Summary#
S-10709, the “Count me out!: Ending New York funding of designated foreign terrorist organizations act,” would amend New York’s Not-for-Profit Corporation Law. Its stated goal is to prevent not-for-profit corporations from knowingly supporting organizations designated as foreign terrorist organizations by the U.S. Secretary of State.
- It would add a ban on a not-for-profit corporation knowingly providing, attempting to provide, or conspiring to provide material support or resources to a designated organization—or to someone acting on its behalf or under its direction or control—when that conduct violates federal law.
- “Material support or resources” would use the definition in federal law. It covers property and services such as money, financial services, lodging, training, expert help, personnel, transportation, weapons and other listed items; medicine and religious materials are excluded.
- The state attorney general could sue the corporation or its trustees, directors, managers, officers or agents for a civil penalty of at least $1 million. The action must be brought within 10 years of the act.
- An individual damaged by a violation could sue those same parties to seek an injunction and actual damages. A court could also award the winning plaintiff legal fees. The suit must be brought within 10 years.
- The bill would exclude acts violating the new section from “charitable purposes” and add authority to dissolve a charitable corporation for violations.
What it means for you#
- Not-for-profit corporations and their leaders: If the bill became law, knowingly engaging in the defined support in violation of federal law would be prohibited under state law. The bill allows claims against both the corporation and named leaders or agents.
- People who are damaged by a violation: They could bring a civil lawsuit seeking to stop the support and recover actual damages. The bill does not say how a person must show they were damaged.
- Charitable corporations: The bill would add a power to dissolve a charitable corporation for violations. The bill does not set out the steps or standards for using that power.
- General public: This is not a general ban on donations to foreign organizations. The bill applies to the defined support involving organizations designated under federal law, or people acting for or under their control, and requires a violation of federal law.
- The bill is introduced and referred to the Senate Rules Committee; it is not law. The supplied material does not include the current Not-for-Profit Corporation Law, so existing rules and how these changes would interact with them could not be verified.
Money#
No publicly available information on the bill’s public implementation or enforcement costs is included in the supplied material.
- The attorney general could seek a civil penalty of at least $1 million; the bill sets no maximum amount. It does not explain how the amount would be calculated.
- Individuals could seek actual damages, and a court could award legal fees to a winning plaintiff.
- The bill does not appropriate money or provide a cost estimate for enforcement, court cases or dissolution proceedings.
What is unclear#
- The bill does not say whether the $1 million minimum applies to each act, each lawsuit or each defendant.
- It does not set out procedures or standards for the attorney general’s new dissolution power.
- It does not define what counts as an individual being “damaged,” or set out other rules for private lawsuits.
- The bill relies on a federal definition “as amended.” It does not explain how changes to that federal definition would affect the state law.
- The supplied material does not show how the new provisions would overlap with existing state law or enforcement processes.
Case for#
- The bill appears intended to prevent New York not-for-profit corporations from providing support that violates federal law and benefits designated foreign terrorist organizations.
- Using the federal designation process gives the bill a stated basis for identifying covered organizations.
- The attorney general’s ability to seek a penalty and an affected individual’s ability to sue could provide routes to enforce the proposed prohibition.
- The bill excludes medicine and religious materials from its definition of material support or resources.
Case against#
- The definition covers indirect support, attempts and conspiracies, as well as a wide range of property and services. The bill does not explain how those terms would apply in particular situations.
- The minimum penalty is at least $1 million, with no maximum stated. The bill does not explain how a court would set the amount.
- The bill adds a power to dissolve charitable corporations but does not spell out the process or standards for using it.
- The bill creates a private right to sue but leaves unclear what level of harm qualifies an individual to bring a case.