jobs, carrying on\nscientific research for the purpose of aiding a community or\ngeographical area by attracting new industry to the community or area or\nby encouraging the development of, or retention of, an industry in the\ncommunity or area, and lessening the burdens of government and acting in\nthe public interest, and any one or more counties, cities, towns or\nvillages of the state, or any combination thereof, or the New York job\ndevelopment authority in exercising its power under the public\nauthorities law to encourage the organization of local development\ncorporations, may cause such corporations to be incorporated by public\nofficers or private individuals or reincorporated upon compliance with\nthe requirements of this section, and it is hereby found, determined and\ndeclared that in carrying out said purposes and in exercising the powers\nconferred by paragraph (b) such corporations will be performing an\nessential governmental function.\n (b) Type of corporation.\n A local development corporation is a charitable corporation under this\nchapter.\n (c) Powers.\n In furtherance of its purposes set forth in paragraph (a) but not for\nany other purposes, a local development corporation incorporated or\nreincorporated under this section shall have the following powers: to\nconstruct, acquire, rehabilitate and improve for use by others\nindustrial or manufacturing plants in the territory in which its\noperations are principally to be conducted, to assist financially in\nsuch construction, acquisition, rehabilitation and improvement, to\nmaintain such plants for others in such territory, to disseminate\ninformation and furnish advice, technical assistance and liaison with\nfederal, state and local authorities with respect thereto, to acquire by\npurchase, lease, gift, bequest, devise or otherwise real or personal\nproperty or interests therein, to borrow money and to issue negotiable\nbonds, notes and other obligations therefor, and notwithstanding section\n510 (Disposition of all or substantially all assets) without leave of\nthe court, to sell, lease, mortgage or otherwise dispose of or encumber\nany such plants or any of its real or personal property or any interest\ntherein upon such terms as it may determine and, in connection with\nloans from the New York job development authority, to enter into\ncovenants and agreements and to comply with all the terms, conditions\nand provisions thereof, and otherwise to carry out its corporate\npurposes and to foster and encourage the location or expansion of\nindustrial or manufacturing plants in the territory in which the\noperations of such corporation are principally to be conducted,\nprovided, however, that no such corporation shall attempt to influence\nlegislation by propaganda or otherwise, or participate or intervene,\ndirectly or indirectly, in any political campaign on behalf of or in\nopposition to any candidate for public office.\n (d) Purchase or lease of real property owned by a county, city, town\nor village.\n (1) The local legislative body of a county, city, town or village or,\nif there is a board of estimate in a city, then the board of estimate,\nmay by resolution determine that specifically described real property\nowned by the county, city, town or village is not required for use by\nsuch county, city, town or village and authorize the county, city, town\nor village to sell or lease such real property to a local development\ncorporation incorporated or reincorporated under this article; provided,\nhowever, that title to such land be not declared inalienable as a forest\npreserve or a parkland.\n (2) Notwithstanding the provisions of any general, special or local\nlaw, charter or ordinance to the contrary, such sale or lease may be\nmade without appraisal, public notice, (except as provided in\nsubparagraph (4)) or public bidding for such price or rental and upon\nsuch terms as may be agreed upon between the county, city, town or\nvillage and said local development corporation; provided, however, that\nin case of a lease the term may not exceed ninety-nine years and\nprovided, further, that in cities having a population of one million or\nmore, no such sale or lease shall be made without the approval of a\nmajority of the members of the borough improvement board of the borough\nin which such real property is located.\n (3) Before any sale or lease to a local development corporation\nincorporated or reincorporated under this article shall be authorized, a\npublic hearing shall be held by the local legislative body, or by the\nboard of estimate, as the case may be, to consider the proposed sale or\nlease.\n (4) Notice of such hearing shall be published at least ten days before\nthe date set for the hearing in such publication and in such manner as\nmay be designated by the local legislative body, or the board of\nestimate as the case may be.\n (5) A local development corporation, incorporated or reincorporated\nunder this section, which purchases or leases real property from a\ncounty, city, town or village, shall not, without the written approval\nof the county, city, town or village, use such real property for any\npurpose except the purposes set forth in the certificate of\nincorporation or reincorporation of said local development corporation.\nIn the event such real property is used in violation of the restrictions\nof this paragraph, the attorney-general may bring an action or special\nproceeding to enjoin the unauthorized use.\n (e) Certificate of incorporation.