A07337 Summary:

BILL NO    A07337 

SAME AS    SAME AS S05198

SPONSOR    Brennan (MS)

COSPNSR    Weinstein, Englebright, Buchwald

MLTSPNSR   Montesano

Amd Various Laws, generally

Enacts the "non-profit revitalization act"; relates to the reform of charitable
organizations.
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A07337 Actions:

BILL NO    A07337 

05/10/2013 referred to corporations, authorities and commissions
01/08/2014 referred to corporations, authorities and commissions
03/11/2014 enacting clause stricken
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A07337 Votes:

There are no votes for this bill in this legislative session.
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A07337 Memo:

BILL NUMBER:A7337

TITLE OF BILL:  An act to amend the not-for-profit corporation law,
the estates, powers and trusts law, the religious corporations law,
the benevolent orders law, the public authorities law, the insurance
law, the racing, pari-mutuel wagering and breeding law, the private
housing finance law, the education law, the banking law, the general
business law, the mental hygiene law and the public lands law, in
relation to reform of charitable organizations; and to repeal certain
provisions of the not-for-profit corporation law relating thereto
(Part A); and to amend the not-for-profit corporation law, the
estates, powers and trusts law, the surrogate's court procedure act,
the executive law, the education law, the religious corporations law,
in relation to reform of charitable organizations; and to repeal
certain provisions of the not-for-profit corporation law and the
estates, powers and trusts law relating thereto (Part B)

PURPOSE OR GENERAL IDEA OF BILL:  To amend the Not-for-Profit
Corporation Law (N-PCL), the Estates Powers and Trusts Law (EPTL), and
Article 7-A of the Executive Law, to reduce unnecessary and outdated
burdens on nonprofits and to enhance nonprofit governance and
oversight to prevent fraud and improve public trust.

SUMMARY OF SPECIFIC PROVISIONS:

PART A

Section 1 adds new definitions to section 102 of the Not-for-Profit
Corporation Law to implement provisions of the bill.

Section 2 amends section 515 of the Not-for-Profit Corporation Law to
clarify that compensation paid to members, directors, officers or key
employees must be fair, reasonable and commensurate with services
provided to the corporation.

Section 3 amends paragraph (a) of section 713 of the Not-for-Profit
Corporation Law and adds a new paragraph (f) to prohibit any employee
of a nonprofit corporation from also serving as chair of its board.
The intent of this provision is to promote clear lines of
accountability between management and the board and ensure independent
board leadership.

Section 4 creates a new section 715-a of the Not-for-Profit
Corporation Law to require that nonprofits adopt written conflict of
interest policies. Section 4 also creates a new section 715-b of the
Not-for-Profit Corporation Law to require that nonprofits with twenty
or more employees and annual revenue exceeding $1 million adopt
whistleblower policies.

Section 5 creates a new section 8-1.9 of the Estates, Powers and
Trusts Law to make applicable to charitable trusts the new
requirements concerning conflict of interest policies and
whistleblower policies that are made applicable to charitable
corporations by section 4 of the bill.

Section 6 amends section 105 of the Not-for-Profit Corporation Law to
allow the Department of State to correct non-material typographical


errors in certificates of incorporation and other instruments upon
written authorization from the incorporator.

Section 8 amends section 201 of the Not-for-Profit Corporation Law to
simplify corporate "types," creating only two categories of
corporations ("charitable corporations" and "non-charitable
corporations") instead of four (A, B, C and D). The amended section
will "grandfather" nonprofits that have already formed as particular
types so they will not have to file new paperwork or amend contracts.

Sections 7, 9 and 10 make conforming changes to the Not-for-Profit
Corporation Law to facilitate the simplification of corporate "types"
pursuant to section 8 of the bill,

Section 11 amends section 115 of the Not-for-Profit Corporation Law to
provide that no corporation required to obtain approval from, or
provide notice to, an administrative agency in the course of
incorporating may solicit funds until it does so.

Sections 12 and 13 amend sections 304 and 306 of the Not-for-Profit
Corporation Law to correct technical errors.

Section 14 amends section 402 of the Not-for-Profit Corporation Law to
make clearer that nonprofits need only state their corporate purposes,
and not specific activities they plan to undertake, when completing
certificates of incorporation for delivery to the Department of State.

Section 15 amends section 404 of the Not-for-Profit Corporation Law to
eliminate the requirement that certain types of nonprofits obtain
pre-approval from the State Education Department prior to
incorporation. Under these amendments, schools, libraries, museums and
historical societies will continue to require the State Education
Department's approval, but other nonprofits may notify the State
Education Department of their formation after incorporation. The
intent of this amendment is to streamline the incorporation process
without hampering oversight by the State Education Department.

Sections 16, 18 and 44 make conforming changes to the Not-for-Profit
Corporation Law to implement section 15 of the bill, the intent of
which is to expedite and simplify the incorporation process.

Section 17 amends section 804 of the Not-for-Profit Corporation Law to
require that governmental agencies be notified within 10 days of
acceptance by the Department of State of any certificate of amendment
that ads, changes or eliminates a purpose, power or provision whose
original inclusion would require the consent from, or notice to, that
governmental agency. The section is also revised to allow charities to
seek approval of changes from the Attorney General, in addition to the
traditional option of approval by the courts.

Sections 19-43 and 4567 make conforming changes to the Not-for-Profit
Corporation. Law to facilitate the simplification of corporate "types"
pursuant to section 8 of the bill.

Sections 68-84 make conforming changes to various statutes to
facilitate the simplification of corporate "types" pursuant to section
8 of the bill.


Section 85 is the effective date.

PART B

Section 1 adds new definitions to section 102 of the Not-for-Profit
Corporation Law to implement provisions of the bill.

Section 2 and 4 amend sections 112 and 715 of the Not-for-Profit
Corporation Law to create new requirements to protect against
self-dealing. The amendments require that boards, or board committees,
undertake an independent review of transactions between the nonprofit
and related parties, and affirmatively determine that such
transactions are in the nonprofit's best interest. The amendments will
also provide clearer authority for the Attorney General to remedy
self-dealing.

Section 3 creates a new section 712-a of the Not-for-Profit
Corporation Law to require that, in cases where nonprofits are
required by the Executive Law to obtain independent CPA audits, boards
or board committees perform certain oversight responsibilities. The
intent of this provision is to ensure that boards are aware of, and
respond to, issues and risks identified by auditors.

Section 5 amends section 720 of the Not-for-Profit Corporation Law to
add key employees to the list of individuals against whom actions may
be brought to remedy violations of the section.

Sections 6 amends section 723 of the Not-for-Profit Corporation Law to
make a clarifying change concerning indemnification of directors and
officers.

Section 7 amends section 724 of the Not-for-Profit Corporation Law to
make clear that the Attorney General is to be provided notice when an
application for indemnification is made to the court.

Section 8 creates a new section 8-1.9 of the Estates, Powers and
Trusts Law to make applicable to charitable trusts the new
requirements concerning audits and related party transactions that are
applied to charitable corporations by sections 3 and 4 of the bill.

Section 9 amends the Surrogates Court Procedure Act to effect the
provisions of section 8 of the bill.

Section 10 amends section 509 of the Not-for-Profit Corporation Law to
permit a majority vote of the nonprofit's board or a committee of the
board, rather than a two-thirds vote of the entire board, to approve
non-substantial real estate transactions. The two-thirds voting
requirement is maintained for transactions involving property that
constitutes all or substantially all of the nonprofit's assets. The
intent of this amendment is to reduce administrative burdens
associated with routine real estate transactions while preserving
stricter requirements for more significant transactions,

Sections 11-15, 17 & 18 amend sections 605, 606, 609, 614, 621, 708,
711 of the Not-for-Profit Corporation Law to allow electronic
transmission of board and membership meeting notices, waivers of
notice and votes requiring unanimous written consent. These amendments


will also allow board members to participate in meetings via
videoconference, Skype, and other forms of video communication.  The
intent of these amendments is to utilize technology to allow for more
effective participation by directors who are unable to attend meetings
in person.

Section 16 amends section 702 of the Not-for-Profit Corporation Law to
remove the definition of "entire board." The bill creates a new
definition for this term in section 102 of the statute, the purpose of
which is to correct ambiguities caused by the existing definition.

Sections 19 and 20 amend section 712 of the Not-for-Profit Corporation
Law to simplify the classification of board committees by eliminating
the distinction between standing and special committees.

Sections 21 and 32 repeal sections 406(b-1) of the Not-for-Profit
Corporation Law and 8-1.8(b-1) of the Estates, Powers and Trusts Law
to eliminate the requirement that private foundations advertise the
availability of their annual financial reports in print newspapers.
The intent of this amendment is to reduce costs without affecting
transparency, as such reports are free and available to the public
online.

Section 22 amends section .520 of the Not-for-Profit Corporation Law
to add a reference to the Executive Law.

Section 23 amends section 555 of the Not-for-Profit Corporation Law to
make clear the continuing availability to the courts of the doctrine
of deviation.

Section 24 amends section 718 of the Not-for-Profit Corporation Law to
protect the privacy of nonprofit directors and officers. Upon demand
from a member of the corporation or a law enforcement agency, the
corporation will have to produce a list of its directors and officers
but will no longer have to disclose their home addresses..

Sections 25 - 29 amend sections 1207, 1211, 1215, 1218 and 1611 of the
Not-for-Profit Corporation Law to allow entities in receivership and
land banks to provide certain notices online, rather than in a print
newspaper. The intent of these provisions is to improve dissemination
of information and reduce costs.

Sections 30, 36, 39, 43, 45 and 47 are intentionally omitted.

Sections 31 and 35 amend section 8-1.4 of the Estates, Powers and
Trusts Law and section 177 of the Executive Law to make clear in these
statutes that the Attorney General may accept nonprofit registrations
and other filings electronically.

Section 33 amends section 171-a of the Executive Law to clarify that
individuals who function solely as grant writers are not "fundraising
counsel."

Section 34 amends section 172-b of the Executive Law to raise the
gross revenue thresholds triggering the requirement to obtain an
independent CPA's audit from $250,000 to $500,000 and an independent
CPA's review from $100,000 to $250,000. The Attorney General will have


authority to request an independent CPA's audit from nonprofits with
gross revenue of $250,000 to $500,000 after reviewing their annual
filings, The intent of these amendments is to reduce costs and burdens
on smaller nonprofits and bring New York's reporting requirements into
line with those of other states.

Sections 37 and 38 amend section 511 and create a new section 511-a of
the Not-for-Profit Corporation Law to allow nonprofit corporations
seeking to sell, lease, exchange or dispose of all or substantially
all of their assets to go through a one-step approval process
(Attorney General approval) instead of a more cumbersome two-step
process (court approval following Attorney General review). The intent
of this provision is to expedite the often-lengthy approval process
and reduce legal costs. Nonprofits will retain the right to seek court
approval of the transaction following the Attorney General's review.

Sections 40-42 amend section 907 and add new sections 907-a and 907-b
to the Not-for-Profit Corporation Law to allow not-for-profit
corporations seeking to merge to go through a one-step approval
process (Attorney General approval) instead of a more cumbersome
two-step process (court approval following Attorney General review).
The intent of this provision is to expedite the often-lengthy approval
process and reduce legal costs. Nonprofits will retain the right to
seek court approval of the transaction following the Attorney
General's review.

Sections 44, 46 and 48 amend sections 1001; 1002-a and 1007 of the
Not-for-Profit Corporation Law to grant the Attorney General authority
to approve charitable corporations' plans of dissolution.  Charitable
corporations will retain the right to appeal to the courts if the
Attorney General does not approve, The Attorney General will have the
option to refer petitions for dissolution to the courts if judicial
review is more appropriate. The intent of these provisions is to
reduce the costs of dissolution so that charitable assets can be more
quickly redirected for other charitable purposes.

Sections 49 and 50 amend sections 216-a and 223 of the Education Law
to permit education corporations to enter into merger transactions in
addition to consolidation transactions. The intent of these amendments
is to simplify mergers and treat educational nonprofits more
equitably.

Sections 51 - 54 amend sections 13, 15-a, 208 and 209 of the Religious
Corporations Law to permit religious corporations to enter into merger
transactions in addition to consolidation transactions. The intent of
these amendments is to simplify mergers and treat religious nonprofits
more equitably.

Section 55 is the effective date.

JUSTIFICATION:  For too long, New York law and regulatory practices
have placed unnecessary and costly burdens on the-nonprofit sector.
Redundancies throughout the system waste scarce taxpayer and nonprofit
dollars.  New York must become a more hospitable environment for
nonprofits.  This bill will modernize key provisions of New York law
governing formation, dissolution, transactions, and board procedures,
reducing unnecessary burdens and costs without sacrificing oversight


or accountability. Implementing these changes will create a more
welcoming environment for new nonprofits and a more business-friendly
environment for existing ones, helping to ensure our state remains
home to the country's strongest and most vibrant nonprofit sector.

At the same time, the success of the nonprofit sector depends on
maintaining the public's trust. This requires that boards provide
effective oversight over the charitable funds entrusted to them, and
that the Attorney General have the necessary tools to protect
charities and donors from fraud and abuse. This bill strengthens New
York law to enhance governance and accountability by setting forth
clearer expectations of board duties in key areas, such as providing
financial oversight. It also includes new provisions to limit and,
when necessary, remedy self-dealing.

PRIOR LEGISLATIVE HISTORY: New bill.

FISCAL IMPLICATIONS:  There is no fiscal impact on the state.

EFFECTIVE DATE:  This act shall take effect January 1, 2014, provided
that section 713(f) of the Not-for-Profit Corporation Law, as added by
section three of Part A of the bill shall take effect January 1, 2015.
Section 712-a of the Not-for-Profit Corporation Law and paragraph (d)
of section 8-1.9 of the Estates, Powers and Trusts Law, as added by
sections 3 and 8 of Part 13 of the bill, shall not be applicable until
January 1, 2015 to any corporation or trust with annual revenues of
less than $10,000,000 in the last fiscal year ending prior to January
3, 2014.
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A07337 Text:

                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________

                                         7337

                              2013-2014 Regular Sessions

                                 I N  A S S E M B L Y

                                     May 10, 2013
                                      ___________

       Introduced by M. of A. BRENNAN, WEINSTEIN, ENGLEBRIGHT -- (at request of
         the  Department  of Law) -- read once and referred to the Committee on
         Corporations, Authorities and Commissions

       AN ACT to amend the not-for-profit corporation law, the estates,  powers
         and  trusts law, the religious corporations law, the benevolent orders
         law, the public authorities law, the insurance law, the racing,  pari-
         mutuel wagering and breeding law, the private housing finance law, the
         education  law,  the banking law, the general business law, the mental
         hygiene law and the public lands law, in relation to reform of  chari-
         table  organizations; and to repeal certain provisions of the not-for-
         profit corporation law relating thereto (Part A);  and  to  amend  the
         not-for-profit  corporation  law,  the estates, powers and trusts law,
         the surrogate's court procedure act, the executive law, the  education
         law, the religious corporations law, in relation to reform of charita-
         ble  organizations;  and  to repeal certain provisions of the not-for-
         profit corporation law and the estates, powers and trusts law relating
         thereto (Part B)

         THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
       BLY, DO ENACT AS FOLLOWS:

    1    Section 1. This act enacts into law components of legislation relating
    2  to  the  reform  of charitable organizations.   Each component is wholly
    3  contained within a Part identified as Parts A through B.  The  effective
    4  date  for  each  particular  provision contained within such Part is set
    5  forth in the last section of such Part. Any  provision  in  any  section
    6  contained within a Part, including the effective date of the Part, which
    7  makes  a  reference  to a section "of this act", when used in connection
    8  with that particular component, shall be deemed to mean and refer to the
    9  corresponding section of the Part in which it is found. Section three of
   10  this act sets forth the general effective date of this act.

   11                                   PART A

        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD10894-01-3
       A. 7337                             2

    1    Section 1. Subparagraph 6 of paragraph (a) of section 102 of the  not-
    2  for-profit  corporation  law  is amended, and six new subparagraphs 3-a,
    3  3-b, 9-a, 19, 20 and 21 are added to read as follows:
    4    (3-A)  "CHARITABLE  CORPORATION"  MEANS ANY CORPORATION FORMED, OR FOR
    5  THE PURPOSES OF THIS  CHAPTER,  DEEMED  TO  BE  FORMED,  FOR  CHARITABLE
    6  PURPOSES.
    7    (3-B)  "CHARITABLE PURPOSES" OF A CORPORATION MEANS PURPOSES CONTAINED
    8  IN THE CERTIFICATE OF INCORPORATION OF THE CORPORATION THAT ARE CHARITA-
    9  BLE, EDUCATIONAL, RELIGIOUS, SCIENTIFIC, LITERARY, CULTURAL OR  FOR  THE
   10  PREVENTION OF CRUELTY TO CHILDREN OR ANIMALS.
   11    (6)  "Director"  means  any  member of the governing board of a corpo-
   12  ration, whether designated as director, trustee, manager,  governor,  or
   13  by  any  other title. The term "board" means "board of directors" OR ANY
   14  OTHER BODY CONSTITUTING A "GOVERNING BOARD" AS DEFINED IN THIS SECTION.
   15    (9-A) "NON-CHARITABLE CORPORATION" MEANS ANY CORPORATION FORMED  UNDER
   16  THIS  CHAPTER, OTHER THAN A CHARITABLE CORPORATION, INCLUDING ONE FORMED
   17  FOR ANY ONE OR MORE OF  THE  FOLLOWING  NON-PECUNIARY  PURPOSES:  CIVIC,
   18  PATRIOTIC,  POLITICAL, SOCIAL, FRATERNAL, ATHLETIC, AGRICULTURAL, HORTI-
   19  CULTURAL, OR ANIMAL HUSBANDRY, OR FOR THE PURPOSE OF OPERATING A PROFES-
   20  SIONAL, COMMERCIAL, INDUSTRIAL, TRADE OR SERVICE ASSOCIATION.
   21    (19) "RELATED PARTY" MEANS (I) ANY DIRECTOR, OFFICER OR  KEY  EMPLOYEE
   22  OF  THE  CORPORATION OR ANY AFFILIATE OF THE CORPORATION; (II) ANY RELA-
   23  TIVE OF ANY DIRECTOR, OFFICER OR KEY EMPLOYEE OF THE CORPORATION OR  ANY
   24  AFFILIATE  OF THE CORPORATION; OR (III) ANY ENTITY IN WHICH ANY INDIVID-
   25  UAL DESCRIBED IN CLAUSES (I) AND (II) OF THIS SUBPARAGRAPH HAS  A  THIR-
   26  TY-FIVE  PERCENT  OR GREATER OWNERSHIP OR BENEFICIAL INTEREST OR, IN THE
   27  CASE OF A PARTNERSHIP OR PROFESSIONAL CORPORATION, A DIRECT OR  INDIRECT
   28  OWNERSHIP INTEREST IN EXCESS OF FIVE PERCENT.
   29    (20)  "RELATED  PARTY TRANSACTION" MEANS ANY TRANSACTION, AGREEMENT OR
   30  ANY OTHER ARRANGEMENT IN WHICH A RELATED PARTY HAS A FINANCIAL  INTEREST
   31  AND  IN  WHICH  THE CORPORATION OR ANY AFFILIATE OF THE CORPORATION IS A
   32  PARTICIPANT.
   33    (21) "KEY EMPLOYEE" MEANS ANY PERSON WHO IS IN A POSITION TO  EXERCISE
   34  SUBSTANTIAL INFLUENCE OVER THE AFFAIRS OF THE CORPORATION, AS REFERENCED
   35  IN   26  U.S.C.  S4958(F)(1)(A)  AND  FURTHER  SPECIFIED  IN  26  CFR  S
   36  53.4958-3(C) AND (D), OR SUCCEEDING PROVISIONS.
   37    S 2.  Paragraphs (b) and (c) of  section  515  of  the  not-for-profit
   38  corporation law, paragraph (c) as amended by  chapter 847 of the laws of
   39  1970, are amended to read as follows:
   40    (b) A corporation may (1) pay compensation [in a reasonable amount] to
   41  members,  directors,  [or]  officers,  OR  KEY  EMPLOYEES  for  services
   42  rendered, AS PERMITTED BY THIS CHAPTER, and [may] (2) make distributions
   43  of cash or property to members upon dissolution or final liquidation  as
   44  permitted by this chapter.  TOTAL COMPENSATION PAID TO ANY PERSON PURSU-
   45  ANT TO SUBPARAGRAPH ONE OF THIS PARAGRAPH SHALL BE FAIR, REASONABLE, AND
   46  COMMENSURATE  WITH  SERVICES  PROVIDED TO THE CORPORATION. NO PERSON WHO
   47  MAY BENEFIT FROM SUCH  COMPENSATION  MAY  BE  PRESENT  AT  OR  OTHERWISE
   48  PARTICIPATE  IN  ANY  BOARD OR COMMITTEE DELIBERATION OR VOTE CONCERNING
   49  SUCH PERSON'S COMPENSATION.
   50    (c) A corporation may confer benefits upon members or  non-members  in
   51  conformity  with  its  purposes  AS PERMITTED BY THIS CHAPTER, INCLUDING
   52  WITHOUT LIMITATION, SECTION 715 (INTERESTED DIRECTORS AND  OFFICERS)  OF
   53  THIS  CHAPTER, may redeem its capital certificates or subvention certif-
   54  icates, and may make other distributions of  cash  or  property  to  its
   55  members  or  former members, directors, or officers prior to dissolution
   56  or final liquidation, as authorized by this  article,  except  when  the
       A. 7337                             3

    1  corporation is currently insolvent or would thereby be made insolvent or
    2  rendered  unable  to  carry  on its corporate purposes, or when the fair
    3  value of the corporation's assets remaining  after  such  conferring  of
    4  benefits,  or redemption, or other distribution would be insufficient to
    5  meet its liabilities.
    6    S 3. Paragraph (a) of section 713 of  the  not-for-profit  corporation
    7  law is amended, and a new paragraph (f) is added to read as follows:
    8    (a) The board may elect or appoint a CHAIR, WHO MAY BE GIVEN THE TITLE
    9  CHAIR  OF THE BOARD, CHAIRPERSON OF THE BOARD, CHAIRMAN OF THE BOARD, OR
   10  CHAIRWOMAN OF THE BOARD, OR president, OR BOTH, one or more  vice-presi-
   11  dents,  a  secretary  and a treasurer, and such other officers as it may
   12  determine, or as may be provided in the by-laws. These officers  may  be
   13  designated  by  such  alternate titles as may be provided in the certif-
   14  icate of incorporation or the by-laws. Any two or more  offices  may  be
   15  held  by the same person, except the offices of president and secretary,
   16  or the offices corresponding thereto.
   17    (F) NO EMPLOYEE OF THE CORPORATION SHALL SERVE AS CHAIR OF  THE  BOARD
   18  OR HOLD ANY OTHER TITLE WITH SIMILAR RESPONSIBILITIES.
   19    S  4.  The not-for-profit corporation law is amended by adding two new
   20  sections 715-a and 715-b to read as follows:
   21  S 715-A. CONFLICT OF INTEREST POLICY.
   22    (A) EVERY CORPORATION SHALL ADOPT A CONFLICT  OF  INTEREST  POLICY  TO
   23  ENSURE  THAT ITS DIRECTORS, OFFICERS AND KEY EMPLOYEES ACT IN THE CORPO-
   24  RATION'S BEST INTEREST AND COMPLY WITH  APPLICABLE  LEGAL  REQUIREMENTS,
   25  INCLUDING BUT NOT LIMITED TO THE REQUIREMENTS SET FORTH IN SECTION SEVEN
   26  HUNDRED FIFTEEN OF THIS ARTICLE.
   27    (B)  THE  CONFLICT OF INTEREST POLICY SHALL INCLUDE, AT A MINIMUM, THE
   28  FOLLOWING PROVISIONS:
   29    (1) A DEFINITION OF THE CIRCUMSTANCES THAT CONSTITUTE  A  CONFLICT  OF
   30  INTEREST;
   31    (2)  PROCEDURES  FOR  DISCLOSING  A  CONFLICT OF INTEREST TO THE AUDIT
   32  COMMITTEE OR, IF THERE IS NO AUDIT COMMITTEE, TO THE BOARD;
   33    (3) A REQUIREMENT THAT THE PERSON WITH THE CONFLICT OF INTEREST NOT BE
   34  PRESENT AT OR PARTICIPATE IN BOARD OR COMMITTEE DELIBERATION OR VOTE  ON
   35  THE MATTER GIVING RISE TO SUCH CONFLICT;
   36    (4)  A PROHIBITION AGAINST ANY ATTEMPT BY THE PERSON WITH THE CONFLICT
   37  TO INFLUENCE THE DELIBERATION OR VOTING ON THE  MATTER  GIVING  RISE  TO
   38  SUCH CONFLICT;
   39    (5) A REQUIREMENT THAT THE EXISTENCE AND RESOLUTION OF THE CONFLICT BE
   40  DOCUMENTED IN THE CORPORATION'S RECORDS, INCLUDING IN THE MINUTES OF ANY
   41  MEETING AT WHICH THE CONFLICT WAS DISCUSSED OR VOTED UPON; AND
   42    (6)  PROCEDURES  FOR  DISCLOSING,  ADDRESSING, AND DOCUMENTING RELATED
   43  PARTY TRANSACTIONS IN ACCORDANCE WITH SECTION SEVEN HUNDRED  FIFTEEN  OF
   44  THIS ARTICLE.
   45    (C)  THE  CONFLICT  OF INTEREST POLICY SHALL REQUIRE THAT PRIOR TO THE
   46  INITIAL ELECTION OF ANY DIRECTOR, AND ANNUALLY THEREAFTER, SUCH DIRECTOR
   47  SHALL COMPLETE, SIGN AND SUBMIT TO THE SECRETARY OF  THE  CORPORATION  A
   48  WRITTEN  STATEMENT  IDENTIFYING  ANY ENTITY OF WHICH SUCH DIRECTOR IS AN
   49  OFFICER, DIRECTOR, TRUSTEE, MEMBER, OWNER (EITHER AS A  SOLE  PROPRIETOR
   50  OR  A  PARTNER),  OR  EMPLOYEE  AND  WITH  WHICH  THE  CORPORATION HAS A
   51  RELATIONSHIP, AND ANY TRANSACTION IN WHICH THE CORPORATION IS A  PARTIC-
   52  IPANT  AND  IN WHICH THE DIRECTOR MIGHT HAVE A CONFLICTING INTEREST. THE
   53  POLICY SHALL REQUIRE THAT EACH DIRECTOR ANNUALLY RESUBMIT  SUCH  WRITTEN
   54  STATEMENT.    THE  SECRETARY  OF THE CORPORATION SHALL PROVIDE A COPY OF
   55  ALL COMPLETED STATEMENTS TO THE CHAIR OF  THE  AUDIT  COMMITTEE  OR,  IF
   56  THERE IS NO AUDIT COMMITTEE, TO THE CHAIR OF THE BOARD.
       A. 7337                             4

    1    (D)  NOTHING  IN THIS SECTION SHALL BE INTERPRETED TO REQUIRE A CORPO-
    2  RATION TO ADOPT ANY SPECIFIC CONFLICT OF INTEREST POLICY  NOT  OTHERWISE
    3  REQUIRED  BY  THIS  SECTION OR ANY OTHER LAW OR RULE, OR TO SUPERSEDE OR
    4  LIMIT ANY REQUIREMENT OR DUTY GOVERNING CONFLICTS OF  INTEREST  REQUIRED
    5  BY ANY OTHER LAW OR RULE.
    6  S 715-B. WHISTLEBLOWER POLICY.
    7    (A)  EVERY  CORPORATION  THAT  HAS TWENTY OR MORE EMPLOYEES AND IN THE
    8  PRIOR FISCAL YEAR HAD ANNUAL REVENUE IN EXCESS OF  ONE  MILLION  DOLLARS
    9  SHALL  ADOPT  A WHISTLEBLOWER POLICY TO PROTECT FROM RETALIATION PERSONS
   10  WHO REPORT SUSPECTED IMPROPER CONDUCT. SUCH POLICY SHALL PROVIDE THAT NO
   11  DIRECTOR, OFFICER, EMPLOYEE OR VOLUNTEER OF A CORPORATION  WHO  IN  GOOD
   12  FAITH  REPORTS  ANY  ACTION  OR  SUSPECTED ACTION TAKEN BY OR WITHIN THE
   13  CORPORATION THAT IS ILLEGAL, FRAUDULENT OR IN VIOLATION OF  ANY  ADOPTED
   14  POLICY   OF  THE  CORPORATION  SHALL  SUFFER  INTIMIDATION,  HARASSMENT,
   15  DISCRIMINATION OR OTHER  RETALIATION  OR,  IN  THE  CASE  OF  EMPLOYEES,
   16  ADVERSE EMPLOYMENT CONSEQUENCE.
   17    (B) THE WHISTLEBLOWER POLICY SHALL INCLUDE THE FOLLOWING PROVISIONS:
   18    (1) PROCEDURES FOR THE REPORTING OF VIOLATIONS OR SUSPECTED VIOLATIONS
   19  OF  LAWS  OR CORPORATE POLICIES, INCLUDING PROCEDURES FOR PRESERVING THE
   20  CONFIDENTIALITY OF REPORTED INFORMATION;
   21    (2) A REQUIREMENT THAT AN EMPLOYEE, OFFICER OR DIRECTOR OF THE  CORPO-
   22  RATION  BE  DESIGNATED  TO  ADMINISTER  THE  WHISTLEBLOWER POLICY AND TO
   23  REPORT TO THE AUDIT COMMITTEE OR OTHER COMMITTEE OF  INDEPENDENT  DIREC-
   24  TORS OR, IF THERE ARE NO SUCH COMMITTEES, TO THE BOARD; AND
   25    (3)  A  REQUIREMENT  THAT  A  COPY OF THE POLICY BE DISTRIBUTED TO ALL
   26  DIRECTORS, OFFICERS, EMPLOYEES AND VOLUNTEERS.
   27    (C) NOTHING IN THIS SECTION SHALL BE INTERPRETED TO RELIEVE ANY CORPO-
   28  RATION FROM ANY ADDITIONAL REQUIREMENTS IN RELATION TO INTERNAL  COMPLI-
   29  ANCE,  RETALIATION,  OR  DOCUMENT RETENTION REQUIRED BY ANY OTHER LAW OR
   30  RULE.
   31    S 5. The estates, powers and trusts law is amended  by  adding  a  new
   32  section 8-1.9 to read as follows:
   33  S 8-1.9 TRUST GOVERNANCE
   34    (A) FOR PURPOSES OF THIS SECTION:
   35    (1) A "TRUST" MEANS A TRUST CREATED SOLELY FOR CHARITABLE PURPOSES, OR
   36  A TRUST THAT CONTINUES SOLELY FOR SUCH PURPOSES AFTER ALL NON-CHARITABLE
   37  INTERESTS HAVE TERMINATED.
   38    (2)  "CHARITABLE PURPOSE" MEANS ANY RELIGIOUS, CHARITABLE, EDUCATIONAL
   39  OR BENEVOLENT PURPOSE.
   40    (3) "KEY EMPLOYEE" MEANS ANY PERSON WHO HAS  RESPONSIBILITIES,  POWERS
   41  OR  INFLUENCE  OVER  THE  TRUST  SIMILAR  TO  THOSE  OF  AN OFFICER OF A
   42  NOT-FOR-PROFIT CORPORATION, OR IS OTHERWISE IN A  POSITION  TO  EXERCISE
   43  SUBSTANTIAL INFLUENCE OVER THE AFFAIRS OF THE TRUST, AS REFERENCED IN 26
   44  U.S.C.  S4958(F)(1)(A) AND FURTHER SPECIFIED IN 26 CFR S53.4958-3(C) AND
   45  (D), OR SUCCEEDING PROVISIONS.
   46    (4) AN "AFFILIATE" OF A TRUST  MEANS  ANY  ENTITY  CONTROLLED  BY,  IN
   47  CONTROL OF, OR UNDER COMMON CONTROL WITH SUCH TRUST.
   48    (5) "RELATIVE" OF AN INDIVIDUAL MEANS THE (I) SPOUSE, DOMESTIC PARTNER
   49  AS  DEFINED  BY SECTION TWENTY-EIGHT HUNDRED FIVE-Q OF THE PUBLIC HEALTH
   50  LAW, CHILD, GRANDCHILD, BROTHER OR SISTER  (WHETHER  BY  THE  WHOLE-  OR
   51  HALF-BLOOD)  OF  THE INDIVIDUAL; AND (II) THE SPOUSE OR DOMESTIC PARTNER
   52  OF A CHILD, GRANDCHILD, BROTHER, OR SISTER (WHETHER  BY  THE  WHOLE-  OR
   53  HALF-BLOOD) OF THE INDIVIDUAL.
   54    (6) "RELATED PARTY" MEANS (I) ANY TRUSTEE OR KEY EMPLOYEE OF THE TRUST
   55  OR  ANY  AFFILIATE OF THE TRUST; (II) ANY RELATIVE OF ANY TRUSTEE OR KEY
   56  EMPLOYEE OF THE TRUST OR ANY AFFILIATE OF THE TRUST; OR (III) AN  ENTITY
       A. 7337                             5

