Bill Text: NY S03755 | 2013-2014 | General Assembly | Amended
Bill Title: Relates to the reform of charitable organizations in the state of New York.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2014-01-08 - REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS [S03755 Detail]
Download: New_York-2013-S03755-Amended.html
S T A T E O F N E W Y O R K
________________________________________________________________________
3755--A
Cal. No. 223
2013-2014 Regular Sessions
I N S E N A T E
February 13, 2013
___________
Introduced by Sen. RANZENHOFER -- read twice and ordered printed, and
when printed to be committed to the Committee on Corporations, Author-
ities and Commissions -- reported favorably from said committee,
ordered to first and second report, ordered to a third reading,
amended and ordered reprinted, retaining its place in the order of
third reading
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
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08903-02-3
S. 3755--A 2
1 TAXATION UNDER SECTION FIVE HUNDRED ONE (C)(3) OF THE INTERNAL REVENUE
2 CODE OF 1986, AS AMENDED, OR ANY SUCCESSOR LAW.
3 (6) "Director" means any member of the governing board of a corpo-
4 ration, whether designated as director, trustee, manager, governor, or
5 by any other title. The term "board" means "board of directors" OR ANY
6 OTHER BODY CONSTITUTING A "GOVERNING BOARD" AS DEFINED IN THIS SECTION.
7 (6-A) "ENTIRE BOARD" MEANS THE TOTAL NUMBER OF DIRECTORS ENTITLED TO
8 VOTE WHICH THE CORPORATION WOULD HAVE IF THERE WERE NO VACANCIES. IF THE
9 BY-LAWS OF ANY CORPORATION PROVIDE THAT THE BOARD MAY CONSIST OF A RANGE
10 BETWEEN A MINIMUM AND MAXIMUM NUMBER OF DIRECTORS, THEN THE "ENTIRE
11 BOARD" SHALL CONSIST OF THE NUMBER OF DIRECTORS WITHIN SUCH RANGE THAT
12 WERE ELECTED AT THE MOST RECENTLY HELD ELECTION OF DIRECTORS.
13 (9-A) "BENEFICENT CORPORATION" MEANS LAWFUL NON-BUSINESS CORPORATIONS,
14 INCLUDING CIVIC LEAGUES, SOCIAL WELFARE ORGANIZATIONS, FRATERNAL BENEFIT
15 SOCIETIES, BUSINESS LEAGUES, CHAMBERS OF COMMERCE, LABOR, AGRICULTURAL
16 AND HORTICULTURAL ORGANIZATIONS, SOCIAL AND RECREATIONAL CLUBS, CEMETERY
17 CORPORATIONS, CERTAIN CREDIT UNIONS, WAR VETERANS POSTS AND ORGANIZA-
18 TIONS, PATRIOTIC AND POLITICAL ORGANIZATIONS, CERTAIN INSURANCE ORGAN-
19 IZATIONS, AND CERTAIN EMPLOYEE BENEFIT ORGANIZATIONS, RECOGNIZED BY THE
20 INTERNAL REVENUE SERVICE AS FEDERAL INCOME TAX EXEMPT UNDER OTHER
21 SUBSECTIONS OF SECTION 501 OR UNDER SECTION 527 OF THE INTERNAL REVENUE
22 CODE OF 1986, AS AMENDED, OR ANY SUCCESSOR LAW, OTHER THAN THOSE ORGAN-
23 IZATIONS EXEMPT UNDER SECTION 501(C)(3) THEREOF.
24 (19) "AFFILIATE" OF A CORPORATION MEANS ANY ENTITY CONTROLLED BY, IN
25 CONTROL OF, OR UNDER COMMON CONTROL WITH SUCH CORPORATION.
26 (20) "INDEPENDENT AUDITOR" MEANS ANY CERTIFIED PUBLIC ACCOUNTANT
27 PERFORMING AN AUDIT OF THE FINANCIAL STATEMENTS OF A CORPORATION
28 REQUIRED BY SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B OF THE
29 EXECUTIVE LAW OR ENVISIONED BY SECTION FIVE HUNDRED NINE OF THIS CHAP-
30 TER.
31 (21) "INDEPENDENT DIRECTOR" MEANS A DIRECTOR WHO IN THE PAST THREE
32 YEARS: (I) WAS NOT EMPLOYED BY, AND DID NOT HAVE A RELATIVE WHO WAS
33 EMPLOYED BY, THE CORPORATION OR AN AFFILIATE OF THE CORPORATION; (II)
34 WAS NOT EMPLOYED BY, AND DID NOT HAVE A RELATIVE WHO WAS EMPLOYED BY,
35 ANY ENTITY THAT MADE PAYMENTS TO, OR RECEIVED PAYMENTS FROM, THE CORPO-
36 RATION OR ANY AFFILIATE OF THE CORPORATION FOR GOODS, PROPERTY OR
37 SERVICES EXCEEDING TEN THOUSAND DOLLARS; (III) HAS NOT HAD, AND DOES NOT
38 HAVE A RELATIVE WHO HAS HAD, A MATERIAL FINANCIAL INTEREST IN ANY ENTITY
39 THAT MADE PAYMENTS TO, OR HAS RECEIVED PAYMENTS FROM, THE CORPORATION OR
40 ANY AFFILIATE OF THE CORPORATION FOR GOODS, PROPERTY OR SERVICES EQUAL-
41 ING THE LESSER OF TWENTY-FIVE THOUSAND DOLLARS OR TWO PERCENT OF THE
42 CORPORATION'S TOTAL REVENUE FOR THE CORPORATION'S TAX YEAR; AND (IV) HAS
43 NOT RECEIVED, AND DOES NOT HAVE ANY RELATIVE WHO HAS RECEIVED, ANY OTHER
44 COMPENSATION, PAYMENT OF BENEFIT HAVING MONETARY VALUE FROM THE CORPO-
45 RATION OR ANY AFFILIATE OF THE CORPORATION, OTHER THAN REIMBURSEMENT FOR
46 EXPENSES REASONABLY INCURRED AS A DIRECTOR OR REASONABLE COMPENSATION
47 FOR SERVICE AS A DIRECTOR AS PERMITTED BY PARAGRAPH (A) OF SECTION TWO
48 HUNDRED TWO OF THIS CHAPTER. FOR PURPOSES OF THIS CHAPTER, "PAYMENT"
49 DOES NOT INCLUDE CONTRIBUTIONS TO A NOT-FOR-PROFIT CORPORATION.
50 (22) "RELATIVE" OF AN INDIVIDUAL MEANS THE (I) SPOUSE, ANCESTOR, CHIL-
51 DREN, GRANDCHILDREN, GREAT GRANDCHILDREN, BROTHER OR SISTER (WHETHER BY
52 THE WHOLE- OR HALF-BLOOD) OF THE INDIVIDUAL; AND (II) THE SPOUSES OF
53 CHILDREN, GRANDCHILDREN, GREAT GRANDCHILDREN, BROTHER OR SISTER (WHETHER
54 BY THE WHOLE- OR HALF-BLOOD) OF THE INDIVIDUAL.
55 (23) "RELATED PARTY" MEANS (I) ANY DIRECTOR, OFFICER OR KEY EMPLOYEE
56 OF THE CORPORATION OR ANY AFFILIATE OF THE CORPORATION; (II) ANY RELA-
S. 3755--A 3
1 TIVE OF ANY DIRECTOR, OFFICER OR KEY EMPLOYEE OF THE CORPORATION OR ANY
2 AFFILIATE OF THE CORPORATION; OR (III) AN ENTITY IN WHICH ANY INDIVIDUAL
3 DESCRIBED IN CLAUSES (I) AND (II) OF THIS SUBPARAGRAPH HAS A THIRTY-FIVE
4 PERCENT OR GREATER OWNERSHIP OR BENEFICIAL INTEREST.
5 (24) "RELATED PARTY TRANSACTION" MEANS ANY TRANSACTION, AGREEMENT OR
6 ANY OTHER ARRANGEMENT IN WHICH A RELATED PARTY HAS A FINANCIAL INTEREST
7 AND IN WHICH THE CORPORATION OR ANY AFFILIATE OF THE CORPORATION IS A
8 PARTICIPANT.
9 (25) "KEY EMPLOYEE" MEANS ANY PERSON WHO IS IN A POSITION TO EXERCISE
10 SUBSTANTIAL INFLUENCE OVER THE AFFAIRS OF THE CORPORATION, AS DEFINED IN
11 SECTION 4958(F)(1)(A) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
12 AND THE REGULATIONS THEREUNDER, AND ANY SUCCESSOR LAW OR REGULATION.
13 S 2. Paragraphs (a), (b) and (c) of section 103 of the not-for-profit
14 corporation law, paragraph (a) as amended by chapter 807 of the laws of
15 1973, paragraph (b) as amended by chapter 847 of the laws of 1970, and
16 paragraph (c) as amended by chapter 961 of the laws of 1972, are amended
17 to read as follows:
18 (a) Except as otherwise provided in this section, this chapter
19 applies to every domestic corporation as herein defined, and to every
20 foreign corporation as herein defined which is authorized to conduct or
21 which conducts any activities in this state. This chapter also applies
22 to any other domestic corporation or foreign corporation of any [type
23 or] kind to the extent, if any, provided under this chapter or any law
24 governing such corporation and, if no such provision for application is
25 made, to the extent, if any, that the membership corporations law
26 applied to such corporation as of the effective date of this chapter. A
27 corporation formed by a special act of this state which has as its prin-
28 cipal purpose an education purpose and which is a member of the univer-
29 sity of the state of New York, is an "education corporation" under
30 section two hundred sixteen-a of the education law.
31 To the extent that the membership corporations law or the general
32 corporation law applied to it as of the effective date of this chapter,
33 the corresponding provisions of this chapter apply to a corporation
34 heretofore formed by or pursuant to a special act of this state other
35 than a religious corporation or an "education corporation" under clause
36 (b) of subdivision one of section two hundred sixteen-a of the education
37 law, if (1) its principal purpose is a religious, charitable or educa-
38 tion purpose, and (2) it is operated, supervised or controlled by or in
39 connection with a religious organization. Any such corporation may
40 elect hereunder at any time after the effective date of this chapter AND
41 BEFORE THE EFFECTIVE DATE OF THE CHAPTER OF THE LAWS OF TWO THOUSAND
42 THIRTEEN WHICH AMENDED THIS PARAGRAPH to file a certificate of type
43 under section one hundred thirteen (Certificate of type of not-for-pro-
44 fit corporation). Upon the filing of such certificate [by] TO the
45 department of state, this chapter shall apply in all respects to such
46 corporation.
47 This chapter also applies to any other corporation of any [type or]
48 kind, formed [not for profit] NOT-FOR-PROFIT under any other chapter of
49 the laws of this state except a chapter of the consolidated laws, to the
50 extent that provisions of this chapter do not conflict with the
51 provisions of such unconsolidated law. If an applicable provision of
52 such unconsolidated law relates to a matter embraced in this chapter but
53 is not in conflict therewith, both provisions shall apply. Any corpo-
54 ration to which this chapter is made applicable by this paragraph shall
55 be treated as a "corporation" or "domestic corporation" as such terms
56 are used in this chapter, except that the purposes of any such corpo-
S. 3755--A 4
1 ration formed or formable under such unconsolidated law shall not there-
2 by be extended. For the purpose of this paragraph, the effective date
3 of this chapter as to corporations to which this chapter is made appli-
4 cable by this paragraph shall be September one, nineteen hundred seven-
5 ty-three.
6 (b) The general corporation law does not apply to a corporation of
7 any [type or] kind to which this chapter applies. A reference in any
8 statute of this state which makes a provision of the general corporation
9 law applicable to a corporation of any [type or] kind to which this
10 chapter is applicable or a reference in any [statute] LAW of this state,
11 other than the membership corporations law, which makes a provision of
12 the membership corporations law applicable to a corporation of any [type
13 or] kind shall be deemed and construed to refer to and make applicable
14 the corresponding provision, if any, of this chapter.
15 (c) If any provision in articles one to thirteen inclusive of this
16 chapter conflicts with a provision of any subsequent articles or of any
17 special act under which a corporation to which this chapter applies is
18 formed, the provision in such subsequent article or special act
19 prevails. A provision of any such subsequent article or special act
20 relating to a matter referred to in articles one to thirteen inclusive
21 and not in conflict therewith is supplemental and both shall apply.
22 Whenever the board of a [Type B] CHARITABLE corporation, formed under a
23 special act, reasonably makes an interpretation as to whether a
24 provision of the special act or this chapter prevails, or both apply,
25 such interpretation shall govern unless and until a court determines
26 otherwise, if such board has acted in good faith for a purpose which it
27 reasonably believes to be in the best interests of the corporation,
28 provided however, that such interpretation shall not bind any govern-
29 mental body or officer.
30 S 3. Paragraph (a) of section 104-a of the not-for-profit corporation
31 law is REPEALED and paragraphs (b) through (s) are relettered paragraphs
32 (a) through (r).
33 S 4. Section 105 of the not-for-profit corporation law, as amended by
34 chapter 172 of the laws of 1999, is amended to read as follows:
35 S 105. Certificates; corrections.
36 (A) ANY CERTIFICATE OR OTHER INSTRUMENT RELATING TO A DOMESTIC OR
37 FOREIGN CORPORATION SUBMITTED TO THE DEPARTMENT OF STATE UNDER THIS
38 CHAPTER MAY BE CORRECTED WITH RESPECT TO ANY TYPOGRAPHICAL, OR SIMILAR
39 NON-MATERIAL ERROR APPARENT ON THE FACE OF THE CERTIFICATE OR INSTRU-
40 MENT, PRIOR TO ACCEPTANCE FOR THE FILING OF SUCH CERTIFICATE OR INSTRU-
41 MENT BY THE DEPARTMENT OF STATE. SUCH CORRECTION SHALL BE EFFECTED BY
42 THE DEPARTMENT OF STATE UPON AUTHORIZATION IN WRITING OR BY ELECTRONIC
43 MAIL BY THE INCORPORATOR, OR FOLLOWING INCORPORATION, BY ANY PERSON
44 AUTHORIZED BY THE CORPORATION.
45 (B) Any certificate or other instrument relating to a domestic or
46 foreign corporation filed by the department of state under this chapter
47 may be corrected with respect to any [informality] TYPOGRAPHICAL OR
48 SIMILAR NON-MATERIAL or error apparent on the face or defect in the
49 execution thereof including the deletion of any matter not permitted to
50 be stated therein. A certificate, entitled "Certificate of correction
51 of.......... (correct title of certificate and name of corporation)"
52 shall be signed and delivered to the department of state. It shall set
53 forth the name of the corporation, the date the certificate to be
54 corrected was filed by the department of state, the provision in the
55 certificate as corrected or eliminated and if the execution was defec-
56 tive, the proper execution. The filing of the certificate by the depart-
S. 3755--A 5
1 ment of state shall not alter the effective time of the instrument being
2 corrected, which shall remain as its original effective time, and shall
3 not affect any right or liability accrued or incurred before such
4 filing. A corporate name may not be changed or corrected under this
5 section OTHER THAN TO CORRECT ANY TYPOGRAPHICAL OR SIMILAR NON-MATERIAL
6 ERROR.
7 S 5. Subparagraphs 7, 8 and 9 of paragraph (a) of section 112 of the
8 not-for-profit corporation law, subparagraphs 7 and 9 as amended by
9 chapter 1058 of the laws of 1971, are amended and two new subparagraphs
10 10 and 11 are added to read as follows:
11 (7) To enforce any right given under this chapter to members, a
12 director or an officer of a [Type B or Type C] NOT-FOR-PROFIT corpo-
13 ration. The attorney-general shall have the same status as such
14 members, director or officer.
15 (8) To compel the directors and officers, or any of them, of a [Type
16 B or Type C] NOT-FOR-PROFIT corporation which has been dissolved under
17 section 1011 (Dissolution for failure to file certificate of type of
18 Not-for-Profit Corporation Law under section 113) to account for the
19 assets of the dissolved corporation.
20 (9) Upon application, ex parte, for an order to the supreme court at
21 a special term held within the judicial district where the office of the
22 corporation is located, and if the court so orders, to enforce any right
23 given under this chapter to members, a director or an officer of [a Type
24 A corporation] A NOT-FOR-PROFIT CORPORATION. For such purpose, the
25 attorney-general shall have the same status as such members, director or
26 officer.
27 (10) TO ENJOIN, VOID OR RESCIND ANY RELATED PARTY TRANSACTION, OR SEEK
28 ADDITIONAL DAMAGES OR REMEDIES PURSUANT TO SECTION 715 (RELATED PARTY
29 TRANSACTIONS) OF THIS CHAPTER.
30 (11) TO ENFORCE THE PARENS PATRIAE POWER AND ANY OTHER COMMON LAW
31 AUTHORITY OF THE ATTORNEY GENERAL AND ANY COMMON-LAW CAUSES OF ACTION
32 AVAILABLE TO MEMBERS, DIRECTORS, OFFICERS, CREDITORS AND OTHERS AGAINST
33 A DOMESTIC OR FOREIGN CORPORATION AND ITS MEMBERS, DIRECTORS AND OFFI-
34 CERS WHICH ARE NOT PREEMPTED BY THIS CHAPTER.
35 S 6. Subparagraph 1 of paragraph (b) of section 112 of the not-for-
36 profit corporation law is amended to read as follows:
37 (1) If an action, it is triable by jury as a matter of right AS GUAR-
38 ANTEED BY ARTICLE I, SECTION 2 OF THE CONSTITUTION AND PROVIDED BY
39 SECTION FORTY-ONE HUNDRED ONE OF THE CIVIL PRACTICE LAW AND RULES.
40 S 7. Subparagraph 1 of paragraph (c) of section 112 of the not-for-
41 profit corporation law is amended to read as follows:
42 (1) As used in this paragraph the term "resident" shall include indi-
43 viduals, domestic corporations of any [type or] kind and foreign corpo-
44 rations of any [type or] kind authorized to do business or carry on
45 activities in the state.
46 S 8. Section 112 of the not-for-profit corporation law is amended by
47 adding a new paragraph (e) to read as follows:
48 (E) NO PROVISIONS OF THIS CHAPTER SHALL PREEMPT WELL-PLEADED COMMON
49 LAW OR EQUITABLE CAUSES OF ACTION OR PROCEEDINGS BROUGHT BY THE ATTORNEY
50 GENERAL AGAINST CORPORATIONS, DIRECTORS, OFFICERS, KEY EMPLOYEES OR
51 AGENTS, IF SUCH CAUSES OF ACTION ARE INDEPENDENT OF CAUSES OF ACTION, IF
52 ANY, BASED ON VIOLATIONS OF THIS CHAPTER.
53 S 9. Section 113 of the not-for-profit corporation law is REPEALED.
54 S 10. Section 114 of the not-for-profit corporation law, as added by
55 chapter 847 of the laws of 1970, is amended to read as follows:
56 S 114. Visitation of supreme court.
S. 3755--A 6
1 [Type B and Type C corporations] CORPORATIONS, whether formed under
2 general or special laws, with their books and vouchers, shall be subject
3 to the visitation and inspection of a justice of the supreme court, or
4 of any person appointed by the court for that purpose. If it appears by
5 the verified petition of a member, DIRECTOR, OFFICER, or creditor of any
6 such corporation, that it, or its directors, officers, MEMBERS, KEY
7 EMPLOYEES, or agents, have misappropriated any of the funds or property
8 of the corporation, or diverted them from the purpose of its incorpo-
9 ration, or that the corporation has acquired property in excess of the
10 amount which it is authorized by law to hold, or has engaged in any
11 business other than that stated in its certificate of incorporation, the
12 court may order that notice of at least eight days, with a copy of the
13 petition, be served on the corporation, THE ATTORNEY GENERAL, and the
14 persons charged with misconduct, requiring them to show cause at a time
15 and place specified, why they should not be required to make and file an
16 inventory and account of the property, effects and liabilities of such
17 corporation with a detailed statement of its transactions during the
18 twelve months next preceding the granting of such order. On the hearing
19 of such application, the court may make an order requiring such invento-
20 ry, account and statement to be filed, and proceed to take and state an
21 account of the property and liabilities of the corporation, or may
22 appoint a referee for that purpose. When such account is taken and
23 stated, after hearing all the parties to the application, the court may
24 enter a final order determining the amount of property so held by the
25 corporation, its annual income, whether any of the property or funds of
26 the corporation have been misappropriated or diverted to any other
27 purpose than that for which such corporation was incorporated, and
28 whether such corporation has been engaged in any activity not covered by
29 its certificate of incorporation. An appeal may be taken from the order
30 by any party aggrieved to the appellate division of the supreme court,
31 and to the court of appeals, as in a civil action. No corporation shall
32 be required to make and file more than one inventory and account in any
33 one year, nor to make a second account and inventory, while proceedings
34 are pending for the statement of an account under this section.
35 S 11. Section 115 of the not-for-profit corporation law, as added by
36 chapter 669 of the laws of 1977, is amended to read as follows:
37 S 115. Power to solicit contributions [for charitable purposes].
38 No corporation having the power to solicit contributions [for charita-
39 ble purposes] may solicit contributions for any purpose [for which
40 approval of such solicitation is required under the provisions of
41 section four hundred four of this chapter] unless the certificate
42 specifically makes provision for such solicitation [and the required
43 written approval is endorsed on or annexed to such certificate or]
44 unless the corporation is among those referred to in section one hundred
45 seventy-two-a of the executive law. If [such approval is not obtained
46 and] the corporation continues to solicit or to receive contributions
47 for such purpose [or advertises that it has obtained such approval], the
48 attorney general[, at the request of the officer or body authorized to
49 grant such approval,] shall maintain an action or proceeding pursuant to
50 the provisions of subparagraph one of paragraph (a) of section one
51 hundred twelve of this chapter, OF THE EXECUTIVE LAW AND THE ESTATES,
52 POWERS AND TRUSTS LAW OR ANY OTHER APPLICABLE LAW AGAINST THE CORPO-
53 RATION, ITS DIRECTORS, OFFICERS, KEY EMPLOYEES, OR AGENTS THAT SOLICITS
54 CONTRIBUTIONS IN VIOLATION OF THIS CHAPTER OR THOSE LAWS. Such an
55 action may also be maintained in relation to a corporation hereinafter
56 incorporated if the name, purposes, objects or the activities of such
S. 3755--A 7
1 corporation may, in any manner, lead to the belief that the corporation
2 possesses or may exercise any of such purposes. OTHERWISE, NO CORPO-
3 RATION MAY SOLICIT CONTRIBUTIONS FOR ANY PURPOSE UNLESS AND UNTIL SUCH
4 CORPORATION IS IN COMPLIANCE WITH THIS SECTION AND THE APPLICABLE REGIS-
5 TRATION AND REPORTING REQUIREMENTS OF ARTICLE SEVEN-A OF THE EXECUTIVE
6 LAW AND SECTION 8-1.4 OF THE ESTATES, POWERS AND TRUSTS LAW.
7 S 12. Section 201 of the not-for-profit corporation law, paragraph (b)
8 as amended by chapter 847 of the laws of 1970 and paragraph (c) as
9 amended by chapter 1058 of the laws of 1971, is amended to read as
10 follows:
11 S 201. Purposes.
12 (a) A corporation, as defined in subparagraph [(5)] (10), paragraph
13 (a) of S 102 (Definitions), may be formed under this chapter [as
14 provided in paragraph (b)] unless it may be formed under any other
15 corporate law of this state in which event it may not be formed under
16 this chapter unless such other corporate law expressly so provides.
17 (b) [A corporation, of a type and for a purpose or purposes as
18 follows, may be formed under this chapter, provided consents required
19 under any other statute of this state have been obtained: Type A -] A
20 CORPORATION FORMED ON OR AFTER JANUARY FIRST, TWO THOUSAND FOURTEEN
21 SHALL BE EITHER A CHARITABLE CORPORATION OR A BENEFICENT CORPORATION. A
22 not-for-profit corporation [of this type may be formed for any lawful
23 non-business purpose or purposes including, but not limited to, any one
24 or more of the following non-pecuniary purposes: civic, patriotic,
25 political, social, fraternal, athletic, agricultural, horticultural,
26 animal husbandry, and for a professional, commercial, industrial, trade
27 or service association.
28 Type B - A not-for-profit corporation of this type may be formed for
29 any one or more of the following non-business purposes: charitable,
30 educational, religious, scientific, literary, cultural or for the
31 prevention of cruelty to children or animals.
32 Type C - A not-for-profit corporation of this type may be formed for
33 any lawful business purpose to achieve a lawful public or quasi-public
34 objective.
35 Type D - A not-for-profit corporation of this type may be formed under
36 this chapter when such formation is authorized by any other corporate
37 law of this state for any business or non-business, or pecuniary or
38 non-pecuniary, purpose or purposes specified by such other law, whether
39 such purpose or purposes are also within types A, B, C above or other-
40 wise.
41 (c) If a corporation is formed for purposes which are within both type
42 A and type B above, it is a type B corporation. If a corporation has
43 among its purposes any purpose which is within type C, such corporation
44 is a type C corporation. A type D corporation is subject to all
45 provisions of this chapter which are applicable to a type B corporation
46 under this chapter unless provided to the contrary in, and subject to
47 the contrary provisions of, the other corporate law authorizing forma-
48 tion under this chapter of the type D corporation.] FORMED PRIOR TO
49 JANUARY FIRST, TWO THOUSAND FOURTEEN AS A TYPE A CORPORATION UNDER THIS
50 CHAPTER SHALL BE A BENEFICENT CORPORATION UNDER THIS CHAPTER. ANY
51 SUBMISSION OR FILING BY SUCH CORPORATION TO ANY PERSON OR ENTITY SHALL
52 BE DEEMED TO HAVE BEEN SUBMITTED OR FILED BY A BENEFICENT CORPORATION,
53 AND ANY REFERENCE IN ANY SUCH FILING OR SUBMISSION REFERRING TO THE
54 STATUS OF SUCH CORPORATION AS A TYPE A CORPORATION SHALL BE DEEMED TO
55 REFER TO A BENEFICENT CORPORATION.
S. 3755--A 8
1 (C) A TYPE B NOT-FOR-PROFIT CORPORATION FORMED PRIOR TO JANUARY FIRST,
2 TWO THOUSAND FOURTEEN SHALL BE DEEMED A CHARITABLE CORPORATION UNDER
3 THIS CHAPTER. ANY SUBMISSION OR FILING BY SUCH CORPORATION TO ANY PERSON
4 OR ENTITY SHALL BE DEEMED TO HAVE BEEN SUBMITTED OR FILED BY A CHARITA-
5 BLE CORPORATION, AND ANY REFERENCE IN ANY SUCH FILING OR SUBMISSION
6 REFERRING TO THE STATUS OF SUCH CORPORATION AS A TYPE B CORPORATION
7 SHALL BE DEEMED TO REFER TO A CHARITABLE CORPORATION.
8 (D) A TYPE C OR D NOT-FOR-PROFIT CORPORATION FORMED PRIOR TO JANUARY
9 FIRST, TWO THOUSAND FOURTEEN SHALL BE DEEMED A BENEFICENT CORPORATION.
10 ANY SUBMISSION OR FILING BY SUCH CORPORATION TO ANY PERSON OR ENTITY
11 SHALL BE DEEMED TO HAVE BEEN SUBMITTED OR FILED BY A BENEFICENT CORPO-
12 RATION, AND ANY REFERENCE IN ANY SUCH FILING OR SUBMISSION REFERRING TO
13 THE STATUS OF SUCH CORPORATION AS A TYPE C OR D CORPORATION SHALL BE
14 DEEMED TO REFER TO A BENEFICENT CORPORATION.
15 S 13. Section 204 of the not-for-profit corporation law is amended to
16 read as follows:
17 S 204. Limitation on activities.
18 Notwithstanding any other provision of this chapter or any other
19 general law, a corporation of any [type or] kind to which this chapter
20 applies shall conduct no activities for pecuniary profit or financial
21 gain, whether or not in furtherance of its corporate purposes, except to
22 the extent that such activity supports its other lawful activities then
23 being conducted.
24 S 14. Subparagraphs 1, 2 and 3 of paragraph (a) of section 301 of the
25 not-for-profit corporation law, subparagraph 1 as amended by section 78
26 of part A of chapter 58 of the laws of 2010, subparagraph 2 as amended
27 by chapter 344 of the laws of 2004, are amended to read as follows:
28 (1) Shall[, unless the corporation is formed for charitable or reli-
29 gious purposes, or for purposes for which the approval of the commis-
30 sioner of social services or the public health and health planning coun-
31 cil is required, or is a bar association,] contain the word
32 "corporation", "incorporated" or "limited" or an abbreviation of one of
33 such words; or, in the case of a foreign corporation, it shall, for use
34 in this state, add at the end of its name one of such words or an abbre-
35 viation thereof.
36 (2) (A) Shall be such as to distinguish it from the names of corpo-
37 rations of any [type or] kind, or a fictitious name of an authorized
38 foreign corporation filed pursuant to article thirteen of this chapter,
39 as such names appear on the index of names of existing domestic and
40 authorized foreign corporations of any [type or] kind, including ficti-
41 tious names of authorized foreign corporations filed pursuant to article
42 thirteen of this chapter, in the department of state, division of corpo-
43 rations, or a name the right to which is reserved.
44 (B) Shall be such as to distinguish it from (i) the names of domestic
45 limited liability companies, (ii) the names of authorized foreign limit-
46 ed liability companies, (iii) the fictitious names of authorized foreign
47 limited liability companies, (iv) the names of domestic limited partner-
48 ships, (v) the names of authorized foreign limited partnerships, or (vi)
49 the fictitious names of authorized foreign limited partnerships, in each
50 case, as such names appear on the index of names of existing domestic
51 and authorized foreign limited liability companies, including fictitious
52 names of authorized foreign limited liability companies, in the depart-
53 ment of state, or on the index of names of existing domestic or author-
54 ized foreign limited partnerships, including fictitious names of author-
55 ized foreign limited partnerships, in the department of state, or names
56 the rights to which are reserved; provided, however, that no corporation
S. 3755--A 9
1 that was formed prior to the effective date of this clause and no
2 foreign corporation that was qualified to conduct activities in this
3 state prior to such effective date shall be required to change the name
4 or fictitious name it had on such effective date solely by reason of
5 such name or fictitious name being indistinguishable from the name or
6 fictitious name of any domestic or authorized foreign limited liability
7 company or limited partnership or from any name the right to which is
8 reserved by or on behalf of any domestic or foreign limited liability
9 company or limited partnership.
10 (3) Shall not contain any word or phrase, or any abbreviation or
11 derivative thereof, the use of which is prohibited or restricted by
12 section 404 [(Approvals] (NOTICES and consents) or any other statute of
13 this state, unless in the latter case the restrictions have been
14 complied with.
15 S 15. Subparagraph 3 of paragraph (b) of section 302 of the not-for
16 profit corporation law, as amended by chapter 847 of the laws of 1970,
17 is amended to read as follows:
18 (3) Shall not prevent a foreign corporation from being authorized
19 under a name which is similar to the name of a corporation of any [type
20 or] kind existing or authorized under any statute, if the department of
21 state finds, upon proof by affidavit or otherwise as it may determine,
22 that a difference between such names exists in the terms or abbrevi-
23 ations indicating corporate character or otherwise, that the applicant
24 has conducted activities as a corporation under its said name for not
25 less than ten consecutive years immediately prior to the date of its
26 application, that the activities to be conducted in this state are not
27 the same or similar to the business or activities conducted by the
28 corporation with whose name it may conflict and that the public is not
29 likely to be confused or deceived, and if the applicant shall agree in
30 its application for authority to use with its corporate name, in this
31 state, to be placed immediately under or following such name, the words
32 "a ..... (name of jurisdiction of incorporation) corporation".
33 S 16. Section 304 of the not-for-profit corporation law, as amended by
34 chapter 168 of the laws of 1982, is amended to read as follows:
35 S 304. Statutory designation of secretary of state as agent of domestic
36 corporations [formed under article four of this chapter] and
37 authorized foreign corporations for service of process.
38 (a) The secretary of state shall be the agent of every domestic corpo-
39 ration [formed under article four of this chapter] and every authorized
40 foreign corporation upon whom process against the corporation may be
41 served.
