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A08072 Summary:

BILL NO    A08072 

SAME AS    SAME AS S05845

SPONSOR    Brennan (MS)

COSPNSR    Weinstein, Englebright, Otis, Mayer, Quart, Simotas, Rosenthal,
           Abinanti, Mosley, Galef, Buchwald, Brook-Krasny, Jaffee

MLTSPNSR   

Amd Various Laws, generally

Enacts the "non-profit revitalization act of 2013"; relates to the reform of
charitable organizations.
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A08072 Actions:

BILL NO    A08072 

06/17/2013 referred to corporations, authorities and commissions
06/19/2013 reported referred to codes
06/20/2013 reported referred to rules
06/20/2013 reported 
06/20/2013 rules report cal.672
06/20/2013 ordered to third reading rules cal.672
06/21/2013 passed assembly
06/21/2013 delivered to senate
06/21/2013 REFERRED TO RULES
06/21/2013 SUBSTITUTED FOR S5845
06/21/2013 3RD READING CAL.1552
06/21/2013 PASSED SENATE
06/21/2013 RETURNED TO ASSEMBLY
12/06/2013 delivered to governor
12/18/2013 signed chap.549
12/19/2013 approval memo.12
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A08072 Votes:

A08072 06/21/2013 131/0
AbbateYColtonYGarbariYKearnsYMillmanYRiveraYStevensAB
AbinantYCookYGibsonYKellnerYMontesaYRobertsYStirpeER
ArroyoERCorwinYGiglioYKimYMorelleYRobinsoERSweeneyY
AubryYCrespoYGjonajERKolbYMosleyYRodriguYTediscoY
BarclayYCrouchYGlickYLalorYMoyaYRosaERTenneyY
BarrettYCurranYGoldfedERLavineYNojayYRosenthYThieleY
BarronYCusickYGoodellYLentolYNolanYRozicERTitoneY
BenedetYCymbrowYGottfriYLiftonYOaksYRussellYTitusY
BlankenYDenDekkERGrafYLopezYO'DonneYRyanYWalterER
BorelliYDinowitYGuntherYLupardoYOrtizYSaladinYWeinsteY
BoylandABDiPietrYHawleyYLupinacYOtisYSantabaYWeisenbY
BraunstYDupreyYHeastieYMageeYPalmesaYScarborYWeprinER
BrennanYEnglebrYHennessYMagnareYPaulinYSchimelYWrightY
BrindisYEspinalYHevesiYMaiselYPeoplesERSchimmiYZebrowsY
BronsonYFahyYHikindERMalliotYPerryYSepulveERMr SpkrY
Brook-KYFarrellYHooperYMarkeyERPretlowYSimanowY
BuchwalYFinchYJacobsYMayerYQuartYSimotasY
ButlerYFitzpatYJaffeeYMcDonalYRaYSkartadY
CahillYFriendYJohnsYMcDonouYRabbittYSkoufisY
CamaraYGabryszYJordanYMcKevitYRaiaYSolagesY
CerettoYGalefYKatzYMcLaughYRamosYStecY
ClarkYGanttYKavanagYMillerYReilichYSteckY

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A08072 Memo:

BILL NUMBER:A8072

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

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:

Section 1 of the bill establishes the title of the Act as the "Nonprofit
Revitalization Act of 2013".

Section  2  amends  section  171-a  of the Executive Law to clarify that
individuals who function solely as grant writers are not  "fund  raising
counsel."

Sections  3,  3-a  and  3-b  amend 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 gross revenue threshold  for
an independent CPA's audit will escalate to $750,000 on July 1, 2017 and
$1  million on July 1, 2021. The Attorney General will have authority to
request an independent CPA's audit from nonprofits  with  gross  revenue
over  $250,000 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 4 and 129 amend section 177 of the Executive  Law  and  section
8-1.4 of the Estates, Powers and Trusts Law to make clear in these stat-
utes  that  the  Attorney General may accept nonprofit registrations and
other filings electronically.

Sections 5, 6, 8, 30, 34, 36, 39-41, 44, 50-52, 54, 57, 61, 76, 79,  81,
86,  93, 94, 102, 103 and 105-126 are amended to make conforming changes
to the Not-for-Profit Corporation Law to facilitate  the  simplification
of corporate "types" pursuant to section 38 of the bill.

Section  6-a  amends section 216 of the Education Law to make clear that
only schools, colleges, universities and entities providing  post-secon-
dary  education  may  not  be  incorporated  without  the consent of the
commissioner of the state education department.

Sections  7  and  9 amend sections 216-a and 223 of the Education Law to
permit education corporations to enter into merger transactions in addi-
tion to consolidation transactions. The intent of these amendments is to
simplify mergers and treat educational nonprofits more equitably.

Sections 10-23 make conforming changes to various statutes to effect the
simplification of corporate "types" pursuant to sections 29  and  38  of
the bill.

Sections  24-27  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  28  amends  the  Surrogate's  Court Procedure Act to effect the
provisions of section 130 of the bill.

Section 29 adds new definitions to section  102  of  the  Not-for-Profit
Corporation Law to implement provisions of the bill.

Section  31 repeals paragraph (a) of section 104-A of the Not-for-Profit
Corporation Law.

Section 32 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 writ-
ten authorization from the incorporator.

Sections 33 and 74 amend sections 112  and  715  of  the  Not-for-Profit
Corporation Law to create new requirements to protect against self-deal-
ing.  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 35 repeals section 113 of the Not-for-Profit Corporation Law.

Section  37  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.

Section  38  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). Corporations formed for both charitable  and  non-
charitable  purposes  under  the  Not-for-Profit Corporation Law will be
deemed charitable for purposes of this statute. The amended section will
"grandfather"  nonprofits  that have already formed as a particular type
so that they will not have to file new paperwork or amend contracts.

Sections 42, 87 and 104 make conforming changes  to  the  Not-for-Profit
Corporation Law to effect the purposes of section 48 of the bill.

Sections  43  and  45  amend  sections 304 and 306 of the Not-for-Profit
Corporation Law to correct technical errors.

Section 46 adds a new section 309 of the Not-for-Profit Corporation  Law
making  clear  that  officers,  directors,  key employees, and agents of
corporations are subject to personal jurisdiction of New York Courts and
may be served with process in a suit by the Attorney General.

Section 47 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  48  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 soci-
eties  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.

Section  49  repeals  and  adds  a new paragraph (w) of section 404 that
permits a newly formed corporation to include language  in  its  certif-
icate  of incorporation making clear to the Department of State that its
purposes do not require agency notice or preapproval.

Section 53 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. If a committee approves the
transaction, it must promptly notify the board.  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 require-
ments for more significant transactions.

Sections 55 and 56 amend section 511 and create a new section  511-a  of
the Not-for-Profit Corporation Law to allow nonprofit corporations seek-
ing  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 trans-
action at any time.

Section 58 amends section 515 of the Not-for-Profit Corporation  Law  to
clarify  that  individuals who may benefit from compensation paid by the
corporation cannot participate in deliberations or voting on  their  own
compensation.

Section  59  amends section 520 of the Not-for-Profit Corporation Law to
add a reference to the Executive Law.

Section 60 amends section 555 of the Not-for-Profit Corporation  Law  to
make  clear the continuing availability to the courts of the doctrine of
deviation.

Sections 62-66, 68 & 69 amend sections 605, 606, 609, 614, 621, 708, and
711 of the Not-for-Profit Corporation Law to allow facsimile  and  elec-
tronic  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 videocon-
ference, 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 67 amends section 702 of the Not-for-Profit Corporation  Law  to
remove  the  definition  of "entire board." The bill creates a new defi-
nition for this term in section 102 of the statute, the purpose of which
is to correct ambiguities caused by the existing definition.

Sections 70 and 71 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.

Section 72 creates a new section 712-a of the Not-for-Profit Corporation
Law to require that, in cases where nonprofits are required by the Exec-
utive 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. State and local authorities, which are  required
by  the  Public  Authorities  Law to perform substantially similar audit
oversight, will be deemed to be in compliance with this section.

Section 73 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 leader-
ship.

Section 75 creates a new section 715-a of the Not-for-Profit Corporation
Law to require that nonprofits adopt written conflict of interest  poli-
cies.  Section 75 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.
Corporations that adopt conflict of interest and whistleblower  policies
pursuant  to  any  other  law  that  are  substantially similar to those
required will be deemed in compliance with these new sections.

Section 77 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 corpo-
ration will have to produce a list of its  directors  and  officers  but
will no longer have to disclose their home addresses.

Section  78  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.

Section 80 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 82 amends section 804 of the Not-for-Profit Corporation  Law  to
require  that  governmental agencies be notified within 30 business days
of acceptance by the Department of State of any certificate of amendment
that adds, 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 83-85 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 at any time.

Sections 88-92 amend sections 1001, 1002, 1002-a, 1003, 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 at any time.
The Attorney General will have the option to refer petitions for dissol-
ution to the courts if judicial review is more appropriate.  The  intent
of these provisions is to reduce the costs of dissolution so that chari-
table  assets  can  be  more  quickly  redirected  for  other charitable
purposes.

Sections 95-101, and 127-128 amend  sections  1203,  1204,  1206,  1207,
1209,  1211-1215, 1611 and 1613 of the Not-for-Profit Corporation Law to
make technical corrections and allow entities in receivership  and  land
banks to provide certain notices online in addition to print newspaper.

Section  130  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,  related  party  transactions,  conflict of interest
policies and whistleblower  policies  that  are  applied  to  charitable
corporations by sections 72, 74 and 75 of the bill.

Section 131 is the severability clause.

Section 132 is the effective date.

JUSTIFICATION:

For too long, New York law and regulatory practices have placed unneces-
sary and costly burdens on the non-profit sector.  Redundancies through-
out  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,  dissol-
ution,  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 nonpro-
fits 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 main-
taining 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  expecta-
tions  of  board  duties in key areas, such as providing financial over-
sight. 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 July 1, 2014, provided, however, that the
amendments to section 172-b of the executive law made by  section  three
of  this act shall expire and be deemed repealed June 30, 2017; provided

further that the amendments to section 172-b of the executive  law  made
by  section three-a of this act shall take effect July 1, 2017 and shall
expire and be deemed repealed June 30, 2021; provided further  that  the
amendments  to section 172-b ofthe executive law made by section three-b
of this act shall take  effect  July  1,  2021;  provided  further  that
section  seventy-three  of  this  act shall take effect January 1, 2015;
provided further that section seventy-two of this act and paragraph  (b)
of  section  8-1.9  of  the  estates,  powers and trusts law as added by
section one hundred thirty of this act shall  not  be  applicable  until
January 1, 2015 for any corporation or trust that had annual revenues of
less  than  10,000,000  dollars  in the last fiscal year ending prior to
January 1, 2014.
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A08072 Text:

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

                                         8072

                              2013-2014 Regular Sessions

                                 I N  A S S E M B L Y

                                     June 17, 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 executive  law,  the  banking  law,  the  benevolent
         orders law, the education law, the general business law, the insurance
         law,  the  mental hygiene law, the public authorities law, the private
         housing finance law, the public lands  law,  the  racing,  pari-mutuel
         wagering  and breeding law, the religious corporations law, the surro-
         gate's court procedure act, the not-for-profit  corporation  law,  and
         the  estates, powers and trusts law, in relation to reform of charita-
         ble organizations; and to repeal certain provisions  of  the  not-for-
         profit  corporation law relating thereto; and providing for the repeal
         of certain provisions upon expiration thereof

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

    1    Section 1. This act shall be known and may be cited as the "non-profit
    2  revitalization act of 2013".
    3    S  2.  Subdivision 9 of section 171-a of the executive law, as amended
    4  by chapter 353 of the laws of 1987, is amended to read as follows:
    5    9. "Fund raising counsel." Any person who  for  compensation  consults
    6  with  a  charitable  organization  or  who  plans,  manages, advises, or
    7  assists with respect to the solicitation in this state of  contributions
    8  for  or  on  behalf  of a charitable organization, but who does not have
    9  access to contributions or other receipts from a solicitation or author-
   10  ity to pay expenses associated with a  solicitation  and  who  does  not
   11  solicit.  A  bona  fide  officer, volunteer, or employee of a charitable
   12  organization or an attorney at law retained by a charitable organization
   13  OR AN INDIVIDUAL ENGAGED SOLELY TO DRAFT APPLICATIONS FOR FUNDING FROM A
   14  GOVERNMENTAL AGENCY OR  AN  ENTITY  EXEMPT  FROM  TAXATION  PURSUANT  TO
   15  SECTION  501(C)(3)  OF  THE INTERNAL REVENUE CODE, shall not be deemed a
   16  fund raising counsel.

        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD10180-09-3
       A. 8072                             2

    1    S 3. Subdivisions 1, 2 and 2-a of section 172-b of the executive  law,
    2  as  amended  by  chapter  43 of the laws of 2002, are amended to read as
    3  follows:
    4    1.  Every  charitable organization registered or required to be regis-
    5  tered pursuant to section one hundred seventy-two of this article  which
    6  shall  receive in any fiscal year gross revenue and support in excess of
    7  [two hundred fifty] FIVE HUNDRED thousand dollars [and every  charitable
    8  organization  whose  fund-raising functions are not carried on solely by
    9  persons who are unpaid for such services] shall file with  the  attorney
   10  general  an  annual written financial report, on forms prescribed by the
   11  attorney general, on or before the fifteenth day of the  fifth  calendar
   12  month  after  the close of such fiscal year. The annual financial report
   13  shall be accompanied by an annual financial statement which includes  an
   14  independent  certified  public  accountant's  audit report containing an
   15  opinion that the financial statements are presented fairly in all  mate-
   16  rial respects and in conformity with generally accepted accounting prin-
   17  ciples,  including  compliance  with all pronouncements of the financial
   18  accounting standards board  and  the  American  Institute  of  Certified
   19  Public  Accountants  that  establish  accounting  principles relevant to
   20  not-for-profit organizations. Such  financial  report  shall  include  a
   21  statement  of any changes in the information required to be contained in
   22  the registration form filed on behalf of such organization.  The  finan-
   23  cial report shall be signed by the president or other authorized officer
   24  and the chief fiscal officer of the organization who shall certify under
   25  penalties  for  perjury that the statements therein are true and correct
   26  to the best of their knowledge, and shall be accompanied by  an  opinion
   27  signed  by an independent public accountant that the financial statement
   28  and balance sheet therein present fairly the  financial  operations  and
   29  position  of  the  organization. A fee of twenty-five dollars payable to
   30  the attorney general shall accompany such financial report at  the  time
   31  of  filing,  provided however, that any such organization that is regis-
   32  tered with the  attorney  general  pursuant  to  article  eight  of  the
   33  estates,  powers  and  trusts  law  is  required to file only one annual
   34  financial report which meets the filing requirements of this article and
   35  section 8-1.4 of the estates, powers and trusts law.
   36    2. Every charitable organization registered or required to  be  regis-
   37  tered  pursuant to section one hundred seventy-two of this article which
   38  shall receive in gross revenue and support in any fiscal year  at  least
   39  [one  hundred] TWO HUNDRED FIFTY thousand dollars but not more than [two
   40  hundred fifty] FIVE HUNDRED thousand dollars shall file an annual finan-
   41  cial report. The annual financial report  shall  be  accompanied  by  an
   42  annual  financial  statement  which  includes  an  independent certified
   43  public accountant's review report  in  accordance  with  "statements  on
   44  standards  for  accounting  and  review services" issued by the American
   45  Institute of Certified Public Accountants. The annual  financial  state-
   46  ment  shall be prepared in conformity with generally accepted accounting
   47  principles, including compliance with all pronouncements of  the  finan-
   48  cial  accounting standards board and the American Institute of Certified
   49  Public Accountants that  establish  accounting  principles  relevant  to
   50  not-for-profit  organizations. Such financial report shall be filed with
   51  the attorney general, upon forms prescribed by the attorney  general  on
   52  an  annual  basis  on  or before the fifteenth day of the fifth calendar
   53  month after the close of such fiscal year, which shall include a  finan-
   54  cial  report  covering such fiscal year in accordance with such require-
   55  ments as the attorney general may prescribe. Such financial report shall
   56  include a statement of any changes in the  information  required  to  be
       A. 8072                             3

    1  contained in the registration form filed on behalf of such organization.
    2  The  financial  report shall be signed by the president or other author-
    3  ized officer and the chief fiscal officer of the organization who  shall
    4  certify under penalties for perjury that the statements therein are true
    5  and  correct  to the best of their knowledge. A fee of [ten] TWENTY-FIVE
    6  dollars payable to the attorney general shall accompany  such  financial
    7  report at the time of filing, provided, however, that any such organiza-
    8  tion  that  is  registered with the attorney general pursuant to article
    9  eight of the estates, powers and trusts law is required to file only one
   10  annual financial report which meets  the  filing  requirements  of  this
   11  article  and  section  8-1.4  of  the  estates,  powers  and trusts law.
   12  NOTWITHSTANDING THE REQUIREMENTS OF THIS SECTION, IF UPON REVIEW  OF  AN
   13  INDEPENDENT  CERTIFIED  PUBLIC ACCOUNTANT'S REVIEW REPORT FILED PURSUANT
   14  TO THIS SUBDIVISION, THE ATTORNEY GENERAL DETERMINES THAT  A  CHARITABLE
   15  ORGANIZATION  SHOULD OBTAIN AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S
   16  AUDIT REPORT, SUCH ORGANIZATION SHALL OBTAIN AND FILE WITH THE  ATTORNEY
   17  GENERAL  AN  AUDIT REPORT THAT MEETS THE REQUIREMENTS OF SUBDIVISION ONE
   18  OF THIS SECTION WITHIN ONE HUNDRED TWENTY DAYS OF THE ATTORNEY GENERAL'S
   19  REQUEST FOR SUCH REPORT.
   20    2-a. Every charitable organization registered or required to be regis-
   21  tered pursuant to section one hundred seventy-two of this article  which
   22  shall  receive in any fiscal year of such organization gross revenue and
   23  support not in excess of [one hundred thousand] TWO HUNDRED FIFTY  THOU-
   24  SAND dollars shall file with the attorney general an unaudited financial
   25  report  on  forms  prescribed  by the attorney general, on or before the
   26  fifteenth day of the fifth calendar month after the close of such fiscal
   27  year. Such financial report shall include a statement of any changes  in
   28  the  information required to be contained in the registration form filed
   29  on behalf of such organization. The financial report shall be signed  by
   30  the  president  or other authorized officer and the chief fiscal officer
   31  of the organization who shall certify under penalties for  perjury  that
   32  the  statements  therein are true and correct to the best of their know-
   33  ledge.   A fee of [ten] TWENTY-FIVE  dollars  payable  to  the  attorney
   34  general  shall  accompany  such  financial report at the time of filing.
   35  Provided, however, that any such organization that  is  registered  with
   36  the  attorney  general  pursuant to article eight of the estates, powers
   37  and trusts law is required to file  only  one  annual  financial  report
   38  which meets the filing requirements of this article and section 8-1.4 of
   39  the estates, powers and trusts law.
   40    S  3-a. Subdivisions 1 and 2 of section 172-b of the executive law, as
   41  amended by chapter 43 of the laws  of  2002,  are  amended  to  read  as
   42  follows:
   43    1.  Every  charitable organization registered or required to be regis-
   44  tered pursuant to section one hundred seventy-two of this article  which
   45  shall  receive in any fiscal year gross revenue and support in excess of
   46  [two hundred fifty] SEVEN HUNDRED  FIFTY  thousand  dollars  [and  every
   47  charitable  organization whose fund-raising functions are not carried on
   48  solely by persons who are unpaid for such services] shall file with  the
   49  attorney general an annual written financial report, on forms prescribed
   50  by  the  attorney  general,  on or before the fifteenth day of the fifth
   51  calendar month after the close of such fiscal year. The annual financial
   52  report shall be accompanied  by  an  annual  financial  statement  which
   53  includes  an  independent  certified  public  accountant's  audit report
   54  containing an opinion that the financial statements are presented fairly
   55  in all material respects  and  in  conformity  with  generally  accepted
   56  accounting  principles,  including compliance with all pronouncements of
       A. 8072                             4

    1  the financial accounting standards board and the American  Institute  of
    2  Certified  Public Accountants that establish accounting principles rele-
    3  vant  to  not-for-profit  organizations.  Such  financial  report  shall
    4  include  a  statement  of  any changes in the information required to be
    5  contained in the registration form filed on behalf of such organization.
    6  The financial report shall be signed by the president or  other  author-
    7  ized  officer and the chief fiscal officer of the organization who shall
    8  certify under penalties for perjury that the statements therein are true
    9  and correct to the best of their knowledge, and shall be accompanied  by
   10  an opinion signed by an independent public accountant that the financial
   11  statement  and  balance sheet therein present fairly the financial oper-
   12  ations and position of the organization. A fee  of  twenty-five  dollars
   13  payable to the attorney general shall accompany such financial report at
   14  the time of filing, provided however, that any such organization that is
   15  registered  with  the  attorney general pursuant to article eight of the
   16  estates, powers and trusts law is  required  to  file  only  one  annual
   17  financial report which meets the filing requirements of this article and
   18  section 8-1.4 of the estates, powers and trusts law.
   19    2.  Every  charitable organization registered or required to be regis-
   20  tered pursuant to section one hundred seventy-two of this article  which
   21  shall  receive  in gross revenue and support in any fiscal year at least
   22  [one hundred] TWO HUNDRED FIFTY thousand dollars but not more than  [two
   23  hundred fifty] SEVEN HUNDRED FIFTY thousand dollars shall file an annual
   24  financial report. The annual financial report shall be accompanied by an
   25  annual  financial  statement  which  includes  an  independent certified
   26  public accountant's review report  in  accordance  with  "statements  on
   27  standards  for  accounting  and  review services" issued by the American
   28  Institute of Certified Public Accountants. The annual  financial  state-
   29  ment  shall be prepared in conformity with generally accepted accounting
   30  principles, including compliance with all pronouncements of  the  finan-
   31  cial  accounting standards board and the American Institute of Certified
   32  Public Accountants that  establish  accounting  principles  relevant  to
   33  not-for-profit  organizations. Such financial report shall be filed with
   34  the attorney general, upon forms prescribed by the attorney  general  on
   35  an  annual  basis  on  or before the fifteenth day of the fifth calendar
   36  month after the close of such fiscal year, which shall include a  finan-
   37  cial  report  covering such fiscal year in accordance with such require-
   38  ments as the attorney general may prescribe. Such financial report shall
   39  include a statement of any changes in the  information  required  to  be
   40  contained in the registration form filed on behalf of such organization.
   41  The  financial  report shall be signed by the president or other author-
   42  ized officer and the chief fiscal officer of the organization who  shall
   43  certify under penalties for perjury that the statements therein are true
   44  and  correct  to the best of their knowledge. A fee of [ten] TWENTY-FIVE
   45  dollars payable to the attorney general shall accompany  such  financial
   46  report at the time of filing, provided, however, that any such organiza-
   47  tion  that  is  registered with the attorney general pursuant to article
   48  eight of the estates, powers and trusts law is required to file only one
   49  annual financial report which meets  the  filing  requirements  of  this
   50  article  and  section  8-1.4  of  the  estates,  powers  and trusts law.
   51  NOTWITHSTANDING THE REQUIREMENTS OF THIS SECTION, IF UPON REVIEW  OF  AN
   52  INDEPENDENT  CERTIFIED  PUBLIC ACCOUNTANT'S REVIEW REPORT FILED PURSUANT
   53  TO THIS SUBDIVISION, THE ATTORNEY GENERAL DETERMINES THAT  A  CHARITABLE
   54  ORGANIZATION  SHOULD OBTAIN AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S
   55  AUDIT REPORT, SUCH ORGANIZATION SHALL OBTAIN AND FILE WITH THE  ATTORNEY
   56  GENERAL  AN  AUDIT REPORT THAT MEETS THE REQUIREMENTS OF SUBDIVISION ONE
       A. 8072                             5

    1  OF THIS SECTION WITHIN ONE HUNDRED TWENTY DAYS OF THE ATTORNEY GENERAL'S
    2  REQUEST FOR SUCH REPORT.
    3    S  3-b. Subdivisions 1 and 2 of section 172-b of the executive law, as
    4  amended by chapter 43 of the laws  of  2002,  are  amended  to  read  as
    5  follows:
    6    1.  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 gross revenue and support in excess of
    9  [two hundred fifty thousand] ONE MILLION dollars [and  every  charitable
   10  organization  whose  fund-raising functions are not carried on solely by
   11  persons who are unpaid for such services] shall file with  the  attorney
   12  general  an  annual written financial report, on forms prescribed by the
   13  attorney general, on or before the fifteenth day of the  fifth  calendar
   14  month  after  the close of such fiscal year. The annual financial report
   15  shall be accompanied by an annual financial statement which includes  an
   16  independent  certified  public  accountant's  audit report containing an
   17  opinion that the financial statements are presented fairly in all  mate-
   18  rial respects and in conformity with generally accepted accounting prin-
   19  ciples,  including  compliance  with all pronouncements of the financial
   20  accounting standards board  and  the  American  Institute  of  Certified
   21  Public  Accountants  that  establish  accounting  principles relevant to
   22  not-for-profit organizations. Such  financial  report  shall  include  a
   23  statement  of any changes in the information required to be contained in
   24  the registration form filed on behalf of such organization.  The  finan-
   25  cial report shall be signed by the president or other authorized officer
   26  and the chief fiscal officer of the organization who shall certify under
   27  penalties  for  perjury that the statements therein are true and correct
   28  to the best of their knowledge, and shall be accompanied by  an  opinion
   29  signed  by an independent public accountant that the financial statement
   30  and balance sheet therein present fairly the  financial  operations  and
   31  position  of  the  organization. A fee of twenty-five dollars payable to
   32  the attorney general shall accompany such financial report at  the  time
   33  of  filing,  provided however, that any such organization that is regis-
   34  tered with the  attorney  general  pursuant  to  article  eight  of  the
   35  estates,  powers  and  trusts  law  is  required to file only one annual
   36  financial report which meets the filing requirements of this article and
   37  section 8-1.4 of the estates, powers and trusts law.
   38    2. Every charitable organization registered or required to  be  regis-
   39  tered  pursuant to section one hundred seventy-two of this article which
   40  shall receive in gross revenue and support in any fiscal year  at  least
   41  [one  hundred] TWO HUNDRED FIFTY thousand dollars but not more than [two
   42  hundred fifty thousand] ONE MILLION dollars shall file an annual  finan-
   43  cial  report.  The  annual  financial  report shall be accompanied by an
   44  annual financial  statement  which  includes  an  independent  certified
   45  public  accountant's  review  report  in  accordance with "statements on
   46  standards for accounting and review services"  issued  by  the  American
   47  Institute  of  Certified Public Accountants. The annual financial state-
   48  ment shall be prepared in conformity with generally accepted  accounting
   49  principles,  including  compliance with all pronouncements of the finan-
   50  cial accounting standards board and the American Institute of  Certified
   51  Public  Accountants  that  establish  accounting  principles relevant to
   52  not-for-profit organizations. Such financial report shall be filed  with
   53  the  attorney  general, upon forms prescribed by the attorney general on
   54  an annual basis on or before the fifteenth day  of  the  fifth  calendar
   55  month  after the close of such fiscal year, which shall include a finan-
   56  cial report covering such fiscal year in accordance with  such  require-
       A. 8072                             6

    1  ments as the attorney general may prescribe. Such financial report shall
    2  include  a  statement  of  any changes in the information required to be
    3  contained in the registration form filed on behalf of such organization.
    4  The  financial  report shall be signed by the president or other author-
    5  ized officer and the chief fiscal officer of the organization who  shall
    6  certify under penalties for perjury that the statements therein are true
    7  and  correct  to the best of their knowledge. A fee of [ten] TWENTY-FIVE
    8  dollars payable to the attorney general shall accompany  such  financial
    9  report at the time of filing, provided, however, that any such organiza-
   10  tion  that  is  registered with the attorney general pursuant to article
   11  eight of the estates, powers and trusts law is required to file only one
   12  annual financial report which meets  the  filing  requirements  of  this
   13  article  and  section  8-1.4  of  the  estates,  powers  and trusts law.
   14  NOTWITHSTANDING THE REQUIREMENTS OF THIS SECTION, IF UPON REVIEW  OF  AN
   15  INDEPENDENT  CERTIFIED  PUBLIC ACCOUNTANT'S REVIEW REPORT FILED PURSUANT
   16  TO THIS SUBDIVISION, THE ATTORNEY GENERAL DETERMINES THAT  A  CHARITABLE
   17  ORGANIZATION  SHOULD OBTAIN AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S
   18  AUDIT REPORT, SUCH ORGANIZATION SHALL OBTAIN AND FILE WITH THE  ATTORNEY
   19  GENERAL  AN  AUDIT REPORT THAT MEETS THE REQUIREMENTS OF SUBDIVISION ONE
   20  OF THIS SECTION WITHIN ONE HUNDRED TWENTY DAYS OF THE ATTORNEY GENERAL'S
   21  REQUEST FOR SUCH REPORT.
   22    S 4. Subdivision 1 of section 177 of the executive law, as amended  by
   23  chapter 83 of the laws of 1995, is amended to read as follows:
   24    1. The attorney general shall make rules and regulations necessary for
   25  the  administration  of this article including, but not limited to regu-
   26  lations and waiver procedures that will ensure that charitable organiza-
   27  tions do not have to register twice in relation to the solicitation  and
   28  administration of assets, AND RULES OR REGULATIONS ALLOWING OR REQUIRING
   29  ANY  SUBMISSION  TO  THE  ATTORNEY  GENERAL TO BE EFFECTED BY ELECTRONIC
   30  MEANS.
   31    S 5. Section 579 of the banking law, as amended by chapter 629 of  the
   32  laws of 2002, is amended to read as follows:
   33    S  579. Doing business without license prohibited. Only a [type B not-
   34  for-profit] CHARITABLE corporation as defined in  [section  two  hundred
   35  one]  PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) of the not-
   36  for-profit corporation law of this state, or an entity  incorporated  in
   37  another  state  and having a similar not-for-profit status, shall engage
   38  in the business of budget planning as  defined  in  subdivision  one  of
   39  section  four  hundred  fifty-five  of  the general business law of this
   40  state except as authorized by this article and without first obtaining a
   41  license from the superintendent.
   42    S 6.  Paragraph (c) of subdivision 1 of section 1-a of the  benevolent
   43  orders  law,  as added by chapter 703 of the laws of 1970, is amended to
   44  read as follows:
   45    (c) The following provisions of  the  not-for-profit  corporation  law
   46  shall  not  apply  to benevolent orders: [section one hundred thirteen,]
   47  section two hundred one, article four, paragraphs (a), (b), and  (c)  of
   48  section  eight  hundred  four,  section nine hundred seven, section nine
   49  hundred eight, section nine hundred nine, [section ten hundred  eleven,]
   50  section ten hundred twelve, and article fourteen.
   51    S 6-a.  Section 216 of the education law, as amended by chapter 901 of
   52  the  laws  of 1972, the closing paragraph as added by chapter 316 of the
   53  laws of 2005, is amended to read as follows:
   54    S 216. Charters. Under such name, with  such  number  of  trustees  or
   55  other managers, and with such powers, privileges and duties, and subject
   56  to  such limitations and restrictions in all respects as the regents may
       A. 8072                             7

    1  prescribe in conformity to law, they may, by an instrument  under  their
    2  seal  and recorded in their office, incorporate any university, college,
    3  academy, library, museum, or other institution or  association  for  the
    4  promotion  of  science,  literature, art, history or other department of
    5  knowledge, or  of  education  in  any  way,  associations  of  teachers,
    6  students,  graduates of educational institutions, and other associations
    7  whose approved purposes are, in whole or  in  part,  of  educational  or
    8  cultural  value  deemed  worthy  of recognition and encouragement by the
    9  university. No [institution or association which might  be  incorporated
   10  by the regents under this chapter shall, without their consent,] SCHOOL;
   11  COLLEGE;  UNIVERSITY OR OTHER ENTITY PROVIDING POST SECONDARY EDUCATION;
   12  LIBRARY; OR MUSEUM OR HISTORICAL SOCIETY SHALL be incorporated under THE
   13  BUSINESS CORPORATION LAW, THE NOT-FOR-PROFIT  CORPORATION  LAW,  OR  any
   14  other  general  law  WITHOUT  THE CONSENT OF THE COMMISSIONER OR, IN THE
   15  CASE OF A COLLEGE OR UNIVERSITY, WITHOUT THE  WRITTEN  AUTHORIZATION  OF
   16  THE  REGENTS. [An institution or association which might be incorporated
   17  by the regents under this chapter may, with the consent of  the  commis-
   18  sioner  of  education,  be  formed under the business corporation law or
   19  pursuant to the not-for-profit corporation law if such  consent  of  the
   20  commissioner  of  education  is  attached to its certificate of incorpo-
   21  ration.]
   22    No individual, association, partnership, company  or  corporation  not
   23  authorized  by  special charter from the legislature of this state or by
   24  charter from the regents to operate a museum, or arboretum  shall  know-
   25  ingly  use,  advertise or transact business under the names "museum," or
   26  "arboretum," or any name, title or descriptive  material  indicating  or
   27  tending to imply that said individual, association, partnership, company
   28  or  corporation  conducts,  carries on, or is such a business when it is
   29  not, or that it is authorized to operate as such, unless the right to do
   30  so has been granted by the regents or the commissioner in  writing.  Any
   31  violation  of this paragraph shall be a misdemeanor. Notwithstanding any
   32  other provision of this section, an  individual,  association,  partner-
   33  ship,  company  or corporation doing business under any of such names on
   34  the effective date of this paragraph may come into compliance with  this
   35  paragraph by obtaining consent of the regents or the commissioner within
   36  one year of such effective date.
   37    S  7.  Paragraph  c of subdivision 4 of section 216-a of the education
   38  law, as added by chapter 901 of the laws of 1972, is amended to read  as
   39  follows:
   40    c.  The  following  provisions  of  the not-for-profit corporation law
   41  shall not apply to education corporations:  section  one  hundred  five,
   42  [section  one hundred thirteen,] section one hundred fourteen, paragraph
   43  (a) of section two hundred one, paragraphs (b) and (c)  of  section  two
   44  hundred  two,  section  two  hundred  five,  section  three hundred one,
   45  section three hundred two, section three  hundred  three,  article  four
   46  except  paragraphs  (b)  through  (p)  of  section four hundred four and
   47  section four hundred five, section  five  hundred  nine,  [section  five
   48  hundred eighteen,] section five hundred twenty-one to the extent that it
   49  refers  to  [section  five  hundred  eighteen,] paragraph (d) of section
   50  seven hundred six, article eight  except  section  eight  hundred  four,
   51  section  nine  hundred seven, [section one thousand eleven,] section one
   52  thousand twelve and article fourteen.
   53    S 8. Subdivision 5 of section 216-a of the education law, as added  by
   54  chapter 901 of the laws of 1972, is amended to read as follows:
   55    5.  Every  corporation  to which the not-for-profit corporation law is
   56  made applicable by this section, is a [type B] CHARITABLE corporation AS
       A. 8072                             8

