A07772 Summary:

BILL NOA07772
 
SAME ASSAME AS S03755-A
 
SPONSORBrennan
 
COSPNSR
 
MLTSPNSR
 
Amd N-PC L, generally
 
Relates to the reform of charitable organizations in the state of New York.
Go to top    

A07772 Actions:

BILL NOA07772
 
06/04/2013referred to corporations, authorities and commissions
01/08/2014referred to corporations, authorities and commissions
03/11/2014enacting clause stricken
Go to top

A07772 Floor Votes:

There are no votes for this bill in this legislative session.
Go to top

A07772 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          7772
 
                               2013-2014 Regular Sessions
 
                   IN ASSEMBLY
 
                                      June 4, 2013
                                       ___________
 
        Introduced  by M. of A. BRENNAN -- read once and referred to the Commit-
          tee on Corporations, Authorities and Commissions
 
        AN ACT to amend the not-for-profit corporation law, the estates,  powers
          and trusts law, the surrogate's court procedure act, the racing, pari-
          mutuel  wagering  and  breeding  law, the executive law, the education

          law, the religious corporations law, the benevolent  orders  law,  the
          public authorities law, the insurance law, the private housing finance
          law, the banking law, the general business law, the mental hygiene law
          and  the  public lands law, in relation to reform of charitable organ-
          izations; and to  repeal  certain  provisions  of  the  not-for-profit
          corporation law and the estates, powers and trusts law relating there-
          to
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Subparagraph 6 of paragraph (a) of section 102 of the  not-
     2  for-profit  corporation  law  is  amended and ten new subparagraphs 3-a,
     3  6-a, 9-a, 19, 20, 21, 22, 23, 24 and 25 are added to read as follows:
     4    (3-a) "Charitable corporation" means corporations  whose  purposes  as

     5  contained  in the certificate of incorporation or special law are exclu-
     6  sively  charitable,  educational,  religious,  scientific,  testing  for
     7  public  safety  and  to  foster national or international amateur sports
     8  competition or for the prevention of cruelty  to  children  or  animals,
     9  including  without  limitation,  arts,  cultural, environmental, health,
    10  human services, literary, public benefit, society  benefit  corporations
    11  and  other  publicly  supported or private foundations recognized by the
    12  United States Internal Revenue Service as  exempt  from  federal  income
    13  taxation  under  section five hundred one (c)(3) of the internal revenue
    14  code of 1986, as amended, or any successor law.

    15    (6) "Director" means any member of the governing  board  of  a  corpo-
    16  ration,  whether  designated as director, trustee, manager, governor, or
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08903-04-3

        A. 7772                             2
 
     1  by any other title. The term "board" means "board of directors"  or  any
     2  other body constituting a "governing board" as defined in this section.
     3    (6-a)  "Entire  board" means the total number of directors entitled to
     4  vote which the corporation would have if there were no vacancies. If the
     5  by-laws of any corporation provide that the board may consist of a range

     6  between a minimum and maximum number  of  directors,  then  the  "entire
     7  board"  shall  consist of the number of directors within such range that
     8  were elected at the most recently held election of directors.
     9    (9-a) "Beneficent corporation" means lawful non-business corporations,
    10  including civic leagues, social welfare organizations, fraternal benefit
    11  societies, business leagues, chambers of commerce,  labor,  agricultural
    12  and horticultural organizations, social and recreational clubs, cemetery
    13  corporations,  certain  credit  unions, war veterans posts and organiza-
    14  tions, patriotic and political organizations, certain  insurance  organ-
    15  izations,  and certain employee benefit organizations, recognized by the

    16  Internal Revenue Service  as  federal  income  tax  exempt  under  other
    17  subsections  of section 501 or under section 527 of the internal revenue
    18  code of 1986, as amended, or any successor law, other than those  organ-
    19  izations exempt under section 501(c)(3) thereof.
    20    (19)  "Affiliate"  of a corporation means any entity controlled by, in
    21  control of, or under common control with such corporation.
    22    (20) "Independent  auditor"  means  any  certified  public  accountant
    23  performing  an  audit  of  the  financial  statements  of  a corporation
    24  required by subdivision one of section one hundred seventy-two-b of  the
    25  executive  law  or envisioned by section five hundred nine of this chap-
    26  ter.

    27    (21) "Independent director" means a director who  in  the  past  three
    28  years:  (i)  was  not  employed  by, and did not have a relative who was
    29  employed by, the corporation or an affiliate of  the  corporation;  (ii)
    30  was  not  employed  by, and did not have a relative who was employed by,
    31  any entity that made payments to, or received payments from, the  corpo-
    32  ration  or  any  affiliate  of  the  corporation  for goods, property or
    33  services exceeding ten thousand dollars; (iii) has not had, and does not
    34  have a relative who has had, a material financial interest in any entity
    35  that made payments to, or has received payments from, the corporation or
    36  any affiliate of the corporation for goods, property or services  equal-

    37  ing  the  lesser  of  twenty-five thousand dollars or two percent of the
    38  corporation's total revenue for the corporation's tax year; and (iv) has
    39  not received, and does not have any relative who has received, any other
    40  compensation, payment of benefit having monetary value from  the  corpo-
    41  ration or any affiliate of the corporation, other than reimbursement for
    42  expenses  reasonably  incurred  as a director or reasonable compensation
    43  for service as a director as permitted by paragraph (a) of  section  two
    44  hundred  two  of this chapter.   For purposes of this chapter, "payment"
    45  does not include contributions to a not-for-profit corporation.
    46    (22) "Relative" of an individual means the (i) spouse, ancestor, chil-

    47  dren, grandchildren, great grandchildren, brother or sister (whether  by
    48  the  whole-  or  half-blood)  of the individual; and (ii) the spouses of
    49  children, grandchildren, great grandchildren, brother or sister (whether
    50  by the whole- or half-blood) of the individual.
    51    (23) "Related party" means (i) any director, officer or  key  employee
    52  of  the  corporation or any affiliate of the corporation; (ii) any rela-
    53  tive of any director, officer or key employee of the corporation or  any
    54  affiliate of the corporation; or (iii) an entity in which any individual
    55  described in clauses (i) and (ii) of this subparagraph has a thirty-five
    56  percent or greater ownership or beneficial interest.

        A. 7772                             3
 

     1    (24)  "Related  party transaction" means any transaction, agreement or
     2  any other arrangement in which a related party has a financial  interest
     3  and  in  which  the corporation or any affiliate of the corporation is a
     4  participant.
     5    (25)  "Key employee" means any person who is in a position to exercise
     6  substantial influence over the affairs of the corporation, as defined in
     7  section 4958(f)(1)(A) of the internal revenue code of 1986, as  amended,
     8  and the regulations thereunder, and any successor law or regulation.
     9    §  2. Paragraphs (a), (b) and (c) of section 103 of the not-for-profit
    10  corporation law, paragraph (a) as amended by chapter 807 of the laws  of
    11  1973,  paragraph  (b) as amended by chapter 847 of the laws of 1970, and

    12  paragraph (c) as amended by chapter 961 of the laws of 1972, are amended
    13  to read as follows:
    14    (a)   Except as otherwise  provided  in  this  section,  this  chapter
    15  applies  to  every  domestic corporation as herein defined, and to every
    16  foreign corporation as herein defined which is authorized to conduct  or
    17  which  conducts any activities in this state.  This chapter also applies
    18  to any other domestic corporation or foreign corporation  of  any  [type
    19  or]  kind  to the extent, if any, provided under this chapter or any law
    20  governing such corporation and, if no such provision for application  is
    21  made,  to  the  extent,  if  any,  that  the membership corporations law
    22  applied to such corporation as of the effective date of this chapter.  A
    23  corporation formed by a special act of this state which has as its prin-

    24  cipal purpose an education purpose and which is a member of the  univer-
    25  sity  of  the  state  of  New  York, is an "education corporation" under
    26  section two hundred sixteen-a of the education law.
    27    To the extent that the membership  corporations  law  or  the  general
    28  corporation  law applied to it as of the effective date of this chapter,
    29  the corresponding provisions of this  chapter  apply  to  a  corporation
    30  heretofore  formed  by  or pursuant to a special act of this state other
    31  than a religious corporation or an "education corporation" under  clause
    32  (b) of subdivision one of section two hundred sixteen-a of the education
    33  law,  if  (1) its principal purpose is a religious, charitable or educa-
    34  tion purpose, and (2) it is operated, supervised or controlled by or  in
    35  connection  with  a  religious  organization.   Any such corporation may

    36  elect hereunder at any time after the effective date of this chapter and
    37  before the effective date of the chapter of the  laws  of  two  thousand
    38  thirteen  which  amended  this  paragraph  to file a certificate of type
    39  under section one hundred thirteen (Certificate of type of  not-for-pro-
    40  fit  corporation).    Upon  the  filing  of such certificate [by] to the
    41  department of state, this chapter shall apply in all  respects  to  such
    42  corporation.
    43    This  chapter  also  applies to any other corporation of any [type or]
    44  kind, formed [not for profit] not-for-profit under any other chapter  of
    45  the laws of this state except a chapter of the consolidated laws, to the
    46  extent  that  provisions  of  this  chapter  do  not  conflict  with the

    47  provisions of such unconsolidated law.   If an applicable  provision  of
    48  such unconsolidated law relates to a matter embraced in this chapter but
    49  is  not  in conflict therewith, both provisions shall apply.  Any corpo-
    50  ration to which this chapter is made applicable by this paragraph  shall
    51  be  treated  as  a "corporation" or "domestic corporation" as such terms
    52  are used in this chapter, except that the purposes of  any  such  corpo-
    53  ration formed or formable under such unconsolidated law shall not there-
    54  by  be extended.   For the purpose of this paragraph, the effective date
    55  of this chapter as to corporations to which this chapter is made  appli-

        A. 7772                             4
 
     1  cable  by this paragraph shall be September one, nineteen hundred seven-
     2  ty-three.
     3    (b)    The  general corporation law does not apply to a corporation of

     4  any [type or] kind to which this chapter applies.   A reference  in  any
     5  statute of this state which makes a provision of the general corporation
     6  law  applicable  to  a  corporation  of any [type or] kind to which this
     7  chapter is applicable or a reference in any [statute] law of this state,
     8  other than the membership corporations law, which makes a  provision  of
     9  the membership corporations law applicable to a corporation of any [type
    10  or]  kind  shall be deemed and construed to refer to and make applicable
    11  the corresponding provision, if any, of this chapter.
    12    (c)  If any provision in articles one to thirteen  inclusive  of  this
    13  chapter  conflicts with a provision of any subsequent articles or of any
    14  special act under which a corporation to which this chapter  applies  is

    15  formed,  the  provision  in  such  subsequent  article  or  special  act
    16  prevails.  A provision of any such subsequent  article  or  special  act
    17  relating  to  a matter referred to in articles one to thirteen inclusive
    18  and not in conflict therewith is  supplemental  and  both  shall  apply.
    19  Whenever  the board of a [Type B] charitable corporation, formed under a
    20  special  act,  reasonably  makes  an  interpretation  as  to  whether  a
    21  provision  of  the  special act or this chapter prevails, or both apply,
    22  such interpretation shall govern unless and  until  a  court  determines
    23  otherwise,  if such board has acted in good faith for a purpose which it
    24  reasonably believes to be in the  best  interests  of  the  corporation,
    25  provided  however,  that  such interpretation shall not bind any govern-
    26  mental body or officer.

    27    § 3. Paragraph (a) of section 104-a of the not-for-profit  corporation
    28  law is REPEALED and paragraphs (b) through (s) are relettered paragraphs
    29  (a) through (r).
    30    §  4. Section 105 of the not-for-profit corporation law, as amended by
    31  chapter 172 of the laws of 1999, is amended to read as follows:
    32  § 105. Certificates; corrections.
    33    (a) Any certificate or other instrument  relating  to  a  domestic  or
    34  foreign  corporation  submitted  to  the  department of state under this
    35  chapter may be corrected with respect to any typographical,  or  similar
    36  non-material  error  apparent  on the face of the certificate or instru-
    37  ment, prior to acceptance for the filing of such certificate or  instru-
    38  ment  by  the  department of state. Such correction shall be effected by

    39  the department of state upon authorization in writing or  by  electronic
    40  mail  by  the  incorporator,  or  following incorporation, by any person
    41  authorized by the corporation.
    42    (b) Any certificate or other instrument  relating  to  a  domestic  or
    43  foreign  corporation filed by the department of state under this chapter
    44  may be corrected with respect  to  any  [informality]  typographical  or
    45  similar  non-material  or  error  apparent  on the face or defect in the
    46  execution thereof including the deletion of any matter not permitted  to
    47  be  stated  therein.  A certificate, entitled "Certificate of correction
    48  of.......... (correct title of certificate  and  name  of  corporation)"
    49  shall  be signed and delivered to the department of state.  It shall set

    50  forth the name of the  corporation,  the  date  the  certificate  to  be
    51  corrected  was  filed  by  the department of state, the provision in the
    52  certificate as corrected or eliminated and if the execution  was  defec-
    53  tive, the proper execution. The filing of the certificate by the depart-
    54  ment of state shall not alter the effective time of the instrument being
    55  corrected,  which shall remain as its original effective time, and shall
    56  not affect any right  or  liability  accrued  or  incurred  before  such

        A. 7772                             5
 
     1  filing.  A  corporate  name  may  not be changed or corrected under this
     2  section other than to correct any typographical or similar  non-material
     3  error.
     4    §  5.  Subparagraphs 7, 8 and 9 of paragraph (a) of section 112 of the

     5  not-for-profit corporation law, subparagraphs 7  and  9  as  amended  by
     6  chapter  1058 of the laws of 1971, are amended and two new subparagraphs
     7  10 and 11 are added to read as follows:
     8    (7)   To enforce any right given under  this  chapter  to  members,  a
     9  director  or  an  officer  of a [Type B or Type C] not-for-profit corpo-
    10  ration.   The attorney-general  shall  have  the  same  status  as  such
    11  members, director or officer.
    12    (8)   To compel the directors and officers, or any of them, of a [Type
    13  B or Type C] not-for-profit corporation which has been  dissolved  under
    14  section  1011  (Dissolution  for  failure to file certificate of type of
    15  Not-for-Profit Corporation Law under section 113)  to  account  for  the
    16  assets of the dissolved corporation.

    17    (9)   Upon application, ex parte, for an order to the supreme court at
    18  a special term held within the judicial district where the office of the
    19  corporation is located, and if the court so orders, to enforce any right
    20  given under this chapter to members, a director or an officer of [a Type
    21  A corporation] a not-for-profit corporation.    For  such  purpose,  the
    22  attorney-general shall have the same status as such members, director or
    23  officer.
    24    (10) To enjoin, void or rescind any related party transaction, or seek
    25  additional  damages  or  remedies pursuant to section 715 (Related party
    26  transactions) of this chapter.
    27    (11) To enforce the parens patriae power  and  any  other  common  law
    28  authority  of  the  attorney general and any common-law causes of action

    29  available to members, directors, officers, creditors and others  against
    30  a  domestic  or foreign corporation and its members, directors and offi-
    31  cers which are not preempted by this chapter.
    32    § 6. Subparagraph 1 of paragraph (b) of section 112  of  the  not-for-
    33  profit corporation law is amended to read as follows:
    34    (1)  If an action, it is triable by jury as a matter of right as guar-
    35  anteed  by  article  I,  section  2  of the constitution and provided by
    36  section forty-one hundred one of the civil practice law and rules.
    37    § 7. Subparagraph 1 of paragraph (c) of section 112  of  the  not-for-
    38  profit corporation law is amended to read as follows:
    39    (1)  As used in this paragraph the term "resident" shall include indi-

    40  viduals,  domestic corporations of any [type or] kind and foreign corpo-
    41  rations of any [type or] kind authorized to  do  business  or  carry  on
    42  activities in the state.
    43    §  8.  Section 112 of the not-for-profit corporation law is amended by
    44  adding a new paragraph (e) to read as follows:
    45    (e) No provisions of this chapter shall  preempt  well-pleaded  common
    46  law or equitable causes of action or proceedings brought by the attorney
    47  general  against  corporations,  directors,  officers,  key employees or
    48  agents, if such causes of action are independent of causes of action, if
    49  any, based on violations of this chapter.
    50    § 9. Section 113 of the not-for-profit corporation law is REPEALED.
    51    § 10. Section 114 of the not-for-profit corporation law, as  added  by

    52  chapter 847 of the laws of 1970, is amended to read as follows:
    53  § 114. Visitation of supreme court.
    54    [Type  B  and  Type C corporations] Corporations, whether formed under
    55  general or special laws, with their books and vouchers, shall be subject
    56  to the visitation and inspection of a justice of the supreme  court,  or

        A. 7772                             6
 
     1  of any person appointed by the court for that purpose.  If it appears by
     2  the verified petition of a member, director, officer, or creditor of any
     3  such  corporation,  that  it,  or  its directors, officers, members, key
     4  employees,  or agents, have misappropriated any of the funds or property
     5  of the corporation, or diverted them from the purpose  of  its  incorpo-

     6  ration,  or  that the corporation has acquired property in excess of the
     7  amount which it is authorized by law to hold,  or  has  engaged  in  any
     8  business other than that stated in its certificate of incorporation, the
     9  court  may  order that notice of at least eight days, with a copy of the
    10  petition, be served on the corporation, the attorney  general,  and  the
    11  persons  charged with misconduct, requiring them to show cause at a time
    12  and place specified, why they should not be required to make and file an
    13  inventory and account of the property, effects and liabilities  of  such
    14  corporation  with  a  detailed  statement of its transactions during the
    15  twelve months next preceding the granting of such order.  On the hearing
    16  of such application, the court may make an order requiring such invento-
    17  ry, account and statement to be filed, and proceed to take and state  an

    18  account  of  the  property  and  liabilities  of the corporation, or may
    19  appoint a referee for that purpose.   When such  account  is  taken  and
    20  stated,  after hearing all the parties to the application, the court may
    21  enter a final order determining the amount of property so  held  by  the
    22  corporation,  its annual income, whether any of the property or funds of
    23  the corporation have been  misappropriated  or  diverted  to  any  other
    24  purpose  than  that  for  which  such  corporation was incorporated, and
    25  whether such corporation has been engaged in any activity not covered by
    26  its certificate of incorporation.  An appeal may be taken from the order
    27  by any party aggrieved to the appellate division of the  supreme  court,
    28  and to the court of appeals, as in a civil action.  No corporation shall
    29  be  required to make and file more than one inventory and account in any

    30  one year, nor to make a second account and inventory, while  proceedings
    31  are pending for the statement of an account under this section.
    32    §  11.  Section 115 of the not-for-profit corporation law, as added by
    33  chapter 669 of the laws of 1977, is amended to read as follows:
    34  § 115. Power to solicit contributions [for charitable purposes].
    35    No corporation having the power to solicit contributions [for charita-
    36  ble purposes] may solicit  contributions  for  any  purpose  [for  which
    37  approval  of  such  solicitation  is  required  under  the provisions of
    38  section four hundred  four  of  this  chapter]  unless  the  certificate
    39  specifically  makes  provision  for  such solicitation [and the required
    40  written approval is endorsed on  or  annexed  to  such  certificate  or]

    41  unless the corporation is among those referred to in section one hundred
    42  seventy-two-a  of  the executive law.  If [such approval is not obtained
    43  and] the corporation continues to solicit or  to  receive  contributions
    44  for such purpose [or advertises that it has obtained such approval], the
    45  attorney  general[,  at the request of the officer or body authorized to
    46  grant such approval,] shall maintain an action or proceeding pursuant to
    47  the provisions of subparagraph one  of  paragraph  (a)  of  section  one
    48  hundred  twelve  of  this chapter, of the executive law and the estates,
    49  powers and trusts law or any other applicable  law  against  the  corpo-
    50  ration,  its directors, officers, key employees, or agents that solicits

    51  contributions in violation of this chapter  or  those  laws.    Such  an
    52  action  may  also be maintained in relation to a corporation hereinafter
    53  incorporated if the name, purposes, objects or the  activities  of  such
    54  corporation  may, in any manner, lead to the belief that the corporation
    55  possesses or may exercise any of such purposes.   Otherwise,  no  corpo-
    56  ration  may  solicit contributions for any purpose unless and until such

        A. 7772                             7
 
     1  corporation is in compliance with this section and the applicable regis-
     2  tration and reporting requirements of article seven-A of  the  executive
     3  law and section 8-1.4 of the estates, powers and trusts law.
     4    § 12. Section 201 of the not-for-profit corporation law, paragraph (b)

     5  as  amended  by  chapter  847  of  the laws of 1970 and paragraph (c) as
     6  amended by chapter 1058 of the laws of  1971,  is  amended  to  read  as
     7  follows:
     8  § 201. Purposes.
     9    (a)  A  corporation,  as defined in subparagraph [(5)] (10), paragraph
    10  (a) of § 102  (Definitions),  may  be  formed  under  this  chapter  [as
    11  provided  in  paragraph  (b)]  unless  it  may be formed under any other
    12  corporate law of this state in which event it may not  be  formed  under
    13  this chapter unless such other corporate law expressly so provides.
    14    (b)  [A  corporation,  of  a  type  and  for  a purpose or purposes as
    15  follows, may be formed under this chapter,  provided  consents  required
    16  under  any  other statute of this state have been obtained:  Type A -] A

    17  corporation formed on or after  January  first,  two  thousand  fourteen
    18  shall  be either a charitable corporation or a beneficent corporation. A
    19  not-for-profit corporation [of this type may be formed  for  any  lawful
    20  non-business  purpose or purposes including, but not limited to, any one
    21  or more of the following  non-pecuniary  purposes:    civic,  patriotic,
    22  political,  social,  fraternal,  athletic,  agricultural, horticultural,
    23  animal husbandry, and for a professional, commercial, industrial,  trade
    24  or service association.
    25    Type  B  - A not-for-profit corporation of this type may be formed for
    26  any one or more of  the  following  non-business  purposes:  charitable,
    27  educational,  religious,  scientific,  literary,  cultural  or  for  the

    28  prevention of cruelty to children or animals.
    29    Type C - A not-for-profit corporation of this type may be  formed  for
    30  any  lawful  business purpose to achieve a lawful public or quasi-public
    31  objective.
    32    Type D - A not-for-profit corporation of this type may be formed under
    33  this chapter when such formation is authorized by  any  other  corporate
    34  law  of  this  state  for  any business or non-business, or pecuniary or
    35  non-pecuniary, purpose or purposes specified by such other law,  whether
    36  such  purpose  or purposes are also within types A, B, C above or other-
    37  wise.
    38    (c) If a corporation is formed for purposes which are within both type
    39  A and type B above, it is a type B corporation.   If a  corporation  has

    40  among  its purposes any purpose which is within type C, such corporation
    41  is a type C corporation.   A  type  D  corporation  is  subject  to  all
    42  provisions  of this chapter which are applicable to a type B corporation
    43  under this chapter unless provided to the contrary in,  and  subject  to
    44  the  contrary  provisions of, the other corporate law authorizing forma-
    45  tion under this chapter of the type  D  corporation.]  formed  prior  to
    46  January  first, two thousand fourteen as a type A corporation under this
    47  chapter shall be  a  beneficent  corporation  under  this  chapter.  Any
    48  submission  or  filing by such corporation to any person or entity shall
    49  be deemed to have been submitted or filed by a  beneficent  corporation,

    50  and  any  reference  in  any  such filing or submission referring to the
    51  status of such corporation as a type A corporation shall  be  deemed  to
    52  refer to a beneficent corporation.
    53    (c) A type B not-for-profit corporation formed prior to January first,
    54  two  thousand  fourteen  shall  be deemed a charitable corporation under
    55  this chapter. Any submission or filing by such corporation to any person
    56  or entity shall be deemed to have been submitted or filed by a  charita-

        A. 7772                             8
 
     1  ble  corporation,  and  any  reference  in any such filing or submission
     2  referring to the status of such corporation  as  a  type  B  corporation
     3  shall be deemed to refer to a charitable corporation.

     4    (d)  A  type C or D not-for-profit corporation formed prior to January
     5  first, two thousand fourteen shall be deemed a  beneficent  corporation.
     6  Any  submission  or  filing  by such corporation to any person or entity
     7  shall be deemed to have been submitted or filed by a  beneficent  corpo-
     8  ration,  and any reference in any such filing or submission referring to
     9  the status of such corporation as a type C or  D  corporation  shall  be
    10  deemed to refer to a beneficent corporation.
    11    §  13. Section 204 of the not-for-profit corporation law is amended to
    12  read as follows:
    13  § 204. Limitation on activities.
    14    Notwithstanding any other provision  of  this  chapter  or  any  other
    15  general  law,  a corporation of any [type or] kind to which this chapter

    16  applies shall conduct no activities for pecuniary  profit  or  financial
    17  gain, whether or not in furtherance of its corporate purposes, except to
    18  the  extent that such activity supports its other lawful activities then
    19  being conducted.
    20    § 14. Subparagraphs 1, 2 and 3 of paragraph (a) of section 301 of  the
    21  not-for-profit  corporation law, subparagraph 1 as amended by section 78
    22  of part A of chapter 58 of the laws of 2010, subparagraph 2  as  amended
    23  by chapter 344 of the laws of 2004, are amended to read as follows:
    24    (1)  Shall[,  unless the corporation is formed for charitable or reli-
    25  gious purposes, or for purposes for which the approval  of  the  commis-
    26  sioner of social services or the public health and health planning coun-
    27  cil   is   required,   or  is  a  bar  association,]  contain  the  word

    28  "corporation", "incorporated" or "limited" or an abbreviation of one  of
    29  such  words; or, in the case of a foreign corporation, it shall, for use
    30  in this state, add at the end of its name one of such words or an abbre-
    31  viation thereof.
    32    (2) (A) Shall be such as to distinguish it from the  names  of  corpo-
    33  rations  of  any  [type  or] kind, or a fictitious name of an authorized
    34  foreign corporation filed pursuant to article thirteen of this  chapter,
    35  as  such  names  appear  on  the index of names of existing domestic and
    36  authorized foreign corporations of any [type or] kind, including  ficti-
    37  tious names of authorized foreign corporations filed pursuant to article
    38  thirteen of this chapter, in the department of state, division of corpo-
    39  rations, or a name the right to which is reserved.