42 (b) Any designation by a domestic corporation [formed under article
43 four of this chapter] or foreign corporation of the secretary of state
44 as such agent, which designation is in effect on the effective date of
45 this chapter, shall continue. Every domestic corporation [formed under
46 article four of this chapter] or foreign corporation, existing or
47 authorized on the effective date of this chapter, which has not desig-
48 nated the secretary of state as such agent, shall be deemed to have done
49 so.
50 (c) Any designation by a domestic corporation [formed under article
51 four of this chapter] or foreign corporation of an agent other than the
52 secretary of state which is in effect on the effective date of this
53 chapter shall continue in effect until changed or revoked as provided in
54 this chapter.
55 (d) Any designated post-office address to which the secretary of state
56 shall mail a copy of process served upon him OR HER as agent of a domes-
S. 3755--A 10
1 tic corporation [formed under article four of this chapter] or foreign
2 corporation, shall continue until the filing of a certificate under this
3 chapter directing the mailing to a different post-office address.
4 S 17. Paragraph (a) of section 305 of the not-for-profit corporation
5 law, as amended by chapter 131 of the laws of 1985, is amended to read
6 as follows:
7 (a) Every domestic corporation or authorized foreign corporation may
8 designate a registered agent in this state upon whom process against
9 such corporation may be served. The agent shall be a natural person who
10 is a resident of or has a business address in this state or a domestic
11 corporation or foreign corporation of any [type or] kind formed, or
12 authorized to do business in this state, under this chapter or under any
13 other statute of this state.
14 S 18. Paragraphs (b) and (c) of section 306 of the not-for-profit
15 corporation law, paragraph (b) as amended by chapter 168 of the laws of
16 1982 and paragraph (c) as amended by chapter 93 of the laws of 1984, are
17 amended to read as follows:
18 (b) Service of process on the secretary of state as agent of a domes-
19 tic corporation [formed under article four of this chapter] or an
20 authorized foreign corporation shall be made by personally delivering to
21 and leaving with [him or his] THE deputy OF THE SECRETARY OF STATE, or
22 with any person authorized by the secretary of state to receive such
23 service, at the office of the department of state in the city of Albany,
24 duplicate copies of such process together with the statutory fee, which
25 fee shall be a taxable disbursement. Service of process on such corpo-
26 ration shall be complete when the secretary of state is so served. The
27 secretary of state shall promptly send one of such copies by certified
28 mail, return receipt requested, to such corporation, at the post office
29 address, on file in the department of state, specified for the purpose.
30 If a domestic corporation [formed under article four of this chapter] or
31 an authorized foreign corporation has no such address on file in the
32 department of state, the secretary of state shall so mail such copy to
33 such corporation at the address of its office within this state on file
34 in the department.
35 (c) If an action or special proceeding is instituted in a court of
36 limited jurisdiction, service of process may be made in the manner
37 provided in this section if the office of the domestic corporation
38 [formed under article four of this chapter] or foreign corporation is
39 within the territorial jurisdiction of the court.
40 S 19. The not-for-profit corporation law is amended by adding a new
41 section 309 to read as follows:
42 S 309. PERSONAL JURISDICTION AND SERVICE OF PROCESS ON NON-DOMICILIARY
43 RESIDENT DIRECTOR, OFFICER, KEY EMPLOYEE OR AGENT.
44 A PERSON, BY BECOMING A DIRECTOR, OFFICER, KEY EMPLOYEE OR AGENT OF A
45 CORPORATION IS SUBJECT TO THE PERSONAL JURISDICTION OF THE SUPREME COURT
46 OF THE STATE OF NEW YORK, AND IN AN ACTION OR PROCEEDING BY THE ATTORNEY
47 GENERAL UNDER THIS CHAPTER PROCESS MAY BE SERVED UPON SUCH PERSON AS
48 PROVIDED IN SECTION THREE HUNDRED THIRTEEN OF THE CIVIL PRACTICE LAW AND
49 RULES.
50 S 20. Subparagraphs 2 and 4 of paragraph (a) of section 402 of the
51 not-for-profit corporation law, subparagraph 2 as amended by chapter 847
52 of the laws of 1970 and subparagraph 4 as amended by chapter 679 of the
53 laws of 1985, are amended to read as follows:
54 (2) That the corporation is a corporation as defined in subparagraph
55 (a) (5) of section 102 (Definitions)[;], the purpose or purposes for
56 which it is formed, and [the type of] WHETHER IT IS A CHARITABLE corpo-
S. 3755--A 11
1 ration [it shall be] OR A BENEFICENT CORPORATION under section 201
2 (Purposes)[; and in the case of a Type C corporation, the lawful public
3 or quasi-public objective which each business purpose will achieve]. ANY
4 CORPORATION MAY ALSO SET FORTH ANY ACTIVITIES THAT IT INTENDS TO CARRY
5 OUT IN FURTHERANCE OF SUCH PURPOSE OR PURPOSES; PROVIDED, HOWEVER, THAT
6 THIS SUBPARAGRAPH SHALL NOT BE INTERPRETED TO REQUIRE THAT SUCH ACTIV-
7 ITIES BE SET FORTH IN THE CERTIFICATE OF INCORPORATION.
8 (4) [In the case of a Type A, Type B, or Type C corporation, the] THE
9 names and addresses of the initial directors. [In the case of a Type D
10 corporation, the names and addresses of the initial directors, if any,
11 may but need not be set forth.]
12 S 21. The section heading and paragraphs (a), (b), (c), (d), (e),
13 (g), (h), (i), (t), (u), (v), and (w) of section 404 of the not-for-pro-
14 fit corporation law, the section heading, paragraphs (c), (d), (e), (h)
15 and (i) as amended and paragraph (a) as added by chapter 139 of the laws
16 of 1993, paragraph (c) as further amended by section 104 of part A of
17 chapter 62 of the laws of 2011 and paragraphs (a), (c), (d), (e), (g),
18 (h) and (i) as relettered by chapter 431 of the laws of 1993, paragraph
19 (b) as amended by section 4 of part D of chapter 58 of the laws of 2006,
20 paragraph (g) as separately amended by chapters 139 and 201 of the laws
21 of 1993, paragraph (t) as amended by section 79 of part A of chapter 58
22 of the laws of 2010, paragraph (u) as amended by chapter 558 of the laws
23 of 1999, paragraph (v) as added by chapter 598 of the laws of 2000 and
24 as further amended by section 104 of part A of chapter 62 of the laws of
25 2011 and paragraph (w) as added by chapter 316 of the laws of 2005, are
26 amended to read as follows:
27 [Approvals] NOTICES and consents.
28 (a) Every [certificate of incorporation] CORPORATION which includes
29 among its purposes the formation of a trade or business association
30 shall [have endorsed thereon or annexed thereto the consent of] SEND BY
31 CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED COPY OF ITS
32 CERTIFICATE OF INCORPORATION TO the attorney-general IMMEDIATELY AFTER
33 THE FILING OF SUCH CERTIFICATE BY THE SECRETARY OF STATE.
34 (b) (1) Every [certificate of incorporation] CORPORATION which
35 includes among its purposes the care of destitute, delinquent, aban-
36 doned, neglected or dependent children; the establishment or operation
37 of any adult care facility, or the establishment or operation of a resi-
38 dential program for victims of domestic violence as defined in subdivi-
39 sion four of section four hundred fifty-nine-a of the social services
40 law, or the placing-out or boarding-out of children or a home or shelter
41 for unmarried mothers, excepting the establishment or maintenance of a
42 hospital or facility providing health-related services as those terms
43 are defined in article twenty-eight of the public health law and a
44 facility for which an operating certificate is required by articles
45 sixteen, nineteen, twenty-two and thirty-one of the mental hygiene law;
46 or the solicitation of contributions for any such purpose or purposes,
47 shall [have endorsed thereon or annexed thereto the approval of] SEND BY
48 CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED COPY OF ITS
49 CERTIFICATE OF INCORPORATION TO the commissioner of the office of chil-
50 dren and family services IMMEDIATELY AFTER THE FILING OF SUCH CERTIF-
51 ICATE BY THE DEPARTMENT OF STATE or with respect to any adult care
52 facility, SEND BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED
53 COPY OF ITS CERTIFICATE OF INCORPORATION TO the commissioner of health
54 IMMEDIATELY AFTER THE FILING OF SUCH CERTIFICATE BY THE DEPARTMENT OF
55 STATE.
S. 3755--A 12
1 (2) A corporation whose statement of purposes specifically includes
2 the establishment or operation of a child day care center, as that term
3 is defined in section three hundred ninety of the social services law,
4 shall [provide a certified copy of the certificate of incorporation]
5 SEND BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED COPY OF
6 ITS CERTIFICATE OF INCORPORATION, each amendment thereto, and any
7 certificate of merger, consolidation or dissolution involving such
8 corporation to the office of children and family services within thirty
9 days after the filing of such certificate, amendment, merger, consol-
10 idation or dissolution with the department of state. This requirement
11 shall also apply to any foreign corporation filing an application for
12 authority under section thirteen hundred four of this chapter, any
13 amendments thereto, and any surrender of authority or termination of
14 authority in this state of such corporation.
15 (c) Every [certificate of incorporation] CORPORATION which includes
16 among [the] ITS purposes [of the corporation,] the establishment, main-
17 tenance and operation of a hospital service or a health service or a
18 medical expense indemnity plan or a dental expense indemnity plan as
19 permitted in article forty-three of the insurance law, shall [have
20 endorsed thereon or annexed thereto the approval of] SEND BY CERTIFIED
21 MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED COPY OF ITS CERTIFICATE OF
22 INCORPORATION TO the superintendent of financial services and the
23 commissioner of health IMMEDIATELY AFTER THE FILING OF SUCH CERTIFICATE
24 BY THE DEPARTMENT OF STATE.
25 (d) Every [certificate of incorporation] CORPORATION which includes a
26 purpose for which a corporation [might] MUST be chartered by the regents
27 of the university of the State of New York shall [have endorsed thereon
28 or annexed thereto the consent of] APPLY TO THE REGENTS FOR A CHARTER.
29 SUCH CORPORATIONS ARE THOSE WHICH CARRY OUT ANY OF THE ACTIVITIES FOR
30 WHICH THE CONSENT OF THE COMMISSIONER OF EDUCATION IS REQUIRED BY PARA-
31 GRAPH (V) OF THIS SECTION. OTHERWISE A CORPORATION WHICH MAY HAVE
32 EDUCATIONAL PURPOSES MUST SEND BY CERTIFIED MAIL, RETURN RECEIPT
33 REQUESTED, A CERTIFIED COPY OF ITS CERTIFICATE OF INCORPORATION TO the
34 commissioner of education IMMEDIATELY AFTER THE FILING OF SUCH CERTIF-
35 ICATE BY THE DEPARTMENT OF STATE.
36 (e) Every [certificate of incorporation of a] cemetery corporation,
37 except those within the exclusionary provisions of section 1503 (Ceme-
38 tery corporations) shall [have endorsed thereon or annexed thereto the
39 approval of] SEND BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTI-
40 FIED COPY OF ITS CERTIFICATE OF INCORPORATION TO the cemetery board
41 IMMEDIATELY AFTER THE FILING OF SUCH CERTIFICATE BY THE DEPARTMENT OF
42 STATE.
43 (g) Every [certificate of incorporation of a] corporation for
44 prevention of cruelty to animals shall [have endorsed thereon or annexed
45 thereto the approval of] SEND BY CERTIFIED MAIL, RETURN RECEIPT
46 REQUESTED, A CERTIFIED COPY OF ITS CERTIFICATE OF INCORPORATION TO the
47 American Society for the Prevention of Cruelty to Animals[, or, if such
48 approval be withheld thirty days after application therefor, a certified
49 copy of an order of a justice of the supreme court of the judicial
50 district in which the office of the corporation is to be located,
51 dispensing with such approval, granted upon eight days' notice to such
52 society] IMMEDIATELY AFTER THE FILING OF SUCH CERTIFICATE BY THE DEPART-
53 MENT OF STATE.
54 (h) Every [certificate of incorporation of] CORPORATION WHICH HAS AS
55 ITS PURPOSE THE ESTABLISHMENT OF a Young Men's Christian Association
56 shall [have endorsed thereon or annexed thereto the approval of] SEND BY
S. 3755--A 13
1 CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED COPY OF ITS
2 CERTIFICATE OF INCORPORATION TO the chairman of the national board of
3 Young Men's Christian Associations IMMEDIATELY AFTER THE FILING OF SUCH
4 CERTIFICATE BY THE DEPARTMENT OF STATE.
5 (i) Every [certificate of incorporation] CORPORATION which [indicates
6 that the proposed corporation is] HAS AS ITS PURPOSE to solicit funds
7 for or otherwise benefit the armed forces of the United States or of any
8 foreign country, or their auxiliaries, or of this or any other state or
9 any territory, shall [have endorsed thereon or annexed thereto the
10 approval of] SEND A CERTIFIED COPY, RETURN RECEIPT REQUESTED, OF ITS
11 CERTIFICATE OF INCORPORATION TO the chief of staff IMMEDIATELY AFTER THE
12 FILING OF SUCH CERTIFICATE BY THE DEPARTMENT OF STATE.
13 [(t)] (S) Every certificate of incorporation which includes among its
14 purposes and powers the establishment or maintenance of a hospital or
15 facility providing health related services, as those terms are defined
16 in article twenty-eight of the public health law, or the solicitation of
17 contributions for any such purpose or two or more of such purposes,
18 shall have endorsed thereon the approval of the public health and health
19 planning council.
20 [(u)] (T) Every certificate of incorporation which includes among the
21 purposes of the corporation, the establishment or operation of a
22 substance abuse, substance dependence, alcohol abuse, alcoholism, or
23 chemical abuse or dependence program, or the solicitation of contrib-
24 utions for any such purpose, shall have endorsed thereon or annexed
25 thereto the consent of the commissioner of the office of alcoholism and
26 substance abuse services to its filing by the department of state.
27 [(v)] (U) Every certificate of incorporation which includes among the
28 purposes of the corporation, the establishment, maintenance and opera-
29 tion of a nonprofit property/casualty insurance company, pursuant to
30 article sixty-seven of the insurance law, shall have endorsed thereon or
31 annexed thereto the approval of the superintendent of financial
32 services.
33 [(w)] (V) Every certificate of incorporation in which the name of the
34 proposed corporation includes the terms: "school," "education," "elemen-
35 tary," "secondary," "kindergarten," "prekindergarten," "preschool,"
36 "nursery school," "museum," "history," "historical," "historical socie-
37 ty," "arboretum," "library," "college," "university," "PUBLIC TELE-
38 VISION," "PUBLIC RADIO STATION," or other term restricted by section two
39 hundred twenty-four of the education law; "conservatory," "academy," or
40 "institute," or any abbreviation or derivative of such terms, shall have
41 endorsed thereon or annexed thereto the consent of the commissioner of
42 education.
43 S 22. Section 404 of the not-for-profit corporation law is amended by
44 adding a new paragraph (w) to read as follows:
45 (W) EACH AGENCY, PUBLIC OFFICER, ORGANIZATION OR PERSON TO WHOM A
46 NOTICE OF INCORPORATION IS TO BE SENT OR FROM WHOM A CONSENT TO INCORPO-
47 RATION MUST BE OBTAINED, AS PROVIDED IN THIS SECTION, SHALL PUBLISH THE
48 NAME AND ADDRESS OF THE REPRESENTATIVE IT HAS DESIGNATED TO RECEIVE SUCH
49 NOTICE OR REQUEST FOR CONSENT. IF ANY AGENCY, PUBLIC OFFICER, ORGANIZA-
50 TION OR PERSON TO WHOM A REQUEST FOR CONSENT HAS BEEN SENT DOES NOT
51 CONSENT OR OBJECT, SETTING FORTH THE REASONS FOR SUCH OBJECTION, WITHIN
52 FORTY-FIVE DAYS AFTER THE RECEIPT OF SUCH REQUEST, THE CONSENT SHALL BE
53 CONCLUSIVELY PRESUMED TO HAVE BEEN GIVEN AND THE SECRETARY OF STATE
54 SHALL FILE THE CERTIFICATE OF INCORPORATION.
55 S 23. Paragraph (b-1) of section 406 of the not-for-profit corporation
56 law is REPEALED.
S. 3755--A 14
1 S 24. Subdivision (d) of section 406 of the not-for-profit corporation
2 law, as added by chapter 331 of the laws of 1971, is amended to read as
3 follows:
4 (d) Nothing in this section shall impair the rights and powers of the
5 courts or the attorney-general of this state INCLUDING THE ENFORCEMENT
6 OF THE PROVISIONS INCLUDED IN THE CERTIFICATES OF INCORPORATION TO WHICH
7 THIS SECTION APPLIES.
8 S 25. Paragraph (d) of section 502 of the not-for-profit corporation
9 law is amended to read as follows:
10 (d) A member's capital contribution shall be evidenced by a capital
11 certificate which shall be non-transferable, except that the certificate
12 of incorporation of a [Type A] BENEFICENT corporation may provide that
13 its capital certificates, or some of them, may be transferable to other
14 members with the consent of the corporation upon specified terms and
15 conditions.
16 S 26. Paragraph (b) of section 503 of the not-for-profit corporation
17 law, subparagraph 1 as amended by chapter 847 of the laws of 1970, is
18 amended to read as follows:
19 (b) Each capital certificate shall when issued state upon the face
20 thereof:
21 (1) That the corporation is a [Type .....] CHARITABLE OR BENEFICENT
22 corporation under section 113 or section 402 of the New York Not-for-
23 Profit Corporation Law.
24 (2) The name of the member to whom issued.
25 (3) The amount of the member's capital contribution evidenced by such
26 certificate.
27 (4) If appropriate, that the corporation is a [Type A] BENEFICENT
28 corporation, and that its certificate of incorporation provides that the
29 capital certificate is transferable to other members with the consent of
30 the corporation.
31 S 27. Subparagraph 1 of paragraph (b) of section 505 of the not-for-
32 profit corporation law, as amended by chapter 847 of the laws of 1970,
33 is amended to read as follows:
34 (1) That the corporation is a [Type .....] CHARITABLE OR BENEFICENT
35 corporation under section 113 or section 402 of the New York Not-for-
36 Profit Corporation Law.
37 S 28. Section 509 of the not-for-profit corporation law, as amended by
38 chapter 145 of the laws of 1991, is amended to read as follows:
39 S 509. Purchase, sale, mortgage and lease of real property.
40 (A) No CORPORATION SHALL purchase [of] real property [shall be made by
41 a corporation and no corporation shall sell, mortgage or lease real
42 property, unless authorized by the vote of] UNLESS AUTHORIZED BY THE
43 VOTE OF A MAJORITY OF DIRECTORS OF THE BOARD OR A COMMITTEE AUTHORIZED
44 BY THE BOARD; PROVIDED, HOWEVER, THAT IF SUCH PROPERTY WOULD, UPON
45 PURCHASE THEREOF, CONSTITUTE ALL, OR SUBSTANTIALLY ALL, OF THE ASSETS OF
46 THE CORPORATION, THEN THE VOTE OF two-thirds of the entire board[,
47 provided that if] SHALL BE REQUIRED, OR, IF there are twenty-one or more
48 directors, the vote of a majority of the entire board shall be suffi-
49 cient.
50 (B) NO CORPORATION SHALL SELL, MORTGAGE OR LEASE ITS REAL PROPERTY
51 UNLESS AUTHORIZED BY THE VOTE OF A MAJORITY OF DIRECTORS OF THE BOARD OR
52 A COMMITTEE AUTHORIZED BY THE BOARD; PROVIDED, HOWEVER, THAT IF SUCH
53 PROPERTY CONSTITUTES ALL, OR SUBSTANTIALLY ALL, OF THE ASSETS OF THE
54 CORPORATION, THEN THE VOTE OF TWO-THIRDS OF THE ENTIRE BOARD SHALL BE
55 REQUIRED, OR, IF THERE ARE TWENTY-ONE OR MORE DIRECTORS, THE VOTE OF A
56 MAJORITY OF THE ENTIRE BOARD SHALL BE SUFFICIENT.
S. 3755--A 15
1 S 29. Paragraph (a) of section 510 of the not-for-profit corporation
2 law, the opening paragraph as amended by chapter 961 of the laws of
3 1972, and subparagraph 3 as amended by chapter 847 of the laws of 1970,
4 is amended to read as follows:
5 (a) A sale, lease, exchange or other disposition of all, or substan-
6 tially all, the assets of a corporation may be made upon such terms and
7 conditions and for such consideration, which may consist in whole or in
8 part of cash or other property, real or personal, including shares,
9 bonds or other securities of any other domestic or foreign corporation
10 or corporations of any [type or] kind, as may be authorized in accord-
11 ance with the following procedure:
12 (1) If there are members entitled to vote thereon, the board shall
13 adopt a resolution recommending such sale, lease, exchange or other
14 disposition. The resolution shall specify the terms and conditions of
15 the proposed transaction, including the consideration to be received by
16 the corporation and the eventual disposition to be made of such consid-
17 eration, together with a statement that the dissolution of the corpo-
18 ration is or is not contemplated thereafter. The resolution shall be
19 submitted to a vote at a meeting of members entitled to vote thereon,
20 which may be either an annual or a special meeting. Notice of the meet-
21 ing shall be given to each member and each holder of subvention certif-
22 icates or bonds of the corporation, whether or not entitled to vote. At
23 such meeting by two-thirds vote as provided in paragraph (c) of section
24 613 (Vote of members) the members may approve the proposed transaction
25 according to the terms of the resolution of the board, or may approve
26 such sale, lease, exchange or other disposition and may authorize the
27 board to modify the terms and conditions thereof.
28 (2) If there are no members entitled to vote thereon, such sale,
29 lease, exchange or other disposition shall be authorized by the vote of
30 at least two-thirds of the entire board, provided that if there are
31 twenty-one or more directors, the vote of a majority of the entire board
32 shall be sufficient.
33 (3) If the corporation is, or would be if formed under this chapter,
34 classified as a [Type B or Type C] CHARITABLE corporation under section
35 201, (Purposes) such sale, lease, exchange or other disposition shall in
36 addition require [leave] EITHER (A) APPROVAL of the supreme court in the
37 judicial district or of the county court of the county in which the
38 corporation has its office or principal place of carrying out the
39 purposes for which it was formed IN ACCORDANCE WITH SECTION 511 (PETI-
40 TION FOR COURT APPROVAL) OR (B) APPROVAL OF THE ATTORNEY GENERAL IF
41 AUTHORIZED UNDER SECTION 511-A (PETITION FOR ATTORNEY GENERAL APPROVAL).
42 S 30. The section heading, the opening paragraph and subparagraph 9 of
43 paragraph (a) of section 511 of the not-for-profit corporation law, are
44 amended to read as follows:
45 Petition for [leave of] court APPROVAL.
46 [A corporation required by law to] TO obtain [leave of] court APPROVAL
47 to sell, lease, exchange or otherwise dispose of all or substantially
48 all its assets, A CORPORATION shall present a verified petition to the
49 supreme court of the judicial district, or the county court of the coun-
50 ty, wherein the corporation has its office or principal place of carry-
51 ing out the purposes for which it was formed. The petition shall set
52 forth:
53 9. A [prayer] REQUEST for [leave] COURT APPROVAL to sell, lease,
54 exchange or otherwise dispose of all or substantially all the assets of
55 the corporation as set forth in the petition.
S. 3755--A 16
1 S 31. The not-for-profit corporation law is amended by adding a new
2 section 511-a to read a follow:
3 S 511-A. PETITION FOR ATTORNEY GENERAL APPROVAL.
4 (A) IN LIEU OF OBTAINING COURT APPROVAL UNDER SECTION 511 (PETITION
5 FOR COURT APPROVAL) TO SELL, LEASE, EXCHANGE OR OTHERWISE DISPOSE OF ALL
6 OR SUBSTANTIALLY ALL OF ITS ASSETS, THE CORPORATION MAY ALTERNATIVELY
7 SEEK APPROVAL OF THE ATTORNEY GENERAL BY VERIFIED PETITION, EXCEPT IN
8 THE FOLLOWING CIRCUMSTANCES:
9 1. THE CORPORATION IS INSOLVENT, OR WOULD BECOME INSOLVENT AS A RESULT
10 OF THE TRANSACTION, AND MUST PROCEED ON NOTICE TO CREDITORS PURSUANT TO
11 PARAGRAPH (C) OF SECTION 511 (PETITION FOR COURT APPROVAL); OR
12 2. THE ATTORNEY GENERAL, IN HIS OR HER DISCRETION, CONCLUDES THAT A
13 COURT SHOULD REVIEW THE PETITION AND MAKE A DETERMINATION THEREON.
14 (B) THE VERIFIED PETITION TO THE ATTORNEY GENERAL SHALL SET FORTH: 1.
15 ALL OF THE INFORMATION REQUIRED TO BE INCLUDED IN A VERIFIED PETITION TO
16 OBTAIN COURT APPROVAL PURSUANT TO SUBPARAGRAPHS ONE THROUGH NINE OF
17 PARAGRAPH (A) OF SECTION 511 (PETITION FOR COURT APPROVAL); 2. A STATE-
18 MENT THAT THE CORPORATION IS NOT INSOLVENT AND WILL NOT BECOME INSOLVENT
19 AS A RESULT OF THE TRANSACTION; AND 3. A STATEMENT AS TO WHETHER ANY
20 PERSONS HAVE RAISED, OR HAVE A REASONABLE BASIS TO RAISE, OBJECTIONS TO
21 THE SALE, LEASE, EXCHANGE OR OTHER DISPOSITION THAT IS THE SUBJECT OF
22 THE PETITION, INCLUDING A STATEMENT SETTING FORTH THE NAMES AND
23 ADDRESSES OF SUCH PERSONS, THE NATURE OF THEIR INTEREST, AND A
24 DESCRIPTION OF THEIR OBJECTIONS. THE ATTORNEY GENERAL, IN HIS OR HER
25 DISCRETION, MAY DIRECT THE CORPORATION TO PROVIDE NOTICE OF SUCH PETI-
26 TION TO ANY INTERESTED PERSON, AND THE CORPORATION SHALL PROVIDE THE
27 ATTORNEY GENERAL WITH A CERTIFICATION THAT SUCH NOTICE HAS BEEN
28 PROVIDED.
29 (C) IF IT SHALL APPEAR, TO THE SATISFACTION OF THE ATTORNEY GENERAL
30 THAT THE CONSIDERATION AND THE TERMS OF THE TRANSACTION ARE FAIR AND
31 REASONABLE TO THE CORPORATION AND THAT THE PURPOSES OF THE CORPORATION
32 OR THE INTERESTS OF THE MEMBERS WILL BE PROMOTED, THE ATTORNEY GENERAL
33 MAY AUTHORIZE THE SALE, LEASE, EXCHANGE OR OTHER DISPOSITION OF ALL OR
34 SUBSTANTIALLY ALL THE ASSETS OF THE CORPORATION, AS DESCRIBED IN THE
35 PETITION, FOR SUCH CONSIDERATION AND UPON SUCH TERMS AS THE ATTORNEY
36 GENERAL MAY PRESCRIBE. THE AUTHORIZATION OF THE ATTORNEY GENERAL SHALL
37 DIRECT THE DISPOSITION OF THE CONSIDERATION TO BE RECEIVED THEREUNDER BY
38 THE CORPORATION.
39 (D) IF THE ATTORNEY GENERAL DOES NOT APPROVE THE PETITION, OR IF THE
40 ATTORNEY GENERAL CONCLUDES THAT COURT REVIEW IS APPROPRIATE, THE PETI-
41 TIONER MAY SEEK COURT APPROVAL ON TEN DAYS NOTICE TO THE ATTORNEY GENER-
42 AL PURSUANT TO SECTION 511 (PETITION FOR COURT APPROVAL).
43 S 32. Paragraph (a) of section 513 of the not-for-profit corporation
44 law, as amended by chapter 690 of the laws of 1978, is amended to read
45 as follows:
46 (a) A corporation which is, or would be if formed under this chapter,
47 [classified as a Type B corporation] shall hold full ownership rights in
48 any assets consisting of funds or other real or personal property of any
49 kind, that may be given, granted, bequeathed or devised to or otherwise
50 vested in such corporation in trust for, or with a direction to apply
51 the same to, any purpose specified in its certificate of incorporation,
52 and shall not be deemed a trustee of an express trust of such assets.
53 Any other corporation subject to this chapter may similarly hold assets
54 so received, unless otherwise provided by law or in the certificate of
55 incorporation.
S. 3755--A 17
1 S 33. Paragraphs (b) and (c) of section 515 of the not-for-profit
2 corporation law, paragraph (c) as amended by chapter 847 of the laws of
3 1970, are amended to read as follows:
4 (b) A corporation may pay compensation in a reasonable amount to
5 members, directors, or officers for services rendered AS PERMITTED BY
6 THIS CHAPTER, INCLUDING WITHOUT LIMITATION, IN ACCORDANCE WITH SUBPARA-
7 GRAPH TWELVE OF PARAGRAPH (A) OF SECTION 202 (GENERAL AND SPECIAL
8 POWERS), AND SECTIONS 712-A (AUDIT OVERSIGHT) AND 715 (RELATED PARTY
9 TRANSACTIONS), and may make distributions of cash or property to members
10 upon dissolution or final liquidation as permitted by this chapter.
11 (c) A corporation may confer benefits upon members or nonmembers in
12 conformity with its purposes AS PERMITTED BY THIS CHAPTER, INCLUDING
13 WITHOUT LIMITATION, SECTIONS 712-A (AUDIT OVERSIGHT) AND 715 (RELATED
14 PARTY TRANSACTIONS), may redeem its capital certificates or subvention
15 certificates, and may make other distributions of cash or property to
16 its members or former members, directors, or officers prior to dissol-
17 ution or final liquidation, as authorized by this article, except when
18 the corporation is currently insolvent or would thereby be made insol-
19 vent or rendered unable to carry on its corporate purposes, or when the
20 fair value of the corporation's assets remaining after such conferring
21 of benefits, or redemption, or other distribution would be insufficient
22 to meet its liabilities.
23 S 34. Section 520 of the not-for-profit corporation law, as amended by
24 chapter 58 of the laws of 1981, is amended to read as follows:
25 S 520. Reports of corporation.
26 Each domestic corporation, and each foreign corporation authorized to
27 conduct activities in this state, shall from time to time file such
28 reports on its activities as may be required by the laws of this state.
29 All registration and reporting requirements pursuant to [EPTL 8-1.4]
30 ARTICLE SEVEN-A OF THE EXECUTIVE LAW, AND SECTION 8-1.4 OF THE ESTATES,
31 POWERS AND TRUSTS LAW, or related successor provisions, are, without
32 limitation on the foregoing, expressly included as reports required by
33 the laws of this state to be filed within the meaning of this section.
34 Willful failure of a corporation to file a report as required by law
35 shall constitute a breach of the directors' duty to the corporation and
36 shall subject the corporation, at the suit of the attorney-general, to
37 an action or special proceeding for dissolution under article 11 (Judi-
38 cial dissolution) in the case of a domestic corporation, or under S 1303
39 (Violations) in the case of a foreign corporation.
40 S 35. The not-for-profit corporation law is amended by adding a new
41 section 522 to read as follows:
42 S 522. CY-PRES AND DEVIATION.
43 NOTHING IN THIS CHAPTER SHALL LIMIT THE APPLICATION OF THE
44 DOCTRINES OF CY-PRES AND DEVIATION.
45 S 36. Paragraph (a) of section 601 of the not-for-profit corporation
46 law, as amended by chapter 1058 of the laws of 1971, is amended to read
47 as follows:
48 (a) A corporation shall have one or more classes of members, or, in
49 the case of a [Type B] CHARITABLE corporation, may have no members, in
50 which case any such provision for classes of members or for no members
51 shall be set forth in the certificate of incorporation or the by-laws.
52 Corporations, joint-stock associations, unincorporated associations and
53 partnerships, as well as any other person without limitation, may be
54 members.