    1  IN  WHICH  ANY  INDIVIDUAL  DESCRIBED  IN  CLAUSES  (I) AND (II) OF THIS
    2  SUBPARAGRAPH HAS A THIRTY-FIVE PERCENT OR GREATER OWNERSHIP  OR  BENEFI-
    3  CIAL  INTEREST  OR,  IN THE CASE OF A PARTNERSHIP OR PROFESSIONAL CORPO-
    4  RATION, A DIRECT OWNERSHIP INTEREST IN EXCESS OF FIVE PERCENT.
    5    (7) "INDEPENDENT TRUSTEE" MEANS A TRUSTEE WHO: (I) IS NOT, AND HAS NOT
    6  BEEN  WITHIN THE LAST THREE YEARS, AN EMPLOYEE OF THE TRUST OR AN AFFIL-
    7  IATE OF THE TRUST, AND DOES NOT HAVE A RELATIVE  WHO  IS,  OR  HAS  BEEN
    8  WITHIN THE LAST THREE YEARS, A KEY EMPLOYEE OF THE TRUST OR AN AFFILIATE
    9  OF  THE  TRUST;  (II) HAS NOT RECEIVED, AND DOES NOT HAVE A RELATIVE WHO
   10  HAS RECEIVED, IN ANY OF THE LAST THREE FISCAL YEARS, MORE THAN TEN THOU-
   11  SAND DOLLARS IN DIRECT COMPENSATION FROM THE TRUST OR  AN  AFFILIATE  OF
   12  THE TRUST (OTHER THAN REIMBURSEMENT FOR EXPENSES OR THE PAYMENT OF TRUS-
   13  TEE  COMMISSIONS  AS PERMITTED BY LAW AND THE GOVERNING INSTRUMENT); AND
   14  (III) IS NOT A CURRENT EMPLOYEE  OF  OR  HAVE  A  SUBSTANTIAL  FINANCIAL
   15  INTEREST IN, AND DOES NOT HAVE A RELATIVE WHO IS A CURRENT OFFICER OF OR
   16  HAVE  A  SUBSTANTIAL  FINANCIAL  INTEREST  IN,  ANY ENTITY THAT HAS MADE
   17  PAYMENTS TO, OR RECEIVED PAYMENTS FROM, THE TRUST OR AN AFFILIATE OF THE
   18  TRUST FOR PROPERTY OR SERVICES IN AN AMOUNT WHICH, IN ANY  OF  THE  LAST
   19  THREE  FISCAL  YEARS, EXCEEDS THE LESSER OF TWENTY-FIVE THOUSAND DOLLARS
   20  OR TWO  PERCENT  OF  SUCH  ENTITY'S  CONSOLIDATED  GROSS  REVENUES.  FOR
   21  PURPOSES  OF  THIS  SUBPARAGRAPH,  "PAYMENT" DOES NOT INCLUDE CHARITABLE
   22  CONTRIBUTIONS.
   23    (8) "RELATED PARTY TRANSACTION" MEANS ANY  TRANSACTION,  AGREEMENT  OR
   24  ANY  OTHER ARRANGEMENT IN WHICH A RELATED PARTY HAS A FINANCIAL INTEREST
   25  AND IN WHICH THE TRUST OR ANY AFFILIATE OF THE TRUST IS A PARTICIPANT.
   26    (9)  "INDEPENDENT  AUDITOR"  MEANS  ANY  CERTIFIED  PUBLIC  ACCOUNTANT
   27  PERFORMING  THE AUDIT OF THE FINANCIAL STATEMENTS OF A TRUST REQUIRED BY
   28  SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B   OF THE  EXECUTIVE
   29  LAW.
   30    (B)(1) EVERY TRUST SHALL ADOPT A CONFLICT OF INTEREST POLICY TO ENSURE
   31  THAT  ITS  TRUSTEES, OFFICERS AND KEY EMPLOYEES ACT IN THE BEST INTEREST
   32  OF THE TRUST AND ITS BENEFICIARIES  AND  COMPLY  WITH  APPLICABLE  LEGAL
   33  REQUIREMENTS, INCLUDING BUT NOT LIMITED TO THE REQUIREMENTS SET FORTH IN
   34  PARAGRAPH (E) OF THIS SECTION.
   35    (2)  THE  CONFLICT OF INTEREST POLICY SHALL INCLUDE, AT A MINIMUM, THE
   36  FOLLOWING PROVISIONS:
   37    (A) A DEFINITION OF THE CIRCUMSTANCES THAT CONSTITUTE  A  CONFLICT  OF
   38  INTEREST;
   39    (B)  PROCEDURES  FOR  DISCLOSING  A  CONFLICT OF INTEREST TO THE AUDIT
   40  COMMITTEE OR, IF THERE IS NO AUDIT COMMITTEE, TO THE TRUSTEES;
   41    (C) A REQUIREMENT THAT THE PERSON WITH THE CONFLICT OF INTEREST NOT BE
   42  PRESENT AT OR PARTICIPATE IN ANY DELIBERATION  OR  VOTE  ON  THE  MATTER
   43  GIVING RISE TO SUCH CONFLICT;
   44    (D)  A PROHIBITION AGAINST ANY ATTEMPT BY THE PERSON WITH THE CONFLICT
   45  TO INFLUENCE THE DELIBERATION OR VOTING ON THE  MATTER  GIVING  RISE  TO
   46  SUCH CONFLICT;
   47    (E) A REQUIREMENT THAT THE EXISTENCE AND RESOLUTION OF THE CONFLICT BE
   48  DOCUMENTED IN THE TRUST'S RECORDS, INCLUDING IN THE MINUTES OF ANY MEET-
   49  ING AT WHICH THE CONFLICT WAS DISCUSSED OR VOTED UPON; AND
   50    (F)  PROCEDURES  FOR  DISCLOSING,  ADDRESSING, AND DOCUMENTING RELATED
   51  PARTY TRANSACTIONS IN ACCORDANCE WITH PARAGRAPH (E) OF THIS SECTION.
   52    (3) THE CONFLICT OF INTEREST POLICY SHALL  REQUIRE  THAT  PRIOR  TO  A
   53  TRUSTEE'S  INITIAL  APPOINTMENT,  AND  ANNUALLY THEREAFTER, SUCH TRUSTEE
   54  SHALL COMPLETE, SIGN AND FILE WITH THE RECORDS OF THE  TRUST  A  WRITTEN
   55  STATEMENT  IDENTIFYING  ANY  ENTITY  OF  WHICH  HE OR SHE IS AN OFFICER,
   56  DIRECTOR, TRUSTEE, MEMBER, OWNER (EITHER AS A SOLE PROPRIETOR OR A PART-
       A. 7337                             6

    1  NER), OR EMPLOYEE AND WITH WHICH THE TRUST HAS A RELATIONSHIP,  AND  ANY
    2  TRANSACTION IN WHICH THE TRUST IS A PARTICIPANT AND IN WHICH THE TRUSTEE
    3  MIGHT  HAVE  A  CONFLICTING INTEREST. THE POLICY SHALL REQUIRE THAT EACH
    4  TRUSTEE  ANNUALLY  RESUBMIT  SUCH  WRITTEN STATEMENT. THE TRUSTEES SHALL
    5  PROVIDE A COPY OF ALL COMPLETED STATEMENTS TO THE  CHAIR  OF  THE  AUDIT
    6  COMMITTEE, IF THERE IS AN AUDIT COMMITTEE.
    7    (4)  NOTHING IN THIS PARAGRAPH SHALL BE INTERPRETED TO REQUIRE A TRUST
    8  TO ADOPT ANY SPECIFIC CONFLICT OF INTEREST POLICY NOT OTHERWISE REQUIRED
    9  BY THIS PARAGRAPH OR ANY OTHER LAW OR RULE, OR TO SUPERSEDE OR LIMIT ANY
   10  REQUIREMENT OR DUTY GOVERNING CONFLICTS  OF  INTEREST  REQUIRED  BY  ANY
   11  OTHER LAW OR RULE.
   12    (C)(1)  EVERY TRUST THAT HAS TWENTY OR MORE EMPLOYEES AND IN THE PRIOR
   13  FISCAL YEAR HAD ANNUAL REVENUE IN EXCESS OF ONE  MILLION  DOLLARS  SHALL
   14  ADOPT  A  WHISTLEBLOWER  POLICY  TO PROTECT FROM RETALIATION PERSONS WHO
   15  REPORT SUSPECTED IMPROPER CONDUCT. SUCH POLICY  SHALL  PROVIDE  THAT  NO
   16  OFFICER,  TRUSTEE,  EMPLOYEE  OR  VOLUNTEER OF A TRUST WHO IN GOOD FAITH
   17  REPORTS ANY ACTION OR SUSPECTED ACTION TAKEN BY OR WITHIN THE TRUST THAT
   18  IS ILLEGAL, FRAUDULENT OR IN VIOLATION OF  ANY  ADOPTED  POLICY  OF  THE
   19  TRUST  SHALL  SUFFER  INTIMIDATION,  HARASSMENT, DISCRIMINATION OR OTHER
   20  RETALIATION OR, IN THE CASE  OF  EMPLOYEES,  ADVERSE  EMPLOYMENT  CONSE-
   21  QUENCE.
   22    (2) THE WHISTLEBLOWER POLICY SHALL INCLUDE THE FOLLOWING PROVISIONS:
   23    (A) PROCEDURES FOR THE REPORTING OF VIOLATIONS OR SUSPECTED VIOLATIONS
   24  OF  LAWS  OR  TRUST  POLICIES,  INCLUDING  PROCEDURES FOR PRESERVING THE
   25  CONFIDENTIALITY OF REPORTED INFORMATION;
   26    (B) A REQUIREMENT THAT A TRUSTEE, OFFICER OR EMPLOYEE OF THE TRUST  BE
   27  DESIGNATED  TO ADMINISTER, THE WHISTLEBLOWER POLICY AND TO REPORT TO THE
   28  AUDIT COMMITTEE OR OTHER COMMITTEE OF INDEPENDENT TRUSTEES,  OR  TO  THE
   29  TRUSTEES; AND
   30    (C)  A  REQUIREMENT  THAT  A  COPY OF THE POLICY BE DISTRIBUTED TO ALL
   31  TRUSTEES, OFFICERS, EMPLOYEES AND VOLUNTEERS, WITH INSTRUCTIONS  ON  HOW
   32  TO COMPLY WITH THE PROCEDURES SET FORTH IN THE POLICY.
   33    (3)  NOTHING  IN  THIS  PARAGRAPH  SHALL BE INTERPRETED TO RELIEVE ANY
   34  TRUST FROM ANY ADDITIONAL REQUIREMENTS IN RELATION TO  INTERNAL  COMPLI-
   35  ANCE,  RETALIATION,  OR  DOCUMENT RETENTION REQUIRED BY ANY OTHER LAW OR
   36  RULE.
   37    S 6. Section 105 of the not-for-profit corporation law, as amended  by
   38  chapter 172 of the laws of 1999, is amended to read as follows:
   39  S 105. Certificates; corrections.
   40    (A)  ANY  CERTIFICATE  OR  OTHER  INSTRUMENT RELATING TO A DOMESTIC OR
   41  FOREIGN CORPORATION SUBMITTED TO THE  DEPARTMENT  OF  STATE  UNDER  THIS
   42  CHAPTER  MAY  BE CORRECTED WITH RESPECT TO ANY TYPOGRAPHICAL, OR SIMILAR
   43  NON-MATERIAL ERROR APPARENT ON THE FACE OF THE  CERTIFICATE  OR  INSTRU-
   44  MENT,  PRIOR  TO  THE  FILING  OF  SUCH CERTIFICATE OR INSTRUMENT BY THE
   45  DEPARTMENT OF STATE. SUCH CORRECTION SHALL BE EFFECTED BY THE DEPARTMENT
   46  OF STATE UPON AUTHORIZATION IN WRITING OR  BY  ELECTRONIC  MAIL  BY  THE
   47  INCORPORATOR,  OR  FOLLOWING  INCORPORATION, BY ANY PERSON AUTHORIZED BY
   48  THE CORPORATION.
   49    (B) Any certificate or other instrument  relating  to  a  domestic  or
   50  foreign  corporation filed by the department of state under this chapter
   51  may be corrected with respect to any [informality or]  TYPOGRAPHICAL  OR
   52  SIMILAR  NON-MATERIAL  error  apparent  on  the  face  or  defect in the
   53  execution thereof including the deletion of any matter not permitted  to
   54  be  stated  therein.  A certificate, entitled "Certificate of correction
   55  of.......... (correct title of certificate  and  name  of  corporation)"
   56  shall  be signed and delivered to the department of state.  It shall set
       A. 7337                             7

    1  forth the name of the  corporation,  the  date  the  certificate  to  be
    2  corrected  was  filed  by  the department of state, the provision in the
    3  certificate as corrected or eliminated and if the execution  was  defec-
    4  tive, the proper execution. The filing of the certificate by the depart-
    5  ment of state shall not alter the effective time of the instrument being
    6  corrected,  which shall remain as its original effective time, and shall
    7  not affect any right  or  liability  accrued  or  incurred  before  such
    8  filing.  A  corporate  name  may  not be changed or corrected under this
    9  section OTHER THAN TO CORRECT ANY TYPOGRAPHICAL OR SIMILAR  NON-MATERIAL
   10  ERROR.
   11    S 7. Section 113 of the not-for-profit corporation law is REPEALED.
   12    S  8. Section 201 of the not-for-profit corporation law, paragraph (b)
   13  as amended by chapter 847 of the laws  of  1970  and  paragraph  (c)  as
   14  amended  by  chapter  1058  of  the  laws of 1971, is amended to read as
   15  follows:
   16  S 201. Purposes.
   17    (a) A corporation, as defined in subparagraph  [(5)]  (10),  paragraph
   18  (a)  of  S  102  (Definitions),  may  be  formed  under this chapter [as
   19  provided in paragraph (b)] unless it  may  be  formed  under  any  other
   20  corporate  law  of this state, in which event it may not be formed under
   21  this chapter unless such other corporate law expressly so provides.
   22    (b) [A corporation, of a  type  and  for  a  purpose  or  purposes  as
   23  follows,  may  be  formed under this chapter, provided consents required
   24  under any other statute of this state have been obtained:
   25    Type A -] A CORPORATION FORMED ON OR AFTER JANUARY FIRST, TWO THOUSAND
   26  FOURTEEN SHALL EITHER BE A CHARITABLE CORPORATION  OR  A  NON-CHARITABLE
   27  CORPORATION.  ANY  CORPORATION  FORMED  FOR BOTH CHARITABLE PURPOSES AND
   28  NON-CHARITABLE PURPOSES SHALL BE DEEMED  A  CHARITABLE  CORPORATION  FOR
   29  PURPOSES  OF  THIS CHAPTER. A TYPE A not-for-profit corporation [of this
   30  type may be formed for  any  lawful  non-business  purpose  or  purposes
   31  including,  but not limited to, any one or more of the following non-pe-
   32  cuniary purposes:    civic,  patriotic,  political,  social,  fraternal,
   33  athletic,  agricultural,  horticultural,  animal  husbandry,  and  for a
   34  professional, commercial, industrial, trade or service association.
   35    Type B - A not-for-profit corporation of this type may be  formed  for
   36  any  one  or  more  of  the following non-business purposes: charitable,
   37  educational,  religious,  scientific,  literary,  cultural  or  for  the
   38  prevention of cruelty to children or animals.
   39    Type  C  - A not-for-profit corporation of this type may be formed for
   40  any lawful business purpose to achieve a lawful public  or  quasi-public
   41  objective.
   42    Type D - A not-for-profit corporation of this type may be formed under
   43  this  chapter  when  such formation is authorized by any other corporate
   44  law of this state for any business  or  non-business,  or  pecuniary  or
   45  non-pecuniary,  purpose or purposes specified by such other law, whether
   46  such purpose or purposes are also within types A, B, C above  or  other-
   47  wise.
   48    (c) If a corporation is formed for purposes which are within both type
   49  A  and  type  B above, it is a type B corporation.  If a corporation has
   50  among its purposes any purpose which is within type C, such  corporation
   51  is  a  type  C  corporation.    A  type  D corporation is subject to all
   52  provisions of this chapter which are applicable to a type B  corporation
   53  under  this  chapter  unless provided to the contrary in, and subject to
   54  the contrary provisions of, the other corporate law  authorizing  forma-
   55  tion  under  this  chapter  of  the type D corporation.] FORMED PRIOR TO
   56  JANUARY FIRST, TWO THOUSAND FOURTEEN SHALL BE  DEEMED  A  NON-CHARITABLE
       A. 7337                             8

    1  CORPORATION  UNDER THIS CHAPTER. ANY SUBMISSION OR FILING BY SUCH CORPO-
    2  RATION TO ANY PERSON OR ENTITY SHALL BE DEEMED TO HAVE BEEN SUBMITTED OR
    3  FILED BY A NON-CHARITABLE CORPORATION, AND ANY  REFERENCE  IN  ANY  SUCH
    4  FILING  OR  SUBMISSION  REFERRING TO THE STATUS OF SUCH CORPORATION AS A
    5  TYPE A CORPORATION SHALL BE DEEMED TO REFER TO A  NON-CHARITABLE  CORPO-
    6  RATION.
    7    (C)  A  TYPE B OR C NOT-FOR-PROFIT CORPORATION FORMED PRIOR TO JANUARY
    8  FIRST, TWO THOUSAND FOURTEEN SHALL BE DEEMED  A  CHARITABLE  CORPORATION
    9  FOR  ALL  PURPOSES  UNDER THIS CHAPTER. ANY SUBMISSION OR FILING BY SUCH
   10  CORPORATION TO ANY PERSON OR ENTITY SHALL BE DEEMED TO HAVE BEEN SUBMIT-
   11  TED OR FILED BY A CHARITABLE CORPORATION, AND ANY REFERENCE IN ANY  SUCH
   12  FILING  OR  SUBMISSION  REFERRING TO THE STATUS OF SUCH CORPORATION AS A
   13  TYPE B OR TYPE C CORPORATION SHALL BE DEEMED TO REFER  TO  A  CHARITABLE
   14  CORPORATION.
   15    (D) A TYPE D NOT-FOR-PROFIT CORPORATION FORMED PRIOR TO JANUARY FIRST,
   16  TWO THOUSAND FOURTEEN FOR CHARITABLE PURPOSES AS THAT TERM IS DEFINED IN
   17  THIS CHAPTER SHALL BE DEEMED A CHARITABLE CORPORATION. ANY SUBMISSION OR
   18  FILING  BY  SUCH  CORPORATION TO ANY PERSON OR ENTITY SHALL BE DEEMED TO
   19  HAVE BEEN SUBMITTED OR FILED BY A CHARITABLE CORPORATION, AND ANY REFER-
   20  ENCE IN ANY SUCH FILING OR SUBMISSION REFERRING TO THE  STATUS  OF  SUCH
   21  CORPORATION AS A TYPE D CORPORATION SHALL BE DEEMED TO REFER TO A CHARI-
   22  TABLE  CORPORATION.  ANY OTHER TYPE D NOT-FOR-PROFIT CORPORATIONS FORMED
   23  PRIOR TO  JANUARY  FIRST,  TWO  THOUSAND  FOURTEEN  SHALL  BE  DEEMED  A
   24  NON-CHARITABLE CORPORATION. ANY SUBMISSION OR FILING BY SUCH CORPORATION
   25  TO  ANY PERSON OR ENTITY SHALL BE DEEMED TO HAVE BEEN SUBMITTED OR FILED
   26  BY A NON-CHARITABLE CORPORATION, AND ANY REFERENCE IN ANY SUCH FILING OR
   27  SUBMISSION REFERRING TO THE STATUS OF  SUCH  CORPORATION  AS  A  TYPE  D
   28  CORPORATION SHALL BE DEEMED TO REFER TO A NON-CHARITABLE CORPORATION.
   29    S  9.  Section 204 of the not-for-profit corporation law is amended to
   30  read as follows:
   31  S 204. Limitation on activities.
   32    Notwithstanding any other provision  of  this  chapter  or  any  other
   33  general  law,  a corporation of any [type or] kind to which this chapter
   34  applies shall conduct no activities for pecuniary  profit  or  financial
   35  gain,  [whether  or  not]  EXCEPT  in  furtherance of, AND AS REASONABLY
   36  NECESSARY TO ACHIEVE, its corporate purposes[, except to the extent that
   37  such  activity  supports  its  other  lawful   activities   then   being
   38  conducted].
   39    S 10. Paragraph (a) of section 104-A of the not-for-profit corporation
   40  law is REPEALED.
   41    S  11.  Section 115 of the not-for-profit corporation law, as added by
   42  chapter 669 of the laws of 1977, is amended to read as follows:
   43  S 115. Power to solicit contributions for charitable purposes.
   44    [No corporation having the power to solicit contributions for charita-
   45  ble purposes  may  solicit  contributions  for  any  purpose  for  which
   46  approval  of  such  solicitation  is  required  under  the provisions of
   47  section four hundred four of this chapter unless the certificate specif-
   48  ically makes provision for such solicitation and  the  required  written
   49  approval  is  endorsed  on  or annexed to such certificate or unless the
   50  corporation is among those referred to in section one  hundred  seventy-
   51  two-a  of  the  executive  law. If such approval is not obtained and the
   52  corporation continues to solicit or to receive  contributions  for  such
   53  purpose  or  advertises  that it has obtained such approval, the] (A) NO
   54  CORPORATION REQUIRED TO OBTAIN APPROVAL OR PROVIDE NOTICE  OF  FORMATION
   55  PURSUANT  TO SECTION 404 (APPROVALS, NOTICES AND CONSENTS) OF THIS CHAP-
   56  TER MAY SOLICIT CONTRIBUTIONS FOR ANY  PURPOSE  UNLESS  AND  UNTIL  SUCH
       A. 7337                             9

    1  CORPORATION  (1)  OBTAINS  AND  SUBMITS  ANY APPROVAL OR NOTICE REQUIRED
    2  THEREUNDER, AND (2) IS IN COMPLIANCE WITH THE REGISTRATION AND REPORTING
    3  REQUIREMENTS OF ARTICLE SEVEN-A OF THE EXECUTIVE LAW AND  SECTION  8-1.4
    4  OF THE ESTATES, POWERS AND TRUSTS LAW.
    5    (B)  THE  attorney  general[,  at  the  request of the officer or body
    6  authorized to grant such approval, shall]  MAY  maintain  an  action  or
    7  proceeding  pursuant  to the provisions of subparagraph one of paragraph
    8  (a) of section one hundred twelve of this [chapter] ARTICLE AGAINST  ANY
    9  CORPORATION THAT SOLICITS CONTRIBUTIONS IN VIOLATION OF PARAGRAPH (A) OF
   10  THIS  SECTION.    Such an action may also be maintained in relation to a
   11  corporation hereinafter incorporated if the name, purposes,  objects  or
   12  the  activities  of  such  corporation  may,  in any manner, lead to the
   13  belief that the corporation  possesses  or  may  exercise  any  of  such
   14  purposes.
   15    S  12.  The  section  heading  and paragraph (a) of section 304 of the
   16  not-for-profit corporation law, as amended by chapter 168 of the laws of
   17  1982, is amended to read as follows:
   18    Statutory designation of secretary  of  state  as  agent  of  domestic
   19  corporations  [formed under article four of this chapter] and authorized
   20  foreign corporations for service of process.
   21    (a) The secretary of state shall be the agent of every domestic corpo-
   22  ration [formed under article four of this chapter] and every  authorized
   23  foreign  corporation  upon  whom  process against the corporation may be
   24  served.
   25    S 13. Paragraphs (b) and (c) of  section  306  of  the  not-for-profit
   26  corporation  law, paragraph (b) as amended by chapter 168 of the laws of
   27  1982, and paragraph (c) as amended by chapter 93 of the  laws  of  1984,
   28  are amended to read as follows:
   29    (b)  Service of process on the secretary of state as agent of a domes-
   30  tic corporation [formed under  article  four  of  this  chapter]  or  an
   31  authorized foreign corporation shall be made by personally delivering to
   32  and  leaving  with [him or his] THE deputy OF THE SECRETARY OF STATE, or
   33  with any person authorized by the secretary of  state  to  receive  such
   34  service, at the office of the department of state in the city of Albany,
   35  duplicate  copies of such process together with the statutory fee, which
   36  fee shall be a taxable disbursement.  Service of process on such  corpo-
   37  ration  shall  be complete when the secretary of state is so served. The
   38  secretary of state shall promptly send one of such copies  by  certified
   39  mail,  return receipt requested, to such corporation, at the post office
   40  address, on file in the department of state, specified for the  purpose.
   41  If a domestic corporation [formed under article four of this chapter] or
   42  an  authorized  foreign  corporation  has no such address on file in the
   43  department of state, the secretary of state shall so mail such  copy  to
   44  such  corporation at the address of its office within this state on file
   45  in the department.
   46    (c) If an action or special proceeding is instituted  in  a  court  of
   47  limited  jurisdiction,  service  of  process  may  be made in the manner
   48  provided in this section if  the  office  of  the  domestic  corporation
   49  [formed  under  article  four of this chapter] or foreign corporation is
   50  within the territorial jurisdiction of the court.
   51    S 14. Subparagraphs 2 and 4 of paragraph (a) of  section  402  of  the
   52  not-for-profit corporation law, subparagraph 2 as amended by chapter 847
   53  of  the laws of 1970 and subparagraph 4 as amended by chapter 679 of the
   54  laws of 1985, are amended to read as follows:
   55    (2) That the corporation is a corporation as defined  in  subparagraph
   56  (a)  (5)  of  section  102 (Definitions)[;], the purpose or purposes for
       A. 7337                            10

    1  which it is formed, and [the type of] WHETHER IT IS A CHARITABLE  corpo-
    2  ration  [it  shall be] OR A NON-CHARITABLE CORPORATION under section 201
    3  (Purposes)[; and in the case of a Type C corporation, the lawful  public
    4  or  quasi-public  objective  which  each business purpose will achieve].
    5  ANY CORPORATION MAY ALSO SET FORTH ANY ACTIVITIES  THAT  IT  INTENDS  TO
    6  CARRY OUT IN FURTHERANCE OF SUCH PURPOSE OR PURPOSES; PROVIDED THAT THIS
    7  SUBPARAGRAPH SHALL NOT BE INTERPRETED TO REQUIRE THAT THE CERTIFICATE OF
    8  INCORPORATION  SET  FORTH  SUCH  ACTIVITIES  OR  OTHERWISE STATE HOW THE
    9  CORPORATION'S PURPOSES WILL BE ACHIEVED.
   10    (4) [In the case of a Type A, Type B, or Type C corporation, the]  THE
   11  names  and  addresses of the initial directors. [In the case of a Type D
   12  corporation, the names and addresses of the initial directors,  if  any,
   13  may but need not be set forth.]
   14    S 15. The section heading and paragraphs (b) and (d) of section 404 of
   15  the  not-for-profit  corporation  law, the section heading and paragraph
   16  (d) as amended by chapter 139 of the laws  of  1993,  paragraph  (b)  as
   17  amended  by  section  4 of part D of chapter 58 of the laws of 2006, and
   18  paragraph (d) as relettered by chapter 431 of  the  laws  of  1993,  are
   19  amended to read as follows:
   20  Approvals, NOTICES and consents.
   21    (b)  (1)  Every  certificate of incorporation which includes among its
   22  purposes the care of  destitute,  delinquent,  abandoned,  neglected  or
   23  dependent  children;  the  establishment  or operation of any adult care
   24  facility, or the establishment or operation of a residential program for
   25  victims of domestic violence as defined in subdivision four  of  section
   26  four hundred fifty-nine-a of the social services law, or the placing-out
   27  or  boarding-out of children or a home or shelter for unmarried mothers,
   28  excepting the establishment or maintenance of  a  hospital  or  facility
   29  providing  health-related services as those terms are defined in article
   30  twenty-eight of the public health law and a facility for which an  oper-
   31  ating  certificate is required by articles sixteen, nineteen, twenty-two
   32  and thirty-one of  the  mental  hygiene  law;  or  the  solicitation  of
   33  contributions  for  any  such  purpose  or purposes, shall have endorsed
   34  thereon or annexed thereto the  approval  of  the  commissioner  of  the
   35  office of children and family services or with respect to any adult care
   36  facility, the commissioner of health.
   37    (2)  A  corporation  whose statement of purposes specifically includes
   38  the establishment or operation of a child day care center, as that  term
   39  is  defined  in section three hundred ninety of the social services law,
   40  shall provide a certified copy of the certificate of incorporation, each
   41  amendment thereto, and  any  certificate  of  merger,  consolidation  or
   42  dissolution  involving  such  corporation  to the office of children and
   43  family services within [thirty] TEN BUSINESS days after  the  filing  of
   44  such  certificate,  amendment, merger, consolidation or dissolution with
   45  the department of state.  This  requirement  shall  also  apply  to  any
   46  foreign  corporation  filing  an application for authority under section
   47  thirteen hundred four of this chapter, any amendments thereto,  and  any
   48  surrender of authority or termination of authority in this state of such
   49  corporation.
   50    (d)  Every  CORPORATION  THE  certificate  of  incorporation  OF WHICH
   51  INCLUDES AMONG ITS PURPOSES THE OPERATION OF A SCHOOL, COLLEGE,  UNIVER-
   52  SITY,  LIBRARY, MUSEUM OR HISTORICAL SOCIETY SHALL HAVE ENDORSED THEREON
   53  OR ANNEXED THERETO THE APPROVAL OF THE COMMISSIONER  OF  EDUCATION.  ANY
   54  OTHER  CORPORATION  THE CERTIFICATE OF INCORPORATION OF which includes a
   55  purpose for which a corporation might be chartered by the regents of the
   56  university of the State of New York  shall  [have  endorsed  thereon  or
       A. 7337                            11

    1  annexed thereto the consent of the commissioner of education.] PROVIDE A
    2  CERTIFIED  COPY  OF THE CERTIFICATE OF INCORPORATION TO THE COMMISSIONER
    3  OF EDUCATION WITHIN TEN BUSINESS DAYS  AFTER  THE  CORPORATION  RECEIVES
    4  CONFIRMATION  FROM THE DEPARTMENT OF STATE THAT THE CERTIFICATE HAS BEEN
    5  ACCEPTED FOR FILING.
    6    S 16. Paragraph (w) of section 404 of the  not-for-profit  corporation
    7  law is REPEALED.
    8    S  17.  The  section  heading  and paragraph (a) of section 804 of the
    9  not-for-profit corporation law, as amended by chapter 139 of the laws of
   10  1993, and subparagraph (i) of paragraph (a) as amended by chapter 198 of
   11  the laws of 2010, are amended to read as follows:
   12    Approvals, NOTICES and effect.
   13    (a) (i) A certificate of amendment shall not be filed if the amendment
   14  adds, changes or eliminates a purpose, power or provision the  inclusion
   15  of  which in a certificate of incorporation requires consent or approval
   16  of a governmental body or officer or any other person or body, or if the
   17  amendment changes the name of a corporation whose certificate of  incor-
   18  poration had such consent or approval endorsed thereon or annexed there-
   19  to, unless such consent or approval is no longer required or is endorsed
   20  on  or annexed to the certificate of amendment.  A CERTIFICATE OF AMEND-
   21  MENT ADDING, CHANGING OR ELIMINATING A PURPOSE, POWER OR  PROVISION  THE
   22  INCLUSION OF WHICH IN A CERTIFICATE OF INCORPORATION REQUIRES THE INCOR-
   23  PORATOR  TO  SEND  SUCH CERTIFICATE TO A GOVERNMENTAL BODY OR OFFICER OR
   24  ANY OTHER PERSON OR BODY, OR IF THE AMENDMENT  CHANGES  THE  NAME  OF  A
   25  CORPORATION WHOSE CERTIFICATE OF INCORPORATION WAS REQUIRED TO BE DELIV-
   26  ERED  BY THE INCORPORATOR TO A GOVERNMENTAL BODY OR OFFICER OR ANY OTHER
   27  PERSON OR BODY, SHALL BE DELIVERED BY THE PERSON OR  ENTITY  FILING  THE
   28  CERTIFICATE  OF AMENDMENT WITHIN TEN BUSINESS DAYS AFTER THE CORPORATION
   29  RECEIVES CONFIRMATION FROM THE DEPARTMENT OF STATE THAT THE  CERTIFICATE
   30  HAS BEEN ACCEPTED FOR FILING.
   31    (ii) Every certificate of amendment of a CHARITABLE corporation [clas-
   32  sified  as type B or type C under section 201 (Purposes)] which seeks to
   33  change or eliminate a purpose or power enumerated in  the  corporation's
   34  certificate  of  incorporation, or to add a power or purpose not enumer-
   35  ated therein,  shall  have  endorsed  thereon  or  annexed  thereto  the
   36  approval  of  EITHER  (A)  THE ATTORNEY GENERAL, OR (B) a justice of the
   37  supreme court of the judicial district in which the office of the corpo-
   38  ration is located. [Ten days' written notice of the application for such
   39  approval shall be given to the attorney-general] IF THE ATTORNEY GENERAL
   40  DOES NOT APPROVE A CERTIFICATE OF AMENDMENT SUBMITTED PURSUANT TO CLAUSE
   41  (A) OF THIS SUBPARAGRAPH THE CORPORATION MAY APPLY FOR APPROVAL  OF  THE
   42  AMENDMENT  TO A JUSTICE OF THE SUPREME COURT OF THE JUDICIAL DISTRICT IN
   43  WHICH THE OFFICE OF THE CORPORATION IS LOCATED.    ANY  APPLICATION  FOR
   44  APPROVAL  OF A CERTIFICATE OF AMENDMENT BY THE SUPREME COURT PURSUANT TO
   45  THIS PARAGRAPH SHALL BE ON TEN DAYS'  WRITTEN  NOTICE  TO  THE  ATTORNEY
   46  GENERAL.
   47    S 18. 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; NOTICES.
   51    (A) If the purposes of any  constituent  or  consolidated  corporation
   52  would  require the approval or consent of any governmental body or offi-
   53  cer or any other person or body under section  404  (Approvals,  NOTICES
   54  and  consents) OF THIS CHAPTER no certificate of merger or consolidation
   55  shall be filed pursuant to this article unless such approval or  consent
   56  is endorsed thereon or annexed thereto. A corporation whose statement of
       A. 7337                            12