    40    (B)  Shall be such as to distinguish it from (i) the names of domestic
    41  limited liability companies, (ii) the names of authorized foreign limit-
    42  ed liability companies, (iii) the fictitious names of authorized foreign
    43  limited liability companies, (iv) the names of domestic limited partner-
    44  ships, (v) the names of authorized foreign limited partnerships, or (vi)
    45  the fictitious names of authorized foreign limited partnerships, in each
    46  case, as such names appear on the index of names  of  existing  domestic
    47  and authorized foreign limited liability companies, including fictitious
    48  names  of authorized foreign limited liability companies, in the depart-
    49  ment of state, or on the index of names of existing domestic or  author-
    50  ized foreign limited partnerships, including fictitious names of author-
    51  ized  foreign limited partnerships, in the department of state, or names

    52  the rights to which are reserved; provided, however, that no corporation
    53  that was formed prior to the  effective  date  of  this  clause  and  no
    54  foreign  corporation  that  was  qualified to conduct activities in this
    55  state prior to such effective date shall be required to change the  name
    56  or  fictitious  name  it  had on such effective date solely by reason of

        A. 7772                             9
 
     1  such name or fictitious name being indistinguishable from  the  name  or
     2  fictitious  name of any domestic or authorized foreign limited liability
     3  company or limited partnership or from any name the right  to  which  is
     4  reserved  by  or  on behalf of any domestic or foreign limited liability
     5  company or limited partnership.
     6    (3)  Shall not contain any word or  phrase,  or  any  abbreviation  or

     7  derivative  thereof,  the  use  of  which is prohibited or restricted by
     8  section 404 [(Approvals] (Notices and consents) or any other statute  of
     9  this  state,  unless  in  the  latter  case  the  restrictions have been
    10  complied with.
    11    § 15. Subparagraph 3 of paragraph (b) of section 302  of  the  not-for
    12  profit  corporation  law, as amended by chapter 847 of the laws of 1970,
    13  is amended to read as follows:
    14    (3) Shall not prevent a  foreign  corporation  from  being  authorized
    15  under  a name which is similar to the name of a corporation of any [type
    16  or] kind existing or authorized under any statute, if the department  of
    17  state  finds,  upon proof by affidavit or otherwise as it may determine,
    18  that a difference between such names exists in  the  terms  or  abbrevi-

    19  ations  indicating  corporate character or otherwise, that the applicant
    20  has conducted activities as a corporation under its said  name  for  not
    21  less  than  ten  consecutive  years immediately prior to the date of its
    22  application, that the activities to be conducted in this state  are  not
    23  the  same  or  similar  to  the  business or activities conducted by the
    24  corporation with whose name it may conflict and that the public  is  not
    25  likely  to  be confused or deceived, and if the applicant shall agree in
    26  its application for authority to use with its corporate  name,  in  this
    27  state,  to be placed immediately under or following such name, the words
    28  "a ..... (name of jurisdiction of incorporation) corporation".
    29    § 16. Section 304 of the not-for-profit corporation law, as amended by
    30  chapter 168 of the laws of 1982, is amended to read as follows:

    31  § 304. Statutory designation of secretary of state as agent of  domestic
    32           corporations  [formed  under  article four of this chapter] and
    33           authorized foreign corporations for service of process.
    34    (a) The secretary of state shall be the agent of every domestic corpo-
    35  ration [formed under article four of this chapter] and every  authorized
    36  foreign  corporation  upon  whom  process against the corporation may be
    37  served.
    38    (b) Any designation by a domestic corporation  [formed  under  article
    39  four  of  this chapter] or foreign corporation of the secretary of state
    40  as such agent, which designation is in effect on the effective  date  of
    41  this  chapter,  shall continue. Every domestic corporation [formed under
    42  article four of  this  chapter]  or  foreign  corporation,  existing  or

    43  authorized  on  the effective date of this chapter, which has not desig-
    44  nated the secretary of state as such agent, shall be deemed to have done
    45  so.
    46    (c) Any designation by a domestic corporation  [formed  under  article
    47  four  of this chapter] or foreign corporation of an agent other than the
    48  secretary of state which is in effect on  the  effective  date  of  this
    49  chapter shall continue in effect until changed or revoked as provided in
    50  this chapter.
    51    (d) Any designated post-office address to which the secretary of state
    52  shall mail a copy of process served upon him or her as agent of a domes-
    53  tic  corporation  [formed under article four of this chapter] or foreign
    54  corporation, shall continue until the filing of a certificate under this
    55  chapter directing the mailing to a different post-office address.

        A. 7772                            10
 
     1    § 17. Paragraph (a) of section 305 of the  not-for-profit  corporation
     2  law,  as  amended by chapter 131 of the laws of 1985, is amended to read
     3  as follows:
     4    (a)  Every  domestic corporation or authorized foreign corporation may
     5  designate a registered agent in this state  upon  whom  process  against
     6  such  corporation may be served. The agent shall be a natural person who
     7  is a resident of or has a business address in this state or  a  domestic
     8  corporation  or  foreign  corporation  of  any [type or] kind formed, or
     9  authorized to do business in this state, under this chapter or under any
    10  other statute of this state.
    11    § 18. Paragraphs (b) and (c) of  section  306  of  the  not-for-profit
    12  corporation  law, paragraph (b) as amended by chapter 168 of the laws of

    13  1982 and paragraph (c) as amended by chapter 93 of the laws of 1984, are
    14  amended to read as follows:
    15    (b) Service of process on the secretary of state as agent of a  domes-
    16  tic  corporation  [formed  under  article  four  of  this chapter] or an
    17  authorized foreign corporation shall be made by personally delivering to
    18  and leaving with [him or his] the deputy of the secretary of  state,  or
    19  with  any  person  authorized  by the secretary of state to receive such
    20  service, at the office of the department of state in the city of Albany,
    21  duplicate copies of such process together with the statutory fee,  which
    22  fee  shall be a taxable disbursement.  Service of process on such corpo-
    23  ration shall be complete when the secretary of state is so  served.  The
    24  secretary  of  state shall promptly send one of such copies by certified

    25  mail, return receipt requested, to such corporation, at the post  office
    26  address,  on file in the department of state, specified for the purpose.
    27  If a domestic corporation [formed under article four of this chapter] or
    28  an authorized foreign corporation has no such address  on  file  in  the
    29  department  of  state, the secretary of state shall so mail such copy to
    30  such corporation at the address of its office within this state on  file
    31  in the department.
    32    (c)  If  an  action  or special proceeding is instituted in a court of
    33  limited jurisdiction, service of process  may  be  made  in  the  manner
    34  provided  in  this  section  if  the  office of the domestic corporation
    35  [formed under article four of this chapter] or  foreign  corporation  is
    36  within the territorial jurisdiction of the court.

    37    §  19.  The  not-for-profit corporation law is amended by adding a new
    38  section 309 to read as follows:
    39  § 309. Personal jurisdiction and service of process  on  non-domiciliary
    40           resident director, officer, key employee or agent.
    41    A  person, by becoming a director, officer, key employee or agent of a
    42  corporation is subject to the personal jurisdiction of the supreme court
    43  of the state of New York, and in an action or proceeding by the attorney
    44  general under this chapter process may be served  upon  such  person  as
    45  provided in section three hundred thirteen of the civil practice law and
    46  rules.
    47    §  20.  Subparagraphs  2  and 4 of paragraph (a) of section 402 of the
    48  not-for-profit corporation law, subparagraph 2 as amended by chapter 847

    49  of the laws of 1970 and subparagraph 4 as amended by chapter 679 of  the
    50  laws of 1985, are amended to read as follows:
    51    (2)  That  the corporation is a corporation as defined in subparagraph
    52  (a) (5) of section 102 (Definitions)[;], the  purpose  or  purposes  for
    53  which  it is formed, and [the type of] whether it is a charitable corpo-
    54  ration [it shall be] or  a  beneficent  corporation  under  section  201
    55  (Purposes)[;  and in the case of a Type C corporation, the lawful public
    56  or quasi-public objective which each business purpose will achieve]. Any

        A. 7772                            11
 
     1  corporation may also set forth any activities that it intends  to  carry

     2  out  in furtherance of such purpose or purposes; provided, however, that
     3  this subparagraph shall not be interpreted to require that  such  activ-
     4  ities be set forth in the certificate of incorporation.
     5    (4)  [In the case of a Type A, Type B, or Type C corporation, the] The
     6  names and addresses of the initial directors. [In the case of a  Type  D
     7  corporation,  the  names and addresses of the initial directors, if any,
     8  may but need not be set forth.]
     9    § 21.  The section heading and paragraphs (a),  (b),  (c),  (d),  (e),
    10  (g), (h), (i), (t), (u), (v), and (w) of section 404 of the not-for-pro-
    11  fit  corporation law, the section heading, paragraphs (c), (d), (e), (h)
    12  and (i) as amended and paragraph (a) as added by chapter 139 of the laws

    13  of 1993, paragraph (c) as further amended by section 104 of  part  A  of
    14  chapter  62  of the laws of 2011 and paragraphs (a), (c), (d), (e), (g),
    15  (h) and (i) as relettered by chapter 431 of the laws of 1993,  paragraph
    16  (b) as amended by section 4 of part D of chapter 58 of the laws of 2006,
    17  paragraph  (g) as separately amended by chapters 139 and 201 of the laws
    18  of 1993, paragraph (t) as amended by section 79 of part A of chapter  58
    19  of the laws of 2010, paragraph (u) as amended by chapter 558 of the laws
    20  of  1999,  paragraph (v) as added by chapter 598 of the laws of 2000 and
    21  as further amended by section 104 of part A of chapter 62 of the laws of
    22  2011 and paragraph (w) as added by chapter 316 of the laws of 2005,  are
    23  amended to read as follows:
    24  [Approvals] Notices and consents.

    25    (a)  Every  [certificate  of incorporation] corporation which includes
    26  among its purposes the formation of  a  trade  or  business  association
    27  shall  [have endorsed thereon or annexed thereto the consent of] send by
    28  certified mail, return  receipt  requested,  a  certified  copy  of  its
    29  certificate  of  incorporation to the attorney-general immediately after
    30  the filing of such certificate by the secretary of state.
    31    (b)  (1)  Every  [certificate  of  incorporation]  corporation   which
    32  includes  among  its  purposes  the care of destitute, delinquent, aban-
    33  doned, neglected or dependent children; the establishment  or  operation
    34  of any adult care facility, or the establishment or operation of a resi-

    35  dential  program for victims of domestic violence as defined in subdivi-
    36  sion four of section four hundred fifty-nine-a of  the  social  services
    37  law, or the placing-out or boarding-out of children or a home or shelter
    38  for  unmarried  mothers, excepting the establishment or maintenance of a
    39  hospital or facility providing health-related services  as  those  terms
    40  are  defined  in  article  twenty-eight  of  the public health law and a
    41  facility for which an operating  certificate  is  required  by  articles
    42  sixteen,  nineteen, twenty-two and thirty-one of the mental hygiene law;
    43  or the solicitation of contributions for any such purpose  or  purposes,
    44  shall [have endorsed thereon or annexed thereto the approval of] send by
    45  certified  mail,  return  receipt  requested,  a  certified  copy of its

    46  certificate of incorporation to the commissioner of the office of  chil-
    47  dren  and  family  services immediately after the filing of such certif-
    48  icate by the department of state or  with  respect  to  any  adult  care
    49  facility,  send by certified mail, return receipt requested, a certified
    50  copy of its certificate of incorporation to the commissioner  of  health
    51  immediately  after  the  filing of such certificate by the department of
    52  state.
    53    (2) A corporation whose statement of  purposes  specifically  includes
    54  the  establishment or operation of a child day care center, as that term
    55  is defined in section three hundred ninety of the social  services  law,
    56  shall  [provide  a  certified  copy of the certificate of incorporation]


        A. 7772                            12
 
     1  send by certified mail, return receipt requested, a  certified  copy  of
     2  its  certificate  of  incorporation,  each  amendment  thereto,  and any
     3  certificate of  merger,  consolidation  or  dissolution  involving  such
     4  corporation  to the office of children and family services within thirty
     5  days after the filing of such certificate,  amendment,  merger,  consol-
     6  idation  or  dissolution  with the department of state. This requirement
     7  shall also apply to any foreign corporation filing  an  application  for
     8  authority  under  section  thirteen  hundred  four  of this chapter, any
     9  amendments thereto, and any surrender of  authority  or  termination  of
    10  authority in this state of such corporation.
    11    (c)  Every  [certificate  of incorporation] corporation which includes

    12  among [the] its purposes [of the corporation,] the establishment,  main-
    13  tenance  and  operation  of  a hospital service or a health service or a
    14  medical expense indemnity plan or a dental  expense  indemnity  plan  as
    15  permitted  in  article  forty-three  of  the  insurance law, shall [have
    16  endorsed thereon or annexed thereto the approval of] send  by  certified
    17  mail,  return  receipt requested, a certified copy of its certificate of
    18  incorporation to  the  superintendent  of  financial  services  and  the
    19  commissioner  of health immediately after the filing of such certificate
    20  by the department of state.
    21    (d) Every [certificate of incorporation] corporation which includes  a

    22  purpose for which a corporation [might] must be chartered by the regents
    23  of  the university of the State of New York shall [have endorsed thereon
    24  or annexed thereto the consent of] apply to the regents for  a  charter.
    25  Such  corporations  are  those which carry out any of the activities for
    26  which the consent of the commissioner of education is required by  para-
    27  graph  (v)  of  this  section.    Otherwise a corporation which may have
    28  educational  purposes  must  send  by  certified  mail,  return  receipt
    29  requested,  a  certified copy of its certificate of incorporation to the
    30  commissioner of education immediately after the filing of  such  certif-
    31  icate by the department of state.

    32    (e)  Every  [certificate  of incorporation of a] cemetery corporation,
    33  except those within the exclusionary provisions of section  1503  (Ceme-
    34  tery  corporations)  shall [have endorsed thereon or annexed thereto the
    35  approval of] send by certified mail, return receipt requested, a  certi-
    36  fied  copy  of  its  certificate  of incorporation to the cemetery board
    37  immediately after the filing of such certificate by  the  department  of
    38  state.
    39    (g)   Every  [certificate  of  incorporation  of  a]  corporation  for
    40  prevention of cruelty to animals shall [have endorsed thereon or annexed
    41  thereto  the  approval  of]  send  by  certified  mail,  return  receipt
    42  requested,  a  certified copy of its certificate of incorporation to the

    43  American Society for the Prevention of Cruelty to Animals[, or, if  such
    44  approval be withheld thirty days after application therefor, a certified
    45  copy  of  an  order  of  a  justice of the supreme court of the judicial
    46  district in which the office  of  the  corporation  is  to  be  located,
    47  dispensing  with  such approval, granted upon eight days' notice to such
    48  society] immediately after the filing of such certificate by the depart-
    49  ment of state.
    50    (h) Every [certificate of incorporation of] corporation which  has  as
    51  its  purpose  the  establishment  of a Young Men's Christian Association
    52  shall [have endorsed thereon or annexed thereto the approval of] send by

    53  certified mail, return  receipt  requested,  a  certified  copy  of  its
    54  certificate  of  incorporation  to the chairman of the national board of
    55  Young Men's Christian Associations immediately after the filing of  such
    56  certificate by the department of state.

        A. 7772                            13
 
     1    (i)  Every [certificate of incorporation] corporation which [indicates
     2  that the proposed corporation is] has as its purpose  to  solicit  funds
     3  for or otherwise benefit the armed forces of the United States or of any
     4  foreign  country, or their auxiliaries, or of this or any other state or
     5  any  territory,  shall  [have  endorsed  thereon  or annexed thereto the

     6  approval of] send a certified copy, return  receipt  requested,  of  its
     7  certificate of incorporation to the chief of staff immediately after the
     8  filing of such certificate by the department of state.
     9    [(t)]  (s) Every certificate of incorporation which includes among its
    10  purposes and powers the establishment or maintenance of  a  hospital  or
    11  facility  providing  health related services, as those terms are defined
    12  in article twenty-eight of the public health law, or the solicitation of
    13  contributions for any such purpose or two  or  more  of  such  purposes,
    14  shall have endorsed thereon the approval of the public health and health
    15  planning council.
    16    [(u)]  (t) Every certificate of incorporation which includes among the

    17  purposes of  the  corporation,  the  establishment  or  operation  of  a
    18  substance  abuse,  substance  dependence,  alcohol abuse, alcoholism, or
    19  chemical abuse or dependence program, or the  solicitation  of  contrib-
    20  utions  for  any  such  purpose,  shall have endorsed thereon or annexed
    21  thereto the consent of the commissioner of the office of alcoholism  and
    22  substance abuse services to its filing by the department of state.
    23    [(v)]  (u) Every certificate of incorporation which includes among the
    24  purposes of the corporation, the establishment, maintenance  and  opera-
    25  tion  of  a  nonprofit  property/casualty insurance company, pursuant to
    26  article sixty-seven of the insurance law, shall have endorsed thereon or
    27  annexed  thereto  the  approval  of  the  superintendent  of   financial
    28  services.

    29    [(w)]  (v) Every certificate of incorporation in which the name of the
    30  proposed corporation includes the terms: "school," "education," "elemen-
    31  tary,"  "secondary,"  "kindergarten,"  "prekindergarten,"   "preschool,"
    32  "nursery  school," "museum," "history," "historical," "historical socie-
    33  ty," "arboretum,"  "library,"  "college,"  "university,"  "public  tele-
    34  vision," "public radio station," or other term restricted by section two
    35  hundred  twenty-four of the education law; "conservatory," "academy," or
    36  "institute," or any abbreviation or derivative of such terms, shall have
    37  endorsed thereon or annexed thereto the consent of the  commissioner  of
    38  education.
    39    §  22. Section 404 of the not-for-profit corporation law is amended by
    40  adding a new paragraph (w) to read as follows:

    41    (w) Each agency, public officer, organization  or  person  to  whom  a
    42  notice of incorporation is to be sent or from whom a consent to incorpo-
    43  ration  must be obtained, as provided in this section, shall publish the
    44  name and address of the representative it has designated to receive such
    45  notice or request for consent. If any agency, public officer,  organiza-
    46  tion  or  person  to  whom  a request for consent has been sent does not
    47  consent or object, setting forth the reasons for such objection,  within
    48  forty-five  days after the receipt of such request, the consent shall be
    49  conclusively presumed to have been given  and  the  secretary  of  state
    50  shall file the certificate of incorporation.

    51    § 23. Paragraph (b-1) of section 406 of the not-for-profit corporation
    52  law is REPEALED.
    53    § 24. Subdivision (d) of section 406 of the not-for-profit corporation
    54  law,  as added by chapter 331 of the laws of 1971, is amended to read as
    55  follows:

        A. 7772                            14
 
     1    (d) Nothing in this section shall impair the rights and powers of  the
     2  courts  or  the attorney-general of this state including the enforcement
     3  of the provisions included in the certificates of incorporation to which
     4  this section applies.
     5    §  25.  Paragraph (d) of section 502 of the not-for-profit corporation
     6  law is amended to read as follows:
     7    (d) A member's capital contribution shall be evidenced  by  a  capital
     8  certificate which shall be non-transferable, except that the certificate

     9  of  incorporation  of a [Type A] beneficent corporation may provide that
    10  its capital certificates, or some of them, may be transferable to  other
    11  members  with  the  consent  of the corporation upon specified terms and
    12  conditions.
    13    § 26. Paragraph (b) of section 503 of the  not-for-profit  corporation
    14  law,  subparagraph  1  as amended by chapter 847 of the laws of 1970, is
    15  amended to read as follows:
    16    (b) Each capital certificate shall when issued  state  upon  the  face
    17  thereof:
    18    (1)  That  the  corporation is a [Type .....] charitable or beneficent
    19  corporation under section 113 or section 402 of the  New  York  Not-for-
    20  Profit Corporation Law.
    21    (2) The name of the member to whom issued.
    22    (3)  The amount of the member's capital contribution evidenced by such
    23  certificate.

    24    (4) If appropriate, that the corporation  is  a  [Type  A]  beneficent
    25  corporation, and that its certificate of incorporation provides that the
    26  capital certificate is transferable to other members with the consent of
    27  the corporation.
    28    §  27.  Subparagraph 1 of paragraph (b) of section 505 of the not-for-
    29  profit corporation law, as amended by chapter 847 of the laws  of  1970,
    30  is amended to read as follows:
    31    (1)  That  the  corporation is a [Type .....] charitable or beneficent
    32  corporation under section 113 or section 402 of the  New  York  Not-for-
    33  Profit Corporation Law.
    34    § 28. Section 509 of the not-for-profit corporation law, as amended by
    35  chapter 145 of the laws of 1991, is amended to read as follows:
    36  § 509. Purchase, sale, mortgage and lease of real property.

    37    (a) No corporation shall purchase [of] real property [shall be made by
    38  a  corporation  and  no  corporation  shall sell, mortgage or lease real
    39  property, unless authorized by the vote of]  unless  authorized  by  the
    40  vote  of  a majority of directors of the board or a committee authorized
    41  by the board; provided, however,  that  if  such  property  would,  upon
    42  purchase thereof, constitute all, or substantially all, of the assets of
    43  the  corporation,  then  the  vote  of  two-thirds of the entire board[,
    44  provided that if] shall be required, or, if there are twenty-one or more
    45  directors, the vote of a majority of the entire board  shall  be  suffi-
    46  cient.

    47    (b)  No  corporation  shall  sell, mortgage or lease its real property
    48  unless authorized by the vote of a majority of directors of the board or
    49  a committee authorized by the board; provided,  however,  that  if  such
    50  property  constitutes  all,  or  substantially all, of the assets of the
    51  corporation, then the vote of two-thirds of the entire  board  shall  be
    52  required,  or,  if there are twenty-one or more directors, the vote of a
    53  majority of the entire board shall be sufficient.
    54    § 29. Paragraph (a) of section 510 of the  not-for-profit  corporation
    55  law,  the  opening  paragraph  as  amended by chapter 961 of the laws of

        A. 7772                            15
 
     1  1972, and subparagraph 3 as amended by chapter 847 of the laws of  1970,

     2  is amended to read as follows:
     3    (a)  A  sale, lease, exchange or other disposition of all, or substan-
     4  tially all, the assets of a corporation may be made upon such terms  and
     5  conditions  and for such consideration, which may consist in whole or in
     6  part of cash or other property,  real  or  personal,  including  shares,
     7  bonds  or  other securities of any other domestic or foreign corporation
     8  or corporations of any [type or] kind, as may be authorized  in  accord-
     9  ance with the following procedure:
    10    (1)  If  there  are  members entitled to vote thereon, the board shall
    11  adopt a resolution recommending such  sale,  lease,  exchange  or  other
    12  disposition.  The  resolution  shall specify the terms and conditions of
    13  the proposed transaction, including the consideration to be received  by
    14  the  corporation and the eventual disposition to be made of such consid-

    15  eration, together with a statement that the dissolution  of  the  corpo-
    16  ration  is  or  is  not contemplated thereafter. The resolution shall be
    17  submitted to a vote at a meeting of members entitled  to  vote  thereon,
    18  which  may be either an annual or a special meeting. Notice of the meet-
    19  ing shall be given to each member and each holder of subvention  certif-
    20  icates  or bonds of the corporation, whether or not entitled to vote. At
    21  such meeting by two-thirds vote as provided in paragraph (c) of  section
    22  613  (Vote  of members) the members may approve the proposed transaction
    23  according to the terms of the resolution of the board,  or  may  approve
    24  such  sale,  lease,  exchange or other disposition and may authorize the
    25  board to modify the terms and conditions thereof.
    26    (2) If there are no members  entitled  to  vote  thereon,  such  sale,

    27  lease,  exchange or other disposition shall be authorized by the vote of
    28  at least two-thirds of the entire board,  provided  that  if  there  are
    29  twenty-one or more directors, the vote of a majority of the entire board
    30  shall be sufficient.
    31    (3)  If  the corporation is, or would be if formed under this chapter,
    32  classified as a [Type B or Type C] charitable corporation under  section
    33  201, (Purposes) such sale, lease, exchange or other disposition shall in
    34  addition require [leave] either (A) approval of the supreme court in the
    35  judicial  district  or  of  the  county court of the county in which the
    36  corporation has its office  or  principal  place  of  carrying  out  the
    37  purposes  for  which it was formed in accordance with section 511 (Peti-

    38  tion for court approval) or (B) approval  of  the  attorney  general  if
    39  authorized under section 511-a (Petition for attorney general approval).
    40    § 30. The section heading, the opening paragraph and subparagraph 9 of
    41  paragraph  (a) of section 511 of the not-for-profit corporation law, are
    42  amended to read as follows:
    43  Petition for [leave of] court approval.
    44    [A corporation required by law to] To obtain [leave of] court approval
    45  to sell, lease, exchange or otherwise dispose of  all  or  substantially
    46  all  its  assets, a corporation shall present a verified petition to the
    47  supreme court of the judicial district, or the county court of the coun-
    48  ty, wherein the corporation has its office or principal place of  carry-

    49  ing  out  the  purposes  for which it was formed. The petition shall set
    50  forth:
    51    9. A [prayer] request for  [leave]  court  approval  to  sell,  lease,
    52  exchange  or otherwise dispose of all or substantially all the assets of
    53  the corporation as set forth in the petition.
    54    § 31. The not-for-profit corporation law is amended by  adding  a  new
    55  section 511-a to read a follow:
    56  § 511-a. Petition for attorney general approval.

        A. 7772                            16
 
     1    (a)  In  lieu  of obtaining court approval under section 511 (Petition
     2  for court approval) to sell, lease, exchange or otherwise dispose of all
     3  or substantially all of its assets, the  corporation  may  alternatively

     4  seek  approval  of  the attorney general by verified petition, except in
     5  the following circumstances:
     6    1. The corporation is insolvent, or would become insolvent as a result
     7  of  the transaction, and must proceed on notice to creditors pursuant to
     8  paragraph (c) of section 511 (Petition for court approval); or
     9   2. The attorney general, in his or her  discretion,  concludes  that  a
    10  court should review the petition and make a determination thereon.
    11    (b)  The verified petition to the attorney general shall set forth: 1.
    12  all of the information required to be included in a verified petition to
    13  obtain court approval pursuant to  subparagraphs  one  through  nine  of
    14  paragraph  (a) of section 511 (Petition for court approval); 2. a state-

    15  ment that the corporation is not insolvent and will not become insolvent
    16  as a result of the transaction; and 3. a statement  as  to  whether  any
    17  persons  have raised, or have a reasonable basis to raise, objections to
    18  the sale, lease, exchange or other disposition that is  the  subject  of
    19  the  petition,  including  a  statement  setting  forth  the  names  and
    20  addresses  of  such  persons,  the  nature  of  their  interest,  and  a
    21  description  of  their  objections.  The attorney general, in his or her
    22  discretion, may direct the corporation to provide notice of  such  peti-
    23  tion  to  any  interested  person, and the corporation shall provide the
    24  attorney  general  with  a  certification  that  such  notice  has  been
    25  provided.