S. 3755--A 18
1 S 37. Paragraph (a) of section 605 of the not-for-profit corporation
2 law, as amended by chapter 1058 of the laws of 1971, is amended to read
3 as follows:
4 (a) Whenever under the provisions of this chapter members are required
5 or permitted to take any action at a meeting, written notice shall state
6 the place, date and hour of the meeting and, unless it is an annual
7 meeting, indicate that it is being issued by or at the direction of the
8 person or persons calling the meeting. Notice of a special meeting shall
9 also state the purpose or purposes for which the meeting is called. A
10 copy of the notice of any meeting shall be given, personally [or], by
11 mail, OR BY FACSIMILE TELECOMMUNICATIONS OR BY ELECTRONIC MAIL, to each
12 member entitled to vote at such meeting. If the notice is given
13 personally [or], by first class mail OR BY FACSIMILE TELECOMMUNICATIONS
14 OR BY ELECTRONIC MAIL, it shall be given not less than ten nor more than
15 fifty days before the date of the meeting; if mailed by any other class
16 of mail, it shall be given not less than thirty nor more than sixty days
17 before such date. If mailed, such notice is given when deposited in the
18 United States mail, with postage thereon prepaid, directed to the member
19 at his address as it appears on the record of members, or, if he shall
20 have filed with the secretary of the corporation a written request that
21 notices to him be mailed to some other address, then directed to him at
22 such other address. IF SENT BY FACSIMILE TELECOMMUNICATIONS OR MAILED
23 ELECTRONICALLY, SUCH NOTICE IS GIVEN WHEN DIRECTED TO THE MEMBER'S FAX
24 NUMBER OR ELECTRONIC MAIL ADDRESS AS IT APPEARS ON THE RECORD OF
25 MEMBERS, OR, TO SUCH FAX NUMBER OR OTHER ELECTRONIC MAIL ADDRESS AS
26 FILED WITH THE SECRETARY OF THE CORPORATION. NOTWITHSTANDING THE FOREGO-
27 ING, SUCH NOTICE SHALL NOT BE GIVEN ELECTRONICALLY: (1) IF THE CORPO-
28 RATION IS UNABLE TO DELIVER TWO CONSECUTIVE NOTICES TO THE MEMBER BY
29 ELECTRONIC MAIL; OR (2) THE CORPORATION OTHERWISE BECOMES AWARE THAT
30 NOTICE CANNOT BE DELIVERED TO THE MEMBER BY ELECTRONIC MAIL. An affida-
31 vit of the secretary or other person giving the notice or of a transfer
32 agent of the corporation that the notice required by this section has
33 been given shall, in the absence of fraud, be prima facie evidence of
34 the facts therein stated. Whenever a corporation has more than five
35 hundred members, the notice may be served by publication[, in lieu of
36 mailing,] in a newspaper published in the county in the state in which
37 the principal office of the corporation is located, once a week for
38 three successive weeks next preceding the date of the meeting, PROVIDED
39 THAT THE CORPORATION SHALL ALSO PROMINENTLY POST NOTICE OF SUCH MEETING
40 ON THE HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE CORPORATION CONTINUOUS-
41 LY FROM THE DATE OF PUBLICATION THROUGH THE DATE OF THE MEETING.
42 S 38. Section 606 of the not-for-profit corporation law is amended to
43 read as follows:
44 S 606. Waivers of notice.
45 Notice of meeting need not be given to any member who submits a
46 [signed] waiver of notice, in person or by proxy, whether before or
47 after the meeting. WAIVER OF NOTICE MAY BE WRITTEN OR ELECTRONIC. IF
48 WRITTEN, THE WAIVER MUST BE EXECUTED BY THE MEMBER OR THE MEMBER'S
49 AUTHORIZED OFFICER, DIRECTOR, EMPLOYEE, OR AGENT BY SIGNING SUCH WAIVER
50 OR CAUSING THE MEMBER'S SIGNATURE TO BE AFFIXED TO SUCH WAIVER BY ANY
51 REASONABLE MEANS, INCLUDING, BUT NOT LIMITED TO FACSIMILE SIGNATURE. IF
52 ELECTRONIC, THE TRANSMISSION OF THE WAIVER MUST BE SENT BY ELECTRONIC
53 MAIL AND SET FORTH, OR BE SUBMITTED WITH, INFORMATION FROM WHICH IT CAN
54 REASONABLY BE DETERMINED THAT THE TRANSMISSION WAS AUTHORIZED BY THE
55 MEMBER. The attendance of any member at a meeting, in person or by
56 proxy, without protesting prior to the conclusion of the meeting the
S. 3755--A 19
1 lack of notice of such meeting, shall constitute a waiver of notice by
2 him.
3 S 39. Paragraphs (b) and (c) of section 609 of the not-for-profit
4 corporation law, as added by chapter 186 of the laws of 1999, are
5 amended to read as follows:
6 (b) Without limiting the manner in which a member may authorize anoth-
7 er person or persons to act for him as proxy pursuant to paragraph (a)
8 of this section, the following shall constitute a valid means by which a
9 member may grant such authority:
10 (1) A member may execute a writing authorizing another person or
11 persons to act for him as proxy. Execution may be accomplished by the
12 member or the member's authorized officer, director, employee or agent
13 signing such writing or causing his or her signature to be affixed to
14 such writing by any reasonable means including, but not limited to, by
15 facsimile signature.
16 (2) A member may authorize another person or persons to act for the
17 member as proxy by [transmitting or authorizing the transmission of a
18 telegram, cablegram or other means of] PROVIDING SUCH AUTHORIZATION BY
19 electronic [transmission] MAIL to the person who will be the holder of
20 the proxy or to a proxy solicitation firm, proxy support service organ-
21 ization or like agent duly authorized by the person [who will be the
22 holder of the proxy to receive such transmission], provided that any
23 such [telegram, cablegram or other means of electronic transmission]
24 AUTHORIZATION BY ELECTRONIC MAIL shall either set forth [or be submitted
25 with] information from which it can be reasonably determined that the
26 [telegram, cablegram or other] AUTHORIZATION BY electronic [trans-
27 mission] MAIL was authorized by the member. If it is determined that
28 such [telegrams, cablegrams or other] AUTHORIZATION BY electronic [tran-
29 smissions are] MAIL IS valid, the inspectors or, if there are no inspec-
30 tors, such other persons making that determination shall specify the
31 nature of the information upon which they relied.
32 (c) Any copy, facsimile telecommunication or other reliable reprod-
33 uction of the writing or [transmission] ELECTRONIC MAIL created pursuant
34 to paragraph (b) of this section may be substituted or used in lieu of
35 the original writing or transmission for any and all purposes for which
36 the original writing or transmission could be used, provided that such
37 copy, facsimile telecommunication or other reproduction shall be a
38 complete reproduction of the entire original writing or transmission.
39 S 40. Paragraphs (a) and (b) of section 614 of the not-for-profit
40 corporation law are amended to read as follows:
41 (a) Whenever, under this chapter, members are required or permitted to
42 take any action by vote, such action may be taken without a meeting [on
43 written] UPON THE consent[, setting forth the action so taken, signed
44 by] OF all of the members entitled to vote thereon, WHICH CONSENT SHALL
45 SET FORTH THE ACTION SO TAKEN. SUCH CONSENT MAY BE WRITTEN OR ELECTRON-
46 IC. IF WRITTEN, THE CONSENT MUST BE EXECUTED BY THE MEMBER OR THE
47 MEMBER'S AUTHORIZED OFFICER, DIRECTOR, EMPLOYEE OR AGENT BY SIGNING SUCH
48 CONSENT OR CAUSING THE MEMBER'S SIGNATURE TO BE AFFIXED TO SUCH WAIVER
49 BY ANY REASONABLE MEANS INCLUDING BUT NOT LIMITED TO FACSIMILE SIGNA-
50 TURE. IF ELECTRONIC, THE TRANSMISSION OF THE CONSENT MUST BE SENT BY
51 ELECTRONIC MAIL AND SET FORTH, OR BE SUBMITTED WITH, INFORMATION FROM
52 WHICH IT CAN REASONABLY BE DETERMINED THAT THE TRANSMISSION WAS AUTHOR-
53 IZED BY THE MEMBER. This paragraph shall not be construed to alter or
54 modify any provision in a certificate of incorporation not inconsistent
55 with this chapter under which the written consent of less than all of
56 the members is sufficient for corporate action.
S. 3755--A 20
1 (b) Written OR ELECTRONIC consent thus given by all members entitled
2 to vote shall have the same effect as a unanimous vote of members and
3 any certificate with respect to the authorization or taking of any such
4 action which is delivered to the department of state shall recite that
5 the authorization was by [uanimous] UNANIMOUS written consent.
6 S 41. Paragraph (a) of section 702 of the not-for-profit corporation
7 law is amended to read as follows:
8 (a) The number of directors constituting the entire board shall be not
9 less than three. Subject to such limitation, such number may be fixed by
10 the by-laws or, in the case of a corporation having members, by action
11 of the members or of the board under the specific provisions of a by-law
12 adopted by the members. If not otherwise fixed under this paragraph, the
13 number shall be three. [As used in this article, "entire board" means
14 the total number of directors entitled to vote which the corporation
15 would have if there were no vacancies.]
16 S 42. Paragraphs (b) and (c) of section 708 of the not-for-profit
17 corporation law, paragraph (b) as amended by chapter 92 of the laws of
18 1983 and paragraph (c) as amended by chapter 211 of the laws of 2007,
19 are amended to read as follows:
20 (b) Unless otherwise restricted by the certificate of incorporation or
21 the by-laws, any action required or permitted to be taken by the board
22 or any committee thereof may be taken without a meeting if all members
23 of the board or the committee consent [in writing] to the adoption of a
24 resolution authorizing the action. SUCH CONSENT MAY BE WRITTEN OR ELEC-
25 TRONIC. IF WRITTEN, THE CONSENT MUST BE EXECUTED BY THE DIRECTOR BY
26 SIGNING SUCH CONSENT OR CAUSING HIS OR HER SIGNATURE TO BE AFFIXED TO
27 SUCH CONSENT BY ANY REASONABLE MEANS INCLUDING, BUT NOT LIMITED TO,
28 FACSIMILE SIGNATURE. IF ELECTRONIC, THE TRANSMISSION OF THE CONSENT MUST
29 BE SENT BY ELECTRONIC MAIL AND SET FORTH, OR BE SUBMITTED WITH, INFORMA-
30 TION FROM WHICH IT CAN REASONABLY BE DETERMINED THAT THE TRANSMISSION
31 WAS AUTHORIZED BY THE DIRECTOR. The resolution and the written consents
32 thereto by the members of the board or committee shall be filed with the
33 minutes of the proceedings of the board or committee.
34 (c) Unless otherwise restricted by the certificate of incorporation or
35 the by-laws, any one or more members of the board or OF any committee
36 thereof [may participate in] WHO IS NOT PHYSICALLY PRESENT AT a meeting
37 of [such] THE board or A committee MAY PARTICIPATE by means of a confer-
38 ence telephone or similar communications equipment [allowing all persons
39 participating in the meeting to hear each other at the same time] OR BY
40 ELECTRONIC VIDEO SCREEN COMMUNICATION. Participation by such means
41 shall constitute presence in person at a meeting AS LONG AS ALL PERSONS
42 PARTICIPATING IN THE MEETING CAN HEAR EACH OTHER AT THE SAME TIME AND
43 EACH DIRECTOR CAN PARTICIPATE IN ALL MATTERS BEFORE THE BOARD, INCLUD-
44 ING, WITHOUT LIMITATION, THE ABILITY TO PROPOSE, OBJECT TO, AND VOTE
45 UPON A SPECIFIC ACTION TO BE TAKEN BY THE BOARD OR COMMITTEE.
46 S 43. Paragraph (c) of section 711 of the not-for-profit corporation
47 law, as amended by chapter 847 of the laws of 1970, is amended to read
48 as follows:
49 (c) Notice of a meeting need not be given to any alternate director,
50 nor to any director who submits a [signed] waiver of notice whether
51 before or after the meeting, or who attends the meeting without protest-
52 ing, prior thereto or at its commencement, the lack of notice to him OR
53 HER. SUCH WAIVER OF NOTICE MAY BE WRITTEN OR ELECTRONIC. IF WRITTEN, THE
54 WAIVER MUST BE EXECUTED BY THE DIRECTOR SIGNING SUCH WAIVER OR CAUSING
55 HIS OR HER SIGNATURE TO BE AFFIXED TO SUCH WAIVER BY ANY REASONABLE
56 MEANS INCLUDING BUT NOT LIMITED TO FACSIMILE SIGNATURE. IF ELECTRONIC,
S. 3755--A 21
1 THE TRANSMISSION OF THE CONSENT MUST BE SENT BY ELECTRONIC MAIL AND SET
2 FORTH, OR BE SUBMITTED WITH, INFORMATION FROM WHICH IT CAN REASONABLY BE
3 DETERMINED THAT THE TRANSMISSION WAS AUTHORIZED BY THE DIRECTOR.
4 S 44. Paragraphs (a), (b) and (e) of section 712 of the not-for-profit
5 corporation law, paragraph (e) as amended by chapter 961 of the laws of
6 1972, are amended to read as follows:
7 (a) If the certificate of incorporation or the by-laws so provide, the
8 board, by resolution adopted by a majority of the entire board, may
9 designate from among its members an executive committee and other
10 [standing] committees, each consisting of three or more directors, and
11 each of which, to the extent provided in the resolution or in the
12 certificate of incorporation or by-laws, shall have all the authority of
13 the board, except that no such committee shall have authority as to the
14 following matters:
15 (1) The submission to members of any action requiring members'
16 approval under this chapter.
17 (2) The filling of vacancies in the board of directors or in any
18 committee.
19 (3) The fixing of compensation of the directors for serving on the
20 board or on any committee.
21 (4) The amendment or repeal of the by-laws or the adoption of new
22 by-laws.
23 (5) The amendment or repeal of any resolution of the board which by
24 its terms shall not be so amendable or repealable.
25 (b) The board may designate one or more directors as alternate members
26 of any [standing] committee, who may replace any absent member or
27 members at any meeting of such committee.
28 [(e)] (D) Committees, other than [standing or special] committees of
29 the board, whether created by the board or by the members, shall be
30 committees of the corporation. Such committees OF THE CORPORATION may be
31 elected or appointed in the same manner as officers of the corporation,
32 BUT NO SUCH COMMITTEE SHALL HAVE THE AUTHORITY TO BIND THE BOARD.
33 Provisions of this chapter applicable to officers generally shall apply
34 to members of such committees.
35 S 45. Paragraph (c) of section 712 of the not-for-profit corporation
36 law is REPEALED and paragraphs (d) and (e) are relettered paragraphs (c)
37 and (d).
38 S 46. The not-for-profit corporation law is amended by adding two new
39 sections 712-a and 712-b to read as follows:
40 S 712-A. AUDIT OVERSIGHT.
41 (A) EVERY CORPORATION REQUIRED TO FILE AN INDEPENDENT CERTIFIED PUBLIC
42 ACCOUNTANT'S AUDIT REPORT WITH THE ATTORNEY GENERAL PURSUANT TO SUBDIVI-
43 SION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B OF THE EXECUTIVE LAW OR
44 WHICH PRESENTS SUCH A REPORT AS PART OF THE ANNUAL REPORT REQUIRED BY
45 SECTION 519 (ANNUAL REPORT OF DIRECTORS) SHALL DESIGNATE AN AUDIT
46 COMMITTEE OF THE BOARD, CONSISTING OF AT LEAST THREE INDEPENDENT DIREC-
47 TORS, FOR THE PURPOSE OF OVERSEEING THE ACCOUNTING AND FINANCIAL REPORT-
48 ING PROCESSES OF THE CORPORATION AND THE INDEPENDENT CERTIFIED PUBLIC
49 ACCOUNTANT'S AUDIT OF THE CORPORATION'S FINANCIAL STATEMENTS. THE CORPO-
50 RATION'S ENTIRE BOARD MAY CONSTITUTE THE AUDIT COMMITTEE, PROVIDED THAT
51 ONLY INDEPENDENT DIRECTORS MAY BE PRESENT AT AND PARTICIPATE IN DELIBER-
52 ATIONS AND VOTING RELATING TO AUDIT COMMITTEE MATTERS. IF A CORPORATION
53 CONTROLS A GROUP OF CORPORATIONS, THE AUDIT COMMITTEE OF THE CONTROLLING
54 CORPORATION MAY BE DEEMED TO BE THE AUDIT COMMITTEE FOR ONE OR MORE OF
55 ITS CONTROLLED CORPORATIONS.
56 (B) THE AUDIT COMMITTEE SHALL, AT A MINIMUM:
S. 3755--A 22
1 (1) RETAIN AND EVALUATE THE INDEPENDENT AUDITOR WHO SHALL REPORT
2 DIRECTLY TO THE AUDIT COMMITTEE;
3 (2) REVIEW WITH THE INDEPENDENT AUDITOR THE SCOPE AND PLANNING OF THE
4 AUDIT;
5 (3) REVIEW AND DISCUSS WITH THE INDEPENDENT AUDITOR, AT A MINIMUM: (A)
6 THE RESULTS OF ANY AUDIT, INCLUDING BUT NOT LIMITED TO: THE MANAGEMENT
7 LETTER TO THE BOARD AND ANY MATERIAL RISKS AND WEAKNESSES IN INTERNAL
8 CONTROLS IDENTIFIED BY THE AUDITOR; (B) ANY RESTRICTIONS ON THE SCOPE OF
9 THE AUDITOR'S ACTIVITIES OR ACCESS TO REQUESTED INFORMATION; (C) ANY
10 SIGNIFICANT DISAGREEMENTS BETWEEN THE AUDITOR AND MANAGEMENT; AND (D)
11 THE ADEQUACY AND PERFORMANCE OF THE CORPORATION'S ACCOUNTING FUNCTION;
12 (4) CONSIDER AT LEAST ANNUALLY THE PERFORMANCE AND INDEPENDENCE OF THE
13 INDEPENDENT AUDITOR;
14 (5) OVERSEE ADOPTION, IMPLEMENTATION OF, AND COMPLIANCE WITH ANY
15 CONFLICT OF INTEREST POLICY OR WHISTLEBLOWER POLICY ADOPTED BY THE
16 CORPORATION PURSUANT TO SECTIONS 715-A (CONFLICT OF INTEREST POLICY) OR
17 715-B (WHISTLEBLOWER POLICY), IF THIS FUNCTION IS NOT OTHERWISE
18 PERFORMED BY ANOTHER COMMITTEE OF THE BOARD COMPRISED SOLELY OF INDE-
19 PENDENT DIRECTORS; AND
20 (6) REPORT ITS ACTIVITIES TO THE BOARD AT LEAST ANNUALLY.
21 (C) THE AUDIT COMMITTEE SHALL ADOPT A CHARTER THAT SHALL STATE ITS
22 AUTHORITY AND RESPONSIBILITIES, INCLUDING THOSE PRESCRIBED BY THIS
23 SECTION, AND THAT SHALL STATE THE SIZE, COMPOSITION AND RULES OR PROCE-
24 DURES OF THE AUDIT COMMITTEE.
25 S 712-B. EXECUTIVE COMPENSATION OVERSIGHT.
26 (A) FOR PURPOSES OF THIS SECTION, "TOTAL COMPENSATION" MEANS: (1) ANY
27 COMPENSATION, WHETHER PAID OR ACCRUED, BY OR ON BEHALF OF THE CORPO-
28 RATION OR ANY AFFILIATE OF THE CORPORATION, INCLUDING BUT NOT LIMITED TO
29 SALARY, BONUS, AND DEFERRED COMPENSATION; AND (2) ANY BENEFIT HAVING
30 MONETARY VALUE PROVIDED BY THE CORPORATION OR ON BEHALF OF THE CORPO-
31 RATION OR ANY AFFILIATE OF THE CORPORATION, INCLUDING BUT NOT LIMITED TO
32 HOUSING ALLOWANCES, LIVING EXPENSES, PERQUISITES, FRINGE BENEFITS,
33 EMPLOYER CONTRIBUTIONS TO DEFINED CONTRIBUTION RETIREMENT PLANS AND
34 OTHER RETIREMENT BENEFITS.
35 (B) THE TOTAL COMPENSATION PAID BY A CORPORATION TO ANY EMPLOYEE OF
36 THE CORPORATION SHALL BE FAIR, REASONABLE AND COMMENSURATE WITH SERVICES
37 THE EMPLOYEE PROVIDES TO THE CORPORATION.
38 (C) NO EMPLOYEE OR OTHER INDIVIDUAL WHO MAY BENEFIT FROM COMPENSATION
39 OR BENEFITS PROVIDED BY THE CORPORATION MAY BE PRESENT AT OR OTHERWISE
40 PARTICIPATE IN ANY BOARD OR COMMITTEE DELIBERATION OR VOTE CONCERNING
41 SUCH COMPENSATION OR BENEFITS.
42 (D) EVERY CHARITABLE CORPORATION THAT IS REQUIRED TO BE REGISTERED
43 WITH THE ATTORNEY GENERAL UNDER ARTICLE SEVEN-A OF THE EXECUTIVE LAW OR
44 ARTICLE EIGHT OF THE ESTATES, POWERS AND TRUSTS LAW OR BOTH AND THAT IN
45 THE PRIOR FISCAL YEAR HAD ANNUAL REVENUES IN EXCESS OF TWO MILLION
46 DOLLARS SHALL DESIGNATE A COMPENSATION COMMITTEE OF THE BOARD TO OVERSEE
47 EXECUTIVE COMPENSATION PROGRAMS AND RELATED PRACTICES OF THE CORPO-
48 RATION.
49 (1) THE COMPENSATION COMMITTEE SHALL BE COMPRISED OF AT LEAST THREE
50 INDEPENDENT DIRECTORS.
51 (2) THE CORPORATION'S BOARD MAY PERFORM THE FUNCTION OF THE COMPEN-
52 SATION COMMITTEE UNLESS THE BYLAWS PROVIDE OTHERWISE, PROVIDED THAT ONLY
53 INDEPENDENT DIRECTORS MAY BE PRESENT AT AND PARTICIPATE IN ANY DELIBER-
54 ATIONS OR VOTING RELATING TO COMPENSATION COMMITTEE MATTERS.
S. 3755--A 23
1 (3) IF A CORPORATION CONTROLS ONE OR MORE CORPORATIONS, THE COMPEN-
2 SATION COMMITTEE OF THE CONTROLLING CORPORATION MAY BE DEEMED TO BE THE
3 COMPENSATION COMMITTEE FOR ITS CONTROLLED CORPORATIONS.
4 (4) THE COMPENSATION COMMITTEE SHALL:
5 (A) REVIEW THE TOTAL COMPENSATION PAID TO THE CORPORATION'S OFFICERS
6 AND ITS FIVE HIGHEST-COMPENSATED KEY EMPLOYEES; (B) AFFIRMATIVELY DETER-
7 MINE THAT THE TOTAL COMPENSATION PAID TO ANY SUCH INDIVIDUAL IS FAIR,
8 REASONABLE AND COMMENSURATE WITH SERVICES PROVIDED TO THE CORPORATION.
9 IN MAKING THIS DETERMINATION, THE COMPENSATION COMMITTEE SHALL AT A
10 MINIMUM CONSIDER THE FOLLOWING FACTORS: (I) THE TOTAL COMPENSATION
11 PROVIDED TO THE INDIVIDUAL; (II) RELEVANT BENCHMARK DATA ON THE TOTAL
12 COMPENSATION PAID TO INDIVIDUALS SERVING IN SIMILAR POSITIONS AT CORPO-
13 RATIONS OF SIMILAR SIZE, TYPE, PURPOSE, AND SCOPE; (III) THE INDIVID-
14 UAL'S QUALIFICATIONS AND PERFORMANCE; (IV) COMPENSATION, PAYMENTS OR ANY
15 OTHER BENEFITS PROVIDED TO THE INDIVIDUAL FROM ANY AFFILIATE OF THE
16 CORPORATION; AND (V) THE OVERALL FINANCIAL CONDITION OF THE CORPORATION;
17 (C) MAKE AND KEEP A CONTEMPORANEOUS WRITTEN RECORD DESCRIBING THE BASIS
18 FOR ITS DETERMINATION, INCLUDING ITS ANALYSIS OF THE FACTORS SET FORTH
19 IN THIS PARAGRAPH AND HOW ANY RELEVANT DATA WAS OBTAINED AND USED; (D)
20 APPROVE BY NOT LESS THAN A MAJORITY VOTE THE TOTAL COMPENSATION PAID TO
21 EACH SUCH INDIVIDUAL.
22 (5) IF, PURSUANT TO SUBPARAGRAPH TWO OF THIS PARAGRAPH, THE BOARD DOES
23 NOT PERFORM THE FUNCTION OF THE COMPENSATION COMMITTEE, THEN: (I) THE
24 COMPENSATION COMMITTEE SHALL RECOMMEND TO THE BOARD FOR ITS APPROVAL THE
25 TOTAL COMPENSATION OF EACH INDIVIDUAL THAT THE COMMITTEE HAS AFFIRMA-
26 TIVELY DETERMINED IS FAIR, REASONABLE, AND COMMENSURATE WITH SERVICES
27 PROVIDED TO THE CORPORATION, AND IN CONNECTION THEREWITH, PROVIDE TO THE
28 BOARD THE WRITTEN RECORD OF ITS DETERMINATION CREATED PURSUANT TO CLAUSE
29 (C) OF THIS SUBPARAGRAPH; (II) UPON REVIEW OF THE RECOMMENDATIONS OF THE
30 COMPENSATION COMMITTEE, THE BOARD SHALL APPROVE BY NOT LESS THAN A
31 MAJORITY VOTE OF THE INDEPENDENT DIRECTORS THE TOTAL COMPENSATION OF
32 EACH SUCH INDIVIDUAL, WITH ONLY INDEPENDENT DIRECTORS PARTICIPATING IN
33 ANY SUCH VOTE AND ANY DISCUSSION RELATING THERETO; AND (III) THE BOARD
34 SHALL KEEP A CONTEMPORANEOUS WRITTEN RECORD OF THE BASIS OF ITS DETERMI-
35 NATION, INCLUDING AREAS OF AGREEMENT OR DISAGREEMENT WITH THE RECOMMEN-
36 DATIONS OF THE COMPENSATION COMMITTEE.
37 (6) THE COMPENSATION COMMITTEE MAY RETAIN A COMPENSATION CONSULTANT TO
38 ASSIST IN THE PERFORMANCE OF ITS RESPONSIBILITIES. THE COMPENSATION
39 COMMITTEE SHALL BE DIRECTLY RESPONSIBLE FOR THE APPOINTMENT, COMPEN-
40 SATION AND OVERSIGHT OF THE WORK OF SUCH CONSULTANT, AND ANY SUCH
41 CONSULTANT SHALL REPORT DIRECTLY TO THE COMPENSATION COMMITTEE. THE
42 COMPENSATION COMMITTEE SHALL, AMONG ITS RESPONSIBILITIES, APPROVE THE
43 COMPENSATION PEER GROUP THAT THE COMPENSATION CONSULTANT RECOMMENDS BE
44 USED TO DEVELOP BENCHMARK DATA
45 (A) PRIOR TO RETAINING ANY SUCH CONSULTANT, THE COMPENSATION COMMITTEE
46 SHALL DETERMINE THAT THE CONSULTANT IS INDEPENDENT AND QUALIFIED TO
47 RENDER ADVICE CONCERNING COMPENSATION; PROVIDED THAT NO CONSULTANT MAY
48 BE DETERMINED INDEPENDENT IF SUCH CONSULTANT OR ANY FIRM THAT EMPLOYS
49 SUCH CONSULTANT HAS (I) RECEIVED DIRECTLY OR INDIRECTLY ANY PAYMENT, FEE
50 OR OTHER COMPENSATION FROM THE CORPORATION OR ANY AFFILIATE OF THE
51 CORPORATION WITHIN THE PRECEDING TWO YEARS, OTHER THAN REASONABLE
52 AMOUNTS PAID FOR COMPENSATION CONSULTING SERVICES, OR (II) ANY BUSINESS
53 OR PERSONAL RELATIONSHIP WITH THE CORPORATION OR ANY AFFILIATE, OR ANY
54 OF THEIR OFFICERS, DIRECTORS OR EMPLOYEES, THAT MAY INTERFERE WITH THE
55 ABILITY OF THE CONSULTANT TO PROVIDE OBJECTIVE ADVICE TO THE COMMITTEE.
S. 3755--A 24
1 (B) NOTHING IN THIS PARAGRAPH SHALL BE CONSTRUED TO (I) REQUIRE THE
2 COMPENSATION COMMITTEE TO IMPLEMENT OR ACT CONSISTENTLY WITH ANY RECOM-
3 MENDATIONS PROVIDED BY THE COMPENSATION CONSULTANT; OR (II) AFFECT THE
4 ABILITY OR OBLIGATION OF MEMBERS OF THE COMPENSATION COMMITTEE TO EXER-
5 CISE THEIR OWN JUDGMENT IN FULFILLMENT OF THEIR DUTIES TO THE CORPO-
6 RATION, INCLUDING THOSE DUTIES PRESCRIBED BY SECTION 717 (DUTIES OF
7 DIRECTORS AND OFFICERS).
8 (7) THE COMPENSATION COMMITTEE SHALL ADOPT A CHARTER SETTING FORTH ITS
9 RESPONSIBILITIES, INCLUDING AS PRESCRIBED BY THIS SECTION, AS WELL AS
10 REQUIREMENTS CONCERNING THE SIZE, COMPOSITION AND FUNCTIONING OF THE
11 COMPENSATION COMMITTEE.
12 S 47. Paragraph (a) of section 713 of the not-for-profit corporation
13 law is amended and a new paragraph (f) is added to read as follows:
14 (a) The board may elect or appoint a CHAIR, WHO MAY BE GIVEN THE TITLE
15 CHAIR OF THE BOARD, CHAIRPERSON OF THE BOARD, CHAIRMAN OF THE BOARD, OR
16 CHAIRWOMAN OF THE BOARD, OR president, OR BOTH, one or more vice-presi-
17 dents, a secretary and a treasurer, and such other officers as it may
18 determine, or as may be provided in the by-laws. These officers may be
19 designated by such alternate titles as may be provided in the certif-
20 icate of incorporation or the by-laws. Any two or more offices may be
21 held by the same person, except the offices of president and secretary,
22 or the offices corresponding thereto.
23 (F) NO EMPLOYEE OF THE CORPORATION SHALL SERVE AS CHAIR OF THE BOARD.
24 S 48. Section 715 of the not-for-profit corporation law, as amended by
25 chapter 847 of the laws of 1970, paragraph (f) as amended by chapter
26 1057 of the laws of 1971, is amended to read as follows:
27 S 715. [Interested directors and officers] RELATED PARTY TRANSACTIONS.
28 (a) [No contract or other transaction between a corporation and one or
29 more of its directors or officers, or between a corporation and any
30 other corporation, firm, association or other entity in which one or
31 more of its directors or officers are directors or officers, or have a
32 substantial financial interest, shall be either void or voidable for
33 this reason alone or by reason alone that such director or directors or
34 officer or officers are present at the meeting of the board, or of a
35 committee thereof, which authorizes such contract or transaction, or
36 that his or their votes are counted for such purpose] NO CORPORATION
37 SHALL ENTER INTO A RELATED PARTY TRANSACTION, UNLESS:
38 (1) [If the] material facts as to [such director's or officer's inter-
39 est in such contract or transaction and as] THE RELATED PARTY'S INTEREST
40 IN, AND RELATIONSHIP to [any such common directorship, officership or
41 financial interest] THE TRANSACTION are disclosed in good faith [or
42 known] to the board [or committee], and [the board or committee author-
43 izes such contract or transaction by a vote sufficient for such purpose
44 without counting the vote or votes of such interested director or offi-
45 cer; or
46 (2) If the material facts as to such director's or officer's interest
47 in such contract or transaction and as to any such common directorship,
48 officership or financial interest are disclosed in good faith or known
49 to the] ANY members OF THE CORPORATION entitled to vote [thereon, if
50 any, and] TO APPROVE such [contract or] transaction [is authorized by
51 vote of such members].
