S T A T E O F N E W Y O R K ________________________________________________________________________ 7772 2013-2014 Regular Sessions I N A S S E M B L Y June 4, 2013 ___________ Introduced by M. of A. BRENNAN -- read once and referred to the Commit- tee on Corporations, Authorities and Commissions AN ACT to amend the not-for-profit corporation law, the estates, powers and trusts law, the surrogate's court procedure act, the racing, pari- mutuel wagering and breeding law, the executive law, the education law, the religious corporations law, the benevolent orders law, the public authorities law, the insurance law, the private housing finance law, the banking law, the general business law, the mental hygiene law and the public lands law, in relation to reform of charitable organ- izations; and to repeal certain provisions of the not-for-profit corporation law and the estates, powers and trusts law relating there- to THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: 1 Section 1. Subparagraph 6 of paragraph (a) of section 102 of the not- 2 for-profit corporation law is amended and ten new subparagraphs 3-a, 3 6-a, 9-a, 19, 20, 21, 22, 23, 24 and 25 are added to read as follows: 4 (3-A) "CHARITABLE CORPORATION" MEANS CORPORATIONS WHOSE PURPOSES AS 5 CONTAINED IN THE CERTIFICATE OF INCORPORATION OR SPECIAL LAW ARE EXCLU- 6 SIVELY CHARITABLE, EDUCATIONAL, RELIGIOUS, SCIENTIFIC, TESTING FOR 7 PUBLIC SAFETY AND TO FOSTER NATIONAL OR INTERNATIONAL AMATEUR SPORTS 8 COMPETITION OR FOR THE PREVENTION OF CRUELTY TO CHILDREN OR ANIMALS, 9 INCLUDING WITHOUT LIMITATION, ARTS, CULTURAL, ENVIRONMENTAL, HEALTH, 10 HUMAN SERVICES, LITERARY, PUBLIC BENEFIT, SOCIETY BENEFIT CORPORATIONS 11 AND OTHER PUBLICLY SUPPORTED OR PRIVATE FOUNDATIONS RECOGNIZED BY THE 12 UNITED STATES INTERNAL REVENUE SERVICE AS EXEMPT FROM FEDERAL INCOME 13 TAXATION UNDER SECTION FIVE HUNDRED ONE (C)(3) OF THE INTERNAL REVENUE 14 CODE OF 1986, AS AMENDED, OR ANY SUCCESSOR LAW. 15 (6) "Director" means any member of the governing board of a corpo- 16 ration, whether designated as director, trustee, manager, governor, or EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD08903-04-3 A. 7772 2 1 by any other title. The term "board" means "board of directors" OR ANY 2 OTHER BODY CONSTITUTING A "GOVERNING BOARD" AS DEFINED IN THIS SECTION. 3 (6-A) "ENTIRE BOARD" MEANS THE TOTAL NUMBER OF DIRECTORS ENTITLED TO 4 VOTE WHICH THE CORPORATION WOULD HAVE IF THERE WERE NO VACANCIES. IF THE 5 BY-LAWS OF ANY CORPORATION PROVIDE THAT THE BOARD MAY CONSIST OF A RANGE 6 BETWEEN A MINIMUM AND MAXIMUM NUMBER OF DIRECTORS, THEN THE "ENTIRE 7 BOARD" SHALL CONSIST OF THE NUMBER OF DIRECTORS WITHIN SUCH RANGE THAT 8 WERE ELECTED AT THE MOST RECENTLY HELD ELECTION OF DIRECTORS. 9 (9-A) "BENEFICENT CORPORATION" MEANS LAWFUL NON-BUSINESS CORPORATIONS, 10 INCLUDING CIVIC LEAGUES, SOCIAL WELFARE ORGANIZATIONS, FRATERNAL BENEFIT 11 SOCIETIES, BUSINESS LEAGUES, CHAMBERS OF COMMERCE, LABOR, AGRICULTURAL 12 AND HORTICULTURAL ORGANIZATIONS, SOCIAL AND RECREATIONAL CLUBS, CEMETERY 13 CORPORATIONS, CERTAIN CREDIT UNIONS, WAR VETERANS POSTS AND ORGANIZA- 14 TIONS, PATRIOTIC AND POLITICAL ORGANIZATIONS, CERTAIN INSURANCE ORGAN- 15 IZATIONS, AND CERTAIN EMPLOYEE BENEFIT ORGANIZATIONS, RECOGNIZED BY THE 16 INTERNAL REVENUE SERVICE AS FEDERAL INCOME TAX EXEMPT UNDER OTHER 17 SUBSECTIONS OF SECTION 501 OR UNDER SECTION 527 OF THE INTERNAL REVENUE 18 CODE OF 1986, AS AMENDED, OR ANY SUCCESSOR LAW, OTHER THAN THOSE ORGAN- 19 IZATIONS EXEMPT UNDER SECTION 501(C)(3) THEREOF. 20 (19) "AFFILIATE" OF A CORPORATION MEANS ANY ENTITY CONTROLLED BY, IN 21 CONTROL OF, OR UNDER COMMON CONTROL WITH SUCH CORPORATION. 22 (20) "INDEPENDENT AUDITOR" MEANS ANY CERTIFIED PUBLIC ACCOUNTANT 23 PERFORMING AN AUDIT OF THE FINANCIAL STATEMENTS OF A CORPORATION 24 REQUIRED BY SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B OF THE 25 EXECUTIVE LAW OR ENVISIONED BY SECTION FIVE HUNDRED NINE OF THIS CHAP- 26 TER. 27 (21) "INDEPENDENT DIRECTOR" MEANS A DIRECTOR WHO IN THE PAST THREE 28 YEARS: (I) WAS NOT EMPLOYED BY, AND DID NOT HAVE A RELATIVE WHO WAS 29 EMPLOYED BY, THE CORPORATION OR AN AFFILIATE OF THE CORPORATION; (II) 30 WAS NOT EMPLOYED BY, AND DID NOT HAVE A RELATIVE WHO WAS EMPLOYED BY, 31 ANY ENTITY THAT MADE PAYMENTS TO, OR RECEIVED PAYMENTS FROM, THE CORPO- 32 RATION OR ANY AFFILIATE OF THE CORPORATION FOR GOODS, PROPERTY OR 33 SERVICES EXCEEDING TEN THOUSAND DOLLARS; (III) HAS NOT HAD, AND DOES NOT 34 HAVE A RELATIVE WHO HAS HAD, A MATERIAL FINANCIAL INTEREST IN ANY ENTITY 35 THAT MADE PAYMENTS TO, OR HAS RECEIVED PAYMENTS FROM, THE CORPORATION OR 36 ANY AFFILIATE OF THE CORPORATION FOR GOODS, PROPERTY OR SERVICES EQUAL- 37 ING THE LESSER OF TWENTY-FIVE THOUSAND DOLLARS OR TWO PERCENT OF THE 38 CORPORATION'S TOTAL REVENUE FOR THE CORPORATION'S TAX YEAR; AND (IV) HAS 39 NOT RECEIVED, AND DOES NOT HAVE ANY RELATIVE WHO HAS RECEIVED, ANY OTHER 40 COMPENSATION, PAYMENT OF BENEFIT HAVING MONETARY VALUE FROM THE CORPO- 41 RATION OR ANY AFFILIATE OF THE CORPORATION, OTHER THAN REIMBURSEMENT FOR 42 EXPENSES REASONABLY INCURRED AS A DIRECTOR OR REASONABLE COMPENSATION 43 FOR SERVICE AS A DIRECTOR AS PERMITTED BY PARAGRAPH (A) OF SECTION TWO 44 HUNDRED TWO OF THIS CHAPTER. FOR PURPOSES OF THIS CHAPTER, "PAYMENT" 45 DOES NOT INCLUDE CONTRIBUTIONS TO A NOT-FOR-PROFIT CORPORATION. 46 (22) "RELATIVE" OF AN INDIVIDUAL MEANS THE (I) SPOUSE, ANCESTOR, CHIL- 47 DREN, GRANDCHILDREN, GREAT GRANDCHILDREN, BROTHER OR SISTER (WHETHER BY 48 THE WHOLE- OR HALF-BLOOD) OF THE INDIVIDUAL; AND (II) THE SPOUSES OF 49 CHILDREN, GRANDCHILDREN, GREAT GRANDCHILDREN, BROTHER OR SISTER (WHETHER 50 BY THE WHOLE- OR HALF-BLOOD) OF THE INDIVIDUAL. 51 (23) "RELATED PARTY" MEANS (I) ANY DIRECTOR, OFFICER OR KEY EMPLOYEE 52 OF THE CORPORATION OR ANY AFFILIATE OF THE CORPORATION; (II) ANY RELA- 53 TIVE OF ANY DIRECTOR, OFFICER OR KEY EMPLOYEE OF THE CORPORATION OR ANY 54 AFFILIATE OF THE CORPORATION; OR (III) AN ENTITY IN WHICH ANY INDIVIDUAL 55 DESCRIBED IN CLAUSES (I) AND (II) OF THIS SUBPARAGRAPH HAS A THIRTY-FIVE 56 PERCENT OR GREATER OWNERSHIP OR BENEFICIAL INTEREST. A. 7772 3 1 (24) "RELATED PARTY TRANSACTION" MEANS ANY TRANSACTION, AGREEMENT OR 2 ANY OTHER ARRANGEMENT IN WHICH A RELATED PARTY HAS A FINANCIAL INTEREST 3 AND IN WHICH THE CORPORATION OR ANY AFFILIATE OF THE CORPORATION IS A 4 PARTICIPANT. 5 (25) "KEY EMPLOYEE" MEANS ANY PERSON WHO IS IN A POSITION TO EXERCISE 6 SUBSTANTIAL INFLUENCE OVER THE AFFAIRS OF THE CORPORATION, AS DEFINED IN 7 SECTION 4958(F)(1)(A) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, 8 AND THE REGULATIONS THEREUNDER, AND ANY SUCCESSOR LAW OR REGULATION. 9 S 2. Paragraphs (a), (b) and (c) of section 103 of the not-for-profit 10 corporation law, paragraph (a) as amended by chapter 807 of the laws of 11 1973, paragraph (b) as amended by chapter 847 of the laws of 1970, and 12 paragraph (c) as amended by chapter 961 of the laws of 1972, are amended 13 to read as follows: 14 (a) Except as otherwise provided in this section, this chapter 15 applies to every domestic corporation as herein defined, and to every 16 foreign corporation as herein defined which is authorized to conduct or 17 which conducts any activities in this state. This chapter also applies 18 to any other domestic corporation or foreign corporation of any [type 19 or] kind to the extent, if any, provided under this chapter or any law 20 governing such corporation and, if no such provision for application is 21 made, to the extent, if any, that the membership corporations law 22 applied to such corporation as of the effective date of this chapter. A 23 corporation formed by a special act of this state which has as its prin- 24 cipal purpose an education purpose and which is a member of the univer- 25 sity of the state of New York, is an "education corporation" under 26 section two hundred sixteen-a of the education law. 27 To the extent that the membership corporations law or the general 28 corporation law applied to it as of the effective date of this chapter, 29 the corresponding provisions of this chapter apply to a corporation 30 heretofore formed by or pursuant to a special act of this state other 31 than a religious corporation or an "education corporation" under clause 32 (b) of subdivision one of section two hundred sixteen-a of the education 33 law, if (1) its principal purpose is a religious, charitable or educa- 34 tion purpose, and (2) it is operated, supervised or controlled by or in 35 connection with a religious organization. Any such corporation may 36 elect hereunder at any time after the effective date of this chapter AND 37 BEFORE THE EFFECTIVE DATE OF THE CHAPTER OF THE LAWS OF TWO THOUSAND 38 THIRTEEN WHICH AMENDED THIS PARAGRAPH to file a certificate of type 39 under section one hundred thirteen (Certificate of type of not-for-pro- 40 fit corporation). Upon the filing of such certificate [by] TO the 41 department of state, this chapter shall apply in all respects to such 42 corporation. 43 This chapter also applies to any other corporation of any [type or] 44 kind, formed [not for profit] NOT-FOR-PROFIT under any other chapter of 45 the laws of this state except a chapter of the consolidated laws, to the 46 extent that provisions of this chapter do not conflict with the 47 provisions of such unconsolidated law. If an applicable provision of 48 such unconsolidated law relates to a matter embraced in this chapter but 49 is not in conflict therewith, both provisions shall apply. Any corpo- 50 ration to which this chapter is made applicable by this paragraph shall 51 be treated as a "corporation" or "domestic corporation" as such terms 52 are used in this chapter, except that the purposes of any such corpo- 53 ration formed or formable under such unconsolidated law shall not there- 54 by be extended. For the purpose of this paragraph, the effective date 55 of this chapter as to corporations to which this chapter is made appli- A. 7772 4 1 cable by this paragraph shall be September one, nineteen hundred seven- 2 ty-three. 3 (b) The general corporation law does not apply to a corporation of 4 any [type or] kind to which this chapter applies. A reference in any 5 statute of this state which makes a provision of the general corporation 6 law applicable to a corporation of any [type or] kind to which this 7 chapter is applicable or a reference in any [statute] LAW of this state, 8 other than the membership corporations law, which makes a provision of 9 the membership corporations law applicable to a corporation of any [type 10 or] kind shall be deemed and construed to refer to and make applicable 11 the corresponding provision, if any, of this chapter. 12 (c) If any provision in articles one to thirteen inclusive of this 13 chapter conflicts with a provision of any subsequent articles or of any 14 special act under which a corporation to which this chapter applies is 15 formed, the provision in such subsequent article or special act 16 prevails. A provision of any such subsequent article or special act 17 relating to a matter referred to in articles one to thirteen inclusive 18 and not in conflict therewith is supplemental and both shall apply. 19 Whenever the board of a [Type B] CHARITABLE corporation, formed under a 20 special act, reasonably makes an interpretation as to whether a 21 provision of the special act or this chapter prevails, or both apply, 22 such interpretation shall govern unless and until a court determines 23 otherwise, if such board has acted in good faith for a purpose which it 24 reasonably believes to be in the best interests of the corporation, 25 provided however, that such interpretation shall not bind any govern- 26 mental body or officer. 27 S 3. Paragraph (a) of section 104-a of the not-for-profit corporation 28 law is REPEALED and paragraphs (b) through (s) are relettered paragraphs 29 (a) through (r). 30 S 4. Section 105 of the not-for-profit corporation law, as amended by 31 chapter 172 of the laws of 1999, is amended to read as follows: 32 S 105. Certificates; corrections. 33 (A) ANY CERTIFICATE OR OTHER INSTRUMENT RELATING TO A DOMESTIC OR 34 FOREIGN CORPORATION SUBMITTED TO THE DEPARTMENT OF STATE UNDER THIS 35 CHAPTER MAY BE CORRECTED WITH RESPECT TO ANY TYPOGRAPHICAL, OR SIMILAR 36 NON-MATERIAL ERROR APPARENT ON THE FACE OF THE CERTIFICATE OR INSTRU- 37 MENT, PRIOR TO ACCEPTANCE FOR THE FILING OF SUCH CERTIFICATE OR INSTRU- 38 MENT BY THE DEPARTMENT OF STATE. SUCH CORRECTION SHALL BE EFFECTED BY 39 THE DEPARTMENT OF STATE UPON AUTHORIZATION IN WRITING OR BY ELECTRONIC 40 MAIL BY THE INCORPORATOR, OR FOLLOWING INCORPORATION, BY ANY PERSON 41 AUTHORIZED BY THE CORPORATION. 42 (B) Any certificate or other instrument relating to a domestic or 43 foreign corporation filed by the department of state under this chapter 44 may be corrected with respect to any [informality] TYPOGRAPHICAL OR 45 SIMILAR NON-MATERIAL or error apparent on the face or defect in the 46 execution thereof including the deletion of any matter not permitted to 47 be stated therein. A certificate, entitled "Certificate of correction 48 of.......... (correct title of certificate and name of corporation)" 49 shall be signed and delivered to the department of state. It shall set 50 forth the name of the corporation, the date the certificate to be 51 corrected was filed by the department of state, the provision in the 52 certificate as corrected or eliminated and if the execution was defec- 53 tive, the proper execution. The filing of the certificate by the depart- 54 ment of state shall not alter the effective time of the instrument being 55 corrected, which shall remain as its original effective time, and shall 56 not affect any right or liability accrued or incurred before such A. 7772 5 1 filing. A corporate name may not be changed or corrected under this 2 section OTHER THAN TO CORRECT ANY TYPOGRAPHICAL OR SIMILAR NON-MATERIAL 3 ERROR. 4 S 5. Subparagraphs 7, 8 and 9 of paragraph (a) of section 112 of the 5 not-for-profit corporation law, subparagraphs 7 and 9 as amended by 6 chapter 1058 of the laws of 1971, are amended and two new subparagraphs 7 10 and 11 are added to read as follows: 8 (7) To enforce any right given under this chapter to members, a 9 director or an officer of a [Type B or Type C] NOT-FOR-PROFIT corpo- 10 ration. The attorney-general shall have the same status as such 11 members, director or officer. 12 (8) To compel the directors and officers, or any of them, of a [Type 13 B or Type C] NOT-FOR-PROFIT corporation which has been dissolved under 14 section 1011 (Dissolution for failure to file certificate of type of 15 Not-for-Profit Corporation Law under section 113) to account for the 16 assets of the dissolved corporation. 17 (9) Upon application, ex parte, for an order to the supreme court at 18 a special term held within the judicial district where the office of the 19 corporation is located, and if the court so orders, to enforce any right 20 given under this chapter to members, a director or an officer of [a Type 21 A corporation] A NOT-FOR-PROFIT CORPORATION. For such purpose, the 22 attorney-general shall have the same status as such members, director or 23 officer. 24 (10) TO ENJOIN, VOID OR RESCIND ANY RELATED PARTY TRANSACTION, OR SEEK 25 ADDITIONAL DAMAGES OR REMEDIES PURSUANT TO SECTION 715 (RELATED PARTY 26 TRANSACTIONS) OF THIS CHAPTER. 27 (11) TO ENFORCE THE PARENS PATRIAE POWER AND ANY OTHER COMMON LAW 28 AUTHORITY OF THE ATTORNEY GENERAL AND ANY COMMON-LAW CAUSES OF ACTION 29 AVAILABLE TO MEMBERS, DIRECTORS, OFFICERS, CREDITORS AND OTHERS AGAINST 30 A DOMESTIC OR FOREIGN CORPORATION AND ITS MEMBERS, DIRECTORS AND OFFI- 31 CERS WHICH ARE NOT PREEMPTED BY THIS CHAPTER. 32 S 6. Subparagraph 1 of paragraph (b) of section 112 of the not-for- 33 profit corporation law is amended to read as follows: 34 (1) If an action, it is triable by jury as a matter of right AS GUAR- 35 ANTEED BY ARTICLE I, SECTION 2 OF THE CONSTITUTION AND PROVIDED BY 36 SECTION FORTY-ONE HUNDRED ONE OF THE CIVIL PRACTICE LAW AND RULES. 37 S 7. Subparagraph 1 of paragraph (c) of section 112 of the not-for- 38 profit corporation law is amended to read as follows: 39 (1) As used in this paragraph the term "resident" shall include indi- 40 viduals, domestic corporations of any [type or] kind and foreign corpo- 41 rations of any [type or] kind authorized to do business or carry on 42 activities in the state. 43 S 8. Section 112 of the not-for-profit corporation law is amended by 44 adding a new paragraph (e) to read as follows: 45 (E) NO PROVISIONS OF THIS CHAPTER SHALL PREEMPT WELL-PLEADED COMMON 46 LAW OR EQUITABLE CAUSES OF ACTION OR PROCEEDINGS BROUGHT BY THE ATTORNEY 47 GENERAL AGAINST CORPORATIONS, DIRECTORS, OFFICERS, KEY EMPLOYEES OR 48 AGENTS, IF SUCH CAUSES OF ACTION ARE INDEPENDENT OF CAUSES OF ACTION, IF 49 ANY, BASED ON VIOLATIONS OF THIS CHAPTER. 50 S 9. Section 113 of the not-for-profit corporation law is REPEALED. 51 S 10. Section 114 of the not-for-profit corporation law, as added by 52 chapter 847 of the laws of 1970, is amended to read as follows: 53 S 114. Visitation of supreme court. 54 [Type B and Type C corporations] CORPORATIONS, whether formed under 55 general or special laws, with their books and vouchers, shall be subject 56 to the visitation and inspection of a justice of the supreme court, or A. 7772 6 1 of any person appointed by the court for that purpose. If it appears by 2 the verified petition of a member, DIRECTOR, OFFICER, or creditor of any 3 such corporation, that it, or its directors, officers, MEMBERS, KEY 4 EMPLOYEES, or agents, have misappropriated any of the funds or property 5 of the corporation, or diverted them from the purpose of its incorpo- 6 ration, or that the corporation has acquired property in excess of the 7 amount which it is authorized by law to hold, or has engaged in any 8 business other than that stated in its certificate of incorporation, the 9 court may order that notice of at least eight days, with a copy of the 10 petition, be served on the corporation, THE ATTORNEY GENERAL, and the 11 persons charged with misconduct, requiring them to show cause at a time 12 and place specified, why they should not be required to make and file an 13 inventory and account of the property, effects and liabilities of such 14 corporation with a detailed statement of its transactions during the 15 twelve months next preceding the granting of such order. On the hearing 16 of such application, the court may make an order requiring such invento- 17 ry, account and statement to be filed, and proceed to take and state an 18 account of the property and liabilities of the corporation, or may 19 appoint a referee for that purpose. When such account is taken and 20 stated, after hearing all the parties to the application, the court may 21 enter a final order determining the amount of property so held by the 22 corporation, its annual income, whether any of the property or funds of 23 the corporation have been misappropriated or diverted to any other 24 purpose than that for which such corporation was incorporated, and 25 whether such corporation has been engaged in any activity not covered by 26 its certificate of incorporation. An appeal may be taken from the order 27 by any party aggrieved to the appellate division of the supreme court, 28 and to the court of appeals, as in a civil action. No corporation shall 29 be required to make and file more than one inventory and account in any 30 one year, nor to make a second account and inventory, while proceedings 31 are pending for the statement of an account under this section. 32 S 11. Section 115 of the not-for-profit corporation law, as added by 33 chapter 669 of the laws of 1977, is amended to read as follows: 34 S 115. Power to solicit contributions [for charitable purposes]. 35 No corporation having the power to solicit contributions [for charita- 36 ble purposes] may solicit contributions for any purpose [for which 37 approval of such solicitation is required under the provisions of 38 section four hundred four of this chapter] unless the certificate 39 specifically makes provision for such solicitation [and the required 40 written approval is endorsed on or annexed to such certificate or] 41 unless the corporation is among those referred to in section one hundred 42 seventy-two-a of the executive law. If [such approval is not obtained 43 and] the corporation continues to solicit or to receive contributions 44 for such purpose [or advertises that it has obtained such approval], the 45 attorney general[, at the request of the officer or body authorized to 46 grant such approval,] shall maintain an action or proceeding pursuant to 47 the provisions of subparagraph one of paragraph (a) of section one 48 hundred twelve of this chapter, OF THE EXECUTIVE LAW AND THE ESTATES, 49 POWERS AND TRUSTS LAW OR ANY OTHER APPLICABLE LAW AGAINST THE CORPO- 50 RATION, ITS DIRECTORS, OFFICERS, KEY EMPLOYEES, OR AGENTS THAT SOLICITS 51 CONTRIBUTIONS IN VIOLATION OF THIS CHAPTER OR THOSE LAWS. Such an 52 action may also be maintained in relation to a corporation hereinafter 53 incorporated if the name, purposes, objects or the activities of such 54 corporation may, in any manner, lead to the belief that the corporation 55 possesses or may exercise any of such purposes. OTHERWISE, NO CORPO- 56 RATION MAY SOLICIT CONTRIBUTIONS FOR ANY PURPOSE UNLESS AND UNTIL SUCH A. 7772 7 1 CORPORATION IS IN COMPLIANCE WITH THIS SECTION AND THE APPLICABLE REGIS- 2 TRATION AND REPORTING REQUIREMENTS OF ARTICLE SEVEN-A OF THE EXECUTIVE 3 LAW AND SECTION 8-1.4 OF THE ESTATES, POWERS AND TRUSTS LAW. 4 S 12. Section 201 of the not-for-profit corporation law, paragraph (b) 5 as amended by chapter 847 of the laws of 1970 and paragraph (c) as 6 amended by chapter 1058 of the laws of 1971, is amended to read as 7 follows: 8 S 201. Purposes. 9 (a) A corporation, as defined in subparagraph [(5)] (10), paragraph 10 (a) of S 102 (Definitions), may be formed under this chapter [as 11 provided in paragraph (b)] unless it may be formed under any other 12 corporate law of this state in which event it may not be formed under 13 this chapter unless such other corporate law expressly so provides. 14 (b) [A corporation, of a type and for a purpose or purposes as 15 follows, may be formed under this chapter, provided consents required 16 under any other statute of this state have been obtained: Type A -] A 17 CORPORATION FORMED ON OR AFTER JANUARY FIRST, TWO THOUSAND FOURTEEN 18 SHALL BE EITHER A CHARITABLE CORPORATION OR A BENEFICENT CORPORATION. A 19 not-for-profit corporation [of this type may be formed for any lawful 20 non-business purpose or purposes including, but not limited to, any one 21 or more of the following non-pecuniary purposes: civic, patriotic, 22 political, social, fraternal, athletic, agricultural, horticultural, 23 animal husbandry, and for a professional, commercial, industrial, trade 24 or service association. 25 Type B - A not-for-profit corporation of this type may be formed for 26 any one or more of the following non-business purposes: charitable, 27 educational, religious, scientific, literary, cultural or for the 28 prevention of cruelty to children or animals. 29 Type C - A not-for-profit corporation of this type may be formed for 30 any lawful business purpose to achieve a lawful public or quasi-public 31 objective. 32 Type D - A not-for-profit corporation of this type may be formed under 33 this chapter when such formation is authorized by any other corporate 34 law of this state for any business or non-business, or pecuniary or 35 non-pecuniary, purpose or purposes specified by such other law, whether 36 such purpose or purposes are also within types A, B, C above or other- 37 wise. 38 (c) If a corporation is formed for purposes which are within both type 39 A and type B above, it is a type B corporation. If a corporation has 40 among its purposes any purpose which is within type C, such corporation 41 is a type C corporation. A type D corporation is subject to all 42 provisions of this chapter which are applicable to a type B corporation 43 under this chapter unless provided to the contrary in, and subject to 44 the contrary provisions of, the other corporate law authorizing forma- 45 tion under this chapter of the type D corporation.] FORMED PRIOR TO 46 JANUARY FIRST, TWO THOUSAND FOURTEEN AS A TYPE A CORPORATION UNDER THIS 47 CHAPTER SHALL BE A BENEFICENT CORPORATION UNDER THIS CHAPTER. ANY 48 SUBMISSION OR FILING BY SUCH CORPORATION TO ANY PERSON OR ENTITY SHALL 49 BE DEEMED TO HAVE BEEN SUBMITTED OR FILED BY A BENEFICENT CORPORATION, 50 AND ANY REFERENCE IN ANY SUCH FILING OR SUBMISSION REFERRING TO THE 51 STATUS OF SUCH CORPORATION AS A TYPE A CORPORATION SHALL BE DEEMED TO 52 REFER TO A BENEFICENT CORPORATION. 53 (C) A TYPE B NOT-FOR-PROFIT CORPORATION FORMED PRIOR TO JANUARY FIRST, 54 TWO THOUSAND FOURTEEN SHALL BE DEEMED A CHARITABLE CORPORATION UNDER 55 THIS CHAPTER. ANY SUBMISSION OR FILING BY SUCH CORPORATION TO ANY PERSON 56 OR ENTITY SHALL BE DEEMED TO HAVE BEEN SUBMITTED OR FILED BY A CHARITA- A. 7772 8 1 BLE CORPORATION, AND ANY REFERENCE IN ANY SUCH FILING OR SUBMISSION 2 REFERRING TO THE STATUS OF SUCH CORPORATION AS A TYPE B CORPORATION 3 SHALL BE DEEMED TO REFER TO A CHARITABLE CORPORATION. 4 (D) A TYPE C OR D NOT-FOR-PROFIT CORPORATION FORMED PRIOR TO JANUARY 5 FIRST, TWO THOUSAND FOURTEEN SHALL BE DEEMED A BENEFICENT CORPORATION. 6 ANY SUBMISSION OR FILING BY SUCH CORPORATION TO ANY PERSON OR ENTITY 7 SHALL BE DEEMED TO HAVE BEEN SUBMITTED OR FILED BY A BENEFICENT CORPO- 8 RATION, AND ANY REFERENCE IN ANY SUCH FILING OR SUBMISSION REFERRING TO 9 THE STATUS OF SUCH CORPORATION AS A TYPE C OR D CORPORATION SHALL BE 10 DEEMED TO REFER TO A BENEFICENT CORPORATION. 11 S 13. Section 204 of the not-for-profit corporation law is amended to 12 read as follows: 13 S 204. Limitation on activities. 14 Notwithstanding any other provision of this chapter or any other 15 general law, a corporation of any [type or] kind to which this chapter 16 applies shall conduct no activities for pecuniary profit or financial 17 gain, whether or not in furtherance of its corporate purposes, except to 18 the extent that such activity supports its other lawful activities then 19 being conducted. 20 S 14. Subparagraphs 1, 2 and 3 of paragraph (a) of section 301 of the 21 not-for-profit corporation law, subparagraph 1 as amended by section 78 22 of part A of chapter 58 of the laws of 2010, subparagraph 2 as amended 23 by chapter 344 of the laws of 2004, are amended to read as follows: 24 (1) Shall[, unless the corporation is formed for charitable or reli- 25 gious purposes, or for purposes for which the approval of the commis- 26 sioner of social services or the public health and health planning coun- 27 cil is required, or is a bar association,] contain the word 28 "corporation", "incorporated" or "limited" or an abbreviation of one of 29 such words; or, in the case of a foreign corporation, it shall, for use 30 in this state, add at the end of its name one of such words or an abbre- 31 viation thereof. 32 (2) (A) Shall be such as to distinguish it from the names of corpo- 33 rations of any [type or] kind, or a fictitious name of an authorized 34 foreign corporation filed pursuant to article thirteen of this chapter, 35 as such names appear on the index of names of existing domestic and 36 authorized foreign corporations of any [type or] kind, including ficti- 37 tious names of authorized foreign corporations filed pursuant to article 38 thirteen of this chapter, in the department of state, division of corpo- 39 rations, or a name the right to which is reserved. 40 (B) Shall be such as to distinguish it from (i) the names of domestic 41 limited liability companies, (ii) the names of authorized foreign limit- 42 ed liability companies, (iii) the fictitious names of authorized foreign 43 limited liability companies, (iv) the names of domestic limited partner- 44 ships, (v) the names of authorized foreign limited partnerships, or (vi) 45 the fictitious names of authorized foreign limited partnerships, in each 46 case, as such names appear on the index of names of existing domestic 47 and authorized foreign limited liability companies, including fictitious 48 names of authorized foreign limited liability companies, in the depart- 49 ment of state, or on the index of names of existing domestic or author- 50 ized foreign limited partnerships, including fictitious names of author- 51 ized foreign limited partnerships, in the department of state, or names 52 the rights to which are reserved; provided, however, that no corporation 53 that was formed prior to the effective date of this clause and no 54 foreign corporation that was qualified to conduct activities in this 55 state prior to such effective date shall be required to change the name 56 or fictitious name it had on such effective date solely by reason of A. 7772 9 1 such name or fictitious name being indistinguishable from the name or 2 fictitious name of any domestic or authorized foreign limited liability 3 company or limited partnership or from any name the right to which is 4 reserved by or on behalf of any domestic or foreign limited liability 5 company or limited partnership. 