NY State Senate Bill 2013-S5198

Archive: Last Bill Status - In Senate Committee Corporations, Authorities And Commissions Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2014	referred to corporations, authorities and commissions
Jun 21, 2013	committed to rules
Jun 10, 2013	advanced to third reading
Jun 05, 2013	2nd report cal.
Jun 04, 2013	1st report cal.1112
May 14, 2013	referred to corporations, authorities and commissions

Votes

- Jun 4, 2013 - Corporations, Authorities And Commissions Committee Vote
  S5198
  
  6
  
  Aye
  
  0
  
  Nay
  
  0
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Corporations, Authorities And Commissions Committee Vote: Jun 4, 2013
      
      aye (6)
      
      Flanagan
      
      Larkin
      
      Martins
      
      Perkins
      
      Ranzenhofer
      
      Squadron

co-Sponsors

2013-S5198 (ACTIVE) - Details

Current Committee:: Senate Corporations, Authorities And Commissions
Law Section:: Not-for-Profit Corporation Law
Laws Affected:: Amd Various Laws generally

2013-S5198 (ACTIVE) - Summary

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

2013-S5198 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S5198

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

PURPOSE OR GENERAL IDEA OF BILL:

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

SUMMARY OF SPECIFIC PROVISIONS:

PART A

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

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

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

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

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


Section 6 amends section 105 of the Not-for-Profit Corporation Law to
allow the Department of State to correct non-material typographical
errors in certificates of incorporation and other instruments upon
written authorization from the incorporator.

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

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

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

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

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

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

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

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

Sections 19-43 and 45-67 make conforming changes to the Not-for-Profit
Corporation Law to facilitate the simplification of corporate "types"
pursuant to section 8 of the bill.


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

Section 85 is the effective date.

PART B

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

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

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

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

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

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

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

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

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


Sections 11-15, 17 & 18 amend sections 605, 606, 609, 614, 621, 708,
711 of the Not-for-Profit Corporation Law to allow electronic
transmission of board and membership meeting notices, waivers of
notice and votes requiring unanimous written consent. These amendments
will also allow board members to participate in meetings via video
conference, Skype, and other forms of video communication.  The intent
of these amendments is to utilize technology to allow for more
effective participation by directors who are unable to attend meetings
in person.

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

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

Sections 21 and 32 repeal sections 406(b-1) of the Not-for-Profit
Corporation Law and 81.8(b-1) of the Estates, Powers and Trusts Law to
eliminate the requirement that private foundations advertise the
availability of their annual financial reports in print newspapers.
The intent of this amendment is to reduce costs without affecting
transparency, as such reports are free and available to the public
online.

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

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

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

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

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

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

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


Section 34 amends section 172-b of the Executive Law to raise the
gross revenue thresholds triggering the requirement to obtain an
independent CPA's audit from $250,000 to $500,000 and an independent
CPA's review from $100,000 to $250,000. The Attorney General will have
authority to request an independent CPA's audit from nonprofits with
gross revenue of $250,000 to $500,000 after reviewing their annual
filings. The intent of these amendments is to reduce costs and burdens
on smaller nonprofits and bring New York's reporting requirements into
line with those of other states.

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

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

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

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

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

Section 55 is the effective date.

JUSTIFICATION:


For too long, New York law and regulatory practices have placed
unnecessary and costly burdens on the nonprofit sector. Redundancies
throughout the system waste scarce taxpayer and nonprofit dollars.
New York must become a more hospitable environment for nonprofits.
This bill will modernize key provisions of New York law governing
formation, dissolution, transactions, and board procedures, reducing
unnecessary burdens and costs without sacrificing oversight or
accountability. Implementing these changes will create a more
welcoming environment for new nonprofits and a more business-friendly
environment for existing ones;:htaing to ensure our state remains home
to the country's strongest and most vibrant nonprofit sector.

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

PRIOR LEGISLATIVE HISTORY:

New bill.

FISCAL IMPLICATIONS:

There is no fiscal impact on the state.

EFFECTIVE DATE:

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

2013-S5198 (ACTIVE) - Bill Text download pdf

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

                                  5198

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              May 14, 2013
                               ___________

Introduced by Sens. RANZENHOFER, MARCELLINO -- (at request of the Attor-
  ney General) -- read twice and ordered printed, and when printed to be
  committed  to  the  Committee on Corporations, Authorities and Commis-
  sions