52 [(b) If such good faith disclosure of the material facts as to the
53 director's or officer's interest in the contract or transaction and as
54 to any such common directorship, officership or financial interest, is
55 made to the directors or members, or known to the board or committee or
56 members authorizing such contract or transaction, as provided in para-
S. 3755--A 25
1 graph (a), the contract or transaction may not be avoided by the corpo-
2 ration for the reasons set forth in paragraph (a). If there was no such
3 disclosure or knowledge, or if the vote of such interested director or
4 officer was necessary for the authorization of such contract or trans-
5 action at a meeting of the board or committee at which it was author-
6 ized, the corporation may avoid the contract or transaction unless the
7 party or parties thereto shall establish affirmatively that the contract
8 or transaction was fair and reasonable as to the corporation at the time
9 it was authorized by the board, a committee or the members.
10 (c) Common or interested directors may be counted in determining the
11 presence of a quorum at a meeting of the board or of a committee which
12 authorizes such contract or transaction.
13 (d)] (2) THE BOARD: (I) HAS CONSIDERED ALTERNATIVE TRANSACTIONS TO THE
14 EXTENT AVAILABLE AND UPON REASONABLE DILIGENCE DETERMINED THAT SUCH
15 ALTERNATIVE TRANSACTIONS WOULD NOT BE MORE ADVANTAGEOUS TO THE CORPO-
16 RATION; (II) DETERMINES BY A TWO-THIRDS VOTE OF THE BOARD THAT THE
17 RELATED PARTY TRANSACTION IS FAIR, REASONABLE AND IN THE BEST INTERESTS
18 OF THE CORPORATION AND APPROVES SUCH TRANSACTION, AND THE RELATED PARTY
19 WITH AN INTEREST IN THE TRANSACTION IS NOT PRESENT AT AND DOES NOT
20 OTHERWISE PARTICIPATE IN ANY DELIBERATION OR VOTING RELATING THERETO;
21 AND (III) CONTEMPORANEOUSLY DOCUMENTS IN WRITING THE BASIS FOR ITS
22 DETERMINATION AND APPROVAL OF THE TRANSACTION. THIS SUBPARAGRAPH SHALL
23 NOT APPLY TO ANY COMPENSATION REVIEWED AND APPROVED IN ACCORDANCE WITH
24 PARAGRAPH (D) OF SECTION 712-A (AUDIT OVERSIGHT). The certificate of
25 incorporation, BYLAWS OR CONFLICT OF INTEREST POLICY OF THE CORPORATION
26 may contain additional restrictions on [contracts or] RELATED PARTY
27 transactions [between a corporation] and [its directors or officers or
28 other persons and may] ADDITIONAL PROCEDURES NECESSARY FOR THE REVIEW OR
29 APPROVAL OF SUCH TRANSACTIONS, OR provide that [contracts or] ANY trans-
30 actions in violation of such restrictions shall be void or voidable.
31 [(e) Unless otherwise provided in the certificate of incorporation or
32 the by-laws, the board shall have authority to fix the compensation of
33 directors for services in any capacity.
34 (f) The fixing of salaries of officers, if not done in or pursuant to
35 the by-laws, shall require the affirmative vote of a majority of the
36 entire board unless a higher proportion is set by the certificate of
37 incorporation or by-laws.]
38 (B) AN OFFICER, DIRECTOR OR KEY EMPLOYEE WHO HAS AN INTEREST IN A
39 RELATED PARTY TRANSACTION SHALL, PRIOR TO THE BOARD'S CONSIDERATION OF
40 THE PROPOSED TRANSACTION, DISCLOSE IN GOOD FAITH TO THE CORPORATION THE
41 MATERIAL FACTS AS TO SUCH PERSON'S INTEREST IN, AND RELATIONSHIP TO, THE
42 TRANSACTION. THE BOARD SHALL ADOPT AND IMPLEMENT PROCEDURES FOR THE
43 TIMELY DISCLOSURE OF SUCH FACTS TO THE BOARD.
44 (C) THE ATTORNEY GENERAL MAY BRING AN ACTION TO ENJOIN, VOID OR
45 RESCIND ANY RELATED PARTY TRANSACTION OR A PROPOSED RELATED PARTY TRANS-
46 ACTION THAT VIOLATES ANY LAW OR IS OTHERWISE NOT FAIR, REASONABLE, OR IN
47 THE BEST INTERESTS OF THE CORPORATION, OR TO SEEK OTHER RELIEF, INCLUD-
48 ING BUT NOT LIMITED TO DAMAGES, RESTITUTION, THE REMOVAL OF DIRECTORS OR
49 OFFICERS, OR SEEK TO REQUIRE ANY PERSON OR ENTITY TO:
50 (1) ACCOUNT FOR ANY PROFITS MADE FROM SUCH TRANSACTION, AND PAY THEM
51 TO THE CORPORATION;
52 (2) PAY THE CORPORATION THE VALUE OF THE USE OF ANY OF ITS PROPERTY OR
53 OTHER ASSETS USED IN SUCH TRANSACTION;
54 (3) RETURN OR REPLACE ANY PROPERTY OR OTHER ASSETS LOST TO THE CORPO-
55 RATION AS A RESULT OF SUCH TRANSACTION, TOGETHER WITH ANY INCOME OR
56 APPRECIATION LOST TO THE CORPORATION BY REASON OF SUCH TRANSACTION, OR
S. 3755--A 26
1 ACCOUNT FOR ANY PROCEEDS OF SALE OF SUCH PROPERTY, AND PAY THE PROCEEDS
2 TO THE CORPORATION TOGETHER WITH INTEREST AT THE LEGAL RATE; AND
3 (4) PAY, IN THE CASE OF WILLFUL CONDUCT, AN AMOUNT UP TO DOUBLE THE
4 AMOUNT OF ANY BENEFIT IMPROPERLY OBTAINED.
5 (D) THE POWERS OF THE ATTORNEY GENERAL PROVIDED IN THIS SECTION ARE IN
6 ADDITION TO ALL OTHER POWERS THE ATTORNEY GENERAL MAY HAVE UNDER THIS
7 CHAPTER OR ANY OTHER LAW.
8 S 49. The not-for-profit corporation law is amended by adding two new
9 sections 715-a and 715-b to read as follows:
10 S 715-A. CONFLICT OF INTEREST POLICY.
11 (A) EVERY CORPORATION SHALL ADOPT A CONFLICT OF INTEREST POLICY TO
12 ENSURE THAT ITS DIRECTORS, OFFICERS AND KEY EMPLOYEES ACT IN THE CORPO-
13 RATION'S BEST INTEREST AND COMPLY WITH APPLICABLE LEGAL REQUIREMENTS,
14 INCLUDING BUT NOT LIMITED TO THE REQUIREMENTS SET FORTH IN SECTION 715
15 (RELATED PARTY TRANSACTIONS).
16 (B) THE CONFLICT OF INTEREST POLICY SHALL INCLUDE, AT A MINIMUM, THE
17 FOLLOWING PROVISIONS:
18 (1) A DEFINITION OF THE CIRCUMSTANCES THAT CONSTITUTE A CONFLICT OF
19 INTEREST;
20 (2) PROCEDURES FOR DISCLOSING A CONFLICT OF INTEREST TO THE AUDIT
21 COMMITTEE OR, IF THERE IS NO AUDIT COMMITTEE, TO THE BOARD;
22 (3) A REQUIREMENT THAT THE PERSON WITH THE CONFLICT OF INTEREST NOT BE
23 PRESENT AT OR PARTICIPATE IN BOARD OR COMMITTEE DELIBERATION OR VOTE ON
24 THE MATTER GIVING RISE TO SUCH CONFLICT;
25 (4) A PROHIBITION AGAINST ANY ATTEMPT BY THE PERSON WITH THE CONFLICT
26 TO INFLUENCE THE DELIBERATION OR VOTING ON THE MATTER GIVING RISE TO
27 SUCH CONFLICT;
28 (5) A REQUIREMENT THAT THE EXISTENCE AND RESOLUTION OF THE CONFLICT BE
29 DOCUMENTED IN THE CORPORATION'S RECORDS, INCLUDING IN THE MINUTES OF ANY
30 MEETING AT WHICH THE CONFLICT WAS DISCUSSED OR VOTED UPON; AND
31 (6) PROCEDURES FOR DISCLOSING, ADDRESSING, AND DOCUMENTING RELATED
32 PARTY TRANSACTIONS IN ACCORDANCE WITH SECTION 715 (RELATED PARTY TRANS-
33 ACTIONS).
34 (C) THE CONFLICT OF INTEREST POLICY SHALL REQUIRE THAT PRIOR TO THE
35 INITIAL ELECTION OF ANY DIRECTOR, AND ANNUALLY THEREAFTER, THAT SUCH
36 DIRECTOR SHALL COMPLETE, SIGN AND SUBMIT TO THE SECRETARY OF THE CORPO-
37 RATION A WRITTEN STATEMENT IDENTIFYING ANY ENTITY OF WHICH SUCH DIRECTOR
38 IS AN OFFICER, DIRECTOR, TRUSTEE, MEMBER, OWNER (EITHER AS A SOLE
39 PROPRIETOR OR A PARTNER), OR EMPLOYEE WITH WHICH THE CORPORATION HAS, OR
40 MIGHT BE EXPECTED TO HAVE, A RELATIONSHIP OR A TRANSACTION IN WHICH THE
41 DIRECTOR MIGHT HAVE A CONFLICTING INTEREST. THE POLICY SHALL REQUIRE
42 THAT EACH DIRECTOR ANNUALLY RESUBMIT SUCH WRITTEN STATEMENT. THE SECRE-
43 TARY OF THE CORPORATION SHALL PROVIDE A COPY OF ALL COMPLETED STATEMENTS
44 TO THE CHAIR OF THE AUDIT COMMITTEE OR, IF THERE IS NO AUDIT COMMITTEE,
45 TO THE CHAIR OF THE BOARD.
46 (D) EVERY CORPORATION REGISTERED OR REQUIRED TO BE REGISTERED PURSUANT
47 TO SECTION ONE HUNDRED SEVENTY-TWO OF THE EXECUTIVE LAW OR SECTION 8-1.4
48 OF THE ESTATES, POWERS AND TRUSTS LAW SHALL TRANSMIT A COPY OF ITS
49 CONFLICT OF INTEREST POLICY TO THE ATTORNEY GENERAL IN THE FORM AND
50 MANNER SPECIFIED BY THE ATTORNEY GENERAL, AND SHALL WITHIN THIRTY DAYS
51 OF ANY MATERIAL CHANGE OF THESE POLICIES PROVIDE THE ATTORNEY GENERAL
52 WITH THE CHANGED POLICIES.
53 (E) NOTHING IN THIS SECTION SHALL BE INTERPRETED TO REQUIRE A CORPO-
54 RATION TO ADOPT ANY SPECIFIC CONFLICT OF INTEREST POLICY NOT OTHERWISE
55 REQUIRED BY LAW, OR TO SUPERSEDE OR LIMIT ANY REQUIREMENT OR DUTY
56 GOVERNING CONFLICTS OF INTEREST REQUIRED BY ANY OTHER LAW OR RULE.
S. 3755--A 27
1 S 715-B. WHISTLEBLOWER POLICY.
2 (A) EVERY CORPORATION THAT HAS TWENTY OR MORE EMPLOYEES AND IN THE
3 PRIOR FISCAL YEAR HAD ANNUAL REVENUE IN EXCESS OF ONE MILLION DOLLARS
4 SHALL ADOPT A WHISTLEBLOWER POLICY TO PROTECT FROM RETALIATION PERSONS
5 WHO REPORT SUSPECTED IMPROPER CONDUCT. SUCH POLICY SHALL PROVIDE THAT NO
6 DIRECTOR, OFFICER, EMPLOYEE OR VOLUNTEER OF A CORPORATION WHO IN GOOD
7 FAITH REPORTS ANY ACTION OR SUSPECTED ACTION TAKEN BY OR WITHIN THE
8 CORPORATION THAT IS ILLEGAL, FRAUDULENT OR IN VIOLATION OF ANY ADOPTED
9 POLICY OF THE CORPORATION SHALL SUFFER INTIMIDATION, HARASSMENT,
10 DISCRIMINATION OR OTHER RETALIATION OR, IN THE CASE OF EMPLOYEES,
11 ADVERSE EMPLOYMENT CONSEQUENCE.
12 (B) THE WHISTLEBLOWER POLICY SHALL INCLUDE THE FOLLOWING PROVISIONS:
13 (1) PROCEDURES FOR THE REPORTING OF VIOLATIONS OR SUSPECTED VIOLATIONS
14 OF LAWS OR CORPORATE POLICIES, INCLUDING PROCEDURES FOR PRESERVING THE
15 CONFIDENTIALITY OF REPORTED INFORMATION;
16 (2) PROCEDURES FOR HANDLING AND INVESTIGATING VIOLATIONS OR SUSPECTED
17 VIOLATIONS OF LAWS OR CORPORATE POLICIES;
18 (3) A REQUIREMENT THAT AN EMPLOYEE OF THE CORPORATION BE DESIGNATED TO
19 ADMINISTER, IMPLEMENT AND OVERSEE COMPLIANCE OF THE WHISTLEBLOWER POLI-
20 CY, AND TO REPORT TO THE AUDIT COMMITTEE OR OTHER COMMITTEE OF INDEPEND-
21 ENT DIRECTORS OR, IF THERE ARE NO SUCH COMMITTEES, TO THE BOARD;
22 (4) A REQUIREMENT THAT ALL DOCUMENTS CONCERNING INFORMATION REPORTED
23 UNDER THE WHISTLEBLOWER POLICY AND ANY INVESTIGATION RELATING THERETO BE
24 RETAINED BY THE CORPORATION FOR A MINIMUM PERIOD OF SIX YEARS; AND
25 (5) A REQUIREMENT THAT A COPY OF THE POLICY BE DISTRIBUTED TO ALL
26 DIRECTORS, OFFICERS, EMPLOYEES AND VOLUNTEERS, WITH INSTRUCTIONS ON HOW
27 TO COMPLY WITH THE PROCEDURES SET FORTH IN THE POLICY.
28 (C) NOTHING IN THIS SECTION SHALL BE INTERPRETED TO RELIEVE ANY CORPO-
29 RATION FROM ANY ADDITIONAL REQUIREMENTS IN RELATION TO INTERNAL COMPLI-
30 ANCE, RETALIATION, OR DOCUMENT RETENTION REQUIRED BY ANY OTHER LAW OR
31 RULE.
32 S 50. Section 716 of the not-for-profit corporation law, as amended by
33 chapter 644 of the laws of 1971, is amended to read as follows:
34 S 716. Loans to directors and officers.
35 No loans, other than through the purchase of bonds, debentures, or
36 similar obligations of the type customarily sold in public offerings, or
37 through ordinary deposit of funds in a bank, shall be made by a corpo-
38 ration to its directors or officers, or to any other corporation, firm,
39 association or other entity in which one or more of its directors or
40 officers are directors or officers or hold a substantial financial
41 interest, except a loan by one [type B] CHARITABLE corporation to anoth-
42 er [type B] CHARITABLE corporation. A loan made in violation of this
43 section shall be a violation of the duty to the corporation of the
44 directors or officers authorizing it or participating in it, but the
45 obligation of the borrower with respect to the loan shall not be
46 affected thereby.
47 S 51. Section 717 of the not-for-profit corporation law, paragraph (a)
48 as amended by chapter 490 of the laws of 2010, and paragraph (b) as
49 amended by chapter 734 of the laws of 1988, is amended to read as
50 follows:
51 S 717. Duty of directors and officers.
52 (a) Directors and officers shall discharge the duties of their respec-
53 tive positions in good faith and with the care an ordinarily prudent
54 person in a like position would exercise under similar circumstances IN
55 LIKE POSITIONS. [The factors set forth in subparagraph one of paragraph
56 (e) of section 552 (Standard of conduct in managing and investing an
S. 3755--A 28
1 institutional fund), if relevant, must be considered by a governing
2 board delegating] IN THE ADMINISTRATION OF THE POWERS TO MAKE AND RETAIN
3 INVESTMENTS PURSUANT TO SECTION 511-A (PETITION FOR ATTORNEY GENERAL
4 APPROVAL), TO APPROPRIATE APPRECIATION PURSUANT TO SECTION 513 (ADMINIS-
5 TRATION OF ASSETS RECEIVED FOR SPECIFIC PURPOSES), AND TO DELEGATE
6 investment management of institutional funds pursuant to section 514
7 (Delegation of investment management) [For purposes of this paragraph,
8 the term institutional fund is defined in section 551 (Definitions).], A
9 GOVERNING BOARD SHALL CONSIDER AMONG OTHER RELEVANT CONSIDERATIONS THE
10 LONG AND SHORT TERM NEEDS OF THE CORPORATION IN CARRYING OUT ITS
11 PURPOSES, ITS PRESENT AND ANTICIPATED FINANCIAL REQUIREMENTS, EXPECTED
12 TOTAL RETURN ON ITS INVESTMENTS, PRICE LEVEL TRENDS, AND GENERAL ECONOM-
13 IC CONDITIONS.
14 (b) In discharging their duties, directors and officers, when acting
15 in good faith, may rely on information, opinions, reports or statements
16 including financial statements and other financial data, in each case
17 prepared or presented by: (1) one or more officers or employees of the
18 corporation, whom the director believes to be reliable and competent in
19 the matters presented, (2) counsel, public accountants or other persons
20 as to matters which the directors or officers believe to be within such
21 person's professional or expert competence or (3) a committee of the
22 board upon which they do not serve, duly designated in accordance with a
23 provision of the certificate of incorporation or the bylaws, as to
24 matters within its designated authority, which committee the directors
25 or officers believe to merit confidence, so long as in so relying they
26 shall be acting in good faith and with that degree of care specified in
27 paragraph (a) of this section, BUT IF THE DIRECTOR OR OFFICER HAS KNOW-
28 LEDGE CONCERNING THE MATTER IN QUESTION REPORTED BY THE COMMITTEE THAT
29 WOULD CAUSE SUCH RELIANCE TO BE UNWARRANTED, THE DIRECTOR OR OFFICER
30 SHALL NOT BE CONSIDERED TO BE ACTING IN GOOD FAITH. Persons shall not
31 be considered to be acting in good faith if they have knowledge concern-
32 ing the matter in question that would cause such reliance to be unwar-
33 ranted. Persons who so perform their duties shall have no liability by
34 reason of being or having been directors or officers of the corporation.
35 (C) IN TAKING ACTION, INCLUDING, WITHOUT LIMITATION, ACTION WHICH MAY
36 INVOLVE OR RELATE TO A CHANGE OR POTENTIAL CHANGE IN THE CONTROL OF
37 CORPORATION, A DIRECTOR SHALL BE ENTITLED TO CONSIDER, WITHOUT LIMITA-
38 TION, (1) BOTH THE LONG-TERM AND THE SHORT-TERM INTERESTS OF THE CORPO-
39 RATION AND ITS MEMBERS AND (2) THE EFFECTS THAT THE CORPORATION'S ACTION
40 MAY HAVE IN THE SHORT-TERM OR IN THE LONG-TERM UPON ANY OF THE FOLLOW-
41 ING: (A) THE PROSPECTS FOR POTENTIAL GROWTH, DEVELOPMENT, PRODUCTIVITY
42 AND FINANCIAL STABILITY OF THE CORPORATION; (B) THE CORPORATION'S
43 CURRENT EMPLOYEES; (C) THE CORPORATION'S RETIRED EMPLOYEES AND OTHER
44 BENEFICIARIES RECEIVING OR ENTITLED TO RECEIVE RETIREMENT, WELFARE OR
45 SIMILAR BENEFITS FROM OR PURSUANT TO ANY PLAN SPONSORED, OR AGREEMENT
46 ENTERED INTO, BY THE CORPORATION; (D) THE BENEFICIARIES OR RECIPIENTS OF
47 THE CORPORATION'S SERVICES; (E) THE CORPORATION'S CREDITORS; (F) THE
48 ABILITY OF THE CORPORATION TO PROVIDE, AS A GOING CONCERN, BENEFITS,
49 GOODS, SERVICES, EMPLOYMENT OPPORTUNITIES AND EMPLOYMENT BENEFITS AND
50 OTHERWISE TO CONTRIBUTE TO THE COMMUNITIES IN WHICH IT CONDUCTS ACTIV-
51 ITIES; AND (G) THE ACCOMPLISHMENT OF THE CORPORATION'S PURPOSES AS STAT-
52 ED IN THE CERTIFICATE OF INCORPORATION. NOTHING IN THIS PARAGRAPH SHALL
53 CREATE ANY DUTIES OWED BY ANY DIRECTOR TO ANY PERSON OR ENTITY TO
54 CONSIDER OR AFFORD ANY PARTICULAR WEIGHT TO ANY OF THE FOREGOING OR
55 ABROGATE ANY DUTY OF THE DIRECTORS, EITHER STATUTORY OR RECOGNIZED BY
56 COMMON LAW OR COURT DECISIONS. FOR PURPOSES OF THIS PARAGRAPH, "CONTROL"
S. 3755--A 29
1 SHALL MEAN THE POSSESSION, DIRECTLY OR INDIRECTLY, OF THE POWER TO
2 DIRECT OR CAUSE THE DIRECTION OF THE MANAGEMENT AND POLICIES OF THE
3 CORPORATION, WHETHER THROUGH MEMBERSHIP OR OTHERWISE.
4 S 52. Section 718 of the not-for-profit corporation law, as amended by
5 chapter 992 of the laws of 1970, is amended to read as follows:
6 S 718. List of directors and officers.
7 (a) If a member or creditor of a corporation, in person or by his
8 attorney or agent, or a representative of the district attorney or of
9 the secretary of state, the attorney general, or other state official,
10 makes a written demand on a corporation to inspect a current list of its
11 directors and officers and their [residence] CURRENT addresses, the
12 corporation shall, within two business days after receipt of the demand
13 and for a period of one week thereafter, make the list available for
14 such inspection at its office during usual business hours.
15 (b) Upon refusal by the corporation to make a current list of its
16 directors and officers and their [residence] CURRENT addresses avail-
17 able, as provided in paragraph (a) OF THIS SECTION, the person making a
18 demand for such list may apply, ex parte, to the supreme court at a
19 special term held within the judicial district where the office of the
20 corporation is located for an order directing the corporation to make
21 such list available. The court may grant such order or take such other
22 action as it may deem just and proper.
23 S 53. The section heading and paragraph (a) of section 720 of the
24 not-for-profit corporation law, the section heading as amended by chap-
25 ter 1058 of the laws of 1971, are amended to read as follows:
26 Actions [on behalf of the corporation] AGAINST DIRECTORS, OFFICERS AND
27 KEY EMPLOYEES.
28 (a) An action may be brought against one or more directors [or], offi-
29 cers, OR KEY EMPLOYEES of a corporation to procure a judgment for the
30 following relief:
31 (1) To compel the defendant to account for his official conduct in the
32 following cases:
33 (A) The neglect of, or failure to perform, or other violation of his
34 duties in the management and disposition of corporate assets committed
35 to his charge.
36 (B) The acquisition by himself, transfer to others, loss or waste of
37 corporate assets due to any neglect of, or failure to perform, or other
38 violation of his duties.
39 (2) To set aside an unlawful conveyance, assignment or transfer of
40 corporate assets, where the transferee knew of its unlawfulness.
41 (3) To enjoin a proposed unlawful conveyance, assignment or transfer
42 of corporate assets, where there are reasonable grounds for belief that
43 it will be made.
44 S 54. Paragraphs (a) and (c) of section 722 of the not-for-profit
45 corporation law, as amended by chapter 368 of the laws of 1987, are
46 amended to read as follows:
47 (a) A corporation may indemnify any person, made, or threatened to be
48 made, a party to an action or proceeding other than one by or in the
49 right of the corporation to procure a judgment in its favor, whether
50 civil or criminal, including an action by or in the right of any other
51 corporation of any [type or] kind, domestic or foreign, or any partner-
52 ship, joint venture, trust, employee benefit plan or other enterprise,
53 which any director or officer of the corporation served in any capacity
54 at the request of the corporation, by reason of the fact that he, his
55 testator or intestate, was a director or officer of the corporation, or
56 served such other corporation, partnership, joint venture, trust,
S. 3755--A 30
1 employee benefit plan or other enterprise in any capacity, against judg-
2 ments, fines, amounts paid in settlement and reasonable expenses,
3 including attorneys' fees actually and necessarily incurred as a result
4 of such action or proceeding, or any appeal therein, if such director or
5 officer acted, in good faith, for a purpose which he reasonably believed
6 to be in, or, in the case of service for any other corporation or any
7 partnership, joint venture, trust, employee benefit plan or other enter-
8 prise, not opposed to, the best interests of the corporation and, in
9 criminal actions or proceedings, in addition, had no reasonable cause to
10 believe that his conduct was unlawful.
11 (c) A corporation may indemnify any person made, or threatened to be
12 made, a party to an action by or in the right of the corporation to
13 procure a judgment in its favor by reason of the fact that he, his
14 testator or intestate, is or was a director or officer of the corpo-
15 ration, or is or was serving at the request of the corporation as a
16 director or officer of any other corporation of any [type or] kind,
17 domestic or foreign, of any partnership, joint venture, trust, employee
18 benefit plan or other enterprise, against amounts paid in settlement and
19 reasonable expenses, including attorneys' fees, actually and necessarily
20 incurred by him in connection with the defense or settlement of such
21 action, or in connection with an appeal therein, if such director or
22 officer acted, in good faith, for a purpose which he reasonably believed
23 to be in, or, in the case of service for any other corporation or any
24 partnership, joint venture, trust, employee benefit plan or other enter-
25 prise, not opposed to, the best interests of the corporation, except
26 that no indemnification under this paragraph shall be made in respect of
27 (1) a threatened action, or a pending action which is settled or other-
28 wise disposed of, or (2) any claim, issue or matter as to which such
29 person shall have been adjudged to be liable to the corporation, unless
30 and only to the extent that the court in which the action was brought,
31 or, if no action was brought, any court of competent jurisdiction,
32 determines upon application that, in view of all the circumstances of
33 the case, the person is fairly and reasonably entitled to indemnity for
34 such portion of the settlement amount and expenses as the court deems
35 proper.
36 S 55. Paragraph (c) of section 723 of the not-for-profit corporation
37 law, as amended by chapter 368 of the laws of 1987, is amended to read
38 as follows:
39 (c) Expenses incurred in defending a civil or criminal action or
40 proceeding may be paid by the corporation in advance of the final dispo-
41 sition of such action or proceeding upon receipt of an undertaking by or
42 on behalf of such director or officer [to repay] SUFFICIENT TO ENSURE
43 THE REPAYMENT OF such amount as, and to the extent, required by para-
44 graph (a) of section 725.
45 S 56. Paragraph (b) of section 724 of the not-for-profit corporation
46 law, as amended by chapter 368 of the laws of 1987, is amended to read
47 as follows:
48 (b) The application shall be made in such manner and form as may be
49 required by the applicable rules of court or, in the absence thereof, by
50 direction of a court to which it is made. Such application shall be upon
51 notice to the corporation AND THE ATTORNEY GENERAL. The court may also
52 direct that notice be given at the expense of the corporation to the
53 members and such other persons as it may designate in such manner as it
54 may require.
S. 3755--A 31
1 S 57. Subparagraph 3 of paragraph (a) of section 803 of the not-for-
2 profit corporation law, as amended by chapter 168 of the laws of 1982,
3 is amended to read as follows:
4 (3) That the corporation is a corporation as defined in subparagraph
5 (a) (5) of section 102 (Definitions)[; the type of corporation it is
6 under section 201 (Purposes); and if the corporate purposes are
7 enlarged, limited or otherwise changed, the type of corporation it shall
8 thereafter be under section 201].
9 S 58. The section heading and paragraph (a) of section 804 of the
10 not-for-profit corporation law, as amended by chapter 139 of the laws of
11 1993, and subparagraph (i) of paragraph (a) as amended by chapter 198 of
12 the laws of 2010, are amended to read as follows:
13 [Approvals] NOTICES, CONSENTS, and effect.
14 (a) (i) A certificate of amendment shall not be filed if the amendment
15 adds, changes or eliminates a purpose, power or provision the inclusion
16 of which in a certificate of incorporation requires consent or approval
17 of a governmental body or officer or any other person or body, or if the
18 amendment changes the name of a corporation whose certificate of incor-
19 poration had such consent or approval endorsed thereon or annexed there-
20 to, unless such consent or approval is no longer required or is endorsed
21 on or annexed to the certificate of amendment. IF A CERTIFICATE OF
22 AMENDMENT ADDING, CHANGING OR ELIMINATING A PURPOSE, POWER OR PROVISION
23 THE INCLUSION OF WHICH IN A CERTIFICATE OF INCORPORATION REQUIRES THE
24 INCORPORATOR TO SEND A CERTIFIED COPY OF ITS CERTIFICATE OF INCORPO-
25 RATION TO A GOVERNMENTAL BODY OR OFFICER OR ANY OTHER PERSON OR ENTITY
26 UNDER SECTION 404 (NOTICES AND CONSENTS), OR IF THE AMENDMENT CHANGES
27 THE NAME OF A CORPORATION WHOSE INCORPORATOR WAS REQUIRED TO DELIVER A
28 CERTIFIED COPY OF ITS CERTIFICATE OF INCORPORATION TO A GOVERNMENTAL
29 BODY OR OFFICER OR ANY OTHER PERSON OR ENTITY UNDER SECTION 404 (NOTICES
30 AND CONSENTS), A CERTIFIED COPY OF THE CERTIFICATE OF AMENDMENT SHALL BE
31 SENT BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE GOVERNMENT BODY
32 OR OFFICER OR OTHER PERSON OR ENTITY IMMEDIATELY AFTER THE FILING OF
33 SUCH CERTIFICATE WITH THE DEPARTMENT OF STATE.
34 (ii) Every certificate of amendment of a CHARITABLE corporation [clas-
35 sified as type B or type C under section 201 (Purposes)] which seeks to
36 change or eliminate a purpose or power enumerated in the corporation's
37 certificate of incorporation, or to add a power or purpose not enumer-
38 ated therein, shall have endorsed thereon or annexed thereto the
39 approval of a justice of the supreme court of the judicial district in
40 which the office of the corporation is located. Ten days' written notice
41 of the application for such approval shall be given to the attorney-gen-
42 eral.
43 S 59. Section 907 of the not-for-profit corporation law is amended to
44 read as follows:
45 S 907. Approval by the supreme court OR THE ATTORNEY GENERAL.
46 [(a)] Where any constituent corporation or the consolidated corpo-
47 ration is, or would be if formed under this chapter, a [Type B or a Type
48 C] CHARITABLE corporation under section 201 (Purposes) [of this chap-
49 ter], no certificate shall be filed pursuant to section 904 (Certificate
50 of merger or consolidation; contents) or section 906 (Merger or consol-
51 idation of domestic and foreign corporations) until (A) THE SUPREME
52 COURT HAS GRANTED an order approving the plan of merger or consolidation
53 and authorizing the filing of the certificate [has been made by the
54 supreme court,] as provided in [this] section[. A certified copy of such
55 order shall be annexed to the certificate of merger or consolidation.