    1  DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) OF THE
    2  NOT-FOR-PROFIT CORPORATION LAW under all applicable provisions  of  that
    3  law.
    4    S  9.  Section  223 of the education law, as amended by chapter 106 of
    5  the laws of 1974, is amended to read as follows:
    6    S 223.  Consolidation OR MERGER of corporations.    Any  two  or  more
    7  corporations  chartered  under the powers of the regents or incorporated
    8  under a special act of the  legislature  or  under  a  general  law  for
    9  purposes  for  which  a  charter may be granted by the regents may enter
   10  into an agreement for the consolidation OR MERGER of such  corporations,
   11  setting  forth  the terms and conditions of consolidation OR MERGER, the
   12  name of the proposed CONSOLIDATED OR MERGED corporation,  the  place  or
   13  places  where the institution or institutions to be maintained is or are
   14  to be located, the number of its directors, which may be five  or  more,
   15  the  time  of  the  annual  election  and the names of the persons to be
   16  directors until the first OR NEXT annual meeting.
   17    The agreement must be approved by three-fourths  of  the  trustees  or
   18  directors  of  such [corporation] CORPORATIONS at a meeting of the trus-
   19  tees or directors of each corporation, separately and  specially  called
   20  for  that  purpose,  which  approval,  duly verified by the chairman and
   21  clerk of such meeting, shall be annexed to the petition.   On  presenta-
   22  tion  of  a  petition, together with the certificate of approval and the
   23  agreement for consolidation OR MERGER, and on such notice to  interested
   24  parties  as  the  regents shall prescribe, and after hearing such inter-
   25  ested parties as desire to be heard, the regents may make and execute an
   26  order for the consolidation OR MERGER of the corporations on such  terms
   27  and  conditions  as the regents may prescribe.  When such order is made,
   28  such corporations shall become one corporation by the name designated in
   29  the order, and shall be subject only to such duties and obligations as a
   30  corporation formed under this chapter for the same purposes; and all the
   31  property belonging to the corporations so consolidated OR  MERGED  shall
   32  be  vested in and transferred to the new OR SURVIVING corporation, which
   33  shall be subject to all the liabilities of the former  corporations,  to
   34  the  same  extent  as if they had been contracted or incurred by it.  If
   35  any corporation so consolidated  OR  MERGED  was  incorporated  under  a
   36  special  act of the legislature or under a general law pursuant to which
   37  its certificate of incorporation was filed with the department of state,
   38  the regents shall deliver a certified copy of the order of consolidation
   39  OR MERGER to such department.
   40    S 10. Subdivision 4 of section 455 of the  general  business  law,  as
   41  amended  by  chapter  456  of  the  laws  of 2006, is amended to read as
   42  follows:
   43    4. Person or entity as used in this article shall not include a  [type
   44  B  not-for-profit]  CHARITABLE  corporation  as  defined in [section two
   45  hundred one] PARAGRAPH (A) OF SECTION ONE HUNDRED TWO  (DEFINITIONS)  of
   46  the  not-for-profit corporation law of this state, or an entity incorpo-
   47  rated in another state  and  having  a  similar  not-for-profit  status,
   48  licensed  by  the  superintendent,  to  engage in the business of budget
   49  planning as defined in this section.
   50    S 11. Paragraph (a) of subdivision 1 of section 458-b of  the  general
   51  business law, as added by chapter 386 of the laws of 1986, is amended to
   52  read as follows:
   53    (a)  Any  [type B not-for-profit] CHARITABLE corporation AS DEFINED IN
   54  PARAGRAPH  (A)  OF  SECTION  ONE  HUNDRED  TWO  (DEFINITIONS)   OF   THE
   55  NOT-FOR-PROFIT  CORPORATION LAW licensed pursuant to article twelve-c of
   56  the banking law.
       A. 8072                             9

    1    S 12. Subsection (a) of section 3435 of the insurance law, as added by
    2  chapter 220 of the laws of 1986, is amended to read as follows:
    3    (a)  This section shall apply to public entities as defined in section
    4  one hundred seven of this chapter, organizations  described  by  section
    5  501(c)(3)  of the United States internal revenue code, [Type B] CHARITA-
    6  BLE corporations AS DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED  TWO
    7  (DEFINITIONS)  OF THE NOT-FOR-PROFIT CORPORATION LAW AND formed pursuant
    8  to paragraph [(b)] (A) of section two hundred one of the  not-for-profit
    9  corporation  law,  and  organizations  described  by section two hundred
   10  sixteen-a of the education law.
   11    S 13. Subsection (a) of section 6703 of the insurance law, as added by
   12  chapter 598 of the laws of 2000, is amended to read as follows:
   13    (a) A corporation may be organized as a  [type  B]  CHARITABLE  corpo-
   14  ration pursuant to paragraph [(b)] (A) of section two hundred one of the
   15  not-for-profit  corporation  law  or  as  a nonprofit reciprocal insurer
   16  under article sixty-one of this chapter to write the kinds of  insurance
   17  specified in subsection (a) of section one thousand one hundred thirteen
   18  of  this  chapter  other  than (1) those types of insurance specified in
   19  paragraphs one, two, eighteen, twenty-two, twenty-three and  twenty-five
   20  of  such  subsection,  (2)  insurance  against  legal  liability  of the
   21  insured, and against loss, damage or expense incident to a claim of such
   22  liability arising out of death or injury of any person, due  to  medical
   23  or  hospital  malpractice by any licensed physician or hospital, and (3)
   24  insurance subject to section three thousand four hundred twenty-five  of
   25  this chapter.
   26    S  14.  The opening paragraph of subsection (b) of section 6704 of the
   27  insurance law, as added by chapter 598 of the laws of 2000,  is  amended
   28  to read as follows:
   29    The  superintendent  may pursuant to this article issue a license to a
   30  nonprofit property/casualty insurance company that  is  organized  as  a
   31  [type  B]  CHARITABLE  corporation [pursuant to paragraph (b) of section
   32  two hundred one] AS DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED  TWO
   33  (DEFINITIONS) of the not-for-profit corporation law if such company:
   34    S 15. Subsection (a) of section 6706 of the insurance law, as added by
   35  chapter 598 of the laws of 2000, is amended to read as follows:
   36    (a)  Except  as otherwise provided in this article, where inconsistent
   37  with this article, or where the context otherwise requires, all  of  the
   38  provisions  of  this chapter and the rules and regulations of the super-
   39  intendent,  relating   to   all   insurers   and   those   relating   to
   40  property/casualty insurance companies transacting the same kind or kinds
   41  of insurance shall be applicable to a nonprofit property/casualty insur-
   42  ance  company  organized as a [type B] CHARITABLE corporation AS DEFINED
   43  IN PARAGRAPH (A)  OF  SECTION  ONE  HUNDRED  TWO  (DEFINITIONS)  OF  THE
   44  NOT-FOR-PROFIT  CORPORATION  LAW  AND FORMED pursuant to paragraph [(b)]
   45  (A) of section two hundred one of the not-for-profit corporation law and
   46  licensed pursuant to  subsection  (b)  of  section  six  thousand  seven
   47  hundred  four of this article. Where any of such provisions of law refer
   48  to a corporation, company or insurer,  such  references,  when  read  in
   49  connection  with  and  applicable  to  this  article,  shall mean such a
   50  nonprofit property/casualty insurance company.
   51    S 16. Subdivision (b) of section 16.32 of the mental hygiene  law,  as
   52  amended  by  chapter  669  of  the  laws  of 1995, is amended to read as
   53  follows:
   54    (b) No loans, other than through the purchase of bonds, debentures, or
   55  similar obligations of the type customarily sold in public offerings, or
   56  through ordinary deposit of funds in a bank, shall be made by a not-for-
       A. 8072                            10

    1  profit corporation which is certified as a provider of services pursuant
    2  to this article to its employee who receives an annual salary in  excess
    3  of  thirty  thousand dollars, or to any other corporation, firm, associ-
    4  ation or other entity in which such employee is a director or officer or
    5  employee  or  holds a direct or indirect substantial financial interest,
    6  except a loan by one corporation incorporated as a [type  B]  CHARITABLE
    7  corporation  [pursuant  to]  AS  DEFINED IN PARAGRAPH (A) OF SECTION ONE
    8  HUNDRED TWO (DEFINITIONS)  OF  the  not-for-profit  corporation  law  to
    9  another  type  B  corporation,  or  a  loan for a temporary or emergency
   10  purpose which will further the health and welfare  of  the  employee  so
   11  long  as  the  purpose  and  amount  of  such  loan are disclosed to and
   12  approved by the board of directors of such agency. Such disclosure shall
   13  be filed with the secretary  of  the  corporation  and  entered  in  the
   14  minutes  of the meeting, and, if approved by such board, such disclosure
   15  shall also be forwarded in writing to the commissioner and to the direc-
   16  tor of community services of each local governmental unit that  has,  at
   17  the  time  of  such disclosure, a contract with such corporation for the
   18  rendition of services pursuant to article forty-one of this  chapter.  A
   19  loan  made in violation of this section shall be a violation of the duty
   20  to the not-for-profit corporation of the directors or officers authoriz-
   21  ing it or participating in it, but the obligation of the  borrower  with
   22  respect to the loan shall not be affected thereby.
   23    S  17.  Subdivision (b) of section 31.31 of the mental hygiene law, as
   24  amended by chapter 669 of the laws  of  1995,  is  amended  to  read  as
   25  follows:
   26    (b) No loans, other than through the purchase of bonds, debentures, or
   27  similar obligations of the type customarily sold in public offerings, or
   28  through ordinary deposit of funds in a bank, shall be made by a not-for-
   29  profit  corporation which is licensed as a provider of services pursuant
   30  to this article to its employee who receives an annual salary in  excess
   31  of  thirty  thousand dollars, or to any other corporation, firm, associ-
   32  ation or other entity in which such employee is a director or officer or
   33  employee or holds a direct or indirect substantial  financial  interest,
   34  except  a  loan by one corporation incorporated as a [type B] CHARITABLE
   35  corporation [pursuant to] AS DEFINED IN PARAGRAPH  (A)  OF  SECTION  ONE
   36  HUNDRED  TWO  (DEFINITIONS)  OF  the  not-for-profit  corporation law to
   37  another type B corporation, or a  loan  for  a  temporary  or  emergency
   38  purpose  which  will  further  the health and welfare of the employee so
   39  long as the purpose and  amount  of  such  loan  are  disclosed  to  and
   40  approved by the board of directors of such agency. Such disclosure shall
   41  be  filed  with  the  secretary  of  the  corporation and entered in the
   42  minutes of the meeting, and, if approved by such board, such  disclosure
   43  shall also be forwarded in writing to the commissioner and to the direc-
   44  tor  of  community services of each local governmental unit that has, at
   45  the time of such disclosure, a contract with such  corporation  for  the
   46  rendition  of  services pursuant to article forty-one of this chapter. A
   47  loan made in violation of this section shall be a violation of the  duty
   48  to the not-for-profit corporation of the directors or officers authoriz-
   49  ing  it  or participating in it, but the obligation of the borrower with
   50  respect to the loan shall not be affected thereby.
   51    S 18.  Subdivision 1 of section 1825 of the public authorities law, as
   52  amended by chapter 1045 of the laws of  1974,  is  amended  to  read  as
   53  follows:
   54    1.  The  corporation shall (a) be incorporated or reincorporated under
   55  [article nineteen of the membership corporations law, or under]  section
   56  fourteen hundred eleven of the not-for-profit corporation law, or (b) be
       A. 8072                            11

    1  incorporated  under  [article two of the membership corporations law, or
    2  under] article four of the not-for-profit corporation law,  in  addition
    3  to  other  purposes, to construct new industrial or manufacturing plants
    4  or  new  research  and  development  buildings and acquire machinery and
    5  equipment deemed related thereto or acquire, rehabilitate,  and  improve
    6  for use by others, industrial or manufacturing plants in the area of the
    7  state  in  which  an assisted project is to be located, to assist finan-
    8  cially in such construction, acquisition, rehabilitation and improvement
    9  and to maintain such plants, buildings and equipment for others, and may
   10  also be authorized to study and promote, alone or in concert with  local
   11  officials  and interested local groups, the economic growth and business
   12  prosperity of the area and the solution of other civic problems  of  the
   13  region which includes such areas[, and (c) if incorporated or reincorpo-
   14  rated  under  the  membership  corporations  law, have complied with the
   15  requirements of section  one  hundred  thirteen  of  the  not-for-profit
   16  corporation law].
   17    S  19.  Subdivision  2  of section 13-a of the private housing finance
   18  law, as added by chapter 547 of the laws of 1971, is amended to read  as
   19  follows:
   20    2.  Every  corporation  to which the not-for-profit corporation law is
   21  made applicable by this section is a [type B] CHARITABLE corporation  AS
   22  DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) OF THE
   23  NOT-FOR-PROFIT CORPORATION LAW for all purposes of that law.
   24    S 20. Paragraph (f) of subdivision 7 of section 75 of the public lands
   25  law,  as added by chapter 791 of the laws of 1992, is amended to read as
   26  follows:
   27    (f) The commissioner, in consultation with the commissioner  of  envi-
   28  ronmental  conservation,  the  secretary  of state, the office of parks,
   29  recreation and historic preservation and other interested state agencies
   30  administering state-owned lands underwater, shall promulgate pursuant to
   31  article two of the state administrative procedure act  such  rules  with
   32  respect to grants, leases, easements and lesser interests for the use of
   33  state-owned land underwater, and the cession of jurisdiction thereof, as
   34  in  his  or  her  judgment  are  reasonable and necessary to protect the
   35  interests of the people in such lands underwater. Such regulations shall
   36  include without being limited to: the fees  to  be  charged,  consistent
   37  with  the  provisions of this section, including mitigation of such fees
   38  in the event of economic hardship on  existing  commercial  enterprises;
   39  fee  limitations to administrative expenses for municipal uses which are
   40  public, non-commercial and offer services free or for nominal fees,  and
   41  for  uses undertaken and operated for public and non-commercial purposes
   42  by not-for-profit corporations characterized as  ["Type  B"]  CHARITABLE
   43  corporations  [pursuant  to paragraph (b) of section two hundred one] AS
   44  DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) of the
   45  not-for-profit corporation law, and for uses undertaken and operated for
   46  public purposes by a corporation formed pursuant to the religious corpo-
   47  ration law or by a corporation formed pursuant to A special act of  this
   48  state  and  which has as its principal purpose a religious purpose; such
   49  further exemptions for projects as the commissioner  determines  do  not
   50  represent  significant  encroachments;  limitations on grants, including
   51  conversion grants, with respect to underwater lands consistent with  the
   52  public  purposes  of this subdivision and limiting such grants to excep-
   53  tional circumstances; and factors  to  be  examined  in  considering  an
   54  application for a lease, easement or other interest. Those factors shall
   55  include  without  limitation the following: (i) the environmental impact
   56  of the project; (ii) the values for natural resource management,  recre-
       A. 8072                            12

    1  ational  uses,  and  commercial  uses  of the pertinent underwater land;
    2  (iii) the size, character and effects of  the  project  in  relation  to
    3  neighboring  uses;  (iv) the potential for interference with navigation,
    4  public uses of the waterway and rights of other riparian owners; (v) the
    5  effect  of the project on the natural resource interests of the state in
    6  the lands; (vi) the water-dependent nature of the  use;  (vii)  and  any
    7  adverse  economic  impact  on existing commercial enterprises. The final
    8  promulgation of rules establishing  fees  or  fee  structures  shall  be
    9  subject to the approval of the director of the budget.
   10    S  21.  Section  202  of the racing, pari-mutuel wagering and breeding
   11  law, as amended by chapter 18 of the laws of 2008, is amended to read as
   12  follows:
   13    S 202. Restriction upon commencement of business. No  business  corpo-
   14  ration  organized  under  the provisions of this article shall engage in
   15  the prosecution or management of its business until  the  whole  of  its
   16  capital  stock shall have been subscribed, nor until it shall have filed
   17  in the offices where certificates of incorporation were filed, a further
   18  certificate stating that the whole of its capital stock has been in good
   19  faith subscribed, executed and acknowledged by its  president  or  vice-
   20  president and treasurer or secretary, and verified by them to the effect
   21  that the statements contained in it are true.
   22    Notwithstanding  the  foregoing,  corporations  organized  pursuant to
   23  section two hundred one of the not-for-profit corporation law  as  [type
   24  C]  CHARITABLE  corporations  AS DEFINED IN PARAGRAPH (A) OF SECTION ONE
   25  HUNDRED TWO (DEFINITIONS) OF THE NOT-FOR-PROFIT  CORPORATION  LAW  shall
   26  not  engage  in  the prosecution or management of its business until its
   27  certificate of incorporation has been accepted for filing by the  secre-
   28  tary  of  state  and such confirmation of filing has been filed with the
   29  board and the franchise oversight board.
   30    S 22. Paragraph (c) of subdivision 1 of section 2-b of  the  religious
   31  corporations  law,  as  amended  by  chapter 490 of the laws of 2010, is
   32  amended to read as follows:
   33    (c) The following provisions of  the  not-for-profit  corporation  law
   34  shall  not apply to religious corporations: subparagraphs (7) and (8) of
   35  paragraph (a) of section one hundred twelve, [section one hundred  thir-
   36  teen,]  section  one  hundred fourteen, section two hundred one, section
   37  three hundred three, section three hundred four, section  three  hundred
   38  five,  section  three  hundred  six,  article  four  except section four
   39  hundred one, section five hundred fourteen, that portion of section five
   40  hundred fifty-five (b) and section five  hundred  fifty-five  (c)  which
   41  reads  "The  institution  shall  notify the donor, if available, and the
   42  attorney general of the application, and the attorney general  and  such
   43  donor  must  be  given  an opportunity to be heard", section six hundred
   44  five, section six hundred seven, section six hundred nine, section eight
   45  hundred four, article nine except section nine hundred ten, article  ten
   46  except  as  provided  in  section eleven hundred fifteen, section eleven
   47  hundred two, and article fifteen except paragraph (c) of section fifteen
   48  hundred seven.
   49    S 23. Subdivision 2 of section 2-b of the religious corporations  law,
   50  as  added  by  chapter  956  of  the laws of 1971, is amended to read as
   51  follows:
   52    2. Every corporation to which the not-for-profit  corporation  law  is
   53  made  applicable by this section is a [type B] CHARITABLE corporation AS
   54  DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) OF THE
   55  NOT-FOR-PROFIT CORPORATION LAW for all purposes of that law.
       A. 8072                            13

    1    S 24. Section 13 of the religious  corporations  law,  as  amended  by
    2  chapter 705 of the laws of 1970, is amended to read as follows:
    3    S  13.  Consolidation  OR MERGER of incorporated churches. Two or more
    4  incorporated churches may enter into an agreement, under  their  respec-
    5  tive  corporate  seals,  for  the consolidation OR MERGER of such corpo-
    6  rations, setting forth the name  of  the  proposed  new  corporation  OR
    7  SURVIVING  CORPORATION,  the  denomination,  if  any,  to which it is to
    8  belong, and if the churches of such  denomination  have  more  than  one
    9  method  of  choosing trustees, by which of such methods the trustees are
   10  to be chosen, the number of such trustees, the names of the  persons  to
   11  be  the first trustees of the new corporation, and the date of its first
   12  annual corporate meeting. Such an  agreement  shall  not  be  valid  for
   13  United  Methodist  churches  unless  proposed  by a majority vote of the
   14  charge conference of each church and approved by the  superintendent  or
   15  superintendents  of the district or districts in which the consolidating
   16  churches are located, and by the majority of the members of each of such
   17  churches, over the age of twenty-one years,  present  and  voting  at  a
   18  meeting thereof held in the usual place of public worship and called for
   19  the purpose of considering such agreement by announcement made at public
   20  service  in  such  churches  on two Sundays, the first not less than ten
   21  days next preceding the date of such meeting. Such agreement  shall  not
   22  be valid unless approved in the case of Protestant Episcopal churches by
   23  the  bishop and standing committee of the diocese in which such churches
   24  are situated and in the case of churches of other denominations  by  the
   25  governing  body  of  the  denomination,  if  any,  to  which each church
   26  belongs, having jurisdiction over such church.  Each  corporation  shall
   27  thereupon  make  a  separate  petition to the supreme court for an order
   28  consolidating OR MERGING the corporations,  setting  forth  the  denomi-
   29  nation,  if  any,  to  which the church belongs, that the consent of the
   30  governing body to the consolidation OR MERGER, if any, of  that  denomi-
   31  nation  having  jurisdiction  over  such  church  has been obtained, the
   32  agreement therefor, and a statement of all the property and  liabilities
   33  and  the  amount  and  sources  of the annual income of such petitioning
   34  corporation. In its discretion the court may direct that notice  of  the
   35  hearing  of  such petition be given to the parties interested therein in
   36  such manner and for such time as it may prescribe.   After  hearing  all
   37  the  parties interested, present and desiring to be heard, the court may
   38  make an order for the consolidation OR MERGER of the corporations on the
   39  terms of such agreement and such other terms and conditions  as  it  may
   40  prescribe,  specifying the name of such new OR SURVIVING corporation and
   41  the [first] trustees thereof, and the method by which  their  successors
   42  shall be chosen and the date of its first OR NEXT annual corporate meet-
   43  ing.  When such order is made and duly entered, the persons constituting
   44  such CONSOLIDATED OR MERGED corporations shall BE OR become an  incorpo-
   45  rated church by, and said petitioning churches shall become consolidated
   46  OR  MERGED  under,  the  name  designated in the order, and the trustees
   47  therein named shall be the [first]  trustees  thereof,  and  the  future
   48  trustees  thereof  shall be chosen by the method therein designated, and
   49  all the estate, rights, powers and property of whatsoever nature belong-
   50  ing to either corporation shall without further act or deed be vested in
   51  and transferred to the new OR SURVIVING corporation  as  effectually  as
   52  they  were  vested  in  or belonging to the former corporations; and the
   53  said new OR SURVIVING corporation shall be liable for all the debts  and
   54  liabilities  of the former corporations in the same manner and as effec-
   55  tually as if said debts or liabilities had been contracted  or  incurred
   56  by  the  new  OR  SURVIVING  corporation. A certified copy of such order
       A. 8072                            14

    1  shall be recorded in the book for  recording  certificates  of  incorpo-
    2  ration  in each county clerk's office in which the certificate of incor-
    3  poration of each consolidating OR MERGING church was recorded; or if  no
    4  such  certificate  was  so  recorded,  then in the clerk's office of the
    5  county in which the principal place of worship or  principal  office  of
    6  the new OR SURVIVING corporation is, or is intended to be, situated.
    7    S  25.  Section  15-a  of  the religious corporations law, as added by
    8  chapter 108 of the laws of 1965, subdivisions 2, 3 and 8 as  amended  by
    9  chapter 381 of the laws of 1985, is amended to read as follows:
   10    S  15-a.  Consolidation  of  incorporated presbyteries. 1. Two or more
   11  incorporated presbyteries may enter into an agreement  for  the  consol-
   12  idation  OR  MERGER  of  such  corporations and such corporations may be
   13  consolidated OR MERGED so as to form a single corporation which  may  be
   14  either a new corporation or one of the [constitutent] CONSTITUENT corpo-
   15  rations.    Said  agreement shall set forth the name of the proposed new
   16  corporation or the name of the existing corporation if it is  to  become
   17  the consolidated OR MERGED corporation, the method of choosing trustees,
   18  the names of the persons to be the first trustees of the new corporation
   19  if the consolidated OR MERGED corporation is to be a new corporation and
   20  the date of the first annual corporate meeting.
   21    2.  Such  agreement must be authorized and approved by a majority vote
   22  of the members of each contracting presbytery  taken  at  a  meeting  at
   23  which  a  quorum  is  present duly called in accordance with the form of
   24  government of the Presbyterian Church (U.S.A.) and the  notice  of  such
   25  meeting shall state the purpose of the meeting.
   26    3.  Before such agreement is approved as aforesaid, such consolidation
   27  OR MERGER must be directed and approved by the Synod  of  the  Northeast
   28  and the General Assembly of the Presbyterian Church (U.S.A.).
   29    4.  Each presbytery shall thereafter join in a petition to the supreme
   30  court for an order consolidating OR  MERGING  the  corporation,  setting
   31  forth  the  agreement of the contracting presbyteries, the direction and
   32  approval of the bodies as set forth in  subdivision  three  [hereof]  OF
   33  THIS  SECTION,  a  statement of all the property and liabilities and the
   34  sources of the annual income of each presbytery and a description of any
   35  property held by such presbyteries in trust for  specific  purposes.  In
   36  its  discretion  the court may direct that notice of the hearing of such
   37  petition be given to the parties interested therein in such manner as it
   38  may prescribe.
   39    5. After hearing all the parties interested, present and  desiring  to
   40  be heard, the court may make an order for the consolidation OR MERGER of
   41  the presbyteries on the terms of such agreement and such other terms and
   42  conditions  as  it  may prescribe, specifying the name of the new corpo-
   43  ration or the name the continuing corporation will have if  one  of  the
   44  [constitutent] CONSTITUENT corporations is to become the consolidated OR
   45  MERGED  corporation,  the first trustees thereof if a new corporation is
   46  to be created and the method by which their successors shall  be  chosen
   47  and  the date of the first annual corporate meeting if a new corporation
   48  is to be created.
   49    6. When such order is made and duly entered, the persons  constituting
   50  such  corporate  presbyteries shall become one incorporated consolidated
   51  OR MERGED presbytery by, and said petitioning presbyteries shall  become
   52  consolidated  OR MERGED under, the name designated in the order, and the
   53  trustees therein named, if it is a new corporation, shall be  the  first
   54  trustees  thereof,  and  if it is a new corporation the trustees thereof
   55  shall be chosen by the method therein designated, and  all  the  estate,
   56  rights,  powers  and  property of whatsoever nature, belonging to either
       A. 8072                            15

    1  corporation shall without further act or deed be vested in and/or trans-
    2  ferred to the new corporation as effectually as they were vested  in  or
    3  belonging  to  the former corporations, and the new or continuing corpo-
    4  rations  shall be liable for all the debts and liabilities of the former
    5  corporations in the same manner and as effectually as if said  debts  or
    6  liabilities had been contracted or incurred by the new corporation.
    7    7. The order or a certified copy thereof shall be recorded in the book
    8  for  recording  certificates  of  incorporation  in  each county clerk's
    9  office in which the certificate of  incorporation  of  each  constituent
   10  presbytery was recorded.
   11    8.  Such  consolidated  OR MERGED presbytery shall have all the powers
   12  and responsibilities conferred upon presbyteries by the constitution and
   13  form of government of the Presbyterian Church (U.S.A.).
   14    S 26. Section 208 of the religious corporations law, as added by chap-
   15  ter 117 of the laws of 1927, is amended to read as follows:
   16    S 208. Consolidation.  Any two or more religious corporations  of  the
   17  Jewish  faith,  incorporated  under  or  by general or special laws, may
   18  enter into an agreement for the consolidation OR MERGER of  such  corpo-
   19  rations,  setting  forth  the terms and conditions of consolidation, the
   20  name of the proposed OR SURVIVING corporation, the number of  its  trus-
   21  tees, the time of the annual election and the names of the persons to be
   22  its  trustees  until  the first OR NEXT annual meeting. Each corporation
   23  may petition the supreme court for an order consolidating OR MERGING the
   24  corporations, setting forth the agreement for consolidation   OR  MERGER
   25  and  a statement of its real property and of its liabilities. Before the
   26  presentation of the petition to the court  the  agreement  and  petition
   27  must  be  approved by two-thirds of the votes cast in person or by proxy
   28  at a meeting of the members of each corporation called for  the  purpose
   29  of  considering  the  proposed  consolidation  OR  MERGER  in the manner
   30  prescribed by section [forty-three of the membership  corporations  law]
   31  SIX  HUNDRED FIVE OF THE NOT-FOR-PROFIT CORPORATION LAW. An affidavit by
   32  the president and the secretary of each corporation  stating  that  such
   33  approval  has  been given shall be annexed to the petition. On presenta-
   34  tion to the court of such petition and agreement  for  consolidation  OR
   35  MERGER and on such notice as the court may direct, the court after hear-
   36  ing  all  the parties interested desiring to be heard, may make an order
   37  approving the consolidation OR MERGER.  When such order is made and duly
   38  entered and a certified copy thereof filed with the secretary  of  state
   39  and  in  the  offices of the clerks of the counties in which the certif-
   40  icates of incorporation of the  several  constituent  corporations  were
   41  recorded,  or if no such certificate was recorded, then in the office of
   42  the clerk of the county in which the principal place of worship  of  the
   43  new  OR  SURVIVING  corporation  is intended to be situated, such corpo-
   44  rations shall become one corporation by the name designated in the order
   45  and the trustees named in the  agreement  for  consolidation  OR  MERGER
   46  shall be the [first] trustees of the consolidated corporation.
   47    S 27. Section 209 of the religious corporations law, as added by chap-
   48  ter 117 of the laws of 1927, is amended to read as follows:
   49    S  209.  Effect  of consolidation.   The consolidated OR MERGED corpo-
   50  ration shall possess all the powers of the constituent corporations  and
   51  shall  have  the power and be subject to the duties and obligations of a
   52  congregation of the Jewish faith formed  for  like  purposes  under  the
   53  religious  corporations law. All the rights, privileges and interests of
   54  each of the constituent corporations, all the property,  real,  personal
   55  and  mixed, and all the debts due on whatever account to either of them,
   56  and all things in action, belonging to either of them, shall  be  deemed
       A. 8072                            16

    1  to  be transferred to and vested in such new corporation without further
    2  act or deed; and all  claims,  demands[.],  property,  and  every  other
    3  interest, belonging to the several constituent corporations, shall be as
    4  effectually  the  property  of  the  new corporation as they were of the
    5  constituent corporations, and the title to all real  property,  held  or
    6  taken  by  deed or otherwise under the laws of this state, vested in the
    7  several constituent corporations shall not be deemed to revert or to  be
    8  in  any  way impaired by reason of the consolidation but shall be vested
    9  in the new corporation. Any devise, bequest, gift, grant, or declaration
   10  of trust, contained in any deed, will, or other instrument, in trust  or
   11  otherwise,  made before or after such consolidation, OR MERGER to or for
   12  any of the constituent corporations, shall inure to the benefit  of  the
   13  consolidated  OR  MERGED corporation. The consolidated corporation shall
   14  be deemed to have assumed and shall be liable for all  debts  and  obli-
   15  gations  of  the  constituent corporations in the same manner as if such
   16  new corporation had itself incurred such debts or obligations.
   17    S 28. Subdivision 2 of section 711 of the surrogate's court  procedure
   18  act is amended to read as follows:
   19    2.  Where  by  reason  of  his having wasted or improperly applied the
   20  assets of the estate, or made investments unauthorized by law or  other-
   21  wise  improvidently  managed  or  injured  the property committed to his
   22  charge, INCLUDING BY FAILING TO COMPLY WITH  PARAGRAPH  (C)  OF  SECTION
   23  8-1.9  OF  THE  ESTATES,  POWERS  AND  TRUSTS LAW, or by reason of other
   24  misconduct in the execution of his office  or  dishonesty,  drunkenness,
   25  improvidence  or want of understanding, he is unfit for the execution of
   26  his office.
   27    S 29. Subparagraph 6 of paragraph (a) of section 102 of  the  not-for-
   28  profit  corporation  law  is  amended, and eleven new subparagraphs 3-a,
   29  3-b, 6-a, 9-a, 19, 20, 21, 22, 23, 24  and  25  are  added  to  read  as
   30  follows:
   31    (3-A)  "CHARITABLE  CORPORATION"  MEANS ANY CORPORATION FORMED, OR FOR
   32  THE PURPOSES OF THIS  CHAPTER,  DEEMED  TO  BE  FORMED,  FOR  CHARITABLE
   33  PURPOSES.
   34    (3-B)  "CHARITABLE PURPOSES" OF A CORPORATION MEANS PURPOSES CONTAINED
   35  IN THE CERTIFICATE OF INCORPORATION OF THE CORPORATION THAT ARE CHARITA-
   36  BLE, EDUCATIONAL, RELIGIOUS, SCIENTIFIC, LITERARY, CULTURAL OR  FOR  THE
   37  PREVENTION OF CRUELTY TO CHILDREN OR ANIMALS.
   38    (6)  "Director"  means  any  member of the governing board of a corpo-
   39  ration, whether designated as director, trustee, manager,  governor,  or
   40  by  any  other title. The term "board" means "board of directors" OR ANY
   41  OTHER BODY CONSTITUTING A "GOVERNING BOARD" AS DEFINED IN THIS SECTION.
   42    (6-A) "ENTIRE BOARD" MEANS THE TOTAL NUMBER OF DIRECTORS  ENTITLED  TO
   43  VOTE  WHICH  THE  CORPORATION WOULD HAVE IF THERE WERE NO VACANCIES.  IF
   44  THE BY-LAWS OF THE CORPORATION PROVIDE THAT THE BOARD SHALL CONSIST OF A
   45  FIXED NUMBER OF DIRECTORS, THEN THE "ENTIRE BOARD" SHALL CONSIST OF THAT
   46  NUMBER OF DIRECTORS.  IF THE BY-LAWS OF ANY CORPORATION PROVIDE THAT THE
   47  BOARD MAY CONSIST OF A RANGE BETWEEN A MINIMUM  AND  MAXIMUM  NUMBER  OF
   48  DIRECTORS, THEN THE "ENTIRE BOARD" SHALL CONSIST OF THE NUMBER OF DIREC-
   49  TORS  WITHIN  SUCH  RANGE THAT WERE ELECTED AS OF THE MOST RECENTLY HELD
   50  ELECTION OF DIRECTORS.
   51    (9-A) "NON-CHARITABLE CORPORATION" MEANS ANY CORPORATION FORMED  UNDER
   52  THIS  CHAPTER,  OTHER  THAN  A CHARITABLE CORPORATION, INCLUDING BUT NOT
   53  LIMITED TO ONE FORMED FOR ANY ONE OR MORE OF THE FOLLOWING NON-PECUNIARY
   54  PURPOSES: CIVIC,  PATRIOTIC,  POLITICAL,  SOCIAL,  FRATERNAL,  ATHLETIC,
   55  AGRICULTURAL,  HORTICULTURAL, OR ANIMAL HUSBANDRY, OR FOR THE PURPOSE OF
       A. 8072                            17