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

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

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

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

S. 5198                             2

                                 PART A

  Section  1. Subparagraph 6 of paragraph (a) of section 102 of the not-
for-profit corporation law is amended, and six  new  subparagraphs  3-a,
3-b, 9-a, 19, 20 and 21 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.
  (9-A) "NON-CHARITABLE CORPORATION" MEANS ANY CORPORATION FORMED  UNDER
THIS  CHAPTER, OTHER THAN A CHARITABLE CORPORATION, INCLUDING ONE FORMED
FOR ANY ONE OR MORE OF  THE  FOLLOWING  NON-PECUNIARY  PURPOSES:  CIVIC,
PATRIOTIC,  POLITICAL, SOCIAL, FRATERNAL, ATHLETIC, AGRICULTURAL, HORTI-
CULTURAL, OR ANIMAL HUSBANDRY, OR FOR THE PURPOSE OF OPERATING A PROFES-
SIONAL, COMMERCIAL, INDUSTRIAL, TRADE OR SERVICE ASSOCIATION.
  (19) "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.
  (20)  "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.
  (21) "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.  S4958(F)(1)(A)  AND  FURTHER  SPECIFIED  IN  26  CFR  S
53.4958-3(C) AND (D), OR SUCCEEDING PROVISIONS.
  S 2.  Paragraphs (b) and (c) of  section  515  of  the  not-for-profit
corporation law, paragraph (c) as amended by  chapter 847 of the laws of
1970, are amended to read as follows:
  (b) A corporation may (1) pay compensation [in a reasonable amount] to
members,  directors,  [or]  officers,  OR  KEY  EMPLOYEES  for  services
rendered, AS PERMITTED BY THIS CHAPTER, and [may] (2) make distributions
of cash or property to members upon dissolution or final liquidation  as
permitted by this chapter.  TOTAL COMPENSATION PAID TO ANY PERSON PURSU-
ANT TO SUBPARAGRAPH ONE OF THIS PARAGRAPH SHALL BE FAIR, REASONABLE, AND
COMMENSURATE  WITH  SERVICES  PROVIDED TO THE CORPORATION. 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 COMPENSATION.
  (c) A corporation may confer benefits upon members or  non-members  in
conformity  with  its  purposes  AS PERMITTED BY THIS CHAPTER, INCLUDING
WITHOUT LIMITATION, SECTION 715 (INTERESTED DIRECTORS AND  OFFICERS)  OF
THIS  CHAPTER, may redeem its capital certificates or subvention certif-
icates, and may make other distributions of  cash  or  property  to  its

S. 5198                             3

members  or  former members, directors, or officers prior to dissolution
or final liquidation, as authorized by this  article,  except  when  the
corporation is currently insolvent or would thereby be made insolvent or
rendered  unable  to  carry  on its corporate purposes, or when the fair
value of the corporation's assets remaining  after  such  conferring  of
benefits,  or redemption, or other distribution would be insufficient to
meet its liabilities.
  S 3. 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, WHO MAY BE GIVEN THE TITLE
CHAIR  OF THE BOARD, CHAIRPERSON OF THE BOARD, CHAIRMAN OF THE BOARD, OR
CHAIRWOMAN OF THE BOARD, OR president, OR BOTH, one or more  vice-presi-
dents,  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 certif-
icate of incorporation or the by-laws. Any two or more  offices  may  be
held  by the same person, except the offices of president 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  4.  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) EVERY CORPORATION SHALL ADOPT A CONFLICT  OF  INTEREST  POLICY  TO
ENSURE  THAT ITS DIRECTORS, OFFICERS AND KEY EMPLOYEES ACT IN THE CORPO-
RATION'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 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  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  PARTIC-
IPANT  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

S. 5198                             4

ALL COMPLETED STATEMENTS TO THE CHAIR OF  THE  AUDIT  COMMITTEE  OR,  IF
THERE IS NO AUDIT COMMITTEE, TO THE CHAIR OF THE BOARD.
  (D)  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.
  (A)  EVERY  CORPORATION  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
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  CORPORATION  SHALL  SUFFER  INTIMIDATION,  HARASSMENT,
DISCRIMINATION OR OTHER  RETALIATION  OR,  IN  THE  CASE  OF  EMPLOYEES,
ADVERSE EMPLOYMENT CONSEQUENCE.
  (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 VOLUNTEERS.
  (C) 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 5. 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 HAS  RESPONSIBILITIES,  POWERS
OR  INFLUENCE  OVER  THE  TRUST  SIMILAR  TO  THOSE  OF  AN OFFICER OF A
NOT-FOR-PROFIT CORPORATION, OR IS OTHERWISE IN A  POSITION  TO  EXERCISE
SUBSTANTIAL INFLUENCE OVER THE AFFAIRS OF THE TRUST, AS REFERENCED IN 26
U.S.C.  S4958(F)(1)(A) AND FURTHER SPECIFIED IN 26 CFR S53.4958-3(C) AND
(D), OR SUCCEEDING PROVISIONS.
  (4) AN "AFFILIATE" OF A TRUST  MEANS  ANY  ENTITY  CONTROLLED  BY,  IN
CONTROL OF, OR UNDER COMMON CONTROL WITH SUCH TRUST.
  (5) "RELATIVE" OF AN INDIVIDUAL MEANS THE (I) SPOUSE, DOMESTIC PARTNER
AS  DEFINED  BY SECTION TWENTY-EIGHT HUNDRED FIVE-Q OF THE PUBLIC HEALTH
LAW, CHILD, GRANDCHILD, BROTHER OR SISTER  (WHETHER  BY  THE  WHOLE-  OR
HALF-BLOOD)  OF  THE INDIVIDUAL; AND (II) THE SPOUSE OR DOMESTIC PARTNER
OF A CHILD, GRANDCHILD, BROTHER, OR SISTER (WHETHER  BY  THE  WHOLE-  OR
HALF-BLOOD) OF THE INDIVIDUAL.