56 Application for the order may be made in the judicial district in which
S. 3755--A 32
1 the principal office of the surviving or consolidated corporation is to
2 be located, or in which the office of one of the domestic constituent
3 corporations is located. The application shall be made by all the
4 constituent corporations jointly and shall set forth by affidavit (1)
5 the plan of merger or consolidation, (2) the approval required by
6 section 903 (Approval of plan) or paragraph (b) of section 906 (Merger
7 or consolidation of domestic and foreign corporations) for each constit-
8 uent corporation, (3) the objects and purposes of each such corporation
9 to be promoted by the consolidation, (4) a statement of all property,
10 and the manner in which it is held, and of all liabilities and of the
11 amount and sources of the annual income of each such corporation, (5)
12 whether any votes against adoption of the resolution approving the plan
13 of merger or consolidation were cast at the meeting at which the resol-
14 ution as adopted by each constituent corporation, and (6) facts showing
15 that the consolidation is authorized by the laws of the jurisdictions
16 under which each of the constituent corporations is incorporated] 907-A
17 (APPLICATION FOR APPROVAL OF THE SUPREME COURT) OR (B) THE ATTORNEY
18 GENERAL HAS APPROVED THE PLAN OF MERGER OR CONSOLIDATION AND AUTHORIZED
19 THE FILING OF THE CERTIFICATE, AS PROVIDED IN SECTION 907-B (APPLICATION
20 FOR APPROVAL OF THE ATTORNEY GENERAL).
21 [(b) Upon the filing of the application the court shall fix a time for
22 hearing thereof and shall direct that notice thereof be given to such
23 persons as may be interested, including the attorney general, any
24 governmental body or officer and any other person or body whose consent
25 or approval is required by section 909 (Consent to filing), in such form
26 and manner as the court may prescribe. If no votes against adoption of
27 the resolution approving the plan of merger or consolidation were cast
28 at the meeting at which the resolution was adopted by any constituent
29 corporation the court may dispense with notice to anyone except the
30 attorney-general, any governmental body or officer and any other person
31 or body whose consent or approval is required by section 909 (Consent to
32 filing). Any person interested may appear and show cause why the appli-
33 cation should not be granted.
34 (c) If the court shall find that any of the assets of any of the
35 constituent corporations are held for a purpose specified as Type B in
36 paragraph (b) of section 201 or are legally required to be used for a
37 particular purpose, but not upon a condition requiring return, transfer
38 or conveyance by reason of the merger or consolidation, the court may,
39 in its discretion, direct that such assets be transferred or conveyed to
40 the surviving or consolidated corporation subject to such purpose or
41 use, or that such assets be transferred or conveyed to the surviving or
42 consolidated corporation or to one or more other domestic or foreign
43 corporations or organizations engaged in substantially similar activ-
44 ities, upon an express trust the terms of which shall be approved by the
45 court.
46 (d) If the court shall find that the interests of non-consenting
47 members are or may be substantially prejudiced by the proposed merger or
48 consolidation, the court may disapprove the plan or may direct a modifi-
49 cation thereof. In the event of a modification, if the court shall find
50 that the interests of any members may be substantially prejudiced by the
51 proposed merger or consolidation as modified, the court shall direct
52 that the modified plan be submitted to vote of the members of the
53 constituent corporations, or if the court shall find that there is not
54 such substantial prejudice, it shall approve the agreement as so modi-
55 fied without further approval by the members. If the court, upon direct-
56 ing a modification of the plan of merger or consolidation, shall direct
S. 3755--A 33
1 that a further approval be obtained from members of the constituent
2 corporations or any of them, such further approval shall be obtained in
3 the manner specified in section 903 (Approval of plan) or section 906(b)
4 (Merger or consolidation of domestic and foreign corporations) of this
5 chapter.
6 (e) If it shall appear, to the satisfaction of the court, that the
7 provisions of this section have been complied with, and that the inter-
8 ests of the constituent corporations and the public interest will not be
9 adversely affected by the merger or consolidation, it shall approve the
10 merger or consolidation upon such terms and conditions as it may
11 prescribe.]
12 S 60. The not-for-profit corporation law is amended by adding a new
13 section 907-a to read as follows:
14 S 907-A. APPLICATION FOR APPROVAL OF THE SUPREME COURT.
15 (A) APPLICATION FOR AN ORDER APPROVING THE PLAN OF MERGER AND AUTHOR-
16 IZING THE FILING OF THE CERTIFICATE MAY BE MADE IN THE JUDICIAL DISTRICT
17 IN WHICH THE PRINCIPAL OFFICE OF THE SURVIVING OR CONSOLIDATED CORPO-
18 RATION IS TO BE LOCATED, OR IN WHICH THE OFFICE OF ONE OF THE DOMESTIC
19 CONSTITUENT CORPORATIONS IS LOCATED. THE APPLICATION SHALL BE MADE BY
20 ALL THE CONSTITUENT CORPORATIONS JOINTLY AND SHALL SET FORTH BY AFFIDA-
21 VIT: (1) THE PLAN OF MERGER OR CONSOLIDATION, (2) THE APPROVAL REQUIRED
22 BY SECTION 903 (APPROVAL OF PLAN) OR PARAGRAPH (B) OF SECTION 906 (MERG-
23 ER OR CONSOLIDATION OF DOMESTIC AND FOREIGN CORPORATIONS) FOR EACH
24 CONSTITUENT CORPORATION, (3) THE OBJECTS AND PURPOSES OF EACH SUCH
25 CORPORATION TO BE PROMOTED BY THE MERGER OR CONSOLIDATION, (4) A STATE-
26 MENT OF ALL PROPERTY, AND THE MANNER IN WHICH IT IS HELD, AND OF ALL
27 LIABILITIES AND OF THE AMOUNT AND SOURCES OF THE ANNUAL INCOME OF EACH
28 SUCH CORPORATION, (5) WHETHER ANY VOTES AGAINST ADOPTION OF THE RESOL-
29 UTION APPROVING THE PLAN OF MERGER OR CONSOLIDATION WERE CAST AT THE
30 MEETING AT WHICH THE RESOLUTION WAS ADOPTED BY EACH CONSTITUENT CORPO-
31 RATION, AND (6) FACTS SHOWING THAT THE CONSOLIDATION IS AUTHORIZED BY
32 THE LAWS OF THE JURISDICTIONS UNDER WHICH EACH OF THE CONSTITUENT CORPO-
33 RATIONS IS INCORPORATED.
34 (B) UPON THE FILING OF THE APPLICATION THE COURT SHALL FIX A TIME FOR
35 A HEARING THEREOF AND SHALL DIRECT THAT NOTICE THEREOF BE GIVEN TO SUCH
36 PERSONS AS MAY BE INTERESTED, INCLUDING THE ATTORNEY GENERAL, ANY
37 GOVERNMENTAL BODY OR OFFICER AND ANY OTHER PERSON OR BODY WHOSE CONSENT
38 OR APPROVAL IS REQUIRED BY SECTION 909 (CONSENT TO FILING), IN SUCH FORM
39 AND MANNER AS THE COURT MAY PRESCRIBE. IF NO VOTES AGAINST ADOPTION OF
40 THE RESOLUTION APPROVING THE PLAN OF MERGER OR CONSOLIDATION WERE CAST
41 AT THE MEETING AT WHICH THE RESOLUTION WAS ADOPTED BY ANY CONSTITUENT
42 CORPORATION THE COURT MAY DISPENSE WITH NOTICE TO ANYONE EXCEPT THE
43 ATTORNEY GENERAL, ANY GOVERNMENTAL BODY OR OFFICER AND ANY OTHER PERSON
44 OR BODY WHOSE CONSENT OR APPROVAL IS REQUIRED BY SECTION 909 (CONSENT TO
45 FILING). ANY PERSON INTERESTED MAY APPEAR AND SHOW CAUSE WHY THE APPLI-
46 CATION SHOULD NOT BE GRANTED.
47 (C) IF THE COURT SHALL FIND THAT ANY OF THE ASSETS OF ANY OF THE
48 CONSTITUENT CORPORATIONS ARE HELD FOR A CHARITABLE PURPOSE OR ARE LEGAL-
49 LY REQUIRED TO BE USED FOR A PARTICULAR PURPOSE, BUT NOT UPON A CONDI-
50 TION REQUIRING RETURN, TRANSFER OR CONVEYANCE BY REASON OF THE MERGER OR
51 CONSOLIDATION, THE COURT MAY, IN ITS DISCRETION, DIRECT THAT SUCH ASSETS
52 BE TRANSFERRED OR CONVEYED TO THE SURVIVING OR CONSOLIDATED CORPORATION
53 SUBJECT TO SUCH PURPOSE OR USE, OR THAT SUCH ASSETS BE TRANSFERRED OR
54 CONVEYED TO THE SURVIVING OR CONSOLIDATED CORPORATION OR TO ONE OR MORE
55 OTHER DOMESTIC OR FOREIGN CORPORATIONS OR ORGANIZATIONS ENGAGED IN
S. 3755--A 34
1 SUBSTANTIALLY SIMILAR ACTIVITIES, UPON AN EXPRESS TRUST THE TERMS OF
2 WHICH SHALL BE APPROVED BY THE COURT.
3 (D) IF THE COURT SHALL FIND THAT THE INTERESTS OF NON-CONSENTING
4 MEMBERS ARE OR MAY BE SUBSTANTIALLY PREJUDICED BY THE PROPOSED MERGER OR
5 CONSOLIDATION, THE COURT MAY DISAPPROVE THE PLAN OR MAY DIRECT A MODIFI-
6 CATION THEREOF. IN THE EVENT OF A MODIFICATION, IF THE COURT SHALL FIND
7 THAT THE INTERESTS OF ANY MEMBERS MAY BE SUBSTANTIALLY PREJUDICED BY THE
8 PROPOSED MERGER OR CONSOLIDATION AS MODIFIED, THE COURT SHALL DIRECT
9 THAT THE MODIFIED PLAN BE SUBMITTED TO VOTE OF THE MEMBERS OF THE
10 CONSTITUENT CORPORATIONS, OR IF THE COURT SHALL FIND THAT THERE IS NOT
11 SUCH SUBSTANTIAL PREJUDICE, IT SHALL APPROVE THE AGREEMENT AS SO MODI-
12 FIED WITHOUT FURTHER APPROVAL BY THE MEMBERS. IF THE COURT, UPON DIRECT-
13 ING A MODIFICATION OF THE PLAN OF MERGER OR CONSOLIDATION, SHALL DIRECT
14 THAT A FURTHER APPROVAL BE OBTAINED FROM MEMBERS OF THE CONSTITUENT
15 CORPORATIONS OR ANY OF THEM, SUCH FURTHER APPROVAL SHALL BE OBTAINED IN
16 THE MANNER SPECIFIED IN SECTION 903 (APPROVAL OF PLAN) OR PARAGRAPH (B)
17 OF SECTION 906 (MERGER OR CONSOLIDATION OF DOMESTIC AND FOREIGN CORPO-
18 RATIONS).
19 (E) IF IT SHALL APPEAR, TO THE SATISFACTION OF THE COURT, THAT THE
20 PROVISIONS OF THIS SECTION HAVE BEEN COMPLIED WITH, AND THAT THE INTER-
21 ESTS OF THE CONSTITUENT CORPORATIONS AND THE PUBLIC INTEREST WILL NOT BE
22 ADVERSELY AFFECTED BY THE MERGER OR CONSOLIDATION, IT SHALL APPROVE THE
23 MERGER OR CONSOLIDATION UPON SUCH TERMS AND CONDITIONS AS IT MAY
24 PRESCRIBE.
25 (F) A CERTIFIED COPY OF SUCH ORDER SHALL BE ANNEXED TO THE CERTIFICATE
26 OF MERGER OR CONSOLIDATION.
27 S 61. The not-for-profit corporation law is amended by adding a new
28 section 907-b to read as follows:
29 S 907-B. APPLICATION FOR APPROVAL OF THE ATTORNEY GENERAL.
30 (A) IN LIEU OF OBTAINING AN ORDER APPROVING THE PLAN OF MERGER OR
31 CONSOLIDATION AND AUTHORIZING THE FILING OF THE CERTIFICATE, THE CORPO-
32 RATION MAY ALTERNATIVELY MAKE AN APPLICATION TO THE ATTORNEY GENERAL FOR
33 APPROVAL, EXCEPT WHERE THE ATTORNEY GENERAL, IN HIS OR HER DISCRETION,
34 CONCLUDES THAT A COURT SHOULD REVIEW THE APPLICATION AND MAKE A DETERMI-
35 NATION THEREON.
36 (B) THE APPLICATION TO THE ATTORNEY GENERAL SHALL BE MADE BY ALL THE
37 CONSTITUENT CORPORATIONS JOINTLY AND SHALL SET FORTH BY AFFIDAVIT: (I)
38 ALL OF THE INFORMATION REQUIRED TO BE INCLUDED IN AN APPLICATION TO
39 OBTAIN COURT APPROVAL PURSUANT TO SECTION 907-A (APPLICATION FOR
40 APPROVAL OF THE SUPREME COURT), (II) ALL CONSENTS AND APPROVALS REQUIRED
41 BY SECTION 909 (CONSENT TO FILING), AND (III) A STATEMENT AS TO WHETHER
42 ANY PERSONS HAVE RAISED, OR HAVE A REASONABLE BASIS TO RAISE, OBJECTIONS
43 TO THE MERGER OR CONSOLIDATION THAT IS THE SUBJECT OF THE APPLICATION,
44 INCLUDING A STATEMENT SETTING FORTH THE NAMES AND ADDRESSES OF SUCH
45 PERSONS, THE NATURE OF THEIR INTEREST, AND A DESCRIPTION OF THEIR
46 OBJECTIONS.
47 (C) UPON THE FILING OF THE APPLICATION, THE ATTORNEY GENERAL, IN HIS
48 OR HER DISCRETION, MAY DIRECT THAT THE CONSTITUENT CORPORATIONS PROVIDE
49 NOTICE TO SUCH PERSONS AS MAY BE INTERESTED, INCLUDING ANY GOVERNMENTAL
50 BODY OR OFFICER AND ANY OTHER PERSON OR BODY THAT IS REQUIRED EITHER TO
51 GIVE CONSENT OR BE NOTIFIED UNDER SECTION 404 (NOTICES AND CONSENTS) OR
52 SECTION 909 (CONSENT TO FILING). THE CONSTITUENT CORPORATIONS SHALL
53 PROVIDE THE ATTORNEY GENERAL WITH A CERTIFICATION THAT SUCH NOTICE HAS
54 BEEN PROVIDED.
55 (D) IF ANY ASSETS OF ANY OF THE CONSTITUENT CORPORATIONS ARE HELD FOR
56 A CHARITABLE PURPOSE OR ARE ASSETS RECEIVED FOR A SPECIFIC PURPOSE AND
S. 3755--A 35
1 LEGALLY REQUIRED TO BE USED FOR A PARTICULAR PURPOSE, BUT NOT UPON A
2 CONDITION REQUIRING RETURN, TRANSFER OR CONVEYANCE BY REASON OF THE
3 MERGER OR CONSOLIDATION, THE ATTORNEY GENERAL MAY, IN HIS OR HER
4 DISCRETION, DIRECT THAT SUCH ASSETS BE TRANSFERRED OR CONVEYED TO THE
5 SURVIVING OR CONSOLIDATED CORPORATION SUBJECT TO SUCH PURPOSE OR USE.
6 (E) IF THE ATTORNEY GENERAL SHALL FIND THAT THE INTERESTS OF NON-CON-
7 SENTING MEMBERS ARE OR MAY BE SUBSTANTIALLY PREJUDICED BY THE PROPOSED
8 MERGER OR CONSOLIDATION, THE ATTORNEY GENERAL MAY DISAPPROVE OF THE
9 APPLICATION OR MAY CONDITION APPROVAL OF THE APPLICATION UPON MODIFICA-
10 TION OF THE PLAN OF MERGER OR CONSOLIDATION IN ACCORDANCE WITH THIS
11 CHAPTER AND ANY OTHER LAW OR RULE.
12 (F) IF IT SHALL APPEAR, TO THE SATISFACTION OF THE ATTORNEY GENERAL,
13 THAT THE PROVISIONS OF THIS SECTION HAVE BEEN COMPLIED WITH, AND THAT
14 THE INTERESTS OF THE CONSTITUENT CORPORATIONS AND THE PUBLIC INTEREST
15 WILL NOT BE ADVERSELY AFFECTED BY THE MERGER OR CONSOLIDATION, THE
16 ATTORNEY GENERAL SHALL APPROVE THE MERGER OR CONSOLIDATION UPON SUCH
17 TERMS AND CONDITIONS AS IT MAY PRESCRIBE.
18 (G) THE APPROVAL OF THE ATTORNEY GENERAL SHALL BE ANNEXED TO THE
19 CERTIFICATE OF MERGER OR CONSOLIDATION.
20 (H) IF THE ATTORNEY GENERAL DOES NOT APPROVE THE APPLICATION, OR IF
21 THE ATTORNEY GENERAL CONCLUDES THAT COURT REVIEW IS APPROPRIATE, THE
22 CONSTITUENT CORPORATIONS MAY SEEK COURT APPROVAL ON NOTICE TO THE ATTOR-
23 NEY GENERAL PURSUANT TO SECTION 907-A (APPLICATION FOR APPROVAL OF THE
24 SUPREME COURT).
25 S 62. Paragraphs (a) and (f) of section 908 of the not-for-profit
26 corporation law are amended to read as follows:
27 (a) One or more domestic or foreign corporations which is, or would be
28 if formed under this chapter, BENEFICENT CORPORATION, OR ANY CORPORATION
29 FORMED AS a type A or type C corporation [under section 201 (Purposes)]
30 PRIOR TO JANUARY FIRST, TWO THOUSAND FOURTEEN, may be merged or consol-
31 idated into a domestic or foreign corporation which is, or would be if
32 formed under the laws of this state, a corporation formed under the
33 business corporation law of this state if such merger or consolidation
34 is not contrary to the law of the state of incorporation of any constit-
35 uent corporation. With respect to such merger or consolidation, any
36 reference in paragraph (b) of section 901 (POWER OF MERGER OR CONSOL-
37 IDATION) of this article or paragraph (b) of section 901 (POWER OF MERG-
38 ER OR CONSOLIDATION) of the business corporation law to a corporation
39 shall, unless the context otherwise requires, include both domestic and
40 foreign corporations.
41 (f) Where any constituent corporation is, or would be if formed under
42 this chapter, a [Type C] CHARITABLE corporation [under section 201
43 (Purposes)], no certificate shall be filed pursuant to this section
44 until an order approving the plan of merger or consolidation and author-
45 izing the filing of the certificate has been made by the supreme court,
46 as provided in section 907 (Approval by the supreme court).
47 S 63. Section 909 of the not-for-profit corporation law, as amended by
48 section 6 of part D of chapter 58 of the laws of 2006, is amended to
49 read as follows:
50 S 909. Consent to filing AND NOTICES.
51 If the purposes of any constituent or consolidated corporation would
52 require the approval or consent of any governmental body or officer or
53 any other person or body under section 404 ([Approvals] NOTICES and
54 consents) no certificate of merger or consolidation shall be filed
55 pursuant to this article unless such approval or consent is endorsed
56 thereon or annexed thereto. A corporation whose statement of purposes
S. 3755--A 36
1 specifically includes the establishment or operation of a child day care
2 center, as that term is defined in section three hundred ninety of the
3 social services law, shall [provide] SEND BY CERTIFIED MAIL, RETURN
4 RECEIPT REQUESTED, a certified copy of any certificate of merger or
5 consolidation involving such corporation to the office of children and
6 family services within thirty days after the filing of such merger or
7 consolidation with the department of state. IF THE PURPOSES OF ANY
8 CONSTITUENT OR CONSOLIDATED CORPORATION WOULD REQUIRE NOTICE TO ANY
9 GOVERNMENTAL BODY OR OFFICER OR ANY OTHER PERSON OR ENTITY UNDER SECTION
10 404 (NOTICES AND CONSENTS), A CERTIFIED COPY OF THE CERTIFICATE OF MERG-
11 ER OR CONSOLIDATION SHALL BE SENT, CERTIFIED MAIL, RETURN RECEIPT
12 REQUESTED, TO THE GOVERNMENTAL BODY OR OFFICER OR ANY OTHER PERSON OR
13 ENTITY IMMEDIATELY AFTER THE FILING OF SUCH MERGER OR CONSOLIDATION BY
14 THE DEPARTMENT OF STATE.
15 S 64. Paragraphs (b), (c) and (d) of section 1001 of the not-for-pro-
16 fit corporation law, as amended by chapter 434 of the laws of 2006, are
17 amended to read as follows:
18 (b) If the corporation is a [Type B, C or D corporation and] has no
19 assets to distribute and no liabilities at the time of dissolution, the
20 plan of dissolution shall include a statement to that effect.
21 (c) If the corporation [is a Type B, C or D corporation and] has no
22 assets to distribute, other than a reserve not to exceed twenty-five
23 thousand dollars for the purpose of paying ordinary and necessary
24 expenses of winding up its affairs including attorney and accountant
25 fees, and liabilities not in excess of ten thousand dollars at the time
26 of adoption of the plan of dissolution, the plan of dissolution shall
27 include a statement to that effect.
28 (d) If the corporation has assets to distribute or liabilities, the
29 plan of dissolution shall contain:
30 (1) a description with reasonable certainty of the assets of the
31 corporation and their fair value, and the total amount of debts and
32 other liabilities incurred or estimated by the corporation, including
33 the total amount of any accounting and legal fees incurred or estimated,
34 in connection with the dissolution procedure.
35 (2) a statement as to whether any gifts or other assets are legally
36 required to be used for a particular purpose.
37 (3) if there are assets received and held by the corporation either
38 for a CHARITABLE CORPORATION OR BENEFICENT CORPORATION purpose [speci-
39 fied as Type B in paragraph (b) of section 201 (Purposes)] or which are
40 legally required to be used for a particular purpose, a statement that
41 the assets owned by the corporation, subject to any unpaid liabilities
42 of the corporation, shall be distributed as required by any gift instru-
43 ment or to a charitable CORPORATION OR organization or organizations OR
44 A BENEFICENT CORPORATION exempt from taxation pursuant to federal and
45 state laws and engaged in activities substantially similar to those of
46 the dissolved corporation. Each such recipient organization shall be
47 identified and the governing instrument and amendments thereto of each
48 of the proposed recipient organizations shall be annexed to such state-
49 ment, along with the financial reports of each recipient organization
50 for the last three years and a sworn affidavit from a director and offi-
51 cer of each recipient organization stating the purposes of the organiza-
52 tion, and that it is currently exempt from federal income taxation.
53 (4) if any of the assets of the corporation are to be distributed to a
54 recipient for a particular legally required purpose, an agreement by the
55 recipient to apply the assets received only for such purpose shall be
56 included.
S. 3755--A 37
1 S 65. Paragraphs (a), (c) and (d) of section 1002 of the not-for-pro-
2 fit corporation law, as amended by chapter 434 of the laws of 2006, are
3 amended to read as follows:
4 (a) Upon adopting a plan of dissolution and distribution of assets,
5 the board shall submit it to a vote of the members, if any, and such
6 plan shall be approved at a meeting of members by two-thirds vote as
7 provided in paragraph (c) of section 613 (Vote of members) OF THIS CHAP-
8 TER; provided, however, that if the corporation is a [Type B, C or D]
9 corporation, other than a corporation incorporated pursuant to article
10 15 (Public cemetery corporations), and has no assets to distribute, OR
11 NO ASSETS TO DISTRIBUTE other than a reserve not to exceed twenty-five
12 thousand dollars for the purpose of paying ordinary and necessary
13 expenses of winding up its affairs including attorney and accountant
14 fees, and liabilities not in excess of ten thousand dollars at the time
15 of adoption of the plan of dissolution, the vote required by the corpo-
16 ration's board of directors for adoption of the plan of dissolution of
17 such a corporation or by the corporation's members for the authorization
18 thereof shall be:
19 (1) In the case of a vote by the board of directors: (i) the number of
20 directors required under the certificate of incorporation, by-laws, this
21 chapter and any other applicable law; or
22 (ii) if the number of directors actually holding office as such at the
23 time of the vote to adopt the plan is less than the number required to
24 constitute a quorum of directors under the certificate of incorporation,
25 the by-laws, this chapter or any other applicable law, the remaining
26 directors unanimously;
27 (2) In the case of a vote by the members, (i) the number of members
28 required under the certificate of incorporation, by-laws, this chapter
29 and any other applicable law; or (ii) by the vote of members authorized
30 by an order of the supreme court pursuant to section 608 (QUORUM AT
31 MEETING OF MEMBERS) of this chapter permitting the corporation to
32 dispense with the applicable quorum requirement.
33 Notice of a special or regular meeting of the board of directors or of
34 the members entitled to vote on adoption and authorization or approval
35 of the plan of dissolution shall be sent to all the directors and
36 members of record entitled to vote. Unless otherwise directed by order
37 of the supreme court pursuant to section 608 (QUORUM AT MEETING OF
38 MEMBERS) of this chapter, the notice shall be sent by certified mail,
39 return receipt requested, to the last known address of record of each
40 director and member not fewer than thirty, and not more than sixty days
41 before the date of each meeting provided, however, that if the last
42 known address of record of any director or member is not within the
43 United States, the notice to such director shall be sent by any other
44 reasonable means.
45 (c) [Whenever] EXCEPT IN THE CASE OF A CORPORATION WITH NO ASSETS TO
46 DISTRIBUTE OR WITH NO ASSETS NOT TO EXCEED TWENTY-FIVE THOUSAND DOLLARS
47 AND LIABILITIES NOT IN EXCESS OF TEN THOUSAND DOLLARS, WHENEVER a stat-
48 ute creating, or authorizing the formation of, a corporation requires
49 approval by a governmental body or officer for the formation of such
50 corporation, dissolution shall not be authorized without the approval of
51 such body or officer.
52 (d) (1) The plan of dissolution and distribution of assets shall have
53 annexed thereto the approval of THE ATTORNEY GENERAL OR a justice of the
54 supreme court in the judicial district in which the office of the corpo-
55 ration is located in the case of a Type B, C or D corporation, and in
56 the case of any other corporation which holds assets at the time of
S. 3755--A 38
1 dissolution legally required to be used for a particular purpose, except
2 that no such approval shall be required with respect to the plan of
3 dissolution of a corporation, other than a corporation incorporated
4 pursuant to article 15 (Public cemetery corporations), which has no
5 assets to distribute at the time of dissolution, OR NO ASSETS TO
6 DISTRIBUTE other than a reserve not to exceed twenty-five thousand
7 dollars for the purpose of paying ordinary and necessary expenses of
8 winding up its affairs including attorney and accountant fees, and
9 liabilities not in excess of ten thousand dollars, and which has
10 complied with the requirements of section 1001 (Plan of dissolution and
11 distribution of assets) and this section applicable to such a corpo-
12 ration.
13 (2) APPLICATION TO THE ATTORNEY GENERAL FOR SUCH APPROVAL SHALL BE BY
14 VERIFIED PETITION, WITH THE PLAN OF DISSOLUTION AND DISTRIBUTION OF
15 ASSETS AND CERTIFIED COPIES OF THE CONSENTS PRESCRIBED BY THIS SECTION
16 ANNEXED THERETO. THE ATTORNEY GENERAL MAY APPROVE THE PETITION IF THE
17 CORPORATION HAS ADOPTED A PLAN IN ACCORDANCE WITH THE REQUIREMENTS OF
18 SECTION 1001 (PLAN OF DISSOLUTION AND DISTRIBUTION OF ASSETS) OF THIS
19 ARTICLE, AND ANY OTHER REQUIREMENTS IMPOSED BY LAW OR RULE. IF THE
20 ATTORNEY GENERAL DOES NOT APPROVE THE PETITION, OR IF THE ATTORNEY
21 GENERAL CONCLUDES THAT COURT REVIEW IS APPROPRIATE, THE PETITIONER MAY
22 SEEK COURT APPROVAL UPON TEN DAYS WRITTEN NOTICE TO THE ATTORNEY GENER-
23 AL.
24 (3) Application to the supreme court for an order for such approval
25 shall be by verified petition, with the plan of dissolution and distrib-
26 ution of assets and certified copies of the consents prescribed by this
27 section annexed thereto, and upon ten days written notice to the attor-
28 ney general accompanied by copies of such petition, plan and consents.
29 (4) In such case where approval of a justice of the supreme court OR
30 THE ATTORNEY GENERAL is not required [for a Type B, C or D corporation],
31 a copy of such plan certified under penalties of perjury shall be filed
32 with the attorney general within ten days after its authorization.
33 S 66. Paragraphs (a) and (c) of section 1002-a of the not-for-profit
34 corporation law as amended by chapter 434 of the laws of 2006, is
35 amended to read as follows:
36 (a) Carry out the plan of dissolution and distribution of assets, pay
37 its liabilities and distribute its assets in accordance therewith within
38 two hundred seventy days from the date the plan of dissolution and
39 distribution of assets shall have been (1) authorized as provided in
40 section 1002 of this article (Authorization of plan), (2) approved by
41 any governmental body or officer whose approval is required pursuant to
42 paragraph (c) of section 1002 of this article, and (3) approved by
43 EITHER THE ATTORNEY GENERAL OR a justice of the supreme court, if such
44 approval is required pursuant to paragraph (d) of section 1002 of this
45 article, or filed with the attorney general, if such filing is required
46 pursuant to paragraph (d) of section 1002 of this article. Evidence of
47 the disposition of its assets and payment of its liabilities pursuant to
48 the plan of dissolution and distribution of assets shall be submitted by
49 the corporation to the attorney general and any other governmental body
50 or officer, as required under applicable laws. If the plan of dissol-
51 ution and distribution of assets cannot be carried out within the
52 prescribed time, the attorney general may upon good cause shown extend
53 such time, or any extended period of time, by not fewer than thirty days
54 nor more than one year;
S. 3755--A 39
1 (c) Distribute the assets of the corporation that remain after paying
2 or adequately providing for the payment of its liabilities, in the
3 following manner:
4 (1) assets received and held by the corporation [either for a purpose
5 specified as Type B in paragraph (b) of section 201 (Purposes)] or which
6 are legally required to be used for a particular purpose, shall be
7 distributed to one or more [domestic or foreign] CHARITABLE
8 corporations, BENEFICENT CORPORATIONS or other organizations engaged in
9 activities substantially similar to those of the dissolved corporation
10 pursuant to the plan of dissolution and distribution or, if applicable,
11 as ordered by the court to which such plan is submitted for approval
12 under section 1002 (Authorization of plan). Any disposition of assets
13 contained in a will or other instrument, in trust or otherwise, made
14 before or after the dissolution, to or for the benefit of any corpo-
15 ration so dissolved shall inure to or for the benefit of the corporation
16 or organization acquiring such assets of the dissolved corporation as
17 provided in this section, and so far as is necessary for that purpose
18 the corporation or organization acquiring such disposition shall be
19 deemed a successor to the dissolved corporation with respect to such
20 assets; provided, however, that such disposition shall be devoted by the
21 acquiring corporation or organization to the purposes intended by the
22 testator, donor or grantor.
23 (2) assets other than those described by subparagraph one of this
24 paragraph, if any, shall be distributed in accordance with the specifi-
25 cations of the plan of dissolution and distribution of assets or, to the
26 extent that the certificate of incorporation prescribes the distributive
27 rights of members, or of any class or classes of members, as provided in
28 such certificate;
29 S 67. Paragraphs (a) and (b) of section 1003 of the not-for-profit
30 corporation law, as amended by chapter 434 of the laws of 2006, are
31 amended to read as follows:
32 (a) After the plan of dissolution and distribution of assets has been
33 adopted, authorized, approved and carried out pursuant to the terms of
34 the plan within the time period set forth pursuant to section 1002-a
35 (Carrying out the plan of dissolution and distribution of assets), a
36 certificate of dissolution, entitled "Certificate of dissolution
37 of ........ (name of corporation) under section 1003 of the Not-for-Pro-
38 fit Corporation Law" shall be signed and, if required pursuant to
39 subparagraph two of paragraph (b) of this section, after the attorney
40 general has affixed thereon his or her consent to the dissolution, such
41 certificate of dissolution shall be delivered to the department of
42 state. It shall set forth:
43 (1) The name of the corporation and, if its name has been changed, the
44 name under which it was formed.
45 (2) The date its certificate of incorporation was filed by the depart-
46 ment of state.
47 (3) The name and address of each of its officers and directors.
48 (4) The type of corporation it is at the time of dissolution.
49 (5) A statement as to whether or not the corporation holds assets at
50 the time of authorization of its plan of dissolution and distribution of
51 assets as provided in section 1002 of this article (Authorization of
52 plan) which are legally required to be used for a particular purpose.
53 (6) That the corporation elects to dissolve.
54 (7) The manner in which the dissolution was authorized. If the dissol-
55 ution of the corporation is authorized by a vote of the directors and/or
56 members of the corporation that is less than that ordinarily required by
S. 3755--A 40
1 the certificate of incorporation, the by-laws, this chapter or any other
2 applicable law, as permitted by paragraph (a) of section 1002 (Authori-
3 zation of plan), then the certificate of dissolution shall so state.
