S. 5845 2
S 3. Subdivisions 1, 2 and 2-a of section 172-b of the executive law,
as amended by chapter 43 of the laws of 2002, are amended to read as
follows:
1. Every charitable organization registered or required to be regis-
tered pursuant to section one hundred seventy-two of this article which
shall receive in any fiscal year gross revenue and support in excess of
[two hundred fifty] FIVE HUNDRED thousand dollars [and every charitable
organization whose fund-raising functions are not carried on solely by
persons who are unpaid for such services] shall file with the attorney
general an annual written financial report, on forms prescribed by the
attorney general, on or before the fifteenth day of the fifth calendar
month after the close of such fiscal year. The annual financial report
shall be accompanied by an annual financial statement which includes an
independent certified public accountant's audit report containing an
opinion that the financial statements are presented fairly in all mate-
rial respects and in conformity with generally accepted accounting prin-
ciples, including compliance with all pronouncements of the financial
accounting standards board and the American Institute of Certified
Public Accountants that establish accounting principles relevant to
not-for-profit organizations. Such financial report shall include a
statement of any changes in the information required to be contained in
the registration form filed on behalf of such organization. The finan-
cial report shall be signed by the president or other authorized officer
and the chief fiscal officer of the organization who shall certify under
penalties for perjury that the statements therein are true and correct
to the best of their knowledge, and shall be accompanied by an opinion
signed by an independent public accountant that the financial statement
and balance sheet therein present fairly the financial operations and
position of the organization. A fee of twenty-five dollars payable to
the attorney general shall accompany such financial report at the time
of filing, provided however, that any such organization that is regis-
tered with the attorney general pursuant to article eight of the
estates, powers and trusts law is required to file only one annual
financial report which meets the filing requirements of this article and
section 8-1.4 of the estates, powers and trusts law.
2. Every charitable organization registered or required to be regis-
tered pursuant to section one hundred seventy-two of this article which
shall receive in gross revenue and support in any fiscal year at least
[one hundred] TWO HUNDRED FIFTY thousand dollars but not more than [two
hundred fifty] FIVE HUNDRED thousand dollars shall file an annual finan-
cial report. The annual financial report shall be accompanied by an
annual financial statement which includes an independent certified
public accountant's review report in accordance with "statements on
standards for accounting and review services" issued by the American
Institute of Certified Public Accountants. The annual financial state-
ment shall be prepared in conformity with generally accepted accounting
principles, including compliance with all pronouncements of the finan-
cial accounting standards board and the American Institute of Certified
Public Accountants that establish accounting principles relevant to
not-for-profit organizations. Such financial report shall be filed with
the attorney general, upon forms prescribed by the attorney general on
an annual basis on or before the fifteenth day of the fifth calendar
month after the close of such fiscal year, which shall include a finan-
cial report covering such fiscal year in accordance with such require-
ments as the attorney general may prescribe. Such financial report shall
include a statement of any changes in the information required to be
S. 5845 3
contained in the registration form filed on behalf of such organization.
The financial report shall be signed by the president or other author-
ized officer and the chief fiscal officer of the organization who shall
certify under penalties for perjury that the statements therein are true
and correct to the best of their knowledge. A fee of [ten] TWENTY-FIVE
dollars payable to the attorney general shall accompany such financial
report at the time of filing, provided, however, that any such organiza-
tion that is registered with the attorney general pursuant to article
eight of the estates, powers and trusts law is required to file only one
annual financial report which meets the filing requirements of this
article and section 8-1.4 of the estates, powers and trusts law.
NOTWITHSTANDING THE REQUIREMENTS OF THIS SECTION, IF UPON REVIEW OF AN
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S REVIEW REPORT FILED PURSUANT
TO THIS SUBDIVISION, THE ATTORNEY GENERAL DETERMINES THAT A CHARITABLE
ORGANIZATION SHOULD OBTAIN AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S
AUDIT REPORT, SUCH ORGANIZATION SHALL OBTAIN AND FILE WITH THE ATTORNEY
GENERAL AN AUDIT REPORT THAT MEETS THE REQUIREMENTS OF SUBDIVISION ONE
OF THIS SECTION WITHIN ONE HUNDRED TWENTY DAYS OF THE ATTORNEY GENERAL'S
REQUEST FOR SUCH REPORT.
2-a. Every charitable organization registered or required to be regis-
tered pursuant to section one hundred seventy-two of this article which
shall receive in any fiscal year of such organization gross revenue and
support not in excess of [one hundred thousand] TWO HUNDRED FIFTY THOU-
SAND dollars shall file with the attorney general an unaudited financial
report on forms prescribed by the attorney general, on or before the
fifteenth day of the fifth calendar month after the close of such fiscal
year. Such financial report shall include a statement of any changes in
the information required to be contained in the registration form filed
on behalf of such organization. The financial report shall be signed by
the president or other authorized officer and the chief fiscal officer
of the organization who shall certify under penalties for perjury that
the statements therein are true and correct to the best of their know-
ledge. A fee of [ten] TWENTY-FIVE dollars payable to the attorney
general shall accompany such financial report at the time of filing.
Provided, however, that any such organization that is registered with
the attorney general pursuant to article eight of the estates, powers
and trusts law is required to file only one annual financial report
which meets the filing requirements of this article and section 8-1.4 of
the estates, powers and trusts law.
S 3-a. Subdivisions 1 and 2 of section 172-b of the executive law, as
amended by chapter 43 of the laws of 2002, are amended to read as
follows:
1. Every charitable organization registered or required to be regis-
tered pursuant to section one hundred seventy-two of this article which
shall receive in any fiscal year gross revenue and support in excess of
[two hundred fifty] SEVEN HUNDRED FIFTY thousand dollars [and every
charitable organization whose fund-raising functions are not carried on
solely by persons who are unpaid for such services] shall file with the
attorney general an annual written financial report, on forms prescribed
by the attorney general, on or before the fifteenth day of the fifth
calendar month after the close of such fiscal year. The annual financial
report shall be accompanied by an annual financial statement which
includes an independent certified public accountant's audit report
containing an opinion that the financial statements are presented fairly
in all material respects and in conformity with generally accepted
accounting principles, including compliance with all pronouncements of
S. 5845 4
the financial accounting standards board and the American Institute of
Certified Public Accountants that establish accounting principles rele-
vant to not-for-profit organizations. Such financial report shall
include a statement of any changes in the information required to be
contained in the registration form filed on behalf of such organization.
The financial report shall be signed by the president or other author-
ized officer and the chief fiscal officer of the organization who shall
certify under penalties for perjury that the statements therein are true
and correct to the best of their knowledge, and shall be accompanied by
an opinion signed by an independent public accountant that the financial
statement and balance sheet therein present fairly the financial oper-
ations and position of the organization. A fee of twenty-five dollars
payable to the attorney general shall accompany such financial report at
the time of filing, provided however, that any such organization that is
registered with the attorney general pursuant to article eight of the
estates, powers and trusts law is required to file only one annual
financial report which meets the filing requirements of this article and
section 8-1.4 of the estates, powers and trusts law.
2. Every charitable organization registered or required to be regis-
tered pursuant to section one hundred seventy-two of this article which
shall receive in gross revenue and support in any fiscal year at least
[one hundred] TWO HUNDRED FIFTY thousand dollars but not more than [two
hundred fifty] SEVEN HUNDRED FIFTY thousand dollars shall file an annual
financial report. The annual financial report shall be accompanied by an
annual financial statement which includes an independent certified
public accountant's review report in accordance with "statements on
standards for accounting and review services" issued by the American
Institute of Certified Public Accountants. The annual financial state-
ment shall be prepared in conformity with generally accepted accounting
principles, including compliance with all pronouncements of the finan-
cial accounting standards board and the American Institute of Certified
Public Accountants that establish accounting principles relevant to
not-for-profit organizations. Such financial report shall be filed with
the attorney general, upon forms prescribed by the attorney general on
an annual basis on or before the fifteenth day of the fifth calendar
month after the close of such fiscal year, which shall include a finan-
cial report covering such fiscal year in accordance with such require-
ments as the attorney general may prescribe. Such financial report shall
include a statement of any changes in the information required to be
contained in the registration form filed on behalf of such organization.
The financial report shall be signed by the president or other author-
ized officer and the chief fiscal officer of the organization who shall
certify under penalties for perjury that the statements therein are true
and correct to the best of their knowledge. A fee of [ten] TWENTY-FIVE
dollars payable to the attorney general shall accompany such financial
report at the time of filing, provided, however, that any such organiza-
tion that is registered with the attorney general pursuant to article
eight of the estates, powers and trusts law is required to file only one
annual financial report which meets the filing requirements of this
article and section 8-1.4 of the estates, powers and trusts law.
NOTWITHSTANDING THE REQUIREMENTS OF THIS SECTION, IF UPON REVIEW OF AN
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S REVIEW REPORT FILED PURSUANT
TO THIS SUBDIVISION, THE ATTORNEY GENERAL DETERMINES THAT A CHARITABLE
ORGANIZATION SHOULD OBTAIN AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S
AUDIT REPORT, SUCH ORGANIZATION SHALL OBTAIN AND FILE WITH THE ATTORNEY
GENERAL AN AUDIT REPORT THAT MEETS THE REQUIREMENTS OF SUBDIVISION ONE
S. 5845 5
OF THIS SECTION WITHIN ONE HUNDRED TWENTY DAYS OF THE ATTORNEY GENERAL'S
REQUEST FOR SUCH REPORT.
S 3-b. Subdivisions 1 and 2 of section 172-b of the executive law, as
amended by chapter 43 of the laws of 2002, are amended to read as
follows:
1. Every charitable organization registered or required to be regis-
tered pursuant to section one hundred seventy-two of this article which
shall receive in any fiscal year gross revenue and support in excess of
[two hundred fifty thousand] ONE MILLION dollars [and every charitable
organization whose fund-raising functions are not carried on solely by
persons who are unpaid for such services] shall file with the attorney
general an annual written financial report, on forms prescribed by the
attorney general, on or before the fifteenth day of the fifth calendar
month after the close of such fiscal year. The annual financial report
shall be accompanied by an annual financial statement which includes an
independent certified public accountant's audit report containing an
opinion that the financial statements are presented fairly in all mate-
rial respects and in conformity with generally accepted accounting prin-
ciples, including compliance with all pronouncements of the financial
accounting standards board and the American Institute of Certified
Public Accountants that establish accounting principles relevant to
not-for-profit organizations. Such financial report shall include a
statement of any changes in the information required to be contained in
the registration form filed on behalf of such organization. The finan-
cial report shall be signed by the president or other authorized officer
and the chief fiscal officer of the organization who shall certify under
penalties for perjury that the statements therein are true and correct
to the best of their knowledge, and shall be accompanied by an opinion
signed by an independent public accountant that the financial statement
and balance sheet therein present fairly the financial operations and
position of the organization. A fee of twenty-five dollars payable to
the attorney general shall accompany such financial report at the time
of filing, provided however, that any such organization that is regis-
tered with the attorney general pursuant to article eight of the
estates, powers and trusts law is required to file only one annual
financial report which meets the filing requirements of this article and
section 8-1.4 of the estates, powers and trusts law.
2. Every charitable organization registered or required to be regis-
tered pursuant to section one hundred seventy-two of this article which
shall receive in gross revenue and support in any fiscal year at least
[one hundred] TWO HUNDRED FIFTY thousand dollars but not more than [two
hundred fifty thousand] ONE MILLION dollars shall file an annual finan-
cial report. The annual financial report shall be accompanied by an
annual financial statement which includes an independent certified
public accountant's review report in accordance with "statements on
standards for accounting and review services" issued by the American
Institute of Certified Public Accountants. The annual financial state-
ment shall be prepared in conformity with generally accepted accounting
principles, including compliance with all pronouncements of the finan-
cial accounting standards board and the American Institute of Certified
Public Accountants that establish accounting principles relevant to
not-for-profit organizations. Such financial report shall be filed with
the attorney general, upon forms prescribed by the attorney general on
an annual basis on or before the fifteenth day of the fifth calendar
month after the close of such fiscal year, which shall include a finan-
cial report covering such fiscal year in accordance with such require-
S. 5845 6
ments as the attorney general may prescribe. Such financial report shall
include a statement of any changes in the information required to be
contained in the registration form filed on behalf of such organization.
The financial report shall be signed by the president or other author-
ized officer and the chief fiscal officer of the organization who shall
certify under penalties for perjury that the statements therein are true
and correct to the best of their knowledge. A fee of [ten] TWENTY-FIVE
dollars payable to the attorney general shall accompany such financial
report at the time of filing, provided, however, that any such organiza-
tion that is registered with the attorney general pursuant to article
eight of the estates, powers and trusts law is required to file only one
annual financial report which meets the filing requirements of this
article and section 8-1.4 of the estates, powers and trusts law.
NOTWITHSTANDING THE REQUIREMENTS OF THIS SECTION, IF UPON REVIEW OF AN
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S REVIEW REPORT FILED PURSUANT
TO THIS SUBDIVISION, THE ATTORNEY GENERAL DETERMINES THAT A CHARITABLE
ORGANIZATION SHOULD OBTAIN AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S
AUDIT REPORT, SUCH ORGANIZATION SHALL OBTAIN AND FILE WITH THE ATTORNEY
GENERAL AN AUDIT REPORT THAT MEETS THE REQUIREMENTS OF SUBDIVISION ONE
OF THIS SECTION WITHIN ONE HUNDRED TWENTY DAYS OF THE ATTORNEY GENERAL'S
REQUEST FOR SUCH REPORT.
S 4. Subdivision 1 of section 177 of the executive law, as amended by
chapter 83 of the laws of 1995, is amended to read as follows:
1. The attorney general shall make rules and regulations necessary for
the administration of this article including, but not limited to regu-
lations and waiver procedures that will ensure that charitable organiza-
tions do not have to register twice in relation to the solicitation and
administration of assets, AND RULES OR REGULATIONS ALLOWING OR REQUIRING
ANY SUBMISSION TO THE ATTORNEY GENERAL TO BE EFFECTED BY ELECTRONIC
MEANS.
S 5. Section 579 of the banking law, as amended by chapter 629 of the
laws of 2002, is amended to read as follows:
S 579. Doing business without license prohibited. Only a [type B not-
for-profit] CHARITABLE corporation as defined in [section two hundred
one] PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) of the not-
for-profit corporation law of this state, or an entity incorporated in
another state and having a similar not-for-profit status, shall engage
in the business of budget planning as defined in subdivision one of
section four hundred fifty-five of the general business law of this
state except as authorized by this article and without first obtaining a
license from the superintendent.
S 6. Paragraph (c) of subdivision 1 of section 1-a of the benevolent
orders law, as added by chapter 703 of the laws of 1970, is amended to
read as follows:
(c) The following provisions of the not-for-profit corporation law
shall not apply to benevolent orders: [section one hundred thirteen,]
section two hundred one, article four, paragraphs (a), (b), and (c) of
section eight hundred four, section nine hundred seven, section nine
hundred eight, section nine hundred nine, [section ten hundred eleven,]
section ten hundred twelve, and article fourteen.
S 6-a. Section 216 of the education law, as amended by chapter 901 of
the laws of 1972, the closing paragraph as added by chapter 316 of the
laws of 2005, is amended to read as follows:
S 216. Charters. Under such name, with such number of trustees or
other managers, and with such powers, privileges and duties, and subject
to such limitations and restrictions in all respects as the regents may
S. 5845 7
prescribe in conformity to law, they may, by an instrument under their
seal and recorded in their office, incorporate any university, college,
academy, library, museum, or other institution or association for the
promotion of science, literature, art, history or other department of
knowledge, or of education in any way, associations of teachers,
students, graduates of educational institutions, and other associations
whose approved purposes are, in whole or in part, of educational or
cultural value deemed worthy of recognition and encouragement by the
university. No [institution or association which might be incorporated
by the regents under this chapter shall, without their consent,] SCHOOL;
COLLEGE; UNIVERSITY OR OTHER ENTITY PROVIDING POST SECONDARY EDUCATION;
LIBRARY; OR MUSEUM OR HISTORICAL SOCIETY SHALL be incorporated under THE
BUSINESS CORPORATION LAW, THE NOT-FOR-PROFIT CORPORATION LAW, OR any
other general law WITHOUT THE CONSENT OF THE COMMISSIONER OR, IN THE
CASE OF A COLLEGE OR UNIVERSITY, WITHOUT THE WRITTEN AUTHORIZATION OF
THE REGENTS. [An institution or association which might be incorporated
by the regents under this chapter may, with the consent of the commis-
sioner of education, be formed under the business corporation law or
pursuant to the not-for-profit corporation law if such consent of the
commissioner of education is attached to its certificate of incorpo-
ration.]
No individual, association, partnership, company or corporation not
authorized by special charter from the legislature of this state or by
charter from the regents to operate a museum, or arboretum shall know-
ingly use, advertise or transact business under the names "museum," or
"arboretum," or any name, title or descriptive material indicating or
tending to imply that said individual, association, partnership, company
or corporation conducts, carries on, or is such a business when it is
not, or that it is authorized to operate as such, unless the right to do
so has been granted by the regents or the commissioner in writing. Any
violation of this paragraph shall be a misdemeanor. Notwithstanding any
other provision of this section, an individual, association, partner-
ship, company or corporation doing business under any of such names on
the effective date of this paragraph may come into compliance with this
paragraph by obtaining consent of the regents or the commissioner within
one year of such effective date.
S 7. Paragraph c of subdivision 4 of section 216-a of the education
law, as added by chapter 901 of the laws of 1972, is amended to read as
follows:
c. The following provisions of the not-for-profit corporation law
shall not apply to education corporations: section one hundred five,
[section one hundred thirteen,] section one hundred fourteen, paragraph
(a) of section two hundred one, paragraphs (b) and (c) of section two
hundred two, section two hundred five, section three hundred one,
section three hundred two, section three hundred three, article four
except paragraphs (b) through (p) of section four hundred four and
section four hundred five, section five hundred nine, [section five
hundred eighteen,] section five hundred twenty-one to the extent that it
refers to [section five hundred eighteen,] paragraph (d) of section
seven hundred six, article eight except section eight hundred four,
section nine hundred seven, [section one thousand eleven,] section one
thousand twelve and article fourteen.
S 8. Subdivision 5 of section 216-a of the education law, as added by
chapter 901 of the laws of 1972, is amended to read as follows:
5. Every corporation to which the not-for-profit corporation law is
made applicable by this section, is a [type B] CHARITABLE corporation AS
S. 5845 8
DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) OF THE
NOT-FOR-PROFIT CORPORATION LAW under all applicable provisions of that
law.
S 9. Section 223 of the education law, as amended by chapter 106 of
the laws of 1974, is amended to read as follows:
S 223. Consolidation OR MERGER of corporations. Any two or more
corporations chartered under the powers of the regents or incorporated
under a special act of the legislature or under a general law for
purposes for which a charter may be granted by the regents may enter
into an agreement for the consolidation OR MERGER of such corporations,
setting forth the terms and conditions of consolidation OR MERGER, the
name of the proposed CONSOLIDATED OR MERGED corporation, the place or
places where the institution or institutions to be maintained is or are
to be located, the number of its directors, which may be five or more,
the time of the annual election and the names of the persons to be
directors until the first OR NEXT annual meeting.
The agreement must be approved by three-fourths of the trustees or
directors of such [corporation] CORPORATIONS at a meeting of the trus-
tees or directors of each corporation, separately and specially called
for that purpose, which approval, duly verified by the chairman and
clerk of such meeting, shall be annexed to the petition. On presenta-
tion of a petition, together with the certificate of approval and the
agreement for consolidation OR MERGER, and on such notice to interested
parties as the regents shall prescribe, and after hearing such inter-
ested parties as desire to be heard, the regents may make and execute an
order for the consolidation OR MERGER of the corporations on such terms
and conditions as the regents may prescribe. When such order is made,
such corporations shall become one corporation by the name designated in
the order, and shall be subject only to such duties and obligations as a
corporation formed under this chapter for the same purposes; and all the
property belonging to the corporations so consolidated OR MERGED shall
be vested in and transferred to the new OR SURVIVING corporation, which
shall be subject to all the liabilities of the former corporations, to
the same extent as if they had been contracted or incurred by it. If
any corporation so consolidated OR MERGED was incorporated under a
special act of the legislature or under a general law pursuant to which
its certificate of incorporation was filed with the department of state,
the regents shall deliver a certified copy of the order of consolidation
OR MERGER to such department.
S 10. Subdivision 4 of section 455 of the general business law, as
amended by chapter 456 of the laws of 2006, is amended to read as
follows:
4. Person or entity as used in this article shall not include a [type
B not-for-profit] CHARITABLE corporation as defined in [section two
hundred one] PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) of
the not-for-profit corporation law of this state, or an entity incorpo-
rated in another state and having a similar not-for-profit status,
licensed by the superintendent, to engage in the business of budget
planning as defined in this section.
S 11. Paragraph (a) of subdivision 1 of section 458-b of the general
business law, as added by chapter 386 of the laws of 1986, is amended to
read as follows:
(a) Any [type B not-for-profit] CHARITABLE corporation AS DEFINED IN
PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) OF THE
NOT-FOR-PROFIT CORPORATION LAW licensed pursuant to article twelve-c of
the banking law.
S. 5845 9
S 12. Subsection (a) of section 3435 of the insurance law, as added by
chapter 220 of the laws of 1986, is amended to read as follows:
(a) This section shall apply to public entities as defined in section
one hundred seven of this chapter, organizations described by section
501(c)(3) of the United States internal revenue code, [Type B] CHARITA-
BLE corporations AS DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO
(DEFINITIONS) OF THE NOT-FOR-PROFIT CORPORATION LAW AND formed pursuant
to paragraph [(b)] (A) of section two hundred one of the not-for-profit
corporation law, and organizations described by section two hundred
sixteen-a of the education law.
S 13. Subsection (a) of section 6703 of the insurance law, as added by
chapter 598 of the laws of 2000, is amended to read as follows:
(a) A corporation may be organized as a [type B] CHARITABLE corpo-
ration pursuant to paragraph [(b)] (A) of section two hundred one of the
not-for-profit corporation law or as a nonprofit reciprocal insurer
under article sixty-one of this chapter to write the kinds of insurance
specified in subsection (a) of section one thousand one hundred thirteen
of this chapter other than (1) those types of insurance specified in
paragraphs one, two, eighteen, twenty-two, twenty-three and twenty-five
of such subsection, (2) insurance against legal liability of the
insured, and against loss, damage or expense incident to a claim of such
liability arising out of death or injury of any person, due to medical
or hospital malpractice by any licensed physician or hospital, and (3)
insurance subject to section three thousand four hundred twenty-five of
this chapter.
S 14. The opening paragraph of subsection (b) of section 6704 of the
insurance law, as added by chapter 598 of the laws of 2000, is amended
to read as follows:
The superintendent may pursuant to this article issue a license to a
nonprofit property/casualty insurance company that is organized as a
[type B] CHARITABLE corporation [pursuant to paragraph (b) of section
two hundred one] AS DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO
(DEFINITIONS) of the not-for-profit corporation law if such company:
S 15. Subsection (a) of section 6706 of the insurance law, as added by
chapter 598 of the laws of 2000, is amended to read as follows:
(a) Except as otherwise provided in this article, where inconsistent
with this article, or where the context otherwise requires, all of the
provisions of this chapter and the rules and regulations of the super-
intendent, relating to all insurers and those relating to
property/casualty insurance companies transacting the same kind or kinds
of insurance shall be applicable to a nonprofit property/casualty insur-
ance company organized as a [type B] CHARITABLE corporation AS DEFINED
IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) OF THE
NOT-FOR-PROFIT CORPORATION LAW AND FORMED pursuant to paragraph [(b)]
(A) of section two hundred one of the not-for-profit corporation law and
licensed pursuant to subsection (b) of section six thousand seven
hundred four of this article. Where any of such provisions of law refer
to a corporation, company or insurer, such references, when read in
connection with and applicable to this article, shall mean such a
nonprofit property/casualty insurance company.
S 16. Subdivision (b) of section 16.32 of the mental hygiene law, as
amended by chapter 669 of the laws of 1995, is amended to read as
follows:
(b) No loans, other than through the purchase of bonds, debentures, or
similar obligations of the type customarily sold in public offerings, or
through ordinary deposit of funds in a bank, shall be made by a not-for-
S. 5845 10
profit corporation which is certified as a provider of services pursuant
to this article to its employee who receives an annual salary in excess
of thirty thousand dollars, or to any other corporation, firm, associ-
ation or other entity in which such employee is a director or officer or
employee or holds a direct or indirect substantial financial interest,
except a loan by one corporation incorporated as a [type B] CHARITABLE
corporation [pursuant to] AS DEFINED IN PARAGRAPH (A) OF SECTION ONE
HUNDRED TWO (DEFINITIONS) OF the not-for-profit corporation law to
another type B corporation, or a loan for a temporary or emergency
purpose which will further the health and welfare of the employee so
long as the purpose and amount of such loan are disclosed to and
approved by the board of directors of such agency. Such disclosure shall
be filed with the secretary of the corporation and entered in the
minutes of the meeting, and, if approved by such board, such disclosure
shall also be forwarded in writing to the commissioner and to the direc-
tor of community services of each local governmental unit that has, at
the time of such disclosure, a contract with such corporation for the
rendition of services pursuant to article forty-one of this chapter. A
loan made in violation of this section shall be a violation of the duty
to the not-for-profit corporation of the directors or officers authoriz-
ing it or participating in it, but the obligation of the borrower with
respect to the loan shall not be affected thereby.
S 17. Subdivision (b) of section 31.31 of the mental hygiene law, as
amended by chapter 669 of the laws of 1995, is amended to read as
follows:
(b) No loans, other than through the purchase of bonds, debentures, or
similar obligations of the type customarily sold in public offerings, or
through ordinary deposit of funds in a bank, shall be made by a not-for-
profit corporation which is licensed as a provider of services pursuant
to this article to its employee who receives an annual salary in excess
of thirty thousand dollars, or to any other corporation, firm, associ-
ation or other entity in which such employee is a director or officer or
employee or holds a direct or indirect substantial financial interest,
except a loan by one corporation incorporated as a [type B] CHARITABLE
corporation [pursuant to] AS DEFINED IN PARAGRAPH (A) OF SECTION ONE
HUNDRED TWO (DEFINITIONS) OF the not-for-profit corporation law to
another type B corporation, or a loan for a temporary or emergency
purpose which will further the health and welfare of the employee so
long as the purpose and amount of such loan are disclosed to and
approved by the board of directors of such agency. Such disclosure shall
be filed with the secretary of the corporation and entered in the
minutes of the meeting, and, if approved by such board, such disclosure
shall also be forwarded in writing to the commissioner and to the direc-
tor of community services of each local governmental unit that has, at
the time of such disclosure, a contract with such corporation for the
rendition of services pursuant to article forty-one of this chapter. A
loan made in violation of this section shall be a violation of the duty
to the not-for-profit corporation of the directors or officers authoriz-
ing it or participating in it, but the obligation of the borrower with
respect to the loan shall not be affected thereby.
S 18. Subdivision 1 of section 1825 of the public authorities law, as
amended by chapter 1045 of the laws of 1974, is amended to read as
follows:
1. The corporation shall (a) be incorporated or reincorporated under
[article nineteen of the membership corporations law, or under] section
fourteen hundred eleven of the not-for-profit corporation law, or (b) be
S. 5845 11
incorporated under [article two of the membership corporations law, or
under] article four of the not-for-profit corporation law, in addition
to other purposes, to construct new industrial or manufacturing plants
or new research and development buildings and acquire machinery and
equipment deemed related thereto or acquire, rehabilitate, and improve
for use by others, industrial or manufacturing plants in the area of the
state in which an assisted project is to be located, to assist finan-
cially in such construction, acquisition, rehabilitation and improvement
and to maintain such plants, buildings and equipment for others, and may
also be authorized to study and promote, alone or in concert with local
officials and interested local groups, the economic growth and business
prosperity of the area and the solution of other civic problems of the
region which includes such areas[, and (c) if incorporated or reincorpo-
rated under the membership corporations law, have complied with the
requirements of section one hundred thirteen of the not-for-profit
corporation law].
S 19. Subdivision 2 of section 13-a of the private housing finance
law, as added by chapter 547 of the laws of 1971, is amended to read as
follows:
2. Every corporation to which the not-for-profit corporation law is
made applicable by this section is a [type B] CHARITABLE corporation AS
DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) OF THE
NOT-FOR-PROFIT CORPORATION LAW for all purposes of that law.