\n In addition to the requirements of section 402 (Certificate of\nincorporation; contents) the certificate of incorporation or\nreincorporation of a local development corporation incorporated or\nreincorporated under this article shall state (1) that all income and\nearnings of such corporation shall be used exclusively for its corporate\npurposes or accrue and be paid to the New York job development\nauthority, (2) that no part of the income or earnings of such\ncorporation shall inure to the benefit or profit of, nor shall any\ndistribution of its property or assets be made to any member or private\nperson, corporate or individual, or any other private interest, except\nthat the certificate of incorporation or reincorporation may authorize\nthe repayment of loans and may also authorize the repayment of\ncontributions (other than dues) to the local development corporation but\nonly if and to the extent that any such contribution may not be\nallowable as a deduction in computing taxable income under the internal\nrevenue code of nineteen hundred fifty-four, (3) that if such\ncorporation accepts a mortgage loan or loans from the New York job\ndevelopment authority, such corporation shall be dissolved in accordance\nwith the provisions of paragraph (g) upon the repayment or other\ndischarge in full by such corporation of all such loans.\n (f) Exemption of income from taxation.\n The income and operations of corporations incorporated or\nreincorporated under this section shall be exempt from taxation.\n (g) Dissolution.\n Upon the dissolution of any local development corporation incorporated\nor reincorporated under this section no member or private person,\ncorporate or individual, or other private interest, shall be entitled to\nany distribution or division of its remaining funds and other property\nand rights and interests in property, and the balance thereof, after the\npayment of all debts and liabilities of the corporation of whatsoever\nkind and nature, (including the payment of loans and contributions the\nrepayment of which has been authorized in its certificate of\nincorporation or reincorporation) shall be distributed to one or more\ncounties, cities, towns or villages within the territory designated in\nits certificate of incorporation or reincorporation as the territory in\nwhich its operations are principally to be conducted, for furtherance of\nthe purposes set forth in paragraph (a), or to the New York job\ndevelopment authority, as shall be provided by said corporation or by\norder of the supreme court of the state of New York pursuant to section\n1008 (Jurisdiction of supreme court to supervise dissolution and\nliquidation).\n (h) Corporations heretofore incorporated.\n Any corporation heretofore incorporated under the membership\ncorporations law or this chapter, or under the stock or business\ncorporation law for any of the purposes set forth in paragraph (a) of\nthis section may amend its certificate of incorporation and be\nreincorporated as a local development corporation organized under this\nsection by making and filing in the office of the secretary of state a\ncertificate, stating the name of such corporation, and, if it has been\nchanged, the name under which it was originally incorporated, the date\nof its incorporation, the names and post-office addresses of its members\nor of the holders of record of all of the outstanding shares of such\ncorporation entitled to vote with relation to the proceedings provided\nfor in the certificate and that such corporation has elected to become\nand be a local development corporation organized and operated under and\nby virtue of this section. Such certificate shall be either (1)\nsubscribed in person or by proxy by all of the members or the holders of\nrecord of all of the outstanding shares of such corporation entitled to\nvote with relation to such proceedings and shall have annexed an\naffidavit of the secretary or an assistant secretary that the persons\nwho have executed the certificate, in person or by proxy, constitute all\nof the members or the holders of record of all of the outstanding shares\nof the corporation entitled to vote with relation to the proceedings\nprovided for in the certificate, or (2) subscribed by the president or a\nvice president and the secretary or an assistant secretary and shall\nhave annexed an affidavit of such officers stating that they have been\nauthorized to execute and file such certificate by the votes, cast in\nperson or by proxy, of all of the members or of the holders of record of\nall of the outstanding shares of such corporation entitled to vote with\nrelation to such proceedings at the meeting at which such votes were\ncast, and that such votes were cast at a meeting of members or\nstockholders held on a date specified, upon notice pursuant to section\n605 (Notice of meeting of members) or to section 605 of the Business\nCorporation Law. Every certificate filed under this paragraph shall have\nendorsed thereon or annexed thereto the approval of a justice of the\nsupreme court of the judicial district in which the office of the\ncorporation is to be located. A reincorporation pursuant to this\nparagraph shall not effect a dissolution of the corporation, but shall\nbe deemed a continuation of its corporate existence, without affecting\nits then existing property rights or liabilities, or the liabilities of\nits members or officers as such, but thereafter it shall have only such\nrights, powers and privileges, and be subject only to such other duties\nand liabilities, as a corporation created for the same purposes under\nthis article.\n (i) Effect of section.\n Corporations incorporated or reincorporated under this section shall\nbe organized and operated exclusively for the purposes set forth in\nparagraph (a), shall have, in addition to the powers otherwise conferred\nby law, the powers conferred by paragraph (c) and shall be subject to\nall the restrictions and limitations imposed by paragraph (e) and\nparagraph (g). In so far as the provisions of this section are\ninconsistent with the provisions of any other law, general or special,\nthe provisions of this section shall be controlling as to corporations\nincorporated or reincorporated hereunder.\n