6 (3) Shall not contain any word or phrase, or any abbreviation or 7 derivative thereof, the use of which is prohibited or restricted by 8 section 404 [(Approvals] (NOTICES and consents) or any other statute of 9 this state, unless in the latter case the restrictions have been 10 complied with. 11 S 15. Subparagraph 3 of paragraph (b) of section 302 of the not-for 12 profit corporation law, as amended by chapter 847 of the laws of 1970, 13 is amended to read as follows: 14 (3) Shall not prevent a foreign corporation from being authorized 15 under a name which is similar to the name of a corporation of any [type 16 or] kind existing or authorized under any statute, if the department of 17 state finds, upon proof by affidavit or otherwise as it may determine, 18 that a difference between such names exists in the terms or abbrevi- 19 ations indicating corporate character or otherwise, that the applicant 20 has conducted activities as a corporation under its said name for not 21 less than ten consecutive years immediately prior to the date of its 22 application, that the activities to be conducted in this state are not 23 the same or similar to the business or activities conducted by the 24 corporation with whose name it may conflict and that the public is not 25 likely to be confused or deceived, and if the applicant shall agree in 26 its application for authority to use with its corporate name, in this 27 state, to be placed immediately under or following such name, the words 28 "a ..... (name of jurisdiction of incorporation) corporation". 29 S 16. Section 304 of the not-for-profit corporation law, as amended by 30 chapter 168 of the laws of 1982, is amended to read as follows: 31 S 304. Statutory designation of secretary of state as agent of domestic 32 corporations [formed under article four of this chapter] and 33 authorized foreign corporations for service of process. 34 (a) The secretary of state shall be the agent of every domestic corpo- 35 ration [formed under article four of this chapter] and every authorized 36 foreign corporation upon whom process against the corporation may be 37 served. 38 (b) Any designation by a domestic corporation [formed under article 39 four of this chapter] or foreign corporation of the secretary of state 40 as such agent, which designation is in effect on the effective date of 41 this chapter, shall continue. Every domestic corporation [formed under 42 article four of this chapter] or foreign corporation, existing or 43 authorized on the effective date of this chapter, which has not desig- 44 nated the secretary of state as such agent, shall be deemed to have done 45 so. 46 (c) Any designation by a domestic corporation [formed under article 47 four of this chapter] or foreign corporation of an agent other than the 48 secretary of state which is in effect on the effective date of this 49 chapter shall continue in effect until changed or revoked as provided in 50 this chapter. 51 (d) Any designated post-office address to which the secretary of state 52 shall mail a copy of process served upon him OR HER as agent of a domes- 53 tic corporation [formed under article four of this chapter] or foreign 54 corporation, shall continue until the filing of a certificate under this 55 chapter directing the mailing to a different post-office address. A. 7772 10 1 S 17. Paragraph (a) of section 305 of the not-for-profit corporation 2 law, as amended by chapter 131 of the laws of 1985, is amended to read 3 as follows: 4 (a) Every domestic corporation or authorized foreign corporation may 5 designate a registered agent in this state upon whom process against 6 such corporation may be served. The agent shall be a natural person who 7 is a resident of or has a business address in this state or a domestic 8 corporation or foreign corporation of any [type or] kind formed, or 9 authorized to do business in this state, under this chapter or under any 10 other statute of this state. 11 S 18. Paragraphs (b) and (c) of section 306 of the not-for-profit 12 corporation law, paragraph (b) as amended by chapter 168 of the laws of 13 1982 and paragraph (c) as amended by chapter 93 of the laws of 1984, are 14 amended to read as follows: 15 (b) Service of process on the secretary of state as agent of a domes- 16 tic corporation [formed under article four of this chapter] or an 17 authorized foreign corporation shall be made by personally delivering to 18 and leaving with [him or his] THE deputy OF THE SECRETARY OF STATE, or 19 with any person authorized by the secretary of state to receive such 20 service, at the office of the department of state in the city of Albany, 21 duplicate copies of such process together with the statutory fee, which 22 fee shall be a taxable disbursement. Service of process on such corpo- 23 ration shall be complete when the secretary of state is so served. The 24 secretary of state shall promptly send one of such copies by certified 25 mail, return receipt requested, to such corporation, at the post office 26 address, on file in the department of state, specified for the purpose. 27 If a domestic corporation [formed under article four of this chapter] or 28 an authorized foreign corporation has no such address on file in the 29 department of state, the secretary of state shall so mail such copy to 30 such corporation at the address of its office within this state on file 31 in the department. 32 (c) If an action or special proceeding is instituted in a court of 33 limited jurisdiction, service of process may be made in the manner 34 provided in this section if the office of the domestic corporation 35 [formed under article four of this chapter] or foreign corporation is 36 within the territorial jurisdiction of the court. 37 S 19. The not-for-profit corporation law is amended by adding a new 38 section 309 to read as follows: 39 S 309. PERSONAL JURISDICTION AND SERVICE OF PROCESS ON NON-DOMICILIARY 40 RESIDENT DIRECTOR, OFFICER, KEY EMPLOYEE OR AGENT. 41 A PERSON, BY BECOMING A DIRECTOR, OFFICER, KEY EMPLOYEE OR AGENT OF A 42 CORPORATION IS SUBJECT TO THE PERSONAL JURISDICTION OF THE SUPREME COURT 43 OF THE STATE OF NEW YORK, AND IN AN ACTION OR PROCEEDING BY THE ATTORNEY 44 GENERAL UNDER THIS CHAPTER PROCESS MAY BE SERVED UPON SUCH PERSON AS 45 PROVIDED IN SECTION THREE HUNDRED THIRTEEN OF THE CIVIL PRACTICE LAW AND 46 RULES. 47 S 20. Subparagraphs 2 and 4 of paragraph (a) of section 402 of the 48 not-for-profit corporation law, subparagraph 2 as amended by chapter 847 49 of the laws of 1970 and subparagraph 4 as amended by chapter 679 of the 50 laws of 1985, are amended to read as follows: 51 (2) That the corporation is a corporation as defined in subparagraph 52 (a) (5) of section 102 (Definitions)[;], the purpose or purposes for 53 which it is formed, and [the type of] WHETHER IT IS A CHARITABLE corpo- 54 ration [it shall be] OR A BENEFICENT CORPORATION under section 201 55 (Purposes)[; and in the case of a Type C corporation, the lawful public 56 or quasi-public objective which each business purpose will achieve]. ANY A. 7772 11 1 CORPORATION MAY ALSO SET FORTH ANY ACTIVITIES THAT IT INTENDS TO CARRY 2 OUT IN FURTHERANCE OF SUCH PURPOSE OR PURPOSES; PROVIDED, HOWEVER, THAT 3 THIS SUBPARAGRAPH SHALL NOT BE INTERPRETED TO REQUIRE THAT SUCH ACTIV- 4 ITIES BE SET FORTH IN THE CERTIFICATE OF INCORPORATION. 5 (4) [In the case of a Type A, Type B, or Type C corporation, the] THE 6 names and addresses of the initial directors. [In the case of a Type D 7 corporation, the names and addresses of the initial directors, if any, 8 may but need not be set forth.] 9 S 21. The section heading and paragraphs (a), (b), (c), (d), (e), 10 (g), (h), (i), (t), (u), (v), and (w) of section 404 of the not-for-pro- 11 fit corporation law, the section heading, paragraphs (c), (d), (e), (h) 12 and (i) as amended and paragraph (a) as added by chapter 139 of the laws 13 of 1993, paragraph (c) as further amended by section 104 of part A of 14 chapter 62 of the laws of 2011 and paragraphs (a), (c), (d), (e), (g), 15 (h) and (i) as relettered by chapter 431 of the laws of 1993, paragraph 16 (b) as amended by section 4 of part D of chapter 58 of the laws of 2006, 17 paragraph (g) as separately amended by chapters 139 and 201 of the laws 18 of 1993, paragraph (t) as amended by section 79 of part A of chapter 58 19 of the laws of 2010, paragraph (u) as amended by chapter 558 of the laws 20 of 1999, paragraph (v) as added by chapter 598 of the laws of 2000 and 21 as further amended by section 104 of part A of chapter 62 of the laws of 22 2011 and paragraph (w) as added by chapter 316 of the laws of 2005, are 23 amended to read as follows: 24 [Approvals] NOTICES and consents. 25 (a) Every [certificate of incorporation] CORPORATION which includes 26 among its purposes the formation of a trade or business association 27 shall [have endorsed thereon or annexed thereto the consent of] SEND BY 28 CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED COPY OF ITS 29 CERTIFICATE OF INCORPORATION TO the attorney-general IMMEDIATELY AFTER 30 THE FILING OF SUCH CERTIFICATE BY THE SECRETARY OF STATE. 31 (b) (1) Every [certificate of incorporation] CORPORATION which 32 includes among its purposes the care of destitute, delinquent, aban- 33 doned, neglected or dependent children; the establishment or operation 34 of any adult care facility, or the establishment or operation of a resi- 35 dential program for victims of domestic violence as defined in subdivi- 36 sion four of section four hundred fifty-nine-a of the social services 37 law, or the placing-out or boarding-out of children or a home or shelter 38 for unmarried mothers, excepting the establishment or maintenance of a 39 hospital or facility providing health-related services as those terms 40 are defined in article twenty-eight of the public health law and a 41 facility for which an operating certificate is required by articles 42 sixteen, nineteen, twenty-two and thirty-one of the mental hygiene law; 43 or the solicitation of contributions for any such purpose or purposes, 44 shall [have endorsed thereon or annexed thereto the approval of] SEND BY 45 CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED COPY OF ITS 46 CERTIFICATE OF INCORPORATION TO the commissioner of the office of chil- 47 dren and family services IMMEDIATELY AFTER THE FILING OF SUCH CERTIF- 48 ICATE BY THE DEPARTMENT OF STATE or with respect to any adult care 49 facility, SEND BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED 50 COPY OF ITS CERTIFICATE OF INCORPORATION TO the commissioner of health 51 IMMEDIATELY AFTER THE FILING OF SUCH CERTIFICATE BY THE DEPARTMENT OF 52 STATE. 53 (2) A corporation whose statement of purposes specifically includes 54 the establishment or operation of a child day care center, as that term 55 is defined in section three hundred ninety of the social services law, 56 shall [provide a certified copy of the certificate of incorporation] A. 7772 12 1 SEND BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED COPY OF 2 ITS CERTIFICATE OF INCORPORATION, each amendment thereto, and any 3 certificate of merger, consolidation or dissolution involving such 4 corporation to the office of children and family services within thirty 5 days after the filing of such certificate, amendment, merger, consol- 6 idation or dissolution with the department of state. This requirement 7 shall also apply to any foreign corporation filing an application for 8 authority under section thirteen hundred four of this chapter, any 9 amendments thereto, and any surrender of authority or termination of 10 authority in this state of such corporation. 11 (c) Every [certificate of incorporation] CORPORATION which includes 12 among [the] ITS purposes [of the corporation,] the establishment, main- 13 tenance and operation of a hospital service or a health service or a 14 medical expense indemnity plan or a dental expense indemnity plan as 15 permitted in article forty-three of the insurance law, shall [have 16 endorsed thereon or annexed thereto the approval of] SEND BY CERTIFIED 17 MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED COPY OF ITS CERTIFICATE OF 18 INCORPORATION TO the superintendent of financial services and the 19 commissioner of health IMMEDIATELY AFTER THE FILING OF SUCH CERTIFICATE 20 BY THE DEPARTMENT OF STATE. 21 (d) Every [certificate of incorporation] CORPORATION which includes a 22 purpose for which a corporation [might] MUST be chartered by the regents 23 of the university of the State of New York shall [have endorsed thereon 24 or annexed thereto the consent of] APPLY TO THE REGENTS FOR A CHARTER. 25 SUCH CORPORATIONS ARE THOSE WHICH CARRY OUT ANY OF THE ACTIVITIES FOR 26 WHICH THE CONSENT OF THE COMMISSIONER OF EDUCATION IS REQUIRED BY PARA- 27 GRAPH (V) OF THIS SECTION. OTHERWISE A CORPORATION WHICH MAY HAVE 28 EDUCATIONAL PURPOSES MUST SEND BY CERTIFIED MAIL, RETURN RECEIPT 29 REQUESTED, A CERTIFIED COPY OF ITS CERTIFICATE OF INCORPORATION TO the 30 commissioner of education IMMEDIATELY AFTER THE FILING OF SUCH CERTIF- 31 ICATE BY THE DEPARTMENT OF STATE. 32 (e) Every [certificate of incorporation of a] cemetery corporation, 33 except those within the exclusionary provisions of section 1503 (Ceme- 34 tery corporations) shall [have endorsed thereon or annexed thereto the 35 approval of] SEND BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTI- 36 FIED COPY OF ITS CERTIFICATE OF INCORPORATION TO the cemetery board 37 IMMEDIATELY AFTER THE FILING OF SUCH CERTIFICATE BY THE DEPARTMENT OF 38 STATE. 39 (g) Every [certificate of incorporation of a] corporation for 40 prevention of cruelty to animals shall [have endorsed thereon or annexed 41 thereto the approval of] SEND BY CERTIFIED MAIL, RETURN RECEIPT 42 REQUESTED, A CERTIFIED COPY OF ITS CERTIFICATE OF INCORPORATION TO the 43 American Society for the Prevention of Cruelty to Animals[, or, if such 44 approval be withheld thirty days after application therefor, a certified 45 copy of an order of a justice of the supreme court of the judicial 46 district in which the office of the corporation is to be located, 47 dispensing with such approval, granted upon eight days' notice to such 48 society] IMMEDIATELY AFTER THE FILING OF SUCH CERTIFICATE BY THE DEPART- 49 MENT OF STATE. 50 (h) Every [certificate of incorporation of] CORPORATION WHICH HAS AS 51 ITS PURPOSE THE ESTABLISHMENT OF a Young Men's Christian Association 52 shall [have endorsed thereon or annexed thereto the approval of] SEND BY 53 CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED COPY OF ITS 54 CERTIFICATE OF INCORPORATION TO the chairman of the national board of 55 Young Men's Christian Associations IMMEDIATELY AFTER THE FILING OF SUCH 56 CERTIFICATE BY THE DEPARTMENT OF STATE. A. 7772 13 1 (i) Every [certificate of incorporation] CORPORATION which [indicates 2 that the proposed corporation is] HAS AS ITS PURPOSE to solicit funds 3 for or otherwise benefit the armed forces of the United States or of any 4 foreign country, or their auxiliaries, or of this or any other state or 5 any territory, shall [have endorsed thereon or annexed thereto the 6 approval of] SEND A CERTIFIED COPY, RETURN RECEIPT REQUESTED, OF ITS 7 CERTIFICATE OF INCORPORATION TO the chief of staff IMMEDIATELY AFTER THE 8 FILING OF SUCH CERTIFICATE BY THE DEPARTMENT OF STATE. 9 [(t)] (S) Every certificate of incorporation which includes among its 10 purposes and powers the establishment or maintenance of a hospital or 11 facility providing health related services, as those terms are defined 12 in article twenty-eight of the public health law, or the solicitation of 13 contributions for any such purpose or two or more of such purposes, 14 shall have endorsed thereon the approval of the public health and health 15 planning council. 16 [(u)] (T) Every certificate of incorporation which includes among the 17 purposes of the corporation, the establishment or operation of a 18 substance abuse, substance dependence, alcohol abuse, alcoholism, or 19 chemical abuse or dependence program, or the solicitation of contrib- 20 utions for any such purpose, shall have endorsed thereon or annexed 21 thereto the consent of the commissioner of the office of alcoholism and 22 substance abuse services to its filing by the department of state. 23 [(v)] (U) Every certificate of incorporation which includes among the 24 purposes of the corporation, the establishment, maintenance and opera- 25 tion of a nonprofit property/casualty insurance company, pursuant to 26 article sixty-seven of the insurance law, shall have endorsed thereon or 27 annexed thereto the approval of the superintendent of financial 28 services. 29 [(w)] (V) Every certificate of incorporation in which the name of the 30 proposed corporation includes the terms: "school," "education," "elemen- 31 tary," "secondary," "kindergarten," "prekindergarten," "preschool," 32 "nursery school," "museum," "history," "historical," "historical socie- 33 ty," "arboretum," "library," "college," "university," "PUBLIC TELE- 34 VISION," "PUBLIC RADIO STATION," or other term restricted by section two 35 hundred twenty-four of the education law; "conservatory," "academy," or 36 "institute," or any abbreviation or derivative of such terms, shall have 37 endorsed thereon or annexed thereto the consent of the commissioner of 38 education. 39 S 22. Section 404 of the not-for-profit corporation law is amended by 40 adding a new paragraph (w) to read as follows: 41 (W) EACH AGENCY, PUBLIC OFFICER, ORGANIZATION OR PERSON TO WHOM A 42 NOTICE OF INCORPORATION IS TO BE SENT OR FROM WHOM A CONSENT TO INCORPO- 43 RATION MUST BE OBTAINED, AS PROVIDED IN THIS SECTION, SHALL PUBLISH THE 44 NAME AND ADDRESS OF THE REPRESENTATIVE IT HAS DESIGNATED TO RECEIVE SUCH 45 NOTICE OR REQUEST FOR CONSENT. IF ANY AGENCY, PUBLIC OFFICER, ORGANIZA- 46 TION OR PERSON TO WHOM A REQUEST FOR CONSENT HAS BEEN SENT DOES NOT 47 CONSENT OR OBJECT, SETTING FORTH THE REASONS FOR SUCH OBJECTION, WITHIN 48 FORTY-FIVE DAYS AFTER THE RECEIPT OF SUCH REQUEST, THE CONSENT SHALL BE 49 CONCLUSIVELY PRESUMED TO HAVE BEEN GIVEN AND THE SECRETARY OF STATE 50 SHALL FILE THE CERTIFICATE OF INCORPORATION. 51 S 23. Paragraph (b-1) of section 406 of the not-for-profit corporation 52 law is REPEALED. 53 S 24. Subdivision (d) of section 406 of the not-for-profit corporation 54 law, as added by chapter 331 of the laws of 1971, is amended to read as 55 follows: A. 7772 14 1 (d) Nothing in this section shall impair the rights and powers of the 2 courts or the attorney-general of this state INCLUDING THE ENFORCEMENT 3 OF THE PROVISIONS INCLUDED IN THE CERTIFICATES OF INCORPORATION TO WHICH 4 THIS SECTION APPLIES. 5 S 25. Paragraph (d) of section 502 of the not-for-profit corporation 6 law is amended to read as follows: 7 (d) A member's capital contribution shall be evidenced by a capital 8 certificate which shall be non-transferable, except that the certificate 9 of incorporation of a [Type A] BENEFICENT corporation may provide that 10 its capital certificates, or some of them, may be transferable to other 11 members with the consent of the corporation upon specified terms and 12 conditions. 13 S 26. Paragraph (b) of section 503 of the not-for-profit corporation 14 law, subparagraph 1 as amended by chapter 847 of the laws of 1970, is 15 amended to read as follows: 16 (b) Each capital certificate shall when issued state upon the face 17 thereof: 18 (1) That the corporation is a [Type .....] CHARITABLE OR BENEFICENT 19 corporation under section 113 or section 402 of the New York Not-for- 20 Profit Corporation Law. 21 (2) The name of the member to whom issued. 22 (3) The amount of the member's capital contribution evidenced by such 23 certificate. 24 (4) If appropriate, that the corporation is a [Type A] BENEFICENT 25 corporation, and that its certificate of incorporation provides that the 26 capital certificate is transferable to other members with the consent of 27 the corporation. 28 S 27. Subparagraph 1 of paragraph (b) of section 505 of the not-for- 29 profit corporation law, as amended by chapter 847 of the laws of 1970, 30 is amended to read as follows: 31 (1) That the corporation is a [Type .....] CHARITABLE OR BENEFICENT 32 corporation under section 113 or section 402 of the New York Not-for- 33 Profit Corporation Law. 34 S 28. Section 509 of the not-for-profit corporation law, as amended by 35 chapter 145 of the laws of 1991, is amended to read as follows: 36 S 509. Purchase, sale, mortgage and lease of real property. 37 (A) No CORPORATION SHALL purchase [of] real property [shall be made by 38 a corporation and no corporation shall sell, mortgage or lease real 39 property, unless authorized by the vote of] UNLESS AUTHORIZED BY THE 40 VOTE OF A MAJORITY OF DIRECTORS OF THE BOARD OR A COMMITTEE AUTHORIZED 41 BY THE BOARD; PROVIDED, HOWEVER, THAT IF SUCH PROPERTY WOULD, UPON 42 PURCHASE THEREOF, CONSTITUTE ALL, OR SUBSTANTIALLY ALL, OF THE ASSETS OF 43 THE CORPORATION, THEN THE VOTE OF two-thirds of the entire board[, 44 provided that if] SHALL BE REQUIRED, OR, IF there are twenty-one or more 45 directors, the vote of a majority of the entire board shall be suffi- 46 cient. 47 (B) NO CORPORATION SHALL SELL, MORTGAGE OR LEASE ITS REAL PROPERTY 48 UNLESS AUTHORIZED BY THE VOTE OF A MAJORITY OF DIRECTORS OF THE BOARD OR 49 A COMMITTEE AUTHORIZED BY THE BOARD; PROVIDED, HOWEVER, THAT IF SUCH 50 PROPERTY CONSTITUTES ALL, OR SUBSTANTIALLY ALL, OF THE ASSETS OF THE 51 CORPORATION, THEN THE VOTE OF TWO-THIRDS OF THE ENTIRE BOARD SHALL BE 52 REQUIRED, OR, IF THERE ARE TWENTY-ONE OR MORE DIRECTORS, THE VOTE OF A 53 MAJORITY OF THE ENTIRE BOARD SHALL BE SUFFICIENT. 54 S 29. Paragraph (a) of section 510 of the not-for-profit corporation 55 law, the opening paragraph as amended by chapter 961 of the laws of A. 7772 15 1 1972, and subparagraph 3 as amended by chapter 847 of the laws of 1970, 2 is amended to read as follows: 3 (a) A sale, lease, exchange or other disposition of all, or substan- 4 tially all, the assets of a corporation may be made upon such terms and 5 conditions and for such consideration, which may consist in whole or in 6 part of cash or other property, real or personal, including shares, 7 bonds or other securities of any other domestic or foreign corporation 8 or corporations of any [type or] kind, as may be authorized in accord- 9 ance with the following procedure: 10 (1) If there are members entitled to vote thereon, the board shall 11 adopt a resolution recommending such sale, lease, exchange or other 12 disposition. The resolution shall specify the terms and conditions of 13 the proposed transaction, including the consideration to be received by 14 the corporation and the eventual disposition to be made of such consid- 15 eration, together with a statement that the dissolution of the corpo- 16 ration is or is not contemplated thereafter. The resolution shall be 17 submitted to a vote at a meeting of members entitled to vote thereon, 18 which may be either an annual or a special meeting. Notice of the meet- 19 ing shall be given to each member and each holder of subvention certif- 20 icates or bonds of the corporation, whether or not entitled to vote. At 21 such meeting by two-thirds vote as provided in paragraph (c) of section 22 613 (Vote of members) the members may approve the proposed transaction 23 according to the terms of the resolution of the board, or may approve 24 such sale, lease, exchange or other disposition and may authorize the 25 board to modify the terms and conditions thereof. 26 (2) If there are no members entitled to vote thereon, such sale, 27 lease, exchange or other disposition shall be authorized by the vote of 28 at least two-thirds of the entire board, provided that if there are 29 twenty-one or more directors, the vote of a majority of the entire board 30 shall be sufficient. 31 (3) If the corporation is, or would be if formed under this chapter, 32 classified as a [Type B or Type C] CHARITABLE corporation under section 33 201, (Purposes) such sale, lease, exchange or other disposition shall in 34 addition require [leave] EITHER (A) APPROVAL of the supreme court in the 35 judicial district or of the county court of the county in which the 36 corporation has its office or principal place of carrying out the 37 purposes for which it was formed IN ACCORDANCE WITH SECTION 511 (PETI- 38 TION FOR COURT APPROVAL) OR (B) APPROVAL OF THE ATTORNEY GENERAL IF 39 AUTHORIZED UNDER SECTION 511-A (PETITION FOR ATTORNEY GENERAL APPROVAL). 40 S 30. The section heading, the opening paragraph and subparagraph 9 of 41 paragraph (a) of section 511 of the not-for-profit corporation law, are 42 amended to read as follows: 43 Petition for [leave of] court APPROVAL. 44 [A corporation required by law to] TO obtain [leave of] court APPROVAL 45 to sell, lease, exchange or otherwise dispose of all or substantially 46 all its assets, A CORPORATION shall present a verified petition to the 47 supreme court of the judicial district, or the county court of the coun- 48 ty, wherein the corporation has its office or principal place of carry- 49 ing out the purposes for which it was formed. The petition shall set 50 forth: 51 9. A [prayer] REQUEST for [leave] COURT APPROVAL to sell, lease, 52 exchange or otherwise dispose of all or substantially all the assets of 53 the corporation as set forth in the petition. 54 S 31. The not-for-profit corporation law is amended by adding a new 55 section 511-a to read a follow: 56 S 511-A. PETITION FOR ATTORNEY GENERAL APPROVAL. A. 7772 16 1 (A) IN LIEU OF OBTAINING COURT APPROVAL UNDER SECTION 511 (PETITION 2 FOR COURT APPROVAL) TO SELL, LEASE, EXCHANGE OR OTHERWISE DISPOSE OF ALL 3 OR SUBSTANTIALLY ALL OF ITS ASSETS, THE CORPORATION MAY ALTERNATIVELY 4 SEEK APPROVAL OF THE ATTORNEY GENERAL BY VERIFIED PETITION, EXCEPT IN 5 THE FOLLOWING CIRCUMSTANCES: 6 1. THE CORPORATION IS INSOLVENT, OR WOULD BECOME INSOLVENT AS A RESULT 7 OF THE TRANSACTION, AND MUST PROCEED ON NOTICE TO CREDITORS PURSUANT TO 8 PARAGRAPH (C) OF SECTION 511 (PETITION FOR COURT APPROVAL); OR 9 2. THE ATTORNEY GENERAL, IN HIS OR HER DISCRETION, CONCLUDES THAT A 10 COURT SHOULD REVIEW THE PETITION AND MAKE A DETERMINATION THEREON. 11 (B) THE VERIFIED PETITION TO THE ATTORNEY GENERAL SHALL SET FORTH: 1. 12 ALL OF THE INFORMATION REQUIRED TO BE INCLUDED IN A VERIFIED PETITION TO 13 OBTAIN COURT APPROVAL PURSUANT TO SUBPARAGRAPHS ONE THROUGH NINE OF 14 PARAGRAPH (A) OF SECTION 511 (PETITION FOR COURT APPROVAL); 2. A STATE- 15 MENT THAT THE CORPORATION IS NOT INSOLVENT AND WILL NOT BECOME INSOLVENT 16 AS A RESULT OF THE TRANSACTION; AND 3. A STATEMENT AS TO WHETHER ANY 17 PERSONS HAVE RAISED, OR HAVE A REASONABLE BASIS TO RAISE, OBJECTIONS TO 18 THE SALE, LEASE, EXCHANGE OR OTHER DISPOSITION THAT IS THE SUBJECT OF 19 THE PETITION, INCLUDING A STATEMENT SETTING FORTH THE NAMES AND 20 ADDRESSES OF SUCH PERSONS, THE NATURE OF THEIR INTEREST, AND A 21 DESCRIPTION OF THEIR OBJECTIONS. THE ATTORNEY GENERAL, IN HIS OR HER 22 DISCRETION, MAY DIRECT THE CORPORATION TO PROVIDE NOTICE OF SUCH PETI- 23 TION TO ANY INTERESTED PERSON, AND THE CORPORATION SHALL PROVIDE THE 24 ATTORNEY GENERAL WITH A CERTIFICATION THAT SUCH NOTICE HAS BEEN 25 PROVIDED. 26 (C) IF IT SHALL APPEAR, TO THE SATISFACTION OF THE ATTORNEY GENERAL 27 THAT THE CONSIDERATION AND THE TERMS OF THE TRANSACTION ARE FAIR AND 28 REASONABLE TO THE CORPORATION AND THAT THE PURPOSES OF THE CORPORATION 29 OR THE INTERESTS OF THE MEMBERS WILL BE PROMOTED, THE ATTORNEY GENERAL 30 MAY AUTHORIZE THE SALE, LEASE, EXCHANGE OR OTHER DISPOSITION OF ALL OR 31 SUBSTANTIALLY ALL THE ASSETS OF THE CORPORATION, AS DESCRIBED IN THE 32 PETITION, FOR SUCH CONSIDERATION AND UPON SUCH TERMS AS THE ATTORNEY 33 GENERAL MAY PRESCRIBE. THE AUTHORIZATION OF THE ATTORNEY GENERAL SHALL 34 DIRECT THE DISPOSITION OF THE CONSIDERATION TO BE RECEIVED THEREUNDER BY 35 THE CORPORATION. 36 (D) IF THE ATTORNEY GENERAL DOES NOT APPROVE THE PETITION, OR IF THE 37 ATTORNEY GENERAL CONCLUDES THAT COURT REVIEW IS APPROPRIATE, THE PETI- 38 TIONER MAY SEEK COURT APPROVAL ON TEN DAYS NOTICE TO THE ATTORNEY GENER- 39 AL PURSUANT TO SECTION 511 (PETITION FOR COURT APPROVAL). 40 S 32. Paragraph (a) of section 513 of the not-for-profit corporation 41 law, as amended by chapter 690 of the laws of 1978, is amended to read 42 as follows: 43 (a) A corporation which is, or would be if formed under this chapter, 44 [classified as a Type B corporation] shall hold full ownership rights in 45 any assets consisting of funds or other real or personal property of any 46 kind, that may be given, granted, bequeathed or devised to or otherwise 47 vested in such corporation in trust for, or with a direction to apply 48 the same to, any purpose specified in its certificate of incorporation, 49 and shall not be deemed a trustee of an express trust of such assets. 50 Any other corporation subject to this chapter may similarly hold assets 51 so received, unless otherwise provided by law or in the certificate of 52 incorporation. 53 S 33. Paragraphs (b) and (c) of section 515 of the not-for-profit 54 corporation law, paragraph (c) as amended by chapter 847 of the laws of 55 1970, are amended to read as follows: A. 7772 17 1 (b) A corporation may pay compensation in a reasonable amount to 2 members, directors, or officers for services rendered AS PERMITTED BY 3 THIS CHAPTER, INCLUDING WITHOUT LIMITATION, IN ACCORDANCE WITH SUBPARA- 4 GRAPH TWELVE OF PARAGRAPH (A) OF SECTION 202 (GENERAL AND SPECIAL 5 POWERS), AND SECTIONS 712-A (AUDIT OVERSIGHT) AND 715 (RELATED PARTY 6 TRANSACTIONS), and may make distributions of cash or property to members 7 upon dissolution or final liquidation as permitted by this chapter. 8 (c) A corporation may confer benefits upon members or nonmembers in 9 conformity with its purposes AS PERMITTED BY THIS CHAPTER, INCLUDING 10 WITHOUT LIMITATION, SECTIONS 712-A (AUDIT OVERSIGHT) AND 715 (RELATED 11 PARTY TRANSACTIONS), may redeem its capital certificates or subvention 12 certificates, and may make other distributions of cash or property to 13 its members or former members, directors, or officers prior to dissol- 14 ution or final liquidation, as authorized by this article, except when 15 the corporation is currently insolvent or would thereby be made insol- 16 vent or rendered unable to carry on its corporate purposes, or when the 17 fair value of the corporation's assets remaining after such conferring 18 of benefits, or redemption, or other distribution would be insufficient 19 to meet its liabilities. 