    26    (c)  If  it  shall appear, to the satisfaction of the attorney general
    27  that the consideration and the terms of the  transaction  are  fair  and
    28  reasonable  to  the corporation and that the purposes of the corporation
    29  or the interests of the members will be promoted, the  attorney  general
    30  may  authorize  the sale, lease, exchange or other disposition of all or
    31  substantially all the assets of the corporation,  as  described  in  the
    32  petition,  for  such  consideration  and upon such terms as the attorney
    33  general may prescribe. The authorization of the attorney  general  shall
    34  direct the disposition of the consideration to be received thereunder by
    35  the corporation.
    36    (d)  If  the attorney general does not approve the petition, or if the

    37  attorney general concludes that court review is appropriate,  the  peti-
    38  tioner may seek court approval on ten days notice to the attorney gener-
    39  al pursuant to section 511 (Petition for court approval).
    40    §  32.  Paragraph (a) of section 513 of the not-for-profit corporation
    41  law, as amended by chapter 690 of the laws of 1978, is amended  to  read
    42  as follows:
    43    (a)  A corporation which is, or would be if formed under this chapter,
    44  [classified as a Type B corporation] shall hold full ownership rights in
    45  any assets consisting of funds or other real or personal property of any
    46  kind, that may be given, granted, bequeathed or devised to or  otherwise
    47  vested  in  such  corporation in trust for, or with a direction to apply
    48  the same to, any purpose specified in its certificate of  incorporation,

    49  and  shall  not  be deemed a trustee of an express trust of such assets.
    50  Any other corporation subject to this chapter may similarly hold  assets
    51  so  received,  unless otherwise provided by law or in the certificate of
    52  incorporation.
    53    § 33. Paragraphs (b) and (c) of  section  515  of  the  not-for-profit
    54  corporation  law, paragraph (c) as amended by chapter 847 of the laws of
    55  1970, are amended to read as follows:

        A. 7772                            17
 
     1    (b) A corporation may pay  compensation  in  a  reasonable  amount  to
     2  members,  directors,  or  officers for services rendered as permitted by
     3  this chapter, including without limitation, in accordance with  subpara-
     4  graph  twelve  of  paragraph  (a)  of  section  202 (General and special

     5  powers),  and  sections  712-a  (Audit oversight) and 715 (Related party
     6  transactions), and may make distributions of cash or property to members
     7  upon dissolution or final liquidation as permitted by this chapter.
     8    (c) A corporation may confer benefits upon members  or  nonmembers  in
     9  conformity  with  its  purposes  as permitted by this chapter, including
    10  without limitation, sections 712-a (Audit oversight)  and  715  (Related
    11  party  transactions),  may redeem its capital certificates or subvention
    12  certificates, and may make other distributions of cash  or  property  to
    13  its  members  or former members, directors, or officers prior to dissol-
    14  ution or final liquidation, as authorized by this article,  except  when
    15  the  corporation  is currently insolvent or would thereby be made insol-

    16  vent or rendered unable to carry on its corporate purposes, or when  the
    17  fair  value  of the corporation's assets remaining after such conferring
    18  of benefits, or redemption, or other distribution would be  insufficient
    19  to meet its liabilities.
    20    § 34. Section 520 of the not-for-profit corporation law, as amended by
    21  chapter 58 of the laws of 1981, is amended to read as follows:
    22  § 520. Reports of corporation.
    23    Each  domestic corporation, and each foreign corporation authorized to
    24  conduct activities in this state, shall from  time  to  time  file  such
    25  reports  on its activities as may be required by the laws of this state.
    26  All registration and reporting requirements  pursuant  to  [EPTL  8-1.4]
    27  article  seven-A of the executive law, and section 8-1.4 of the estates,

    28  powers and trusts law, or related  successor  provisions,  are,  without
    29  limitation  on  the foregoing, expressly included as reports required by
    30  the laws of this state to be filed within the meaning of  this  section.
    31  Willful  failure  of  a  corporation to file a report as required by law
    32  shall constitute a breach of the directors' duty to the corporation  and
    33  shall  subject  the corporation, at the suit of the attorney-general, to
    34  an action or special proceeding for dissolution under article 11  (Judi-
    35  cial dissolution) in the case of a domestic corporation, or under § 1303
    36  (Violations) in the case of a foreign corporation.
    37    §  35.  The  not-for-profit corporation law is amended by adding a new
    38  section 522 to read as follows:
    39  § 522. Cy-pres and deviation.

    40             Nothing in this chapter shall limit the  application  of  the
    41           doctrines of cy-pres and deviation.
    42    §  36.  Paragraph (a) of section 601 of the not-for-profit corporation
    43  law, as amended by chapter 1058 of the laws of 1971, is amended to  read
    44  as follows:
    45    (a)  A  corporation  shall have one or more classes of members, or, in
    46  the case of a [Type B] charitable corporation, may have no  members,  in
    47  which  case  any such provision for classes of members or for no members
    48  shall be set forth in the certificate of incorporation or  the  by-laws.
    49  Corporations,  joint-stock associations, unincorporated associations and
    50  partnerships, as well as any other person  without  limitation,  may  be
    51  members.
    52    §  37.  Paragraph (a) of section 605 of the not-for-profit corporation

    53  law, as amended by chapter 1058 of the laws of 1971, is amended to  read
    54  as follows:
    55    (a) Whenever under the provisions of this chapter members are required
    56  or permitted to take any action at a meeting, written notice shall state

        A. 7772                            18
 
     1  the  place,  date  and  hour  of the meeting and, unless it is an annual
     2  meeting, indicate that it is being issued by or at the direction of  the
     3  person or persons calling the meeting. Notice of a special meeting shall
     4  also  state  the  purpose or purposes for which the meeting is called. A
     5  copy of the notice of any meeting shall be given,  personally  [or],  by
     6  mail,  or by facsimile telecommunications or by electronic mail, to each
     7  member entitled to  vote  at  such  meeting.  If  the  notice  is  given

     8  personally  [or], by first class mail or by facsimile telecommunications
     9  or by electronic mail, it shall be given not less than ten nor more than
    10  fifty days before the date of the meeting; if mailed by any other  class
    11  of mail, it shall be given not less than thirty nor more than sixty days
    12  before such date.  If mailed, such notice is given when deposited in the
    13  United States mail, with postage thereon prepaid, directed to the member
    14  at  his  address as it appears on the record of members, or, if he shall
    15  have filed with the secretary of the corporation a written request  that
    16  notices  to him be mailed to some other address, then directed to him at
    17  such other address. If sent by facsimile  telecommunications  or  mailed
    18  electronically,  such  notice is given when directed to the member's fax

    19  number or electronic mail  address  as  it  appears  on  the  record  of
    20  members,  or,  to  such  fax  number or other electronic mail address as
    21  filed with the secretary of the corporation. Notwithstanding the forego-
    22  ing, such notice shall not be given electronically: (1)  if  the  corpo-
    23  ration  is  unable  to  deliver two consecutive notices to the member by
    24  electronic mail; or (2) the corporation  otherwise  becomes  aware  that
    25  notice  cannot be delivered to the member by electronic mail. An affida-
    26  vit of the secretary or other person giving the notice or of a  transfer
    27  agent  of  the  corporation that the notice required by this section has
    28  been given shall, in the absence of fraud, be prima  facie  evidence  of
    29  the  facts  therein  stated.  Whenever  a corporation has more than five

    30  hundred members, the notice may be served by publication[,  in  lieu  of
    31  mailing,]  in  a newspaper published in the county in the state in which
    32  the principal office of the corporation is  located,  once  a  week  for
    33  three  successive weeks next preceding the date of the meeting, provided
    34  that the corporation shall also prominently post notice of such  meeting
    35  on the homepage of any website maintained by the corporation continuous-
    36  ly from the date of publication through the date of the meeting.
    37    §  38. Section 606 of the not-for-profit corporation law is amended to
    38  read as follows:
    39  § 606. Waivers of notice.
    40    Notice of meeting need not be  given  to  any  member  who  submits  a
    41  [signed]  waiver  of  notice,  in  person or by proxy, whether before or

    42  after the meeting. Waiver of notice may be  written  or  electronic.  If
    43  written,  the  waiver  must  be  executed  by the member or the member's
    44  authorized officer, director, employee, or agent by signing such  waiver
    45  or  causing  the  member's signature to be affixed to such waiver by any
    46  reasonable means, including, but not limited to facsimile signature.  If
    47  electronic,  the  transmission  of the waiver must be sent by electronic
    48  mail and set forth, or be submitted with, information from which it  can
    49  reasonably  be  determined  that  the transmission was authorized by the
    50  member. The attendance of any member at  a  meeting,  in  person  or  by
    51  proxy,  without  protesting  prior  to the conclusion of the meeting the

    52  lack of notice of such meeting, shall constitute a waiver of  notice  by
    53  him.
    54    §  39.  Paragraphs  (b)  and  (c) of section 609 of the not-for-profit
    55  corporation law, as added by chapter  186  of  the  laws  of  1999,  are
    56  amended to read as follows:

        A. 7772                            19
 
     1    (b) Without limiting the manner in which a member may authorize anoth-
     2  er  person  or persons to act for him as proxy pursuant to paragraph (a)
     3  of this section, the following shall constitute a valid means by which a
     4  member may grant such authority:
     5    (1)  A  member  may  execute  a  writing authorizing another person or
     6  persons to act for him as proxy. Execution may be  accomplished  by  the
     7  member  or  the member's authorized officer, director, employee or agent
     8  signing such writing or causing his or her signature to  be  affixed  to

     9  such  writing  by any reasonable means including, but not limited to, by
    10  facsimile signature.
    11    (2) A member may authorize another person or persons to  act  for  the
    12  member  as  proxy  by [transmitting or authorizing the transmission of a
    13  telegram, cablegram or other means of] providing such  authorization  by
    14  electronic  [transmission]  mail to the person who will be the holder of
    15  the proxy or to a proxy solicitation firm, proxy support service  organ-
    16  ization  or  like  agent  duly authorized by the person [who will be the
    17  holder of the proxy to receive such  transmission],  provided  that  any
    18  such  [telegram,  cablegram  or  other means of electronic transmission]
    19  authorization by electronic mail shall either set forth [or be submitted

    20  with] information from which it can be reasonably  determined  that  the
    21  [telegram,  cablegram  or  other]  authorization  by  electronic [trans-
    22  mission] mail was authorized by the member. If  it  is  determined  that
    23  such [telegrams, cablegrams or other] authorization by electronic [tran-
    24  smissions are] mail is valid, the inspectors or, if there are no inspec-
    25  tors,  such  other  persons  making that determination shall specify the
    26  nature of the information upon which they relied.
    27    (c) Any copy, facsimile telecommunication or  other  reliable  reprod-
    28  uction of the writing or [transmission] electronic mail created pursuant
    29  to  paragraph  (b) of this section may be substituted or used in lieu of

    30  the original writing or transmission for any and all purposes for  which
    31  the  original  writing or transmission could be used, provided that such
    32  copy, facsimile telecommunication  or  other  reproduction  shall  be  a
    33  complete reproduction of the entire original writing or transmission.
    34    §  40.  Paragraphs  (a)  and  (b) of section 614 of the not-for-profit
    35  corporation law are amended to read as follows:
    36    (a) Whenever, under this chapter, members are required or permitted to
    37  take any action by vote, such action may be taken without a meeting  [on
    38  written]  upon  the  consent[, setting forth the action so taken, signed
    39  by] of all of the members entitled to vote thereon, which consent  shall
    40  set  forth the action so taken. Such consent may be written or electron-

    41  ic.  If written, the consent must be  executed  by  the  member  or  the
    42  member's authorized officer, director, employee or agent by signing such
    43  consent  or  causing the member's signature to be affixed to such waiver
    44  by any reasonable means including but not limited  to  facsimile  signa-
    45  ture.  If  electronic,  the  transmission of the consent must be sent by
    46  electronic mail and set forth, or be submitted  with,  information  from
    47  which  it can reasonably be determined that the transmission was author-
    48  ized by the member. This paragraph shall not be construed  to  alter  or
    49  modify  any provision in a certificate of incorporation not inconsistent
    50  with this chapter under which the written consent of less  than  all  of
    51  the members is sufficient for corporate action.

    52    (b)  Written  or electronic consent thus given by all members entitled
    53  to vote shall have the same effect as a unanimous vote  of  members  and
    54  any  certificate with respect to the authorization or taking of any such
    55  action which is delivered to the department of state shall  recite  that
    56  the authorization was by [uanimous] unanimous written consent.

        A. 7772                            20
 
     1    §  41.  Paragraph (a) of section 702 of the not-for-profit corporation
     2  law is amended to read as follows:
     3    (a) The number of directors constituting the entire board shall be not
     4  less than three. Subject to such limitation, such number may be fixed by
     5  the  by-laws  or, in the case of a corporation having members, by action
     6  of the members or of the board under the specific provisions of a by-law

     7  adopted by the members. If not otherwise fixed under this paragraph, the
     8  number shall be three. [As used in this article,  "entire  board"  means
     9  the  total  number  of  directors entitled to vote which the corporation
    10  would have if there were no vacancies.]
    11    § 42. Paragraphs (b) and (c) of  section  708  of  the  not-for-profit
    12  corporation  law,  paragraph (b) as amended by chapter 92 of the laws of
    13  1983 and paragraph (c) as amended by chapter 211 of the  laws  of  2007,
    14  are amended to read as follows:
    15    (b) Unless otherwise restricted by the certificate of incorporation or
    16  the  by-laws,  any action required or permitted to be taken by the board
    17  or any committee thereof may be taken without a meeting if  all  members
    18  of  the board or the committee consent [in writing] to the adoption of a

    19  resolution authorizing the action. Such consent may be written or  elec-
    20  tronic.  If  written,  the  consent  must be executed by the director by
    21  signing such consent or causing his or her signature to  be  affixed  to
    22  such  consent  by  any  reasonable  means including, but not limited to,
    23  facsimile signature. If electronic, the transmission of the consent must
    24  be sent by electronic mail and set forth, or be submitted with, informa-
    25  tion from which it can reasonably be determined  that  the  transmission
    26  was  authorized by the director. The resolution and the written consents
    27  thereto by the members of the board or committee shall be filed with the
    28  minutes of the proceedings of the board or committee.
    29    (c) Unless otherwise restricted by the certificate of incorporation or

    30  the by-laws, any one or more members of the board or  of  any  committee
    31  thereof  [may participate in] who is not physically present at a meeting
    32  of [such] the board or a committee may participate by means of a confer-
    33  ence telephone or similar communications equipment [allowing all persons
    34  participating in the meeting to hear each other at the same time] or  by
    35  electronic  video  screen  communication.    Participation by such means
    36  shall constitute presence in person at a meeting as long as all  persons
    37  participating  in  the  meeting can hear each other at the same time and
    38  each director can participate in all matters before the  board,  includ-

    39  ing,  without  limitation,  the  ability to propose, object to, and vote
    40  upon a specific action to be taken by the board or committee.
    41    § 43. Paragraph (c) of section 711 of the  not-for-profit  corporation
    42  law,  as  amended by chapter 847 of the laws of 1970, is amended to read
    43  as follows:
    44    (c) Notice of a meeting need not be given to any  alternate  director,
    45  nor  to  any  director  who  submits a [signed] waiver of notice whether
    46  before or after the meeting, or who attends the meeting without protest-
    47  ing, prior thereto or at its commencement, the lack of notice to him  or
    48  her. Such waiver of notice may be written or electronic. If written, the
    49  waiver  must  be executed by the director signing such waiver or causing

    50  his or her signature to be affixed to  such  waiver  by  any  reasonable
    51  means  including  but not limited to facsimile signature. If electronic,
    52  the transmission of the consent must be sent by electronic mail and  set
    53  forth, or be submitted with, information from which it can reasonably be
    54  determined that the transmission was authorized by the director.

        A. 7772                            21
 
     1    § 44. Paragraphs (a), (b) and (e) of section 712 of the not-for-profit
     2  corporation  law, paragraph (e) as amended by chapter 961 of the laws of
     3  1972, are amended to read as follows:
     4    (a) If the certificate of incorporation or the by-laws so provide, the
     5  board,  by  resolution  adopted  by  a majority of the entire board, may

     6  designate from among  its  members  an  executive  committee  and  other
     7  [standing]  committees,  each consisting of three or more directors, and
     8  each of which, to the extent  provided  in  the  resolution  or  in  the
     9  certificate of incorporation or by-laws, shall have all the authority of
    10  the  board, except that no such committee shall have authority as to the
    11  following matters:
    12    (1) The  submission  to  members  of  any  action  requiring  members'
    13  approval under this chapter.
    14    (2)  The  filling  of  vacancies  in  the board of directors or in any
    15  committee.
    16    (3) The fixing of compensation of the directors  for  serving  on  the
    17  board or on any committee.
    18    (4)  The  amendment  or  repeal  of the by-laws or the adoption of new
    19  by-laws.
    20    (5) The amendment or repeal of any resolution of the  board  which  by

    21  its terms shall not be so amendable or repealable.
    22    (b) The board may designate one or more directors as alternate members
    23  of  any  [standing]  committee,  who  may  replace  any absent member or
    24  members at any meeting of such committee.
    25    [(e)] (d) Committees, other than [standing or special]  committees  of
    26  the  board,  whether  created  by  the board or by the members, shall be
    27  committees of the corporation. Such committees of the corporation may be
    28  elected or appointed in the same manner as officers of the  corporation,
    29  but  no  such  committee  shall  have  the  authority to bind the board.
    30  Provisions of this chapter applicable to officers generally shall  apply
    31  to members of such committees.
    32    §  45.  Paragraph (c) of section 712 of the not-for-profit corporation

    33  law is REPEALED and paragraphs (d) and (e) are relettered paragraphs (c)
    34  and (d).
    35    § 46. The not-for-profit corporation law is amended by adding two  new
    36  sections 712-a and 712-b to read as follows:
    37  § 712-a. Audit oversight.
    38    (a) Every corporation required to file an independent certified public
    39  accountant's audit report with the attorney general pursuant to subdivi-
    40  sion  one  of  section one hundred seventy-two-b of the executive law or
    41  which presents such a report as part of the annual  report  required  by
    42  section  519  (Annual  report  of  directors)  shall  designate an audit
    43  committee of the board, consisting of at least three independent  direc-
    44  tors, for the purpose of overseeing the accounting and financial report-

    45  ing  processes  of  the corporation and the independent certified public
    46  accountant's audit of the corporation's financial statements. The corpo-
    47  ration's entire board may constitute the audit committee, provided  that
    48  only independent directors may be present at and participate in deliber-
    49  ations  and voting relating to audit committee matters. If a corporation
    50  controls a group of corporations, the audit committee of the controlling
    51  corporation may be deemed to be the audit committee for one or  more  of
    52  its controlled corporations.
    53    (b) The audit committee shall, at a minimum:
    54    (1)  retain  and  evaluate  the  independent  auditor who shall report
    55  directly to the audit committee;


        A. 7772                            22
 
     1    (2) review with the independent auditor the scope and planning of  the
     2  audit;
     3    (3) review and discuss with the independent auditor, at a minimum: (a)
     4  the  results  of any audit, including but not limited to: the management
     5  letter to the board and any material risks and  weaknesses  in  internal
     6  controls identified by the auditor; (b) any restrictions on the scope of
     7  the  auditor's  activities  or  access to requested information; (c) any
     8  significant disagreements between the auditor and  management;  and  (d)
     9  the adequacy and performance of the corporation's accounting function;
    10    (4) consider at least annually the performance and independence of the
    11  independent auditor;

    12    (5)  oversee  adoption,  implementation  of,  and  compliance with any
    13  conflict of interest policy  or  whistleblower  policy  adopted  by  the
    14  corporation  pursuant to sections 715-a (Conflict of interest policy) or
    15  715-b  (Whistleblower  policy),  if  this  function  is  not   otherwise
    16  performed  by  another  committee of the board comprised solely of inde-
    17  pendent directors; and
    18    (6) report its activities to the board at least annually.
    19    (c) The audit committee shall adopt a charter  that  shall  state  its
    20  authority  and  responsibilities,  including  those  prescribed  by this
    21  section, and that shall state the size, composition and rules or  proce-
    22  dures of the audit committee.

    23  § 712-b. Executive compensation oversight.
    24    (a)  For purposes of this section, "total compensation" means: (1) any
    25  compensation, whether paid or accrued, by or on  behalf  of  the  corpo-
    26  ration or any affiliate of the corporation, including but not limited to
    27  salary,  bonus,  and  deferred  compensation; and (2) any benefit having
    28  monetary value provided by the corporation or on behalf  of  the  corpo-
    29  ration or any affiliate of the corporation, including but not limited to
    30  housing  allowances,  living  expenses,  perquisites,  fringe  benefits,
    31  employer contributions to  defined  contribution  retirement  plans  and
    32  other retirement benefits.
    33    (b)  The  total  compensation paid by a corporation to any employee of

    34  the corporation shall be fair, reasonable and commensurate with services
    35  the employee provides to the corporation.
    36    (c) No employee or other individual who may benefit from  compensation
    37  or  benefits  provided by the corporation may be present at or otherwise
    38  participate in any board or committee deliberation  or  vote  concerning
    39  such compensation or benefits.
    40    (d)  Every  charitable  corporation  that is required to be registered
    41  with the attorney general under article seven-A of the executive law  or
    42  article  eight of the estates, powers and trusts law or both and that in
    43  the prior fiscal year had annual  revenues  in  excess  of  two  million
    44  dollars shall designate a compensation committee of the board to oversee

    45  executive  compensation  programs  and  related  practices of the corpo-
    46  ration.
    47    (1) The compensation committee shall be comprised of  at  least  three
    48  independent directors.
    49    (2)  The  corporation's  board may perform the function of the compen-
    50  sation committee unless the bylaws provide otherwise, provided that only
    51  independent directors may be present at and participate in any  deliber-
    52  ations or voting relating to compensation committee matters.
    53    (3)  If  a  corporation controls one or more corporations, the compen-
    54  sation committee of the controlling corporation may be deemed to be  the
    55  compensation committee for its controlled corporations.
    56    (4) The compensation committee shall:

        A. 7772                            23
 
     1    (A)  Review  the total compensation paid to the corporation's officers
     2  and its five highest-compensated key employees; (B) affirmatively deter-
     3  mine that the total compensation paid to any such  individual  is  fair,
     4  reasonable  and  commensurate with services provided to the corporation.
     5  In  making  this  determination,  the  compensation committee shall at a
     6  minimum consider the  following  factors:  (i)  the  total  compensation
     7  provided  to  the  individual; (ii) relevant benchmark data on the total
     8  compensation paid to individuals serving in similar positions at  corpo-
     9  rations  of  similar  size, type, purpose, and scope; (iii) the individ-

    10  ual's qualifications and performance; (iv) compensation, payments or any
    11  other benefits provided to the individual  from  any  affiliate  of  the
    12  corporation; and (v) the overall financial condition of the corporation;
    13  (C)  make and keep a contemporaneous written record describing the basis
    14  for its determination, including its analysis of the factors  set  forth
    15  in  this  paragraph and how any relevant data was obtained and used; (D)
    16  approve by not less than a majority vote the total compensation paid  to
    17  each such individual.
    18    (5) If, pursuant to subparagraph two of this paragraph, the board does
    19  not  perform  the  function of the compensation committee, then: (i) the
    20  compensation committee shall recommend to the board for its approval the

    21  total compensation of each individual that the  committee  has  affirma-
    22  tively  determined  is  fair, reasonable, and commensurate with services
    23  provided to the corporation, and in connection therewith, provide to the
    24  board the written record of its determination created pursuant to clause
    25  (C) of this subparagraph; (ii) upon review of the recommendations of the
    26  compensation committee, the board shall  approve  by  not  less  than  a
    27  majority  vote  of  the  independent directors the total compensation of
    28  each such individual, with only independent directors  participating  in
    29  any  such  vote and any discussion relating thereto; and (iii) the board
    30  shall keep a contemporaneous written record of the basis of its determi-

    31  nation, including areas of agreement or disagreement with the  recommen-
    32  dations of the compensation committee.
    33    (6) The compensation committee may retain a compensation consultant to
    34  assist  in  the  performance  of  its responsibilities. The compensation
    35  committee shall be directly responsible  for  the  appointment,  compen-
    36  sation  and  oversight  of  the  work  of  such consultant, and any such
    37  consultant shall report directly  to  the  compensation  committee.  The
    38  compensation  committee  shall,  among its responsibilities, approve the
    39  compensation peer group that the compensation consultant  recommends  be
    40  used to develop benchmark data
    41    (A) prior to retaining any such consultant, the compensation committee

    42  shall  determine  that  the  consultant  is independent and qualified to
    43  render advice concerning compensation; provided that no  consultant  may
    44  be  determined  independent  if such consultant or any firm that employs
    45  such consultant has (i) received directly or indirectly any payment, fee
    46  or other compensation from the  corporation  or  any  affiliate  of  the
    47  corporation  within  the  preceding  two  years,  other  than reasonable
    48  amounts paid for compensation consulting services, or (ii) any  business
    49  or  personal  relationship with the corporation or any affiliate, or any
    50  of their officers, directors or employees, that may interfere  with  the
    51  ability of the consultant to provide objective advice to the committee.

    52    (B)  Nothing  in  this paragraph shall be construed to (i) require the
    53  compensation committee to implement or act consistently with any  recom-
    54  mendations  provided  by the compensation consultant; or (ii) affect the
    55  ability or obligation of members of the compensation committee to  exer-
    56  cise  their  own  judgment  in fulfillment of their duties to the corpo-

        A. 7772                            24
 
     1  ration, including those duties prescribed  by  section  717  (Duties  of
     2  directors and officers).
     3    (7) The compensation committee shall adopt a charter setting forth its
     4  responsibilities,  including  as  prescribed by this section, as well as
     5  requirements concerning the size, composition  and  functioning  of  the

     6  compensation committee.
     7    §  47.  Paragraph (a) of section 713 of the not-for-profit corporation
     8  law is amended and a new paragraph (f) is added to read as follows:
     9    (a) The board may elect or appoint a chair, who may be given the title
    10  chair of the board, chairperson of the board, chairman of the board,  or
    11  chairwoman  of the board, or president, or both, one or more vice-presi-
    12  dents, a secretary and a treasurer, and such other officers  as  it  may
    13  determine,  or  as may be provided in the by-laws. These officers may be
    14  designated by such alternate titles as may be provided  in  the  certif-
    15  icate  of  incorporation  or the by-laws. Any two or more offices may be
    16  held by the same person, except the offices of president and  secretary,
    17  or the offices corresponding thereto.

    18    (f) No employee of the corporation shall serve as chair of the board.
    19    § 48. Section 715 of the not-for-profit corporation law, as amended by
    20  chapter  847  of  the  laws of 1970, paragraph (f) as amended by chapter
    21  1057 of the laws of 1971, is amended to read as follows:
    22  § 715. [Interested directors and officers] Related party transactions.
    23    (a) [No contract or other transaction between a corporation and one or
    24  more of its directors or officers, or  between  a  corporation  and  any
    25  other  corporation,  firm,  association  or other entity in which one or
    26  more of its directors or officers are directors or officers, or  have  a
    27  substantial  financial  interest,  shall  be either void or voidable for

    28  this reason alone or by reason alone that such director or directors  or
    29  officer  or  officers  are  present at the meeting of the board, or of a
    30  committee thereof, which authorizes such  contract  or  transaction,  or
    31  that  his  or  their  votes are counted for such purpose] No corporation
    32  shall enter into a related party transaction, unless:
    33    (1) [If the] material facts as to [such director's or officer's inter-
    34  est in such contract or transaction and as] the related party's interest
    35  in, and relationship to [any such common  directorship,  officership  or
    36  financial  interest]  the  transaction  are  disclosed in good faith [or

    37  known] to the board [or committee], and [the board or committee  author-
    38  izes  such contract or transaction by a vote sufficient for such purpose
    39  without counting the vote or votes of such interested director or  offi-
    40  cer; or
    41    (2)  If the material facts as to such director's or officer's interest
    42  in such contract or transaction and as to any such common  directorship,
    43  officership  or  financial interest are disclosed in good faith or known
    44  to the] any members of the corporation entitled  to  vote  [thereon,  if
    45  any,  and]  to  approve such [contract or] transaction [is authorized by
    46  vote of such members].