    1  purposes specifically includes the establishment or operation of a child
    2  day care center, as that term is defined in section three hundred ninety
    3  of  the  social  services  law,  shall  provide  a certified copy of any
    4  certificate of merger or consolidation involving such corporation to the
    5  office  of  children  and  family  services within thirty days after the
    6  filing of such merger or consolidation with the department of state.
    7    (B) IF THE PURPOSES OF ANY  CONSTITUENT  OR  CONSOLIDATED  CORPORATION
    8  WOULD REQUIRE THE CERTIFICATE OF INCORPORATION OR ANY OTHER NOTICE TO BE
    9  DELIVERED  TO ANY PERSON OR ENTITY UNDER SECTION 404 (APPROVALS, NOTICES
   10  AND CONSENTS) OF THIS CHAPTER, THE CORPORATION  SHALL  PROVIDE  TO  SUCH
   11  PERSON  OR  ENTITY  A CERTIFIED COPY OF THE CERTIFICATE OF INCORPORATION
   12  WITHIN TEN BUSINESS DAYS AFTER  THE  CORPORATION  RECEIVES  CONFIRMATION
   13  FROM  THE DEPARTMENT OF STATE THAT THE CERTIFICATE HAS BEEN ACCEPTED FOR
   14  FILING.
   15    S 19. Paragraphs (a), (b) and (c) of section 103 of the not-for-profit
   16  corporation law, paragraph (a) as amended by chapter 807 of the laws  of
   17  1973,  paragraph  (b) as amended by chapter 847 of the laws of 1970, and
   18  paragraph (c) as amended by chapter 961 of the laws of 1972, are amended
   19  to read as follows:
   20    (a)   Except as otherwise  provided  in  this  section,  this  chapter
   21  applies  to  every  domestic corporation as herein defined, and to every
   22  foreign corporation as herein defined which is authorized to conduct  or
   23  which  conducts any activities in this state.  This chapter also applies
   24  to any other domestic corporation or foreign corporation  of  any  [type
   25  or]  kind  to the extent, if any, provided under this chapter or any law
   26  governing such corporation and, if no such provision for application  is
   27  made,  to  the  extent,  if  any,  that  the membership corporations law
   28  applied to such corporation as of the effective date of this chapter.  A
   29  corporation formed by a special act of this state which has as its prin-
   30  cipal purpose an education purpose and which is a member of the  univer-
   31  sity  of  the  state  of  New  York, is an "education corporation" under
   32  section two hundred sixteen-a of the education law.
   33    To the extent that the membership  corporations  law  or  the  general
   34  corporation  law applied to it as of the effective date of this chapter,
   35  the corresponding provisions of this  chapter  apply  to  a  corporation
   36  heretofore  formed  by  or pursuant to a special act of this state other
   37  than a religious corporation or an "education corporation" under  clause
   38  (b) of subdivision one of section two hundred sixteen-a of the education
   39  law,  if  (1) its principal purpose is a religious, charitable or educa-
   40  tion purpose, and (2) it is operated, supervised or controlled by or  in
   41  connection  with  a  religious organization.   [Any such corporation may
   42  elect hereunder at any time after the effective date of this chapter  to
   43  file  a  certificate of type under section one hundred thirteen (Certif-
   44  icate of type of not-for-profit corporation).  Upon the filing  of  such
   45  certificate  by the department of state, this chapter shall apply in all
   46  respects to such corporation.]
   47    This chapter also applies to any other corporation of  any  [type  or]
   48  kind,  formed not for profit under any other chapter of the laws of this
   49  state except a chapter of the consolidated  laws,  to  the  extent  that
   50  provisions  of  this chapter do not conflict with the provisions of such
   51  unconsolidated law.  If an applicable provision of  such  unconsolidated
   52  law  relates to a matter embraced in this chapter but is not in conflict
   53  therewith, both provisions shall apply.  Any corporation to  which  this
   54  chapter  is  made  applicable  by  this  paragraph shall be treated as a
   55  "corporation" or "domestic corporation" as such terms are used  in  this
   56  chapter,  except  that  the  purposes  of any such corporation formed or
       A. 7337                            13

    1  formable under such unconsolidated law shall not  thereby  be  extended.
    2  For the purpose of this paragraph, the effective date of this chapter as
    3  to  corporations  to which this chapter is made applicable by this para-
    4  graph shall be September one, nineteen hundred seventy-three.
    5    (b)    The  general corporation law does not apply to a corporation of
    6  any [type or] kind to which this chapter applies.   A reference  in  any
    7  statute of this state which makes a provision of the general corporation
    8  law  applicable  to  a  corporation  of any [type or] kind to which this
    9  chapter is applicable or a reference in any statute of this state, other
   10  than the membership corporations law, which makes  a  provision  of  the
   11  membership corporations law applicable to a corporation of any [type or]
   12  kind  shall  be deemed and construed to refer to and make applicable the
   13  corresponding provision, if any, of this chapter.
   14    (c) If any provision in articles one to  thirteen  inclusive  of  this
   15  chapter  conflicts with a provision of any subsequent articles or of any
   16  special act under which a corporation to which this chapter  applies  is
   17  formed,  the  provision  in  such  subsequent  article  or  special  act
   18  prevails.  A provision of any such subsequent  article  or  special  act
   19  relating  to  a matter referred to in articles one to thirteen inclusive
   20  and not in conflict therewith is  supplemental  and  both  shall  apply.
   21  Whenever  the  board  of  a [Type B] corporation, formed under a special
   22  act, reasonably makes an interpretation as to whether a provision of the
   23  special act or this chapter prevails, or both apply, such interpretation
   24  shall govern unless and until a  court  determines  otherwise,  if  such
   25  board has acted in good faith for a purpose which it reasonably believes
   26  to  be  in the best interests of the corporation, provided however, that
   27  such interpretation shall not bind any governmental body or officer.
   28    S 20. Subparagraphs 7, 8 and 9 of paragraph (a) of section 112 of  the
   29  not-for-profit  corporation  law,  subparagraphs  7  and 9 as amended by
   30  chapter 1058 of the laws of 1971, are amended to read as follows:
   31    (7)   To enforce any right given under  this  chapter  to  members,  a
   32  director  or  an officer of a [Type B or Type C] CHARITABLE corporation.
   33  The attorney-general shall have the same status as such members,  direc-
   34  tor or officer.
   35    (8) [To compel the directors and officers, or any of them, of a Type B
   36  or  Type  C  corporation  which  has  been  dissolved under section 1011
   37  (Dissolution for failure to file certificate of type  of  Not-for-Profit
   38  Corporation  Law  under  section  113)  to account for the assets of the
   39  dissolved corporation.
   40    (9)] Upon application, ex parte, for an order to the supreme court  at
   41  a special term held within the judicial district where the office of the
   42  corporation is located, and if the court so orders, to enforce any right
   43  given under this chapter to members, a director or an officer of a [Type
   44  A corporation] NON-CHARITABLE CORPORATION.  For such purpose, the attor-
   45  ney-general  shall  have  the  same  status as such members, director or
   46  officer.
   47    S 21. Subparagraph 1 of paragraph (c) of section 112 of  the  not-for-
   48  profit corporation law is amended to read as follows:
   49    (1)  As used in this paragraph the term "resident" shall include indi-
   50  viduals,  domestic corporations of any [type or] kind and foreign corpo-
   51  rations of any [type or] kind authorized to  do  business  or  carry  on
   52  activities in the state.
   53    S  22.  Section 114 of the not-for-profit corporation law, as added by
   54  chapter 847 of the laws of 1970, is amended to read as follows:
   55  S 114. Visitation of supreme court.
       A. 7337                            14

    1    [Type B and Type C]  CHARITABLE  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 ON NOTICE TO THE ATTORNEY  GENERAL,  that  it,  or  its
    7  directors, officers, MEMBERS, KEY EMPLOYEES or agents, have misappropri-
    8  ated  any  of the funds or property of the corporation, or diverted them
    9  from the purpose of its  incorporation,  or  that  the  corporation  has
   10  acquired  property in excess of the amount which it is authorized by law
   11  to hold, or has engaged in any business other than that  stated  in  its
   12  certificate  of  incorporation,  the  court  may order that notice of at
   13  least eight days, with a copy of the petition, be served on  the  corpo-
   14  ration  and  the persons charged with misconduct, requiring them to show
   15  cause at a time and place specified, why they should not be required  to
   16  make  and  file  an  inventory  and account of the property, effects and
   17  liabilities of such corporation with a detailed statement of its  trans-
   18  actions  during  the  twelve  months next preceding the granting of such
   19  order.  On the hearing of such application, the court may make an  order
   20  requiring such inventory, account and statement to be filed, and proceed
   21  to  take  and  state  an  account of the property and liabilities of the
   22  corporation, or may appoint a referee  for  that  purpose.    When  such
   23  account is taken and stated, after hearing all the parties to the appli-
   24  cation,  the  court  may  enter  a final order determining the amount of
   25  property so held by the corporation, its annual income, whether  any  of
   26  the  property  or  funds of the corporation have been misappropriated or
   27  diverted to any other purpose than that for which such  corporation  was
   28  incorporated,  and  whether  such  corporation  has  been engaged in any
   29  activity not covered by its certificate of incorporation.  An appeal may
   30  be taken from the order by any party aggrieved to the appellate division
   31  of the supreme court, and to the court of appeals, as in a civil action.
   32  No corporation shall be required to make and file more than one invento-
   33  ry and account in any one year, nor to make a second account and  inven-
   34  tory,  while  proceedings  are  pending  for the statement of an account
   35  under this section.
   36    S 23. Subparagraphs 2 and 3 of paragraph (a) of  section  301  of  the
   37  not-for-profit corporation law, subparagraph 2 as amended by chapter 344
   38  of the laws of 2004, are amended to read as follows:
   39    (2)  (A)  Shall  be such as to distinguish it from the names of corpo-
   40  rations of any [type or] kind, or a fictitious  name  of  an  authorized
   41  foreign  corporation filed pursuant to article thirteen of this chapter,
   42  as such names appear on the index of  names  of  existing  domestic  and
   43  authorized  foreign corporations of any [type or] kind, including ficti-
   44  tious names of authorized foreign corporations filed pursuant to article
   45  thirteen of this chapter, in the department of state, division of corpo-
   46  rations, or a name the right to which is reserved.
   47    (B) Shall be such as to distinguish it from (i) the names of  domestic
   48  limited liability companies, (ii) the names of authorized foreign limit-
   49  ed liability companies, (iii) the fictitious names of authorized foreign
   50  limited liability companies, (iv) the names of domestic limited partner-
   51  ships, (v) the names of authorized foreign limited partnerships, or (vi)
   52  the fictitious names of authorized foreign limited partnerships, in each
   53  case,  as  such  names appear on the index of names of existing domestic
   54  and authorized foreign limited liability companies, including fictitious
   55  names of authorized foreign limited liability companies, in the  depart-
   56  ment  of state, or on the index of names of existing domestic or author-
       A. 7337                            15

    1  ized foreign limited partnerships, including fictitious names of author-
    2  ized foreign limited partnerships, in the department of state, or  names
    3  the rights to which are reserved; provided, however, that no corporation
    4  that  was  formed  prior  to  the  effective  date of this clause and no
    5  foreign corporation that was qualified to  conduct  activities  in  this
    6  state  prior to such effective date shall be required to change the name
    7  or fictitious name it had on such effective date  solely  by  reason  of
    8  such  name  or  fictitious name being indistinguishable from the name or
    9  fictitious name of any domestic or authorized foreign limited  liability
   10  company  or  limited  partnership or from any name the right to which is
   11  reserved by or on behalf of any domestic or  foreign  limited  liability
   12  company or limited partnership.
   13    (3)    Shall  not  contain  any word or phrase, or any abbreviation or
   14  derivative thereof, the use of which  is  prohibited  or  restricted  by
   15  section  404  (Approvals,  NOTICES and consents) or any other statute of
   16  this state, unless  in  the  latter  case  the  restrictions  have  been
   17  complied with.
   18    S  24.  Subparagraph 3 of paragraph (b) of section 302 of the not-for-
   19  profit corporation law, as amended by chapter 847 of the laws  of  1970,
   20  is amended to read as follows:
   21    (3)  Shall  not  prevent  a  foreign corporation from being authorized
   22  under a name which is similar to the name of a corporation of any  [type
   23  or]  kind existing or authorized under any statute, if the department of
   24  state finds, upon proof by affidavit or otherwise as it  may  determine,
   25  that  a  difference  between  such names exists in the terms or abbrevi-
   26  ations indicating corporate character or otherwise, that  the  applicant
   27  has  conducted  activities  as a corporation under its said name for not
   28  less than ten consecutive years immediately prior to  the  date  of  its
   29  application,  that  the activities to be conducted in this state are not
   30  the same or similar to the  business  or  activities  conducted  by  the
   31  corporation  with  whose name it may conflict and that the public is not
   32  likely to be confused or deceived, and if the applicant shall  agree  in
   33  its  application  for  authority to use with its corporate name, in this
   34  state, to be placed immediately under or following such name, the  words
   35  "a ..... (name of jurisdiction of incorporation) corporation".
   36    S  25.  Paragraph (c) of section 303 of the not-for-profit corporation
   37  law, as amended by chapter 590 of the laws of 1982, is amended  to  read
   38  as follows:
   39    (c)  Application to reserve a corporate name shall be delivered to the
   40  department of state. It shall set forth the  name  and  address  of  the
   41  applicant,  the  name  to be reserved and a statement of the basis under
   42  paragraph (a) or (b) for the application. The  secretary  of  state  may
   43  require  the applicant to set forth in his application the nature of the
   44  activities to be conducted by the corporation. If the name is  available
   45  for  corporate  use,  the department of state shall reserve the name for
   46  the use of the applicant for a period of sixty days and issue a  certif-
   47  icate  of reservation. The prohibitions, restrictions and qualifications
   48  set forth in section 301 (Corporate name; general), section 302  (Corpo-
   49  rate name; exceptions) and section 404 (Approvals, NOTICES and consents)
   50  are  not  waived  by  the  issuance of a certificate of reservation. The
   51  certificate of reservation shall include the name of the applicant,  the
   52  name reserved and the date of the reservation. The certificate of reser-
   53  vation (or in lieu thereof an affidavit by the applicant or by his agent
   54  or  attorney  that  the  certificate  of  reservation  has  been lost or
   55  destroyed) shall accompany  the  certificate  of  incorporation  or  the
       A. 7337                            16

    1  application  for authority when either is delivered to the department of
    2  state.
    3    S  26.  Paragraph (a) of section 305 of the not-for-profit corporation
    4  law, as amended by chapter 131 of the laws of 1985, is amended  to  read
    5  as follows:
    6    (a)  Every  domestic corporation or authorized foreign corporation may
    7  designate a registered agent in this state  upon  whom  process  against
    8  such  corporation may be served. The agent shall be a natural person who
    9  is a resident of or has a business address in this state or  a  domestic
   10  corporation  or  foreign  corporation  of  any [type or] kind formed, or
   11  authorized to do business in this state, under this chapter or under any
   12  other statute of this state.
   13    S 27. Paragraph (d) of section 502 of the  not-for-profit  corporation
   14  law is amended to read as follows:
   15    (d)  A  member's  capital contribution shall be evidenced by a capital
   16  certificate which shall be non-transferable, except that the certificate
   17  of incorporation of a [Type A] NON-CHARITABLE  corporation  may  provide
   18  that  its  capital certificates, or some of them, may be transferable to
   19  other members with the consent of the corporation upon  specified  terms
   20  and conditions.
   21    S  28.    Paragraphs  (b) and (c) of section 503 of the not-for-profit
   22  corporation law, subparagraph 1 of paragraph (b) and  paragraph  (c)  as
   23  amended  by  chapter  847  of  the  laws of 1970, are amended to read as
   24  follows:
   25    (b) Each capital certificate shall when issued  state  upon  the  face
   26  thereof:
   27    (1)  [That  the  corporation is a Type ..... corporation under section
   28  113 or section 402 of the New York Not-for-Profit Corporation Law.
   29    (2)] The name of the member to whom issued.
   30    [(3)] (2) The amount of the member's capital contribution evidenced by
   31  such certificate.
   32    [(4)] (3) If appropriate, that the corporation is a [Type A] NON-CHAR-
   33  ITABLE corporation, and that its certificate of  incorporation  provides
   34  that  the  capital certificate is transferable to other members with the
   35  consent of the corporation.
   36    [(c)] (4) The fact that the corporation  is  a  not-for-profit  corpo-
   37  ration,  and  that  the  capital  certificate  is non-transferable or is
   38  transferable to other members, with  the  consent  of  the  corporation,
   39  shall  be  noted  conspicuously on the face or back of each such certif-
   40  icate.
   41    S 29.  Paragraph (b) of section 505 of the not-for-profit  corporation
   42  law,  subparagraph  1  as amended by chapter 847 of the laws of 1970, is
   43  amended to read as follows:
   44    (b) Each subvention certificate shall when issued state upon the  face
   45  thereof:
   46    (1)  [That  the  corporation is a Type ..... corporation under section
   47  113 or section 402 of the New York Not-for-Profit Corporation Law.
   48    (2)] The name of the person or persons to whom issued.
   49    [(3)] (2) The amount of the subvention evidenced by such certificate.
   50    [(4)] (3) The amount of the periodic payment thereon, if any,  author-
   51  ized by the resolution of the board.
   52    [(5)]  (4)  If  appropriate,  that the certificate is redeemable and a
   53  summary of the conditions for redemption at the  option  of  the  corpo-
   54  ration or of the holder.
   55    [(6)] (5) If appropriate, that the certificate is transferable, either
   56  at will or subject to specified restrictions.
       A. 7337                            17

    1    S  30.  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,  subparagraph  3 as amended by chapter 847 of the laws of 1970, is
    4  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
   36  in addition require [leave] APPROVAL of the supreme court in  the  judi-
   37  cial  district  or of the county court of the county in which the corpo-
   38  ration has its office or principal place of carrying out the  [puropses]
   39  PURPOSES  for  which it was formed IN ACCORDANCE WITH SECTION 511 (PETI-
   40  TION FOR LEAVE OF COURT) OF THIS ARTICLE.
   41    S 31. Paragraph (a) of section 513 of the  not-for-profit  corporation
   42  law,  as  amended by chapter 690 of the laws of 1978, is amended to read
   43  as follows:
   44    (a) A corporation which is, or would be if formed under this  chapter,
   45  [classified as] a [Type B] CHARITABLE corporation shall hold full owner-
   46  ship  rights in any assets consisting of funds or other real or personal
   47  property of any kind, that may be given, granted, bequeathed or  devised
   48  to  or  otherwise  vested  in  such  corporation in trust for, or with a
   49  direction to apply the same to, any purpose specified in its certificate
   50  of incorporation, and shall not be deemed a trustee of an express  trust
   51  of such assets.  Any other corporation subject to this chapter may simi-
   52  larly  hold  assets  so received, unless otherwise provided by law or in
   53  the certificate of incorporation.
   54    S 32. Paragraph (a) of section 601 of the  not-for-profit  corporation
   55  law,  as amended by chapter 1058 of the laws of 1971, is amended to read
   56  as follows:
       A. 7337                            18

    1    (a) A corporation shall have one or more classes of  members,  or,  in
    2  the  case  of a [Type B] CHARITABLE corporation, may have no members, in
    3  which case any such provision for classes of members or for  no  members
    4  shall  be  set forth in the certificate of incorporation or the by-laws.
    5  Corporations,  joint-stock associations, unincorporated associations and
    6  partnerships, as well as any other person  without  limitation,  may  be
    7  members.
    8    S 33. Section 716 of the not-for-profit corporation law, as amended by
    9  chapter 644 of the laws of 1971, is amended to read as follows:
   10  S 716. Loans to directors and officers.
   11    No  loans,  other  than  through the purchase of bonds, debentures, or
   12  similar obligations of the type customarily sold in public offerings, or
   13  through ordinary deposit of funds in a bank, shall be made by  a  corpo-
   14  ration  to its directors or officers, or to any other corporation, firm,
   15  association or other entity in which one or more  of  its  directors  or
   16  officers  are  directors  or  officers  or  hold a substantial financial
   17  interest, except a loan by one [type B] CHARITABLE corporation to anoth-
   18  er [type B] CHARITABLE corporation. A loan made  in  violation  of  this
   19  section  shall  be  a  violation  of  the duty to the corporation of the
   20  directors or officers authorizing it or participating  in  it,  but  the
   21  obligation  of  the  borrower  with  respect  to  the  loan shall not be
   22  affected thereby.
   23    S 34. Paragraphs (a) and (c) of  section  722  of  the  not-for-profit
   24  corporation  law,  as  amended  by  chapter 368 of the laws of 1987, are
   25  amended to read as follows:
   26    (a) A corporation may indemnify any person, made, or threatened to  be
   27  made,  a  party  to  an action or proceeding other than one by or in the
   28  right of the corporation to procure a judgment  in  its  favor,  whether
   29  civil  or  criminal, including an action by or in the right of any other
   30  corporation of any [type or] kind, domestic or foreign, or any  partner-
   31  ship,  joint  venture, trust, employee benefit plan or other enterprise,
   32  which any director or officer of the corporation served in any  capacity
   33  at  the  request  of the corporation, by reason of the fact that he, his
   34  testator or intestate, was a director or officer of the corporation,  or
   35  served  such  other  corporation,  partnership,  joint  venture,  trust,
   36  employee benefit plan or other enterprise in any capacity, against judg-
   37  ments, fines,  amounts  paid  in  settlement  and  reasonable  expenses,
   38  including  attorneys' fees actually and necessarily incurred as a result
   39  of such action or proceeding, or any appeal therein, if such director or
   40  officer acted, in good faith, for a purpose which he reasonably believed
   41  to be in, or, in the case of service for any other  corporation  or  any
   42  partnership, joint venture, trust, employee benefit plan or other enter-
   43  prise,  not  opposed  to,  the best interests of the corporation and, in
   44  criminal actions or proceedings, in addition, had no reasonable cause to
   45  believe that his conduct was unlawful.
   46    (c) A corporation may indemnify any person made, or threatened  to  be
   47  made,  a  party  to  an  action by or in the right of the corporation to
   48  procure a judgment in its favor by reason  of  the  fact  that  he,  his
   49  testator  or  intestate,  is  or was a director or officer of the corpo-
   50  ration, or is or was serving at the request  of  the  corporation  as  a
   51  director  or  officer  of  any  other corporation of any [type or] kind,
   52  domestic or foreign, of any partnership, joint venture, trust,  employee
   53  benefit plan or other enterprise, against amounts paid in settlement and
   54  reasonable expenses, including attorneys' fees, actually and necessarily
   55  incurred  by  him  in  connection with the defense or settlement of such
   56  action, or in connection with an appeal therein,  if  such  director  or
       A. 7337                            19

    1  officer acted, in good faith, for a purpose which he reasonably believed
    2  to  be  in,  or, in the case of service for any other corporation or any
    3  partnership, joint venture, trust, employee benefit plan or other enter-
    4  prise,  not  opposed  to,  the best interests of the corporation, except
    5  that no indemnification under this paragraph shall be made in respect of
    6  (1) a threatened action, or a pending action which is settled or  other-
    7  wise  disposed  of,  or  (2) any claim, issue or matter as to which such
    8  person shall have been adjudged to be liable to the corporation,  unless
    9  and  only  to the extent that the court in which the action was brought,
   10  or, if no action was  brought,  any  court  of  competent  jurisdiction,
   11  determines  upon  application  that, in view of all the circumstances of
   12  the case, the person is fairly and reasonably entitled to indemnity  for
   13  such  portion  of  the settlement amount and expenses as the court deems
   14  proper.
   15    S 35. Subparagraph 3 of paragraph (a) of section 803 of  the  not-for-
   16  profit  corporation  law, as amended by chapter 168 of the laws of 1982,
   17  is amended to read as follows:
   18    (3) That the corporation is a corporation as defined  in  subparagraph
   19  (a)  (5)  of  section  102 (Definitions)[; the type of corporation it is
   20  under  section  201  (Purposes);  and  if  the  corporate  purposes  are
   21  enlarged, limited or otherwise changed, the type of corporation it shall
   22  thereafter be under section 201].
   23    S  36.  Paragraphs  (a)  and  (f) of section 908 of the not-for-profit
   24  corporation law are amended to read as follows:
   25    (a) One or more domestic or foreign corporations which is, or would be
   26  if formed under this  chapter,  a  NON-CHARITABLE  CORPORATION,  OR  ANY
   27  CORPORATION  FORMED  AS  A type A or [type] C corporation [under section
   28  201 (Purposes)] PRIOR TO JANUARY FIRST, TWO THOUSAND  FOURTEEN,  may  be
   29  merged  or consolidated into a domestic or foreign corporation which is,
   30  or would be if formed under the laws of this state, a corporation formed
   31  under the business corporation law of  this  state  if  such  merger  or
   32  consolidation  is  not contrary to the law of the state of incorporation
   33  of any constituent corporation. With respect to such merger  or  consol-
   34  idation,  any reference in paragraph (b) of section 901 (POWER OF MERGER
   35  OR CONSOLIDATION) of this article or paragraph (b) of section 901 (POWER
   36  OF MERGER OR CONSOLIDATION) of the business corporation law to a  corpo-
   37  ration shall, unless the context otherwise requires, include both domes-
   38  tic and foreign corporations.
   39    (f)  Where any constituent corporation is, or would be if formed under
   40  this chapter, a [Type  C]  CHARITABLE  corporation  [under  section  201
   41  (Purposes)],  no  certificate  shall  be  filed pursuant to this section
   42  until an order approving the plan of merger or consolidation and author-
   43  izing the filing of the certificate has been made by the supreme  court,
   44  as provided in section 907 (Approval by the supreme court) OF THIS ARTI-
   45  CLE.
   46    S  37.  Paragraphs  (b)  and (d) of section 1001 of the not-for-profit
   47  corporation law, as amended by chapter 434 of  the  laws  of  2006,  are
   48  amended to read as follows:
   49    (b)  If  the  corporation is a [Type B, C or D] CHARITABLE corporation
   50  and has no assets to distribute  and  no  liabilities  at  the  time  of
   51  dissolution,  the  plan of dissolution shall include a statement to that
   52  effect.
   53    (d) If the corporation has assets to distribute  or  liabilities,  the
   54  plan of dissolution shall contain:
   55    (1)  a  description  with  reasonable  certainty  of the assets of the
   56  corporation and their fair value, and the  total  amount  of  debts  and
       A. 7337                            20

    1  other  liabilities  incurred  or estimated by the corporation, including
    2  the total amount of any accounting and legal fees incurred or estimated,
    3  in connection with the dissolution procedure.
    4    (2)  a  statement  as to whether any gifts or other assets are legally
    5  required to be used for a particular purpose.
    6    (3) if there are assets received and held by  the  corporation  either
    7  for  a  CHARITABLE  purpose  [specified  as  Type  B in paragraph (b) of
    8  section 201 (Purposes)] or which are legally required to be used  for  a
    9  particular  purpose,  a  statement  that  the assets owned by the corpo-
   10  ration, subject to any unpaid liabilities of the corporation,  shall  be
   11  distributed as required by any gift instrument or to a charitable organ-
   12  ization  or  organizations  exempt from taxation pursuant to federal and
   13  state laws and engaged in activities substantially similar to  those  of
   14  the  dissolved  corporation.   Each such recipient organization shall be
   15  identified and the governing instrument and amendments thereto  of  each
   16  of  the proposed recipient organizations shall be annexed to such state-
   17  ment, along with the MOST RECENT  financial  [reports]  REPORT  of  each
   18  recipient  organization  for  the last three years and a sworn affidavit
   19  from a director and officer of each recipient organization  stating  the
   20  purposes  of  the  organization,  and  that  it is currently exempt from
   21  federal income taxation.
   22    (4) if any of the assets of the corporation are to be distributed to a
   23  recipient for a particular legally required purpose, an agreement by the
   24  recipient to apply the assets received only for such  purpose  shall  be
   25  included.
   26    S  38.  Paragraphs  (a)  and (d) of section 1002 of the not-for-profit
   27  corporation law, as amended by chapter 434 of  the  laws  of  2006,  are
   28  amended to read as follows:
   29    (a)  Upon  adopting  a plan of dissolution and distribution of assets,
   30  the board shall submit it to a vote of the members,  if  any,  and  such
   31  plan  shall  be  approved  at a meeting of members by two-thirds vote as
   32  provided in paragraph (c) of section 613 (Vote of members) OF THIS CHAP-
   33  TER; provided, however, that if the corporation is a [Type B,  C  or  D]
   34  CHARITABLE  corporation,  other than a corporation incorporated pursuant
   35  to article 15 (Public cemetery corporations) OF THIS CHAPTER,  [and  has
   36  no  assets to distribute, other than a reserve not to exceed twenty-five
   37  thousand dollars for  the  purpose  of  paying  ordinary  and  necessary
   38  expenses  of  winding  up  its affairs including attorney and accountant
   39  fees, and liabilities not in excess of ten thousand dollars at the  time
   40  of adoption of the plan of dissolution,] the vote required by the corpo-
   41  ration's  board  of directors for adoption of the plan of dissolution of
   42  such a corporation or by the corporation's members for the authorization
   43  thereof shall be:
   44    (1) In the case of a vote by the board of directors: (i) the number of
   45  directors required under the certificate of incorporation, by-laws, this
   46  chapter and any other applicable law; or
   47    (ii) if the number of directors actually holding office as such at the
   48  time of the vote to adopt the plan is less than the number  required  to
   49  constitute a quorum of directors under the certificate of incorporation,
   50  the  by-laws,  this  chapter  or any other applicable law, the remaining
   51  directors unanimously;
   52    (2) In the case of a vote by the members, (i) the  number  of  members
   53  required  under  the certificate of incorporation, by-laws, this chapter
   54  and any other applicable law; or (ii) by the vote of members  authorized
   55  by  an  order  of  the  supreme court pursuant to section 608 (QUORUM AT
       A. 7337                            21