S. 5198                             5

  (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  HAVE  A  SUBSTANTIAL  FINANCIAL
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) 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
REQUIREMENTS, INCLUDING BUT NOT LIMITED TO THE REQUIREMENTS SET FORTH IN
PARAGRAPH (E) OF THIS SECTION.
  (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 PARAGRAPH (E) OF THIS SECTION.
  (3) THE CONFLICT OF INTEREST POLICY SHALL  REQUIRE  THAT  PRIOR  TO  A
TRUSTEE'S  INITIAL  APPOINTMENT,  AND  ANNUALLY THEREAFTER, SUCH TRUSTEE

S. 5198                             6

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)  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.
  (C)(1)  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  CONSE-
QUENCE.
  (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)  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 6. 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

S. 5198                             7

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 7. Section 113 of the not-for-profit corporation law is REPEALED.
  S 8. 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)] (10), paragraph
(a) of S 102  (Definitions),  may  be  formed  under  this  chapter  [as
provided  in  paragraph  (b)]  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 ON OR AFTER JANUARY 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 CORPORATION 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-pe-
cuniary  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.
  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

S. 5198                             8

the  contrary  provisions of, the other corporate law authorizing forma-
tion under this chapter of the type  D  corporation.]  FORMED  PRIOR  TO
JANUARY  FIRST,  TWO  THOUSAND FOURTEEN SHALL BE DEEMED A NON-CHARITABLE
CORPORATION  UNDER THIS CHAPTER. ANY SUBMISSION OR FILING BY SUCH CORPO-
RATION 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  CORPO-
RATION.
  (C)  A  TYPE B OR C NOT-FOR-PROFIT CORPORATION FORMED PRIOR TO JANUARY
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 JANUARY 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  JANUARY  FIRST,  TWO  THOUSAND  FOURTEEN  SHALL  BE  DEEMED  A
NON-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 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  9.  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]  EXCEPT  in  furtherance of, AND AS REASONABLY
NECESSARY TO ACHIEVE, its corporate purposes[, except to the extent that
such  activity  supports  its  other  lawful   activities   then   being
conducted].
  S 10. Paragraph (a) of section 104-A of the not-for-profit corporation
law is REPEALED.
  S  11.  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
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

S. 5198                             9

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  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  12.  The  section  heading  and paragraph (a) of 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:
  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.
  S 13. 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
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 14. Subparagraphs 2 and 4 of paragraph (a) of  section  402  of  the
not-for-profit corporation law, subparagraph 2 as amended by chapter 847

S. 5198                            10

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 15. The section heading and paragraphs (b) and (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, paragraph (b) as
amended by section 4 of part D of chapter 58 of the laws  of  2006,  and
paragraph  (d)  as  relettered  by  chapter 431 of the laws of 1993, are
amended to read as follows:
Approvals, NOTICES and consents.
  (b) (1) Every certificate of incorporation which  includes  among  its
purposes  the  care  of  destitute,  delinquent, abandoned, neglected or
dependent children; the establishment or operation  of  any  adult  care
facility, or the establishment or operation of a residential program for
victims  of  domestic violence as defined in subdivision four of section
four hundred fifty-nine-a of the social services law, or the placing-out
or boarding-out of children or a home or shelter for unmarried  mothers,
excepting  the  establishment  or  maintenance of a hospital or facility
providing health-related services as those terms are defined in  article
twenty-eight  of the public health law and a facility for which an oper-
ating certificate is required by articles sixteen, nineteen,  twenty-two
and  thirty-one  of  the  mental  hygiene  law;  or  the solicitation of
contributions for any such purpose  or  purposes,  shall  have  endorsed
thereon  or  annexed  thereto  the  approval  of the commissioner of the
office of children and family services or with respect to any adult care
facility, the commissioner of health.
  (2) 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 the certificate of incorporation, each
amendment  thereto,  and  any  certificate  of  merger, consolidation or
dissolution involving such corporation to the  office  of  children  and
family  services  within  [thirty] TEN BUSINESS days after the filing of
such certificate, amendment, merger, consolidation or  dissolution  with
the  department  of  state.  This  requirement  shall  also apply to any
foreign corporation filing an application for  authority  under  section
thirteen  hundred  four of this chapter, any amendments thereto, and any
surrender of authority or termination of authority in this state of such
corporation.
  (d) Every  CORPORATION  THE  certificate  of  incorporation  OF  WHICH
INCLUDES  AMONG ITS PURPOSES THE OPERATION OF A SCHOOL, COLLEGE, UNIVER-
SITY, LIBRARY, MUSEUM OR HISTORICAL SOCIETY SHALL HAVE ENDORSED  THEREON