    47    [(b) If such good faith disclosure of the material  facts  as  to  the
    48  director's  or  officer's interest in the contract or transaction and as
    49  to any such common directorship, officership or financial  interest,  is
    50  made  to the directors or members, or known to the board or committee or
    51  members authorizing such contract or transaction, as provided  in  para-
    52  graph  (a), the contract or transaction may not be avoided by the corpo-
    53  ration for the reasons set forth in paragraph (a). If there was no  such
    54  disclosure  or  knowledge, or if the vote of such interested director or
    55  officer was necessary for the authorization of such contract  or  trans-
    56  action  at  a  meeting of the board or committee at which it was author-


        A. 7772                            25

     1  ized, the corporation may avoid the contract or transaction  unless  the
     2  party or parties thereto shall establish affirmatively that the contract
     3  or transaction was fair and reasonable as to the corporation at the time
     4  it was authorized by the board, a committee or the members.
     5    (c)  Common  or interested directors may be counted in determining the
     6  presence of a quorum at a meeting of the board or of a  committee  which
     7  authorizes such contract or transaction.
     8    (d)] (2) the board: (i) has considered alternative transactions to the
     9  extent  available  and  upon  reasonable  diligence determined that such
    10  alternative transactions would not be more advantageous  to  the  corpo-

    11  ration;  (ii)  determines  by  a  two-thirds  vote of the board that the
    12  related party transaction is fair, reasonable and in the best  interests
    13  of  the corporation and approves such transaction, and the related party
    14  with an interest in the transaction is  not  present  at  and  does  not
    15  otherwise  participate  in  any deliberation or voting relating thereto;
    16  and (iii) contemporaneously documents  in  writing  the  basis  for  its
    17  determination  and  approval of the transaction. This subparagraph shall
    18  not apply to any compensation reviewed and approved in  accordance  with
    19  paragraph  (d)  of  section  712-a (Audit oversight). The certificate of
    20  incorporation, bylaws or conflict of interest policy of the  corporation

    21  may  contain  additional  restrictions  on  [contracts or] related party
    22  transactions [between a corporation] and [its directors or  officers  or
    23  other persons and may] additional procedures necessary for the review or
    24  approval of such transactions, or provide that [contracts or] any trans-
    25  actions in violation of such restrictions shall be void or voidable.
    26    [(e)  Unless otherwise provided in the certificate of incorporation or
    27  the by-laws, the board shall have authority to fix the  compensation  of
    28  directors for services in any capacity.
    29    (f)  The fixing of salaries of officers, if not done in or pursuant to
    30  the by-laws, shall require the affirmative vote of  a  majority  of  the

    31  entire  board  unless  a  higher proportion is set by the certificate of
    32  incorporation or by-laws.]
    33    (b) An officer, director or key employee who  has  an  interest  in  a
    34  related  party  transaction shall, prior to the board's consideration of
    35  the proposed transaction, disclose in good faith to the corporation  the
    36  material facts as to such person's interest in, and relationship to, the
    37  transaction.    The  board  shall adopt and implement procedures for the
    38  timely disclosure of such facts to the board.
    39    (c) The attorney general may  bring  an  action  to  enjoin,  void  or
    40  rescind any related party transaction or a proposed related party trans-
    41  action that violates any law or is otherwise not fair, reasonable, or in

    42  the  best interests of the corporation, or to seek other relief, includ-
    43  ing but not limited to damages, restitution, the removal of directors or
    44  officers, or seek to require any person or entity to:
    45    (1) account for any profits made from such transaction, and  pay  them
    46  to the corporation;
    47    (2) pay the corporation the value of the use of any of its property or
    48  other assets used in such transaction;
    49    (3)  return or replace any property or other assets lost to the corpo-
    50  ration as a result of such transaction,  together  with  any  income  or
    51  appreciation  lost  to the corporation by reason of such transaction, or
    52  account for any proceeds of sale of such property, and pay the  proceeds

    53  to the corporation together with interest at the legal rate; and
    54    (4)  pay,  in  the case of willful conduct, an amount up to double the
    55  amount of any benefit improperly obtained.

        A. 7772                            26
 
     1    (d) The powers of the attorney general provided in this section are in
     2  addition to all other powers the attorney general may  have  under  this
     3  chapter or any other law.
     4    §  49. The not-for-profit corporation law is amended by adding two new
     5  sections 715-a and 715-b to read as follows:
     6  § 715-a. Conflict of interest policy.
     7    (a) Every corporation shall adopt a conflict  of  interest  policy  to
     8  ensure  that its directors, officers and key employees act in the corpo-

     9  ration's best interest and comply with  applicable  legal  requirements,
    10  including  but  not limited to the requirements set forth in section 715
    11  (Related party transactions).
    12    (b) The conflict of interest policy shall include, at a  minimum,  the
    13  following provisions:
    14    (1)  a  definition  of the circumstances that constitute a conflict of
    15  interest;
    16    (2) procedures for disclosing a conflict  of  interest  to  the  audit
    17  committee or, if there is no audit committee, to the board;
    18    (3) a requirement that the person with the conflict of interest not be
    19  present  at or participate in board or committee deliberation or vote on
    20  the matter giving rise to such conflict;

    21    (4) a prohibition against any attempt by the person with the  conflict
    22  to  influence  the  deliberation  or voting on the matter giving rise to
    23  such conflict;
    24    (5) a requirement that the existence and resolution of the conflict be
    25  documented in the corporation's records, including in the minutes of any
    26  meeting at which the conflict was discussed or voted upon; and
    27    (6) procedures for disclosing,  addressing,  and  documenting  related
    28  party  transactions in accordance with section 715 (Related party trans-
    29  actions).
    30    (c) The conflict of interest policy shall require that  prior  to  the
    31  initial  election  of  any  director, and annually thereafter, that such

    32  director shall complete, sign and submit to the secretary of the  corpo-
    33  ration a written statement identifying any entity of which such director
    34  is  an  officer,  director,  trustee,  member,  owner  (either as a sole
    35  proprietor or a partner), or employee with which the corporation has, or
    36  might be expected to have, a relationship or a transaction in which  the
    37  director  might  have  a  conflicting interest. The policy shall require
    38  that each director annually resubmit such written statement. The  secre-
    39  tary of the corporation shall provide a copy of all completed statements
    40  to  the chair of the audit committee or, if there is no audit committee,
    41  to the chair of the board.
    42    (d) Every corporation registered or required to be registered pursuant

    43  to section one hundred seventy-two of the executive law or section 8-1.4
    44  of the estates, powers and trusts law  shall  transmit  a  copy  of  its
    45  conflict  of  interest  policy  to  the attorney general in the form and
    46  manner specified by the attorney general, and shall within  thirty  days
    47  of  any  material  change of these policies provide the attorney general
    48  with the changed policies.
    49    (e) Nothing in this section shall be interpreted to require  a  corpo-
    50  ration  to  adopt any specific conflict of interest policy not otherwise
    51  required by law, or to  supersede  or  limit  any  requirement  or  duty
    52  governing conflicts of interest required by any other law or rule.
    53  § 715-b. Whistleblower policy.

    54    (a)  Every  corporation  that  has twenty or more employees and in the
    55  prior fiscal year had annual revenue in excess of  one  million  dollars
    56  shall  adopt  a whistleblower policy to protect from retaliation persons

        A. 7772                            27
 
     1  who report suspected improper conduct. Such policy shall provide that no
     2  director, officer, employee or volunteer of a corporation  who  in  good
     3  faith  reports  any  action  or  suspected action taken by or within the
     4  corporation  that  is illegal, fraudulent or in violation of any adopted
     5  policy  of  the  corporation  shall  suffer  intimidation,   harassment,
     6  discrimination  or  other  retaliation  or,  in  the  case of employees,
     7  adverse employment consequence.

     8    (b) The whistleblower policy shall include the following provisions:
     9    (1) procedures for the reporting of violations or suspected violations
    10  of laws or corporate policies, including procedures for  preserving  the
    11  confidentiality of reported information;
    12    (2)  procedures for handling and investigating violations or suspected
    13  violations of laws or corporate policies;
    14    (3) a requirement that an employee of the corporation be designated to
    15  administer, implement and oversee compliance of the whistleblower  poli-
    16  cy, and to report to the audit committee or other committee of independ-
    17  ent directors or, if there are no such committees, to the board;
    18    (4)  a  requirement that all documents concerning information reported

    19  under the whistleblower policy and any investigation relating thereto be
    20  retained by the corporation for a minimum period of six years; and
    21    (5) a requirement that a copy of the  policy  be  distributed  to  all
    22  directors,  officers, employees and volunteers, with instructions on how
    23  to comply with the procedures set forth in the policy.
    24    (c) Nothing in this section shall be interpreted to relieve any corpo-
    25  ration from any additional requirements in relation to internal  compli-
    26  ance,  retaliation,  or  document retention required by any other law or
    27  rule.
    28    § 50. Section 716 of the not-for-profit corporation law, as amended by
    29  chapter 644 of the laws of 1971, is amended to read as follows:
    30  § 716. Loans to directors and officers.

    31    No loans, other than through the purchase  of  bonds,  debentures,  or
    32  similar obligations of the type customarily sold in public offerings, or
    33  through  ordinary  deposit of funds in a bank, shall be made by a corpo-
    34  ration to its directors or officers, or to any other corporation,  firm,
    35  association  or  other  entity  in which one or more of its directors or
    36  officers are directors or  officers  or  hold  a  substantial  financial
    37  interest, except a loan by one [type B] charitable corporation to anoth-
    38  er  [type  B]  charitable  corporation. A loan made in violation of this
    39  section shall be a violation of the  duty  to  the  corporation  of  the
    40  directors  or  officers  authorizing  it or participating in it, but the
    41  obligation of the borrower  with  respect  to  the  loan  shall  not  be
    42  affected thereby.

    43    § 51. Section 717 of the not-for-profit corporation law, paragraph (a)
    44  as  amended  by  chapter  490  of the laws of 2010, and paragraph (b) as
    45  amended by chapter 734 of the laws  of  1988,  is  amended  to  read  as
    46  follows:
    47  § 717. Duty of directors and officers.
    48    (a) Directors and officers shall discharge the duties of their respec-
    49  tive  positions  in  good  faith and with the care an ordinarily prudent
    50  person in a like position would exercise under similar circumstances  in
    51  like  positions. [The factors set forth in subparagraph one of paragraph
    52  (e) of section 552 (Standard of conduct in  managing  and  investing  an
    53  institutional  fund),  if  relevant,  must  be considered by a governing
    54  board delegating] In the administration of the powers to make and retain

    55  investments pursuant to section 511-a  (Petition  for  attorney  general
    56  approval), to appropriate appreciation pursuant to section 513 (Adminis-

        A. 7772                            28
 
     1  tration  of  assets  received  for  specific  purposes), and to delegate
     2  investment management of institutional funds  pursuant  to  section  514
     3  (Delegation  of  investment management) [For purposes of this paragraph,
     4  the term institutional fund is defined in section 551 (Definitions).], a
     5  governing  board  shall consider among other relevant considerations the
     6  long and short term  needs  of  the  corporation  in  carrying  out  its
     7  purposes,  its  present and anticipated financial requirements, expected

     8  total return on its investments, price level trends, and general econom-
     9  ic conditions.
    10    (b) In discharging their duties, directors and officers,  when  acting
    11  in  good faith, may rely on information, opinions, reports or statements
    12  including financial statements and other financial data,  in  each  case
    13  prepared  or  presented by: (1) one or more officers or employees of the
    14  corporation, whom the director believes to be reliable and competent  in
    15  the  matters presented, (2) counsel, public accountants or other persons
    16  as to matters which the directors or officers believe to be within  such
    17  person's  professional  or  expert  competence or (3) a committee of the
    18  board upon which they do not serve, duly designated in accordance with a
    19  provision of the certificate of  incorporation  or  the  bylaws,  as  to

    20  matters  within  its designated authority, which committee the directors
    21  or officers believe to merit confidence, so long as in so  relying  they
    22  shall  be acting in good faith and with that degree of care specified in
    23  paragraph (a) of this section, but if the director or officer has  know-
    24  ledge  concerning  the matter in question reported by the committee that
    25  would cause such reliance to be unwarranted,  the  director  or  officer
    26  shall  not  be considered to be acting in good faith.  Persons shall not
    27  be considered to be acting in good faith if they have knowledge concern-
    28  ing the matter in question that would cause such reliance to  be  unwar-
    29  ranted.  Persons  who so perform their duties shall have no liability by
    30  reason of being or having been directors or officers of the corporation.

    31    (c) In taking action, including, without limitation, action which  may
    32  involve  or  relate  to  a  change or potential change in the control of
    33  corporation, a director shall be entitled to consider,  without  limita-
    34  tion,  (1) both the long-term and the short-term interests of the corpo-
    35  ration and its members and (2) the effects that the corporation's action
    36  may have in the short-term or in the long-term upon any of  the  follow-
    37  ing:  (a)  the prospects for potential growth, development, productivity
    38  and financial  stability  of  the  corporation;  (b)  the  corporation's
    39  current  employees;  (c)  the  corporation's retired employees and other
    40  beneficiaries receiving or entitled to receive  retirement,  welfare  or

    41  similar  benefits  from  or pursuant to any plan sponsored, or agreement
    42  entered into, by the corporation; (d) the beneficiaries or recipients of
    43  the corporation's services; (e) the  corporation's  creditors;  (f)  the
    44  ability  of  the  corporation  to provide, as a going concern, benefits,
    45  goods, services, employment opportunities and  employment  benefits  and
    46  otherwise  to  contribute to the communities in which it conducts activ-
    47  ities; and (g) the accomplishment of the corporation's purposes as stat-
    48  ed in the certificate of incorporation. Nothing in this paragraph  shall
    49  create  any  duties  owed  by  any  director  to any person or entity to
    50  consider or afford any particular weight to  any  of  the  foregoing  or

    51  abrogate  any  duty  of the directors, either statutory or recognized by
    52  common law or court decisions. For purposes of this paragraph, "control"
    53  shall mean the possession, directly  or  indirectly,  of  the  power  to
    54  direct  or  cause  the  direction  of the management and policies of the
    55  corporation, whether through membership or otherwise.

        A. 7772                            29
 
     1    § 52. Section 718 of the not-for-profit corporation law, as amended by
     2  chapter 992 of the laws of 1970, is amended to read as follows:
     3  § 718. List of directors and officers.
     4    (a)  If  a  member  or  creditor of a corporation, in person or by his
     5  attorney or agent, or a representative of the district  attorney  or  of
     6  the  secretary  of state, the attorney general, or other state official,

     7  makes a written demand on a corporation to inspect a current list of its
     8  directors and officers and  their  [residence]  current  addresses,  the
     9  corporation  shall, within two business days after receipt of the demand
    10  and for a period of one week thereafter, make  the  list  available  for
    11  such inspection at its office during usual business hours.
    12    (b)  Upon  refusal  by  the  corporation to make a current list of its
    13  directors and officers and their [residence]  current  addresses  avail-
    14  able,  as provided in paragraph (a) of this section, the person making a
    15  demand for such list may apply, ex parte, to  the  supreme  court  at  a
    16  special  term  held within the judicial district where the office of the
    17  corporation is located for an order directing the  corporation  to  make

    18  such  list available.  The court may grant such order or take such other
    19  action as it may deem just and proper.
    20    § 53. The section heading and paragraph (a)  of  section  720  of  the
    21  not-for-profit  corporation law, the section heading as amended by chap-
    22  ter 1058 of the laws of 1971, are amended to read as follows:
    23    Actions [on behalf of the corporation] against directors, officers and
    24  key employees.
    25    (a) An action may be brought against one or more directors [or], offi-
    26  cers, or key employees of a corporation to procure a  judgment  for  the
    27  following relief:
    28    (1) To compel the defendant to account for his official conduct in the
    29  following cases:
    30    (A)  The  neglect of, or failure to perform, or other violation of his

    31  duties in the management and disposition of corporate  assets  committed
    32  to his charge.
    33    (B)  The  acquisition by himself, transfer to others, loss or waste of
    34  corporate assets due to any neglect of, or failure to perform, or  other
    35  violation of his duties.
    36    (2)  To  set  aside  an unlawful conveyance, assignment or transfer of
    37  corporate assets, where the transferee knew of its unlawfulness.
    38    (3) To enjoin a proposed unlawful conveyance, assignment  or  transfer
    39  of  corporate assets, where there are reasonable grounds for belief that
    40  it will be made.
    41    § 54. Paragraphs (a) and (c) of  section  722  of  the  not-for-profit
    42  corporation  law,  as  amended  by  chapter 368 of the laws of 1987, are
    43  amended to read as follows:
    44    (a) A corporation may indemnify any person, made, or threatened to  be

    45  made,  a  party  to  an action or proceeding other than one by or in the
    46  right of the corporation to procure a judgment  in  its  favor,  whether
    47  civil  or  criminal, including an action by or in the right of any other
    48  corporation of any [type or] kind, domestic or foreign, or any  partner-
    49  ship,  joint  venture, trust, employee benefit plan or other enterprise,
    50  which any director or officer of the corporation served in any  capacity
    51  at  the  request  of the corporation, by reason of the fact that he, his
    52  testator or intestate, was a director or officer of the corporation,  or
    53  served  such  other  corporation,  partnership,  joint  venture,  trust,
    54  employee benefit plan or other enterprise in any capacity, against judg-
    55  ments, fines,  amounts  paid  in  settlement  and  reasonable  expenses,
    56  including  attorneys' fees actually and necessarily incurred as a result

        A. 7772                            30
 
     1  of such action or proceeding, or any appeal therein, if such director or
     2  officer acted, in good faith, for a purpose which he reasonably believed
     3  to be in, or, in the case of service for any other  corporation  or  any
     4  partnership, joint venture, trust, employee benefit plan or other enter-
     5  prise,  not  opposed  to,  the best interests of the corporation and, in
     6  criminal actions or proceedings, in addition, had no reasonable cause to
     7  believe that his conduct was unlawful.
     8    (c) A corporation may indemnify any person made, or threatened  to  be
     9  made,  a  party  to  an  action by or in the right of the corporation to
    10  procure a judgment in its favor by reason  of  the  fact  that  he,  his
    11  testator  or  intestate,  is  or was a director or officer of the corpo-

    12  ration, or is or was serving at the request  of  the  corporation  as  a
    13  director  or  officer  of  any  other corporation of any [type or] kind,
    14  domestic or foreign, of any partnership, joint venture, trust,  employee
    15  benefit plan or other enterprise, against amounts paid in settlement and
    16  reasonable expenses, including attorneys' fees, actually and necessarily
    17  incurred  by  him  in  connection with the defense or settlement of such
    18  action, or in connection with an appeal therein,  if  such  director  or
    19  officer acted, in good faith, for a purpose which he reasonably believed
    20  to  be  in,  or, in the case of service for any other corporation or any
    21  partnership, joint venture, trust, employee benefit plan or other enter-
    22  prise, not opposed to, the best interests  of  the  corporation,  except
    23  that no indemnification under this paragraph shall be made in respect of

    24  (1)  a threatened action, or a pending action which is settled or other-
    25  wise disposed of, or (2) any claim, issue or matter  as  to  which  such
    26  person  shall have been adjudged to be liable to the corporation, unless
    27  and only to the extent that the court in which the action  was  brought,
    28  or,  if  no  action  was  brought,  any court of competent jurisdiction,
    29  determines upon application that, in view of all  the  circumstances  of
    30  the  case, the person is fairly and reasonably entitled to indemnity for
    31  such portion of the settlement amount and expenses as  the  court  deems
    32  proper.
    33    §  55.  Paragraph (c) of section 723 of the not-for-profit corporation
    34  law, as amended by chapter 368 of the laws of 1987, is amended  to  read
    35  as follows:
    36    (c)  Expenses  incurred  in  defending  a  civil or criminal action or

    37  proceeding may be paid by the corporation in advance of the final dispo-
    38  sition of such action or proceeding upon receipt of an undertaking by or
    39  on behalf of such director or officer [to repay]  sufficient  to  ensure
    40  the  repayment  of  such amount as, and to the extent, required by para-
    41  graph (a) of section 725.
    42    § 56. Paragraph (b) of section 724 of the  not-for-profit  corporation
    43  law,  as  amended by chapter 368 of the laws of 1987, is amended to read
    44  as follows:
    45    (b) The application shall be made in such manner and form  as  may  be
    46  required by the applicable rules of court or, in the absence thereof, by
    47  direction of a court to which it is made. Such application shall be upon
    48  notice  to  the corporation and the attorney general. The court may also

    49  direct that notice be given at the expense of  the  corporation  to  the
    50  members  and such other persons as it may designate in such manner as it
    51  may require.
    52    § 57. Subparagraph 3 of paragraph (a) of section 803 of  the  not-for-
    53  profit  corporation  law, as amended by chapter 168 of the laws of 1982,
    54  is amended to read as follows:
    55    (3) That the corporation is a corporation as defined  in  subparagraph
    56  (a)  (5)  of  section  102 (Definitions)[; the type of corporation it is

        A. 7772                            31

     1  under  section  201  (Purposes);  and  if  the  corporate  purposes  are
     2  enlarged, limited or otherwise changed, the type of corporation it shall
     3  thereafter be under section 201].
     4    §  58.  The  section  heading  and paragraph (a) of section 804 of the

     5  not-for-profit corporation law, as amended by chapter 139 of the laws of
     6  1993, and subparagraph (i) of paragraph (a) as amended by chapter 198 of
     7  the laws of 2010, are amended to read as follows:
     8    [Approvals] Notices, consents, and effect.
     9    (a) (i) A certificate of amendment shall not be filed if the amendment
    10  adds, changes or eliminates a purpose, power or provision the  inclusion
    11  of  which in a certificate of incorporation requires consent or approval
    12  of a governmental body or officer or any other person or body, or if the
    13  amendment changes the name of a corporation whose certificate of  incor-
    14  poration had such consent or approval endorsed thereon or annexed there-
    15  to, unless such consent or approval is no longer required or is endorsed
    16  on  or  annexed  to  the  certificate  of amendment. If a certificate of

    17  amendment adding, changing or eliminating a purpose, power or  provision
    18  the  inclusion  of  which in a certificate of incorporation requires the
    19  incorporator to send a certified copy of  its  certificate  of  incorpo-
    20  ration  to  a governmental body or officer or any other person or entity
    21  under section 404 (Notices and consents), or if  the  amendment  changes
    22  the  name  of a corporation whose incorporator was required to deliver a
    23  certified copy of its certificate of  incorporation  to  a  governmental
    24  body or officer or any other person or entity under section 404 (Notices
    25  and consents), a certified copy of the certificate of amendment shall be
    26  sent by certified mail, return receipt requested, to the government body

    27  or  officer  or  other  person or entity immediately after the filing of
    28  such certificate with the department of state.
    29    (ii) Every certificate of amendment of a charitable corporation [clas-
    30  sified as type B or type C under section 201 (Purposes)] which seeks  to
    31  change  or  eliminate a purpose or power enumerated in the corporation's
    32  certificate of incorporation, or to add a power or purpose  not  enumer-
    33  ated  therein,  shall  have  endorsed  thereon  or  annexed  thereto the
    34  approval of a justice of the supreme court of the judicial  district  in
    35  which the office of the corporation is located. Ten days' written notice
    36  of the application for such approval shall be given to the attorney-gen-
    37  eral.
    38    §  59. Section 907 of the not-for-profit corporation law is amended to
    39  read as follows:

    40  § 907. Approval by the supreme court or the attorney general.
    41    [(a)] Where any constituent corporation  or  the  consolidated  corpo-
    42  ration is, or would be if formed under this chapter, a [Type B or a Type
    43  C]  charitable  corporation  under section 201 (Purposes) [of this chap-
    44  ter], no certificate shall be filed pursuant to section 904 (Certificate
    45  of merger or consolidation; contents) or section 906 (Merger or  consol-
    46  idation  of  domestic  and  foreign  corporations) until (a) the Supreme
    47  Court has granted an order approving the plan of merger or consolidation
    48  and authorizing the filing of the certificate  [has  been  made  by  the
    49  supreme court,] as provided in [this] section[. A certified copy of such

    50  order  shall  be  annexed to the certificate of merger or consolidation.
    51  Application for the order may be made in the judicial district in  which
    52  the  principal office of the surviving or consolidated corporation is to
    53  be located, or in which the office of one of  the  domestic  constituent
    54  corporations  is  located.  The  application  shall  be  made by all the
    55  constituent corporations jointly and shall set forth  by  affidavit  (1)
    56  the  plan  of  merger  or  consolidation,  (2)  the approval required by

        A. 7772                            32

     1  section 903 (Approval of plan) or paragraph (b) of section  906  (Merger
     2  or consolidation of domestic and foreign corporations) for each constit-

     3  uent  corporation, (3) the objects and purposes of each such corporation
     4  to  be  promoted  by the consolidation, (4) a statement of all property,
     5  and the manner in which it is held, and of all liabilities  and  of  the
     6  amount  and  sources  of the annual income of each such corporation, (5)
     7  whether any votes against adoption of the resolution approving the  plan
     8  of  merger or consolidation were cast at the meeting at which the resol-
     9  ution as adopted by each constituent corporation, and (6) facts  showing
    10  that  the  consolidation  is authorized by the laws of the jurisdictions
    11  under which each of the constituent corporations is incorporated]  907-a
    12  (Application  for  approval  of  the  supreme court) or (b) the attorney

    13  general has approved the plan of merger or consolidation and  authorized
    14  the filing of the certificate, as provided in section 907-b (Application
    15  for approval of the attorney general).
    16    [(b) Upon the filing of the application the court shall fix a time for
    17  hearing  thereof  and  shall direct that notice thereof be given to such
    18  persons as may  be  interested,  including  the  attorney  general,  any
    19  governmental  body or officer and any other person or body whose consent
    20  or approval is required by section 909 (Consent to filing), in such form
    21  and manner as the court may prescribe. If no votes against  adoption  of
    22  the  resolution  approving the plan of merger or consolidation were cast

    23  at the meeting at which the resolution was adopted  by  any  constituent
    24  corporation  the  court  may  dispense  with notice to anyone except the
    25  attorney-general, any governmental body or officer and any other  person
    26  or body whose consent or approval is required by section 909 (Consent to
    27  filing).  Any person interested may appear and show cause why the appli-
    28  cation should not be granted.
    29    (c) If the court shall find that any of  the  assets  of  any  of  the
    30  constituent  corporations  are held for a purpose specified as Type B in
    31  paragraph (b) of section 201 or are legally required to be  used  for  a
    32  particular  purpose, but not upon a condition requiring return, transfer

    33  or conveyance by reason of the merger or consolidation, the  court  may,
    34  in its discretion, direct that such assets be transferred or conveyed to
    35  the  surviving  or  consolidated  corporation subject to such purpose or
    36  use, or that such assets be transferred or conveyed to the surviving  or
    37  consolidated  corporation  or  to  one or more other domestic or foreign
    38  corporations or organizations engaged in  substantially  similar  activ-
    39  ities, upon an express trust the terms of which shall be approved by the
    40  court.
    41    (d)  If  the  court  shall  find  that the interests of non-consenting
    42  members are or may be substantially prejudiced by the proposed merger or
    43  consolidation, the court may disapprove the plan or may direct a modifi-

    44  cation thereof. In the event of a modification, if the court shall  find
    45  that the interests of any members may be substantially prejudiced by the
    46  proposed  merger  or  consolidation  as modified, the court shall direct
    47  that the modified plan be submitted  to  vote  of  the  members  of  the
    48  constituent  corporations,  or if the court shall find that there is not
    49  such substantial prejudice, it shall approve the agreement as  so  modi-
    50  fied without further approval by the members. If the court, upon direct-
    51  ing  a modification of the plan of merger or consolidation, shall direct
    52  that a further approval be obtained  from  members  of  the  constituent
    53  corporations  or any of them, such further approval shall be obtained in

    54  the manner specified in section 903 (Approval of plan) or section 906(b)
    55  (Merger or consolidation of domestic and foreign corporations)  of  this
    56  chapter.