20 S 34. Section 520 of the not-for-profit corporation law, as amended by 21 chapter 58 of the laws of 1981, is amended to read as follows: 22 S 520. Reports of corporation. 23 Each domestic corporation, and each foreign corporation authorized to 24 conduct activities in this state, shall from time to time file such 25 reports on its activities as may be required by the laws of this state. 26 All registration and reporting requirements pursuant to [EPTL 8-1.4] 27 ARTICLE SEVEN-A OF THE EXECUTIVE LAW, AND SECTION 8-1.4 OF THE ESTATES, 28 POWERS AND TRUSTS LAW, or related successor provisions, are, without 29 limitation on the foregoing, expressly included as reports required by 30 the laws of this state to be filed within the meaning of this section. 31 Willful failure of a corporation to file a report as required by law 32 shall constitute a breach of the directors' duty to the corporation and 33 shall subject the corporation, at the suit of the attorney-general, to 34 an action or special proceeding for dissolution under article 11 (Judi- 35 cial dissolution) in the case of a domestic corporation, or under S 1303 36 (Violations) in the case of a foreign corporation. 37 S 35. The not-for-profit corporation law is amended by adding a new 38 section 522 to read as follows: 39 S 522. CY-PRES AND DEVIATION. 40 NOTHING IN THIS CHAPTER SHALL LIMIT THE APPLICATION OF THE 41 DOCTRINES OF CY-PRES AND DEVIATION. 42 S 36. Paragraph (a) of section 601 of the not-for-profit corporation 43 law, as amended by chapter 1058 of the laws of 1971, is amended to read 44 as follows: 45 (a) A corporation shall have one or more classes of members, or, in 46 the case of a [Type B] CHARITABLE corporation, may have no members, in 47 which case any such provision for classes of members or for no members 48 shall be set forth in the certificate of incorporation or the by-laws. 49 Corporations, joint-stock associations, unincorporated associations and 50 partnerships, as well as any other person without limitation, may be 51 members. 52 S 37. Paragraph (a) of section 605 of the not-for-profit corporation 53 law, as amended by chapter 1058 of the laws of 1971, is amended to read 54 as follows: 55 (a) Whenever under the provisions of this chapter members are required 56 or permitted to take any action at a meeting, written notice shall state A. 7772 18 1 the place, date and hour of the meeting and, unless it is an annual 2 meeting, indicate that it is being issued by or at the direction of the 3 person or persons calling the meeting. Notice of a special meeting shall 4 also state the purpose or purposes for which the meeting is called. A 5 copy of the notice of any meeting shall be given, personally [or], by 6 mail, OR BY FACSIMILE TELECOMMUNICATIONS OR BY ELECTRONIC MAIL, to each 7 member entitled to vote at such meeting. If the notice is given 8 personally [or], by first class mail OR BY FACSIMILE TELECOMMUNICATIONS 9 OR BY ELECTRONIC MAIL, it shall be given not less than ten nor more than 10 fifty days before the date of the meeting; if mailed by any other class 11 of mail, it shall be given not less than thirty nor more than sixty days 12 before such date. If mailed, such notice is given when deposited in the 13 United States mail, with postage thereon prepaid, directed to the member 14 at his address as it appears on the record of members, or, if he shall 15 have filed with the secretary of the corporation a written request that 16 notices to him be mailed to some other address, then directed to him at 17 such other address. IF SENT BY FACSIMILE TELECOMMUNICATIONS OR MAILED 18 ELECTRONICALLY, SUCH NOTICE IS GIVEN WHEN DIRECTED TO THE MEMBER'S FAX 19 NUMBER OR ELECTRONIC MAIL ADDRESS AS IT APPEARS ON THE RECORD OF 20 MEMBERS, OR, TO SUCH FAX NUMBER OR OTHER ELECTRONIC MAIL ADDRESS AS 21 FILED WITH THE SECRETARY OF THE CORPORATION. NOTWITHSTANDING THE FOREGO- 22 ING, SUCH NOTICE SHALL NOT BE GIVEN ELECTRONICALLY: (1) IF THE CORPO- 23 RATION IS UNABLE TO DELIVER TWO CONSECUTIVE NOTICES TO THE MEMBER BY 24 ELECTRONIC MAIL; OR (2) THE CORPORATION OTHERWISE BECOMES AWARE THAT 25 NOTICE CANNOT BE DELIVERED TO THE MEMBER BY ELECTRONIC MAIL. An affida- 26 vit of the secretary or other person giving the notice or of a transfer 27 agent of the corporation that the notice required by this section has 28 been given shall, in the absence of fraud, be prima facie evidence of 29 the facts therein stated. Whenever a corporation has more than five 30 hundred members, the notice may be served by publication[, in lieu of 31 mailing,] in a newspaper published in the county in the state in which 32 the principal office of the corporation is located, once a week for 33 three successive weeks next preceding the date of the meeting, PROVIDED 34 THAT THE CORPORATION SHALL ALSO PROMINENTLY POST NOTICE OF SUCH MEETING 35 ON THE HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE CORPORATION CONTINUOUS- 36 LY FROM THE DATE OF PUBLICATION THROUGH THE DATE OF THE MEETING. 37 S 38. Section 606 of the not-for-profit corporation law is amended to 38 read as follows: 39 S 606. Waivers of notice. 40 Notice of meeting need not be given to any member who submits a 41 [signed] waiver of notice, in person or by proxy, whether before or 42 after the meeting. WAIVER OF NOTICE MAY BE WRITTEN OR ELECTRONIC. IF 43 WRITTEN, THE WAIVER MUST BE EXECUTED BY THE MEMBER OR THE MEMBER'S 44 AUTHORIZED OFFICER, DIRECTOR, EMPLOYEE, OR AGENT BY SIGNING SUCH WAIVER 45 OR CAUSING THE MEMBER'S SIGNATURE TO BE AFFIXED TO SUCH WAIVER BY ANY 46 REASONABLE MEANS, INCLUDING, BUT NOT LIMITED TO FACSIMILE SIGNATURE. IF 47 ELECTRONIC, THE TRANSMISSION OF THE WAIVER MUST BE SENT BY ELECTRONIC 48 MAIL AND SET FORTH, OR BE SUBMITTED WITH, INFORMATION FROM WHICH IT CAN 49 REASONABLY BE DETERMINED THAT THE TRANSMISSION WAS AUTHORIZED BY THE 50 MEMBER. The attendance of any member at a meeting, in person or by 51 proxy, without protesting prior to the conclusion of the meeting the 52 lack of notice of such meeting, shall constitute a waiver of notice by 53 him. 54 S 39. Paragraphs (b) and (c) of section 609 of the not-for-profit 55 corporation law, as added by chapter 186 of the laws of 1999, are 56 amended to read as follows: A. 7772 19 1 (b) Without limiting the manner in which a member may authorize anoth- 2 er person or persons to act for him as proxy pursuant to paragraph (a) 3 of this section, the following shall constitute a valid means by which a 4 member may grant such authority: 5 (1) A member may execute a writing authorizing another person or 6 persons to act for him as proxy. Execution may be accomplished by the 7 member or the member's authorized officer, director, employee or agent 8 signing such writing or causing his or her signature to be affixed to 9 such writing by any reasonable means including, but not limited to, by 10 facsimile signature. 11 (2) A member may authorize another person or persons to act for the 12 member as proxy by [transmitting or authorizing the transmission of a 13 telegram, cablegram or other means of] PROVIDING SUCH AUTHORIZATION BY 14 electronic [transmission] MAIL to the person who will be the holder of 15 the proxy or to a proxy solicitation firm, proxy support service organ- 16 ization or like agent duly authorized by the person [who will be the 17 holder of the proxy to receive such transmission], provided that any 18 such [telegram, cablegram or other means of electronic transmission] 19 AUTHORIZATION BY ELECTRONIC MAIL shall either set forth [or be submitted 20 with] information from which it can be reasonably determined that the 21 [telegram, cablegram or other] AUTHORIZATION BY electronic [trans- 22 mission] MAIL was authorized by the member. If it is determined that 23 such [telegrams, cablegrams or other] AUTHORIZATION BY electronic [tran- 24 smissions are] MAIL IS valid, the inspectors or, if there are no inspec- 25 tors, such other persons making that determination shall specify the 26 nature of the information upon which they relied. 27 (c) Any copy, facsimile telecommunication or other reliable reprod- 28 uction of the writing or [transmission] ELECTRONIC MAIL created pursuant 29 to paragraph (b) of this section may be substituted or used in lieu of 30 the original writing or transmission for any and all purposes for which 31 the original writing or transmission could be used, provided that such 32 copy, facsimile telecommunication or other reproduction shall be a 33 complete reproduction of the entire original writing or transmission. 34 S 40. Paragraphs (a) and (b) of section 614 of the not-for-profit 35 corporation law are amended to read as follows: 36 (a) Whenever, under this chapter, members are required or permitted to 37 take any action by vote, such action may be taken without a meeting [on 38 written] UPON THE consent[, setting forth the action so taken, signed 39 by] OF all of the members entitled to vote thereon, WHICH CONSENT SHALL 40 SET FORTH THE ACTION SO TAKEN. SUCH CONSENT MAY BE WRITTEN OR ELECTRON- 41 IC. IF WRITTEN, THE CONSENT MUST BE EXECUTED BY THE MEMBER OR THE 42 MEMBER'S AUTHORIZED OFFICER, DIRECTOR, EMPLOYEE OR AGENT BY SIGNING SUCH 43 CONSENT OR CAUSING THE MEMBER'S SIGNATURE TO BE AFFIXED TO SUCH WAIVER 44 BY ANY REASONABLE MEANS INCLUDING BUT NOT LIMITED TO FACSIMILE SIGNA- 45 TURE. IF ELECTRONIC, THE TRANSMISSION OF THE CONSENT MUST BE SENT BY 46 ELECTRONIC MAIL AND SET FORTH, OR BE SUBMITTED WITH, INFORMATION FROM 47 WHICH IT CAN REASONABLY BE DETERMINED THAT THE TRANSMISSION WAS AUTHOR- 48 IZED BY THE MEMBER. This paragraph shall not be construed to alter or 49 modify any provision in a certificate of incorporation not inconsistent 50 with this chapter under which the written consent of less than all of 51 the members is sufficient for corporate action. 52 (b) Written OR ELECTRONIC consent thus given by all members entitled 53 to vote shall have the same effect as a unanimous vote of members and 54 any certificate with respect to the authorization or taking of any such 55 action which is delivered to the department of state shall recite that 56 the authorization was by [uanimous] UNANIMOUS written consent. A. 7772 20 1 S 41. Paragraph (a) of section 702 of the not-for-profit corporation 2 law is amended to read as follows: 3 (a) The number of directors constituting the entire board shall be not 4 less than three. Subject to such limitation, such number may be fixed by 5 the by-laws or, in the case of a corporation having members, by action 6 of the members or of the board under the specific provisions of a by-law 7 adopted by the members. If not otherwise fixed under this paragraph, the 8 number shall be three. [As used in this article, "entire board" means 9 the total number of directors entitled to vote which the corporation 10 would have if there were no vacancies.] 11 S 42. Paragraphs (b) and (c) of section 708 of the not-for-profit 12 corporation law, paragraph (b) as amended by chapter 92 of the laws of 13 1983 and paragraph (c) as amended by chapter 211 of the laws of 2007, 14 are amended to read as follows: 15 (b) Unless otherwise restricted by the certificate of incorporation or 16 the by-laws, any action required or permitted to be taken by the board 17 or any committee thereof may be taken without a meeting if all members 18 of the board or the committee consent [in writing] to the adoption of a 19 resolution authorizing the action. SUCH CONSENT MAY BE WRITTEN OR ELEC- 20 TRONIC. IF WRITTEN, THE CONSENT MUST BE EXECUTED BY THE DIRECTOR BY 21 SIGNING SUCH CONSENT OR CAUSING HIS OR HER SIGNATURE TO BE AFFIXED TO 22 SUCH CONSENT BY ANY REASONABLE MEANS INCLUDING, BUT NOT LIMITED TO, 23 FACSIMILE SIGNATURE. IF ELECTRONIC, THE TRANSMISSION OF THE CONSENT MUST 24 BE SENT BY ELECTRONIC MAIL AND SET FORTH, OR BE SUBMITTED WITH, INFORMA- 25 TION FROM WHICH IT CAN REASONABLY BE DETERMINED THAT THE TRANSMISSION 26 WAS AUTHORIZED BY THE DIRECTOR. The resolution and the written consents 27 thereto by the members of the board or committee shall be filed with the 28 minutes of the proceedings of the board or committee. 29 (c) Unless otherwise restricted by the certificate of incorporation or 30 the by-laws, any one or more members of the board or OF any committee 31 thereof [may participate in] WHO IS NOT PHYSICALLY PRESENT AT a meeting 32 of [such] THE board or A committee MAY PARTICIPATE by means of a confer- 33 ence telephone or similar communications equipment [allowing all persons 34 participating in the meeting to hear each other at the same time] OR BY 35 ELECTRONIC VIDEO SCREEN COMMUNICATION. Participation by such means 36 shall constitute presence in person at a meeting AS LONG AS ALL PERSONS 37 PARTICIPATING IN THE MEETING CAN HEAR EACH OTHER AT THE SAME TIME AND 38 EACH DIRECTOR CAN PARTICIPATE IN ALL MATTERS BEFORE THE BOARD, INCLUD- 39 ING, WITHOUT LIMITATION, THE ABILITY TO PROPOSE, OBJECT TO, AND VOTE 40 UPON A SPECIFIC ACTION TO BE TAKEN BY THE BOARD OR COMMITTEE. 41 S 43. Paragraph (c) of section 711 of the not-for-profit corporation 42 law, as amended by chapter 847 of the laws of 1970, is amended to read 43 as follows: 44 (c) Notice of a meeting need not be given to any alternate director, 45 nor to any director who submits a [signed] waiver of notice whether 46 before or after the meeting, or who attends the meeting without protest- 47 ing, prior thereto or at its commencement, the lack of notice to him OR 48 HER. SUCH WAIVER OF NOTICE MAY BE WRITTEN OR ELECTRONIC. IF WRITTEN, THE 49 WAIVER MUST BE EXECUTED BY THE DIRECTOR SIGNING SUCH WAIVER OR CAUSING 50 HIS OR HER SIGNATURE TO BE AFFIXED TO SUCH WAIVER BY ANY REASONABLE 51 MEANS INCLUDING BUT NOT LIMITED TO FACSIMILE SIGNATURE. IF ELECTRONIC, 52 THE TRANSMISSION OF THE CONSENT MUST BE SENT BY ELECTRONIC MAIL AND SET 53 FORTH, OR BE SUBMITTED WITH, INFORMATION FROM WHICH IT CAN REASONABLY BE 54 DETERMINED THAT THE TRANSMISSION WAS AUTHORIZED BY THE DIRECTOR. A. 7772 21 1 S 44. Paragraphs (a), (b) and (e) of section 712 of the not-for-profit 2 corporation law, paragraph (e) as amended by chapter 961 of the laws of 3 1972, are amended to read as follows: 4 (a) If the certificate of incorporation or the by-laws so provide, the 5 board, by resolution adopted by a majority of the entire board, may 6 designate from among its members an executive committee and other 7 [standing] committees, each consisting of three or more directors, and 8 each of which, to the extent provided in the resolution or in the 9 certificate of incorporation or by-laws, shall have all the authority of 10 the board, except that no such committee shall have authority as to the 11 following matters: 12 (1) The submission to members of any action requiring members' 13 approval under this chapter. 14 (2) The filling of vacancies in the board of directors or in any 15 committee. 16 (3) The fixing of compensation of the directors for serving on the 17 board or on any committee. 18 (4) The amendment or repeal of the by-laws or the adoption of new 19 by-laws. 20 (5) The amendment or repeal of any resolution of the board which by 21 its terms shall not be so amendable or repealable. 22 (b) The board may designate one or more directors as alternate members 23 of any [standing] committee, who may replace any absent member or 24 members at any meeting of such committee. 25 [(e)] (D) Committees, other than [standing or special] committees of 26 the board, whether created by the board or by the members, shall be 27 committees of the corporation. Such committees OF THE CORPORATION may be 28 elected or appointed in the same manner as officers of the corporation, 29 BUT NO SUCH COMMITTEE SHALL HAVE THE AUTHORITY TO BIND THE BOARD. 30 Provisions of this chapter applicable to officers generally shall apply 31 to members of such committees. 32 S 45. Paragraph (c) of section 712 of the not-for-profit corporation 33 law is REPEALED and paragraphs (d) and (e) are relettered paragraphs (c) 34 and (d). 35 S 46. The not-for-profit corporation law is amended by adding two new 36 sections 712-a and 712-b to read as follows: 37 S 712-A. AUDIT OVERSIGHT. 38 (A) EVERY CORPORATION REQUIRED TO FILE AN INDEPENDENT CERTIFIED PUBLIC 39 ACCOUNTANT'S AUDIT REPORT WITH THE ATTORNEY GENERAL PURSUANT TO SUBDIVI- 40 SION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B OF THE EXECUTIVE LAW OR 41 WHICH PRESENTS SUCH A REPORT AS PART OF THE ANNUAL REPORT REQUIRED BY 42 SECTION 519 (ANNUAL REPORT OF DIRECTORS) SHALL DESIGNATE AN AUDIT 43 COMMITTEE OF THE BOARD, CONSISTING OF AT LEAST THREE INDEPENDENT DIREC- 44 TORS, FOR THE PURPOSE OF OVERSEEING THE ACCOUNTING AND FINANCIAL REPORT- 45 ING PROCESSES OF THE CORPORATION AND THE INDEPENDENT CERTIFIED PUBLIC 46 ACCOUNTANT'S AUDIT OF THE CORPORATION'S FINANCIAL STATEMENTS. THE CORPO- 47 RATION'S ENTIRE BOARD MAY CONSTITUTE THE AUDIT COMMITTEE, PROVIDED THAT 48 ONLY INDEPENDENT DIRECTORS MAY BE PRESENT AT AND PARTICIPATE IN DELIBER- 49 ATIONS AND VOTING RELATING TO AUDIT COMMITTEE MATTERS. IF A CORPORATION 50 CONTROLS A GROUP OF CORPORATIONS, THE AUDIT COMMITTEE OF THE CONTROLLING 51 CORPORATION MAY BE DEEMED TO BE THE AUDIT COMMITTEE FOR ONE OR MORE OF 52 ITS CONTROLLED CORPORATIONS. 53 (B) THE AUDIT COMMITTEE SHALL, AT A MINIMUM: 54 (1) RETAIN AND EVALUATE THE INDEPENDENT AUDITOR WHO SHALL REPORT 55 DIRECTLY TO THE AUDIT COMMITTEE; A. 7772 22 1 (2) REVIEW WITH THE INDEPENDENT AUDITOR THE SCOPE AND PLANNING OF THE 2 AUDIT; 3 (3) REVIEW AND DISCUSS WITH THE INDEPENDENT AUDITOR, AT A MINIMUM: (A) 4 THE RESULTS OF ANY AUDIT, INCLUDING BUT NOT LIMITED TO: THE MANAGEMENT 5 LETTER TO THE BOARD AND ANY MATERIAL RISKS AND WEAKNESSES IN INTERNAL 6 CONTROLS IDENTIFIED BY THE AUDITOR; (B) ANY RESTRICTIONS ON THE SCOPE OF 7 THE AUDITOR'S ACTIVITIES OR ACCESS TO REQUESTED INFORMATION; (C) ANY 8 SIGNIFICANT DISAGREEMENTS BETWEEN THE AUDITOR AND MANAGEMENT; AND (D) 9 THE ADEQUACY AND PERFORMANCE OF THE CORPORATION'S ACCOUNTING FUNCTION; 10 (4) CONSIDER AT LEAST ANNUALLY THE PERFORMANCE AND INDEPENDENCE OF THE 11 INDEPENDENT AUDITOR; 12 (5) OVERSEE ADOPTION, IMPLEMENTATION OF, AND COMPLIANCE WITH ANY 13 CONFLICT OF INTEREST POLICY OR WHISTLEBLOWER POLICY ADOPTED BY THE 14 CORPORATION PURSUANT TO SECTIONS 715-A (CONFLICT OF INTEREST POLICY) OR 15 715-B (WHISTLEBLOWER POLICY), IF THIS FUNCTION IS NOT OTHERWISE 16 PERFORMED BY ANOTHER COMMITTEE OF THE BOARD COMPRISED SOLELY OF INDE- 17 PENDENT DIRECTORS; AND 18 (6) REPORT ITS ACTIVITIES TO THE BOARD AT LEAST ANNUALLY. 19 (C) THE AUDIT COMMITTEE SHALL ADOPT A CHARTER THAT SHALL STATE ITS 20 AUTHORITY AND RESPONSIBILITIES, INCLUDING THOSE PRESCRIBED BY THIS 21 SECTION, AND THAT SHALL STATE THE SIZE, COMPOSITION AND RULES OR PROCE- 22 DURES OF THE AUDIT COMMITTEE. 23 S 712-B. EXECUTIVE COMPENSATION OVERSIGHT. 24 (A) FOR PURPOSES OF THIS SECTION, "TOTAL COMPENSATION" MEANS: (1) ANY 25 COMPENSATION, WHETHER PAID OR ACCRUED, BY OR ON BEHALF OF THE CORPO- 26 RATION OR ANY AFFILIATE OF THE CORPORATION, INCLUDING BUT NOT LIMITED TO 27 SALARY, BONUS, AND DEFERRED COMPENSATION; AND (2) ANY BENEFIT HAVING 28 MONETARY VALUE PROVIDED BY THE CORPORATION OR ON BEHALF OF THE CORPO- 29 RATION OR ANY AFFILIATE OF THE CORPORATION, INCLUDING BUT NOT LIMITED TO 30 HOUSING ALLOWANCES, LIVING EXPENSES, PERQUISITES, FRINGE BENEFITS, 31 EMPLOYER CONTRIBUTIONS TO DEFINED CONTRIBUTION RETIREMENT PLANS AND 32 OTHER RETIREMENT BENEFITS. 33 (B) THE TOTAL COMPENSATION PAID BY A CORPORATION TO ANY EMPLOYEE OF 34 THE CORPORATION SHALL BE FAIR, REASONABLE AND COMMENSURATE WITH SERVICES 35 THE EMPLOYEE PROVIDES TO THE CORPORATION. 36 (C) NO EMPLOYEE OR OTHER INDIVIDUAL WHO MAY BENEFIT FROM COMPENSATION 37 OR BENEFITS PROVIDED BY THE CORPORATION MAY BE PRESENT AT OR OTHERWISE 38 PARTICIPATE IN ANY BOARD OR COMMITTEE DELIBERATION OR VOTE CONCERNING 39 SUCH COMPENSATION OR BENEFITS. 40 (D) EVERY CHARITABLE CORPORATION THAT IS REQUIRED TO BE REGISTERED 41 WITH THE ATTORNEY GENERAL UNDER ARTICLE SEVEN-A OF THE EXECUTIVE LAW OR 42 ARTICLE EIGHT OF THE ESTATES, POWERS AND TRUSTS LAW OR BOTH AND THAT IN 43 THE PRIOR FISCAL YEAR HAD ANNUAL REVENUES IN EXCESS OF TWO MILLION 44 DOLLARS SHALL DESIGNATE A COMPENSATION COMMITTEE OF THE BOARD TO OVERSEE 45 EXECUTIVE COMPENSATION PROGRAMS AND RELATED PRACTICES OF THE CORPO- 46 RATION. 47 (1) THE COMPENSATION COMMITTEE SHALL BE COMPRISED OF AT LEAST THREE 48 INDEPENDENT DIRECTORS. 49 (2) THE CORPORATION'S BOARD MAY PERFORM THE FUNCTION OF THE COMPEN- 50 SATION COMMITTEE UNLESS THE BYLAWS PROVIDE OTHERWISE, PROVIDED THAT ONLY 51 INDEPENDENT DIRECTORS MAY BE PRESENT AT AND PARTICIPATE IN ANY DELIBER- 52 ATIONS OR VOTING RELATING TO COMPENSATION COMMITTEE MATTERS. 53 (3) IF A CORPORATION CONTROLS ONE OR MORE CORPORATIONS, THE COMPEN- 54 SATION COMMITTEE OF THE CONTROLLING CORPORATION MAY BE DEEMED TO BE THE 55 COMPENSATION COMMITTEE FOR ITS CONTROLLED CORPORATIONS. 56 (4) THE COMPENSATION COMMITTEE SHALL: A. 7772 23 1 (A) REVIEW THE TOTAL COMPENSATION PAID TO THE CORPORATION'S OFFICERS 2 AND ITS FIVE HIGHEST-COMPENSATED KEY EMPLOYEES; (B) AFFIRMATIVELY DETER- 3 MINE THAT THE TOTAL COMPENSATION PAID TO ANY SUCH INDIVIDUAL IS FAIR, 4 REASONABLE AND COMMENSURATE WITH SERVICES PROVIDED TO THE CORPORATION. 5 IN MAKING THIS DETERMINATION, THE COMPENSATION COMMITTEE SHALL AT A 6 MINIMUM CONSIDER THE FOLLOWING FACTORS: (I) THE TOTAL COMPENSATION 7 PROVIDED TO THE INDIVIDUAL; (II) RELEVANT BENCHMARK DATA ON THE TOTAL 8 COMPENSATION PAID TO INDIVIDUALS SERVING IN SIMILAR POSITIONS AT CORPO- 9 RATIONS OF SIMILAR SIZE, TYPE, PURPOSE, AND SCOPE; (III) THE INDIVID- 10 UAL'S QUALIFICATIONS AND PERFORMANCE; (IV) COMPENSATION, PAYMENTS OR ANY 11 OTHER BENEFITS PROVIDED TO THE INDIVIDUAL FROM ANY AFFILIATE OF THE 12 CORPORATION; AND (V) THE OVERALL FINANCIAL CONDITION OF THE CORPORATION; 13 (C) MAKE AND KEEP A CONTEMPORANEOUS WRITTEN RECORD DESCRIBING THE BASIS 14 FOR ITS DETERMINATION, INCLUDING ITS ANALYSIS OF THE FACTORS SET FORTH 15 IN THIS PARAGRAPH AND HOW ANY RELEVANT DATA WAS OBTAINED AND USED; (D) 16 APPROVE BY NOT LESS THAN A MAJORITY VOTE THE TOTAL COMPENSATION PAID TO 17 EACH SUCH INDIVIDUAL. 18 (5) IF, PURSUANT TO SUBPARAGRAPH TWO OF THIS PARAGRAPH, THE BOARD DOES 19 NOT PERFORM THE FUNCTION OF THE COMPENSATION COMMITTEE, THEN: (I) THE 20 COMPENSATION COMMITTEE SHALL RECOMMEND TO THE BOARD FOR ITS APPROVAL THE 21 TOTAL COMPENSATION OF EACH INDIVIDUAL THAT THE COMMITTEE HAS AFFIRMA- 22 TIVELY DETERMINED IS FAIR, REASONABLE, AND COMMENSURATE WITH SERVICES 23 PROVIDED TO THE CORPORATION, AND IN CONNECTION THEREWITH, PROVIDE TO THE 24 BOARD THE WRITTEN RECORD OF ITS DETERMINATION CREATED PURSUANT TO CLAUSE 25 (C) OF THIS SUBPARAGRAPH; (II) UPON REVIEW OF THE RECOMMENDATIONS OF THE 26 COMPENSATION COMMITTEE, THE BOARD SHALL APPROVE BY NOT LESS THAN A 27 MAJORITY VOTE OF THE INDEPENDENT DIRECTORS THE TOTAL COMPENSATION OF 28 EACH SUCH INDIVIDUAL, WITH ONLY INDEPENDENT DIRECTORS PARTICIPATING IN 29 ANY SUCH VOTE AND ANY DISCUSSION RELATING THERETO; AND (III) THE BOARD 30 SHALL KEEP A CONTEMPORANEOUS WRITTEN RECORD OF THE BASIS OF ITS DETERMI- 31 NATION, INCLUDING AREAS OF AGREEMENT OR DISAGREEMENT WITH THE RECOMMEN- 32 DATIONS OF THE COMPENSATION COMMITTEE. 33 (6) THE COMPENSATION COMMITTEE MAY RETAIN A COMPENSATION CONSULTANT TO 34 ASSIST IN THE PERFORMANCE OF ITS RESPONSIBILITIES. THE COMPENSATION 35 COMMITTEE SHALL BE DIRECTLY RESPONSIBLE FOR THE APPOINTMENT, COMPEN- 36 SATION AND OVERSIGHT OF THE WORK OF SUCH CONSULTANT, AND ANY SUCH 37 CONSULTANT SHALL REPORT DIRECTLY TO THE COMPENSATION COMMITTEE. THE 38 COMPENSATION COMMITTEE SHALL, AMONG ITS RESPONSIBILITIES, APPROVE THE 39 COMPENSATION PEER GROUP THAT THE COMPENSATION CONSULTANT RECOMMENDS BE 40 USED TO DEVELOP BENCHMARK DATA 41 (A) PRIOR TO RETAINING ANY SUCH CONSULTANT, THE COMPENSATION COMMITTEE 42 SHALL DETERMINE THAT THE CONSULTANT IS INDEPENDENT AND QUALIFIED TO 43 RENDER ADVICE CONCERNING COMPENSATION; PROVIDED THAT NO CONSULTANT MAY 44 BE DETERMINED INDEPENDENT IF SUCH CONSULTANT OR ANY FIRM THAT EMPLOYS 45 SUCH CONSULTANT HAS (I) RECEIVED DIRECTLY OR INDIRECTLY ANY PAYMENT, FEE 46 OR OTHER COMPENSATION FROM THE CORPORATION OR ANY AFFILIATE OF THE 47 CORPORATION WITHIN THE PRECEDING TWO YEARS, OTHER THAN REASONABLE 48 AMOUNTS PAID FOR COMPENSATION CONSULTING SERVICES, OR (II) ANY BUSINESS 49 OR PERSONAL RELATIONSHIP WITH THE CORPORATION OR ANY AFFILIATE, OR ANY 50 OF THEIR OFFICERS, DIRECTORS OR EMPLOYEES, THAT MAY INTERFERE WITH THE 51 ABILITY OF THE CONSULTANT TO PROVIDE OBJECTIVE ADVICE TO THE COMMITTEE. 52 (B) NOTHING IN THIS PARAGRAPH SHALL BE CONSTRUED TO (I) REQUIRE THE 53 COMPENSATION COMMITTEE TO IMPLEMENT OR ACT CONSISTENTLY WITH ANY RECOM- 54 MENDATIONS PROVIDED BY THE COMPENSATION CONSULTANT; OR (II) AFFECT THE 55 ABILITY OR OBLIGATION OF MEMBERS OF THE COMPENSATION COMMITTEE TO EXER- 56 CISE THEIR OWN JUDGMENT IN FULFILLMENT OF THEIR DUTIES TO THE CORPO- A. 7772 24 1 RATION, INCLUDING THOSE DUTIES PRESCRIBED BY SECTION 717 (DUTIES OF 2 DIRECTORS AND OFFICERS). 3 (7) THE COMPENSATION COMMITTEE SHALL ADOPT A CHARTER SETTING FORTH ITS 4 RESPONSIBILITIES, INCLUDING AS PRESCRIBED BY THIS SECTION, AS WELL AS 5 REQUIREMENTS CONCERNING THE SIZE, COMPOSITION AND FUNCTIONING OF THE 6 COMPENSATION COMMITTEE. 7 S 47. Paragraph (a) of section 713 of the not-for-profit corporation 8 law is amended and a new paragraph (f) is added to read as follows: 9 (a) The board may elect or appoint a CHAIR, WHO MAY BE GIVEN THE TITLE 10 CHAIR OF THE BOARD, CHAIRPERSON OF THE BOARD, CHAIRMAN OF THE BOARD, OR 11 CHAIRWOMAN OF THE BOARD, OR president, OR BOTH, one or more vice-presi- 12 dents, a secretary and a treasurer, and such other officers as it may 13 determine, or as may be provided in the by-laws. These officers may be 14 designated by such alternate titles as may be provided in the certif- 15 icate of incorporation or the by-laws. Any two or more offices may be 16 held by the same person, except the offices of president and secretary, 17 or the offices corresponding thereto. 18 (F) NO EMPLOYEE OF THE CORPORATION SHALL SERVE AS CHAIR OF THE BOARD. 19 S 48. Section 715 of the not-for-profit corporation law, as amended by 20 chapter 847 of the laws of 1970, paragraph (f) as amended by chapter 21 1057 of the laws of 1971, is amended to read as follows: 22 S 715. [Interested directors and officers] RELATED PARTY TRANSACTIONS. 23 (a) [No contract or other transaction between a corporation and one or 24 more of its directors or officers, or between a corporation and any 25 other corporation, firm, association or other entity in which one or 26 more of its directors or officers are directors or officers, or have a 27 substantial financial interest, shall be either void or voidable for 28 this reason alone or by reason alone that such director or directors or 29 officer or officers are present at the meeting of the board, or of a 30 committee thereof, which authorizes such contract or transaction, or 31 that his or their votes are counted for such purpose] NO CORPORATION 32 SHALL ENTER INTO A RELATED PARTY TRANSACTION, UNLESS: 33 (1) [If the] material facts as to [such director's or officer's inter- 34 est in such contract or transaction and as] THE RELATED PARTY'S INTEREST 35 IN, AND RELATIONSHIP to [any such common directorship, officership or 36 financial interest] THE TRANSACTION are disclosed in good faith [or 37 known] to the board [or committee], and [the board or committee author- 38 izes such contract or transaction by a vote sufficient for such purpose 39 without counting the vote or votes of such interested director or offi- 40 cer; or 41 (2) If the material facts as to such director's or officer's interest 42 in such contract or transaction and as to any such common directorship, 43 officership or financial interest are disclosed in good faith or known 44 to the] ANY members OF THE CORPORATION entitled to vote [thereon, if 45 any, and] TO APPROVE such [contract or] transaction [is authorized by 46 vote of such members]. 47 [(b) If such good faith disclosure of the material facts as to the 48 director's or officer's interest in the contract or transaction and as 49 to any such common directorship, officership or financial interest, is 50 made to the directors or members, or known to the board or committee or 51 members authorizing such contract or transaction, as provided in para- 52 graph (a), the contract or transaction may not be avoided by the corpo- 53 ration for the reasons set forth in paragraph (a). If there was no such 54 disclosure or knowledge, or if the vote of such interested director or 55 officer was necessary for the authorization of such contract or trans- 56 action at a meeting of the board or committee at which it was author- A. 7772 25 1 ized, the corporation may avoid the contract or transaction unless the 2 party or parties thereto shall establish affirmatively that the contract 3 or transaction was fair and reasonable as to the corporation at the time 4 it was authorized by the board, a committee or the members. 5 (c) Common or interested directors may be counted in determining the 6 presence of a quorum at a meeting of the board or of a committee which 7 authorizes such contract or transaction. 