    1  MEETING OF MEMBERS)  of  this  chapter  permitting  the  corporation  to
    2  dispense with the applicable quorum requirement.
    3    Notice of a special or regular meeting of the board of directors or of
    4  the  members  entitled to vote on adoption and authorization or approval
    5  of the plan of dissolution shall  be  sent  to  all  the  directors  and
    6  members  of  record entitled to vote. Unless otherwise directed by order
    7  of the supreme court pursuant to  section  608  (QUORUM  AT  MEETING  OF
    8  MEMBERS)  of  this  chapter, the notice shall be sent by certified mail,
    9  return receipt requested, to the last known address of  record  of  each
   10  director  and member not fewer than thirty, and not more than sixty days
   11  before the date of each meeting provided,  however,  that  if  the  last
   12  known  address  of  record  of  any director or member is not within the
   13  United States, the notice to such director shall be sent  by  any  other
   14  reasonable means.
   15    (d)  (1) The plan of dissolution and distribution of assets shall have
   16  annexed thereto the approval of [a justice of the supreme court  in  the
   17  judicial district in which the office of the corporation is located] THE
   18  ATTORNEY  GENERAL  in  the  case of a [Type B, C or D] CHARITABLE corpo-
   19  ration, and in the case of any [other] NON-CHARITABLE corporation  which
   20  [holds  assets] at the time of dissolution HOLDS ASSETS legally required
   21  to be used for a particular purpose[, except that no such approval shall
   22  be required with respect to the plan of dissolution  of  a  corporation,
   23  other  than  a  corporation  incorporated pursuant to article 15 (Public
   24  cemetery corporations), which has no assets to distribute at the time of
   25  dissolution, other than a reserve not  to  exceed  twenty-five  thousand
   26  dollars  for  the  purpose  of paying ordinary and necessary expenses of
   27  winding up its affairs  including  attorney  and  accountant  fees,  and
   28  liabilities  not  in  excess  of  ten  thousand  dollars,  and which has
   29  complied with the requirements of section 1001 (Plan of dissolution  and
   30  distribution  of  assets)  and  this section applicable to such a corpo-
   31  ration].
   32    (2) Application to the [supreme court for an order]  ATTORNEY  GENERAL
   33  for  such  approval  shall  be  by  verified  petition, with the plan of
   34  dissolution and distribution of  assets  and  certified  copies  of  the
   35  consents  prescribed by this section annexed thereto[, and upon ten days
   36  written notice to the attorney general accompanied  by  copies  of  such
   37  petition, plan and consents. In such case where approval of a justice of
   38  the  supreme  court  is not required for a Type B, C or D corporation, a
   39  copy of such plan certified under penalties of perjury  shall  be  filed
   40  with the attorney general within ten days after its authorization].
   41    (3)  THE  ATTORNEY GENERAL MAY APPROVE THE PETITION IF THE CORPORATION
   42  HAS ADOPTED A PLAN IN ACCORDANCE WITH THE REQUIREMENTS OF  SECTION  1001
   43  (PLAN  OF  DISSOLUTION  AND DISTRIBUTION OF ASSETS) OF THIS ARTICLE, AND
   44  ANY OTHER REQUIREMENTS IMPOSED BY LAW OR RULE. IF THE  ATTORNEY  GENERAL
   45  DOES NOT APPROVE THE PETITION, OR THE ATTORNEY GENERAL CONCLUDES, IN HIS
   46  OR HER DISCRETION, THAT COURT REVIEW OF THE PETITION IS APPROPRIATE, THE
   47  CORPORATION  MAY APPLY FOR APPROVAL TO THE SUPREME COURT IN THE JUDICIAL
   48  DISTRICT IN WHICH THE PRINCIPAL OFFICE OF THE SURVIVING OR  CONSOLIDATED
   49  CORPORATION  IS  TO  BE  LOCATED,  OR  IN WHICH THE OFFICE OF ONE OF THE
   50  DOMESTIC CONSTITUENT CORPORATIONS IS LOCATED, FOR  AN  ORDER  DISSOLVING
   51  THE  CORPORATION. APPLICATION TO THE SUPREME COURT FOR AN ORDER FOR SUCH
   52  APPROVAL SHALL BE BY VERIFIED PETITION UPON TEN DAYS WRITTEN  NOTICE  TO
   53  THE  ATTORNEY  GENERAL, AND SHALL INCLUDE ALL INFORMATION REQUIRED TO BE
   54  INCLUDED IN THE APPLICATION TO THE ATTORNEY  GENERAL  PURSUANT  TO  THIS
   55  SECTION.
       A. 7337                            22

    1    S  39.    Paragraphs (a) and (b) of section 1003 of the not-for-profit
    2  corporation law, as amended by chapter 434 of  the  laws  of  2006,  are
    3  amended to read as follows:
    4    (a)  After the plan of dissolution and distribution of assets has been
    5  adopted, authorized, approved and carried out pursuant to the  terms  of
    6  the  plan  within  the  time period set forth pursuant to section 1002-a
    7  (Carrying out the plan of dissolution and  distribution  of  assets),  a
    8  certificate   of   dissolution,  entitled  "Certificate  of  dissolution
    9  of ........ (name of corporation) under section 1003 of the Not-for-Pro-
   10  fit Corporation Law" shall  be  signed  and,  if  required  pursuant  to
   11  subparagraph  two  of  paragraph (b) of this section, after the attorney
   12  general has affixed thereon his or her consent to the dissolution,  such
   13  certificate  of  dissolution  shall  be  delivered  to the department of
   14  state. It shall set forth:
   15    (1) The name of the corporation and, if its name has been changed, the
   16  name under which it was formed.
   17    (2) The date its certificate of incorporation was filed by the depart-
   18  ment of state.
   19    (3) The name and address of each of its officers and directors.
   20    (4) [The type of corporation it is  at  the  time  of  dissolution]  A
   21  STATEMENT AS TO WHETHER THE CORPORATION IS A CHARITABLE CORPORATION OR A
   22  NON-CHARITABLE CORPORATION.
   23    (5)  A  statement as to whether or not the corporation holds assets at
   24  the time of authorization of its plan of dissolution and distribution of
   25  assets as provided in section 1002 of  this  article  (Authorization  of
   26  plan) which are legally required to be used for a particular purpose.
   27    (6) That the corporation elects to dissolve.
   28    (7) The manner in which the dissolution was authorized. If the dissol-
   29  ution of the corporation is authorized by a vote of the directors and/or
   30  members of the corporation that is less than that ordinarily required by
   31  the certificate of incorporation, the by-laws, this chapter or any other
   32  applicable  law, as permitted by paragraph (a) of section 1002 (Authori-
   33  zation of plan) OF THIS ARTICLE, then  the  certificate  of  dissolution
   34  shall so state.
   35    (8)  A statement that prior to delivery of such certificate of dissol-
   36  ution to the department of state for filing, the plan of dissolution and
   37  distribution of assets has been approved by THE ATTORNEY GENERAL OR BY a
   38  justice of the supreme court, if such approval is required  PURSUANT  TO
   39  SECTION  1002  (AUTHORIZATION  OF  PLAN)  OF THIS ARTICLE. A copy of the
   40  order shall be attached to the certificate of dissolution. In  the  case
   41  of  a  corporation,  other  than  a corporation incorporated pursuant to
   42  article 15 (Public cemetery corporations), having no assets to  distrib-
   43  ute, other than a reserve not to exceed twenty-five thousand dollars for
   44  the  purpose of paying ordinary and necessary expenses of winding up its
   45  affairs including attorney and accountant fees, and liabilities  not  in
   46  excess  of  ten thousand dollars at the time of dissolution, a statement
   47  that a copy of the plan of  dissolution  which  contains  the  statement
   48  prescribed  by  paragraph  (b)  of section 1001 (Plan of dissolution and
   49  distribution of assets) has been duly filed with the  attorney  general,
   50  if required.
   51    (b)  Such  certificate  of  dissolution shall have [indorsed] ENDORSED
   52  thereon or annexed thereto the approval of the dissolution:
   53    (1) By a governmental body or officer, if such approval is required. A
   54  corporation whose statement of purposes specifically includes the estab-
   55  lishment or operation of a child  day  care  center,  as  that  term  is
   56  defined  in  section  three  hundred  ninety of the social services law,
       A. 7337                            23

    1  shall provide a certified copy of any certificate of dissolution involv-
    2  ing such corporation to the office of children and family services with-
    3  in thirty days after the filing of such dissolution with the  department
    4  of state.
    5    (2) By the attorney general in the case of a [Type B, C or D] CHARITA-
    6  BLE  corporation, or any other corporation that holds assets at the time
    7  of dissolution legally required to be used for a particular purpose.
    8    S 40. Subparagraph 15 of paragraph (a) of section 1008 of the not-for-
    9  profit corporation law, as amended by chapter 434 of the laws  of  2006,
   10  is amended to read as follows:
   11    (15) Where assets were received and held by the corporation either for
   12  a  CHARITABLE  purpose  [specified as Type B in paragraph (b) of section
   13  201 (Purposes),] or [were] legally required to be used for a  particular
   14  purpose,  the  distribution  of  such  assets to one or more domestic or
   15  foreign  corporations  or  other  organizations  engaged  in  activities
   16  substantially  similar  to those of the dissolved corporation, on notice
   17  to the attorney general and to such other persons, and in  such  manner,
   18  as the court may deem proper.
   19    S 41.  Subparagraph 6 of paragraph (a) of section 1012 of the not-for-
   20  profit  corporation  law, as amended by chapter 726 of the laws of 2005,
   21  is amended to read as follows:
   22    (6) That[, under section 201 (Purposes),] it is a [Type  .............
   23  (Insert  A,  B,  C  or  D)  not-for-profit]  CHARITABLE corporation OR A
   24  NON-CHARITABLE CORPORATION, AS APPLICABLE.
   25    S 42.  Section 1302 of the not-for-profit corporation law, as  amended
   26  by chapter 847 of the laws of 1970, is amended to read as follows:
   27  S 1302. Application to existing authorized foreign corporations.
   28    Every  foreign corporation which on the effective date of this chapter
   29  is authorized to conduct activities in this state under a certificate of
   30  authority heretofore issued to  it  by  the  secretary  of  state  shall
   31  continue to have such authority.  Such foreign corporation, its members,
   32  directors,  and  officers  shall  have  the same rights, franchises, and
   33  privileges and shall be subject to the same  limitations,  restrictions,
   34  liabilities,  and  penalties  as  a foreign corporation authorized under
   35  this chapter, its members, directors,  and  officers  respectively.    A
   36  foreign corporation may by amendment to its certificate of authority set
   37  forth  [the type of] WHETHER IT IS A CHARITABLE corporation [it is under
   38  section 201 (Purposes);] OR A  NON-CHARITABLE  CORPORATION  and  in  the
   39  absence  of  such amendment an authorized foreign corporation shall be a
   40  [Type B] CHARITABLE corporation.  Reference in this chapter to an appli-
   41  cation for authority  shall,  unless  the  context  otherwise  requires,
   42  include the statement and designation and any amendment thereof required
   43  to  be  filed by the secretary of state under prior statutes to obtain a
   44  certificate of authority.
   45    S 43.  Subparagraph 4 of paragraph (a) of section 1304 of the not-for-
   46  profit corporation law, as amended by chapter 847 of the  laws  of  1970
   47  and as renumbered by chapter 590 of the laws of 1982, is amended to read
   48  as follows:
   49    (4)  That  the  corporation  is  a  foreign  corporation as defined in
   50  subparagraph [(a)] (7) OF PARAGRAPH (A) of section  102  (Definitions)[;
   51  the  type  of]  OF THIS CHAPTER, WHETHER IT WOULD BE A CHARITABLE corpo-
   52  ration [it shall be  under  section  201  (Purposes);  a  statement]  OR
   53  NON-CHARITABLE  CORPORATION  IF FORMED IN THIS STATE; A STATEMENT of its
   54  purposes to be pursued in this state and  of  the  activities  which  it
   55  proposes to conduct in this state; AND a statement that it is authorized
   56  to  conduct  those activities in the jurisdiction of its incorporation[;
       A. 7337                            24

    1  and in the case of a Type C corporation, the  lawful  public  or  quasi-
    2  public objective which each business purpose will achieve].
    3    S  44. Paragraph (c) of section 1304 of the not-for-profit corporation
    4  law is amended, and a new paragraph (d) is added to read as follows:
    5    (c) If the application for authority sets forth any purpose or  activ-
    6  ity  for  which  a  domestic  corporation  could be formed only with the
    7  consent or approval of any governmental body or officer, or other person
    8  or body under section 404 (Approvals,  NOTICES  and  consents)  OF  THIS
    9  CHAPTER,  such  consent or approval shall be endorsed thereon or annexed
   10  thereto.
   11    (D) IF THE APPLICATION FOR AUTHORITY SETS FORTH ANY PURPOSE OR  ACTIV-
   12  ITY  REQUIRING A DOMESTIC CORPORATION TO PROVIDE NOTICE OF THE FILING OF
   13  A CERTIFICATE OF INCORPORATION TO ANY PERSON OR ENTITY UNDER SECTION 404
   14  (APPROVALS, NOTICES AND CONSENTS), THEN THE CORPORATION SHALL PROVIDE  A
   15  CERTIFIED  COPY OF THE CERTIFICATE OF AUTHORITY TO SUCH PERSON OR ENTITY
   16  WITHIN TEN BUSINESS DAYS AFTER  THE  CORPORATION  RECEIVES  CONFIRMATION
   17  FROM  THE DEPARTMENT OF STATE THAT THE CERTIFICATE HAS BEEN ACCEPTED FOR
   18  FILING.
   19    S 45. Subparagraph 1 of paragraph (a) of section 1309 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] ARTICLE.
   27    S  46. Subparagraph 1 of paragraph (b) of section 1310 of the not-for-
   28  profit corporation law, as amended by chapter 186 of the laws  of  1983,
   29  is amended to read as follows:
   30    (1)  The name of the foreign corporation as it appears on the index of
   31  names of existing domestic and authorized foreign  corporations  of  any
   32  [type  or]  kind  in the department of state and the fictitious name the
   33  corporation has agreed to use in this state pursuant to paragraph (d) of
   34  section 1301 of this [chapter] ARTICLE.
   35    S 47. Subparagraph 1 of paragraph (a) of section 1311 of the  not-for-
   36  profit  corporation  law, as amended by chapter 186 of the laws of 1983,
   37  is amended to read as follows:
   38    (1) The name of the foreign corporation as it appears on the index  of
   39  names  of  existing  domestic and authorized foreign corporations of any
   40  [type or] kind in the department of state and the  fictitious  name  the
   41  corporation has agreed to use in this state pursuant to paragraph (d) of
   42  section 1301 of this [chapter] ARTICLE.
   43    S  48.  Paragraphs  (a)  and (b) of section 1315 of the not-for-profit
   44  corporation law, subparagraph 5 of paragraph (b) as amended  by  chapter
   45  847 of the laws of 1970, are amended to read as follows:
   46    (a)  An action or special proceeding against a foreign corporation may
   47  be  maintained  by a resident of this state or by a domestic corporation
   48  of any [type or] kind for any cause of action.
   49    (b)   Except as otherwise provided  in  this  article,  an  action  or
   50  special  proceeding  against  a foreign corporation may be maintained by
   51  another foreign corporation of any [type or] kind or by a nonresident in
   52  the following cases only:
   53    (1)  Where the action is brought to recover damages for the breach  of
   54  a  contract  made  or  to be performed within this state, or relating to
   55  property situated within this state at the time of  the  making  of  the
   56  contract.
       A. 7337                            25

    1    (2)    Where  the  subject matter of the litigation is situated within
    2  this state.
    3    (3)    Where the cause of action arose within this state, except where
    4  the object of the action or special proceeding is to affect the title of
    5  real property situated outside this state.
    6    (4)  Where, in any case not included in the preceding subparagraphs, a
    7  non-domiciliary would be subject to the  personal  jurisdiction  of  the
    8  courts  of this state under section [302] THREE HUNDRED TWO of the civil
    9  practice law and rules.
   10    (5)  Where the defendant is a foreign  corporation  conducting  activ-
   11  ities or authorized to conduct activities in this state.
   12    S  49. Paragraph (b) of section 1316 of the not-for-profit corporation
   13  law is amended to read as follows:
   14    (b)  An examination authorized by paragraph (a) may be denied to  such
   15  member or other person upon his refusal to furnish to the foreign corpo-
   16  ration  or  its  transfer  agent  or  registrar  an  affidavit that such
   17  inspection is not desired for a purpose which is in the interests  of  a
   18  business  or object other than the activities of the foreign corporation
   19  and that such member or other person has not within five years  sold  or
   20  offered for sale any list or record of members of any corporation of any
   21  [type  or]  kind, whether or not formed under the laws of this state, or
   22  aided or abetted any person in procuring any  such  list  or  record  of
   23  members for any such purpose.
   24    S  50. Paragraph (a) of section 1321 of the not-for-profit corporation
   25  law, subparagraphs 1, 2 and 3 as amended by chapter 847 of the  laws  of
   26  1970, is amended to read as follows:
   27    (a)    Notwithstanding  any other provision of this chapter, a foreign
   28  corporation conducting activities in  this  state  which  is  authorized
   29  under this article, its directors, officers and members, shall be exempt
   30  from  the  provisions  of  paragraph  (e)  of section 1317 (Voting trust
   31  records), subparagraph [(a)]  (1)  OF  PARAGRAPH  (A)  of  section  1318
   32  (Liabilities  of  directors  and  officers of foreign corporations), and
   33  subparagraph [(a)] (2) OF PARAGRAPH (A) of section  1320  (Applicability
   34  of other provisions) OF THIS ARTICLE if when such provision would other-
   35  wise apply:
   36    (1)  The  corporation  is  a [Type A] NON-CHARITABLE corporation under
   37  this chapter; its principal activities are conducted outside this state;
   38  the greater part of its property is located outside this state; and less
   39  than one third of its members are residents of this state; or
   40    (2)  The corporation is a [Type B] CHARITABLE corporation  under  this
   41  chapter;  its principal activities are conducted outside this state; the
   42  greater part of its property is located outside  this  state;  and  less
   43  than ten per cent of its annual revenues is derived from solicitation of
   44  funds within this state[; or
   45    (3)    The corporation is a Type C corporation under this chapter; its
   46  principal activities are conducted outside this state; the greater  part
   47  of its property is located outside this state; and less than one half of
   48  its revenues for the preceding three fiscal years, or such portion ther-
   49  eof as the foreign corporation was in existence, was derived from sourc-
   50  es within this state].
   51    S  51. Paragraph (d) of section 1401 of the not-for-profit corporation
   52  law, as added by chapter 871 of the laws of 1977, is amended to read  as
   53  follows:
   54    (d) Type of corporation. A family or private cemetery corporation is a
   55  [type B] CHARITABLE corporation under this chapter.
       A. 7337                            26

    1    S  52. Paragraph (b) of section 1402 of the not-for-profit corporation
    2  law is amended to read as follows:
    3    (b) Type of corporation.
    4    A  fire  corporation  is  a [Type B] CHARITABLE corporation under this
    5  chapter.
    6    S 53. Paragraph (c) of section 1403 of the not-for-profit  corporation
    7  law is amended to read as follows:
    8    (c) Type of corporation.
    9    A  corporation  for the prevention of cruelty is a [Type B] CHARITABLE
   10  corporation under this chapter.
   11    S 54. Paragraph (b) of section 1404 of the not-for-profit  corporation
   12  law,  as amended by chapter 1058 of the laws of 1971, is amended to read
   13  as follows:
   14    (b)  Type of corporation.
   15    A christian association is a [Type  B]  CHARITABLE  corporation  under
   16  this chapter.
   17    S  55. Paragraph (b) of section 1405 of the not-for-profit corporation
   18  law is amended to read as follows:
   19    (b)  Type of corporation.
   20    A soldiers' monument corporation is a [Type B] CHARITABLE corporation.
   21    S 56. Paragraph (b) of section 1406 of the not-for-profit  corporation
   22  law is amended to read as follows:
   23    (b)  Type of corporation.
   24    A  medical society is a [Type A] NON-CHARITABLE corporation under this
   25  chapter.
   26    S 57. Paragraph (b) of section 1407 of the not-for-profit  corporation
   27  law is amended to read as follows:
   28    (b)  Type of corporation.
   29    An alumni corporation is a [Type A] NON-CHARITABLE corporation.
   30    S  58. Paragraph (b) of section 1408 of the not-for-profit corporation
   31  law is amended to read as follows:
   32    (b)  Type of corporation.
   33    An historical society is a [Type B] CHARITABLE corporation under  this
   34  chapter.
   35    S  59. Paragraph (b) of section 1409 of the not-for-profit corporation
   36  law, as amended by chapter 1058 of the laws of 1971, is amended to  read
   37  as follows:
   38    (b) Type of corporation.  An agricultural or horticultural corporation
   39  is a [Type A] NON-CHARITABLE corporation under this chapter, except that
   40  any  such  corporation  which  has received moneys from the state or has
   41  acted as agent for the state under paragraph (c) OF THIS SECTION, or has
   42  acquired or does acquire real property by condemnation is or  becomes  a
   43  [Type B] CHARITABLE corporation under this chapter. [If such corporation
   44  has  not  already  filed  as  a  Type  B corporation it shall, upon such
   45  receipt of moneys or acting as such agent or such  acquisition  of  real
   46  property by condemnation, amend its certificate to that effect.]
   47    S  60. Paragraph (b) of section 1410 of the not-for-profit corporation
   48  law is amended to read as follows:
   49    (b)  Type of corporation.
   50    A board of trade or a chamber of commerce is a [Type A] NON-CHARITABLE
   51  corporation under this chapter.
   52    S 61. Paragraph (b) of section 1411 of the not-for-profit  corporation
   53  law is amended to read as follows:
   54    (b) Type of corporation.
   55    A  local  development corporation is a [Type C] CHARITABLE corporation
   56  under this chapter.
       A. 7337                            27

    1    S 62. Paragraph (d) of section 1412 of the not-for-profit  corporation
    2  law,  as added by chapter 555 of the laws of 1993, is amended to read as
    3  follows:
    4    (d)  Type.  A  university  faculty  practice corporation is a [Type B]
    5  CHARITABLE corporation under this chapter.
    6    S 63. Paragraph (c) of section 1505 of the not-for-profit  corporation
    7  law,  as added by chapter 871 of the laws of 1977, is amended to read as
    8  follows:
    9    (c)  Type of corporation.  A cemetery corporation is a [Type B] CHARI-
   10  TABLE corporation under this chapter.
   11    S 64. Paragraph (b) of section 1602 of the not-for-profit  corporation
   12  law,  as added by chapter 257 of the laws of 2011, is amended to read as
   13  follows:
   14    (b) "land bank" shall mean a land bank established as a [type C] CHAR-
   15  ITABLE not-for-profit corporation under this chapter and  in  accordance
   16  with the provisions of this article and pursuant to this article;
   17    S  65. Paragraph (f) of section 1603 of the not-for-profit corporation
   18  law, as added by chapter 257 of the laws of 2011, is amended to read  as
   19  follows:
   20    (f)  Each  land  bank  created pursuant to this act shall be a [type C
   21  not-for-profit] CHARITABLE corporation, and  shall  have  permanent  and
   22  perpetual duration until terminated and dissolved in accordance with the
   23  provisions of section sixteen hundred thirteen of this article.
   24    S  66.  The  opening paragraph of paragraph (a) of section 1607 of the
   25  not-for-profit corporation law, as added by chapter 257 of the  laws  of
   26  2011, is amended to read as follows:
   27    A  land  bank  shall  constitute  a [type C] CHARITABLE not-for-profit
   28  corporation under New York law, which powers shall  include  all  powers
   29  necessary  to  carry  out  and effectuate the purposes and provisions of
   30  this article, including the following powers in addition to those herein
   31  otherwise granted:
   32    S 67.  Section 1613 of the not-for-profit corporation law, as added by
   33  chapter 257 of the laws of 2011, is amended to read as follows:
   34  S 1613. Dissolution of land bank.
   35    A land bank may be dissolved as a [type C]  CHARITABLE  not-for-profit
   36  corporation sixty calendar days after an affirmative resolution approved
   37  by  two-thirds of the membership of the board of directors. Sixty calen-
   38  dar days advance written notice of  consideration  of  a  resolution  of
   39  dissolution shall be given to the foreclosing governmental unit or units
   40  that  created  the land bank, shall be published in a local newspaper of
   41  general circulation, and POSTED  PROMINENTLY  AND  CONTINUOUSLY  ON  THE
   42  HOMEPAGE  OF  ANY WEBSITE MAINTAINED BY THE LAND BANK, AND shall be sent
   43  certified mail to the trustee of any outstanding bonds of the land bank.
   44  Upon dissolution of the land bank all real property,  personal  property
   45  and  other  assets of the land bank shall become the assets of the fore-
   46  closing governmental unit or units that created the land  bank.  In  the
   47  event that two or more foreclosing governmental units create a land bank
   48  in  accordance  with  section sixteen hundred three of this article, the
   49  withdrawal of one or  more  foreclosing  governmental  units  shall  not
   50  result  in the dissolution of the land bank unless the intergovernmental
   51  agreement so provides, and there is  no  foreclosing  governmental  unit
   52  that desires to continue the existence of the land bank.
   53    S  68.  Paragraph (c) of subdivision 1 of section 2-b of the religious
   54  corporations law, as amended by chapter 490 of  the  laws  of  2010,  is
   55  amended to read as follows:
       A. 7337                            28

    1    (c)  The  following  provisions  of the not-for-profit corporation law
    2  shall not apply to religious corporations: [subparagraphs]  SUBPARAGRAPH
    3  (7)  [and  (8)] of paragraph (a) of section one hundred twelve, [section
    4  one hundred thirteen,] section one hundred fourteen, section two hundred
    5  one,  section  three  hundred three, section three hundred four, section
    6  three hundred five, section  three  hundred  six,  article  four  except
    7  section four hundred one, section five hundred fourteen, that portion of
    8  section  five hundred fifty-five (b) and section five hundred fifty-five
    9  (c) which reads "The institution shall notify the donor,  if  available,
   10  and  the  attorney  general of the application, and the attorney general
   11  and such donor must be given an opportunity to be  heard",  section  six
   12  hundred  five,  section  six  hundred  seven,  section six hundred nine,
   13  section eight hundred four, article nine  except  section  nine  hundred
   14  ten,  article  ten except as provided in section eleven hundred fifteen,
   15  section eleven hundred two, and article fifteen except paragraph (c)  of
   16  section fifteen hundred seven.
   17    S 69.  Paragraph (c) of subdivision 1 of section 1-a of the benevolent
   18  orders  law,  as added by chapter 703 of the laws of 1970, is amended to
   19  read as follows:
   20    (c) The following provisions of  the  not-for-profit  corporation  law
   21  shall  not  apply  to benevolent orders: [section one hundred thirteen,]
   22  section two hundred one, article four, paragraphs (a), (b), and  (c)  of
   23  section  eight  hundred  four,  section nine hundred seven, section nine
   24  hundred eight, section nine hundred nine, [section ten hundred  eleven,]
   25  section ten hundred twelve, and article fourteen.
   26    S 70.  Subdivision 1 of section 1825 of the public authorities law, as
   27  amended  by  chapter  1045  of  the  laws of 1974, is amended to read as
   28  follows:
   29    1. The corporation shall (a) be incorporated or  reincorporated  under
   30  [article  nineteen of the membership corporations law, or under] section
   31  fourteen hundred eleven of the not-for-profit corporation law, or (b) be
   32  incorporated under [article two of the membership corporations  law,  or
   33  under]  article  four of the not-for-profit corporation law, in addition
   34  to other purposes, to construct new industrial or  manufacturing  plants
   35  or  new  research  and  development  buildings and acquire machinery and
   36  equipment deemed related thereto or acquire, rehabilitate,  and  improve
   37  for use by others, industrial or manufacturing plants in the area of the
   38  state  in  which  an assisted project is to be located, to assist finan-
   39  cially in such construction, acquisition, rehabilitation and improvement
   40  and to maintain such plants, buildings and equipment for others, and may
   41  also be authorized to study and promote, alone or in concert with  local
   42  officials  and interested local groups, the economic growth and business
   43  prosperity of the area and the solution of other civic problems  of  the
   44  region which includes such areas[, and (c) if incorporated or reincorpo-
   45  rated  under  the  membership  corporations  law, have complied with the
   46  requirements of section  one  hundred  thirteen  of  the  not-for-profit
   47  corporation law].
   48    S 71. Subsection (a) of section 3435 of the insurance law, as added by
   49  chapter 220 of the laws of 1986, is amended to read as follows:
   50    (a)  This section shall apply to public entities as defined in section
   51  one hundred seven of this chapter, organizations  described  by  section
   52  501(c)(3)  of the United States internal revenue code, [Type B] CHARITA-
   53  BLE corporations AS DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED  TWO
   54  (DEFINITIONS)  OF THE NOT-FOR-PROFIT CORPORATION LAW AND formed pursuant
   55  to paragraph [(b)] (A) of section two hundred one of the  not-for-profit
       A. 7337                            29

    1  corporation  law,  and  organizations  described  by section two hundred
    2  sixteen-a of the education law.
    3    S 72. Subsection (a) of section 6703 of the insurance law, as added by
    4  chapter 598 of the laws of 2000, is amended to read as follows:
    5    (a)  A  corporation  may  be organized as a [type B] CHARITABLE corpo-
    6  ration [pursuant to paragraph (b) of section two hundred one] AS DEFINED
    7  IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS)  of  the  not-
    8  for-profit  corporation  law  or as a nonprofit reciprocal insurer under
    9  article sixty-one of this chapter to write the kinds of insurance speci-
   10  fied in subsection (a) of section one thousand one hundred  thirteen  of
   11  this  chapter other than (1) those types of insurance specified in para-
   12  graphs one, two, eighteen, twenty-two, twenty-three and  twenty-five  of
   13  such  subsection,  (2) insurance against legal liability of the insured,
   14  and against loss, damage or expense incident to a claim of such  liabil-
   15  ity  arising  out  of  death  or injury of any person, due to medical or
   16  hospital malpractice by any licensed  physician  or  hospital,  and  (3)
   17  insurance  subject to section three thousand four hundred twenty-five of
   18  this chapter.
   19    S 73. The opening paragraph of subsection (b) of section 6704  of  the
   20  insurance  law,  as added by chapter 598 of the laws of 2000, is amended
   21  to read as follows:
   22    The superintendent may pursuant to this article issue a license  to  a
   23  nonprofit  property/casualty  insurance  company  that is organized as a
   24  [type B] CHARITABLE corporation [pursuant to paragraph  (b)  of  section
   25  two  hundred one] AS DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO
   26  (DEFINITIONS) of the not-for-profit corporation law if such company:
   27    S 74. Subsection (a) of section 6706 of the insurance law, as added by
   28  chapter 598 of the laws of 2000, is amended to read as follows:
   29    (a) Except as otherwise provided in this article,  where  inconsistent
   30  with  this  article, or where the context otherwise requires, all of the
   31  provisions of this chapter and the rules and regulations of  the  super-
   32  intendent,   relating   to   all   insurers   and   those   relating  to
   33  property/casualty insurance companies transacting the same kind or kinds
   34  of insurance shall be applicable to a nonprofit property/casualty insur-
   35  ance company organized as a [type B] CHARITABLE corporation  AS  DEFINED
   36  IN  PARAGRAPH  (A)  OF  SECTION  ONE  HUNDRED  TWO  (DEFINITIONS) OF THE
   37  NOT-FOR-PROFIT CORPORATION LAW AND FORMED pursuant to paragraph  (b)  of
   38  section  two  hundred  one  of  the  not-for-profit  corporation law and
   39  licensed pursuant to  subsection  (b)  of  section  six  thousand  seven
   40  hundred  four of this article. Where any of such provisions of law refer
   41  to a corporation, company or insurer,  such  references,  when  read  in
   42  connection  with  and  applicable  to  this  article,  shall mean such a
   43  nonprofit property/casualty insurance company.
   44    S 75. Section 202 of the racing,  pari-mutuel  wagering  and  breeding
   45  law, as amended by chapter 18 of the laws of 2008, is amended to read as
   46  follows:
   47    S  202.  Restriction upon commencement of business. No business corpo-
   48  ration organized under the provisions of this article  shall  engage  in
   49  the  prosecution  or  management  of its business until the whole of its
   50  capital stock shall have been subscribed, nor until it shall have  filed
   51  in the offices where certificates of incorporation were filed, a further
   52  certificate stating that the whole of its capital stock has been in good
   53  faith  subscribed,  executed  and acknowledged by its president or vice-
   54  president and treasurer or secretary, and verified by them to the effect
   55  that the statements contained in it are true.
       A. 7337                            30