4 (8) A statement that prior to delivery of such certificate of dissol-
5 ution to the department of state for filing, the plan of dissolution and
6 distribution of assets has been approved by EITHER THE ATTORNEY GENERAL
7 OR a justice of the supreme court, if such approval is required. A copy
8 of the order shall be attached to the certificate of dissolution. In the
9 case of a corporation, other than a corporation incorporated pursuant to
10 article 15 (Public cemetery corporations), having no assets to distrib-
11 ute, OR HAVING NO ASSETS TO DISTRIBUTE other than a reserve not to
12 exceed twenty-five thousand dollars for the purpose of paying ordinary
13 and necessary expenses of winding up its affairs including attorney and
14 accountant fees, and liabilities not in excess of ten thousand dollars
15 at the time of dissolution, a statement that a copy of the plan of
16 dissolution which contains the statement prescribed by paragraph (b) of
17 section 1001 (Plan of dissolution and distribution of assets) has been
18 duly filed with the attorney general, if required.
19 (b) Such certificate of dissolution shall have indorsed thereon or
20 annexed thereto the approval of the dissolution:
21 (1) By a governmental body or officer, if such approval is required. A
22 corporation whose statement of purposes specifically includes the estab-
23 lishment or operation of a child day care center, as that term is
24 defined in section three hundred ninety of the social services law,
25 shall provide a certified copy of any certificate of dissolution involv-
26 ing such corporation to the office of children and family services with-
27 in thirty days after the filing of such dissolution with the department
28 of state.
29 (2) By the attorney general in the case of a [Type B, C or D] CHARITA-
30 BLE corporation, or any other corporation that holds assets at the time
31 of dissolution legally required to be used for a particular purpose.
32 S 68. Paragraph (a) of section 1007 of the not-for-profit corporation
33 law, as amended by chapter 434 of the laws of 2006, is amended to read
34 as follows:
35 (a) At any time after the plan of dissolution and distribution of
36 assets shall have been (1) authorized as provided in section 1002 of
37 this article (Authorization of plan), (2) approved by any governmental
38 body or officer whose approval is required pursuant to paragraph (c) of
39 section 1002 of this article, and (3) approved by EITHER BY THE ATTORNEY
40 GENERAL OR a justice of the supreme court, if such approval is required
41 pursuant to paragraph (d) of section 1002 of this article, or filed with
42 the attorney general, if such filing is required pursuant to paragraph
43 (d) of section 1002 of this article, and prior to filing the certificate
44 of dissolution, the corporation may give a notice requiring all credi-
45 tors and claimants, including any with unliquidated or contingent claims
46 and any with whom the corporation has unfulfilled contracts, to present
47 their claims in writing and in detail at a specified place and by a
48 specified day, which shall not be less than six months after the first
49 publication of such notice. Such notice shall be published at least once
50 a week for two successive weeks in a newspaper of general circulation in
51 the county in which the office of the corporation was located at the
52 date of authorization of its plan of dissolution and distribution of
53 assets as provided in section 1002 of this article (Authorization of
54 plan). On or before the date of the first publication OR POSTING ON A
55 WEBSITE of such notice, the corporation shall mail a copy thereof, post-
56 age prepaid, to each person believed to be a creditor of or claimant
S. 3755--A 41
1 against the corporation whose current name and address are known to or
2 can with due diligence be ascertained by the corporation. The giving of
3 such notice shall not constitute a recognition that any person is a
4 proper creditor or claimant, and shall not revive or make valid, or
5 operate as a recognition of the validity of, or a waiver of any defense
6 or counterclaim in respect of any claim against the corporation, its
7 assets, directors, officers or members, which has been barred by any
8 statute of limitations or become invalid by any cause, or in respect of
9 which the corporation, its directors, officers or members, has any
10 defense or counterclaim.
11 S 69. Subparagraph 15 of paragraph (a) of section 1008 of the not-for-
12 profit corporation law, as amended by chapter 434 of the laws of 2006,
13 is amended to read as follows:
14 (15) Where assets were received and held by the corporation either for
15 a CHARITABLE CORPORATION OR A BENEFICENT CORPORATION purpose [specified
16 as Type B in paragraph (b) of section 201 (Purposes),] or were legally
17 required to be used for a particular purpose, the distribution of such
18 assets to one or more [domestic or foreign] CHARITABLE corporations,
19 BENEFICENT CORPORATIONS or other organizations engaged in activities
20 substantially similar to those of the dissolved corporation, on notice
21 to the attorney general and to such other persons, and in such manner,
22 as the court may deem proper.
23 S 70. Paragraph (a) of section 1010 of the not-for-profit corporation
24 law is amended to read as follows:
25 [(a)] At any time prior to the filing of a certificate of dissolution
26 by the department of state, a corporation may revoke the action taken to
27 dissolve the corporation in the following manner:
28 (1) If there are members entitled to vote thereon:
29 (A) Unless the certificate of incorporation dispenses with dissol-
30 ution action by the board, the board shall adopt a resolution recommend-
31 ing that the voluntary dissolution proceedings be revoked and directing
32 submission of the proposed revocation to a vote of the members entitled
33 to vote thereon.
34 (B) Revocation of the voluntary dissolution proceedings shall be
35 authorized by two-thirds vote as provided in paragraph (c) of section
36 613 (Vote of members).
37 (2) If there are no members entitled to vote thereon, revocation of
38 the voluntary dissolution proceedings shall be authorized by the vote of
39 a majority of the directors then in office.
40 (3) If approval of the dissolution of a corporation by a governmental
41 body or officer is required, as provided in paragraph (c) of section
42 1002 (Authorization of plan), and such approval has been given, revoca-
43 tion of the voluntary dissolution proceedings shall not be authorized
44 without approval thereof by such body or officer.
45 S 71. Subparagraph 6 of paragraph (a) of section 1012 of the not-for
46 profit corporation law, as amended by chapter 726 of the laws of 2005,
47 is amended to read as follows:
48 (6) That[, under section 201 (Purposes),] it is a [Type .............
49 (Insert A, B, C or D)] CHARITABLE OR BENEFICENT not-for-profit corpo-
50 ration.
51 S 72. Subparagraph 1 of paragraph (a) of section 1207 of the not-for-
52 profit corporation law, clause (C) as amended by chapter 847 of the laws
53 of 1970, is amended to read as follows:
54 (1) To give immediate notice of his appointment by publication once a
55 week for two successive weeks in two newspapers of general circulation
56 in the county where the office of the corporation is located or, in the
S. 3755--A 42
1 case of a foreign corporation against which an action has been brought
2 under subparagraph [(a)] (4) OF PARAGRAPH (A) of section 1202 (Appoint-
3 ment of receiver of property of a domestic or foreign corporation) OF
4 THIS ARTICLE EITHER, AS DIRECTED BY THE COURT, in a newspaper of general
5 circulation [as directed by the court,] OR POSTED PROMINENTLY AND
6 CONTINUOUSLY FOR TWO SUCCESSIVE WEEKS ON THE HOMEPAGE OF ANY WEBSITE
7 MAINTAINED BY THE CORPORATION OR requiring:
8 (A) All persons indebted to the corporation to render an account of
9 all debts owing by them to the corporation and to pay the same to the
10 receiver at a specified place and by a specified day.
11 (B) All persons having in their possession any property of the corpo-
12 ration to deliver the same to the receiver at the specified place and by
13 the specified day.
14 (C) All creditors and claimants, including any with unliquidated or
15 contingent claims and any with whom the corporation has unfulfilled
16 contracts, to present their claims to the receiver in writing and in
17 detail at a specified place and by a specified day, which shall not be
18 less than six months after the first publication of such notice. When-
19 ever a receiver is appointed in dissolution proceedings under article 10
20 (Non-judicial dissolution) or article 11 (Judicial dissolution), section
21 1007 (Notice to creditors BY CORPORATIONS INTENDING TO DISSOLVE; filing
22 or barring claims) shall apply and shall control the giving of notice to
23 creditors and claimants and the filing and barring of claims.
24 S 73. Paragraph (a) of section 1211 of the not-for-profit corporation
25 law is amended to read as follows:
26 (a) If there remains property of the corporation after the first
27 distribution, the receiver shall, within one year thereafter, make a
28 final distribution among the creditors entitled thereto. Notice that
29 such distribution will be the final distribution to creditors shall be
30 published once a week for two consecutive weeks in a newspaper of gener-
31 al circulation in the county where the office of the corporation is
32 located OR POSTED PROMINENTLY AND CONTINUOUSLY FOR TWO CONSECUTIVE WEEKS
33 ON THE HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE CORPORATION.
34 S 74. Paragraph (b) of section 1215 of the not-for-profit corporation
35 law is amended to read as follows:
36 (b) The petition shall be accompanied by a verified account of all
37 the assets of the corporation received by him, of all payments or other
38 disposition thereof made by him, of the remaining assets of the corpo-
39 ration in respect to which he was appointed receiver and the situation
40 of the same, and of all his transactions as receiver. Thereupon, the
41 court shall grant an order directing notice to be given to the sureties
42 on his official bond and to all persons interested in the property of
43 the corporation to show cause, at a time and place specified, why the
44 receiver should not be permitted to resign. Such notice shall EITHER,
45 AS DIRECTED BY THE COURT, be published once in each week for six succes-
46 sive weeks in one or more newspapers [as the court shall direct] OR
47 POSTED PROMINENTLY AND CONTINUOUSLY FOR SIX SUCCESSIVE WEEKS ON THE
48 HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE CORPORATION. If it shall
49 appear that the proceedings of the receiver in the discharge of his
50 trust have been fair and honest and that there is no good cause to the
51 contrary, the court shall make an order permitting such receiver to
52 resign. Thereupon he shall be discharged and his powers as receiver
53 shall cease, but he shall remain subject to any liability incurred prior
54 to the making of such order. The court, in its discretion, may require
55 the expense of such proceeding to be paid by the receiver presenting the
56 petition.
S. 3755--A 43
1 S 75. Subparagraph 3 of paragraph (a) of section 1218 of the not-for-
2 profit corporation law is amended to read as follows:
3 (3) The order directing service of the summons shall require the
4 publication thereof EITHER in a newspaper published in the state of New
5 York in the English language at least once a week for four successive
6 weeks, OR POSTED PROMINENTLY AND CONTINUOUSLY FOR FOUR SUCCESSIVE WEEKS
7 ON ANY APPROPRIATE WEBSITE, and shall also require the mailing on or
8 before the date of the first publication of a copy of the summons,
9 complaint and order to the corporation at its last known principal or
10 head office in the state or country of its incorporation.
11 S 76. Section 1302 of the not-for-profit corporation law, as amended
12 by chapter 847 of the laws of 1970, is amended to read as follows:
13 S 1302. Application to existing authorized foreign corporations.
14 Every foreign corporation which on the effective date of this chapter
15 is authorized to conduct activities in this state under a certificate of
16 authority heretofore issued to it by the secretary of state shall
17 continue to have such authority. Such foreign corporation, its members,
18 directors, and officers shall have the same rights, franchises, and
19 privileges and shall be subject to the same limitations, restrictions,
20 liabilities, and penalties as a foreign corporation authorized under
21 this chapter, its members, directors, and officers respectively. A
22 foreign corporation may by amendment to its certificate of authority set
23 forth [the type of] WHETHER IT IS A CHARITABLE corporation [it is under
24 section 201 (Purposes);] OR A BENEFICENT CORPORATION and in the absence
25 of such amendment an authorized foreign corporation shall be a [Type B]
26 CHARITABLE corporation. Reference in this chapter to an application for
27 authority shall, unless the context otherwise requires, include the
28 statement and designation and any amendment thereof required to be filed
29 by the secretary of state under prior statutes to obtain a certificate
30 of authority.
31 S 77. Subparagraph 4 of paragraph (a) of section 1304 of the not-for-
32 profit corporation law, as amended by chapter 847 of the laws of 1970
33 and as renumbered by chapter 590 of the laws of 1982, is amended to read
34 as follows:
35 (4) That the corporation is a foreign corporation as defined in
36 subparagraph [(a)] (7) OF PARAGRAPH (A) of section 102 (Definitions)[;
37 the type of] OF THIS CHAPTER, WHETHER IT WOULD BE A CHARITABLE corpo-
38 ration [it shall be under section 201 (Purposes); a statement] OR A
39 BENEFICENT CORPORATION IF FORMED IN THIS STATE; A STATEMENT of its
40 purposes to be pursued in this state and of the activities which it
41 proposes to conduct in this state; AND a statement that it is authorized
42 to conduct those activities in the jurisdiction of its incorporation[;
43 and in the case of a Type C corporation, the lawful public or quasi-
44 public objective which each business purpose will achieve].
45 S 78. Paragraph (c) of section 1304 of the not-for-profit corporation
46 law is amended to read as follows:
47 (c) If the application for authority sets forth any purpose or activ-
48 ity for which a domestic corporation could be formed only with the
49 consent or approval of any governmental body or officer, or other person
50 or body under section 404 ([Approvals] NOTICES and consents), such
51 consent or approval shall be endorsed thereon or annexed thereto. IF THE
52 APPLICATION FOR AUTHORITY SETS FORTH ANY PURPOSE OR ACTIVITY REQUIRING A
53 DOMESTIC CORPORATION TO PROVIDE NOTICE OF THE FILING OF A CERTIFICATE OF
54 INCORPORATION TO ANY GOVERNMENT BODY OR OFFICER OR OTHER ENTITY UNDER
55 SECTION 404 (NOTICES AND CONSENTS) OF THIS CHAPTER, THEN THE CORPORATION
56 SHALL SEND BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED COPY
S. 3755--A 44
1 OF THE CERTIFICATE OF AUTHORITY TO SUCH PERSON OR ENTITY IMMEDIATELY
2 AFTER FILING THE CERTIFICATE OF AUTHORITY BY THE DEPARTMENT OF STATE.
3 S 79. Subparagraph 1 of paragraph (a) of section 1309 of the not-for-
4 profit corporation law, as amended by chapter 186 of the laws of 1983,
5 is amended to read as follows:
6 (1) The name of the foreign corporation as it appears on the index of
7 names of existing domestic and authorized foreign corporations of any
8 [type or] kind in the department of state and the fictitious name the
9 corporation has agreed to use in this state pursuant to paragraph (d) of
10 section 1301 of this chapter.
11 S 80. Subparagraph 1 of paragraph (b) of section 1310 of the not-for-
12 profit corporation law, as amended by chapter 186 of the laws of 1983,
13 is amended to read as follows:
14 (1) The name of the foreign corporation as it appears on the index of
15 names of existing domestic and authorized foreign corporations of any
16 [type or] kind in the department of state and the fictitious name the
17 corporation has agreed to use in this state pursuant to paragraph (d) of
18 section 1301 of this chapter.
19 S 81. Subparagraph 1 of paragraph (a) of section 1311 of the not-for-
20 profit corporation law, as amended by chapter 186 of the laws of 1983,
21 is amended to read as follows:
22 (1) The name of the foreign corporation as it appears on the index of
23 names of existing domestic and authorized foreign corporations of any
24 [type or] kind in the department of state and the fictitious name the
25 corporation has agreed to use in this state pursuant to paragraph (d) of
26 section 1301 of this chapter.
27 S 82. Paragraphs (a) and (b) of section 1315 of the not-for-profit
28 corporation law, subparagraph 5 of paragraph (b) as amended by chapter
29 847 of the laws of 1970, are amended to read as follows:
30 (a) An action or special proceeding against a foreign corporation may
31 be maintained by a resident of this state or by a domestic corporation
32 of any [type or] kind for any cause of action.
33 (b) Except as otherwise provided in this article, an action or special
34 proceeding against a foreign corporation may be maintained by another
35 foreign corporation of any [type or] kind or by a nonresident in the
36 following cases only:
37 (1) Where the action is brought to recover damages for the breach of a
38 contract made or to be performed within this state, or relating to prop-
39 erty situated within this state at the time of the making of the
40 contract.
41 (2) Where the subject matter of the litigation is situated within this
42 state.
43 (3) Where the cause of action arose within this state, except where
44 the object of the action or special proceeding is to affect the title of
45 real property situated outside this state.
46 (4) Where, in any case not included in the preceding subparagraphs, a
47 non-domiciliary would be subject to the personal jurisdiction of the
48 courts of this state under section [302] THREE HUNDRED TWO of the civil
49 practice law and rules.
50 (5) Where the defendant is a foreign corporation conducting activities
51 or authorized to conduct activities in this state.
52 S 83. Paragraph (b) of section 1316 of the not-for-profit corporation
53 law is amended to read as follows:
54 (b) An examination authorized by paragraph (a) may be denied to such
55 member or other person upon his refusal to furnish to the foreign corpo-
56 ration or its transfer agent or registrar an affidavit that such
S. 3755--A 45
1 inspection is not desired for a purpose which is in the interests of a
2 business or object other than the activities of the foreign corporation
3 and that such member or other person has not within five years sold or
4 offered for sale any list or record of members of any corporation of any
5 [type or] kind, whether or not formed under the laws of this state, or
6 aided or abetted any person in procuring any such list or record of
7 members for any such purpose.
8 S 84. Paragraph (a) of section 1321 of the not-for-profit corporation
9 law, subparagraphs 1, 2 and 3 as amended by chapter 847 of the laws of
10 1970, is amended to read as follows:
11 (a) Notwithstanding any other provision of this chapter, a foreign
12 corporation conducting activities in this state which is authorized
13 under this article, its directors, officers and members, shall be exempt
14 from the provisions of paragraph (e) of section 1317 (Voting trust
15 records), subparagraph [(a)] (1) OF PARAGRAPH (A) of section 1318
16 (Liabilities of directors and officers of foreign corporations), and
17 subparagraph [(a)] (2) OF PARAGRAPH (A) of section 1320 (Applicability
18 of other provisions) if when such provision would otherwise apply:
19 (1) The corporation is a [Type A] BENEFICENT corporation under this
20 chapter; its principal activities are conducted outside this state; the
21 greater part of its property is located outside this state; and less
22 than one third of its members are residents of this state; or
23 (2) The corporation is a [Type B] CHARITABLE corporation under this
24 chapter; its principal activities are conducted outside this state; the
25 greater part of its property is located outside this state; and less
26 than ten per cent of its annual revenues is derived from solicitation of
27 funds within this state[; or
28 (3) The corporation is a Type C corporation under this chapter; its
29 principal activities are conducted outside this state; the greater part
30 of its property is located outside this state; and less than one half of
31 its revenues for the preceding three fiscal years, or such portion ther-
32 eof as the foreign corporation was in existence, was derived from sourc-
33 es within this state].
34 S 85. Paragraph (d) of section 1401 of the not-for-profit corporation
35 law, as added by chapter 871 of the laws of 1977, is amended to read as
36 follows:
37 (d) Type of corporation. A family or private cemetery corporation is a
38 [type B] CHARITABLE corporation under this chapter.
39 S 86. Paragraph (b) of section 1402 of the not-for-profit corporation
40 law is amended to read as follows:
41 (b) Type of corporation.
42 A fire corporation is a [Type B] CHARITABLE corporation under this
43 chapter.
44 S 87. Paragraph (c) of section 1403 of the not-for-profit corporation
45 law is amended to read as follows:
46 (c) Type of corporation. A corporation for the prevention of cruelty
47 is a [Type B] CHARITABLE corporation under this chapter.
48 S 88. Paragraph (b) of section 1404 of the not-for-profit corporation
49 law, as amended by chapter 1058 of the laws of 1971, is amended to read
50 as follows:
51 (b) Type of corporation.
52 A christian association is a [Type B] CHARITABLE corporation under
53 this chapter.
54 S 89. Paragraph (b) of section 1405 of the not-for-profit corporation
55 law is amended to read as follows:
56 (b) Type of corporation.
S. 3755--A 46
1 A soldiers' monument corporation is a [Type B] CHARITABLE corporation.
2 S 90. Paragraph (b) of section 1406 of the not-for-profit corporation
3 law is amended to read as follows:
4 (b) Type of corporation.
5 A medical society is a [Type A] BENEFICENT corporation under this
6 chapter.
7 S 91. Paragraph (b) of section 1407 of the not-for-profit corporation
8 law is amended to read as follows:
9 (b) Type of corporation.
10 An alumni corporation is a [Type A] BENEFICENT corporation.
11 S 92. Paragraph (b) of section 1408 of the not-for-profit corporation
12 law is amended to read as follows:
13 (b) Type of corporation.
14 An historical society is a [Type B] CHARITABLE corporation under this
15 chapter.
16 S 93. Paragraph (b) of section 1409 of the not-for-profit corporation
17 law, as amended by chapter 1058 of the laws of 1971, is amended to read
18 as follows:
19 (b) Type of corporation.
20 An agricultural or horticultural corporation is a [Type A] BENEFICENT
21 corporation under this chapter, except that any such corporation which
22 has received moneys from the state or has acted as agent for the state
23 under paragraph (c) OF THIS SECTION, or has acquired or does acquire
24 real property by condemnation is or becomes a [Type B] CHARITABLE corpo-
25 ration under this chapter. [If such corporation has not already filed as
26 a Type B corporation it shall, upon such receipt of moneys or acting as
27 such agent or such acquisition of real property by condemnation, amend
28 its certificate to that effect.]
29 S 94. Paragraph (b) of section 1410 of the not-for-profit corporation
30 law is amended to read as follows:
31 (b) Type of corporation.
32 A board of trade or a chamber of commerce is a [Type A] BENEFICENT
33 corporation under this chapter.
34 S 95. Paragraph (b) of section 1411 of the not-for-profit corporation
35 law is amended to read as follows:
36 (b) Type of corporation. A local development corporation is a [Type
37 C] CHARITABLE corporation under this chapter.
38 S 96. Paragraph (d) of section 1412 of the not-for-profit corporation
39 law, as added by chapter 555 of the laws of 1993, is amended to read as
40 follows:
41 (d) Type. A university faculty practice corporation is a [Type B]
42 CHARITABLE corporation under this chapter.
43 S 97. Paragraph (c) of section 1505 of the not-for-profit corporation
44 law, as added by chapter 871 of the laws of 1977, is amended to read as
45 follows:
46 (c) Type of corporation. A cemetery corporation is a [Type B] CHARI-
47 TABLE corporation under this chapter.
48 S 98. Paragraph (b) of section 1602 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 (b) "land bank" shall mean a land bank established as a [type C not-
52 for-profit] CHARITABLE corporation under this chapter and in accordance
53 with the provisions of this article and pursuant to this article;
54 S 99. Paragraph (f) of section 1603 of the not-for-profit corporation
55 law, as added by chapter 257 of the laws of 2011, is amended to read as
56 follows:
S. 3755--A 47
1 (f) Each land bank created pursuant to this act shall be a [type C
2 not-for-profit] CHARITABLE corporation, and shall have permanent and
3 perpetual duration until terminated and dissolved in accordance with the
4 provisions of section sixteen hundred thirteen of this article.
5 S 100. The opening paragraph of paragraph (a) of section 1607 of the
6 not-for-profit corporation law, as added by chapter 257 of the laws of
7 2011, is amended to read as follows:
8 A land bank shall constitute a [type C not-for-profit] CHARITABLE
9 corporation under New York law, which powers shall include all powers
10 necessary to carry out and effectuate the purposes and provisions of
11 this article, including the following powers in addition to those herein
12 otherwise granted:
13 S 101. Paragraph (e) of section 1611 of the not-for-profit corporation
14 law, as added by chapter 257 of the laws of 2011, is amended to read as
15 follows:
16 (e) Bonds issued by the land bank shall be issued, sold, and delivered
17 in accordance with the terms and provisions of a resolution adopted by
18 the board. The board may sell such bonds in such manner, either at
19 public or at private sale, and for such price as it may determine to be
20 in the best interests of the land bank. The resolution issuing bonds
21 shall be published in a newspaper of general circulation within the
22 jurisdiction of the land bank AND POSTED PROMINENTLY AND CONTINUOUSLY ON
23 THE HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE LAND BANK.
24 S 102. Section 1613 of the not-for-profit corporation law, as added by
25 chapter 257 of the laws of 2011, is amended to read as follows:
26 S 1613. Dissolution of land bank.
27 A land bank may be dissolved as a [type C not-for-profit] CHARITABLE
28 corporation sixty calendar days after an affirmative resolution approved
29 by two-thirds of the membership of the board of directors. Sixty calen-
30 dar days advance written notice of consideration of a resolution of
31 dissolution shall be given to the foreclosing governmental unit or units
32 that created the land bank, shall be published in a local newspaper of
33 general circulation, and POSTED PROMINENTLY AND CONTINUOUSLY ON THE
34 HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE LAND BANK, AND shall be sent
35 certified mail to the trustee of any outstanding bonds of the land bank.
36 Upon dissolution of the land bank all real property, personal property
37 and other assets of the land bank shall become the assets of the fore-
38 closing governmental unit or units that created the land bank. In the
39 event that two or more foreclosing governmental units create a land bank
40 in accordance with section [sixteen hundred three] 1603 of this article,
41 the withdrawal of one or more foreclosing governmental units shall not
42 result in the dissolution of the land bank unless the intergovernmental
43 agreement so provides, and there is no foreclosing governmental unit
44 that desires to continue the existence of the land bank.
45 S 103. Paragraph (h) of section 8-1.4 of the estates, powers and
46 trusts law, as amended by chapter 43 of the laws of 2002, is amended to
47 read as follows:
48 (h) The attorney general shall make rules and regulations necessary
49 for the administration of this section, including rules and regulations
50 as to the time for filing reports, the contents thereof, and [the] ANY
51 manner of executing and filing them, INCLUDING BUT NOT LIMITED TO ALLOW-
52 ING OR REQUIRING ANY SUBMISSION TO THE ATTORNEY GENERAL TO BE EFFECTED
53 BY ELECTRONIC MEANS AND ELECTRONIC SIGNATURES. He or she may classify
54 trusts, estates, corporations and other trustees as to purpose, nature
55 of assets, duration, amount of assets, amounts to be devoted to charita-
56 ble purposes, or otherwise, and may establish different rules for
S. 3755--A 48
1 different classes as to time and nature of the reports required, to the
2 ends that he or she shall receive current financial reports as to all
3 such trusts, estates, corporations or other trustees which will enable
4 him or her to ascertain whether they are being properly administered.
5 The attorney general may suspend the filing of financial reports as to a
6 particular trustee for a reasonable, specifically designated time upon
7 written application of the trustee, signed under penalties for perjury,
8 and filed with the attorney general and after the attorney general has
9 filed in the register of trustees a written statement that the interests
10 of the beneficiaries will not be prejudiced thereby and that periodic
11 reports during the term of such suspension are not required for proper
12 supervision by his or her office. The filing of the financial reports
13 required by this section, or the exemption from such filing or the
14 suspension therefrom, shall not have the effect of absolving trustees
15 from any responsibility for accounting for property or income held by
16 them for charitable purposes. A copy of an account or other financial
17 report filed by a trustee in any court in this state, if the account or
18 other financial report substantially complies with the rules and regu-
19 lations of the attorney general, may be filed as a financial report
20 under this section.
21 S 104. Paragraph (b-1) of section 8-1.8 of the estates, powers and
22 trusts law is REPEALED.
23 S 105. The estates, powers and trusts law is amended by adding a new
24 section 8-1.9 to read as follows:
25 S 8-1.9 TRUST GOVERNANCE
26 (A) FOR PURPOSES OF THIS SECTION:
27 (1) A "TRUST" MEANS A TRUST CREATED SOLELY FOR CHARITABLE PURPOSES, OR
28 A TRUST THAT CONTINUES SOLELY FOR SUCH PURPOSES AFTER ALL NON-CHARITABLE
29 INTERESTS HAVE TERMINATED.
30 (2) "CHARITABLE PURPOSE" MEANS ANY RELIGIOUS, CHARITABLE EDUCATIONAL
31 OR BENEVOLENT PURPOSE.
32 (3) "KEY EMPLOYEE" MEANS ANY PERSON WHO HAS RESPONSIBILITIES, POWERS
33 OR INFLUENCE OVER THE TRUST SIMILAR TO THOSE OF AN OFFICER OF A
34 NOT-FOR-PROFIT CORPORATION, OR IS OTHERWISE IN A POSITION TO EXERCISE
35 SUBSTANTIAL INFLUENCE OVER THE AFFAIRS OF THE TRUST, AS DEFINED IN
36 SECTION 4958(F)(1)(A) OF THE INTERNAL REVENUE CODE OF 1986 AS AMENDED,
37 AND THE REGULATIONS THEREUNDER, AND ANY SUCCESSOR LAW OR REGULATION.
38 (4) AN "AFFILIATE" OF A TRUST MEANS ANY ENTITY CONTROLLED BY, IN
39 CONTROL OF, OR UNDER COMMON CONTROL WITH SUCH TRUST.
40 (5) "RELATIVE" OF AN INDIVIDUAL MEANS THE (I) SPOUSE, ANCESTOR, CHIL-
41 DREN, GRANDCHILDREN, GREAT GRANDCHILDREN, BROTHER OR SISTER (WHETHER BY
42 THE WHOLE- OR HALF-BLOOD) OF THE INDIVIDUAL; AND (II) THE SPOUSES OF
43 CHILDREN, GRANDCHILDREN, GREAT GRANDCHILDREN, BROTHER, OR SISTER (WHETH-
44 ER BY THE WHOLE- OR HALF-BLOOD) OF THE INDIVIDUAL.
45 (6) "RELATED PARTY" MEANS (I) ANY TRUSTEE OR KEY EMPLOYEE OF THE TRUST
46 OR ANY AFFILIATE OF THE TRUST;
47 (II) ANY RELATIVE OF ANY TRUSTEE OR KEY EMPLOYEE OF THE TRUST OR ANY
48 AFFILIATE OF THE TRUST; OR (III) AN ENTITY IN WHICH ANY INDIVIDUAL
49 DESCRIBED IN CLAUSES (I) AND (II) OF THIS SUBPARAGRAPH HAS A THIRTY-
50 FIVE PERCENT OR GREATER OWNERSHIP OR BENEFICIAL INTEREST.
51 (7) "INDEPENDENT TRUSTEE" MEANS A TRUSTEE WHO IN THE PAST THREE YEARS:
52 (I) WAS NOT EMPLOYED BY, AND DID NOT HAVE A RELATIVE WHO WAS EMPLOYED
53 BY, THE TRUST OR AN AFFILIATE OF THE TRUST; (II) WAS NOT EMPLOYED BY,
54 AND DOES NOT HAVE A RELATIVE WHO WAS EMPLOYED BY, ANY ENTITY THAT MADE
55 PAYMENTS TO, OR RECEIVED PAYMENTS FROM, THE TRUST OR ANY AFFILIATE OF
56 THE TRUST FOR GOODS, PROPERTY OR SERVICES EXCEEDING TEN THOUSAND
S. 3755--A 49
1 DOLLARS; (III) HAS NOT HAD, AND DOES NOT HAVE A RELATIVE WHO HAS HAD, A
2 MATERIAL FINANCIAL INTEREST IN ANY ENTITY THAT MADE PAYMENTS TO, OR
3 RECEIVED PAYMENTS FROM, THE TRUST OR ANY AFFILIATE OF THE TRUST FOR
4 GOODS, PROPERTY OR SERVICES EXCEEDING TEN THOUSAND DOLLARS; AND (IV) HAS
5 NOT RECEIVED, AND DOES NOT HAVE ANY RELATIVE WHO HAS RECEIVED, ANY OTHER
6 COMPENSATION, PAYMENT OR BENEFIT HAVING MONETARY VALUE FROM THE TRUST OR
7 ANY AFFILIATE OF THE TRUST, OTHER THAN REIMBURSEMENT FOR EXPENSES OR THE
8 PAYMENT OF TRUSTEE COMMISSIONS OR OTHER TRUSTEE COMPENSATION AS PERMIT-
9 TED BY LAW AND THE GOVERNING INSTRUMENT.
10 (8) "RELATED PARTY TRANSACTION" MEANS ANY TRANSACTION, AGREEMENT OR
11 ANY OTHER ARRANGEMENT IN WHICH A RELATED PARTY HAS A FINANCIAL INTEREST
12 AND IN WHICH THE TRUST OR ANY AFFILIATE OF THE TRUST IS A PARTICIPANT.
13 (9) "INDEPENDENT AUDITOR" MEANS ANY CERTIFIED PUBLIC ACCOUNTANT
14 PERFORMING THE AUDIT OF THE FINANCIAL STATEMENTS OF A TRUST REQUIRED BY
15 SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B OF THE EXECUTIVE
16 LAW.
17 (B)(1) EVERY TRUST REQUIRED TO FILE AN INDEPENDENT CERTIFIED PUBLIC
18 ACCOUNTANT'S AUDIT REPORT WITH THE ATTORNEY GENERAL PURSUANT TO SUBDIVI-
19 SION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B OF THE EXECUTIVE LAW AND
20 THIS CHAPTER SHALL DESIGNATE AN AUDIT COMMITTEE, CONSISTING OF ONE OR
21 MORE INDEPENDENT TRUSTEES, FOR THE PURPOSE OF OVERSEEING THE ACCOUNTING
22 AND FINANCIAL REPORTING PROCESSES OF THE TRUST AND THE INDEPENDENT
23 CERTIFIED PUBLIC ACCOUNTANT'S AUDIT OF THE TRUST'S FINANCIAL STATEMENTS.
24 AN AUDIT COMMITTEE THAT IS NOT MADE UP OF ALL TRUSTEES SHALL BE OVERSEEN
25 BY AND BE RESPONSIBLE TO THE TRUSTEES. IF A TRUST REQUIRED TO HAVE AN
26 AUDIT COMMITTEE PURSUANT TO THIS PARAGRAPH IS UNDER THE CONTROL OF
27 ANOTHER TRUST OR CORPORATION, THE AUDIT COMMITTEE FUNCTION MAY BE
28 CONDUCTED BY THE TRUSTEES OR THE BOARD OF DIRECTORS OF THE CONTROLLING
29 TRUST OR CORPORATION.
30 (2) THE AUDIT COMMITTEE SHALL, AT A MINIMUM:
31 (I) RETAIN AND EVALUATE THE INDEPENDENT AUDITOR, WHICH SHALL REPORT
32 DIRECTLY TO THE AUDIT COMMITTEE;
33 (II) REVIEW WITH THE INDEPENDENT AUDITOR THE SCOPE AND PLANNING OF THE
34 AUDIT;
35 (III) REVIEW AND DISCUSS WITH THE INDEPENDENT AUDITOR, AT A MINIMUM:
36 (A) THE RESULTS OF ANY AUDIT, INCLUDING BUT NOT LIMITED TO: THE MANAGE-
37 MENT LETTER TO THE TRUST AND ANY MATERIAL RISKS AND WEAKNESSES IN INTER-
38 NAL CONTROLS IDENTIFIED BY THE AUDITOR; (B) ANY RESTRICTIONS ON THE
39 SCOPE OF THE AUDITOR'S ACTIVITIES OR ACCESS TO REQUESTED INFORMATION;
40 (C) ANY SIGNIFICANT DISAGREEMENTS BETWEEN THE AUDITOR AND MANAGEMENT;
41 AND (D) THE ADEQUACY AND PERFORMANCE OF THE TRUST'S ACCOUNTING FUNCTION.
42 (IV) CONSIDER AT LEAST ANNUALLY THE PERFORMANCE AND INDEPENDENCE OF
43 THE INDEPENDENT AUDITOR;
44 (V) OVERSEE ADOPTION, IMPLEMENTATION OF AND COMPLIANCE WITH ANY
45 CONFLICT OF INTEREST POLICY ADOPTED BY THE TRUST PURSUANT TO PARAGRAPH
46 (F) OF THIS SECTION, AND IF APPLICABLE, ANY WHISTLEBLOWER POLICY, IF
47 THIS FUNCTION IS NOT OTHERWISE PERFORMED BY ANOTHER COMMITTEE COMPRISED
48 SOLELY OF INDEPENDENT TRUSTEES; AND
49 (VI) REPORT ITS ACTIVITIES TO THE TRUSTEES AT LEAST ANNUALLY.