        A. 7772                            33

     1    (e)  If  it  shall  appear, to the satisfaction of the court, that the
     2  provisions of this section have been complied with, and that the  inter-
     3  ests of the constituent corporations and the public interest will not be
     4  adversely  affected by the merger or consolidation, it shall approve the
     5  merger  or  consolidation  upon  such  terms  and  conditions  as it may
     6  prescribe.]
     7    § 60. The not-for-profit corporation law is amended by  adding  a  new
     8  section 907-a to read as follows:

     9  § 907-a. Application for approval of the supreme court.
    10    (a)  Application for an order approving the plan of merger and author-
    11  izing the filing of the certificate may be made in the judicial district
    12  in which the principal office of the surviving  or  consolidated  corpo-
    13  ration  is  to be located, or in which the office of one of the domestic
    14  constituent corporations is located. The application shall  be  made  by
    15  all  the constituent corporations jointly and shall set forth by affida-
    16  vit: (1) the plan of merger or consolidation, (2) the approval  required
    17  by section 903 (Approval of plan) or paragraph (b) of section 906 (Merg-
    18  er  or  consolidation  of  domestic  and  foreign corporations) for each

    19  constituent corporation, (3) the  objects  and  purposes  of  each  such
    20  corporation  to be promoted by the merger or consolidation, (4) a state-
    21  ment of all property, and the manner in which it is  held,  and  of  all
    22  liabilities  and  of the amount and sources of the annual income of each
    23  such corporation, (5) whether any votes against adoption of  the  resol-
    24  ution  approving  the  plan  of merger or consolidation were cast at the
    25  meeting at which the resolution was adopted by each  constituent  corpo-
    26  ration,  and  (6)  facts showing that the consolidation is authorized by
    27  the laws of the jurisdictions under which each of the constituent corpo-
    28  rations is incorporated.
    29    (b) Upon the filing of the application the court shall fix a time  for

    30  a  hearing thereof and shall direct that notice thereof be given to such
    31  persons as may  be  interested,  including  the  attorney  general,  any
    32  governmental  body or officer and any other person or body whose consent
    33  or approval is required by section 909 (Consent to filing), in such form
    34  and manner as the court may prescribe. If no votes against  adoption  of
    35  the  resolution  approving the plan of merger or consolidation were cast
    36  at the meeting at which the resolution was adopted  by  any  constituent
    37  corporation  the  court  may  dispense  with notice to anyone except the
    38  attorney general, any governmental body or officer and any other  person
    39  or body whose consent or approval is required by section 909 (Consent to

    40  filing).  Any person interested may appear and show cause why the appli-
    41  cation should not be granted.
    42    (c) If the court shall find that any of  the  assets  of  any  of  the
    43  constituent corporations are held for a charitable purpose or are legal-
    44  ly  required  to be used for a particular purpose, but not upon a condi-
    45  tion requiring return, transfer or conveyance by reason of the merger or
    46  consolidation, the court may, in its discretion, direct that such assets
    47  be transferred or conveyed to the surviving or consolidated  corporation
    48  subject  to  such  purpose or use, or that such assets be transferred or
    49  conveyed to the surviving or consolidated corporation or to one or  more

    50  other  domestic  or  foreign  corporations  or  organizations engaged in
    51  substantially similar activities, upon an express  trust  the  terms  of
    52  which shall be approved by the court.
    53    (d)  If  the  court  shall  find  that the interests of non-consenting
    54  members are or may be substantially prejudiced by the proposed merger or
    55  consolidation, the court may disapprove the plan or may direct a modifi-
    56  cation thereof. In the event of a modification, if the court shall  find

        A. 7772                            34
 
     1  that the interests of any members may be substantially prejudiced by the
     2  proposed  merger  or  consolidation  as modified, the court shall direct

     3  that the modified plan be submitted  to  vote  of  the  members  of  the
     4  constituent  corporations,  or if the court shall find that there is not
     5  such substantial prejudice, it shall approve the agreement as  so  modi-
     6  fied without further approval by the members. If the court, upon direct-
     7  ing  a modification of the plan of merger or consolidation, shall direct
     8  that a further approval be obtained  from  members  of  the  constituent
     9  corporations  or any of them, such further approval shall be obtained in
    10  the manner specified in section 903 (Approval of plan) or paragraph  (b)
    11  of  section  906 (Merger or consolidation of domestic and foreign corpo-
    12  rations).
    13    (e) If it shall appear, to the satisfaction of  the  court,  that  the

    14  provisions  of this section have been complied with, and that the inter-
    15  ests of the constituent corporations and the public interest will not be
    16  adversely affected by the merger or consolidation, it shall approve  the
    17  merger  or  consolidation  upon  such  terms  and  conditions  as it may
    18  prescribe.
    19    (f) A certified copy of such order shall be annexed to the certificate
    20  of merger or consolidation.
    21    § 61. The not-for-profit corporation law is amended by  adding  a  new
    22  section 907-b to read as follows:
    23  § 907-b. Application for approval of the attorney general.
    24    (a)  In  lieu  of  obtaining  an order approving the plan of merger or
    25  consolidation and authorizing the filing of the certificate, the  corpo-

    26  ration may alternatively make an application to the attorney general for
    27  approval,  except  where the attorney general, in his or her discretion,
    28  concludes that a court should review the application and make a determi-
    29  nation thereon.
    30    (b) The application to the attorney general shall be made by  all  the
    31  constituent  corporations  jointly and shall set forth by affidavit: (i)
    32  all of the information required to be  included  in  an  application  to
    33  obtain  court  approval  pursuant  to  section  907-a  (Application  for
    34  approval of the supreme court), (ii) all consents and approvals required
    35  by section 909 (Consent to filing), and (iii) a statement as to  whether
    36  any persons have raised, or have a reasonable basis to raise, objections

    37  to  the  merger or consolidation that is the subject of the application,
    38  including a statement setting forth the  names  and  addresses  of  such
    39  persons,  the  nature  of  their  interest,  and  a description of their
    40  objections.
    41    (c) Upon the filing of the application, the attorney general,  in  his
    42  or  her discretion, may direct that the constituent corporations provide
    43  notice to such persons as may be interested, including any  governmental
    44  body  or officer and any other person or body that is required either to
    45  give consent or be notified under section 404 (Notices and consents)  or
    46  section  909  (Consent  to  filing).  The constituent corporations shall
    47  provide the attorney general with a certification that such  notice  has

    48  been provided.
    49    (d)  If any assets of any of the constituent corporations are held for
    50  a charitable purpose or are assets received for a specific  purpose  and
    51  legally  required  to  be  used for a particular purpose, but not upon a
    52  condition requiring return, transfer or  conveyance  by  reason  of  the
    53  merger  or  consolidation,  the  attorney  general  may,  in  his or her
    54  discretion, direct that such assets be transferred or  conveyed  to  the
    55  surviving or consolidated corporation subject to such purpose or use.

        A. 7772                            35
 
     1    (e)  If the attorney general shall find that the interests of non-con-
     2  senting members are or may be substantially prejudiced by  the  proposed

     3  merger  or  consolidation,  the  attorney  general may disapprove of the
     4  application or may condition approval of the application upon  modifica-
     5  tion  of  the  plan  of  merger or consolidation in accordance with this
     6  chapter and any other law or rule.
     7    (f) If it shall appear, to the satisfaction of the  attorney  general,
     8  that  the  provisions  of this section have been complied with, and that
     9  the interests of the constituent corporations and  the  public  interest
    10  will  not  be  adversely  affected  by  the merger or consolidation, the
    11  attorney general shall approve the merger  or  consolidation  upon  such
    12  terms and conditions as it may prescribe.
    13    (g)  The  approval  of  the  attorney  general shall be annexed to the

    14  certificate of merger or consolidation.
    15    (h) If the attorney general does not approve the  application,  or  if
    16  the  attorney  general  concludes  that court review is appropriate, the
    17  constituent corporations may seek court approval on notice to the attor-
    18  ney general pursuant to section 907-a (Application for approval  of  the
    19  supreme court).
    20    §  62.  Paragraphs  (a)  and  (f) of section 908 of the not-for-profit
    21  corporation law are amended to read as follows:
    22    (a) One or more domestic or foreign corporations which is, or would be
    23  if formed under this chapter, beneficent corporation, or any corporation
    24  formed as a type A or type C corporation [under section 201  (Purposes)]

    25  prior  to January first, two thousand fourteen, may be merged or consol-
    26  idated into a domestic or foreign corporation which is, or would  be  if
    27  formed  under  the  laws  of  this state, a corporation formed under the
    28  business corporation law of this state if such merger  or  consolidation
    29  is not contrary to the law of the state of incorporation of any constit-
    30  uent  corporation.  With  respect  to  such merger or consolidation, any
    31  reference in paragraph (b) of section 901 (Power of  merger  or  consol-
    32  idation) of this article or paragraph (b) of section 901 (Power of merg-
    33  er  or  consolidation)  of the business corporation law to a corporation
    34  shall, unless the context otherwise requires, include both domestic  and
    35  foreign corporations.
    36    (f)  Where any constituent corporation is, or would be if formed under

    37  this chapter, a [Type  C]  charitable  corporation  [under  section  201
    38  (Purposes)],  no  certificate  shall  be  filed pursuant to this section
    39  until an order approving the plan of merger or consolidation and author-
    40  izing the filing of the certificate has been made by the supreme  court,
    41  as provided in section 907 (Approval by the supreme court).
    42    § 63. Section 909 of the not-for-profit corporation law, as amended by
    43  section  6  of  part  D of chapter 58 of the laws of 2006, is amended to
    44  read as follows:
    45  § 909. Consent to filing and notices.
    46    If the purposes of any constituent or consolidated  corporation  would
    47  require  the  approval or consent of any governmental body or officer or
    48  any other person or body under  section  404  ([Approvals]  Notices  and

    49  consents)  no  certificate  of  merger  or  consolidation shall be filed
    50  pursuant to this article unless such approval  or  consent  is  endorsed
    51  thereon  or  annexed  thereto. A corporation whose statement of purposes
    52  specifically includes the establishment or operation of a child day care
    53  center, as that term is defined in section three hundred ninety  of  the
    54  social  services  law,  shall  [provide]  send by certified mail, return
    55  receipt requested, a certified copy of  any  certificate  of  merger  or
    56  consolidation  involving  such corporation to the office of children and

        A. 7772                            36
 
     1  family services within thirty days after the filing of  such  merger  or
     2  consolidation  with  the  department  of state.   If the purposes of any

     3  constituent or consolidated corporation  would  require  notice  to  any
     4  governmental body or officer or any other person or entity under section
     5  404 (Notices and consents), a certified copy of the certificate of merg-
     6  er  or  consolidation  shall  be  sent,  certified  mail, return receipt
     7  requested, to the governmental body or officer or any  other  person  or
     8  entity  immediately  after the filing of such merger or consolidation by
     9  the department of state.
    10    § 64. Paragraphs (b), (c) and (d) of section 1001 of the  not-for-pro-
    11  fit  corporation law, as amended by chapter 434 of the laws of 2006, are
    12  amended to read as follows:
    13    (b) If the corporation is a [Type B, C or D corporation  and]  has  no
    14  assets  to distribute and no liabilities at the time of dissolution, the

    15  plan of dissolution shall include a statement to that effect.
    16    (c) If the corporation [is a Type B, C or D corporation  and]  has  no
    17  assets  to  distribute,  other  than a reserve not to exceed twenty-five
    18  thousand dollars for  the  purpose  of  paying  ordinary  and  necessary
    19  expenses  of  winding  up  its affairs including attorney and accountant
    20  fees, and liabilities not in excess of ten thousand dollars at the  time
    21  of  adoption  of  the plan of dissolution, the plan of dissolution shall
    22  include a statement to that effect.
    23    (d) If the corporation has assets to distribute  or  liabilities,  the
    24  plan of dissolution shall contain:
    25    (1)  a  description  with  reasonable  certainty  of the assets of the
    26  corporation and their fair value, and the  total  amount  of  debts  and
    27  other  liabilities  incurred  or estimated by the corporation, including

    28  the total amount of any accounting and legal fees incurred or estimated,
    29  in connection with the dissolution procedure.
    30    (2) a statement as to whether any gifts or other  assets  are  legally
    31  required to be used for a particular purpose.
    32    (3)  if  there  are assets received and held by the corporation either
    33  for a charitable corporation or beneficent corporation  purpose  [speci-
    34  fied  as Type B in paragraph (b) of section 201 (Purposes)] or which are
    35  legally required to be used for a particular purpose, a  statement  that
    36  the  assets  owned by the corporation, subject to any unpaid liabilities
    37  of the corporation, shall be distributed as required by any gift instru-
    38  ment or to a charitable corporation or organization or organizations  or

    39  a  beneficent  corporation  exempt from taxation pursuant to federal and
    40  state laws and engaged in activities substantially similar to  those  of
    41  the  dissolved  corporation.   Each such recipient organization shall be
    42  identified and the governing instrument and amendments thereto  of  each
    43  of  the proposed recipient organizations shall be annexed to such state-
    44  ment, along with the financial reports of  each  recipient  organization
    45  for the last three years and a sworn affidavit from a director and offi-
    46  cer of each recipient organization stating the purposes of the organiza-
    47  tion, and that it is currently exempt from federal income taxation.
    48    (4) if any of the assets of the corporation are to be distributed to a
    49  recipient for a particular legally required purpose, an agreement by the
    50  recipient  to  apply  the assets received only for such purpose shall be
    51  included.

    52    § 65. Paragraphs (a), (c) and (d) of section 1002 of the  not-for-pro-
    53  fit  corporation law, as amended by chapter 434 of the laws of 2006, are
    54  amended to read as follows:
    55    (a) Upon adopting a plan of dissolution and  distribution  of  assets,
    56  the  board  shall  submit  it to a vote of the members, if any, and such

        A. 7772                            37
 
     1  plan shall be approved at a meeting of members  by  two-thirds  vote  as
     2  provided in paragraph (c) of section 613 (Vote of members) of this chap-
     3  ter;  provided,  however,  that if the corporation is a [Type B, C or D]
     4  corporation,  other  than a corporation incorporated pursuant to article
     5  15 (Public cemetery corporations), and has no assets to  distribute,  or

     6  no  assets  to distribute other than a reserve not to exceed twenty-five
     7  thousand dollars for  the  purpose  of  paying  ordinary  and  necessary
     8  expenses  of  winding  up  its affairs including attorney and accountant
     9  fees, and liabilities not in excess of ten thousand dollars at the  time
    10  of  adoption of the plan of dissolution, the vote required by the corpo-
    11  ration's board of directors for adoption of the plan of  dissolution  of
    12  such a corporation or by the corporation's members for the authorization
    13  thereof shall be:
    14    (1) In the case of a vote by the board of directors: (i) the number of
    15  directors required under the certificate of incorporation, by-laws, this
    16  chapter and any other applicable law; or
    17    (ii) if the number of directors actually holding office as such at the
    18  time  of  the vote to adopt the plan is less than the number required to

    19  constitute a quorum of directors under the certificate of incorporation,
    20  the by-laws, this chapter or any other  applicable  law,  the  remaining
    21  directors unanimously;
    22    (2)  In  the  case of a vote by the members, (i) the number of members
    23  required under the certificate of incorporation, by-laws,  this  chapter
    24  and  any other applicable law; or (ii) by the vote of members authorized
    25  by an order of the supreme court pursuant  to  section  608  (Quorum  at
    26  meeting  of  members)  of  this  chapter  permitting  the corporation to
    27  dispense with the applicable quorum requirement.
    28    Notice of a special or regular meeting of the board of directors or of
    29  the members entitled to vote on adoption and authorization  or  approval
    30  of  the  plan  of  dissolution  shall  be  sent to all the directors and

    31  members of record entitled to vote. Unless otherwise directed  by  order
    32  of  the  supreme  court  pursuant  to  section 608 (Quorum at meeting of
    33  members) of this chapter, the notice shall be sent  by  certified  mail,
    34  return  receipt  requested,  to the last known address of record of each
    35  director and member not fewer than thirty, and not more than sixty  days
    36  before  the  date  of  each  meeting provided, however, that if the last
    37  known address of record of any director or  member  is  not  within  the
    38  United  States,  the  notice to such director shall be sent by any other
    39  reasonable means.
    40    (c) [Whenever] Except in the case of a corporation with no  assets  to
    41  distribute  or with no assets not to exceed twenty-five thousand dollars

    42  and liabilities not in excess of ten thousand dollars, whenever a  stat-
    43  ute  creating,  or  authorizing the formation of, a corporation requires
    44  approval by a governmental body or officer for  the  formation  of  such
    45  corporation, dissolution shall not be authorized without the approval of
    46  such body or officer.
    47    (d)  (1) The plan of dissolution and distribution of assets shall have
    48  annexed thereto the approval of the attorney general or a justice of the
    49  supreme court in the judicial district in which the office of the corpo-
    50  ration is located in the case of a Type B, C or D  corporation,  and  in
    51  the  case  of  any  other  corporation which holds assets at the time of
    52  dissolution legally required to be used for a particular purpose, except
    53  that no such approval shall be required with  respect  to  the  plan  of

    54  dissolution  of  a  corporation,  other  than a corporation incorporated
    55  pursuant to article 15 (Public  cemetery  corporations),  which  has  no
    56  assets  to  distribute  at  the  time  of  dissolution,  or no assets to

        A. 7772                            38
 
     1  distribute other than a  reserve  not  to  exceed  twenty-five  thousand
     2  dollars  for  the  purpose  of paying ordinary and necessary expenses of
     3  winding up its affairs  including  attorney  and  accountant  fees,  and
     4  liabilities  not  in  excess  of  ten  thousand  dollars,  and which has
     5  complied with the requirements of section 1001 (Plan of dissolution  and
     6  distribution  of  assets)  and  this section applicable to such a corpo-
     7  ration.
     8    (2) Application to the attorney general for such approval shall be  by

     9  verified  petition,  with  the  plan  of dissolution and distribution of
    10  assets and certified copies of the consents prescribed by  this  section
    11  annexed  thereto.  The  attorney general may approve the petition if the
    12  corporation has adopted a plan in accordance with  the  requirements  of
    13  section  1001  (Plan  of dissolution and distribution of assets) of this
    14  article, and any other requirements imposed  by  law  or  rule.  If  the
    15  attorney  general  does  not  approve  the  petition, or if the attorney
    16  general concludes that court review is appropriate, the  petitioner  may
    17  seek  court approval upon ten days written notice to the attorney gener-
    18  al.
    19    (3) Application to the supreme court for an order  for  such  approval

    20  shall be by verified petition, with the plan of dissolution and distrib-
    21  ution  of assets and certified copies of the consents prescribed by this
    22  section annexed thereto, and upon ten days written notice to the  attor-
    23  ney general accompanied by copies of such petition, plan and consents.
    24    (4)  In  such case where approval of a justice of the supreme court or
    25  the attorney general is not required [for a Type B, C or D corporation],
    26  a copy of such plan certified under penalties of perjury shall be  filed
    27  with the attorney general within ten days after its authorization.
    28    §  66.  Paragraphs (a) and (c) of section 1002-a of the not-for-profit
    29  corporation law as amended by chapter  434  of  the  laws  of  2006,  is
    30  amended to read as follows:
    31    (a)  Carry out the plan of dissolution and distribution of assets, pay

    32  its liabilities and distribute its assets in accordance therewith within
    33  two hundred seventy days from the  date  the  plan  of  dissolution  and
    34  distribution  of  assets  shall  have been (1) authorized as provided in
    35  section 1002 of this article (Authorization of plan),  (2)  approved  by
    36  any  governmental body or officer whose approval is required pursuant to
    37  paragraph (c) of section 1002 of  this  article,  and  (3)  approved  by
    38  either  the  attorney general or a justice of the supreme court, if such
    39  approval is required pursuant to paragraph (d) of section 1002  of  this
    40  article,  or filed with the attorney general, if such filing is required
    41  pursuant to paragraph (d) of section 1002 of this article.  Evidence  of
    42  the disposition of its assets and payment of its liabilities pursuant to
    43  the plan of dissolution and distribution of assets shall be submitted by

    44  the  corporation to the attorney general and any other governmental body
    45  or officer, as required under applicable laws. If the  plan  of  dissol-
    46  ution  and  distribution  of  assets  cannot  be  carried out within the
    47  prescribed time, the attorney general may upon good cause  shown  extend
    48  such time, or any extended period of time, by not fewer than thirty days
    49  nor more than one year;
    50    (c)  Distribute the assets of the corporation that remain after paying
    51  or adequately providing for the  payment  of  its  liabilities,  in  the
    52  following manner:
    53    (1)  assets received and held by the corporation [either for a purpose
    54  specified as Type B in paragraph (b) of section 201 (Purposes)] or which
    55  are legally required to be used  for  a  particular  purpose,  shall  be

    56  distributed   to   one   or   more   [domestic  or  foreign]  charitable

        A. 7772                            39
 
     1  corporations, beneficent corporations or other organizations engaged  in
     2  activities  substantially  similar to those of the dissolved corporation
     3  pursuant to the plan of dissolution and distribution or, if  applicable,
     4  as  ordered  by  the  court to which such plan is submitted for approval
     5  under section 1002 (Authorization of plan). Any  disposition  of  assets
     6  contained  in  a  will  or other instrument, in trust or otherwise, made
     7  before or after the dissolution, to or for the  benefit  of  any  corpo-
     8  ration so dissolved shall inure to or for the benefit of the corporation
     9  or  organization  acquiring  such assets of the dissolved corporation as

    10  provided in this section, and so far as is necessary  for  that  purpose
    11  the  corporation  or  organization  acquiring  such disposition shall be
    12  deemed a successor to the dissolved corporation  with  respect  to  such
    13  assets; provided, however, that such disposition shall be devoted by the
    14  acquiring  corporation  or  organization to the purposes intended by the
    15  testator, donor or grantor.
    16    (2) assets other than those described  by  subparagraph  one  of  this
    17  paragraph,  if any, shall be distributed in accordance with the specifi-
    18  cations of the plan of dissolution and distribution of assets or, to the
    19  extent that the certificate of incorporation prescribes the distributive
    20  rights of members, or of any class or classes of members, as provided in
    21  such certificate;
    22    § 67. Paragraphs (a) and (b) of section  1003  of  the  not-for-profit

    23  corporation  law,  as  amended  by  chapter 434 of the laws of 2006, are
    24  amended to read as follows:
    25    (a) After the plan of dissolution and distribution of assets has  been
    26  adopted,  authorized,  approved and carried out pursuant to the terms of
    27  the plan within the time period set forth  pursuant  to  section  1002-a
    28  (Carrying  out  the  plan  of dissolution and distribution of assets), a
    29  certificate  of  dissolution,  entitled  "Certificate   of   dissolution
    30  of ........ (name of corporation) under section 1003 of the Not-for-Pro-
    31  fit  Corporation  Law"  shall  be  signed  and,  if required pursuant to
    32  subparagraph two of paragraph (b) of this section,  after  the  attorney
    33  general  has affixed thereon his or her consent to the dissolution, such
    34  certificate of dissolution shall  be  delivered  to  the  department  of
    35  state. It shall set forth:

    36    (1) The name of the corporation and, if its name has been changed, the
    37  name under which it was formed.
    38    (2) The date its certificate of incorporation was filed by the depart-
    39  ment of state.
    40    (3) The name and address of each of its officers and directors.
    41    (4) The type of corporation it is at the time of dissolution.
    42    (5)  A  statement as to whether or not the corporation holds assets at
    43  the time of authorization of its plan of dissolution and distribution of
    44  assets as provided in section 1002 of  this  article  (Authorization  of
    45  plan) which are legally required to be used for a particular purpose.
    46    (6) That the corporation elects to dissolve.
    47    (7) The manner in which the dissolution was authorized. If the dissol-
    48  ution of the corporation is authorized by a vote of the directors and/or
    49  members of the corporation that is less than that ordinarily required by

    50  the certificate of incorporation, the by-laws, this chapter or any other
    51  applicable  law, as permitted by paragraph (a) of section 1002 (Authori-
    52  zation of plan), then the certificate of dissolution shall so state.
    53    (8) A statement that prior to delivery of such certificate of  dissol-
    54  ution to the department of state for filing, the plan of dissolution and
    55  distribution  of assets has been approved by either the attorney general
    56  or a justice of the supreme court, if such approval is required. A  copy

        A. 7772                            40
 
     1  of the order shall be attached to the certificate of dissolution. In the
     2  case of a corporation, other than a corporation incorporated pursuant to
     3  article  15 (Public cemetery corporations), having no assets to distrib-

     4  ute,  or  having  no  assets  to  distribute other than a reserve not to
     5  exceed twenty-five thousand dollars for the purpose of  paying  ordinary
     6  and  necessary expenses of winding up its affairs including attorney and
     7  accountant fees, and liabilities not in excess of ten  thousand  dollars
     8  at  the  time  of  dissolution,  a  statement that a copy of the plan of
     9  dissolution which contains the statement prescribed by paragraph (b)  of
    10  section  1001  (Plan of dissolution and distribution of assets) has been
    11  duly filed with the attorney general, if required.
    12    (b) Such certificate of dissolution shall  have  indorsed  thereon  or
    13  annexed thereto the approval of the dissolution:
    14    (1) By a governmental body or officer, if such approval is required. A
    15  corporation whose statement of purposes specifically includes the estab-

    16  lishment  or  operation  of  a  child  day  care center, as that term is
    17  defined in section three hundred ninety  of  the  social  services  law,
    18  shall provide a certified copy of any certificate of dissolution involv-
    19  ing such corporation to the office of children and family services with-
    20  in  thirty days after the filing of such dissolution with the department
    21  of state.
    22    (2) By the attorney general in the case of a [Type B, C or D] charita-
    23  ble corporation, or any other corporation that holds assets at the  time
    24  of dissolution legally required to be used for a particular purpose.
    25    §  68. Paragraph (a) of section 1007 of the not-for-profit corporation
    26  law, as amended by chapter 434 of the laws of 2006, is amended  to  read
    27  as follows:
    28    (a)  At  any  time  after  the plan of dissolution and distribution of

    29  assets shall have been (1) authorized as provided  in  section  1002  of
    30  this  article  (Authorization of plan), (2) approved by any governmental
    31  body or officer whose approval is required pursuant to paragraph (c)  of
    32  section 1002 of this article, and (3) approved by either by the attorney
    33  general  or a justice of the supreme court, if such approval is required
    34  pursuant to paragraph (d) of section 1002 of this article, or filed with
    35  the attorney general, if such filing is required pursuant  to  paragraph
    36  (d) of section 1002 of this article, and prior to filing the certificate
    37  of  dissolution,  the corporation may give a notice requiring all credi-
    38  tors and claimants, including any with unliquidated or contingent claims
    39  and any with whom the corporation has unfulfilled contracts, to  present
    40  their  claims  in  writing  and  in detail at a specified place and by a

    41  specified day, which shall not be less than six months after  the  first
    42  publication of such notice. Such notice shall be published at least once
    43  a week for two successive weeks in a newspaper of general circulation in
    44  the  county  in  which  the office of the corporation was located at the
    45  date of authorization of its plan of  dissolution  and  distribution  of
    46  assets  as  provided  in  section 1002 of this article (Authorization of
    47  plan). On or before the date of the first publication or  posting  on  a
    48  website of such notice, the corporation shall mail a copy thereof, post-
    49  age  prepaid,  to  each  person believed to be a creditor of or claimant
    50  against the corporation whose current name and address are known  to  or
    51  can  with due diligence be ascertained by the corporation. The giving of
    52  such notice shall not constitute a recognition  that  any  person  is  a

    53  proper  creditor  or  claimant,  and  shall not revive or make valid, or
    54  operate as a recognition of the validity of, or a waiver of any  defense
    55  or  counterclaim  in  respect  of any claim against the corporation, its
    56  assets, directors, officers or members, which has  been  barred  by  any

        A. 7772                            41
 
     1  statute  of limitations or become invalid by any cause, or in respect of
     2  which the corporation, its  directors,  officers  or  members,  has  any
     3  defense or counterclaim.
     4    § 69. Subparagraph 15 of paragraph (a) of section 1008 of the not-for-
     5  profit  corporation  law, as amended by chapter 434 of the laws of 2006,
     6  is amended to read as follows:
     7    (15) Where assets were received and held by the corporation either for

     8  a charitable corporation or a beneficent corporation purpose  [specified
     9  as  Type  B in paragraph (b) of section 201 (Purposes),] or were legally
    10  required to be used for a particular purpose, the distribution  of  such
    11  assets  to  one  or  more [domestic or foreign] charitable corporations,
    12  beneficent corporations or other  organizations  engaged  in  activities
    13  substantially  similar  to those of the dissolved corporation, on notice
    14  to the attorney general and to such other persons, and in  such  manner,
    15  as the court may deem proper.
    16    §  70. Paragraph (a) of section 1010 of the not-for-profit corporation
    17  law is amended to read as follows:
    18    [(a)]  At any time prior to the filing of a certificate of dissolution

    19  by the department of state, a corporation may revoke the action taken to
    20  dissolve the corporation in the following manner:
    21    (1)  If there are members entitled to vote thereon:
    22    (A)  Unless the certificate of incorporation  dispenses  with  dissol-
    23  ution action by the board, the board shall adopt a resolution recommend-
    24  ing  that the voluntary dissolution proceedings be revoked and directing
    25  submission of the proposed revocation to a vote of the members  entitled
    26  to vote thereon.
    27    (B)    Revocation  of  the  voluntary dissolution proceedings shall be
    28  authorized by two-thirds vote as provided in paragraph  (c)  of  section
    29  613 (Vote of members).
    30    (2)    If there are no members entitled to vote thereon, revocation of
    31  the voluntary dissolution proceedings shall be authorized by the vote of
    32  a majority of the directors then in office.