S 20. Paragraph (f) of subdivision 7 of section 75 of the public lands
law, as added by chapter 791 of the laws of 1992, is amended to read as
follows:
(f) The commissioner, in consultation with the commissioner of envi-
ronmental conservation, the secretary of state, the office of parks,
recreation and historic preservation and other interested state agencies
administering state-owned lands underwater, shall promulgate pursuant to
article two of the state administrative procedure act such rules with
respect to grants, leases, easements and lesser interests for the use of
state-owned land underwater, and the cession of jurisdiction thereof, as
in his or her judgment are reasonable and necessary to protect the
interests of the people in such lands underwater. Such regulations shall
include without being limited to: the fees to be charged, consistent
with the provisions of this section, including mitigation of such fees
in the event of economic hardship on existing commercial enterprises;
fee limitations to administrative expenses for municipal uses which are
public, non-commercial and offer services free or for nominal fees, and
for uses undertaken and operated for public and non-commercial purposes
by not-for-profit corporations characterized as ["Type B"] CHARITABLE
corporations [pursuant to paragraph (b) of section two hundred one] AS
DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) of the
not-for-profit corporation law, and for uses undertaken and operated for
public purposes by a corporation formed pursuant to the religious corpo-
ration law or by a corporation formed pursuant to A special act of this
state and which has as its principal purpose a religious purpose; such
further exemptions for projects as the commissioner determines do not
represent significant encroachments; limitations on grants, including
conversion grants, with respect to underwater lands consistent with the
public purposes of this subdivision and limiting such grants to excep-
tional circumstances; and factors to be examined in considering an
application for a lease, easement or other interest. Those factors shall
include without limitation the following: (i) the environmental impact
of the project; (ii) the values for natural resource management, recre-
S. 5845 12
ational uses, and commercial uses of the pertinent underwater land;
(iii) the size, character and effects of the project in relation to
neighboring uses; (iv) the potential for interference with navigation,
public uses of the waterway and rights of other riparian owners; (v) the
effect of the project on the natural resource interests of the state in
the lands; (vi) the water-dependent nature of the use; (vii) and any
adverse economic impact on existing commercial enterprises. The final
promulgation of rules establishing fees or fee structures shall be
subject to the approval of the director of the budget.
S 21. Section 202 of the racing, pari-mutuel wagering and breeding
law, as amended by chapter 18 of the laws of 2008, is amended to read as
follows:
S 202. Restriction upon commencement of business. No business corpo-
ration organized under the provisions of this article shall engage in
the prosecution or management of its business until the whole of its
capital stock shall have been subscribed, nor until it shall have filed
in the offices where certificates of incorporation were filed, a further
certificate stating that the whole of its capital stock has been in good
faith subscribed, executed and acknowledged by its president or vice-
president and treasurer or secretary, and verified by them to the effect
that the statements contained in it are true.
Notwithstanding the foregoing, corporations organized pursuant to
section two hundred one of the not-for-profit corporation law as [type
C] CHARITABLE corporations AS DEFINED IN PARAGRAPH (A) OF SECTION ONE
HUNDRED TWO (DEFINITIONS) OF THE NOT-FOR-PROFIT CORPORATION LAW shall
not engage in the prosecution or management of its business until its
certificate of incorporation has been accepted for filing by the secre-
tary of state and such confirmation of filing has been filed with the
board and the franchise oversight board.
S 22. Paragraph (c) of subdivision 1 of section 2-b of the religious
corporations law, as amended by chapter 490 of the laws of 2010, is
amended to read as follows:
(c) The following provisions of the not-for-profit corporation law
shall not apply to religious corporations: subparagraphs (7) and (8) of
paragraph (a) of section one hundred twelve, [section one hundred thir-
teen,] section one hundred fourteen, section two hundred one, section
three hundred three, section three hundred four, section three hundred
five, section three hundred six, article four except section four
hundred one, section five hundred fourteen, that portion of section five
hundred fifty-five (b) and section five hundred fifty-five (c) which
reads "The institution shall notify the donor, if available, and the
attorney general of the application, and the attorney general and such
donor must be given an opportunity to be heard", section six hundred
five, section six hundred seven, section six hundred nine, section eight
hundred four, article nine except section nine hundred ten, article ten
except as provided in section eleven hundred fifteen, section eleven
hundred two, and article fifteen except paragraph (c) of section fifteen
hundred seven.
S 23. Subdivision 2 of section 2-b of the religious corporations law,
as added by chapter 956 of the laws of 1971, is amended to read as
follows:
2. Every corporation to which the not-for-profit corporation law is
made applicable by this section is a [type B] CHARITABLE corporation AS
DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) OF THE
NOT-FOR-PROFIT CORPORATION LAW for all purposes of that law.
S. 5845 13
S 24. Section 13 of the religious corporations law, as amended by
chapter 705 of the laws of 1970, is amended to read as follows:
S 13. Consolidation OR MERGER of incorporated churches. Two or more
incorporated churches may enter into an agreement, under their respec-
tive corporate seals, for the consolidation OR MERGER of such corpo-
rations, setting forth the name of the proposed new corporation OR
SURVIVING CORPORATION, the denomination, if any, to which it is to
belong, and if the churches of such denomination have more than one
method of choosing trustees, by which of such methods the trustees are
to be chosen, the number of such trustees, the names of the persons to
be the first trustees of the new corporation, and the date of its first
annual corporate meeting. Such an agreement shall not be valid for
United Methodist churches unless proposed by a majority vote of the
charge conference of each church and approved by the superintendent or
superintendents of the district or districts in which the consolidating
churches are located, and by the majority of the members of each of such
churches, over the age of twenty-one years, present and voting at a
meeting thereof held in the usual place of public worship and called for
the purpose of considering such agreement by announcement made at public
service in such churches on two Sundays, the first not less than ten
days next preceding the date of such meeting. Such agreement shall not
be valid unless approved in the case of Protestant Episcopal churches by
the bishop and standing committee of the diocese in which such churches
are situated and in the case of churches of other denominations by the
governing body of the denomination, if any, to which each church
belongs, having jurisdiction over such church. Each corporation shall
thereupon make a separate petition to the supreme court for an order
consolidating OR MERGING the corporations, setting forth the denomi-
nation, if any, to which the church belongs, that the consent of the
governing body to the consolidation OR MERGER, if any, of that denomi-
nation having jurisdiction over such church has been obtained, the
agreement therefor, and a statement of all the property and liabilities
and the amount and sources of the annual income of such petitioning
corporation. In its discretion the court may direct that notice of the
hearing of such petition be given to the parties interested therein in
such manner and for such time as it may prescribe. After hearing all
the parties interested, present and desiring to be heard, the court may
make an order for the consolidation OR MERGER of the corporations on the
terms of such agreement and such other terms and conditions as it may
prescribe, specifying the name of such new OR SURVIVING corporation and
the [first] trustees thereof, and the method by which their successors
shall be chosen and the date of its first OR NEXT annual corporate meet-
ing. When such order is made and duly entered, the persons constituting
such CONSOLIDATED OR MERGED corporations shall BE OR become an incorpo-
rated church by, and said petitioning churches shall become consolidated
OR MERGED under, the name designated in the order, and the trustees
therein named shall be the [first] trustees thereof, and the future
trustees thereof shall be chosen by the method therein designated, and
all the estate, rights, powers and property of whatsoever nature belong-
ing to either corporation shall without further act or deed be vested in
and transferred to the new OR SURVIVING corporation as effectually as
they were vested in or belonging to the former corporations; and the
said new OR SURVIVING corporation shall be liable for all the debts and
liabilities of the former corporations in the same manner and as effec-
tually as if said debts or liabilities had been contracted or incurred
by the new OR SURVIVING corporation. A certified copy of such order
S. 5845 14
shall be recorded in the book for recording certificates of incorpo-
ration in each county clerk's office in which the certificate of incor-
poration of each consolidating OR MERGING church was recorded; or if no
such certificate was so recorded, then in the clerk's office of the
county in which the principal place of worship or principal office of
the new OR SURVIVING corporation is, or is intended to be, situated.
S 25. Section 15-a of the religious corporations law, as added by
chapter 108 of the laws of 1965, subdivisions 2, 3 and 8 as amended by
chapter 381 of the laws of 1985, is amended to read as follows:
S 15-a. Consolidation of incorporated presbyteries. 1. Two or more
incorporated presbyteries may enter into an agreement for the consol-
idation OR MERGER of such corporations and such corporations may be
consolidated OR MERGED so as to form a single corporation which may be
either a new corporation or one of the [constitutent] CONSTITUENT corpo-
rations. Said agreement shall set forth the name of the proposed new
corporation or the name of the existing corporation if it is to become
the consolidated OR MERGED corporation, the method of choosing trustees,
the names of the persons to be the first trustees of the new corporation
if the consolidated OR MERGED corporation is to be a new corporation and
the date of the first annual corporate meeting.
2. Such agreement must be authorized and approved by a majority vote
of the members of each contracting presbytery taken at a meeting at
which a quorum is present duly called in accordance with the form of
government of the Presbyterian Church (U.S.A.) and the notice of such
meeting shall state the purpose of the meeting.
3. Before such agreement is approved as aforesaid, such consolidation
OR MERGER must be directed and approved by the Synod of the Northeast
and the General Assembly of the Presbyterian Church (U.S.A.).
4. Each presbytery shall thereafter join in a petition to the supreme
court for an order consolidating OR MERGING the corporation, setting
forth the agreement of the contracting presbyteries, the direction and
approval of the bodies as set forth in subdivision three [hereof] OF
THIS SECTION, a statement of all the property and liabilities and the
sources of the annual income of each presbytery and a description of any
property held by such presbyteries in trust for specific purposes. In
its discretion the court may direct that notice of the hearing of such
petition be given to the parties interested therein in such manner as it
may prescribe.
5. After hearing all the parties interested, present and desiring to
be heard, the court may make an order for the consolidation OR MERGER of
the presbyteries on the terms of such agreement and such other terms and
conditions as it may prescribe, specifying the name of the new corpo-
ration or the name the continuing corporation will have if one of the
[constitutent] CONSTITUENT corporations is to become the consolidated OR
MERGED corporation, the first trustees thereof if a new corporation is
to be created and the method by which their successors shall be chosen
and the date of the first annual corporate meeting if a new corporation
is to be created.
6. When such order is made and duly entered, the persons constituting
such corporate presbyteries shall become one incorporated consolidated
OR MERGED presbytery by, and said petitioning presbyteries shall become
consolidated OR MERGED under, the name designated in the order, and the
trustees therein named, if it is a new corporation, shall be the first
trustees thereof, and if it is a new corporation the trustees thereof
shall be chosen by the method therein designated, and all the estate,
rights, powers and property of whatsoever nature, belonging to either
S. 5845 15
corporation shall without further act or deed be vested in and/or trans-
ferred to the new corporation as effectually as they were vested in or
belonging to the former corporations, and the new or continuing corpo-
rations shall be liable for all the debts and liabilities of the former
corporations in the same manner and as effectually as if said debts or
liabilities had been contracted or incurred by the new corporation.
7. The order or a certified copy thereof shall be recorded in the book
for recording certificates of incorporation in each county clerk's
office in which the certificate of incorporation of each constituent
presbytery was recorded.
8. Such consolidated OR MERGED presbytery shall have all the powers
and responsibilities conferred upon presbyteries by the constitution and
form of government of the Presbyterian Church (U.S.A.).
S 26. Section 208 of the religious corporations law, as added by chap-
ter 117 of the laws of 1927, is amended to read as follows:
S 208. Consolidation. Any two or more religious corporations of the
Jewish faith, incorporated under or by general or special laws, may
enter into an agreement for the consolidation OR MERGER of such corpo-
rations, setting forth the terms and conditions of consolidation, the
name of the proposed OR SURVIVING corporation, the number of its trus-
tees, the time of the annual election and the names of the persons to be
its trustees until the first OR NEXT annual meeting. Each corporation
may petition the supreme court for an order consolidating OR MERGING the
corporations, setting forth the agreement for consolidation OR MERGER
and a statement of its real property and of its liabilities. Before the
presentation of the petition to the court the agreement and petition
must be approved by two-thirds of the votes cast in person or by proxy
at a meeting of the members of each corporation called for the purpose
of considering the proposed consolidation OR MERGER in the manner
prescribed by section [forty-three of the membership corporations law]
SIX HUNDRED FIVE OF THE NOT-FOR-PROFIT CORPORATION LAW. An affidavit by
the president and the secretary of each corporation stating that such
approval has been given shall be annexed to the petition. On presenta-
tion to the court of such petition and agreement for consolidation OR
MERGER and on such notice as the court may direct, the court after hear-
ing all the parties interested desiring to be heard, may make an order
approving the consolidation OR MERGER. When such order is made and duly
entered and a certified copy thereof filed with the secretary of state
and in the offices of the clerks of the counties in which the certif-
icates of incorporation of the several constituent corporations were
recorded, or if no such certificate was recorded, then in the office of
the clerk of the county in which the principal place of worship of the
new OR SURVIVING corporation is intended to be situated, such corpo-
rations shall become one corporation by the name designated in the order
and the trustees named in the agreement for consolidation OR MERGER
shall be the [first] trustees of the consolidated corporation.
S 27. Section 209 of the religious corporations law, as added by chap-
ter 117 of the laws of 1927, is amended to read as follows:
S 209. Effect of consolidation. The consolidated OR MERGED corpo-
ration shall possess all the powers of the constituent corporations and
shall have the power and be subject to the duties and obligations of a
congregation of the Jewish faith formed for like purposes under the
religious corporations law. All the rights, privileges and interests of
each of the constituent corporations, all the property, real, personal
and mixed, and all the debts due on whatever account to either of them,
and all things in action, belonging to either of them, shall be deemed
S. 5845 16
to be transferred to and vested in such new corporation without further
act or deed; and all claims, demands[.], property, and every other
interest, belonging to the several constituent corporations, shall be as
effectually the property of the new corporation as they were of the
constituent corporations, and the title to all real property, held or
taken by deed or otherwise under the laws of this state, vested in the
several constituent corporations shall not be deemed to revert or to be
in any way impaired by reason of the consolidation but shall be vested
in the new corporation. Any devise, bequest, gift, grant, or declaration
of trust, contained in any deed, will, or other instrument, in trust or
otherwise, made before or after such consolidation, OR MERGER to or for
any of the constituent corporations, shall inure to the benefit of the
consolidated OR MERGED corporation. The consolidated corporation shall
be deemed to have assumed and shall be liable for all debts and obli-
gations of the constituent corporations in the same manner as if such
new corporation had itself incurred such debts or obligations.
S 28. Subdivision 2 of section 711 of the surrogate's court procedure
act is amended to read as follows:
2. Where by reason of his having wasted or improperly applied the
assets of the estate, or made investments unauthorized by law or other-
wise improvidently managed or injured the property committed to his
charge, INCLUDING BY FAILING TO COMPLY WITH PARAGRAPH (C) OF SECTION
8-1.9 OF THE ESTATES, POWERS AND TRUSTS LAW, or by reason of other
misconduct in the execution of his office or dishonesty, drunkenness,
improvidence or want of understanding, he is unfit for the execution of
his office.
S 29. Subparagraph 6 of paragraph (a) of section 102 of the not-for-
profit corporation law is amended, and eleven new subparagraphs 3-a,
3-b, 6-a, 9-a, 19, 20, 21, 22, 23, 24 and 25 are added to read as
follows:
(3-A) "CHARITABLE CORPORATION" MEANS ANY CORPORATION FORMED, OR FOR
THE PURPOSES OF THIS CHAPTER, DEEMED TO BE FORMED, FOR CHARITABLE
PURPOSES.
(3-B) "CHARITABLE PURPOSES" OF A CORPORATION MEANS PURPOSES CONTAINED
IN THE CERTIFICATE OF INCORPORATION OF THE CORPORATION THAT ARE CHARITA-
BLE, EDUCATIONAL, RELIGIOUS, SCIENTIFIC, LITERARY, CULTURAL OR FOR THE
PREVENTION OF CRUELTY TO CHILDREN OR ANIMALS.
(6) "Director" means any member of the governing board of a corpo-
ration, whether designated as director, trustee, manager, governor, or
by any other title. The term "board" means "board of directors" OR ANY
OTHER BODY CONSTITUTING A "GOVERNING BOARD" AS DEFINED IN THIS SECTION.
(6-A) "ENTIRE BOARD" MEANS THE TOTAL NUMBER OF DIRECTORS ENTITLED TO
VOTE WHICH THE CORPORATION WOULD HAVE IF THERE WERE NO VACANCIES. IF
THE BY-LAWS OF THE CORPORATION PROVIDE THAT THE BOARD SHALL CONSIST OF A
FIXED NUMBER OF DIRECTORS, THEN THE "ENTIRE BOARD" SHALL CONSIST OF THAT
NUMBER OF DIRECTORS. IF THE BY-LAWS OF ANY CORPORATION PROVIDE THAT THE
BOARD MAY CONSIST OF A RANGE BETWEEN A MINIMUM AND MAXIMUM NUMBER OF
DIRECTORS, THEN THE "ENTIRE BOARD" SHALL CONSIST OF THE NUMBER OF DIREC-
TORS WITHIN SUCH RANGE THAT WERE ELECTED AS OF THE MOST RECENTLY HELD
ELECTION OF DIRECTORS.
(9-A) "NON-CHARITABLE CORPORATION" MEANS ANY CORPORATION FORMED UNDER
THIS CHAPTER, OTHER THAN A CHARITABLE CORPORATION, INCLUDING BUT NOT
LIMITED TO ONE FORMED FOR ANY ONE OR MORE OF THE FOLLOWING NON-PECUNIARY
PURPOSES: CIVIC, PATRIOTIC, POLITICAL, SOCIAL, FRATERNAL, ATHLETIC,
AGRICULTURAL, HORTICULTURAL, OR ANIMAL HUSBANDRY, OR FOR THE PURPOSE OF
S. 5845 17
OPERATING A PROFESSIONAL, COMMERCIAL, INDUSTRIAL, TRADE OR SERVICE ASSO-
CIATION.
(19) AN "AFFILIATE" OF A CORPORATION MEANS ANY ENTITY CONTROLLED BY,
IN CONTROL OF, OR UNDER COMMON CONTROL WITH SUCH CORPORATION.
(20) "INDEPENDENT AUDITOR" MEANS ANY CERTIFIED PUBLIC ACCOUNTANT
PERFORMING THE AUDIT OF THE FINANCIAL STATEMENTS OF A CORPORATION
REQUIRED BY SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B OF THE
EXECUTIVE LAW.
(21) "INDEPENDENT DIRECTOR" MEANS A DIRECTOR WHO: (I) IS NOT, AND HAS
NOT BEEN WITHIN THE LAST THREE YEARS, AN EMPLOYEE OF THE CORPORATION OR
AN AFFILIATE OF THE CORPORATION, AND DOES NOT HAVE A RELATIVE WHO IS, OR
HAS BEEN WITHIN THE LAST THREE YEARS, A KEY EMPLOYEE OF THE CORPORATION
OR AN AFFILIATE OF THE CORPORATION; (II) HAS NOT RECEIVED, AND DOES NOT
HAVE A RELATIVE WHO HAS RECEIVED, IN ANY OF THE LAST THREE FISCAL YEARS,
MORE THAN TEN THOUSAND DOLLARS IN DIRECT COMPENSATION FROM THE CORPO-
RATION OR AN AFFILIATE OF THE CORPORATION (OTHER THAN REIMBURSEMENT FOR
EXPENSES REASONABLY INCURRED AS A DIRECTOR OR REASONABLE COMPENSATION
FOR SERVICE AS A DIRECTOR AS PERMITTED BY PARAGRAPH (A) OF SECTION 202
(GENERAL AND SPECIAL POWERS)); AND (III) IS NOT A CURRENT EMPLOYEE OF OR
DOES NOT HAVE A SUBSTANTIAL FINANCIAL INTEREST IN, AND DOES NOT HAVE A
RELATIVE WHO IS A CURRENT OFFICER OF OR HAS A SUBSTANTIAL FINANCIAL
INTEREST IN, ANY ENTITY THAT HAS MADE PAYMENTS TO, OR RECEIVED PAYMENTS
FROM, THE CORPORATION OR AN AFFILIATE OF THE CORPORATION FOR PROPERTY OR
SERVICES IN AN AMOUNT WHICH, IN ANY OF THE LAST THREE FISCAL YEARS,
EXCEEDS THE LESSER OF TWENTY-FIVE THOUSAND DOLLARS OR TWO PERCENT OF
SUCH ENTITY'S CONSOLIDATED GROSS REVENUES. FOR PURPOSES OF THIS SUBPAR-
AGRAPH, "PAYMENT" DOES NOT INCLUDE CHARITABLE CONTRIBUTIONS.
(22) "RELATIVE" OF AN INDIVIDUAL MEANS HIS OR HER (I) SPOUSE, ANCES-
TORS, BROTHERS AND SISTERS (WHETHER WHOLE OR HALF BLOOD), CHILDREN
(WHETHER NATURAL OR ADOPTED), GRANDCHILDREN, GREAT-GRANDCHILDREN, AND
SPOUSES OF BROTHERS, SISTERS, CHILDREN, GRANDCHILDREN, AND GREAT-GRAND-
CHILDREN; OR (II) DOMESTIC PARTNER AS DEFINED IN SECTION TWENTY-NINE
HUNDRED NINETY-FOUR-A OF THE PUBLIC HEALTH LAW.
(23) "RELATED PARTY" MEANS (I) ANY DIRECTOR, OFFICER OR KEY EMPLOYEE
OF THE CORPORATION OR ANY AFFILIATE OF THE CORPORATION; (II) ANY RELA-
TIVE OF ANY DIRECTOR, OFFICER OR KEY EMPLOYEE OF THE CORPORATION OR ANY
AFFILIATE OF THE CORPORATION; OR (III) ANY ENTITY IN WHICH ANY INDIVID-
UAL DESCRIBED IN CLAUSES (I) AND (II) OF THIS SUBPARAGRAPH HAS A THIR-
TY-FIVE PERCENT OR GREATER OWNERSHIP OR BENEFICIAL INTEREST OR, IN THE
CASE OF A PARTNERSHIP OR PROFESSIONAL CORPORATION, A DIRECT OR INDIRECT
OWNERSHIP INTEREST IN EXCESS OF FIVE PERCENT.
(24) "RELATED PARTY TRANSACTION" MEANS ANY TRANSACTION, AGREEMENT OR
ANY OTHER ARRANGEMENT IN WHICH A RELATED PARTY HAS A FINANCIAL INTEREST
AND IN WHICH THE CORPORATION OR ANY AFFILIATE OF THE CORPORATION IS A
PARTICIPANT.
(25) "KEY EMPLOYEE" MEANS ANY PERSON WHO IS IN A POSITION TO EXERCISE
SUBSTANTIAL INFLUENCE OVER THE AFFAIRS OF THE CORPORATION, AS REFERENCED
IN 26 U.S.C. S 4958(F)(1)(A) AND FURTHER SPECIFIED IN 26 CFR S
53.4958-3(C), (D) AND (E), OR SUCCEEDING PROVISIONS.
S 30. Paragraphs (a), (b) and (c) of section 103 of the not-for-profit
corporation law, paragraph (a) as amended by chapter 807 of the laws of
1973, paragraph (b) as amended by chapter 847 of the laws of 1970, and
paragraph (c) as amended by chapter 961 of the laws of 1972, are amended
to read as follows:
(a) Except as otherwise provided in this section, this chapter
applies to every domestic corporation as herein defined, and to every
S. 5845 18
foreign corporation as herein defined which is authorized to conduct or
which conducts any activities in this state. This chapter also applies
to any other domestic corporation or foreign corporation of any [type
or] kind to the extent, if any, provided under this chapter or any law
governing such corporation and, if no such provision for application is
made, to the extent, if any, that the membership corporations law
applied to such corporation as of the effective date of this chapter. A
corporation formed by a special act of this state which has as its prin-
cipal purpose an education purpose and which is a member of the univer-
sity of the state of New York, is an "education corporation" under
section two hundred sixteen-a of the education law.
To the extent that the membership corporations law or the general
corporation law applied to it as of the effective date of this chapter,
the corresponding provisions of this chapter apply to a corporation
heretofore formed by or pursuant to a special act of this state other
than a religious corporation or an "education corporation" under clause
(b) of subdivision one of section two hundred sixteen-a of the education
law, if (1) its principal purpose is a religious, charitable or educa-
tion purpose, and (2) it is operated, supervised or controlled by or in
connection with a religious organization. [Any such corporation may
elect hereunder at any time after the effective date of this chapter to
file a certificate of type under section one hundred thirteen (Certif-
icate of type of not-for-profit corporation). Upon the filing of such
certificate by the department of state, this chapter shall apply in all
respects to such corporation.]
This chapter also applies to any other corporation of any [type or]
kind, formed [not for profit] NOT-FOR-PROFIT under any other chapter of
the laws of this state except a chapter of the consolidated laws, to the
extent that provisions of this chapter do not conflict with the
provisions of such unconsolidated law. If an applicable provision of
such unconsolidated law relates to a matter embraced in this chapter but
is not in conflict therewith, both provisions shall apply. Any corpo-
ration to which this chapter is made applicable by this paragraph shall
be treated as a "corporation" or "domestic corporation" as such terms
are used in this chapter, except that the purposes of any such corpo-
ration formed or formable under such unconsolidated law shall not there-
by be extended. For the purpose of this paragraph, the effective date
of this chapter as to corporations to which this chapter is made appli-
cable by this paragraph shall be September one, nineteen hundred seven-
ty-three.
(b) The general corporation law does not apply to a corporation of
any [type or] kind to which this chapter applies. A reference in any
statute of this state which makes a provision of the general corporation
law applicable to a corporation of any [type or] kind to which this
chapter is applicable or a reference in any statute of this state, other
than the membership corporations law, which makes a provision of the
membership corporations law applicable to a corporation of any [type or]
kind shall be deemed and construed to refer to and make applicable the
corresponding provision, if any, of this chapter.
(c) If any provision in articles one to thirteen inclusive of this
chapter conflicts with a provision of any subsequent articles or of any
special act under which a corporation to which this chapter applies is
formed, the provision in such subsequent article or special act
prevails. A provision of any such subsequent article or special act
relating to a matter referred to in articles one to thirteen inclusive
and not in conflict therewith is supplemental and both shall apply.
S. 5845 19
Whenever the board of a [Type B] corporation, formed under a special
act, reasonably makes an interpretation as to whether a provision of the
special act or this chapter prevails, or both apply, such interpretation
shall govern unless and until a court determines otherwise, if such
board has acted in good faith for a purpose which it reasonably believes
to be in the best interests of the corporation, provided however, that
such interpretation shall not bind any governmental body or officer.
S 31. Paragraph (a) of section 104-A of the not-for-profit corporation
law is REPEALED.
S 32. Section 105 of the not-for-profit corporation law, as amended by
chapter 172 of the laws of 1999, is amended to read as follows:
S 105. Certificates; corrections.
(A) ANY CERTIFICATE OR OTHER INSTRUMENT RELATING TO A DOMESTIC OR
FOREIGN CORPORATION SUBMITTED TO THE DEPARTMENT OF STATE UNDER THIS
CHAPTER MAY BE CORRECTED WITH RESPECT TO ANY TYPOGRAPHICAL, OR SIMILAR
NON-MATERIAL ERROR APPARENT ON THE FACE OF THE CERTIFICATE OR INSTRU-
MENT, PRIOR TO THE FILING OF SUCH CERTIFICATE OR INSTRUMENT BY THE
DEPARTMENT OF STATE. SUCH CORRECTION SHALL BE EFFECTED BY THE DEPARTMENT
OF STATE UPON AUTHORIZATION IN WRITING OR BY ELECTRONIC MAIL BY THE
INCORPORATOR, OR FOLLOWING INCORPORATION, BY ANY PERSON AUTHORIZED BY
THE CORPORATION.
(B) Any certificate or other instrument relating to a domestic or
foreign corporation filed by the department of state under this chapter
may be corrected with respect to any [informality or] TYPOGRAPHICAL OR
SIMILAR NON-MATERIAL error apparent on the face or defect in the
execution thereof including the deletion of any matter not permitted to
be stated therein. A certificate, entitled "Certificate of correction
of.......... (correct title of certificate and name of corporation)"
shall be signed and delivered to the department of state. It shall set
forth the name of the corporation, the date the certificate to be
corrected was filed by the department of state, the provision in the
certificate as corrected or eliminated and if the execution was defec-
tive, the proper execution. The filing of the certificate by the depart-
ment of state shall not alter the effective time of the instrument being
corrected, which shall remain as its original effective time, and shall
not affect any right or liability accrued or incurred before such
filing. A corporate name may not be changed or corrected under this
section OTHER THAN TO CORRECT ANY TYPOGRAPHICAL OR SIMILAR NON-MATERIAL
ERROR.