    1    Notwithstanding the  foregoing,  corporations  organized  pursuant  to
    2  section  two  hundred one of the not-for-profit corporation law as [type
    3  C] CHARITABLE corporations AS DEFINED IN PARAGRAPH (A)  OF  SECTION  ONE
    4  HUNDRED  TWO  (DEFINITIONS)  OF THE NOT-FOR-PROFIT CORPORATION LAW shall
    5  not  engage  in  the prosecution or management of its business until its
    6  certificate of incorporation has been accepted for filing by the  secre-
    7  tary  of  state  and such confirmation of filing has been filed with the
    8  board and the franchise oversight board.
    9    S 76. Subdivision 2 of section 2-b of the religious corporations  law,
   10  as  added  by  chapter  956  of  the laws of 1971, is amended to read as
   11  follows:
   12    2. Every corporation to which the not-for-profit  corporation  law  is
   13  made  applicable by this section is a [type B] CHARITABLE corporation AS
   14  DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) OF THE
   15  NOT-FOR-PROFIT CORPORATION LAW for all purposes of that law.
   16    S 77. Subdivision 2 of section 13-a of  the  private  housing  finance
   17  law,  as added by chapter 547 of the laws of 1971, is amended to read as
   18  follows:
   19    2. Every corporation to which the not-for-profit  corporation  law  is
   20  made  applicable by this section is a [type B] CHARITABLE corporation AS
   21  DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) OF THE
   22  NOT-FOR-PROFIT CORPORATION LAW for all purposes of that law.
   23    S 78. Subdivision 5 of section 216-a of the education law, as added by
   24  chapter 901 of the laws of 1972, is amended to read as follows:
   25    5. Every corporation to which the not-for-profit  corporation  law  is
   26  made applicable by this section, is a [type B] CHARITABLE corporation AS
   27  DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) OF THE
   28  NOT-FOR-PROFIT  CORPORATION  LAW under all applicable provisions of that
   29  law.
   30    S 79. Section 579 of the banking law, as amended by chapter 629 of the
   31  laws of 2002, is amended to read as follows:
   32    S 579. Doing business without license prohibited. Only a [type B  not-
   33  for-profit]  CHARITABLE  corporation  as defined in [section two hundred
   34  one] PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) of the  not-
   35  for-profit  corporation  law of this state, or an entity incorporated in
   36  another state and having a similar not-for-profit status,  shall  engage
   37  in  the  business  of  budget  planning as defined in subdivision one of
   38  section four hundred fifty-five of the  general  business  law  of  this
   39  state except as authorized by this article and without first obtaining a
   40  license from the superintendent.
   41    S  80.  Subdivision  4  of section 455 of the general business law, as
   42  amended by chapter 456 of the laws  of  2006,  is  amended  to  read  as
   43  follows:
   44    4.  Person or entity as used in this article shall not include a [type
   45  B not-for-profit] CHARITABLE corporation  as  defined  in  [section  two
   46  hundred  one]  PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) of
   47  the not-for-profit corporation law of this state, or an entity  incorpo-
   48  rated  in  another  state  and  having  a similar not-for-profit status,
   49  licensed by the superintendent, to engage  in  the  business  of  budget
   50  planning as defined in this section.
   51    S  81. Paragraph (a) of  subdivision 1 of section 458-b of the general
   52  business law, as added by chapter 386 of the laws of 1986, is amended to
   53  read as follows:
   54    (a) Any [type B not-for-profit] CHARITABLE corporation AS  DEFINED  IN
   55  PARAGRAPH   (A)   OF  SECTION  ONE  HUNDRED  TWO  (DEFINITIONS)  OF  THE
       A. 7337                            31

    1  NOT-FOR-PROFIT CORPORATION LAW licensed pursuant to article twelve-c  of
    2  the banking law.
    3    S  82.  Subdivision (b) of section 16.32 of the mental hygiene law, as
    4  amended by chapter 669 of the laws  of  1995,  is  amended  to  read  as
    5  follows:
    6    (b) No loans, other than through the purchase of bonds, debentures, or
    7  similar obligations of the type customarily sold in public offerings, or
    8  through ordinary deposit of funds in a bank, shall be made by a not-for-
    9  profit corporation which is certified as a provider of services pursuant
   10  to  this article to its employee who receives an annual salary in excess
   11  of thirty thousand dollars, or to any other corporation,  firm,  associ-
   12  ation or other entity in which such employee is a director or officer or
   13  employee  or  holds a direct or indirect substantial financial interest,
   14  except a loan by one corporation incorporated as a [type  B]  CHARITABLE
   15  corporation  [pursuant  to]  AS  DEFINED IN PARAGRAPH (A) OF SECTION ONE
   16  HUNDRED TWO (DEFINITIONS)  OF  the  not-for-profit  corporation  law  to
   17  another  type  B  corporation,  or  a  loan for a temporary or emergency
   18  purpose which will further the health and welfare  of  the  employee  so
   19  long  as  the  purpose  and  amount  of  such  loan are disclosed to and
   20  approved by the board of directors of such agency. Such disclosure shall
   21  be filed with the secretary  of  the  corporation  and  entered  in  the
   22  minutes  of the meeting, and, if approved by such board, such disclosure
   23  shall also be forwarded in writing to the commissioner and to the direc-
   24  tor of community services of each local governmental unit that  has,  at
   25  the  time  of  such disclosure, a contract with such corporation for the
   26  rendition of services pursuant to article forty-one of this  chapter.  A
   27  loan  made in violation of this section shall be a violation of the duty
   28  to the not-for-profit corporation of the directors or officers authoriz-
   29  ing it or participating in it, but the obligation of the  borrower  with
   30  respect to the loan shall not be affected thereby.
   31    S  83.  Subdivision (b) of section 31.31 of the mental hygiene law, as
   32  amended by chapter 669 of the laws  of  1995,  is  amended  to  read  as
   33  follows:
   34    (b) No loans, other than through the purchase of bonds, debentures, or
   35  similar obligations of the type customarily sold in public offerings, or
   36  through ordinary deposit of funds in a bank, shall be made by a not-for-
   37  profit  corporation which is licensed as a provider of services pursuant
   38  to this article to its employee who receives an annual salary in  excess
   39  of  thirty  thousand dollars, or to any other corporation, firm, associ-
   40  ation or other entity in which such employee is a director or officer or
   41  employee or holds a direct or indirect substantial  financial  interest,
   42  except  a  loan by one corporation incorporated as a [type B] CHARITABLE
   43  corporation [pursuant to] AS DEFINED IN PARAGRAPH  (A)  OF  SECTION  ONE
   44  HUNDRED  TWO  (DEFINITIONS)  OF  the  not-for-profit  corporation law to
   45  another type B corporation, or a  loan  for  a  temporary  or  emergency
   46  purpose  which  will  further  the health and welfare of the employee so
   47  long as the purpose and  amount  of  such  loan  are  disclosed  to  and
   48  approved by the board of directors of such agency. Such disclosure shall
   49  be  filed  with  the  secretary  of  the  corporation and entered in the
   50  minutes of the meeting, and, if approved by such board, such  disclosure
   51  shall also be forwarded in writing to the commissioner and to the direc-
   52  tor  of  community services of each local governmental unit that has, at
   53  the time of such disclosure, a contract with such  corporation  for  the
   54  rendition  of  services pursuant to article forty-one of this chapter. A
   55  loan made in violation of this section shall be a violation of the  duty
   56  to the not-for-profit corporation of the directors or officers authoriz-
       A. 7337                            32

    1  ing  it  or participating in it, but the obligation of the borrower with
    2  respect to the loan shall not be affected thereby.
    3    S 84. Paragraph (f) of subdivision 7 of section 75 of the public lands
    4  law,  as added by chapter 791 of the laws of 1992, is amended to read as
    5  follows:
    6    (f) The commissioner, in consultation with the commissioner  of  envi-
    7  ronmental  conservation,  the  secretary  of state, the office of parks,
    8  recreation and historic preservation and other interested state agencies
    9  administering state-owned lands underwater, shall promulgate pursuant to
   10  article two of the state administrative procedure act  such  rules  with
   11  respect to grants, leases, easements and lesser interests for the use of
   12  state-owned land underwater, and the cession of jurisdiction thereof, as
   13  in  his  or  her  judgment  are  reasonable and necessary to protect the
   14  interests of the people in such lands underwater. Such regulations shall
   15  include without being limited to: the fees  to  be  charged,  consistent
   16  with  the  provisions of this section, including mitigation of such fees
   17  in the event of economic hardship on  existing  commercial  enterprises;
   18  fee  limitations to administrative expenses for municipal uses which are
   19  public, non-commercial and offer services free or for nominal fees,  and
   20  for  uses undertaken and operated for public and non-commercial purposes
   21  by not-for-profit corporations characterized as  ["Type  B"]  CHARITABLE
   22  corporations  [pursuant  to paragraph (b) of section two hundred one] AS
   23  DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) of the
   24  not-for-profit corporation law, and for uses undertaken and operated for
   25  public purposes by a corporation formed pursuant to the religious corpo-
   26  ration law or by a corporation formed pursuant to A special act of  this
   27  state  and  which has as its principal purpose a religious purpose; such
   28  further exemptions for projects as the commissioner  determines  do  not
   29  represent  significant  encroachments;  limitations on grants, including
   30  conversion grants, with respect to underwater lands consistent with  the
   31  public  purposes  of this subdivision and limiting such grants to excep-
   32  tional circumstances; and factors  to  be  examined  in  considering  an
   33  application for a lease, easement or other interest. Those factors shall
   34  include  without  limitation the following: (i) the environmental impact
   35  of the project; (ii) the values for natural resource management,  recre-
   36  ational  uses,  and  commercial  uses  of the pertinent underwater land;
   37  (iii) the size, character and effects of  the  project  in  relation  to
   38  neighboring  uses;  (iv) the potential for interference with navigation,
   39  public uses of the waterway and rights of other riparian owners; (v) the
   40  effect of the project on the natural resource interests of the state  in
   41  the  lands;  (vi)  the  water-dependent nature of the use; (vii) and any
   42  adverse economic impact on existing commercial  enterprises.  The  final
   43  promulgation  of  rules  establishing  fees  or  fee structures shall be
   44  subject to the approval of the director of the budget.
   45    S 85. This act shall  take  effect  January  1,  2014,  provided  that
   46  section three of this act shall take effect January 1, 2015.

   47                                   PART B

   48    Section  1.  Paragraph (a) of section 102 of the not-for-profit corpo-
   49  ration law is amended by adding six new subparagraphs 6-a, 22,  23,  24,
   50  25 and 26 to read as follows:
   51    (6-A)  "ENTIRE  BOARD" MEANS THE TOTAL NUMBER OF DIRECTORS ENTITLED TO
   52  VOTE WHICH THE CORPORATION WOULD HAVE IF THERE WERE NO  VACANCIES.    IF
   53  THE BY-LAWS OF THE CORPORATION PROVIDE THAT THE BOARD SHALL CONSIST OF A
   54  FIXED NUMBER OF DIRECTORS, THEN THE "ENTIRE BOARD" SHALL CONSIST OF THAT
       A. 7337                            33

    1  NUMBER OF DIRECTORS.  IF THE BY-LAWS OF ANY CORPORATION PROVIDE THAT THE
    2  BOARD  MAY  CONSIST  OF  A RANGE BETWEEN A MINIMUM AND MAXIMUM NUMBER OF
    3  DIRECTORS, THEN THE "ENTIRE BOARD" SHALL CONSIST OF THE NUMBER OF DIREC-
    4  TORS  WITHIN  SUCH  RANGE THAT WERE ELECTED AS OF THE MOST RECENTLY HELD
    5  ELECTION OF DIRECTORS.
    6    (22) AN "AFFILIATE" OF A CORPORATION MEANS ANY ENTITY  CONTROLLED  BY,
    7  IN CONTROL OF, OR UNDER COMMON CONTROL WITH SUCH CORPORATION.
    8    (23)  "INDEPENDENT  AUDITOR"  MEANS  ANY  CERTIFIED  PUBLIC ACCOUNTANT
    9  PERFORMING THE AUDIT  OF  THE  FINANCIAL  STATEMENTS  OF  A  CORPORATION
   10  REQUIRED  BY SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B OF THE
   11  EXECUTIVE LAW.
   12    (24) "INDEPENDENT DIRECTOR" MEANS A DIRECTOR WHO: (I) IS NOT, AND  HAS
   13  NOT  BEEN WITHIN THE LAST THREE YEARS, AN EMPLOYEE OF THE CORPORATION OR
   14  AN AFFILIATE OF THE CORPORATION, AND DOES NOT HAVE A RELATIVE WHO IS, OR
   15  HAS BEEN WITHIN THE LAST THREE YEARS, A KEY EMPLOYEE OF THE  CORPORATION
   16  OR  AN AFFILIATE OF THE CORPORATION; (II) HAS NOT RECEIVED, AND DOES NOT
   17  HAVE A RELATIVE WHO HAS RECEIVED, IN ANY OF THE LAST THREE FISCAL YEARS,
   18  MORE THAN TEN THOUSAND DOLLARS IN DIRECT COMPENSATION  FROM  THE  CORPO-
   19  RATION  OR AN AFFILIATE OF THE CORPORATION (OTHER THAN REIMBURSEMENT FOR
   20  EXPENSES REASONABLY INCURRED AS A DIRECTOR  OR  REASONABLE  COMPENSATION
   21  FOR  SERVICE  AS A DIRECTOR AS PERMITTED BY PARAGRAPH (A) OF SECTION 202
   22  (GENERAL AND SPECIAL POWERS)); AND (III) IS NOT A CURRENT EMPLOYEE OF OR
   23  HAVE A SUBSTANTIAL FINANCIAL INTEREST IN, AND DOES NOT HAVE  A  RELATIVE
   24  WHO  IS A CURRENT OFFICER OF OR HAS A SUBSTANTIAL FINANCIAL INTEREST IN,
   25  ANY ENTITY THAT HAS MADE PAYMENTS TO, OR  RECEIVED  PAYMENTS  FROM,  THE
   26  CORPORATION  OR AN AFFILIATE OF THE CORPORATION FOR PROPERTY OR SERVICES
   27  IN AN AMOUNT WHICH, IN ANY OF THE LAST THREE FISCAL YEARS,  EXCEEDS  THE
   28  LESSER  OF  TWENTY-FIVE THOUSAND DOLLARS OR TWO PERCENT OF SUCH ENTITY'S
   29  CONSOLIDATED  GROSS  REVENUES.    FOR  PURPOSES  OF  THIS  SUBPARAGRAPH,
   30  "PAYMENT" DOES NOT INCLUDE CHARITABLE CONTRIBUTIONS.
   31    (25)  "RELATIVE" OF AN INDIVIDUAL MEANS THE (I) SPOUSE, DOMESTIC PART-
   32  NER AS DEFINED BY SECTION TWENTY-EIGHT  HUNDRED  FIVE-Q  OF  THE  PUBLIC
   33  HEALTH  LAW, CHILD, GRANDCHILD, BROTHER OR SISTER (WHETHER BY THE WHOLE-
   34  OR HALF-BLOOD) OF THE INDIVIDUAL; AND (II) THE SPOUSE OR DOMESTIC  PART-
   35  NER  OF A CHILD, GRANDCHILD, BROTHER OR SISTER (WHETHER BY THE WHOLE- OR
   36  HALF-BLOOD) OF THE INDIVIDUAL.
   37    (26) "TOTAL COMPENSATION" MEANS: (I) ANY COMPENSATION, WHETHER PAID OR
   38  ACCRUED, BY OR ON BEHALF OF THE CORPORATION  OR  ANY  AFFILIATE  OF  THE
   39  CORPORATION FOR SERVICES RENDERED TO, ON BEHALF OF, OR AT THE REQUEST OF
   40  THE  CORPORATION,  INCLUDING  BUT  NOT  LIMITED  TO  SALARY,  BONUS, AND
   41  DEFERRED COMPENSATION;  AND  (II)  ANY  BENEFIT  HAVING  MONETARY  VALUE
   42  PROVIDED  BY  OR  ON  BEHALF  OF THE CORPORATION OR ANY AFFILIATE OF THE
   43  CORPORATION, INCLUDING BUT NOT LIMITED  TO  HOUSING  ALLOWANCES,  LIVING
   44  EXPENSES,   PERQUISITES,  FRINGE  BENEFITS,  EMPLOYER  CONTRIBUTIONS  TO
   45  DEFINED CONTRIBUTION RETIREMENT PLANS AND OTHER RETIREMENT BENEFITS.
   46    S 2. Paragraph (a) of section 112 of  the  not-for-profit  corporation
   47  law is amended by adding a new subparagraph 9 to read as follows:
   48    (9)  TO ENJOIN, VOID OR RESCIND ANY RELATED PARTY TRANSACTION, OR SEEK
   49  ADDITIONAL DAMAGES OR REMEDIES PURSUANT TO SECTION  715  (RELATED  PARTY
   50  TRANSACTIONS) OF THIS CHAPTER.
   51    S  3.  The  not-for-profit  corporation law is amended by adding a new
   52  section 712-a to read as follows:
   53  S 712-A. AUDIT OVERSIGHT.
   54    (A) THE BOARD OR A DESIGNATED AUDIT COMMITTEE OF THE  BOARD  COMPRISED
   55  SOLELY  OF  INDEPENDENT DIRECTORS OF ANY CORPORATION REQUIRED TO FILE AN
   56  INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S AUDIT REPORT WITH THE ATTORNEY
       A. 7337                            34

    1  GENERAL PURSUANT TO SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B
    2  OF THE EXECUTIVE LAW SHALL OVERSEE THE ACCOUNTING AND FINANCIAL  REPORT-
    3  ING  PROCESSES  OF  THE  CORPORATION  AND THE AUDIT OF THE CORPORATION'S
    4  FINANCIAL  STATEMENTS.  THE  BOARD  OR  DESIGNATED AUDIT COMMITTEE SHALL
    5  ANNUALLY RETAIN OR RENEW THE RETENTION  OF  AN  INDEPENDENT  AUDITOR  TO
    6  CONDUCT  THE  AUDIT  AND, UPON COMPLETION THEREOF, REVIEW THE RESULTS OF
    7  THE AUDIT AND ANY RELATED MANAGEMENT LETTER WITH THE  INDEPENDENT  AUDI-
    8  TOR.
    9    (B)  THE  BOARD OR A DESIGNATED AUDIT COMMITTEE OF THE BOARD COMPRISED
   10  SOLELY OF INDEPENDENT DIRECTORS OF ANY CORPORATION REQUIRED TO  FILE  AN
   11  INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S AUDIT REPORT WITH THE ATTORNEY
   12  GENERAL PURSUANT TO SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B
   13  OF  THE  EXECUTIVE  LAW  AND THAT IN THE PRIOR FISCAL YEAR HAD OR IN THE
   14  CURRENT FISCAL YEAR REASONABLY EXPECTS TO HAVE ANNUAL REVENUE IN  EXCESS
   15  OF  ONE  MILLION DOLLARS SHALL, IN ADDITION TO THOSE DUTIES SET FORTH IN
   16  PARAGRAPH (A) OF THIS SECTION:
   17    (1) REVIEW WITH THE INDEPENDENT AUDITOR THE SCOPE AND PLANNING OF  THE
   18  AUDIT PRIOR TO THE AUDIT'S COMMENCEMENT;
   19    (2)  UPON  COMPLETION  OF THE AUDIT, REVIEW AND DISCUSS WITH THE INDE-
   20  PENDENT AUDITOR: (A) ANY  MATERIAL  RISKS  AND  WEAKNESSES  IN  INTERNAL
   21  CONTROLS IDENTIFIED BY THE AUDITOR; (B) ANY RESTRICTIONS ON THE SCOPE OF
   22  THE  AUDITOR'S  ACTIVITIES  OR  ACCESS TO REQUESTED INFORMATION; (C) ANY
   23  SIGNIFICANT DISAGREEMENTS BETWEEN THE AUDITOR AND  MANAGEMENT;  AND  (D)
   24  THE  ADEQUACY  OF  THE  CORPORATION'S ACCOUNTING AND FINANCIAL REPORTING
   25  PROCESSES;
   26    (3) ANNUALLY CONSIDER THE PERFORMANCE AND INDEPENDENCE  OF  THE  INDE-
   27  PENDENT AUDITOR; AND
   28    (4)  IF  THE DUTIES REQUIRED BY THIS SECTION ARE PERFORMED BY AN AUDIT
   29  COMMITTEE, REPORT ON THE COMMITTEE'S ACTIVITIES TO THE BOARD.
   30    (C) THE BOARD OR DESIGNATED AUDIT COMMITTEE OF THE BOARD SHALL OVERSEE
   31  THE ADOPTION, IMPLEMENTATION OF, AND COMPLIANCE  WITH  ANY  CONFLICT  OF
   32  INTEREST  POLICY  OR  WHISTLEBLOWER POLICY ADOPTED BY THE CORPORATION IF
   33  THIS FUNCTION IS NOT OTHERWISE PERFORMED BY  ANOTHER  COMMITTEE  OF  THE
   34  BOARD COMPRISED SOLELY OF INDEPENDENT DIRECTORS.
   35    (D)  IF  A  CORPORATION CONTROLS A GROUP OF CORPORATIONS, THE BOARD OR
   36  DESIGNATED AUDIT COMMITTEE OF THE BOARD OF THE  CONTROLLING  CORPORATION
   37  MAY  PERFORM  THE DUTIES REQUIRED BY THIS SECTION FOR ONE OR MORE OF THE
   38  CONTROLLED CORPORATIONS.
   39    (E) ONLY INDEPENDENT DIRECTORS MAY PARTICIPATE IN ANY BOARD OR COMMIT-
   40  TEE DELIBERATIONS OR VOTING  RELATING  TO  MATTERS  SET  FORTH  IN  THIS
   41  SECTION.
   42    S 4.  Section 715 of the not-for-profit corporation law, as amended by
   43  chapter  847 of the laws of 1970 and paragraph (f) as amended by chapter
   44  1057 of the laws of 1971, is amended to read as follows:
   45  S 715. [Interested directors and officers] RELATED PARTY TRANSACTIONS.
   46    (a) [No contract or other transaction between a corporation and one or
   47  more of its directors or officers, or  between  a  corporation  and  any
   48  other  corporation,  firm,  association  or other entity in which one or
   49  more of its directors or officers are directors or officers, or  have  a
   50  substantial  financial  interest,  shall  be either void or voidable for
   51  this reason alone or by reason alone that such director or directors  or
   52  officer  or  officers  are  present at the meeting of the board, or of a
   53  committee thereof, which authorizes such  contract  or  transaction,  or
   54  that his or their votes are counted for such purpose:
   55    (1)  If the material facts as to such director's or officer's interest
   56  in such contract or transaction and as to any such common  directorship,
       A. 7337                            35

    1  officership  or  financial interest are disclosed in good faith or known
    2  to the board or committee, and the board or  committee  authorizes  such
    3  contract  or  transaction  by a vote sufficient for such purpose without
    4  counting the vote or votes of such interested director or officer; or
    5    (2)  If the material facts as to such director's or officer's interest
    6  in such contract or transaction and as to any such common  directorship,
    7  officership  or  financial interest are disclosed in good faith or known
    8  to the members entitled to vote thereon, if any, and  such  contract  or
    9  transaction is authorized by vote of such members.
   10    (b)  If  such  good  faith  disclosure of the material facts as to the
   11  director's or officer's interest in the contract or transaction  and  as
   12  to  any  such common directorship, officership or financial interest, is
   13  made to the directors or members, or known to the board or committee  or
   14  members  authorizing  such contract or transaction, as provided in para-
   15  graph (a), the contract or transaction may not be avoided by the  corpo-
   16  ration  for the reasons set forth in paragraph (a). If there was no such
   17  disclosure or knowledge, or if the vote of such interested  director  or
   18  officer  was  necessary for the authorization of such contract or trans-
   19  action at a meeting of the board or committee at which  it  was  author-
   20  ized,  the  corporation may avoid the contract or transaction unless the
   21  party or parties thereto shall establish affirmatively that the contract
   22  or transaction was fair and reasonable as to the corporation at the time
   23  it was authorized by the board, a committee or the members.
   24    (c) Common or interested directors may be counted in  determining  the
   25  presence  of  a quorum at a meeting of the board or of a committee which
   26  authorizes such contract or transaction.
   27    (d)] NO CORPORATION SHALL ENTER INTO  ANY  RELATED  PARTY  TRANSACTION
   28  UNLESS THE TRANSACTION IS FAIR, REASONABLE AND IN THE CORPORATION'S BEST
   29  INTEREST. ANY DIRECTOR, OFFICER OR KEY EMPLOYEE WHO HAS AN INTEREST IN A
   30  RELATED  PARTY TRANSACTION SHALL DISCLOSE IN GOOD FAITH TO THE BOARD, OR
   31  AN AUTHORIZED COMMITTEE THEREOF,  THE  MATERIAL  FACTS  CONCERNING  SUCH
   32  INTEREST.
   33    (B) WITH RESPECT TO ANY RELATED PARTY TRANSACTION INVOLVING A CHARITA-
   34  BLE CORPORATION AND IN WHICH A RELATED PARTY HAS A SUBSTANTIAL FINANCIAL
   35  INTEREST,  THE  BOARD  OF  SUCH  CORPORATION, OR AN AUTHORIZED COMMITTEE
   36  THEREOF, SHALL:
   37    (1) PRIOR TO ENTERING INTO THE TRANSACTION, CONSIDER ALTERNATIVE TRAN-
   38  SACTIONS TO THE EXTENT AVAILABLE;
   39    (2) APPROVE THE TRANSACTION BY NOT LESS THAN A MAJORITY  VOTE  OF  THE
   40  DIRECTORS OR COMMITTEE MEMBERS PRESENT AT THE MEETING; AND
   41    (3)  CONTEMPORANEOUSLY  DOCUMENT IN WRITING THE BASIS FOR THE BOARD OR
   42  AUTHORIZED COMMITTEE'S APPROVAL,  INCLUDING  ITS  CONSIDERATION  OF  ANY
   43  ALTERNATIVE TRANSACTIONS.
   44    (C) The certificate of incorporation, BY-LAWS OR ANY POLICY ADOPTED BY
   45  THE  BOARD may contain additional restrictions on [contracts or] RELATED
   46  PARTY transactions [between a corporation and its directors or  officers
   47  or  other  persons  and may] AND ADDITIONAL PROCEDURES NECESSARY FOR THE
   48  REVIEW AND APPROVAL OF SUCH TRANSACTIONS, OR provide that [contracts  or
   49  transactions] ANY TRANSACTION in violation of such restrictions shall be
   50  void or voidable.
   51    [(e)  Unless otherwise provided in the certificate of incorporation or
   52  the by-laws, the board shall have authority to fix the  compensation  of
   53  directors for services in any capacity.
   54    (f)]  (D) The fixing of salaries of officers, if not done in or pursu-
   55  ant to the by-laws, shall require the affirmative vote of a majority  of
       A. 7337                            36

    1  the entire board unless a higher proportion is set by the certificate of
    2  incorporation or by-laws.
    3    (E)  THE  ATTORNEY  GENERAL  MAY  BRING  AN  ACTION TO ENJOIN, VOID OR
    4  RESCIND ANY RELATED PARTY TRANSACTION OR PROPOSED RELATED  PARTY  TRANS-
    5  ACTION,  INCLUDING  THE PAYMENT OF COMPENSATION TO ANY OFFICER, DIRECTOR
    6  OR KEY EMPLOYEE, THAT VIOLATES ANY LAW OR IS OTHERWISE NOT FAIR, REASON-
    7  ABLE, OR IN THE BEST INTERESTS OF THE  CORPORATION,  OR  TO  SEEK  OTHER
    8  RELIEF,  INCLUDING  BUT  NOT  LIMITED  TO  DAMAGES, RESTITUTION, AND THE
    9  REMOVAL OF DIRECTORS OR OFFICERS, OR SEEK TO REQUIRE ANY PERSON OR ENTI-
   10  TY TO:
   11    (1) ACCOUNT FOR ANY PROFITS MADE FROM SUCH TRANSACTION, AND  PAY  THEM
   12  TO THE CORPORATION;
   13    (2) PAY THE CORPORATION THE VALUE OF THE USE OF ANY OF ITS PROPERTY OR
   14  OTHER ASSETS USED IN SUCH TRANSACTION;
   15    (3)  RETURN OR REPLACE ANY PROPERTY OR OTHER ASSETS LOST TO THE CORPO-
   16  RATION AS A RESULT OF SUCH TRANSACTION,  TOGETHER  WITH  ANY  INCOME  OR
   17  APPRECIATION  LOST  TO THE CORPORATION BY REASON OF SUCH TRANSACTION, OR
   18  ACCOUNT FOR ANY PROCEEDS OF SALE OF SUCH PROPERTY, AND PAY THE  PROCEEDS
   19  TO THE CORPORATION TOGETHER WITH INTEREST AT THE LEGAL RATE; AND
   20    (4)  PAY,  IN  THE CASE OF WILLFUL CONDUCT, AN AMOUNT UP TO DOUBLE THE
   21  AMOUNT OF ANY BENEFIT IMPROPERLY OBTAINED.
   22    (F) THE POWERS OF THE ATTORNEY GENERAL PROVIDED IN THIS SECTION ARE IN
   23  ADDITION TO ALL OTHER POWERS THE ATTORNEY GENERAL MAY  HAVE  UNDER  THIS
   24  CHAPTER OR ANY OTHER LAW.
   25    (G) NO RELATED PARTY MAY PARTICIPATE IN DELIBERATIONS OR VOTING RELAT-
   26  ING TO MATTERS SET FORTH IN THIS SECTION.
   27    S  5. The section heading and paragraph (a) of section 720 of the not-
   28  for-profit corporation law, the section heading as  amended  by  chapter
   29  1058 of the laws of 1971, are amended to read as follows:
   30  Actions  [on  behalf of the corporation] AGAINST DIRECTORS, OFFICERS AND
   31           KEY EMPLOYEES.
   32    (a) An action may be brought against one or more directors [or], offi-
   33  cers, OR KEY EMPLOYEES of a corporation to procure a  judgment  for  the
   34  following relief:
   35    (1) To compel the defendant to account for his official conduct in the
   36  following cases:
   37    (A)  The  neglect of, or failure to perform, or other violation of his
   38  duties in the management and disposition of corporate  assets  committed
   39  to his charge.
   40    (B)  The  acquisition by himself, transfer to others, loss or waste of
   41  corporate assets due to any neglect of, or failure to perform, or  other
   42  violation of his duties.
   43    (2)  To  set  aside  an unlawful conveyance, assignment or transfer of
   44  corporate assets, where the transferee knew of its unlawfulness.
   45    (3) To enjoin a proposed unlawful conveyance, assignment  or  transfer
   46  of  corporate assets, where there are reasonable grounds for belief that
   47  it will be made.
   48    S 6. Paragraph (c) of section 723 of  the  not-for-profit  corporation
   49  law,  as  amended by chapter 368 of the laws of 1987, is amended to read
   50  as follows:
   51    (c) Expenses incurred in defending  a  civil  or  criminal  action  or
   52  proceeding may be paid by the corporation in advance of the final dispo-
   53  sition of such action or proceeding upon receipt of an undertaking by or
   54  on  behalf  of  such director or officer [to repay] SUFFICIENT TO ENSURE
   55  REPAYMENT OF such amount as, and to the extent,  required  by  paragraph
       A. 7337                            37