    1  OPERATING A PROFESSIONAL, COMMERCIAL, INDUSTRIAL, TRADE OR SERVICE ASSO-
    2  CIATION.
    3    (19)  AN  "AFFILIATE" OF A CORPORATION MEANS ANY ENTITY CONTROLLED BY,
    4  IN CONTROL OF, OR UNDER COMMON CONTROL WITH SUCH CORPORATION.
    5    (20) "INDEPENDENT  AUDITOR"  MEANS  ANY  CERTIFIED  PUBLIC  ACCOUNTANT
    6  PERFORMING  THE  AUDIT  OF  THE  FINANCIAL  STATEMENTS  OF A CORPORATION
    7  REQUIRED BY SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B OF  THE
    8  EXECUTIVE LAW.
    9    (21)  "INDEPENDENT DIRECTOR" MEANS A DIRECTOR WHO: (I) IS NOT, AND HAS
   10  NOT BEEN WITHIN THE LAST THREE YEARS, AN EMPLOYEE OF THE CORPORATION  OR
   11  AN AFFILIATE OF THE CORPORATION, AND DOES NOT HAVE A RELATIVE WHO IS, OR
   12  HAS  BEEN WITHIN THE LAST THREE YEARS, A KEY EMPLOYEE OF THE CORPORATION
   13  OR AN AFFILIATE OF THE CORPORATION; (II) HAS NOT RECEIVED, AND DOES  NOT
   14  HAVE A RELATIVE WHO HAS RECEIVED, IN ANY OF THE LAST THREE FISCAL YEARS,
   15  MORE  THAN  TEN  THOUSAND DOLLARS IN DIRECT COMPENSATION FROM THE CORPO-
   16  RATION OR AN AFFILIATE OF THE CORPORATION (OTHER THAN REIMBURSEMENT  FOR
   17  EXPENSES  REASONABLY  INCURRED  AS A DIRECTOR OR REASONABLE COMPENSATION
   18  FOR SERVICE AS A DIRECTOR AS PERMITTED BY PARAGRAPH (A) OF  SECTION  202
   19  (GENERAL AND SPECIAL POWERS)); AND (III) IS NOT A CURRENT EMPLOYEE OF OR
   20  DOES  NOT  HAVE A SUBSTANTIAL FINANCIAL INTEREST IN, AND DOES NOT HAVE A
   21  RELATIVE WHO IS A CURRENT OFFICER OF  OR  HAS  A  SUBSTANTIAL  FINANCIAL
   22  INTEREST  IN, ANY ENTITY THAT HAS MADE PAYMENTS TO, OR RECEIVED PAYMENTS
   23  FROM, THE CORPORATION OR AN AFFILIATE OF THE CORPORATION FOR PROPERTY OR
   24  SERVICES IN AN AMOUNT WHICH, IN ANY OF  THE  LAST  THREE  FISCAL  YEARS,
   25  EXCEEDS  THE  LESSER  OF  TWENTY-FIVE THOUSAND DOLLARS OR TWO PERCENT OF
   26  SUCH ENTITY'S CONSOLIDATED GROSS REVENUES.  FOR PURPOSES OF THIS SUBPAR-
   27  AGRAPH, "PAYMENT" DOES NOT INCLUDE CHARITABLE CONTRIBUTIONS.
   28    (22) "RELATIVE" OF AN INDIVIDUAL MEANS HIS OR HER (I)  SPOUSE,  ANCES-
   29  TORS,  BROTHERS  AND  SISTERS  (WHETHER  WHOLE  OR HALF BLOOD), CHILDREN
   30  (WHETHER NATURAL OR ADOPTED),  GRANDCHILDREN,  GREAT-GRANDCHILDREN,  AND
   31  SPOUSES  OF BROTHERS, SISTERS, CHILDREN, GRANDCHILDREN, AND GREAT-GRAND-
   32  CHILDREN; OR (II) DOMESTIC PARTNER AS  DEFINED  IN  SECTION  TWENTY-NINE
   33  HUNDRED NINETY-FOUR-A OF THE PUBLIC HEALTH LAW.
   34    (23)  "RELATED  PARTY" MEANS (I) ANY DIRECTOR, OFFICER OR KEY EMPLOYEE
   35  OF THE CORPORATION OR ANY AFFILIATE OF THE CORPORATION; (II)  ANY  RELA-
   36  TIVE  OF ANY DIRECTOR, OFFICER OR KEY EMPLOYEE OF THE CORPORATION OR ANY
   37  AFFILIATE OF THE CORPORATION; OR (III) ANY ENTITY IN WHICH ANY  INDIVID-
   38  UAL  DESCRIBED  IN CLAUSES (I) AND (II) OF THIS SUBPARAGRAPH HAS A THIR-
   39  TY-FIVE PERCENT OR GREATER OWNERSHIP OR BENEFICIAL INTEREST OR,  IN  THE
   40  CASE  OF A PARTNERSHIP OR PROFESSIONAL CORPORATION, A DIRECT OR INDIRECT
   41  OWNERSHIP INTEREST IN EXCESS OF FIVE PERCENT.
   42    (24) "RELATED PARTY TRANSACTION" MEANS ANY TRANSACTION,  AGREEMENT  OR
   43  ANY  OTHER ARRANGEMENT IN WHICH A RELATED PARTY HAS A FINANCIAL INTEREST
   44  AND IN WHICH THE CORPORATION OR ANY AFFILIATE OF THE  CORPORATION  IS  A
   45  PARTICIPANT.
   46    (25)  "KEY EMPLOYEE" MEANS ANY PERSON WHO IS IN A POSITION TO EXERCISE
   47  SUBSTANTIAL INFLUENCE OVER THE AFFAIRS OF THE CORPORATION, AS REFERENCED
   48  IN 26  U.S.C.  S  4958(F)(1)(A)  AND  FURTHER  SPECIFIED  IN  26  CFR  S
   49  53.4958-3(C), (D) AND (E), OR SUCCEEDING PROVISIONS.
   50    S 30. Paragraphs (a), (b) and (c) of section 103 of the not-for-profit
   51  corporation  law, paragraph (a) as amended by chapter 807 of the laws of
   52  1973, paragraph (b) as amended by chapter 847 of the laws of  1970,  and
   53  paragraph (c) as amended by chapter 961 of the laws of 1972, are amended
   54  to read as follows:
   55    (a)    Except  as  otherwise  provided  in  this section, this chapter
   56  applies to every domestic corporation as herein defined,  and  to  every
       A. 8072                            18

    1  foreign  corporation as herein defined which is authorized to conduct or
    2  which conducts any activities in this state. This chapter  also  applies
    3  to  any  other  domestic corporation or foreign corporation of any [type
    4  or]  kind  to the extent, if any, provided under this chapter or any law
    5  governing such corporation and, if no such provision for application  is
    6  made,  to  the  extent,  if  any,  that  the membership corporations law
    7  applied to such corporation as of the effective date of this chapter.  A
    8  corporation formed by a special act of this state which has as its prin-
    9  cipal  purpose an education purpose and which is a member of the univer-
   10  sity of the state of New  York,  is  an  "education  corporation"  under
   11  section two hundred sixteen-a of the education law.
   12    To  the  extent  that  the  membership corporations law or the general
   13  corporation law applied to it as of the effective date of this  chapter,
   14  the  corresponding  provisions  of  this  chapter apply to a corporation
   15  heretofore formed by or pursuant to a special act of  this  state  other
   16  than  a religious corporation or an "education corporation" under clause
   17  (b) of subdivision one of section two hundred sixteen-a of the education
   18  law, if (1) its principal purpose is a religious, charitable  or  educa-
   19  tion  purpose, and (2) it is operated, supervised or controlled by or in
   20  connection with a religious  organization.  [Any  such  corporation  may
   21  elect  hereunder at any time after the effective date of this chapter to
   22  file a certificate of type under section one hundred  thirteen  (Certif-
   23  icate  of  type  of not-for-profit corporation). Upon the filing of such
   24  certificate by the department of state, this chapter shall apply in  all
   25  respects to such corporation.]
   26    This  chapter  also  applies to any other corporation of any [type or]
   27  kind, formed [not for profit] NOT-FOR-PROFIT under any other chapter  of
   28  the laws of this state except a chapter of the consolidated laws, to the
   29  extent  that  provisions  of  this  chapter  do  not  conflict  with the
   30  provisions of such unconsolidated law.   If an applicable  provision  of
   31  such unconsolidated law relates to a matter embraced in this chapter but
   32  is  not  in conflict therewith, both provisions shall apply.  Any corpo-
   33  ration to which this chapter is made applicable by this paragraph  shall
   34  be  treated  as  a "corporation" or "domestic corporation" as such terms
   35  are used in this chapter, except that the purposes of  any  such  corpo-
   36  ration formed or formable under such unconsolidated law shall not there-
   37  by  be extended.   For the purpose of this paragraph, the effective date
   38  of this chapter as to corporations to which this chapter is made  appli-
   39  cable  by this paragraph shall be September one, nineteen hundred seven-
   40  ty-three.
   41    (b)  The general corporation law does not apply to  a  corporation  of
   42  any  [type  or]  kind to which this chapter applies.  A reference in any
   43  statute of this state which makes a provision of the general corporation
   44  law applicable to a corporation of any [type  or]  kind  to  which  this
   45  chapter is applicable or a reference in any statute of this state, other
   46  than  the  membership  corporations  law, which makes a provision of the
   47  membership corporations law applicable to a corporation of any [type or]
   48  kind shall be deemed and construed to refer to and make  applicable  the
   49  corresponding provision, if any, of this chapter.
   50    (c)  If  any  provision  in articles one to thirteen inclusive of this
   51  chapter conflicts with a provision of any subsequent articles or of  any
   52  special  act  under which a corporation to which this chapter applies is
   53  formed,  the  provision  in  such  subsequent  article  or  special  act
   54  prevails.    A  provision  of any such subsequent article or special act
   55  relating to a matter referred to in articles one to  thirteen  inclusive
   56  and  not  in  conflict  therewith  is supplemental and both shall apply.
       A. 8072                            19

    1  Whenever the board of a [Type B] corporation,  formed  under  a  special
    2  act, reasonably makes an interpretation as to whether a provision of the
    3  special act or this chapter prevails, or both apply, such interpretation
    4  shall  govern  unless  and  until  a court determines otherwise, if such
    5  board has acted in good faith for a purpose which it reasonably believes
    6  to be in the best interests of the corporation, provided  however,  that
    7  such interpretation shall not bind any governmental body or officer.
    8    S 31. Paragraph (a) of section 104-A of the not-for-profit corporation
    9  law is REPEALED.
   10    S 32. Section 105 of the not-for-profit corporation law, as amended by
   11  chapter 172 of the laws of 1999, is amended to read as follows:
   12  S 105. Certificates; corrections.
   13    (A)  ANY  CERTIFICATE  OR  OTHER  INSTRUMENT RELATING TO A DOMESTIC OR
   14  FOREIGN CORPORATION SUBMITTED TO THE  DEPARTMENT  OF  STATE  UNDER  THIS
   15  CHAPTER  MAY  BE CORRECTED WITH RESPECT TO ANY TYPOGRAPHICAL, OR SIMILAR
   16  NON-MATERIAL ERROR APPARENT ON THE FACE OF THE  CERTIFICATE  OR  INSTRU-
   17  MENT,  PRIOR  TO  THE  FILING  OF  SUCH CERTIFICATE OR INSTRUMENT BY THE
   18  DEPARTMENT OF STATE. SUCH CORRECTION SHALL BE EFFECTED BY THE DEPARTMENT
   19  OF STATE UPON AUTHORIZATION IN WRITING OR  BY  ELECTRONIC  MAIL  BY  THE
   20  INCORPORATOR,  OR  FOLLOWING  INCORPORATION, BY ANY PERSON AUTHORIZED BY
   21  THE CORPORATION.
   22    (B) Any certificate or other instrument  relating  to  a  domestic  or
   23  foreign  corporation filed by the department of state under this chapter
   24  may be corrected with respect to any [informality or]  TYPOGRAPHICAL  OR
   25  SIMILAR  NON-MATERIAL  error  apparent  on  the  face  or  defect in the
   26  execution thereof including the deletion of any matter not permitted  to
   27  be  stated  therein.  A certificate, entitled "Certificate of correction
   28  of.......... (correct title of certificate  and  name  of  corporation)"
   29  shall  be signed and delivered to the department of state.  It shall set
   30  forth the name of the  corporation,  the  date  the  certificate  to  be
   31  corrected  was  filed  by  the department of state, the provision in the
   32  certificate as corrected or eliminated and if the execution  was  defec-
   33  tive, the proper execution. The filing of the certificate by the depart-
   34  ment of state shall not alter the effective time of the instrument being
   35  corrected,  which shall remain as its original effective time, and shall
   36  not affect any right  or  liability  accrued  or  incurred  before  such
   37  filing.  A  corporate  name  may  not be changed or corrected under this
   38  section OTHER THAN TO CORRECT ANY TYPOGRAPHICAL OR SIMILAR  NON-MATERIAL
   39  ERROR.
   40    S  33. Subparagraphs 7, 8 and 9 of paragraph (a) of section 112 of the
   41  not-for-profit corporation law, subparagraphs 7  and  9  as  amended  by
   42  chapter  1058 of the laws of 1971, are amended and a new subparagraph 10
   43  is added to read as follows:
   44    (7)   To enforce any right given under  this  chapter  to  members,  a
   45  director  or  an officer of a [Type B or Type C] CHARITABLE corporation.
   46  The attorney-general shall have the same status as such members,  direc-
   47  tor or officer.
   48    (8) To compel the directors and officers, or any of them, of a [Type B
   49  or Type C] CHARITABLE corporation which has been dissolved under section
   50  1011  (Dissolution  for  failure to file certificate of type of Not-for-
   51  Profit Corporation Law under section 113) to account for the  assets  of
   52  the dissolved corporation.
   53    (9) Upon application, ex parte, for an order to the supreme court at a
   54  special  term  held within the judicial district where the office of the
   55  corporation is located, and if the court so orders, to enforce any right
   56  given under this chapter to members, a director or an officer of a [Type
       A. 8072                            20

    1  A corporation] NON-CHARITABLE CORPORATION.  For such purpose, the attor-
    2  ney-general shall have the same status  as  such  members,  director  or
    3  officer.
    4    (10) TO ENJOIN, VOID OR RESCIND ANY RELATED PARTY TRANSACTION, OR SEEK
    5  ADDITIONAL  DAMAGES  OR  REMEDIES PURSUANT TO SECTION 715 (RELATED PARTY
    6  TRANSACTIONS) OF THIS CHAPTER.
    7    S 34. Subparagraph 1 of paragraph (c) of section 112 of  the  not-for-
    8  profit corporation law is amended to read as follows:
    9    (1)  As used in this paragraph the term "resident" shall include indi-
   10  viduals,  domestic corporations of any [type or] kind and foreign corpo-
   11  rations of any [type or] kind authorized to  do  business  or  carry  on
   12  activities in the state.
   13    S 35. Section 113 of the not-for-profit corporation law is REPEALED.
   14    S  36.  Section 114 of the not-for-profit corporation law, as added by
   15  chapter 847 of the laws of 1970, is amended to read as follows:
   16  S 114. Visitation of supreme court.
   17    [Type B and Type C]  CHARITABLE  corporations,  whether  formed  under
   18  general or special laws, with their books and vouchers, shall be subject
   19  to  the  visitation and inspection of a justice of the supreme court, or
   20  of any person appointed by the court for that purpose.  If it appears by
   21  the verified petition of a member, DIRECTOR, OFFICER or creditor of  any
   22  such  corporation,  that  it,  or  its directors, officers, MEMBERS, KEY
   23  EMPLOYEES or agents, have misappropriated any of the funds  or  property
   24  of  the  corporation,  or diverted them from the purpose of its incorpo-
   25  ration, or that the corporation has acquired property in excess  of  the
   26  amount  which  it  is  authorized  by law to hold, or has engaged in any
   27  business other than that stated in its certificate of incorporation, the
   28  court may order that notice of at least eight days, with a copy  of  the
   29  petition,  be  served  on  the corporation, THE ATTORNEY GENERAL and the
   30  persons charged with misconduct, requiring them to show cause at a  time
   31  and place specified, why they should not be required to make and file an
   32  inventory  and  account of the property, effects and liabilities of such
   33  corporation with a detailed statement of  its  transactions  during  the
   34  twelve months next preceding the granting of such order.  On the hearing
   35  of such application, the court may make an order requiring such invento-
   36  ry,  account and statement to be filed, and proceed to take and state an
   37  account of the property and  liabilities  of  the  corporation,  or  may
   38  appoint  a  referee  for  that purpose.   When such account is taken and
   39  stated, after hearing all the parties to the application, the court  may
   40  enter  a  final  order determining the amount of property so held by the
   41  corporation, its annual income, whether any of the property or funds  of
   42  the  corporation  have  been  misappropriated  or  diverted to any other
   43  purpose than that for  which  such  corporation  was  incorporated,  and
   44  whether such corporation has been engaged in any activity not covered by
   45  its certificate of incorporation.  An appeal may be taken from the order
   46  by  any  party aggrieved to the appellate division of the supreme court,
   47  and to the court of appeals, as in a civil action.  No corporation shall
   48  be required to make and file more than one inventory and account in  any
   49  one  year, nor to make a second account and inventory, while proceedings
   50  are pending for the statement of an account under this section.
   51    S 37. Section 115 of the not-for-profit corporation law, as  added  by
   52  chapter 669 of the laws of 1977, is amended to read as follows:
   53  S 115. Power to solicit contributions for charitable purposes.
   54    [No corporation having the power to solicit contributions for charita-
   55  ble  purposes  may  solicit  contributions  for  any  purpose  for which
   56  approval of such  solicitation  is  required  under  the  provisions  of
       A. 8072                            21

    1  section four hundred four of this chapter unless the certificate specif-
    2  ically  makes  provision  for such solicitation and the required written
    3  approval is endorsed on or annexed to such  certificate  or  unless  the
    4  corporation  is  among those referred to in section one hundred seventy-
    5  two-a of the executive law. If such approval is  not  obtained  and  the
    6  corporation  continues  to  solicit or to receive contributions for such
    7  purpose or advertises that it has obtained such approval,  the]  (A)  NO
    8  CORPORATION  REQUIRED  TO OBTAIN APPROVAL OR PROVIDE NOTICE OF FORMATION
    9  PURSUANT TO SECTION 404 (APPROVALS, NOTICES AND CONSENTS) OF THIS  CHAP-
   10  TER MAY SOLICIT CONTRIBUTIONS FOR ANY PURPOSE REQUIRING SUCH APPROVAL OR
   11  NOTICE  UNLESS  AND  UNTIL  SUCH CORPORATION (1) OBTAINS AND SUBMITS ANY
   12  APPROVAL OR NOTICE REQUIRED THEREUNDER, AND (2) IS  IN  COMPLIANCE  WITH
   13  THE  REGISTRATION  AND  REPORTING REQUIREMENTS OF ARTICLE SEVEN-A OF THE
   14  EXECUTIVE LAW AND SECTION 8-1.4 OF THE ESTATES, POWERS AND TRUSTS LAW.
   15    (B) THE attorney general[, at the  request  of  the  officer  or  body
   16  authorized  to  grant  such  approval,  shall] MAY maintain an action or
   17  proceeding pursuant to the provisions of subparagraph one  of  paragraph
   18  (a)  of section one hundred twelve of this [chapter] ARTICLE AGAINST ANY
   19  CORPORATION THAT SOLICITS CONTRIBUTIONS IN VIOLATION OF PARAGRAPH (A) OF
   20  THIS SECTION.  Such an action may also be maintained in  relation  to  a
   21  corporation  hereinafter  incorporated if the name, purposes, objects or
   22  the activities of such corporation may,  in  any  manner,  lead  to  the
   23  belief  that  the  corporation  possesses  or  may  exercise any of such
   24  purposes.
   25    S 38. Section 201 of the not-for-profit corporation law, paragraph (b)
   26  as amended by chapter 847 of the laws  of  1970  and  paragraph  (c)  as
   27  amended  by  chapter  1058  of  the  laws of 1971, is amended to read as
   28  follows:
   29  S 201. Purposes.
   30    (a) A corporation, as defined in [subparagraph (5),] paragraph (a)  of
   31  S  102  (Definitions),  may be formed under this chapter [as provided in
   32  paragraph (b)] AS A CHARITABLE CORPORATION OR  A  NON-CHARITABLE  CORPO-
   33  RATION  unless  it  may  be formed under any other corporate law of this
   34  state, in which event it may not be formed  under  this  chapter  unless
   35  such other corporate law expressly so provides.
   36    (b)  [A  corporation,  of  a  type  and  for  a purpose or purposes as
   37  follows, may be formed under this chapter,  provided  consents  required
   38  under any other statute of this state have been obtained:
   39    Type  A  -]  A  CORPORATION FORMED UNDER THIS CHAPTER ON OR AFTER JULY
   40  FIRST, TWO THOUSAND FOURTEEN SHALL EITHER BE A CHARITABLE CORPORATION OR
   41  A NON-CHARITABLE CORPORATION. ANY CORPORATION FORMED FOR BOTH CHARITABLE
   42  PURPOSES AND NON-CHARITABLE PURPOSES SHALL BE DEEMED A CHARITABLE CORPO-
   43  RATION FOR PURPOSES OF THIS CHAPTER. A TYPE A not-for-profit corporation
   44  [of this type may be formed  for  any  lawful  non-business  purpose  or
   45  purposes including, but not limited to, any one or more of the following
   46  non-pecuniary purposes:  civic, patriotic, political, social, fraternal,
   47  athletic,  agricultural,  horticultural,  animal  husbandry,  and  for a
   48  professional, commercial, industrial, trade or service association.
   49    Type B - A not-for-profit corporation of this type may be  formed  for
   50  any  one  or  more  of  the following non-business purposes: charitable,
   51  educational,  religious,  scientific,  literary,  cultural  or  for  the
   52  prevention of cruelty to children or animals.
   53    Type  C  - A not-for-profit corporation of this type may be formed for
   54  any lawful business purpose to achieve a lawful public  or  quasi-public
   55  objective.
       A. 8072                            22

    1    Type D - A not-for-profit corporation of this type may be formed under
    2  this  chapter  when  such formation is authorized by any other corporate
    3  law of this state for any business  or  non-business,  or  pecuniary  or
    4  non-pecuniary,  purpose or purposes specified by such other law, whether
    5  such  purpose  or purposes are also within types A, B, C above or other-
    6  wise.
    7    (c) If a corporation is formed for purposes which are within both type
    8  A and type B above, it is a type B corporation.   If a  corporation  has
    9  among  its purposes any purpose which is within type C, such corporation
   10  is a type C corporation.   A  type  D  corporation  is  subject  to  all
   11  provisions  of this chapter which are applicable to a type B corporation
   12  under this chapter unless provided to the contrary in,  and  subject  to
   13  the  contrary  provisions of, the other corporate law authorizing forma-
   14  tion under this chapter of the type D corporation.] FORMED PRIOR TO JULY
   15  FIRST, TWO THOUSAND FOURTEEN SHALL BE  DEEMED  A  NON-CHARITABLE  CORPO-
   16  RATION  UNDER THIS CHAPTER. ANY SUBMISSION OR FILING BY SUCH CORPORATION
   17  TO ANY PERSON OR ENTITY SHALL BE DEEMED TO HAVE BEEN SUBMITTED OR  FILED
   18  BY A NON-CHARITABLE CORPORATION, AND ANY REFERENCE IN ANY SUCH FILING OR
   19  SUBMISSION  REFERRING  TO  THE  STATUS  OF  SUCH CORPORATION AS A TYPE A
   20  CORPORATION SHALL BE DEEMED TO REFER TO A NON-CHARITABLE CORPORATION.
   21    (C) A TYPE B OR C NOT-FOR-PROFIT  CORPORATION  FORMED  PRIOR  TO  JULY
   22  FIRST,  TWO  THOUSAND  FOURTEEN SHALL BE DEEMED A CHARITABLE CORPORATION
   23  FOR ALL PURPOSES UNDER THIS CHAPTER. ANY SUBMISSION OR  FILING  BY  SUCH
   24  CORPORATION TO ANY PERSON OR ENTITY SHALL BE DEEMED TO HAVE BEEN SUBMIT-
   25  TED  OR FILED BY A CHARITABLE CORPORATION, AND ANY REFERENCE IN ANY SUCH
   26  FILING OR SUBMISSION REFERRING TO THE STATUS OF SUCH  CORPORATION  AS  A
   27  TYPE  B  OR  TYPE C CORPORATION SHALL BE DEEMED TO REFER TO A CHARITABLE
   28  CORPORATION.
   29    (D) A TYPE D NOT-FOR-PROFIT CORPORATION FORMED PRIOR  TO  JULY  FIRST,
   30  TWO THOUSAND FOURTEEN FOR CHARITABLE PURPOSES AS THAT TERM IS DEFINED IN
   31  THIS CHAPTER SHALL BE DEEMED A CHARITABLE CORPORATION. ANY SUBMISSION OR
   32  FILING  BY  SUCH  CORPORATION TO ANY PERSON OR ENTITY SHALL BE DEEMED TO
   33  HAVE BEEN SUBMITTED OR FILED BY A CHARITABLE CORPORATION, AND ANY REFER-
   34  ENCE IN ANY SUCH FILING OR SUBMISSION REFERRING TO THE  STATUS  OF  SUCH
   35  CORPORATION AS A TYPE D CORPORATION SHALL BE DEEMED TO REFER TO A CHARI-
   36  TABLE  CORPORATION.  ANY OTHER TYPE D NOT-FOR-PROFIT CORPORATIONS FORMED
   37  PRIOR TO JULY FIRST, TWO THOUSAND FOURTEEN SHALL BE DEEMED A  NON-CHARI-
   38  TABLE  CORPORATION.  ANY SUBMISSION OR FILING BY SUCH CORPORATION TO ANY
   39  PERSON OR ENTITY SHALL BE DEEMED TO HAVE BEEN SUBMITTED OR  FILED  BY  A
   40  NON-CHARITABLE  CORPORATION,  AND  ANY  REFERENCE  IN ANY SUCH FILING OR
   41  SUBMISSION REFERRING TO THE STATUS OF  SUCH  CORPORATION  AS  A  TYPE  D
   42  CORPORATION SHALL BE DEEMED TO REFER TO A NON-CHARITABLE CORPORATION.
   43    S  39. Section 204 of the not-for-profit corporation law is amended to
   44  read as follows:
   45  S 204. Limitation on activities.
   46    Notwithstanding any other provision  of  this  chapter  or  any  other
   47  general  law,  a corporation of any [type or] kind to which this chapter
   48  applies shall conduct no activities for pecuniary  profit  or  financial
   49  gain, whether or not in furtherance of its corporate purposes, except to
   50  the  extent that such activity supports its other lawful activities then
   51  being conducted.
   52    S 40. Subparagraphs 2 and 3 of paragraph (a) of  section  301  of  the
   53  not-for-profit corporation law, subparagraph 2 as amended by chapter 344
   54  of the laws of 2004, are amended to read as follows:
   55    (2)  (A)  Shall  be such as to distinguish it from the names of corpo-
   56  rations of any [type or] kind, or a fictitious  name  of  an  authorized
       A. 8072                            23

    1  foreign  corporation filed pursuant to article thirteen of this chapter,
    2  as such names appear on the index of  names  of  existing  domestic  and
    3  authorized  foreign corporations of any [type or] kind, including ficti-
    4  tious names of authorized foreign corporations filed pursuant to article
    5  thirteen of this chapter, in the department of state, division of corpo-
    6  rations, or a name the right to which is reserved.
    7    (B)  Shall be such as to distinguish it from (i) the names of domestic
    8  limited liability companies, (ii) the names of authorized foreign limit-
    9  ed liability companies, (iii) the fictitious names of authorized foreign
   10  limited liability companies, (iv) the names of domestic limited partner-
   11  ships, (v) the names of authorized foreign limited partnerships, or (vi)
   12  the fictitious names of authorized foreign limited partnerships, in each
   13  case, as such names appear on the index of names  of  existing  domestic
   14  and authorized foreign limited liability companies, including fictitious
   15  names  of authorized foreign limited liability companies, in the depart-
   16  ment of state, or on the index of names of existing domestic or  author-
   17  ized foreign limited partnerships, including fictitious names of author-
   18  ized  foreign limited partnerships, in the department of state, or names
   19  the rights to which are reserved; provided, however, that no corporation
   20  that was formed prior to the  effective  date  of  this  clause  and  no
   21  foreign  corporation  that  was  qualified to conduct activities in this
   22  state prior to such effective date shall be required to change the  name
   23  or  fictitious  name  it  had on such effective date solely by reason of
   24  such name or fictitious name being indistinguishable from  the  name  or
   25  fictitious  name of any domestic or authorized foreign limited liability
   26  company or limited partnership or from any name the right  to  which  is
   27  reserved  by  or  on behalf of any domestic or foreign limited liability
   28  company or limited partnership.
   29    (3)  Shall not contain any word or  phrase,  or  any  abbreviation  or
   30  derivative  thereof,  the  use  of  which is prohibited or restricted by
   31  section 404 (Approvals, NOTICES and consents) or any  other  statute  of
   32  this  state,  unless  in  the  latter  case  the  restrictions have been
   33  complied with.
   34    S 41. Subparagraph 3 of paragraph (b) of section 302 of  the  not-for-
   35  profit  corporation  law, as amended by chapter 847 of the laws of 1970,
   36  is amended to read as follows:
   37    (3) Shall not prevent a  foreign  corporation  from  being  authorized
   38  under  a name which is similar to the name of a corporation of any [type
   39  or] kind existing or authorized under any statute, if the department  of
   40  state  finds,  upon proof by affidavit or otherwise as it may determine,
   41  that a difference between such names exists in  the  terms  or  abbrevi-
   42  ations  indicating  corporate character or otherwise, that the applicant
   43  has conducted activities as a corporation under its said  name  for  not
   44  less  than  ten  consecutive  years immediately prior to the date of its
   45  application, that the activities to be conducted in this state  are  not
   46  the  same  or  similar  to  the  business or activities conducted by the
   47  corporation with whose name it may conflict and that the public  is  not
   48  likely  to  be confused or deceived, and if the applicant shall agree in
   49  its application for authority to use with its corporate  name,  in  this
   50  state,  to be placed immediately under or following such name, the words
   51  "a ..... (name of jurisdiction of incorporation) corporation".
   52    S 42. Paragraph (c) of section 303 of the  not-for-profit  corporation
   53  law,  as  amended by chapter 590 of the laws of 1982, is amended to read
   54  as follows:
   55    (c) Application to reserve a corporate name shall be delivered to  the
   56  department  of  state.  It  shall  set forth the name and address of the
       A. 8072                            24

    1  applicant, the name to be reserved and a statement of  the  basis  under
    2  paragraph  (a)  or  (b)  for the application. The secretary of state may
    3  require the applicant to set forth in his application the nature of  the
    4  activities  to be conducted by the corporation. If the name is available
    5  for corporate use, the department of state shall reserve  the  name  for
    6  the  use of the applicant for a period of sixty days and issue a certif-
    7  icate of reservation. The prohibitions, restrictions and  qualifications
    8  set  forth in section 301 (Corporate name; general), section 302 (Corpo-
    9  rate name; exceptions) and section 404 (Approvals, NOTICES and consents)
   10  are not waived by the issuance of  a  certificate  of  reservation.  The
   11  certificate  of reservation shall include the name of the applicant, the
   12  name reserved and the date of the reservation. The certificate of reser-
   13  vation (or in lieu thereof an affidavit by the applicant or by his agent
   14  or attorney that  the  certificate  of  reservation  has  been  lost  or
   15  destroyed)  shall  accompany  the  certificate  of  incorporation or the
   16  application for authority when either is delivered to the department  of
   17  state.
   18    S 43. Section 304 of the not-for-profit corporation law, as amended by
   19  chapter 168 of the laws of 1982, is amended to read as follows:
   20  S 304. Statutory  designation of secretary of state as agent of domestic
   21           corporations [formed under article four of  this  chapter]  and
   22           authorized foreign corporations for service of process.
   23    (a) The secretary of state shall be the agent of every domestic corpo-
   24  ration  [formed under article four of this chapter] and every authorized
   25  foreign corporation upon whom process against  the  corporation  may  be
   26  served.
   27    (b)  Any  designation  by a domestic corporation [formed under article
   28  four of this chapter] or foreign corporation of the secretary  of  state
   29  as  such  agent, which designation is in effect on the effective date of
   30  this chapter, shall continue. Every domestic corporation  [formed  under
   31  article  four  of  this  chapter]  or  foreign  corporation, existing or
   32  authorized on the effective date of this chapter, which has  not  desig-
   33  nated the secretary of state as such agent, shall be deemed to have done
   34  so.
   35    (c)  Any  designation  by a domestic corporation [formed under article
   36  four of this chapter] or foreign corporation of an agent other than  the
   37  secretary  of  state  which  is  in effect on the effective date of this
   38  chapter shall continue in effect until changed or revoked as provided in
   39  this chapter.
   40    (d) Any designated post-office address to which the secretary of state
   41  shall mail a copy of process served upon him OR HER as agent of a domes-
   42  tic corporation [formed under article four of this chapter]  or  foreign
   43  corporation, shall continue until the filing of a certificate under this
   44  chapter directing the mailing to a different post-office address.
   45    S  44.  Paragraph (a) of section 305 of the not-for-profit corporation
   46  law, as amended by chapter 131 of the laws of 1985, is amended  to  read
   47  as follows:
   48    (a)  Every  domestic corporation or authorized foreign corporation may
   49  designate a registered agent in this state  upon  whom  process  against
   50  such  corporation may be served. The agent shall be a natural person who
   51  is a resident of or has a business address in this state or  a  domestic
   52  corporation  or  foreign  corporation  of  any [type or] kind formed, or
   53  authorized to do business in this state, under this chapter or under any
   54  other statute of this state.
   55    S 45. Paragraphs (b) and (c) of  section  306  of  the  not-for-profit
   56  corporation  law, paragraph (b) as amended by chapter 168 of the laws of
       A. 8072                            25

    1  1982, and paragraph (c) as amended by chapter 93 of the  laws  of  1984,
    2  are amended to read as follows:
    3    (b)  Service of process on the secretary of state as agent of a domes-
    4  tic corporation [formed under  article  four  of  this  chapter]  or  an
    5  authorized foreign corporation shall be made by personally delivering to
    6  and  leaving  with [him or his] THE deputy OF THE SECRETARY OF STATE, or
    7  with any person authorized by the secretary of  state  to  receive  such
    8  service, at the office of the department of state in the city of Albany,
    9  duplicate  copies of such process together with the statutory fee, which
   10  fee shall be a taxable disbursement.  Service of process on such  corpo-
   11  ration  shall  be complete when the secretary of state is so served. The
   12  secretary of state shall promptly send one of such copies  by  certified
   13  mail,  return receipt requested, to such corporation, at the post office
   14  address, on file in the department of state, specified for the  purpose.
   15  If a domestic corporation [formed under article four of this chapter] or
   16  an  authorized  foreign  corporation  has no such address on file in the
   17  department of state, the secretary of state shall so mail such  copy  to
   18  such  corporation at the address of its office within this state on file
   19  in the department.
   20    (c) If an action or special proceeding is instituted  in  a  court  of
   21  limited  jurisdiction,  service  of  process  may  be made in the manner
   22  provided in this section if  the  office  of  the  domestic  corporation
   23  [formed  under  article  four of this chapter] or foreign corporation is
   24  within the territorial jurisdiction of the court.
   25    S 46. The not-for-profit corporation law is amended by  adding  a  new
   26  section 309 to read as follows:
   27  S  309.  PERSONAL JURISDICTION AND SERVICE OF PROCESS ON NON-DOMICILIARY
   28           RESIDENT DIRECTOR, OFFICER, KEY EMPLOYEE OR AGENT.
   29    A PERSON, BY BECOMING A DIRECTOR, OFFICER, KEY EMPLOYEE OR AGENT OF  A
   30  CORPORATION IS SUBJECT TO THE PERSONAL JURISDICTION OF THE SUPREME COURT
   31  OF THE STATE OF NEW YORK, AND IN AN ACTION OR PROCEEDING BY THE ATTORNEY
   32  GENERAL  UNDER  THIS  CHAPTER  PROCESS MAY BE SERVED UPON SUCH PERSON AS
   33  PROVIDED IN SECTION THREE HUNDRED THIRTEEN OF THE CIVIL PRACTICE LAW AND
   34  RULES.
   35    S 47. Subparagraphs 2 and 4 of paragraph (a) of  section  402  of  the
   36  not-for-profit corporation law, subparagraph 2 as amended by chapter 847
   37  of  the laws of 1970 and subparagraph 4 as amended by chapter 679 of the
   38  laws of 1985, are amended to read as follows:
   39    (2) That the corporation is a corporation as defined  in  subparagraph
   40  (a)  (5)  of  section  102 (Definitions)[;], the purpose or purposes for
   41  which it is formed, and [the type of] WHETHER IT IS A CHARITABLE  corpo-
   42  ration  [it  shall be] OR A NON-CHARITABLE CORPORATION under section 201
   43  (Purposes)[; and in the case of a Type C corporation, the lawful  public
   44  or  quasi-public  objective  which  each business purpose will achieve].
   45  ANY CORPORATION MAY ALSO SET FORTH ANY ACTIVITIES  THAT  IT  INTENDS  TO
   46  CARRY OUT IN FURTHERANCE OF SUCH PURPOSE OR PURPOSES; PROVIDED THAT THIS
   47  SUBPARAGRAPH SHALL NOT BE INTERPRETED TO REQUIRE THAT THE CERTIFICATE OF
   48  INCORPORATION  SET  FORTH  SUCH  ACTIVITIES  OR  OTHERWISE STATE HOW THE
   49  CORPORATION'S PURPOSES WILL BE ACHIEVED.
   50    (4) [In the case of a Type A, Type B, or Type C corporation, the]  THE
   51  names  and  addresses of the initial directors. [In the case of a Type D
   52  corporation, the names and addresses of the initial directors,  if  any,
   53  may but need not be set forth.]
   54    S  48.  The  section  heading  and paragraph (d) of section 404 of the
   55  not-for-profit corporation law, the section heading and paragraph (d) as
   56  amended by chapter 139 of the laws of 1993, and paragraph (d) as  relet-
       A. 8072                            26

