senate Bill S7431

2011-2012 Legislative Session

Enacts the "non-profit revitalization act"; repealer

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Senate Actions - UPPERCASE
May 15, 2012 referred to corporations, authorities and commissions

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S7431 - Bill Details

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

S7431 - Bill Texts

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

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BILL NUMBER:S7431

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

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to reduce unnecessary and outdated burdens on non-profits and to
enhance nonprofit governance and oversight to prevent fraud and
improve public trust.

SUMMARY OF SPECIFIC PROVISIONS:
Section 1 of the bill establishes the title of the Act as the
"Nonprofit Revitalization Act".

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

Sections 2, 3, 6 - 8, 12 - 14, 16, 21 - 23, 28, 31,
47, 52, 53, 57, 59, 62, 63, 65, 66, 71, 72, 74 - 95, and 97 make
conforming
changes to the Not-for-Profit Corporation Law to facilitate the
simplification of corporate "types" pursuant to section 10 of the bill.

Section 4 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.

Sections 5 and 45 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 undertake an
independent review of transactions between the nonprofit and related
parties, and affirmatively determine that such transactions are in
the non-profit's best interest. The amendments will also provide
clearer authority for the Attorney General to remedy self-dealing.

Sections 9, 15, 19, 58 and 73 make conforming changes to the
Not-for-Profit Corporation Law to implement section 18 of the bill,
the intent of which is to expedite and simplify the incorporation
process.


Section 10 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" non-profits that have already formed as a
particular type so that they will not have to file new paperwork or
amend contracts.

Sections 11, 37, 49 and 50 are intentionally omitted.

Section 17 amends section 402 of the Not-for-Profit Corporation Law to
make clearer that non-Profits 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 18 amends section 404 of the Not-for-Profit Corporation Law to
eliminate the requirement that certain types of non-profits 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 non-profits 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 20 and 99 repeal sections 406(b-1) of the Not-for-Profit
Corporation Law and 81.8(b-l) 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 24 amends section 509 of the Not-for-Profit Corporation Law to
permit a majority vote of the non-profit'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 non-profit'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 25 - 27 amend sections 510 and 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. Non-Profits will retain the
right to seek court approval of the transaction following the
Attorney General's review.

Section 29 amends section 515 of the Not-for-Profit Corporation Law to
require that any compensation paid or benefits conferred upon


members, officers and directors is done in accordance with new
requirements governing executive compensation practices and related
party transactions enacted by sections 43 and 45 of the bill.

Section 30 amends section 520 of the Not-for-Profit Corporation Law to
add a reference to the Executive Law.

Sections 32 - 36, 39 and 40 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 38 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 41 and 42 amend section 712 of the Not-for-Profit
Corporation Law to simplify the classification of board committees
by eliminating the distinction between standing and special committees.

Section 43 creates a new section 712-a of the Not-for-Profit
Corporation Law to require that, in cases where non-profits are
required by the Executive Law to obtain independent CPA audits,
boards 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 43 also creates a new
section 712-b of the Not-for-Profit Corporation Law to set forth new
requirements for setting and reviewing executive compensation. The
bill will require that compensation is fair, reasonable, and
commensurate with services provided, and that boards of larger
non-profits follow particular procedures in determining that
compensation meets this standard.

Section 44 creates a new section 713(f) of the Not-for-Profit
Corporation Law to prohibit the CEO or any other employee of a
nonprofit corporation from also serving as chair of the board. The
intent of this provision is to promote clear lines of accountability
between management and the board and ensure independent board
leadership.

Sections 46 creates a new section 715-a of the Not-for-Profit
Corporation Law to require that non-profits adopt written conflict of
interest policies. Section 46 also creates a new section 715-b of the
Not-for-Profit Corporation Law to require that non-profits with five
or more employees and annual revenue exceeding $1 million adopt
whistleblower policies.

Section 48 amends section 718 of the Not-for-Profit Corporation Law to
protect the privacy of non-profit 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.

Section 51 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 54 - 56 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. Non-profits will retain the
right to seek court approval of the transaction following the Attorney
General's review.