8 (d)] (2) THE BOARD: (I) HAS CONSIDERED ALTERNATIVE TRANSACTIONS TO THE 9 EXTENT AVAILABLE AND UPON REASONABLE DILIGENCE DETERMINED THAT SUCH 10 ALTERNATIVE TRANSACTIONS WOULD NOT BE MORE ADVANTAGEOUS TO THE CORPO- 11 RATION; (II) DETERMINES BY A TWO-THIRDS VOTE OF THE BOARD THAT THE 12 RELATED PARTY TRANSACTION IS FAIR, REASONABLE AND IN THE BEST INTERESTS 13 OF THE CORPORATION AND APPROVES SUCH TRANSACTION, AND THE RELATED PARTY 14 WITH AN INTEREST IN THE TRANSACTION IS NOT PRESENT AT AND DOES NOT 15 OTHERWISE PARTICIPATE IN ANY DELIBERATION OR VOTING RELATING THERETO; 16 AND (III) CONTEMPORANEOUSLY DOCUMENTS IN WRITING THE BASIS FOR ITS 17 DETERMINATION AND APPROVAL OF THE TRANSACTION. THIS SUBPARAGRAPH SHALL 18 NOT APPLY TO ANY COMPENSATION REVIEWED AND APPROVED IN ACCORDANCE WITH 19 PARAGRAPH (D) OF SECTION 712-A (AUDIT OVERSIGHT). The certificate of 20 incorporation, BYLAWS OR CONFLICT OF INTEREST POLICY OF THE CORPORATION 21 may contain additional restrictions on [contracts or] RELATED PARTY 22 transactions [between a corporation] and [its directors or officers or 23 other persons and may] ADDITIONAL PROCEDURES NECESSARY FOR THE REVIEW OR 24 APPROVAL OF SUCH TRANSACTIONS, OR provide that [contracts or] ANY trans- 25 actions in violation of such restrictions shall be void or voidable. 26 [(e) Unless otherwise provided in the certificate of incorporation or 27 the by-laws, the board shall have authority to fix the compensation of 28 directors for services in any capacity. 29 (f) The fixing of salaries of officers, if not done in or pursuant to 30 the by-laws, shall require the affirmative vote of a majority of the 31 entire board unless a higher proportion is set by the certificate of 32 incorporation or by-laws.] 33 (B) AN OFFICER, DIRECTOR OR KEY EMPLOYEE WHO HAS AN INTEREST IN A 34 RELATED PARTY TRANSACTION SHALL, PRIOR TO THE BOARD'S CONSIDERATION OF 35 THE PROPOSED TRANSACTION, DISCLOSE IN GOOD FAITH TO THE CORPORATION THE 36 MATERIAL FACTS AS TO SUCH PERSON'S INTEREST IN, AND RELATIONSHIP TO, THE 37 TRANSACTION. THE BOARD SHALL ADOPT AND IMPLEMENT PROCEDURES FOR THE 38 TIMELY DISCLOSURE OF SUCH FACTS TO THE BOARD. 39 (C) THE ATTORNEY GENERAL MAY BRING AN ACTION TO ENJOIN, VOID OR 40 RESCIND ANY RELATED PARTY TRANSACTION OR A PROPOSED RELATED PARTY TRANS- 41 ACTION THAT VIOLATES ANY LAW OR IS OTHERWISE NOT FAIR, REASONABLE, OR IN 42 THE BEST INTERESTS OF THE CORPORATION, OR TO SEEK OTHER RELIEF, INCLUD- 43 ING BUT NOT LIMITED TO DAMAGES, RESTITUTION, THE REMOVAL OF DIRECTORS OR 44 OFFICERS, OR SEEK TO REQUIRE ANY PERSON OR ENTITY TO: 45 (1) ACCOUNT FOR ANY PROFITS MADE FROM SUCH TRANSACTION, AND PAY THEM 46 TO THE CORPORATION; 47 (2) PAY THE CORPORATION THE VALUE OF THE USE OF ANY OF ITS PROPERTY OR 48 OTHER ASSETS USED IN SUCH TRANSACTION; 49 (3) RETURN OR REPLACE ANY PROPERTY OR OTHER ASSETS LOST TO THE CORPO- 50 RATION AS A RESULT OF SUCH TRANSACTION, TOGETHER WITH ANY INCOME OR 51 APPRECIATION LOST TO THE CORPORATION BY REASON OF SUCH TRANSACTION, OR 52 ACCOUNT FOR ANY PROCEEDS OF SALE OF SUCH PROPERTY, AND PAY THE PROCEEDS 53 TO THE CORPORATION TOGETHER WITH INTEREST AT THE LEGAL RATE; AND 54 (4) PAY, IN THE CASE OF WILLFUL CONDUCT, AN AMOUNT UP TO DOUBLE THE 55 AMOUNT OF ANY BENEFIT IMPROPERLY OBTAINED. A. 7772 26 1 (D) THE POWERS OF THE ATTORNEY GENERAL PROVIDED IN THIS SECTION ARE IN 2 ADDITION TO ALL OTHER POWERS THE ATTORNEY GENERAL MAY HAVE UNDER THIS 3 CHAPTER OR ANY OTHER LAW. 4 S 49. The not-for-profit corporation law is amended by adding two new 5 sections 715-a and 715-b to read as follows: 6 S 715-A. CONFLICT OF INTEREST POLICY. 7 (A) EVERY CORPORATION SHALL ADOPT A CONFLICT OF INTEREST POLICY TO 8 ENSURE THAT ITS DIRECTORS, OFFICERS AND KEY EMPLOYEES ACT IN THE CORPO- 9 RATION'S BEST INTEREST AND COMPLY WITH APPLICABLE LEGAL REQUIREMENTS, 10 INCLUDING BUT NOT LIMITED TO THE REQUIREMENTS SET FORTH IN SECTION 715 11 (RELATED PARTY TRANSACTIONS). 12 (B) THE CONFLICT OF INTEREST POLICY SHALL INCLUDE, AT A MINIMUM, THE 13 FOLLOWING PROVISIONS: 14 (1) A DEFINITION OF THE CIRCUMSTANCES THAT CONSTITUTE A CONFLICT OF 15 INTEREST; 16 (2) PROCEDURES FOR DISCLOSING A CONFLICT OF INTEREST TO THE AUDIT 17 COMMITTEE OR, IF THERE IS NO AUDIT COMMITTEE, TO THE BOARD; 18 (3) A REQUIREMENT THAT THE PERSON WITH THE CONFLICT OF INTEREST NOT BE 19 PRESENT AT OR PARTICIPATE IN BOARD OR COMMITTEE DELIBERATION OR VOTE ON 20 THE MATTER GIVING RISE TO SUCH CONFLICT; 21 (4) A PROHIBITION AGAINST ANY ATTEMPT BY THE PERSON WITH THE CONFLICT 22 TO INFLUENCE THE DELIBERATION OR VOTING ON THE MATTER GIVING RISE TO 23 SUCH CONFLICT; 24 (5) A REQUIREMENT THAT THE EXISTENCE AND RESOLUTION OF THE CONFLICT BE 25 DOCUMENTED IN THE CORPORATION'S RECORDS, INCLUDING IN THE MINUTES OF ANY 26 MEETING AT WHICH THE CONFLICT WAS DISCUSSED OR VOTED UPON; AND 27 (6) PROCEDURES FOR DISCLOSING, ADDRESSING, AND DOCUMENTING RELATED 28 PARTY TRANSACTIONS IN ACCORDANCE WITH SECTION 715 (RELATED PARTY TRANS- 29 ACTIONS). 30 (C) THE CONFLICT OF INTEREST POLICY SHALL REQUIRE THAT PRIOR TO THE 31 INITIAL ELECTION OF ANY DIRECTOR, AND ANNUALLY THEREAFTER, THAT SUCH 32 DIRECTOR SHALL COMPLETE, SIGN AND SUBMIT TO THE SECRETARY OF THE CORPO- 33 RATION A WRITTEN STATEMENT IDENTIFYING ANY ENTITY OF WHICH SUCH DIRECTOR 34 IS AN OFFICER, DIRECTOR, TRUSTEE, MEMBER, OWNER (EITHER AS A SOLE 35 PROPRIETOR OR A PARTNER), OR EMPLOYEE WITH WHICH THE CORPORATION HAS, OR 36 MIGHT BE EXPECTED TO HAVE, A RELATIONSHIP OR A TRANSACTION IN WHICH THE 37 DIRECTOR MIGHT HAVE A CONFLICTING INTEREST. THE POLICY SHALL REQUIRE 38 THAT EACH DIRECTOR ANNUALLY RESUBMIT SUCH WRITTEN STATEMENT. THE SECRE- 39 TARY OF THE CORPORATION SHALL PROVIDE A COPY OF ALL COMPLETED STATEMENTS 40 TO THE CHAIR OF THE AUDIT COMMITTEE OR, IF THERE IS NO AUDIT COMMITTEE, 41 TO THE CHAIR OF THE BOARD. 42 (D) EVERY CORPORATION REGISTERED OR REQUIRED TO BE REGISTERED PURSUANT 43 TO SECTION ONE HUNDRED SEVENTY-TWO OF THE EXECUTIVE LAW OR SECTION 8-1.4 44 OF THE ESTATES, POWERS AND TRUSTS LAW SHALL TRANSMIT A COPY OF ITS 45 CONFLICT OF INTEREST POLICY TO THE ATTORNEY GENERAL IN THE FORM AND 46 MANNER SPECIFIED BY THE ATTORNEY GENERAL, AND SHALL WITHIN THIRTY DAYS 47 OF ANY MATERIAL CHANGE OF THESE POLICIES PROVIDE THE ATTORNEY GENERAL 48 WITH THE CHANGED POLICIES. 49 (E) NOTHING IN THIS SECTION SHALL BE INTERPRETED TO REQUIRE A CORPO- 50 RATION TO ADOPT ANY SPECIFIC CONFLICT OF INTEREST POLICY NOT OTHERWISE 51 REQUIRED BY LAW, OR TO SUPERSEDE OR LIMIT ANY REQUIREMENT OR DUTY 52 GOVERNING CONFLICTS OF INTEREST REQUIRED BY ANY OTHER LAW OR RULE. 53 S 715-B. WHISTLEBLOWER POLICY. 54 (A) EVERY CORPORATION THAT HAS TWENTY OR MORE EMPLOYEES AND IN THE 55 PRIOR FISCAL YEAR HAD ANNUAL REVENUE IN EXCESS OF ONE MILLION DOLLARS 56 SHALL ADOPT A WHISTLEBLOWER POLICY TO PROTECT FROM RETALIATION PERSONS A. 7772 27 1 WHO REPORT SUSPECTED IMPROPER CONDUCT. SUCH POLICY SHALL PROVIDE THAT NO 2 DIRECTOR, OFFICER, EMPLOYEE OR VOLUNTEER OF A CORPORATION WHO IN GOOD 3 FAITH REPORTS ANY ACTION OR SUSPECTED ACTION TAKEN BY OR WITHIN THE 4 CORPORATION THAT IS ILLEGAL, FRAUDULENT OR IN VIOLATION OF ANY ADOPTED 5 POLICY OF THE CORPORATION SHALL SUFFER INTIMIDATION, HARASSMENT, 6 DISCRIMINATION OR OTHER RETALIATION OR, IN THE CASE OF EMPLOYEES, 7 ADVERSE EMPLOYMENT CONSEQUENCE. 8 (B) THE WHISTLEBLOWER POLICY SHALL INCLUDE THE FOLLOWING PROVISIONS: 9 (1) PROCEDURES FOR THE REPORTING OF VIOLATIONS OR SUSPECTED VIOLATIONS 10 OF LAWS OR CORPORATE POLICIES, INCLUDING PROCEDURES FOR PRESERVING THE 11 CONFIDENTIALITY OF REPORTED INFORMATION; 12 (2) PROCEDURES FOR HANDLING AND INVESTIGATING VIOLATIONS OR SUSPECTED 13 VIOLATIONS OF LAWS OR CORPORATE POLICIES; 14 (3) A REQUIREMENT THAT AN EMPLOYEE OF THE CORPORATION BE DESIGNATED TO 15 ADMINISTER, IMPLEMENT AND OVERSEE COMPLIANCE OF THE WHISTLEBLOWER POLI- 16 CY, AND TO REPORT TO THE AUDIT COMMITTEE OR OTHER COMMITTEE OF INDEPEND- 17 ENT DIRECTORS OR, IF THERE ARE NO SUCH COMMITTEES, TO THE BOARD; 18 (4) A REQUIREMENT THAT ALL DOCUMENTS CONCERNING INFORMATION REPORTED 19 UNDER THE WHISTLEBLOWER POLICY AND ANY INVESTIGATION RELATING THERETO BE 20 RETAINED BY THE CORPORATION FOR A MINIMUM PERIOD OF SIX YEARS; AND 21 (5) A REQUIREMENT THAT A COPY OF THE POLICY BE DISTRIBUTED TO ALL 22 DIRECTORS, OFFICERS, EMPLOYEES AND VOLUNTEERS, WITH INSTRUCTIONS ON HOW 23 TO COMPLY WITH THE PROCEDURES SET FORTH IN THE POLICY. 24 (C) NOTHING IN THIS SECTION SHALL BE INTERPRETED TO RELIEVE ANY CORPO- 25 RATION FROM ANY ADDITIONAL REQUIREMENTS IN RELATION TO INTERNAL COMPLI- 26 ANCE, RETALIATION, OR DOCUMENT RETENTION REQUIRED BY ANY OTHER LAW OR 27 RULE. 28 S 50. Section 716 of the not-for-profit corporation law, as amended by 29 chapter 644 of the laws of 1971, is amended to read as follows: 30 S 716. Loans to directors and officers. 31 No loans, other than through the purchase of bonds, debentures, or 32 similar obligations of the type customarily sold in public offerings, or 33 through ordinary deposit of funds in a bank, shall be made by a corpo- 34 ration to its directors or officers, or to any other corporation, firm, 35 association or other entity in which one or more of its directors or 36 officers are directors or officers or hold a substantial financial 37 interest, except a loan by one [type B] CHARITABLE corporation to anoth- 38 er [type B] CHARITABLE corporation. A loan made in violation of this 39 section shall be a violation of the duty to the corporation of the 40 directors or officers authorizing it or participating in it, but the 41 obligation of the borrower with respect to the loan shall not be 42 affected thereby. 43 S 51. Section 717 of the not-for-profit corporation law, paragraph (a) 44 as amended by chapter 490 of the laws of 2010, and paragraph (b) as 45 amended by chapter 734 of the laws of 1988, is amended to read as 46 follows: 47 S 717. Duty of directors and officers. 48 (a) Directors and officers shall discharge the duties of their respec- 49 tive positions in good faith and with the care an ordinarily prudent 50 person in a like position would exercise under similar circumstances IN 51 LIKE POSITIONS. [The factors set forth in subparagraph one of paragraph 52 (e) of section 552 (Standard of conduct in managing and investing an 53 institutional fund), if relevant, must be considered by a governing 54 board delegating] IN THE ADMINISTRATION OF THE POWERS TO MAKE AND RETAIN 55 INVESTMENTS PURSUANT TO SECTION 511-A (PETITION FOR ATTORNEY GENERAL 56 APPROVAL), TO APPROPRIATE APPRECIATION PURSUANT TO SECTION 513 (ADMINIS- A. 7772 28 1 TRATION OF ASSETS RECEIVED FOR SPECIFIC PURPOSES), AND TO DELEGATE 2 investment management of institutional funds pursuant to section 514 3 (Delegation of investment management) [For purposes of this paragraph, 4 the term institutional fund is defined in section 551 (Definitions).], A 5 GOVERNING BOARD SHALL CONSIDER AMONG OTHER RELEVANT CONSIDERATIONS THE 6 LONG AND SHORT TERM NEEDS OF THE CORPORATION IN CARRYING OUT ITS 7 PURPOSES, ITS PRESENT AND ANTICIPATED FINANCIAL REQUIREMENTS, EXPECTED 8 TOTAL RETURN ON ITS INVESTMENTS, PRICE LEVEL TRENDS, AND GENERAL ECONOM- 9 IC CONDITIONS. 10 (b) In discharging their duties, directors and officers, when acting 11 in good faith, may rely on information, opinions, reports or statements 12 including financial statements and other financial data, in each case 13 prepared or presented by: (1) one or more officers or employees of the 14 corporation, whom the director believes to be reliable and competent in 15 the matters presented, (2) counsel, public accountants or other persons 16 as to matters which the directors or officers believe to be within such 17 person's professional or expert competence or (3) a committee of the 18 board upon which they do not serve, duly designated in accordance with a 19 provision of the certificate of incorporation or the bylaws, as to 20 matters within its designated authority, which committee the directors 21 or officers believe to merit confidence, so long as in so relying they 22 shall be acting in good faith and with that degree of care specified in 23 paragraph (a) of this section, BUT IF THE DIRECTOR OR OFFICER HAS KNOW- 24 LEDGE CONCERNING THE MATTER IN QUESTION REPORTED BY THE COMMITTEE THAT 25 WOULD CAUSE SUCH RELIANCE TO BE UNWARRANTED, THE DIRECTOR OR OFFICER 26 SHALL NOT BE CONSIDERED TO BE ACTING IN GOOD FAITH. Persons shall not 27 be considered to be acting in good faith if they have knowledge concern- 28 ing the matter in question that would cause such reliance to be unwar- 29 ranted. Persons who so perform their duties shall have no liability by 30 reason of being or having been directors or officers of the corporation. 31 (C) IN TAKING ACTION, INCLUDING, WITHOUT LIMITATION, ACTION WHICH MAY 32 INVOLVE OR RELATE TO A CHANGE OR POTENTIAL CHANGE IN THE CONTROL OF 33 CORPORATION, A DIRECTOR SHALL BE ENTITLED TO CONSIDER, WITHOUT LIMITA- 34 TION, (1) BOTH THE LONG-TERM AND THE SHORT-TERM INTERESTS OF THE CORPO- 35 RATION AND ITS MEMBERS AND (2) THE EFFECTS THAT THE CORPORATION'S ACTION 36 MAY HAVE IN THE SHORT-TERM OR IN THE LONG-TERM UPON ANY OF THE FOLLOW- 37 ING: (A) THE PROSPECTS FOR POTENTIAL GROWTH, DEVELOPMENT, PRODUCTIVITY 38 AND FINANCIAL STABILITY OF THE CORPORATION; (B) THE CORPORATION'S 39 CURRENT EMPLOYEES; (C) THE CORPORATION'S RETIRED EMPLOYEES AND OTHER 40 BENEFICIARIES RECEIVING OR ENTITLED TO RECEIVE RETIREMENT, WELFARE OR 41 SIMILAR BENEFITS FROM OR PURSUANT TO ANY PLAN SPONSORED, OR AGREEMENT 42 ENTERED INTO, BY THE CORPORATION; (D) THE BENEFICIARIES OR RECIPIENTS OF 43 THE CORPORATION'S SERVICES; (E) THE CORPORATION'S CREDITORS; (F) THE 44 ABILITY OF THE CORPORATION TO PROVIDE, AS A GOING CONCERN, BENEFITS, 45 GOODS, SERVICES, EMPLOYMENT OPPORTUNITIES AND EMPLOYMENT BENEFITS AND 46 OTHERWISE TO CONTRIBUTE TO THE COMMUNITIES IN WHICH IT CONDUCTS ACTIV- 47 ITIES; AND (G) THE ACCOMPLISHMENT OF THE CORPORATION'S PURPOSES AS STAT- 48 ED IN THE CERTIFICATE OF INCORPORATION. NOTHING IN THIS PARAGRAPH SHALL 49 CREATE ANY DUTIES OWED BY ANY DIRECTOR TO ANY PERSON OR ENTITY TO 50 CONSIDER OR AFFORD ANY PARTICULAR WEIGHT TO ANY OF THE FOREGOING OR 51 ABROGATE ANY DUTY OF THE DIRECTORS, EITHER STATUTORY OR RECOGNIZED BY 52 COMMON LAW OR COURT DECISIONS. FOR PURPOSES OF THIS PARAGRAPH, "CONTROL" 53 SHALL MEAN THE POSSESSION, DIRECTLY OR INDIRECTLY, OF THE POWER TO 54 DIRECT OR CAUSE THE DIRECTION OF THE MANAGEMENT AND POLICIES OF THE 55 CORPORATION, WHETHER THROUGH MEMBERSHIP OR OTHERWISE. A. 7772 29 1 S 52. Section 718 of the not-for-profit corporation law, as amended by 2 chapter 992 of the laws of 1970, is amended to read as follows: 3 S 718. List of directors and officers. 4 (a) If a member or creditor of a corporation, in person or by his 5 attorney or agent, or a representative of the district attorney or of 6 the secretary of state, the attorney general, or other state official, 7 makes a written demand on a corporation to inspect a current list of its 8 directors and officers and their [residence] CURRENT addresses, the 9 corporation shall, within two business days after receipt of the demand 10 and for a period of one week thereafter, make the list available for 11 such inspection at its office during usual business hours. 12 (b) Upon refusal by the corporation to make a current list of its 13 directors and officers and their [residence] CURRENT addresses avail- 14 able, as provided in paragraph (a) OF THIS SECTION, the person making a 15 demand for such list may apply, ex parte, to the supreme court at a 16 special term held within the judicial district where the office of the 17 corporation is located for an order directing the corporation to make 18 such list available. The court may grant such order or take such other 19 action as it may deem just and proper. 20 S 53. The section heading and paragraph (a) of section 720 of the 21 not-for-profit corporation law, the section heading as amended by chap- 22 ter 1058 of the laws of 1971, are amended to read as follows: 23 Actions [on behalf of the corporation] AGAINST DIRECTORS, OFFICERS AND 24 KEY EMPLOYEES. 25 (a) An action may be brought against one or more directors [or], offi- 26 cers, OR KEY EMPLOYEES of a corporation to procure a judgment for the 27 following relief: 28 (1) To compel the defendant to account for his official conduct in the 29 following cases: 30 (A) The neglect of, or failure to perform, or other violation of his 31 duties in the management and disposition of corporate assets committed 32 to his charge. 33 (B) The acquisition by himself, transfer to others, loss or waste of 34 corporate assets due to any neglect of, or failure to perform, or other 35 violation of his duties. 36 (2) To set aside an unlawful conveyance, assignment or transfer of 37 corporate assets, where the transferee knew of its unlawfulness. 38 (3) To enjoin a proposed unlawful conveyance, assignment or transfer 39 of corporate assets, where there are reasonable grounds for belief that 40 it will be made. 41 S 54. Paragraphs (a) and (c) of section 722 of the not-for-profit 42 corporation law, as amended by chapter 368 of the laws of 1987, are 43 amended to read as follows: 44 (a) A corporation may indemnify any person, made, or threatened to be 45 made, a party to an action or proceeding other than one by or in the 46 right of the corporation to procure a judgment in its favor, whether 47 civil or criminal, including an action by or in the right of any other 48 corporation of any [type or] kind, domestic or foreign, or any partner- 49 ship, joint venture, trust, employee benefit plan or other enterprise, 50 which any director or officer of the corporation served in any capacity 51 at the request of the corporation, by reason of the fact that he, his 52 testator or intestate, was a director or officer of the corporation, or 53 served such other corporation, partnership, joint venture, trust, 54 employee benefit plan or other enterprise in any capacity, against judg- 55 ments, fines, amounts paid in settlement and reasonable expenses, 56 including attorneys' fees actually and necessarily incurred as a result A. 7772 30 1 of such action or proceeding, or any appeal therein, if such director or 2 officer acted, in good faith, for a purpose which he reasonably believed 3 to be in, or, in the case of service for any other corporation or any 4 partnership, joint venture, trust, employee benefit plan or other enter- 5 prise, not opposed to, the best interests of the corporation and, in 6 criminal actions or proceedings, in addition, had no reasonable cause to 7 believe that his conduct was unlawful. 8 (c) A corporation may indemnify any person made, or threatened to be 9 made, a party to an action by or in the right of the corporation to 10 procure a judgment in its favor by reason of the fact that he, his 11 testator or intestate, is or was a director or officer of the corpo- 12 ration, or is or was serving at the request of the corporation as a 13 director or officer of any other corporation of any [type or] kind, 14 domestic or foreign, of any partnership, joint venture, trust, employee 15 benefit plan or other enterprise, against amounts paid in settlement and 16 reasonable expenses, including attorneys' fees, actually and necessarily 17 incurred by him in connection with the defense or settlement of such 18 action, or in connection with an appeal therein, if such director or 19 officer acted, in good faith, for a purpose which he reasonably believed 20 to be in, or, in the case of service for any other corporation or any 21 partnership, joint venture, trust, employee benefit plan or other enter- 22 prise, not opposed to, the best interests of the corporation, except 23 that no indemnification under this paragraph shall be made in respect of 24 (1) a threatened action, or a pending action which is settled or other- 25 wise disposed of, or (2) any claim, issue or matter as to which such 26 person shall have been adjudged to be liable to the corporation, unless 27 and only to the extent that the court in which the action was brought, 28 or, if no action was brought, any court of competent jurisdiction, 29 determines upon application that, in view of all the circumstances of 30 the case, the person is fairly and reasonably entitled to indemnity for 31 such portion of the settlement amount and expenses as the court deems 32 proper. 33 S 55. Paragraph (c) of section 723 of the not-for-profit corporation 34 law, as amended by chapter 368 of the laws of 1987, is amended to read 35 as follows: 36 (c) Expenses incurred in defending a civil or criminal action or 37 proceeding may be paid by the corporation in advance of the final dispo- 38 sition of such action or proceeding upon receipt of an undertaking by or 39 on behalf of such director or officer [to repay] SUFFICIENT TO ENSURE 40 THE REPAYMENT OF such amount as, and to the extent, required by para- 41 graph (a) of section 725. 42 S 56. Paragraph (b) of section 724 of the not-for-profit corporation 43 law, as amended by chapter 368 of the laws of 1987, is amended to read 44 as follows: 45 (b) The application shall be made in such manner and form as may be 46 required by the applicable rules of court or, in the absence thereof, by 47 direction of a court to which it is made. Such application shall be upon 48 notice to the corporation AND THE ATTORNEY GENERAL. The court may also 49 direct that notice be given at the expense of the corporation to the 50 members and such other persons as it may designate in such manner as it 51 may require. 52 S 57. Subparagraph 3 of paragraph (a) of section 803 of the not-for- 53 profit corporation law, as amended by chapter 168 of the laws of 1982, 54 is amended to read as follows: 55 (3) That the corporation is a corporation as defined in subparagraph 56 (a) (5) of section 102 (Definitions)[; the type of corporation it is A. 7772 31 1 under section 201 (Purposes); and if the corporate purposes are 2 enlarged, limited or otherwise changed, the type of corporation it shall 3 thereafter be under section 201]. 4 S 58. The section heading and paragraph (a) of section 804 of the 5 not-for-profit corporation law, as amended by chapter 139 of the laws of 6 1993, and subparagraph (i) of paragraph (a) as amended by chapter 198 of 7 the laws of 2010, are amended to read as follows: 8 [Approvals] NOTICES, CONSENTS, and effect. 9 (a) (i) A certificate of amendment shall not be filed if the amendment 10 adds, changes or eliminates a purpose, power or provision the inclusion 11 of which in a certificate of incorporation requires consent or approval 12 of a governmental body or officer or any other person or body, or if the 13 amendment changes the name of a corporation whose certificate of incor- 14 poration had such consent or approval endorsed thereon or annexed there- 15 to, unless such consent or approval is no longer required or is endorsed 16 on or annexed to the certificate of amendment. IF A CERTIFICATE OF 17 AMENDMENT ADDING, CHANGING OR ELIMINATING A PURPOSE, POWER OR PROVISION 18 THE INCLUSION OF WHICH IN A CERTIFICATE OF INCORPORATION REQUIRES THE 19 INCORPORATOR TO SEND A CERTIFIED COPY OF ITS CERTIFICATE OF INCORPO- 20 RATION TO A GOVERNMENTAL BODY OR OFFICER OR ANY OTHER PERSON OR ENTITY 21 UNDER SECTION 404 (NOTICES AND CONSENTS), OR IF THE AMENDMENT CHANGES 22 THE NAME OF A CORPORATION WHOSE INCORPORATOR WAS REQUIRED TO DELIVER A 23 CERTIFIED COPY OF ITS CERTIFICATE OF INCORPORATION TO A GOVERNMENTAL 24 BODY OR OFFICER OR ANY OTHER PERSON OR ENTITY UNDER SECTION 404 (NOTICES 25 AND CONSENTS), A CERTIFIED COPY OF THE CERTIFICATE OF AMENDMENT SHALL BE 26 SENT BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE GOVERNMENT BODY 27 OR OFFICER OR OTHER PERSON OR ENTITY IMMEDIATELY AFTER THE FILING OF 28 SUCH CERTIFICATE WITH THE DEPARTMENT OF STATE. 29 (ii) Every certificate of amendment of a CHARITABLE corporation [clas- 30 sified as type B or type C under section 201 (Purposes)] which seeks to 31 change or eliminate a purpose or power enumerated in the corporation's 32 certificate of incorporation, or to add a power or purpose not enumer- 33 ated therein, shall have endorsed thereon or annexed thereto the 34 approval of a justice of the supreme court of the judicial district in 35 which the office of the corporation is located. Ten days' written notice 36 of the application for such approval shall be given to the attorney-gen- 37 eral. 38 S 59. Section 907 of the not-for-profit corporation law is amended to 39 read as follows: 40 S 907. Approval by the supreme court OR THE ATTORNEY GENERAL. 41 [(a)] Where any constituent corporation or the consolidated corpo- 42 ration is, or would be if formed under this chapter, a [Type B or a Type 43 C] CHARITABLE corporation under section 201 (Purposes) [of this chap- 44 ter], no certificate shall be filed pursuant to section 904 (Certificate 45 of merger or consolidation; contents) or section 906 (Merger or consol- 46 idation of domestic and foreign corporations) until (A) THE SUPREME 47 COURT HAS GRANTED an order approving the plan of merger or consolidation 48 and authorizing the filing of the certificate [has been made by the 49 supreme court,] as provided in [this] section[. A certified copy of such 50 order shall be annexed to the certificate of merger or consolidation. 51 Application for the order may be made in the judicial district in which 52 the principal office of the surviving or consolidated corporation is to 53 be located, or in which the office of one of the domestic constituent 54 corporations is located. The application shall be made by all the 55 constituent corporations jointly and shall set forth by affidavit (1) 56 the plan of merger or consolidation, (2) the approval required by A. 7772 32 1 section 903 (Approval of plan) or paragraph (b) of section 906 (Merger 2 or consolidation of domestic and foreign corporations) for each constit- 3 uent corporation, (3) the objects and purposes of each such corporation 4 to be promoted by the consolidation, (4) a statement of all property, 5 and the manner in which it is held, and of all liabilities and of the 6 amount and sources of the annual income of each such corporation, (5) 7 whether any votes against adoption of the resolution approving the plan 8 of merger or consolidation were cast at the meeting at which the resol- 9 ution as adopted by each constituent corporation, and (6) facts showing 10 that the consolidation is authorized by the laws of the jurisdictions 11 under which each of the constituent corporations is incorporated] 907-A 12 (APPLICATION FOR APPROVAL OF THE SUPREME COURT) OR (B) THE ATTORNEY 13 GENERAL HAS APPROVED THE PLAN OF MERGER OR CONSOLIDATION AND AUTHORIZED 14 THE FILING OF THE CERTIFICATE, AS PROVIDED IN SECTION 907-B (APPLICATION 15 FOR APPROVAL OF THE ATTORNEY GENERAL). 16 [(b) Upon the filing of the application the court shall fix a time for 17 hearing thereof and shall direct that notice thereof be given to such 18 persons as may be interested, including the attorney general, any 19 governmental body or officer and any other person or body whose consent 20 or approval is required by section 909 (Consent to filing), in such form 21 and manner as the court may prescribe. If no votes against adoption of 22 the resolution approving the plan of merger or consolidation were cast 23 at the meeting at which the resolution was adopted by any constituent 24 corporation the court may dispense with notice to anyone except the 25 attorney-general, any governmental body or officer and any other person 26 or body whose consent or approval is required by section 909 (Consent to 27 filing). Any person interested may appear and show cause why the appli- 28 cation should not be granted. 29 (c) If the court shall find that any of the assets of any of the 30 constituent corporations are held for a purpose specified as Type B in 31 paragraph (b) of section 201 or are legally required to be used for a 32 particular purpose, but not upon a condition requiring return, transfer 33 or conveyance by reason of the merger or consolidation, the court may, 34 in its discretion, direct that such assets be transferred or conveyed to 35 the surviving or consolidated corporation subject to such purpose or 36 use, or that such assets be transferred or conveyed to the surviving or 37 consolidated corporation or to one or more other domestic or foreign 38 corporations or organizations engaged in substantially similar activ- 39 ities, upon an express trust the terms of which shall be approved by the 40 court. 41 (d) If the court shall find that the interests of non-consenting 42 members are or may be substantially prejudiced by the proposed merger or 43 consolidation, the court may disapprove the plan or may direct a modifi- 44 cation thereof. In the event of a modification, if the court shall find 45 that the interests of any members may be substantially prejudiced by the 46 proposed merger or consolidation as modified, the court shall direct 47 that the modified plan be submitted to vote of the members of the 48 constituent corporations, or if the court shall find that there is not 49 such substantial prejudice, it shall approve the agreement as so modi- 50 fied without further approval by the members. If the court, upon direct- 51 ing a modification of the plan of merger or consolidation, shall direct 52 that a further approval be obtained from members of the constituent 53 corporations or any of them, such further approval shall be obtained in 54 the manner specified in section 903 (Approval of plan) or section 906(b) 55 (Merger or consolidation of domestic and foreign corporations) of this 56 chapter. A. 7772 33 1 (e) If it shall appear, to the satisfaction of the court, that the 2 provisions of this section have been complied with, and that the inter- 3 ests of the constituent corporations and the public interest will not be 4 adversely affected by the merger or consolidation, it shall approve the 5 merger or consolidation upon such terms and conditions as it may 6 prescribe.] 