S 33. Subparagraphs 7, 8 and 9 of paragraph (a) of section 112 of the
not-for-profit corporation law, subparagraphs 7 and 9 as amended by
chapter 1058 of the laws of 1971, are amended and a new subparagraph 10
is added to read as follows:
(7) To enforce any right given under this chapter to members, a
director or an officer of a [Type B or Type C] CHARITABLE corporation.
The attorney-general shall have the same status as such members, direc-
tor or officer.
(8) To compel the directors and officers, or any of them, of a [Type B
or Type C] CHARITABLE corporation which has been dissolved under section
1011 (Dissolution for failure to file certificate of type of Not-for-
Profit Corporation Law under section 113) to account for the assets of
the dissolved corporation.
(9) Upon application, ex parte, for an order to the supreme court at a
special term held within the judicial district where the office of the
corporation is located, and if the court so orders, to enforce any right
given under this chapter to members, a director or an officer of a [Type
S. 5845 20
A corporation] NON-CHARITABLE CORPORATION. For such purpose, the attor-
ney-general shall have the same status as such members, director or
officer.
(10) TO ENJOIN, VOID OR RESCIND ANY RELATED PARTY TRANSACTION, OR SEEK
ADDITIONAL DAMAGES OR REMEDIES PURSUANT TO SECTION 715 (RELATED PARTY
TRANSACTIONS) OF THIS CHAPTER.
S 34. Subparagraph 1 of paragraph (c) of section 112 of the not-for-
profit corporation law is amended to read as follows:
(1) As used in this paragraph the term "resident" shall include indi-
viduals, domestic corporations of any [type or] kind and foreign corpo-
rations of any [type or] kind authorized to do business or carry on
activities in the state.
S 35. Section 113 of the not-for-profit corporation law is REPEALED.
S 36. Section 114 of the not-for-profit corporation law, as added by
chapter 847 of the laws of 1970, is amended to read as follows:
S 114. Visitation of supreme court.
[Type B and Type C] CHARITABLE corporations, whether formed under
general or special laws, with their books and vouchers, shall be subject
to the visitation and inspection of a justice of the supreme court, or
of any person appointed by the court for that purpose. If it appears by
the verified petition of a member, DIRECTOR, OFFICER or creditor of any
such corporation, that it, or its directors, officers, MEMBERS, KEY
EMPLOYEES or agents, have misappropriated any of the funds or property
of the corporation, or diverted them from the purpose of its incorpo-
ration, or that the corporation has acquired property in excess of the
amount which it is authorized by law to hold, or has engaged in any
business other than that stated in its certificate of incorporation, the
court may order that notice of at least eight days, with a copy of the
petition, be served on the corporation, THE ATTORNEY GENERAL and the
persons charged with misconduct, requiring them to show cause at a time
and place specified, why they should not be required to make and file an
inventory and account of the property, effects and liabilities of such
corporation with a detailed statement of its transactions during the
twelve months next preceding the granting of such order. On the hearing
of such application, the court may make an order requiring such invento-
ry, account and statement to be filed, and proceed to take and state an
account of the property and liabilities of the corporation, or may
appoint a referee for that purpose. When such account is taken and
stated, after hearing all the parties to the application, the court may
enter a final order determining the amount of property so held by the
corporation, its annual income, whether any of the property or funds of
the corporation have been misappropriated or diverted to any other
purpose than that for which such corporation was incorporated, and
whether such corporation has been engaged in any activity not covered by
its certificate of incorporation. An appeal may be taken from the order
by any party aggrieved to the appellate division of the supreme court,
and to the court of appeals, as in a civil action. No corporation shall
be required to make and file more than one inventory and account in any
one year, nor to make a second account and inventory, while proceedings
are pending for the statement of an account under this section.
S 37. Section 115 of the not-for-profit corporation law, as added by
chapter 669 of the laws of 1977, is amended to read as follows:
S 115. Power to solicit contributions for charitable purposes.
[No corporation having the power to solicit contributions for charita-
ble purposes may solicit contributions for any purpose for which
approval of such solicitation is required under the provisions of
S. 5845 21
section four hundred four of this chapter unless the certificate specif-
ically makes provision for such solicitation and the required written
approval is endorsed on or annexed to such certificate or unless the
corporation is among those referred to in section one hundred seventy-
two-a of the executive law. If such approval is not obtained and the
corporation continues to solicit or to receive contributions for such
purpose or advertises that it has obtained such approval, the] (A) NO
CORPORATION REQUIRED TO OBTAIN APPROVAL OR PROVIDE NOTICE OF FORMATION
PURSUANT TO SECTION 404 (APPROVALS, NOTICES AND CONSENTS) OF THIS CHAP-
TER MAY SOLICIT CONTRIBUTIONS FOR ANY PURPOSE REQUIRING SUCH APPROVAL OR
NOTICE UNLESS AND UNTIL SUCH CORPORATION (1) OBTAINS AND SUBMITS ANY
APPROVAL OR NOTICE REQUIRED THEREUNDER, AND (2) IS IN COMPLIANCE WITH
THE REGISTRATION AND REPORTING REQUIREMENTS OF ARTICLE SEVEN-A OF THE
EXECUTIVE LAW AND SECTION 8-1.4 OF THE ESTATES, POWERS AND TRUSTS LAW.
(B) THE attorney general[, at the request of the officer or body
authorized to grant such approval, shall] MAY maintain an action or
proceeding pursuant to the provisions of subparagraph one of paragraph
(a) of section one hundred twelve of this [chapter] ARTICLE AGAINST ANY
CORPORATION THAT SOLICITS CONTRIBUTIONS IN VIOLATION OF PARAGRAPH (A) OF
THIS SECTION. Such an action may also be maintained in relation to a
corporation hereinafter incorporated if the name, purposes, objects or
the activities of such corporation may, in any manner, lead to the
belief that the corporation possesses or may exercise any of such
purposes.
S 38. Section 201 of the not-for-profit corporation law, paragraph (b)
as amended by chapter 847 of the laws of 1970 and paragraph (c) as
amended by chapter 1058 of the laws of 1971, is amended to read as
follows:
S 201. Purposes.
(a) A corporation, as defined in [subparagraph (5),] paragraph (a) of
S 102 (Definitions), may be formed under this chapter [as provided in
paragraph (b)] AS A CHARITABLE CORPORATION OR A NON-CHARITABLE CORPO-
RATION unless it may be formed under any other corporate law of this
state, in which event it may not be formed under this chapter unless
such other corporate law expressly so provides.
(b) [A corporation, of a type and for a purpose or purposes as
follows, may be formed under this chapter, provided consents required
under any other statute of this state have been obtained:
Type A -] A CORPORATION FORMED UNDER THIS CHAPTER ON OR AFTER JULY
FIRST, TWO THOUSAND FOURTEEN SHALL EITHER BE A CHARITABLE CORPORATION OR
A NON-CHARITABLE CORPORATION. ANY CORPORATION FORMED FOR BOTH CHARITABLE
PURPOSES AND NON-CHARITABLE PURPOSES SHALL BE DEEMED A CHARITABLE CORPO-
RATION FOR PURPOSES OF THIS CHAPTER. A TYPE A not-for-profit corporation
[of this type may be formed for any lawful non-business purpose or
purposes including, but not limited to, any one or more of the following
non-pecuniary purposes: civic, patriotic, political, social, fraternal,
athletic, agricultural, horticultural, animal husbandry, and for a
professional, commercial, industrial, trade or service association.
Type B - A not-for-profit corporation of this type may be formed for
any one or more of the following non-business purposes: charitable,
educational, religious, scientific, literary, cultural or for the
prevention of cruelty to children or animals.
Type C - A not-for-profit corporation of this type may be formed for
any lawful business purpose to achieve a lawful public or quasi-public
objective.
S. 5845 22
Type D - A not-for-profit corporation of this type may be formed under
this chapter when such formation is authorized by any other corporate
law of this state for any business or non-business, or pecuniary or
non-pecuniary, purpose or purposes specified by such other law, whether
such purpose or purposes are also within types A, B, C above or other-
wise.
(c) If a corporation is formed for purposes which are within both type
A and type B above, it is a type B corporation. If a corporation has
among its purposes any purpose which is within type C, such corporation
is a type C corporation. A type D corporation is subject to all
provisions of this chapter which are applicable to a type B corporation
under this chapter unless provided to the contrary in, and subject to
the contrary provisions of, the other corporate law authorizing forma-
tion under this chapter of the type D corporation.] FORMED PRIOR TO JULY
FIRST, TWO THOUSAND FOURTEEN SHALL BE DEEMED A NON-CHARITABLE CORPO-
RATION UNDER THIS CHAPTER. ANY SUBMISSION OR FILING BY SUCH CORPORATION
TO ANY PERSON OR ENTITY SHALL BE DEEMED TO HAVE BEEN SUBMITTED OR FILED
BY A NON-CHARITABLE CORPORATION, AND ANY REFERENCE IN ANY SUCH FILING OR
SUBMISSION REFERRING TO THE STATUS OF SUCH CORPORATION AS A TYPE A
CORPORATION SHALL BE DEEMED TO REFER TO A NON-CHARITABLE CORPORATION.
(C) A TYPE B OR C NOT-FOR-PROFIT CORPORATION FORMED PRIOR TO JULY
FIRST, TWO THOUSAND FOURTEEN SHALL BE DEEMED A CHARITABLE CORPORATION
FOR ALL PURPOSES UNDER THIS CHAPTER. ANY SUBMISSION OR FILING BY SUCH
CORPORATION TO ANY PERSON OR ENTITY SHALL BE DEEMED TO HAVE BEEN SUBMIT-
TED OR FILED BY A CHARITABLE CORPORATION, AND ANY REFERENCE IN ANY SUCH
FILING OR SUBMISSION REFERRING TO THE STATUS OF SUCH CORPORATION AS A
TYPE B OR TYPE C CORPORATION SHALL BE DEEMED TO REFER TO A CHARITABLE
CORPORATION.
(D) A TYPE D NOT-FOR-PROFIT CORPORATION FORMED PRIOR TO JULY FIRST,
TWO THOUSAND FOURTEEN FOR CHARITABLE PURPOSES AS THAT TERM IS DEFINED IN
THIS CHAPTER SHALL BE DEEMED A CHARITABLE CORPORATION. ANY SUBMISSION OR
FILING BY SUCH CORPORATION TO ANY PERSON OR ENTITY SHALL BE DEEMED TO
HAVE BEEN SUBMITTED OR FILED BY A CHARITABLE CORPORATION, AND ANY REFER-
ENCE IN ANY SUCH FILING OR SUBMISSION REFERRING TO THE STATUS OF SUCH
CORPORATION AS A TYPE D CORPORATION SHALL BE DEEMED TO REFER TO A CHARI-
TABLE CORPORATION. ANY OTHER TYPE D NOT-FOR-PROFIT CORPORATIONS FORMED
PRIOR TO JULY FIRST, TWO THOUSAND FOURTEEN SHALL BE DEEMED A NON-CHARI-
TABLE CORPORATION. ANY SUBMISSION OR FILING BY SUCH CORPORATION TO ANY
PERSON OR ENTITY SHALL BE DEEMED TO HAVE BEEN SUBMITTED OR FILED BY A
NON-CHARITABLE CORPORATION, AND ANY REFERENCE IN ANY SUCH FILING OR
SUBMISSION REFERRING TO THE STATUS OF SUCH CORPORATION AS A TYPE D
CORPORATION SHALL BE DEEMED TO REFER TO A NON-CHARITABLE CORPORATION.
S 39. Section 204 of the not-for-profit corporation law is amended to
read as follows:
S 204. Limitation on activities.
Notwithstanding any other provision of this chapter or any other
general law, a corporation of any [type or] kind to which this chapter
applies shall conduct no activities for pecuniary profit or financial
gain, whether or not in furtherance of its corporate purposes, except to
the extent that such activity supports its other lawful activities then
being conducted.
S 40. Subparagraphs 2 and 3 of paragraph (a) of section 301 of the
not-for-profit corporation law, subparagraph 2 as amended by chapter 344
of the laws of 2004, are amended to read as follows:
(2) (A) Shall be such as to distinguish it from the names of corpo-
rations of any [type or] kind, or a fictitious name of an authorized
S. 5845 23
foreign corporation filed pursuant to article thirteen of this chapter,
as such names appear on the index of names of existing domestic and
authorized foreign corporations of any [type or] kind, including ficti-
tious names of authorized foreign corporations filed pursuant to article
thirteen of this chapter, in the department of state, division of corpo-
rations, or a name the right to which is reserved.
(B) Shall be such as to distinguish it from (i) the names of domestic
limited liability companies, (ii) the names of authorized foreign limit-
ed liability companies, (iii) the fictitious names of authorized foreign
limited liability companies, (iv) the names of domestic limited partner-
ships, (v) the names of authorized foreign limited partnerships, or (vi)
the fictitious names of authorized foreign limited partnerships, in each
case, as such names appear on the index of names of existing domestic
and authorized foreign limited liability companies, including fictitious
names of authorized foreign limited liability companies, in the depart-
ment of state, or on the index of names of existing domestic or author-
ized foreign limited partnerships, including fictitious names of author-
ized foreign limited partnerships, in the department of state, or names
the rights to which are reserved; provided, however, that no corporation
that was formed prior to the effective date of this clause and no
foreign corporation that was qualified to conduct activities in this
state prior to such effective date shall be required to change the name
or fictitious name it had on such effective date solely by reason of
such name or fictitious name being indistinguishable from the name or
fictitious name of any domestic or authorized foreign limited liability
company or limited partnership or from any name the right to which is
reserved by or on behalf of any domestic or foreign limited liability
company or limited partnership.
(3) Shall not contain any word or phrase, or any abbreviation or
derivative thereof, the use of which is prohibited or restricted by
section 404 (Approvals, NOTICES and consents) or any other statute of
this state, unless in the latter case the restrictions have been
complied with.
S 41. Subparagraph 3 of paragraph (b) of section 302 of the not-for-
profit corporation law, as amended by chapter 847 of the laws of 1970,
is amended to read as follows:
(3) Shall not prevent a foreign corporation from being authorized
under a name which is similar to the name of a corporation of any [type
or] kind existing or authorized under any statute, if the department of
state finds, upon proof by affidavit or otherwise as it may determine,
that a difference between such names exists in the terms or abbrevi-
ations indicating corporate character or otherwise, that the applicant
has conducted activities as a corporation under its said name for not
less than ten consecutive years immediately prior to the date of its
application, that the activities to be conducted in this state are not
the same or similar to the business or activities conducted by the
corporation with whose name it may conflict and that the public is not
likely to be confused or deceived, and if the applicant shall agree in
its application for authority to use with its corporate name, in this
state, to be placed immediately under or following such name, the words
"a ..... (name of jurisdiction of incorporation) corporation".
S 42. Paragraph (c) of section 303 of the not-for-profit corporation
law, as amended by chapter 590 of the laws of 1982, is amended to read
as follows:
(c) Application to reserve a corporate name shall be delivered to the
department of state. It shall set forth the name and address of the
S. 5845 24
applicant, the name to be reserved and a statement of the basis under
paragraph (a) or (b) for the application. The secretary of state may
require the applicant to set forth in his application the nature of the
activities to be conducted by the corporation. If the name is available
for corporate use, the department of state shall reserve the name for
the use of the applicant for a period of sixty days and issue a certif-
icate of reservation. The prohibitions, restrictions and qualifications
set forth in section 301 (Corporate name; general), section 302 (Corpo-
rate name; exceptions) and section 404 (Approvals, NOTICES and consents)
are not waived by the issuance of a certificate of reservation. The
certificate of reservation shall include the name of the applicant, the
name reserved and the date of the reservation. The certificate of reser-
vation (or in lieu thereof an affidavit by the applicant or by his agent
or attorney that the certificate of reservation has been lost or
destroyed) shall accompany the certificate of incorporation or the
application for authority when either is delivered to the department of
state.
S 43. Section 304 of the not-for-profit corporation law, as amended by
chapter 168 of the laws of 1982, is amended to read as follows:
S 304. Statutory designation of secretary of state as agent of domestic
corporations [formed under article four of this chapter] and
authorized foreign corporations for service of process.
(a) The secretary of state shall be the agent of every domestic corpo-
ration [formed under article four of this chapter] and every authorized
foreign corporation upon whom process against the corporation may be
served.
(b) Any designation by a domestic corporation [formed under article
four of this chapter] or foreign corporation of the secretary of state
as such agent, which designation is in effect on the effective date of
this chapter, shall continue. Every domestic corporation [formed under
article four of this chapter] or foreign corporation, existing or
authorized on the effective date of this chapter, which has not desig-
nated the secretary of state as such agent, shall be deemed to have done
so.
(c) Any designation by a domestic corporation [formed under article
four of this chapter] or foreign corporation of an agent other than the
secretary of state which is in effect on the effective date of this
chapter shall continue in effect until changed or revoked as provided in
this chapter.
(d) Any designated post-office address to which the secretary of state
shall mail a copy of process served upon him OR HER as agent of a domes-
tic corporation [formed under article four of this chapter] or foreign
corporation, shall continue until the filing of a certificate under this
chapter directing the mailing to a different post-office address.
S 44. Paragraph (a) of section 305 of the not-for-profit corporation
law, as amended by chapter 131 of the laws of 1985, is amended to read
as follows:
(a) Every domestic corporation or authorized foreign corporation may
designate a registered agent in this state upon whom process against
such corporation may be served. The agent shall be a natural person who
is a resident of or has a business address in this state or a domestic
corporation or foreign corporation of any [type or] kind formed, or
authorized to do business in this state, under this chapter or under any
other statute of this state.
S 45. Paragraphs (b) and (c) of section 306 of the not-for-profit
corporation law, paragraph (b) as amended by chapter 168 of the laws of
S. 5845 25
1982, and paragraph (c) as amended by chapter 93 of the laws of 1984,
are amended to read as follows:
(b) Service of process on the secretary of state as agent of a domes-
tic corporation [formed under article four of this chapter] or an
authorized foreign corporation shall be made by personally delivering to
and leaving with [him or his] THE deputy OF THE SECRETARY OF STATE, or
with any person authorized by the secretary of state to receive such
service, at the office of the department of state in the city of Albany,
duplicate copies of such process together with the statutory fee, which
fee shall be a taxable disbursement. Service of process on such corpo-
ration shall be complete when the secretary of state is so served. The
secretary of state shall promptly send one of such copies by certified
mail, return receipt requested, to such corporation, at the post office
address, on file in the department of state, specified for the purpose.
If a domestic corporation [formed under article four of this chapter] or
an authorized foreign corporation has no such address on file in the
department of state, the secretary of state shall so mail such copy to
such corporation at the address of its office within this state on file
in the department.
(c) If an action or special proceeding is instituted in a court of
limited jurisdiction, service of process may be made in the manner
provided in this section if the office of the domestic corporation
[formed under article four of this chapter] or foreign corporation is
within the territorial jurisdiction of the court.
S 46. The not-for-profit corporation law is amended by adding a new
section 309 to read as follows:
S 309. PERSONAL JURISDICTION AND SERVICE OF PROCESS ON NON-DOMICILIARY
RESIDENT DIRECTOR, OFFICER, KEY EMPLOYEE OR AGENT.
A PERSON, BY BECOMING A DIRECTOR, OFFICER, KEY EMPLOYEE OR AGENT OF A
CORPORATION IS SUBJECT TO THE PERSONAL JURISDICTION OF THE SUPREME COURT
OF THE STATE OF NEW YORK, AND IN AN ACTION OR PROCEEDING BY THE ATTORNEY
GENERAL UNDER THIS CHAPTER PROCESS MAY BE SERVED UPON SUCH PERSON AS
PROVIDED IN SECTION THREE HUNDRED THIRTEEN OF THE CIVIL PRACTICE LAW AND
RULES.
S 47. Subparagraphs 2 and 4 of paragraph (a) of section 402 of the
not-for-profit corporation law, subparagraph 2 as amended by chapter 847
of the laws of 1970 and subparagraph 4 as amended by chapter 679 of the
laws of 1985, are amended to read as follows:
(2) That the corporation is a corporation as defined in subparagraph
(a) (5) of section 102 (Definitions)[;], the purpose or purposes for
which it is formed, and [the type of] WHETHER IT IS A CHARITABLE corpo-
ration [it shall be] OR A NON-CHARITABLE CORPORATION under section 201
(Purposes)[; and in the case of a Type C corporation, the lawful public
or quasi-public objective which each business purpose will achieve].
ANY CORPORATION MAY ALSO SET FORTH ANY ACTIVITIES THAT IT INTENDS TO
CARRY OUT IN FURTHERANCE OF SUCH PURPOSE OR PURPOSES; PROVIDED THAT THIS
SUBPARAGRAPH SHALL NOT BE INTERPRETED TO REQUIRE THAT THE CERTIFICATE OF
INCORPORATION SET FORTH SUCH ACTIVITIES OR OTHERWISE STATE HOW THE
CORPORATION'S PURPOSES WILL BE ACHIEVED.
(4) [In the case of a Type A, Type B, or Type C corporation, the] THE
names and addresses of the initial directors. [In the case of a Type D
corporation, the names and addresses of the initial directors, if any,
may but need not be set forth.]
S 48. The section heading and paragraph (d) of section 404 of the
not-for-profit corporation law, the section heading and paragraph (d) as
amended by chapter 139 of the laws of 1993, and paragraph (d) as relet-
S. 5845 26
tered by chapter 431 of the laws of 1993, are amended to read as
follows:
Approvals, NOTICES and consents.
(d) Every CORPORATION WHOSE certificate of incorporation INCLUDES
AMONG ITS PURPOSES THE OPERATION OF A SCHOOL; A COLLEGE, UNIVERSITY OR
OTHER ENTITY PROVIDING POST SECONDARY EDUCATION; A LIBRARY; OR A MUSEUM
OR HISTORICAL SOCIETY SHALL HAVE ENDORSED THEREON OR ANNEXED THERETO THE
APPROVAL OF THE COMMISSIONER OF EDUCATION, OR IN THE CASE OF A COLLEGE
OR A UNIVERSITY, THE WRITTEN AUTHORIZATION OF THE REGENTS. ANY OTHER
CORPORATION THE CERTIFICATE OF INCORPORATION OF which includes a purpose
for which a corporation might be chartered by the regents of the univer-
sity of the State of New York shall [have endorsed thereon or annexed
thereto the consent of the commissioner of education.] PROVIDE A CERTI-
FIED COPY OF THE CERTIFICATE OF INCORPORATION TO THE COMMISSIONER OF
EDUCATION WITHIN THIRTY BUSINESS DAYS AFTER THE CORPORATION RECEIVES
CONFIRMATION FROM THE DEPARTMENT OF STATE THAT THE CERTIFICATE HAS BEEN
ACCEPTED FOR FILING.
S 49. Paragraph (w) of section 404 of the not-for-profit corporation
law is REPEALED and a new paragraph (w) is added to read as follows:
(W) A STATEMENT IN THE CERTIFICATE OF INCORPORATION OF A CORPORATION
THAT THE CORPORATION'S PURPOSES AND POWERS DO NOT INCLUDE ANY OF THOSE
DESCRIBED IN PARAGRAPHS (A) THROUGH (V) OF THIS SECTION SHALL BE SUFFI-
CIENT TO SATISFY THE APPROVAL AND NOTICE REQUIREMENTS CONTAINED IN THIS
SECTION PROVIDED SUCH STATEMENT IS ACCURATE AS OF THE DATE THE CERTIF-
ICATE OF INCORPORATION IS FILED.
S 50. Paragraph (d) of section 502 of the not-for-profit corporation
law is amended to read as follows:
(d) A member's capital contribution shall be evidenced by a capital
certificate which shall be non-transferable, except that the certificate
of incorporation of a [Type A] NON-CHARITABLE corporation may provide
that its capital certificates, or some of them, may be transferable to
other members with the consent of the corporation upon specified terms
and conditions.
S 51. Paragraphs (b) and (c) of section 503 of the not-for-profit
corporation law, subparagraph 1 of paragraph (b) and paragraph (c) as
amended by chapter 847 of the laws of 1970, are amended to read as
follows:
(b) Each capital certificate shall when issued state upon the face
thereof:
(1) [That the corporation is a Type ..... corporation under section
113 or section 402 of the New York Not-for-Profit Corporation Law.
(2)] The name of the member to whom issued.
[(3)] (2) The amount of the member's capital contribution evidenced by
such certificate.
[(4)] (3) If appropriate, that the corporation is a [Type A] NON-CHAR-
ITABLE corporation, and that its certificate of incorporation provides
that the capital certificate is transferable to other members with the
consent of the corporation.
[(c)] (4) The fact that the corporation is a not-for-profit corpo-
ration, and that the capital certificate is non-transferable or is
transferable to other members, with the consent of the corporation,
shall be noted conspicuously on the face or back of each such certif-
icate.
S 52. Paragraph (b) of section 505 of the not-for-profit corporation
law, subparagraph 1 as amended by chapter 847 of the laws of 1970, is
amended to read as follows:
S. 5845 27
(b) Each subvention certificate shall when issued state upon the face
thereof:
(1) [That the corporation is a Type ..... corporation under section
113 or section 402 of the New York Not-for-Profit Corporation Law.
(2)] The name of the person or persons to whom issued.
[(3)] (2) The amount of the subvention evidenced by such certificate.
[(4)] (3) The amount of the periodic payment thereon, if any, author-
ized by the resolution of the board.
[(5)] (4) If appropriate, that the certificate is redeemable and a
summary of the conditions for redemption at the option of the corpo-
ration or of the holder.
[(6)] (5) If appropriate, that the certificate is transferable, either
at will or subject to specified restrictions.
S 53. Section 509 of the not-for-profit corporation law, as amended by
chapter 145 of the laws of 1991, is amended to read as follows:
S 509. Purchase, sale, mortgage and lease of real property.
(A) No CORPORATION SHALL purchase [of] real property [shall be made by
a corporation and no corporation shall sell, mortgage or lease real
property, unless authorized by the vote of] UNLESS SUCH PURCHASE IS
AUTHORIZED BY THE VOTE OF A MAJORITY OF DIRECTORS OF THE BOARD OR OF A
MAJORITY OF A COMMITTEE AUTHORIZED BY THE BOARD, PROVIDED THAT IF SUCH
PROPERTY WOULD, UPON PURCHASE THEREOF, CONSTITUTE ALL, OR SUBSTANTIALLY
ALL, OF THE ASSETS OF THE CORPORATION, THEN THE VOTE OF two-thirds of
the entire board[, provided that if] SHALL BE REQUIRED, OR, IF there are
twenty-one or more directors, the vote of a majority of the entire board
shall be sufficient.
(B) NO CORPORATION SHALL SELL, MORTGAGE, LEASE, EXCHANGE OR OTHERWISE
DISPOSE OF ITS REAL PROPERTY UNLESS AUTHORIZED BY THE VOTE OF A MAJORITY
OF DIRECTORS OF THE BOARD OR OF A MAJORITY OF A COMMITTEE AUTHORIZED BY
THE BOARD; PROVIDED THAT IF SUCH PROPERTY CONSTITUTES ALL, OR SUBSTAN-
TIALLY ALL, OF THE ASSETS OF THE CORPORATION, THEN THE VOTE OF
TWO-THIRDS OF THE ENTIRE BOARD SHALL BE REQUIRED, OR, IF THERE ARE TWEN-
TY-ONE OR MORE DIRECTORS, THE VOTE OF A MAJORITY OF THE ENTIRE BOARD
SHALL BE SUFFICIENT.
(C) IF A CORPORATION AUTHORIZES A COMMITTEE TO ACT PURSUANT TO PARA-
GRAPHS (A) AND (B) OF THIS SECTION, THE COMMITTEE SHALL PROMPTLY REPORT
ANY ACTIONS TAKEN TO THE BOARD, AND IN NO EVENT AFTER THE NEXT REGULARLY
SCHEDULED MEETING OF THE BOARD.