    1  (a) of section 725 (OTHER PROVISIONS AFFECTING INDEMNIFICATION OF DIREC-
    2  TORS AND OFFICERS).
    3    S  7.  Paragraph  (a) of section 724 of the not-for-profit corporation
    4  law, as amended by chapter 368 of the laws of 1987, is amended  to  read
    5  as follows:
    6    (a) Notwithstanding the failure of a corporation to provide indemnifi-
    7  cation,  and  despite  any  contrary  resolution  of the board or of the
    8  members in the specific case under section 723 (Payment of  indemnifica-
    9  tion  other  than by court award), indemnification shall be awarded by a
   10  court to the extent authorized  under  section  722  (Authorization  for
   11  indemnification of directors and officers), and paragraph (a) of section
   12  723  (PAYMENT OF INDEMNIFICATION OTHER THAN BY COURT AWARD). Application
   13  therefor SHALL BE MADE ON NOTICE TO THE  ATTORNEY  GENERAL  AND  may  be
   14  made, in every case, either:
   15    (1)  In  the  civil  action  or  proceeding in which the expenses were
   16  incurred or other amounts were paid, or
   17    (2) To the supreme court in a separate proceeding, in which  case  the
   18  application  shall set forth the disposition of any previous application
   19  made to any court for the same or similar  relief  and  also  reasonable
   20  cause  for the failure to make application for such relief in the action
   21  or proceeding in which the expenses were incurred or other amounts  were
   22  paid.
   23    S  8. Section 8-1.9 of the estates, powers and trusts law, as added by
   24  section 5 of part A of this act, is amended by adding two new paragraphs
   25  (d) and (e) to read as follows:
   26    (D)(1) THE TRUSTEES OR A DESIGNATED AUDIT COMMITTEE CONSISTING OF  ONE
   27  OR  MORE INDEPENDENT TRUSTEES OF ANY TRUST REQUIRED TO FILE AN INDEPEND-
   28  ENT CERTIFIED PUBLIC ACCOUNTANT'S AUDIT REPORT WITH THE ATTORNEY GENERAL
   29  PURSUANT TO SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B OF  THE
   30  EXECUTIVE LAW SHALL OVERSEE THE ACCOUNTING AND FINANCIAL REPORTING PROC-
   31  ESSES  OF  THE  TRUST AND THE AUDIT OF THE TRUST'S FINANCIAL STATEMENTS.
   32  THE TRUSTEES OR DESIGNATED AUDIT  COMMITTEE  SHALL  ANNUALLY  RETAIN  OR
   33  RENEW  THE RETENTION OF AN INDEPENDENT AUDITOR TO CONDUCT THE AUDIT AND,
   34  UPON COMPLETION THEREOF, REVIEW THE RESULTS OF THE AUDIT AND ANY RELATED
   35  MANAGEMENT LETTER WITH THE INDEPENDENT AUDITOR.
   36    (2) THE TRUSTEES OR A DESIGNATED AUDIT COMMITTEE CONSISTING OF ONE  OR
   37  MORE  INDEPENDENT  TRUSTEES OF ANY TRUST REQUIRED TO FILE AN INDEPENDENT
   38  CERTIFIED PUBLIC ACCOUNTANT'S AUDIT REPORT  WITH  THE  ATTORNEY  GENERAL
   39  PURSUANT  TO SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B OF THE
   40  EXECUTIVE LAW AND THAT IN THE PRIOR FISCAL YEAR HAD OR  IN  THE  CURRENT
   41  FISCAL  YEAR  REASONABLY EXPECTS TO HAVE ANNUAL REVENUE IN EXCESS OF ONE
   42  MILLION DOLLARS SHALL, IN ADDITION TO THOSE DUTIES SET FORTH IN SUBPARA-
   43  GRAPH ONE OF THIS PARAGRAPH:
   44    (A) REVIEW WITH THE INDEPENDENT AUDITOR THE SCOPE AND PLANNING OF  THE
   45  AUDIT PRIOR TO THE AUDIT'S COMMENCEMENT;
   46    (B)  UPON  COMPLETION  OF THE AUDIT, REVIEW AND DISCUSS WITH THE INDE-
   47  PENDENT AUDITOR: (I) ANY  MATERIAL  RISKS  AND  WEAKNESSES  IN  INTERNAL
   48  CONTROLS  IDENTIFIED  BY THE AUDITOR; (II) ANY RESTRICTIONS ON THE SCOPE
   49  OF THE AUDITOR'S ACTIVITIES OR ACCESS TO  REQUESTED  INFORMATION;  (III)
   50  ANY  SIGNIFICANT  DISAGREEMENTS  BETWEEN THE AUDITOR AND MANAGEMENT; AND
   51  (IV) THE ADEQUACY OF THE  TRUST'S  ACCOUNTING  AND  FINANCIAL  REPORTING
   52  PROCESSES;
   53    (C)  ANNUALLY  CONSIDER  THE PERFORMANCE AND INDEPENDENCE OF THE INDE-
   54  PENDENT AUDITOR; AND
   55    (D) IF THE DUTIES REQUIRED BY THIS SECTION ARE PERFORMED BY  AN  AUDIT
   56  COMMITTEE, REPORT ON THE COMMITTEE'S ACTIVITIES TO THE TRUSTEES.
       A. 7337                            38

    1    (3)  THE  TRUSTEES  OR  DESIGNATED  AUDIT  COMMITTEE SHALL OVERSEE THE
    2  ADOPTION, IMPLEMENTATION OF, AND COMPLIANCE WITH ANY CONFLICT OF  INTER-
    3  EST POLICY OR WHISTLEBLOWER POLICY ADOPTED BY THE TRUST IF THIS FUNCTION
    4  IS  NOT  OTHERWISE  PERFORMED  BY  ANOTHER COMMITTEE COMPRISED SOLELY OF
    5  INDEPENDENT TRUSTEES.
    6    (4) IF A TRUST IS UNDER THE CONTROL OF ANOTHER TRUST OR A CORPORATION,
    7  THE  TRUSTEES OR DESIGNATED AUDIT COMMITTEE OF THE CONTROLLING TRUST, OR
    8  THE BOARD OR DESIGNATED AUDIT COMMITTEE OF THE BOARD OF THE  CONTROLLING
    9  CORPORATION, MAY PERFORM THE DUTIES REQUIRED BY THIS PARAGRAPH.
   10    (5)  ONLY  INDEPENDENT  TRUSTEES  MAY  PARTICIPATE IN DELIBERATIONS OR
   11  VOTING RELATING TO MATTERS SET FORTH IN THIS PARAGRAPH.
   12    (E)(1) NOTWITHSTANDING ANY PROVISION OF THE TRUST  INSTRUMENT  TO  THE
   13  CONTRARY, NO TRUST SHALL ENTER INTO ANY RELATED PARTY TRANSACTION UNLESS
   14  THE  TRANSACTION  IS  FAIR, REASONABLE AND IN THE TRUST'S BEST INTEREST.
   15  ANY TRUSTEE, OFFICER OR KEY EMPLOYEE WHO HAS AN INTEREST  IN  A  RELATED
   16  PARTY  TRANSACTION  SHALL  DISCLOSE IN GOOD FAITH TO THE TRUSTEES, OR AN
   17  AUTHORIZED COMMITTEE THEREOF, THE MATERIAL FACTS CONCERNING SUCH  INTER-
   18  EST.
   19    (2)  WITH  RESPECT TO ANY RELATED PARTY TRANSACTION IN WHICH A RELATED
   20  PARTY HAS A SUBSTANTIAL FINANCIAL INTEREST, THE TRUSTEES, OR AN  AUTHOR-
   21  IZED COMMITTEE THEREOF, SHALL:
   22    (A) PRIOR TO ENTERING INTO THE TRANSACTION, CONSIDER ALTERNATIVE TRAN-
   23  SACTIONS TO THE EXTENT AVAILABLE;
   24    (B)  APPROVE  THE  TRANSACTION BY NOT LESS THAN A MAJORITY VOTE OF THE
   25  TRUSTEES OR COMMITTEE MEMBERS PRESENT AT THE MEETING; AND
   26    (C) CONTEMPORANEOUSLY DOCUMENT IN WRITING THE BASIS FOR THE  TRUSTEES'
   27  OR  AUTHORIZED  COMMITTEE'S  APPROVAL,  INCLUDING  CONSIDERATION  OF ANY
   28  ALTERNATIVE TRANSACTIONS.
   29    (3) THE TRUST INSTRUMENT, BY-LAWS OR ANY POLICY ADOPTED BY  THE  TRUS-
   30  TEES  MAY  CONTAIN ADDITIONAL RESTRICTIONS ON RELATED PARTY TRANSACTIONS
   31  AND ADDITIONAL PROCEDURES NECESSARY FOR THE REVIEW AND APPROVAL OF  SUCH
   32  TRANSACTIONS,  OR  PROVIDE  THAT  ANY  TRANSACTION  IN VIOLATION OF SUCH
   33  RESTRICTIONS SHALL BE VOID OR VOIDABLE.
   34    (4) 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  TRUSTEES UNLESS A HIGHER PROPORTION IS SET BY THE TRUST INSTRUMENT.
   37    (5) THE ATTORNEY GENERAL MAY  BRING  AN  ACTION  TO  ENJOIN,  VOID  OR
   38  RESCIND  ANY  RELATED PARTY TRANSACTION OR PROPOSED RELATED PARTY TRANS-
   39  ACTION, INCLUDING THE PAYMENT OF COMPENSATION TO ANY OFFICER, TRUSTEE OR
   40  KEY EMPLOYEE, THAT VIOLATES ANY LAW OR IS OTHERWISE  NOT  FAIR,  REASON-
   41  ABLE,  OR  IN  THE BEST INTERESTS OF THE TRUST, OR TO SEEK OTHER RELIEF,
   42  INCLUDING BUT NOT LIMITED TO DAMAGES, RESTITUTION, AND  THE  REMOVAL  OF
   43  TRUSTEES OR OFFICERS, OR SEEK TO REQUIRE ANY PERSON OR ENTITY TO:
   44    (A)  ACCOUNT  FOR ANY PROFITS MADE FROM SUCH TRANSACTION, AND PAY THEM
   45  TO THE TRUST;
   46    (B) PAY THE TRUST THE VALUE OF THE USE OF ANY OF ITS PROPERTY OR OTHER
   47  ASSETS USED IN SUCH TRANSACTION;
   48    (C) RETURN OR REPLACE ANY PROPERTY OR OTHER ASSETS LOST TO  THE  TRUST
   49  AS  A  RESULT  OF SUCH TRANSACTION, TOGETHER WITH ANY INCOME OR APPRECI-
   50  ATION LOST TO THE TRUST BY REASON OF SUCH TRANSACTION,  OR  ACCOUNT  FOR
   51  ANY PROCEEDS OF SALE OF SUCH PROPERTY, AND PAY THE PROCEEDS TO THE TRUST
   52  TOGETHER WITH INTEREST AT THE LEGAL RATE; AND
   53    (D)  PAY,  IN  THE CASE OF WILLFUL CONDUCT, AN AMOUNT UP TO DOUBLE THE
   54  AMOUNT OF ANY BENEFIT IMPROPERLY OBTAINED.
       A. 7337                            39

    1    (6) THE POWERS OF THE ATTORNEY GENERAL PROVIDED IN THIS SECTION ARE IN
    2  ADDITION TO ALL OTHER POWERS THE ATTORNEY GENERAL MAY  HAVE  UNDER  THIS
    3  CHAPTER OR ANY OTHER LAW.
    4    (7) NO RELATED PARTY MAY PARTICIPATE IN DELIBERATIONS OR VOTING RELAT-
    5  ING TO MATTERS SET FORTH IN THIS PARAGRAPH.
    6    S  9.  Subdivision 2 of section 711 of the surrogate's court procedure
    7  act is amended to read as follows:
    8    2. Where by reason of his having  wasted  or  improperly  applied  the
    9  assets  of the estate, or made investments unauthorized by law or other-
   10  wise improvidently managed or injured  the  property  committed  to  his
   11  charge,  INCLUDING  BY  FAILING  TO  COMPLY  WITH  SECTION  8-1.9 OF THE
   12  ESTATES, POWERS AND TRUSTS LAW, or by reason of other misconduct in  the
   13  execution of his office or dishonesty, drunkenness, improvidence or want
   14  of understanding, he is unfit for the execution of his office.
   15    S 10. Section 509 of the not-for-profit corporation law, as amended by
   16  chapter 145 of the laws of 1991, is amended to read as follows:
   17  S 509. Purchase, sale, mortgage and lease of real property.
   18    (A) No CORPORATION SHALL purchase [of] real property [shall be made by
   19  a  corporation  and  no  corporation  shall sell, mortgage or lease real
   20  property, unless authorized by the vote  of]  UNLESS  SUCH  PURCHASE  IS
   21  AUTHORIZED  BY  THE  VOTE  OF  A MAJORITY OF DIRECTORS OF THE BOARD OR A
   22  COMMITTEE AUTHORIZED BY THE BOARD, PROVIDED THAT IF SUCH PROPERTY WOULD,
   23  UPON PURCHASE THEREOF, CONSTITUTE ALL,  OR  SUBSTANTIALLY  ALL,  OF  THE
   24  ASSETS  OF  THE  CORPORATION,  THEN THE VOTE OF two-thirds of the entire
   25  board[, provided that if] SHALL BE REQUIRED, OR, IF there are twenty-one
   26  or more directors, the vote of a majority of the entire board  shall  be
   27  sufficient.
   28    (B)  NO CORPORATION SHALL SELL, MORTGAGE, LEASE, EXCHANGE OR OTHERWISE
   29  DISPOSE OF ITS REAL PROPERTY UNLESS AUTHORIZED BY THE VOTE OF A MAJORITY
   30  OF DIRECTORS OF THE BOARD  OR  A  COMMITTEE  AUTHORIZED  BY  THE  BOARD;
   31  PROVIDED THAT IF SUCH PROPERTY CONSTITUTES ALL, OR SUBSTANTIALLY ALL, OF
   32  THE ASSETS OF THE CORPORATION, THEN THE VOTE OF TWO-THIRDS OF THE ENTIRE
   33  BOARD  SHALL BE REQUIRED, OR, IF THERE ARE TWENTY-ONE OR MORE DIRECTORS,
   34  THE VOTE OF A MAJORITY OF THE ENTIRE BOARD SHALL BE SUFFICIENT.
   35    S 11.  Paragraph (a) of section 605 of the not-for-profit  corporation
   36  law,  as amended by chapter 1058 of the laws of 1971, is amended to read
   37  as follows:
   38    (a) Whenever under the provisions of this chapter members are required
   39  or permitted to take any action at a meeting, written notice shall state
   40  the place, date and hour of the meeting and,  unless  it  is  an  annual
   41  meeting,  indicate that it is being issued by or at the direction of the
   42  person or persons calling the meeting. Notice of a special meeting shall
   43  also state the purpose or purposes for which the meeting  is  called.  A
   44  copy  of  the  notice of any meeting shall be given, personally [or], by
   45  mail, OR BY ELECTRONIC MAIL, to each member entitled  to  vote  at  such
   46  meeting.  If the notice is given personally [or], by first class mail OR
   47  BY ELECTRONIC MAIL, it shall be given not less than ten  nor  more  than
   48  fifty  days before the date of the meeting; if mailed by any other class
   49  of mail, it shall be given not less than thirty nor more than sixty days
   50  before such date.  If mailed, such notice is given when deposited in the
   51  United States mail, with postage thereon prepaid, directed to the member
   52  at his address as it appears on the record of members, or, if  he  shall
   53  have  filed with the secretary of the corporation a written request that
   54  notices to him be mailed to some other address, then directed to him  at
   55  such other address.  IF MAILED ELECTRONICALLY, SUCH NOTICE IS GIVEN WHEN
   56  DIRECTED  TO  THE  MEMBER'S ELECTRONIC MAIL ADDRESS AS IT APPEARS ON THE
       A. 7337                            40

    1  RECORD OF MEMBERS, OR, TO SUCH OTHER ELECTRONIC MAIL  ADDRESS  AS  FILED
    2  WITH  THE  SECRETARY  OF THE CORPORATION. NOTWITHSTANDING THE FOREGOING,
    3  SUCH NOTICE SHALL NOT BE DEEMED TO HAVE BEEN GIVEN ELECTRONICALLY (1) IF
    4  THE  CORPORATION  IS  UNABLE  TO  DELIVER TWO CONSECUTIVE NOTICES TO THE
    5  MEMBER BY ELECTRONIC MAIL; OR  (2)  THE  CORPORATION  OTHERWISE  BECOMES
    6  AWARE  THAT NOTICE CANNOT BE DELIVERED TO THE MEMBER BY ELECTRONIC MAIL.
    7  An affidavit of the secretary or other person giving the notice or of  a
    8  transfer  agent  of  the  corporation  that  the notice required by this
    9  section has been given shall, in the absence of fraud,  be  prima  facie
   10  evidence  of  the  facts therein stated. Whenever a corporation has more
   11  than five hundred members, the notice may be served by publication[,  in
   12  lieu of mailing,] in a newspaper published in the county in the state in
   13  which  the  principal  office of the corporation is located, once a week
   14  for three successive weeks next  preceding  the  date  of  the  meeting,
   15  PROVIDED THAT THE CORPORATION SHALL ALSO PROMINENTLY POST NOTICE OF SUCH
   16  MEETING  ON  THE  HOMEPAGE  OF ANY WEBSITE MAINTAINED BY THE CORPORATION
   17  CONTINUOUSLY FROM THE DATE OF PUBLICATION THROUGH THE DATE OF THE  MEET-
   18  ING.
   19    S 12.  Section 606 of the not-for-profit corporation law is amended to
   20  read as follows:
   21  S 606. Waivers of notice.
   22    Notice  of  meeting  need  not  be  given  to any member who submits a
   23  [signed] waiver of notice, in person or  by  proxy,  whether  before  or
   24  after  the  meeting.   WAIVER OF NOTICE MAY BE WRITTEN OR ELECTRONIC. IF
   25  WRITTEN, THE WAIVER MUST BE EXECUTED  BY  THE  MEMBER  OR  THE  MEMBER'S
   26  AUTHORIZED  OFFICER, DIRECTOR, EMPLOYEE, OR AGENT BY SIGNING SUCH WAIVER
   27  OR CAUSING HIS SIGNATURE TO BE AFFIXED TO SUCH WAIVER BY ANY  REASONABLE
   28  MEANS, INCLUDING, BUT NOT LIMITED TO FACSIMILE SIGNATURE. IF ELECTRONIC,
   29  THE  TRANSMISSION  OF THE WAIVER MUST BE SENT BY ELECTRONIC MAIL AND SET
   30  FORTH, OR BE SUBMITTED WITH, INFORMATION FROM WHICH IT CAN REASONABLY BE
   31  DETERMINED THAT THE TRANSMISSION  WAS  AUTHORIZED  BY  THE  MEMBER.  The
   32  attendance  of  any  member at a meeting, in person or by proxy, without
   33  protesting prior to the conclusion of the meeting the lack of notice  of
   34  such meeting, shall constitute a waiver of notice by him.
   35    S  13.  Paragraphs  (b)  and  (c) of section 609 of the not-for-profit
   36  corporation law, as added by chapter  186  of  the  laws  of  1999,  are
   37  amended to read as follows:
   38    (b) Without limiting the manner in which a member may authorize anoth-
   39  er  person  or persons to act for him as proxy pursuant to paragraph (a)
   40  of this section, the following shall constitute a valid means by which a
   41  member may grant such authority:
   42    (1) A member may execute  a  writing  authorizing  another  person  or
   43  persons  to  act  for him as proxy. Execution may be accomplished by the
   44  member or the member's authorized officer, director, employee  or  agent
   45  signing  such  writing  or causing his or her signature to be affixed to
   46  such writing by any reasonable means including, but not limited  to,  by
   47  facsimile signature.
   48    (2)  A  member  may authorize another person or persons to act for the
   49  member as proxy by [transmitting or authorizing the  transmission  of  a
   50  telegram,  cablegram  or other means of] PROVIDING SUCH AUTHORIZATION BY
   51  electronic [transmission] MAIL to the person who will be the  holder  of
   52  the  proxy or to a proxy solicitation firm, proxy support service organ-
   53  ization or like agent duly authorized by the person  [who  will  be  the
   54  holder  of  the  proxy  to receive such transmission], provided that any
   55  such [telegram, cablegram or other means of] AUTHORIZATION BY electronic
   56  [transmission] MAIL shall either set forth [or be submitted with] infor-
       A. 7337                            41

    1  mation from which it can be reasonably determined  that  the  [telegram,
    2  cablegram  or other] AUTHORIZATION BY electronic [transmission] MAIL was
    3  authorized by the member. If it  is  determined  that  such  [telegrams,
    4  cablegrams  or  other]  AUTHORIZATION  BY electronic [transmissions are]
    5  MAIL IS valid, the inspectors or, if there are no inspectors, such other
    6  persons making that determination shall specify the nature of the infor-
    7  mation upon which they relied.
    8    (c) Any copy, facsimile telecommunication or  other  reliable  reprod-
    9  uction of the writing or [transmission] ELECTRONIC MAIL created pursuant
   10  to  paragraph  (b) of this section may be substituted or used in lieu of
   11  the original writing or transmission for any and all purposes for  which
   12  the  original  writing or transmission could be used, provided that such
   13  copy, facsimile telecommunication  or  other  reproduction  shall  be  a
   14  complete reproduction of the entire original writing or transmission.
   15    S  14.  Paragraphs  (a)  and  (b) of section 614 of the not-for-profit
   16  corporation law are amended to read as follows:
   17    (a) Whenever, under this chapter, members are required or permitted to
   18  take any action by vote, such action may be taken without a meeting  [on
   19  written]  UPON  THE  consent[, setting forth the action so taken, signed
   20  by] OF all of the members entitled to vote thereon, WHICH CONSENT  SHALL
   21  SET  FORTH THE ACTION SO TAKEN. SUCH CONSENT MAY BE WRITTEN OR ELECTRON-
   22  IC. IF WRITTEN, THE CONSENT MUST  BE  EXECUTED  BY  THE  MEMBER  OR  THE
   23  MEMBER'S AUTHORIZED OFFICER, DIRECTOR, EMPLOYEE OR AGENT BY SIGNING SUCH
   24  CONSENT  OR  CAUSING  HIS  SIGNATURE TO BE AFFIXED TO SUCH WAIVER BY ANY
   25  REASONABLE MEANS INCLUDING BUT NOT LIMITED TO  FACSIMILE  SIGNATURE.  IF
   26  ELECTRONIC,  THE  TRANSMISSION OF THE CONSENT MUST BE SENT BY ELECTRONIC
   27  MAIL AND SET FORTH, OR BE SUBMITTED WITH, INFORMATION FROM WHICH IT  CAN
   28  REASONABLY  BE  DETERMINED  THAT  THE TRANSMISSION WAS AUTHORIZED BY THE
   29  MEMBER.  This paragraph shall not be construed to alter  or  modify  any
   30  provision  in  a certificate of incorporation not inconsistent with this
   31  chapter under which the written consent of less than all of the  members
   32  is sufficient for corporate action.
   33    (b)  Written  OR ELECTRONIC consent thus given by all members entitled
   34  to vote shall have the same effect as a unanimous vote  of  members  and
   35  any  certificate with respect to the authorization or taking of any such
   36  action which is delivered to the department of state shall  recite  that
   37  the authorization was by [uanimous] UNANIMOUS written consent.
   38    S  15.  Paragraph (e) of section 621 of the not-for-profit corporation
   39  law, as amended by chapter 847 of the laws of 1970, is amended  to  read
   40  as follows:
   41    (e)  Upon  the  written  request  of  any person who shall have been a
   42  member of record for at  least  six  months  immediately  preceding  his
   43  request, or of any person holding, or thereunto authorized in writing by
   44  the  holders  of,  at least five percent of any class of the outstanding
   45  capital certificates, the corporation shall [give or  mail]  PROVIDE  to
   46  such  member  an annual balance sheet and profit and loss statement or a
   47  financial statement performing a  similar  function  for  the  preceding
   48  fiscal  year,  and,  if  any interim balance sheet or profit and loss or
   49  similar financial statement has  been  distributed  to  its  members  or
   50  otherwise  made  available  to  the public, the most recent such interim
   51  balance sheet or profit and loss or  similar  financial  statement.  The
   52  corporation  shall  be  allowed a reasonable time to prepare such annual
   53  balance sheet and profit and loss or similar financial statement.
   54    S 16. Paragraph (a) of section 702 of the  not-for-profit  corporation
   55  law is amended to read as follows:
       A. 7337                            42

    1    (a) The number of directors constituting the entire board shall be not
    2  less than three. Subject to such limitation, such number may be fixed by
    3  the by-laws or[, in the case of a corporation having members,] by action
    4  of the members or of the board under the specific provisions of a by-law
    5  [adopted by the members] ALLOWING SUCH ACTION, OR BY ANY NUMBER WITHIN A
    6  RANGE  SET FORTH IN THE BY-LAWS. If not otherwise fixed under this para-
    7  graph, the number shall be three. [As  used  in  this  article,  "entire
    8  board"  means  the  total number of directors entitled to vote which the
    9  corporation would have if there were no vacancies.]
   10    S 17. Paragraphs (b) and (c) of  section  708  of  the  not-for-profit
   11  corporation  law,  paragraph (b) as amended by chapter 92 of the laws of
   12  1983 and paragraph (c) as amended by chapter 211 of the  laws  of  2007,
   13  are amended to read as follows:
   14    (b) Unless otherwise restricted by the certificate of incorporation or
   15  the  by-laws,  any action required or permitted to be taken by the board
   16  or any committee thereof may be taken without a meeting if  all  members
   17  of  the board or the committee consent [in writing] to the adoption of a
   18  resolution authorizing the action.  SUCH CONSENT MAY BE WRITTEN OR ELEC-
   19  TRONIC. IF WRITTEN, THE CONSENT MUST BE  EXECUTED  BY  THE  DIRECTOR  BY
   20  SIGNING  SUCH  CONSENT  OR CAUSING HIS OR HER SIGNATURE TO BE AFFIXED TO
   21  SUCH CONSENT BY ANY REASONABLE MEANS  INCLUDING,  BUT  NOT  LIMITED  TO,
   22  FACSIMILE SIGNATURE. IF ELECTRONIC, THE TRANSMISSION OF THE CONSENT MUST
   23  BE SENT BY ELECTRONIC MAIL AND SET FORTH, OR BE SUBMITTED WITH, INFORMA-
   24  TION  FROM  WHICH  IT CAN REASONABLY BE DETERMINED THAT THE TRANSMISSION
   25  WAS AUTHORIZED BY THE DIRECTOR. The resolution and the written  consents
   26  thereto by the members of the board or committee shall be filed with the
   27  minutes of the proceedings of the board or committee.
   28    (c) Unless otherwise restricted by the certificate of incorporation or
   29  the  by-laws,  any  one or more members of the board or OF any committee
   30  thereof [may participate in] WHO IS NOT PHYSICALLY PRESENT AT a  meeting
   31  of [such] THE board or A committee MAY PARTICIPATE by means of a confer-
   32  ence telephone or similar communications equipment [allowing all persons
   33  participating  in the meeting to hear each other at the same time] OR BY
   34  ELECTRONIC VIDEO SCREEN COMMUNICATION.    Participation  by  such  means
   35  shall  constitute presence in person at a meeting AS LONG AS ALL PERSONS
   36  PARTICIPATING IN THE MEETING CAN HEAR EACH OTHER AT THE  SAME  TIME  AND
   37  EACH  DIRECTOR  CAN PARTICIPATE IN ALL MATTERS BEFORE THE BOARD, INCLUD-
   38  ING, WITHOUT LIMITATION, THE ABILITY TO PROPOSE,  OBJECT  TO,  AND  VOTE
   39  UPON A SPECIFIC ACTION TO BE TAKEN BY THE BOARD OR COMMITTEE.
   40    S  18.  Paragraph (c) of section 711 of the not-for-profit corporation
   41  law, as amended by chapter 847 of the laws of 1970, is amended  to  read
   42  as follows:
   43    (c)  Notice  of a meeting need not be given to any alternate director,
   44  nor to any director who submits a  [signed]  waiver  of  notice  whether
   45  before or after the meeting, or who attends the meeting without protest-
   46  ing,  prior  thereto  or at its commencement, the lack of notice to him.
   47  SUCH WAIVER OF NOTICE MAY BE WRITTEN  OR  ELECTRONIC.  IF  WRITTEN,  THE
   48  WAIVER  MUST  BE EXECUTED BY THE DIRECTOR SIGNING SUCH WAIVER OR CAUSING
   49  HIS OR HER SIGNATURE TO BE AFFIXED TO  SUCH  WAIVER  BY  ANY  REASONABLE
   50  MEANS  INCLUDING  BUT NOT LIMITED TO FACSIMILE SIGNATURE. IF ELECTRONIC,
   51  THE TRANSMISSION OF THE CONSENT MUST BE SENT BY ELECTRONIC MAIL AND  SET
   52  FORTH, OR BE SUBMITTED WITH, INFORMATION FROM WHICH IT CAN REASONABLY BE
   53  DETERMINED THAT THE TRANSMISSION WAS AUTHORIZED BY THE DIRECTOR.
   54    S 19. Paragraphs (a), (b) and (e) of section 712 of the not-for-profit
   55  corporation  law, paragraph (e) as amended by chapter 961 of the laws of
   56  1972, are amended to read as follows:
       A. 7337                            43

    1    (a) If the certificate of incorporation or the by-laws so provide, the
    2  board, by resolution adopted by a majority  of  the  entire  board,  may
    3  designate  from  among  its  members  an  executive  committee and other
    4  [standing] committees, each consisting of three or more  directors,  and
    5  each  of  which,  to  the  extent  provided  in the resolution or in the
    6  certificate of incorporation or by-laws, shall have all the authority of
    7  the board, except that no such committee shall have authority as to  the
    8  following matters:
    9    (1)  The  submission  to  members  of  any  action  requiring members'
   10  approval under this chapter.
   11    (2) The filling of vacancies in the  board  of  directors  or  in  any
   12  committee.
   13    (3)  The  fixing  of  compensation of the directors for serving on the
   14  board or on any committee.
   15    (4) The amendment or repeal of the by-laws  or  the  adoption  of  new
   16  by-laws.
   17    (5)  The  amendment  or repeal of any resolution of the board which by
   18  its terms shall not be so amendable or repealable.
   19    (b) The board may designate one or more directors as alternate members
   20  of any [standing] committee,  who  may  replace  any  absent  member  or
   21  members at any meeting of such committee.
   22    (e)  Committees,  other  than  [standing or special] committees of the
   23  board, whether created by the board or by the members, shall be  commit-
   24  tees  of  the  corporation.  Such  committees  OF THE CORPORATION may be
   25  elected or appointed in the same manner as officers of the  corporation,
   26  BUT  NO  SUCH  COMMITTEE  SHALL  HAVE  THE  AUTHORITY TO BIND THE BOARD.
   27  Provisions of this chapter applicable to officers generally shall  apply
   28  to  members of such committees. SUCH COMMITTEES OF THE CORPORATION SHALL
   29  BE ELECTED OR APPOINTED IN THE MANNER SET FORTH IN THE  BY-LAWS,  OR  IF
   30  NOT  SET  FORTH  IN  THE  BY-LAWS, IN THE SAME MANNER AS OFFICERS OF THE
   31  CORPORATION.
   32    S 20. Paragraph (c) of section 712 of the  not-for-profit  corporation
   33  law is REPEALED.
   34    S 21. Paragraph (b-1) of section 406 of the not-for-profit corporation
   35  law is REPEALED.
   36    S 22. Section 520 of the not-for-profit corporation law, as amended by
   37  chapter 58 of the laws of 1981, is amended to read  as follows:
   38  S 520. Reports of corporation.
   39    Each  domestic corporation, and each foreign corporation authorized to
   40  conduct activities in this state, shall from  time  to  time  file  such
   41  reports  on its activities as may be required by the laws of this state.
   42  All registration and reporting requirements pursuant to  [EPTL]  ARTICLE
   43  SEVEN-A  OF  THE EXECUTIVE LAW, AND SECTION 8-1.4 OF THE ESTATES, POWERS
   44  AND TRUSTS LAW, or related successor provisions, are, without limitation
   45  on the foregoing, expressly included as reports required by the laws  of
   46  this state to be filed within the meaning of this section. Willful fail-
   47  ure  of  a corporation to file a report as required by law shall consti-
   48  tute a breach of the  directors'  duty  to  the  corporation  and  shall
   49  subject  the  corporation,  at  the  suit of the attorney-general, to an
   50  action or special proceeding for dissolution under article 11  (Judicial
   51  dissolution) in the case of a domestic corporation, or under [S] SECTION
   52  1303 (Violations) in the case of a foreign corporation.
   53    S  23.  Paragraph (f) of section 555 of the not-for-profit corporation
   54  law, as added by chapter 490 of the laws of 2010, is amended to read  as
   55  follows:
       A. 7337                            44

    1    (f)  This  section  shall  not limit the application of the [doctrine]
    2  DOCTRINES of cy pres AND DEVIATION.
    3    S 24. Section 718 of the not-for-profit corporation law, as amended by
    4  chapter 992 of the laws of 1970, is amended to read as follows:
    5  S 718. List of directors and officers.
    6    (a)  If  a  member  or  creditor of a corporation, in person or by his
    7  attorney or agent, or a representative of the district  attorney  or  of
    8  the  secretary  of state, the attorney general, or other state official,
    9  makes a written demand on a corporation to inspect a current list of its
   10  directors and officers [and their residence addresses], the  corporation
   11  shall,  within  two  business days after receipt of the demand and for a
   12  period of  one  week  thereafter,  make  the  list  available  for  such
   13  inspection at its office during usual business hours.
   14    (b)  Upon  refusal  by  the  corporation to make a current list of its
   15  directors and officers [and their  residence  addresses]  available,  as
   16  provided  in  paragraph  (a) OF THIS SECTION, the person making a demand
   17  for such list may apply, ex parte, to the supreme  court  at  a  special
   18  term  held  within  the judicial district where the office of the corpo-
   19  ration is located for an order directing the corporation  to  make  such
   20  list  available.    The  court  may  grant such order or take such other
   21  action as it may deem just and proper.
   22    S 25.  Subparagraph 1 of paragraph (a) of section 1207 of the not-for-
   23  profit corporation law, clause (C) as amended by chapter 847 of the laws
   24  of 1970, is amended to read as follows:
   25    (1)  To give immediate notice of his appointment by publication once a
   26  week for two successive weeks in two newspapers of  general  circulation
   27  in  the county where the office of the corporation is located or, in the
   28  case of a foreign corporation against which an action has  been  brought
   29  under  subparagraph [(a)] (4) OF PARAGRAPH (A) of section 1202 (Appoint-
   30  ment of receiver of property of a domestic or  foreign  corporation)  OF
   31  THIS ARTICLE EITHER, AS DIRECTED BY THE COURT, in a newspaper of general
   32  circulation  [as  directed  by  the  court,]  OR  POSTED PROMINENTLY AND
   33  CONTINUOUSLY FOR TWO SUCCESSIVE WEEKS ON THE  HOMEPAGE  OF  ANY  WEBSITE
   34  MAINTAINED BY THE CORPORATION OR requiring:
   35    (A)    All persons indebted to the corporation to render an account of
   36  all debts owing by them to the corporation and to pay the  same  to  the
   37  receiver at a specified place and by a specified day.
   38    (B)  All persons having in their possession any property of the corpo-
   39  ration to deliver the same to the receiver at the specified place and by
   40  the specified day.
   41    (C)    All creditors and claimants, including any with unliquidated or
   42  contingent claims and any with  whom  the  corporation  has  unfulfilled
   43  contracts,  to  present  their  claims to the receiver in writing and in
   44  detail at a specified place and by a specified day, which shall  not  be
   45  less  than six months after the first publication of such notice.  When-
   46  ever a receiver is appointed in dissolution proceedings under article 10
   47  (Non-judicial dissolution) or article 11 (Judicial dissolution), section
   48  1007 (Notice to creditors BY CORPORATIONS INTENDING TO DISSOLVE;  filing
   49  or  barring  claims)  OF  THIS CHAPTER shall apply and shall control the
   50  giving of notice to creditors and claimants and the filing  and  barring
   51  of claims.
   52    S 26.  Paragraph (a) of section 1211 of the not-for-profit corporation
   53  law is amended to read as follows:
   54    (a)    If  there  remains  property of the corporation after the first
   55  distribution, the receiver shall, within one  year  thereafter,  make  a
   56  final  distribution  among  the creditors entitled thereto.  Notice that
       A. 7337                            45