    1  tered  by  chapter  431  of  the  laws  of  1993, are amended to read as
    2  follows:
    3  Approvals, NOTICES and consents.
    4    (d)  Every  CORPORATION  WHOSE  certificate  of incorporation INCLUDES
    5  AMONG ITS PURPOSES THE OPERATION OF A SCHOOL; A COLLEGE,  UNIVERSITY  OR
    6  OTHER  ENTITY PROVIDING POST SECONDARY EDUCATION; A LIBRARY; OR A MUSEUM
    7  OR HISTORICAL SOCIETY SHALL HAVE ENDORSED THEREON OR ANNEXED THERETO THE
    8  APPROVAL OF THE COMMISSIONER OF EDUCATION, OR IN THE CASE OF  A  COLLEGE
    9  OR  A  UNIVERSITY,  THE  WRITTEN AUTHORIZATION OF THE REGENTS. ANY OTHER
   10  CORPORATION THE CERTIFICATE OF INCORPORATION OF which includes a purpose
   11  for which a corporation might be chartered by the regents of the univer-
   12  sity of the State of New York shall [have endorsed  thereon  or  annexed
   13  thereto  the consent of the commissioner of education.] PROVIDE A CERTI-
   14  FIED COPY OF THE CERTIFICATE OF INCORPORATION  TO  THE  COMMISSIONER  OF
   15  EDUCATION  WITHIN  THIRTY  BUSINESS  DAYS AFTER THE CORPORATION RECEIVES
   16  CONFIRMATION FROM THE DEPARTMENT OF STATE THAT THE CERTIFICATE HAS  BEEN
   17  ACCEPTED FOR FILING.
   18    S  49.  Paragraph (w) of section 404 of the not-for-profit corporation
   19  law is REPEALED and a new paragraph (w) is added to read as follows:
   20    (W) A STATEMENT IN THE CERTIFICATE OF INCORPORATION OF  A  CORPORATION
   21  THAT  THE  CORPORATION'S PURPOSES AND POWERS DO NOT INCLUDE ANY OF THOSE
   22  DESCRIBED IN PARAGRAPHS (A) THROUGH (V) OF THIS SECTION SHALL BE  SUFFI-
   23  CIENT  TO SATISFY THE APPROVAL AND NOTICE REQUIREMENTS CONTAINED IN THIS
   24  SECTION PROVIDED SUCH STATEMENT IS ACCURATE AS OF THE DATE  THE  CERTIF-
   25  ICATE OF INCORPORATION IS FILED.
   26    S  50.  Paragraph (d) of section 502 of the not-for-profit corporation
   27  law is amended to read as follows:
   28    (d) A member's capital contribution shall be evidenced  by  a  capital
   29  certificate which shall be non-transferable, except that the certificate
   30  of  incorporation  of  a [Type A] NON-CHARITABLE corporation may provide
   31  that its capital certificates, or some of them, may be  transferable  to
   32  other  members  with the consent of the corporation upon specified terms
   33  and conditions.
   34    S 51.  Paragraphs (b) and (c) of section  503  of  the  not-for-profit
   35  corporation  law,  subparagraph  1 of paragraph (b) and paragraph (c) as
   36  amended by chapter 847 of the laws of  1970,  are  amended  to  read  as
   37  follows:
   38    (b)  Each  capital  certificate  shall when issued state upon the face
   39  thereof:
   40    (1) [That the corporation is a Type .....  corporation  under  section
   41  113 or section 402 of the New York Not-for-Profit Corporation Law.
   42    (2)] The name of the member to whom issued.
   43    [(3)] (2) The amount of the member's capital contribution evidenced by
   44  such certificate.
   45    [(4)] (3) If appropriate, that the corporation is a [Type A] NON-CHAR-
   46  ITABLE  corporation,  and that its certificate of incorporation provides
   47  that the capital certificate is transferable to other members  with  the
   48  consent of the corporation.
   49    [(c)]  (4)  The  fact  that the corporation is a not-for-profit corpo-
   50  ration, and that the  capital  certificate  is  non-transferable  or  is
   51  transferable  to  other  members,  with  the consent of the corporation,
   52  shall be noted conspicuously on the face or back of  each  such  certif-
   53  icate.
   54    S  52.  Paragraph (b) of section 505 of the not-for-profit corporation
   55  law, subparagraph 1 as amended by chapter 847 of the laws  of  1970,  is
   56  amended to read as follows:
       A. 8072                            27

    1    (b)  Each subvention certificate shall when issued state upon the face
    2  thereof:
    3    (1)  [That  the  corporation is a Type ..... corporation under section
    4  113 or section 402 of the New York Not-for-Profit Corporation Law.
    5    (2)] The name of the person or persons to whom issued.
    6    [(3)] (2) The amount of the subvention evidenced by such certificate.
    7    [(4)] (3) The amount of the periodic payment thereon, if any,  author-
    8  ized by the resolution of the board.
    9    [(5)]  (4)  If  appropriate,  that the certificate is redeemable and a
   10  summary of the conditions for redemption at the  option  of  the  corpo-
   11  ration or of the holder.
   12    [(6)] (5) If appropriate, that the certificate is transferable, either
   13  at will or subject to specified restrictions.
   14    S 53. Section 509 of the not-for-profit corporation law, as amended by
   15  chapter 145 of the laws of 1991, is amended to read as follows:
   16  S 509. Purchase, sale, mortgage and lease of real property.
   17    (A) No CORPORATION SHALL purchase [of] real property [shall be made by
   18  a  corporation  and  no  corporation  shall sell, mortgage or lease real
   19  property, unless authorized by the vote  of]  UNLESS  SUCH  PURCHASE  IS
   20  AUTHORIZED  BY  THE VOTE OF A MAJORITY OF DIRECTORS OF THE BOARD OR OF A
   21  MAJORITY OF A COMMITTEE AUTHORIZED BY THE BOARD, PROVIDED THAT  IF  SUCH
   22  PROPERTY  WOULD, UPON PURCHASE THEREOF, CONSTITUTE ALL, OR SUBSTANTIALLY
   23  ALL, OF THE ASSETS OF THE CORPORATION, THEN THE VOTE  OF  two-thirds  of
   24  the entire board[, provided that if] SHALL BE REQUIRED, OR, IF there are
   25  twenty-one or more directors, the vote of a majority of the entire board
   26  shall be sufficient.
   27    (B)  NO CORPORATION SHALL SELL, MORTGAGE, LEASE, EXCHANGE OR OTHERWISE
   28  DISPOSE OF ITS REAL PROPERTY UNLESS AUTHORIZED BY THE VOTE OF A MAJORITY
   29  OF DIRECTORS OF THE BOARD OR OF A MAJORITY OF A COMMITTEE AUTHORIZED  BY
   30  THE  BOARD;  PROVIDED THAT IF SUCH PROPERTY CONSTITUTES ALL, OR SUBSTAN-
   31  TIALLY ALL,  OF  THE  ASSETS  OF  THE  CORPORATION,  THEN  THE  VOTE  OF
   32  TWO-THIRDS OF THE ENTIRE BOARD SHALL BE REQUIRED, OR, IF THERE ARE TWEN-
   33  TY-ONE  OR  MORE  DIRECTORS,  THE VOTE OF A MAJORITY OF THE ENTIRE BOARD
   34  SHALL BE SUFFICIENT.
   35    (C) IF A CORPORATION AUTHORIZES A COMMITTEE TO ACT PURSUANT  TO  PARA-
   36  GRAPHS  (A) AND (B) OF THIS SECTION, THE COMMITTEE SHALL PROMPTLY REPORT
   37  ANY ACTIONS TAKEN TO THE BOARD, AND IN NO EVENT AFTER THE NEXT REGULARLY
   38  SCHEDULED MEETING OF THE BOARD.
   39    S 54. Paragraph (a) of section 510 of the  not-for-profit  corporation
   40  law,  the  opening  paragraph  as  amended by chapter 961 of the laws of
   41  1972, subparagraph 3 as amended by chapter 847 of the laws of  1970,  is
   42  amended to read as follows:
   43    (a)  A  sale, lease, exchange or other disposition of all, or substan-
   44  tially all, the assets of a corporation may be made upon such terms  and
   45  conditions  and for such consideration, which may consist in whole or in
   46  part of cash or other property,  real  or  personal,  including  shares,
   47  bonds  or  other securities of any other domestic or foreign corporation
   48  or corporations of any [type or] kind, as may be authorized  in  accord-
   49  ance with the following procedure:
   50    (1)  If  there  are  members entitled to vote thereon, the board shall
   51  adopt a resolution recommending such  sale,  lease,  exchange  or  other
   52  disposition.  The  resolution  shall specify the terms and conditions of
   53  the proposed transaction, including the consideration to be received  by
   54  the  corporation and the eventual disposition to be made of such consid-
   55  eration, together with a statement that the dissolution  of  the  corpo-
   56  ration  is  or  is  not contemplated thereafter. The resolution shall be
       A. 8072                            28

    1  submitted to a vote at a meeting of members entitled  to  vote  thereon,
    2  which  may be either an annual or a special meeting. Notice of the meet-
    3  ing shall be given to each member and each holder of subvention  certif-
    4  icates  or bonds of the corporation, whether or not entitled to vote. At
    5  such meeting by two-thirds vote as provided in paragraph (c) of  section
    6  613  (Vote  of members) the members may approve the proposed transaction
    7  according to the terms of the resolution of the board,  or  may  approve
    8  such  sale,  lease,  exchange or other disposition and may authorize the
    9  board to modify the terms and conditions thereof.
   10    (2) If there are no members  entitled  to  vote  thereon,  such  sale,
   11  lease,  exchange or other disposition shall be authorized by the vote of
   12  at least two-thirds of the entire board,  provided  that  if  there  are
   13  twenty-one or more directors, the vote of a majority of the entire board
   14  shall be sufficient.
   15    (3)  If  the corporation is, or would be if formed under this chapter,
   16  classified as a [Type B or Type C] CHARITABLE corporation under  section
   17  201[,]  (Purposes) such sale, lease, exchange or other disposition shall
   18  in addition require [leave] APPROVAL of  the  ATTORNEY  GENERAL  OR  THE
   19  supreme  court  in  the  judicial district or of the county court of the
   20  county in which the corporation has its office  or  principal  place  of
   21  carrying  out the [puropses] PURPOSES for which it was formed IN ACCORD-
   22  ANCE WITH SECTION 511 (PETITION FOR COURT  APPROVAL)  OR  SECTION  511-A
   23  (PETITION FOR ATTORNEY GENERAL APPROVAL) OF THIS ARTICLE.
   24    S  55.  The  section  heading  and paragraph (a) of section 511 of the
   25  not-for-profit corporation law,  subparagraph  6  of  paragraph  (a)  as
   26  amended  by  chapter  961  of  the  laws of 1972, are amended to read as
   27  follows:
   28  Petition for [leave of] court APPROVAL.
   29    (a) [A corporation required by law to]  TO  obtain  [leave  of]  court
   30  APPROVAL  to  sell,  lease,  exchange  or  otherwise  dispose  of all or
   31  substantially all its assets, A CORPORATION  shall  present  a  verified
   32  petition  to  the  supreme court of the judicial district, or the county
   33  court of the county, wherein the corporation has its office or principal
   34  place of carrying out the purposes for which it was formed. The petition
   35  shall set forth:
   36    1. The name of the corporation, the law  under  or  by  which  it  was
   37  incorporated.
   38    2. The names of its directors and principal officers, and their places
   39  of residence.
   40    3. The activities of the corporation.
   41    4. A description, with reasonable certainty, of the assets to be sold,
   42  leased,  exchanged,  or otherwise disposed of, or a statement that it is
   43  proposed to sell,  lease,  exchange  or  otherwise  dispose  of  all  or
   44  substantially  all the corporate assets more fully described in a sched-
   45  ule attached to the petition; and a statement of the fair value of  such
   46  assets,  and  the  amount of the corporation's debts and liabilities and
   47  how secured.
   48    5. The consideration to be received by the corporation and the  dispo-
   49  sition  proposed  to be made thereof, together with a statement that the
   50  dissolution of the corporation is or is not contemplated thereafter.
   51    6. That the consideration and the terms of the sale,  lease,  exchange
   52  or  other  disposition  of  the  assets  of the corporation are fair and
   53  reasonable to the corporation, and that the purposes of the corporation,
   54  or the interests of its members will be promoted thereby, and a  concise
   55  statement of the reasons therefor.
       A. 8072                            29

    1    7. That such sale, lease, exchange or disposition of corporate assets,
    2  has  been  recommended or authorized by vote of the directors in accord-
    3  ance with law, at a meeting duly called and held, as shown in a schedule
    4  annexed to the petition setting forth a copy of the resolution  granting
    5  such authority with a statement of the vote thereon.
    6    8. Where the consent of members of the corporation is required by law,
    7  that  such consent has been given, as shown in a schedule annexed to the
    8  petition setting forth a copy of such consent, if in writing,  or  of  a
    9  resolution  giving  such  consent,  adopted at a meeting of members duly
   10  called and held, with a statement of the vote thereon.
   11    9. A [prayer] REQUEST for  [leave]  COURT  APPROVAL  to  sell,  lease,
   12  exchange  or otherwise dispose of all or substantially all the assets of
   13  the corporation as set forth in the petition.
   14    S 56. The not-for-profit corporation law is amended by  adding  a  new
   15  section 511-a to read as follows:
   16  S 511-A. PETITION FOR ATTORNEY GENERAL APPROVAL.
   17    (A)  IN  LIEU  OF OBTAINING COURT APPROVAL UNDER SECTION 511 (PETITION
   18  FOR COURT APPROVAL) OF THIS ARTICLE TO SELL, LEASE, EXCHANGE  OR  OTHER-
   19  WISE  DISPOSE OF ALL OR SUBSTANTIALLY ALL OF ITS ASSETS, THE CORPORATION
   20  MAY ALTERNATIVELY SEEK APPROVAL OF  THE  ATTORNEY  GENERAL  BY  VERIFIED
   21  PETITION,  EXCEPT IN THE FOLLOWING CIRCUMSTANCES: (1) THE CORPORATION IS
   22  INSOLVENT, OR WOULD BECOME INSOLVENT AS A RESULT OF THE TRANSACTION, AND
   23  MUST PROCEED ON NOTICE TO CREDITORS PURSUANT TO PARAGRAPH (C) OF SECTION
   24  511 OF THIS ARTICLE;  OR  (2)  THE  ATTORNEY  GENERAL,  IN  HIS  OR  HER
   25  DISCRETION, CONCLUDES THAT A COURT SHOULD REVIEW THE PETITION AND MAKE A
   26  DETERMINATION THEREON.
   27    (B)  THE VERIFIED PETITION TO THE ATTORNEY GENERAL SHALL SET FORTH (1)
   28  ALL OF THE INFORMATION REQUIRED TO BE INCLUDED IN A VERIFIED PETITION TO
   29  OBTAIN COURT APPROVAL PURSUANT TO  SUBPARAGRAPHS  ONE  THROUGH  NINE  OF
   30  PARAGRAPH  (A)  OF SECTION 511 OF THIS ARTICLE; (2) A STATEMENT THAT THE
   31  CORPORATION IS NOT INSOLVENT AND WILL NOT BECOME INSOLVENT AS  A  RESULT
   32  OF  THE  TRANSACTION; AND (3) A STATEMENT AS TO WHETHER ANY PERSONS HAVE
   33  RAISED, OR HAVE A REASONABLE BASIS TO RAISE,  OBJECTIONS  TO  THE  SALE,
   34  LEASE,  EXCHANGE  OR  OTHER DISPOSITION THAT IS THE SUBJECT OF THE PETI-
   35  TION, INCLUDING A STATEMENT SETTING FORTH THE  NAMES  AND  ADDRESSES  OF
   36  SUCH  PERSONS,  THE NATURE OF THEIR INTEREST, AND A DESCRIPTION OF THEIR
   37  OBJECTIONS. THE ATTORNEY GENERAL, IN HIS OR HER DISCRETION,  MAY  DIRECT
   38  THE  CORPORATION  TO  PROVIDE  NOTICE OF SUCH PETITION TO ANY INTERESTED
   39  PERSON, AND THE CORPORATION SHALL PROVIDE THE ATTORNEY  GENERAL  WITH  A
   40  CERTIFICATION THAT SUCH NOTICE HAS BEEN PROVIDED.
   41    (C)  IF  IT  SHALL APPEAR, TO THE SATISFACTION OF THE ATTORNEY GENERAL
   42  THAT THE CONSIDERATION AND THE TERMS OF THE  TRANSACTION  ARE  FAIR  AND
   43  REASONABLE  TO  THE CORPORATION AND THAT THE PURPOSES OF THE CORPORATION
   44  OR THE INTERESTS OF THE MEMBERS WILL BE PROMOTED, THE  ATTORNEY  GENERAL
   45  MAY  AUTHORIZE  THE SALE, LEASE, EXCHANGE OR OTHER DISPOSITION OF ALL OR
   46  SUBSTANTIALLY ALL THE ASSETS OF THE CORPORATION,  AS  DESCRIBED  IN  THE
   47  PETITION,  FOR  SUCH  CONSIDERATION  AND UPON SUCH TERMS AS THE ATTORNEY
   48  GENERAL MAY PRESCRIBE. THE AUTHORIZATION OF THE ATTORNEY  GENERAL  SHALL
   49  DIRECT THE DISPOSITION OF THE CONSIDERATION TO BE RECEIVED THEREUNDER BY
   50  THE CORPORATION.
   51    (D)  AT  ANY  TIME, INCLUDING IF THE ATTORNEY GENERAL DOES NOT APPROVE
   52  THE PETITION, OR IF THE ATTORNEY GENERAL CONCLUDES THAT COURT REVIEW  IS
   53  APPROPRIATE,  THE  PETITIONER  MAY  SEEK COURT APPROVAL ON NOTICE TO THE
   54  ATTORNEY GENERAL PURSUANT TO SECTION 511 (PETITION FOR  COURT  APPROVAL)
   55  OF THIS ARTICLE.
       A. 8072                            30

    1    S  57.  Paragraph (a) of section 513 of the not-for-profit corporation
    2  law, as amended by chapter 690 of the laws of 1978, is amended  to  read
    3  as follows:
    4    (a)  A corporation which is, or would be if formed under this chapter,
    5  [classified as] a [Type B] CHARITABLE corporation shall hold full owner-
    6  ship rights in any assets consisting of funds or other real or  personal
    7  property  of any kind, that may be given, granted, bequeathed or devised
    8  to or otherwise vested in such corporation  in  trust  for,  or  with  a
    9  direction to apply the same to, any purpose specified in its certificate
   10  of  incorporation, and shall not be deemed a trustee of an express trust
   11  of such assets.  Any other corporation subject to this chapter may simi-
   12  larly hold assets so received, unless otherwise provided by  law  or  in
   13  the certificate of incorporation.
   14    S  58.  Paragraph (b) of section 515 of the not-for-profit corporation
   15  law is amended to read as follows:
   16    (b) A corporation may pay  compensation  in  a  reasonable  amount  to
   17  members,  directors,  or  officers,  for services rendered, and may make
   18  distributions of cash or property to members upon dissolution  or  final
   19  liquidation  as  permitted  by this chapter.   NO PERSON WHO MAY BENEFIT
   20  FROM SUCH COMPENSATION MAY BE PRESENT AT OR OTHERWISE PARTICIPATE IN ANY
   21  BOARD OR COMMITTEE DELIBERATION OR VOTE CONCERNING SUCH PERSON'S COMPEN-
   22  SATION; PROVIDED THAT NOTHING IN THIS SECTION SHALL PROHIBIT  THE  BOARD
   23  OR  AUTHORIZED  COMMITTEE  FROM REQUESTING THAT A PERSON WHO MAY BENEFIT
   24  FROM SUCH COMPENSATION PRESENT INFORMATION AS BACKGROUND OR ANSWER QUES-
   25  TIONS AT A COMMITTEE OR BOARD  MEETING  PRIOR  TO  THE  COMMENCEMENT  OF
   26  DELIBERATIONS OR VOTING RELATING THERETO.
   27    S 59. Section 520 of the not-for-profit corporation law, as amended by
   28  chapter 58 of the laws of 1981, is amended to read  as follows:
   29  S 520. Reports of corporation.
   30    Each  domestic corporation, and each foreign corporation authorized to
   31  conduct activities in this state, shall from  time  to  time  file  such
   32  reports  on its activities as may be required by the laws of this state.
   33  All registration and reporting requirements pursuant to  [EPTL]  ARTICLE
   34  SEVEN-A  OF  THE EXECUTIVE LAW, AND SECTION 8-1.4 OF THE ESTATES, POWERS
   35  AND TRUSTS LAW, or related successor provisions, are, without limitation
   36  on the foregoing, expressly included as reports required by the laws  of
   37  this state to be filed within the meaning of this section. Willful fail-
   38  ure  of  a corporation to file a report as required by law shall consti-
   39  tute a breach of the  directors'  duty  to  the  corporation  and  shall
   40  subject  the  corporation,  at  the  suit of the attorney-general, to an
   41  action or special proceeding for dissolution under article 11  (Judicial
   42  dissolution) in the case of a domestic corporation, or under [S] SECTION
   43  1303 (Violations) in the case of a foreign corporation.
   44    S  60.  Paragraph (f) of section 555 of the not-for-profit corporation
   45  law, as added by chapter 490 of the laws of 2010, is amended to read  as
   46  follows:
   47    (f)  This  [section]  CHAPTER  shall  not limit the application of the
   48  [doctrine] DOCTRINES of cy pres AND DEVIATION.
   49    S 61. Paragraph (a) of section 601 of the  not-for-profit  corporation
   50  law,  as amended by chapter 1058 of the laws of 1971, is amended to read
   51  as follows:
   52    (a) A corporation shall have one or more classes of  members,  or,  in
   53  the  case  of a [Type B] CHARITABLE corporation, may have no members, in
   54  which case any such provision for classes of members or for  no  members
   55  shall  be  set forth in the certificate of incorporation or the by-laws.
   56  Corporations, joint-stock associations, unincorporated associations  and
       A. 8072                            31

    1  partnerships,  as  well  as  any other person without limitation, may be
    2  members.
    3    S  62.  Paragraph (a) of section 605 of the not-for-profit corporation
    4  law, as amended by chapter 1058 of the laws of 1971, is amended to  read
    5  as follows:
    6    (a) Whenever under the provisions of this chapter members are required
    7  or permitted to take any action at a meeting, written notice shall state
    8  the  place,  date  and  hour  of the meeting and, unless it is an annual
    9  meeting, indicate that it is being issued by or at the direction of  the
   10  person or persons calling the meeting. Notice of a special meeting shall
   11  also  state  the  purpose or purposes for which the meeting is called. A
   12  copy of the notice of any meeting shall be given,  personally  [or],  by
   13  mail,  OR BY FACSIMILE TELECOMMUNICATIONS OR BY ELECTRONIC MAIL, to each
   14  member entitled to  vote  at  such  meeting.  If  the  notice  is  given
   15  personally  [or], by first class mail OR BY FACSIMILE TELECOMMUNICATIONS
   16  OR BY ELECTRONIC MAIL, it shall be given not less than ten nor more than
   17  fifty days before the date of the meeting; if mailed by any other  class
   18  of mail, it shall be given not less than thirty nor more than sixty days
   19  before such date.  If mailed, such notice is given when deposited in the
   20  United States mail, with postage thereon prepaid, directed to the member
   21  at  his  address as it appears on the record of members, or, if he shall
   22  have filed with the secretary of the corporation a written request  that
   23  notices  to him be mailed to some other address, then directed to him at
   24  such other address.  IF SENT BY FACSIMILE  TELECOMMUNICATION  OR  MAILED
   25  ELECTRONICALLY,  SUCH  NOTICE IS GIVEN WHEN DIRECTED TO THE MEMBER'S FAX
   26  NUMBER OR ELECTRONIC MAIL  ADDRESS  AS  IT  APPEARS  ON  THE  RECORD  OF
   27  MEMBERS,  OR,  TO  SUCH  FAX  NUMBER OR OTHER ELECTRONIC MAIL ADDRESS AS
   28  FILED WITH THE SECRETARY OF THE CORPORATION. NOTWITHSTANDING THE FOREGO-
   29  ING, SUCH NOTICE SHALL NOT BE DEEMED TO HAVE BEEN  GIVEN  ELECTRONICALLY
   30  (1)  IF  THE CORPORATION IS UNABLE TO DELIVER TWO CONSECUTIVE NOTICES TO
   31  THE MEMBER BY FACSIMILE TELECOMMUNICATION OR ELECTRONIC MAIL; OR (2) THE
   32  CORPORATION OTHERWISE BECOMES AWARE THAT NOTICE CANNOT BE  DELIVERED  TO
   33  THE MEMBER BY FACSIMILE TELECOMMUNICATION OR ELECTRONIC MAIL. An affida-
   34  vit  of the secretary or other person giving the notice or of a transfer
   35  agent of the corporation that the notice required by  this  section  has
   36  been  given  shall,  in the absence of fraud, be prima facie evidence of
   37  the facts therein stated. Whenever a  corporation  has  more  than  five
   38  hundred  members,  the  notice may be served by publication[, in lieu of
   39  mailing,] in a newspaper published in the county in the state  in  which
   40  the  principal  office  of  the  corporation is located, once a week for
   41  three successive weeks next preceding the date of the meeting,  PROVIDED
   42  THAT  THE CORPORATION SHALL ALSO PROMINENTLY POST NOTICE OF SUCH MEETING
   43  ON THE HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE CORPORATION CONTINUOUS-
   44  LY FROM THE DATE OF PUBLICATION THROUGH  THE  DATE  OF  THE  MEETING.  A
   45  CORPORATION  SHALL  SEND  NOTICE  OF MEETINGS BY FIRST CLASS MAIL TO ANY
   46  MEMBER WHO REQUESTS IN WRITING THAT SUCH NOTICES BE  DELIVERED  BY  SUCH
   47  METHOD.
   48    S 63.  Section 606 of the not-for-profit corporation law is amended to
   49  read as follows:
   50  S 606. Waivers of notice.
   51    Notice  of  meeting  need  not  be  given  to any member who submits a
   52  [signed] waiver of notice, in person or  by  proxy,  whether  before  or
   53  after  the  meeting.   WAIVER OF NOTICE MAY BE WRITTEN OR ELECTRONIC. IF
   54  WRITTEN, THE WAIVER MUST BE EXECUTED  BY  THE  MEMBER  OR  THE  MEMBER'S
   55  AUTHORIZED  OFFICER, DIRECTOR, EMPLOYEE, OR AGENT BY SIGNING SUCH WAIVER
   56  OR CAUSING HIS SIGNATURE TO BE AFFIXED TO SUCH WAIVER BY ANY  REASONABLE
       A. 8072                            32

    1  MEANS, INCLUDING, BUT NOT LIMITED TO FACSIMILE SIGNATURE. IF ELECTRONIC,
    2  THE  TRANSMISSION  OF THE WAIVER MUST BE SENT BY ELECTRONIC MAIL AND SET
    3  FORTH, OR BE SUBMITTED WITH, INFORMATION FROM WHICH IT CAN REASONABLY BE
    4  DETERMINED  THAT  THE  TRANSMISSION  WAS  AUTHORIZED  BY THE MEMBER. The
    5  attendance of any member at a meeting, in person or  by  proxy,  without
    6  protesting  prior to the conclusion of the meeting the lack of notice of
    7  such meeting, shall constitute a waiver of notice by him.
    8    S 64. Paragraphs (b) and (c) of  section  609  of  the  not-for-profit
    9  corporation  law,  as  added  by  chapter  186  of the laws of 1999, are
   10  amended to read as follows:
   11    (b) Without limiting the manner in which a member may authorize anoth-
   12  er person or persons to act for him as proxy pursuant to  paragraph  (a)
   13  of this section, the following shall constitute a valid means by which a
   14  member may grant such authority:
   15    (1)  A  member  may  execute  a  writing authorizing another person or
   16  persons to act for him as proxy. Execution may be  accomplished  by  the
   17  member  or  the member's authorized officer, director, employee or agent
   18  signing such writing or causing his or her signature to  be  affixed  to
   19  such  writing  by any reasonable means including, but not limited to, by
   20  facsimile signature.
   21    (2) A member may authorize another person or persons to  act  for  the
   22  member  as  proxy  by [transmitting or authorizing the transmission of a
   23  telegram, cablegram or other means of] PROVIDING SUCH  AUTHORIZATION  BY
   24  electronic  [transmission]  MAIL to the person who will be the holder of
   25  the proxy or to a proxy solicitation firm, proxy support service  organ-
   26  ization  or  like  agent  duly authorized by the person [who will be the
   27  holder of the proxy to receive such  transmission],  provided  that  any
   28  such [telegram, cablegram or other means of] AUTHORIZATION BY electronic
   29  [transmission] MAIL shall either set forth [or be submitted with] infor-
   30  mation  from  which  it can be reasonably determined that the [telegram,
   31  cablegram or other] AUTHORIZATION BY electronic [transmission] MAIL  was
   32  authorized  by  the  member.  If  it is determined that such [telegrams,
   33  cablegrams or other] AUTHORIZATION  BY  electronic  [transmissions  are]
   34  MAIL IS valid, the inspectors or, if there are no inspectors, such other
   35  persons making that determination shall specify the nature of the infor-
   36  mation upon which they relied.
   37    (c)  Any  copy,  facsimile telecommunication or other reliable reprod-
   38  uction of the writing or [transmission] ELECTRONIC MAIL created pursuant
   39  to paragraph (b) of this section may be substituted or used in  lieu  of
   40  the  original writing or transmission for any and all purposes for which
   41  the original writing or transmission could be used, provided  that  such
   42  copy,  facsimile  telecommunication  or  other  reproduction  shall be a
   43  complete reproduction of the entire original writing or transmission.
   44    S 65. Paragraphs (a) and (b) of  section  614  of  the  not-for-profit
   45  corporation law are amended to read as follows:
   46    (a) Whenever, under this chapter, members are required or permitted to
   47  take  any action by vote, such action may be taken without a meeting [on
   48  written] UPON THE consent[, setting forth the action  so  taken,  signed
   49  by]  OF all of the members entitled to vote thereon, WHICH CONSENT SHALL
   50  SET FORTH THE ACTION SO TAKEN. SUCH CONSENT MAY BE WRITTEN OR  ELECTRON-
   51  IC.  IF  WRITTEN,  THE  CONSENT  MUST  BE  EXECUTED BY THE MEMBER OR THE
   52  MEMBER'S AUTHORIZED OFFICER, DIRECTOR, EMPLOYEE OR AGENT BY SIGNING SUCH
   53  CONSENT OR CAUSING HIS SIGNATURE TO BE AFFIXED TO  SUCH  WAIVER  BY  ANY
   54  REASONABLE  MEANS  INCLUDING  BUT NOT LIMITED TO FACSIMILE SIGNATURE. IF
   55  ELECTRONIC, THE TRANSMISSION OF THE CONSENT MUST BE SENT  BY  ELECTRONIC
   56  MAIL  AND SET FORTH, OR BE SUBMITTED WITH, INFORMATION FROM WHICH IT CAN
       A. 8072                            33

    1  REASONABLY BE DETERMINED THAT THE TRANSMISSION  WAS  AUTHORIZED  BY  THE
    2  MEMBER.    This  paragraph shall not be construed to alter or modify any
    3  provision in a certificate of incorporation not inconsistent  with  this
    4  chapter  under which the written consent of less than all of the members
    5  is sufficient for corporate action.
    6    (b) Written OR ELECTRONIC consent thus given by all  members  entitled
    7  to  vote  shall  have the same effect as a unanimous vote of members and
    8  any certificate with respect to the authorization or taking of any  such
    9  action  which  is delivered to the department of state shall recite that
   10  the authorization was by [uanimous] UNANIMOUS written consent.
   11    S 66. Paragraph (e) of section 621 of the  not-for-profit  corporation
   12  law,  as  amended by chapter 847 of the laws of 1970, is amended to read
   13  as follows:
   14    (e) Upon the written request of any  person  who  shall  have  been  a
   15  member  of  record  for  at  least  six months immediately preceding his
   16  request, or of any person holding, or thereunto authorized in writing by
   17  the holders of, at least five percent of any class  of  the  outstanding
   18  capital  certificates,  the  corporation shall [give or mail] PROVIDE to
   19  such member an annual balance sheet and profit and loss statement  or  a
   20  financial  statement  performing  a  similar  function for the preceding
   21  fiscal year, and, if any interim balance sheet or  profit  and  loss  or
   22  similar  financial  statement  has  been  distributed  to its members or
   23  otherwise made available to the public, the  most  recent  such  interim
   24  balance  sheet  or  profit  and loss or similar financial statement. The
   25  corporation shall be allowed a reasonable time to  prepare  such  annual
   26  balance sheet and profit and loss or similar financial statement.
   27    S  67.  Paragraph (a) of section 702 of the not-for-profit corporation
   28  law is amended to read as follows:
   29    (a) The number of directors constituting the entire board shall be not
   30  less than three. Subject to such limitation, such number may be fixed by
   31  the by-laws or[, in the case of a corporation having members,] by action
   32  of the members or of the board under the specific provisions of a by-law
   33  [adopted by the members] ALLOWING SUCH ACTION, OR BY ANY NUMBER WITHIN A
   34  RANGE SET FORTH IN THE BY-LAWS. If not otherwise fixed under this  para-
   35  graph,  the  number  shall  be  three. [As used in this article, "entire
   36  board" means the total number of directors entitled to  vote  which  the
   37  corporation would have if there were no vacancies.]
   38    S  68.  Paragraphs  (b)  and  (c) of section 708 of the not-for-profit
   39  corporation law, paragraph (b) as amended by chapter 92 of the  laws  of
   40  1983  and  paragraph  (c) as amended by chapter 211 of the laws of 2007,
   41  are amended to read as follows:
   42    (b) Unless otherwise restricted by the certificate of incorporation or
   43  the by-laws, any action required or permitted to be taken by  the  board
   44  or  any  committee thereof may be taken without a meeting if all members
   45  of the board or the committee consent [in writing] to the adoption of  a
   46  resolution authorizing the action.  SUCH CONSENT MAY BE WRITTEN OR ELEC-
   47  TRONIC.  IF  WRITTEN,  THE  CONSENT  MUST BE EXECUTED BY THE DIRECTOR BY
   48  SIGNING SUCH CONSENT OR CAUSING HIS OR HER SIGNATURE TO  BE  AFFIXED  TO
   49  SUCH  CONSENT  BY  ANY  REASONABLE  MEANS INCLUDING, BUT NOT LIMITED TO,
   50  FACSIMILE SIGNATURE. IF ELECTRONIC, THE TRANSMISSION OF THE CONSENT MUST
   51  BE SENT BY ELECTRONIC MAIL AND SET FORTH, OR BE SUBMITTED WITH, INFORMA-
   52  TION FROM WHICH IT CAN REASONABLY BE DETERMINED  THAT  THE  TRANSMISSION
   53  WAS  AUTHORIZED BY THE DIRECTOR. The resolution and the written consents
   54  thereto by the members of the board or committee shall be filed with the
   55  minutes of the proceedings of the board or committee.
       A. 8072                            34