    33    (3)  If approval of the dissolution of a corporation by a governmental
    34  body or officer is required, as provided in paragraph (c)    of  section
    35  1002  (Authorization of plan), and such approval has been given, revoca-
    36  tion of the voluntary dissolution proceedings shall  not  be  authorized
    37  without approval thereof by such body or officer.
    38    §  71.  Subparagraph 6 of paragraph (a) of section 1012 of the not-for
    39  profit corporation law, as amended by chapter 726 of the laws  of  2005,
    40  is amended to read as follows:
    41    (6)  That[, under section 201 (Purposes),] it is a [Type .............
    42  (Insert A, B, C or D)] charitable or  beneficent  not-for-profit  corpo-
    43  ration.
    44    §  72. Subparagraph 1 of paragraph (a) of section 1207 of the not-for-
    45  profit corporation law, clause (C) as amended by chapter 847 of the laws

    46  of 1970, is amended to read as follows:
    47    (1)  To give immediate notice of his appointment by publication once a
    48  week for two successive weeks in two newspapers of  general  circulation
    49  in  the county where the office of the corporation is located or, in the
    50  case of a foreign corporation against which an action has  been  brought
    51  under  subparagraph [(a)] (4) of paragraph (a) of section 1202 (Appoint-
    52  ment of receiver of property of a domestic or  foreign  corporation)  of
    53  this article either, as directed by the court, in a newspaper of general
    54  circulation  [as  directed  by  the  court,]  or  posted prominently and
    55  continuously for two successive weeks on the  homepage  of  any  website
    56  maintained by the corporation or requiring:


        A. 7772                            42
 
     1    (A)    All persons indebted to the corporation to render an account of
     2  all debts owing by them to the corporation and to pay the  same  to  the
     3  receiver at a specified place and by a specified day.
     4    (B)  All persons having in their possession any property of the corpo-
     5  ration to deliver the same to the receiver at the specified place and by
     6  the specified day.
     7    (C)    All creditors and claimants, including any with unliquidated or
     8  contingent claims and any with  whom  the  corporation  has  unfulfilled
     9  contracts,  to  present  their  claims to the receiver in writing and in
    10  detail at a specified place and by a specified day, which shall  not  be
    11  less  than six months after the first publication of such notice.  When-
    12  ever a receiver is appointed in dissolution proceedings under article 10

    13  (Non-judicial dissolution) or article 11 (Judicial dissolution), section
    14  1007 (Notice to creditors by corporations intending to dissolve;  filing
    15  or barring claims) shall apply and shall control the giving of notice to
    16  creditors and claimants and the filing and barring of claims.
    17    §  73. Paragraph (a) of section 1211 of the not-for-profit corporation
    18  law is amended to read as follows:
    19    (a)  If there remains property of  the  corporation  after  the  first
    20  distribution,  the  receiver  shall,  within one year thereafter, make a
    21  final distribution among the creditors entitled thereto.    Notice  that
    22  such  distribution  will be the final distribution to creditors shall be
    23  published once a week for two consecutive weeks in a newspaper of gener-
    24  al circulation in the county where the  office  of  the  corporation  is

    25  located or posted prominently and continuously for two consecutive weeks
    26  on the homepage of any website maintained by the corporation.
    27    §  74. Paragraph (b) of section 1215 of the not-for-profit corporation
    28  law is amended to read as follows:
    29    (b)  The petition shall be accompanied by a verified  account  of  all
    30  the  assets of the corporation received by him, of all payments or other
    31  disposition thereof made by him, of the remaining assets of  the  corpo-
    32  ration  in  respect to which he was appointed receiver and the situation
    33  of the same, and of all his transactions as receiver.    Thereupon,  the
    34  court  shall grant an order directing notice to be given to the sureties
    35  on his official bond and to all persons interested in  the  property  of
    36  the  corporation  to  show cause, at a time and place specified, why the

    37  receiver should not be permitted to resign.  Such notice  shall  either,
    38  as directed by the court, be published once in each week for six succes-
    39  sive  weeks  in  one  or  more newspapers [as the court shall direct] or
    40  posted prominently and continuously for  six  successive  weeks  on  the
    41  homepage  of  any  website  maintained  by  the corporation. If it shall
    42  appear that the proceedings of the receiver  in  the  discharge  of  his
    43  trust  have  been fair and honest and that there is no good cause to the
    44  contrary, the court shall make an  order  permitting  such  receiver  to
    45  resign.    Thereupon  he  shall be discharged and his powers as receiver
    46  shall cease, but he shall remain subject to any liability incurred prior
    47  to the making of such order.  The court, in its discretion, may  require

    48  the expense of such proceeding to be paid by the receiver presenting the
    49  petition.
    50    §  75. Subparagraph 3 of paragraph (a) of section 1218 of the not-for-
    51  profit corporation law is amended to read as follows:
    52    (3)  The order directing service of  the  summons  shall  require  the
    53  publication  thereof either in a newspaper published in the state of New
    54  York in the English language at least once a week  for  four  successive
    55  weeks,  or posted prominently and continuously for four successive weeks
    56  on any appropriate website, and shall also require  the  mailing  on  or

        A. 7772                            43
 
     1  before  the  date  of  the  first  publication of a copy of the summons,
     2  complaint and order to the corporation at its last  known  principal  or

     3  head office in the state or country of its incorporation.
     4    §  76.  Section 1302 of the not-for-profit corporation law, as amended
     5  by chapter 847 of the laws of 1970, is amended to read as follows:
     6  § 1302. Application to existing authorized foreign corporations.
     7    Every foreign corporation which on the effective date of this  chapter
     8  is authorized to conduct activities in this state under a certificate of
     9  authority  heretofore  issued  to  it  by  the  secretary of state shall
    10  continue to have such authority.  Such foreign corporation, its members,
    11  directors, and officers shall have  the  same  rights,  franchises,  and
    12  privileges  and  shall be subject to the same limitations, restrictions,
    13  liabilities, and penalties as a  foreign  corporation  authorized  under
    14  this  chapter,  its  members,  directors, and officers respectively.   A

    15  foreign corporation may by amendment to its certificate of authority set
    16  forth [the type of] whether it is a charitable corporation [it is  under
    17  section  201 (Purposes);] or a beneficent corporation and in the absence
    18  of such amendment an authorized foreign corporation shall be a [Type  B]
    19  charitable corporation.  Reference in this chapter to an application for
    20  authority  shall,  unless  the  context  otherwise requires, include the
    21  statement and designation and any amendment thereof required to be filed
    22  by the secretary of state under prior statutes to obtain  a  certificate
    23  of authority.
    24    §  77. Subparagraph 4 of paragraph (a) of section 1304 of the not-for-
    25  profit corporation law, as amended by chapter 847 of the  laws  of  1970

    26  and as renumbered by chapter 590 of the laws of 1982, is amended to read
    27  as follows:
    28    (4)  That  the  corporation  is  a  foreign  corporation as defined in
    29  subparagraph [(a)] (7) of paragraph (a) of section  102  (Definitions)[;
    30  the  type  of]  of this chapter, whether it would be a charitable corpo-
    31  ration [it shall be under section 201  (Purposes);  a  statement]  or  a
    32  beneficent  corporation  if  formed  in  this  state; a statement of its
    33  purposes to be pursued in this state and  of  the  activities  which  it
    34  proposes to conduct in this state; and a statement that it is authorized
    35  to  conduct  those activities in the jurisdiction of its incorporation[;
    36  and in the case of a Type C corporation, the  lawful  public  or  quasi-

    37  public objective which each business purpose will achieve].
    38    §  78. Paragraph (c) of section 1304 of the not-for-profit corporation
    39  law is amended to read as follows:
    40    (c) If the application for authority sets forth any purpose or  activ-
    41  ity  for  which  a  domestic  corporation  could be formed only with the
    42  consent or approval of any governmental body or officer, or other person
    43  or body under section  404  ([Approvals]  Notices  and  consents),  such
    44  consent or approval shall be endorsed thereon or annexed thereto. If the
    45  application for authority sets forth any purpose or activity requiring a
    46  domestic corporation to provide notice of the filing of a certificate of
    47  incorporation  to  any  government body or officer or other entity under

    48  section 404 (Notices and consents) of this chapter, then the corporation
    49  shall send by certified mail, return receipt requested, a certified copy
    50  of the certificate of authority to such  person  or  entity  immediately
    51  after filing the certificate of authority by the department of state.
    52    §  79. Subparagraph 1 of paragraph (a) of section 1309 of the not-for-
    53  profit corporation law, as amended by chapter 186 of the laws  of  1983,
    54  is amended to read as follows:
    55    (1)  The name of the foreign corporation as it appears on the index of
    56  names of existing domestic and authorized foreign  corporations  of  any

        A. 7772                            44
 
     1  [type  or]  kind  in the department of state and the fictitious name the

     2  corporation has agreed to use in this state pursuant to paragraph (d) of
     3  section 1301 of this chapter.
     4    §  80. Subparagraph 1 of paragraph (b) of section 1310 of the not-for-
     5  profit corporation law, as amended by chapter 186 of the laws  of  1983,
     6  is amended to read as follows:
     7    (1)  The name of the foreign corporation as it appears on the index of
     8  names of existing domestic and authorized foreign  corporations  of  any
     9  [type  or]  kind  in the department of state and the fictitious name the
    10  corporation has agreed to use in this state pursuant to paragraph (d) of
    11  section 1301 of this chapter.
    12    § 81. Subparagraph 1 of paragraph (a) of section 1311 of the  not-for-
    13  profit  corporation  law, as amended by chapter 186 of the laws of 1983,
    14  is amended to read as follows:
    15    (1) The name of the foreign corporation as it appears on the index  of

    16  names  of  existing  domestic and authorized foreign corporations of any
    17  [type or] kind in the department of state and the  fictitious  name  the
    18  corporation has agreed to use in this state pursuant to paragraph (d) of
    19  section 1301 of this chapter.
    20    §  82.  Paragraphs  (a)  and (b) of section 1315 of the not-for-profit
    21  corporation law, subparagraph 5 of paragraph (b) as amended  by  chapter
    22  847 of the laws of 1970, are amended to read as follows:
    23    (a)  An action or special proceeding against a foreign corporation may
    24  be maintained by a resident of this state or by a  domestic  corporation
    25  of any [type or] kind for any cause of action.
    26    (b) Except as otherwise provided in this article, an action or special
    27  proceeding  against  a  foreign corporation may be maintained by another

    28  foreign corporation of any [type or] kind or by  a  nonresident  in  the
    29  following cases only:
    30    (1) Where the action is brought to recover damages for the breach of a
    31  contract made or to be performed within this state, or relating to prop-
    32  erty  situated  within  this  state  at  the  time  of the making of the
    33  contract.
    34    (2) Where the subject matter of the litigation is situated within this
    35  state.
    36    (3) Where the cause of action arose within this  state,  except  where
    37  the object of the action or special proceeding is to affect the title of
    38  real property situated outside this state.
    39    (4)  Where, in any case not included in the preceding subparagraphs, a
    40  non-domiciliary would be subject to the  personal  jurisdiction  of  the
    41  courts  of this state under section [302] three hundred two of the civil
    42  practice law and rules.

    43    (5) Where the defendant is a foreign corporation conducting activities
    44  or authorized to conduct activities in this state.
    45    § 83. Paragraph (b) of section 1316 of the not-for-profit  corporation
    46  law is amended to read as follows:
    47    (b)  An  examination authorized by paragraph (a) may be denied to such
    48  member or other person upon his refusal to furnish to the foreign corpo-
    49  ration or its  transfer  agent  or  registrar  an  affidavit  that  such
    50  inspection  is  not desired for a purpose which is in the interests of a
    51  business or object other than the activities of the foreign  corporation
    52  and  that  such member or other person has not within five years sold or
    53  offered for sale any list or record of members of any corporation of any
    54  [type or] kind, whether or not formed under the laws of this  state,  or

    55  aided  or  abetted  any  person  in procuring any such list or record of
    56  members for any such purpose.

        A. 7772                            45
 
     1    § 84. Paragraph (a) of section 1321 of the not-for-profit  corporation
     2  law,  subparagraphs  1, 2 and 3 as amended by chapter 847 of the laws of
     3  1970, is amended to read as follows:
     4    (a)  Notwithstanding  any  other  provision of this chapter, a foreign
     5  corporation conducting activities in  this  state  which  is  authorized
     6  under this article, its directors, officers and members, shall be exempt
     7  from  the  provisions  of  paragraph  (e)  of section 1317 (Voting trust
     8  records), subparagraph [(a)]  (1)  of  paragraph  (a)  of  section  1318
     9  (Liabilities  of  directors  and  officers of foreign corporations), and

    10  subparagraph [(a)] (2) of paragraph (a) of section  1320  (Applicability
    11  of other provisions) if when such provision would otherwise apply:
    12    (1)  The  corporation  is a [Type A] beneficent corporation under this
    13  chapter; its principal activities are conducted outside this state;  the
    14  greater  part  of  its  property is located outside this state; and less
    15  than one third of its members are residents of this state; or
    16    (2) The corporation is a [Type B] charitable  corporation  under  this
    17  chapter;  its principal activities are conducted outside this state; the
    18  greater part of its property is located outside  this  state;  and  less
    19  than ten per cent of its annual revenues is derived from solicitation of
    20  funds within this state[; or

    21    (3)  The  corporation  is a Type C corporation under this chapter; its
    22  principal activities are conducted outside this state; the greater  part
    23  of its property is located outside this state; and less than one half of
    24  its revenues for the preceding three fiscal years, or such portion ther-
    25  eof as the foreign corporation was in existence, was derived from sourc-
    26  es within this state].
    27    §  85. Paragraph (d) of section 1401 of the not-for-profit corporation
    28  law, as added by chapter 871 of the laws of 1977, is amended to read  as
    29  follows:
    30    (d) Type of corporation. A family or private cemetery corporation is a
    31  [type B] charitable corporation under this chapter.
    32    §  86. Paragraph (b) of section 1402 of the not-for-profit corporation

    33  law is amended to read as follows:
    34    (b) Type of corporation.
    35    A fire corporation is a [Type B]  charitable  corporation  under  this
    36  chapter.
    37    §  87. Paragraph (c) of section 1403 of the not-for-profit corporation
    38  law is amended to read as follows:
    39    (c) Type of corporation.  A corporation for the prevention of  cruelty
    40  is a [Type B] charitable corporation under this chapter.
    41    §  88. Paragraph (b) of section 1404 of the not-for-profit corporation
    42  law, as amended by chapter 1058 of the laws of 1971, is amended to  read
    43  as follows:
    44    (b)  Type of corporation.
    45    A  christian  association  is  a [Type B] charitable corporation under
    46  this chapter.
    47    § 89. Paragraph (b) of section 1405 of the not-for-profit  corporation
    48  law is amended to read as follows:

    49    (b)  Type of corporation.
    50    A soldiers' monument corporation is a [Type B] charitable corporation.
    51    §  90. Paragraph (b) of section 1406 of the not-for-profit corporation
    52  law is amended to read as follows:
    53    (b)  Type of corporation.
    54    A medical society is a [Type  A]  beneficent  corporation  under  this
    55  chapter.

        A. 7772                            46
 
     1    §  91. Paragraph (b) of section 1407 of the not-for-profit corporation
     2  law is amended to read as follows:
     3    (b)  Type of corporation.
     4    An alumni corporation is a [Type A] beneficent corporation.
     5    §  92. Paragraph (b) of section 1408 of the not-for-profit corporation
     6  law is amended to read as follows:
     7    (b)  Type of corporation.

     8    An historical society is a [Type B] charitable corporation under  this
     9  chapter.
    10    §  93. Paragraph (b) of section 1409 of the not-for-profit corporation
    11  law, as amended by chapter 1058 of the laws of 1971, is amended to  read
    12  as follows:
    13    (b) Type of corporation.
    14    An  agricultural or horticultural corporation is a [Type A] beneficent
    15  corporation under this chapter, except that any such  corporation  which
    16  has  received  moneys from the state or has acted as agent for the state
    17  under paragraph (c) of this section, or has  acquired  or  does  acquire
    18  real property by condemnation is or becomes a [Type B] charitable corpo-
    19  ration under this chapter. [If such corporation has not already filed as

    20  a  Type B corporation it shall, upon such receipt of moneys or acting as
    21  such agent or such acquisition of real property by  condemnation,  amend
    22  its certificate to that effect.]
    23    §  94. Paragraph (b) of section 1410 of the not-for-profit corporation
    24  law is amended to read as follows:
    25    (b)  Type of corporation.
    26    A board of trade or a chamber of commerce is  a  [Type  A]  beneficent
    27  corporation under this chapter.
    28    §  95. Paragraph (b) of section 1411 of the not-for-profit corporation
    29  law is amended to read as follows:
    30    (b)  Type of corporation.  A local development corporation is a  [Type
    31  C] charitable corporation under this chapter.
    32    §  96. Paragraph (d) of section 1412 of the not-for-profit corporation

    33  law, as added by chapter 555 of the laws of 1993, is amended to read  as
    34  follows:
    35    (d)  Type.  A  university  faculty  practice corporation is a [Type B]
    36  charitable corporation under this chapter.
    37    § 97. Paragraph (c) of section 1505 of the not-for-profit  corporation
    38  law,  as added by chapter 871 of the laws of 1977, is amended to read as
    39  follows:
    40    (c)  Type of corporation.  A cemetery corporation is a [Type B] chari-
    41  table corporation under this chapter.
    42    § 98. Paragraph (b) of section 1602 of the not-for-profit  corporation
    43  law,  as added by chapter 257 of the laws of 2011, is amended to read as
    44  follows:
    45    (b) "land bank" shall mean a land bank established as a [type  C  not-
    46  for-profit]  charitable corporation under this chapter and in accordance

    47  with the provisions of this article and pursuant to this article;
    48    § 99. Paragraph (f) of section 1603 of the not-for-profit  corporation
    49  law,  as added by chapter 257 of the laws of 2011, is amended to read as
    50  follows:
    51    (f) Each land bank created pursuant to this act shall  be  a  [type  C
    52  not-for-profit]  charitable  corporation,  and  shall have permanent and
    53  perpetual duration until terminated and dissolved in accordance with the
    54  provisions of section sixteen hundred thirteen of this article.

        A. 7772                            47
 
     1    § 100. The opening paragraph of paragraph (a) of section 1607  of  the
     2  not-for-profit  corporation  law, as added by chapter 257 of the laws of
     3  2011, is amended to read as follows:

     4    A  land  bank  shall  constitute  a [type C not-for-profit] charitable
     5  corporation under New York law, which powers shall  include  all  powers
     6  necessary  to  carry  out  and effectuate the purposes and provisions of
     7  this article, including the following powers in addition to those herein
     8  otherwise granted:
     9    § 101. Paragraph (e) of section 1611 of the not-for-profit corporation
    10  law, as added by chapter 257 of the laws of 2011, is amended to read  as
    11  follows:
    12    (e) Bonds issued by the land bank shall be issued, sold, and delivered
    13  in  accordance  with the terms and provisions of a resolution adopted by
    14  the board. The board may sell such  bonds  in  such  manner,  either  at
    15  public  or at private sale, and for such price as it may determine to be
    16  in the best interests of the land bank.  The  resolution  issuing  bonds

    17  shall  be  published  in  a  newspaper of general circulation within the
    18  jurisdiction of the land bank and posted prominently and continuously on
    19  the homepage of any website maintained by the land bank.
    20    § 102. Section 1613 of the not-for-profit corporation law, as added by
    21  chapter 257 of the laws of 2011, is amended to read as follows:
    22  § 1613. Dissolution of land bank.
    23    A land bank may be dissolved as a [type C  not-for-profit]  charitable
    24  corporation sixty calendar days after an affirmative resolution approved
    25  by  two-thirds of the membership of the board of directors. Sixty calen-
    26  dar days advance written notice of  consideration  of  a  resolution  of
    27  dissolution shall be given to the foreclosing governmental unit or units
    28  that  created  the land bank, shall be published in a local newspaper of

    29  general circulation, and posted  prominently  and  continuously  on  the
    30  homepage  of  any website maintained by the land bank, and shall be sent
    31  certified mail to the trustee of any outstanding bonds of the land bank.
    32  Upon dissolution of the land bank all real property,  personal  property
    33  and  other  assets of the land bank shall become the assets of the fore-
    34  closing governmental unit or units that created the land  bank.  In  the
    35  event that two or more foreclosing governmental units create a land bank
    36  in accordance with section [sixteen hundred three] 1603 of this article,
    37  the  withdrawal  of one or more foreclosing governmental units shall not
    38  result in the dissolution of the land bank unless the  intergovernmental
    39  agreement  so  provides,  and  there is no foreclosing governmental unit

    40  that desires to continue the existence of the land bank.
    41    § 103. Paragraph (h) of section  8-1.4  of  the  estates,  powers  and
    42  trusts  law, as amended by chapter 43 of the laws of 2002, is amended to
    43  read as follows:
    44    (h) The attorney general shall make rules  and  regulations  necessary
    45  for  the administration of this section, including rules and regulations
    46  as to the time for filing reports, the contents thereof, and  [the]  any
    47  manner of executing and filing them, including but not limited to allow-
    48  ing  or  requiring any submission to the attorney general to be effected
    49  by electronic means and electronic signatures.  He or she  may  classify
    50  trusts,  estates,  corporations and other trustees as to purpose, nature
    51  of assets, duration, amount of assets, amounts to be devoted to charita-

    52  ble purposes, or  otherwise,  and  may  establish  different  rules  for
    53  different  classes as to time and nature of the reports required, to the
    54  ends that he or she shall receive current financial reports  as  to  all
    55  such  trusts,  estates, corporations or other trustees which will enable
    56  him or her to ascertain whether they are  being  properly  administered.

        A. 7772                            48
 
     1  The attorney general may suspend the filing of financial reports as to a
     2  particular  trustee  for a reasonable, specifically designated time upon
     3  written application of the trustee, signed under penalties for  perjury,
     4  and  filed  with the attorney general and after the attorney general has
     5  filed in the register of trustees a written statement that the interests
     6  of the beneficiaries will not be prejudiced thereby  and  that  periodic

     7  reports  during  the term of such suspension are not required for proper
     8  supervision by his or her office. The filing of  the  financial  reports
     9  required  by  this  section,  or  the  exemption from such filing or the
    10  suspension therefrom, shall not have the effect  of  absolving  trustees
    11  from  any  responsibility  for accounting for property or income held by
    12  them for charitable purposes. A copy of an account  or  other  financial
    13  report  filed by a trustee in any court in this state, if the account or
    14  other financial report substantially complies with the rules  and  regu-
    15  lations  of  the  attorney  general,  may be filed as a financial report
    16  under this section.
    17    § 104. Paragraph (b-1) of section 8-1.8 of  the  estates,  powers  and
    18  trusts law is REPEALED.
    19    §  105.  The estates, powers and trusts law is amended by adding a new

    20  section 8-1.9 to read as follows:
    21  § 8-1.9 Trust Governance
    22    (a) for purposes of this section:
    23    (1) a "trust" means a trust created solely for charitable purposes, or
    24  a trust that continues solely for such purposes after all non-charitable
    25  interests have terminated.
    26    (2) "charitable purpose" means any religious,  charitable  educational
    27  or benevolent purpose.
    28    (3)  "key  employee" means any person who has responsibilities, powers
    29  or influence over the trust similar to those of an officer of a not-for-
    30  profit corporation, or is otherwise in a position to  exercise  substan-
    31  tial  influence  over  the  affairs  of the trust, as defined in section

    32  4958(f)(1)(A) of the internal revenue code of 1986 as amended,  and  the
    33  regulations thereunder, and any successor law or regulation.
    34    (4)  an  "affiliate"  of  a  trust  means any entity controlled by, in
    35  control of, or under common control with such trust.
    36    (5) "relative" of an individual means the (i) spouse, ancestor,  chil-
    37  dren,  grandchildren, great grandchildren, brother or sister (whether by
    38  the whole- or half-blood) of the individual; and  (ii)  the  spouses  of
    39  children, grandchildren, great grandchildren, brother, or sister (wheth-
    40  er by the whole- or half-blood) of the individual.
    41    (6) "related party" means (i) any trustee or key employee of the trust
    42  or any affiliate of the trust;

    43    (ii)  any  relative of any trustee or key employee of the trust or any
    44  affiliate of the trust; or (iii)  an  entity  in  which  any  individual
    45  described  in  clauses  (i)  and (ii) of this subparagraph has a thirty-
    46  five percent or greater ownership or beneficial interest.
    47    (7) "independent trustee" means a trustee who in the past three years:
    48  (i) was not employed by, and did not have a relative  who  was  employed
    49  by,  the  trust  or an affiliate of the trust; (ii) was not employed by,
    50  and does not have a relative who was employed by, any entity  that  made
    51  payments  to,  or  received payments from, the trust or any affiliate of
    52  the trust  for  goods,  property  or  services  exceeding  ten  thousand

    53  dollars;  (iii) has not had, and does not have a relative who has had, a
    54  material financial interest in any entity  that  made  payments  to,  or
    55  received  payments  from,  the  trust  or any affiliate of the trust for
    56  goods, property or services exceeding ten thousand dollars; and (iv) has

        A. 7772                            49
 
     1  not received, and does not have any relative who has received, any other
     2  compensation, payment or benefit having monetary value from the trust or
     3  any affiliate of the trust, other than reimbursement for expenses or the
     4  payment  of trustee commissions or other trustee compensation as permit-
     5  ted by law and the governing instrument.