S 54. Paragraph (a) of section 510 of the not-for-profit corporation
law, the opening paragraph as amended by chapter 961 of the laws of
1972, subparagraph 3 as amended by chapter 847 of the laws of 1970, is
amended to read as follows:
(a) A sale, lease, exchange or other disposition of all, or substan-
tially all, the assets of a corporation may be made upon such terms and
conditions and for such consideration, which may consist in whole or in
part of cash or other property, real or personal, including shares,
bonds or other securities of any other domestic or foreign corporation
or corporations of any [type or] kind, as may be authorized in accord-
ance with the following procedure:
(1) If there are members entitled to vote thereon, the board shall
adopt a resolution recommending such sale, lease, exchange or other
disposition. The resolution shall specify the terms and conditions of
the proposed transaction, including the consideration to be received by
the corporation and the eventual disposition to be made of such consid-
eration, together with a statement that the dissolution of the corpo-
ration is or is not contemplated thereafter. The resolution shall be
S. 5845 28
submitted to a vote at a meeting of members entitled to vote thereon,
which may be either an annual or a special meeting. Notice of the meet-
ing shall be given to each member and each holder of subvention certif-
icates or bonds of the corporation, whether or not entitled to vote. At
such meeting by two-thirds vote as provided in paragraph (c) of section
613 (Vote of members) the members may approve the proposed transaction
according to the terms of the resolution of the board, or may approve
such sale, lease, exchange or other disposition and may authorize the
board to modify the terms and conditions thereof.
(2) If there are no members entitled to vote thereon, such sale,
lease, exchange or other disposition shall be authorized by the vote of
at least two-thirds of the entire board, provided that if there are
twenty-one or more directors, the vote of a majority of the entire board
shall be sufficient.
(3) If the corporation is, or would be if formed under this chapter,
classified as a [Type B or Type C] CHARITABLE corporation under section
201[,] (Purposes) such sale, lease, exchange or other disposition shall
in addition require [leave] APPROVAL of the ATTORNEY GENERAL OR THE
supreme court in the judicial district or of the county court of the
county in which the corporation has its office or principal place of
carrying out the [puropses] PURPOSES for which it was formed IN ACCORD-
ANCE WITH SECTION 511 (PETITION FOR COURT APPROVAL) OR SECTION 511-A
(PETITION FOR ATTORNEY GENERAL APPROVAL) OF THIS ARTICLE.
S 55. The section heading and paragraph (a) of section 511 of the
not-for-profit corporation law, subparagraph 6 of paragraph (a) as
amended by chapter 961 of the laws of 1972, are amended to read as
follows:
Petition for [leave of] court APPROVAL.
(a) [A corporation required by law to] TO obtain [leave of] court
APPROVAL to sell, lease, exchange or otherwise dispose of all or
substantially all its assets, A CORPORATION shall present a verified
petition to the supreme court of the judicial district, or the county
court of the county, wherein the corporation has its office or principal
place of carrying out the purposes for which it was formed. The petition
shall set forth:
1. The name of the corporation, the law under or by which it was
incorporated.
2. The names of its directors and principal officers, and their places
of residence.
3. The activities of the corporation.
4. A description, with reasonable certainty, of the assets to be sold,
leased, exchanged, or otherwise disposed of, or a statement that it is
proposed to sell, lease, exchange or otherwise dispose of all or
substantially all the corporate assets more fully described in a sched-
ule attached to the petition; and a statement of the fair value of such
assets, and the amount of the corporation's debts and liabilities and
how secured.
5. The consideration to be received by the corporation and the dispo-
sition proposed to be made thereof, together with a statement that the
dissolution of the corporation is or is not contemplated thereafter.
6. That the consideration and the terms of the sale, lease, exchange
or other disposition of the assets of the corporation are fair and
reasonable to the corporation, and that the purposes of the corporation,
or the interests of its members will be promoted thereby, and a concise
statement of the reasons therefor.
S. 5845 29
7. That such sale, lease, exchange or disposition of corporate assets,
has been recommended or authorized by vote of the directors in accord-
ance with law, at a meeting duly called and held, as shown in a schedule
annexed to the petition setting forth a copy of the resolution granting
such authority with a statement of the vote thereon.
8. Where the consent of members of the corporation is required by law,
that such consent has been given, as shown in a schedule annexed to the
petition setting forth a copy of such consent, if in writing, or of a
resolution giving such consent, adopted at a meeting of members duly
called and held, with a statement of the vote thereon.
9. A [prayer] REQUEST for [leave] COURT APPROVAL to sell, lease,
exchange or otherwise dispose of all or substantially all the assets of
the corporation as set forth in the petition.
S 56. The not-for-profit corporation law is amended by adding a new
section 511-a to read as follows:
S 511-A. PETITION FOR ATTORNEY GENERAL APPROVAL.
(A) IN LIEU OF OBTAINING COURT APPROVAL UNDER SECTION 511 (PETITION
FOR COURT APPROVAL) OF THIS ARTICLE TO SELL, LEASE, EXCHANGE OR OTHER-
WISE DISPOSE OF ALL OR SUBSTANTIALLY ALL OF ITS ASSETS, THE CORPORATION
MAY ALTERNATIVELY SEEK APPROVAL OF THE ATTORNEY GENERAL BY VERIFIED
PETITION, EXCEPT IN THE FOLLOWING CIRCUMSTANCES: (1) THE CORPORATION IS
INSOLVENT, OR WOULD BECOME INSOLVENT AS A RESULT OF THE TRANSACTION, AND
MUST PROCEED ON NOTICE TO CREDITORS PURSUANT TO PARAGRAPH (C) OF SECTION
511 OF THIS ARTICLE; OR (2) THE ATTORNEY GENERAL, IN HIS OR HER
DISCRETION, CONCLUDES THAT A COURT SHOULD REVIEW THE PETITION AND MAKE A
DETERMINATION THEREON.
(B) THE VERIFIED PETITION TO THE ATTORNEY GENERAL SHALL SET FORTH (1)
ALL OF THE INFORMATION REQUIRED TO BE INCLUDED IN A VERIFIED PETITION TO
OBTAIN COURT APPROVAL PURSUANT TO SUBPARAGRAPHS ONE THROUGH NINE OF
PARAGRAPH (A) OF SECTION 511 OF THIS ARTICLE; (2) A STATEMENT THAT THE
CORPORATION IS NOT INSOLVENT AND WILL NOT BECOME INSOLVENT AS A RESULT
OF THE TRANSACTION; AND (3) A STATEMENT AS TO WHETHER ANY PERSONS HAVE
RAISED, OR HAVE A REASONABLE BASIS TO RAISE, OBJECTIONS TO THE SALE,
LEASE, EXCHANGE OR OTHER DISPOSITION THAT IS THE SUBJECT OF THE PETI-
TION, INCLUDING A STATEMENT SETTING FORTH THE NAMES AND ADDRESSES OF
SUCH PERSONS, THE NATURE OF THEIR INTEREST, AND A DESCRIPTION OF THEIR
OBJECTIONS. THE ATTORNEY GENERAL, IN HIS OR HER DISCRETION, MAY DIRECT
THE CORPORATION TO PROVIDE NOTICE OF SUCH PETITION TO ANY INTERESTED
PERSON, AND THE CORPORATION SHALL PROVIDE THE ATTORNEY GENERAL WITH A
CERTIFICATION THAT SUCH NOTICE HAS BEEN PROVIDED.
(C) IF IT SHALL APPEAR, TO THE SATISFACTION OF THE ATTORNEY GENERAL
THAT THE CONSIDERATION AND THE TERMS OF THE TRANSACTION ARE FAIR AND
REASONABLE TO THE CORPORATION AND THAT THE PURPOSES OF THE CORPORATION
OR THE INTERESTS OF THE MEMBERS WILL BE PROMOTED, THE ATTORNEY GENERAL
MAY AUTHORIZE THE SALE, LEASE, EXCHANGE OR OTHER DISPOSITION OF ALL OR
SUBSTANTIALLY ALL THE ASSETS OF THE CORPORATION, AS DESCRIBED IN THE
PETITION, FOR SUCH CONSIDERATION AND UPON SUCH TERMS AS THE ATTORNEY
GENERAL MAY PRESCRIBE. THE AUTHORIZATION OF THE ATTORNEY GENERAL SHALL
DIRECT THE DISPOSITION OF THE CONSIDERATION TO BE RECEIVED THEREUNDER BY
THE CORPORATION.
(D) AT ANY TIME, INCLUDING IF THE ATTORNEY GENERAL DOES NOT APPROVE
THE PETITION, OR IF THE ATTORNEY GENERAL CONCLUDES THAT COURT REVIEW IS
APPROPRIATE, THE PETITIONER MAY SEEK COURT APPROVAL ON NOTICE TO THE
ATTORNEY GENERAL PURSUANT TO SECTION 511 (PETITION FOR COURT APPROVAL)
OF THIS ARTICLE.
S. 5845 30
S 57. Paragraph (a) of section 513 of the not-for-profit corporation
law, as amended by chapter 690 of the laws of 1978, is amended to read
as follows:
(a) A corporation which is, or would be if formed under this chapter,
[classified as] a [Type B] CHARITABLE corporation shall hold full owner-
ship rights in any assets consisting of funds or other real or personal
property of any kind, that may be given, granted, bequeathed or devised
to or otherwise vested in such corporation in trust for, or with a
direction to apply the same to, any purpose specified in its certificate
of incorporation, and shall not be deemed a trustee of an express trust
of such assets. Any other corporation subject to this chapter may simi-
larly hold assets so received, unless otherwise provided by law or in
the certificate of incorporation.
S 58. Paragraph (b) of section 515 of the not-for-profit corporation
law is amended to read as follows:
(b) A corporation may pay compensation in a reasonable amount to
members, directors, or officers, for services rendered, and may make
distributions of cash or property to members upon dissolution or final
liquidation as permitted by this chapter. NO PERSON WHO MAY BENEFIT
FROM SUCH COMPENSATION MAY BE PRESENT AT OR OTHERWISE PARTICIPATE IN ANY
BOARD OR COMMITTEE DELIBERATION OR VOTE CONCERNING SUCH PERSON'S COMPEN-
SATION; PROVIDED THAT NOTHING IN THIS SECTION SHALL PROHIBIT THE BOARD
OR AUTHORIZED COMMITTEE FROM REQUESTING THAT A PERSON WHO MAY BENEFIT
FROM SUCH COMPENSATION PRESENT INFORMATION AS BACKGROUND OR ANSWER QUES-
TIONS AT A COMMITTEE OR BOARD MEETING PRIOR TO THE COMMENCEMENT OF
DELIBERATIONS OR VOTING RELATING THERETO.
S 59. Section 520 of the not-for-profit corporation law, as amended by
chapter 58 of the laws of 1981, is amended to read as follows:
S 520. Reports of corporation.
Each domestic corporation, and each foreign corporation authorized to
conduct activities in this state, shall from time to time file such
reports on its activities as may be required by the laws of this state.
All registration and reporting requirements pursuant to [EPTL] ARTICLE
SEVEN-A OF THE EXECUTIVE LAW, AND SECTION 8-1.4 OF THE ESTATES, POWERS
AND TRUSTS LAW, or related successor provisions, are, without limitation
on the foregoing, expressly included as reports required by the laws of
this state to be filed within the meaning of this section. Willful fail-
ure of a corporation to file a report as required by law shall consti-
tute a breach of the directors' duty to the corporation and shall
subject the corporation, at the suit of the attorney-general, to an
action or special proceeding for dissolution under article 11 (Judicial
dissolution) in the case of a domestic corporation, or under [S] SECTION
1303 (Violations) in the case of a foreign corporation.
S 60. Paragraph (f) of section 555 of the not-for-profit corporation
law, as added by chapter 490 of the laws of 2010, is amended to read as
follows:
(f) This [section] CHAPTER shall not limit the application of the
[doctrine] DOCTRINES of cy pres AND DEVIATION.
S 61. Paragraph (a) of section 601 of the not-for-profit corporation
law, as amended by chapter 1058 of the laws of 1971, is amended to read
as follows:
(a) A corporation shall have one or more classes of members, or, in
the case of a [Type B] CHARITABLE corporation, may have no members, in
which case any such provision for classes of members or for no members
shall be set forth in the certificate of incorporation or the by-laws.
Corporations, joint-stock associations, unincorporated associations and
S. 5845 31
partnerships, as well as any other person without limitation, may be
members.
S 62. Paragraph (a) of section 605 of the not-for-profit corporation
law, as amended by chapter 1058 of the laws of 1971, is amended to read
as follows:
(a) Whenever under the provisions of this chapter members are required
or permitted to take any action at a meeting, written notice shall state
the place, date and hour of the meeting and, unless it is an annual
meeting, indicate that it is being issued by or at the direction of the
person or persons calling the meeting. Notice of a special meeting shall
also state the purpose or purposes for which the meeting is called. A
copy of the notice of any meeting shall be given, personally [or], by
mail, OR BY FACSIMILE TELECOMMUNICATIONS OR BY ELECTRONIC MAIL, to each
member entitled to vote at such meeting. If the notice is given
personally [or], by first class mail OR BY FACSIMILE TELECOMMUNICATIONS
OR BY ELECTRONIC MAIL, it shall be given not less than ten nor more than
fifty days before the date of the meeting; if mailed by any other class
of mail, it shall be given not less than thirty nor more than sixty days
before such date. If mailed, such notice is given when deposited in the
United States mail, with postage thereon prepaid, directed to the member
at his address as it appears on the record of members, or, if he shall
have filed with the secretary of the corporation a written request that
notices to him be mailed to some other address, then directed to him at
such other address. IF SENT BY FACSIMILE TELECOMMUNICATION OR MAILED
ELECTRONICALLY, SUCH NOTICE IS GIVEN WHEN DIRECTED TO THE MEMBER'S FAX
NUMBER OR ELECTRONIC MAIL ADDRESS AS IT APPEARS ON THE RECORD OF
MEMBERS, OR, TO SUCH FAX NUMBER OR OTHER ELECTRONIC MAIL ADDRESS AS
FILED WITH THE SECRETARY OF THE CORPORATION. NOTWITHSTANDING THE FOREGO-
ING, SUCH NOTICE SHALL NOT BE DEEMED TO HAVE BEEN GIVEN ELECTRONICALLY
(1) IF THE CORPORATION IS UNABLE TO DELIVER TWO CONSECUTIVE NOTICES TO
THE MEMBER BY FACSIMILE TELECOMMUNICATION OR ELECTRONIC MAIL; OR (2) THE
CORPORATION OTHERWISE BECOMES AWARE THAT NOTICE CANNOT BE DELIVERED TO
THE MEMBER BY FACSIMILE TELECOMMUNICATION OR ELECTRONIC MAIL. An affida-
vit of the secretary or other person giving the notice or of a transfer
agent of the corporation that the notice required by this section has
been given shall, in the absence of fraud, be prima facie evidence of
the facts therein stated. Whenever a corporation has more than five
hundred members, the notice may be served by publication[, in lieu of
mailing,] in a newspaper published in the county in the state in which
the principal office of the corporation is located, once a week for
three successive weeks next preceding the date of the meeting, PROVIDED
THAT THE CORPORATION SHALL ALSO PROMINENTLY POST NOTICE OF SUCH MEETING
ON THE HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE CORPORATION CONTINUOUS-
LY FROM THE DATE OF PUBLICATION THROUGH THE DATE OF THE MEETING. A
CORPORATION SHALL SEND NOTICE OF MEETINGS BY FIRST CLASS MAIL TO ANY
MEMBER WHO REQUESTS IN WRITING THAT SUCH NOTICES BE DELIVERED BY SUCH
METHOD.
S 63. Section 606 of the not-for-profit corporation law is amended to
read as follows:
S 606. Waivers of notice.
Notice of meeting need not be given to any member who submits a
[signed] waiver of notice, in person or by proxy, whether before or
after the meeting. WAIVER OF NOTICE MAY BE WRITTEN OR ELECTRONIC. IF
WRITTEN, THE WAIVER MUST BE EXECUTED BY THE MEMBER OR THE MEMBER'S
AUTHORIZED OFFICER, DIRECTOR, EMPLOYEE, OR AGENT BY SIGNING SUCH WAIVER
OR CAUSING HIS SIGNATURE TO BE AFFIXED TO SUCH WAIVER BY ANY REASONABLE
S. 5845 32
MEANS, INCLUDING, BUT NOT LIMITED TO FACSIMILE SIGNATURE. IF ELECTRONIC,
THE TRANSMISSION OF THE WAIVER MUST BE SENT BY ELECTRONIC MAIL AND SET
FORTH, OR BE SUBMITTED WITH, INFORMATION FROM WHICH IT CAN REASONABLY BE
DETERMINED THAT THE TRANSMISSION WAS AUTHORIZED BY THE MEMBER. The
attendance of any member at a meeting, in person or by proxy, without
protesting prior to the conclusion of the meeting the lack of notice of
such meeting, shall constitute a waiver of notice by him.
S 64. Paragraphs (b) and (c) of section 609 of the not-for-profit
corporation law, as added by chapter 186 of the laws of 1999, are
amended to read as follows:
(b) Without limiting the manner in which a member may authorize anoth-
er person or persons to act for him as proxy pursuant to paragraph (a)
of this section, the following shall constitute a valid means by which a
member may grant such authority:
(1) A member may execute a writing authorizing another person or
persons to act for him as proxy. Execution may be accomplished by the
member or the member's authorized officer, director, employee or agent
signing such writing or causing his or her signature to be affixed to
such writing by any reasonable means including, but not limited to, by
facsimile signature.
(2) A member may authorize another person or persons to act for the
member as proxy by [transmitting or authorizing the transmission of a
telegram, cablegram or other means of] PROVIDING SUCH AUTHORIZATION BY
electronic [transmission] MAIL to the person who will be the holder of
the proxy or to a proxy solicitation firm, proxy support service organ-
ization or like agent duly authorized by the person [who will be the
holder of the proxy to receive such transmission], provided that any
such [telegram, cablegram or other means of] AUTHORIZATION BY electronic
[transmission] MAIL shall either set forth [or be submitted with] infor-
mation from which it can be reasonably determined that the [telegram,
cablegram or other] AUTHORIZATION BY electronic [transmission] MAIL was
authorized by the member. If it is determined that such [telegrams,
cablegrams or other] AUTHORIZATION BY electronic [transmissions are]
MAIL IS valid, the inspectors or, if there are no inspectors, such other
persons making that determination shall specify the nature of the infor-
mation upon which they relied.
(c) Any copy, facsimile telecommunication or other reliable reprod-
uction of the writing or [transmission] ELECTRONIC MAIL created pursuant
to paragraph (b) of this section may be substituted or used in lieu of
the original writing or transmission for any and all purposes for which
the original writing or transmission could be used, provided that such
copy, facsimile telecommunication or other reproduction shall be a
complete reproduction of the entire original writing or transmission.
S 65. Paragraphs (a) and (b) of section 614 of the not-for-profit
corporation law are amended to read as follows:
(a) Whenever, under this chapter, members are required or permitted to
take any action by vote, such action may be taken without a meeting [on
written] UPON THE consent[, setting forth the action so taken, signed
by] OF all of the members entitled to vote thereon, WHICH CONSENT SHALL
SET FORTH THE ACTION SO TAKEN. SUCH CONSENT MAY BE WRITTEN OR ELECTRON-
IC. IF WRITTEN, THE CONSENT MUST BE EXECUTED BY THE MEMBER OR THE
MEMBER'S AUTHORIZED OFFICER, DIRECTOR, EMPLOYEE OR AGENT BY SIGNING SUCH
CONSENT OR CAUSING HIS SIGNATURE TO BE AFFIXED TO SUCH WAIVER BY ANY
REASONABLE MEANS INCLUDING BUT NOT LIMITED TO FACSIMILE SIGNATURE. IF
ELECTRONIC, THE TRANSMISSION OF THE CONSENT MUST BE SENT BY ELECTRONIC
MAIL AND SET FORTH, OR BE SUBMITTED WITH, INFORMATION FROM WHICH IT CAN
S. 5845 33
REASONABLY BE DETERMINED THAT THE TRANSMISSION WAS AUTHORIZED BY THE
MEMBER. This paragraph shall not be construed to alter or modify any
provision in a certificate of incorporation not inconsistent with this
chapter under which the written consent of less than all of the members
is sufficient for corporate action.
(b) Written OR ELECTRONIC consent thus given by all members entitled
to vote shall have the same effect as a unanimous vote of members and
any certificate with respect to the authorization or taking of any such
action which is delivered to the department of state shall recite that
the authorization was by [uanimous] UNANIMOUS written consent.
S 66. Paragraph (e) of section 621 of the not-for-profit corporation
law, as amended by chapter 847 of the laws of 1970, is amended to read
as follows:
(e) Upon the written request of any person who shall have been a
member of record for at least six months immediately preceding his
request, or of any person holding, or thereunto authorized in writing by
the holders of, at least five percent of any class of the outstanding
capital certificates, the corporation shall [give or mail] PROVIDE to
such member an annual balance sheet and profit and loss statement or a
financial statement performing a similar function for the preceding
fiscal year, and, if any interim balance sheet or profit and loss or
similar financial statement has been distributed to its members or
otherwise made available to the public, the most recent such interim
balance sheet or profit and loss or similar financial statement. The
corporation shall be allowed a reasonable time to prepare such annual
balance sheet and profit and loss or similar financial statement.
S 67. Paragraph (a) of section 702 of the not-for-profit corporation
law is amended to read as follows:
(a) The number of directors constituting the entire board shall be not
less than three. Subject to such limitation, such number may be fixed by
the by-laws or[, in the case of a corporation having members,] by action
of the members or of the board under the specific provisions of a by-law
[adopted by the members] ALLOWING SUCH ACTION, OR BY ANY NUMBER WITHIN A
RANGE SET FORTH IN THE BY-LAWS. If not otherwise fixed under this para-
graph, the number shall be three. [As used in this article, "entire
board" means the total number of directors entitled to vote which the
corporation would have if there were no vacancies.]
S 68. Paragraphs (b) and (c) of section 708 of the not-for-profit
corporation law, paragraph (b) as amended by chapter 92 of the laws of
1983 and paragraph (c) as amended by chapter 211 of the laws of 2007,
are amended to read as follows:
(b) Unless otherwise restricted by the certificate of incorporation or
the by-laws, any action required or permitted to be taken by the board
or any committee thereof may be taken without a meeting if all members
of the board or the committee consent [in writing] to the adoption of a
resolution authorizing the action. SUCH CONSENT MAY BE WRITTEN OR ELEC-
TRONIC. IF WRITTEN, THE CONSENT MUST BE EXECUTED BY THE DIRECTOR BY
SIGNING SUCH CONSENT OR CAUSING HIS OR HER SIGNATURE TO BE AFFIXED TO
SUCH CONSENT BY ANY REASONABLE MEANS INCLUDING, BUT NOT LIMITED TO,
FACSIMILE SIGNATURE. IF ELECTRONIC, THE TRANSMISSION OF THE CONSENT MUST
BE SENT BY ELECTRONIC MAIL AND SET FORTH, OR BE SUBMITTED WITH, INFORMA-
TION FROM WHICH IT CAN REASONABLY BE DETERMINED THAT THE TRANSMISSION
WAS AUTHORIZED BY THE DIRECTOR. The resolution and the written consents
thereto by the members of the board or committee shall be filed with the
minutes of the proceedings of the board or committee.
S. 5845 34
(c) Unless otherwise restricted by the certificate of incorporation or
the by-laws, any one or more members of the board or OF any committee
thereof [may participate in] WHO IS NOT PHYSICALLY PRESENT AT a meeting
of [such] THE board or A committee MAY PARTICIPATE by means of a confer-
ence telephone or similar communications equipment [allowing all persons
participating in the meeting to hear each other at the same time] OR BY
ELECTRONIC VIDEO SCREEN COMMUNICATION. Participation by such means
shall constitute presence in person at a meeting AS LONG AS ALL PERSONS
PARTICIPATING IN THE MEETING CAN HEAR EACH OTHER AT THE SAME TIME AND
EACH DIRECTOR CAN PARTICIPATE IN ALL MATTERS BEFORE THE BOARD, INCLUD-
ING, WITHOUT LIMITATION, THE ABILITY TO PROPOSE, OBJECT TO, AND VOTE
UPON A SPECIFIC ACTION TO BE TAKEN BY THE BOARD OR COMMITTEE.
S 69. Paragraph (c) of section 711 of the not-for-profit corporation
law, as amended by chapter 847 of the laws of 1970, is amended to read
as follows:
(c) Notice of a meeting need not be given to any alternate director,
nor to any director who submits a [signed] waiver of notice whether
before or after the meeting, or who attends the meeting without protest-
ing, prior thereto or at its commencement, the lack of notice to him.
SUCH WAIVER OF NOTICE MAY BE WRITTEN OR ELECTRONIC. IF WRITTEN, THE
WAIVER MUST BE EXECUTED BY THE DIRECTOR SIGNING SUCH WAIVER OR CAUSING
HIS OR HER SIGNATURE TO BE AFFIXED TO SUCH WAIVER BY ANY REASONABLE
MEANS INCLUDING BUT NOT LIMITED TO FACSIMILE SIGNATURE. IF ELECTRONIC,
THE TRANSMISSION OF THE CONSENT MUST BE SENT BY ELECTRONIC MAIL AND SET
FORTH, OR BE SUBMITTED WITH, INFORMATION FROM WHICH IT CAN REASONABLY BE
DETERMINED THAT THE TRANSMISSION WAS AUTHORIZED BY THE DIRECTOR.
S 70. Paragraphs (a), (b) and (e) of section 712 of the not-for-profit
corporation law, paragraph (e) as amended by chapter 961 of the laws of
1972, are amended to read as follows:
(a) If the certificate of incorporation or the by-laws so provide, the
board, by resolution adopted by a majority of the entire board, may
designate from among its members an executive committee and other
[standing] committees, each consisting of three or more directors, and
each of which, to the extent provided in the resolution or in the
certificate of incorporation or by-laws, shall have all the authority of
the board, except that no such committee shall have authority as to the
following matters:
(1) The submission to members of any action requiring members'
approval under this chapter.
(2) The filling of vacancies in the board of directors or in any
committee.
(3) The fixing of compensation of the directors for serving on the
board or on any committee.
(4) The amendment or repeal of the by-laws or the adoption of new
by-laws.
(5) The amendment or repeal of any resolution of the board which by
its terms shall not be so amendable or repealable.
(b) The board may designate one or more directors as alternate members
of any [standing] committee, who may replace any absent member or
members at any meeting of such committee.
(e) Committees, other than [standing or special] committees of the
board, whether created by the board or by the members, shall be commit-
tees of the corporation. Such committees OF THE CORPORATION may be
elected or appointed in the same manner as officers of the corporation,
BUT NO SUCH COMMITTEE SHALL HAVE THE AUTHORITY TO BIND THE BOARD.
Provisions of this chapter applicable to officers generally shall apply
S. 5845 35
to members of such committees. SUCH COMMITTEES OF THE CORPORATION SHALL
BE ELECTED OR APPOINTED IN THE MANNER SET FORTH IN THE BY-LAWS, OR IF
NOT SET FORTH IN THE BY-LAWS, IN THE SAME MANNER AS OFFICERS OF THE
CORPORATION.
S 71. Paragraph (c) of section 712 of the not-for-profit corporation
law is REPEALED.
S 72. The not-for-profit corporation law is amended by adding a new
section 712-a to read as follows:
S 712-A. AUDIT OVERSIGHT.
(A) THE BOARD, OR A DESIGNATED AUDIT COMMITTEE OF THE BOARD COMPRISED
SOLELY OF INDEPENDENT DIRECTORS, OF ANY CORPORATION REQUIRED TO FILE AN
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S AUDIT REPORT WITH THE ATTORNEY
GENERAL PURSUANT TO SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B
OF THE EXECUTIVE LAW SHALL OVERSEE THE ACCOUNTING AND FINANCIAL REPORT-
ING PROCESSES OF THE CORPORATION AND THE AUDIT OF THE CORPORATION'S
FINANCIAL STATEMENTS. THE BOARD OR DESIGNATED AUDIT COMMITTEE SHALL
ANNUALLY RETAIN OR RENEW THE RETENTION OF AN INDEPENDENT AUDITOR TO
CONDUCT THE AUDIT AND, UPON COMPLETION THEREOF, REVIEW THE RESULTS OF
THE AUDIT AND ANY RELATED MANAGEMENT LETTER WITH THE INDEPENDENT AUDI-
TOR.