    1    (c) Unless otherwise restricted by the certificate of incorporation or
    2  the by-laws, any one or more members of the board or  OF  any  committee
    3  thereof  [may participate in] WHO IS NOT PHYSICALLY PRESENT AT a meeting
    4  of [such] THE board or A committee MAY PARTICIPATE by means of a confer-
    5  ence telephone or similar communications equipment [allowing all persons
    6  participating  in the meeting to hear each other at the same time] OR BY
    7  ELECTRONIC VIDEO SCREEN COMMUNICATION.    Participation  by  such  means
    8  shall  constitute presence in person at a meeting AS LONG AS ALL PERSONS
    9  PARTICIPATING IN THE MEETING CAN HEAR EACH OTHER AT THE  SAME  TIME  AND
   10  EACH  DIRECTOR  CAN PARTICIPATE IN ALL MATTERS BEFORE THE BOARD, INCLUD-
   11  ING, WITHOUT LIMITATION, THE ABILITY TO PROPOSE,  OBJECT  TO,  AND  VOTE
   12  UPON A SPECIFIC ACTION TO BE TAKEN BY THE BOARD OR COMMITTEE.
   13    S  69.  Paragraph (c) of section 711 of the not-for-profit corporation
   14  law, as amended by chapter 847 of the laws of 1970, is amended  to  read
   15  as follows:
   16    (c)  Notice  of a meeting need not be given to any alternate director,
   17  nor to any director who submits a  [signed]  waiver  of  notice  whether
   18  before or after the meeting, or who attends the meeting without protest-
   19  ing,  prior  thereto  or at its commencement, the lack of notice to him.
   20  SUCH WAIVER OF NOTICE MAY BE WRITTEN  OR  ELECTRONIC.  IF  WRITTEN,  THE
   21  WAIVER  MUST  BE EXECUTED BY THE DIRECTOR SIGNING SUCH WAIVER OR CAUSING
   22  HIS OR HER SIGNATURE TO BE AFFIXED TO  SUCH  WAIVER  BY  ANY  REASONABLE
   23  MEANS  INCLUDING  BUT NOT LIMITED TO FACSIMILE SIGNATURE. IF ELECTRONIC,
   24  THE TRANSMISSION OF THE CONSENT MUST BE SENT BY ELECTRONIC MAIL AND  SET
   25  FORTH, OR BE SUBMITTED WITH, INFORMATION FROM WHICH IT CAN REASONABLY BE
   26  DETERMINED THAT THE TRANSMISSION WAS AUTHORIZED BY THE DIRECTOR.
   27    S 70. Paragraphs (a), (b) and (e) of section 712 of the not-for-profit
   28  corporation  law, paragraph (e) as amended by chapter 961 of the laws of
   29  1972, are amended to read as follows:
   30    (a) If the certificate of incorporation or the by-laws so provide, the
   31  board, by resolution adopted by a majority  of  the  entire  board,  may
   32  designate  from  among  its  members  an  executive  committee and other
   33  [standing] committees, each consisting of three or more  directors,  and
   34  each  of  which,  to  the  extent  provided  in the resolution or in the
   35  certificate of incorporation or by-laws, shall have all the authority of
   36  the board, except that no such committee shall have authority as to  the
   37  following matters:
   38    (1)  The  submission  to  members  of  any  action  requiring members'
   39  approval under this chapter.
   40    (2) The filling of vacancies in the  board  of  directors  or  in  any
   41  committee.
   42    (3)  The  fixing  of  compensation of the directors for serving on the
   43  board or on any committee.
   44    (4) The amendment or repeal of the by-laws  or  the  adoption  of  new
   45  by-laws.
   46    (5)  The  amendment  or repeal of any resolution of the board which by
   47  its terms shall not be so amendable or repealable.
   48    (b) The board may designate one or more directors as alternate members
   49  of any [standing] committee,  who  may  replace  any  absent  member  or
   50  members at any meeting of such committee.
   51    (e)  Committees,  other  than  [standing or special] committees of the
   52  board, whether created by the board or by the members, shall be  commit-
   53  tees  of  the  corporation.  Such  committees  OF THE CORPORATION may be
   54  elected or appointed in the same manner as officers of the  corporation,
   55  BUT  NO  SUCH  COMMITTEE  SHALL  HAVE  THE  AUTHORITY TO BIND THE BOARD.
   56  Provisions of this chapter applicable to officers generally shall  apply
       A. 8072                            35

    1  to  members of such committees. SUCH COMMITTEES OF THE CORPORATION SHALL
    2  BE ELECTED OR APPOINTED IN THE MANNER SET FORTH IN THE  BY-LAWS,  OR  IF
    3  NOT  SET  FORTH  IN  THE  BY-LAWS, IN THE SAME MANNER AS OFFICERS OF THE
    4  CORPORATION.
    5    S  71.  Paragraph (c) of section 712 of the not-for-profit corporation
    6  law is REPEALED.
    7    S 72. The not-for-profit corporation law is amended by  adding  a  new
    8  section 712-a to read as follows:
    9  S 712-A. AUDIT OVERSIGHT.
   10    (A)  THE BOARD, OR A DESIGNATED AUDIT COMMITTEE OF THE BOARD COMPRISED
   11  SOLELY OF INDEPENDENT DIRECTORS, OF ANY CORPORATION REQUIRED TO FILE  AN
   12  INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S AUDIT REPORT WITH THE ATTORNEY
   13  GENERAL PURSUANT TO SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B
   14  OF  THE EXECUTIVE LAW SHALL OVERSEE THE ACCOUNTING AND FINANCIAL REPORT-
   15  ING PROCESSES OF THE CORPORATION AND  THE  AUDIT  OF  THE  CORPORATION'S
   16  FINANCIAL  STATEMENTS.  THE  BOARD  OR  DESIGNATED AUDIT COMMITTEE SHALL
   17  ANNUALLY RETAIN OR RENEW THE RETENTION  OF  AN  INDEPENDENT  AUDITOR  TO
   18  CONDUCT  THE  AUDIT  AND, UPON COMPLETION THEREOF, REVIEW THE RESULTS OF
   19  THE AUDIT AND ANY RELATED MANAGEMENT LETTER WITH THE  INDEPENDENT  AUDI-
   20  TOR.
   21    (B)  THE BOARD, OR A DESIGNATED AUDIT COMMITTEE OF THE BOARD COMPRISED
   22  SOLELY OF INDEPENDENT DIRECTORS, OF ANY CORPORATION REQUIRED TO FILE  AN
   23  INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S AUDIT REPORT WITH THE ATTORNEY
   24  GENERAL PURSUANT TO SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B
   25  OF  THE  EXECUTIVE  LAW  AND THAT IN THE PRIOR FISCAL YEAR HAD OR IN THE
   26  CURRENT FISCAL YEAR REASONABLY EXPECTS TO HAVE ANNUAL REVENUE IN  EXCESS
   27  OF  ONE  MILLION DOLLARS SHALL, IN ADDITION TO THOSE DUTIES SET FORTH IN
   28  PARAGRAPH (A) OF THIS SECTION:
   29    (1) REVIEW WITH THE INDEPENDENT AUDITOR THE SCOPE AND PLANNING OF  THE
   30  AUDIT PRIOR TO THE AUDIT'S COMMENCEMENT;
   31    (2)  UPON  COMPLETION  OF THE AUDIT, REVIEW AND DISCUSS WITH THE INDE-
   32  PENDENT AUDITOR: (A) ANY  MATERIAL  RISKS  AND  WEAKNESSES  IN  INTERNAL
   33  CONTROLS IDENTIFIED BY THE AUDITOR; (B) ANY RESTRICTIONS ON THE SCOPE OF
   34  THE  AUDITOR'S  ACTIVITIES  OR  ACCESS TO REQUESTED INFORMATION; (C) ANY
   35  SIGNIFICANT DISAGREEMENTS BETWEEN THE AUDITOR AND  MANAGEMENT;  AND  (D)
   36  THE  ADEQUACY  OF  THE  CORPORATION'S ACCOUNTING AND FINANCIAL REPORTING
   37  PROCESSES;
   38    (3) ANNUALLY CONSIDER THE PERFORMANCE AND INDEPENDENCE  OF  THE  INDE-
   39  PENDENT AUDITOR; AND
   40    (4)  IF  THE DUTIES REQUIRED BY THIS SECTION ARE PERFORMED BY AN AUDIT
   41  COMMITTEE, REPORT ON THE COMMITTEE'S ACTIVITIES TO THE BOARD.
   42    (C) THE BOARD OR DESIGNATED AUDIT COMMITTEE OF THE BOARD SHALL OVERSEE
   43  THE ADOPTION, IMPLEMENTATION OF, AND COMPLIANCE  WITH  ANY  CONFLICT  OF
   44  INTEREST  POLICY  OR  WHISTLEBLOWER POLICY ADOPTED BY THE CORPORATION IF
   45  THIS FUNCTION IS NOT OTHERWISE PERFORMED BY  ANOTHER  COMMITTEE  OF  THE
   46  BOARD COMPRISED SOLELY OF INDEPENDENT DIRECTORS.
   47    (D)  IF  A  CORPORATION CONTROLS A GROUP OF CORPORATIONS, THE BOARD OR
   48  DESIGNATED AUDIT COMMITTEE OF THE BOARD OF THE  CONTROLLING  CORPORATION
   49  MAY  PERFORM  THE DUTIES REQUIRED BY THIS SECTION FOR ONE OR MORE OF THE
   50  CONTROLLED CORPORATIONS.
   51    (E) ONLY INDEPENDENT DIRECTORS MAY PARTICIPATE IN ANY BOARD OR COMMIT-
   52  TEE DELIBERATIONS OR VOTING  RELATING  TO  MATTERS  SET  FORTH  IN  THIS
   53  SECTION.
   54    (F)  ANY CORPORATION THAT IS A STATE AUTHORITY OR A LOCAL AUTHORITY AS
   55  DEFINED IN SECTION TWO OF  THE  PUBLIC  AUTHORITIES  LAW  AND  THAT  HAS
   56  COMPLIED  SUBSTANTIALLY WITH SECTIONS TWENTY-EIGHT HUNDRED TWO AND TWEN-
       A. 8072                            36

    1  TY-EIGHT HUNDRED TWENTY-FOUR OF SUCH LAW SHALL BE DEEMED  IN  COMPLIANCE
    2  WITH THIS SECTION.
    3    S  73.  Paragraph (a) of section 713 of the not-for-profit corporation
    4  law is amended, and a new paragraph (f) is added to read as follows:
    5    (a) The board may elect or appoint a CHAIR OR president, OR BOTH,  one
    6  or  more  vice-presidents,  a  secretary and a treasurer, and such other
    7  officers as it may determine, or as may  be  provided  in  the  by-laws.
    8  These  officers  may  be  designated  by such alternate titles as may be
    9  provided in the certificate of incorporation or the by-laws. Any two  or
   10  more offices may be held by the same person, except the offices of pres-
   11  ident and secretary, or the offices corresponding thereto.
   12    (F)  NO  EMPLOYEE OF THE CORPORATION SHALL SERVE AS CHAIR OF THE BOARD
   13  OR HOLD ANY OTHER TITLE WITH SIMILAR RESPONSIBILITIES.
   14    S 74.  Section 715 of the not-for-profit corporation law,  as  amended
   15  by chapter 847 of the laws of 1970 and paragraph (f) as amended by chap-
   16  ter 1057 of the laws of 1971, is amended to read as follows:
   17  S 715. [Interested directors and officers] RELATED PARTY TRANSACTIONS.
   18    (a) [No contract or other transaction between a corporation and one or
   19  more  of  its  directors  or  officers, or between a corporation and any
   20  other corporation, firm, association or other entity  in  which  one  or
   21  more  of  its directors or officers are directors or officers, or have a
   22  substantial financial interest, shall be either  void  or  voidable  for
   23  this  reason alone or by reason alone that such director or directors or
   24  officer or officers are present at the meeting of the  board,  or  of  a
   25  committee  thereof,  which  authorizes  such contract or transaction, or
   26  that his or their votes are counted for such purpose:
   27    (1) If the material facts as to such director's or officer's  interest
   28  in  such contract or transaction and as to any such common directorship,
   29  officership or financial interest are disclosed in good faith  or  known
   30  to  the  board  or committee, and the board or committee authorizes such
   31  contract or transaction by a vote sufficient for  such  purpose  without
   32  counting the vote or votes of such interested director or officer; or
   33    (2)  If the material facts as to such director's or officer's interest
   34  in such contract or transaction and as to any such common  directorship,
   35  officership  or  financial interest are disclosed in good faith or known
   36  to the members entitled to vote thereon, if any, and  such  contract  or
   37  transaction is authorized by vote of such members.
   38    (b)  If  such  good  faith  disclosure of the material facts as to the
   39  director's or officer's interest in the contract or transaction  and  as
   40  to  any  such common directorship, officership or financial interest, is
   41  made to the directors or members, or known to the board or committee  or
   42  members  authorizing  such contract or transaction, as provided in para-
   43  graph (a), the contract or transaction may not be avoided by the  corpo-
   44  ration  for the reasons set forth in paragraph (a). If there was no such
   45  disclosure or knowledge, or if the vote of such interested  director  or
   46  officer  was  necessary for the authorization of such contract or trans-
   47  action at a meeting of the board or committee at which  it  was  author-
   48  ized,  the  corporation may avoid the contract or transaction unless the
   49  party or parties thereto shall establish affirmatively that the contract
   50  or transaction was fair and reasonable as to the corporation at the time
   51  it was authorized by the board, a committee or the members.
   52    (c) Common or interested directors may be counted in  determining  the
   53  presence  of  a quorum at a meeting of the board or of a committee which
   54  authorizes such contract or transaction.
   55    (d)] NO CORPORATION SHALL ENTER INTO  ANY  RELATED  PARTY  TRANSACTION
   56  UNLESS THE TRANSACTION IS DETERMINED BY THE BOARD TO BE FAIR, REASONABLE
       A. 8072                            37

    1  AND  IN  THE  CORPORATION'S  BEST  INTEREST AT THE TIME OF SUCH DETERMI-
    2  NATION. ANY DIRECTOR, OFFICER OR KEY EMPLOYEE WHO HAS AN INTEREST  IN  A
    3  RELATED  PARTY TRANSACTION SHALL DISCLOSE IN GOOD FAITH TO THE BOARD, OR
    4  AN  AUTHORIZED  COMMITTEE  THEREOF,  THE  MATERIAL FACTS CONCERNING SUCH
    5  INTEREST.
    6    (B) WITH RESPECT TO ANY RELATED PARTY TRANSACTION INVOLVING A CHARITA-
    7  BLE CORPORATION AND IN WHICH A RELATED PARTY HAS A SUBSTANTIAL FINANCIAL
    8  INTEREST, THE BOARD OF SUCH  CORPORATION,  OR  AN  AUTHORIZED  COMMITTEE
    9  THEREOF, SHALL:
   10    (1) PRIOR TO ENTERING INTO THE TRANSACTION, CONSIDER ALTERNATIVE TRAN-
   11  SACTIONS TO THE EXTENT AVAILABLE;
   12    (2)  APPROVE  THE  TRANSACTION BY NOT LESS THAN A MAJORITY VOTE OF THE
   13  DIRECTORS OR COMMITTEE MEMBERS PRESENT AT THE MEETING; AND
   14    (3) CONTEMPORANEOUSLY DOCUMENT IN WRITING THE BASIS FOR THE  BOARD  OR
   15  AUTHORIZED  COMMITTEE'S  APPROVAL,  INCLUDING  ITS  CONSIDERATION OF ANY
   16  ALTERNATIVE TRANSACTIONS.
   17    (C) The certificate of incorporation, BY-LAWS OR ANY POLICY ADOPTED BY
   18  THE BOARD may contain additional restrictions on [contracts or]  RELATED
   19  PARTY  transactions [between a corporation and its directors or officers
   20  or other persons and may] AND ADDITIONAL PROCEDURES  NECESSARY  FOR  THE
   21  REVIEW  AND APPROVAL OF SUCH TRANSACTIONS, OR provide that [contracts or
   22  transactions] ANY TRANSACTION in violation of such restrictions shall be
   23  void or voidable.
   24    [(e)] (D) Unless otherwise provided in  the  certificate  of  incorpo-
   25  ration or the by-laws, the board shall have authority to fix the compen-
   26  sation of directors for services in any capacity.
   27    [(f)] (E) The fixing of salaries of officers, if not done in or pursu-
   28  ant  to the by-laws, shall require the affirmative vote of a majority of
   29  the entire board unless a higher proportion is set by the certificate of
   30  incorporation or by-laws.
   31    (F) THE ATTORNEY GENERAL MAY  BRING  AN  ACTION  TO  ENJOIN,  VOID  OR
   32  RESCIND  ANY  RELATED PARTY TRANSACTION OR PROPOSED RELATED PARTY TRANS-
   33  ACTION THAT VIOLATES ANY PROVISION OF THIS CHAPTER OR WAS OTHERWISE  NOT
   34  REASONABLE  OR  IN THE BEST INTERESTS OF THE CORPORATION AT THE TIME THE
   35  TRANSACTION WAS APPROVED, OR TO SEEK RESTITUTION,  AND  THE  REMOVAL  OF
   36  DIRECTORS OR OFFICERS, OR SEEK TO REQUIRE ANY PERSON OR ENTITY TO:
   37    (1)  ACCOUNT  FOR ANY PROFITS MADE FROM SUCH TRANSACTION, AND PAY THEM
   38  TO THE CORPORATION;
   39    (2) PAY THE CORPORATION THE VALUE OF THE USE OF ANY OF ITS PROPERTY OR
   40  OTHER ASSETS USED IN SUCH TRANSACTION;
   41    (3) RETURN OR REPLACE ANY PROPERTY OR OTHER ASSETS LOST TO THE  CORPO-
   42  RATION  AS  A  RESULT  OF  SUCH TRANSACTION, TOGETHER WITH ANY INCOME OR
   43  APPRECIATION LOST TO THE CORPORATION BY REASON OF SUCH  TRANSACTION,  OR
   44  ACCOUNT  FOR ANY PROCEEDS OF SALE OF SUCH PROPERTY, AND PAY THE PROCEEDS
   45  TO THE CORPORATION TOGETHER WITH INTEREST AT THE LEGAL RATE; AND
   46    (4) PAY, IN THE CASE OF WILLFUL AND INTENTIONAL CONDUCT, AN AMOUNT  UP
   47  TO DOUBLE THE AMOUNT OF ANY BENEFIT IMPROPERLY OBTAINED.
   48    (F) THE POWERS OF THE ATTORNEY GENERAL PROVIDED IN THIS SECTION ARE IN
   49  ADDITION  TO  ALL  OTHER POWERS THE ATTORNEY GENERAL MAY HAVE UNDER THIS
   50  CHAPTER OR ANY OTHER LAW.
   51    (G) NO RELATED PARTY MAY PARTICIPATE IN DELIBERATIONS OR VOTING RELAT-
   52  ING TO MATTERS SET FORTH IN THIS SECTION; PROVIDED THAT NOTHING IN  THIS
   53  SECTION SHALL PROHIBIT THE BOARD OR AUTHORIZED COMMITTEE FROM REQUESTING
   54  THAT  A  RELATED  PARTY  PRESENT  INFORMATION CONCERNING A RELATED PARTY
   55  TRANSACTION AT A BOARD OR COMMITTEE MEETING PRIOR TO THE COMMENCEMENT OF
   56  DELIBERATIONS OR VOTING RELATING THERETO.
       A. 8072                            38

    1    S 75. The not-for-profit corporation law is amended by adding two  new
    2  sections 715-a and 715-b to read as follows:
    3  S 715-A. CONFLICT OF INTEREST POLICY.
    4    (A)  EXCEPT AS PROVIDED IN PARAGRAPH (D) OF THIS SECTION, EVERY CORPO-
    5  RATION SHALL ADOPT A CONFLICT OF INTEREST  POLICY  TO  ENSURE  THAT  ITS
    6  DIRECTORS,  OFFICERS  AND  KEY  EMPLOYEES  ACT IN THE CORPORATION'S BEST
    7  INTEREST AND COMPLY WITH APPLICABLE LEGAL  REQUIREMENTS,  INCLUDING  BUT
    8  NOT  LIMITED  TO  THE  REQUIREMENTS  SET  FORTH IN SECTION SEVEN HUNDRED
    9  FIFTEEN OF THIS ARTICLE.
   10    (B) THE CONFLICT OF INTEREST POLICY SHALL INCLUDE, AT A  MINIMUM,  THE
   11  FOLLOWING PROVISIONS:
   12    (1)  A  DEFINITION  OF THE CIRCUMSTANCES THAT CONSTITUTE A CONFLICT OF
   13  INTEREST;
   14    (2) PROCEDURES FOR DISCLOSING A CONFLICT  OF  INTEREST  TO  THE  AUDIT
   15  COMMITTEE OR, IF THERE IS NO AUDIT COMMITTEE, TO THE BOARD;
   16    (3) A REQUIREMENT THAT THE PERSON WITH THE CONFLICT OF INTEREST NOT BE
   17  PRESENT  AT OR PARTICIPATE IN BOARD OR COMMITTEE DELIBERATION OR VOTE ON
   18  THE MATTER GIVING RISE TO SUCH CONFLICT;
   19    (4) A PROHIBITION AGAINST ANY ATTEMPT BY THE PERSON WITH THE  CONFLICT
   20  TO  INFLUENCE IMPROPERLY THE DELIBERATION OR VOTING ON THE MATTER GIVING
   21  RISE TO SUCH CONFLICT;
   22    (5) A REQUIREMENT THAT THE EXISTENCE AND RESOLUTION OF THE CONFLICT BE
   23  DOCUMENTED IN THE CORPORATION'S RECORDS, INCLUDING IN THE MINUTES OF ANY
   24  MEETING AT WHICH THE CONFLICT WAS DISCUSSED OR VOTED UPON; AND
   25    (6) PROCEDURES FOR DISCLOSING,  ADDRESSING,  AND  DOCUMENTING  RELATED
   26  PARTY  TRANSACTIONS  IN ACCORDANCE WITH SECTION SEVEN HUNDRED FIFTEEN OF
   27  THIS ARTICLE.
   28    (C) THE CONFLICT OF INTEREST POLICY SHALL REQUIRE THAT  PRIOR  TO  THE
   29  INITIAL ELECTION OF ANY DIRECTOR, AND ANNUALLY THEREAFTER, SUCH DIRECTOR
   30  SHALL  COMPLETE,  SIGN  AND SUBMIT TO THE SECRETARY OF THE CORPORATION A
   31  WRITTEN STATEMENT IDENTIFYING, TO THE BEST OF THE DIRECTOR'S  KNOWLEDGE,
   32  ANY  ENTITY  OF  WHICH  SUCH  DIRECTOR IS AN OFFICER, DIRECTOR, TRUSTEE,
   33  MEMBER, OWNER (EITHER AS A SOLE PROPRIETOR OR A  PARTNER),  OR  EMPLOYEE
   34  AND  WITH  WHICH THE CORPORATION HAS A RELATIONSHIP, AND ANY TRANSACTION
   35  IN WHICH THE CORPORATION IS A PARTICIPANT  AND  IN  WHICH  THE  DIRECTOR
   36  MIGHT  HAVE  A  CONFLICTING INTEREST. THE POLICY SHALL REQUIRE THAT EACH
   37  DIRECTOR ANNUALLY RESUBMIT SUCH WRITTEN STATEMENT.   THE  SECRETARY   OF
   38  THE  CORPORATION SHALL PROVIDE A COPY OF ALL COMPLETED STATEMENTS TO THE
   39  CHAIR OF THE AUDIT COMMITTEE OR, IF THERE IS NO AUDIT COMMITTEE, TO  THE
   40  CHAIR OF THE BOARD.
   41    (D)  A CORPORATION THAT HAS ADOPTED AND POSSESSES A CONFLICT OF INTER-
   42  EST POLICY PURSUANT TO FEDERAL, STATE OR LOCAL LAWS THAT IS SUBSTANTIAL-
   43  LY CONSISTENT WITH THE PROVISIONS OF PARAGRAPH (B) OF THIS SECTION SHALL
   44  BE DEEMED IN COMPLIANCE WITH PROVISIONS OF THIS SECTION.   IN  ADDITION,
   45  ANY  CORPORATION  THAT  IS  A  STATE  AUTHORITY  OR A LOCAL AUTHORITY AS
   46  DEFINED IN SECTION TWO OF THE  PUBLIC  AUTHORITIES  LAW,  AND  THAT  HAS
   47  COMPLIED SUBSTANTIALLY WITH SECTION TWENTY-EIGHT HUNDRED TWENTY-FOUR AND
   48  SUBDIVISION  THREE  OF  SECTION TWENTY-EIGHT HUNDRED TWENTY-FIVE OF SUCH
   49  LAW, SHALL BE DEEMED IN COMPLIANCE WITH THIS SECTION.
   50    (E) NOTHING IN THIS SECTION SHALL BE INTERPRETED TO REQUIRE  A  CORPO-
   51  RATION  TO  ADOPT ANY SPECIFIC CONFLICT OF INTEREST POLICY NOT OTHERWISE
   52  REQUIRED BY THIS SECTION OR ANY OTHER LAW OR RULE, OR  TO  SUPERSEDE  OR
   53  LIMIT  ANY  REQUIREMENT OR DUTY GOVERNING CONFLICTS OF INTEREST REQUIRED
   54  BY ANY OTHER LAW OR RULE.
   55  S 715-B. WHISTLEBLOWER POLICY.
       A. 8072                            39

    1    (A) EXCEPT AS PROVIDED IN PARAGRAPH (C) OF THIS SECTION, EVERY  CORPO-
    2  RATION  THAT  HAS  TWENTY OR MORE EMPLOYEES AND IN THE PRIOR FISCAL YEAR
    3  HAD ANNUAL REVENUE IN EXCESS OF ONE MILLION DOLLARS SHALL ADOPT A WHIST-
    4  LEBLOWER POLICY TO PROTECT FROM RETALIATION PERSONS WHO REPORT SUSPECTED
    5  IMPROPER  CONDUCT.  SUCH POLICY SHALL PROVIDE THAT NO DIRECTOR, OFFICER,
    6  EMPLOYEE OR VOLUNTEER OF A CORPORATION WHO IN  GOOD  FAITH  REPORTS  ANY
    7  ACTION  OR  SUSPECTED  ACTION TAKEN BY OR WITHIN THE CORPORATION THAT IS
    8  ILLEGAL, FRAUDULENT OR IN VIOLATION OF ANY ADOPTED POLICY OF THE  CORPO-
    9  RATION  SHALL  SUFFER  INTIMIDATION, HARASSMENT, DISCRIMINATION OR OTHER
   10  RETALIATION OR, IN THE CASE  OF  EMPLOYEES,  ADVERSE  EMPLOYMENT  CONSE-
   11  QUENCE.
   12    (B) THE WHISTLEBLOWER POLICY SHALL INCLUDE THE FOLLOWING PROVISIONS:
   13    (1) PROCEDURES FOR THE REPORTING OF VIOLATIONS OR SUSPECTED VIOLATIONS
   14  OF  LAWS  OR CORPORATE POLICIES, INCLUDING PROCEDURES FOR PRESERVING THE
   15  CONFIDENTIALITY OF REPORTED INFORMATION;
   16    (2) A REQUIREMENT THAT AN EMPLOYEE, OFFICER OR DIRECTOR OF THE  CORPO-
   17  RATION  BE  DESIGNATED  TO  ADMINISTER  THE  WHISTLEBLOWER POLICY AND TO
   18  REPORT TO THE AUDIT COMMITTEE OR OTHER COMMITTEE OF  INDEPENDENT  DIREC-
   19  TORS OR, IF THERE ARE NO SUCH COMMITTEES, TO THE BOARD; AND
   20    (3)  A  REQUIREMENT  THAT  A  COPY OF THE POLICY BE DISTRIBUTED TO ALL
   21  DIRECTORS, OFFICERS, EMPLOYEES AND TO VOLUNTEERS WHO PROVIDE SUBSTANTIAL
   22  SERVICES TO THE CORPORATION.
   23    (C) A CORPORATION THAT HAS ADOPTED AND POSSESSES A WHISTLEBLOWER POLI-
   24  CY PURSUANT TO FEDERAL,  STATE  OR  LOCAL  LAWS  THAT  IS  SUBSTANTIALLY
   25  CONSISTENT WITH THE PROVISIONS OF PARAGRAPH (B) OF THIS SECTION SHALL BE
   26  DEEMED  IN COMPLIANCE WITH PROVISIONS OF THIS SECTION.  IN ADDITION, ANY
   27  CORPORATION THAT IS A STATE AUTHORITY OR LOCAL AUTHORITY AS  DEFINED  IN
   28  SECTION  TWO  OF  THE  PUBLIC  AUTHORITIES  LAW,  AND  THAT HAS COMPLIED
   29  SUBSTANTIALLY WITH SECTION TWENTY-EIGHT HUNDRED TWENTY-FOUR OF SUCH  LAW
   30  AND  IS SUBJECT TO THE PROVISIONS OF SECTION TWENTY-EIGHT HUNDRED FIFTY-
   31  SEVEN OF SUCH LAW, SHALL BE DEEMED IN COMPLIANCE WITH THE PROVISIONS  OF
   32  THIS SECTION.
   33    (D) NOTHING IN THIS SECTION SHALL BE INTERPRETED TO RELIEVE ANY CORPO-
   34  RATION  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 76. Section 716 of the not-for-profit corporation law, as amended by
   38  chapter 644 of the laws of 1971, is amended to read as follows:
   39  S 716. Loans to directors and officers.
   40    No  loans,  other  than  through the purchase of bonds, debentures, or
   41  similar obligations of the type customarily sold in public offerings, or
   42  through ordinary deposit of funds in a bank, shall be made by  a  corpo-
   43  ration  to its directors or officers, or to any other corporation, firm,
   44  association or other entity in which one or more  of  its  directors  or
   45  officers  are  directors  or  officers  or  hold a substantial financial
   46  interest, except a loan by one [type B] CHARITABLE corporation to anoth-
   47  er [type B] CHARITABLE corporation. A loan made  in  violation  of  this
   48  section  shall  be  a  violation  of  the duty to the corporation of the
   49  directors or officers authorizing it or participating  in  it,  but  the
   50  obligation  of  the  borrower  with  respect  to  the  loan shall not be
   51  affected thereby.
   52    S 77. Section 718 of the not-for-profit corporation law, as amended by
   53  chapter 992 of the laws of 1970, is amended to read as follows:
   54  S 718. List of directors and officers.
   55    (a) If a member or creditor of a corporation,  in  person  or  by  his
   56  attorney  or  agent,  or a representative of the district attorney or of
       A. 8072                            40

    1  the secretary of state, the attorney general, or other  state  official,
    2  makes a written demand on a corporation to inspect a current list of its
    3  directors  and officers [and their residence addresses], the corporation
    4  shall,  within  two  business days after receipt of the demand and for a
    5  period of  one  week  thereafter,  make  the  list  available  for  such
    6  inspection at its office during usual business hours.
    7    (b)  Upon  refusal  by  the  corporation to make a current list of its
    8  directors and officers [and their  residence  addresses]  available,  as
    9  provided  in  paragraph  (a) OF THIS SECTION, the person making a demand
   10  for such list may apply, ex parte, to the supreme  court  at  a  special
   11  term  held  within  the judicial district where the office of the corpo-
   12  ration is located for an order directing the corporation  to  make  such
   13  list  available.    The  court  may  grant such order or take such other
   14  action as it may deem just and proper.
   15    S 78. The section heading and paragraph (a)  of  section  720  of  the
   16  not-for-profit  corporation law, the section heading as amended by chap-
   17  ter 1058 of the laws of 1971, are amended to read as follows:
   18  Actions [on behalf of the corporation] AGAINST DIRECTORS,  OFFICERS  AND
   19           KEY EMPLOYEES.
   20    (a) An action may be brought against one or more directors [or], offi-
   21  cers,  OR  KEY  EMPLOYEES of a corporation to procure a judgment for the
   22  following relief:
   23    (1) To compel the defendant to account for his official conduct in the
   24  following cases:
   25    (A) The neglect of, or failure to perform, or other violation  of  his
   26  duties  in  the management and disposition of corporate assets committed
   27  to his charge.
   28    (B) The acquisition by himself, transfer to others, loss or  waste  of
   29  corporate  assets due to any neglect of, or failure to perform, or other
   30  violation of his duties.
   31    (2) To set aside an unlawful conveyance,  assignment  or  transfer  of
   32  corporate assets, where the transferee knew of its unlawfulness.
   33    (3)  To  enjoin a proposed unlawful conveyance, assignment or transfer
   34  of corporate assets, where there are reasonable grounds for belief  that
   35  it will be made.
   36    S  79.  Paragraphs  (a)  and  (c) of section 722 of the not-for-profit
   37  corporation law, as amended by chapter 368 of  the  laws  of  1987,  are
   38  amended to read as follows:
   39    (a)  A corporation may indemnify any person, made, or threatened to be
   40  made, a party to an action or proceeding other than one  by  or  in  the
   41  right  of  the  corporation  to procure a judgment in its favor, whether
   42  civil or criminal, including an action by or in the right of  any  other
   43  corporation  of any [type or] kind, domestic or foreign, or any partner-
   44  ship, joint venture, trust, employee benefit plan or  other  enterprise,
   45  which  any director or officer of the corporation served in any capacity
   46  at the request of the corporation, by reason of the fact  that  he,  his
   47  testator  or intestate, was a director or officer of the corporation, or
   48  served  such  other  corporation,  partnership,  joint  venture,  trust,
   49  employee benefit plan or other enterprise in any capacity, against judg-
   50  ments,  fines,  amounts  paid  in  settlement  and  reasonable expenses,
   51  including attorneys' fees actually and necessarily incurred as a  result
   52  of such action or proceeding, or any appeal therein, if such director or
   53  officer acted, in good faith, for a purpose which he reasonably believed
   54  to  be  in,  or, in the case of service for any other corporation or any
   55  partnership, joint venture, trust, employee benefit plan or other enter-
   56  prise, not opposed to, the best interests of  the  corporation  and,  in
       A. 8072                            41

