N.Y. Arts and Cultural Affairs Law § 3.19

§ 3.19. Prohibition. The council on the arts shall be prohibited from\nissuing grants to an organization unless such organization is\nincorporated as a nonprofit organization either in the state or, if an\norganization is incorporated elsewhere, such organization must be\nregistered to do business in the state through the department of state\nand must have its principal place of business located within the state.\nGrant recipients shall also be prohibited from using grant funding\nreceived from the council on the arts to fund components of an\norganization's budget that are not directed towards programs in the\nstate. If an organization is found to have violated this section, they\nshall (1) be required to reimburse back to the council on the arts, all\nmonies received under the particular grant within thirty days or face a\nfine to be determined by the department of state, and (2) not be allowed\nto reapply for future funding until they provide proof to the council on\nthe arts of their subsequent filing of articles of incorporation with\nthe department of state in New York.\n