Sections 60 - 62 and 64 amend sections 1001, 1002, 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 67 - 70, 96 and 97 amend sections 1207, 1211, 1215,
1218, 1611
and 1613 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 98 and 105 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 100 creates a new section 8-1.9 of the Estates, Powers and
Trusts Law to make applicable to charitable trusts the new
requirements concerning audit oversight, executive compensation,
related party transactions, conflict of interest policies, and
whistleblower policies that are made applicable to charitable
corporations in sections 43, 45 and 46.

Section 101 makes conforming changes to the Surrogates Court Procedure
Act to implement substantive provisions of the bill.

Sections 102, 112, 113, and 115- 129 make conforming changes to
various statutes to facilitate the simplification of corporate
"types" pursuant to section 10 of the bill.

Section 103 amends section 171-a of the Executive Law to clarify that
individuals who function solely as grant writers are not "fundraising
counsel."


Section 104 amends section 172 of the Executive Law to require that
non-profits required to register with the Attorney General file with
the Attorney General conflict-of-interest and whistleblower policies
adopted pursuant to the newly-enacted sections 712-a and
712-b of the Not-for-Profit Corporation Law and 8-1.9 of the Estates,
Powers and Trusts Law.

Section 104-a 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 non-profits 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 non-profits and
bring New York's reporting requirements into line with those of other
states.

Sections 106 and 107 amend sections 216-a and 223 of the Education Law
to permit educational corporations to enter into merger
transactions in addition to consolidation transactions. The intent of
this amendment is to simplify mergers and treat educational
non-profits more equitably.

Sections 108 - 111 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 this amendment is to simplify mergers and treat
religious non-profits more equitably.

Section 114 amends section 1825 of the Public Authorities Law to
correct outdated references to the repealed Membership Corporation Law.

Section 130 is the effective date; this act shall take effect January
1, 2013, provided that section 713(f) of the Not-for-Profit
Corporation Law as added by section forty-four of this act shall take
effect January 1, 2014.

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 non-profits and a more business friendly
environment for existing ones, helping to ensure our state remains
home to the country's strongest and most vibrant nonprofit sector.

At the same time, the success of the nonprofit sector depends on
maintaining the public's trust. This requires that boards provide
effective oversight over the charitable funds entrusted to them, and
that the Attorney General have the necessary tools to protect
charities and donors from fraud and abuse. This bill strengthens New
York law to enhance governance and accountability by setting forth


clearer expectations of board
duties in key areas, such as setting compensation and 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, 2013; provided
however, that section 713(f) of the Not-for-Profit Corporation Law as
added by section forty-four of this act shall take effect January
1, 2014.

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

                                  7431

                            I N  S E N A T E

                              May 15, 2012
                               ___________

Introduced by Sens. MARCELLINO, RANZENHOFER -- (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 surrogate's court procedure act, the racing, pari-
  mutuel  wagering  and  breeding  law, the executive law, the education
  law, the religious corporations law, the benevolent  orders  law,  the
  public authorities law, the insurance law, the private housing finance
  law, the banking law, the general business law, the mental hygiene law
  and  the  public lands law, in relation to reform of charitable organ-
  izations; and to  repeal  certain  provisions  of  the  not-for-profit
  corporation law and the estates, powers and trusts law relating there-
  to

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

  Section 1. This act shall be known and may be cited as the "non-profit
revitalization act".
  S 1-a. Subparagraph 6 of paragraph (a) of section 102 of the  not-for-
profit  corporation  law  is  amended, and twelve new subparagraphs 3-a,
3-b, 6-a, 9-a, 9-b, 19, 20, 21, 22, 23, 24 and 25 are added to  read  as
follows:
  (3-A)  "CHARITABLE  CORPORATION"  MEANS ANY CORPORATION FORMED, OR FOR
THE PURPOSES OF THIS  CHAPTER,  DEEMED  TO  BE  FORMED,  FOR  CHARITABLE
PURPOSES.
  (3-B)  "CHARITABLE PURPOSES" OF A CORPORATION MEANS PURPOSES CONTAINED
IN THE CERTIFICATE OF INCORPORATION OF THE CORPORATION THAT ARE CHARITA-
BLE, EDUCATIONAL, RELIGIOUS, SCIENTIFIC, LITERARY, CULTURAL OR  FOR  THE
PREVENTION  OF  CRUELTY  TO CHILDREN OR ANIMALS, AND ANY LAWFUL BUSINESS
PURPOSE TO ACHIEVE THE FOREGOING.
  (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.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15173-04-2