     6    (8) "related party transaction" means any  transaction,  agreement  or
     7  any  other arrangement in which a related party has a financial interest
     8  and in which the trust or any affiliate of the trust is a participant.
     9    (9)  "independent  auditor"  means  any  certified  public  accountant
    10  performing  the audit of the financial statements of a trust required by
    11  subdivision one of section one hundred seventy-two-b  of  the  executive
    12  law.
    13    (b)(1)  every  trust  required to file an independent certified public
    14  accountant's audit report with the attorney general pursuant to subdivi-
    15  sion one of section one hundred seventy-two-b of the executive  law  and
    16  this  chapter  shall  designate an audit committee, consisting of one or

    17  more independent trustees, for the purpose of overseeing the  accounting
    18  and  financial  reporting  processes  of  the  trust and the independent
    19  certified public accountant's audit of the trust's financial statements.
    20  An audit committee that is not made up of all trustees shall be overseen
    21  by and be responsible to the trustees. If a trust required  to  have  an
    22  audit  committee  pursuant  to  this  paragraph  is under the control of
    23  another trust or  corporation,  the  audit  committee  function  may  be
    24  conducted  by  the trustees or the board of directors of the controlling
    25  trust or corporation.
    26    (2) the audit committee shall, at a minimum:
    27    (i) retain and evaluate the independent auditor,  which  shall  report

    28  directly to the audit committee;
    29    (ii) review with the independent auditor the scope and planning of the
    30  audit;
    31    (iii)  review  and discuss with the independent auditor, at a minimum:
    32  (A) the results of any audit, including but not limited to: the  manage-
    33  ment letter to the trust and any material risks and weaknesses in inter-
    34  nal  controls  identified  by  the  auditor; (B) any restrictions on the
    35  scope of the auditor's activities or access  to  requested  information;
    36  (C)  any  significant  disagreements between the auditor and management;
    37  and (D) the adequacy and performance of the trust's accounting function.
    38    (iv) consider at least annually the performance  and  independence  of
    39  the independent auditor;

    40    (v)  oversee  adoption,  implementation  of  and  compliance  with any
    41  conflict of interest policy adopted by the trust pursuant  to  paragraph
    42  (f)  of  this  section,  and if applicable, any whistleblower policy, if
    43  this function is not otherwise performed by another committee  comprised
    44  solely of independent trustees; and
    45    (vi) report its activities to the trustees at least annually.
    46    (3)  the  audit  committee  shall adopt a charter that shall state its
    47  authority and responsibilities, including those prescribed by this para-
    48  graph, and that shall state the size, composition and functioning of the
    49  audit committee.
    50    (c)(1) for purposes of this paragraph, "total compensation" means  (1)

    51  any  compensation, whether paid or accrued, by or on behalf of the trust
    52  or any affiliate of the trust, including  but  not  limited  to  salary,
    53  bonus,  and  deferred  compensation, and (2) any benefit having monetary
    54  value provided by the trust or on behalf of the trust or  any  affiliate
    55  of  the  trust,  including but not limited to housing allowances, living

        A. 7772                            50
 
     1  expenses,  perquisites,  fringe  benefits,  employer  contributions   to
     2  defined contribution retirement plans and other retirement benefits.
     3    (2)  the  total  compensation  paid  by a trust to any employee of the
     4  trust shall be fair,  reasonable  and  commensurate  with  services  the
     5  employee provides to the trust.

     6    (3)  no employee or other individual who may benefit from compensation
     7  or benefits provided by the trust may be present at or otherwise partic-
     8  ipate in trustee or  committee  deliberation  or  vote  concerning  such
     9  compensation or benefits.
    10    (4)  every  trust  that is required to be registered with the attorney
    11  general under article seven-A of the executive law and this chapter  and
    12  that  in  the  prior  fiscal  year  had annual revenues in excess of two
    13  million dollars shall designate a compensation committee of the trustees
    14  to oversee executive compensation programs and related practices of  the
    15  trust.  (i) the compensation committee shall be comprised of one or more
    16  independent  trustees.  If a trust controls one or more trusts or corpo-

    17  rations, the compensation committee of  the  controlling  trust  may  be
    18  deemed  to  be  the  compensation committee for its controlled entities.
    19  (ii) the compensation committee shall:
    20    (A) review the total compensation paid to the trust's officers and its
    21  five highest-compensated key employees. (B) affirmatively determine that
    22  the total compensation paid to any such individual is  fair,  reasonable
    23  and  commensurate  with  services provided to the trust.  In making this
    24  determination, the compensation committee shall at  a  minimum  consider
    25  the  following factors:  1. the total compensation provided to the indi-
    26  vidual; 2. relevant benchmark data on the  total  compensation  paid  to

    27  individuals  serving  in  similar positions at trusts or corporations of
    28  similar size, type, purpose, and scope; 3. the  individual's  qualifica-
    29  tions  and performance; 4.  compensation, payments or any other benefits
    30  provided to the individual from any affiliate of the trust; and  5.  the
    31  overall  financial condition of the trust. (C) make and keep a contempo-
    32  raneous written record  describing  the  basis  for  its  determination,
    33  including  its  analysis  of the factors set forth in this paragraph and
    34  how any relevant data was obtained and used. (D)  approve  by  not  less
    35  than  a  majority vote the total compensation paid to each such individ-
    36  ual.
    37    (d) if the compensation committee is comprised of fewer  than  all  of

    38  the  independent  trustees,  then:  (1) the compensation committee shall
    39  recommend to all of the independent  trustees  for  their  approval  the
    40  total  compensation  of  each individual that the committee has affirma-
    41  tively determined is fair, reasonable, and  commensurate  with  services
    42  provided  to  the trust, and include therewith the written record of its
    43  determination created pursuant to subparagraph three of this  paragraph;
    44  (2)  upon  review  of the recommendations of the compensation committee,
    45  the trustees shall approve by not less than a majority vote of the inde-
    46  pendent trustees the total compensation of each  such  individual,  with
    47  only  independent  trustees  participating  in  any  such  vote  and any

    48  discussion relating thereto; and (3) the independent trustees shall keep
    49  a contemporaneous written record of  the  basis  of  its  determination,
    50  including areas of agreement or disagreement with the recommendations of
    51  the compensation committee.  (4) the compensation committee may retain a
    52  compensation consultant to assist in the performance of its responsibil-
    53  ities.  The compensation committee shall be directly responsible for the
    54  appointment, compensation and oversight of the work of such  consultant,
    55  and  any  such  consultant  shall  report  directly  to the compensation
    56  committee. The compensation committee shall, among its responsibilities,

        A. 7772                            51
 

     1  approve the compensation peer group  that  the  compensation  consultant
     2  recommends be used to develop benchmark data. (i) prior to retaining any
     3  such  consultant,  the  compensation  committee shall determine that the
     4  consultant  is  independent  and qualified to render advice to the trust
     5  concerning compensation; provided that no consultant may  be  determined
     6  independent  if such consultant or any firm that employs such consultant
     7  has (A) received directly  or  indirectly  any  payment,  fee  or  other
     8  compensation  from  the  trust  or any affiliate of the trust within the
     9  preceding two years, other than reasonable amounts paid for compensation
    10  consulting services, or (B) any business or personal  relationship  with

    11  the  trust  or  any affiliate of the trust, or any of its or their offi-
    12  cers, directors or employees, that may interfere with the ability of the
    13  consultant to provide objective advice to the committee. (ii) nothing in
    14  this subparagraph shall be construed to  (A)  require  the  compensation
    15  committee  to implement or act consistently with the advice or recommen-
    16  dations provided by the  compensation  consultant  to  the  compensation
    17  committee;  or  (B)  affect  the ability or obligation of members of the
    18  compensation committee to exercise their own judgment in fulfillment  of
    19  their  duties  to  the trust and its beneficiaries. (5) the compensation
    20  committee shall adopt a  charter  setting  forth  its  responsibilities,

    21  including  as  prescribed  by  this  paragraph,  as well as requirements
    22  concerning the size, composition and  functioning  of  the  compensation
    23  committee.
    24    (e)  (1)  notwithstanding any provision in the trust instrument to the
    25  contrary, no trust shall enter into a related party transaction, unless:
    26    (i) the material facts as to the  related  party's  interest  in,  and
    27  relationship  to,  the  transaction  are  disclosed in good faith to the
    28  trustees; (ii) the trustees: (A) consider  alternative  transactions  to
    29  the  extent  available and upon reasonable diligence determine that such
    30  alternative transactions would not be more advantageous to the trust and
    31  its beneficiaries under the circumstances; (B) determine by a two-thirds

    32  vote of the trustees that the related party transaction is fair, reason-
    33  able and in the best interests of the trust and  its  beneficiaries  and
    34  approve  such transaction, and the related party with an interest in the
    35  transaction is not present at and otherwise does not  otherwise  partic-
    36  ipate  in any deliberation or voting relating thereto; and (C) contempo-
    37  raneously document in writing the  basis  for  their  determination  and
    38  approval  of  the  transaction. This subparagraph shall not apply to any
    39  compensation reviewed and approved in accordance with subparagraph  four
    40  of paragraph (c) of this section.
    41    (2) the trust instrument, bylaws or conflict of interest policy of the

    42  trust  may contain additional restrictions on related party transactions
    43  and additional procedures necessary for the review or approval  of  such
    44  transactions,  or  provide  that  any  transactions in violation of such
    45  restrictions shall be void or voidable.
    46    (3) any trustee or key employee who has an interest in a related party
    47  transaction shall, prior to the trustees' consideration of the  proposed
    48  transaction,  disclose  in good faith to the trustees the material facts
    49  as to such person's interest in, and relationship to,  the  transaction.
    50  The trustees shall adopt and implement procedures for the timely disclo-
    51  sure of such facts to the trustees.
    52    (4)  the  attorney  general  may  bring  an  action to enjoin, void or

    53  rescind any related party transaction or a proposed related party trans-
    54  action that violates any law or is otherwise not fair, reasonable, or in
    55  the best interests of the trust or its beneficiaries, or to  seek  other
    56  relief,  including  but not limited to damages, restitution, the removal

        A. 7772                            52
 
     1  of trustees, or seek to require any person or entity to:    (i)  account
     2  for  any  profits made from such transaction, and pay them to the trust;
     3  (ii) pay the trust the value of the use of any of its property or  other
     4  assets used in such transaction; (iii) return or replace any property or
     5  other assets lost to the trust as a result of such transaction, together

     6  with  any  income  or  appreciation  lost to the trust by reason of such
     7  transaction, or account for any proceeds of sale of such  property,  and
     8  pay  the proceeds to the trust together with interest at the legal rate;
     9  and (iv) pay, in the case of willful conduct, an amount up to double the
    10  amount of any benefit improperly obtained.
    11    (5) the powers and duties of the attorney  general  provided  in  this
    12  paragraph  are  in  addition to all other powers and duties the attorney
    13  general may have under this chapter or any other law.
    14    (f)(1) every trust shall adopt a conflict of interest policy to ensure
    15  that its trustees and key employees act in  the  best  interest  of  the
    16  trust  and  its  beneficiaries and comply with applicable legal require-

    17  ments, including but not limited to the requirements set forth in  para-
    18  graph (d) of this section.
    19    (2)  the  conflict of interest policy shall include, at a minimum, the
    20  following provisions:
    21    (i) a definition of the circumstances that constitute  a  conflict  of
    22  interest;  (ii)  procedures for disclosing a conflict of interest to the
    23  audit committee or, if there is no audit  committee,  to  the  trustees;
    24  (iii) a requirement that the person with the conflict of interest not be
    25  present  at  or  participate  in  any deliberation or vote on the matter
    26  giving rise to such conflict; (iv) a prohibition against any attempt  by
    27  the  person with the conflict to influence the deliberation or voting on

    28  the matter giving rise to such conflict;  (v)  a  requirement  that  the
    29  existence  and  resolution  of the conflict be documented in the trust's
    30  records, including in the minutes of any meeting at which  the  conflict
    31  was  discussed  or  voted  upon;  and  (vi)  procedures  for disclosing,
    32  addressing, and documenting related  party  transactions  in  accordance
    33  with paragraph (d) of this section.
    34    (3)  the  conflict  of  interest  policy shall require that prior to a
    35  trustee's initial appointment, and  annually  thereafter,  such  trustee
    36  shall  complete,  sign  and file with the records of the trust a written
    37  statement identifying any entity of which  he  or  she  is  an  officer,

    38  director, trustee, member, owner (either as a sole proprietor or a part-
    39  ner),  or  employee  with  which  the trust has, or might be expected to
    40  have, a relationship or a transaction in which the trustee might have  a
    41  conflicting interest. The policy shall require that each trustee annual-
    42  ly resubmit such written statement. The trustees shall provide a copy of
    43  all  completed  statements to the chair of the audit committee, if there
    44  is an audit committee.
    45    (4) every trust registered or required to be  registered  pursuant  to
    46  section one hundred seventy-two of the executive law or section 8-1.4 of
    47  this  part  shall  transmit such policies to the attorney general in the
    48  form and manner specified by the  attorney  general,  and  shall  within

    49  thirty  days of any material change of these policies provide the attor-
    50  ney general with the changed policies.
    51    (5) nothing in this paragraph shall be interpreted to require a  trust
    52  to adopt any specific conflict of interest policy not otherwise required
    53  by  law,  or  to  supersede  or  limit any requirement or duty governing
    54  conflicts of interest required by any other law or rule.
    55    (g)(1) every trust that has twenty or more employees and in the  prior
    56  fiscal  year  had  annual revenue in excess of one million dollars shall

        A. 7772                            53
 
     1  adopt a whistleblower policy to protect  from  retaliation  persons  who
     2  report  suspected  improper  conduct.  Such policy shall provide that no

     3  trustee, employee or volunteer of a trust who in good faith reports  any
     4  action or suspected action taken by or within the trust that is illegal,
     5  fraudulent  or  in  violation  of  any adopted policy of the trust shall
     6  suffer intimidation, harassment, discrimination or other retaliation or,
     7  in the case of employees, adverse employment consequence.
     8    (2) the whistleblower policy shall include the following provisions:
     9    (i) procedures for the reporting of violations or suspected violations
    10  of laws or trust  policies,  including  procedures  for  preserving  the
    11  confidentiality of reported information;
    12    (ii) procedures for handling and investigating violations or suspected
    13  violations of laws or trust policies;

    14    (iii)  a  requirement  that  a  trustee or an employee of the trust be
    15  designated to administer, implement and oversee compliance of the  whis-
    16  tle-blower  policy and to report to the audit committee or other commit-
    17  tee of independent trustees, or to the trustees;
    18    (iv) a requirement that all documents concerning information  reported
    19  under the whistleblower policy and any investigation relating thereto be
    20  retained by the trust for a minimum period of six years; and
    21    (v)  a  requirement  that  a  copy of the policy be distributed to all
    22  trustees, employees and volunteers, with instructions on how  to  comply
    23  with the procedures set forth in the policy.
    24    (3)  nothing in this section shall be interpreted to relieve any trust

    25  from any additional requirements in  relation  to  internal  compliance,
    26  retaliation, or document retention required by any other law or rule.
    27    § 106. Subdivision 2 of section 711 of the surrogate's court procedure
    28  act is amended to read as follows:
    29    2.  Where  by  reason  of  his having wasted or improperly applied the
    30  assets of the estate, or made investments unauthorized by law or  other-
    31  wise  improvidently  managed  or  injured  the property committed to his
    32  charge, including by  failing  to  comply  with  section  8-1.9  of  the
    33  estates,  powers and trusts law, or by reason of other misconduct in the
    34  execution of his office or dishonesty, drunkenness, improvidence or want
    35  of understanding, he is unfit for the execution of his office.
    36    § 107. Section 202 of the racing, pari-mutuel  wagering  and  breeding

    37  law, as amended by chapter 18 of the laws of 2008, is amended to read as
    38  follows:
    39    §  202.  Restriction upon commencement of business. No business corpo-
    40  ration organized under the provisions of this article  shall  engage  in
    41  the  prosecution  or  management  of its business until the whole of its
    42  capital stock shall have been subscribed, nor until it shall have  filed
    43  in the offices where certificates of incorporation were filed, a further
    44  certificate stating that the whole of its capital stock has been in good
    45  faith  subscribed,  executed  and acknowledged by its president or vice-
    46  president and treasurer or secretary, and verified by them to the effect
    47  that the statements contained in it are true.
    48    Notwithstanding the foregoing, [corporations organized] no  charitable

    49  corporation  as  defined  in paragraph (a) of section one hundred two of
    50  the not-for-profit corporation law or any corporations  organized  prior
    51  to January first, two thousand fourteen as a type C corporation pursuant
    52  to  section  two  hundred  one of the not-for-profit corporation law [as
    53  type C corporations] or as a charitable corporation as defined in  para-
    54  graph  (a)  of section one hundred two of the not-for-profit corporation
    55  law shall [not] engage in the prosecution or management of its  business
    56  until  its  certificate of incorporation has been accepted for filing by

        A. 7772                            54
 
     1  the secretary of state and such confirmation of filing  has  been  filed
     2  with the board and the franchise oversight board.

     3    § 108. Subdivision 9 of section 171-a of the executive law, as amended
     4  by chapter 353 of the laws of 1987, is amended to read as follows:
     5    9.  "Fund  raising  counsel." Any person who for compensation consults
     6  with a charitable  organization  or  who  plans,  manages,  advises,  or
     7  assists  with respect to the solicitation in this state of contributions
     8  for or on behalf of a charitable organization, but  who  does  not  have
     9  access to contributions or other receipts from a solicitation or author-
    10  ity  to  pay  expenses  associated  with a solicitation and who does not
    11  solicit. A bona fide officer, volunteer, or  employee  of  a  charitable
    12  organization or an attorney at law retained by a charitable organization
    13  or an individual engaged solely to draft applications for funding from a
    14  governmental  agency  or  an  entity  exempt  from  taxation pursuant to

    15  section five hundred one (c)(3) of the internal revenue code, shall  not
    16  be deemed a fund raising counsel.
    17    § 109. Subdivision 1 of section 172 of the executive law is amended by
    18  adding a new paragraph (k) to read as follows:
    19    (k)  any  conflict  of  interest  policy  and any whistleblower policy
    20  adopted pursuant to sections seven hundred fifteen-a and  seven  hundred
    21  fifteen-b  of the not-for-profit corporation law or section 8-1.9 of the
    22  estates, powers and trusts law.
    23    § 110. Subdivisions 1 and 2 of section 172-b of the executive law,  as
    24  amended  by  section  43  of  the  laws  of 2002, are amended to read as
    25  follows:
    26    1. Every charitable organization registered or required to  be  regis-
    27  tered  pursuant to section one hundred seventy-two of this article which

    28  shall receive in any fiscal year gross revenue and support in excess  of
    29  [two  hundred fifty] five hundred thousand dollars [and every charitable
    30  organization whose fund-raising functions are not carried on  solely  by
    31  persons  who  are unpaid for such services] shall file with the attorney
    32  general an annual written financial report, on forms prescribed  by  the
    33  attorney  general,  on or before the fifteenth day of the fifth calendar
    34  month after the close of such fiscal year. The annual  financial  report
    35  shall  be accompanied by an annual financial statement which includes an
    36  independent certified public accountant's  audit  report  containing  an
    37  opinion  that the financial statements are presented fairly in all mate-
    38  rial respects and in conformity with generally accepted accounting prin-

    39  ciples, including compliance with all pronouncements  of  the  financial
    40  accounting  standards  board  and  the  American  Institute of Certified
    41  Public Accountants that  establish  accounting  principles  relevant  to
    42  not-for-profit  organizations.  Such  financial  report  shall include a
    43  statement of any changes in the information required to be contained  in
    44  the  registration form filed on behalf of such organization.  The finan-
    45  cial report shall be signed by the president or other authorized officer
    46  and the chief fiscal officer of the organization who shall certify under
    47  penalties for perjury that the statements therein are true  and  correct
    48  to  the  best of their knowledge, and shall be accompanied by an opinion
    49  signed by an independent public accountant that the financial  statement
    50  and  balance  sheet  therein present fairly the financial operations and

    51  position of the organization. A fee of twenty-five  dollars  payable  to
    52  the  attorney  general shall accompany such financial report at the time
    53  of filing, provided however, that any such organization that  is  regis-
    54  tered  with  the  attorney  general  pursuant  to  article  eight of the
    55  estates, powers and trusts law is  required  to  file  only  one  annual

        A. 7772                            55
 
     1  financial report which meets the filing requirements of this article and
     2  section 8-1.4 of the estates, powers and trusts law.
     3    2.  Every  charitable organization registered or required to be regis-
     4  tered pursuant to section one hundred seventy-two of this article  which
     5  shall  receive  in gross revenue and support in any fiscal year at least
     6  one hundred thousand dollars but not more than [two hundred fifty]  five

     7  hundred  thousand  dollars  shall  file  an annual financial report. The
     8  annual financial report shall be  accompanied  by  an  annual  financial
     9  statement  which  includes  an independent certified public accountant's
    10  review report in accordance with "statements on standards for accounting
    11  and review services" issued  by  the  American  Institute  of  Certified
    12  Public  Accountants. The annual financial statement shall be prepared in
    13  conformity with  generally  accepted  accounting  principles,  including
    14  compliance with all pronouncements of the financial accounting standards
    15  board  and  the  American Institute of Certified Public Accountants that
    16  establish accounting principles  relevant  to  not-for-profit  organiza-
    17  tions.  Such  financial report shall be filed with the attorney general,
    18  upon forms prescribed by the attorney general on an annual basis  on  or

    19  before  the fifteenth day of the fifth calendar month after the close of
    20  such fiscal year, which shall include a financial report  covering  such
    21  fiscal year in accordance with such requirements as the attorney general
    22  may  prescribe.  Such  financial report shall include a statement of any
    23  changes in the information required to be contained in the  registration
    24  form filed on behalf of such organization. The financial report shall be
    25  signed by the president or other authorized officer and the chief fiscal
    26  officer of the organization who shall certify under penalties for perju-
    27  ry that the statements therein are true and correct to the best of their
    28  knowledge.  A  fee  of ten dollars payable to the attorney general shall
    29  accompany such financial report at the time of filing, provided,  howev-
    30  er,  that  any  such  organization  that is registered with the attorney

    31  general pursuant to article eight of the estates, powers and trusts  law
    32  is  required  to  file  only one annual financial report which meets the
    33  filing requirements of this article and section 8-1.4  of  the  estates,
    34  powers  and  trusts  law.    Notwithstanding  the  requirements  of this
    35  section, if upon review of an independent certified public  accountant's
    36  review  report  filed pursuant to this subdivision, the attorney general
    37  determines that a charitable organization should obtain  an  independent
    38  certified  public  accountant's  audit  report,  such organization shall
    39  obtain and file with the attorney general an audit report that meets the
    40  requirements of subdivision one of this section within sixty days of the
    41  attorney general's request for such report.

    42    § 111. Subdivision 1 of section 177 of the executive law,  as  amended
    43  by chapter 83 of the laws of 1995, is amended to read as follows:
    44    1. The attorney general shall make rules and regulations necessary for
    45  the  administration  of this article including, but not limited to regu-
    46  lations and waiver procedures that will ensure that charitable organiza-
    47  tions do not have to register twice in relation to the solicitation  and
    48  administration of assets, and rules or regulations allowing or requiring
    49  any  submission  to  the  attorney  general to be effected by electronic
    50  means.
    51    § 112. Section 223 of the education law, as amended by chapter 106  of
    52  the laws of 1974, is amended to read as follows:
    53    § 223.   Consolidation  or  merger  of corporations.   Any two or more

    54  corporations chartered under the powers of the regents  or  incorporated
    55  under  a  special  act  of  the  legislature  or under a general law for
    56  purposes for which a charter may be granted by  the  regents  may  enter

        A. 7772                            56
 
     1  into  an agreement for the consolidation or merger of such corporations,
     2  setting forth the terms and conditions of consolidation or  merger,  the
     3  name  of  the  proposed consolidated or merged corporation, the place or
     4  places  where the institution or institutions to be maintained is or are
     5  to be located, the number of its directors, which may be five  or  more,
     6  the  time  of  the  annual  election  and the names of the persons to be
     7  directors until the first or next annual meeting.

     8    The agreement must be approved by three-fourths  of  the  trustees  or
     9  directors  of  such [corporation] corporations at a meeting of the trus-
    10  tees or directors of each corporation, separately and  specially  called
    11  for  that  purpose,  which  approval,  duly verified by the chairman and
    12  clerk of such meeting, shall be annexed to the petition.   On  presenta-
    13  tion  of  a  petition, together with the certificate of approval and the
    14  agreement for consolidation or merger, and on such notice to  interested
    15  parties  as  the  regents shall prescribe, and after hearing such inter-
    16  ested parties as desire to be heard, the regents may make and execute an
    17  order for the consolidation or merger of the corporations on such  terms
    18  and  conditions  as the regents may prescribe.  When such order is made,

    19  such corporations shall become one corporation by the name designated in
    20  the order, and shall be subject only to such duties and obligations as a
    21  corporation formed under this chapter for the same purposes; and all the
    22  property belonging to the corporations so consolidated or  merged  shall
    23  be  vested in and transferred to the new or surviving corporation, which
    24  shall be subject to all the liabilities of the former  corporations,  to
    25  the  same  extent  as if they had been contracted or incurred by it.  If
    26  any corporation so consolidated  or  merged  was  incorporated  under  a
    27  special  act of the legislature or under a general law pursuant to which
    28  its certificate of incorporation was filed with the department of state,
    29  the regents shall deliver a certified copy of the order of consolidation
    30  or merger to such department.