S. 5198                            11

OR  ANNEXED  THERETO  THE APPROVAL OF THE COMMISSIONER OF EDUCATION. ANY
OTHER CORPORATION THE CERTIFICATE OF INCORPORATION OF which  includes  a
purpose for which a corporation might be chartered by the regents of the
university  of  the  State  of  New York shall [have endorsed thereon or
annexed thereto the consent of the commissioner of education.] PROVIDE A
CERTIFIED COPY OF THE CERTIFICATE OF INCORPORATION TO  THE  COMMISSIONER
OF  EDUCATION  WITHIN  TEN  BUSINESS DAYS AFTER THE CORPORATION RECEIVES
CONFIRMATION FROM THE DEPARTMENT OF STATE THAT THE CERTIFICATE HAS  BEEN
ACCEPTED FOR FILING.
  S  16.  Paragraph (w) of section 404 of the not-for-profit corporation
law is REPEALED.
  S 17. 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 TEN BUSINESS DAYS AFTER THE  CORPORATION
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] IF THE ATTORNEY GENERAL
DOES NOT APPROVE A CERTIFICATE OF AMENDMENT SUBMITTED PURSUANT TO CLAUSE
(A)  OF  THIS SUBPARAGRAPH 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' WRITTEN NOTICE TO THE ATTORNEY
GENERAL.
  S 18. 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-

S. 5198                            12

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
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  TEN  BUSINESS  DAYS  AFTER THE CORPORATION RECEIVES CONFIRMATION
FROM THE DEPARTMENT OF STATE THAT THE CERTIFICATE HAS BEEN ACCEPTED  FOR
FILING.
  S 19. 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
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 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

S. 5198                            13

therewith,  both  provisions shall apply.  Any corporation 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 corporation formed or
formable under such unconsolidated law shall not  thereby  be  extended.
For the purpose of this paragraph, the effective date of this chapter as
to  corporations  to which this chapter is made applicable by this para-
graph shall be September one, nineteen hundred seventy-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.
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  20. 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 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 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
A corporation] NON-CHARITABLE CORPORATION.  For such purpose, the attor-
ney-general shall have the same status  as  such  members,  director  or
officer.
  S  21.  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. 5198                            14

  S 22. 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 ON NOTICE TO THE ATTORNEY  GENERAL,  that  it,  or  its
directors, officers, MEMBERS, KEY EMPLOYEES or agents, have misappropri-
ated  any  of the funds or property of the corporation, or diverted them
from the purpose of its  incorporation,  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  corpo-
ration  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  trans-
actions  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 inventory, 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 appli-
cation,  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 invento-
ry and account in any one year, nor to make a second account and  inven-
tory,  while  proceedings  are  pending  for the statement of an account
under this section.
  S 23. 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
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

S. 5198                            15

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 24. 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 25. 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
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

S. 5198                            16

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  26.  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 27. 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  28.    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 29.  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:
  (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.

S. 5198                            17

  [(6)] (5) If appropriate, that the certificate is transferable, either
at will or subject to specified restrictions.
  S  30.  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
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 supreme court in the judi-
cial district or of the county court of the county in which  the  corpo-
ration  has its office or principal place of carrying out the [puropses]
PURPOSES for which it was formed IN ACCORDANCE WITH SECTION  511  (PETI-
TION FOR LEAVE OF COURT) OF THIS ARTICLE.
  S  31.  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. 5198                            18

  S  32.  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
partnerships, as well as any other person  without  limitation,  may  be
members.
  S 33. 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 34. 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
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

S. 5198                            19

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  35.  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 36. Paragraphs (a) and (f) of  section  908  of  the  not-for-profit
corporation law are 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 JANUARY 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.
  (f) Where any constituent corporation is, or would be if formed  under
this  chapter,  a  [Type  C]  CHARITABLE  corporation [under section 201
(Purposes)], no certificate shall be  filed  pursuant  to  this  section
until an order approving the plan of merger or consolidation and author-
izing  the filing of the certificate has been made by the supreme court,
as provided in section 907 (Approval by the supreme court) OF THIS ARTI-
CLE.
  S 37. Paragraphs (b) and (d) of section  1001  of  the  not-for-profit
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.

S. 5198                            20

  (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 organ-
ization 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  state-
ment,  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 38. 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:
  (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;

S. 5198                            21

  (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
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. 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 SURVIVING OR CONSOLIDATED
CORPORATION IS TO BE LOCATED, OR IN WHICH  THE  OFFICE  OF  ONE  OF  THE
DOMESTIC  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

S. 5198                            22

THE ATTORNEY GENERAL, AND SHALL INCLUDE ALL INFORMATION REQUIRED  TO  BE
INCLUDED  IN  THE  APPLICATION  TO THE ATTORNEY GENERAL PURSUANT TO THIS
SECTION.
  S  39.    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.
  (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, 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:

S. 5198                            23

  (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 40. 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 41.  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  42.  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 43.  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

S. 5198                            24

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
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  44. 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), THEN THE CORPORATION SHALL PROVIDE  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 45. 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  46. 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 47. 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  48.  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:

S. 5198                            25

  (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
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 activ-
ities or authorized to conduct activities in this state.
  S 49. 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 50. 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 other-
wise 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. 5198                            26