(B) THE BOARD, OR A DESIGNATED AUDIT COMMITTEE OF THE BOARD COMPRISED
SOLELY OF INDEPENDENT DIRECTORS, OF ANY CORPORATION REQUIRED TO FILE AN
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S AUDIT REPORT WITH THE ATTORNEY
GENERAL PURSUANT TO SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B
OF THE EXECUTIVE LAW AND THAT IN THE PRIOR FISCAL YEAR HAD OR IN THE
CURRENT FISCAL YEAR REASONABLY EXPECTS TO HAVE ANNUAL REVENUE IN EXCESS
OF ONE MILLION DOLLARS SHALL, IN ADDITION TO THOSE DUTIES SET FORTH IN
PARAGRAPH (A) OF THIS SECTION:
(1) REVIEW WITH THE INDEPENDENT AUDITOR THE SCOPE AND PLANNING OF THE
AUDIT PRIOR TO THE AUDIT'S COMMENCEMENT;
(2) UPON COMPLETION OF THE AUDIT, REVIEW AND DISCUSS WITH THE INDE-
PENDENT AUDITOR: (A) ANY MATERIAL RISKS AND WEAKNESSES IN INTERNAL
CONTROLS IDENTIFIED BY THE AUDITOR; (B) ANY RESTRICTIONS ON THE SCOPE OF
THE AUDITOR'S ACTIVITIES OR ACCESS TO REQUESTED INFORMATION; (C) ANY
SIGNIFICANT DISAGREEMENTS BETWEEN THE AUDITOR AND MANAGEMENT; AND (D)
THE ADEQUACY OF THE CORPORATION'S ACCOUNTING AND FINANCIAL REPORTING
PROCESSES;
(3) ANNUALLY CONSIDER THE PERFORMANCE AND INDEPENDENCE OF THE INDE-
PENDENT AUDITOR; AND
(4) IF THE DUTIES REQUIRED BY THIS SECTION ARE PERFORMED BY AN AUDIT
COMMITTEE, REPORT ON THE COMMITTEE'S ACTIVITIES TO THE BOARD.
(C) THE BOARD OR DESIGNATED AUDIT COMMITTEE OF THE BOARD SHALL OVERSEE
THE ADOPTION, IMPLEMENTATION OF, AND COMPLIANCE WITH ANY CONFLICT OF
INTEREST POLICY OR WHISTLEBLOWER POLICY ADOPTED BY THE CORPORATION IF
THIS FUNCTION IS NOT OTHERWISE PERFORMED BY ANOTHER COMMITTEE OF THE
BOARD COMPRISED SOLELY OF INDEPENDENT DIRECTORS.
(D) IF A CORPORATION CONTROLS A GROUP OF CORPORATIONS, THE BOARD OR
DESIGNATED AUDIT COMMITTEE OF THE BOARD OF THE CONTROLLING CORPORATION
MAY PERFORM THE DUTIES REQUIRED BY THIS SECTION FOR ONE OR MORE OF THE
CONTROLLED CORPORATIONS.
(E) ONLY INDEPENDENT DIRECTORS MAY PARTICIPATE IN ANY BOARD OR COMMIT-
TEE DELIBERATIONS OR VOTING RELATING TO MATTERS SET FORTH IN THIS
SECTION.
(F) ANY CORPORATION THAT IS A STATE AUTHORITY OR A LOCAL AUTHORITY AS
DEFINED IN SECTION TWO OF THE PUBLIC AUTHORITIES LAW AND THAT HAS
COMPLIED SUBSTANTIALLY WITH SECTIONS TWENTY-EIGHT HUNDRED TWO AND TWEN-
S. 5845 36
TY-EIGHT HUNDRED TWENTY-FOUR OF SUCH LAW SHALL BE DEEMED IN COMPLIANCE
WITH THIS SECTION.
S 73. Paragraph (a) of section 713 of the not-for-profit corporation
law is amended, and a new paragraph (f) is added to read as follows:
(a) The board may elect or appoint a CHAIR OR president, OR BOTH, one
or more vice-presidents, a secretary and a treasurer, and such other
officers as it may determine, or as may be provided in the by-laws.
These officers may be designated by such alternate titles as may be
provided in the certificate of incorporation or the by-laws. Any two or
more offices may be held by the same person, except the offices of pres-
ident and secretary, or the offices corresponding thereto.
(F) NO EMPLOYEE OF THE CORPORATION SHALL SERVE AS CHAIR OF THE BOARD
OR HOLD ANY OTHER TITLE WITH SIMILAR RESPONSIBILITIES.
S 74. Section 715 of the not-for-profit corporation law, as amended
by chapter 847 of the laws of 1970 and paragraph (f) as amended by chap-
ter 1057 of the laws of 1971, is amended to read as follows:
S 715. [Interested directors and officers] RELATED PARTY TRANSACTIONS.
(a) [No contract or other transaction between a corporation and one or
more of its directors or officers, or between a corporation and any
other corporation, firm, association or other entity in which one or
more of its directors or officers are directors or officers, or have a
substantial financial interest, shall be either void or voidable for
this reason alone or by reason alone that such director or directors or
officer or officers are present at the meeting of the board, or of a
committee thereof, which authorizes such contract or transaction, or
that his or their votes are counted for such purpose:
(1) If the material facts as to such director's or officer's interest
in such contract or transaction and as to any such common directorship,
officership or financial interest are disclosed in good faith or known
to the board or committee, and the board or committee authorizes such
contract or transaction by a vote sufficient for such purpose without
counting the vote or votes of such interested director or officer; or
(2) If the material facts as to such director's or officer's interest
in such contract or transaction and as to any such common directorship,
officership or financial interest are disclosed in good faith or known
to the members entitled to vote thereon, if any, and such contract or
transaction is authorized by vote of such members.
(b) If such good faith disclosure of the material facts as to the
director's or officer's interest in the contract or transaction and as
to any such common directorship, officership or financial interest, is
made to the directors or members, or known to the board or committee or
members authorizing such contract or transaction, as provided in para-
graph (a), the contract or transaction may not be avoided by the corpo-
ration for the reasons set forth in paragraph (a). If there was no such
disclosure or knowledge, or if the vote of such interested director or
officer was necessary for the authorization of such contract or trans-
action at a meeting of the board or committee at which it was author-
ized, the corporation may avoid the contract or transaction unless the
party or parties thereto shall establish affirmatively that the contract
or transaction was fair and reasonable as to the corporation at the time
it was authorized by the board, a committee or the members.
(c) Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the board or of a committee which
authorizes such contract or transaction.
(d)] NO CORPORATION SHALL ENTER INTO ANY RELATED PARTY TRANSACTION
UNLESS THE TRANSACTION IS DETERMINED BY THE BOARD TO BE FAIR, REASONABLE
S. 5845 37
AND IN THE CORPORATION'S BEST INTEREST AT THE TIME OF SUCH DETERMI-
NATION. ANY DIRECTOR, OFFICER OR KEY EMPLOYEE WHO HAS AN INTEREST IN A
RELATED PARTY TRANSACTION SHALL DISCLOSE IN GOOD FAITH TO THE BOARD, OR
AN AUTHORIZED COMMITTEE THEREOF, THE MATERIAL FACTS CONCERNING SUCH
INTEREST.
(B) WITH RESPECT TO ANY RELATED PARTY TRANSACTION INVOLVING A CHARITA-
BLE CORPORATION AND IN WHICH A RELATED PARTY HAS A SUBSTANTIAL FINANCIAL
INTEREST, THE BOARD OF SUCH CORPORATION, OR AN AUTHORIZED COMMITTEE
THEREOF, SHALL:
(1) PRIOR TO ENTERING INTO THE TRANSACTION, CONSIDER ALTERNATIVE TRAN-
SACTIONS TO THE EXTENT AVAILABLE;
(2) APPROVE THE TRANSACTION BY NOT LESS THAN A MAJORITY VOTE OF THE
DIRECTORS OR COMMITTEE MEMBERS PRESENT AT THE MEETING; AND
(3) CONTEMPORANEOUSLY DOCUMENT IN WRITING THE BASIS FOR THE BOARD OR
AUTHORIZED COMMITTEE'S APPROVAL, INCLUDING ITS CONSIDERATION OF ANY
ALTERNATIVE TRANSACTIONS.
(C) The certificate of incorporation, BY-LAWS OR ANY POLICY ADOPTED BY
THE BOARD may contain additional restrictions on [contracts or] RELATED
PARTY transactions [between a corporation and its directors or officers
or other persons and may] AND ADDITIONAL PROCEDURES NECESSARY FOR THE
REVIEW AND APPROVAL OF SUCH TRANSACTIONS, OR provide that [contracts or
transactions] ANY TRANSACTION in violation of such restrictions shall be
void or voidable.
[(e)] (D) Unless otherwise provided in the certificate of incorpo-
ration or the by-laws, the board shall have authority to fix the compen-
sation of directors for services in any capacity.
[(f)] (E) The fixing of salaries of officers, if not done in or pursu-
ant to the by-laws, shall require the affirmative vote of a majority of
the entire board unless a higher proportion is set by the certificate of
incorporation or by-laws.
(F) THE ATTORNEY GENERAL MAY BRING AN ACTION TO ENJOIN, VOID OR
RESCIND ANY RELATED PARTY TRANSACTION OR PROPOSED RELATED PARTY TRANS-
ACTION THAT VIOLATES ANY PROVISION OF THIS CHAPTER OR WAS OTHERWISE NOT
REASONABLE OR IN THE BEST INTERESTS OF THE CORPORATION AT THE TIME THE
TRANSACTION WAS APPROVED, OR TO SEEK RESTITUTION, AND THE REMOVAL OF
DIRECTORS OR OFFICERS, OR SEEK TO REQUIRE ANY PERSON OR ENTITY TO:
(1) ACCOUNT FOR ANY PROFITS MADE FROM SUCH TRANSACTION, AND PAY THEM
TO THE CORPORATION;
(2) PAY THE CORPORATION THE VALUE OF THE USE OF ANY OF ITS PROPERTY OR
OTHER ASSETS USED IN SUCH TRANSACTION;
(3) RETURN OR REPLACE ANY PROPERTY OR OTHER ASSETS LOST TO THE CORPO-
RATION AS A RESULT OF SUCH TRANSACTION, TOGETHER WITH ANY INCOME OR
APPRECIATION LOST TO THE CORPORATION BY REASON OF SUCH TRANSACTION, OR
ACCOUNT FOR ANY PROCEEDS OF SALE OF SUCH PROPERTY, AND PAY THE PROCEEDS
TO THE CORPORATION TOGETHER WITH INTEREST AT THE LEGAL RATE; AND
(4) PAY, IN THE CASE OF WILLFUL AND INTENTIONAL CONDUCT, AN AMOUNT UP
TO DOUBLE THE AMOUNT OF ANY BENEFIT IMPROPERLY OBTAINED.
(F) THE POWERS OF THE ATTORNEY GENERAL PROVIDED IN THIS SECTION ARE IN
ADDITION TO ALL OTHER POWERS THE ATTORNEY GENERAL MAY HAVE UNDER THIS
CHAPTER OR ANY OTHER LAW.
(G) NO RELATED PARTY MAY PARTICIPATE IN DELIBERATIONS OR VOTING RELAT-
ING TO MATTERS SET FORTH IN THIS SECTION; PROVIDED THAT NOTHING IN THIS
SECTION SHALL PROHIBIT THE BOARD OR AUTHORIZED COMMITTEE FROM REQUESTING
THAT A RELATED PARTY PRESENT INFORMATION CONCERNING A RELATED PARTY
TRANSACTION AT A BOARD OR COMMITTEE MEETING PRIOR TO THE COMMENCEMENT OF
DELIBERATIONS OR VOTING RELATING THERETO.
S. 5845 38
S 75. The not-for-profit corporation law is amended by adding two new
sections 715-a and 715-b to read as follows:
S 715-A. CONFLICT OF INTEREST POLICY.
(A) EXCEPT AS PROVIDED IN PARAGRAPH (D) OF THIS SECTION, EVERY CORPO-
RATION SHALL ADOPT A CONFLICT OF INTEREST POLICY TO ENSURE THAT ITS
DIRECTORS, OFFICERS AND KEY EMPLOYEES ACT IN THE CORPORATION'S BEST
INTEREST AND COMPLY WITH APPLICABLE LEGAL REQUIREMENTS, INCLUDING BUT
NOT LIMITED TO THE REQUIREMENTS SET FORTH IN SECTION SEVEN HUNDRED
FIFTEEN OF THIS ARTICLE.
(B) THE CONFLICT OF INTEREST POLICY SHALL INCLUDE, AT A MINIMUM, THE
FOLLOWING PROVISIONS:
(1) A DEFINITION OF THE CIRCUMSTANCES THAT CONSTITUTE A CONFLICT OF
INTEREST;
(2) PROCEDURES FOR DISCLOSING A CONFLICT OF INTEREST TO THE AUDIT
COMMITTEE OR, IF THERE IS NO AUDIT COMMITTEE, TO THE BOARD;
(3) A REQUIREMENT THAT THE PERSON WITH THE CONFLICT OF INTEREST NOT BE
PRESENT AT OR PARTICIPATE IN BOARD OR COMMITTEE DELIBERATION OR VOTE ON
THE MATTER GIVING RISE TO SUCH CONFLICT;
(4) A PROHIBITION AGAINST ANY ATTEMPT BY THE PERSON WITH THE CONFLICT
TO INFLUENCE IMPROPERLY THE DELIBERATION OR VOTING ON THE MATTER GIVING
RISE TO SUCH CONFLICT;
(5) A REQUIREMENT THAT THE EXISTENCE AND RESOLUTION OF THE CONFLICT BE
DOCUMENTED IN THE CORPORATION'S RECORDS, INCLUDING IN THE MINUTES OF ANY
MEETING AT WHICH THE CONFLICT WAS DISCUSSED OR VOTED UPON; AND
(6) PROCEDURES FOR DISCLOSING, ADDRESSING, AND DOCUMENTING RELATED
PARTY TRANSACTIONS IN ACCORDANCE WITH SECTION SEVEN HUNDRED FIFTEEN OF
THIS ARTICLE.
(C) THE CONFLICT OF INTEREST POLICY SHALL REQUIRE THAT PRIOR TO THE
INITIAL ELECTION OF ANY DIRECTOR, AND ANNUALLY THEREAFTER, SUCH DIRECTOR
SHALL COMPLETE, SIGN AND SUBMIT TO THE SECRETARY OF THE CORPORATION A
WRITTEN STATEMENT IDENTIFYING, TO THE BEST OF THE DIRECTOR'S KNOWLEDGE,
ANY ENTITY OF WHICH SUCH DIRECTOR IS AN OFFICER, DIRECTOR, TRUSTEE,
MEMBER, OWNER (EITHER AS A SOLE PROPRIETOR OR A PARTNER), OR EMPLOYEE
AND WITH WHICH THE CORPORATION HAS A RELATIONSHIP, AND ANY TRANSACTION
IN WHICH THE CORPORATION IS A PARTICIPANT AND IN WHICH THE DIRECTOR
MIGHT HAVE A CONFLICTING INTEREST. THE POLICY SHALL REQUIRE THAT EACH
DIRECTOR ANNUALLY RESUBMIT SUCH WRITTEN STATEMENT. THE SECRETARY OF
THE CORPORATION SHALL PROVIDE A COPY OF ALL COMPLETED STATEMENTS TO THE
CHAIR OF THE AUDIT COMMITTEE OR, IF THERE IS NO AUDIT COMMITTEE, TO THE
CHAIR OF THE BOARD.
(D) A CORPORATION THAT HAS ADOPTED AND POSSESSES A CONFLICT OF INTER-
EST POLICY PURSUANT TO FEDERAL, STATE OR LOCAL LAWS THAT IS SUBSTANTIAL-
LY CONSISTENT WITH THE PROVISIONS OF PARAGRAPH (B) OF THIS SECTION SHALL
BE DEEMED IN COMPLIANCE WITH PROVISIONS OF THIS SECTION. IN ADDITION,
ANY CORPORATION THAT IS A STATE AUTHORITY OR A LOCAL AUTHORITY AS
DEFINED IN SECTION TWO OF THE PUBLIC AUTHORITIES LAW, AND THAT HAS
COMPLIED SUBSTANTIALLY WITH SECTION TWENTY-EIGHT HUNDRED TWENTY-FOUR AND
SUBDIVISION THREE OF SECTION TWENTY-EIGHT HUNDRED TWENTY-FIVE OF SUCH
LAW, SHALL BE DEEMED IN COMPLIANCE WITH THIS SECTION.
(E) NOTHING IN THIS SECTION SHALL BE INTERPRETED TO REQUIRE A CORPO-
RATION TO ADOPT ANY SPECIFIC CONFLICT OF INTEREST POLICY NOT OTHERWISE
REQUIRED BY THIS SECTION OR ANY OTHER LAW OR RULE, OR TO SUPERSEDE OR
LIMIT ANY REQUIREMENT OR DUTY GOVERNING CONFLICTS OF INTEREST REQUIRED
BY ANY OTHER LAW OR RULE.
S 715-B. WHISTLEBLOWER POLICY.
S. 5845 39
(A) EXCEPT AS PROVIDED IN PARAGRAPH (C) OF THIS SECTION, EVERY CORPO-
RATION THAT HAS TWENTY OR MORE EMPLOYEES AND IN THE PRIOR FISCAL YEAR
HAD ANNUAL REVENUE IN EXCESS OF ONE MILLION DOLLARS SHALL ADOPT A WHIST-
LEBLOWER POLICY TO PROTECT FROM RETALIATION PERSONS WHO REPORT SUSPECTED
IMPROPER CONDUCT. SUCH POLICY SHALL PROVIDE THAT NO DIRECTOR, OFFICER,
EMPLOYEE OR VOLUNTEER OF A CORPORATION WHO IN GOOD FAITH REPORTS ANY
ACTION OR SUSPECTED ACTION TAKEN BY OR WITHIN THE CORPORATION THAT IS
ILLEGAL, FRAUDULENT OR IN VIOLATION OF ANY ADOPTED POLICY OF THE CORPO-
RATION SHALL SUFFER INTIMIDATION, HARASSMENT, DISCRIMINATION OR OTHER
RETALIATION OR, IN THE CASE OF EMPLOYEES, ADVERSE EMPLOYMENT CONSE-
QUENCE.
(B) THE WHISTLEBLOWER POLICY SHALL INCLUDE THE FOLLOWING PROVISIONS:
(1) PROCEDURES FOR THE REPORTING OF VIOLATIONS OR SUSPECTED VIOLATIONS
OF LAWS OR CORPORATE POLICIES, INCLUDING PROCEDURES FOR PRESERVING THE
CONFIDENTIALITY OF REPORTED INFORMATION;
(2) A REQUIREMENT THAT AN EMPLOYEE, OFFICER OR DIRECTOR OF THE CORPO-
RATION BE DESIGNATED TO ADMINISTER THE WHISTLEBLOWER POLICY AND TO
REPORT TO THE AUDIT COMMITTEE OR OTHER COMMITTEE OF INDEPENDENT DIREC-
TORS OR, IF THERE ARE NO SUCH COMMITTEES, TO THE BOARD; AND
(3) A REQUIREMENT THAT A COPY OF THE POLICY BE DISTRIBUTED TO ALL
DIRECTORS, OFFICERS, EMPLOYEES AND TO VOLUNTEERS WHO PROVIDE SUBSTANTIAL
SERVICES TO THE CORPORATION.
(C) A CORPORATION THAT HAS ADOPTED AND POSSESSES A WHISTLEBLOWER POLI-
CY PURSUANT TO FEDERAL, STATE OR LOCAL LAWS THAT IS SUBSTANTIALLY
CONSISTENT WITH THE PROVISIONS OF PARAGRAPH (B) OF THIS SECTION SHALL BE
DEEMED IN COMPLIANCE WITH PROVISIONS OF THIS SECTION. IN ADDITION, ANY
CORPORATION THAT IS A STATE AUTHORITY OR LOCAL AUTHORITY AS DEFINED IN
SECTION TWO OF THE PUBLIC AUTHORITIES LAW, AND THAT HAS COMPLIED
SUBSTANTIALLY WITH SECTION TWENTY-EIGHT HUNDRED TWENTY-FOUR OF SUCH LAW
AND IS SUBJECT TO THE PROVISIONS OF SECTION TWENTY-EIGHT HUNDRED FIFTY-
SEVEN OF SUCH LAW, SHALL BE DEEMED IN COMPLIANCE WITH THE PROVISIONS OF
THIS SECTION.
(D) NOTHING IN THIS SECTION SHALL BE INTERPRETED TO RELIEVE ANY CORPO-
RATION FROM ANY ADDITIONAL REQUIREMENTS IN RELATION TO INTERNAL COMPLI-
ANCE, RETALIATION, OR DOCUMENT RETENTION REQUIRED BY ANY OTHER LAW OR
RULE.
S 76. Section 716 of the not-for-profit corporation law, as amended by
chapter 644 of the laws of 1971, is amended to read as follows:
S 716. Loans to directors and officers.
No loans, other than through the purchase of bonds, debentures, or
similar obligations of the type customarily sold in public offerings, or
through ordinary deposit of funds in a bank, shall be made by a corpo-
ration to its directors or officers, or to any other corporation, firm,
association or other entity in which one or more of its directors or
officers are directors or officers or hold a substantial financial
interest, except a loan by one [type B] CHARITABLE corporation to anoth-
er [type B] CHARITABLE corporation. A loan made in violation of this
section shall be a violation of the duty to the corporation of the
directors or officers authorizing it or participating in it, but the
obligation of the borrower with respect to the loan shall not be
affected thereby.
S 77. Section 718 of the not-for-profit corporation law, as amended by
chapter 992 of the laws of 1970, is amended to read as follows:
S 718. List of directors and officers.
(a) If a member or creditor of a corporation, in person or by his
attorney or agent, or a representative of the district attorney or of
S. 5845 40
the secretary of state, the attorney general, or other state official,
makes a written demand on a corporation to inspect a current list of its
directors and officers [and their residence addresses], the corporation
shall, within two business days after receipt of the demand and for a
period of one week thereafter, make the list available for such
inspection at its office during usual business hours.
(b) Upon refusal by the corporation to make a current list of its
directors and officers [and their residence addresses] available, as
provided in paragraph (a) OF THIS SECTION, the person making a demand
for such list may apply, ex parte, to the supreme court at a special
term held within the judicial district where the office of the corpo-
ration is located for an order directing the corporation to make such
list available. The court may grant such order or take such other
action as it may deem just and proper.
S 78. The section heading and paragraph (a) of section 720 of the
not-for-profit corporation law, the section heading as amended by chap-
ter 1058 of the laws of 1971, are amended to read as follows:
Actions [on behalf of the corporation] AGAINST DIRECTORS, OFFICERS AND
KEY EMPLOYEES.
(a) An action may be brought against one or more directors [or], offi-
cers, OR KEY EMPLOYEES of a corporation to procure a judgment for the
following relief:
(1) To compel the defendant to account for his official conduct in the
following cases:
(A) The neglect of, or failure to perform, or other violation of his
duties in the management and disposition of corporate assets committed
to his charge.
(B) The acquisition by himself, transfer to others, loss or waste of
corporate assets due to any neglect of, or failure to perform, or other
violation of his duties.
(2) To set aside an unlawful conveyance, assignment or transfer of
corporate assets, where the transferee knew of its unlawfulness.
(3) To enjoin a proposed unlawful conveyance, assignment or transfer
of corporate assets, where there are reasonable grounds for belief that
it will be made.
S 79. Paragraphs (a) and (c) of section 722 of the not-for-profit
corporation law, as amended by chapter 368 of the laws of 1987, are
amended to read as follows:
(a) A corporation may indemnify any person, made, or threatened to be
made, a party to an action or proceeding other than one by or in the
right of the corporation to procure a judgment in its favor, whether
civil or criminal, including an action by or in the right of any other
corporation of any [type or] kind, domestic or foreign, or any partner-
ship, joint venture, trust, employee benefit plan or other enterprise,
which any director or officer of the corporation served in any capacity
at the request of the corporation, by reason of the fact that he, his
testator or intestate, was a director or officer of the corporation, or
served such other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in any capacity, against judg-
ments, fines, amounts paid in settlement and reasonable expenses,
including attorneys' fees actually and necessarily incurred as a result
of such action or proceeding, or any appeal therein, if such director or
officer acted, in good faith, for a purpose which he reasonably believed
to be in, or, in the case of service for any other corporation or any
partnership, joint venture, trust, employee benefit plan or other enter-
prise, not opposed to, the best interests of the corporation and, in
S. 5845 41
criminal actions or proceedings, in addition, had no reasonable cause to
believe that his conduct was unlawful.
(c) A corporation may indemnify any person made, or threatened to be
made, a party to an action by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he, his
testator or intestate, is or was a director or officer of the corpo-
ration, or is or was serving at the request of the corporation as a
director or officer of any other corporation of any [type or] kind,
domestic or foreign, of any partnership, joint venture, trust, employee
benefit plan or other enterprise, against amounts paid in settlement and
reasonable expenses, including attorneys' fees, actually and necessarily
incurred by him in connection with the defense or settlement of such
action, or in connection with an appeal therein, if such director or
officer acted, in good faith, for a purpose which he reasonably believed
to be in, or, in the case of service for any other corporation or any
partnership, joint venture, trust, employee benefit plan or other enter-
prise, not opposed to, the best interests of the corporation, except
that no indemnification under this paragraph shall be made in respect of
(1) a threatened action, or a pending action which is settled or other-
wise disposed of, or (2) any claim, issue or matter as to which such
person shall have been adjudged to be liable to the corporation, unless
and only to the extent that the court in which the action was brought,
or, if no action was brought, any court of competent jurisdiction,
determines upon application that, in view of all the circumstances of
the case, the person is fairly and reasonably entitled to indemnity for
such portion of the settlement amount and expenses as the court deems
proper.
S 80. Paragraph (a) of section 724 of the not-for-profit corporation
law, as amended by chapter 368 of the laws of 1987, is amended to read
as follows:
(a) Notwithstanding the failure of a corporation to provide indemnifi-
cation, and despite any contrary resolution of the board or of the
members in the specific case under section 723 (Payment of indemnifica-
tion other than by court award), indemnification shall be awarded by a
court to the extent authorized under section 722 (Authorization for
indemnification of directors and officers), and paragraph (a) of section
723 (PAYMENT OF INDEMNIFICATION OTHER THAN BY COURT AWARD). Application
therefor SHALL BE MADE ON NOTICE TO THE ATTORNEY GENERAL AND may be
made, in every case, either:
(1) In the civil action or proceeding in which the expenses were
incurred or other amounts were paid, or
(2) To the supreme court in a separate proceeding, in which case the
application shall set forth the disposition of any previous application
made to any court for the same or similar relief and also reasonable
cause for the failure to make application for such relief in the action
or proceeding in which the expenses were incurred or other amounts were
paid.
S 81. Subparagraph 3 of paragraph (a) of section 803 of the not-for-
profit corporation law, as amended by chapter 168 of the laws of 1982,
is amended to read as follows:
(3) That the corporation is a corporation as defined in subparagraph
(a) (5) of section 102 (Definitions)[; the type of corporation it is
under section 201 (Purposes); and if the corporate purposes are
enlarged, limited or otherwise changed, the type of corporation it shall
thereafter be under section 201].
S. 5845 42
S 82. The section heading and paragraph (a) of section 804 of the
not-for-profit corporation law, as amended by chapter 139 of the laws of
1993, and subparagraph (i) of paragraph (a) as amended by chapter 198 of
the laws of 2010, are amended to read as follows:
Approvals, NOTICES and effect.
(a) (i) A certificate of amendment shall not be filed if the amendment
adds, changes or eliminates a purpose, power or provision the inclusion
of which in a certificate of incorporation requires consent or approval
of a governmental body or officer or any other person or body, or if the
amendment changes the name of a corporation whose certificate of incor-
poration had such consent or approval endorsed thereon or annexed there-
to, unless such consent or approval is no longer required or is endorsed
on or annexed to the certificate of amendment. A CERTIFICATE OF AMEND-
MENT ADDING, CHANGING OR ELIMINATING A PURPOSE, POWER OR PROVISION THE
INCLUSION OF WHICH IN A CERTIFICATE OF INCORPORATION REQUIRES THE INCOR-
PORATOR TO SEND SUCH CERTIFICATE TO A GOVERNMENTAL BODY OR OFFICER OR
ANY OTHER PERSON OR BODY, OR IF THE AMENDMENT CHANGES THE NAME OF A
CORPORATION WHOSE CERTIFICATE OF INCORPORATION WAS REQUIRED TO BE DELIV-
ERED BY THE INCORPORATOR TO A GOVERNMENTAL BODY OR OFFICER OR ANY OTHER
PERSON OR BODY, SHALL BE DELIVERED BY THE PERSON OR ENTITY FILING THE
CERTIFICATE OF AMENDMENT WITHIN THIRTY BUSINESS DAYS AFTER THE CORPO-
RATION RECEIVES CONFIRMATION FROM THE DEPARTMENT OF STATE THAT THE
CERTIFICATE HAS BEEN ACCEPTED FOR FILING.