50 (3) THE AUDIT COMMITTEE SHALL ADOPT A CHARTER THAT SHALL STATE ITS
51 AUTHORITY AND RESPONSIBILITIES, INCLUDING THOSE PRESCRIBED BY THIS PARA-
52 GRAPH, AND THAT SHALL STATE THE SIZE, COMPOSITION AND FUNCTIONING OF THE
53 AUDIT COMMITTEE.
54 (C)(1) FOR PURPOSES OF THIS PARAGRAPH, "TOTAL COMPENSATION" MEANS (1)
55 ANY COMPENSATION, WHETHER PAID OR ACCRUED, BY OR ON BEHALF OF THE TRUST
56 OR ANY AFFILIATE OF THE TRUST, INCLUDING BUT NOT LIMITED TO SALARY,
S. 3755--A 50
1 BONUS, AND DEFERRED COMPENSATION, AND (2) ANY BENEFIT HAVING MONETARY
2 VALUE PROVIDED BY THE TRUST OR ON BEHALF OF THE TRUST OR ANY AFFILIATE
3 OF THE TRUST, INCLUDING BUT NOT LIMITED TO HOUSING ALLOWANCES, LIVING
4 EXPENSES, PERQUISITES, FRINGE BENEFITS, EMPLOYER CONTRIBUTIONS TO
5 DEFINED CONTRIBUTION RETIREMENT PLANS AND OTHER RETIREMENT BENEFITS.
6 (2) THE TOTAL COMPENSATION PAID BY A TRUST TO ANY EMPLOYEE OF THE
7 TRUST SHALL BE FAIR, REASONABLE AND COMMENSURATE WITH SERVICES THE
8 EMPLOYEE PROVIDES TO THE TRUST.
9 (3) NO EMPLOYEE OR OTHER INDIVIDUAL WHO MAY BENEFIT FROM COMPENSATION
10 OR BENEFITS PROVIDED BY THE TRUST MAY BE PRESENT AT OR OTHERWISE PARTIC-
11 IPATE IN TRUSTEE OR COMMITTEE DELIBERATION OR VOTE CONCERNING SUCH
12 COMPENSATION OR BENEFITS.
13 (4) EVERY TRUST THAT IS REQUIRED TO BE REGISTERED WITH THE ATTORNEY
14 GENERAL UNDER ARTICLE SEVEN-A OF THE EXECUTIVE LAW AND THIS CHAPTER AND
15 THAT IN THE PRIOR FISCAL YEAR HAD ANNUAL REVENUES IN EXCESS OF TWO
16 MILLION DOLLARS SHALL DESIGNATE A COMPENSATION COMMITTEE OF THE TRUSTEES
17 TO OVERSEE EXECUTIVE COMPENSATION PROGRAMS AND RELATED PRACTICES OF THE
18 TRUST. (I) THE COMPENSATION COMMITTEE SHALL BE COMPRISED OF ONE OR MORE
19 INDEPENDENT TRUSTEES. IF A TRUST CONTROLS ONE OR MORE TRUSTS OR CORPO-
20 RATIONS, THE COMPENSATION COMMITTEE OF THE CONTROLLING TRUST MAY BE
21 DEEMED TO BE THE COMPENSATION COMMITTEE FOR ITS CONTROLLED ENTITIES.
22 (II) THE COMPENSATION COMMITTEE SHALL:
23 (A) REVIEW THE TOTAL COMPENSATION PAID TO THE TRUST'S OFFICERS AND ITS
24 FIVE HIGHEST-COMPENSATED KEY EMPLOYEES. (B) AFFIRMATIVELY DETERMINE THAT
25 THE TOTAL COMPENSATION PAID TO ANY SUCH INDIVIDUAL IS FAIR, REASONABLE
26 AND COMMENSURATE WITH SERVICES PROVIDED TO THE TRUST. IN MAKING THIS
27 DETERMINATION, THE COMPENSATION COMMITTEE SHALL AT A MINIMUM CONSIDER
28 THE FOLLOWING FACTORS: 1. THE TOTAL COMPENSATION PROVIDED TO THE INDI-
29 VIDUAL; 2. RELEVANT BENCHMARK DATA ON THE TOTAL COMPENSATION PAID TO
30 INDIVIDUALS SERVING IN SIMILAR POSITIONS AT TRUSTS OR CORPORATIONS OF
31 SIMILAR SIZE, TYPE, PURPOSE, AND SCOPE; 3. THE INDIVIDUAL'S QUALIFICA-
32 TIONS AND PERFORMANCE; 4. COMPENSATION, PAYMENTS OR ANY OTHER BENEFITS
33 PROVIDED TO THE INDIVIDUAL FROM ANY AFFILIATE OF THE TRUST; AND 5. THE
34 OVERALL FINANCIAL CONDITION OF THE TRUST. (C) MAKE AND KEEP A CONTEMPO-
35 RANEOUS WRITTEN RECORD DESCRIBING THE BASIS FOR ITS DETERMINATION,
36 INCLUDING ITS ANALYSIS OF THE FACTORS SET FORTH IN THIS PARAGRAPH AND
37 HOW ANY RELEVANT DATA WAS OBTAINED AND USED. (D) APPROVE BY NOT LESS
38 THAN A MAJORITY VOTE THE TOTAL COMPENSATION PAID TO EACH SUCH INDIVID-
39 UAL.
40 (D) IF THE COMPENSATION COMMITTEE IS COMPRISED OF FEWER THAN ALL OF
41 THE INDEPENDENT TRUSTEES, THEN: (1) THE COMPENSATION COMMITTEE SHALL
42 RECOMMEND TO ALL OF THE INDEPENDENT TRUSTEES FOR THEIR APPROVAL THE
43 TOTAL COMPENSATION OF EACH INDIVIDUAL THAT THE COMMITTEE HAS AFFIRMA-
44 TIVELY DETERMINED IS FAIR, REASONABLE, AND COMMENSURATE WITH SERVICES
45 PROVIDED TO THE TRUST, AND INCLUDE THEREWITH THE WRITTEN RECORD OF ITS
46 DETERMINATION CREATED PURSUANT TO SUBPARAGRAPH THREE OF THIS PARAGRAPH;
47 (2) UPON REVIEW OF THE RECOMMENDATIONS OF THE COMPENSATION COMMITTEE,
48 THE TRUSTEES SHALL APPROVE BY NOT LESS THAN A MAJORITY VOTE OF THE INDE-
49 PENDENT TRUSTEES THE TOTAL COMPENSATION OF EACH SUCH INDIVIDUAL, WITH
50 ONLY INDEPENDENT TRUSTEES PARTICIPATING IN ANY SUCH VOTE AND ANY
51 DISCUSSION RELATING THERETO; AND (3) THE INDEPENDENT TRUSTEES SHALL KEEP
52 A CONTEMPORANEOUS WRITTEN RECORD OF THE BASIS OF ITS DETERMINATION,
53 INCLUDING AREAS OF AGREEMENT OR DISAGREEMENT WITH THE RECOMMENDATIONS OF
54 THE COMPENSATION COMMITTEE. (4) THE COMPENSATION COMMITTEE MAY RETAIN A
55 COMPENSATION CONSULTANT TO ASSIST IN THE PERFORMANCE OF ITS RESPONSIBIL-
56 ITIES. THE COMPENSATION COMMITTEE SHALL BE DIRECTLY RESPONSIBLE FOR THE
S. 3755--A 51
1 APPOINTMENT, COMPENSATION AND OVERSIGHT OF THE WORK OF SUCH CONSULTANT,
2 AND ANY SUCH CONSULTANT SHALL REPORT DIRECTLY TO THE COMPENSATION
3 COMMITTEE. THE COMPENSATION COMMITTEE SHALL, AMONG ITS RESPONSIBILITIES,
4 APPROVE THE COMPENSATION PEER GROUP THAT THE COMPENSATION CONSULTANT
5 RECOMMENDS BE USED TO DEVELOP BENCHMARK DATA. (I) PRIOR TO RETAINING ANY
6 SUCH CONSULTANT, THE COMPENSATION COMMITTEE SHALL DETERMINE THAT THE
7 CONSULTANT IS INDEPENDENT AND QUALIFIED TO RENDER ADVICE TO THE TRUST
8 CONCERNING COMPENSATION; PROVIDED THAT NO CONSULTANT MAY BE DETERMINED
9 INDEPENDENT IF SUCH CONSULTANT OR ANY FIRM THAT EMPLOYS SUCH CONSULTANT
10 HAS (A) RECEIVED DIRECTLY OR INDIRECTLY ANY PAYMENT, FEE OR OTHER
11 COMPENSATION FROM THE TRUST OR ANY AFFILIATE OF THE TRUST WITHIN THE
12 PRECEDING TWO YEARS, OTHER THAN REASONABLE AMOUNTS PAID FOR COMPENSATION
13 CONSULTING SERVICES, OR (B) ANY BUSINESS OR PERSONAL RELATIONSHIP WITH
14 THE TRUST OR ANY AFFILIATE OF THE TRUST, OR ANY OF ITS OR THEIR OFFI-
15 CERS, DIRECTORS OR EMPLOYEES, THAT MAY INTERFERE WITH THE ABILITY OF THE
16 CONSULTANT TO PROVIDE OBJECTIVE ADVICE TO THE COMMITTEE. (II) NOTHING IN
17 THIS SUBPARAGRAPH SHALL BE CONSTRUED TO (A) REQUIRE THE COMPENSATION
18 COMMITTEE TO IMPLEMENT OR ACT CONSISTENTLY WITH THE ADVICE OR RECOMMEN-
19 DATIONS PROVIDED BY THE COMPENSATION CONSULTANT TO THE COMPENSATION
20 COMMITTEE; OR (B) AFFECT THE ABILITY OR OBLIGATION OF MEMBERS OF THE
21 COMPENSATION COMMITTEE TO EXERCISE THEIR OWN JUDGMENT IN FULFILLMENT OF
22 THEIR DUTIES TO THE TRUST AND ITS BENEFICIARIES. (5) THE COMPENSATION
23 COMMITTEE SHALL ADOPT A CHARTER SETTING FORTH ITS RESPONSIBILITIES,
24 INCLUDING AS PRESCRIBED BY THIS PARAGRAPH, AS WELL AS REQUIREMENTS
25 CONCERNING THE SIZE, COMPOSITION AND FUNCTIONING OF THE COMPENSATION
26 COMMITTEE.
27 (E) (1) NOTWITHSTANDING ANY PROVISION IN THE TRUST INSTRUMENT TO THE
28 CONTRARY, NO TRUST SHALL ENTER INTO A RELATED PARTY TRANSACTION, UNLESS:
29 (I) THE MATERIAL FACTS AS TO THE RELATED PARTY'S INTEREST IN, AND
30 RELATIONSHIP TO, THE TRANSACTION ARE DISCLOSED IN GOOD FAITH TO THE
31 TRUSTEES; (II) THE TRUSTEES: (A) CONSIDER ALTERNATIVE TRANSACTIONS TO
32 THE EXTENT AVAILABLE AND UPON REASONABLE DILIGENCE DETERMINE THAT SUCH
33 ALTERNATIVE TRANSACTIONS WOULD NOT BE MORE ADVANTAGEOUS TO THE TRUST AND
34 ITS BENEFICIARIES UNDER THE CIRCUMSTANCES; (B) DETERMINE BY A TWO-THIRDS
35 VOTE OF THE TRUSTEES THAT THE RELATED PARTY TRANSACTION IS FAIR, REASON-
36 ABLE AND IN THE BEST INTERESTS OF THE TRUST AND ITS BENEFICIARIES AND
37 APPROVE SUCH TRANSACTION, AND THE RELATED PARTY WITH AN INTEREST IN THE
38 TRANSACTION IS NOT PRESENT AT AND OTHERWISE DOES NOT OTHERWISE PARTIC-
39 IPATE IN ANY DELIBERATION OR VOTING RELATING THERETO; AND (C) CONTEMPO-
40 RANEOUSLY DOCUMENT IN WRITING THE BASIS FOR THEIR DETERMINATION AND
41 APPROVAL OF THE TRANSACTION. THIS SUBPARAGRAPH SHALL NOT APPLY TO ANY
42 COMPENSATION REVIEWED AND APPROVED IN ACCORDANCE WITH SUBPARAGRAPH FOUR
43 OF PARAGRAPH (C) OF THIS SECTION.
44 (2) THE TRUST INSTRUMENT, BYLAWS OR CONFLICT OF INTEREST POLICY OF THE
45 TRUST MAY CONTAIN ADDITIONAL RESTRICTIONS ON RELATED PARTY TRANSACTIONS
46 AND ADDITIONAL PROCEDURES NECESSARY FOR THE REVIEW OR APPROVAL OF SUCH
47 TRANSACTIONS, OR PROVIDE THAT ANY TRANSACTIONS IN VIOLATION OF SUCH
48 RESTRICTIONS SHALL BE VOID OR VOIDABLE.
49 (3) ANY TRUSTEE OR KEY EMPLOYEE WHO HAS AN INTEREST IN A RELATED PARTY
50 TRANSACTION SHALL, PRIOR TO THE TRUSTEES' CONSIDERATION OF THE PROPOSED
51 TRANSACTION, DISCLOSE IN GOOD FAITH TO THE TRUSTEES THE MATERIAL FACTS
52 AS TO SUCH PERSON'S INTEREST IN, AND RELATIONSHIP TO, THE TRANSACTION.
53 THE TRUSTEES SHALL ADOPT AND IMPLEMENT PROCEDURES FOR THE TIMELY DISCLO-
54 SURE OF SUCH FACTS TO THE TRUSTEES.
55 (4) THE ATTORNEY GENERAL MAY BRING AN ACTION TO ENJOIN, VOID OR
56 RESCIND ANY RELATED PARTY TRANSACTION OR A PROPOSED RELATED PARTY TRANS-
S. 3755--A 52
1 ACTION THAT VIOLATES ANY LAW OR IS OTHERWISE NOT FAIR, REASONABLE, OR IN
2 THE BEST INTERESTS OF THE TRUST OR ITS BENEFICIARIES, OR TO SEEK OTHER
3 RELIEF, INCLUDING BUT NOT LIMITED TO DAMAGES, RESTITUTION, THE REMOVAL
4 OF TRUSTEES, OR SEEK TO REQUIRE ANY PERSON OR ENTITY TO: (I) ACCOUNT
5 FOR ANY PROFITS MADE FROM SUCH TRANSACTION, AND PAY THEM TO THE TRUST;
6 (II) PAY THE TRUST THE VALUE OF THE USE OF ANY OF ITS PROPERTY OR OTHER
7 ASSETS USED IN SUCH TRANSACTION; (III) RETURN OR REPLACE ANY PROPERTY OR
8 OTHER ASSETS LOST TO THE TRUST AS A RESULT OF SUCH TRANSACTION, TOGETHER
9 WITH ANY INCOME OR APPRECIATION LOST TO THE TRUST BY REASON OF SUCH
10 TRANSACTION, OR ACCOUNT FOR ANY PROCEEDS OF SALE OF SUCH PROPERTY, AND
11 PAY THE PROCEEDS TO THE TRUST TOGETHER WITH INTEREST AT THE LEGAL RATE;
12 AND (IV) PAY, IN THE CASE OF WILLFUL CONDUCT, AN AMOUNT UP TO DOUBLE THE
13 AMOUNT OF ANY BENEFIT IMPROPERLY OBTAINED.
14 (5) THE POWERS AND DUTIES OF THE ATTORNEY GENERAL PROVIDED IN THIS
15 PARAGRAPH ARE IN ADDITION TO ALL OTHER POWERS AND DUTIES THE ATTORNEY
16 GENERAL MAY HAVE UNDER THIS CHAPTER OR ANY OTHER LAW.
17 (F)(1) EVERY TRUST SHALL ADOPT A CONFLICT OF INTEREST POLICY TO ENSURE
18 THAT ITS TRUSTEES AND KEY EMPLOYEES ACT IN THE BEST INTEREST OF THE
19 TRUST AND ITS BENEFICIARIES AND COMPLY WITH APPLICABLE LEGAL REQUIRE-
20 MENTS, INCLUDING BUT NOT LIMITED TO THE REQUIREMENTS SET FORTH IN PARA-
21 GRAPH (D) OF THIS SECTION.
22 (2) THE CONFLICT OF INTEREST POLICY SHALL INCLUDE, AT A MINIMUM, THE
23 FOLLOWING PROVISIONS:
24 (I) A DEFINITION OF THE CIRCUMSTANCES THAT CONSTITUTE A CONFLICT OF
25 INTEREST; (II) PROCEDURES FOR DISCLOSING A CONFLICT OF INTEREST TO THE
26 AUDIT COMMITTEE OR, IF THERE IS NO AUDIT COMMITTEE, TO THE TRUSTEES;
27 (III) A REQUIREMENT THAT THE PERSON WITH THE CONFLICT OF INTEREST NOT BE
28 PRESENT AT OR PARTICIPATE IN ANY DELIBERATION OR VOTE ON THE MATTER
29 GIVING RISE TO SUCH CONFLICT; (IV) A PROHIBITION AGAINST ANY ATTEMPT BY
30 THE PERSON WITH THE CONFLICT TO INFLUENCE THE DELIBERATION OR VOTING ON
31 THE MATTER GIVING RISE TO SUCH CONFLICT; (V) A REQUIREMENT THAT THE
32 EXISTENCE AND RESOLUTION OF THE CONFLICT BE DOCUMENTED IN THE TRUST'S
33 RECORDS, INCLUDING IN THE MINUTES OF ANY MEETING AT WHICH THE CONFLICT
34 WAS DISCUSSED OR VOTED UPON; AND (VI) PROCEDURES FOR DISCLOSING,
35 ADDRESSING, AND DOCUMENTING RELATED PARTY TRANSACTIONS IN ACCORDANCE
36 WITH PARAGRAPH (D) OF THIS SECTION.
37 (3) THE CONFLICT OF INTEREST POLICY SHALL REQUIRE THAT PRIOR TO A
38 TRUSTEE'S INITIAL APPOINTMENT, AND ANNUALLY THEREAFTER, SUCH TRUSTEE
39 SHALL COMPLETE, SIGN AND FILE WITH THE RECORDS OF THE TRUST A WRITTEN
40 STATEMENT IDENTIFYING ANY ENTITY OF WHICH HE OR SHE IS AN OFFICER,
41 DIRECTOR, TRUSTEE, MEMBER, OWNER (EITHER AS A SOLE PROPRIETOR OR A PART-
42 NER), OR EMPLOYEE WITH WHICH THE TRUST HAS, OR MIGHT BE EXPECTED TO
43 HAVE, A RELATIONSHIP OR A TRANSACTION IN WHICH THE TRUSTEE MIGHT HAVE A
44 CONFLICTING INTEREST. THE POLICY SHALL REQUIRE THAT EACH TRUSTEE ANNUAL-
45 LY RESUBMIT SUCH WRITTEN STATEMENT. THE TRUSTEES SHALL PROVIDE A COPY OF
46 ALL COMPLETED STATEMENTS TO THE CHAIR OF THE AUDIT COMMITTEE, IF THERE
47 IS AN AUDIT COMMITTEE.
48 (4) EVERY TRUST REGISTERED OR REQUIRED TO BE REGISTERED PURSUANT TO
49 SECTION ONE HUNDRED SEVENTY-TWO OF THE EXECUTIVE LAW OR SECTION 8-1.4 OF
50 THIS PART SHALL TRANSMIT SUCH POLICIES TO THE ATTORNEY GENERAL IN THE
51 FORM AND MANNER SPECIFIED BY THE ATTORNEY GENERAL, AND SHALL WITHIN
52 THIRTY DAYS OF ANY MATERIAL CHANGE OF THESE POLICIES PROVIDE THE ATTOR-
53 NEY GENERAL WITH THE CHANGED POLICIES.
54 (5) NOTHING IN THIS PARAGRAPH SHALL BE INTERPRETED TO REQUIRE A TRUST
55 TO ADOPT ANY SPECIFIC CONFLICT OF INTEREST POLICY NOT OTHERWISE REQUIRED
S. 3755--A 53
1 BY LAW, OR TO SUPERSEDE OR LIMIT ANY REQUIREMENT OR DUTY GOVERNING
2 CONFLICTS OF INTEREST REQUIRED BY ANY OTHER LAW OR RULE.
3 (G)(1) EVERY TRUST THAT HAS TWENTY OR MORE EMPLOYEES AND IN THE PRIOR
4 FISCAL YEAR HAD ANNUAL REVENUE IN EXCESS OF ONE MILLION DOLLARS SHALL
5 ADOPT A WHISTLEBLOWER POLICY TO PROTECT FROM RETALIATION PERSONS WHO
6 REPORT SUSPECTED IMPROPER CONDUCT. SUCH POLICY SHALL PROVIDE THAT NO
7 TRUSTEE, EMPLOYEE OR VOLUNTEER OF A TRUST WHO IN GOOD FAITH REPORTS ANY
8 ACTION OR SUSPECTED ACTION TAKEN BY OR WITHIN THE TRUST THAT IS ILLEGAL,
9 FRAUDULENT OR IN VIOLATION OF ANY ADOPTED POLICY OF THE TRUST SHALL
10 SUFFER INTIMIDATION, HARASSMENT, DISCRIMINATION OR OTHER RETALIATION OR,
11 IN THE CASE OF EMPLOYEES, ADVERSE EMPLOYMENT CONSEQUENCE.
12 (2) THE WHISTLEBLOWER POLICY SHALL INCLUDE THE FOLLOWING PROVISIONS:
13 (I) PROCEDURES FOR THE REPORTING OF VIOLATIONS OR SUSPECTED VIOLATIONS
14 OF LAWS OR TRUST POLICIES, INCLUDING PROCEDURES FOR PRESERVING THE
15 CONFIDENTIALITY OF REPORTED INFORMATION;
16 (II) PROCEDURES FOR HANDLING AND INVESTIGATING VIOLATIONS OR SUSPECTED
17 VIOLATIONS OF LAWS OR TRUST POLICIES;
18 (III) A REQUIREMENT THAT A TRUSTEE OR AN EMPLOYEE OF THE TRUST BE
19 DESIGNATED TO ADMINISTER, IMPLEMENT AND OVERSEE COMPLIANCE OF THE WHIS-
20 TLE-BLOWER POLICY AND TO REPORT TO THE AUDIT COMMITTEE OR OTHER COMMIT-
21 TEE OF INDEPENDENT TRUSTEES, OR TO THE TRUSTEES;
22 (IV) A REQUIREMENT THAT ALL DOCUMENTS CONCERNING INFORMATION REPORTED
23 UNDER THE WHISTLEBLOWER POLICY AND ANY INVESTIGATION RELATING THERETO BE
24 RETAINED BY THE TRUST FOR A MINIMUM PERIOD OF SIX YEARS; AND
25 (V) A REQUIREMENT THAT A COPY OF THE POLICY BE DISTRIBUTED TO ALL
26 TRUSTEES, EMPLOYEES AND VOLUNTEERS, WITH INSTRUCTIONS ON HOW TO COMPLY
27 WITH THE PROCEDURES SET FORTH IN THE POLICY.
28 (3) NOTHING IN THIS SECTION SHALL BE INTERPRETED TO RELIEVE ANY TRUST
29 FROM ANY ADDITIONAL REQUIREMENTS IN RELATION TO INTERNAL COMPLIANCE,
30 RETALIATION, OR DOCUMENT RETENTION REQUIRED BY ANY OTHER LAW OR RULE.
31 S 106. Subdivision 2 of section 711 of the surrogate's court procedure
32 act is amended to read as follows:
33 2. Where by reason of his having wasted or improperly applied the
34 assets of the estate, or made investments unauthorized by law or other-
35 wise improvidently managed or injured the property committed to his
36 charge, INCLUDING BY FAILING TO COMPLY WITH SECTION 8-1.9 OF THE
37 ESTATES, POWERS AND TRUSTS LAW, or by reason of other misconduct in the
38 execution of his office or dishonesty, drunkenness, improvidence or want
39 of understanding, he is unfit for the execution of his office.
40 S 107. Section 202 of the racing, pari-mutuel wagering and breeding
41 law, as amended by chapter 18 of the laws of 2008, is amended to read as
42 follows:
43 S 202. Restriction upon commencement of business. No business corpo-
44 ration organized under the provisions of this article shall engage in
45 the prosecution or management of its business until the whole of its
46 capital stock shall have been subscribed, nor until it shall have filed
47 in the offices where certificates of incorporation were filed, a further
48 certificate stating that the whole of its capital stock has been in good
49 faith subscribed, executed and acknowledged by its president or vice-
50 president and treasurer or secretary, and verified by them to the effect
51 that the statements contained in it are true.
52 Notwithstanding the foregoing, [corporations organized] NO CHARITABLE
53 CORPORATION AS DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO OF
54 THE NOT-FOR-PROFIT CORPORATION LAW OR ANY CORPORATIONS ORGANIZED PRIOR
55 TO JANUARY FIRST, TWO THOUSAND FOURTEEN AS A TYPE C CORPORATION pursuant
56 to section two hundred one of the not-for-profit corporation law [as
S. 3755--A 54
1 type C corporations] OR AS A CHARITABLE CORPORATION AS DEFINED IN PARA-
2 GRAPH (A) OF SECTION ONE HUNDRED TWO OF THE NOT-FOR-PROFIT CORPORATION
3 LAW shall [not] engage in the prosecution or management of its business
4 until its certificate of incorporation has been accepted for filing by
5 the secretary of state and such confirmation of filing has been filed
6 with the board and the franchise oversight board.
7 S 108. Subdivision 9 of section 171-a of the executive law, as amended
8 by chapter 353 of the laws of 1987, is amended to read as follows:
9 9. "Fund raising counsel." Any person who for compensation consults
10 with a charitable organization or who plans, manages, advises, or
11 assists with respect to the solicitation in this state of contributions
12 for or on behalf of a charitable organization, but who does not have
13 access to contributions or other receipts from a solicitation or author-
14 ity to pay expenses associated with a solicitation and who does not
15 solicit. A bona fide officer, volunteer, or employee of a charitable
16 organization or an attorney at law retained by a charitable organization
17 OR AN INDIVIDUAL ENGAGED SOLELY TO DRAFT APPLICATIONS FOR FUNDING FROM A
18 GOVERNMENTAL AGENCY OR AN ENTITY EXEMPT FROM TAXATION PURSUANT TO
19 SECTION FIVE HUNDRED ONE (C)(3) OF THE INTERNAL REVENUE CODE, shall not
20 be deemed a fund raising counsel.
21 S 109. Subdivision 1 of section 172 of the executive law is amended by
22 adding a new paragraph (k) to read as follows:
23 (K) ANY CONFLICT OF INTEREST POLICY AND ANY WHISTLEBLOWER POLICY
24 ADOPTED PURSUANT TO SECTIONS SEVEN HUNDRED FIFTEEN-A AND SEVEN HUNDRED
25 FIFTEEN-B OF THE NOT-FOR-PROFIT CORPORATION LAW OR SECTION 8-1.9 OF THE
26 ESTATES, POWERS AND TRUSTS LAW.
27 S 110. Subdivisions 1 and 2 of section 172-b of the executive law, as
28 amended by section 43 of the laws of 2002, are amended to read as
29 follows:
30 1. Every charitable organization registered or required to be regis-
31 tered pursuant to section one hundred seventy-two of this article which
32 shall receive in any fiscal year gross revenue and support in excess of
33 [two hundred fifty] FIVE HUNDRED thousand dollars [and every charitable
34 organization whose fund-raising functions are not carried on solely by
35 persons who are unpaid for such services] shall file with the attorney
36 general an annual written financial report, on forms prescribed by the
37 attorney general, on or before the fifteenth day of the fifth calendar
38 month after the close of such fiscal year. The annual financial report
39 shall be accompanied by an annual financial statement which includes an
40 independent certified public accountant's audit report containing an
41 opinion that the financial statements are presented fairly in all mate-
42 rial respects and in conformity with generally accepted accounting prin-
43 ciples, including compliance with all pronouncements of the financial
44 accounting standards board and the American Institute of Certified
45 Public Accountants that establish accounting principles relevant to
46 not-for-profit organizations. Such financial report shall include a
47 statement of any changes in the information required to be contained in
48 the registration form filed on behalf of such organization. The finan-
49 cial report shall be signed by the president or other authorized officer
50 and the chief fiscal officer of the organization who shall certify under
51 penalties for perjury that the statements therein are true and correct
52 to the best of their knowledge, and shall be accompanied by an opinion
53 signed by an independent public accountant that the financial statement
54 and balance sheet therein present fairly the financial operations and
55 position of the organization. A fee of twenty-five dollars payable to
56 the attorney general shall accompany such financial report at the time
S. 3755--A 55
1 of filing, provided however, that any such organization that is regis-
2 tered with the attorney general pursuant to article eight of the
3 estates, powers and trusts law is required to file only one annual
4 financial report which meets the filing requirements of this article and
5 section 8-1.4 of the estates, powers and trusts law.