7 S 60. The not-for-profit corporation law is amended by adding a new 8 section 907-a to read as follows: 9 S 907-A. APPLICATION FOR APPROVAL OF THE SUPREME COURT. 10 (A) APPLICATION FOR AN ORDER APPROVING THE PLAN OF MERGER AND AUTHOR- 11 IZING THE FILING OF THE CERTIFICATE MAY BE MADE IN THE JUDICIAL DISTRICT 12 IN WHICH THE PRINCIPAL OFFICE OF THE SURVIVING OR CONSOLIDATED CORPO- 13 RATION IS TO BE LOCATED, OR IN WHICH THE OFFICE OF ONE OF THE DOMESTIC 14 CONSTITUENT CORPORATIONS IS LOCATED. THE APPLICATION SHALL BE MADE BY 15 ALL THE CONSTITUENT CORPORATIONS JOINTLY AND SHALL SET FORTH BY AFFIDA- 16 VIT: (1) THE PLAN OF MERGER OR CONSOLIDATION, (2) THE APPROVAL REQUIRED 17 BY SECTION 903 (APPROVAL OF PLAN) OR PARAGRAPH (B) OF SECTION 906 (MERG- 18 ER OR CONSOLIDATION OF DOMESTIC AND FOREIGN CORPORATIONS) FOR EACH 19 CONSTITUENT CORPORATION, (3) THE OBJECTS AND PURPOSES OF EACH SUCH 20 CORPORATION TO BE PROMOTED BY THE MERGER OR CONSOLIDATION, (4) A STATE- 21 MENT OF ALL PROPERTY, AND THE MANNER IN WHICH IT IS HELD, AND OF ALL 22 LIABILITIES AND OF THE AMOUNT AND SOURCES OF THE ANNUAL INCOME OF EACH 23 SUCH CORPORATION, (5) WHETHER ANY VOTES AGAINST ADOPTION OF THE RESOL- 24 UTION APPROVING THE PLAN OF MERGER OR CONSOLIDATION WERE CAST AT THE 25 MEETING AT WHICH THE RESOLUTION WAS ADOPTED BY EACH CONSTITUENT CORPO- 26 RATION, AND (6) FACTS SHOWING THAT THE CONSOLIDATION IS AUTHORIZED BY 27 THE LAWS OF THE JURISDICTIONS UNDER WHICH EACH OF THE CONSTITUENT CORPO- 28 RATIONS IS INCORPORATED. 29 (B) UPON THE FILING OF THE APPLICATION THE COURT SHALL FIX A TIME FOR 30 A HEARING THEREOF AND SHALL DIRECT THAT NOTICE THEREOF BE GIVEN TO SUCH 31 PERSONS AS MAY BE INTERESTED, INCLUDING THE ATTORNEY GENERAL, ANY 32 GOVERNMENTAL BODY OR OFFICER AND ANY OTHER PERSON OR BODY WHOSE CONSENT 33 OR APPROVAL IS REQUIRED BY SECTION 909 (CONSENT TO FILING), IN SUCH FORM 34 AND MANNER AS THE COURT MAY PRESCRIBE. IF NO VOTES AGAINST ADOPTION OF 35 THE RESOLUTION APPROVING THE PLAN OF MERGER OR CONSOLIDATION WERE CAST 36 AT THE MEETING AT WHICH THE RESOLUTION WAS ADOPTED BY ANY CONSTITUENT 37 CORPORATION THE COURT MAY DISPENSE WITH NOTICE TO ANYONE EXCEPT THE 38 ATTORNEY GENERAL, ANY GOVERNMENTAL BODY OR OFFICER AND ANY OTHER PERSON 39 OR BODY WHOSE CONSENT OR APPROVAL IS REQUIRED BY SECTION 909 (CONSENT TO 40 FILING). ANY PERSON INTERESTED MAY APPEAR AND SHOW CAUSE WHY THE APPLI- 41 CATION SHOULD NOT BE GRANTED. 42 (C) IF THE COURT SHALL FIND THAT ANY OF THE ASSETS OF ANY OF THE 43 CONSTITUENT CORPORATIONS ARE HELD FOR A CHARITABLE PURPOSE OR ARE LEGAL- 44 LY REQUIRED TO BE USED FOR A PARTICULAR PURPOSE, BUT NOT UPON A CONDI- 45 TION REQUIRING RETURN, TRANSFER OR CONVEYANCE BY REASON OF THE MERGER OR 46 CONSOLIDATION, THE COURT MAY, IN ITS DISCRETION, DIRECT THAT SUCH ASSETS 47 BE TRANSFERRED OR CONVEYED TO THE SURVIVING OR CONSOLIDATED CORPORATION 48 SUBJECT TO SUCH PURPOSE OR USE, OR THAT SUCH ASSETS BE TRANSFERRED OR 49 CONVEYED TO THE SURVIVING OR CONSOLIDATED CORPORATION OR TO ONE OR MORE 50 OTHER DOMESTIC OR FOREIGN CORPORATIONS OR ORGANIZATIONS ENGAGED IN 51 SUBSTANTIALLY SIMILAR ACTIVITIES, UPON AN EXPRESS TRUST THE TERMS OF 52 WHICH SHALL BE APPROVED BY THE COURT. 53 (D) IF THE COURT SHALL FIND THAT THE INTERESTS OF NON-CONSENTING 54 MEMBERS ARE OR MAY BE SUBSTANTIALLY PREJUDICED BY THE PROPOSED MERGER OR 55 CONSOLIDATION, THE COURT MAY DISAPPROVE THE PLAN OR MAY DIRECT A MODIFI- 56 CATION THEREOF. IN THE EVENT OF A MODIFICATION, IF THE COURT SHALL FIND A. 7772 34 1 THAT THE INTERESTS OF ANY MEMBERS MAY BE SUBSTANTIALLY PREJUDICED BY THE 2 PROPOSED MERGER OR CONSOLIDATION AS MODIFIED, THE COURT SHALL DIRECT 3 THAT THE MODIFIED PLAN BE SUBMITTED TO VOTE OF THE MEMBERS OF THE 4 CONSTITUENT CORPORATIONS, OR IF THE COURT SHALL FIND THAT THERE IS NOT 5 SUCH SUBSTANTIAL PREJUDICE, IT SHALL APPROVE THE AGREEMENT AS SO MODI- 6 FIED WITHOUT FURTHER APPROVAL BY THE MEMBERS. IF THE COURT, UPON DIRECT- 7 ING A MODIFICATION OF THE PLAN OF MERGER OR CONSOLIDATION, SHALL DIRECT 8 THAT A FURTHER APPROVAL BE OBTAINED FROM MEMBERS OF THE CONSTITUENT 9 CORPORATIONS OR ANY OF THEM, SUCH FURTHER APPROVAL SHALL BE OBTAINED IN 10 THE MANNER SPECIFIED IN SECTION 903 (APPROVAL OF PLAN) OR PARAGRAPH (B) 11 OF SECTION 906 (MERGER OR CONSOLIDATION OF DOMESTIC AND FOREIGN CORPO- 12 RATIONS). 13 (E) IF IT SHALL APPEAR, TO THE SATISFACTION OF THE COURT, THAT THE 14 PROVISIONS OF THIS SECTION HAVE BEEN COMPLIED WITH, AND THAT THE INTER- 15 ESTS OF THE CONSTITUENT CORPORATIONS AND THE PUBLIC INTEREST WILL NOT BE 16 ADVERSELY AFFECTED BY THE MERGER OR CONSOLIDATION, IT SHALL APPROVE THE 17 MERGER OR CONSOLIDATION UPON SUCH TERMS AND CONDITIONS AS IT MAY 18 PRESCRIBE. 19 (F) A CERTIFIED COPY OF SUCH ORDER SHALL BE ANNEXED TO THE CERTIFICATE 20 OF MERGER OR CONSOLIDATION. 21 S 61. The not-for-profit corporation law is amended by adding a new 22 section 907-b to read as follows: 23 S 907-B. APPLICATION FOR APPROVAL OF THE ATTORNEY GENERAL. 24 (A) IN LIEU OF OBTAINING AN ORDER APPROVING THE PLAN OF MERGER OR 25 CONSOLIDATION AND AUTHORIZING THE FILING OF THE CERTIFICATE, THE CORPO- 26 RATION MAY ALTERNATIVELY MAKE AN APPLICATION TO THE ATTORNEY GENERAL FOR 27 APPROVAL, EXCEPT WHERE THE ATTORNEY GENERAL, IN HIS OR HER DISCRETION, 28 CONCLUDES THAT A COURT SHOULD REVIEW THE APPLICATION AND MAKE A DETERMI- 29 NATION THEREON. 30 (B) THE APPLICATION TO THE ATTORNEY GENERAL SHALL BE MADE BY ALL THE 31 CONSTITUENT CORPORATIONS JOINTLY AND SHALL SET FORTH BY AFFIDAVIT: (I) 32 ALL OF THE INFORMATION REQUIRED TO BE INCLUDED IN AN APPLICATION TO 33 OBTAIN COURT APPROVAL PURSUANT TO SECTION 907-A (APPLICATION FOR 34 APPROVAL OF THE SUPREME COURT), (II) ALL CONSENTS AND APPROVALS REQUIRED 35 BY SECTION 909 (CONSENT TO FILING), AND (III) A STATEMENT AS TO WHETHER 36 ANY PERSONS HAVE RAISED, OR HAVE A REASONABLE BASIS TO RAISE, OBJECTIONS 37 TO THE MERGER OR CONSOLIDATION THAT IS THE SUBJECT OF THE APPLICATION, 38 INCLUDING A STATEMENT SETTING FORTH THE NAMES AND ADDRESSES OF SUCH 39 PERSONS, THE NATURE OF THEIR INTEREST, AND A DESCRIPTION OF THEIR 40 OBJECTIONS. 41 (C) UPON THE FILING OF THE APPLICATION, THE ATTORNEY GENERAL, IN HIS 42 OR HER DISCRETION, MAY DIRECT THAT THE CONSTITUENT CORPORATIONS PROVIDE 43 NOTICE TO SUCH PERSONS AS MAY BE INTERESTED, INCLUDING ANY GOVERNMENTAL 44 BODY OR OFFICER AND ANY OTHER PERSON OR BODY THAT IS REQUIRED EITHER TO 45 GIVE CONSENT OR BE NOTIFIED UNDER SECTION 404 (NOTICES AND CONSENTS) OR 46 SECTION 909 (CONSENT TO FILING). THE CONSTITUENT CORPORATIONS SHALL 47 PROVIDE THE ATTORNEY GENERAL WITH A CERTIFICATION THAT SUCH NOTICE HAS 48 BEEN PROVIDED. 49 (D) IF ANY ASSETS OF ANY OF THE CONSTITUENT CORPORATIONS ARE HELD FOR 50 A CHARITABLE PURPOSE OR ARE ASSETS RECEIVED FOR A SPECIFIC PURPOSE AND 51 LEGALLY REQUIRED TO BE USED FOR A PARTICULAR PURPOSE, BUT NOT UPON A 52 CONDITION REQUIRING RETURN, TRANSFER OR CONVEYANCE BY REASON OF THE 53 MERGER OR CONSOLIDATION, THE ATTORNEY GENERAL MAY, IN HIS OR HER 54 DISCRETION, DIRECT THAT SUCH ASSETS BE TRANSFERRED OR CONVEYED TO THE 55 SURVIVING OR CONSOLIDATED CORPORATION SUBJECT TO SUCH PURPOSE OR USE. A. 7772 35 1 (E) IF THE ATTORNEY GENERAL SHALL FIND THAT THE INTERESTS OF NON-CON- 2 SENTING MEMBERS ARE OR MAY BE SUBSTANTIALLY PREJUDICED BY THE PROPOSED 3 MERGER OR CONSOLIDATION, THE ATTORNEY GENERAL MAY DISAPPROVE OF THE 4 APPLICATION OR MAY CONDITION APPROVAL OF THE APPLICATION UPON MODIFICA- 5 TION OF THE PLAN OF MERGER OR CONSOLIDATION IN ACCORDANCE WITH THIS 6 CHAPTER AND ANY OTHER LAW OR RULE. 7 (F) IF IT SHALL APPEAR, TO THE SATISFACTION OF THE ATTORNEY GENERAL, 8 THAT THE PROVISIONS OF THIS SECTION HAVE BEEN COMPLIED WITH, AND THAT 9 THE INTERESTS OF THE CONSTITUENT CORPORATIONS AND THE PUBLIC INTEREST 10 WILL NOT BE ADVERSELY AFFECTED BY THE MERGER OR CONSOLIDATION, THE 11 ATTORNEY GENERAL SHALL APPROVE THE MERGER OR CONSOLIDATION UPON SUCH 12 TERMS AND CONDITIONS AS IT MAY PRESCRIBE. 13 (G) THE APPROVAL OF THE ATTORNEY GENERAL SHALL BE ANNEXED TO THE 14 CERTIFICATE OF MERGER OR CONSOLIDATION. 15 (H) IF THE ATTORNEY GENERAL DOES NOT APPROVE THE APPLICATION, OR IF 16 THE ATTORNEY GENERAL CONCLUDES THAT COURT REVIEW IS APPROPRIATE, THE 17 CONSTITUENT CORPORATIONS MAY SEEK COURT APPROVAL ON NOTICE TO THE ATTOR- 18 NEY GENERAL PURSUANT TO SECTION 907-A (APPLICATION FOR APPROVAL OF THE 19 SUPREME COURT). 20 S 62. Paragraphs (a) and (f) of section 908 of the not-for-profit 21 corporation law are amended to read as follows: 22 (a) One or more domestic or foreign corporations which is, or would be 23 if formed under this chapter, BENEFICENT CORPORATION, OR ANY CORPORATION 24 FORMED AS a type A or type C corporation [under section 201 (Purposes)] 25 PRIOR TO JANUARY FIRST, TWO THOUSAND FOURTEEN, may be merged or consol- 26 idated into a domestic or foreign corporation which is, or would be if 27 formed under the laws of this state, a corporation formed under the 28 business corporation law of this state if such merger or consolidation 29 is not contrary to the law of the state of incorporation of any constit- 30 uent corporation. With respect to such merger or consolidation, any 31 reference in paragraph (b) of section 901 (POWER OF MERGER OR CONSOL- 32 IDATION) of this article or paragraph (b) of section 901 (POWER OF MERG- 33 ER OR CONSOLIDATION) of the business corporation law to a corporation 34 shall, unless the context otherwise requires, include both domestic and 35 foreign corporations. 36 (f) Where any constituent corporation is, or would be if formed under 37 this chapter, a [Type C] CHARITABLE corporation [under section 201 38 (Purposes)], no certificate shall be filed pursuant to this section 39 until an order approving the plan of merger or consolidation and author- 40 izing the filing of the certificate has been made by the supreme court, 41 as provided in section 907 (Approval by the supreme court). 42 S 63. Section 909 of the not-for-profit corporation law, as amended by 43 section 6 of part D of chapter 58 of the laws of 2006, is amended to 44 read as follows: 45 S 909. Consent to filing AND NOTICES. 46 If the purposes of any constituent or consolidated corporation would 47 require the approval or consent of any governmental body or officer or 48 any other person or body under section 404 ([Approvals] NOTICES and 49 consents) no certificate of merger or consolidation shall be filed 50 pursuant to this article unless such approval or consent is endorsed 51 thereon or annexed thereto. A corporation whose statement of purposes 52 specifically includes the establishment or operation of a child day care 53 center, as that term is defined in section three hundred ninety of the 54 social services law, shall [provide] SEND BY CERTIFIED MAIL, RETURN 55 RECEIPT REQUESTED, a certified copy of any certificate of merger or 56 consolidation involving such corporation to the office of children and A. 7772 36 1 family services within thirty days after the filing of such merger or 2 consolidation with the department of state. IF THE PURPOSES OF ANY 3 CONSTITUENT OR CONSOLIDATED CORPORATION WOULD REQUIRE NOTICE TO ANY 4 GOVERNMENTAL BODY OR OFFICER OR ANY OTHER PERSON OR ENTITY UNDER SECTION 5 404 (NOTICES AND CONSENTS), A CERTIFIED COPY OF THE CERTIFICATE OF MERG- 6 ER OR CONSOLIDATION SHALL BE SENT, CERTIFIED MAIL, RETURN RECEIPT 7 REQUESTED, TO THE GOVERNMENTAL BODY OR OFFICER OR ANY OTHER PERSON OR 8 ENTITY IMMEDIATELY AFTER THE FILING OF SUCH MERGER OR CONSOLIDATION BY 9 THE DEPARTMENT OF STATE. 10 S 64. Paragraphs (b), (c) and (d) of section 1001 of the not-for-pro- 11 fit corporation law, as amended by chapter 434 of the laws of 2006, are 12 amended to read as follows: 13 (b) If the corporation is a [Type B, C or D corporation and] has no 14 assets to distribute and no liabilities at the time of dissolution, the 15 plan of dissolution shall include a statement to that effect. 16 (c) If the corporation [is a Type B, C or D corporation and] has no 17 assets to distribute, other than a reserve not to exceed twenty-five 18 thousand dollars for the purpose of paying ordinary and necessary 19 expenses of winding up its affairs including attorney and accountant 20 fees, and liabilities not in excess of ten thousand dollars at the time 21 of adoption of the plan of dissolution, the plan of dissolution shall 22 include a statement to that effect. 23 (d) If the corporation has assets to distribute or liabilities, the 24 plan of dissolution shall contain: 25 (1) a description with reasonable certainty of the assets of the 26 corporation and their fair value, and the total amount of debts and 27 other liabilities incurred or estimated by the corporation, including 28 the total amount of any accounting and legal fees incurred or estimated, 29 in connection with the dissolution procedure. 30 (2) a statement as to whether any gifts or other assets are legally 31 required to be used for a particular purpose. 32 (3) if there are assets received and held by the corporation either 33 for a CHARITABLE CORPORATION OR BENEFICENT CORPORATION purpose [speci- 34 fied as Type B in paragraph (b) of section 201 (Purposes)] or which are 35 legally required to be used for a particular purpose, a statement that 36 the assets owned by the corporation, subject to any unpaid liabilities 37 of the corporation, shall be distributed as required by any gift instru- 38 ment or to a charitable CORPORATION OR organization or organizations OR 39 A BENEFICENT CORPORATION exempt from taxation pursuant to federal and 40 state laws and engaged in activities substantially similar to those of 41 the dissolved corporation. Each such recipient organization shall be 42 identified and the governing instrument and amendments thereto of each 43 of the proposed recipient organizations shall be annexed to such state- 44 ment, along with the financial reports of each recipient organization 45 for the last three years and a sworn affidavit from a director and offi- 46 cer of each recipient organization stating the purposes of the organiza- 47 tion, and that it is currently exempt from federal income taxation. 48 (4) if any of the assets of the corporation are to be distributed to a 49 recipient for a particular legally required purpose, an agreement by the 50 recipient to apply the assets received only for such purpose shall be 51 included. 52 S 65. Paragraphs (a), (c) and (d) of section 1002 of the not-for-pro- 53 fit corporation law, as amended by chapter 434 of the laws of 2006, are 54 amended to read as follows: 55 (a) Upon adopting a plan of dissolution and distribution of assets, 56 the board shall submit it to a vote of the members, if any, and such A. 7772 37 1 plan shall be approved at a meeting of members by two-thirds vote as 2 provided in paragraph (c) of section 613 (Vote of members) OF THIS CHAP- 3 TER; provided, however, that if the corporation is a [Type B, C or D] 4 corporation, other than a corporation incorporated pursuant to article 5 15 (Public cemetery corporations), and has no assets to distribute, OR 6 NO ASSETS TO DISTRIBUTE other than a reserve not to exceed twenty-five 7 thousand dollars for the purpose of paying ordinary and necessary 8 expenses of winding up its affairs including attorney and accountant 9 fees, and liabilities not in excess of ten thousand dollars at the time 10 of adoption of the plan of dissolution, the vote required by the corpo- 11 ration's board of directors for adoption of the plan of dissolution of 12 such a corporation or by the corporation's members for the authorization 13 thereof shall be: 14 (1) In the case of a vote by the board of directors: (i) the number of 15 directors required under the certificate of incorporation, by-laws, this 16 chapter and any other applicable law; or 17 (ii) if the number of directors actually holding office as such at the 18 time of the vote to adopt the plan is less than the number required to 19 constitute a quorum of directors under the certificate of incorporation, 20 the by-laws, this chapter or any other applicable law, the remaining 21 directors unanimously; 22 (2) In the case of a vote by the members, (i) the number of members 23 required under the certificate of incorporation, by-laws, this chapter 24 and any other applicable law; or (ii) by the vote of members authorized 25 by an order of the supreme court pursuant to section 608 (QUORUM AT 26 MEETING OF MEMBERS) of this chapter permitting the corporation to 27 dispense with the applicable quorum requirement. 28 Notice of a special or regular meeting of the board of directors or of 29 the members entitled to vote on adoption and authorization or approval 30 of the plan of dissolution shall be sent to all the directors and 31 members of record entitled to vote. Unless otherwise directed by order 32 of the supreme court pursuant to section 608 (QUORUM AT MEETING OF 33 MEMBERS) of this chapter, the notice shall be sent by certified mail, 34 return receipt requested, to the last known address of record of each 35 director and member not fewer than thirty, and not more than sixty days 36 before the date of each meeting provided, however, that if the last 37 known address of record of any director or member is not within the 38 United States, the notice to such director shall be sent by any other 39 reasonable means. 40 (c) [Whenever] EXCEPT IN THE CASE OF A CORPORATION WITH NO ASSETS TO 41 DISTRIBUTE OR WITH NO ASSETS NOT TO EXCEED TWENTY-FIVE THOUSAND DOLLARS 42 AND LIABILITIES NOT IN EXCESS OF TEN THOUSAND DOLLARS, WHENEVER a stat- 43 ute creating, or authorizing the formation of, a corporation requires 44 approval by a governmental body or officer for the formation of such 45 corporation, dissolution shall not be authorized without the approval of 46 such body or officer. 47 (d) (1) The plan of dissolution and distribution of assets shall have 48 annexed thereto the approval of THE ATTORNEY GENERAL OR a justice of the 49 supreme court in the judicial district in which the office of the corpo- 50 ration is located in the case of a Type B, C or D corporation, and in 51 the case of any other corporation which holds assets at the time of 52 dissolution legally required to be used for a particular purpose, except 53 that no such approval shall be required with respect to the plan of 54 dissolution of a corporation, other than a corporation incorporated 55 pursuant to article 15 (Public cemetery corporations), which has no 56 assets to distribute at the time of dissolution, OR NO ASSETS TO A. 7772 38 1 DISTRIBUTE other than a reserve not to exceed twenty-five thousand 2 dollars for the purpose of paying ordinary and necessary expenses of 3 winding up its affairs including attorney and accountant fees, and 4 liabilities not in excess of ten thousand dollars, and which has 5 complied with the requirements of section 1001 (Plan of dissolution and 6 distribution of assets) and this section applicable to such a corpo- 7 ration. 8 (2) APPLICATION TO THE ATTORNEY GENERAL FOR SUCH APPROVAL SHALL BE BY 9 VERIFIED PETITION, WITH THE PLAN OF DISSOLUTION AND DISTRIBUTION OF 10 ASSETS AND CERTIFIED COPIES OF THE CONSENTS PRESCRIBED BY THIS SECTION 11 ANNEXED THERETO. THE ATTORNEY GENERAL MAY APPROVE THE PETITION IF THE 12 CORPORATION HAS ADOPTED A PLAN IN ACCORDANCE WITH THE REQUIREMENTS OF 13 SECTION 1001 (PLAN OF DISSOLUTION AND DISTRIBUTION OF ASSETS) OF THIS 14 ARTICLE, AND ANY OTHER REQUIREMENTS IMPOSED BY LAW OR RULE. IF THE 15 ATTORNEY GENERAL DOES NOT APPROVE THE PETITION, OR IF THE ATTORNEY 16 GENERAL CONCLUDES THAT COURT REVIEW IS APPROPRIATE, THE PETITIONER MAY 17 SEEK COURT APPROVAL UPON TEN DAYS WRITTEN NOTICE TO THE ATTORNEY GENER- 18 AL. 19 (3) Application to the supreme court for an order for such approval 20 shall be by verified petition, with the plan of dissolution and distrib- 21 ution of assets and certified copies of the consents prescribed by this 22 section annexed thereto, and upon ten days written notice to the attor- 23 ney general accompanied by copies of such petition, plan and consents. 24 (4) In such case where approval of a justice of the supreme court OR 25 THE ATTORNEY GENERAL is not required [for a Type B, C or D corporation], 26 a copy of such plan certified under penalties of perjury shall be filed 27 with the attorney general within ten days after its authorization. 28 S 66. Paragraphs (a) and (c) of section 1002-a of the not-for-profit 29 corporation law as amended by chapter 434 of the laws of 2006, is 30 amended to read as follows: 31 (a) Carry out the plan of dissolution and distribution of assets, pay 32 its liabilities and distribute its assets in accordance therewith within 33 two hundred seventy days from the date the plan of dissolution and 34 distribution of assets shall have been (1) authorized as provided in 35 section 1002 of this article (Authorization of plan), (2) approved by 36 any governmental body or officer whose approval is required pursuant to 37 paragraph (c) of section 1002 of this article, and (3) approved by 38 EITHER THE ATTORNEY GENERAL OR a justice of the supreme court, if such 39 approval is required pursuant to paragraph (d) of section 1002 of this 40 article, or filed with the attorney general, if such filing is required 41 pursuant to paragraph (d) of section 1002 of this article. Evidence of 42 the disposition of its assets and payment of its liabilities pursuant to 43 the plan of dissolution and distribution of assets shall be submitted by 44 the corporation to the attorney general and any other governmental body 45 or officer, as required under applicable laws. If the plan of dissol- 46 ution and distribution of assets cannot be carried out within the 47 prescribed time, the attorney general may upon good cause shown extend 48 such time, or any extended period of time, by not fewer than thirty days 49 nor more than one year; 50 (c) Distribute the assets of the corporation that remain after paying 51 or adequately providing for the payment of its liabilities, in the 52 following manner: 53 (1) assets received and held by the corporation [either for a purpose 54 specified as Type B in paragraph (b) of section 201 (Purposes)] or which 55 are legally required to be used for a particular purpose, shall be 56 distributed to one or more [domestic or foreign] CHARITABLE A. 7772 39 1 corporations, BENEFICENT CORPORATIONS or other organizations engaged in 2 activities substantially similar to those of the dissolved corporation 3 pursuant to the plan of dissolution and distribution or, if applicable, 4 as ordered by the court to which such plan is submitted for approval 5 under section 1002 (Authorization of plan). Any disposition of assets 6 contained in a will or other instrument, in trust or otherwise, made 7 before or after the dissolution, to or for the benefit of any corpo- 8 ration so dissolved shall inure to or for the benefit of the corporation 9 or organization acquiring such assets of the dissolved corporation as 10 provided in this section, and so far as is necessary for that purpose 11 the corporation or organization acquiring such disposition shall be 12 deemed a successor to the dissolved corporation with respect to such 13 assets; provided, however, that such disposition shall be devoted by the 14 acquiring corporation or organization to the purposes intended by the 15 testator, donor or grantor. 16 (2) assets other than those described by subparagraph one of this 17 paragraph, if any, shall be distributed in accordance with the specifi- 18 cations of the plan of dissolution and distribution of assets or, to the 19 extent that the certificate of incorporation prescribes the distributive 20 rights of members, or of any class or classes of members, as provided in 21 such certificate; 22 S 67. Paragraphs (a) and (b) of section 1003 of the not-for-profit 23 corporation law, as amended by chapter 434 of the laws of 2006, are 24 amended to read as follows: 25 (a) After the plan of dissolution and distribution of assets has been 26 adopted, authorized, approved and carried out pursuant to the terms of 27 the plan within the time period set forth pursuant to section 1002-a 28 (Carrying out the plan of dissolution and distribution of assets), a 29 certificate of dissolution, entitled "Certificate of dissolution 30 of ........ (name of corporation) under section 1003 of the Not-for-Pro- 31 fit Corporation Law" shall be signed and, if required pursuant to 32 subparagraph two of paragraph (b) of this section, after the attorney 33 general has affixed thereon his or her consent to the dissolution, such 34 certificate of dissolution shall be delivered to the department of 35 state. It shall set forth: 36 (1) The name of the corporation and, if its name has been changed, the 37 name under which it was formed. 38 (2) The date its certificate of incorporation was filed by the depart- 39 ment of state. 40 (3) The name and address of each of its officers and directors. 41 (4) The type of corporation it is at the time of dissolution. 42 (5) A statement as to whether or not the corporation holds assets at 43 the time of authorization of its plan of dissolution and distribution of 44 assets as provided in section 1002 of this article (Authorization of 45 plan) which are legally required to be used for a particular purpose. 46 (6) That the corporation elects to dissolve. 47 (7) The manner in which the dissolution was authorized. If the dissol- 48 ution of the corporation is authorized by a vote of the directors and/or 49 members of the corporation that is less than that ordinarily required by 50 the certificate of incorporation, the by-laws, this chapter or any other 51 applicable law, as permitted by paragraph (a) of section 1002 (Authori- 52 zation of plan), then the certificate of dissolution shall so state. 53 (8) A statement that prior to delivery of such certificate of dissol- 54 ution to the department of state for filing, the plan of dissolution and 55 distribution of assets has been approved by EITHER THE ATTORNEY GENERAL 56 OR a justice of the supreme court, if such approval is required. A copy A. 7772 40 1 of the order shall be attached to the certificate of dissolution. In the 2 case of a corporation, other than a corporation incorporated pursuant to 3 article 15 (Public cemetery corporations), having no assets to distrib- 4 ute, OR HAVING NO ASSETS TO DISTRIBUTE other than a reserve not to 5 exceed twenty-five thousand dollars for the purpose of paying ordinary 6 and necessary expenses of winding up its affairs including attorney and 7 accountant fees, and liabilities not in excess of ten thousand dollars 8 at the time of dissolution, a statement that a copy of the plan of 9 dissolution which contains the statement prescribed by paragraph (b) of 10 section 1001 (Plan of dissolution and distribution of assets) has been 11 duly filed with the attorney general, if required. 12 (b) Such certificate of dissolution shall have indorsed thereon or 13 annexed thereto the approval of the dissolution: 14 (1) By a governmental body or officer, if such approval is required. A 15 corporation whose statement of purposes specifically includes the estab- 16 lishment or operation of a child day care center, as that term is 17 defined in section three hundred ninety of the social services law, 18 shall provide a certified copy of any certificate of dissolution involv- 19 ing such corporation to the office of children and family services with- 20 in thirty days after the filing of such dissolution with the department 21 of state. 22 (2) By the attorney general in the case of a [Type B, C or D] CHARITA- 23 BLE corporation, or any other corporation that holds assets at the time 24 of dissolution legally required to be used for a particular purpose. 25 S 68. Paragraph (a) of section 1007 of the not-for-profit corporation 26 law, as amended by chapter 434 of the laws of 2006, is amended to read 27 as follows: 28 (a) At any time after the plan of dissolution and distribution of 29 assets shall have been (1) authorized as provided in section 1002 of 30 this article (Authorization of plan), (2) approved by any governmental 31 body or officer whose approval is required pursuant to paragraph (c) of 32 section 1002 of this article, and (3) approved by EITHER BY THE ATTORNEY 33 GENERAL OR a justice of the supreme court, if such approval is required 34 pursuant to paragraph (d) of section 1002 of this article, or filed with 35 the attorney general, if such filing is required pursuant to paragraph 36 (d) of section 1002 of this article, and prior to filing the certificate 37 of dissolution, the corporation may give a notice requiring all credi- 38 tors and claimants, including any with unliquidated or contingent claims 39 and any with whom the corporation has unfulfilled contracts, to present 40 their claims in writing and in detail at a specified place and by a 41 specified day, which shall not be less than six months after the first 42 publication of such notice. Such notice shall be published at least once 43 a week for two successive weeks in a newspaper of general circulation in 44 the county in which the office of the corporation was located at the 45 date of authorization of its plan of dissolution and distribution of 46 assets as provided in section 1002 of this article (Authorization of 47 plan). On or before the date of the first publication OR POSTING ON A 48 WEBSITE of such notice, the corporation shall mail a copy thereof, post- 49 age prepaid, to each person believed to be a creditor of or claimant 50 against the corporation whose current name and address are known to or 51 can with due diligence be ascertained by the corporation. The giving of 52 such notice shall not constitute a recognition that any person is a 53 proper creditor or claimant, and shall not revive or make valid, or 54 operate as a recognition of the validity of, or a waiver of any defense 55 or counterclaim in respect of any claim against the corporation, its 56 assets, directors, officers or members, which has been barred by any A. 7772 41 1 statute of limitations or become invalid by any cause, or in respect of 2 which the corporation, its directors, officers or members, has any 3 defense or counterclaim. 