S. 7431                             2

  (6-A)  "ENTIRE  BOARD" MEANS THE TOTAL NUMBER OF DIRECTORS ENTITLED TO
VOTE WHICH THE CORPORATION WOULD HAVE IF THERE WERE NO VACANCIES. IF THE
BY-LAWS OF 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 DIRECTORS WITHIN SUCH RANGE THAT
WERE ELECTED AT THE MOST RECENTLY HELD ELECTION OF DIRECTORS.
  (9-A) "NON-CHARITABLE CORPORATION" MEANS ANY CORPORATION FORMED  UNDER
THIS CHAPTER FOR NON-CHARITABLE PURPOSES.
  (9-B)  "NON-CHARITABLE  PURPOSES"  OF  A  CORPORATION MEANS ANY LAWFUL
NON-BUSINESS PURPOSE, OTHER THAN ANY CHARITABLE PURPOSE  AS  DEFINED  IN
THIS  SECTION,  INCLUDING,  BUT  NOT  LIMITED TO, ANY ONE OR MORE OF THE
FOLLOWING NON-PECUNIARY PURPOSES: CIVIC, PATRIOTIC,  POLITICAL,  SOCIAL,
FRATERNAL,  ATHLETIC, AGRICULTURAL, HORTICULTURAL, ANIMAL HUSBANDRY, AND
FOR A PROFESSIONAL, COMMERCIAL, INDUSTRIAL,  TRADE  OR  SERVICE  ASSOCI-
ATION.
  (19)  AN  "AFFILIATE" OF A CORPORATION MEANS ANY ENTITY CONTROLLED BY,
IN CONTROL OF, OR UNDER COMMON CONTROL WITH SUCH CORPORATION.
  (20) "INDEPENDENT  AUDITOR"  MEANS  ANY  CERTIFIED  PUBLIC  ACCOUNTANT
PERFORMING  THE  AUDIT  OF  THE  FINANCIAL  STATEMENTS  OF A CORPORATION
REQUIRED BY SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B OF  THE
EXECUTIVE LAW.
  (21)  "INDEPENDENT  DIRECTOR"  MEANS  A DIRECTOR WHO IN THE PAST THREE
YEARS: (I) WAS NOT EMPLOYED BY, AND DID NOT  HAVE  A  RELATIVE  WHO  WAS
EMPLOYED  BY,  THE  CORPORATION OR AN AFFILIATE OF THE CORPORATION; (II)
WAS NOT EMPLOYED BY, AND DOES NOT HAVE A RELATIVE WHO WAS  EMPLOYED  BY,
ANY  ENTITY THAT MADE PAYMENTS TO, OR RECEIVED PAYMENTS FROM, THE CORPO-
RATION OR ANY AFFILIATE  OF  THE  CORPORATION  FOR  GOODS,  PROPERTY  OR
SERVICES EXCEEDING TEN THOUSAND DOLLARS; (III) HAS NOT HAD, AND DOES NOT
HAVE A RELATIVE WHO HAS HAD, A MATERIAL FINANCIAL INTEREST IN ANY ENTITY
THAT MADE PAYMENTS TO, OR RECEIVED PAYMENTS FROM, THE CORPORATION OR ANY
AFFILIATE  OF  THE CORPORATION FOR GOODS, PROPERTY OR SERVICES EXCEEDING
TEN THOUSAND DOLLARS; AND (IV) HAS NOT RECEIVED, AND DOES NOT  HAVE  ANY
RELATIVE  WHO  HAS  RECEIVED, ANY OTHER COMPENSATION, PAYMENT OF BENEFIT
HAVING MONETARY VALUE FROM THE  CORPORATION  OR  ANY  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 TWO HUNDRED TWO OF THIS CHAPTER.
  (22) "RELATIVE" OF AN INDIVIDUAL MEANS THE (I) SPOUSE, ANCESTOR, CHIL-
DREN,  GRANDCHILDREN, GREAT GRANDCHILDREN, BROTHER OR SISTER (WHETHER BY
THE WHOLE- OR HALF-BLOOD) OF THE INDIVIDUAL; AND  (II)  THE  SPOUSES  OF
CHILDREN, GRANDCHILDREN, GREAT GRANDCHILDREN, BROTHER OR SISTER (WHETHER
BY THE WHOLE- OR HALF-BLOOD) OF THE INDIVIDUAL.
  (23)  "RELATED  PARTY" MEANS (I) ANY DIRECTOR, OFFICER OR KEY EMPLOYEE
OF THE CORPORATION OR ANY AFFILIATE OF THE CORPORATION; (II)  ANY  RELA-
TIVE  OF ANY DIRECTOR, OFFICER OR KEY EMPLOYEE OF THE CORPORATION OR ANY
AFFILIATE OF THE CORPORATION; OR (III) AN ENTITY IN WHICH ANY INDIVIDUAL
DESCRIBED IN CLAUSES (I) AND (II) OF THIS SUBPARAGRAPH HAS A THIRTY-FIVE
PERCENT OR GREATER OWNERSHIP OR BENEFICIAL INTEREST.
  (24) "RELATED PARTY TRANSACTION" MEANS ANY TRANSACTION,  AGREEMENT  OR
ANY  OTHER ARRANGEMENT IN WHICH A RELATED PARTY HAS A FINANCIAL INTEREST
AND IN WHICH THE CORPORATION OR ANY AFFILIATE OF THE  CORPORATION  IS  A
PARTICIPANT.
  (25)  "KEY  EMPLOYEE"  MEANS  ANY  PERSON WHO IS NOT AN OFFICER OF THE
CORPORATION AND IS IN A POSITION TO EXERCISE SUBSTANTIAL INFLUENCE  OVER
THE   AFFAIRS   OF   THE   CORPORATION,   AS  REFERENCED  IN  26  U.S.C.