    1  criminal actions or proceedings, in addition, had no reasonable cause to
    2  believe that his conduct was unlawful.
    3    (c)  A  corporation may indemnify any person made, or threatened to be
    4  made, a party to an action by or in the  right  of  the  corporation  to
    5  procure  a  judgment  in  its  favor  by reason of the fact that he, his
    6  testator or intestate, is or was a director or  officer  of  the  corpo-
    7  ration,  or  is  or  was  serving at the request of the corporation as a
    8  director or officer of any other corporation  of  any  [type  or]  kind,
    9  domestic  or foreign, of any partnership, joint venture, trust, employee
   10  benefit plan or other enterprise, against amounts paid in settlement and
   11  reasonable expenses, including attorneys' fees, actually and necessarily
   12  incurred by him in connection with the defense  or  settlement  of  such
   13  action,  or  in  connection  with an appeal therein, if such director or
   14  officer acted, in good faith, for a purpose which he reasonably believed
   15  to be in, or, in the case of service for any other  corporation  or  any
   16  partnership, joint venture, trust, employee benefit plan or other enter-
   17  prise,  not  opposed  to,  the best interests of the corporation, except
   18  that no indemnification under this paragraph shall be made in respect of
   19  (1) a threatened action, or a pending action which is settled or  other-
   20  wise  disposed  of,  or  (2) any claim, issue or matter as to which such
   21  person shall have been adjudged to be liable to the corporation,  unless
   22  and  only  to the extent that the court in which the action was brought,
   23  or, if no action was  brought,  any  court  of  competent  jurisdiction,
   24  determines  upon  application  that, in view of all the circumstances of
   25  the case, the person is fairly and reasonably entitled to indemnity  for
   26  such  portion  of  the settlement amount and expenses as the court deems
   27  proper.
   28    S 80. Paragraph (a) of section 724 of the  not-for-profit  corporation
   29  law,  as  amended by chapter 368 of the laws of 1987, is amended to read
   30  as follows:
   31    (a) Notwithstanding the failure of a corporation to provide indemnifi-
   32  cation, and despite any contrary resolution  of  the  board  or  of  the
   33  members  in the specific case under section 723 (Payment of indemnifica-
   34  tion other than by court award), indemnification shall be awarded  by  a
   35  court  to  the  extent  authorized  under section 722 (Authorization for
   36  indemnification of directors and officers), and paragraph (a) of section
   37  723 (PAYMENT OF INDEMNIFICATION OTHER THAN BY COURT AWARD).  Application
   38  therefor  SHALL  BE  MADE  ON  NOTICE TO THE ATTORNEY GENERAL AND may be
   39  made, in every case, either:
   40    (1) In the civil action or  proceeding  in  which  the  expenses  were
   41  incurred or other amounts were paid, or
   42    (2)  To  the supreme court in a separate proceeding, in which case the
   43  application shall set forth the disposition of any previous  application
   44  made  to  any  court  for the same or similar relief and also reasonable
   45  cause for the failure to make application for such relief in the  action
   46  or  proceeding in which the expenses were incurred or other amounts were
   47  paid.
   48    S 81. Subparagraph 3 of paragraph (a) of section 803 of  the  not-for-
   49  profit  corporation  law, as amended by chapter 168 of the laws of 1982,
   50  is amended to read as follows:
   51    (3) That the corporation is a corporation as defined  in  subparagraph
   52  (a)  (5)  of  section  102 (Definitions)[; the type of corporation it is
   53  under  section  201  (Purposes);  and  if  the  corporate  purposes  are
   54  enlarged, limited or otherwise changed, the type of corporation it shall
   55  thereafter be under section 201].
       A. 8072                            42

    1    S  82.  The  section  heading  and paragraph (a) of section 804 of the
    2  not-for-profit corporation law, as amended by chapter 139 of the laws of
    3  1993, and subparagraph (i) of paragraph (a) as amended by chapter 198 of
    4  the laws of 2010, are amended to read as follows:
    5    Approvals, NOTICES and effect.
    6    (a) (i) A certificate of amendment shall not be filed if the amendment
    7  adds,  changes or eliminates a purpose, power or provision the inclusion
    8  of which in a certificate of incorporation requires consent or  approval
    9  of a governmental body or officer or any other person or body, or if the
   10  amendment  changes the name of a corporation whose certificate of incor-
   11  poration had such consent or approval endorsed thereon or annexed there-
   12  to, unless such consent or approval is no longer required or is endorsed
   13  on or annexed to the certificate of amendment.  A CERTIFICATE OF  AMEND-
   14  MENT  ADDING,  CHANGING OR ELIMINATING A PURPOSE, POWER OR PROVISION THE
   15  INCLUSION OF WHICH IN A CERTIFICATE OF INCORPORATION REQUIRES THE INCOR-
   16  PORATOR TO SEND SUCH CERTIFICATE TO A GOVERNMENTAL BODY  OR  OFFICER  OR
   17  ANY  OTHER  PERSON  OR  BODY,  OR IF THE AMENDMENT CHANGES THE NAME OF A
   18  CORPORATION WHOSE CERTIFICATE OF INCORPORATION WAS REQUIRED TO BE DELIV-
   19  ERED BY THE INCORPORATOR TO A GOVERNMENTAL BODY OR OFFICER OR ANY  OTHER
   20  PERSON  OR  BODY,  SHALL BE DELIVERED BY THE PERSON OR ENTITY FILING THE
   21  CERTIFICATE OF AMENDMENT WITHIN THIRTY BUSINESS DAYS  AFTER  THE  CORPO-
   22  RATION  RECEIVES  CONFIRMATION  FROM  THE  DEPARTMENT  OF STATE THAT THE
   23  CERTIFICATE HAS BEEN ACCEPTED FOR FILING.
   24    (ii) Every certificate of amendment of a CHARITABLE corporation [clas-
   25  sified as type B or type C under section 201 (Purposes)] which seeks  to
   26  change  or  eliminate a purpose or power enumerated in the corporation's
   27  certificate of incorporation, or to add a power or purpose  not  enumer-
   28  ated  therein,  shall  have  endorsed  thereon  or  annexed  thereto the
   29  approval of EITHER (A) THE ATTORNEY GENERAL, OR (B)  a  justice  of  the
   30  supreme court of the judicial district in which the office of the corpo-
   31  ration is located. [Ten days' written notice of the application for such
   32  approval  shall be given to the attorney-general] AT ANY TIME, INCLUDING
   33  IF THE ATTORNEY GENERAL DOES NOT  APPROVE  A  CERTIFICATE  OF  AMENDMENT
   34  SUBMITTED  PURSUANT TO CLAUSE (A) OF THIS SUBPARAGRAPH, OR IF THE ATTOR-
   35  NEY GENERAL CONCLUDES THAT COURT REVIEW IS APPROPRIATE, THE  CORPORATION
   36  MAY  APPLY  FOR  APPROVAL  OF  THE AMENDMENT TO A JUSTICE OF THE SUPREME
   37  COURT OF THE JUDICIAL DISTRICT IN WHICH THE OFFICE OF THE CORPORATION IS
   38  LOCATED.  ANY APPLICATION FOR APPROVAL OF A CERTIFICATE OF AMENDMENT  BY
   39  THE SUPREME COURT PURSUANT TO THIS PARAGRAPH SHALL BE ON TEN DAYS' WRIT-
   40  TEN NOTICE TO THE ATTORNEY GENERAL.
   41    S  83. Section 907 of the not-for-profit corporation law is amended to
   42  read as follows:
   43  S 907. Approval by the supreme court OR ATTORNEY GENERAL.
   44    [(a)] Where any constituent corporation  or  the  consolidated  corpo-
   45  ration is, or would be if formed under this chapter, a [Type B or a Type
   46  C]  CHARITABLE corporation under section 201 (Purposes) of this chapter,
   47  no certificate shall be filed pursuant to section  904  (Certificate  of
   48  merger  or  consolidation;  contents)  or section 906 (Merger or consol-
   49  idation of domestic and foreign  corporations)  until  (A)  THE  SUPREME
   50  COURT HAS GRANTED an order approving the plan of merger or consolidation
   51  and  authorizing  the  filing  of  the certificate [has been made by the
   52  supreme court], as provided in [this] section[. A certified copy of such
   53  order shall be annexed to the certificate of  merger  or  consolidation.
   54  Application  for the order may be made in the judicial district in which
   55  the principal office of the surviving or consolidated corporation is  to
   56  be  located,  or  in which the office of one of the domestic constituent
       A. 8072                            43

    1  corporations is located. The  application  shall  be  made  by  all  the
    2  constituent  corporations  jointly  and shall set forth by affidavit (1)
    3  the plan of merger  or  consolidation,  (2)  the  approval  required  by
    4  section  903  (Approval of plan) or paragraph (b) of section 906 (Merger
    5  or consolidation of domestic and foreign corporations) for each constit-
    6  uent corporation, (3) the objects and purposes of each such  corporation
    7  to  be  promoted  by the consolidation, (4) a statement of all property,
    8  and the manner in which it is held, and of all liabilities  and  of  the
    9  amount  and  sources  of the annual income of each such corporation, (5)
   10  whether any votes against adoption of the resolution approving the  plan
   11  of  merger or consolidation were cast at the meeting at which the resol-
   12  ution as adopted by each constituent corporation, and (6) facts  showing
   13  that  the  consolidation  is authorized by the laws of the jurisdictions
   14  under which each of the constituent corporations is incorporated]  907-A
   15  (APPLICATION  FOR  APPROVAL OF THE SUPREME COURT) OF THIS ARTICLE OR (B)
   16  THE ATTORNEY GENERAL HAS APPROVED THE PLAN OF  MERGER  OR  CONSOLIDATION
   17  AND  AUTHORIZED  THE  FILING  OF THE CERTIFICATE, AS PROVIDED IN SECTION
   18  907-B (APPLICATION  FOR  APPROVAL  OF  THE  ATTORNEY  GENERAL)  OF  THIS
   19  ARTICLE.
   20    [(b) Upon the filing of the application the court shall fix a time for
   21  hearing  thereof  and  shall direct that notice thereof be given to such
   22  persons as may  be  interested,  including  the  attorney  general,  any
   23  governmental  body or officer and any other person or body whose consent
   24  or approval is required by section 909 (Consent to filing), in such form
   25  and manner as the court may prescribe. If no votes against  adoption  of
   26  the  resolution  approving the plan of merger or consolidation were cast
   27  at the meeting at which the resolution was adopted  by  any  constituent
   28  corporation  the  court  may  dispense  with notice to anyone except the
   29  attorney-general, any governmental body or officer and any other  person
   30  or body whose consent or approval is required by section 909 (Consent to
   31  filing).  Any person interested may appear and show cause why the appli-
   32  cation should not be granted.
   33    (c) If the court shall find that any of  the  assets  of  any  of  the
   34  constituent  corporations  are held for a purpose specified as Type B in
   35  paragraph (b) of section 201 or are legally required to be  used  for  a
   36  particular  purpose, but not upon a condition requiring return, transfer
   37  or conveyance by reason of the merger or consolidation, the  court  may,
   38  in its discretion, direct that such assets be transferred or conveyed to
   39  the  surviving  or  consolidated  corporation subject to such purpose or
   40  use, or that such assets be transferred or conveyed to the surviving  or
   41  consolidated  corporation  or  to  one or more other domestic or foreign
   42  corporations or organizations engaged in  substantially  similar  activ-
   43  ities, upon an express trust the terms of which shall be approved by the
   44  court.
   45    (d)  If  the  court  shall  find  that the interests of non-consenting
   46  members are or may be substantially prejudiced by the proposed merger or
   47  consolidation, the court may disapprove the plan or may direct a modifi-
   48  cation thereof. In the event of a modification, if the court shall  find
   49  that the interests of any members may be substantially prejudiced by the
   50  proposed  merger  or  consolidation  as modified, the court shall direct
   51  that the modified plan be submitted  to  vote  of  the  members  of  the
   52  constituent  corporations,  or if the court shall find that there is not
   53  such substantial prejudice, it shall approve the agreement as  so  modi-
   54  fied without further approval by the members. If the court, upon direct-
   55  ing  a modification of the plan of merger or consolidation, shall direct
   56  that a further approval be obtained  from  members  of  the  constituent
       A. 8072                            44

    1  corporations  or any of them, such further approval shall be obtained in
    2  the manner specified in section 903 (Approval of plan) or section 906(b)
    3  (Merger or consolidation of domestic and foreign corporations)  of  this
    4  chapter.
    5    (e)  If  it  shall  appear, to the satisfaction of the court, that the
    6  provisions of this section have been complied with, and that the  inter-
    7  ests of the constituent corporations and the public interest will not be
    8  adversely  affected by the merger or consolidation, it shall approve the
    9  merger or consolidation  upon  such  terms  and  conditions  as  it  may
   10  prescribe.]
   11    S  84.  The  not-for-profit corporation law is amended by adding a new
   12  section 907-a to read as follows:
   13  S 907-A. APPLICATION FOR APPROVAL OF THE SUPREME COURT.
   14    (A) APPLICATION FOR AN ORDER APPROVING THE PLAN OF MERGER AND  AUTHOR-
   15  IZING THE FILING OF THE CERTIFICATE MAY BE MADE IN THE JUDICIAL DISTRICT
   16  IN  WHICH  THE  PRINCIPAL OFFICE OF THE SURVIVING OR CONSOLIDATED CORPO-
   17  RATION IS TO BE LOCATED, OR IN WHICH THE OFFICE OF ONE OF  THE  DOMESTIC
   18  CONSTITUENT  CORPORATIONS  IS  LOCATED. THE APPLICATION SHALL BE MADE BY
   19  ALL THE CONSTITUENT CORPORATIONS JOINTLY AND SHALL SET FORTH BY  AFFIDA-
   20  VIT:  (1) THE PLAN OF MERGER OR CONSOLIDATION, (2) THE APPROVAL REQUIRED
   21  BY SECTION 903 (APPROVAL OF PLAN) OR PARAGRAPH (B) OF SECTION 906 (MERG-
   22  ER OR CONSOLIDATION OF DOMESTIC AND FOREIGN CORPORATIONS) OF THIS  ARTI-
   23  CLE  FOR  EACH  CONSTITUENT CORPORATION, (3) THE OBJECTS AND PURPOSES OF
   24  EACH SUCH CORPORATION TO BE PROMOTED BY THE MERGER OR CONSOLIDATION, (4)
   25  A STATEMENT OF ALL PROPERTY, AND THE MANNER IN WHICH IT IS HELD, AND  OF
   26  ALL  LIABILITIES  AND  OF THE AMOUNT AND SOURCES OF THE ANNUAL INCOME OF
   27  EACH SUCH CORPORATION, (5) WHETHER ANY VOTES  AGAINST  ADOPTION  OF  THE
   28  RESOLUTION  APPROVING  THE  PLAN OF MERGER OR CONSOLIDATION WERE CAST AT
   29  THE MEETING AT WHICH THE RESOLUTION  WAS  ADOPTED  BY  EACH  CONSTITUENT
   30  CORPORATION,  AND (6) FACTS SHOWING THAT THE CONSOLIDATION IS AUTHORIZED
   31  BY THE LAWS OF THE JURISDICTIONS UNDER WHICH  EACH  OF  THE  CONSTITUENT
   32  CORPORATIONS IS INCORPORATED.
   33    (B)  UPON THE FILING OF THE APPLICATION THE COURT SHALL FIX A TIME FOR
   34  HEARING THEREOF AND SHALL DIRECT THAT NOTICE THEREOF BE  GIVEN  TO  SUCH
   35  PERSONS  AS  MAY  BE  INTERESTED,  INCLUDING  THE  ATTORNEY GENERAL, ANY
   36  GOVERNMENTAL BODY OR OFFICER AND ANY OTHER PERSON OR BODY WHOSE  CONSENT
   37  OR APPROVAL IS REQUIRED BY SECTION 909 (CONSENT TO FILING) OF THIS ARTI-
   38  CLE,  IN  SUCH  FORM  AND MANNER AS THE COURT MAY PRESCRIBE. IF NO VOTES
   39  AGAINST ADOPTION OF THE RESOLUTION  APPROVING  THE  PLAN  OF  MERGER  OR
   40  CONSOLIDATION  WERE  CAST  AT  THE  MEETING  AT WHICH THE RESOLUTION WAS
   41  ADOPTED BY ANY CONSTITUENT  CORPORATION  THE  COURT  MAY  DISPENSE  WITH
   42  NOTICE  TO  ANYONE EXCEPT THE ATTORNEY-GENERAL, ANY GOVERNMENTAL BODY OR
   43  OFFICER AND ANY OTHER PERSON  OR  BODY  WHOSE  CONSENT  OR  APPROVAL  IS
   44  REQUIRED  BY SECTION 909 (CONSENT TO FILING) OF THIS ARTICLE. ANY PERSON
   45  INTERESTED MAY APPEAR AND SHOW CAUSE WHY THE APPLICATION SHOULD  NOT  BE
   46  GRANTED.
   47    (C)  IF  THE  COURT  SHALL  FIND  THAT ANY OF THE ASSETS OF ANY OF THE
   48  CONSTITUENT CORPORATIONS ARE HELD FOR A CHARITABLE PURPOSE OR ARE LEGAL-
   49  LY REQUIRED TO BE USED FOR A PARTICULAR PURPOSE, BUT NOT UPON  A  CONDI-
   50  TION REQUIRING RETURN, TRANSFER OR CONVEYANCE BY REASON OF THE MERGER OR
   51  CONSOLIDATION, THE COURT MAY, IN ITS DISCRETION, DIRECT THAT SUCH ASSETS
   52  BE  TRANSFERRED OR CONVEYED TO THE SURVIVING OR CONSOLIDATED CORPORATION
   53  SUBJECT TO SUCH PURPOSE OR USE, OR THAT SUCH ASSETS  BE  TRANSFERRED  OR
   54  CONVEYED  TO THE SURVIVING OR CONSOLIDATED CORPORATION OR TO ONE OR MORE
   55  OTHER DOMESTIC OR  FOREIGN  CORPORATIONS  OR  ORGANIZATIONS  ENGAGED  IN
       A. 8072                            45

    1  SUBSTANTIALLY  SIMILAR  ACTIVITIES,  UPON  AN EXPRESS TRUST THE TERMS OF
    2  WHICH SHALL BE APPROVED BY THE COURT.
    3    (D)  IF  THE  COURT  SHALL  FIND  THAT THE INTERESTS OF NON-CONSENTING
    4  MEMBERS ARE OR MAY BE SUBSTANTIALLY PREJUDICED BY THE PROPOSED MERGER OR
    5  CONSOLIDATION, THE COURT MAY DISAPPROVE THE PLAN OR MAY DIRECT A MODIFI-
    6  CATION THEREOF. IN THE EVENT OF A MODIFICATION, IF THE COURT SHALL  FIND
    7  THAT THE INTERESTS OF ANY MEMBERS MAY BE SUBSTANTIALLY PREJUDICED BY THE
    8  PROPOSED  MERGER  OR  CONSOLIDATION  AS MODIFIED, THE COURT SHALL DIRECT
    9  THAT THE MODIFIED PLAN BE SUBMITTED  TO  VOTE  OF  THE  MEMBERS  OF  THE
   10  CONSTITUENT  CORPORATIONS,  OR IF THE COURT SHALL FIND THAT THERE IS NOT
   11  SUCH SUBSTANTIAL PREJUDICE, IT SHALL APPROVE THE AGREEMENT AS  SO  MODI-
   12  FIED WITHOUT FURTHER APPROVAL BY THE MEMBERS. IF THE COURT, UPON DIRECT-
   13  ING  A MODIFICATION OF THE PLAN OF MERGER OR CONSOLIDATION, SHALL DIRECT
   14  THAT A FURTHER APPROVAL BE OBTAINED  FROM  MEMBERS  OF  THE  CONSTITUENT
   15  CORPORATIONS  OR ANY OF THEM, SUCH FURTHER APPROVAL SHALL BE OBTAINED IN
   16  THE MANNER SPECIFIED IN SECTION 903 (APPROVAL OF PLAN) OR PARAGRAPH  (B)
   17  OF  SECTION  906 (MERGER OR CONSOLIDATION OF DOMESTIC AND FOREIGN CORPO-
   18  RATIONS) OF THIS ARTICLE.
   19    (E) IF IT SHALL APPEAR, TO THE SATISFACTION OF  THE  COURT,  THAT  THE
   20  PROVISIONS  OF THIS SECTION HAVE BEEN COMPLIED WITH, AND THAT THE INTER-
   21  ESTS OF THE CONSTITUENT CORPORATIONS AND THE PUBLIC INTEREST WILL NOT BE
   22  ADVERSELY AFFECTED BY THE MERGER OR CONSOLIDATION, IT SHALL APPROVE  THE
   23  MERGER  OR  CONSOLIDATION  UPON  SUCH  TERMS  AND  CONDITIONS  AS IT MAY
   24  PRESCRIBE.
   25    (F) A CERTIFIED COPY OF SUCH ORDER SHALL BE ANNEXED TO THE CERTIFICATE
   26  OF MERGER OR CONSOLIDATION.
   27    S 85. The not-for-profit corporation law is amended by  adding  a  new
   28  section 907-b to read as follows:
   29  S 907-B. APPLICATION FOR APPROVAL OF THE ATTORNEY GENERAL.
   30    (A)  IN  LIEU  OF  OBTAINING  AN ORDER APPROVING THE PLAN OF MERGER OR
   31  CONSOLIDATION AND AUTHORIZING THE FILING OF THE CERTIFICATE, THE  CORPO-
   32  RATION MAY ALTERNATIVELY MAKE AN APPLICATION TO THE ATTORNEY GENERAL FOR
   33  APPROVAL,  EXCEPT  WHERE THE ATTORNEY GENERAL, IN HIS OR HER DISCRETION,
   34  CONCLUDES THAT A COURT SHOULD REVIEW THE APPLICATION AND MAKE A DETERMI-
   35  NATION THEREON.
   36    (B) THE APPLICATION TO THE ATTORNEY GENERAL SHALL BE MADE BY  ALL  THE
   37  CONSTITUENT  CORPORATIONS  JOINTLY AND SHALL SET FORTH BY AFFIDAVIT: (I)
   38  ALL OF THE INFORMATION REQUIRED TO BE  INCLUDED  IN  AN  APPLICATION  TO
   39  OBTAIN  COURT  APPROVAL  PURSUANT  TO  SECTION  907-A  (APPLICATION  FOR
   40  APPROVAL OF THE SUPREME COURT) OF THIS ARTICLE, (II)  ALL  CONSENTS  AND
   41  APPROVALS  REQUIRED  BY  SECTION  909  (CONSENT  TO FILING), AND (III) A
   42  STATEMENT AS TO WHETHER ANY PERSONS HAVE RAISED, OR  HAVE  A  REASONABLE
   43  BASIS  TO  RAISE,  OBJECTIONS TO THE MERGER OR CONSOLIDATION THAT IS THE
   44  SUBJECT OF THE APPLICATION, INCLUDING  A  STATEMENT  SETTING  FORTH  THE
   45  NAMES AND ADDRESSES OF SUCH PERSONS, THE NATURE OF THEIR INTEREST, AND A
   46  DESCRIPTION OF THEIR OBJECTIONS.
   47    (C)  UPON  THE FILING OF THE APPLICATION, THE ATTORNEY GENERAL, IN HIS
   48  OR HER DISCRETION, MAY DIRECT THAT THE CONSTITUENT CORPORATIONS  PROVIDE
   49  NOTICE  TO SUCH PERSONS AS MAY BE INTERESTED, INCLUDING ANY GOVERNMENTAL
   50  BODY OR OFFICER AND ANY OTHER PERSON OR BODY THAT IS REQUIRED EITHER  TO
   51  GIVE  CONSENT  OR  BE NOTIFIED UNDER SECTION 404 (APPROVALS, NOTICES AND
   52  CONSENTS) OF THIS ARTICLE OR 909 (CONSENT TO FILING)  OF  THIS  ARTICLE.
   53  THE  CONSTITUENT  CORPORATIONS SHALL PROVIDE THE ATTORNEY GENERAL WITH A
   54  CERTIFICATION THAT SUCH NOTICE HAS BEEN PROVIDED.
   55    (D) IF ANY ASSETS OF ANY OF THE CONSTITUENT CORPORATIONS ARE HELD  FOR
   56  A  CHARITABLE  PURPOSE OR ARE ASSETS RECEIVED FOR A SPECIFIC PURPOSE AND
       A. 8072                            46

    1  LEGALLY REQUIRED TO BE USED FOR A PARTICULAR PURPOSE,  BUT  NOT  UPON  A
    2  CONDITION  REQUIRING  RETURN,  TRANSFER  OR  CONVEYANCE BY REASON OF THE
    3  MERGER OR CONSOLIDATION,  THE  ATTORNEY  GENERAL  MAY,  IN  HIS  OR  HER
    4  DISCRETION,  DIRECT  THAT  SUCH ASSETS BE TRANSFERRED OR CONVEYED TO THE
    5  SURVIVING OR CONSOLIDATED CORPORATION SUBJECT TO SUCH PURPOSE OR USE.
    6    (E) IF THE ATTORNEY GENERAL SHALL FIND THAT THE INTERESTS OF  NON-CON-
    7  SENTING  MEMBERS  ARE OR MAY BE SUBSTANTIALLY PREJUDICED BY THE PROPOSED
    8  MERGER OR CONSOLIDATION, THE ATTORNEY  GENERAL  MAY  DISAPPROVE  OF  THE
    9  APPLICATION  OR MAY CONDITION APPROVAL OF THE APPLICATION UPON MODIFICA-
   10  TION OF THE PLAN OF MERGER OR  CONSOLIDATION  IN  ACCORDANCE  WITH  THIS
   11  CHAPTER AND ANY OTHER LAW OR RULE.
   12    (F)  IF  IT SHALL APPEAR, TO THE SATISFACTION OF THE ATTORNEY GENERAL,
   13  THAT THE PROVISIONS OF THIS SECTION HAVE BEEN COMPLIED  WITH,  AND  THAT
   14  THE  INTERESTS  OF  THE CONSTITUENT CORPORATIONS AND THE PUBLIC INTEREST
   15  WILL NOT BE ADVERSELY AFFECTED  BY  THE  MERGER  OR  CONSOLIDATION,  THE
   16  ATTORNEY  GENERAL  SHALL  APPROVE  THE MERGER OR CONSOLIDATION UPON SUCH
   17  TERMS AND CONDITIONS AS IT MAY PRESCRIBE.
   18    (G) THE APPROVAL OF THE ATTORNEY  GENERAL  SHALL  BE  ANNEXED  TO  THE
   19  CERTIFICATE OF MERGER OR CONSOLIDATION.
   20    (H)  AT  ANY  TIME, INCLUDING IF THE ATTORNEY GENERAL DOES NOT APPROVE
   21  THE APPLICATION, OR IF THE ATTORNEY GENERAL CONCLUDES THAT COURT  REVIEW
   22  IS  APPROPRIATE, THE CONSTITUENT CORPORATIONS MAY SEEK COURT APPROVAL ON
   23  NOTICE TO THE ATTORNEY GENERAL PURSUANT TO  SECTION  907-A  (APPLICATION
   24  FOR APPROVAL OF THE SUPREME COURT) OF THIS ARTICLE.
   25    S 85-a. Paragraph (f) of section 908 of the not-for-profit corporation
   26  law is REPEALED.
   27    S  86.  Paragraph (a) of section 908 of the not-for-profit corporation
   28  law is amended to read as follows:
   29    (a) One or more domestic or foreign corporations which is, or would be
   30  if formed under this  chapter,  a  NON-CHARITABLE  CORPORATION,  OR  ANY
   31  CORPORATION  FORMED  AS  A type A [or type C] corporation [under section
   32  201 (Purposes)] PRIOR TO JULY  FIRST,  TWO  THOUSAND  FOURTEEN,  may  be
   33  merged  or consolidated into a domestic or foreign corporation which is,
   34  or would be if formed under the laws of this state, a corporation formed
   35  under the business corporation law of  this  state  if  such  merger  or
   36  consolidation  is  not contrary to the law of the state of incorporation
   37  of any constituent corporation. With respect to such merger  or  consol-
   38  idation,  any reference in paragraph (b) of section 901 (POWER OF MERGER
   39  OR CONSOLIDATION) of this article or paragraph (b) of section 901 (POWER
   40  OF MERGER OR CONSOLIDATION) of the business corporation law to a  corpo-
   41  ration shall, unless the context otherwise requires, include both domes-
   42  tic and foreign corporations.
   43    S 87. Section 909 of the not-for-profit corporation law, as amended by
   44  section  6  of  part  D of chapter 58 of the laws of 2006, is amended to
   45  read as follows:
   46  S 909. Consent to filing; NOTICES.
   47    (A) If the purposes of any  constituent  or  consolidated  corporation
   48  would  require the approval or consent of any governmental body or offi-
   49  cer or any other person or body under section  404  (Approvals,  NOTICES
   50  and  consents) OF THIS CHAPTER no certificate of merger or consolidation
   51  shall be filed pursuant to this article unless such approval or  consent
   52  is endorsed thereon or annexed thereto. A corporation whose statement of
   53  purposes specifically includes the establishment or operation of a child
   54  day care center, as that term is defined in section three hundred ninety
   55  of  the  social  services  law,  shall  provide  a certified copy of any
   56  certificate of merger or consolidation involving such corporation to the
       A. 8072                            47

    1  office of children and family services  within  thirty  days  after  the
    2  filing of such merger or consolidation with the department of state.
    3    (B)  IF  THE  PURPOSES  OF ANY CONSTITUENT OR CONSOLIDATED CORPORATION
    4  WOULD REQUIRE THE CERTIFICATE OF INCORPORATION OR ANY OTHER NOTICE TO BE
    5  DELIVERED TO ANY PERSON OR ENTITY UNDER SECTION 404 (APPROVALS,  NOTICES
    6  AND  CONSENTS)  OF  THIS  CHAPTER, THE CORPORATION SHALL PROVIDE TO SUCH
    7  PERSON OR ENTITY A CERTIFIED COPY OF THE  CERTIFICATE  OF  INCORPORATION
    8  WITHIN  THIRTY DAYS AFTER THE CORPORATION RECEIVES CONFIRMATION FROM THE
    9  DEPARTMENT OF STATE THAT THE CERTIFICATE HAS BEEN ACCEPTED FOR FILING.
   10    S 88. Paragraphs (b), (c) and (d) of section 1001 of the  not-for-pro-
   11  fit  corporation law, as amended by chapter 434 of the laws of 2006, are
   12  amended to read as follows:
   13    (b) If the corporation is a [Type B, C or  D]  CHARITABLE  corporation
   14  and  has  no  assets  to  distribute  and  no liabilities at the time of
   15  dissolution, the plan of dissolution shall include a statement  to  that
   16  effect.
   17    (c)  If  the  corporation [is a Type B, C or D corporation and] has no
   18  assets to distribute, other than a reserve  not  to  exceed  twenty-five
   19  thousand  dollars  for  the  purpose  of  paying  ordinary and necessary
   20  expenses of winding up its affairs  including  attorney  and  accountant
   21  fees,  and liabilities not in excess of ten thousand dollars at the time
   22  of adoption of the plan of dissolution, the plan  of  dissolution  shall
   23  include a statement to that effect.
   24    (d)  If  the  corporation has assets to distribute or liabilities, the
   25  plan of dissolution shall contain:
   26    (1) a description with reasonable  certainty  of  the  assets  of  the
   27  corporation  and  their  fair  value,  and the total amount of debts and
   28  other liabilities incurred or estimated by  the  corporation,  including
   29  the total amount of any accounting and legal fees incurred or estimated,
   30  in connection with the dissolution procedure.
   31    (2)  a  statement  as to whether any gifts or other assets are legally
   32  required to be used for a particular purpose.
   33    (3) if there are assets received and held by  the  corporation  either
   34  for  a  CHARITABLE  purpose  [specified  as  Type  B in paragraph (b) of
   35  section 201 (Purposes)] or which are legally required to be used  for  a
   36  particular  purpose,  a  statement  that  the assets owned by the corpo-
   37  ration, subject to any unpaid liabilities of the corporation,  shall  be
   38  distributed as required by any gift instrument or to a charitable CORPO-
   39  RATION OR organization or organizations exempt from taxation pursuant to
   40  federal  and  state laws and engaged in activities substantially similar
   41  to those of the dissolved corporation.  Each such recipient organization
   42  shall be identified and the governing instrument and amendments  thereto
   43  of each of the proposed recipient organizations shall be annexed to such
   44  statement, along with the MOST RECENT financial [reports] REPORT of each
   45  recipient  organization [for the last three years] and a sworn affidavit
   46  from a director and officer of each recipient organization  stating  the
   47  purposes  of  the  organization,  and  that  it is currently exempt from
   48  federal income taxation.
   49    (4) if any of the assets of the corporation are to be distributed to a
   50  recipient for a particular legally required purpose, an agreement by the
   51  recipient to apply the assets received only for such  purpose  shall  be
   52  included.
   53    S  89.  Paragraphs  (a)  and (d) of section 1002 of the not-for-profit
   54  corporation law, as amended by chapter 434 of  the  laws  of  2006,  are
   55  amended to read as follows:
       A. 8072                            48