    1  such distribution will be the final distribution to creditors  shall  be
    2  published once a week for two consecutive weeks in a newspaper of gener-
    3  al  circulation  in  the  county  where the office of the corporation is
    4  located OR POSTED PROMINENTLY AND CONTINUOUSLY FOR TWO CONSECUTIVE WEEKS
    5  ON THE HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE CORPORATION.
    6    S 27.  Paragraph (b) of section 1215 of the not-for-profit corporation
    7  law is amended to read as follows:
    8    (b)    The  petition shall be accompanied by a verified account of all
    9  the assets of the corporation received by him, of all payments or  other
   10  disposition  thereof  made by him, of the remaining assets of the corpo-
   11  ration in respect to which he was appointed receiver and  the  situation
   12  of  the  same,  and of all his transactions as receiver.  Thereupon, the
   13  court shall grant an order directing notice to be given to the  sureties
   14  on  his  official  bond and to all persons interested in the property of
   15  the corporation to show cause, at a time and place  specified,  why  the
   16  receiver  should  not be permitted to resign.  Such notice shall EITHER,
   17  AS DIRECTED BY THE COURT, be published once in each week for six succes-
   18  sive weeks in one or more newspapers [as  the  court  shall  direct]  OR
   19  POSTED  PROMINENTLY  AND  CONTINUOUSLY  FOR  SIX SUCCESSIVE WEEKS ON THE
   20  HOMEPAGE OF ANY WEBSITE MAINTAINED  BY  THE  CORPORATION.  If  it  shall
   21  appear  that  the  proceedings  of  the receiver in the discharge of his
   22  trust have been fair and honest and that there is no good cause  to  the
   23  contrary,  the  court  shall  make  an order permitting such receiver to
   24  resign.  Thereupon he shall be discharged and  his  powers  as  receiver
   25  shall cease, but he shall remain subject to any liability incurred prior
   26  to  the making of such order.  The court, in its discretion, may require
   27  the expense of such proceeding to be paid by the receiver presenting the
   28  petition.
   29    S 28.  Subparagraph 3 of paragraph (a) of section 1218 of the not-for-
   30  profit corporation law is amended to read as follows:
   31    (3)  The order directing service of  the  summons  shall  require  the
   32  publication  thereof EITHER in a newspaper published in the state of New
   33  York in the English language at least once a week  for  four  successive
   34  weeks,  OR POSTED PROMINENTLY AND CONTINUOUSLY FOR FOUR SUCCESSIVE WEEKS
   35  ON ANY APPROPRIATE WEBSITE, and shall also require  the  mailing  on  or
   36  before  the  date  of  the  first  publication of a copy of the summons,
   37  complaint and order to the corporation at its last  known  principal  or
   38  head office in the state or country of its incorporation.
   39    S  29. Paragraph (e) of section 1611 of the not-for-profit corporation
   40  law, as added by chapter 257 of the laws of 2011, is amended to read  as
   41  follows:
   42    (e) Bonds issued by the land bank shall be issued, sold, and delivered
   43  in  accordance  with the terms and provisions of a resolution adopted by
   44  the board. The board may sell such  bonds  in  such  manner,  either  at
   45  public  or at private sale, and for such price as it may determine to be
   46  in the best interests of the land bank.  The  resolution  issuing  bonds
   47  shall  be  published  in  a  newspaper of general circulation within the
   48  jurisdiction of the land bank AND POSTED PROMINENTLY AND CONTINUOUSLY ON
   49  THE HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE LAND BANK.
   50    S 30.  Intentionally omitted.
   51    S 31.   Paragraph (h) of section 8-1.4  of  the  estates,  powers  and
   52  trusts  law, as amended by chapter 43 of the laws of 2002, is amended to
   53  read as follows:
   54    (h) The attorney general shall make rules  and  regulations  necessary
   55  for  the administration of this section, including rules and regulations
   56  as to the time for filing reports, the contents thereof, and  [the]  ANY
       A. 7337                            46

    1  manner of executing and filing them, INCLUDING BUT NOT LIMITED TO ALLOW-
    2  ING  OR  REQUIRING ANY SUBMISSION TO THE ATTORNEY GENERAL TO BE EFFECTED
    3  BY ELECTRONIC MEANS AND ELECTRONIC SIGNATURES. He or  she  may  classify
    4  trusts,  estates,  corporations and other trustees as to purpose, nature
    5  of assets, duration, amount of assets, amounts to be devoted to charita-
    6  ble purposes, or  otherwise,  and  may  establish  different  rules  for
    7  different  classes as to time and nature of the reports required, to the
    8  ends that he or she shall receive current financial reports  as  to  all
    9  such  trusts,  estates, corporations or other trustees which will enable
   10  him or her to ascertain whether they are  being  properly  administered.
   11  The attorney general may suspend the filing of financial reports as to a
   12  particular  trustee  for a reasonable, specifically designated time upon
   13  written application of the trustee, signed under penalties for  perjury,
   14  and  filed  with the attorney general and after the attorney general has
   15  filed in the register of trustees a written statement that the interests
   16  of the beneficiaries will not be prejudiced thereby  and  that  periodic
   17  reports  during  the term of such suspension are not required for proper
   18  supervision by his or her office. The filing of  the  financial  reports
   19  required  by  this  section,  or  the  exemption from such filing or the
   20  suspension therefrom, shall not have the effect  of  absolving  trustees
   21  from  any  responsibility  for accounting for property or income held by
   22  them for charitable purposes. A copy of an account  or  other  financial
   23  report  filed by a trustee in any court in this state, if the account or
   24  other financial report substantially complies with the rules  and  regu-
   25  lations  of  the  attorney  general,  may be filed as a financial report
   26  under this section.
   27    S 32.  Paragraph (b-1) of section 8-1.8 of  the  estates,  powers  and
   28  trusts law is REPEALED.
   29    S  33. Subdivision 9 of section 171-a of the executive law, as amended
   30  by chapter 353 of the laws of 1987, is amended to read as follows:
   31    9. "Fund raising counsel." Any person who  for  compensation  consults
   32  with  a  charitable  organization  or  who  plans,  manages, advises, or
   33  assists with respect to the solicitation in this state of  contributions
   34  for  or  on  behalf  of a charitable organization, but who does not have
   35  access to contributions or other receipts from a solicitation or author-
   36  ity to pay expenses associated with a  solicitation  and  who  does  not
   37  solicit.  A  bona  fide  officer, volunteer, or employee of a charitable
   38  organization or an attorney at law retained by a charitable organization
   39  OR AN INDIVIDUAL ENGAGED SOLELY TO DRAFT APPLICATIONS FOR FUNDING FROM A
   40  GOVERNMENTAL AGENCY OR  AN  ENTITY  EXEMPT  FROM  TAXATION  PURSUANT  TO
   41  SECTION  501(C)(3)  OF  THE INTERNAL REVENUE CODE, shall not be deemed a
   42  fund raising counsel.
   43    S 34. Subdivisions 1, 2 and 2-a of section 172-b of the executive law,
   44  as amended by section 43 of the laws of 2002, are  amended  to  read  as
   45  follows:
   46    1.  Every  charitable organization registered or required to be regis-
   47  tered pursuant to section one hundred seventy-two of this article  which
   48  shall  receive in any fiscal year gross revenue and support in excess of
   49  [two hundred fifty] FIVE HUNDRED thousand dollars [and every  charitable
   50  organization  whose  fund-raising functions are not carried on solely by
   51  persons who are unpaid for such services] shall file with  the  attorney
   52  general  an  annual written financial report, on forms prescribed by the
   53  attorney general, on or before the fifteenth day of the  fifth  calendar
   54  month  after  the close of such fiscal year. The annual financial report
   55  shall be accompanied by an annual financial statement which includes  an
   56  independent  certified  public  accountant's  audit report containing an
       A. 7337                            47

    1  opinion that the financial statements are presented fairly in all  mate-
    2  rial respects and in conformity with generally accepted accounting prin-
    3  ciples,  including  compliance  with all pronouncements of the financial
    4  accounting  standards  board  and  the  American  Institute of Certified
    5  Public Accountants that  establish  accounting  principles  relevant  to
    6  not-for-profit  organizations.  Such  financial  report  shall include a
    7  statement of any changes in the information required to be contained  in
    8  the  registration form filed on behalf of such organization.  The finan-
    9  cial report shall be signed by the president or other authorized officer
   10  and the chief fiscal officer of the organization who shall certify under
   11  penalties for perjury that the statements therein are true  and  correct
   12  to  the  best of their knowledge, and shall be accompanied by an opinion
   13  signed by an independent public accountant that the financial  statement
   14  and  balance  sheet  therein present fairly the financial operations and
   15  position of the organization. A fee of twenty-five  dollars  payable  to
   16  the  attorney  general shall accompany such financial report at the time
   17  of filing, provided however, that any such organization that  is  regis-
   18  tered  with  the  attorney  general  pursuant  to  article  eight of the
   19  estates, powers and trusts law is  required  to  file  only  one  annual
   20  financial report which meets the filing requirements of this article and
   21  section 8-1.4 of the estates, powers and trusts law.
   22    2.  Every  charitable organization registered or required to be regis-
   23  tered pursuant to section one hundred seventy-two of this article  which
   24  shall  receive  in gross revenue and support in any fiscal year at least
   25  [one hundred] TWO HUNDRED FIFTY thousand dollars but not more than  [two
   26  hundred fifty] FIVE HUNDRED thousand dollars shall file an annual finan-
   27  cial  report.  The  annual  financial  report shall be accompanied by an
   28  annual financial  statement  which  includes  an  independent  certified
   29  public  accountant's  review  report  in  accordance with "statements on
   30  standards for accounting and review services"  issued  by  the  American
   31  Institute  of  Certified Public Accountants. The annual financial state-
   32  ment shall be prepared in conformity with generally accepted  accounting
   33  principles,  including  compliance with all pronouncements of the finan-
   34  cial accounting standards board and the American Institute of  Certified
   35  Public  Accountants  that  establish  accounting  principles relevant to
   36  not-for-profit organizations. Such financial report shall be filed  with
   37  the  attorney  general, upon forms prescribed by the attorney general on
   38  an annual basis on or before the fifteenth day  of  the  fifth  calendar
   39  month  after the close of such fiscal year, which shall include a finan-
   40  cial report covering such fiscal year in accordance with  such  require-
   41  ments as the attorney general may prescribe. Such financial report shall
   42  include  a  statement  of  any changes in the information required to be
   43  contained in the registration form filed on behalf of such organization.
   44  The financial report shall be signed by the president or  other  author-
   45  ized  officer and the chief fiscal officer of the organization who shall
   46  certify under penalties for perjury that the statements therein are true
   47  and correct to the best of their knowledge. A fee of  [ten]  TWENTY-FIVE
   48  dollars  payable  to the attorney general shall accompany such financial
   49  report at the time of filing, provided, however, that any such organiza-
   50  tion that is registered with the attorney general  pursuant  to  article
   51  eight of the estates, powers and trusts law is required to file only one
   52  annual  financial  report  which  meets  the filing requirements of this
   53  article and section  8-1.4  of  the  estates,  powers  and  trusts  law.
   54  NOTWITHSTANDING  THE  REQUIREMENTS OF THIS SECTION, IF UPON REVIEW OF AN
   55  INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S REVIEW REPORT  FILED  PURSUANT
   56  TO  THIS  SUBDIVISION, THE ATTORNEY GENERAL DETERMINES THAT A CHARITABLE
       A. 7337                            48

    1  ORGANIZATION SHOULD OBTAIN AN INDEPENDENT CERTIFIED PUBLIC  ACCOUNTANT'S
    2  AUDIT  REPORT, SUCH ORGANIZATION SHALL OBTAIN AND FILE WITH THE ATTORNEY
    3  GENERAL AN AUDIT REPORT THAT MEETS THE REQUIREMENTS OF  SUBDIVISION  ONE
    4  OF  THIS SECTION WITHIN SIXTY DAYS OF THE ATTORNEY GENERAL'S REQUEST FOR
    5  SUCH REPORT.
    6    2-a. 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 any fiscal year of such organization gross revenue and
    9  support not in excess of [one hundred thousand] TWO HUNDRED FIFTY  THOU-
   10  SAND dollars shall file with the attorney general an unaudited financial
   11  report  on  forms  prescribed  by the attorney general, on or before the
   12  fifteenth day of the fifth calendar month after the close of such fiscal
   13  year. Such financial report shall include a statement of any changes  in
   14  the  information required to be contained in the registration form filed
   15  on behalf of such organization. The financial report shall be signed  by
   16  the  president  or other authorized officer and the chief fiscal officer
   17  of the organization who shall certify under penalties for  perjury  that
   18  the  statements  therein are true and correct to the best of their know-
   19  ledge.   A fee of ten dollars payable  to  the  attorney  general  shall
   20  accompany  such financial report at the time of filing. Provided, howev-
   21  er, that any such organization that  is  registered  with  the  attorney
   22  general  pursuant to article eight of the estates, powers and trusts law
   23  is required to file only one annual financial  report  which  meets  the
   24  filing  requirements  of  this article and section 8-1.4 of the estates,
   25  powers and trusts law.
   26    S 35. Subdivision 1 of section 177 of the executive law, as amended by
   27  chapter 83 of the laws of 1995, is amended to read as follows:
   28    1. The attorney general shall make rules and regulations necessary for
   29  the administration of this article including, but not limited  to  regu-
   30  lations and waiver procedures that will ensure that charitable organiza-
   31  tions  do not have to register twice in relation to the solicitation and
   32  administration of assets, AND RULES OR REGULATIONS ALLOWING OR REQUIRING
   33  ANY SUBMISSION TO THE ATTORNEY GENERAL  TO  BE  EFFECTED  BY  ELECTRONIC
   34  MEANS.
   35    S 36. Intentionally omitted.
   36    S  37.  The  section  heading  and paragraph (a) of section 511 of the
   37  not-for-profit corporation law,  subparagraph  6  of  paragraph  (a)  as
   38  amended  by  chapter  961  of  the  laws of 1972, are amended to read as
   39  follows:
   40  Petition for [leave of] court APPROVAL.
   41    (a) [A corporation required by law to]  TO  obtain  [leave  of]  court
   42  APPROVAL  to  sell,  lease,  exchange  or  otherwise  dispose  of all or
   43  substantially all its assets, A CORPORATION  shall  present  a  verified
   44  petition  to  the  supreme court of the judicial district, or the county
   45  court of the county, wherein the corporation has its office or principal
   46  place of carrying out the purposes for which it was formed. The petition
   47  shall set forth:
   48    1. The name of the corporation, the law  under  or  by  which  it  was
   49  incorporated.
   50    2. The names of its directors and principal officers, and their places
   51  of residence.
   52    3. The activities of the corporation.
   53    4. A description, with reasonable certainty, of the assets to be sold,
   54  leased,  exchanged,  or otherwise disposed of, or a statement that it is
   55  proposed to sell,  lease,  exchange  or  otherwise  dispose  of  all  or
   56  substantially  all the corporate assets more fully described in a sched-
       A. 7337                            49

    1  ule attached to the petition; and a statement of the fair value of  such
    2  assets,  and  the  amount of the corporation's debts and liabilities and
    3  how secured.
    4    5.  The consideration to be received by the corporation and the dispo-
    5  sition proposed to be made thereof, together with a statement  that  the
    6  dissolution of the corporation is or is not contemplated thereafter.
    7    6.  That  the consideration and the terms of the sale, lease, exchange
    8  or other disposition of the assets  of  the  corporation  are  fair  and
    9  reasonable to the corporation, and that the purposes of the corporation,
   10  or  the interests of its members will be promoted thereby, and a concise
   11  statement of the reasons therefor.
   12    7. That such sale, lease, exchange or disposition of corporate assets,
   13  has been recommended or authorized by vote of the directors  in  accord-
   14  ance with law, at a meeting duly called and held, as shown in a schedule
   15  annexed  to the petition setting forth a copy of the resolution granting
   16  such authority with a statement of the vote thereon.
   17    8. Where the consent of members of the corporation is required by law,
   18  that such consent has been given, as shown in a schedule annexed to  the
   19  petition  setting  forth  a copy of such consent, if in writing, or of a
   20  resolution giving such consent, adopted at a  meeting  of  members  duly
   21  called and held, with a statement of the vote thereon.
   22    9.  A  [prayer]  REQUEST  for  [leave]  COURT APPROVAL to sell, lease,
   23  exchange or otherwise dispose of all or substantially all the assets  of
   24  the corporation as set forth in the petition.
   25    S  38.  The  not-for-profit corporation law is amended by adding a new
   26  section 511-a to read as follows:
   27  S 511-A. PETITION FOR ATTORNEY GENERAL APPROVAL.
   28    (A) IN LIEU OF OBTAINING COURT APPROVAL UNDER  SECTION  511  (PETITION
   29  FOR  COURT  APPROVAL) OF THIS ARTICLE TO SELL, LEASE, EXCHANGE OR OTHER-
   30  WISE DISPOSE OF ALL OR SUBSTANTIALLY ALL OF ITS ASSETS, THE  CORPORATION
   31  MAY  ALTERNATIVELY  SEEK  APPROVAL  OF  THE ATTORNEY GENERAL BY VERIFIED
   32  PETITION, EXCEPT IN THE FOLLOWING CIRCUMSTANCES: 1. THE  CORPORATION  IS
   33  INSOLVENT, OR WOULD BECOME INSOLVENT AS A RESULT OF THE TRANSACTION, AND
   34  MUST PROCEED ON NOTICE TO CREDITORS PURSUANT TO PARAGRAPH (C) OF SECTION
   35  511  OF  THIS  ARTICLE;  OR  2.  THE  ATTORNEY  GENERAL,  IN  HIS OR HER
   36  DISCRETION, CONCLUDES THAT A COURT SHOULD REVIEW THE PETITION AND MAKE A
   37  DETERMINATION THEREON.
   38    (B) THE VERIFIED PETITION TO THE ATTORNEY GENERAL SHALL SET FORTH  (I)
   39  ALL OF THE INFORMATION REQUIRED TO BE INCLUDED IN A VERIFIED PETITION TO
   40  OBTAIN  COURT  APPROVAL  PURSUANT  TO  SUBPARAGRAPHS ONE THROUGH NINE OF
   41  PARAGRAPH (A) OF SECTION 511 OF THIS ARTICLE; (II) A STATEMENT THAT  THE
   42  CORPORATION  IS  NOT INSOLVENT AND WILL NOT BECOME INSOLVENT AS A RESULT
   43  OF THE TRANSACTION; AND (III) A STATEMENT AS TO WHETHER ANY PERSONS HAVE
   44  RAISED, OR HAVE A REASONABLE BASIS TO RAISE,  OBJECTIONS  TO  THE  SALE,
   45  LEASE,  EXCHANGE  OR  OTHER DISPOSITION THAT IS THE SUBJECT OF THE PETI-
   46  TION, INCLUDING A STATEMENT SETTING FORTH THE  NAMES  AND  ADDRESSES  OF
   47  SUCH  PERSONS,  THE NATURE OF THEIR INTEREST, AND A DESCRIPTION OF THEIR
   48  OBJECTIONS. THE ATTORNEY GENERAL, IN HIS OR HER DISCRETION,  MAY  DIRECT
   49  THE  CORPORATION  TO  PROVIDE  NOTICE OF SUCH PETITION TO ANY INTERESTED
   50  PERSON, AND THE CORPORATION SHALL PROVIDE THE ATTORNEY  GENERAL  WITH  A
   51  CERTIFICATION THAT SUCH NOTICE HAS BEEN PROVIDED.
   52    (C)  IF  IT  SHALL APPEAR, TO THE SATISFACTION OF THE ATTORNEY GENERAL
   53  THAT THE CONSIDERATION AND THE TERMS OF THE  TRANSACTION  ARE  FAIR  AND
   54  REASONABLE  TO  THE CORPORATION AND THAT THE PURPOSES OF THE CORPORATION
   55  OR THE INTERESTS OF THE MEMBERS WILL BE PROMOTED, THE  ATTORNEY  GENERAL
   56  MAY  AUTHORIZE  THE SALE, LEASE, EXCHANGE OR OTHER DISPOSITION OF ALL OR
       A. 7337                            50

    1  SUBSTANTIALLY ALL THE ASSETS OF THE CORPORATION,  AS  DESCRIBED  IN  THE
    2  PETITION,  FOR  SUCH  CONSIDERATION  AND UPON SUCH TERMS AS THE ATTORNEY
    3  GENERAL MAY PRESCRIBE. THE AUTHORIZATION OF THE ATTORNEY  GENERAL  SHALL
    4  DIRECT THE DISPOSITION OF THE CONSIDERATION TO BE RECEIVED THEREUNDER BY
    5  THE CORPORATION.
    6    (D)  IF  THE ATTORNEY GENERAL DOES NOT APPROVE THE PETITION, OR IF THE
    7  ATTORNEY GENERAL CONCLUDES THAT COURT REVIEW IS APPROPRIATE,  THE  PETI-
    8  TIONER  MAY SEEK COURT APPROVAL ON NOTICE TO THE ATTORNEY GENERAL PURSU-
    9  ANT TO SECTION 511 (PETITION FOR COURT APPROVAL) OF THIS ARTICLE.
   10    S 39. Intentionally omitted.
   11    S 40. Section 907 of the not-for-profit corporation law is amended  to
   12  read as follows:
   13  S 907. Approval by the supreme court OR ATTORNEY GENERAL.
   14    [(a)]  Where  any  constituent  corporation or the consolidated corpo-
   15  ration is, or would be if formed under this chapter, a [Type B or a Type
   16  C] CHARITABLE corporation under section 201 (Purposes) of this  chapter,
   17  no  certificate  shall  be filed pursuant to section 904 (Certificate of
   18  merger or consolidation; contents) or section  906  (Merger  or  consol-
   19  idation  of  domestic  and  foreign  corporations) until (A) THE SUPREME
   20  COURT HAS GRANTED an order approving the plan of merger or consolidation
   21  and authorizing the filing of the certificate  [has  been  made  by  the
   22  supreme court], as provided in [this] section[. A certified copy of such
   23  order  shall  be  annexed to the certificate of merger or consolidation.
   24  Application for the order may be made in the judicial district in  which
   25  the  principal office of the surviving or consolidated corporation is to
   26  be located, or in which the office of one of  the  domestic  constituent
   27  corporations  is  located.  The  application  shall  be  made by all the
   28  constituent corporations jointly and shall set forth  by  affidavit  (1)
   29  the  plan  of  merger  or  consolidation,  (2)  the approval required by
   30  section 903 (Approval of plan) or paragraph (b) of section  906  (Merger
   31  or consolidation of domestic and foreign corporations) for each constit-
   32  uent  corporation, (3) the objects and purposes of each such corporation
   33  to be promoted by the consolidation, (4) a statement  of  all  property,
   34  and  the  manner  in which it is held, and of all liabilities and of the
   35  amount and sources of the annual income of each  such  corporation,  (5)
   36  whether  any votes against adoption of the resolution approving the plan
   37  of merger or consolidation were cast at the meeting at which the  resol-
   38  ution  as adopted by each constituent corporation, and (6) facts showing
   39  that the consolidation is authorized by the laws  of  the  jurisdictions
   40  under  which each of the constituent corporations is incorporated] 907-A
   41  (APPLICATION FOR APPROVAL OF THE SUPREME COURT) OF THIS ARTICLE  OR  (B)
   42  THE  ATTORNEY  GENERAL  HAS APPROVED THE PLAN OF MERGER OR CONSOLIDATION
   43  AND AUTHORIZED THE FILING OF THE CERTIFICATE,  AS  PROVIDED  IN  SECTION
   44  907-B  (APPLICATION  FOR  APPROVAL  OF  THE  ATTORNEY  GENERAL)  OF THIS
   45  ARTICLE.
   46    [(b) Upon the filing of the application the court shall fix a time for
   47  hearing thereof and shall direct that notice thereof be  given  to  such
   48  persons  as  may  be  interested,  including  the  attorney general, any
   49  governmental body or officer and any other person or body whose  consent
   50  or approval is required by section 909 (Consent to filing), in such form
   51  and  manner  as the court may prescribe. If no votes against adoption of
   52  the resolution approving the plan of merger or consolidation  were  cast
   53  at  the  meeting  at which the resolution was adopted by any constituent
   54  corporation the court may dispense with  notice  to  anyone  except  the
   55  attorney-general,  any governmental body or officer and any other person
   56  or body whose consent or approval is required by section 909 (Consent to
       A. 7337                            51

    1  filing). Any person interested may appear and show cause why the  appli-
    2  cation should not be granted.
    3    (c)  If  the  court  shall  find  that any of the assets of any of the
    4  constituent corporations are held for a purpose specified as Type  B  in
    5  paragraph  (b)  of  section 201 or are legally required to be used for a
    6  particular purpose, but not upon a condition requiring return,  transfer
    7  or  conveyance  by reason of the merger or consolidation, the court may,
    8  in its discretion, direct that such assets be transferred or conveyed to
    9  the surviving or consolidated corporation subject  to  such  purpose  or
   10  use,  or that such assets be transferred or conveyed to the surviving or
   11  consolidated corporation or to one or more  other  domestic  or  foreign
   12  corporations  or  organizations  engaged in substantially similar activ-
   13  ities, upon an express trust the terms of which shall be approved by the
   14  court.
   15    (d) If the court shall  find  that  the  interests  of  non-consenting
   16  members are or may be substantially prejudiced by the proposed merger or
   17  consolidation, the court may disapprove the plan or may direct a modifi-
   18  cation  thereof. In the event of a modification, if the court shall find
   19  that the interests of any members may be substantially prejudiced by the
   20  proposed merger or consolidation as modified,  the  court  shall  direct
   21  that  the  modified  plan  be  submitted  to  vote of the members of the
   22  constituent corporations, or if the court shall find that there  is  not
   23  such  substantial  prejudice, it shall approve the agreement as so modi-
   24  fied without further approval by the members. If the court, upon direct-
   25  ing a modification of the plan of merger or consolidation, shall  direct
   26  that  a  further  approval  be  obtained from members of the constituent
   27  corporations or any of them, such further approval shall be obtained  in
   28  the manner specified in section 903 (Approval of plan) or section 906(b)
   29  (Merger  or  consolidation of domestic and foreign corporations) of this
   30  chapter.
   31    (e) If it shall appear, to the satisfaction of  the  court,  that  the
   32  provisions  of this section have been complied with, and that the inter-
   33  ests of the constituent corporations and the public interest will not be
   34  adversely affected by the merger or consolidation, it shall approve  the
   35  merger  or  consolidation  upon  such  terms  and  conditions  as it may
   36  prescribe.]
   37    S 41. The not-for-profit corporation law is amended by  adding  a  new
   38  section 907-a to read as follows:
   39  S 907-A. APPLICATION FOR APPROVAL OF THE SUPREME COURT.
   40    (A)  APPLICATION FOR AN ORDER APPROVING THE PLAN OF MERGER AND AUTHOR-
   41  IZING THE FILING OF THE CERTIFICATE MAY BE MADE IN THE JUDICIAL DISTRICT
   42  IN WHICH THE PRINCIPAL OFFICE OF THE SURVIVING  OR  CONSOLIDATED  CORPO-
   43  RATION  IS  TO BE LOCATED, OR IN WHICH THE OFFICE OF ONE OF THE DOMESTIC
   44  CONSTITUENT CORPORATIONS IS LOCATED. THE APPLICATION SHALL  BE  MADE  BY
   45  ALL  THE CONSTITUENT CORPORATIONS JOINTLY AND SHALL SET FORTH BY AFFIDA-
   46  VIT: (1) THE PLAN OF MERGER OR CONSOLIDATION, (2) THE APPROVAL  REQUIRED
   47  BY SECTION 903 (APPROVAL OF PLAN) OR PARAGRAPH (B) OF SECTION 906 (MERG-
   48  ER  OR CONSOLIDATION OF DOMESTIC AND FOREIGN CORPORATIONS) OF THIS ARTI-
   49  CLE FOR EACH CONSTITUENT CORPORATION, (3) THE OBJECTS  AND  PURPOSES  OF
   50  EACH SUCH CORPORATION TO BE PROMOTED BY THE MERGER OR CONSOLIDATION, (4)
   51  A  STATEMENT OF ALL PROPERTY, AND THE MANNER IN WHICH IT IS HELD, AND OF
   52  ALL LIABILITIES AND OF THE AMOUNT AND SOURCES OF THE  ANNUAL  INCOME  OF
   53  EACH  SUCH  CORPORATION,  (5)  WHETHER ANY VOTES AGAINST ADOPTION OF THE
   54  RESOLUTION APPROVING THE PLAN OF MERGER OR CONSOLIDATION  WERE  CAST  AT
   55  THE  MEETING  AT  WHICH  THE  RESOLUTION WAS ADOPTED BY EACH CONSTITUENT
   56  CORPORATION, AND (6) FACTS SHOWING THAT THE CONSOLIDATION IS  AUTHORIZED
       A. 7337                            52