S. 7431                             3

S4958(F)(1)(A) AND FURTHER SPECIFIED IN 26 CFR S 53.4958-3(C)  AND  (D),
OR SUCCEEDING PROVISIONS.
  S  2. 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
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]

S. 7431                             4

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] CHARITABLE 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  govern-
mental body or officer.
  S  3. Paragraph (a) of section 104-a of the not-for-profit corporation
law is REPEALED.
  S 4. 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]  TYPOGRAPHICAL  OR
SIMILAR  NON-MATERIAL  or  error  apparent  on the face or defect in the
execution thereof including the deletion of any matter not permitted  to
be  stated  therein.  A certificate, entitled "Certificate of correction
of.......... (correct title of certificate  and  name  of  corporation)"
shall  be signed and delivered to the department of state.  It shall set
forth the name of the  corporation,  the  date  the  certificate  to  be
corrected  was  filed  by  the department of state, the provision in the
certificate as corrected or eliminated and if the execution  was  defec-
tive, the proper execution. The filing of the certificate by the depart-
ment of state shall not alter the effective time of the instrument being
corrected,  which shall remain as its original effective time, and shall
not affect any right  or  liability  accrued  or  incurred  before  such
filing.  A  corporate  name  may  not be changed or corrected under this
section OTHER THAN TO CORRECT ANY TYPOGRAPHICAL OR SIMILAR  NON-MATERIAL
ERROR.
  S  5.  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, is amended to read as follows:
  (a)    The attorney-general may maintain an action or special proceed-
ing:

S. 7431                             5

  (1)  To annul the corporate existence or dissolve a  corporation  that
has  acted  beyond its capacity or power or to restrain it from carrying
on unauthorized activities;
  (2)  To annul the corporate existence or dissolve any corporation that
has not been duly formed;
  (3)    To  restrain any person or persons from acting as a domestic or
foreign corporation within this state without being duly incorporated or
from exercising in this state any corporate rights, privileges or  fran-
chises not granted to them by the law of the state;
  (4)    To  procure a judgment removing a director of a corporation for
cause under section 706 (Removal of directors);
  (5)   To dissolve a corporation under  article  11  (Judicial  dissol-
ution);
  (6)    To  restrain a foreign corporation or to annul its authority to
carry on activities in this state under section 1303 (Violations).
  (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.
  (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 6. 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 7. Section 113 of the not-for-profit corporation law is REPEALED.
  S  8.  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 or creditor of any  such  corporation,
that  it, or its directors, officers or agents, have misappropriated any
of the funds or property of the corporation, or diverted them  from  the
purpose of its incorporation, or that the corporation has acquired prop-
erty  in  excess of the amount which it is authorized by law to hold, or
has engaged in any business other than that stated in its certificate of
incorporation, the court may order that notice of at least  eight  days,
with  a  copy  of  the  petition,  be  served on the corporation and the

S. 7431                             6

persons charged with misconduct, requiring them to show cause at a  time
and place specified, why they should not be required to make and file an
inventory  and  account of the property, effects and liabilities of such
corporation  with  a  detailed  statement of its transactions during the
twelve months next preceding the granting of such order.  On the hearing
of such application, the court may make an order requiring such invento-
ry, account and statement to be filed, and proceed to take and state  an
account  of  the  property  and  liabilities  of the corporation, or may
appoint a referee for that purpose.   When such  account  is  taken  and
stated,  after hearing all the parties to the application, the court may
enter a final order determining the amount of property so  held  by  the
corporation,  its annual income, whether any of the property or funds of
the corporation have been  misappropriated  or  diverted  to  any  other
purpose  than  that  for  which  such  corporation was incorporated, and
whether such corporation has been engaged in any activity not covered by
its certificate of incorporation.  An appeal may be taken from the order
by any party aggrieved to the appellate division of the  supreme  court,
and to the court of appeals, as in a civil action.  No corporation shall
be  required to make and file more than one inventory and account in any
one year, nor to make a second account and inventory, while  proceedings
are pending for the statement of an account under this section.
  S  9.  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
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  ANY  REQUIRED APPROVAL THEREUNDER AND ANNEXES
SUCH APPROVAL TO ITS CERTIFICATE FILED WITH THE DEPARTMENT OF STATE, AND
PROVIDES ANY REQUIRED NOTICE AS SET FORTH IN THE  REQUIREMENTS  OF  THAT
SECTION,  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 10. 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

S. 7431                             7

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
THIRTEEN  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
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 THIRTEEN 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  THIRTEEN 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

S. 7431                             8

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 THIRTEEN 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  THIRTEEN  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 11. Intentionally omitted.
  S  12. Section 204 of the not-for-profit corporation law is amended to
read as follows:
S 204. Limitation on activities.
  Notwithstanding any other provision  of  this  chapter  or  any  other
general  law,  a corporation of any [type or] kind to which this chapter
applies shall conduct no activities for pecuniary  profit  or  financial
gain, whether or not in furtherance of its corporate purposes, except to
the  extent that such activity supports its other lawful activities then
being conducted.
  S 13. 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
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

S. 7431                             9

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  14.  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  15.  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
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 16. 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

S. 7431                            10

authorized to do business in this state, under this chapter or under any
other statute of this state.
  S  17.  Subparagraphs  2  and 4 of paragraph (a) of section 402 of the
not-for-profit corporation law, subparagraph 2 as amended by chapter 847
of the laws of 1970 and subparagraph 4 as amended by chapter 679 of  the
laws of 1985, are amended to read as follows:
  (2)  That  the corporation is a corporation as defined in subparagraph
(a) (5) of section 102 (Definitions)[;], the  purpose  or  purposes  for
which  it is formed, and [the type of] WHETHER IT IS A CHARITABLE corpo-
ration [it shall be] OR A NON-CHARITABLE CORPORATION under  section  201
(Purposes)[;  and in the case of a Type C corporation, the lawful public
or quasi-public objective which each  business  purpose  will  achieve].
ANY  CORPORATION  MAY  ALSO  SET FORTH ANY ACTIVITIES THAT IT INTENDS TO
CARRY OUT IN FURTHERANCE OF SUCH PURPOSE OR PURPOSES; PROVIDED THAT THIS
SUBPARAGRAPH SHALL NOT BE INTERPRETED TO REQUIRE THAT SUCH ACTIVITIES BE
SET FORTH IN THE CERTIFICATE OF INCORPORATION.
  (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 18. 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  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 corpo-
ration.