    1    (a)  Upon  adopting  a plan of dissolution and distribution of assets,
    2  the board shall submit it to a vote of the members,  if  any,  and  such
    3  plan  shall  be  approved  at a meeting of members by two-thirds vote as
    4  provided in paragraph (c) of section 613 (Vote of members) OF THIS CHAP-
    5  TER;  provided,  however,  that if the corporation is a [Type B, C or D]
    6  CHARITABLE corporation, other than a corporation  incorporated  pursuant
    7  to  article  15 (Public cemetery corporations) OF THIS CHAPTER, [and has
    8  no assets to distribute, other than a reserve not to exceed  twenty-five
    9  thousand  dollars  for  the  purpose  of  paying  ordinary and necessary
   10  expenses of winding up its affairs  including  attorney  and  accountant
   11  fees,  and liabilities not in excess of ten thousand dollars at the time
   12  of adoption of the plan of dissolution,] the vote required by the corpo-
   13  ration's board of directors for adoption of the plan of  dissolution  of
   14  such a corporation or by the corporation's members for the authorization
   15  thereof shall be:
   16    (1) In the case of a vote by the board of directors: (i) the number of
   17  directors required under the certificate of incorporation, by-laws, this
   18  chapter and any other applicable law; or
   19    (ii) if the number of directors actually holding office as such at the
   20  time  of  the vote to adopt the plan is less than the number required to
   21  constitute a quorum of directors under the certificate of incorporation,
   22  the by-laws, this chapter or any other  applicable  law,  the  remaining
   23  directors unanimously;
   24    (2)  In  the  case of a vote by the members, (i) the number of members
   25  required under the certificate of incorporation, by-laws,  this  chapter
   26  and  any other applicable law; or (ii) by the vote of members authorized
   27  by an order of the supreme court pursuant  to  section  608  (QUORUM  AT
   28  MEETING  OF  MEMBERS)  of  this  chapter  permitting  the corporation to
   29  dispense with the applicable quorum requirement.
   30    Notice of a special or regular meeting of the board of directors or of
   31  the members entitled to vote on adoption and authorization  or  approval
   32  of  the  plan  of  dissolution  shall  be  sent to all the directors and
   33  members of record entitled to vote. Unless otherwise directed  by  order
   34  of  the  supreme  court  pursuant  to  section 608 (QUORUM AT MEETING OF
   35  MEMBERS) of this chapter, the notice shall be sent  by  certified  mail,
   36  return  receipt  requested,  to the last known address of record of each
   37  director and member not fewer than thirty, and not more than sixty  days
   38  before  the  date  of  each  meeting provided, however, that if the last
   39  known address of record of any director or  member  is  not  within  the
   40  United  States,  the  notice to such director shall be sent by any other
   41  reasonable means.
   42    (d) (1) The plan of dissolution and distribution of assets shall  have
   43  annexed  thereto  the approval of [a justice of the supreme court in the
   44  judicial district in which the office of the corporation is located] THE
   45  ATTORNEY GENERAL in the case of a [Type B, C  or  D]  CHARITABLE  corpo-
   46  ration,  and in the case of any [other] NON-CHARITABLE corporation which
   47  [holds assets] at the time of dissolution HOLDS ASSETS legally  required
   48  to be used for a particular purpose[, except that no such approval shall
   49  be  required  with  respect to the plan of dissolution of a corporation,
   50  other than a corporation incorporated pursuant  to  article  15  (Public
   51  cemetery corporations), which has no assets to distribute at the time of
   52  dissolution,  other  than  a  reserve not to exceed twenty-five thousand
   53  dollars for the purpose of paying ordinary  and  necessary  expenses  of
   54  winding  up  its  affairs  including  attorney  and accountant fees, and
   55  liabilities not in  excess  of  ten  thousand  dollars,  and  which  has
   56  complied  with the requirements of section 1001 (Plan of dissolution and
       A. 8072                            49

    1  distribution of assets) and this section applicable  to  such  a  corpo-
    2  ration].
    3    (2)  Application  to the [supreme court for an order] ATTORNEY GENERAL
    4  for such approval shall be  by  verified  petition,  with  the  plan  of
    5  dissolution  and  distribution  of  assets  and  certified copies of the
    6  consents prescribed by this section annexed thereto[, and upon ten  days
    7  written  notice  to  the  attorney general accompanied by copies of such
    8  petition, plan and consents. In such case where approval of a justice of
    9  the supreme court is not required for a Type B, C or  D  corporation,  a
   10  copy  of  such  plan certified under penalties of perjury shall be filed
   11  with the attorney general within ten days after its authorization].
   12    (3) THE ATTORNEY GENERAL MAY APPROVE THE PETITION IF  THE  CORPORATION
   13  HAS  ADOPTED  A PLAN IN ACCORDANCE WITH THE REQUIREMENTS OF SECTION 1001
   14  (PLAN OF DISSOLUTION AND DISTRIBUTION OF ASSETS) OF  THIS  ARTICLE,  AND
   15  ANY OTHER REQUIREMENTS IMPOSED BY LAW OR RULE. AT ANY TIME, INCLUDING IF
   16  THE  ATTORNEY  GENERAL  DOES  NOT  APPROVE THE PETITION, OR THE ATTORNEY
   17  GENERAL CONCLUDES, IN HIS OR HER DISCRETION, THAT COURT  REVIEW  OF  THE
   18  PETITION  IS  APPROPRIATE, THE CORPORATION MAY APPLY FOR APPROVAL TO THE
   19  SUPREME COURT IN THE JUDICIAL DISTRICT IN WHICH THE PRINCIPAL OFFICE  OF
   20  THE  CORPORATION IS LOCATED, OR IN WHICH THE OFFICE OF ONE OF THE DOMES-
   21  TIC CONSTITUENT CORPORATIONS IS LOCATED, FOR  AN  ORDER  DISSOLVING  THE
   22  CORPORATION.  APPLICATION  TO  THE  SUPREME  COURT FOR AN ORDER FOR SUCH
   23  APPROVAL SHALL BE BY VERIFIED PETITION UPON TEN DAYS WRITTEN  NOTICE  TO
   24  THE  ATTORNEY  GENERAL, AND SHALL INCLUDE ALL INFORMATION REQUIRED TO BE
   25  INCLUDED IN THE APPLICATION TO THE ATTORNEY  GENERAL  PURSUANT  TO  THIS
   26  SECTION.
   27    S  90.  Paragraphs (a) and (c) of section 1002-a of the not-for-profit
   28  corporation law, as amended by chapter 434 of  the  laws  of  2006,  are
   29  amended to read as follows:
   30    (a)  Carry out the plan of dissolution and distribution of assets, pay
   31  its liabilities and distribute its assets in accordance therewith within
   32  two hundred seventy days from the  date  the  plan  of  dissolution  and
   33  distribution  of  assets  shall  have been (1) authorized as provided in
   34  section 1002 (AUTHORIZATION OF PLAN) of this article,  (2)  approved  by
   35  any  governmental body or officer whose approval is required pursuant to
   36  paragraph (c) of section 1002 (AUTHORIZATION OF PLAN) of  this  article,
   37  and  (3)  approved  by  EITHER  THE ATTORNEY GENERAL OR a justice of the
   38  supreme court[, if such approval is required] pursuant to paragraph  (d)
   39  of  section 1002 (AUTHORIZATION OF PLAN) of this article[, or filed with
   40  the attorney general, if such filing is required pursuant  to  paragraph
   41  (d) of section 1002 of this article]. Evidence of the disposition of its
   42  assets  and  payment  of its liabilities pursuant to the plan of dissol-
   43  ution and distribution of assets shall be submitted by  the  corporation
   44  to  the  attorney general and any other governmental body or officer, as
   45  required under applicable laws. If the plan of dissolution and  distrib-
   46  ution  of  assets  cannot be carried out within the prescribed time, the
   47  attorney general may upon good cause shown  extend  such  time,  or  any
   48  extended period of time, by not fewer than thirty days nor more than one
   49  year;
   50    (c)  Distribute the assets of the corporation that remain after paying
   51  or adequately providing for the  payment  of  its  liabilities,  in  the
   52  following manner:
   53    (1)  assets received and held by the corporation either for a CHARITA-
   54  BLE purpose [specified as  Type  B  in  paragraph  (b)  of  section  201
   55  (Purposes)]  or  which  are legally required to be used for a particular
   56  purpose, shall be distributed to one or more domestic or foreign  corpo-
       A. 8072                            50

    1  rations or other organizations engaged in activities substantially simi-
    2  lar  to  those  of  the  dissolved  corporation  pursuant to the plan of
    3  dissolution and distribution or,  if  applicable,  as  APPROVED  BY  THE
    4  ATTORNEY GENERAL OR ordered by the SUPREME court PURSUANT to [which such
    5  plan  is  submitted  for  approval under] section 1002 (Authorization of
    6  plan) OF THIS ARTICLE.  Any disposition of assets contained in a will or
    7  other instrument, in trust  or  otherwise,  made  before  or  after  the
    8  dissolution, to or for the benefit of any corporation so dissolved shall
    9  inure to or for the benefit of the corporation or organization acquiring
   10  such  assets  of  the dissolved corporation as provided in this section,
   11  and so far as is necessary for that purpose the corporation or organiza-
   12  tion acquiring such disposition shall  be  deemed  a  successor  to  the
   13  dissolved  corporation  with  respect to such assets; provided, however,
   14  that such disposition shall be devoted by the acquiring  corporation  or
   15  organization to the purposes intended by the testator, donor or grantor.
   16    (2)  assets  other  than  those  described by subparagraph one of this
   17  paragraph, if any, shall be distributed in accordance with the  specifi-
   18  cations of the plan of dissolution and distribution of assets or, to the
   19  extent that the certificate of incorporation prescribes the distributive
   20  rights of members, or of any class or classes of members, as provided in
   21  such certificate;
   22    S  91.    Paragraphs (a) and (b) of section 1003 of the not-for-profit
   23  corporation law, as amended by chapter 434 of  the  laws  of  2006,  are
   24  amended to read as follows:
   25    (a)  After the plan of dissolution and distribution of assets has been
   26  adopted, authorized, approved and carried out pursuant to the  terms  of
   27  the  plan  within  the  time period set forth pursuant to section 1002-a
   28  (Carrying out the plan of dissolution and  distribution  of  assets),  a
   29  certificate   of   dissolution,  entitled  "Certificate  of  dissolution
   30  of ........ (name of corporation) under section 1003 of the Not-for-Pro-
   31  fit Corporation Law" shall  be  signed  and,  if  required  pursuant  to
   32  subparagraph  two  of  paragraph (b) of this section, after the attorney
   33  general has affixed thereon his or her consent to the dissolution,  such
   34  certificate  of  dissolution  shall  be  delivered  to the department of
   35  state. It shall set forth:
   36    (1) The name of the corporation and, if its name has been changed, the
   37  name under which it was formed.
   38    (2) The date its certificate of incorporation was filed by the depart-
   39  ment of state.
   40    (3) The name and address of each of its officers and directors.
   41    (4) [The type of corporation it is  at  the  time  of  dissolution]  A
   42  STATEMENT AS TO WHETHER THE CORPORATION IS A CHARITABLE CORPORATION OR A
   43  NON-CHARITABLE CORPORATION.
   44    (5)  A  statement as to whether or not the corporation holds assets at
   45  the time of authorization of its plan of dissolution and distribution of
   46  assets as provided in section 1002 of  this  article  (Authorization  of
   47  plan) which are legally required to be used for a particular purpose.
   48    (6) That the corporation elects to dissolve.
   49    (7) The manner in which the dissolution was authorized. If the dissol-
   50  ution of the corporation is authorized by a vote of the directors and/or
   51  members of the corporation that is less than that ordinarily required by
   52  the certificate of incorporation, the by-laws, this chapter or any other
   53  applicable  law, as permitted by paragraph (a) of section 1002 (Authori-
   54  zation of plan) OF THIS ARTICLE, then  the  certificate  of  dissolution
   55  shall so state.
       A. 8072                            51

    1    (8)  A statement that prior to delivery of such certificate of dissol-
    2  ution to the department of state for filing, the plan of dissolution and
    3  distribution of assets has been approved by THE ATTORNEY GENERAL OR BY a
    4  justice of the supreme court, if such approval is required  PURSUANT  TO
    5  SECTION  1002  (AUTHORIZATION  OF  PLAN)  OF THIS ARTICLE. A copy of the
    6  order shall be attached to the certificate of dissolution. In  the  case
    7  of  a  corporation,  other  than  a corporation incorporated pursuant to
    8  article 15 (Public cemetery corporations), having no assets to  distrib-
    9  ute,  OR  HAVING  NO  ASSETS  TO  DISTRIBUTE other than a reserve not to
   10  exceed twenty-five thousand dollars for the purpose of  paying  ordinary
   11  and  necessary expenses of winding up its affairs including attorney and
   12  accountant fees, and liabilities not in excess of ten  thousand  dollars
   13  at  the  time  of  dissolution,  a  statement that a copy of the plan of
   14  dissolution which contains the statement prescribed by paragraph (b)  of
   15  section  1001  (Plan of dissolution and distribution of assets) has been
   16  duly filed with the attorney general, if required.
   17    (b) Such certificate of dissolution  shall  have  [indorsed]  ENDORSED
   18  thereon or annexed thereto the approval of the dissolution:
   19    (1) By a governmental body or officer, if such approval is required. A
   20  corporation whose statement of purposes specifically includes the estab-
   21  lishment  or  operation  of  a  child  day  care center, as that term is
   22  defined in section three hundred ninety  of  the  social  services  law,
   23  shall provide a certified copy of any certificate of dissolution involv-
   24  ing such corporation to the office of children and family services with-
   25  in  thirty days after the filing of such dissolution with the department
   26  of state.
   27    (2) By the attorney general in the case of a [Type B, C or D] CHARITA-
   28  BLE corporation, or any other corporation that holds assets at the  time
   29  of dissolution legally required to be used for a particular purpose.
   30    S  92. Paragraph (a) of section 1007 of the not-for-profit corporation
   31  law, as amended by chapter 434 of the laws of 2006, is amended  to  read
   32  as follows:
   33    (a)  At  any  time  after  the plan of dissolution and distribution of
   34  assets shall have been (1) authorized as provided  in  section  1002  of
   35  this  article  (Authorization of plan), (2) approved by any governmental
   36  body or officer whose approval is required pursuant to paragraph (c)  of
   37  section 1002 of this article, and (3) approved by EITHER BY THE ATTORNEY
   38  GENERAL OR a justice of the supreme court[, if such approval is required
   39  pursuant to paragraph (d) of section 1002 of this article, or filed with
   40  the  attorney general, if such filing is required] pursuant to paragraph
   41  (d) of section 1002 of this article, and prior to filing the certificate
   42  of dissolution, the corporation may give a notice requiring  all  credi-
   43  tors and claimants, including any with unliquidated or contingent claims
   44  and  any with whom the corporation has unfulfilled contracts, to present
   45  their claims in writing and in detail at a  specified  place  and  by  a
   46  specified  day,  which shall not be less than six months after the first
   47  publication of such notice. Such notice shall be published at least once
   48  a week for two successive weeks in a newspaper of general circulation in
   49  the county in which the office of the corporation  was  located  at  the
   50  date  of  authorization  of  its plan of dissolution and distribution of
   51  assets as provided in section 1002 of  this  article  (Authorization  of
   52  plan).    On or before the date of the first publication of such notice,
   53  the corporation shall mail a copy  thereof,  postage  prepaid,  to  each
   54  person  believed to be a creditor of or claimant against the corporation
   55  whose current name and address are known to or can with due diligence be
   56  ascertained by the corporation. The giving  of  such  notice  shall  not
       A. 8072                            52

    1  constitute  a recognition that any person is a proper creditor or claim-
    2  ant, and shall not revive or make valid, or operate as a recognition  of
    3  the  validity  of, or a waiver of any defense or counterclaim in respect
    4  of any claim against the corporation, its assets, directors, officers or
    5  members,  which  has been barred by any statute of limitations or become
    6  invalid by any cause, or in respect of which the corporation, its direc-
    7  tors, officers or members, has any defense or counterclaim.
    8    S 93. 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 94.  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 95. Sections 1203 and 1204 of the not-for-profit corporation law are
   26  amended to read as follows:
   27  S 1203. Temporary and permanent receiver.
   28    (a)  At any stage before final judgment or final order in an action or
   29  special proceeding brought under this article, the court may appoint one
   30  or more receivers of the property of the corporation or of the  property
   31  in  this state of a foreign corporation against which an action has been
   32  brought under subparagraph [(a)] (4) OF PARAGRAPH (A)  of  section  1202
   33  [(Appointment  of a receiver of property of a domestic or foreign corpo-
   34  ration)] OF THIS ARTICLE.  Notice of an application shall  be  given  to
   35  the attorney-general, to each governmental body or officer whose consent
   36  is  required  for the dissolution of such corporation, and to such other
   37  persons and in such manner as the court directs.   The determination  by
   38  the  court  of the necessity or advisability of appointing a receiver or
   39  an attorney for a receiver, and the allowance of  expenses,  commissions
   40  or compensation to the receiver or [his] SUCH attorney, shall be subject
   41  to review on appeal.  This provision shall not affect any other right to
   42  review on appeal.
   43    (b)   A receiver appointed by or under a final judgment or order in an
   44  action or special proceeding, or a temporary receiver who  is  continued
   45  by  the final judgment or order, is a permanent receiver.  The court may
   46  confer upon a temporary receiver  the  powers,  and  subject  [him]  THE
   47  TEMPORARY  RECEIVER  to  the  duties of a permanent receiver, or so much
   48  thereof as it deems proper.
   49  S 1204. Oath and security.
   50    [(a)]  A receiver, before entering upon  his  OR  HER  duties,  shall:
   51  [(1)](A)  Take  and  subscribe  an  oath that he OR SHE will faithfully,
   52  honestly and impartially discharge the trust committed to  him  OR  HER,
   53  and  the  oath  shall  be filed with the clerk of the court in which the
   54  action or special proceeding is pending.
   55    [(2)] (B) File with the clerk of such court a bond to the people, with
   56  at least two sufficient sureties or a bond executed by any  fidelity  or
       A. 8072                            53

    1  surety  company  authorized  by the laws of this state to transact busi-
    2  ness, in a penalty fixed by the court appointing him OR HER, conditioned
    3  for the faithful discharge of his OR HER duties as receiver.  The  court
    4  may  at  any time direct a receiver to give a new bond with new sureties
    5  and with like condition.
    6    S 96. Subparagraphs 2 and 3 of paragraph (b) of section  1206  of  the
    7  not-for-profit corporation law are amended to read as follows:
    8    (2)    To  sell  at  public or private sale all the property vested in
    9  [him] THE PERMANENT RECEIVER, in such  manner  and  on  such  terms  and
   10  conditions  as  the  court shall direct, and to make necessary transfers
   11  and conveyances thereof.
   12    (3)  To examine on oath, to be administered  by  [him]  THE  PERMANENT
   13  RECEIVER,  any  person  concerning any matter pertaining to or affecting
   14  the receivership.
   15    S 97.  Subparagraph 1 of paragraph (a) of section 1207 of the not-for-
   16  profit corporation law, clause (C) as amended by chapter 847 of the laws
   17  of 1970, is amended to read as follows:
   18    (1)  To give immediate notice of his OR HER appointment by publication
   19  once a week for two successive weeks in two newspapers of general circu-
   20  lation in the county where the office of the corporation is located  or,
   21  in  the  case  of a foreign corporation against which an action has been
   22  brought under subparagraph [(a)] (4) OF PARAGRAPH (A)  of  section  1202
   23  (Appointment  of  receiver  of  property of a domestic or foreign corpo-
   24  ration), in a newspaper of general circulation as directed by the court,
   25  requiring:
   26    (A)  All persons indebted to the corporation to render an  account  of
   27  all  debts  owing  by them to the corporation and to pay the same to the
   28  receiver at a specified place and by a specified day.
   29    (B)  All persons having in their possession any property of the corpo-
   30  ration to deliver the same to the receiver at the specified place and by
   31  the specified day.
   32    (C)  All creditors and claimants, including any with  unliquidated  or
   33  contingent  claims  and  any  with  whom the corporation has unfulfilled
   34  contracts, to present their claims to the receiver  in  writing  and  in
   35  detail  at  a specified place and by a specified day, which shall not be
   36  less than six months after the first publication of such notice.   When-
   37  ever a receiver is appointed in dissolution proceedings under article 10
   38  (Non-judicial dissolution) or article 11 (Judicial dissolution), section
   39  1007  (Notice to creditors BY CORPORATIONS INTENDING TO DISSOLVE; filing
   40  or barring claims) OF THIS CHAPTER shall apply  and  shall  control  the
   41  giving  of  notice to creditors and claimants and the filing and barring
   42  of claims.
   43    S 98. Paragraphs (a) and (e) of section  1209  of  the  not-for-profit
   44  corporation law are amended to read as follows:
   45    (a)  Whenever a receiver, by verified petition to the supreme court at
   46  a  special term held in the judicial district in which [he] THE RECEIVER
   47  was appointed, shall show that he OR SHE has good reason to believe that
   48  any person has in his OR HER possession or under his OR HER control,  or
   49  has  wrongfully  concealed, withheld or disposed of, any property of the
   50  corporation, or that any person can testify concerning such  facts,  the
   51  court, with or without notice, shall make an order requiring such person
   52  to appear before the court or a referee, at a time and place designated,
   53  and  submit  to an examination concerning such facts.  In such order, or
   54  at any time thereafter, in its discretion,  the  court  may  enjoin  and
   55  restrain  such  person from disposing of any property of the corporation
   56  in his OR HER possession or under his OR HER control.
       A. 8072                            54

    1    (e)  The testimony taken under such order shall be signed and sworn to
    2  by the person examined, and be filed in the office of the clerk  of  the
    3  county  where  the  action or proceeding is pending.  If it shall appear
    4  that any person is wrongfully concealing or withholding, or has  in  his
    5  OR  HER  possession  or  under  his  OR HER control, any property of the
    6  corporation, on notice to [him] SUCH PERSON, the court may make an order
    7  requiring [him] SUCH PERSON forthwith to deliver  it  to  the  receiver,
    8  subject to the further order of the court.
    9    S 99.  Paragraph (a) of section 1211 of the not-for-profit corporation
   10  law is amended to read as follows:
   11    (a)    If  there  remains  property of the corporation after the first
   12  distribution, the receiver shall, within one  year  thereafter,  make  a
   13  final  distribution  among  the creditors entitled thereto.  Notice that
   14  such distribution will be the final distribution to creditors  shall  be
   15  published once a week for two consecutive weeks in a newspaper of gener-
   16  al  circulation  in  the  county  where the office of the corporation is
   17  located AND POSTED PROMINENTLY  AND  CONTINUOUSLY  FOR  TWO  CONSECUTIVE
   18  WEEKS ON THE HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE CORPORATION.
   19    S  100.  Section 1212 of the not-for-profit corporation law, paragraph
   20  (b) as amended by chapter 726 of the laws of 2005, is amended to read as
   21  follows:
   22  S 1212. Disposition of  moneys  retained;  surplus;  unclaimed  distrib-
   23            utions.
   24    (a) When any action pending at the time of final distribution shall be
   25  terminated,  the  receiver  shall apply the moneys retained by [him] THE
   26  RECEIVER to the payment of the amount recovered, and [his]  THE  RECEIV-
   27  ER'S necessary charges and expenses incurred therein.
   28    (b) After the final distribution to creditors and after deducting [his
   29  or her] THE RECEIVER'S charges and expenses, the receiver shall distrib-
   30  ute  any  surplus  in the manner prescribed in section 1002-a [(Carrying
   31  out the plan of dissolution and distribution of assets)] OF THIS CHAPTER
   32  or, if dissolution of the corporation is not involved, in such manner as
   33  the court shall order.
   34    S 101. Sections 1213, 1214 and 1215 of the not-for-profit  corporation
   35  law are amended to read as follows:
   36  S 1213. Omission or default of receiver.
   37    Upon  notice to the attorney-general and upon such notice to creditors
   38  or others interested as the court shall direct, the court  may,  in  the
   39  furtherance of justice, relieve a receiver from any omission or default,
   40  on  such  conditions  as  may  be imposed, and, on compliance therewith,
   41  confirm [his] THE RECEIVER'S action.
   42  S 1214. Application by attorney-general for removal of receiver  and  to
   43            close receivership.
   44    (a)    Whenever  he  OR  SHE  deems  it  to be to the advantage of the
   45  members, creditors or other persons interested  in  the  assets  of  any
   46  corporation for which a receiver has been appointed, the attorney-gener-
   47  al may move:
   48    (1)  For an order removing the receiver and appointing another [in his
   49  stead] RECEIVER;
   50    (2)  To compel the receiver to account;
   51    (3)   For such other and additional orders as may facilitate the clos-
   52  ing of the receivership.
   53  S 1215. Resignation by receiver; filling any vacancy.
   54    (a)  A receiver may petition the [court] appointing [him] COURT for an
   55  order to show cause why he OR SHE should not be permitted to resign.
       A. 8072                            55

    1    (b)  The petition shall be accompanied by a verified  account  of  all
    2  the  assets  of  the  corporation received by [him] THE RECEIVER, of all
    3  payments or other disposition thereof made by [him] THE RECEIVER, of the
    4  remaining assets of the corporation in respect to which [he] THE RECEIV-
    5  ER  was appointed receiver and the situation of the same, and of all his
    6  OR HER transactions as receiver.  Thereupon, the court  shall  grant  an
    7  order  directing  notice to be given to the sureties on his OR HER offi-
    8  cial bond and to all persons interested in the property  of  the  corpo-
    9  ration  to  show  cause, at a time and place specified, why the receiver
   10  should not be permitted to resign.  Such notice shall be published  once
   11  in  each  week for six successive weeks in one or more newspapers as the
   12  court shall direct.   If it shall appear that  the  proceedings  of  the
   13  receiver  in the discharge of his OR HER trust have been fair and honest
   14  and that there is no good cause to the contrary, the court shall make an
   15  order permitting such receiver to resign.  Thereupon [he]  THE  RECEIVER
   16  shall  be  discharged and his OR HER powers as receiver shall cease, but
   17  he OR SHE shall remain subject to any liability incurred  prior  to  the
   18  making  of  such  order.   The court, in its discretion, may require the
   19  expense of such proceeding to be paid by  the  receiver  presenting  the
   20  petition.
   21    (c)   Any vacancy created by resignation, removal, death or otherwise,
   22  may be filled by the court, and the property of the  receivership  shall
   23  be  delivered  to  the remaining receivers or, if there are none, to the
   24  successor appointed by the court.    The  court  may  summarily  enforce
   25  delivery  by  order  in  the  action  or special proceeding in which the
   26  receiver was appointed.
   27    S 102. Section 1302 of the not-for-profit corporation law, as  amended
   28  by chapter 847 of the laws of 1970, is amended to read as follows:
   29  S 1302. Application to existing authorized foreign corporations.
   30    Every  foreign corporation which on the effective date of this chapter
   31  is authorized to conduct activities in this state under a certificate of
   32  authority heretofore issued to  it  by  the  secretary  of  state  shall
   33  continue to have such authority.  Such foreign corporation, its members,
   34  directors,  and  officers  shall  have  the same rights, franchises, and
   35  privileges and shall be subject to the same  limitations,  restrictions,
   36  liabilities,  and  penalties  as  a foreign corporation authorized under
   37  this chapter, its members, directors,  and  officers  respectively.    A
   38  foreign corporation may by amendment to its certificate of authority set
   39  forth  [the type of] WHETHER IT IS A CHARITABLE corporation [it is under
   40  section 201 (Purposes);] OR A  NON-CHARITABLE  CORPORATION  and  in  the
   41  absence  of  such amendment an authorized foreign corporation shall be a
   42  [Type B] CHARITABLE corporation.  Reference in this chapter to an appli-
   43  cation for authority  shall,  unless  the  context  otherwise  requires,
   44  include the statement and designation and any amendment thereof required
   45  to  be  filed by the secretary of state under prior statutes to obtain a
   46  certificate of authority.
   47    S 103. Subparagraph 4 of paragraph (a) of section 1304 of the not-for-
   48  profit corporation law, as amended by chapter 847 of the  laws  of  1970
   49  and as renumbered by chapter 590 of the laws of 1982, is amended to read
   50  as follows:
   51    (4)  That  the  corporation  is  a  foreign  corporation as defined in
   52  subparagraph [(a)] (7) OF PARAGRAPH (A) of section  102  (Definitions)[;
   53  the  type  of]  OF THIS CHAPTER, WHETHER IT WOULD BE A CHARITABLE corpo-
   54  ration [it shall be  under  section  201  (Purposes);  a  statement]  OR
   55  NON-CHARITABLE  CORPORATION  IF FORMED IN THIS STATE; A STATEMENT of its
   56  purposes to be pursued in this state and  of  the  activities  which  it
       A. 8072                            56

    1  proposes to conduct in this state; AND a statement that it is authorized
    2  to  conduct  those activities in the jurisdiction of its incorporation[;
    3  and in the case of a Type C corporation, the  lawful  public  or  quasi-
    4  public objective which each business purpose will achieve].
    5    S 104. Paragraph (c) of section 1304 of the not-for-profit corporation
    6  law is amended, and a new paragraph (d) is added to read as follows:
    7    (c)  If the application for authority sets forth any purpose or activ-
    8  ity for which a domestic corporation  could  be  formed  only  with  the
    9  consent or approval of any governmental body or officer, or other person
   10  or  body  under  section  404  (Approvals, NOTICES and consents) OF THIS
   11  CHAPTER, such consent or approval shall be endorsed thereon  or  annexed
   12  thereto.
   13    (D)  IF THE APPLICATION FOR AUTHORITY SETS FORTH ANY PURPOSE OR ACTIV-
   14  ITY REQUIRING A DOMESTIC CORPORATION TO PROVIDE NOTICE OF THE FILING  OF
   15  A CERTIFICATE OF INCORPORATION TO ANY PERSON OR ENTITY UNDER SECTION 404
   16  (APPROVALS,  NOTICES AND CONSENTS) OF THIS CHAPTER, THEN THE CORPORATION
   17  SHALL SEND BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED COPY
   18  OF THE CERTIFICATE OF AUTHORITY TO SUCH  PERSON  OR  ENTITY  WITHIN  TEN
   19  BUSINESS  DAYS  AFTER  THE  CORPORATION  RECEIVES  CONFIRMATION FROM THE
   20  DEPARTMENT OF STATE THAT THE CERTIFICATE HAS BEEN ACCEPTED FOR FILING.
   21    S 105. Subparagraph 1 of paragraph (a) of section 1309 of the not-for-
   22  profit corporation law, as amended by chapter 186 of the laws  of  1983,
   23  is amended to read as follows:
   24    (1)  The name of the foreign corporation as it appears on the index of
   25  names of existing domestic and authorized foreign  corporations  of  any
   26  [type  or]  kind  in the department of state and the fictitious name the
   27  corporation has agreed to use in this state pursuant to paragraph (d) of
   28  section 1301 of this [chapter] ARTICLE.
   29    S 106. Subparagraph 1 of paragraph (b) of section 1310 of the not-for-
   30  profit corporation law, as amended by chapter 186 of the laws  of  1983,
   31  is amended to read as follows:
   32    (1)  The name of the foreign corporation as it appears on the index of
   33  names of existing domestic and authorized foreign  corporations  of  any
   34  [type  or]  kind  in the department of state and the fictitious name the
   35  corporation has agreed to use in this state pursuant to paragraph (d) of
   36  section 1301 of this [chapter] ARTICLE.
   37    S 107. Subparagraph 1 of paragraph (a) of section 1311 of the not-for-
   38  profit corporation law, as amended by chapter 186 of the laws  of  1983,
   39  is amended to read as follows:
   40    (1)  The name of the foreign corporation as it appears on the index of
   41  names of existing domestic and authorized foreign  corporations  of  any
   42  [type  or]  kind  in the department of state and the fictitious name the
   43  corporation has agreed to use in this state pursuant to paragraph (d) of
   44  section 1301 of this [chapter] ARTICLE.
   45    S 108. Paragraphs (a) and (b) of section 1315  of  the  not-for-profit
   46  corporation  law,  subparagraph 5 of paragraph (b) as amended by chapter
   47  847 of the laws of 1970, are amended to read as follows:
   48    (a)  An action or special proceeding against a foreign corporation may
   49  be maintained by a resident of this state or by a  domestic  corporation
   50  of any [type or] kind for any cause of action.
   51    (b)    Except  as  otherwise  provided  in  this article, an action or
   52  special proceeding against a foreign corporation may  be  maintained  by
   53  another foreign corporation of any [type or] kind or by a nonresident in
   54  the following cases only:
   55    (1)   Where the action is brought to recover damages for the breach of
   56  a contract made or to be performed within this  state,  or  relating  to
       A. 8072                            57

    1  property  situated  within  this  state at the time of the making of the
    2  contract.
    3    (2)    Where  the  subject matter of the litigation is situated within
    4  this state.
    5    (3)  Where the cause of action arose within this state,  except  where
    6  the object of the action or special proceeding is to affect the title of
    7  real property situated outside this state.
    8    (4)  Where, in any case not included in the preceding subparagraphs, a
    9  non-domiciliary  would  be  subject  to the personal jurisdiction of the
   10  courts of this state under section [302] THREE HUNDRED TWO of the  civil
   11  practice law and rules.
   12    (5) Where the defendant is a foreign corporation conducting activities
   13  or authorized to conduct activities in this state.
   14    S 109. Paragraph (b) of section 1316 of the not-for-profit corporation
   15  law is amended to read as follows:
   16    (b)   An examination authorized by paragraph (a) may be denied to such
   17  member or other person upon his refusal to furnish to the foreign corpo-
   18  ration or its  transfer  agent  or  registrar  an  affidavit  that  such
   19  inspection  is  not desired for a purpose which is in the interests of a
   20  business or object other than the activities of the foreign  corporation
   21  and  that  such member or other person has not within five years sold or
   22  offered for sale any list or record of members of any corporation of any
   23  [type or] kind, whether or not formed under the laws of this  state,  or
   24  aided  or  abetted  any  person  in procuring any such list or record of
   25  members for any such purpose.
   26    S 110. Paragraph (a) of section 1321 of the not-for-profit corporation
   27  law, subparagraphs 1, 2 and 3 as amended by chapter 847 of the  laws  of
   28  1970, is amended to read as follows:
   29    (a)    Notwithstanding  any other provision of this chapter, a foreign
   30  corporation conducting activities in  this  state  which  is  authorized
   31  under this article, its directors, officers and members, shall be exempt
   32  from  the  provisions  of  paragraph  (e)  of section 1317 (Voting trust
   33  records), subparagraph [(a)]  (1)  OF  PARAGRAPH  (A)  of  section  1318
   34  (Liabilities  of  directors  and  officers of foreign corporations), and
   35  subparagraph [(a)] (2) OF PARAGRAPH (A) of section  1320  (Applicability
   36  of  other  provisions)  OF  THIS  ARTICLE if [when] such provision would
   37  otherwise apply:
   38    (1) The corporation is a [Type  A]  NON-CHARITABLE  corporation  under
   39  this chapter; its principal activities are conducted outside this state;
   40  the greater part of its property is located outside this state; and less
   41  than one third of its members are residents of this state; or
   42    (2)    The corporation is a [Type B] CHARITABLE corporation under this
   43  chapter; its principal activities are conducted outside this state;  the
   44  greater  part  of  its  property is located outside this state; and less
   45  than ten per cent of its annual revenues is derived from solicitation of
   46  funds within this state[; or
   47    (3) The corporation is a Type C corporation under  this  chapter;  its
   48  principal  activities are conducted outside this state; the greater part
   49  of its property is located outside this state; and less than one half of
   50  its revenues for the preceding three fiscal years, or such portion ther-
   51  eof as the foreign corporation was in existence, was derived from sourc-
   52  es within this state].
   53    S 111. Paragraph (d) of section 1401 of the not-for-profit corporation
   54  law, as added by chapter 871 of the laws of 1977, is amended to read  as
   55  follows:
       A. 8072                            58