  S 51. 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:
  (d) Type of corporation. A family or private cemetery corporation is a
[type B] CHARITABLE corporation under this chapter.
  S  52. 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  53. 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  54. 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 55. 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  56. 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  57. 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 58. 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 59. 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 60. 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. 5198                            27

  S  61. Paragraph (b) of section 1411 of the not-for-profit corporation
law is amended to read as follows:
  (b) Type of corporation.
  A  local  development corporation is a [Type C] CHARITABLE corporation
under this chapter.
  S 62. 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  63. 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  64. 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 65. 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 66. 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 67.  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.
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

S. 5198                            28

agreement  so  provides,  and  there is no foreclosing governmental unit
that desires to continue the existence of the land bank.
  S  68.  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]  SUBPARAGRAPH
(7)  [and  (8)] of paragraph (a) of section one hundred twelve, [section
one hundred thirteen,] 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 69.  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 70.  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
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 71. 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

S. 5198                            29

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 72. 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) of section two hundred one] AS DEFINED
IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS)  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 speci-
fied in subsection (a) of section one thousand one hundred  thirteen  of
this  chapter other than (1) those types of insurance specified in para-
graphs 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  liabil-
ity  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 73. 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 74. 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)  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 75. 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

S. 5198                            30

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 76. 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 77. 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 78. 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
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 79. 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  80.  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  81. 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:

S. 5198                            31

  (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  82.  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-
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  83.  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

S. 5198                            32

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 84. 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-
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 85. This act shall  take  effect  January  1,  2014,  provided  that
section three of this act shall take effect January 1, 2015.

                                 PART B

  Section  1.  Paragraph (a) of section 102 of the not-for-profit corpo-
ration law is amended by adding six new subparagraphs 6-a, 22,  23,  24,
25 and 26 to read as follows:
  (6-A)  "ENTIRE  BOARD" MEANS THE TOTAL NUMBER OF DIRECTORS ENTITLED TO
VOTE WHICH THE CORPORATION WOULD HAVE IF THERE WERE NO  VACANCIES.    IF

S. 5198                            33

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.
  (22)  AN  "AFFILIATE" OF A CORPORATION MEANS ANY ENTITY CONTROLLED BY,
IN CONTROL OF, OR UNDER COMMON CONTROL WITH SUCH CORPORATION.
  (23) "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.
  (24)  "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
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  SUBPARAGRAPH,
"PAYMENT" DOES NOT INCLUDE CHARITABLE CONTRIBUTIONS.
  (25) "RELATIVE" OF AN INDIVIDUAL MEANS THE (I) SPOUSE, DOMESTIC  PART-
NER  AS  DEFINED  BY  SECTION  TWENTY-EIGHT HUNDRED FIVE-Q OF THE PUBLIC
HEALTH LAW, CHILD, GRANDCHILD, BROTHER OR SISTER (WHETHER BY THE  WHOLE-
OR  HALF-BLOOD) OF THE INDIVIDUAL; AND (II) THE SPOUSE OR DOMESTIC PART-
NER OF A CHILD, GRANDCHILD, BROTHER OR SISTER (WHETHER BY THE WHOLE-  OR
HALF-BLOOD) OF THE INDIVIDUAL.
  (26) "TOTAL COMPENSATION" MEANS: (I) ANY COMPENSATION, WHETHER PAID OR
ACCRUED,  BY  OR  ON  BEHALF  OF THE CORPORATION OR ANY AFFILIATE OF THE
CORPORATION FOR SERVICES RENDERED TO, ON BEHALF OF, OR AT THE REQUEST OF
THE CORPORATION,  INCLUDING  BUT  NOT  LIMITED  TO  SALARY,  BONUS,  AND
DEFERRED  COMPENSATION;  AND  (II)  ANY  BENEFIT  HAVING  MONETARY VALUE
PROVIDED BY OR ON BEHALF OF THE CORPORATION  OR  ANY  AFFILIATE  OF  THE
CORPORATION,  INCLUDING  BUT  NOT  LIMITED TO HOUSING ALLOWANCES, LIVING
EXPENSES,  PERQUISITES,  FRINGE  BENEFITS,  EMPLOYER  CONTRIBUTIONS   TO
DEFINED CONTRIBUTION RETIREMENT PLANS AND OTHER RETIREMENT BENEFITS.
  S  2.  Paragraph  (a) of section 112 of the not-for-profit corporation
law is amended by adding a new subparagraph 9 to read as follows:
  (9) 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 3. The not-for-profit corporation law is amended  by  adding  a  new
section 712-a to read as follows:
S 712-A. AUDIT OVERSIGHT.

S. 5198                            34

  (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.
  S 4.  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 chapter
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

S. 5198                            35

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 FAIR, REASONABLE AND IN THE CORPORATION'S BEST
INTEREST. 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.