4 S 69. Subparagraph 15 of paragraph (a) of section 1008 of the not-for- 5 profit corporation law, as amended by chapter 434 of the laws of 2006, 6 is amended to read as follows: 7 (15) Where assets were received and held by the corporation either for 8 a CHARITABLE CORPORATION OR A BENEFICENT CORPORATION purpose [specified 9 as Type B in paragraph (b) of section 201 (Purposes),] or were legally 10 required to be used for a particular purpose, the distribution of such 11 assets to one or more [domestic or foreign] CHARITABLE corporations, 12 BENEFICENT CORPORATIONS or other organizations engaged in activities 13 substantially similar to those of the dissolved corporation, on notice 14 to the attorney general and to such other persons, and in such manner, 15 as the court may deem proper. 16 S 70. Paragraph (a) of section 1010 of the not-for-profit corporation 17 law is amended to read as follows: 18 [(a)] At any time prior to the filing of a certificate of dissolution 19 by the department of state, a corporation may revoke the action taken to 20 dissolve the corporation in the following manner: 21 (1) If there are members entitled to vote thereon: 22 (A) Unless the certificate of incorporation dispenses with dissol- 23 ution action by the board, the board shall adopt a resolution recommend- 24 ing that the voluntary dissolution proceedings be revoked and directing 25 submission of the proposed revocation to a vote of the members entitled 26 to vote thereon. 27 (B) Revocation of the voluntary dissolution proceedings shall be 28 authorized by two-thirds vote as provided in paragraph (c) of section 29 613 (Vote of members). 30 (2) If there are no members entitled to vote thereon, revocation of 31 the voluntary dissolution proceedings shall be authorized by the vote of 32 a majority of the directors then in office. 33 (3) If approval of the dissolution of a corporation by a governmental 34 body or officer is required, as provided in paragraph (c) of section 35 1002 (Authorization of plan), and such approval has been given, revoca- 36 tion of the voluntary dissolution proceedings shall not be authorized 37 without approval thereof by such body or officer. 38 S 71. Subparagraph 6 of paragraph (a) of section 1012 of the not-for 39 profit corporation law, as amended by chapter 726 of the laws of 2005, 40 is amended to read as follows: 41 (6) That[, under section 201 (Purposes),] it is a [Type ............. 42 (Insert A, B, C or D)] CHARITABLE OR BENEFICENT not-for-profit corpo- 43 ration. 44 S 72. Subparagraph 1 of paragraph (a) of section 1207 of the not-for- 45 profit corporation law, clause (C) as amended by chapter 847 of the laws 46 of 1970, is amended to read as follows: 47 (1) To give immediate notice of his appointment by publication once a 48 week for two successive weeks in two newspapers of general circulation 49 in the county where the office of the corporation is located or, in the 50 case of a foreign corporation against which an action has been brought 51 under subparagraph [(a)] (4) OF PARAGRAPH (A) of section 1202 (Appoint- 52 ment of receiver of property of a domestic or foreign corporation) OF 53 THIS ARTICLE EITHER, AS DIRECTED BY THE COURT, in a newspaper of general 54 circulation [as directed by the court,] OR POSTED PROMINENTLY AND 55 CONTINUOUSLY FOR TWO SUCCESSIVE WEEKS ON THE HOMEPAGE OF ANY WEBSITE 56 MAINTAINED BY THE CORPORATION OR requiring: A. 7772 42 1 (A) All persons indebted to the corporation to render an account of 2 all debts owing by them to the corporation and to pay the same to the 3 receiver at a specified place and by a specified day. 4 (B) All persons having in their possession any property of the corpo- 5 ration to deliver the same to the receiver at the specified place and by 6 the specified day. 7 (C) All creditors and claimants, including any with unliquidated or 8 contingent claims and any with whom the corporation has unfulfilled 9 contracts, to present their claims to the receiver in writing and in 10 detail at a specified place and by a specified day, which shall not be 11 less than six months after the first publication of such notice. When- 12 ever a receiver is appointed in dissolution proceedings under article 10 13 (Non-judicial dissolution) or article 11 (Judicial dissolution), section 14 1007 (Notice to creditors BY CORPORATIONS INTENDING TO DISSOLVE; filing 15 or barring claims) shall apply and shall control the giving of notice to 16 creditors and claimants and the filing and barring of claims. 17 S 73. Paragraph (a) of section 1211 of the not-for-profit corporation 18 law is amended to read as follows: 19 (a) If there remains property of the corporation after the first 20 distribution, the receiver shall, within one year thereafter, make a 21 final distribution among the creditors entitled thereto. Notice that 22 such distribution will be the final distribution to creditors shall be 23 published once a week for two consecutive weeks in a newspaper of gener- 24 al circulation in the county where the office of the corporation is 25 located OR POSTED PROMINENTLY AND CONTINUOUSLY FOR TWO CONSECUTIVE WEEKS 26 ON THE HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE CORPORATION. 27 S 74. Paragraph (b) of section 1215 of the not-for-profit corporation 28 law is amended to read as follows: 29 (b) The petition shall be accompanied by a verified account of all 30 the assets of the corporation received by him, of all payments or other 31 disposition thereof made by him, of the remaining assets of the corpo- 32 ration in respect to which he was appointed receiver and the situation 33 of the same, and of all his transactions as receiver. Thereupon, the 34 court shall grant an order directing notice to be given to the sureties 35 on his official bond and to all persons interested in the property of 36 the corporation to show cause, at a time and place specified, why the 37 receiver should not be permitted to resign. Such notice shall EITHER, 38 AS DIRECTED BY THE COURT, be published once in each week for six succes- 39 sive weeks in one or more newspapers [as the court shall direct] OR 40 POSTED PROMINENTLY AND CONTINUOUSLY FOR SIX SUCCESSIVE WEEKS ON THE 41 HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE CORPORATION. If it shall 42 appear that the proceedings of the receiver in the discharge of his 43 trust have been fair and honest and that there is no good cause to the 44 contrary, the court shall make an order permitting such receiver to 45 resign. Thereupon he shall be discharged and his powers as receiver 46 shall cease, but he shall remain subject to any liability incurred prior 47 to the making of such order. The court, in its discretion, may require 48 the expense of such proceeding to be paid by the receiver presenting the 49 petition. 50 S 75. Subparagraph 3 of paragraph (a) of section 1218 of the not-for- 51 profit corporation law is amended to read as follows: 52 (3) The order directing service of the summons shall require the 53 publication thereof EITHER in a newspaper published in the state of New 54 York in the English language at least once a week for four successive 55 weeks, OR POSTED PROMINENTLY AND CONTINUOUSLY FOR FOUR SUCCESSIVE WEEKS 56 ON ANY APPROPRIATE WEBSITE, and shall also require the mailing on or A. 7772 43 1 before the date of the first publication of a copy of the summons, 2 complaint and order to the corporation at its last known principal or 3 head office in the state or country of its incorporation. 4 S 76. Section 1302 of the not-for-profit corporation law, as amended 5 by chapter 847 of the laws of 1970, is amended to read as follows: 6 S 1302. Application to existing authorized foreign corporations. 7 Every foreign corporation which on the effective date of this chapter 8 is authorized to conduct activities in this state under a certificate of 9 authority heretofore issued to it by the secretary of state shall 10 continue to have such authority. Such foreign corporation, its members, 11 directors, and officers shall have the same rights, franchises, and 12 privileges and shall be subject to the same limitations, restrictions, 13 liabilities, and penalties as a foreign corporation authorized under 14 this chapter, its members, directors, and officers respectively. A 15 foreign corporation may by amendment to its certificate of authority set 16 forth [the type of] WHETHER IT IS A CHARITABLE corporation [it is under 17 section 201 (Purposes);] OR A BENEFICENT CORPORATION and in the absence 18 of such amendment an authorized foreign corporation shall be a [Type B] 19 CHARITABLE corporation. Reference in this chapter to an application for 20 authority shall, unless the context otherwise requires, include the 21 statement and designation and any amendment thereof required to be filed 22 by the secretary of state under prior statutes to obtain a certificate 23 of authority. 24 S 77. Subparagraph 4 of paragraph (a) of section 1304 of the not-for- 25 profit corporation law, as amended by chapter 847 of the laws of 1970 26 and as renumbered by chapter 590 of the laws of 1982, is amended to read 27 as follows: 28 (4) That the corporation is a foreign corporation as defined in 29 subparagraph [(a)] (7) OF PARAGRAPH (A) of section 102 (Definitions)[; 30 the type of] OF THIS CHAPTER, WHETHER IT WOULD BE A CHARITABLE corpo- 31 ration [it shall be under section 201 (Purposes); a statement] OR A 32 BENEFICENT CORPORATION IF FORMED IN THIS STATE; A STATEMENT of its 33 purposes to be pursued in this state and of the activities which it 34 proposes to conduct in this state; AND a statement that it is authorized 35 to conduct those activities in the jurisdiction of its incorporation[; 36 and in the case of a Type C corporation, the lawful public or quasi- 37 public objective which each business purpose will achieve]. 38 S 78. Paragraph (c) of section 1304 of the not-for-profit corporation 39 law is amended to read as follows: 40 (c) If the application for authority sets forth any purpose or activ- 41 ity for which a domestic corporation could be formed only with the 42 consent or approval of any governmental body or officer, or other person 43 or body under section 404 ([Approvals] NOTICES and consents), such 44 consent or approval shall be endorsed thereon or annexed thereto. IF THE 45 APPLICATION FOR AUTHORITY SETS FORTH ANY PURPOSE OR ACTIVITY REQUIRING A 46 DOMESTIC CORPORATION TO PROVIDE NOTICE OF THE FILING OF A CERTIFICATE OF 47 INCORPORATION TO ANY GOVERNMENT BODY OR OFFICER OR OTHER ENTITY UNDER 48 SECTION 404 (NOTICES AND CONSENTS) OF THIS CHAPTER, THEN THE CORPORATION 49 SHALL SEND BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED COPY 50 OF THE CERTIFICATE OF AUTHORITY TO SUCH PERSON OR ENTITY IMMEDIATELY 51 AFTER FILING THE CERTIFICATE OF AUTHORITY BY THE DEPARTMENT OF STATE. 52 S 79. Subparagraph 1 of paragraph (a) of section 1309 of the not-for- 53 profit corporation law, as amended by chapter 186 of the laws of 1983, 54 is amended to read as follows: 55 (1) The name of the foreign corporation as it appears on the index of 56 names of existing domestic and authorized foreign corporations of any A. 7772 44 1 [type or] kind in the department of state and the fictitious name the 2 corporation has agreed to use in this state pursuant to paragraph (d) of 3 section 1301 of this chapter. 4 S 80. Subparagraph 1 of paragraph (b) of section 1310 of the not-for- 5 profit corporation law, as amended by chapter 186 of the laws of 1983, 6 is amended to read as follows: 7 (1) The name of the foreign corporation as it appears on the index of 8 names of existing domestic and authorized foreign corporations of any 9 [type or] kind in the department of state and the fictitious name the 10 corporation has agreed to use in this state pursuant to paragraph (d) of 11 section 1301 of this chapter. 12 S 81. Subparagraph 1 of paragraph (a) of section 1311 of the not-for- 13 profit corporation law, as amended by chapter 186 of the laws of 1983, 14 is amended to read as follows: 15 (1) The name of the foreign corporation as it appears on the index of 16 names of existing domestic and authorized foreign corporations of any 17 [type or] kind in the department of state and the fictitious name the 18 corporation has agreed to use in this state pursuant to paragraph (d) of 19 section 1301 of this chapter. 20 S 82. Paragraphs (a) and (b) of section 1315 of the not-for-profit 21 corporation law, subparagraph 5 of paragraph (b) as amended by chapter 22 847 of the laws of 1970, are amended to read as follows: 23 (a) An action or special proceeding against a foreign corporation may 24 be maintained by a resident of this state or by a domestic corporation 25 of any [type or] kind for any cause of action. 26 (b) Except as otherwise provided in this article, an action or special 27 proceeding against a foreign corporation may be maintained by another 28 foreign corporation of any [type or] kind or by a nonresident in the 29 following cases only: 30 (1) Where the action is brought to recover damages for the breach of a 31 contract made or to be performed within this state, or relating to prop- 32 erty situated within this state at the time of the making of the 33 contract. 34 (2) Where the subject matter of the litigation is situated within this 35 state. 36 (3) Where the cause of action arose within this state, except where 37 the object of the action or special proceeding is to affect the title of 38 real property situated outside this state. 39 (4) Where, in any case not included in the preceding subparagraphs, a 40 non-domiciliary would be subject to the personal jurisdiction of the 41 courts of this state under section [302] THREE HUNDRED TWO of the civil 42 practice law and rules. 43 (5) Where the defendant is a foreign corporation conducting activities 44 or authorized to conduct activities in this state. 45 S 83. Paragraph (b) of section 1316 of the not-for-profit corporation 46 law is amended to read as follows: 47 (b) An examination authorized by paragraph (a) may be denied to such 48 member or other person upon his refusal to furnish to the foreign corpo- 49 ration or its transfer agent or registrar an affidavit that such 50 inspection is not desired for a purpose which is in the interests of a 51 business or object other than the activities of the foreign corporation 52 and that such member or other person has not within five years sold or 53 offered for sale any list or record of members of any corporation of any 54 [type or] kind, whether or not formed under the laws of this state, or 55 aided or abetted any person in procuring any such list or record of 56 members for any such purpose. A. 7772 45 1 S 84. Paragraph (a) of section 1321 of the not-for-profit corporation 2 law, subparagraphs 1, 2 and 3 as amended by chapter 847 of the laws of 3 1970, is amended to read as follows: 4 (a) Notwithstanding any other provision of this chapter, a foreign 5 corporation conducting activities in this state which is authorized 6 under this article, its directors, officers and members, shall be exempt 7 from the provisions of paragraph (e) of section 1317 (Voting trust 8 records), subparagraph [(a)] (1) OF PARAGRAPH (A) of section 1318 9 (Liabilities of directors and officers of foreign corporations), and 10 subparagraph [(a)] (2) OF PARAGRAPH (A) of section 1320 (Applicability 11 of other provisions) if when such provision would otherwise apply: 12 (1) The corporation is a [Type A] BENEFICENT corporation under this 13 chapter; its principal activities are conducted outside this state; the 14 greater part of its property is located outside this state; and less 15 than one third of its members are residents of this state; or 16 (2) The corporation is a [Type B] CHARITABLE corporation under this 17 chapter; its principal activities are conducted outside this state; the 18 greater part of its property is located outside this state; and less 19 than ten per cent of its annual revenues is derived from solicitation of 20 funds within this state[; or 21 (3) The corporation is a Type C corporation under this chapter; its 22 principal activities are conducted outside this state; the greater part 23 of its property is located outside this state; and less than one half of 24 its revenues for the preceding three fiscal years, or such portion ther- 25 eof as the foreign corporation was in existence, was derived from sourc- 26 es within this state]. 27 S 85. Paragraph (d) of section 1401 of the not-for-profit corporation 28 law, as added by chapter 871 of the laws of 1977, is amended to read as 29 follows: 30 (d) Type of corporation. A family or private cemetery corporation is a 31 [type B] CHARITABLE corporation under this chapter. 32 S 86. Paragraph (b) of section 1402 of the not-for-profit corporation 33 law is amended to read as follows: 34 (b) Type of corporation. 35 A fire corporation is a [Type B] CHARITABLE corporation under this 36 chapter. 37 S 87. Paragraph (c) of section 1403 of the not-for-profit corporation 38 law is amended to read as follows: 39 (c) Type of corporation. A corporation for the prevention of cruelty 40 is a [Type B] CHARITABLE corporation under this chapter. 41 S 88. Paragraph (b) of section 1404 of the not-for-profit corporation 42 law, as amended by chapter 1058 of the laws of 1971, is amended to read 43 as follows: 44 (b) Type of corporation. 45 A christian association is a [Type B] CHARITABLE corporation under 46 this chapter. 47 S 89. Paragraph (b) of section 1405 of the not-for-profit corporation 48 law is amended to read as follows: 49 (b) Type of corporation. 50 A soldiers' monument corporation is a [Type B] CHARITABLE corporation. 51 S 90. Paragraph (b) of section 1406 of the not-for-profit corporation 52 law is amended to read as follows: 53 (b) Type of corporation. 54 A medical society is a [Type A] BENEFICENT corporation under this 55 chapter. A. 7772 46 1 S 91. Paragraph (b) of section 1407 of the not-for-profit corporation 2 law is amended to read as follows: 3 (b) Type of corporation. 4 An alumni corporation is a [Type A] BENEFICENT corporation. 5 S 92. Paragraph (b) of section 1408 of the not-for-profit corporation 6 law is amended to read as follows: 7 (b) Type of corporation. 8 An historical society is a [Type B] CHARITABLE corporation under this 9 chapter. 10 S 93. Paragraph (b) of section 1409 of the not-for-profit corporation 11 law, as amended by chapter 1058 of the laws of 1971, is amended to read 12 as follows: 13 (b) Type of corporation. 14 An agricultural or horticultural corporation is a [Type A] BENEFICENT 15 corporation under this chapter, except that any such corporation which 16 has received moneys from the state or has acted as agent for the state 17 under paragraph (c) OF THIS SECTION, or has acquired or does acquire 18 real property by condemnation is or becomes a [Type B] CHARITABLE corpo- 19 ration under this chapter. [If such corporation has not already filed as 20 a Type B corporation it shall, upon such receipt of moneys or acting as 21 such agent or such acquisition of real property by condemnation, amend 22 its certificate to that effect.] 23 S 94. Paragraph (b) of section 1410 of the not-for-profit corporation 24 law is amended to read as follows: 25 (b) Type of corporation. 26 A board of trade or a chamber of commerce is a [Type A] BENEFICENT 27 corporation under this chapter. 28 S 95. Paragraph (b) of section 1411 of the not-for-profit corporation 29 law is amended to read as follows: 30 (b) Type of corporation. A local development corporation is a [Type 31 C] CHARITABLE corporation under this chapter. 32 S 96. Paragraph (d) of section 1412 of the not-for-profit corporation 33 law, as added by chapter 555 of the laws of 1993, is amended to read as 34 follows: 35 (d) Type. A university faculty practice corporation is a [Type B] 36 CHARITABLE corporation under this chapter. 37 S 97. Paragraph (c) of section 1505 of the not-for-profit corporation 38 law, as added by chapter 871 of the laws of 1977, is amended to read as 39 follows: 40 (c) Type of corporation. A cemetery corporation is a [Type B] CHARI- 41 TABLE corporation under this chapter. 42 S 98. Paragraph (b) of section 1602 of the not-for-profit corporation 43 law, as added by chapter 257 of the laws of 2011, is amended to read as 44 follows: 45 (b) "land bank" shall mean a land bank established as a [type C not- 46 for-profit] CHARITABLE corporation under this chapter and in accordance 47 with the provisions of this article and pursuant to this article; 48 S 99. Paragraph (f) of section 1603 of the not-for-profit corporation 49 law, as added by chapter 257 of the laws of 2011, is amended to read as 50 follows: 51 (f) Each land bank created pursuant to this act shall be a [type C 52 not-for-profit] CHARITABLE corporation, and shall have permanent and 53 perpetual duration until terminated and dissolved in accordance with the 54 provisions of section sixteen hundred thirteen of this article. A. 7772 47 1 S 100. The opening paragraph of paragraph (a) of section 1607 of the 2 not-for-profit corporation law, as added by chapter 257 of the laws of 3 2011, is amended to read as follows: 4 A land bank shall constitute a [type C not-for-profit] CHARITABLE 5 corporation under New York law, which powers shall include all powers 6 necessary to carry out and effectuate the purposes and provisions of 7 this article, including the following powers in addition to those herein 8 otherwise granted: 9 S 101. Paragraph (e) of section 1611 of the not-for-profit corporation 10 law, as added by chapter 257 of the laws of 2011, is amended to read as 11 follows: 12 (e) Bonds issued by the land bank shall be issued, sold, and delivered 13 in accordance with the terms and provisions of a resolution adopted by 14 the board. The board may sell such bonds in such manner, either at 15 public or at private sale, and for such price as it may determine to be 16 in the best interests of the land bank. The resolution issuing bonds 17 shall be published in a newspaper of general circulation within the 18 jurisdiction of the land bank AND POSTED PROMINENTLY AND CONTINUOUSLY ON 19 THE HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE LAND BANK. 20 S 102. Section 1613 of the not-for-profit corporation law, as added by 21 chapter 257 of the laws of 2011, is amended to read as follows: 22 S 1613. Dissolution of land bank. 23 A land bank may be dissolved as a [type C not-for-profit] CHARITABLE 24 corporation sixty calendar days after an affirmative resolution approved 25 by two-thirds of the membership of the board of directors. Sixty calen- 26 dar days advance written notice of consideration of a resolution of 27 dissolution shall be given to the foreclosing governmental unit or units 28 that created the land bank, shall be published in a local newspaper of 29 general circulation, and POSTED PROMINENTLY AND CONTINUOUSLY ON THE 30 HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE LAND BANK, AND shall be sent 31 certified mail to the trustee of any outstanding bonds of the land bank. 32 Upon dissolution of the land bank all real property, personal property 33 and other assets of the land bank shall become the assets of the fore- 34 closing governmental unit or units that created the land bank. In the 35 event that two or more foreclosing governmental units create a land bank 36 in accordance with section [sixteen hundred three] 1603 of this article, 37 the withdrawal of one or more foreclosing governmental units shall not 38 result in the dissolution of the land bank unless the intergovernmental 39 agreement so provides, and there is no foreclosing governmental unit 40 that desires to continue the existence of the land bank. 41 S 103. Paragraph (h) of section 8-1.4 of the estates, powers and 42 trusts law, as amended by chapter 43 of the laws of 2002, is amended to 43 read as follows: 44 (h) The attorney general shall make rules and regulations necessary 45 for the administration of this section, including rules and regulations 46 as to the time for filing reports, the contents thereof, and [the] ANY 47 manner of executing and filing them, INCLUDING BUT NOT LIMITED TO ALLOW- 48 ING OR REQUIRING ANY SUBMISSION TO THE ATTORNEY GENERAL TO BE EFFECTED 49 BY ELECTRONIC MEANS AND ELECTRONIC SIGNATURES. He or she may classify 50 trusts, estates, corporations and other trustees as to purpose, nature 51 of assets, duration, amount of assets, amounts to be devoted to charita- 52 ble purposes, or otherwise, and may establish different rules for 53 different classes as to time and nature of the reports required, to the 54 ends that he or she shall receive current financial reports as to all 55 such trusts, estates, corporations or other trustees which will enable 56 him or her to ascertain whether they are being properly administered. A. 7772 48 1 The attorney general may suspend the filing of financial reports as to a 2 particular trustee for a reasonable, specifically designated time upon 3 written application of the trustee, signed under penalties for perjury, 4 and filed with the attorney general and after the attorney general has 5 filed in the register of trustees a written statement that the interests 6 of the beneficiaries will not be prejudiced thereby and that periodic 7 reports during the term of such suspension are not required for proper 8 supervision by his or her office. The filing of the financial reports 9 required by this section, or the exemption from such filing or the 10 suspension therefrom, shall not have the effect of absolving trustees 11 from any responsibility for accounting for property or income held by 12 them for charitable purposes. A copy of an account or other financial 13 report filed by a trustee in any court in this state, if the account or 14 other financial report substantially complies with the rules and regu- 15 lations of the attorney general, may be filed as a financial report 16 under this section. 17 S 104. Paragraph (b-1) of section 8-1.8 of the estates, powers and 18 trusts law is REPEALED. 19 S 105. The estates, powers and trusts law is amended by adding a new 20 section 8-1.9 to read as follows: 21 S 8-1.9 TRUST GOVERNANCE 22 (A) FOR PURPOSES OF THIS SECTION: 23 (1) A "TRUST" MEANS A TRUST CREATED SOLELY FOR CHARITABLE PURPOSES, OR 24 A TRUST THAT CONTINUES SOLELY FOR SUCH PURPOSES AFTER ALL NON-CHARITABLE 25 INTERESTS HAVE TERMINATED. 26 (2) "CHARITABLE PURPOSE" MEANS ANY RELIGIOUS, CHARITABLE EDUCATIONAL 27 OR BENEVOLENT PURPOSE. 28 (3) "KEY EMPLOYEE" MEANS ANY PERSON WHO HAS RESPONSIBILITIES, POWERS 29 OR INFLUENCE OVER THE TRUST SIMILAR TO THOSE OF AN OFFICER OF A 30 NOT-FOR-PROFIT CORPORATION, OR IS OTHERWISE IN A POSITION TO EXERCISE 31 SUBSTANTIAL INFLUENCE OVER THE AFFAIRS OF THE TRUST, AS DEFINED IN 32 SECTION 4958(F)(1)(A) OF THE INTERNAL REVENUE CODE OF 1986 AS AMENDED, 33 AND THE REGULATIONS THEREUNDER, AND ANY SUCCESSOR LAW OR REGULATION. 34 (4) AN "AFFILIATE" OF A TRUST MEANS ANY ENTITY CONTROLLED BY, IN 35 CONTROL OF, OR UNDER COMMON CONTROL WITH SUCH TRUST. 36 (5) "RELATIVE" OF AN INDIVIDUAL MEANS THE (I) SPOUSE, ANCESTOR, CHIL- 37 DREN, GRANDCHILDREN, GREAT GRANDCHILDREN, BROTHER OR SISTER (WHETHER BY 38 THE WHOLE- OR HALF-BLOOD) OF THE INDIVIDUAL; AND (II) THE SPOUSES OF 39 CHILDREN, GRANDCHILDREN, GREAT GRANDCHILDREN, BROTHER, OR SISTER (WHETH- 40 ER BY THE WHOLE- OR HALF-BLOOD) OF THE INDIVIDUAL. 41 (6) "RELATED PARTY" MEANS (I) ANY TRUSTEE OR KEY EMPLOYEE OF THE TRUST 42 OR ANY AFFILIATE OF THE TRUST; 43 (II) ANY RELATIVE OF ANY TRUSTEE OR KEY EMPLOYEE OF THE TRUST OR ANY 44 AFFILIATE OF THE TRUST; OR (III) AN ENTITY IN WHICH ANY INDIVIDUAL 45 DESCRIBED IN CLAUSES (I) AND (II) OF THIS SUBPARAGRAPH HAS A THIRTY- 46 FIVE PERCENT OR GREATER OWNERSHIP OR BENEFICIAL INTEREST. 47 (7) "INDEPENDENT TRUSTEE" MEANS A TRUSTEE WHO IN THE PAST THREE YEARS: 48 (I) WAS NOT EMPLOYED BY, AND DID NOT HAVE A RELATIVE WHO WAS EMPLOYED 49 BY, THE TRUST OR AN AFFILIATE OF THE TRUST; (II) WAS NOT EMPLOYED BY, 50 AND DOES NOT HAVE A RELATIVE WHO WAS EMPLOYED BY, ANY ENTITY THAT MADE 51 PAYMENTS TO, OR RECEIVED PAYMENTS FROM, THE TRUST OR ANY AFFILIATE OF 52 THE TRUST FOR GOODS, PROPERTY OR SERVICES EXCEEDING TEN THOUSAND 53 DOLLARS; (III) HAS NOT HAD, AND DOES NOT HAVE A RELATIVE WHO HAS HAD, A 54 MATERIAL FINANCIAL INTEREST IN ANY ENTITY THAT MADE PAYMENTS TO, OR 55 RECEIVED PAYMENTS FROM, THE TRUST OR ANY AFFILIATE OF THE TRUST FOR 56 GOODS, PROPERTY OR SERVICES EXCEEDING TEN THOUSAND DOLLARS; AND (IV) HAS A. 7772 49 1 NOT RECEIVED, AND DOES NOT HAVE ANY RELATIVE WHO HAS RECEIVED, ANY OTHER 2 COMPENSATION, PAYMENT OR BENEFIT HAVING MONETARY VALUE FROM THE TRUST OR 3 ANY AFFILIATE OF THE TRUST, OTHER THAN REIMBURSEMENT FOR EXPENSES OR THE 4 PAYMENT OF TRUSTEE COMMISSIONS OR OTHER TRUSTEE COMPENSATION AS PERMIT- 5 TED BY LAW AND THE GOVERNING INSTRUMENT. 6 (8) "RELATED PARTY TRANSACTION" MEANS ANY TRANSACTION, AGREEMENT OR 7 ANY OTHER ARRANGEMENT IN WHICH A RELATED PARTY HAS A FINANCIAL INTEREST 8 AND IN WHICH THE TRUST OR ANY AFFILIATE OF THE TRUST IS A PARTICIPANT. 