    1    (d) Type of corporation. A family or private cemetery corporation is a
    2  [type B] CHARITABLE corporation under this chapter.
    3    S 112. Paragraph (b) of section 1402 of the not-for-profit corporation
    4  law is amended to read as follows:
    5    (b) Type of corporation.
    6    A  fire  corporation  is  a [Type B] CHARITABLE corporation under this
    7  chapter.
    8    S 113. Paragraph (c) of section 1403 of the not-for-profit corporation
    9  law is amended to read as follows:
   10    (c) Type of corporation.
   11    A corporation for the prevention of cruelty is a [Type  B]  CHARITABLE
   12  corporation under this chapter.
   13    S 114. Paragraph (b) of section 1404 of the not-for-profit corporation
   14  law,  as amended by chapter 1058 of the laws of 1971, is amended to read
   15  as follows:
   16    (b)  Type of corporation.
   17    A christian association is a [Type  B]  CHARITABLE  corporation  under
   18  this chapter.
   19    S 115. Paragraph (b) of section 1405 of the not-for-profit corporation
   20  law is amended to read as follows:
   21    (b)  Type of corporation.
   22    A soldiers' monument corporation is a [Type B] CHARITABLE corporation.
   23    S 116. Paragraph (b) of section 1406 of the not-for-profit corporation
   24  law is amended to read as follows:
   25    (b)  Type of corporation.
   26    A  medical society is a [Type A] NON-CHARITABLE corporation under this
   27  chapter.
   28    S 117. Paragraph (b) of section 1407 of the not-for-profit corporation
   29  law is amended to read as follows:
   30    (b)  Type of corporation.
   31    An alumni corporation is a [Type A] NON-CHARITABLE corporation.
   32    S 118. Paragraph (b) of section 1408 of the not-for-profit corporation
   33  law is amended to read as follows:
   34    (b)  Type of corporation.
   35    An historical society is a [Type B] CHARITABLE corporation under  this
   36  chapter.
   37    S 119. Paragraph (b) of section 1409 of the not-for-profit corporation
   38  law,  as amended by chapter 1058 of the laws of 1971, is amended to read
   39  as follows:
   40    (b) Type of corporation.  An agricultural or horticultural corporation
   41  is a [Type A] NON-CHARITABLE corporation under this chapter, except that
   42  any such corporation which has received moneys from  the  state  or  has
   43  acted as agent for the state under paragraph (c) OF THIS SECTION, or has
   44  acquired  or  does acquire real property by condemnation is or becomes a
   45  [Type B] CHARITABLE corporation under this chapter. [If such corporation
   46  has not already filed as a  Type  B  corporation  it  shall,  upon  such
   47  receipt  of  moneys  or acting as such agent or such acquisition of real
   48  property by condemnation, amend its certificate to that effect.]
   49    S 120. Paragraph (b) of section 1410 of the not-for-profit corporation
   50  law is amended to read as follows:
   51    (b)  Type of corporation.
   52    A board of trade or a chamber of commerce is a [Type A] NON-CHARITABLE
   53  corporation under this chapter.
   54    S 121. Paragraph (b) of section 1411 of the not-for-profit corporation
   55  law is amended to read as follows:
   56    (b) Type of corporation.
       A. 8072                            59

    1    A local development corporation is a [Type C]  CHARITABLE  corporation
    2  under this chapter.
    3    S 122. Paragraph (d) of section 1412 of the not-for-profit corporation
    4  law,  as added by chapter 555 of the laws of 1993, is amended to read as
    5  follows:
    6    (d) Type. A university faculty practice  corporation  is  a  [Type  B]
    7  CHARITABLE corporation under this chapter.
    8    S 123. Paragraph (c) of section 1505 of the not-for-profit corporation
    9  law,  as added by chapter 871 of the laws of 1977, is amended to read as
   10  follows:
   11    (c)  Type of corporation.  A cemetery corporation is a [Type B] CHARI-
   12  TABLE corporation under this chapter.
   13    S 124. Paragraph (b) of section 1602 of the not-for-profit corporation
   14  law, as added by chapter 257 of the laws of 2011, is amended to read  as
   15  follows:
   16    (b) "land bank" shall mean a land bank established as a [type C] CHAR-
   17  ITABLE  not-for-profit  corporation under this chapter and in accordance
   18  with the provisions of this article and pursuant to this article;
   19    S 125. Paragraph (f) of section 1603 of the not-for-profit corporation
   20  law, as added by chapter 257 of the laws of 2011, is amended to read  as
   21  follows:
   22    (f)  Each  land  bank  created pursuant to this act shall be a [type C
   23  not-for-profit] CHARITABLE corporation, and  shall  have  permanent  and
   24  perpetual duration until terminated and dissolved in accordance with the
   25  provisions of section sixteen hundred thirteen of this article.
   26    S  126.  The opening paragraph of paragraph (a) of section 1607 of the
   27  not-for-profit corporation law, as added by chapter 257 of the  laws  of
   28  2011, is amended to read as follows:
   29    A  land  bank  shall  constitute  a [type C] CHARITABLE not-for-profit
   30  corporation under New York law, which powers shall  include  all  powers
   31  necessary  to  carry  out  and effectuate the purposes and provisions of
   32  this article, including the following powers in addition to those herein
   33  otherwise granted:
   34    S 127. Paragraph (e) of section 1611 of the not-for-profit corporation
   35  law, as added by chapter 257 of the laws of 2011, is amended to read  as
   36  follows:
   37    (e) Bonds issued by the land bank shall be issued, sold, and delivered
   38  in  accordance  with the terms and provisions of a resolution adopted by
   39  the board. The board may sell such  bonds  in  such  manner,  either  at
   40  public  or at private sale, and for such price as it may determine to be
   41  in the best interests of the land bank.  The  resolution  issuing  bonds
   42  shall  be  published  in  a  newspaper of general circulation within the
   43  jurisdiction of the land bank AND POSTED PROMINENTLY AND CONTINUOUSLY ON
   44  THE HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE LAND BANK.
   45    S 128. Section 1613 of the not-for-profit corporation law, as added by
   46  chapter 257 of the laws of 2011, is amended to read as follows:
   47  S 1613. Dissolution of land bank.
   48    A land bank may be dissolved as a [type C]  CHARITABLE  not-for-profit
   49  corporation sixty calendar days after an affirmative resolution approved
   50  by  two-thirds of the membership of the board of directors. Sixty calen-
   51  dar days advance written notice of  consideration  of  a  resolution  of
   52  dissolution shall be given to the foreclosing governmental unit or units
   53  that  created  the land bank, shall be published in a local newspaper of
   54  general circulation, and POSTED  PROMINENTLY  AND  CONTINUOUSLY  ON  THE
   55  HOMEPAGE  OF  ANY WEBSITE MAINTAINED BY THE LAND BANK, AND shall be sent
   56  certified mail to the trustee of any outstanding bonds of the land bank.
       A. 8072                            60

    1  Upon dissolution of the land bank all real property,  personal  property
    2  and  other  assets of the land bank shall become the assets of the fore-
    3  closing governmental unit or units that created the land  bank.  In  the
    4  event that two or more foreclosing governmental units create a land bank
    5  in  accordance  with  section sixteen hundred three of this article, the
    6  withdrawal of one or  more  foreclosing  governmental  units  shall  not
    7  result  in the dissolution of the land bank unless the intergovernmental
    8  agreement so provides, and there is  no  foreclosing  governmental  unit
    9  that desires to continue the existence of the land bank.
   10    S  129.    Paragraph  (h)  of section 8-1.4 of the estates, powers and
   11  trusts law, as amended by chapter 43 of the laws of 2002, is amended  to
   12  read as follows:
   13    (h)  The  attorney  general shall make rules and regulations necessary
   14  for the administration of this section, including rules and  regulations
   15  as  to  the time for filing reports, the contents thereof, and [the] ANY
   16  manner of executing and filing them, INCLUDING BUT NOT LIMITED TO ALLOW-
   17  ING OR REQUIRING ANY SUBMISSION TO THE ATTORNEY GENERAL TO  BE  EFFECTED
   18  BY  ELECTRONIC  MEANS  AND ELECTRONIC SIGNATURES. He or she may classify
   19  trusts, estates, corporations and other trustees as to  purpose,  nature
   20  of assets, duration, amount of assets, amounts to be devoted to charita-
   21  ble  purposes,  or  otherwise,  and  may  establish  different rules for
   22  different classes as to time and nature of the reports required, to  the
   23  ends  that  he  or she shall receive current financial reports as to all
   24  such trusts, estates, corporations or other trustees which  will  enable
   25  him  or  her  to ascertain whether they are being properly administered.
   26  The attorney general may suspend the filing of financial reports as to a
   27  particular trustee for a reasonable, specifically designated  time  upon
   28  written  application of the trustee, signed under penalties for perjury,
   29  and filed with the attorney general and after the attorney  general  has
   30  filed in the register of trustees a written statement that the interests
   31  of  the  beneficiaries  will not be prejudiced thereby and that periodic
   32  reports during the term of such suspension are not required  for  proper
   33  supervision  by  his  or her office. The filing of the financial reports
   34  required by this section, or the  exemption  from  such  filing  or  the
   35  suspension  therefrom,  shall  not have the effect of absolving trustees
   36  from any responsibility for accounting for property or  income  held  by
   37  them  for  charitable  purposes. A copy of an account or other financial
   38  report filed by a trustee in any court in this state, if the account  or
   39  other  financial  report substantially complies with the rules and regu-
   40  lations of the attorney general, may be  filed  as  a  financial  report
   41  under this section.
   42    S  130.  The estates, powers and trusts law is amended by adding a new
   43  section 8-1.9 to read as follows:
   44  S 8-1.9 TRUST GOVERNANCE
   45    (A) FOR PURPOSES OF THIS SECTION:
   46    (1) A "TRUST" MEANS A TRUST CREATED SOLELY FOR CHARITABLE PURPOSES, OR
   47  A TRUST THAT CONTINUES SOLELY FOR SUCH PURPOSES AFTER ALL NON-CHARITABLE
   48  INTERESTS HAVE TERMINATED.
   49    (2) "CHARITABLE PURPOSE" MEANS ANY RELIGIOUS, CHARITABLE,  EDUCATIONAL
   50  OR BENEVOLENT PURPOSE.
   51    (3)  "KEY  EMPLOYEE" MEANS ANY PERSON WHO IS IN A POSITION TO EXERCISE
   52  SUBSTANTIAL INFLUENCE OVER THE AFFAIRS OF THE CORPORATION AS  REFERENCED
   53  IN  26  U.S.C.  SECTION 4958(F)(1)(A) AND FURTHER SPECIFIED IN 26 C.F.R.
   54  SECTION 53.4958-3(C), (D) AND (E), OR SUCCEEDING PROVISIONS.
   55    (4) AN "AFFILIATE" OF A TRUST  MEANS  ANY  ENTITY  CONTROLLED  BY,  IN
   56  CONTROL OF, OR UNDER COMMON CONTROL WITH SUCH TRUST.
       A. 8072                            61

    1    (5)  "RELATIVE"  OF  AN INDIVIDUAL MEANS HIS OR HER (I) SPOUSE, ANCES-
    2  TORS, BROTHERS AND SISTERS  (WHETHER  WHOLE  OR  HALF  BLOOD),  CHILDREN
    3  (WHETHER  NATURAL  OR  ADOPTED), GRANDCHILDREN, GREAT-GRANDCHILDREN, AND
    4  SPOUSES OF BROTHERS, SISTERS, CHILDREN, GRANDCHILDREN, AND  GREAT-GRAND-
    5  CHILDREN;  AND  (II)  HIS  OR HER DOMESTIC PARTNER AS DEFINED IN SECTION
    6  TWENTY-NINE HUNDRED NINETY-FOUR-A OF THE PUBLIC HEALTH LAW.
    7    (6) "RELATED PARTY" MEANS (I) ANY TRUSTEE OR KEY EMPLOYEE OF THE TRUST
    8  OR ANY AFFILIATE OF THE TRUST; (II) ANY RELATIVE OF ANY TRUSTEE  OR  KEY
    9  EMPLOYEE  OF THE TRUST OR ANY AFFILIATE OF THE TRUST; OR (III) AN ENTITY
   10  IN WHICH ANY INDIVIDUAL DESCRIBED  IN  CLAUSES  (I)  AND  (II)  OF  THIS
   11  SUBPARAGRAPH  HAS  A THIRTY-FIVE PERCENT OR GREATER OWNERSHIP OR BENEFI-
   12  CIAL INTEREST OR, IN THE CASE OF A PARTNERSHIP  OR  PROFESSIONAL  CORPO-
   13  RATION, A DIRECT OWNERSHIP INTEREST IN EXCESS OF FIVE PERCENT.
   14    (7) "INDEPENDENT TRUSTEE" MEANS A TRUSTEE WHO: (I) IS NOT, AND HAS NOT
   15  BEEN  WITHIN THE LAST THREE YEARS, AN EMPLOYEE OF THE TRUST OR AN AFFIL-
   16  IATE OF THE TRUST, AND DOES NOT HAVE A RELATIVE  WHO  IS,  OR  HAS  BEEN
   17  WITHIN THE LAST THREE YEARS, A KEY EMPLOYEE OF THE TRUST OR AN AFFILIATE
   18  OF  THE  TRUST;  (II) HAS NOT RECEIVED, AND DOES NOT HAVE A RELATIVE WHO
   19  HAS RECEIVED, IN ANY OF THE LAST THREE FISCAL YEARS, MORE THAN TEN THOU-
   20  SAND DOLLARS IN DIRECT COMPENSATION FROM THE TRUST OR  AN  AFFILIATE  OF
   21  THE TRUST (OTHER THAN REIMBURSEMENT FOR EXPENSES OR THE PAYMENT OF TRUS-
   22  TEE  COMMISSIONS  AS PERMITTED BY LAW AND THE GOVERNING INSTRUMENT); AND
   23  (III) IS NOT A CURRENT EMPLOYEE OF OR DOES NOT HAVE A SUBSTANTIAL FINAN-
   24  CIAL INTEREST IN, AND DOES NOT HAVE A RELATIVE WHO IS A CURRENT  OFFICER
   25  OF OR HAVE A SUBSTANTIAL FINANCIAL INTEREST IN, ANY ENTITY THAT HAS MADE
   26  PAYMENTS TO, OR RECEIVED PAYMENTS FROM, THE TRUST OR AN AFFILIATE OF THE
   27  TRUST  FOR  PROPERTY  OR SERVICES IN AN AMOUNT WHICH, IN ANY OF THE LAST
   28  THREE FISCAL YEARS, EXCEEDS THE LESSER OF TWENTY-FIVE  THOUSAND  DOLLARS
   29  OR  TWO  PERCENT  OF  SUCH  ENTITY'S  CONSOLIDATED  GROSS  REVENUES. FOR
   30  PURPOSES OF THIS SUBPARAGRAPH, "PAYMENT"  DOES  NOT  INCLUDE  CHARITABLE
   31  CONTRIBUTIONS.
   32    (8)  "RELATED  PARTY  TRANSACTION" MEANS ANY TRANSACTION, AGREEMENT OR
   33  ANY OTHER ARRANGEMENT IN WHICH A RELATED PARTY HAS A FINANCIAL  INTEREST
   34  AND IN WHICH THE TRUST OR ANY AFFILIATE OF THE TRUST IS A PARTICIPANT.
   35    (9)  "INDEPENDENT  AUDITOR"  MEANS  ANY  CERTIFIED  PUBLIC  ACCOUNTANT
   36  PERFORMING THE AUDIT OF THE FINANCIAL STATEMENTS OF A TRUST REQUIRED  BY
   37  SUBDIVISION  ONE  OF SECTION ONE HUNDRED SEVENTY-TWO-B  OF THE EXECUTIVE
   38  LAW.
   39    (B)(1) THE TRUSTEES OR A DESIGNATED AUDIT COMMITTEE CONSISTING OF  ONE
   40  OR  MORE INDEPENDENT TRUSTEES OF ANY TRUST REQUIRED TO FILE AN INDEPEND-
   41  ENT CERTIFIED PUBLIC ACCOUNTANT'S AUDIT REPORT WITH THE ATTORNEY GENERAL
   42  PURSUANT TO SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B OF  THE
   43  EXECUTIVE LAW SHALL OVERSEE THE ACCOUNTING AND FINANCIAL REPORTING PROC-
   44  ESSES  OF  THE  TRUST AND THE AUDIT OF THE TRUST'S FINANCIAL STATEMENTS.
   45  THE TRUSTEES OR DESIGNATED AUDIT  COMMITTEE  SHALL  ANNUALLY  RETAIN  OR
   46  RENEW  THE RETENTION OF AN INDEPENDENT AUDITOR TO CONDUCT THE AUDIT AND,
   47  UPON COMPLETION THEREOF, REVIEW THE RESULTS OF THE AUDIT AND ANY RELATED
   48  MANAGEMENT LETTER WITH THE INDEPENDENT AUDITOR.
   49    (2) THE TRUSTEES OR A DESIGNATED AUDIT COMMITTEE CONSISTING OF ONE  OR
   50  MORE  INDEPENDENT  TRUSTEES OF ANY TRUST REQUIRED TO FILE AN INDEPENDENT
   51  CERTIFIED PUBLIC ACCOUNTANT'S AUDIT REPORT  WITH  THE  ATTORNEY  GENERAL
   52  PURSUANT  TO SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B OF THE
   53  EXECUTIVE LAW AND THAT IN THE PRIOR FISCAL YEAR HAD OR  IN  THE  CURRENT
   54  FISCAL  YEAR  REASONABLY EXPECTS TO HAVE ANNUAL REVENUE IN EXCESS OF ONE
   55  MILLION DOLLARS SHALL, IN ADDITION TO THOSE DUTIES SET FORTH IN SUBPARA-
   56  GRAPH ONE OF THIS PARAGRAPH:
       A. 8072                            62

    1    (A) REVIEW WITH THE INDEPENDENT AUDITOR THE SCOPE AND PLANNING OF  THE
    2  AUDIT PRIOR TO THE AUDIT'S COMMENCEMENT;
    3    (B)  UPON  COMPLETION  OF THE AUDIT, REVIEW AND DISCUSS WITH THE INDE-
    4  PENDENT AUDITOR: (I) ANY  MATERIAL  RISKS  AND  WEAKNESSES  IN  INTERNAL
    5  CONTROLS  IDENTIFIED  BY THE AUDITOR; (II) ANY RESTRICTIONS ON THE SCOPE
    6  OF THE AUDITOR'S ACTIVITIES OR ACCESS TO  REQUESTED  INFORMATION;  (III)
    7  ANY  SIGNIFICANT  DISAGREEMENTS  BETWEEN THE AUDITOR AND MANAGEMENT; AND
    8  (IV) THE ADEQUACY OF THE  TRUST'S  ACCOUNTING  AND  FINANCIAL  REPORTING
    9  PROCESSES;
   10    (C)  ANNUALLY  CONSIDER  THE PERFORMANCE AND INDEPENDENCE OF THE INDE-
   11  PENDENT AUDITOR; AND
   12    (D) IF THE DUTIES REQUIRED BY THIS SECTION ARE PERFORMED BY  AN  AUDIT
   13  COMMITTEE, REPORT ON THE COMMITTEE'S ACTIVITIES TO THE TRUSTEES.
   14    (3)  THE  TRUSTEES  OR  DESIGNATED  AUDIT  COMMITTEE SHALL OVERSEE THE
   15  ADOPTION, IMPLEMENTATION OF, AND COMPLIANCE WITH ANY CONFLICT OF  INTER-
   16  EST POLICY OR WHISTLEBLOWER POLICY ADOPTED BY THE TRUST IF THIS FUNCTION
   17  IS  NOT  OTHERWISE  PERFORMED  BY  ANOTHER COMMITTEE COMPRISED SOLELY OF
   18  INDEPENDENT TRUSTEES.
   19    (4) IF A TRUST IS UNDER THE CONTROL OF ANOTHER TRUST OR A CORPORATION,
   20  THE TRUSTEES OR DESIGNATED AUDIT COMMITTEE OF THE CONTROLLING TRUST,  OR
   21  THE  BOARD OR DESIGNATED AUDIT COMMITTEE OF THE BOARD OF THE CONTROLLING
   22  CORPORATION, MAY PERFORM THE DUTIES REQUIRED BY THIS PARAGRAPH.
   23    (5) ONLY INDEPENDENT TRUSTEES  MAY  PARTICIPATE  IN  DELIBERATIONS  OR
   24  VOTING RELATING TO MATTERS SET FORTH IN THIS PARAGRAPH.
   25    (C)(1)  NOTWITHSTANDING  ANY  PROVISION OF THE TRUST INSTRUMENT TO THE
   26  CONTRARY, NO TRUST SHALL ENTER INTO ANY RELATED PARTY TRANSACTION UNLESS
   27  THE TRANSACTION IS DETERMINED BY THE TRUSTEES TO BE FAIR, REASONABLE AND
   28  IN THE TRUST'S BEST INTEREST AT THE TIME OF  SUCH  DETERMINATION.    ANY
   29  TRUSTEE,  OFFICER OR KEY EMPLOYEE WHO HAS AN INTEREST IN A RELATED PARTY
   30  TRANSACTION SHALL DISCLOSE IN GOOD FAITH TO THE TRUSTEES, OR AN  AUTHOR-
   31  IZED COMMITTEE THEREOF, THE MATERIAL FACTS CONCERNING SUCH INTEREST.
   32    (2)  WITH  RESPECT TO ANY RELATED PARTY TRANSACTION IN WHICH A RELATED
   33  PARTY HAS A SUBSTANTIAL FINANCIAL INTEREST, THE TRUSTEES, OR AN  AUTHOR-
   34  IZED COMMITTEE THEREOF, SHALL:
   35    (A) PRIOR TO ENTERING INTO THE TRANSACTION, CONSIDER ALTERNATIVE TRAN-
   36  SACTIONS TO THE EXTENT AVAILABLE;
   37    (B)  APPROVE  THE  TRANSACTION BY NOT LESS THAN A MAJORITY VOTE OF THE
   38  TRUSTEES OR COMMITTEE MEMBERS PRESENT AT THE MEETING; AND
   39    (C) CONTEMPORANEOUSLY DOCUMENT IN WRITING THE BASIS FOR THE  TRUSTEES'
   40  OR  AUTHORIZED  COMMITTEE'S  APPROVAL,  INCLUDING  CONSIDERATION  OF ANY
   41  ALTERNATIVE TRANSACTIONS.
   42    (3) THE TRUST INSTRUMENT, BY-LAWS OR ANY POLICY ADOPTED BY  THE  TRUS-
   43  TEES  MAY  CONTAIN ADDITIONAL RESTRICTIONS ON RELATED PARTY TRANSACTIONS
   44  AND ADDITIONAL PROCEDURES NECESSARY FOR THE REVIEW AND APPROVAL OF  SUCH
   45  TRANSACTIONS,  OR  PROVIDE  THAT  ANY  TRANSACTION  IN VIOLATION OF SUCH
   46  RESTRICTIONS SHALL BE VOID OR VOIDABLE.
   47    (4) THE ATTORNEY GENERAL MAY  BRING  AN  ACTION  TO  ENJOIN,  VOID  OR
   48  RESCIND  ANY  RELATED PARTY TRANSACTION OR PROPOSED RELATED PARTY TRANS-
   49  ACTION THAT VIOLATES ANY PROVISION OF THIS ARTICLE OR WAS OTHERWISE  NOT
   50  REASONABLE  OR IN THE BEST INTERESTS OF THE TRUST AT THE TIME THE TRANS-
   51  ACTION WAS APPROVED, OR TO SEEK RESTITUTION, AND THE REMOVAL OF TRUSTEES
   52  OR OFFICERS, OR SEEK TO REQUIRE ANY PERSON OR ENTITY TO:
   53    (A) ACCOUNT FOR ANY PROFITS MADE FROM SUCH TRANSACTION, AND  PAY  THEM
   54  TO THE TRUST;
   55    (B) PAY THE TRUST THE VALUE OF THE USE OF ANY OF ITS PROPERTY OR OTHER
   56  ASSETS USED IN SUCH TRANSACTION;
       A. 8072                            63

    1    (C)  RETURN  OR REPLACE ANY PROPERTY OR OTHER ASSETS LOST TO THE TRUST
    2  AS A RESULT OF SUCH TRANSACTION, TOGETHER WITH ANY  INCOME  OR  APPRECI-
    3  ATION  LOST  TO  THE TRUST BY REASON OF SUCH TRANSACTION, OR ACCOUNT FOR
    4  ANY PROCEEDS OF SALE OF SUCH PROPERTY, AND PAY THE PROCEEDS TO THE TRUST
    5  TOGETHER WITH INTEREST AT THE LEGAL RATE; AND
    6    (D)  PAY, IN THE CASE OF WILLFUL AND INTENTIONAL CONDUCT, AN AMOUNT UP
    7  TO DOUBLE THE AMOUNT OF ANY BENEFIT IMPROPERLY OBTAINED.
    8    (5) THE POWERS OF THE ATTORNEY GENERAL PROVIDED IN THIS SECTION ARE IN
    9  ADDITION TO ALL OTHER POWERS THE ATTORNEY GENERAL MAY  HAVE  UNDER  THIS
   10  CHAPTER OR ANY OTHER LAW.
   11    (6) NO RELATED PARTY MAY PARTICIPATE IN DELIBERATIONS OR VOTING RELAT-
   12  ING  TO  MATTERS  SET  FORTH IN THIS PARAGRAPH; PROVIDED THAT NOTHING IN
   13  THIS SECTION SHALL PROHIBIT THE TRUSTEES OR DESIGNATED  AUDIT  COMMITTEE
   14  FROM  REQUESTING  THAT  A RELATED PARTY PRESENT INFORMATION CONCERNING A
   15  RELATED PARTY TRANSACTION AT A TRUSTEES OR COMMITTEE  MEETING  PRIOR  TO
   16  THE  COMMENCEMENT  OF  DELIBERATIONS  OR  VOTING RELATING TO THE RELATED
   17  PARTY TRANSACTION.
   18    (D)(1) EXCEPT AS PROVIDED IN  SUBPARAGRAPH  FOUR  OF  THIS  PARAGRAPH,
   19  EVERY TRUST SHALL ADOPT A CONFLICT OF INTEREST POLICY TO ENSURE THAT ITS
   20  TRUSTEES,  OFFICERS  AND  KEY  EMPLOYEES ACT IN THE BEST INTEREST OF THE
   21  TRUST AND ITS BENEFICIARIES AND COMPLY WITH  APPLICABLE  LEGAL  REQUIRE-
   22  MENTS,  INCLUDING  BUT NOT LIMITED TO THE REQUIREMENTS SET FORTH IN THIS
   23  PARAGRAPH.
   24    (2) THE CONFLICT OF INTEREST POLICY SHALL INCLUDE, AT A  MINIMUM,  THE
   25  FOLLOWING PROVISIONS:
   26    (A)  A  DEFINITION  OF THE CIRCUMSTANCES THAT CONSTITUTE A CONFLICT OF
   27  INTEREST;
   28    (B) PROCEDURES FOR DISCLOSING A CONFLICT  OF  INTEREST  TO  THE  AUDIT
   29  COMMITTEE OR, IF THERE IS NO AUDIT COMMITTEE, TO THE TRUSTEES;
   30    (C) A REQUIREMENT THAT THE PERSON WITH THE CONFLICT OF INTEREST NOT BE
   31  PRESENT  AT  OR  PARTICIPATE  IN  ANY DELIBERATION OR VOTE ON THE MATTER
   32  GIVING RISE TO SUCH CONFLICT;
   33    (D) A PROHIBITION AGAINST ANY ATTEMPT BY THE PERSON WITH THE  CONFLICT
   34  TO  INFLUENCE  THE  DELIBERATION  OR VOTING ON THE MATTER GIVING RISE TO
   35  SUCH CONFLICT;
   36    (E) A REQUIREMENT THAT THE EXISTENCE AND RESOLUTION OF THE CONFLICT BE
   37  DOCUMENTED IN THE TRUST'S RECORDS, INCLUDING IN THE MINUTES OF ANY MEET-
   38  ING AT WHICH THE CONFLICT WAS DISCUSSED OR VOTED UPON; AND
   39    (F) PROCEDURES FOR DISCLOSING,  ADDRESSING,  AND  DOCUMENTING  RELATED
   40  PARTY TRANSACTIONS IN ACCORDANCE WITH THIS PARAGRAPH.
   41    (3)  THE  CONFLICT  OF  INTEREST  POLICY SHALL REQUIRE THAT PRIOR TO A
   42  TRUSTEE'S INITIAL APPOINTMENT, AND  ANNUALLY  THEREAFTER,  SUCH  TRUSTEE
   43  SHALL  COMPLETE,  SIGN  AND FILE WITH THE RECORDS OF THE TRUST A WRITTEN
   44  STATEMENT IDENTIFYING ANY ENTITY OF WHICH  HE  OR  SHE  IS  AN  OFFICER,
   45  DIRECTOR, TRUSTEE, MEMBER, OWNER (EITHER AS A SOLE PROPRIETOR OR A PART-
   46  NER),  OR  EMPLOYEE AND WITH WHICH THE TRUST HAS A RELATIONSHIP, AND ANY
   47  TRANSACTION IN WHICH THE TRUST IS A PARTICIPANT AND IN WHICH THE TRUSTEE
   48  MIGHT HAVE A CONFLICTING INTEREST. THE POLICY SHALL  REQUIRE  THAT  EACH
   49  TRUSTEE  ANNUALLY  RESUBMIT  SUCH  WRITTEN STATEMENT. THE TRUSTEES SHALL
   50  PROVIDE A COPY OF ALL COMPLETED STATEMENTS TO THE  CHAIR  OF  THE  AUDIT
   51  COMMITTEE, IF THERE IS AN AUDIT COMMITTEE.
   52    (4)  A  TRUST  THAT  HAS  ADOPTED AND POSSESSES A CONFLICT OF INTEREST
   53  POLICY PURSUANT TO FEDERAL, STATE OR LOCAL LAWS  THAT  IS  SUBSTANTIALLY
   54  CONSISTENT  WITH  THE  PROVISIONS  OF SUBPARAGRAPH TWO OF THIS PARAGRAPH
   55  SHALL BE DEEMED IN COMPLIANCE WITH PROVISIONS OF THIS PARAGRAPH.
       A. 8072                            64

    1    (5) NOTHING IN THIS PARAGRAPH SHALL BE INTERPRETED TO REQUIRE A  TRUST
    2  TO ADOPT ANY SPECIFIC CONFLICT OF INTEREST POLICY NOT OTHERWISE REQUIRED
    3  BY THIS PARAGRAPH OR ANY OTHER LAW OR RULE, OR TO SUPERSEDE OR LIMIT ANY
    4  REQUIREMENT  OR  DUTY  GOVERNING  CONFLICTS  OF INTEREST REQUIRED BY ANY
    5  OTHER LAW OR RULE.
    6    (E)(1)  EXCEPT  AS  PROVIDED  IN SUBPARAGRAPH THREE OF THIS PARAGRAPH,
    7  EVERY TRUST THAT HAS TWENTY OR MORE EMPLOYEES AND IN  THE  PRIOR  FISCAL
    8  YEAR  HAD  ANNUAL REVENUE IN EXCESS OF ONE MILLION DOLLARS SHALL ADOPT A
    9  WHISTLEBLOWER POLICY TO PROTECT  FROM  RETALIATION  PERSONS  WHO  REPORT
   10  SUSPECTED  IMPROPER  CONDUCT. SUCH POLICY SHALL PROVIDE THAT NO OFFICER,
   11  TRUSTEE, EMPLOYEE OR VOLUNTEER OF A TRUST WHO IN GOOD FAITH REPORTS  ANY
   12  ACTION OR SUSPECTED ACTION TAKEN BY OR WITHIN THE TRUST THAT IS ILLEGAL,
   13  FRAUDULENT  OR  IN  VIOLATION  OF  ANY ADOPTED POLICY OF THE TRUST SHALL
   14  SUFFER INTIMIDATION, HARASSMENT, DISCRIMINATION OR OTHER RETALIATION OR,
   15  IN THE CASE OF EMPLOYEES, ADVERSE EMPLOYMENT CONSEQUENCE.
   16    (2) THE WHISTLEBLOWER POLICY SHALL INCLUDE THE FOLLOWING PROVISIONS:
   17    (A) PROCEDURES FOR THE REPORTING OF VIOLATIONS OR SUSPECTED VIOLATIONS
   18  OF LAWS OR TRUST  POLICIES,  INCLUDING  PROCEDURES  FOR  PRESERVING  THE
   19  CONFIDENTIALITY OF REPORTED INFORMATION;
   20    (B)  A REQUIREMENT THAT A TRUSTEE, OFFICER OR EMPLOYEE OF THE TRUST BE
   21  DESIGNATED TO ADMINISTER, THE WHISTLEBLOWER POLICY AND TO REPORT TO  THE
   22  AUDIT  COMMITTEE  OR  OTHER COMMITTEE OF INDEPENDENT TRUSTEES, OR TO THE
   23  TRUSTEES; AND
   24    (C) A REQUIREMENT THAT A COPY OF THE  POLICY  BE  DISTRIBUTED  TO  ALL
   25  TRUSTEES,  OFFICERS,  EMPLOYEES AND VOLUNTEERS, WITH INSTRUCTIONS ON HOW
   26  TO COMPLY WITH THE PROCEDURES SET FORTH IN THE POLICY.
   27    (3) A TRUST THAT HAS ADOPTED  AND  POSSESSES  A  WHISTLEBLOWER  POLICY
   28  PURSUANT  TO FEDERAL, STATE OR LOCAL LAWS THAT IS SUBSTANTIALLY CONSIST-
   29  ENT WITH THE PROVISIONS OF SUBPARAGRAPH TWO OF THIS PARAGRAPH  SHALL  BE
   30  DEEMED IN COMPLIANCE WITH THE PROVISIONS OF THIS PARAGRAPH.
   31    (4)  NOTHING  IN  THIS  PARAGRAPH  SHALL BE INTERPRETED TO RELIEVE ANY
   32  TRUST FROM ANY ADDITIONAL REQUIREMENTS IN RELATION TO  INTERNAL  COMPLI-
   33  ANCE,  RETALIATION,  OR  DOCUMENT RETENTION REQUIRED BY ANY OTHER LAW OR
   34  RULE.
   35    S 131. Severability. If any clause, sentence,  paragraph,  section  or
   36  part  of  this act shall be adjudged by any court of competent jurisdic-
   37  tion to be invalid, the judgment shall not affect, impair, or invalidate
   38  the remainder thereof, but shall be confined in  its  operation  to  the
   39  clause,  sentence,  paragraph, section or part thereof directly involved
   40  in the controversy in which the judgment shall have been rendered.
   41    S 132. This act shall take effect July  1,  2014,  provided,  however,
   42  that  the  amendments  to  section  172-b  of  the executive law made by
   43  section three of this act shall expire and be deemed repealed  June  30,
   44  2017; provided further that the amendments to section 172-b of the exec-
   45  utive  law made by section three-a of this act shall take effect July 1,
   46  2017 and shall expire and be deemed repealed  June  30,  2021;  provided
   47  further  that  the amendments to section 172-b of the executive law made
   48  by section three-b of this act shall take effect July 1, 2021;  provided
   49  further that section seventy-three of this act shall take effect January
   50  1, 2015; provided further that section seventy-two of this act and para-
   51  graph  (b)  of  section  8-1.9  of the estates, powers and trusts law as
   52  added by section one hundred thirty of this act shall not be  applicable
   53  until  January  1,  2015  for  any  corporation or trust that had annual
   54  revenues of less than 10,000,000 dollars in the last fiscal year  ending
   55  prior to January 1, 2014.
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