S. 5198                            36

  [(e) Unless otherwise provided in the certificate of incorporation  or
the  by-laws,  the board shall have authority to fix the compensation of
directors for services in any capacity.
  (f)]  (D) 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.
  (E)  THE  ATTORNEY  GENERAL  MAY  BRING  AN  ACTION TO ENJOIN, VOID OR
RESCIND ANY RELATED PARTY TRANSACTION OR PROPOSED RELATED  PARTY  TRANS-
ACTION,  INCLUDING  THE PAYMENT OF COMPENSATION TO ANY OFFICER, DIRECTOR
OR KEY EMPLOYEE, THAT VIOLATES ANY LAW OR IS OTHERWISE NOT FAIR, REASON-
ABLE, OR IN THE BEST INTERESTS OF THE  CORPORATION,  OR  TO  SEEK  OTHER
RELIEF,  INCLUDING  BUT  NOT  LIMITED  TO  DAMAGES, RESTITUTION, AND THE
REMOVAL OF DIRECTORS OR OFFICERS, OR SEEK TO REQUIRE ANY PERSON OR ENTI-
TY 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 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.
  S  5. The section heading and paragraph (a) of section 720 of the not-
for-profit corporation law, the section heading as  amended  by  chapter
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 6. Paragraph (c) of section 723 of  the  not-for-profit  corporation
law,  as  amended by chapter 368 of the laws of 1987, is amended to read
as follows:

S. 5198                            37

  (c) Expenses incurred in defending  a  civil  or  criminal  action  or
proceeding may be paid by the corporation in advance of the final dispo-
sition of such action or proceeding upon receipt of an undertaking by or
on  behalf  of  such director or officer [to repay] SUFFICIENT TO ENSURE
REPAYMENT  OF  such  amount as, and to the extent, required by paragraph
(a) of section 725 (OTHER PROVISIONS AFFECTING INDEMNIFICATION OF DIREC-
TORS AND OFFICERS).
  S 7. 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 8. Section 8-1.9 of the estates, powers and trusts law, as added  by
section 5 of part A of this act, is amended by adding two new paragraphs
(d) and (e) to read as follows:
  (D)(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:
  (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

S. 5198                            38

(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.
  (E)(1)  NOTWITHSTANDING  ANY  PROVISION OF THE TRUST INSTRUMENT TO THE
CONTRARY, NO TRUST SHALL ENTER INTO ANY RELATED PARTY TRANSACTION UNLESS
THE TRANSACTION IS FAIR, REASONABLE AND IN THE  TRUST'S  BEST  INTEREST.
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
AUTHORIZED  COMMITTEE THEREOF, THE MATERIAL FACTS CONCERNING SUCH INTER-
EST.
  (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 FIXING OF SALARIES OF OFFICERS, IF NOT DONE IN OR PURSUANT TO
THE BY-LAWS SHALL REQUIRE THE AFFIRMATIVE VOTE  OF  A  MAJORITY  OF  THE
TRUSTEES UNLESS A HIGHER PROPORTION IS SET BY THE TRUST INSTRUMENT.
  (5)  THE  ATTORNEY  GENERAL  MAY  BRING  AN  ACTION TO ENJOIN, VOID OR
RESCIND ANY RELATED PARTY TRANSACTION OR PROPOSED RELATED  PARTY  TRANS-
ACTION, INCLUDING THE PAYMENT OF COMPENSATION TO ANY OFFICER, TRUSTEE OR
KEY  EMPLOYEE,  THAT  VIOLATES ANY LAW OR IS OTHERWISE NOT FAIR, REASON-
ABLE, OR IN THE BEST INTERESTS OF THE TRUST, OR TO  SEEK  OTHER  RELIEF,
INCLUDING  BUT  NOT  LIMITED TO DAMAGES, 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;
  (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

S. 5198                            39

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 CONDUCT, AN AMOUNT UP TO DOUBLE THE
AMOUNT OF ANY BENEFIT IMPROPERLY OBTAINED.
  (6) 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.
  (7) NO RELATED PARTY MAY PARTICIPATE IN DELIBERATIONS OR VOTING RELAT-
ING TO MATTERS SET FORTH IN THIS PARAGRAPH.
  S  9.  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  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 10. 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 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  A  COMMITTEE  AUTHORIZED  BY  THE  BOARD;
PROVIDED THAT IF SUCH PROPERTY CONSTITUTES ALL, OR SUBSTANTIALLY ALL, OF
THE ASSETS OF THE CORPORATION, THEN THE VOTE OF TWO-THIRDS OF THE ENTIRE
BOARD  SHALL BE REQUIRED, OR, IF THERE ARE TWENTY-ONE OR MORE DIRECTORS,
THE VOTE OF A MAJORITY OF THE ENTIRE BOARD SHALL BE SUFFICIENT.
  S 11.  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 ELECTRONIC MAIL, to each member entitled  to  vote  at  such
meeting.  If the notice is given personally [or], by first class mail 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