9 (9) "INDEPENDENT AUDITOR" MEANS ANY CERTIFIED PUBLIC ACCOUNTANT 10 PERFORMING THE AUDIT OF THE FINANCIAL STATEMENTS OF A TRUST REQUIRED BY 11 SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B OF THE EXECUTIVE 12 LAW. 13 (B)(1) EVERY TRUST REQUIRED TO FILE AN INDEPENDENT CERTIFIED PUBLIC 14 ACCOUNTANT'S AUDIT REPORT WITH THE ATTORNEY GENERAL PURSUANT TO SUBDIVI- 15 SION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B OF THE EXECUTIVE LAW AND 16 THIS CHAPTER SHALL DESIGNATE AN AUDIT COMMITTEE, CONSISTING OF ONE OR 17 MORE INDEPENDENT TRUSTEES, FOR THE PURPOSE OF OVERSEEING THE ACCOUNTING 18 AND FINANCIAL REPORTING PROCESSES OF THE TRUST AND THE INDEPENDENT 19 CERTIFIED PUBLIC ACCOUNTANT'S AUDIT OF THE TRUST'S FINANCIAL STATEMENTS. 20 AN AUDIT COMMITTEE THAT IS NOT MADE UP OF ALL TRUSTEES SHALL BE OVERSEEN 21 BY AND BE RESPONSIBLE TO THE TRUSTEES. IF A TRUST REQUIRED TO HAVE AN 22 AUDIT COMMITTEE PURSUANT TO THIS PARAGRAPH IS UNDER THE CONTROL OF 23 ANOTHER TRUST OR CORPORATION, THE AUDIT COMMITTEE FUNCTION MAY BE 24 CONDUCTED BY THE TRUSTEES OR THE BOARD OF DIRECTORS OF THE CONTROLLING 25 TRUST OR CORPORATION. 26 (2) THE AUDIT COMMITTEE SHALL, AT A MINIMUM: 27 (I) RETAIN AND EVALUATE THE INDEPENDENT AUDITOR, WHICH SHALL REPORT 28 DIRECTLY TO THE AUDIT COMMITTEE; 29 (II) REVIEW WITH THE INDEPENDENT AUDITOR THE SCOPE AND PLANNING OF THE 30 AUDIT; 31 (III) REVIEW AND DISCUSS WITH THE INDEPENDENT AUDITOR, AT A MINIMUM: 32 (A) THE RESULTS OF ANY AUDIT, INCLUDING BUT NOT LIMITED TO: THE MANAGE- 33 MENT LETTER TO THE TRUST AND ANY MATERIAL RISKS AND WEAKNESSES IN INTER- 34 NAL CONTROLS IDENTIFIED BY THE AUDITOR; (B) ANY RESTRICTIONS ON THE 35 SCOPE OF THE AUDITOR'S ACTIVITIES OR ACCESS TO REQUESTED INFORMATION; 36 (C) ANY SIGNIFICANT DISAGREEMENTS BETWEEN THE AUDITOR AND MANAGEMENT; 37 AND (D) THE ADEQUACY AND PERFORMANCE OF THE TRUST'S ACCOUNTING FUNCTION. 38 (IV) CONSIDER AT LEAST ANNUALLY THE PERFORMANCE AND INDEPENDENCE OF 39 THE INDEPENDENT AUDITOR; 40 (V) OVERSEE ADOPTION, IMPLEMENTATION OF AND COMPLIANCE WITH ANY 41 CONFLICT OF INTEREST POLICY ADOPTED BY THE TRUST PURSUANT TO PARAGRAPH 42 (F) OF THIS SECTION, AND IF APPLICABLE, ANY WHISTLEBLOWER POLICY, IF 43 THIS FUNCTION IS NOT OTHERWISE PERFORMED BY ANOTHER COMMITTEE COMPRISED 44 SOLELY OF INDEPENDENT TRUSTEES; AND 45 (VI) REPORT ITS ACTIVITIES TO THE TRUSTEES AT LEAST ANNUALLY. 46 (3) THE AUDIT COMMITTEE SHALL ADOPT A CHARTER THAT SHALL STATE ITS 47 AUTHORITY AND RESPONSIBILITIES, INCLUDING THOSE PRESCRIBED BY THIS PARA- 48 GRAPH, AND THAT SHALL STATE THE SIZE, COMPOSITION AND FUNCTIONING OF THE 49 AUDIT COMMITTEE. 50 (C)(1) FOR PURPOSES OF THIS PARAGRAPH, "TOTAL COMPENSATION" MEANS (1) 51 ANY COMPENSATION, WHETHER PAID OR ACCRUED, BY OR ON BEHALF OF THE TRUST 52 OR ANY AFFILIATE OF THE TRUST, INCLUDING BUT NOT LIMITED TO SALARY, 53 BONUS, AND DEFERRED COMPENSATION, AND (2) ANY BENEFIT HAVING MONETARY 54 VALUE PROVIDED BY THE TRUST OR ON BEHALF OF THE TRUST OR ANY AFFILIATE 55 OF THE TRUST, INCLUDING BUT NOT LIMITED TO HOUSING ALLOWANCES, LIVING A. 7772 50 1 EXPENSES, PERQUISITES, FRINGE BENEFITS, EMPLOYER CONTRIBUTIONS TO 2 DEFINED CONTRIBUTION RETIREMENT PLANS AND OTHER RETIREMENT BENEFITS. 3 (2) THE TOTAL COMPENSATION PAID BY A TRUST TO ANY EMPLOYEE OF THE 4 TRUST SHALL BE FAIR, REASONABLE AND COMMENSURATE WITH SERVICES THE 5 EMPLOYEE PROVIDES TO THE TRUST. 6 (3) NO EMPLOYEE OR OTHER INDIVIDUAL WHO MAY BENEFIT FROM COMPENSATION 7 OR BENEFITS PROVIDED BY THE TRUST MAY BE PRESENT AT OR OTHERWISE PARTIC- 8 IPATE IN TRUSTEE OR COMMITTEE DELIBERATION OR VOTE CONCERNING SUCH 9 COMPENSATION OR BENEFITS. 10 (4) EVERY TRUST THAT IS REQUIRED TO BE REGISTERED WITH THE ATTORNEY 11 GENERAL UNDER ARTICLE SEVEN-A OF THE EXECUTIVE LAW AND THIS CHAPTER AND 12 THAT IN THE PRIOR FISCAL YEAR HAD ANNUAL REVENUES IN EXCESS OF TWO 13 MILLION DOLLARS SHALL DESIGNATE A COMPENSATION COMMITTEE OF THE TRUSTEES 14 TO OVERSEE EXECUTIVE COMPENSATION PROGRAMS AND RELATED PRACTICES OF THE 15 TRUST. (I) THE COMPENSATION COMMITTEE SHALL BE COMPRISED OF ONE OR MORE 16 INDEPENDENT TRUSTEES. IF A TRUST CONTROLS ONE OR MORE TRUSTS OR CORPO- 17 RATIONS, THE COMPENSATION COMMITTEE OF THE CONTROLLING TRUST MAY BE 18 DEEMED TO BE THE COMPENSATION COMMITTEE FOR ITS CONTROLLED ENTITIES. 19 (II) THE COMPENSATION COMMITTEE SHALL: 20 (A) REVIEW THE TOTAL COMPENSATION PAID TO THE TRUST'S OFFICERS AND ITS 21 FIVE HIGHEST-COMPENSATED KEY EMPLOYEES. (B) AFFIRMATIVELY DETERMINE THAT 22 THE TOTAL COMPENSATION PAID TO ANY SUCH INDIVIDUAL IS FAIR, REASONABLE 23 AND COMMENSURATE WITH SERVICES PROVIDED TO THE TRUST. IN MAKING THIS 24 DETERMINATION, THE COMPENSATION COMMITTEE SHALL AT A MINIMUM CONSIDER 25 THE FOLLOWING FACTORS: 1. THE TOTAL COMPENSATION PROVIDED TO THE INDI- 26 VIDUAL; 2. RELEVANT BENCHMARK DATA ON THE TOTAL COMPENSATION PAID TO 27 INDIVIDUALS SERVING IN SIMILAR POSITIONS AT TRUSTS OR CORPORATIONS OF 28 SIMILAR SIZE, TYPE, PURPOSE, AND SCOPE; 3. THE INDIVIDUAL'S QUALIFICA- 29 TIONS AND PERFORMANCE; 4. COMPENSATION, PAYMENTS OR ANY OTHER BENEFITS 30 PROVIDED TO THE INDIVIDUAL FROM ANY AFFILIATE OF THE TRUST; AND 5. THE 31 OVERALL FINANCIAL CONDITION OF THE TRUST. (C) MAKE AND KEEP A CONTEMPO- 32 RANEOUS WRITTEN RECORD DESCRIBING THE BASIS FOR ITS DETERMINATION, 33 INCLUDING ITS ANALYSIS OF THE FACTORS SET FORTH IN THIS PARAGRAPH AND 34 HOW ANY RELEVANT DATA WAS OBTAINED AND USED. (D) APPROVE BY NOT LESS 35 THAN A MAJORITY VOTE THE TOTAL COMPENSATION PAID TO EACH SUCH INDIVID- 36 UAL. 37 (D) IF THE COMPENSATION COMMITTEE IS COMPRISED OF FEWER THAN ALL OF 38 THE INDEPENDENT TRUSTEES, THEN: (1) THE COMPENSATION COMMITTEE SHALL 39 RECOMMEND TO ALL OF THE INDEPENDENT TRUSTEES FOR THEIR APPROVAL THE 40 TOTAL COMPENSATION OF EACH INDIVIDUAL THAT THE COMMITTEE HAS AFFIRMA- 41 TIVELY DETERMINED IS FAIR, REASONABLE, AND COMMENSURATE WITH SERVICES 42 PROVIDED TO THE TRUST, AND INCLUDE THEREWITH THE WRITTEN RECORD OF ITS 43 DETERMINATION CREATED PURSUANT TO SUBPARAGRAPH THREE OF THIS PARAGRAPH; 44 (2) UPON REVIEW OF THE RECOMMENDATIONS OF THE COMPENSATION COMMITTEE, 45 THE TRUSTEES SHALL APPROVE BY NOT LESS THAN A MAJORITY VOTE OF THE INDE- 46 PENDENT TRUSTEES THE TOTAL COMPENSATION OF EACH SUCH INDIVIDUAL, WITH 47 ONLY INDEPENDENT TRUSTEES PARTICIPATING IN ANY SUCH VOTE AND ANY 48 DISCUSSION RELATING THERETO; AND (3) THE INDEPENDENT TRUSTEES SHALL KEEP 49 A CONTEMPORANEOUS WRITTEN RECORD OF THE BASIS OF ITS DETERMINATION, 50 INCLUDING AREAS OF AGREEMENT OR DISAGREEMENT WITH THE RECOMMENDATIONS OF 51 THE COMPENSATION COMMITTEE. (4) THE COMPENSATION COMMITTEE MAY RETAIN A 52 COMPENSATION CONSULTANT TO ASSIST IN THE PERFORMANCE OF ITS RESPONSIBIL- 53 ITIES. THE COMPENSATION COMMITTEE SHALL BE DIRECTLY RESPONSIBLE FOR THE 54 APPOINTMENT, COMPENSATION AND OVERSIGHT OF THE WORK OF SUCH CONSULTANT, 55 AND ANY SUCH CONSULTANT SHALL REPORT DIRECTLY TO THE COMPENSATION 56 COMMITTEE. THE COMPENSATION COMMITTEE SHALL, AMONG ITS RESPONSIBILITIES, A. 7772 51 1 APPROVE THE COMPENSATION PEER GROUP THAT THE COMPENSATION CONSULTANT 2 RECOMMENDS BE USED TO DEVELOP BENCHMARK DATA. (I) PRIOR TO RETAINING ANY 3 SUCH CONSULTANT, THE COMPENSATION COMMITTEE SHALL DETERMINE THAT THE 4 CONSULTANT IS INDEPENDENT AND QUALIFIED TO RENDER ADVICE TO THE TRUST 5 CONCERNING COMPENSATION; PROVIDED THAT NO CONSULTANT MAY BE DETERMINED 6 INDEPENDENT IF SUCH CONSULTANT OR ANY FIRM THAT EMPLOYS SUCH CONSULTANT 7 HAS (A) RECEIVED DIRECTLY OR INDIRECTLY ANY PAYMENT, FEE OR OTHER 8 COMPENSATION FROM THE TRUST OR ANY AFFILIATE OF THE TRUST WITHIN THE 9 PRECEDING TWO YEARS, OTHER THAN REASONABLE AMOUNTS PAID FOR COMPENSATION 10 CONSULTING SERVICES, OR (B) ANY BUSINESS OR PERSONAL RELATIONSHIP WITH 11 THE TRUST OR ANY AFFILIATE OF THE TRUST, OR ANY OF ITS OR THEIR OFFI- 12 CERS, DIRECTORS OR EMPLOYEES, THAT MAY INTERFERE WITH THE ABILITY OF THE 13 CONSULTANT TO PROVIDE OBJECTIVE ADVICE TO THE COMMITTEE. (II) NOTHING IN 14 THIS SUBPARAGRAPH SHALL BE CONSTRUED TO (A) REQUIRE THE COMPENSATION 15 COMMITTEE TO IMPLEMENT OR ACT CONSISTENTLY WITH THE ADVICE OR RECOMMEN- 16 DATIONS PROVIDED BY THE COMPENSATION CONSULTANT TO THE COMPENSATION 17 COMMITTEE; OR (B) AFFECT THE ABILITY OR OBLIGATION OF MEMBERS OF THE 18 COMPENSATION COMMITTEE TO EXERCISE THEIR OWN JUDGMENT IN FULFILLMENT OF 19 THEIR DUTIES TO THE TRUST AND ITS BENEFICIARIES. (5) THE COMPENSATION 20 COMMITTEE SHALL ADOPT A CHARTER SETTING FORTH ITS RESPONSIBILITIES, 21 INCLUDING AS PRESCRIBED BY THIS PARAGRAPH, AS WELL AS REQUIREMENTS 22 CONCERNING THE SIZE, COMPOSITION AND FUNCTIONING OF THE COMPENSATION 23 COMMITTEE. 24 (E) (1) NOTWITHSTANDING ANY PROVISION IN THE TRUST INSTRUMENT TO THE 25 CONTRARY, NO TRUST SHALL ENTER INTO A RELATED PARTY TRANSACTION, UNLESS: 26 (I) THE MATERIAL FACTS AS TO THE RELATED PARTY'S INTEREST IN, AND 27 RELATIONSHIP TO, THE TRANSACTION ARE DISCLOSED IN GOOD FAITH TO THE 28 TRUSTEES; (II) THE TRUSTEES: (A) CONSIDER ALTERNATIVE TRANSACTIONS TO 29 THE EXTENT AVAILABLE AND UPON REASONABLE DILIGENCE DETERMINE THAT SUCH 30 ALTERNATIVE TRANSACTIONS WOULD NOT BE MORE ADVANTAGEOUS TO THE TRUST AND 31 ITS BENEFICIARIES UNDER THE CIRCUMSTANCES; (B) DETERMINE BY A TWO-THIRDS 32 VOTE OF THE TRUSTEES THAT THE RELATED PARTY TRANSACTION IS FAIR, REASON- 33 ABLE AND IN THE BEST INTERESTS OF THE TRUST AND ITS BENEFICIARIES AND 34 APPROVE SUCH TRANSACTION, AND THE RELATED PARTY WITH AN INTEREST IN THE 35 TRANSACTION IS NOT PRESENT AT AND OTHERWISE DOES NOT OTHERWISE PARTIC- 36 IPATE IN ANY DELIBERATION OR VOTING RELATING THERETO; AND (C) CONTEMPO- 37 RANEOUSLY DOCUMENT IN WRITING THE BASIS FOR THEIR DETERMINATION AND 38 APPROVAL OF THE TRANSACTION. THIS SUBPARAGRAPH SHALL NOT APPLY TO ANY 39 COMPENSATION REVIEWED AND APPROVED IN ACCORDANCE WITH SUBPARAGRAPH FOUR 40 OF PARAGRAPH (C) OF THIS SECTION. 41 (2) THE TRUST INSTRUMENT, BYLAWS OR CONFLICT OF INTEREST POLICY OF THE 42 TRUST MAY CONTAIN ADDITIONAL RESTRICTIONS ON RELATED PARTY TRANSACTIONS 43 AND ADDITIONAL PROCEDURES NECESSARY FOR THE REVIEW OR APPROVAL OF SUCH 44 TRANSACTIONS, OR PROVIDE THAT ANY TRANSACTIONS IN VIOLATION OF SUCH 45 RESTRICTIONS SHALL BE VOID OR VOIDABLE. 46 (3) ANY TRUSTEE OR KEY EMPLOYEE WHO HAS AN INTEREST IN A RELATED PARTY 47 TRANSACTION SHALL, PRIOR TO THE TRUSTEES' CONSIDERATION OF THE PROPOSED 48 TRANSACTION, DISCLOSE IN GOOD FAITH TO THE TRUSTEES THE MATERIAL FACTS 49 AS TO SUCH PERSON'S INTEREST IN, AND RELATIONSHIP TO, THE TRANSACTION. 50 THE TRUSTEES SHALL ADOPT AND IMPLEMENT PROCEDURES FOR THE TIMELY DISCLO- 51 SURE OF SUCH FACTS TO THE TRUSTEES. 52 (4) THE ATTORNEY GENERAL MAY BRING AN ACTION TO ENJOIN, VOID OR 53 RESCIND ANY RELATED PARTY TRANSACTION OR A PROPOSED RELATED PARTY TRANS- 54 ACTION THAT VIOLATES ANY LAW OR IS OTHERWISE NOT FAIR, REASONABLE, OR IN 55 THE BEST INTERESTS OF THE TRUST OR ITS BENEFICIARIES, OR TO SEEK OTHER 56 RELIEF, INCLUDING BUT NOT LIMITED TO DAMAGES, RESTITUTION, THE REMOVAL A. 7772 52 1 OF TRUSTEES, OR SEEK TO REQUIRE ANY PERSON OR ENTITY TO: (I) ACCOUNT 2 FOR ANY PROFITS MADE FROM SUCH TRANSACTION, AND PAY THEM TO THE TRUST; 3 (II) PAY THE TRUST THE VALUE OF THE USE OF ANY OF ITS PROPERTY OR OTHER 4 ASSETS USED IN SUCH TRANSACTION; (III) RETURN OR REPLACE ANY PROPERTY OR 5 OTHER ASSETS LOST TO THE TRUST AS A RESULT OF SUCH TRANSACTION, TOGETHER 6 WITH ANY INCOME OR APPRECIATION LOST TO THE TRUST BY REASON OF SUCH 7 TRANSACTION, OR ACCOUNT FOR ANY PROCEEDS OF SALE OF SUCH PROPERTY, AND 8 PAY THE PROCEEDS TO THE TRUST TOGETHER WITH INTEREST AT THE LEGAL RATE; 9 AND (IV) PAY, IN THE CASE OF WILLFUL CONDUCT, AN AMOUNT UP TO DOUBLE THE 10 AMOUNT OF ANY BENEFIT IMPROPERLY OBTAINED. 11 (5) THE POWERS AND DUTIES OF THE ATTORNEY GENERAL PROVIDED IN THIS 12 PARAGRAPH ARE IN ADDITION TO ALL OTHER POWERS AND DUTIES THE ATTORNEY 13 GENERAL MAY HAVE UNDER THIS CHAPTER OR ANY OTHER LAW. 14 (F)(1) EVERY TRUST SHALL ADOPT A CONFLICT OF INTEREST POLICY TO ENSURE 15 THAT ITS TRUSTEES AND KEY EMPLOYEES ACT IN THE BEST INTEREST OF THE 16 TRUST AND ITS BENEFICIARIES AND COMPLY WITH APPLICABLE LEGAL REQUIRE- 17 MENTS, INCLUDING BUT NOT LIMITED TO THE REQUIREMENTS SET FORTH IN PARA- 18 GRAPH (D) OF THIS SECTION. 19 (2) THE CONFLICT OF INTEREST POLICY SHALL INCLUDE, AT A MINIMUM, THE 20 FOLLOWING PROVISIONS: 21 (I) A DEFINITION OF THE CIRCUMSTANCES THAT CONSTITUTE A CONFLICT OF 22 INTEREST; (II) PROCEDURES FOR DISCLOSING A CONFLICT OF INTEREST TO THE 23 AUDIT COMMITTEE OR, IF THERE IS NO AUDIT COMMITTEE, TO THE TRUSTEES; 24 (III) A REQUIREMENT THAT THE PERSON WITH THE CONFLICT OF INTEREST NOT BE 25 PRESENT AT OR PARTICIPATE IN ANY DELIBERATION OR VOTE ON THE MATTER 26 GIVING RISE TO SUCH CONFLICT; (IV) A PROHIBITION AGAINST ANY ATTEMPT BY 27 THE PERSON WITH THE CONFLICT TO INFLUENCE THE DELIBERATION OR VOTING ON 28 THE MATTER GIVING RISE TO SUCH CONFLICT; (V) A REQUIREMENT THAT THE 29 EXISTENCE AND RESOLUTION OF THE CONFLICT BE DOCUMENTED IN THE TRUST'S 30 RECORDS, INCLUDING IN THE MINUTES OF ANY MEETING AT WHICH THE CONFLICT 31 WAS DISCUSSED OR VOTED UPON; AND (VI) PROCEDURES FOR DISCLOSING, 32 ADDRESSING, AND DOCUMENTING RELATED PARTY TRANSACTIONS IN ACCORDANCE 33 WITH PARAGRAPH (D) OF THIS SECTION. 34 (3) THE CONFLICT OF INTEREST POLICY SHALL REQUIRE THAT PRIOR TO A 35 TRUSTEE'S INITIAL APPOINTMENT, AND ANNUALLY THEREAFTER, SUCH TRUSTEE 36 SHALL COMPLETE, SIGN AND FILE WITH THE RECORDS OF THE TRUST A WRITTEN 37 STATEMENT IDENTIFYING ANY ENTITY OF WHICH HE OR SHE IS AN OFFICER, 38 DIRECTOR, TRUSTEE, MEMBER, OWNER (EITHER AS A SOLE PROPRIETOR OR A PART- 39 NER), OR EMPLOYEE WITH WHICH THE TRUST HAS, OR MIGHT BE EXPECTED TO 40 HAVE, A RELATIONSHIP OR A TRANSACTION IN WHICH THE TRUSTEE MIGHT HAVE A 41 CONFLICTING INTEREST. THE POLICY SHALL REQUIRE THAT EACH TRUSTEE ANNUAL- 42 LY RESUBMIT SUCH WRITTEN STATEMENT. THE TRUSTEES SHALL PROVIDE A COPY OF 43 ALL COMPLETED STATEMENTS TO THE CHAIR OF THE AUDIT COMMITTEE, IF THERE 44 IS AN AUDIT COMMITTEE. 45 (4) EVERY TRUST REGISTERED OR REQUIRED TO BE REGISTERED PURSUANT TO 46 SECTION ONE HUNDRED SEVENTY-TWO OF THE EXECUTIVE LAW OR SECTION 8-1.4 OF 47 THIS PART SHALL TRANSMIT SUCH POLICIES TO THE ATTORNEY GENERAL IN THE 48 FORM AND MANNER SPECIFIED BY THE ATTORNEY GENERAL, AND SHALL WITHIN 49 THIRTY DAYS OF ANY MATERIAL CHANGE OF THESE POLICIES PROVIDE THE ATTOR- 50 NEY GENERAL WITH THE CHANGED POLICIES. 51 (5) NOTHING IN THIS PARAGRAPH SHALL BE INTERPRETED TO REQUIRE A TRUST 52 TO ADOPT ANY SPECIFIC CONFLICT OF INTEREST POLICY NOT OTHERWISE REQUIRED 53 BY LAW, OR TO SUPERSEDE OR LIMIT ANY REQUIREMENT OR DUTY GOVERNING 54 CONFLICTS OF INTEREST REQUIRED BY ANY OTHER LAW OR RULE. 55 (G)(1) EVERY TRUST THAT HAS TWENTY OR MORE EMPLOYEES AND IN THE PRIOR 56 FISCAL YEAR HAD ANNUAL REVENUE IN EXCESS OF ONE MILLION DOLLARS SHALL A. 7772 53 1 ADOPT A WHISTLEBLOWER POLICY TO PROTECT FROM RETALIATION PERSONS WHO 2 REPORT SUSPECTED IMPROPER CONDUCT. SUCH POLICY SHALL PROVIDE THAT NO 3 TRUSTEE, EMPLOYEE OR VOLUNTEER OF A TRUST WHO IN GOOD FAITH REPORTS ANY 4 ACTION OR SUSPECTED ACTION TAKEN BY OR WITHIN THE TRUST THAT IS ILLEGAL, 5 FRAUDULENT OR IN VIOLATION OF ANY ADOPTED POLICY OF THE TRUST SHALL 6 SUFFER INTIMIDATION, HARASSMENT, DISCRIMINATION OR OTHER RETALIATION OR, 7 IN THE CASE OF EMPLOYEES, ADVERSE EMPLOYMENT CONSEQUENCE. 8 (2) THE WHISTLEBLOWER POLICY SHALL INCLUDE THE FOLLOWING PROVISIONS: 9 (I) PROCEDURES FOR THE REPORTING OF VIOLATIONS OR SUSPECTED VIOLATIONS 10 OF LAWS OR TRUST POLICIES, INCLUDING PROCEDURES FOR PRESERVING THE 11 CONFIDENTIALITY OF REPORTED INFORMATION; 12 (II) PROCEDURES FOR HANDLING AND INVESTIGATING VIOLATIONS OR SUSPECTED 13 VIOLATIONS OF LAWS OR TRUST POLICIES; 14 (III) A REQUIREMENT THAT A TRUSTEE OR AN EMPLOYEE OF THE TRUST BE 15 DESIGNATED TO ADMINISTER, IMPLEMENT AND OVERSEE COMPLIANCE OF THE WHIS- 16 TLE-BLOWER POLICY AND TO REPORT TO THE AUDIT COMMITTEE OR OTHER COMMIT- 17 TEE OF INDEPENDENT TRUSTEES, OR TO THE TRUSTEES; 18 (IV) A REQUIREMENT THAT ALL DOCUMENTS CONCERNING INFORMATION REPORTED 19 UNDER THE WHISTLEBLOWER POLICY AND ANY INVESTIGATION RELATING THERETO BE 20 RETAINED BY THE TRUST FOR A MINIMUM PERIOD OF SIX YEARS; AND 21 (V) A REQUIREMENT THAT A COPY OF THE POLICY BE DISTRIBUTED TO ALL 22 TRUSTEES, EMPLOYEES AND VOLUNTEERS, WITH INSTRUCTIONS ON HOW TO COMPLY 23 WITH THE PROCEDURES SET FORTH IN THE POLICY. 24 (3) NOTHING IN THIS SECTION SHALL BE INTERPRETED TO RELIEVE ANY TRUST 25 FROM ANY ADDITIONAL REQUIREMENTS IN RELATION TO INTERNAL COMPLIANCE, 26 RETALIATION, OR DOCUMENT RETENTION REQUIRED BY ANY OTHER LAW OR RULE. 27 S 106. Subdivision 2 of section 711 of the surrogate's court procedure 28 act is amended to read as follows: 29 2. Where by reason of his having wasted or improperly applied the 30 assets of the estate, or made investments unauthorized by law or other- 31 wise improvidently managed or injured the property committed to his 32 charge, INCLUDING BY FAILING TO COMPLY WITH SECTION 8-1.9 OF THE 33 ESTATES, POWERS AND TRUSTS LAW, or by reason of other misconduct in the 34 execution of his office or dishonesty, drunkenness, improvidence or want 35 of understanding, he is unfit for the execution of his office. 36 S 107. Section 202 of the racing, pari-mutuel wagering and breeding 37 law, as amended by chapter 18 of the laws of 2008, is amended to read as 38 follows: 39 S 202. Restriction upon commencement of business. No business corpo- 40 ration organized under the provisions of this article shall engage in 41 the prosecution or management of its business until the whole of its 42 capital stock shall have been subscribed, nor until it shall have filed 43 in the offices where certificates of incorporation were filed, a further 44 certificate stating that the whole of its capital stock has been in good 45 faith subscribed, executed and acknowledged by its president or vice- 46 president and treasurer or secretary, and verified by them to the effect 47 that the statements contained in it are true. 48 Notwithstanding the foregoing, [corporations organized] NO CHARITABLE 49 CORPORATION AS DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO OF 50 THE NOT-FOR-PROFIT CORPORATION LAW OR ANY CORPORATIONS ORGANIZED PRIOR 51 TO JANUARY FIRST, TWO THOUSAND FOURTEEN AS A TYPE C CORPORATION pursuant 52 to section two hundred one of the not-for-profit corporation law [as 53 type C corporations] OR AS A CHARITABLE CORPORATION AS DEFINED IN PARA- 54 GRAPH (A) OF SECTION ONE HUNDRED TWO OF THE NOT-FOR-PROFIT CORPORATION 55 LAW shall [not] engage in the prosecution or management of its business 56 until its certificate of incorporation has been accepted for filing by A. 7772 54 1 the secretary of state and such confirmation of filing has been filed 2 with the board and the franchise oversight board. 3 S 108. Subdivision 9 of section 171-a of the executive law, as amended 4 by chapter 353 of the laws of 1987, is amended to read as follows: 5 9. "Fund raising counsel." Any person who for compensation consults 6 with a charitable organization or who plans, manages, advises, or 7 assists with respect to the solicitation in this state of contributions 8 for or on behalf of a charitable organization, but who does not have 9 access to contributions or other receipts from a solicitation or author- 10 ity to pay expenses associated with a solicitation and who does not 11 solicit. A bona fide officer, volunteer, or employee of a charitable 12 organization or an attorney at law retained by a charitable organization 13 OR AN INDIVIDUAL ENGAGED SOLELY TO DRAFT APPLICATIONS FOR FUNDING FROM A 14 GOVERNMENTAL AGENCY OR AN ENTITY EXEMPT FROM TAXATION PURSUANT TO 15 SECTION FIVE HUNDRED ONE (C)(3) OF THE INTERNAL REVENUE CODE, shall not 16 be deemed a fund raising counsel. 17 S 109. Subdivision 1 of section 172 of the executive law is amended by 18 adding a new paragraph (k) to read as follows: 19 (K) ANY CONFLICT OF INTEREST POLICY AND ANY WHISTLEBLOWER POLICY 20 ADOPTED PURSUANT TO SECTIONS SEVEN HUNDRED FIFTEEN-A AND SEVEN HUNDRED 21 FIFTEEN-B OF THE NOT-FOR-PROFIT CORPORATION LAW OR SECTION 8-1.9 OF THE 22 ESTATES, POWERS AND TRUSTS LAW. 23 S 110. Subdivisions 1 and 2 of section 172-b of the executive law, as 24 amended by section 43 of the laws of 2002, are amended to read as 25 follows: 26 1. Every charitable organization registered or required to be regis- 27 tered pursuant to section one hundred seventy-two of this article which 28 shall receive in any fiscal year gross revenue and support in excess of 29 [two hundred fifty] FIVE HUNDRED thousand dollars [and every charitable 30 organization whose fund-raising functions are not carried on solely by 31 persons who are unpaid for such services] shall file with the attorney 32 general an annual written financial report, on forms prescribed by the 33 attorney general, on or before the fifteenth day of the fifth calendar 34 month after the close of such fiscal year. The annual financial report 35 shall be accompanied by an annual financial statement which includes an 36 independent certified public accountant's audit report containing an 37 opinion that the financial statements are presented fairly in all mate- 38 rial respects and in conformity with generally accepted accounting prin- 39 ciples, including compliance with all pronouncements of the financial 40 accounting standards board and the American Institute of Certified 41 Public Accountants that establish accounting principles relevant to 42 not-for-profit organizations. Such financial report shall include a 43 statement of any changes in the information required to be contained in 44 the registration form filed on behalf of such organization. The finan- 45 cial report shall be signed by the president or other authorized officer 46 and the chief fiscal officer of the organization who shall certify under 47 penalties for perjury that the statements therein are true and correct 48 to the best of their knowledge, and shall be accompanied by an opinion 49 signed by an independent public accountant that the financial statement 50 and balance sheet therein present fairly the financial operations and 51 position of the organization. A fee of twenty-five dollars payable to 52 the attorney general shall accompany such financial report at the time 53 of filing, provided however, that any such organization that is regis- 54 tered with the attorney general pursuant to article eight of the 55 estates, powers and trusts law is required to file only one annual A. 7772 55 1 financial report which meets the filing requirements of this article and 2 section 8-1.4 of the estates, powers and trusts law. 3 2. Every charitable organization registered or required to be regis- 4 tered pursuant to section one hundred seventy-two of this article which 5 shall receive in gross revenue and support in any fiscal year at least 6 one hundred thousand dollars but not more than [two hundred fifty] FIVE 7 HUNDRED thousand dollars shall file an annual financial report. The 8 annual financial report shall be accompanied by an annual financial 9 statement which includes an independent certified public accountant's 10 review report in accordance with "statements on standards for accounting 11 and review services" issued by the American Institute of Certified 12 Public Accountants. The annual financial statement shall be prepared in 13 conformity with generally accepted accounting principles, including 14 compliance with all pronouncements of the financial accounting standards 15 board and the American Institute of Certified Public Accountants that 16 establish accounting principles relevant to not-for-profit organiza- 17 tions. Such financial report shall be filed with the attorney general, 18 upon forms prescribed by the attorney general on an annual basis on or 19 before the fifteenth day of the fifth calendar month after the close of 20 such fiscal year, which shall include a financial report covering such 21 fiscal year in accordance with such requirements as the attorney general 22 may prescribe. Such financial report shall include a statement of any 23 changes in the information required to be contained in the registration 24 form filed on behalf of such organization. The financial report shall be 25 signed by the president or other authorized officer and the chief fiscal 26 officer of the organization who shall certify under penalties for perju- 27 ry that the statements therein are true and correct to the best of their 28 knowledge. A fee of ten dollars payable to the attorney general shall 29 accompany such financial report at the time of filing, provided, howev- 30 er, that any such organization that is registered with the attorney 31 general pursuant to article eight of the estates, powers and trusts law 32 is required to file only one annual financial report which meets the 33 filing requirements of this article and section 8-1.4 of the estates, 34 powers and trusts law. NOTWITHSTANDING THE REQUIREMENTS OF THIS 35 SECTION, IF UPON REVIEW OF AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S 36 REVIEW REPORT FILED PURSUANT TO THIS SUBDIVISION, THE ATTORNEY GENERAL 37 DETERMINES THAT A CHARITABLE ORGANIZATION SHOULD OBTAIN AN INDEPENDENT 38 CERTIFIED PUBLIC ACCOUNTANT'S AUDIT REPORT, SUCH ORGANIZATION SHALL 39 OBTAIN AND FILE WITH THE ATTORNEY GENERAL AN AUDIT REPORT THAT MEETS THE 40 REQUIREMENTS OF SUBDIVISION ONE OF THIS SECTION WITHIN SIXTY DAYS OF THE 41 ATTORNEY GENERAL'S REQUEST FOR SUCH REPORT. 42 S 111. Subdivision 1 of section 177 of the executive law, as amended 43 by chapter 83 of the laws of 1995, is amended to read as follows: 44 1. The attorney general shall make rules and regulations necessary for 45 the administration of this article including, but not limited to regu- 46 lations and waiver procedures that will ensure that charitable organiza- 47 tions do not have to register twice in relation to the solicitation and 48 administration of assets, AND RULES OR REGULATIONS ALLOWING OR REQUIRING 49 ANY SUBMISSION TO THE ATTORNEY GENERAL TO BE EFFECTED BY ELECTRONIC 50 MEANS. 51 S 112. Section 223 of the education law, as amended by chapter 106 of 52 the laws of 1974, is amended to read as follows: 53 S 223. Consolidation OR MERGER of corporations. Any two or more 54 corporations chartered under the powers of the regents or incorporated 55 under a special act of the legislature or under a general law for 56 purposes for which a charter may be granted by the regents may enter A. 7772 56 1 into an agreement for the consolidation OR MERGER of such corporations, 2 setting forth the terms and conditions of consolidation OR MERGER, the 3 name of the proposed CONSOLIDATED OR MERGED corporation, the place or 4 places where the institution or institutions to be maintained is or are 5 to be located, the number of its directors, which may be five or more, 6 the time of the annual election and the names of the persons to be 7 directors until the first OR NEXT annual meeting. 8 The agreement must be approved by three-fourths of the trustees or 9 directors of such [corporation] CORPORATIONS at a meeting of the trus- 10 tees or directors of each corporation, separately and specially called 11 for that purpose, which approval, duly verified by the chairman and 12 clerk of such meeting, shall be annexed to the petition. On presenta- 13 tion of a petition, together with the certificate of approval and the 14 agreement for consolidation OR MERGER, and on such notice to interested 15 parties as the regents shall prescribe, and after hearing such inter- 16 ested parties as desire to be heard, the regents may make and execute an 17 order for the consolidation OR MERGER of the corporations on such terms 18 and conditions as the regents may prescribe. When such order is made, 19 such corporations shall become one corporation by the name designated in 20 the order, and shall be subject only to such duties and obligations as a 21 corporation formed under this chapter for the same purposes; and all the 22 property belonging to the corporations so consolidated OR MERGED shall 23 be vested in and transferred to the new OR SURVIVING corporation, which 24 shall be subject to all the liabilities of the former corporations, to 25 the same extent as if they had been contracted or incurred by it. If 26 any corporation so consolidated OR MERGED was incorporated under a 27 special act of the legislature or under a general law pursuant to which 28 its certificate of incorporation was filed with the department of state, 29 the regents shall deliver a certified copy of the order of consolidation 30 OR MERGER to such department. 31 S 113. Paragraph c of subdivision 4 of section 216-a of the education 32 law, as added by chapter 901 of the laws of 1972, is amended to read as 33 follows: 34 c. The following provisions of the not-for-profit corporation law 35 shall not apply to education corporations: section one hundred five, 36 [section one hundred thirteen,] section one hundred fourteen, paragraph 37 (a) of section two hundred one, paragraphs (b) and (c) of section two 38 hundred two, section two hundred five, section three hundred one, 39 section three hundred two, section three hundred three, article four 40 except paragraphs (b) through (p) of section four hundred four and 41 section four hundred five, section five hundred nine, [section five 42 hundred eighteen,] section five hundred twenty-one to the extent that it 43 refers to [section five hundred eighteen,] paragraph (d) of section 44 seven hundred six, article eight except section eight hundred four, 45 section nine hundred seven, [section one thousand eleven,] section one 46 thousand twelve and article fourteen. 