    1  BY  THE  LAWS  OF  THE JURISDICTIONS UNDER WHICH EACH OF THE CONSTITUENT
    2  CORPORATIONS IS INCORPORATED.
    3    (B)  UPON THE FILING OF THE APPLICATION THE COURT SHALL FIX A TIME FOR
    4  HEARING THEREOF AND SHALL DIRECT THAT NOTICE THEREOF BE  GIVEN  TO  SUCH
    5  PERSONS  AS  MAY  BE  INTERESTED,  INCLUDING  THE  ATTORNEY GENERAL, ANY
    6  GOVERNMENTAL BODY OR OFFICER AND ANY OTHER PERSON OR BODY WHOSE  CONSENT
    7  OR APPROVAL IS REQUIRED BY SECTION 909 (CONSENT TO FILING) OF THIS ARTI-
    8  CLE,  IN  SUCH  FORM  AND MANNER AS THE COURT MAY PRESCRIBE. IF NO VOTES
    9  AGAINST ADOPTION OF THE RESOLUTION  APPROVING  THE  PLAN  OF  MERGER  OR
   10  CONSOLIDATION  WERE  CAST  AT  THE  MEETING  AT WHICH THE RESOLUTION WAS
   11  ADOPTED BY ANY CONSTITUENT  CORPORATION  THE  COURT  MAY  DISPENSE  WITH
   12  NOTICE  TO  ANYONE EXCEPT THE ATTORNEY-GENERAL, ANY GOVERNMENTAL BODY OR
   13  OFFICER AND ANY OTHER PERSON  OR  BODY  WHOSE  CONSENT  OR  APPROVAL  IS
   14  REQUIRED  BY SECTION 909 (CONSENT TO FILING) OF THIS ARTICLE. ANY PERSON
   15  INTERESTED MAY APPEAR AND SHOW CAUSE WHY THE APPLICATION SHOULD  NOT  BE
   16  GRANTED.
   17    (C)  IF  THE  COURT  SHALL  FIND  THAT ANY OF THE ASSETS OF ANY OF THE
   18  CONSTITUENT CORPORATIONS ARE HELD FOR A CHARITABLE PURPOSE OR ARE LEGAL-
   19  LY REQUIRED TO BE USED FOR A PARTICULAR PURPOSE, BUT NOT UPON  A  CONDI-
   20  TION REQUIRING RETURN, TRANSFER OR CONVEYANCE BY REASON OF THE MERGER OR
   21  CONSOLIDATION, THE COURT MAY, IN ITS DISCRETION, DIRECT THAT SUCH ASSETS
   22  BE  TRANSFERRED OR CONVEYED TO THE SURVIVING OR CONSOLIDATED CORPORATION
   23  SUBJECT TO SUCH PURPOSE OR USE, OR THAT SUCH ASSETS  BE  TRANSFERRED  OR
   24  CONVEYED  TO THE SURVIVING OR CONSOLIDATED CORPORATION OR TO ONE OR MORE
   25  OTHER DOMESTIC OR  FOREIGN  CORPORATIONS  OR  ORGANIZATIONS  ENGAGED  IN
   26  SUBSTANTIALLY  SIMILAR  ACTIVITIES,  UPON  AN EXPRESS TRUST THE TERMS OF
   27  WHICH SHALL BE APPROVED BY THE COURT.
   28    (D) IF THE COURT SHALL  FIND  THAT  THE  INTERESTS  OF  NON-CONSENTING
   29  MEMBERS ARE OR MAY BE SUBSTANTIALLY PREJUDICED BY THE PROPOSED MERGER OR
   30  CONSOLIDATION, THE COURT MAY DISAPPROVE THE PLAN OR MAY DIRECT A MODIFI-
   31  CATION  THEREOF. IN THE EVENT OF A MODIFICATION, IF THE COURT SHALL FIND
   32  THAT THE INTERESTS OF ANY MEMBERS MAY BE SUBSTANTIALLY PREJUDICED BY THE
   33  PROPOSED MERGER OR CONSOLIDATION AS MODIFIED,  THE  COURT  SHALL  DIRECT
   34  THAT  THE  MODIFIED  PLAN  BE  SUBMITTED  TO  VOTE OF THE MEMBERS OF THE
   35  CONSTITUENT CORPORATIONS, OR IF THE COURT SHALL FIND THAT THERE  IS  NOT
   36  SUCH  SUBSTANTIAL  PREJUDICE, IT SHALL APPROVE THE AGREEMENT AS SO MODI-
   37  FIED WITHOUT FURTHER APPROVAL BY THE MEMBERS. IF THE COURT, UPON DIRECT-
   38  ING A MODIFICATION OF THE PLAN OF MERGER OR CONSOLIDATION, SHALL  DIRECT
   39  THAT  A  FURTHER  APPROVAL  BE  OBTAINED FROM MEMBERS OF THE CONSTITUENT
   40  CORPORATIONS OR ANY OF THEM, SUCH FURTHER APPROVAL SHALL BE OBTAINED  IN
   41  THE  MANNER SPECIFIED IN SECTION 903 (APPROVAL OF PLAN) OR PARAGRAPH (B)
   42  OF SECTION 906 (MERGER OR CONSOLIDATION OF DOMESTIC AND  FOREIGN  CORPO-
   43  RATIONS) OF THIS ARTICLE.
   44    (E)  IF  IT  SHALL  APPEAR, TO THE SATISFACTION OF THE COURT, THAT THE
   45  PROVISIONS OF THIS SECTION HAVE BEEN COMPLIED WITH, AND THAT THE  INTER-
   46  ESTS OF THE CONSTITUENT CORPORATIONS AND THE PUBLIC INTEREST WILL NOT BE
   47  ADVERSELY  AFFECTED BY THE MERGER OR CONSOLIDATION, IT SHALL APPROVE THE
   48  MERGER OR CONSOLIDATION  UPON  SUCH  TERMS  AND  CONDITIONS  AS  IT  MAY
   49  PRESCRIBE.
   50    (F) A CERTIFIED COPY OF SUCH ORDER SHALL BE ANNEXED TO THE CERTIFICATE
   51  OF MERGER OR CONSOLIDATION.
   52    S  42.  The  not-for-profit corporation law is amended by adding a new
   53  section 907-b to read as follows:
   54  S 907-B. APPLICATION FOR APPROVAL OF THE ATTORNEY GENERAL.
   55    (A) IN LIEU OF OBTAINING AN ORDER APPROVING  THE  PLAN  OF  MERGER  OR
   56  CONSOLIDATION  AND AUTHORIZING THE FILING OF THE CERTIFICATE, THE CORPO-
       A. 7337                            53

    1  RATION MAY ALTERNATIVELY MAKE AN APPLICATION TO THE ATTORNEY GENERAL FOR
    2  APPROVAL, EXCEPT WHERE THE ATTORNEY GENERAL, IN HIS OR  HER  DISCRETION,
    3  CONCLUDES THAT A COURT SHOULD REVIEW THE APPLICATION AND MAKE A DETERMI-
    4  NATION THEREON.
    5    (B)  THE  APPLICATION TO THE ATTORNEY GENERAL SHALL BE MADE BY ALL THE
    6  CONSTITUENT CORPORATIONS JOINTLY AND SHALL SET FORTH BY  AFFIDAVIT:  (I)
    7  ALL  OF  THE  INFORMATION  REQUIRED  TO BE INCLUDED IN AN APPLICATION TO
    8  OBTAIN  COURT  APPROVAL  PURSUANT  TO  SECTION  907-A  (APPLICATION  FOR
    9  APPROVAL  OF  THE  SUPREME COURT) OF THIS ARTICLE, (II) ALL CONSENTS AND
   10  APPROVALS REQUIRED BY SECTION 909  (CONSENT  TO  FILING),  AND  (III)  A
   11  STATEMENT  AS  TO  WHETHER ANY PERSONS HAVE RAISED, OR HAVE A REASONABLE
   12  BASIS TO RAISE, OBJECTIONS TO THE MERGER OR CONSOLIDATION  THAT  IS  THE
   13  SUBJECT  OF  THE  APPLICATION,  INCLUDING  A STATEMENT SETTING FORTH THE
   14  NAMES AND ADDRESSES OF SUCH PERSONS, THE NATURE OF THEIR INTEREST, AND A
   15  DESCRIPTION OF THEIR OBJECTIONS.
   16    (C) UPON THE FILING OF THE APPLICATION, THE ATTORNEY GENERAL,  IN  HIS
   17  OR  HER DISCRETION, MAY DIRECT THAT THE CONSTITUENT CORPORATIONS PROVIDE
   18  NOTICE TO SUCH PERSONS AS MAY BE INTERESTED, INCLUDING ANY  GOVERNMENTAL
   19  BODY  OR OFFICER AND ANY OTHER PERSON OR BODY THAT IS REQUIRED EITHER TO
   20  GIVE CONSENT OR BE NOTIFIED UNDER SECTION 404  (APPROVALS,  NOTICES  AND
   21  CONSENTS)  OF  THIS  ARTICLE OR 909 (CONSENT TO FILING) OF THIS ARTICLE.
   22  THE CONSTITUENT CORPORATIONS SHALL PROVIDE THE ATTORNEY GENERAL  WITH  A
   23  CERTIFICATION THAT SUCH NOTICE HAS BEEN PROVIDED.
   24    (D)  IF ANY ASSETS OF ANY OF THE CONSTITUENT CORPORATIONS ARE HELD FOR
   25  A CHARITABLE PURPOSE OR ARE ASSETS RECEIVED FOR A SPECIFIC  PURPOSE  AND
   26  LEGALLY  REQUIRED  TO  BE  USED FOR A PARTICULAR PURPOSE, BUT NOT UPON A
   27  CONDITION REQUIRING RETURN, TRANSFER OR  CONVEYANCE  BY  REASON  OF  THE
   28  MERGER  OR  CONSOLIDATION,  THE  ATTORNEY  GENERAL  MAY,  IN  HIS OR HER
   29  DISCRETION, DIRECT THAT SUCH ASSETS BE TRANSFERRED OR  CONVEYED  TO  THE
   30  SURVIVING OR CONSOLIDATED CORPORATION SUBJECT TO SUCH PURPOSE OR USE.
   31    (E)  IF THE ATTORNEY GENERAL SHALL FIND THAT THE INTERESTS OF NON-CON-
   32  SENTING MEMBERS ARE OR MAY BE SUBSTANTIALLY PREJUDICED BY  THE  PROPOSED
   33  MERGER  OR  CONSOLIDATION,  THE  ATTORNEY  GENERAL MAY DISAPPROVE OF THE
   34  APPLICATION OR MAY CONDITION APPROVAL OF THE APPLICATION UPON  MODIFICA-
   35  TION  OF  THE  PLAN  OF  MERGER OR CONSOLIDATION IN ACCORDANCE WITH THIS
   36  CHAPTER AND ANY OTHER LAW OR RULE.
   37    (F) IF IT SHALL APPEAR, TO THE SATISFACTION OF THE  ATTORNEY  GENERAL,
   38  THAT  THE  PROVISIONS  OF THIS SECTION HAVE BEEN COMPLIED WITH, AND THAT
   39  THE INTERESTS OF THE CONSTITUENT CORPORATIONS AND  THE  PUBLIC  INTEREST
   40  WILL  NOT  BE  ADVERSELY  AFFECTED  BY  THE MERGER OR CONSOLIDATION, THE
   41  ATTORNEY GENERAL SHALL APPROVE THE MERGER  OR  CONSOLIDATION  UPON  SUCH
   42  TERMS AND CONDITIONS AS IT MAY PRESCRIBE.
   43    (G)  THE  APPROVAL  OF  THE  ATTORNEY  GENERAL SHALL BE ANNEXED TO THE
   44  CERTIFICATE OF MERGER OR CONSOLIDATION.
   45    (H) IF THE ATTORNEY GENERAL DOES NOT APPROVE THE  APPLICATION,  OR  IF
   46  THE  ATTORNEY  GENERAL  CONCLUDES  THAT COURT REVIEW IS APPROPRIATE, THE
   47  CONSTITUENT CORPORATIONS MAY SEEK COURT APPROVAL ON NOTICE TO THE ATTOR-
   48  NEY GENERAL PURSUANT TO SECTION 907-A (APPLICATION FOR APPROVAL  OF  THE
   49  SUPREME COURT) OF THIS ARTICLE.
   50    S 43. Intentionally omitted.
   51    S  44. Paragraph (c) of section 1001 of the not-for-profit corporation
   52  law is REPEALED.
   53    S 45. Intentionally omitted.
   54    S 46. Paragraphs (a) and (c) of section 1002-a of  the  not-for-profit
   55  corporation  law,  as  amended  by  chapter 434 of the laws of 2006, are
   56  amended to read as follows:
       A. 7337                            54

    1    (a) Carry out the plan of dissolution and distribution of assets,  pay
    2  its liabilities and distribute its assets in accordance therewith within
    3  two  hundred  seventy  days  from  the  date the plan of dissolution and
    4  distribution of assets shall have been (1)  authorized  as  provided  in
    5  section  1002  (AUTHORIZATION  OF PLAN) of this article, (2) approved by
    6  any governmental body or officer whose approval is required pursuant  to
    7  paragraph  (c)  of section 1002 (AUTHORIZATION OF PLAN) of this article,
    8  and (3) approved by EITHER THE ATTORNEY GENERAL  OR  a  justice  of  the
    9  supreme  court[, if such approval is required] pursuant to paragraph (d)
   10  of section 1002 (AUTHORIZATION OF PLAN) of this article[, or filed  with
   11  the  attorney  general, if such filing is required pursuant to paragraph
   12  (d) of section 1002 of this article]. Evidence of the disposition of its
   13  assets and payment of its liabilities pursuant to the  plan  of  dissol-
   14  ution  and  distribution of assets shall be submitted by the corporation
   15  to the attorney general and any other governmental body or  officer,  as
   16  required  under applicable laws. If the plan of dissolution and distrib-
   17  ution of assets cannot be carried out within the  prescribed  time,  the
   18  attorney  general  may  upon  good  cause shown extend such time, or any
   19  extended period of time, by not fewer than thirty days nor more than one
   20  year;
   21    (c) Distribute the assets of the corporation that remain after  paying
   22  or  adequately  providing  for  the  payment  of its liabilities, in the
   23  following manner:
   24    (1) assets received and held by the corporation either for a  CHARITA-
   25  BLE  purpose  [specified  as  Type  B  in  paragraph  (b) of section 201
   26  (Purposes)] or which are legally required to be used  for  a  particular
   27  purpose,  shall be distributed to one or more domestic or foreign corpo-
   28  rations or other organizations engaged in activities substantially simi-
   29  lar to those of the  dissolved  corporation  pursuant  to  the  plan  of
   30  dissolution  and  distribution  or,  if  applicable,  as APPROVED BY THE
   31  ATTORNEY GENERAL OR ordered by the SUPREME court PURSUANT to [which such
   32  plan is submitted for approval under]  section  1002  (Authorization  of
   33  plan) OF THIS ARTICLE.  Any disposition of assets contained in a will or
   34  other  instrument,  in  trust  or  otherwise,  made  before or after the
   35  dissolution, to or for the benefit of any corporation so dissolved shall
   36  inure to or for the benefit of the corporation or organization acquiring
   37  such assets of the dissolved corporation as provided  in  this  section,
   38  and so far as is necessary for that purpose the corporation or organiza-
   39  tion  acquiring  such  disposition  shall  be  deemed a successor to the
   40  dissolved corporation with respect to such  assets;  provided,  however,
   41  that  such  disposition shall be devoted by the acquiring corporation or
   42  organization to the purposes intended by the testator, donor or grantor.
   43    (2) assets other than those described  by  subparagraph  one  of  this
   44  paragraph,  if any, shall be distributed in accordance with the specifi-
   45  cations of the plan of dissolution and distribution of assets or, to the
   46  extent that the certificate of incorporation prescribes the distributive
   47  rights of members, or of any class or classes of members, as provided in
   48  such certificate;
   49    S 47.  Intentionally omitted.
   50    S 48. Paragraph (a) of section 1007 of the not-for-profit  corporation
   51  law,  as  amended by chapter 434 of the laws of 2006, is amended to read
   52  as follows:
   53    (a) At any time after the plan  of  dissolution  and  distribution  of
   54  assets  shall  have  been  (1) authorized as provided in section 1002 of
   55  this article (Authorization of plan), (2) approved by  any  governmental
   56  body  or officer whose approval is required pursuant to paragraph (c) of
       A. 7337                            55

    1  section 1002 of this article, and (3) approved by EITHER BY THE ATTORNEY
    2  GENERAL OR a justice of the supreme court[, if such approval is required
    3  pursuant to paragraph (d) of section 1002 of this article, or filed with
    4  the  attorney general, if such filing is required] pursuant to paragraph
    5  (d) of section 1002 of this article, and prior to filing the certificate
    6  of dissolution, the corporation may give a notice requiring  all  credi-
    7  tors and claimants, including any with unliquidated or contingent claims
    8  and  any with whom the corporation has unfulfilled contracts, to present
    9  their claims in writing and in detail at a  specified  place  and  by  a
   10  specified  day,  which shall not be less than six months after the first
   11  publication of such notice. Such notice shall be published at least once
   12  a week for two successive weeks in a newspaper of general circulation in
   13  the county in which the office of the corporation  was  located  at  the
   14  date  of  authorization  of  its plan of dissolution and distribution of
   15  assets as provided in section 1002 of  this  article  (Authorization  of
   16  plan),  OR, UPON CONSENT OF THE ATTORNEY GENERAL, POSTED PROMINENTLY AND
   17  CONTINUOUSLY FOR TWO SUCCESSIVE WEEKS ON THE  HOMEPAGE  OF  ANY  WEBSITE
   18  MAINTAINED  BY  THE  CORPORATION.    On  or before the date of the first
   19  publication OR POSTING ON A WEBSITE  of  such  notice,  the  corporation
   20  shall  mail  a copy thereof, postage prepaid, to each person believed to
   21  be a creditor of or claimant against the corporation whose current  name
   22  and address are known to or can with due diligence be ascertained by the
   23  corporation.  The  giving of such notice shall not constitute a recogni-
   24  tion that any person is a proper creditor or  claimant,  and  shall  not
   25  revive or make valid, or operate as a recognition of the validity of, or
   26  a  waiver of any defense or counterclaim in respect of any claim against
   27  the corporation, its assets, directors, officers or members,  which  has
   28  been  barred  by  any  statute  of  limitations or become invalid by any
   29  cause, or in respect of which the corporation, its  directors,  officers
   30  or members, has any defense or counterclaim.
   31    S  49.  Paragraph c of subdivision 4 of section 216-a of the education
   32  law, as added by chapter 901 of the laws of 1972, is amended to read  as
   33  follows:
   34    c.  The  following  provisions  of  the not-for-profit corporation law
   35  shall not apply to education corporations:  section  one  hundred  five,
   36  [section  one hundred thirteen,] section one hundred fourteen, paragraph
   37  (a) of section two hundred one, paragraphs (b) and (c)  of  section  two
   38  hundred  two,  section  two  hundred  five,  section  three hundred one,
   39  section three hundred two, section three  hundred  three,  article  four
   40  except  paragraphs  (b)  through  (p)  of  section four hundred four and
   41  section four hundred five, section  five  hundred  nine,  [section  five
   42  hundred eighteen,] section five hundred twenty-one to the extent that it
   43  refers  to  [section  five  hundred  eighteen,] paragraph (d) of section
   44  seven hundred six, article eight  except  section  eight  hundred  four,
   45  section  nine  hundred seven, [section one thousand eleven,] section one
   46  thousand twelve and article fourteen.
   47    S 50. Section 223 of the education law, as amended by chapter  106  of
   48  the laws of 1974, is amended to read as follows:
   49    S 223.   Consolidation  OR  MERGER  of corporations.   Any two or more
   50  corporations chartered under the powers of the regents  or  incorporated
   51  under  a  special  act  of  the  legislature  or under a general law for
   52  purposes for which a charter may be granted by  the  regents  may  enter
   53  into  an agreement for the consolidation OR MERGER of such corporations,
   54  setting forth the terms and conditions of consolidation OR  MERGER,  the
   55  name  of  the  proposed CONSOLIDATED OR MERGED corporation, the place or
   56  places where the institution or institutions to be maintained is or  are
       A. 7337                            56

    1  to  be  located, the number of its directors, which may be five or more,
    2  the time of the annual election and the  names  of  the  persons  to  be
    3  directors until the first OR NEXT annual meeting.
    4    The  agreement  must  be  approved by three-fourths of the trustees or
    5  directors of such [corporation] CORPORATIONS at a meeting of  the  trus-
    6  tees  or  directors of each corporation, separately and specially called
    7  for that purpose, which approval, duly  verified  by  the  chairman  and
    8  clerk  of  such meeting, shall be annexed to the petition.  On presenta-
    9  tion of a petition, together with the certificate of  approval  and  the
   10  agreement  for consolidation OR MERGER, and on such notice to interested
   11  parties as the regents shall prescribe, and after  hearing  such  inter-
   12  ested parties as desire to be heard, the regents may make and execute an
   13  order  for the consolidation OR MERGER of the corporations on such terms
   14  and conditions as the regents may prescribe.  When such order  is  made,
   15  such corporations shall become one corporation by the name designated in
   16  the order, and shall be subject only to such duties and obligations as a
   17  corporation formed under this chapter for the same purposes; and all the
   18  property  belonging  to the corporations so consolidated OR MERGED shall
   19  be vested in and transferred to the new OR SURVIVING corporation,  which
   20  shall  be  subject to all the liabilities of the former corporations, to
   21  the same extent as if they had been contracted or incurred by  it.    If
   22  any  corporation  so  consolidated  OR  MERGED  was incorporated under a
   23  special act of the legislature or under a general law pursuant to  which
   24  its certificate of incorporation was filed with the department of state,
   25  the regents shall deliver a certified copy of the order of consolidation
   26  OR MERGER to such department.
   27    S  51.  Section  13  of  the religious corporations law, as amended by
   28  chapter 705 of the laws of 1970, is amended to read as follows:
   29    S 13. Consolidation OR MERGER of incorporated churches.  Two  or  more
   30  incorporated  churches  may enter into an agreement, under their respec-
   31  tive corporate seals, for the consolidation OR  MERGER  of  such  corpo-
   32  rations,  setting  forth  the  name  of  the proposed new corporation OR
   33  SURVIVING CORPORATION, the denomination, if  any,  to  which  it  is  to
   34  belong,  and  if  the  churches  of such denomination have more than one
   35  method of choosing trustees, by which of such methods the  trustees  are
   36  to  be  chosen, the number of such trustees, the names of the persons to
   37  be the first trustees of the new corporation, and the date of its  first
   38  annual  corporate  meeting.  Such  an  agreement  shall not be valid for
   39  United Methodist churches unless proposed by  a  majority  vote  of  the
   40  charge  conference  of each church and approved by the superintendent or
   41  superintendents of the district or districts in which the  consolidating
   42  churches are located, and by the majority of the members of each of such
   43  churches,  over  the  age  of  twenty-one years, present and voting at a
   44  meeting thereof held in the usual place of public worship and called for
   45  the purpose of considering such agreement by announcement made at public
   46  service in such churches on two Sundays, the first  not  less  than  ten
   47  days  next  preceding the date of such meeting. Such agreement shall not
   48  be valid unless approved in the case of Protestant Episcopal churches by
   49  the bishop and standing committee of the diocese in which such  churches
   50  are  situated  and in the case of churches of other denominations by the
   51  governing body of  the  denomination,  if  any,  to  which  each  church
   52  belongs,  having  jurisdiction  over such church. Each corporation shall
   53  thereupon make a separate petition to the supreme  court  for  an  order
   54  consolidating  OR  MERGING  the  corporations, setting forth the denomi-
   55  nation, if any, to which the church belongs, that  the  consent  of  the
   56  governing  body  to the consolidation OR MERGER, if any, of that denomi-
       A. 7337                            57

    1  nation having jurisdiction over  such  church  has  been  obtained,  the
    2  agreement  therefor, and a statement of all the property and liabilities
    3  and the amount and sources of the  annual  income  of  such  petitioning
    4  corporation.  In  its discretion the court may direct that notice of the
    5  hearing of such petition be given to the parties interested  therein  in
    6  such  manner  and  for such time as it may prescribe.  After hearing all
    7  the parties interested, present and desiring to be heard, the court  may
    8  make an order for the consolidation OR MERGER of the corporations on the
    9  terms  of  such  agreement and such other terms and conditions as it may
   10  prescribe, specifying the name of such new OR SURVIVING corporation  and
   11  the  [first]  trustees thereof, and the method by which their successors
   12  shall be chosen and the date of its first OR NEXT annual corporate meet-
   13  ing. When such order is made and duly entered, the persons  constituting
   14  such  CONSOLIDATED OR MERGED corporations shall BE OR become an incorpo-
   15  rated church by, and said petitioning churches shall become consolidated
   16  OR MERGED under, the name designated in  the  order,  and  the  trustees
   17  therein  named  shall  be  the  [first] trustees thereof, and the future
   18  trustees thereof shall be chosen by the method therein  designated,  and
   19  all the estate, rights, powers and property of whatsoever nature belong-
   20  ing to either corporation shall without further act or deed be vested in
   21  and  transferred  to  the new OR SURVIVING corporation as effectually as
   22  they were vested in or belonging to the  former  corporations;  and  the
   23  said  new OR SURVIVING corporation shall be liable for all the debts and
   24  liabilities of the former corporations in the same manner and as  effec-
   25  tually  as  if said debts or liabilities had been contracted or incurred
   26  by the new OR SURVIVING corporation. A  certified  copy  of  such  order
   27  shall  be  recorded  in  the book for recording certificates of incorpo-
   28  ration in each county clerk's office in which the certificate of  incor-
   29  poration  of each consolidating OR MERGING church was recorded; or if no
   30  such certificate was so recorded, then in  the  clerk's  office  of  the
   31  county  in  which  the principal place of worship or principal office of
   32  the new OR SURVIVING corporation is, or is intended to be, situated.
   33    S 52. Section 15-a of the religious  corporations  law,  as  added  by
   34  chapter  108  of the laws of 1965, subdivisions 2, 3 and 8 as amended by
   35  chapter 381 of the laws of 1985, is amended to read as follows:
   36    S 15-a. Consolidation of incorporated presbyteries.  1.  Two  or  more
   37  incorporated  presbyteries  may  enter into an agreement for the consol-
   38  idation OR MERGER of such corporations  and  such  corporations  may  be
   39  consolidated  OR  MERGED so as to form a single corporation which may be
   40  either a new corporation or one of the [constitutent] CONSTITUENT corpo-
   41  rations.  Said agreement shall set forth the name of  the  proposed  new
   42  corporation  or  the name of the existing corporation if it is to become
   43  the consolidated OR MERGED corporation, the method of choosing trustees,
   44  the names of the persons to be the first trustees of the new corporation
   45  if the consolidated OR MERGED corporation is to be a new corporation and
   46  the date of the first annual corporate meeting.
   47    2. Such agreement must be authorized and approved by a  majority  vote
   48  of  the  members  of  each  contracting presbytery taken at a meeting at
   49  which a quorum is present duly called in accordance  with  the  form  of
   50  government  of  the  Presbyterian Church (U.S.A.) and the notice of such
   51  meeting shall state the purpose of the meeting.
   52    3. Before such agreement is approved as aforesaid, such  consolidation
   53  OR  MERGER  must  be directed and approved by the Synod of the Northeast
   54  and the General Assembly of the Presbyterian Church (U.S.A.).
   55    4. Each presbytery shall thereafter join in a petition to the  supreme
   56  court  for  an  order  consolidating OR MERGING the corporation, setting
       A. 7337                            58

    1  forth the agreement of the contracting presbyteries, the  direction  and
    2  approval  of  the  bodies  as set forth in subdivision three [hereof] OF
    3  THIS SECTION, a statement of all the property and  liabilities  and  the
    4  sources of the annual income of each presbytery and a description of any
    5  property  held  by  such presbyteries in trust for specific purposes. In
    6  its discretion the court may direct that notice of the hearing  of  such
    7  petition be given to the parties interested therein in such manner as it
    8  may prescribe.
    9    5.  After  hearing all the parties interested, present and desiring to
   10  be heard, the court may make an order for the consolidation OR MERGER of
   11  the presbyteries on the terms of such agreement and such other terms and
   12  conditions as it may prescribe, specifying the name of  the  new  corpo-
   13  ration  or  the  name the continuing corporation will have if one of the
   14  [constitutent] CONSTITUENT corporations is to become the consolidated OR
   15  MERGED corporation, the first trustees thereof if a new  corporation  is
   16  to  be  created and the method by which their successors shall be chosen
   17  and the date of the first annual corporate meeting if a new  corporation
   18  is to be created.
   19    6.  When such order is made and duly entered, the persons constituting
   20  such corporate presbyteries shall become one  incorporated  consolidated
   21  OR  MERGED presbytery by, and said petitioning presbyteries shall become
   22  consolidated OR MERGED under, the name designated in the order, and  the
   23  trustees  therein  named, if it is a new corporation, shall be the first
   24  trustees thereof, and if it is a new corporation  the  trustees  thereof
   25  shall  be  chosen  by the method therein designated, and all the estate,
   26  rights, powers and property of whatsoever nature,  belonging  to  either
   27  corporation shall without further act or deed be vested in and/or trans-
   28  ferred  to  the new corporation as effectually as they were vested in or
   29  belonging to the former corporations, and the new or  continuing  corpo-
   30  rations  shall be liable for all the debts and liabilities of the former
   31  corporations in the same manner and as effectually as if said  debts  or
   32  liabilities had been contracted or incurred by the new corporation.
   33    7. The order or a certified copy thereof shall be recorded in the book
   34  for  recording  certificates  of  incorporation  in  each county clerk's
   35  office in which the certificate of  incorporation  of  each  constituent
   36  presbytery was recorded.
   37    8.  Such  consolidated  OR MERGED presbytery shall have all the powers
   38  and responsibilities conferred upon presbyteries by the constitution and
   39  form of government of the Presbyterian Church (U.S.A.).
   40    S 53. Section 208 of the religious corporations law, as added by chap-
   41  ter 117 of the laws of 1927, is amended to read as follows:
   42    S 208. Consolidation.  Any two or more religious corporations  of  the
   43  Jewish  faith,  incorporated  under  or  by general or special laws, may
   44  enter into an agreement for the consolidation OR MERGER of  such  corpo-
   45  rations,  setting  forth  the terms and conditions of consolidation, the
   46  name of the proposed OR SURVIVING corporation, the number of  its  trus-
   47  tees, the time of the annual election and the names of the persons to be
   48  its  trustees  until  the first OR NEXT annual meeting. Each corporation
   49  may petition the supreme court for an order consolidating OR MERGING the
   50  corporations, setting forth the agreement for consolidation   OR  MERGER
   51  and  a statement of its real property and of its liabilities. Before the
   52  presentation of the petition to the court  the  agreement  and  petition
   53  must  be  approved by two-thirds of the votes cast in person or by proxy
   54  at a meeting of the members of each corporation called for  the  purpose
   55  of  considering  the  proposed  consolidation  OR  MERGER  in the manner
   56  prescribed by section [forty-three of the membership  corporations  law]
       A. 7337                            59

    1  SIX  HUNDRED FIVE OF THE NOT-FOR-PROFIT CORPORATION LAW. An affidavit by
    2  the president and the secretary of each corporation  stating  that  such
    3  approval  has  been given shall be annexed to the petition. On presenta-
    4  tion  to  the  court of such petition and agreement for consolidation OR
    5  MERGER and on such notice as the court may direct, the court after hear-
    6  ing all the parties interested desiring to be heard, may make  an  order
    7  approving the consolidation OR MERGER.  When such order is made and duly
    8  entered  and  a certified copy thereof filed with the secretary of state
    9  and in the offices of the clerks of the counties in  which  the  certif-
   10  icates  of  incorporation  of  the several constituent corporations were
   11  recorded, or if no such certificate was recorded, then in the office  of
   12  the  clerk  of the county in which the principal place of worship of the
   13  new OR SURVIVING corporation is intended to  be  situated,  such  corpo-
   14  rations shall become one corporation by the name designated in the order
   15  and  the  trustees  named  in  the agreement for consolidation OR MERGER
   16  shall be the [first] trustees of the consolidated corporation.
   17    S 54. Section 209 of the religious corporations law, as added by chap-
   18  ter 117 of the laws of 1927, is amended to read as follows:
   19    S 209. Effect of consolidation.   The consolidated  OR  MERGED  corpo-
   20  ration  shall possess all the powers of the constituent corporations and
   21  shall have the power and be subject to the duties and obligations  of  a
   22  congregation  of  the  Jewish  faith  formed for like purposes under the
   23  religious corporations law. All the rights, privileges and interests  of
   24  each  of  the constituent corporations, all the property, real, personal
   25  and mixed, and all the debts due on whatever account to either of  them,
   26  and  all  things in action, belonging to either of them, shall be deemed
   27  to be transferred to and vested in such new corporation without  further
   28  act  or  deed;  and  all  claims,  demands[.], property, and every other
   29  interest, belonging to the several constituent corporations, shall be as
   30  effectually the property of the new corporation  as  they  were  of  the
   31  constituent  corporations,  and  the title to all real property, held or
   32  taken by deed or otherwise under the laws of this state, vested  in  the
   33  several  constituent corporations shall not be deemed to revert or to be
   34  in any way impaired by reason of the consolidation but shall  be  vested
   35  in the new corporation. Any devise, bequest, gift, grant, or declaration
   36  of  trust, contained in any deed, will, or other instrument, in trust or
   37  otherwise, made before or after such consolidation, OR MERGER to or  for
   38  any  of  the constituent corporations, shall inure to the benefit of the
   39  consolidated OR MERGED corporation. The consolidated  corporation  shall
   40  be  deemed  to  have assumed and shall be liable for all debts and obli-
   41  gations of the constituent corporations in the same manner  as  if  such
   42  new corporation had itself incurred such debts or obligations.
   43    S  55.  This  act  shall  take  effect  January 1, 2014, provided that
   44  section three of this act and paragraph (d)  of  section  8-1.9  of  the
   45  estates,  powers  and  trusts  law as added by section eight of this act
   46  shall not be applicable until January 1, 2015  for  any  corporation  or
   47  trust  that  had  annual revenues of less than 10,000,000 dollars in the
   48  last fiscal year ending prior to January 1, 2014.
   49    S 2. Severability clause. If any clause, sentence, paragraph, subdivi-
   50  sion, section or part of this act shall be  adjudged  by  any  court  of
   51  competent  jurisdiction  to  be invalid, such judgment shall not affect,
   52  impair, or invalidate the remainder thereof, but shall  be  confined  in
   53  its  operation  to the clause, sentence, paragraph, subdivision, section
   54  or part thereof directly involved in the controversy in which such judg-
   55  ment shall have been rendered. It is hereby declared to be the intent of
       A. 7337                            60

    1  the legislature that this act would  have  been  enacted  even  if  such
    2  invalid provisions had not been included herein.
    3    S  3.  This  act shall take effect immediately provided, however, that
    4  the applicable effective date of Parts A through B of this act shall  be
    5  as specifically set forth in the last section of such Parts.
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