S. 5198                            40

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 MAILED ELECTRONICALLY, SUCH NOTICE IS GIVEN WHEN
DIRECTED  TO  THE  MEMBER'S ELECTRONIC MAIL ADDRESS AS IT APPEARS ON THE
RECORD OF MEMBERS, OR, TO SUCH OTHER ELECTRONIC MAIL  ADDRESS  AS  FILED
WITH  THE  SECRETARY  OF THE CORPORATION. NOTWITHSTANDING THE FOREGOING,
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  ELECTRONIC  MAIL;  OR  (2) THE CORPORATION OTHERWISE BECOMES
AWARE THAT NOTICE CANNOT BE DELIVERED TO THE MEMBER BY ELECTRONIC  MAIL.
An  affidavit 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
CONTINUOUSLY  FROM THE DATE OF PUBLICATION THROUGH THE DATE OF THE MEET-
ING.
  S 12.  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
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 13. 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-

S. 5198                            41

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 14. 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
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 15. 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

S. 5198                            42

corporation shall be allowed a reasonable time to  prepare  such  annual
balance sheet and profit and loss or similar financial statement.
  S  16.  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  17.  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.
  (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 18. 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

S. 5198                            43

FORTH, OR BE SUBMITTED WITH, INFORMATION FROM WHICH IT CAN REASONABLY BE
DETERMINED THAT THE TRANSMISSION WAS AUTHORIZED BY THE DIRECTOR.
  S 19. 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
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 20. Paragraph (c) of section 712 of the  not-for-profit  corporation
law is REPEALED.
  S 21. Paragraph (b-1) of section 406 of the not-for-profit corporation
law is REPEALED.
  S 22. 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

S. 5198                            44

dissolution) in the case of a domestic corporation, or under [S] SECTION
1303 (Violations) in the case of a foreign corporation.
  S  23.  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  shall  not limit the application of the [doctrine]
DOCTRINES of cy pres AND DEVIATION.
  S 24. 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
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 25.  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 appointment by publication once a
week  for  two successive weeks in two newspapers of general circulation
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  (Appoint-
ment  of  receiver  of property of a domestic or foreign corporation) OF
THIS ARTICLE EITHER, AS DIRECTED BY THE COURT, in a newspaper of general
circulation [as directed  by  the  court,]  OR  POSTED  PROMINENTLY  AND
CONTINUOUSLY  FOR  TWO  SUCCESSIVE  WEEKS ON THE HOMEPAGE OF ANY WEBSITE
MAINTAINED BY THE CORPORATION OR 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. 5198                            45

  S 26.  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 OR POSTED PROMINENTLY AND CONTINUOUSLY FOR TWO CONSECUTIVE WEEKS
ON THE HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE CORPORATION.
  S 27.  Paragraph (b) of section 1215 of the not-for-profit corporation
law is amended to read as follows:
  (b)  The petition shall be accompanied by a verified  account  of  all
the  assets of the corporation received by him, of all payments or other
disposition thereof made by him, of the remaining assets of  the  corpo-
ration  in  respect to which he was appointed receiver and the situation
of the same, and of all his transactions as receiver.    Thereupon,  the
court  shall grant an order directing notice to be given to the sureties
on his official bond and to all persons interested in  the  property  of
the  corporation  to  show cause, at a time and place specified, why the
receiver should not be permitted to resign.  Such notice  shall  EITHER,
AS DIRECTED BY THE COURT, be published once in each week for six succes-
sive  weeks  in  one  or  more newspapers [as the court shall direct] OR
POSTED PROMINENTLY AND CONTINUOUSLY FOR  SIX  SUCCESSIVE  WEEKS  ON  THE
HOMEPAGE  OF  ANY  WEBSITE  MAINTAINED  BY  THE CORPORATION. If it shall
appear that the proceedings of the receiver  in  the  discharge  of  his
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  shall be discharged and his powers as receiver
shall cease, but he 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.
  S 28.  Subparagraph 3 of paragraph (a) of section 1218 of the not-for-
profit corporation law is amended to read as follows:
  (3)    The  order  directing  service of the summons shall require the
publication thereof EITHER in a newspaper published in the state of  New
York  in  the  English language at least once a week for four successive
weeks, OR POSTED PROMINENTLY AND CONTINUOUSLY FOR FOUR SUCCESSIVE  WEEKS
ON  ANY  APPROPRIATE  WEBSITE,  and shall also require the mailing on or
before the date of the first publication  of  a  copy  of  the  summons,
complaint  and  order  to the corporation at its last known principal or
head office in the state or country of its incorporation.
  S 29. 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 30.  Intentionally omitted.

S. 5198                            46

  S  31.    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  32.    Paragraph  (b-1) of section 8-1.8 of the estates, powers and
trusts law is REPEALED.
  S 33. Subdivision 9 of section 171-a of the executive law, as  amended
by chapter 353 of the laws of 1987, is amended to read as follows:
  9.  "Fund  raising  counsel." Any person who for compensation consults
with a charitable  organization  or  who  plans,  manages,  advises,  or
assists  with respect to the solicitation in this state of contributions
for or on behalf of a charitable organization, but  who  does  not  have
access to contributions or other receipts from a solicitation or author-
ity  to  pay  expenses  associated  with a solicitation and who does not
solicit. A bona fide officer, volunteer, or  employee  of  a  charitable
organization or an attorney at law retained by a charitable organization
OR AN INDIVIDUAL ENGAGED SOLELY TO DRAFT APPLICATIONS FOR FUNDING FROM A
GOVERNMENTAL  AGENCY  OR  AN  ENTITY  EXEMPT  FROM  TAXATION PURSUANT TO
SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE, shall not  be  deemed  a
fund raising counsel.
  S 34. Subdivisions 1, 2 and 2-a of section 172-b of the executive law,
as  amended  by  section  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

S. 5198                            47

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
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

S. 5198                            48

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 SIXTY 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 dollars payable  to  the  attorney  general  shall
accompany  such financial report at the time of filing. Provided, howev-
er, 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 35. 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 36. Intentionally omitted.
  S  37.  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.

