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New York Not-For-Profit Board Chair Requirement Delayed Again

One of the more contentious requirements imposed by the New York Non-Profit Revitalization Act is the new Section 713(f) of the Not-for-Profit Corporation Law, which states that no employee of a not-for-profit organization can serve as Board chair or hold any title with similar responsibilities.  Implementation of Section 713(f) previously was delayed until January 1, 2016, and on October 26, Governor Andrew Cuomo signed into law a bill which delays the effective date, for another year, until January 1, 2017.  According to the memorandum accompanying the bill, the delay is necessary because “the Legislature requires more time to study the impact of this prohibition on not-for-profit organizations.”

The future of Section 713(f) remains unclear.  In February 2015, New York State Senator Michael H. Ranzenhofer introduced a bill which would repeal Section 713(f) with the “expectation that a new provision will be enacted next year.”  The memorandum to the bill recognizes that “[c]ertain not-for-profit corporations specifically hire a person to serve as the chair or president of their board, which is different from the typical situation of an employee-employer relationship.”  While this bill has been referred to committee, it has not yet been passed by the Senate or introduced in the New York State Assembly.