(ii) Every certificate of amendment of a CHARITABLE corporation [clas-
sified as type B or type C under section 201 (Purposes)] which seeks to
change or eliminate a purpose or power enumerated in the corporation's
certificate of incorporation, or to add a power or purpose not enumer-
ated therein, shall have endorsed thereon or annexed thereto the
approval of EITHER (A) THE ATTORNEY GENERAL, OR (B) a justice of the
supreme court of the judicial district in which the office of the corpo-
ration is located. [Ten days' written notice of the application for such
approval shall be given to the attorney-general] AT ANY TIME, INCLUDING
IF THE ATTORNEY GENERAL DOES NOT APPROVE A CERTIFICATE OF AMENDMENT
SUBMITTED PURSUANT TO CLAUSE (A) OF THIS SUBPARAGRAPH, OR IF THE ATTOR-
NEY GENERAL CONCLUDES THAT COURT REVIEW IS APPROPRIATE, THE CORPORATION
MAY APPLY FOR APPROVAL OF THE AMENDMENT TO A JUSTICE OF THE SUPREME
COURT OF THE JUDICIAL DISTRICT IN WHICH THE OFFICE OF THE CORPORATION IS
LOCATED. ANY APPLICATION FOR APPROVAL OF A CERTIFICATE OF AMENDMENT BY
THE SUPREME COURT PURSUANT TO THIS PARAGRAPH SHALL BE ON TEN DAYS' WRIT-
TEN NOTICE TO THE ATTORNEY GENERAL.
S 83. Section 907 of the not-for-profit corporation law is amended to
read as follows:
S 907. Approval by the supreme court OR ATTORNEY GENERAL.
[(a)] Where any constituent corporation or the consolidated corpo-
ration is, or would be if formed under this chapter, a [Type B or a Type
C] CHARITABLE corporation under section 201 (Purposes) of this chapter,
no certificate shall be filed pursuant to section 904 (Certificate of
merger or consolidation; contents) or section 906 (Merger or consol-
idation of domestic and foreign corporations) until (A) THE SUPREME
COURT HAS GRANTED an order approving the plan of merger or consolidation
and authorizing the filing of the certificate [has been made by the
supreme court], as provided in [this] section[. A certified copy of such
order shall be annexed to the certificate of merger or consolidation.
Application for the order may be made in the judicial district in which
the principal office of the surviving or consolidated corporation is to
be located, or in which the office of one of the domestic constituent
S. 5845 43
corporations is located. The application shall be made by all the
constituent corporations jointly and shall set forth by affidavit (1)
the plan of merger or consolidation, (2) the approval required by
section 903 (Approval of plan) or paragraph (b) of section 906 (Merger
or consolidation of domestic and foreign corporations) for each constit-
uent corporation, (3) the objects and purposes of each such corporation
to be promoted by the consolidation, (4) a statement of all property,
and the manner in which it is held, and of all liabilities and of the
amount and sources of the annual income of each such corporation, (5)
whether any votes against adoption of the resolution approving the plan
of merger or consolidation were cast at the meeting at which the resol-
ution as adopted by each constituent corporation, and (6) facts showing
that the consolidation is authorized by the laws of the jurisdictions
under which each of the constituent corporations is incorporated] 907-A
(APPLICATION FOR APPROVAL OF THE SUPREME COURT) OF THIS ARTICLE OR (B)
THE ATTORNEY GENERAL HAS APPROVED THE PLAN OF MERGER OR CONSOLIDATION
AND AUTHORIZED THE FILING OF THE CERTIFICATE, AS PROVIDED IN SECTION
907-B (APPLICATION FOR APPROVAL OF THE ATTORNEY GENERAL) OF THIS
ARTICLE.
[(b) Upon the filing of the application the court shall fix a time for
hearing thereof and shall direct that notice thereof be given to such
persons as may be interested, including the attorney general, any
governmental body or officer and any other person or body whose consent
or approval is required by section 909 (Consent to filing), in such form
and manner as the court may prescribe. If no votes against adoption of
the resolution approving the plan of merger or consolidation were cast
at the meeting at which the resolution was adopted by any constituent
corporation the court may dispense with notice to anyone except the
attorney-general, any governmental body or officer and any other person
or body whose consent or approval is required by section 909 (Consent to
filing). Any person interested may appear and show cause why the appli-
cation should not be granted.
(c) If the court shall find that any of the assets of any of the
constituent corporations are held for a purpose specified as Type B in
paragraph (b) of section 201 or are legally required to be used for a
particular purpose, but not upon a condition requiring return, transfer
or conveyance by reason of the merger or consolidation, the court may,
in its discretion, direct that such assets be transferred or conveyed to
the surviving or consolidated corporation subject to such purpose or
use, or that such assets be transferred or conveyed to the surviving or
consolidated corporation or to one or more other domestic or foreign
corporations or organizations engaged in substantially similar activ-
ities, upon an express trust the terms of which shall be approved by the
court.
(d) If the court shall find that the interests of non-consenting
members are or may be substantially prejudiced by the proposed merger or
consolidation, the court may disapprove the plan or may direct a modifi-
cation thereof. In the event of a modification, if the court shall find
that the interests of any members may be substantially prejudiced by the
proposed merger or consolidation as modified, the court shall direct
that the modified plan be submitted to vote of the members of the
constituent corporations, or if the court shall find that there is not
such substantial prejudice, it shall approve the agreement as so modi-
fied without further approval by the members. If the court, upon direct-
ing a modification of the plan of merger or consolidation, shall direct
that a further approval be obtained from members of the constituent
S. 5845 44
corporations or any of them, such further approval shall be obtained in
the manner specified in section 903 (Approval of plan) or section 906(b)
(Merger or consolidation of domestic and foreign corporations) of this
chapter.
(e) If it shall appear, to the satisfaction of the court, that the
provisions of this section have been complied with, and that the inter-
ests of the constituent corporations and the public interest will not be
adversely affected by the merger or consolidation, it shall approve the
merger or consolidation upon such terms and conditions as it may
prescribe.]
S 84. The not-for-profit corporation law is amended by adding a new
section 907-a to read as follows:
S 907-A. APPLICATION FOR APPROVAL OF THE SUPREME COURT.
(A) APPLICATION FOR AN ORDER APPROVING THE PLAN OF MERGER AND AUTHOR-
IZING THE FILING OF THE CERTIFICATE MAY BE MADE IN THE JUDICIAL DISTRICT
IN WHICH THE PRINCIPAL OFFICE OF THE SURVIVING OR CONSOLIDATED CORPO-
RATION IS TO BE LOCATED, OR IN WHICH THE OFFICE OF ONE OF THE DOMESTIC
CONSTITUENT CORPORATIONS IS LOCATED. THE APPLICATION SHALL BE MADE BY
ALL THE CONSTITUENT CORPORATIONS JOINTLY AND SHALL SET FORTH BY AFFIDA-
VIT: (1) THE PLAN OF MERGER OR CONSOLIDATION, (2) THE APPROVAL REQUIRED
BY SECTION 903 (APPROVAL OF PLAN) OR PARAGRAPH (B) OF SECTION 906 (MERG-
ER OR CONSOLIDATION OF DOMESTIC AND FOREIGN CORPORATIONS) OF THIS ARTI-
CLE FOR EACH CONSTITUENT CORPORATION, (3) THE OBJECTS AND PURPOSES OF
EACH SUCH CORPORATION TO BE PROMOTED BY THE MERGER OR CONSOLIDATION, (4)
A STATEMENT OF ALL PROPERTY, AND THE MANNER IN WHICH IT IS HELD, AND OF
ALL LIABILITIES AND OF THE AMOUNT AND SOURCES OF THE ANNUAL INCOME OF
EACH SUCH CORPORATION, (5) WHETHER ANY VOTES AGAINST ADOPTION OF THE
RESOLUTION APPROVING THE PLAN OF MERGER OR CONSOLIDATION WERE CAST AT
THE MEETING AT WHICH THE RESOLUTION WAS ADOPTED BY EACH CONSTITUENT
CORPORATION, AND (6) FACTS SHOWING THAT THE CONSOLIDATION IS AUTHORIZED
BY THE LAWS OF THE JURISDICTIONS UNDER WHICH EACH OF THE CONSTITUENT
CORPORATIONS IS INCORPORATED.
(B) UPON THE FILING OF THE APPLICATION THE COURT SHALL FIX A TIME FOR
HEARING THEREOF AND SHALL DIRECT THAT NOTICE THEREOF BE GIVEN TO SUCH
PERSONS AS MAY BE INTERESTED, INCLUDING THE ATTORNEY GENERAL, ANY
GOVERNMENTAL BODY OR OFFICER AND ANY OTHER PERSON OR BODY WHOSE CONSENT
OR APPROVAL IS REQUIRED BY SECTION 909 (CONSENT TO FILING) OF THIS ARTI-
CLE, IN SUCH FORM AND MANNER AS THE COURT MAY PRESCRIBE. IF NO VOTES
AGAINST ADOPTION OF THE RESOLUTION APPROVING THE PLAN OF MERGER OR
CONSOLIDATION WERE CAST AT THE MEETING AT WHICH THE RESOLUTION WAS
ADOPTED BY ANY CONSTITUENT CORPORATION THE COURT MAY DISPENSE WITH
NOTICE TO ANYONE EXCEPT THE ATTORNEY-GENERAL, ANY GOVERNMENTAL BODY OR
OFFICER AND ANY OTHER PERSON OR BODY WHOSE CONSENT OR APPROVAL IS
REQUIRED BY SECTION 909 (CONSENT TO FILING) OF THIS ARTICLE. ANY PERSON
INTERESTED MAY APPEAR AND SHOW CAUSE WHY THE APPLICATION SHOULD NOT BE
GRANTED.
(C) IF THE COURT SHALL FIND THAT ANY OF THE ASSETS OF ANY OF THE
CONSTITUENT CORPORATIONS ARE HELD FOR A CHARITABLE PURPOSE OR ARE LEGAL-
LY REQUIRED TO BE USED FOR A PARTICULAR PURPOSE, BUT NOT UPON A CONDI-
TION REQUIRING RETURN, TRANSFER OR CONVEYANCE BY REASON OF THE MERGER OR
CONSOLIDATION, THE COURT MAY, IN ITS DISCRETION, DIRECT THAT SUCH ASSETS
BE TRANSFERRED OR CONVEYED TO THE SURVIVING OR CONSOLIDATED CORPORATION
SUBJECT TO SUCH PURPOSE OR USE, OR THAT SUCH ASSETS BE TRANSFERRED OR
CONVEYED TO THE SURVIVING OR CONSOLIDATED CORPORATION OR TO ONE OR MORE
OTHER DOMESTIC OR FOREIGN CORPORATIONS OR ORGANIZATIONS ENGAGED IN
S. 5845 45
SUBSTANTIALLY SIMILAR ACTIVITIES, UPON AN EXPRESS TRUST THE TERMS OF
WHICH SHALL BE APPROVED BY THE COURT.
(D) IF THE COURT SHALL FIND THAT THE INTERESTS OF NON-CONSENTING
MEMBERS ARE OR MAY BE SUBSTANTIALLY PREJUDICED BY THE PROPOSED MERGER OR
CONSOLIDATION, THE COURT MAY DISAPPROVE THE PLAN OR MAY DIRECT A MODIFI-
CATION THEREOF. IN THE EVENT OF A MODIFICATION, IF THE COURT SHALL FIND
THAT THE INTERESTS OF ANY MEMBERS MAY BE SUBSTANTIALLY PREJUDICED BY THE
PROPOSED MERGER OR CONSOLIDATION AS MODIFIED, THE COURT SHALL DIRECT
THAT THE MODIFIED PLAN BE SUBMITTED TO VOTE OF THE MEMBERS OF THE
CONSTITUENT CORPORATIONS, OR IF THE COURT SHALL FIND THAT THERE IS NOT
SUCH SUBSTANTIAL PREJUDICE, IT SHALL APPROVE THE AGREEMENT AS SO MODI-
FIED WITHOUT FURTHER APPROVAL BY THE MEMBERS. IF THE COURT, UPON DIRECT-
ING A MODIFICATION OF THE PLAN OF MERGER OR CONSOLIDATION, SHALL DIRECT
THAT A FURTHER APPROVAL BE OBTAINED FROM MEMBERS OF THE CONSTITUENT
CORPORATIONS OR ANY OF THEM, SUCH FURTHER APPROVAL SHALL BE OBTAINED IN
THE MANNER SPECIFIED IN SECTION 903 (APPROVAL OF PLAN) OR PARAGRAPH (B)
OF SECTION 906 (MERGER OR CONSOLIDATION OF DOMESTIC AND FOREIGN CORPO-
RATIONS) OF THIS ARTICLE.
(E) IF IT SHALL APPEAR, TO THE SATISFACTION OF THE COURT, THAT THE
PROVISIONS OF THIS SECTION HAVE BEEN COMPLIED WITH, AND THAT THE INTER-
ESTS OF THE CONSTITUENT CORPORATIONS AND THE PUBLIC INTEREST WILL NOT BE
ADVERSELY AFFECTED BY THE MERGER OR CONSOLIDATION, IT SHALL APPROVE THE
MERGER OR CONSOLIDATION UPON SUCH TERMS AND CONDITIONS AS IT MAY
PRESCRIBE.
(F) A CERTIFIED COPY OF SUCH ORDER SHALL BE ANNEXED TO THE CERTIFICATE
OF MERGER OR CONSOLIDATION.
S 85. The not-for-profit corporation law is amended by adding a new
section 907-b to read as follows:
S 907-B. APPLICATION FOR APPROVAL OF THE ATTORNEY GENERAL.
(A) IN LIEU OF OBTAINING AN ORDER APPROVING THE PLAN OF MERGER OR
CONSOLIDATION AND AUTHORIZING THE FILING OF THE CERTIFICATE, THE CORPO-
RATION MAY ALTERNATIVELY MAKE AN APPLICATION TO THE ATTORNEY GENERAL FOR
APPROVAL, EXCEPT WHERE THE ATTORNEY GENERAL, IN HIS OR HER DISCRETION,
CONCLUDES THAT A COURT SHOULD REVIEW THE APPLICATION AND MAKE A DETERMI-
NATION THEREON.
(B) THE APPLICATION TO THE ATTORNEY GENERAL SHALL BE MADE BY ALL THE
CONSTITUENT CORPORATIONS JOINTLY AND SHALL SET FORTH BY AFFIDAVIT: (I)
ALL OF THE INFORMATION REQUIRED TO BE INCLUDED IN AN APPLICATION TO
OBTAIN COURT APPROVAL PURSUANT TO SECTION 907-A (APPLICATION FOR
APPROVAL OF THE SUPREME COURT) OF THIS ARTICLE, (II) ALL CONSENTS AND
APPROVALS REQUIRED BY SECTION 909 (CONSENT TO FILING), AND (III) A
STATEMENT AS TO WHETHER ANY PERSONS HAVE RAISED, OR HAVE A REASONABLE
BASIS TO RAISE, OBJECTIONS TO THE MERGER OR CONSOLIDATION THAT IS THE
SUBJECT OF THE APPLICATION, INCLUDING A STATEMENT SETTING FORTH THE
NAMES AND ADDRESSES OF SUCH PERSONS, THE NATURE OF THEIR INTEREST, AND A
DESCRIPTION OF THEIR OBJECTIONS.
(C) UPON THE FILING OF THE APPLICATION, THE ATTORNEY GENERAL, IN HIS
OR HER DISCRETION, MAY DIRECT THAT THE CONSTITUENT CORPORATIONS PROVIDE
NOTICE TO SUCH PERSONS AS MAY BE INTERESTED, INCLUDING ANY GOVERNMENTAL
BODY OR OFFICER AND ANY OTHER PERSON OR BODY THAT IS REQUIRED EITHER TO
GIVE CONSENT OR BE NOTIFIED UNDER SECTION 404 (APPROVALS, NOTICES AND
CONSENTS) OF THIS ARTICLE OR 909 (CONSENT TO FILING) OF THIS ARTICLE.
THE CONSTITUENT CORPORATIONS SHALL PROVIDE THE ATTORNEY GENERAL WITH A
CERTIFICATION THAT SUCH NOTICE HAS BEEN PROVIDED.
(D) IF ANY ASSETS OF ANY OF THE CONSTITUENT CORPORATIONS ARE HELD FOR
A CHARITABLE PURPOSE OR ARE ASSETS RECEIVED FOR A SPECIFIC PURPOSE AND
S. 5845 46
LEGALLY REQUIRED TO BE USED FOR A PARTICULAR PURPOSE, BUT NOT UPON A
CONDITION REQUIRING RETURN, TRANSFER OR CONVEYANCE BY REASON OF THE
MERGER OR CONSOLIDATION, THE ATTORNEY GENERAL MAY, IN HIS OR HER
DISCRETION, DIRECT THAT SUCH ASSETS BE TRANSFERRED OR CONVEYED TO THE
SURVIVING OR CONSOLIDATED CORPORATION SUBJECT TO SUCH PURPOSE OR USE.
(E) IF THE ATTORNEY GENERAL SHALL FIND THAT THE INTERESTS OF NON-CON-
SENTING MEMBERS ARE OR MAY BE SUBSTANTIALLY PREJUDICED BY THE PROPOSED
MERGER OR CONSOLIDATION, THE ATTORNEY GENERAL MAY DISAPPROVE OF THE
APPLICATION OR MAY CONDITION APPROVAL OF THE APPLICATION UPON MODIFICA-
TION OF THE PLAN OF MERGER OR CONSOLIDATION IN ACCORDANCE WITH THIS
CHAPTER AND ANY OTHER LAW OR RULE.
(F) IF IT SHALL APPEAR, TO THE SATISFACTION OF THE ATTORNEY GENERAL,
THAT THE PROVISIONS OF THIS SECTION HAVE BEEN COMPLIED WITH, AND THAT
THE INTERESTS OF THE CONSTITUENT CORPORATIONS AND THE PUBLIC INTEREST
WILL NOT BE ADVERSELY AFFECTED BY THE MERGER OR CONSOLIDATION, THE
ATTORNEY GENERAL SHALL APPROVE THE MERGER OR CONSOLIDATION UPON SUCH
TERMS AND CONDITIONS AS IT MAY PRESCRIBE.
(G) THE APPROVAL OF THE ATTORNEY GENERAL SHALL BE ANNEXED TO THE
CERTIFICATE OF MERGER OR CONSOLIDATION.
(H) AT ANY TIME, INCLUDING IF THE ATTORNEY GENERAL DOES NOT APPROVE
THE APPLICATION, OR IF THE ATTORNEY GENERAL CONCLUDES THAT COURT REVIEW
IS APPROPRIATE, THE CONSTITUENT CORPORATIONS MAY SEEK COURT APPROVAL ON
NOTICE TO THE ATTORNEY GENERAL PURSUANT TO SECTION 907-A (APPLICATION
FOR APPROVAL OF THE SUPREME COURT) OF THIS ARTICLE.
S 85-a. Paragraph (f) of section 908 of the not-for-profit corporation
law is REPEALED.
S 86. Paragraph (a) of section 908 of the not-for-profit corporation
law is amended to read as follows:
(a) One or more domestic or foreign corporations which is, or would be
if formed under this chapter, a NON-CHARITABLE CORPORATION, OR ANY
CORPORATION FORMED AS A type A [or type C] corporation [under section
201 (Purposes)] PRIOR TO JULY FIRST, TWO THOUSAND FOURTEEN, may be
merged or consolidated into a domestic or foreign corporation which is,
or would be if formed under the laws of this state, a corporation formed
under the business corporation law of this state if such merger or
consolidation is not contrary to the law of the state of incorporation
of any constituent corporation. With respect to such merger or consol-
idation, any reference in paragraph (b) of section 901 (POWER OF MERGER
OR CONSOLIDATION) of this article or paragraph (b) of section 901 (POWER
OF MERGER OR CONSOLIDATION) of the business corporation law to a corpo-
ration shall, unless the context otherwise requires, include both domes-
tic and foreign corporations.
S 87. Section 909 of the not-for-profit corporation law, as amended by
section 6 of part D of chapter 58 of the laws of 2006, is amended to
read as follows:
S 909. Consent to filing; NOTICES.
(A) If the purposes of any constituent or consolidated corporation
would require the approval or consent of any governmental body or offi-
cer or any other person or body under section 404 (Approvals, NOTICES
and consents) OF THIS CHAPTER no certificate of merger or consolidation
shall be filed pursuant to this article unless such approval or consent
is endorsed thereon or annexed thereto. A corporation whose statement of
purposes specifically includes the establishment or operation of a child
day care center, as that term is defined in section three hundred ninety
of the social services law, shall provide a certified copy of any
certificate of merger or consolidation involving such corporation to the
S. 5845 47
office of children and family services within thirty days after the
filing of such merger or consolidation with the department of state.
(B) IF THE PURPOSES OF ANY CONSTITUENT OR CONSOLIDATED CORPORATION
WOULD REQUIRE THE CERTIFICATE OF INCORPORATION OR ANY OTHER NOTICE TO BE
DELIVERED TO ANY PERSON OR ENTITY UNDER SECTION 404 (APPROVALS, NOTICES
AND CONSENTS) OF THIS CHAPTER, THE CORPORATION SHALL PROVIDE TO SUCH
PERSON OR ENTITY A CERTIFIED COPY OF THE CERTIFICATE OF INCORPORATION
WITHIN THIRTY DAYS AFTER THE CORPORATION RECEIVES CONFIRMATION FROM THE
DEPARTMENT OF STATE THAT THE CERTIFICATE HAS BEEN ACCEPTED FOR FILING.
S 88. Paragraphs (b), (c) and (d) of section 1001 of the not-for-pro-
fit corporation law, as amended by chapter 434 of the laws of 2006, are
amended to read as follows:
(b) If the corporation is a [Type B, C or D] CHARITABLE corporation
and has no assets to distribute and no liabilities at the time of
dissolution, the plan of dissolution shall include a statement to that
effect.
(c) If the corporation [is a Type B, C or D corporation and] has no
assets to distribute, other than a reserve not to exceed twenty-five
thousand dollars for the purpose of paying ordinary and necessary
expenses of winding up its affairs including attorney and accountant
fees, and liabilities not in excess of ten thousand dollars at the time
of adoption of the plan of dissolution, the plan of dissolution shall
include a statement to that effect.
(d) If the corporation has assets to distribute or liabilities, the
plan of dissolution shall contain:
(1) a description with reasonable certainty of the assets of the
corporation and their fair value, and the total amount of debts and
other liabilities incurred or estimated by the corporation, including
the total amount of any accounting and legal fees incurred or estimated,
in connection with the dissolution procedure.
(2) a statement as to whether any gifts or other assets are legally
required to be used for a particular purpose.
(3) if there are assets received and held by the corporation either
for a CHARITABLE purpose [specified as Type B in paragraph (b) of
section 201 (Purposes)] or which are legally required to be used for a
particular purpose, a statement that the assets owned by the corpo-
ration, subject to any unpaid liabilities of the corporation, shall be
distributed as required by any gift instrument or to a charitable CORPO-
RATION OR organization or organizations exempt from taxation pursuant to
federal and state laws and engaged in activities substantially similar
to those of the dissolved corporation. Each such recipient organization
shall be identified and the governing instrument and amendments thereto
of each of the proposed recipient organizations shall be annexed to such
statement, along with the MOST RECENT financial [reports] REPORT of each
recipient organization [for the last three years] and a sworn affidavit
from a director and officer of each recipient organization stating the
purposes of the organization, and that it is currently exempt from
federal income taxation.
(4) if any of the assets of the corporation are to be distributed to a
recipient for a particular legally required purpose, an agreement by the
recipient to apply the assets received only for such purpose shall be
included.
S 89. Paragraphs (a) and (d) of section 1002 of the not-for-profit
corporation law, as amended by chapter 434 of the laws of 2006, are
amended to read as follows:
S. 5845 48
(a) Upon adopting a plan of dissolution and distribution of assets,
the board shall submit it to a vote of the members, if any, and such
plan shall be approved at a meeting of members by two-thirds vote as
provided in paragraph (c) of section 613 (Vote of members) OF THIS CHAP-
TER; provided, however, that if the corporation is a [Type B, C or D]
CHARITABLE corporation, other than a corporation incorporated pursuant
to article 15 (Public cemetery corporations) OF THIS CHAPTER, [and has
no assets to distribute, other than a reserve not to exceed twenty-five
thousand dollars for the purpose of paying ordinary and necessary
expenses of winding up its affairs including attorney and accountant
fees, and liabilities not in excess of ten thousand dollars at the time
of adoption of the plan of dissolution,] the vote required by the corpo-
ration's board of directors for adoption of the plan of dissolution of
such a corporation or by the corporation's members for the authorization
thereof shall be:
(1) In the case of a vote by the board of directors: (i) the number of
directors required under the certificate of incorporation, by-laws, this
chapter and any other applicable law; or
(ii) if the number of directors actually holding office as such at the
time of the vote to adopt the plan is less than the number required to
constitute a quorum of directors under the certificate of incorporation,
the by-laws, this chapter or any other applicable law, the remaining
directors unanimously;
(2) In the case of a vote by the members, (i) the number of members
required under the certificate of incorporation, by-laws, this chapter
and any other applicable law; or (ii) by the vote of members authorized
by an order of the supreme court pursuant to section 608 (QUORUM AT
MEETING OF MEMBERS) of this chapter permitting the corporation to
dispense with the applicable quorum requirement.
Notice of a special or regular meeting of the board of directors or of
the members entitled to vote on adoption and authorization or approval
of the plan of dissolution shall be sent to all the directors and
members of record entitled to vote. Unless otherwise directed by order
of the supreme court pursuant to section 608 (QUORUM AT MEETING OF
MEMBERS) of this chapter, the notice shall be sent by certified mail,
return receipt requested, to the last known address of record of each
director and member not fewer than thirty, and not more than sixty days
before the date of each meeting provided, however, that if the last
known address of record of any director or member is not within the
United States, the notice to such director shall be sent by any other
reasonable means.
(d) (1) The plan of dissolution and distribution of assets shall have
annexed thereto the approval of [a justice of the supreme court in the
judicial district in which the office of the corporation is located] THE
ATTORNEY GENERAL in the case of a [Type B, C or D] CHARITABLE corpo-
ration, and in the case of any [other] NON-CHARITABLE corporation which
[holds assets] at the time of dissolution HOLDS ASSETS legally required
to be used for a particular purpose[, except that no such approval shall
be required with respect to the plan of dissolution of a corporation,
other than a corporation incorporated pursuant to article 15 (Public
cemetery corporations), which has no assets to distribute at the time of
dissolution, other than a reserve not to exceed twenty-five thousand
dollars for the purpose of paying ordinary and necessary expenses of
winding up its affairs including attorney and accountant fees, and
liabilities not in excess of ten thousand dollars, and which has
complied with the requirements of section 1001 (Plan of dissolution and
S. 5845 49
distribution of assets) and this section applicable to such a corpo-
ration].
(2) Application to the [supreme court for an order] ATTORNEY GENERAL
for such approval shall be by verified petition, with the plan of
dissolution and distribution of assets and certified copies of the
consents prescribed by this section annexed thereto[, and upon ten days
written notice to the attorney general accompanied by copies of such
petition, plan and consents. In such case where approval of a justice of
the supreme court is not required for a Type B, C or D corporation, a
copy of such plan certified under penalties of perjury shall be filed
with the attorney general within ten days after its authorization].
(3) THE ATTORNEY GENERAL MAY APPROVE THE PETITION IF THE CORPORATION
HAS ADOPTED A PLAN IN ACCORDANCE WITH THE REQUIREMENTS OF SECTION 1001
(PLAN OF DISSOLUTION AND DISTRIBUTION OF ASSETS) OF THIS ARTICLE, AND
ANY OTHER REQUIREMENTS IMPOSED BY LAW OR RULE. AT ANY TIME, INCLUDING IF
THE ATTORNEY GENERAL DOES NOT APPROVE THE PETITION, OR THE ATTORNEY
GENERAL CONCLUDES, IN HIS OR HER DISCRETION, THAT COURT REVIEW OF THE
PETITION IS APPROPRIATE, THE CORPORATION MAY APPLY FOR APPROVAL TO THE
SUPREME COURT IN THE JUDICIAL DISTRICT IN WHICH THE PRINCIPAL OFFICE OF
THE CORPORATION IS LOCATED, OR IN WHICH THE OFFICE OF ONE OF THE DOMES-
TIC CONSTITUENT CORPORATIONS IS LOCATED, FOR AN ORDER DISSOLVING THE
CORPORATION. APPLICATION TO THE SUPREME COURT FOR AN ORDER FOR SUCH
APPROVAL SHALL BE BY VERIFIED PETITION UPON TEN DAYS WRITTEN NOTICE TO
THE ATTORNEY GENERAL, AND SHALL INCLUDE ALL INFORMATION REQUIRED TO BE
INCLUDED IN THE APPLICATION TO THE ATTORNEY GENERAL PURSUANT TO THIS
SECTION.