S. 5198                            49

  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.
  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 38. 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 (I)
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; (II) A STATEMENT THAT THE
CORPORATION IS NOT INSOLVENT AND WILL NOT BECOME INSOLVENT AS  A  RESULT
OF THE TRANSACTION; AND (III) 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

S. 5198                            50

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)  IF  THE ATTORNEY GENERAL DOES NOT APPROVE THE PETITION, OR IF THE
ATTORNEY GENERAL CONCLUDES THAT COURT REVIEW IS APPROPRIATE,  THE  PETI-
TIONER  MAY SEEK COURT APPROVAL ON NOTICE TO THE ATTORNEY GENERAL PURSU-
ANT TO SECTION 511 (PETITION FOR COURT APPROVAL) OF THIS ARTICLE.
  S 39. Intentionally omitted.
  S 40. 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
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

S. 5198                            51

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
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 41. 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

S. 5198                            52

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
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.

S. 5198                            53

  (F) A CERTIFIED COPY OF SUCH ORDER SHALL BE ANNEXED TO THE CERTIFICATE
OF MERGER OR CONSOLIDATION.
  S  42.  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
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) 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 ATTOR-
NEY GENERAL PURSUANT TO SECTION 907-A (APPLICATION FOR APPROVAL  OF  THE
SUPREME COURT) OF THIS ARTICLE.

S. 5198                            54

  S 43. Intentionally omitted.
  S  44. Paragraph (c) of section 1001 of the not-for-profit corporation
law is REPEALED.
  S 45. Intentionally omitted.
  S 46. 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-
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 47.  Intentionally omitted.

S. 5198                            55

  S 48. 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),  OR, UPON CONSENT OF THE ATTORNEY GENERAL, POSTED PROMINENTLY AND
CONTINUOUSLY FOR TWO SUCCESSIVE WEEKS ON THE  HOMEPAGE  OF  ANY  WEBSITE
MAINTAINED  BY  THE  CORPORATION.    On  or before the date of the first
publication OR POSTING ON A WEBSITE  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 constitute a recogni-
tion that any person is a proper creditor or  claimant,  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  directors,  officers
or members, has any defense or counterclaim.
  S  49.  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 50. Section 223 of the education law, as amended by chapter  106  of
the laws of 1974, is amended to read as follows:

S. 5198                            56

  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  51.  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

S. 5198                            57

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
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 52. 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

S. 5198                            58

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
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 53. 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

S. 5198                            59

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 54. 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
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  55.  This  act  shall  take  effect  January 1, 2014, provided that
section three of this act and paragraph (d)  of  section  8-1.9  of  the
estates,  powers  and  trusts  law as added by section eight 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.

S. 5198                            60

  S 2. Severability clause. If any clause, sentence, paragraph, subdivi-
sion, section or part of this act shall be  adjudged  by  any  court  of
competent  jurisdiction  to  be invalid, such judgment shall not affect,
impair, or invalidate the remainder thereof, but shall  be  confined  in
its  operation  to the clause, sentence, paragraph, subdivision, section
or part thereof directly involved in the controversy in which such judg-
ment shall have been rendered. It is hereby declared to be the intent of
the legislature that this act would  have  been  enacted  even  if  such
invalid provisions had not been included herein.
  S  3.  This  act shall take effect immediately provided, however, that
the applicable effective date of Parts A through B of this act shall  be
as specifically set forth in the last section of such Parts.

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Senate Bill S5198

Sponsored By

Archive: Last Bill Status - In Senate Committee Corporations, Authorities And Commissions Committee

Jun 4, 2013 - Corporations, Authorities And Commissions Committee Vote

Corporations, Authorities And Commissions Committee Vote: Jun 4, 2013

co-Sponsors

2013-S5198 (ACTIVE) - Details

2013-S5198 (ACTIVE) - Summary

2013-S5198 (ACTIVE) - Sponsor Memo

2013-S5198 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S5198

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Sponsored By

Michael H. Ranzenhofer

Archive: Last Bill Status - In Senate Committee Corporations, Authorities And Commissions Committee

co-Sponsors

Carl L. Marcellino

2013-S5198 (ACTIVE) - Details

2013-S5198 (ACTIVE) - Summary

2013-S5198 (ACTIVE) - Sponsor Memo

2013-S5198 (ACTIVE) - Bill Text download pdf

Comments