6 2. Every charitable organization registered or required to be regis-
7 tered pursuant to section one hundred seventy-two of this article which
8 shall receive in gross revenue and support in any fiscal year at least
9 one hundred thousand dollars but not more than [two hundred fifty] FIVE
10 HUNDRED thousand dollars shall file an annual financial report. The
11 annual financial report shall be accompanied by an annual financial
12 statement which includes an independent certified public accountant's
13 review report in accordance with "statements on standards for accounting
14 and review services" issued by the American Institute of Certified
15 Public Accountants. The annual financial statement shall be prepared in
16 conformity with generally accepted accounting principles, including
17 compliance with all pronouncements of the financial accounting standards
18 board and the American Institute of Certified Public Accountants that
19 establish accounting principles relevant to not-for-profit organiza-
20 tions. Such financial report shall be filed with the attorney general,
21 upon forms prescribed by the attorney general on an annual basis on or
22 before the fifteenth day of the fifth calendar month after the close of
23 such fiscal year, which shall include a financial report covering such
24 fiscal year in accordance with such requirements as the attorney general
25 may prescribe. Such financial report shall include a statement of any
26 changes in the information required to be contained in the registration
27 form filed on behalf of such organization. The financial report shall be
28 signed by the president or other authorized officer and the chief fiscal
29 officer of the organization who shall certify under penalties for perju-
30 ry that the statements therein are true and correct to the best of their
31 knowledge. A fee of ten dollars payable to the attorney general shall
32 accompany such financial report at the time of filing, provided, howev-
33 er, that any such organization that is registered with the attorney
34 general pursuant to article eight of the estates, powers and trusts law
35 is required to file only one annual financial report which meets the
36 filing requirements of this article and section 8-1.4 of the estates,
37 powers and trusts law. NOTWITHSTANDING THE REQUIREMENTS OF THIS
38 SECTION, IF UPON REVIEW OF AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S
39 REVIEW REPORT FILED PURSUANT TO THIS SUBDIVISION, THE ATTORNEY GENERAL
40 DETERMINES THAT A CHARITABLE ORGANIZATION SHOULD OBTAIN AN INDEPENDENT
41 CERTIFIED PUBLIC ACCOUNTANT'S AUDIT REPORT, SUCH ORGANIZATION SHALL
42 OBTAIN AND FILE WITH THE ATTORNEY GENERAL AN AUDIT REPORT THAT MEETS THE
43 REQUIREMENTS OF SUBDIVISION ONE OF THIS SECTION WITHIN SIXTY DAYS OF THE
44 ATTORNEY GENERAL'S REQUEST FOR SUCH REPORT.
45 S 111. Subdivision 1 of section 177 of the executive law, as amended
46 by chapter 83 of the laws of 1995, is amended to read as follows:
47 1. The attorney general shall make rules and regulations necessary for
48 the administration of this article including, but not limited to regu-
49 lations and waiver procedures that will ensure that charitable organiza-
50 tions do not have to register twice in relation to the solicitation and
51 administration of assets, AND RULES OR REGULATIONS ALLOWING OR REQUIRING
52 ANY SUBMISSION TO THE ATTORNEY GENERAL TO BE EFFECTED BY ELECTRONIC
53 MEANS.
54 S 112. Section 223 of the education law, as amended by chapter 106 of
55 the laws of 1974, is amended to read as follows:
S. 3755--A 56
1 S 223. Consolidation OR MERGER of corporations. Any two or more
2 corporations chartered under the powers of the regents or incorporated
3 under a special act of the legislature or under a general law for
4 purposes for which a charter may be granted by the regents may enter
5 into an agreement for the consolidation OR MERGER of such corporations,
6 setting forth the terms and conditions of consolidation OR MERGER, the
7 name of the proposed CONSOLIDATED OR MERGED corporation, the place or
8 places where the institution or institutions to be maintained is or are
9 to be located, the number of its directors, which may be five or more,
10 the time of the annual election and the names of the persons to be
11 directors until the first OR NEXT annual meeting.
12 The agreement must be approved by three-fourths of the trustees or
13 directors of such [corporation] CORPORATIONS at a meeting of the trus-
14 tees or directors of each corporation, separately and specially called
15 for that purpose, which approval, duly verified by the chairman and
16 clerk of such meeting, shall be annexed to the petition. On presenta-
17 tion of a petition, together with the certificate of approval and the
18 agreement for consolidation OR MERGER, and on such notice to interested
19 parties as the regents shall prescribe, and after hearing such inter-
20 ested parties as desire to be heard, the regents may make and execute an
21 order for the consolidation OR MERGER of the corporations on such terms
22 and conditions as the regents may prescribe. When such order is made,
23 such corporations shall become one corporation by the name designated in
24 the order, and shall be subject only to such duties and obligations as a
25 corporation formed under this chapter for the same purposes; and all the
26 property belonging to the corporations so consolidated OR MERGED shall
27 be vested in and transferred to the new OR SURVIVING corporation, which
28 shall be subject to all the liabilities of the former corporations, to
29 the same extent as if they had been contracted or incurred by it. If
30 any corporation so consolidated OR MERGED was incorporated under a
31 special act of the legislature or under a general law pursuant to which
32 its certificate of incorporation was filed with the department of state,
33 the regents shall deliver a certified copy of the order of consolidation
34 OR MERGER to such department.
35 S 113. Paragraph c of subdivision 4 of section 216-a of the education
36 law, as added by chapter 901 of the laws of 1972, is amended to read as
37 follows:
38 c. The following provisions of the not-for-profit corporation law
39 shall not apply to education corporations: section one hundred five,
40 [section one hundred thirteen,] section one hundred fourteen, paragraph
41 (a) of section two hundred one, paragraphs (b) and (c) of section two
42 hundred two, section two hundred five, section three hundred one,
43 section three hundred two, section three hundred three, article four
44 except paragraphs (b) through (p) of section four hundred four and
45 section four hundred five, section five hundred nine, [section five
46 hundred eighteen,] section five hundred twenty-one to the extent that it
47 refers to [section five hundred eighteen,] paragraph (d) of section
48 seven hundred six, article eight except section eight hundred four,
49 section nine hundred seven, [section one thousand eleven,] section one
50 thousand twelve and article fourteen.
51 S 114. Section 13 of the religious corporations law, as amended by
52 chapter 705 of the laws of 1970, is amended to read as follows:
53 S 13. Consolidation OR MERGER of incorporated churches. Two or more
54 incorporated churches may enter into an agreement, under their respec-
55 tive corporate seals, for the consolidation OR MERGER of such corpo-
56 rations, setting forth the name of the proposed new corporation OR
S. 3755--A 57
1 SURVIVING CORPORATION, the denomination, if any, to which it is to
2 belong, and if the churches of such denomination have more than one
3 method of choosing trustees, by which of such methods the trustees are
4 to be chosen, the number of such trustees, the names of the persons to
5 be the first trustees of the new corporation, and the date of its first
6 annual corporate meeting. Such an agreement shall not be valid for
7 United Methodist churches unless proposed by a majority vote of the
8 charge conference of each church and approved by the superintendent or
9 superintendents of the district or districts in which the consolidating
10 churches are located, and by the majority of the members of each of such
11 churches, over the age of twenty-one years, present and voting at a
12 meeting thereof held in the usual place of public worship and called for
13 the purpose of considering such agreement by announcement made at public
14 service in such churches on two Sundays, the first not less than ten
15 days next preceding the date of such meeting. Such agreement shall not
16 be valid unless approved in the case of Protestant Episcopal churches by
17 the bishop and standing committee of the diocese in which such churches
18 are situated and in the case of churches of other denominations by the
19 governing body of the denomination, if any, to which each church
20 belongs, having jurisdiction over such church. Each corporation shall
21 thereupon make a separate petition to the supreme court for an order
22 consolidating OR MERGING the corporations, setting forth the denomi-
23 nation, if any, to which the church belongs, that the consent of the
24 governing body to the consolidation OR MERGER, if any, of that denomi-
25 nation having jurisdiction over such church has been obtained, the
26 agreement therefor, and a statement of all the property and liabilities
27 and the amount and sources of the annual income of such petitioning
28 corporation. In its discretion the court may direct that notice of the
29 hearing of such petition be given to the parties interested therein in
30 such manner and for such time as it may prescribe. After hearing all
31 the parties interested, present and desiring to be heard, the court may
32 make an order for the consolidation OR MERGER of the corporations on the
33 terms of such agreement and such other terms and conditions as it may
34 prescribe, specifying the name of such new OR SURVIVING corporation and
35 the [first] trustees thereof, and the method by which their successors
36 shall be chosen and the date of its first OR NEXT annual corporate meet-
37 ing. When such order is made and duly entered, the persons constituting
38 such CONSOLIDATED OR MERGED corporations shall BE OR become an incorpo-
39 rated church by, and said petitioning churches shall become consolidated
40 OR MERGED under, the name designated in the order, and the trustees
41 therein named shall be the [first] trustees thereof, and the future
42 trustees thereof shall be chosen by the method therein designated, and
43 all the estate, rights, powers and property of whatsoever nature belong-
44 ing to either corporation shall without further act or deed be vested in
45 and transferred to the new OR SURVIVING corporation as effectually as
46 they were vested in or belonging to the former corporations; and the
47 said new OR SURVIVING corporation shall be liable for all the debts and
48 liabilities of the former corporations in the same manner and as effec-
49 tually as if said debts or liabilities had been contracted or incurred
50 by the new OR SURVIVING corporation. A certified copy of such order
51 shall be recorded in the book for recording certificates of incorpo-
52 ration in each county clerk's office in which the certificate of incor-
53 poration of each consolidating OR MERGING church was recorded; or if no
54 such certificate was so recorded, then in the clerk's office of the
55 county in which the principal place of worship or principal office of
56 the new OR SURVIVING corporation is, or is intended to be, situated.
S. 3755--A 58
1 S 115. Section 15-a of the religious corporations law, as added by
2 chapter 108 of the laws of 1965, subdivisions 2, 3 and 8 as amended by
3 chapter 381 of the laws of 1985, is amended to read as follows:
4 S 15-a. Consolidation of incorporated presbyteries. 1. Two or more
5 incorporated presbyteries may enter into an agreement for the consol-
6 idation OR MERGER of such corporations and such corporations may be
7 consolidated OR MERGED so as to form a single corporation which may be
8 either a new corporation or one of the [constitutent] CONSTITUENT corpo-
9 rations. Said agreement shall set forth the name of the proposed new
10 corporation or the name of the existing corporation if it is to become
11 the consolidated OR MERGED corporation, the method of choosing trustees,
12 the names of the persons to be the first trustees of the new corporation
13 if the consolidated OR MERGED corporation is to be a new corporation and
14 the date of the first annual corporate meeting.
15 2. Such agreement must be authorized and approved by a majority vote
16 of the members of each contracting presbytery taken at a meeting at
17 which a quorum is present duly called in accordance with the form of
18 government of the Presbyterian Church (U.S.A.) and the notice of such
19 meeting shall state the purpose of the meeting.
20 3. Before such agreement is approved as aforesaid, such consolidation
21 OR MERGER must be directed and approved by the Synod of the Northeast
22 and the General Assembly of the Presbyterian Church (U.S.A.).
23 4. Each presbytery shall thereafter join in a petition to the supreme
24 court for an order consolidating OR MERGING the corporation, setting
25 forth the agreement of the contracting presbyteries, the direction and
26 approval of the bodies as set forth in subdivision three [hereof] OF
27 THIS SECTION, a statement of all the property and liabilities and the
28 sources of the annual income of each presbytery and a description of any
29 property held by such presbyteries in trust for specific purposes. In
30 its discretion the court may direct that notice of the hearing of such
31 petition be given to the parties interested therein in such manner as it
32 may prescribe.
33 5. After hearing all the parties interested, present and desiring to
34 be heard, the court may make an order for the consolidation OR MERGER of
35 the presbyteries on the terms of such agreement and such other terms and
36 conditions as it may prescribe, specifying the name of the new corpo-
37 ration or the name the continuing corporation will have if one of the
38 [constitutent] CONSTITUENT corporations is to become the consolidated OR
39 MERGED corporation, the first trustees thereof if a new corporation is
40 to be created and the method by which their successors shall be chosen
41 and the date of the first annual corporate meeting if a new corporation
42 is to be created.
43 6. When such order is made and duly entered, the persons constituting
44 such corporate presbyteries shall become one incorporated consolidated
45 OR MERGED presbytery by, and said petitioning presbyteries shall become
46 consolidated OR MERGED under, the name designated in the order, and the
47 trustees therein named, if it is a new corporation, shall be the first
48 trustees thereof, and if it is a new corporation the trustees thereof
49 shall be chosen by the method therein designated, and all the estate,
50 rights, powers and property of whatsoever nature, belonging to either
51 corporation shall without further act or deed be vested in and/or trans-
52 ferred to the new corporation as effectually as they were vested in or
53 belonging to the former corporations, and the new or continuing corpo-
54 rations shall be liable for all the debts and liabilities of the former
55 corporations in the same manner and as effectually as if said debts or
56 liabilities had been contracted or incurred by the new corporation.
S. 3755--A 59
1 7. The order or a certified copy thereof shall be recorded in the book
2 for recording certificates of incorporation in each county clerk's
3 office in which the certificate of incorporation of each constituent
4 presbytery was recorded.
5 8. Such consolidated OR MERGED presbytery shall have all the powers
6 and responsibilities conferred upon presbyteries by the constitution and
7 form of government of the Presbyterian Church (U.S.A.).
8 S 116. Section 208 of the religious corporations law, as added by
9 chapter 117 of the laws of 1927, is amended to read as follows:
10 S 208. Consolidation OR MERGER. Any two or more religious corpo-
11 rations of the Jewish faith, incorporated under or by general or special
12 laws, may enter into an agreement for the consolidation OR MERGER of
13 such corporations, setting forth the terms and conditions of consol-
14 idation, the name of the proposed OR SURVIVING corporation, the number
15 of its trustees, the time of the annual election and the names of the
16 persons to be its trustees until the first OR NEXT annual meeting. Each
17 corporation may petition the supreme court for an order consolidating OR
18 MERGING the corporations, setting forth the agreement for consolidation
19 OR MERGER and a statement of its real property and of its liabilities.
20 Before the presentation of the petition to the court the agreement and
21 petition must be approved by two-thirds of the votes cast in person or
22 by proxy at a meeting of the members of each corporation called for the
23 purpose of considering the proposed consolidation OR MERGER in the
24 manner prescribed by section [forty-three of the membership corporations
25 law] SIX HUNDRED FIVE OF THE NOT-FOR-PROFIT CORPORATION LAW. An affida-
26 vit by the president and the secretary of each corporation stating that
27 such approval has been given shall be annexed to the petition. On pres-
28 entation to the court of such petition and agreement for consolidation
29 OR MERGER and on such notice as the court may direct, the court after
30 hearing all the parties interested desiring to be heard, may make an
31 order approving the consolidation OR MERGER. When such order is made
32 and duly entered and a certified copy thereof filed with the secretary
33 of state and in the offices of the clerks of the counties in which the
34 certificates of incorporation of the several constituent corporations
35 were recorded, or if no such certificate was recorded, then in the
36 office of the clerk of the county in which the principal place of
37 worship of the new OR SURVIVING corporation is intended to be situated,
38 such corporations shall become one corporation by the name designated in
39 the order and the trustees named in the agreement for consolidation OR
40 MERGER shall be the [first] trustees of the consolidated corporation.
41 S 117. Section 209 of the religious corporations law, as added by
42 chapter 117 of the laws of 1927, is amended to read as follows:
43 S 209. Effect of consolidation OR MERGER. The consolidated OR MERGED
44 corporation shall possess all the powers of the constituent corporations
45 and shall have the power and be subject to the duties and obligations of
46 a congregation of the Jewish faith formed for like purposes under the
47 religious corporations law. All the rights, privileges and interests of
48 each of the constituent corporations, all the property, real, personal
49 and mixed, and all the debts due on whatever account to either of them,
50 and all things in action, belonging to either of them, shall be deemed
51 to be transferred to and vested in such new corporation without further
52 act or deed; and all claims, demands[.], property, and every other
53 interest, belonging to the several constituent corporations, shall be as
54 effectually the property of the new corporation as they were of the
55 constituent corporations, and the title to all real property, held or
56 taken by deed or otherwise under the laws of this state, vested in the
S. 3755--A 60
1 several constituent corporations shall not be deemed to revert or to be
2 in any way impaired by reason of the consolidation but shall be vested
3 in the new corporation. Any devise, bequest, gift, grant, or declaration
4 of trust, contained in any deed, will, or other instrument, in trust or
5 otherwise, made before or after such consolidation, OR MERGER to or for
6 any of the constituent corporations, shall inure to the benefit of the
7 consolidated OR MERGED corporation. The consolidated corporation shall
8 be deemed to have assumed and shall be liable for all debts and obli-
9 gations of the constituent corporations in the same manner as if such
10 new corporation had itself incurred such debts or obligations.
11 S 118. Paragraph (c) of subdivision 1 of section 2-b of the religious
12 corporations law, as amended by chapter 490 of the laws of 2010, is
13 amended to read as follows:
14 (c) The following provisions of the not-for-profit corporation law
15 shall not apply to religious corporations: subparagraphs (7) and (8) of
16 paragraph (a) of section one hundred twelve, [section one hundred thir-
17 teen,] section one hundred fourteen, section two hundred one, section
18 three hundred three, section three hundred four, section three hundred
19 five, section three hundred six, article four except section four
20 hundred one, section five hundred fourteen, that portion of section five
21 hundred fifty-five (b) and section five hundred fifty-five (c) which
22 reads "The institution shall notify the donor, if available, and the
23 attorney general of the application, and the attorney general and such
24 donor must be given an opportunity to be heard", section six hundred
25 five, section six hundred seven, section six hundred nine, section eight
26 hundred four, article nine except section nine hundred ten, article ten
27 except as provided in section eleven hundred fifteen, section eleven
28 hundred two, and article fifteen except paragraph (c) of section fifteen
29 hundred seven.
30 S 119. Paragraph (c) of subdivision 1 of section 1-a of the benevolent
31 orders law, as added by chapter 703 of the laws of 1970, is amended to
32 read as follows:
33 (c) The following provisions of the not-for-profit corporation law
34 shall not apply to benevolent orders: [section one hundred thirteen,]
35 section two hundred one, article four, paragraphs (a), (b), and (c) of
36 section eight hundred four, section nine hundred seven, section nine
37 hundred eight, section nine hundred nine, [section ten hundred eleven,]
38 section ten hundred twelve, and article fourteen.
39 S 120. Subdivision 1 of section 1825 of the public authorities law, as
40 amended by chapter 1045 of the laws of 1974, is amended to read as
41 follows:
42 1. The corporation shall (a) be incorporated or reincorporated under
43 [article nineteen of the membership corporations law, or under] section
44 fourteen hundred eleven of the not-for-profit corporation law, or (b) be
45 incorporated under [article two of the membership corporations law, or
46 under] article four of the not-for-profit corporation law, in addition
47 to other purposes, to construct new industrial or manufacturing plants
48 or new research and development buildings and acquire machinery and
49 equipment deemed related thereto or acquire, rehabilitate, and improve
50 for use by others, industrial or manufacturing plants in the area of the
51 state in which an assisted project is to be located, to assist finan-
52 cially in such construction, acquisition, rehabilitation and improvement
53 and to maintain such plants, buildings and equipment for others, and may
54 also be authorized to study and promote, alone or in concert with local
55 officials and interested local groups, the economic growth and business
56 prosperity of the area and the solution of other civic problems of the
S. 3755--A 61
1 region which includes such areas[, and (c) if incorporated or reincorpo-
2 rated under the membership corporations law, have complied with the
3 requirements of section one hundred thirteen of the not-for-profit
4 corporation law].
5 S 121. Subsection (a) of section 3435 of the insurance law, as added
6 by chapter 220 of the laws of 1986, is amended to read as follows:
7 (a) This section shall apply to public entities as defined in section
8 one hundred seven of this chapter, organizations described by section
9 501 (c)(3) of the United States internal revenue code, [Type B] CHARITA-
10 BLE corporations AS DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO
11 (DEFINITIONS), OF THE NOT-FOR-PROFIT CORPORATION LAW AND formed pursuant
12 to paragraph [(b)] (A) of section two hundred one of the not-for-profit
13 corporation law, and organizations described by section two hundred
14 sixteen-a of the education law.
15 S 122. Subsection (a) of section 6703 of the insurance law, as added
16 by chapter 598 of the laws of 2000, is amended to read as follows:
17 (a) A corporation may be organized as a [type B] CHARITABLE corpo-
18 ration [pursuant to paragraph (b) of section two hundred one] AS DEFINED
19 IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) of the not-
20 for-profit corporation law or as a nonprofit reciprocal insurer under
21 article sixty-one of this chapter to write the kinds of insurance speci-
22 fied in subsection (a) of section one thousand one hundred thirteen of
23 this chapter other than (1) those types of insurance specified in para-
24 graphs one, two, eighteen, twenty-two, twenty-three and twenty-five of
25 such subsection, (2) insurance against legal liability of the insured,
26 and against loss, damage or expense incident to a claim of such liabil-
27 ity arising out of death or injury of any person, due to medical or
28 hospital malpractice by any licensed physician or hospital, and (3)
29 insurance subject to section three thousand four hundred twenty-five of
30 this chapter.
31 S 123. The opening paragraph of subsection (b) of section 6704 of the
32 insurance law, as added by chapter 598 of the laws of 2000, is amended
33 to read as follows:
34 The superintendent may pursuant to this article issue a license to a
35 nonprofit property/casualty insurance company that is organized as a
36 [type B] CHARITABLE corporation [pursuant to paragraph (b) of section
37 two hundred one] AS DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO
38 (DEFINITIONS) of the not-for-profit corporation law if such company:
39 S 124. Subsection (a) of section 6706 of the insurance law, as added
40 by chapter 598 of the laws of 2000, is amended to read as follows:
41 (a) Except as otherwise provided in this article, where inconsistent
42 with this article, or where the context otherwise requires, all of the
43 provisions of this chapter and the rules and regulations of the super-
44 intendent, relating to all insurers and those relating to
45 property/casualty insurance companies transacting the same kind or kinds
46 of insurance shall be applicable to a nonprofit property/casualty insur-
47 ance company organized as a [type B] CHARITABLE corporation AS DEFINED
48 IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) OF THE
49 NOT-FOR-PROFIT CORPORATION LAW AND FORMED pursuant to paragraph (b) of
50 section two hundred one of the not-for-profit corporation law and
51 licensed pursuant to subsection (b) of section six thousand seven
52 hundred four of this article. Where any of such provisions of law refer
53 to a corporation, company or insurer, such references, when read in
54 connection with and applicable to this article, shall mean such a
55 nonprofit property/casualty insurance company.
S. 3755--A 62
1 S 125. Subdivision 2 of section 2-b of the religious corporations law,
2 as added by chapter 956 of the laws of 1971, is amended to read as
3 follows:
4 2. Every corporation to which the not-for-profit corporation law is
5 made applicable by this section is a [type B] CHARITABLE corporation AS
6 DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) OF THE
7 NOT-FOR-PROFIT CORPORATION LAW for all purposes of that law.
8 S 126. Subdivision 2 of section 13-a of the private housing finance
9 law, as added by chapter 547 of the laws of 1971, is amended to read as
10 follows:
11 2. Every corporation to which the not-for-profit corporation law is
12 made applicable by this section is a [type B] CHARITABLE corporation AS
13 DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) OF THE
14 NOT-FOR-PROFIT CORPORATION LAW for all purposes of that law.
15 S 127. Subdivision 5 of section 216-a of the education law, as added
16 by chapter 901 of the laws of 1972, is amended to read as follows:
17 5. Every corporation to which the not-for-profit corporation law is
18 made applicable by this section, is a [type B] CHARITABLE corporation AS
19 DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) OF THE
20 NOT-FOR-PROFIT CORPORATION LAW under all applicable provisions of that
21 law.
22 S 128. Section 579 of the banking law, as amended by chapter 629 of
23 the laws of 2002, is amended to read as follows:
24 S 579. Doing business without license prohibited. Only a [type B not-
25 for-profit] CHARITABLE corporation as defined in [section two hundred
26 one] PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) of the not-
27 for-profit corporation law of this state, or an entity incorporated in
28 another state and having a similar not-for-profit status, shall engage
29 in the business of budget planning as defined in subdivision one of
30 section four hundred fifty-five of the general business law of this
31 state except as authorized by this article and without first obtaining a
32 license from the superintendent.
33 S 129. Subdivision 4 of section 455 of the general business law, as
34 amended by chapter 456 of the laws of 2006, is amended to read as
35 follows:
36 4. Person or entity as used in this article shall not include a [type
37 B not-for-profit] CHARITABLE corporation as defined in [section two
38 hundred one] PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) of
39 the not-for-profit corporation law of this state, or an entity incorpo-
40 rated in another state and having a similar not-for-profit status,
41 licensed by the superintendent, to engage in the business of budget
42 planning as defined in this section.
43 S 130. Paragraph (a) of subdivision 1 of section 458-b of the general
44 business law, as added by chapter 386 of the laws of 1986, is amended to
45 read as follows:
46 (a) Any [type B not-for-profit] CHARITABLE corporation AS DEFINED IN
47 PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) OF THE
48 NOT-FOR-PROFIT CORPORATION LAW licensed pursuant to article [twelve-c]
49 TWELVE-C of the banking law.
50 S 131. Subdivision (b) of section 16.32 of the mental hygiene law, as
51 amended by chapter 669 of the laws of 1995, is amended to read as
52 follows:
53 (b) No loans, other than through the purchase of bonds, debentures, or
54 similar obligations of the type customarily sold in public offerings, or
55 through ordinary deposit of funds in a bank, shall be made by a not-for-
56 profit corporation which is certified as a provider of services pursuant
S. 3755--A 63
1 to this article to its employee who receives an annual salary in excess
2 of thirty thousand dollars, or to any other corporation, firm, associ-
3 ation or other entity in which such employee is a director or officer or
4 employee or holds a direct or indirect substantial financial interest,
5 except a loan by one corporation incorporated as a [type B] CHARITABLE
6 corporation [pursuant to] AS DEFINED IN PARAGRAPH (A) OF SECTION ONE
7 HUNDRED TWO (DEFINITIONS) OF the not-for-profit corporation law to
8 another type B corporation, or a loan for a temporary or emergency
9 purpose which will further the health and welfare of the employee so
10 long as the purpose and amount of such loan are disclosed to and
11 approved by the board of directors of such agency. Such disclosure shall
12 be filed with the secretary of the corporation and entered in the
13 minutes of the meeting, and, if approved by such board, such disclosure
14 shall also be forwarded in writing to the commissioner and to the direc-
15 tor of community services of each local governmental unit that has, at
16 the time of such disclosure, a contract with such corporation for the
17 rendition of services pursuant to article forty-one of this chapter. A
18 loan made in violation of this section shall be a violation of the duty
19 to the not-for-profit corporation of the directors or officers authoriz-
20 ing it or participating in it, but the obligation of the borrower with
21 respect to the loan shall not be affected thereby.
22 S 132. Subdivision (b) of section 31.31 of the mental hygiene law, as
23 amended by chapter 669 of the laws of 1995, is amended to read as
24 follows:
25 (b) No loans, other than through the purchase of bonds, debentures, or
26 similar obligations of the type customarily sold in public offerings, or
27 through ordinary deposit of funds in a bank, shall be made by a not-for-
28 profit corporation which is licensed as a provider of services pursuant
29 to this article to its employee who receives an annual salary in excess
30 of thirty thousand dollars, or to any other corporation, firm, associ-
31 ation or other entity in which such employee is a director or officer or
32 employee or holds a direct or indirect substantial financial interest,
33 except a loan by one corporation incorporated as [a type B] CHARITABLE
34 corporation [pursuant to] AS DEFINED IN PARAGRAPH (A) OF SECTION ONE
35 HUNDRED TWO (DEFINITIONS) OF the not-for-profit corporation law to
36 another type B corporation, or a loan for a temporary or emergency
37 purpose which will further the health and welfare of the employee so
38 long as the purpose and amount of such loan are disclosed to and
39 approved by the board of directors of such agency. Such disclosure shall
40 be filed with the secretary of the corporation and entered in the
41 minutes of the meeting, and, if approved by such board, such disclosure
42 shall also be forwarded in writing to the commissioner and to the direc-
43 tor of community services of each local governmental unit that has, at
44 the time of such disclosure, a contract with such corporation for the
45 rendition of services pursuant to article forty-one of this chapter. A
46 loan made in violation of this section shall be a violation of the duty
47 to the not-for-profit corporation of the directors or officers authoriz-
48 ing it or participating in it, but the obligation of the borrower with
49 respect to the loan shall not be affected thereby.
50 S 133. Paragraph (f) of subdivision 7 of section 75 of the public
51 lands law, as added by chapter 791 of the laws of 1992, is amended to
52 read as follows:
53 (f) The commissioner, in consultation with the commissioner of envi-
54 ronmental conservation, the secretary of state, the office of parks,
55 recreation and historic preservation and other interested state agencies
56 administering state-owned lands underwater, shall promulgate pursuant to
S. 3755--A 64
1 article two of the state administrative procedure act such rules with
2 respect to grants, leases, easements and lesser interests for the use of
3 state-owned land underwater, and the cession of jurisdiction thereof, as
4 in his or her judgment are reasonable and necessary to protect the
5 interests of the people in such lands underwater. Such regulations shall
6 include without being limited to: the fees to be charged, consistent
7 with the provisions of this section, including mitigation of such fees
8 in the event of economic hardship on existing commercial enterprises;
9 fee limitations to administrative expenses for municipal uses which are
10 public, non-commercial and offer services free or for nominal fees, and
11 for uses undertaken and operated for public and non-commercial purposes
12 by not-for-profit corporations characterized as ["Type B"] CHARITABLE
13 corporations [pursuant to paragraph (b) of section two hundred one] AS
14 DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) of the
15 not-for-profit corporation law, and for uses undertaken and operated for
16 public purposes by a corporation formed pursuant to the religious corpo-
17 ration law or by a corporation formed pursuant to A special act of this
18 state and which has as its principal purpose a religious purpose; such
19 further exemptions for projects as the commissioner determines do not
20 represent significant encroachments; limitations on grants, including
21 conversion grants, with respect to underwater lands consistent with the
22 public purposes of this subdivision and limiting such grants to excep-
23 tional circumstances; and factors to be examined in considering an
24 application for a lease, easement or other interest. Those factors shall
25 include without limitation the following: (i) the environmental impact
26 of the project; (ii) the values for natural resource management, recre-
27 ational uses, and commercial uses of the pertinent underwater land;
28 (iii) the size, character and effects of the project in relation to
29 neighboring uses; (iv) the potential for interference with navigation,
30 public uses of the waterway and rights of other riparian owners; (v) the
31 effect of the project on the natural resource interests of the state in
32 the lands; (vi) the water-dependent nature of the use; (vii) and any
33 adverse economic impact on existing commercial enterprises. The final
34 promulgation of rules establishing fees or fee structures shall be
35 subject to the approval of the director of the budget.
36 S 134. This act shall take effect January 1, 2014, provided, however,
37 that section forty-five of this act shall take effect January 1, 2015.