S 90. Paragraphs (a) and (c) of section 1002-a of the not-for-profit
corporation law, as amended by chapter 434 of the laws of 2006, are
amended to read as follows:
(a) Carry out the plan of dissolution and distribution of assets, pay
its liabilities and distribute its assets in accordance therewith within
two hundred seventy days from the date the plan of dissolution and
distribution of assets shall have been (1) authorized as provided in
section 1002 (AUTHORIZATION OF PLAN) of this article, (2) approved by
any governmental body or officer whose approval is required pursuant to
paragraph (c) of section 1002 (AUTHORIZATION OF PLAN) of this article,
and (3) approved by EITHER THE ATTORNEY GENERAL OR a justice of the
supreme court[, if such approval is required] pursuant to paragraph (d)
of section 1002 (AUTHORIZATION OF PLAN) of this article[, or filed with
the attorney general, if such filing is required pursuant to paragraph
(d) of section 1002 of this article]. Evidence of the disposition of its
assets and payment of its liabilities pursuant to the plan of dissol-
ution and distribution of assets shall be submitted by the corporation
to the attorney general and any other governmental body or officer, as
required under applicable laws. If the plan of dissolution and distrib-
ution of assets cannot be carried out within the prescribed time, the
attorney general may upon good cause shown extend such time, or any
extended period of time, by not fewer than thirty days nor more than one
year;
(c) Distribute the assets of the corporation that remain after paying
or adequately providing for the payment of its liabilities, in the
following manner:
(1) assets received and held by the corporation either for a CHARITA-
BLE purpose [specified as Type B in paragraph (b) of section 201
(Purposes)] or which are legally required to be used for a particular
purpose, shall be distributed to one or more domestic or foreign corpo-
S. 5845 50
rations or other organizations engaged in activities substantially simi-
lar to those of the dissolved corporation pursuant to the plan of
dissolution and distribution or, if applicable, as APPROVED BY THE
ATTORNEY GENERAL OR ordered by the SUPREME court PURSUANT to [which such
plan is submitted for approval under] section 1002 (Authorization of
plan) OF THIS ARTICLE. Any disposition of assets contained in a will or
other instrument, in trust or otherwise, made before or after the
dissolution, to or for the benefit of any corporation so dissolved shall
inure to or for the benefit of the corporation or organization acquiring
such assets of the dissolved corporation as provided in this section,
and so far as is necessary for that purpose the corporation or organiza-
tion acquiring such disposition shall be deemed a successor to the
dissolved corporation with respect to such assets; provided, however,
that such disposition shall be devoted by the acquiring corporation or
organization to the purposes intended by the testator, donor or grantor.
(2) assets other than those described by subparagraph one of this
paragraph, if any, shall be distributed in accordance with the specifi-
cations of the plan of dissolution and distribution of assets or, to the
extent that the certificate of incorporation prescribes the distributive
rights of members, or of any class or classes of members, as provided in
such certificate;
S 91. Paragraphs (a) and (b) of section 1003 of the not-for-profit
corporation law, as amended by chapter 434 of the laws of 2006, are
amended to read as follows:
(a) After the plan of dissolution and distribution of assets has been
adopted, authorized, approved and carried out pursuant to the terms of
the plan within the time period set forth pursuant to section 1002-a
(Carrying out the plan of dissolution and distribution of assets), a
certificate of dissolution, entitled "Certificate of dissolution
of ........ (name of corporation) under section 1003 of the Not-for-Pro-
fit Corporation Law" shall be signed and, if required pursuant to
subparagraph two of paragraph (b) of this section, after the attorney
general has affixed thereon his or her consent to the dissolution, such
certificate of dissolution shall be delivered to the department of
state. It shall set forth:
(1) The name of the corporation and, if its name has been changed, the
name under which it was formed.
(2) The date its certificate of incorporation was filed by the depart-
ment of state.
(3) The name and address of each of its officers and directors.
(4) [The type of corporation it is at the time of dissolution] A
STATEMENT AS TO WHETHER THE CORPORATION IS A CHARITABLE CORPORATION OR A
NON-CHARITABLE CORPORATION.
(5) A statement as to whether or not the corporation holds assets at
the time of authorization of its plan of dissolution and distribution of
assets as provided in section 1002 of this article (Authorization of
plan) which are legally required to be used for a particular purpose.
(6) That the corporation elects to dissolve.
(7) The manner in which the dissolution was authorized. If the dissol-
ution of the corporation is authorized by a vote of the directors and/or
members of the corporation that is less than that ordinarily required by
the certificate of incorporation, the by-laws, this chapter or any other
applicable law, as permitted by paragraph (a) of section 1002 (Authori-
zation of plan) OF THIS ARTICLE, then the certificate of dissolution
shall so state.
S. 5845 51
(8) A statement that prior to delivery of such certificate of dissol-
ution to the department of state for filing, the plan of dissolution and
distribution of assets has been approved by THE ATTORNEY GENERAL OR BY a
justice of the supreme court, if such approval is required PURSUANT TO
SECTION 1002 (AUTHORIZATION OF PLAN) OF THIS ARTICLE. A copy of the
order shall be attached to the certificate of dissolution. In the case
of a corporation, other than a corporation incorporated pursuant to
article 15 (Public cemetery corporations), having no assets to distrib-
ute, OR HAVING NO ASSETS TO DISTRIBUTE other than a reserve not to
exceed twenty-five thousand dollars for the purpose of paying ordinary
and necessary expenses of winding up its affairs including attorney and
accountant fees, and liabilities not in excess of ten thousand dollars
at the time of dissolution, a statement that a copy of the plan of
dissolution which contains the statement prescribed by paragraph (b) of
section 1001 (Plan of dissolution and distribution of assets) has been
duly filed with the attorney general, if required.
(b) Such certificate of dissolution shall have [indorsed] ENDORSED
thereon or annexed thereto the approval of the dissolution:
(1) By a governmental body or officer, if such approval is required. A
corporation whose statement of purposes specifically includes the estab-
lishment or operation of a child day care center, as that term is
defined in section three hundred ninety of the social services law,
shall provide a certified copy of any certificate of dissolution involv-
ing such corporation to the office of children and family services with-
in thirty days after the filing of such dissolution with the department
of state.
(2) By the attorney general in the case of a [Type B, C or D] CHARITA-
BLE corporation, or any other corporation that holds assets at the time
of dissolution legally required to be used for a particular purpose.
S 92. Paragraph (a) of section 1007 of the not-for-profit corporation
law, as amended by chapter 434 of the laws of 2006, is amended to read
as follows:
(a) At any time after the plan of dissolution and distribution of
assets shall have been (1) authorized as provided in section 1002 of
this article (Authorization of plan), (2) approved by any governmental
body or officer whose approval is required pursuant to paragraph (c) of
section 1002 of this article, and (3) approved by EITHER BY THE ATTORNEY
GENERAL OR a justice of the supreme court[, if such approval is required
pursuant to paragraph (d) of section 1002 of this article, or filed with
the attorney general, if such filing is required] pursuant to paragraph
(d) of section 1002 of this article, and prior to filing the certificate
of dissolution, the corporation may give a notice requiring all credi-
tors and claimants, including any with unliquidated or contingent claims
and any with whom the corporation has unfulfilled contracts, to present
their claims in writing and in detail at a specified place and by a
specified day, which shall not be less than six months after the first
publication of such notice. Such notice shall be published at least once
a week for two successive weeks in a newspaper of general circulation in
the county in which the office of the corporation was located at the
date of authorization of its plan of dissolution and distribution of
assets as provided in section 1002 of this article (Authorization of
plan). On or before the date of the first publication of such notice,
the corporation shall mail a copy thereof, postage prepaid, to each
person believed to be a creditor of or claimant against the corporation
whose current name and address are known to or can with due diligence be
ascertained by the corporation. The giving of such notice shall not
S. 5845 52
constitute a recognition that any person is a proper creditor or claim-
ant, and shall not revive or make valid, or operate as a recognition of
the validity of, or a waiver of any defense or counterclaim in respect
of any claim against the corporation, its assets, directors, officers or
members, which has been barred by any statute of limitations or become
invalid by any cause, or in respect of which the corporation, its direc-
tors, officers or members, has any defense or counterclaim.
S 93. Subparagraph 15 of paragraph (a) of section 1008 of the not-for-
profit corporation law, as amended by chapter 434 of the laws of 2006,
is amended to read as follows:
(15) Where assets were received and held by the corporation either for
a CHARITABLE purpose [specified as Type B in paragraph (b) of section
201 (Purposes),] or [were] legally required to be used for a particular
purpose, the distribution of such assets to one or more domestic or
foreign corporations or other organizations engaged in activities
substantially similar to those of the dissolved corporation, on notice
to the attorney general and to such other persons, and in such manner,
as the court may deem proper.
S 94. Subparagraph 6 of paragraph (a) of section 1012 of the not-for-
profit corporation law, as amended by chapter 726 of the laws of 2005,
is amended to read as follows:
(6) That[, under section 201 (Purposes),] it is a [Type .............
(Insert A, B, C or D) not-for-profit] CHARITABLE corporation OR A
NON-CHARITABLE CORPORATION, AS APPLICABLE.
S 95. Sections 1203 and 1204 of the not-for-profit corporation law are
amended to read as follows:
S 1203. Temporary and permanent receiver.
(a) At any stage before final judgment or final order in an action or
special proceeding brought under this article, the court may appoint one
or more receivers of the property of the corporation or of the property
in this state of a foreign corporation against which an action has been
brought under subparagraph [(a)] (4) OF PARAGRAPH (A) of section 1202
[(Appointment of a receiver of property of a domestic or foreign corpo-
ration)] OF THIS ARTICLE. Notice of an application shall be given to
the attorney-general, to each governmental body or officer whose consent
is required for the dissolution of such corporation, and to such other
persons and in such manner as the court directs. The determination by
the court of the necessity or advisability of appointing a receiver or
an attorney for a receiver, and the allowance of expenses, commissions
or compensation to the receiver or [his] SUCH attorney, shall be subject
to review on appeal. This provision shall not affect any other right to
review on appeal.
(b) A receiver appointed by or under a final judgment or order in an
action or special proceeding, or a temporary receiver who is continued
by the final judgment or order, is a permanent receiver. The court may
confer upon a temporary receiver the powers, and subject [him] THE
TEMPORARY RECEIVER to the duties of a permanent receiver, or so much
thereof as it deems proper.
S 1204. Oath and security.
[(a)] A receiver, before entering upon his OR HER duties, shall:
[(1)](A) Take and subscribe an oath that he OR SHE will faithfully,
honestly and impartially discharge the trust committed to him OR HER,
and the oath shall be filed with the clerk of the court in which the
action or special proceeding is pending.
[(2)] (B) File with the clerk of such court a bond to the people, with
at least two sufficient sureties or a bond executed by any fidelity or
S. 5845 53
surety company authorized by the laws of this state to transact busi-
ness, in a penalty fixed by the court appointing him OR HER, conditioned
for the faithful discharge of his OR HER duties as receiver. The court
may at any time direct a receiver to give a new bond with new sureties
and with like condition.
S 96. Subparagraphs 2 and 3 of paragraph (b) of section 1206 of the
not-for-profit corporation law are amended to read as follows:
(2) To sell at public or private sale all the property vested in
[him] THE PERMANENT RECEIVER, in such manner and on such terms and
conditions as the court shall direct, and to make necessary transfers
and conveyances thereof.
(3) To examine on oath, to be administered by [him] THE PERMANENT
RECEIVER, any person concerning any matter pertaining to or affecting
the receivership.
S 97. Subparagraph 1 of paragraph (a) of section 1207 of the not-for-
profit corporation law, clause (C) as amended by chapter 847 of the laws
of 1970, is amended to read as follows:
(1) To give immediate notice of his OR HER appointment by publication
once a week for two successive weeks in two newspapers of general circu-
lation in the county where the office of the corporation is located or,
in the case of a foreign corporation against which an action has been
brought under subparagraph [(a)] (4) OF PARAGRAPH (A) of section 1202
(Appointment of receiver of property of a domestic or foreign corpo-
ration), in a newspaper of general circulation as directed by the court,
requiring:
(A) All persons indebted to the corporation to render an account of
all debts owing by them to the corporation and to pay the same to the
receiver at a specified place and by a specified day.
(B) All persons having in their possession any property of the corpo-
ration to deliver the same to the receiver at the specified place and by
the specified day.
(C) All creditors and claimants, including any with unliquidated or
contingent claims and any with whom the corporation has unfulfilled
contracts, to present their claims to the receiver in writing and in
detail at a specified place and by a specified day, which shall not be
less than six months after the first publication of such notice. When-
ever a receiver is appointed in dissolution proceedings under article 10
(Non-judicial dissolution) or article 11 (Judicial dissolution), section
1007 (Notice to creditors BY CORPORATIONS INTENDING TO DISSOLVE; filing
or barring claims) OF THIS CHAPTER shall apply and shall control the
giving of notice to creditors and claimants and the filing and barring
of claims.
S 98. Paragraphs (a) and (e) of section 1209 of the not-for-profit
corporation law are amended to read as follows:
(a) Whenever a receiver, by verified petition to the supreme court at
a special term held in the judicial district in which [he] THE RECEIVER
was appointed, shall show that he OR SHE has good reason to believe that
any person has in his OR HER possession or under his OR HER control, or
has wrongfully concealed, withheld or disposed of, any property of the
corporation, or that any person can testify concerning such facts, the
court, with or without notice, shall make an order requiring such person
to appear before the court or a referee, at a time and place designated,
and submit to an examination concerning such facts. In such order, or
at any time thereafter, in its discretion, the court may enjoin and
restrain such person from disposing of any property of the corporation
in his OR HER possession or under his OR HER control.
S. 5845 54
(e) The testimony taken under such order shall be signed and sworn to
by the person examined, and be filed in the office of the clerk of the
county where the action or proceeding is pending. If it shall appear
that any person is wrongfully concealing or withholding, or has in his
OR HER possession or under his OR HER control, any property of the
corporation, on notice to [him] SUCH PERSON, the court may make an order
requiring [him] SUCH PERSON forthwith to deliver it to the receiver,
subject to the further order of the court.
S 99. Paragraph (a) of section 1211 of the not-for-profit corporation
law is amended to read as follows:
(a) If there remains property of the corporation after the first
distribution, the receiver shall, within one year thereafter, make a
final distribution among the creditors entitled thereto. Notice that
such distribution will be the final distribution to creditors shall be
published once a week for two consecutive weeks in a newspaper of gener-
al circulation in the county where the office of the corporation is
located AND POSTED PROMINENTLY AND CONTINUOUSLY FOR TWO CONSECUTIVE
WEEKS ON THE HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE CORPORATION.
S 100. Section 1212 of the not-for-profit corporation law, paragraph
(b) as amended by chapter 726 of the laws of 2005, is amended to read as
follows:
S 1212. Disposition of moneys retained; surplus; unclaimed distrib-
utions.
(a) When any action pending at the time of final distribution shall be
terminated, the receiver shall apply the moneys retained by [him] THE
RECEIVER to the payment of the amount recovered, and [his] THE RECEIV-
ER'S necessary charges and expenses incurred therein.
(b) After the final distribution to creditors and after deducting [his
or her] THE RECEIVER'S charges and expenses, the receiver shall distrib-
ute any surplus in the manner prescribed in section 1002-a [(Carrying
out the plan of dissolution and distribution of assets)] OF THIS CHAPTER
or, if dissolution of the corporation is not involved, in such manner as
the court shall order.
S 101. Sections 1213, 1214 and 1215 of the not-for-profit corporation
law are amended to read as follows:
S 1213. Omission or default of receiver.
Upon notice to the attorney-general and upon such notice to creditors
or others interested as the court shall direct, the court may, in the
furtherance of justice, relieve a receiver from any omission or default,
on such conditions as may be imposed, and, on compliance therewith,
confirm [his] THE RECEIVER'S action.
S 1214. Application by attorney-general for removal of receiver and to
close receivership.
(a) Whenever he OR SHE deems it to be to the advantage of the
members, creditors or other persons interested in the assets of any
corporation for which a receiver has been appointed, the attorney-gener-
al may move:
(1) For an order removing the receiver and appointing another [in his
stead] RECEIVER;
(2) To compel the receiver to account;
(3) For such other and additional orders as may facilitate the clos-
ing of the receivership.
S 1215. Resignation by receiver; filling any vacancy.
(a) A receiver may petition the [court] appointing [him] COURT for an
order to show cause why he OR SHE should not be permitted to resign.
S. 5845 55
(b) The petition shall be accompanied by a verified account of all
the assets of the corporation received by [him] THE RECEIVER, of all
payments or other disposition thereof made by [him] THE RECEIVER, of the
remaining assets of the corporation in respect to which [he] THE RECEIV-
ER was appointed receiver and the situation of the same, and of all his
OR HER transactions as receiver. Thereupon, the court shall grant an
order directing notice to be given to the sureties on his OR HER offi-
cial bond and to all persons interested in the property of the corpo-
ration to show cause, at a time and place specified, why the receiver
should not be permitted to resign. Such notice shall be published once
in each week for six successive weeks in one or more newspapers as the
court shall direct. If it shall appear that the proceedings of the
receiver in the discharge of his OR HER trust have been fair and honest
and that there is no good cause to the contrary, the court shall make an
order permitting such receiver to resign. Thereupon [he] THE RECEIVER
shall be discharged and his OR HER powers as receiver shall cease, but
he OR SHE shall remain subject to any liability incurred prior to the
making of such order. The court, in its discretion, may require the
expense of such proceeding to be paid by the receiver presenting the
petition.
(c) Any vacancy created by resignation, removal, death or otherwise,
may be filled by the court, and the property of the receivership shall
be delivered to the remaining receivers or, if there are none, to the
successor appointed by the court. The court may summarily enforce
delivery by order in the action or special proceeding in which the
receiver was appointed.
S 102. Section 1302 of the not-for-profit corporation law, as amended
by chapter 847 of the laws of 1970, is amended to read as follows:
S 1302. Application to existing authorized foreign corporations.
Every foreign corporation which on the effective date of this chapter
is authorized to conduct activities in this state under a certificate of
authority heretofore issued to it by the secretary of state shall
continue to have such authority. Such foreign corporation, its members,
directors, and officers shall have the same rights, franchises, and
privileges and shall be subject to the same limitations, restrictions,
liabilities, and penalties as a foreign corporation authorized under
this chapter, its members, directors, and officers respectively. A
foreign corporation may by amendment to its certificate of authority set
forth [the type of] WHETHER IT IS A CHARITABLE corporation [it is under
section 201 (Purposes);] OR A NON-CHARITABLE CORPORATION and in the
absence of such amendment an authorized foreign corporation shall be a
[Type B] CHARITABLE corporation. Reference in this chapter to an appli-
cation for authority shall, unless the context otherwise requires,
include the statement and designation and any amendment thereof required
to be filed by the secretary of state under prior statutes to obtain a
certificate of authority.
S 103. Subparagraph 4 of paragraph (a) of section 1304 of the not-for-
profit corporation law, as amended by chapter 847 of the laws of 1970
and as renumbered by chapter 590 of the laws of 1982, is amended to read
as follows:
(4) That the corporation is a foreign corporation as defined in
subparagraph [(a)] (7) OF PARAGRAPH (A) of section 102 (Definitions)[;
the type of] OF THIS CHAPTER, WHETHER IT WOULD BE A CHARITABLE corpo-
ration [it shall be under section 201 (Purposes); a statement] OR
NON-CHARITABLE CORPORATION IF FORMED IN THIS STATE; A STATEMENT of its
purposes to be pursued in this state and of the activities which it
S. 5845 56
proposes to conduct in this state; AND a statement that it is authorized
to conduct those activities in the jurisdiction of its incorporation[;
and in the case of a Type C corporation, the lawful public or quasi-
public objective which each business purpose will achieve].
S 104. Paragraph (c) of section 1304 of the not-for-profit corporation
law is amended, and a new paragraph (d) is added to read as follows:
(c) If the application for authority sets forth any purpose or activ-
ity for which a domestic corporation could be formed only with the
consent or approval of any governmental body or officer, or other person
or body under section 404 (Approvals, NOTICES and consents) OF THIS
CHAPTER, such consent or approval shall be endorsed thereon or annexed
thereto.
(D) IF THE APPLICATION FOR AUTHORITY SETS FORTH ANY PURPOSE OR ACTIV-
ITY REQUIRING A DOMESTIC CORPORATION TO PROVIDE NOTICE OF THE FILING OF
A CERTIFICATE OF INCORPORATION TO ANY PERSON OR ENTITY UNDER SECTION 404
(APPROVALS, NOTICES AND CONSENTS) OF THIS CHAPTER, THEN THE CORPORATION
SHALL SEND BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED COPY
OF THE CERTIFICATE OF AUTHORITY TO SUCH PERSON OR ENTITY WITHIN TEN
BUSINESS DAYS AFTER THE CORPORATION RECEIVES CONFIRMATION FROM THE
DEPARTMENT OF STATE THAT THE CERTIFICATE HAS BEEN ACCEPTED FOR FILING.
S 105. Subparagraph 1 of paragraph (a) of section 1309 of the not-for-
profit corporation law, as amended by chapter 186 of the laws of 1983,
is amended to read as follows:
(1) The name of the foreign corporation as it appears on the index of
names of existing domestic and authorized foreign corporations of any
[type or] kind in the department of state and the fictitious name the
corporation has agreed to use in this state pursuant to paragraph (d) of
section 1301 of this [chapter] ARTICLE.
S 106. Subparagraph 1 of paragraph (b) of section 1310 of the not-for-
profit corporation law, as amended by chapter 186 of the laws of 1983,
is amended to read as follows:
(1) The name of the foreign corporation as it appears on the index of
names of existing domestic and authorized foreign corporations of any
[type or] kind in the department of state and the fictitious name the
corporation has agreed to use in this state pursuant to paragraph (d) of
section 1301 of this [chapter] ARTICLE.
S 107. Subparagraph 1 of paragraph (a) of section 1311 of the not-for-
profit corporation law, as amended by chapter 186 of the laws of 1983,
is amended to read as follows:
(1) The name of the foreign corporation as it appears on the index of
names of existing domestic and authorized foreign corporations of any
[type or] kind in the department of state and the fictitious name the
corporation has agreed to use in this state pursuant to paragraph (d) of
section 1301 of this [chapter] ARTICLE.
S 108. Paragraphs (a) and (b) of section 1315 of the not-for-profit
corporation law, subparagraph 5 of paragraph (b) as amended by chapter
847 of the laws of 1970, are amended to read as follows:
(a) An action or special proceeding against a foreign corporation may
be maintained by a resident of this state or by a domestic corporation
of any [type or] kind for any cause of action.
(b) Except as otherwise provided in this article, an action or
special proceeding against a foreign corporation may be maintained by
another foreign corporation of any [type or] kind or by a nonresident in
the following cases only:
(1) Where the action is brought to recover damages for the breach of
a contract made or to be performed within this state, or relating to
S. 5845 57
property situated within this state at the time of the making of the
contract.
(2) Where the subject matter of the litigation is situated within
this state.
(3) Where the cause of action arose within this state, except where
the object of the action or special proceeding is to affect the title of
real property situated outside this state.
(4) Where, in any case not included in the preceding subparagraphs, a
non-domiciliary would be subject to the personal jurisdiction of the
courts of this state under section [302] THREE HUNDRED TWO of the civil
practice law and rules.
(5) Where the defendant is a foreign corporation conducting activities
or authorized to conduct activities in this state.
S 109. Paragraph (b) of section 1316 of the not-for-profit corporation
law is amended to read as follows:
(b) An examination authorized by paragraph (a) may be denied to such
member or other person upon his refusal to furnish to the foreign corpo-
ration or its transfer agent or registrar an affidavit that such
inspection is not desired for a purpose which is in the interests of a
business or object other than the activities of the foreign corporation
and that such member or other person has not within five years sold or
offered for sale any list or record of members of any corporation of any
[type or] kind, whether or not formed under the laws of this state, or
aided or abetted any person in procuring any such list or record of
members for any such purpose.
S 110. Paragraph (a) of section 1321 of the not-for-profit corporation
law, subparagraphs 1, 2 and 3 as amended by chapter 847 of the laws of
1970, is amended to read as follows:
(a) Notwithstanding any other provision of this chapter, a foreign
corporation conducting activities in this state which is authorized
under this article, its directors, officers and members, shall be exempt
from the provisions of paragraph (e) of section 1317 (Voting trust
records), subparagraph [(a)] (1) OF PARAGRAPH (A) of section 1318
(Liabilities of directors and officers of foreign corporations), and
subparagraph [(a)] (2) OF PARAGRAPH (A) of section 1320 (Applicability
of other provisions) OF THIS ARTICLE if [when] such provision would
otherwise apply:
(1) The corporation is a [Type A] NON-CHARITABLE corporation under
this chapter; its principal activities are conducted outside this state;
the greater part of its property is located outside this state; and less
than one third of its members are residents of this state; or
(2) The corporation is a [Type B] CHARITABLE corporation under this
chapter; its principal activities are conducted outside this state; the
greater part of its property is located outside this state; and less
than ten per cent of its annual revenues is derived from solicitation of
funds within this state[; or
(3) The corporation is a Type C corporation under this chapter; its
principal activities are conducted outside this state; the greater part
of its property is located outside this state; and less than one half of
its revenues for the preceding three fiscal years, or such portion ther-
eof as the foreign corporation was in existence, was derived from sourc-
es within this state].
S 111. Paragraph (d) of section 1401 of the not-for-profit corporation
law, as added by chapter 871 of the laws of 1977, is amended to read as
follows:
S. 5845 58
(d) Type of corporation. A family or private cemetery corporation is a
[type B] CHARITABLE corporation under this chapter.
S 112. Paragraph (b) of section 1402 of the not-for-profit corporation
law is amended to read as follows:
(b) Type of corporation.
A fire corporation is a [Type B] CHARITABLE corporation under this
chapter.
S 113. Paragraph (c) of section 1403 of the not-for-profit corporation
law is amended to read as follows:
(c) Type of corporation.
A corporation for the prevention of cruelty is a [Type B] CHARITABLE
corporation under this chapter.
S 114. Paragraph (b) of section 1404 of the not-for-profit corporation
law, as amended by chapter 1058 of the laws of 1971, is amended to read
as follows:
(b) Type of corporation.
A christian association is a [Type B] CHARITABLE corporation under
this chapter.
S 115. Paragraph (b) of section 1405 of the not-for-profit corporation
law is amended to read as follows:
(b) Type of corporation.
A soldiers' monument corporation is a [Type B] CHARITABLE corporation.
S 116. Paragraph (b) of section 1406 of the not-for-profit corporation
law is amended to read as follows:
(b) Type of corporation.
A medical society is a [Type A] NON-CHARITABLE corporation under this
chapter.
S 117. Paragraph (b) of section 1407 of the not-for-profit corporation
law is amended to read as follows:
(b) Type of corporation.
An alumni corporation is a [Type A] NON-CHARITABLE corporation.
S 118. Paragraph (b) of section 1408 of the not-for-profit corporation
law is amended to read as follows:
(b) Type of corporation.
An historical society is a [Type B] CHARITABLE corporation under this
chapter.
S 119. Paragraph (b) of section 1409 of the not-for-profit corporation
law, as amended by chapter 1058 of the laws of 1971, is amended to read
as follows:
(b) Type of corporation. An agricultural or horticultural corporation
is a [Type A] NON-CHARITABLE corporation under this chapter, except that
any such corporation which has received moneys from the state or has
acted as agent for the state under paragraph (c) OF THIS SECTION, or has
acquired or does acquire real property by condemnation is or becomes a
[Type B] CHARITABLE corporation under this chapter. [If such corporation
has not already filed as a Type B corporation it shall, upon such
receipt of moneys or acting as such agent or such acquisition of real
property by condemnation, amend its certificate to that effect.]
S 120. Paragraph (b) of section 1410 of the not-for-profit corporation
law is amended to read as follows:
(b) Type of corporation.
A board of trade or a chamber of commerce is a [Type A] NON-CHARITABLE
corporation under this chapter.
S 121. Paragraph (b) of section 1411 of the not-for-profit corporation
law is amended to read as follows:
(b) Type of corporation.