47 S 114. Section 13 of the religious corporations law, as amended by 48 chapter 705 of the laws of 1970, is amended to read as follows: 49 S 13. Consolidation OR MERGER of incorporated churches. Two or more 50 incorporated churches may enter into an agreement, under their respec- 51 tive corporate seals, for the consolidation OR MERGER of such corpo- 52 rations, setting forth the name of the proposed new corporation OR 53 SURVIVING CORPORATION, the denomination, if any, to which it is to 54 belong, and if the churches of such denomination have more than one 55 method of choosing trustees, by which of such methods the trustees are 56 to be chosen, the number of such trustees, the names of the persons to A. 7772 57 1 be the first trustees of the new corporation, and the date of its first 2 annual corporate meeting. Such an agreement shall not be valid for 3 United Methodist churches unless proposed by a majority vote of the 4 charge conference of each church and approved by the superintendent or 5 superintendents of the district or districts in which the consolidating 6 churches are located, and by the majority of the members of each of such 7 churches, over the age of twenty-one years, present and voting at a 8 meeting thereof held in the usual place of public worship and called for 9 the purpose of considering such agreement by announcement made at public 10 service in such churches on two Sundays, the first not less than ten 11 days next preceding the date of such meeting. Such agreement shall not 12 be valid unless approved in the case of Protestant Episcopal churches by 13 the bishop and standing committee of the diocese in which such churches 14 are situated and in the case of churches of other denominations by the 15 governing body of the denomination, if any, to which each church 16 belongs, having jurisdiction over such church. Each corporation shall 17 thereupon make a separate petition to the supreme court for an order 18 consolidating OR MERGING the corporations, setting forth the denomi- 19 nation, if any, to which the church belongs, that the consent of the 20 governing body to the consolidation OR MERGER, if any, of that denomi- 21 nation having jurisdiction over such church has been obtained, the 22 agreement therefor, and a statement of all the property and liabilities 23 and the amount and sources of the annual income of such petitioning 24 corporation. In its discretion the court may direct that notice of the 25 hearing of such petition be given to the parties interested therein in 26 such manner and for such time as it may prescribe. After hearing all 27 the parties interested, present and desiring to be heard, the court may 28 make an order for the consolidation OR MERGER of the corporations on the 29 terms of such agreement and such other terms and conditions as it may 30 prescribe, specifying the name of such new OR SURVIVING corporation and 31 the [first] trustees thereof, and the method by which their successors 32 shall be chosen and the date of its first OR NEXT annual corporate meet- 33 ing. When such order is made and duly entered, the persons constituting 34 such CONSOLIDATED OR MERGED corporations shall BE OR become an incorpo- 35 rated church by, and said petitioning churches shall become consolidated 36 OR MERGED under, the name designated in the order, and the trustees 37 therein named shall be the [first] trustees thereof, and the future 38 trustees thereof shall be chosen by the method therein designated, and 39 all the estate, rights, powers and property of whatsoever nature belong- 40 ing to either corporation shall without further act or deed be vested in 41 and transferred to the new OR SURVIVING corporation as effectually as 42 they were vested in or belonging to the former corporations; and the 43 said new OR SURVIVING corporation shall be liable for all the debts and 44 liabilities of the former corporations in the same manner and as effec- 45 tually as if said debts or liabilities had been contracted or incurred 46 by the new OR SURVIVING corporation. A certified copy of such order 47 shall be recorded in the book for recording certificates of incorpo- 48 ration in each county clerk's office in which the certificate of incor- 49 poration of each consolidating OR MERGING church was recorded; or if no 50 such certificate was so recorded, then in the clerk's office of the 51 county in which the principal place of worship or principal office of 52 the new OR SURVIVING corporation is, or is intended to be, situated. 53 S 115. Section 15-a of the religious corporations law, as added by 54 chapter 108 of the laws of 1965, subdivisions 2, 3 and 8 as amended by 55 chapter 381 of the laws of 1985, is amended to read as follows: A. 7772 58 1 S 15-a. Consolidation of incorporated presbyteries. 1. Two or more 2 incorporated presbyteries may enter into an agreement for the consol- 3 idation OR MERGER of such corporations and such corporations may be 4 consolidated OR MERGED so as to form a single corporation which may be 5 either a new corporation or one of the [constitutent] CONSTITUENT corpo- 6 rations. Said agreement shall set forth the name of the proposed new 7 corporation or the name of the existing corporation if it is to become 8 the consolidated OR MERGED corporation, the method of choosing trustees, 9 the names of the persons to be the first trustees of the new corporation 10 if the consolidated OR MERGED corporation is to be a new corporation and 11 the date of the first annual corporate meeting. 12 2. Such agreement must be authorized and approved by a majority vote 13 of the members of each contracting presbytery taken at a meeting at 14 which a quorum is present duly called in accordance with the form of 15 government of the Presbyterian Church (U.S.A.) and the notice of such 16 meeting shall state the purpose of the meeting. 17 3. Before such agreement is approved as aforesaid, such consolidation 18 OR MERGER must be directed and approved by the Synod of the Northeast 19 and the General Assembly of the Presbyterian Church (U.S.A.). 20 4. Each presbytery shall thereafter join in a petition to the supreme 21 court for an order consolidating OR MERGING the corporation, setting 22 forth the agreement of the contracting presbyteries, the direction and 23 approval of the bodies as set forth in subdivision three [hereof] OF 24 THIS SECTION, a statement of all the property and liabilities and the 25 sources of the annual income of each presbytery and a description of any 26 property held by such presbyteries in trust for specific purposes. In 27 its discretion the court may direct that notice of the hearing of such 28 petition be given to the parties interested therein in such manner as it 29 may prescribe. 30 5. After hearing all the parties interested, present and desiring to 31 be heard, the court may make an order for the consolidation OR MERGER of 32 the presbyteries on the terms of such agreement and such other terms and 33 conditions as it may prescribe, specifying the name of the new corpo- 34 ration or the name the continuing corporation will have if one of the 35 [constitutent] CONSTITUENT corporations is to become the consolidated OR 36 MERGED corporation, the first trustees thereof if a new corporation is 37 to be created and the method by which their successors shall be chosen 38 and the date of the first annual corporate meeting if a new corporation 39 is to be created. 40 6. When such order is made and duly entered, the persons constituting 41 such corporate presbyteries shall become one incorporated consolidated 42 OR MERGED presbytery by, and said petitioning presbyteries shall become 43 consolidated OR MERGED under, the name designated in the order, and the 44 trustees therein named, if it is a new corporation, shall be the first 45 trustees thereof, and if it is a new corporation the trustees thereof 46 shall be chosen by the method therein designated, and all the estate, 47 rights, powers and property of whatsoever nature, belonging to either 48 corporation shall without further act or deed be vested in and/or trans- 49 ferred to the new corporation as effectually as they were vested in or 50 belonging to the former corporations, and the new or continuing corpo- 51 rations shall be liable for all the debts and liabilities of the former 52 corporations in the same manner and as effectually as if said debts or 53 liabilities had been contracted or incurred by the new corporation. 54 7. The order or a certified copy thereof shall be recorded in the book 55 for recording certificates of incorporation in each county clerk's A. 7772 59 1 office in which the certificate of incorporation of each constituent 2 presbytery was recorded. 3 8. Such consolidated OR MERGED presbytery shall have all the powers 4 and responsibilities conferred upon presbyteries by the constitution and 5 form of government of the Presbyterian Church (U.S.A.). 6 S 116. Section 208 of the religious corporations law, as added by 7 chapter 117 of the laws of 1927, is amended to read as follows: 8 S 208. Consolidation OR MERGER. Any two or more religious corpo- 9 rations of the Jewish faith, incorporated under or by general or special 10 laws, may enter into an agreement for the consolidation OR MERGER of 11 such corporations, setting forth the terms and conditions of consol- 12 idation, the name of the proposed OR SURVIVING corporation, the number 13 of its trustees, the time of the annual election and the names of the 14 persons to be its trustees until the first OR NEXT annual meeting. Each 15 corporation may petition the supreme court for an order consolidating OR 16 MERGING the corporations, setting forth the agreement for consolidation 17 OR MERGER and a statement of its real property and of its liabilities. 18 Before the presentation of the petition to the court the agreement and 19 petition must be approved by two-thirds of the votes cast in person or 20 by proxy at a meeting of the members of each corporation called for the 21 purpose of considering the proposed consolidation OR MERGER in the 22 manner prescribed by section [forty-three of the membership corporations 23 law] SIX HUNDRED FIVE OF THE NOT-FOR-PROFIT CORPORATION LAW. An affida- 24 vit by the president and the secretary of each corporation stating that 25 such approval has been given shall be annexed to the petition. On pres- 26 entation to the court of such petition and agreement for consolidation 27 OR MERGER and on such notice as the court may direct, the court after 28 hearing all the parties interested desiring to be heard, may make an 29 order approving the consolidation OR MERGER. When such order is made 30 and duly entered and a certified copy thereof filed with the secretary 31 of state and in the offices of the clerks of the counties in which the 32 certificates of incorporation of the several constituent corporations 33 were recorded, or if no such certificate was recorded, then in the 34 office of the clerk of the county in which the principal place of 35 worship of the new OR SURVIVING corporation is intended to be situated, 36 such corporations shall become one corporation by the name designated in 37 the order and the trustees named in the agreement for consolidation OR 38 MERGER shall be the [first] trustees of the consolidated corporation. 39 S 117. Section 209 of the religious corporations law, as added by 40 chapter 117 of the laws of 1927, is amended to read as follows: 41 S 209. Effect of consolidation OR MERGER. The consolidated OR MERGED 42 corporation shall possess all the powers of the constituent corporations 43 and shall have the power and be subject to the duties and obligations of 44 a congregation of the Jewish faith formed for like purposes under the 45 religious corporations law. All the rights, privileges and interests of 46 each of the constituent corporations, all the property, real, personal 47 and mixed, and all the debts due on whatever account to either of them, 48 and all things in action, belonging to either of them, shall be deemed 49 to be transferred to and vested in such new corporation without further 50 act or deed; and all claims, demands[.], property, and every other 51 interest, belonging to the several constituent corporations, shall be as 52 effectually the property of the new corporation as they were of the 53 constituent corporations, and the title to all real property, held or 54 taken by deed or otherwise under the laws of this state, vested in the 55 several constituent corporations shall not be deemed to revert or to be 56 in any way impaired by reason of the consolidation but shall be vested A. 7772 60 1 in the new corporation. Any devise, bequest, gift, grant, or declaration 2 of trust, contained in any deed, will, or other instrument, in trust or 3 otherwise, made before or after such consolidation, OR MERGER to or for 4 any of the constituent corporations, shall inure to the benefit of the 5 consolidated OR MERGED corporation. The consolidated corporation shall 6 be deemed to have assumed and shall be liable for all debts and obli- 7 gations of the constituent corporations in the same manner as if such 8 new corporation had itself incurred such debts or obligations. 9 S 118. Paragraph (c) of subdivision 1 of section 2-b of the religious 10 corporations law, as amended by chapter 490 of the laws of 2010, is 11 amended to read as follows: 12 (c) The following provisions of the not-for-profit corporation law 13 shall not apply to religious corporations: subparagraphs (7) and (8) of 14 paragraph (a) of section one hundred twelve, [section one hundred thir- 15 teen,] section one hundred fourteen, section two hundred one, section 16 three hundred three, section three hundred four, section three hundred 17 five, section three hundred six, article four except section four 18 hundred one, section five hundred fourteen, that portion of section five 19 hundred fifty-five (b) and section five hundred fifty-five (c) which 20 reads "The institution shall notify the donor, if available, and the 21 attorney general of the application, and the attorney general and such 22 donor must be given an opportunity to be heard", section six hundred 23 five, section six hundred seven, section six hundred nine, section eight 24 hundred four, article nine except section nine hundred ten, article ten 25 except as provided in section eleven hundred fifteen, section eleven 26 hundred two, and article fifteen except paragraph (c) of section fifteen 27 hundred seven. 28 S 119. Paragraph (c) of subdivision 1 of section 1-a of the benevolent 29 orders law, as added by chapter 703 of the laws of 1970, is amended to 30 read as follows: 31 (c) The following provisions of the not-for-profit corporation law 32 shall not apply to benevolent orders: [section one hundred thirteen,] 33 section two hundred one, article four, paragraphs (a), (b), and (c) of 34 section eight hundred four, section nine hundred seven, section nine 35 hundred eight, section nine hundred nine, [section ten hundred eleven,] 36 section ten hundred twelve, and article fourteen. 37 S 120. Subdivision 1 of section 1825 of the public authorities law, as 38 amended by chapter 1045 of the laws of 1974, is amended to read as 39 follows: 40 1. The corporation shall (a) be incorporated or reincorporated under 41 [article nineteen of the membership corporations law, or under] section 42 fourteen hundred eleven of the not-for-profit corporation law, or (b) be 43 incorporated under [article two of the membership corporations law, or 44 under] article four of the not-for-profit corporation law, in addition 45 to other purposes, to construct new industrial or manufacturing plants 46 or new research and development buildings and acquire machinery and 47 equipment deemed related thereto or acquire, rehabilitate, and improve 48 for use by others, industrial or manufacturing plants in the area of the 49 state in which an assisted project is to be located, to assist finan- 50 cially in such construction, acquisition, rehabilitation and improvement 51 and to maintain such plants, buildings and equipment for others, and may 52 also be authorized to study and promote, alone or in concert with local 53 officials and interested local groups, the economic growth and business 54 prosperity of the area and the solution of other civic problems of the 55 region which includes such areas[, and (c) if incorporated or reincorpo- 56 rated under the membership corporations law, have complied with the A. 7772 61 1 requirements of section one hundred thirteen of the not-for-profit 2 corporation law]. 3 S 121. Subsection (a) of section 3435 of the insurance law, as added 4 by chapter 220 of the laws of 1986, is amended to read as follows: 5 (a) This section shall apply to public entities as defined in section 6 one hundred seven of this chapter, organizations described by section 7 501 (c)(3) of the United States internal revenue code, [Type B] CHARITA- 8 BLE corporations AS DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO 9 (DEFINITIONS), OF THE NOT-FOR-PROFIT CORPORATION LAW AND formed pursuant 10 to paragraph [(b)] (A) of section two hundred one of the not-for-profit 11 corporation law, and organizations described by section two hundred 12 sixteen-a of the education law. 13 S 122. Subsection (a) of section 6703 of the insurance law, as added 14 by chapter 598 of the laws of 2000, is amended to read as follows: 15 (a) A corporation may be organized as a [type B] CHARITABLE corpo- 16 ration [pursuant to paragraph (b) of section two hundred one] AS DEFINED 17 IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) of the not- 18 for-profit corporation law or as a nonprofit reciprocal insurer under 19 article sixty-one of this chapter to write the kinds of insurance speci- 20 fied in subsection (a) of section one thousand one hundred thirteen of 21 this chapter other than (1) those types of insurance specified in para- 22 graphs one, two, eighteen, twenty-two, twenty-three and twenty-five of 23 such subsection, (2) insurance against legal liability of the insured, 24 and against loss, damage or expense incident to a claim of such liabil- 25 ity arising out of death or injury of any person, due to medical or 26 hospital malpractice by any licensed physician or hospital, and (3) 27 insurance subject to section three thousand four hundred twenty-five of 28 this chapter. 29 S 123. The opening paragraph of subsection (b) of section 6704 of the 30 insurance law, as added by chapter 598 of the laws of 2000, is amended 31 to read as follows: 32 The superintendent may pursuant to this article issue a license to a 33 nonprofit property/casualty insurance company that is organized as a 34 [type B] CHARITABLE corporation [pursuant to paragraph (b) of section 35 two hundred one] AS DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO 36 (DEFINITIONS) of the not-for-profit corporation law if such company: 37 S 124. Subsection (a) of section 6706 of the insurance law, as added 38 by chapter 598 of the laws of 2000, is amended to read as follows: 39 (a) Except as otherwise provided in this article, where inconsistent 40 with this article, or where the context otherwise requires, all of the 41 provisions of this chapter and the rules and regulations of the super- 42 intendent, relating to all insurers and those relating to 43 property/casualty insurance companies transacting the same kind or kinds 44 of insurance shall be applicable to a nonprofit property/casualty insur- 45 ance company organized as a [type B] CHARITABLE corporation AS DEFINED 46 IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) OF THE 47 NOT-FOR-PROFIT CORPORATION LAW AND FORMED pursuant to paragraph (b) of 48 section two hundred one of the not-for-profit corporation law and 49 licensed pursuant to subsection (b) of section six thousand seven 50 hundred four of this article. Where any of such provisions of law refer 51 to a corporation, company or insurer, such references, when read in 52 connection with and applicable to this article, shall mean such a 53 nonprofit property/casualty insurance company. 54 S 125. Subdivision 2 of section 2-b of the religious corporations law, 55 as added by chapter 956 of the laws of 1971, is amended to read as 56 follows: A. 7772 62 1 2. Every corporation to which the not-for-profit corporation law is 2 made applicable by this section is a [type B] CHARITABLE corporation AS 3 DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) OF THE 4 NOT-FOR-PROFIT CORPORATION LAW for all purposes of that law. 5 S 126. Subdivision 2 of section 13-a of the private housing finance 6 law, as added by chapter 547 of the laws of 1971, is amended to read as 7 follows: 8 2. Every corporation to which the not-for-profit corporation law is 9 made applicable by this section is a [type B] CHARITABLE corporation AS 10 DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) OF THE 11 NOT-FOR-PROFIT CORPORATION LAW for all purposes of that law. 12 S 127. Subdivision 5 of section 216-a of the education law, as added 13 by chapter 901 of the laws of 1972, is amended to read as follows: 14 5. Every corporation to which the not-for-profit corporation law is 15 made applicable by this section, is a [type B] CHARITABLE corporation AS 16 DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) OF THE 17 NOT-FOR-PROFIT CORPORATION LAW under all applicable provisions of that 18 law. 19 S 128. Section 579 of the banking law, as amended by chapter 629 of 20 the laws of 2002, is amended to read as follows: 21 S 579. Doing business without license prohibited. Only a [type B not- 22 for-profit] CHARITABLE corporation as defined in [section two hundred 23 one] PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) of the not- 24 for-profit corporation law of this state, or an entity incorporated in 25 another state and having a similar not-for-profit status, shall engage 26 in the business of budget planning as defined in subdivision one of 27 section four hundred fifty-five of the general business law of this 28 state except as authorized by this article and without first obtaining a 29 license from the superintendent. 30 S 129. Subdivision 4 of section 455 of the general business law, as 31 amended by chapter 456 of the laws of 2006, is amended to read as 32 follows: 33 4. Person or entity as used in this article shall not include a [type 34 B not-for-profit] CHARITABLE corporation as defined in [section two 35 hundred one] PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) of 36 the not-for-profit corporation law of this state, or an entity incorpo- 37 rated in another state and having a similar not-for-profit status, 38 licensed by the superintendent, to engage in the business of budget 39 planning as defined in this section. 40 S 130. Paragraph (a) of subdivision 1 of section 458-b of the general 41 business law, as added by chapter 386 of the laws of 1986, is amended to 42 read as follows: 43 (a) Any [type B not-for-profit] CHARITABLE corporation AS DEFINED IN 44 PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) OF THE 45 NOT-FOR-PROFIT CORPORATION LAW licensed pursuant to article [twelve-c] 46 TWELVE-C of the banking law. 47 S 131. Subdivision (b) of section 16.32 of the mental hygiene law, as 48 amended by chapter 669 of the laws of 1995, is amended to read as 49 follows: 50 (b) No loans, other than through the purchase of bonds, debentures, or 51 similar obligations of the type customarily sold in public offerings, or 52 through ordinary deposit of funds in a bank, shall be made by a not-for- 53 profit corporation which is certified as a provider of services pursuant 54 to this article to its employee who receives an annual salary in excess 55 of thirty thousand dollars, or to any other corporation, firm, associ- 56 ation or other entity in which such employee is a director or officer or A. 7772 63 1 employee or holds a direct or indirect substantial financial interest, 2 except a loan by one corporation incorporated as a [type B] CHARITABLE 3 corporation [pursuant to] AS DEFINED IN PARAGRAPH (A) OF SECTION ONE 4 HUNDRED TWO (DEFINITIONS) OF the not-for-profit corporation law to 5 another type B corporation, or a loan for a temporary or emergency 6 purpose which will further the health and welfare of the employee so 7 long as the purpose and amount of such loan are disclosed to and 8 approved by the board of directors of such agency. Such disclosure shall 9 be filed with the secretary of the corporation and entered in the 10 minutes of the meeting, and, if approved by such board, such disclosure 11 shall also be forwarded in writing to the commissioner and to the direc- 12 tor of community services of each local governmental unit that has, at 13 the time of such disclosure, a contract with such corporation for the 14 rendition of services pursuant to article forty-one of this chapter. A 15 loan made in violation of this section shall be a violation of the duty 16 to the not-for-profit corporation of the directors or officers authoriz- 17 ing it or participating in it, but the obligation of the borrower with 18 respect to the loan shall not be affected thereby. 19 S 132. Subdivision (b) of section 31.31 of the mental hygiene law, as 20 amended by chapter 669 of the laws of 1995, is amended to read as 21 follows: 22 (b) No loans, other than through the purchase of bonds, debentures, or 23 similar obligations of the type customarily sold in public offerings, or 24 through ordinary deposit of funds in a bank, shall be made by a not-for- 25 profit corporation which is licensed as a provider of services pursuant 26 to this article to its employee who receives an annual salary in excess 27 of thirty thousand dollars, or to any other corporation, firm, associ- 28 ation or other entity in which such employee is a director or officer or 29 employee or holds a direct or indirect substantial financial interest, 30 except a loan by one corporation incorporated as [a type B] CHARITABLE 31 corporation [pursuant to] AS DEFINED IN PARAGRAPH (A) OF SECTION ONE 32 HUNDRED TWO (DEFINITIONS) OF the not-for-profit corporation law to 33 another type B corporation, or a loan for a temporary or emergency 34 purpose which will further the health and welfare of the employee so 35 long as the purpose and amount of such loan are disclosed to and 36 approved by the board of directors of such agency. Such disclosure shall 37 be filed with the secretary of the corporation and entered in the 38 minutes of the meeting, and, if approved by such board, such disclosure 39 shall also be forwarded in writing to the commissioner and to the direc- 40 tor of community services of each local governmental unit that has, at 41 the time of such disclosure, a contract with such corporation for the 42 rendition of services pursuant to article forty-one of this chapter. A 43 loan made in violation of this section shall be a violation of the duty 44 to the not-for-profit corporation of the directors or officers authoriz- 45 ing it or participating in it, but the obligation of the borrower with 46 respect to the loan shall not be affected thereby. 47 S 133. Paragraph (f) of subdivision 7 of section 75 of the public 48 lands law, as added by chapter 791 of the laws of 1992, is amended to 49 read as follows: 50 (f) The commissioner, in consultation with the commissioner of envi- 51 ronmental conservation, the secretary of state, the office of parks, 52 recreation and historic preservation and other interested state agencies 53 administering state-owned lands underwater, shall promulgate pursuant to 54 article two of the state administrative procedure act such rules with 55 respect to grants, leases, easements and lesser interests for the use of 56 state-owned land underwater, and the cession of jurisdiction thereof, as A. 7772 64 1 in his or her judgment are reasonable and necessary to protect the 2 interests of the people in such lands underwater. Such regulations shall 3 include without being limited to: the fees to be charged, consistent 4 with the provisions of this section, including mitigation of such fees 5 in the event of economic hardship on existing commercial enterprises; 6 fee limitations to administrative expenses for municipal uses which are 7 public, non-commercial and offer services free or for nominal fees, and 8 for uses undertaken and operated for public and non-commercial purposes 9 by not-for-profit corporations characterized as ["Type B"] CHARITABLE 10 corporations [pursuant to paragraph (b) of section two hundred one] AS 11 DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) of the 12 not-for-profit corporation law, and for uses undertaken and operated for 13 public purposes by a corporation formed pursuant to the religious corpo- 14 ration law or by a corporation formed pursuant to A special act of this 15 state and which has as its principal purpose a religious purpose; such 16 further exemptions for projects as the commissioner determines do not 17 represent significant encroachments; limitations on grants, including 18 conversion grants, with respect to underwater lands consistent with the 19 public purposes of this subdivision and limiting such grants to excep- 20 tional circumstances; and factors to be examined in considering an 21 application for a lease, easement or other interest. Those factors shall 22 include without limitation the following: (i) the environmental impact 23 of the project; (ii) the values for natural resource management, recre- 24 ational uses, and commercial uses of the pertinent underwater land; 25 (iii) the size, character and effects of the project in relation to 26 neighboring uses; (iv) the potential for interference with navigation, 27 public uses of the waterway and rights of other riparian owners; (v) the 28 effect of the project on the natural resource interests of the state in 29 the lands; (vi) the water-dependent nature of the use; (vii) and any 30 adverse economic impact on existing commercial enterprises. The final 31 promulgation of rules establishing fees or fee structures shall be 32 subject to the approval of the director of the budget. 33 S 134. This act shall take effect January 1, 2014, provided, however, 34 that section forty-five of this act shall take effect January 1, 2015.