    31    § 113. Paragraph c of subdivision 4 of section 216-a of the  education
    32  law,  as added by chapter 901 of the laws of 1972, is amended to read as
    33  follows:
    34    c. The following provisions  of  the  not-for-profit  corporation  law
    35  shall  not  apply  to  education corporations: section one hundred five,
    36  [section one hundred thirteen,] section one hundred fourteen,  paragraph
    37  (a)  of  section  two hundred one, paragraphs (b) and (c) of section two
    38  hundred two, section  two  hundred  five,  section  three  hundred  one,
    39  section  three  hundred  two,  section three hundred three, article four
    40  except paragraphs (b) through (p)  of  section  four  hundred  four  and
    41  section  four  hundred  five,  section  five hundred nine, [section five
    42  hundred eighteen,] section five hundred twenty-one to the extent that it

    43  refers to [section five hundred  eighteen,]  paragraph  (d)  of  section
    44  seven  hundred  six,  article  eight  except section eight hundred four,
    45  section nine hundred seven, [section one thousand eleven,]  section  one
    46  thousand twelve and article fourteen.
    47    §  114.  Section  13  of the religious corporations law, as amended by
    48  chapter 705 of the laws of 1970, is amended to read as follows:
    49    § 13. Consolidation or merger of incorporated churches.  Two  or  more
    50  incorporated  churches  may enter into an agreement, under their respec-
    51  tive corporate seals, for the consolidation or  merger  of  such  corpo-
    52  rations,  setting  forth  the  name  of  the proposed new corporation or
    53  surviving corporation, the denomination, if  any,  to  which  it  is  to

    54  belong,  and  if  the  churches  of such denomination have more than one
    55  method of choosing trustees, by which of such methods the  trustees  are
    56  to  be  chosen, the number of such trustees, the names of the persons to

        A. 7772                            57
 
     1  be the first trustees of the new corporation, and the date of its  first
     2  annual  corporate  meeting.  Such  an  agreement  shall not be valid for
     3  United Methodist churches unless proposed by  a  majority  vote  of  the
     4  charge  conference  of each church and approved by the superintendent or
     5  superintendents of the district or districts in which the  consolidating
     6  churches are located, and by the majority of the members of each of such
     7  churches,  over  the  age  of  twenty-one years, present and voting at a
     8  meeting thereof held in the usual place of public worship and called for

     9  the purpose of considering such agreement by announcement made at public
    10  service in such churches on two Sundays, the first  not  less  than  ten
    11  days  next  preceding the date of such meeting. Such agreement shall not
    12  be valid unless approved in the case of Protestant Episcopal churches by
    13  the bishop and standing committee of the diocese in which such  churches
    14  are  situated  and in the case of churches of other denominations by the
    15  governing body of  the  denomination,  if  any,  to  which  each  church
    16  belongs,  having  jurisdiction  over such church. Each corporation shall
    17  thereupon make a separate petition to the supreme  court  for  an  order
    18  consolidating  or  merging  the  corporations, setting forth the denomi-
    19  nation, if any, to which the church belongs, that  the  consent  of  the
    20  governing  body  to the consolidation or merger, if any, of that denomi-

    21  nation having jurisdiction over  such  church  has  been  obtained,  the
    22  agreement  therefor, and a statement of all the property and liabilities
    23  and the amount and sources of the  annual  income  of  such  petitioning
    24  corporation.  In  its discretion the court may direct that notice of the
    25  hearing of such petition be given to the parties interested  therein  in
    26  such  manner  and  for such time as it may prescribe.  After hearing all
    27  the parties interested, present and desiring to be heard, the court  may
    28  make an order for the consolidation or merger of the corporations on the
    29  terms  of  such  agreement and such other terms and conditions as it may
    30  prescribe, specifying the name of such new or surviving corporation  and
    31  the  [first]  trustees thereof, and the method by which their successors

    32  shall be chosen and the date of its first or next annual corporate meet-
    33  ing. When such order is made and duly entered, the persons  constituting
    34  such  consolidated or merged corporations shall be or become an incorpo-
    35  rated church by, and said petitioning churches shall become consolidated
    36  or merged under, the name designated in  the  order,  and  the  trustees
    37  therein  named  shall  be  the  [first] trustees thereof, and the future
    38  trustees thereof shall be chosen by the method therein  designated,  and
    39  all the estate, rights, powers and property of whatsoever nature belong-
    40  ing to either corporation shall without further act or deed be vested in
    41  and  transferred  to  the new or surviving corporation as effectually as
    42  they were vested in or belonging to the  former  corporations;  and  the

    43  said  new or surviving corporation shall be liable for all the debts and
    44  liabilities of the former corporations in the same manner and as  effec-
    45  tually  as  if said debts or liabilities had been contracted or incurred
    46  by the new or surviving corporation. A  certified  copy  of  such  order
    47  shall  be  recorded  in  the book for recording certificates of incorpo-
    48  ration in each county clerk's office in which the certificate of  incor-
    49  poration  of each consolidating or merging church was recorded; or if no
    50  such certificate was so recorded, then in  the  clerk's  office  of  the
    51  county  in  which  the principal place of worship or principal office of
    52  the new or surviving corporation is, or is intended to be, situated.
    53    § 115. Section 15-a of the religious corporations  law,  as  added  by

    54  chapter  108  of the laws of 1965, subdivisions 2, 3 and 8 as amended by
    55  chapter 381 of the laws of 1985, is amended to read as follows:

        A. 7772                            58
 
     1    § 15-a. Consolidation of incorporated presbyteries.  1.  Two  or  more
     2  incorporated  presbyteries  may  enter into an agreement for the consol-
     3  idation or merger of such corporations  and  such  corporations  may  be
     4  consolidated  or  merged so as to form a single corporation which may be
     5  either a new corporation or one of the [constitutent] constituent corpo-
     6  rations.    Said  agreement shall set forth the name of the proposed new
     7  corporation or the name of the existing corporation if it is  to  become
     8  the consolidated or merged corporation, the method of choosing trustees,

     9  the names of the persons to be the first trustees of the new corporation
    10  if the consolidated or merged corporation is to be a new corporation and
    11  the date of the first annual corporate meeting.
    12    2.  Such  agreement must be authorized and approved by a majority vote
    13  of the members of each contracting presbytery  taken  at  a  meeting  at
    14  which  a  quorum  is  present duly called in accordance with the form of
    15  government of the Presbyterian Church (U.S.A.) and the  notice  of  such
    16  meeting shall state the purpose of the meeting.
    17    3.  Before such agreement is approved as aforesaid, such consolidation
    18  or merger must be directed and approved by the Synod  of  the  Northeast
    19  and the General Assembly of the Presbyterian Church (U.S.A.).
    20    4.  Each presbytery shall thereafter join in a petition to the supreme

    21  court for an order consolidating or  merging  the  corporation,  setting
    22  forth  the  agreement of the contracting presbyteries, the direction and
    23  approval of the bodies as set forth in  subdivision  three  [hereof]  of
    24  this  section,  a  statement of all the property and liabilities and the
    25  sources of the annual income of each presbytery and a description of any
    26  property held by such presbyteries in trust for  specific  purposes.  In
    27  its  discretion  the court may direct that notice of the hearing of such
    28  petition be given to the parties interested therein in such manner as it
    29  may prescribe.
    30    5. After hearing all the parties interested, present and  desiring  to
    31  be heard, the court may make an order for the consolidation or merger of
    32  the presbyteries on the terms of such agreement and such other terms and

    33  conditions  as  it  may prescribe, specifying the name of the new corpo-
    34  ration or the name the continuing corporation will have if  one  of  the
    35  [constitutent] constituent corporations is to become the consolidated or
    36  merged  corporation,  the first trustees thereof if a new corporation is
    37  to be created and the method by which their successors shall  be  chosen
    38  and  the date of the first annual corporate meeting if a new corporation
    39  is to be created.
    40    6. When such order is made and duly entered, the persons  constituting
    41  such  corporate  presbyteries shall become one incorporated consolidated
    42  or merged presbytery by, and said petitioning presbyteries shall  become
    43  consolidated  or merged under, the name designated in the order, and the

    44  trustees therein named, if it is a new corporation, shall be  the  first
    45  trustees  thereof,  and  if it is a new corporation the trustees thereof
    46  shall be chosen by the method therein designated, and  all  the  estate,
    47  rights,  powers  and  property of whatsoever nature, belonging to either
    48  corporation shall without further act or deed be vested in and/or trans-
    49  ferred to the new corporation as effectually as they were vested  in  or
    50  belonging  to  the former corporations, and the new or continuing corpo-
    51  rations shall be liable for all the debts and liabilities of the  former
    52  corporations  in  the same manner and as effectually as if said debts or
    53  liabilities had been contracted or incurred by the new corporation.
    54    7. The order or a certified copy thereof shall be recorded in the book
    55  for recording certificates  of  incorporation  in  each  county  clerk's

        A. 7772                            59
 
     1  office  in  which  the  certificate of incorporation of each constituent
     2  presbytery was recorded.
     3    8.  Such  consolidated  or merged presbytery shall have all the powers
     4  and responsibilities conferred upon presbyteries by the constitution and
     5  form of government of the Presbyterian Church (U.S.A.).
     6    § 116. Section 208 of the religious  corporations  law,  as  added  by
     7  chapter 117 of the laws of 1927, is amended to read as follows:
     8    §  208.  Consolidation  or  merger.   Any two or more religious corpo-
     9  rations of the Jewish faith, incorporated under or by general or special
    10  laws, may enter into an agreement for the  consolidation  or  merger  of
    11  such  corporations,  setting  forth  the terms and conditions of consol-

    12  idation, the name of the proposed or surviving corporation,  the  number
    13  of  its  trustees,  the time of the annual election and the names of the
    14  persons to be its trustees until the first or next annual meeting.  Each
    15  corporation may petition the supreme court for an order consolidating or
    16  merging  the corporations, setting forth the agreement for consolidation
    17  or merger and a statement of its real property and of  its  liabilities.
    18  Before  the  presentation of the petition to the court the agreement and
    19  petition must be approved by two-thirds of the votes cast in  person  or
    20  by  proxy at a meeting of the members of each corporation called for the
    21  purpose of considering the  proposed  consolidation  or  merger  in  the
    22  manner prescribed by section [forty-three of the membership corporations

    23  law] six hundred five of the not-for-profit corporation law.  An affida-
    24  vit  by the president and the secretary of each corporation stating that
    25  such approval has been given shall be annexed to the petition. On  pres-
    26  entation  to  the court of such petition and agreement for consolidation
    27  or merger and on such notice as the court may direct,  the  court  after
    28  hearing  all  the  parties  interested desiring to be heard, may make an
    29  order approving the consolidation or merger.   When such order  is  made
    30  and  duly  entered and a certified copy thereof filed with the secretary
    31  of state and in the offices of the clerks of the counties in  which  the
    32  certificates  of  incorporation  of the several constituent corporations
    33  were recorded, or if no such  certificate  was  recorded,  then  in  the

    34  office  of  the  clerk  of  the  county  in which the principal place of
    35  worship of the new or surviving corporation is intended to be  situated,
    36  such corporations shall become one corporation by the name designated in
    37  the  order  and the trustees named in the agreement for consolidation or
    38  merger shall be the [first] trustees of the consolidated corporation.
    39    § 117. Section 209 of the religious  corporations  law,  as  added  by
    40  chapter 117 of the laws of 1927, is amended to read as follows:
    41    §  209. Effect of consolidation or merger.  The consolidated or merged
    42  corporation shall possess all the powers of the constituent corporations
    43  and shall have the power and be subject to the duties and obligations of
    44  a congregation of the Jewish faith formed for like  purposes  under  the

    45  religious  corporations law. All the rights, privileges and interests of
    46  each of the constituent corporations, all the property,  real,  personal
    47  and  mixed, and all the debts due on whatever account to either of them,
    48  and all things in action, belonging to either of them, shall  be  deemed
    49  to  be transferred to and vested in such new corporation without further
    50  act or deed; and all  claims,  demands[.],  property,  and  every  other
    51  interest, belonging to the several constituent corporations, shall be as
    52  effectually  the  property  of  the  new corporation as they were of the
    53  constituent corporations, and the title to all real  property,  held  or
    54  taken  by  deed or otherwise under the laws of this state, vested in the
    55  several constituent corporations shall not be deemed to revert or to  be
    56  in  any  way impaired by reason of the consolidation but shall be vested

        A. 7772                            60
 
     1  in the new corporation. Any devise, bequest, gift, grant, or declaration
     2  of trust, contained in any deed, will, or other instrument, in trust  or
     3  otherwise,  made before or after such consolidation, or merger to or for
     4  any  of  the constituent corporations, shall inure to the benefit of the
     5  consolidated or merged corporation. The consolidated  corporation  shall
     6  be  deemed  to  have assumed and shall be liable for all debts and obli-
     7  gations of the constituent corporations in the same manner  as  if  such
     8  new corporation had itself incurred such debts or obligations.
     9    §  118. Paragraph (c) of subdivision 1 of section 2-b of the religious
    10  corporations law, as amended by chapter 490 of  the  laws  of  2010,  is
    11  amended to read as follows:

    12    (c)  The  following  provisions  of the not-for-profit corporation law
    13  shall not apply to religious corporations: subparagraphs (7) and (8)  of
    14  paragraph  (a) of section one hundred twelve, [section one hundred thir-
    15  teen,] section one hundred fourteen, section two  hundred  one,  section
    16  three  hundred  three, section three hundred four, section three hundred
    17  five, section three  hundred  six,  article  four  except  section  four
    18  hundred one, section five hundred fourteen, that portion of section five
    19  hundred  fifty-five  (b)  and  section five hundred fifty-five (c) which
    20  reads "The institution shall notify the donor,  if  available,  and  the
    21  attorney  general  of the application, and the attorney general and such
    22  donor must be given an opportunity to be  heard",  section  six  hundred
    23  five, section six hundred seven, section six hundred nine, section eight

    24  hundred  four, article nine except section nine hundred ten, article ten
    25  except as provided in section eleven  hundred  fifteen,  section  eleven
    26  hundred two, and article fifteen except paragraph (c) of section fifteen
    27  hundred seven.
    28    § 119. Paragraph (c) of subdivision 1 of section 1-a of the benevolent
    29  orders  law,  as added by chapter 703 of the laws of 1970, is amended to
    30  read as follows:
    31    (c) The following provisions of  the  not-for-profit  corporation  law
    32  shall  not  apply  to benevolent orders: [section one hundred thirteen,]
    33  section two hundred one, article four, paragraphs (a), (b), and  (c)  of
    34  section  eight  hundred  four,  section nine hundred seven, section nine
    35  hundred eight, section nine hundred nine, [section ten hundred  eleven,]
    36  section ten hundred twelve, and article fourteen.

    37    § 120. Subdivision 1 of section 1825 of the public authorities law, as
    38  amended  by  chapter  1045  of  the  laws of 1974, is amended to read as
    39  follows:
    40    1. The corporation shall (a) be incorporated or  reincorporated  under
    41  [article  nineteen of the membership corporations law, or under] section
    42  fourteen hundred eleven of the not-for-profit corporation law, or (b) be
    43  incorporated under [article two of the membership corporations  law,  or
    44  under]  article  four of the not-for-profit corporation law, in addition
    45  to other purposes, to construct new industrial or  manufacturing  plants
    46  or  new  research  and  development  buildings and acquire machinery and
    47  equipment deemed related thereto or acquire, rehabilitate,  and  improve
    48  for use by others, industrial or manufacturing plants in the area of the

    49  state  in  which  an assisted project is to be located, to assist finan-
    50  cially in such construction, acquisition, rehabilitation and improvement
    51  and to maintain such plants, buildings and equipment for others, and may
    52  also be authorized to study and promote, alone or in concert with  local
    53  officials  and interested local groups, the economic growth and business
    54  prosperity of the area and the solution of other civic problems  of  the
    55  region which includes such areas[, and (c) if incorporated or reincorpo-
    56  rated  under  the  membership  corporations  law, have complied with the

        A. 7772                            61

     1  requirements of section  one  hundred  thirteen  of  the  not-for-profit
     2  corporation law].
     3    §  121.  Subsection (a) of section 3435 of the insurance law, as added

     4  by chapter 220 of the laws of 1986, is amended to read as follows:
     5    (a) This section shall apply to public entities as defined in  section
     6  one  hundred  seven  of this chapter, organizations described by section
     7  501 (c)(3) of the United States internal revenue code, [Type B] charita-
     8  ble corporations as defined in paragraph (a) of section one hundred  two
     9  (Definitions), of the not-for-profit corporation law and formed pursuant
    10  to  paragraph [(b)] (a) of section two hundred one of the not-for-profit
    11  corporation law, and organizations  described  by  section  two  hundred
    12  sixteen-a of the education law.
    13    §  122.  Subsection (a) of section 6703 of the insurance law, as added
    14  by chapter 598 of the laws of 2000, is amended to read as follows:

    15    (a) A corporation may be organized as a  [type  B]  charitable  corpo-
    16  ration [pursuant to paragraph (b) of section two hundred one] as defined
    17  in  paragraph  (a)  of section one hundred two (Definitions) of the not-
    18  for-profit corporation law or as a nonprofit  reciprocal  insurer  under
    19  article sixty-one of this chapter to write the kinds of insurance speci-
    20  fied  in  subsection (a) of section one thousand one hundred thirteen of
    21  this chapter other than (1) those types of insurance specified in  para-
    22  graphs  one,  two, eighteen, twenty-two, twenty-three and twenty-five of
    23  such subsection, (2) insurance against legal liability of  the  insured,
    24  and  against loss, damage or expense incident to a claim of such liabil-
    25  ity arising out of death or injury of any  person,  due  to  medical  or

    26  hospital  malpractice  by  any  licensed  physician or hospital, and (3)
    27  insurance subject to section three thousand four hundred twenty-five  of
    28  this chapter.
    29    §  123. The opening paragraph of subsection (b) of section 6704 of the
    30  insurance law, as added by chapter 598 of the laws of 2000,  is  amended
    31  to read as follows:
    32    The  superintendent  may pursuant to this article issue a license to a
    33  nonprofit property/casualty insurance company that  is  organized  as  a
    34  [type  B]  charitable  corporation [pursuant to paragraph (b) of section
    35  two hundred one] as defined in paragraph (a) of section one hundred  two
    36  (Definitions) of the not-for-profit corporation law if such company:
    37    §  124.  Subsection (a) of section 6706 of the insurance law, as added

    38  by chapter 598 of the laws of 2000, is amended to read as follows:
    39    (a) Except as otherwise provided in this article,  where  inconsistent
    40  with  this  article, or where the context otherwise requires, all of the
    41  provisions of this chapter and the rules and regulations of  the  super-
    42  intendent,   relating   to   all   insurers   and   those   relating  to
    43  property/casualty insurance companies transacting the same kind or kinds
    44  of insurance shall be applicable to a nonprofit property/casualty insur-
    45  ance company organized as a [type B] charitable corporation  as  defined
    46  in  paragraph  (a)  of section one hundred two (Definitions) of the not-
    47  for-profit corporation law and  formed  pursuant  to  paragraph  (b)  of
    48  section  two  hundred  one  of  the  not-for-profit  corporation law and

    49  licensed pursuant to  subsection  (b)  of  section  six  thousand  seven
    50  hundred  four of this article. Where any of such provisions of law refer
    51  to a corporation, company or insurer,  such  references,  when  read  in
    52  connection  with  and  applicable  to  this  article,  shall mean such a
    53  nonprofit property/casualty insurance company.
    54    § 125. Subdivision 2 of section 2-b of the religious corporations law,
    55  as added by chapter 956 of the laws of  1971,  is  amended  to  read  as
    56  follows:

        A. 7772                            62
 
     1    2.  Every  corporation  to which the not-for-profit corporation law is
     2  made applicable by this section is a [type B] charitable corporation  as
     3  defined in paragraph (a) of section one hundred two (Definitions) of the

     4  not-for-profit corporation law for all purposes of that law.
     5    §  126.  Subdivision  2 of section 13-a of the private housing finance
     6  law, as added by chapter 547 of the laws of 1971, is amended to read  as
     7  follows:
     8    2.  Every  corporation  to which the not-for-profit corporation law is
     9  made applicable by this section is a [type B] charitable corporation  as
    10  defined in paragraph (a) of section one hundred two (Definitions) of the
    11  not-for-profit corporation law for all purposes of that law.
    12    §  127.  Subdivision 5 of section 216-a of the education law, as added
    13  by chapter 901 of the laws of 1972, is amended to read as follows:
    14    5. Every corporation to which the not-for-profit  corporation  law  is

    15  made applicable by this section, is a [type B] charitable corporation as
    16  defined in paragraph (a) of section one hundred two (Definitions) of the
    17  not-for-profit  corporation  law under all applicable provisions of that
    18  law.
    19    § 128. Section 579 of the banking law, as amended by  chapter  629  of
    20  the laws of 2002, is amended to read as follows:
    21    §  579. Doing business without license prohibited. Only a [type B not-
    22  for-profit] charitable corporation as defined in  [section  two  hundred
    23  one]  paragraph (a) of section one hundred two (Definitions) of the not-
    24  for-profit corporation law of this state, or an entity  incorporated  in
    25  another  state  and having a similar not-for-profit status, shall engage

    26  in the business of budget planning as  defined  in  subdivision  one  of
    27  section  four  hundred  fifty-five  of  the general business law of this
    28  state except as authorized by this article and without first obtaining a
    29  license from the superintendent.
    30    § 129. Subdivision 4 of section 455 of the general  business  law,  as
    31  amended  by  chapter  456  of  the  laws  of 2006, is amended to read as
    32  follows:
    33    4. Person or entity as used in this article shall not include a  [type
    34  B  not-for-profit]  charitable  corporation  as  defined in [section two
    35  hundred one] paragraph (a) of section one hundred two  (Definitions)  of
    36  the  not-for-profit corporation law of this state, or an entity incorpo-
    37  rated in another state  and  having  a  similar  not-for-profit  status,

    38  licensed  by  the  superintendent,  to  engage in the business of budget
    39  planning as defined in this section.
    40    § 130. Paragraph (a) of subdivision 1 of section 458-b of the  general
    41  business law, as added by chapter 386 of the laws of 1986, is amended to
    42  read as follows:
    43    (a)  Any  [type B not-for-profit] charitable corporation as defined in
    44  paragraph (a) of section one hundred two (Definitions) of  the  not-for-
    45  profit  corporation law licensed pursuant to article [twelve-c] twelve-C
    46  of the banking law.
    47    § 131. Subdivision (b) of section 16.32 of the mental hygiene law,  as
    48  amended  by  chapter  669  of  the laws of 1995, is   amended to read as
    49  follows:
    50    (b) No loans, other than through the purchase of bonds, debentures, or

    51  similar obligations of the type customarily sold in public offerings, or
    52  through ordinary deposit of funds in a bank, shall be made by a not-for-
    53  profit corporation which is certified as a provider of services pursuant
    54  to this article to its employee who receives an annual salary in  excess
    55  of  thirty  thousand dollars, or to any other corporation, firm, associ-
    56  ation or other entity in which such employee is a director or officer or

        A. 7772                            63
 
     1  employee or holds a direct or indirect substantial  financial  interest,
     2  except  a  loan by one corporation incorporated as a [type B] charitable
     3  corporation [pursuant to] as defined in paragraph  (a)  of  section  one
     4  hundred  two  (Definitions)  of  the  not-for-profit  corporation law to

     5  another type B corporation, or a  loan  for  a  temporary  or  emergency
     6  purpose  which  will  further  the health and welfare of the employee so
     7  long as the purpose and  amount  of  such  loan  are  disclosed  to  and
     8  approved by the board of directors of such agency. Such disclosure shall
     9  be  filed  with  the  secretary  of  the  corporation and entered in the
    10  minutes of the meeting, and, if approved by such board, such  disclosure
    11  shall also be forwarded in writing to the commissioner and to the direc-
    12  tor  of  community services of each local governmental unit that has, at
    13  the time of such disclosure, a contract with such  corporation  for  the
    14  rendition  of  services pursuant to article forty-one of this chapter. A
    15  loan made in violation of this section shall be a violation of the  duty
    16  to the not-for-profit corporation of the directors or officers authoriz-

    17  ing  it  or participating in it, but the obligation of the borrower with
    18  respect to the loan shall not be affected thereby.
    19    § 132. Subdivision (b) of section 31.31 of the mental hygiene law,  as
    20  amended  by  chapter  669  of  the  laws  of 1995, is amended to read as
    21  follows:
    22    (b) No loans, other than through the purchase of bonds, debentures, or
    23  similar obligations of the type customarily sold in public offerings, or
    24  through ordinary deposit of funds in a bank, shall be made by a not-for-
    25  profit corporation which is licensed as a provider of services  pursuant
    26  to  this article to its employee who receives an annual salary in excess
    27  of thirty thousand dollars, or to any other corporation,  firm,  associ-
    28  ation or other entity in which such employee is a director or officer or
    29  employee  or  holds a direct or indirect substantial financial interest,

    30  except a loan by one corporation incorporated as [a type  B]  charitable
    31  corporation  [pursuant  to]  as  defined in paragraph (a) of section one
    32  hundred two (Definitions)  of  the  not-for-profit  corporation  law  to
    33  another  type  B  corporation,  or  a  loan for a temporary or emergency
    34  purpose which will further the health and welfare  of  the  employee  so
    35  long  as  the  purpose  and  amount  of  such  loan are disclosed to and
    36  approved by the board of directors of such agency. Such disclosure shall
    37  be filed with the secretary  of  the  corporation  and  entered  in  the
    38  minutes  of the meeting, and, if approved by such board, such disclosure
    39  shall also be forwarded in writing to the commissioner and to the direc-
    40  tor of community services of each local governmental unit that  has,  at

    41  the  time  of  such disclosure, a contract with such corporation for the
    42  rendition of services pursuant to article forty-one of this  chapter.  A
    43  loan  made in violation of this section shall be a violation of the duty
    44  to the not-for-profit corporation of the directors or officers authoriz-
    45  ing it or participating in it, but the obligation of the  borrower  with
    46  respect to the loan shall not be affected thereby.
    47    §  133.  Paragraph  (f)  of  subdivision 7 of section 75 of the public
    48  lands law, as added by chapter 791 of the laws of 1992,  is  amended  to
    49  read as follows:
    50    (f)  The  commissioner, in consultation with the commissioner of envi-
    51  ronmental conservation, the secretary of state,  the  office  of  parks,
    52  recreation and historic preservation and other interested state agencies
    53  administering state-owned lands underwater, shall promulgate pursuant to

    54  article  two  of  the state administrative procedure act such rules with
    55  respect to grants, leases, easements and lesser interests for the use of
    56  state-owned land underwater, and the cession of jurisdiction thereof, as

        A. 7772                            64
 
     1  in his or her judgment are  reasonable  and  necessary  to  protect  the
     2  interests of the people in such lands underwater. Such regulations shall
     3  include  without  being  limited  to: the fees to be charged, consistent
     4  with  the  provisions of this section, including mitigation of such fees
     5  in the event of economic hardship on  existing  commercial  enterprises;
     6  fee  limitations to administrative expenses for municipal uses which are
     7  public, non-commercial and offer services free or for nominal fees,  and
     8  for  uses undertaken and operated for public and non-commercial purposes

     9  by not-for-profit corporations characterized as  ["Type  B"]  charitable
    10  corporations  [pursuant  to paragraph (b) of section two hundred one] as
    11  defined in paragraph (a) of section one hundred two (Definitions) of the
    12  not-for-profit corporation law, and for uses undertaken and operated for
    13  public purposes by a corporation formed pursuant to the religious corpo-
    14  ration law or by a corporation formed pursuant to a special act of  this
    15  state  and  which has as its principal purpose a religious purpose; such
    16  further exemptions for projects as the commissioner  determines  do  not
    17  represent  significant  encroachments;  limitations on grants, including
    18  conversion grants, with respect to underwater lands consistent with  the
    19  public  purposes  of this subdivision and limiting such grants to excep-

    20  tional circumstances; and factors  to  be  examined  in  considering  an
    21  application for a lease, easement or other interest. Those factors shall
    22  include  without  limitation the following: (i) the environmental impact
    23  of the project; (ii) the values for natural resource management,  recre-
    24  ational  uses,  and  commercial  uses  of the pertinent underwater land;
    25  (iii) the size, character and effects of  the  project  in  relation  to
    26  neighboring  uses;  (iv) the potential for interference with navigation,
    27  public uses of the waterway and rights of other riparian owners; (v) the
    28  effect of the project on the natural resource interests of the state  in
    29  the  lands;  (vi)  the  water-dependent nature of the use; (vii) and any
    30  adverse economic impact on existing commercial  enterprises.  The  final
    31  promulgation  of  rules  establishing  fees  or  fee structures shall be

    32  subject to the approval of the director of the budget.
    33    § 134. This act shall take effect January 1, 2014, provided,  however,
    34  that section forty-five of this act shall take effect January 1, 2015.
Go to top