S. 5845 59
A local development corporation is a [Type C] CHARITABLE corporation
under this chapter.
S 122. Paragraph (d) of section 1412 of the not-for-profit corporation
law, as added by chapter 555 of the laws of 1993, is amended to read as
follows:
(d) Type. A university faculty practice corporation is a [Type B]
CHARITABLE corporation under this chapter.
S 123. Paragraph (c) of section 1505 of the not-for-profit corporation
law, as added by chapter 871 of the laws of 1977, is amended to read as
follows:
(c) Type of corporation. A cemetery corporation is a [Type B] CHARI-
TABLE corporation under this chapter.
S 124. Paragraph (b) of section 1602 of the not-for-profit corporation
law, as added by chapter 257 of the laws of 2011, is amended to read as
follows:
(b) "land bank" shall mean a land bank established as a [type C] CHAR-
ITABLE not-for-profit corporation under this chapter and in accordance
with the provisions of this article and pursuant to this article;
S 125. Paragraph (f) of section 1603 of the not-for-profit corporation
law, as added by chapter 257 of the laws of 2011, is amended to read as
follows:
(f) Each land bank created pursuant to this act shall be a [type C
not-for-profit] CHARITABLE corporation, and shall have permanent and
perpetual duration until terminated and dissolved in accordance with the
provisions of section sixteen hundred thirteen of this article.
S 126. The opening paragraph of paragraph (a) of section 1607 of the
not-for-profit corporation law, as added by chapter 257 of the laws of
2011, is amended to read as follows:
A land bank shall constitute a [type C] CHARITABLE not-for-profit
corporation under New York law, which powers shall include all powers
necessary to carry out and effectuate the purposes and provisions of
this article, including the following powers in addition to those herein
otherwise granted:
S 127. Paragraph (e) of section 1611 of the not-for-profit corporation
law, as added by chapter 257 of the laws of 2011, is amended to read as
follows:
(e) Bonds issued by the land bank shall be issued, sold, and delivered
in accordance with the terms and provisions of a resolution adopted by
the board. The board may sell such bonds in such manner, either at
public or at private sale, and for such price as it may determine to be
in the best interests of the land bank. The resolution issuing bonds
shall be published in a newspaper of general circulation within the
jurisdiction of the land bank AND POSTED PROMINENTLY AND CONTINUOUSLY ON
THE HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE LAND BANK.
S 128. Section 1613 of the not-for-profit corporation law, as added by
chapter 257 of the laws of 2011, is amended to read as follows:
S 1613. Dissolution of land bank.
A land bank may be dissolved as a [type C] CHARITABLE not-for-profit
corporation sixty calendar days after an affirmative resolution approved
by two-thirds of the membership of the board of directors. Sixty calen-
dar days advance written notice of consideration of a resolution of
dissolution shall be given to the foreclosing governmental unit or units
that created the land bank, shall be published in a local newspaper of
general circulation, and POSTED PROMINENTLY AND CONTINUOUSLY ON THE
HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE LAND BANK, AND shall be sent
certified mail to the trustee of any outstanding bonds of the land bank.
S. 5845 60
Upon dissolution of the land bank all real property, personal property
and other assets of the land bank shall become the assets of the fore-
closing governmental unit or units that created the land bank. In the
event that two or more foreclosing governmental units create a land bank
in accordance with section sixteen hundred three of this article, the
withdrawal of one or more foreclosing governmental units shall not
result in the dissolution of the land bank unless the intergovernmental
agreement so provides, and there is no foreclosing governmental unit
that desires to continue the existence of the land bank.
S 129. Paragraph (h) of section 8-1.4 of the estates, powers and
trusts law, as amended by chapter 43 of the laws of 2002, is amended to
read as follows:
(h) The attorney general shall make rules and regulations necessary
for the administration of this section, including rules and regulations
as to the time for filing reports, the contents thereof, and [the] ANY
manner of executing and filing them, INCLUDING BUT NOT LIMITED TO ALLOW-
ING OR REQUIRING ANY SUBMISSION TO THE ATTORNEY GENERAL TO BE EFFECTED
BY ELECTRONIC MEANS AND ELECTRONIC SIGNATURES. He or she may classify
trusts, estates, corporations and other trustees as to purpose, nature
of assets, duration, amount of assets, amounts to be devoted to charita-
ble purposes, or otherwise, and may establish different rules for
different classes as to time and nature of the reports required, to the
ends that he or she shall receive current financial reports as to all
such trusts, estates, corporations or other trustees which will enable
him or her to ascertain whether they are being properly administered.
The attorney general may suspend the filing of financial reports as to a
particular trustee for a reasonable, specifically designated time upon
written application of the trustee, signed under penalties for perjury,
and filed with the attorney general and after the attorney general has
filed in the register of trustees a written statement that the interests
of the beneficiaries will not be prejudiced thereby and that periodic
reports during the term of such suspension are not required for proper
supervision by his or her office. The filing of the financial reports
required by this section, or the exemption from such filing or the
suspension therefrom, shall not have the effect of absolving trustees
from any responsibility for accounting for property or income held by
them for charitable purposes. A copy of an account or other financial
report filed by a trustee in any court in this state, if the account or
other financial report substantially complies with the rules and regu-
lations of the attorney general, may be filed as a financial report
under this section.
S 130. The estates, powers and trusts law is amended by adding a new
section 8-1.9 to read as follows:
S 8-1.9 TRUST GOVERNANCE
(A) FOR PURPOSES OF THIS SECTION:
(1) A "TRUST" MEANS A TRUST CREATED SOLELY FOR CHARITABLE PURPOSES, OR
A TRUST THAT CONTINUES SOLELY FOR SUCH PURPOSES AFTER ALL NON-CHARITABLE
INTERESTS HAVE TERMINATED.
(2) "CHARITABLE PURPOSE" MEANS ANY RELIGIOUS, CHARITABLE, EDUCATIONAL
OR BENEVOLENT PURPOSE.
(3) "KEY EMPLOYEE" MEANS ANY PERSON WHO IS IN A POSITION TO EXERCISE
SUBSTANTIAL INFLUENCE OVER THE AFFAIRS OF THE CORPORATION AS REFERENCED
IN 26 U.S.C. SECTION 4958(F)(1)(A) AND FURTHER SPECIFIED IN 26 C.F.R.
SECTION 53.4958-3(C), (D) AND (E), OR SUCCEEDING PROVISIONS.
(4) AN "AFFILIATE" OF A TRUST MEANS ANY ENTITY CONTROLLED BY, IN
CONTROL OF, OR UNDER COMMON CONTROL WITH SUCH TRUST.
S. 5845 61
(5) "RELATIVE" OF AN INDIVIDUAL MEANS HIS OR HER (I) SPOUSE, ANCES-
TORS, BROTHERS AND SISTERS (WHETHER WHOLE OR HALF BLOOD), CHILDREN
(WHETHER NATURAL OR ADOPTED), GRANDCHILDREN, GREAT-GRANDCHILDREN, AND
SPOUSES OF BROTHERS, SISTERS, CHILDREN, GRANDCHILDREN, AND GREAT-GRAND-
CHILDREN; AND (II) HIS OR HER DOMESTIC PARTNER AS DEFINED IN SECTION
TWENTY-NINE HUNDRED NINETY-FOUR-A OF THE PUBLIC HEALTH LAW.
(6) "RELATED PARTY" MEANS (I) ANY TRUSTEE OR KEY EMPLOYEE OF THE TRUST
OR ANY AFFILIATE OF THE TRUST; (II) ANY RELATIVE OF ANY TRUSTEE OR KEY
EMPLOYEE OF THE TRUST OR ANY AFFILIATE OF THE TRUST; OR (III) AN ENTITY
IN WHICH ANY INDIVIDUAL DESCRIBED IN CLAUSES (I) AND (II) OF THIS
SUBPARAGRAPH HAS A THIRTY-FIVE PERCENT OR GREATER OWNERSHIP OR BENEFI-
CIAL INTEREST OR, IN THE CASE OF A PARTNERSHIP OR PROFESSIONAL CORPO-
RATION, A DIRECT OWNERSHIP INTEREST IN EXCESS OF FIVE PERCENT.
(7) "INDEPENDENT TRUSTEE" MEANS A TRUSTEE WHO: (I) IS NOT, AND HAS NOT
BEEN WITHIN THE LAST THREE YEARS, AN EMPLOYEE OF THE TRUST OR AN AFFIL-
IATE OF THE TRUST, AND DOES NOT HAVE A RELATIVE WHO IS, OR HAS BEEN
WITHIN THE LAST THREE YEARS, A KEY EMPLOYEE OF THE TRUST OR AN AFFILIATE
OF THE TRUST; (II) HAS NOT RECEIVED, AND DOES NOT HAVE A RELATIVE WHO
HAS RECEIVED, IN ANY OF THE LAST THREE FISCAL YEARS, MORE THAN TEN THOU-
SAND DOLLARS IN DIRECT COMPENSATION FROM THE TRUST OR AN AFFILIATE OF
THE TRUST (OTHER THAN REIMBURSEMENT FOR EXPENSES OR THE PAYMENT OF TRUS-
TEE COMMISSIONS AS PERMITTED BY LAW AND THE GOVERNING INSTRUMENT); AND
(III) IS NOT A CURRENT EMPLOYEE OF OR DOES NOT HAVE A SUBSTANTIAL FINAN-
CIAL INTEREST IN, AND DOES NOT HAVE A RELATIVE WHO IS A CURRENT OFFICER
OF OR HAVE A SUBSTANTIAL FINANCIAL INTEREST IN, ANY ENTITY THAT HAS MADE
PAYMENTS TO, OR RECEIVED PAYMENTS FROM, THE TRUST OR AN AFFILIATE OF THE
TRUST FOR PROPERTY OR SERVICES IN AN AMOUNT WHICH, IN ANY OF THE LAST
THREE FISCAL YEARS, EXCEEDS THE LESSER OF TWENTY-FIVE THOUSAND DOLLARS
OR TWO PERCENT OF SUCH ENTITY'S CONSOLIDATED GROSS REVENUES. FOR
PURPOSES OF THIS SUBPARAGRAPH, "PAYMENT" DOES NOT INCLUDE CHARITABLE
CONTRIBUTIONS.
(8) "RELATED PARTY TRANSACTION" MEANS ANY TRANSACTION, AGREEMENT OR
ANY OTHER ARRANGEMENT IN WHICH A RELATED PARTY HAS A FINANCIAL INTEREST
AND IN WHICH THE TRUST OR ANY AFFILIATE OF THE TRUST IS A PARTICIPANT.
(9) "INDEPENDENT AUDITOR" MEANS ANY CERTIFIED PUBLIC ACCOUNTANT
PERFORMING THE AUDIT OF THE FINANCIAL STATEMENTS OF A TRUST REQUIRED BY
SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B OF THE EXECUTIVE
LAW.
(B)(1) THE TRUSTEES OR A DESIGNATED AUDIT COMMITTEE CONSISTING OF ONE
OR MORE INDEPENDENT TRUSTEES OF ANY TRUST REQUIRED TO FILE AN INDEPEND-
ENT CERTIFIED PUBLIC ACCOUNTANT'S AUDIT REPORT WITH THE ATTORNEY GENERAL
PURSUANT TO SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B OF THE
EXECUTIVE LAW SHALL OVERSEE THE ACCOUNTING AND FINANCIAL REPORTING PROC-
ESSES OF THE TRUST AND THE AUDIT OF THE TRUST'S FINANCIAL STATEMENTS.
THE TRUSTEES OR DESIGNATED AUDIT COMMITTEE SHALL ANNUALLY RETAIN OR
RENEW THE RETENTION OF AN INDEPENDENT AUDITOR TO CONDUCT THE AUDIT AND,
UPON COMPLETION THEREOF, REVIEW THE RESULTS OF THE AUDIT AND ANY RELATED
MANAGEMENT LETTER WITH THE INDEPENDENT AUDITOR.
(2) THE TRUSTEES OR A DESIGNATED AUDIT COMMITTEE CONSISTING OF ONE OR
MORE INDEPENDENT TRUSTEES OF ANY TRUST REQUIRED TO FILE AN INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANT'S AUDIT REPORT WITH THE ATTORNEY GENERAL
PURSUANT TO SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B OF THE
EXECUTIVE LAW AND THAT IN THE PRIOR FISCAL YEAR HAD OR IN THE CURRENT
FISCAL YEAR REASONABLY EXPECTS TO HAVE ANNUAL REVENUE IN EXCESS OF ONE
MILLION DOLLARS SHALL, IN ADDITION TO THOSE DUTIES SET FORTH IN SUBPARA-
GRAPH ONE OF THIS PARAGRAPH:
S. 5845 62
(A) REVIEW WITH THE INDEPENDENT AUDITOR THE SCOPE AND PLANNING OF THE
AUDIT PRIOR TO THE AUDIT'S COMMENCEMENT;
(B) UPON COMPLETION OF THE AUDIT, REVIEW AND DISCUSS WITH THE INDE-
PENDENT AUDITOR: (I) ANY MATERIAL RISKS AND WEAKNESSES IN INTERNAL
CONTROLS IDENTIFIED BY THE AUDITOR; (II) ANY RESTRICTIONS ON THE SCOPE
OF THE AUDITOR'S ACTIVITIES OR ACCESS TO REQUESTED INFORMATION; (III)
ANY SIGNIFICANT DISAGREEMENTS BETWEEN THE AUDITOR AND MANAGEMENT; AND
(IV) THE ADEQUACY OF THE TRUST'S ACCOUNTING AND FINANCIAL REPORTING
PROCESSES;
(C) ANNUALLY CONSIDER THE PERFORMANCE AND INDEPENDENCE OF THE INDE-
PENDENT AUDITOR; AND
(D) IF THE DUTIES REQUIRED BY THIS SECTION ARE PERFORMED BY AN AUDIT
COMMITTEE, REPORT ON THE COMMITTEE'S ACTIVITIES TO THE TRUSTEES.
(3) THE TRUSTEES OR DESIGNATED AUDIT COMMITTEE SHALL OVERSEE THE
ADOPTION, IMPLEMENTATION OF, AND COMPLIANCE WITH ANY CONFLICT OF INTER-
EST POLICY OR WHISTLEBLOWER POLICY ADOPTED BY THE TRUST IF THIS FUNCTION
IS NOT OTHERWISE PERFORMED BY ANOTHER COMMITTEE COMPRISED SOLELY OF
INDEPENDENT TRUSTEES.
(4) IF A TRUST IS UNDER THE CONTROL OF ANOTHER TRUST OR A CORPORATION,
THE TRUSTEES OR DESIGNATED AUDIT COMMITTEE OF THE CONTROLLING TRUST, OR
THE BOARD OR DESIGNATED AUDIT COMMITTEE OF THE BOARD OF THE CONTROLLING
CORPORATION, MAY PERFORM THE DUTIES REQUIRED BY THIS PARAGRAPH.
(5) ONLY INDEPENDENT TRUSTEES MAY PARTICIPATE IN DELIBERATIONS OR
VOTING RELATING TO MATTERS SET FORTH IN THIS PARAGRAPH.
(C)(1) NOTWITHSTANDING ANY PROVISION OF THE TRUST INSTRUMENT TO THE
CONTRARY, NO TRUST SHALL ENTER INTO ANY RELATED PARTY TRANSACTION UNLESS
THE TRANSACTION IS DETERMINED BY THE TRUSTEES TO BE FAIR, REASONABLE AND
IN THE TRUST'S BEST INTEREST AT THE TIME OF SUCH DETERMINATION. ANY
TRUSTEE, OFFICER OR KEY EMPLOYEE WHO HAS AN INTEREST IN A RELATED PARTY
TRANSACTION SHALL DISCLOSE IN GOOD FAITH TO THE TRUSTEES, OR AN AUTHOR-
IZED COMMITTEE THEREOF, THE MATERIAL FACTS CONCERNING SUCH INTEREST.
(2) WITH RESPECT TO ANY RELATED PARTY TRANSACTION IN WHICH A RELATED
PARTY HAS A SUBSTANTIAL FINANCIAL INTEREST, THE TRUSTEES, OR AN AUTHOR-
IZED COMMITTEE THEREOF, SHALL:
(A) PRIOR TO ENTERING INTO THE TRANSACTION, CONSIDER ALTERNATIVE TRAN-
SACTIONS TO THE EXTENT AVAILABLE;
(B) APPROVE THE TRANSACTION BY NOT LESS THAN A MAJORITY VOTE OF THE
TRUSTEES OR COMMITTEE MEMBERS PRESENT AT THE MEETING; AND
(C) CONTEMPORANEOUSLY DOCUMENT IN WRITING THE BASIS FOR THE TRUSTEES'
OR AUTHORIZED COMMITTEE'S APPROVAL, INCLUDING CONSIDERATION OF ANY
ALTERNATIVE TRANSACTIONS.
(3) THE TRUST INSTRUMENT, BY-LAWS OR ANY POLICY ADOPTED BY THE TRUS-
TEES MAY CONTAIN ADDITIONAL RESTRICTIONS ON RELATED PARTY TRANSACTIONS
AND ADDITIONAL PROCEDURES NECESSARY FOR THE REVIEW AND APPROVAL OF SUCH
TRANSACTIONS, OR PROVIDE THAT ANY TRANSACTION IN VIOLATION OF SUCH
RESTRICTIONS SHALL BE VOID OR VOIDABLE.
(4) THE ATTORNEY GENERAL MAY BRING AN ACTION TO ENJOIN, VOID OR
RESCIND ANY RELATED PARTY TRANSACTION OR PROPOSED RELATED PARTY TRANS-
ACTION THAT VIOLATES ANY PROVISION OF THIS ARTICLE OR WAS OTHERWISE NOT
REASONABLE OR IN THE BEST INTERESTS OF THE TRUST AT THE TIME THE TRANS-
ACTION WAS APPROVED, OR TO SEEK RESTITUTION, AND THE REMOVAL OF TRUSTEES
OR OFFICERS, OR SEEK TO REQUIRE ANY PERSON OR ENTITY TO:
(A) ACCOUNT FOR ANY PROFITS MADE FROM SUCH TRANSACTION, AND PAY THEM
TO THE TRUST;
(B) PAY THE TRUST THE VALUE OF THE USE OF ANY OF ITS PROPERTY OR OTHER
ASSETS USED IN SUCH TRANSACTION;
S. 5845 63
(C) RETURN OR REPLACE ANY PROPERTY OR OTHER ASSETS LOST TO THE TRUST
AS A RESULT OF SUCH TRANSACTION, TOGETHER WITH ANY INCOME OR APPRECI-
ATION LOST TO THE TRUST BY REASON OF SUCH TRANSACTION, OR ACCOUNT FOR
ANY PROCEEDS OF SALE OF SUCH PROPERTY, AND PAY THE PROCEEDS TO THE TRUST
TOGETHER WITH INTEREST AT THE LEGAL RATE; AND
(D) PAY, IN THE CASE OF WILLFUL AND INTENTIONAL CONDUCT, AN AMOUNT UP
TO DOUBLE THE AMOUNT OF ANY BENEFIT IMPROPERLY OBTAINED.
(5) THE POWERS OF THE ATTORNEY GENERAL PROVIDED IN THIS SECTION ARE IN
ADDITION TO ALL OTHER POWERS THE ATTORNEY GENERAL MAY HAVE UNDER THIS
CHAPTER OR ANY OTHER LAW.
(6) NO RELATED PARTY MAY PARTICIPATE IN DELIBERATIONS OR VOTING RELAT-
ING TO MATTERS SET FORTH IN THIS PARAGRAPH; PROVIDED THAT NOTHING IN
THIS SECTION SHALL PROHIBIT THE TRUSTEES OR DESIGNATED AUDIT COMMITTEE
FROM REQUESTING THAT A RELATED PARTY PRESENT INFORMATION CONCERNING A
RELATED PARTY TRANSACTION AT A TRUSTEES OR COMMITTEE MEETING PRIOR TO
THE COMMENCEMENT OF DELIBERATIONS OR VOTING RELATING TO THE RELATED
PARTY TRANSACTION.
(D)(1) EXCEPT AS PROVIDED IN SUBPARAGRAPH FOUR OF THIS PARAGRAPH,
EVERY TRUST SHALL ADOPT A CONFLICT OF INTEREST POLICY TO ENSURE THAT ITS
TRUSTEES, OFFICERS AND KEY EMPLOYEES ACT IN THE BEST INTEREST OF THE
TRUST AND ITS BENEFICIARIES AND COMPLY WITH APPLICABLE LEGAL REQUIRE-
MENTS, INCLUDING BUT NOT LIMITED TO THE REQUIREMENTS SET FORTH IN THIS
PARAGRAPH.
(2) THE CONFLICT OF INTEREST POLICY SHALL INCLUDE, AT A MINIMUM, THE
FOLLOWING PROVISIONS:
(A) A DEFINITION OF THE CIRCUMSTANCES THAT CONSTITUTE A CONFLICT OF
INTEREST;
(B) PROCEDURES FOR DISCLOSING A CONFLICT OF INTEREST TO THE AUDIT
COMMITTEE OR, IF THERE IS NO AUDIT COMMITTEE, TO THE TRUSTEES;
(C) A REQUIREMENT THAT THE PERSON WITH THE CONFLICT OF INTEREST NOT BE
PRESENT AT OR PARTICIPATE IN ANY DELIBERATION OR VOTE ON THE MATTER
GIVING RISE TO SUCH CONFLICT;
(D) A PROHIBITION AGAINST ANY ATTEMPT BY THE PERSON WITH THE CONFLICT
TO INFLUENCE THE DELIBERATION OR VOTING ON THE MATTER GIVING RISE TO
SUCH CONFLICT;
(E) A REQUIREMENT THAT THE EXISTENCE AND RESOLUTION OF THE CONFLICT BE
DOCUMENTED IN THE TRUST'S RECORDS, INCLUDING IN THE MINUTES OF ANY MEET-
ING AT WHICH THE CONFLICT WAS DISCUSSED OR VOTED UPON; AND
(F) PROCEDURES FOR DISCLOSING, ADDRESSING, AND DOCUMENTING RELATED
PARTY TRANSACTIONS IN ACCORDANCE WITH THIS PARAGRAPH.
(3) THE CONFLICT OF INTEREST POLICY SHALL REQUIRE THAT PRIOR TO A
TRUSTEE'S INITIAL APPOINTMENT, AND ANNUALLY THEREAFTER, SUCH TRUSTEE
SHALL COMPLETE, SIGN AND FILE WITH THE RECORDS OF THE TRUST A WRITTEN
STATEMENT IDENTIFYING ANY ENTITY OF WHICH HE OR SHE IS AN OFFICER,
DIRECTOR, TRUSTEE, MEMBER, OWNER (EITHER AS A SOLE PROPRIETOR OR A PART-
NER), OR EMPLOYEE AND WITH WHICH THE TRUST HAS A RELATIONSHIP, AND ANY
TRANSACTION IN WHICH THE TRUST IS A PARTICIPANT AND IN WHICH THE TRUSTEE
MIGHT HAVE A CONFLICTING INTEREST. THE POLICY SHALL REQUIRE THAT EACH
TRUSTEE ANNUALLY RESUBMIT SUCH WRITTEN STATEMENT. THE TRUSTEES SHALL
PROVIDE A COPY OF ALL COMPLETED STATEMENTS TO THE CHAIR OF THE AUDIT
COMMITTEE, IF THERE IS AN AUDIT COMMITTEE.
(4) A TRUST THAT HAS ADOPTED AND POSSESSES A CONFLICT OF INTEREST
POLICY PURSUANT TO FEDERAL, STATE OR LOCAL LAWS THAT IS SUBSTANTIALLY
CONSISTENT WITH THE PROVISIONS OF SUBPARAGRAPH TWO OF THIS PARAGRAPH
SHALL BE DEEMED IN COMPLIANCE WITH PROVISIONS OF THIS PARAGRAPH.
S. 5845 64
(5) NOTHING IN THIS PARAGRAPH SHALL BE INTERPRETED TO REQUIRE A TRUST
TO ADOPT ANY SPECIFIC CONFLICT OF INTEREST POLICY NOT OTHERWISE REQUIRED
BY THIS PARAGRAPH OR ANY OTHER LAW OR RULE, OR TO SUPERSEDE OR LIMIT ANY
REQUIREMENT OR DUTY GOVERNING CONFLICTS OF INTEREST REQUIRED BY ANY
OTHER LAW OR RULE.
(E)(1) EXCEPT AS PROVIDED IN SUBPARAGRAPH THREE OF THIS PARAGRAPH,
EVERY TRUST THAT HAS TWENTY OR MORE EMPLOYEES AND IN THE PRIOR FISCAL
YEAR HAD ANNUAL REVENUE IN EXCESS OF ONE MILLION DOLLARS SHALL ADOPT A
WHISTLEBLOWER POLICY TO PROTECT FROM RETALIATION PERSONS WHO REPORT
SUSPECTED IMPROPER CONDUCT. SUCH POLICY SHALL PROVIDE THAT NO OFFICER,
TRUSTEE, EMPLOYEE OR VOLUNTEER OF A TRUST WHO IN GOOD FAITH REPORTS ANY
ACTION OR SUSPECTED ACTION TAKEN BY OR WITHIN THE TRUST THAT IS ILLEGAL,
FRAUDULENT OR IN VIOLATION OF ANY ADOPTED POLICY OF THE TRUST SHALL
SUFFER INTIMIDATION, HARASSMENT, DISCRIMINATION OR OTHER RETALIATION OR,
IN THE CASE OF EMPLOYEES, ADVERSE EMPLOYMENT CONSEQUENCE.
(2) THE WHISTLEBLOWER POLICY SHALL INCLUDE THE FOLLOWING PROVISIONS:
(A) PROCEDURES FOR THE REPORTING OF VIOLATIONS OR SUSPECTED VIOLATIONS
OF LAWS OR TRUST POLICIES, INCLUDING PROCEDURES FOR PRESERVING THE
CONFIDENTIALITY OF REPORTED INFORMATION;
(B) A REQUIREMENT THAT A TRUSTEE, OFFICER OR EMPLOYEE OF THE TRUST BE
DESIGNATED TO ADMINISTER, THE WHISTLEBLOWER POLICY AND TO REPORT TO THE
AUDIT COMMITTEE OR OTHER COMMITTEE OF INDEPENDENT TRUSTEES, OR TO THE
TRUSTEES; AND
(C) A REQUIREMENT THAT A COPY OF THE POLICY BE DISTRIBUTED TO ALL
TRUSTEES, OFFICERS, EMPLOYEES AND VOLUNTEERS, WITH INSTRUCTIONS ON HOW
TO COMPLY WITH THE PROCEDURES SET FORTH IN THE POLICY.
(3) A TRUST THAT HAS ADOPTED AND POSSESSES A WHISTLEBLOWER POLICY
PURSUANT TO FEDERAL, STATE OR LOCAL LAWS THAT IS SUBSTANTIALLY CONSIST-
ENT WITH THE PROVISIONS OF SUBPARAGRAPH TWO OF THIS PARAGRAPH SHALL BE
DEEMED IN COMPLIANCE WITH THE PROVISIONS OF THIS PARAGRAPH.
(4) NOTHING IN THIS PARAGRAPH SHALL BE INTERPRETED TO RELIEVE ANY
TRUST FROM ANY ADDITIONAL REQUIREMENTS IN RELATION TO INTERNAL COMPLI-
ANCE, RETALIATION, OR DOCUMENT RETENTION REQUIRED BY ANY OTHER LAW OR
RULE.
S 131. Severability. If any clause, sentence, paragraph, section or
part of this act shall be adjudged by any court of competent jurisdic-
tion to be invalid, the judgment shall not affect, impair, or invalidate
the remainder thereof, but shall be confined in its operation to the
clause, sentence, paragraph, section or part thereof directly involved
in the controversy in which the judgment shall have been rendered.
S 132. This act shall take effect July 1, 2014, provided, however,
that the amendments to section 172-b of the executive law made by
section three of this act shall expire and be deemed repealed June 30,
2017; provided further that the amendments to section 172-b of the exec-
utive law made by section three-a of this act shall take effect July 1,
2017 and shall expire and be deemed repealed June 30, 2021; provided
further that the amendments to section 172-b of the executive law made
by section three-b of this act shall take effect July 1, 2021; provided
further that section seventy-three of this act shall take effect January
1, 2015; provided further that section seventy-two of this act and para-
graph (b) of section 8-1.9 of the estates, powers and trusts law as
added by section one hundred thirty of this act shall not be applicable
until January 1, 2015 for any corporation or trust that had annual
revenues of less than 10,000,000 dollars in the last fiscal year ending
prior to January 1, 2014.