S. 7431                            11

  (d) Every  CORPORATION  THE  certificate  of  incorporation  OF  WHICH
INCLUDES  AMONG  ITS PURPOSES THE OPERATION OF A SCHOOL, LIBRARY, MUSEUM
OR HISTORICAL SOCIETY SHALL HAVE ENDORSED THEREON 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 19. Paragraph (w) of section 404 of the  not-for-profit  corporation
law is REPEALED.
  S 20. Paragraph (b-1) of section 406 of the not-for-profit corporation
law is REPEALED.
  S  21.  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 22.  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  23.  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.

S. 7431                            12

  [(5)] (4) If appropriate, that the certificate  is  redeemable  and  a
summary  of  the  conditions  for redemption at the option of the corpo-
ration or of the holder.
  [(6)] (5) If appropriate, that the certificate is transferable, either
at will or subject to specified restrictions.
  S  24.   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 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 THERE-
OF,  CONSTITUTE  ALL,  OR SUBSTANTIALLY ALL, OF THE ASSETS OF THE CORPO-
RATION, 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 OR  LEASE  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  25.  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.

S. 7431                            13

  (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] EITHER (A) APPROVAL of the supreme court in the
judicial  district  or  of  the  county court of the county in which the
corporation has its office  or  principal  place  of  carrying  out  the
[puropses]  PURPOSES  for which it was formed IN ACCORDANCE WITH SECTION
FIVE HUNDRED ELEVEN (PETITION FOR COURT APPROVAL) OF  THIS  ARTICLE,  OR
(B)  APPROVAL  OF  THE ATTORNEY GENERAL IF AUTHORIZED UNDER SECTION FIVE
HUNDRED ELEVEN-A (PETITION FOR ATTORNEY GENERAL APPROVAL) OF THIS  ARTI-
CLE.
  S  26.  The  section  heading  and paragraph (a) of section 511 of the
not-for-profit corporation law,  subparagraph  6  of  paragraph  (a)  as
amended  by  chapter  961  of  the  laws of 1972, are amended to read as
follows:
Petition for [leave of] court APPROVAL.
  (a) [A corporation required by law to]  TO  obtain  [leave  of]  court
APPROVAL  to  sell,  lease,  exchange  or  otherwise  dispose  of all or
substantially all its assets, A CORPORATION  shall  present  a  verified
petition  to  the  supreme court of the judicial district, or the county
court of the county, wherein the corporation has its office or principal
place of carrying out the purposes for which it was formed. The petition
shall set forth:
  1. The name of the corporation, the law  under  or  by  which  it  was
incorporated.
  2. The names of its directors and principal officers, and their places
of residence.
  3. The activities of the corporation.
  4. A description, with reasonable certainty, of the assets to be sold,
leased,  exchanged,  or otherwise disposed of, or a statement that it is
proposed to sell,  lease,  exchange  or  otherwise  dispose  of  all  or
substantially  all the corporate assets more fully described in a sched-
ule attached to the petition; and a statement of the fair value of  such
assets,  and  the  amount of the corporation's debts and liabilities and
how secured.
  5. The consideration to be received by the corporation and the  dispo-
sition  proposed  to be made thereof, together with a statement that the
dissolution of the corporation is or is not contemplated thereafter.
  6. That the consideration and the terms of the sale,  lease,  exchange
or  other  disposition  of  the  assets  of the corporation are fair and
reasonable to the corporation, and that the purposes of the corporation,
or the interests of its members will be promoted thereby, and a  concise
statement of the reasons therefor.
  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. 7431                            14

  S 27. 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 FIVE HUNDRED
ELEVEN (PETITION FOR COURT APPROVAL) OF THIS  ARTICLE  TO  SELL,  LEASE,
EXCHANGE OR OTHERWISE 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  PARA-
GRAPH (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
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  28.  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. 7431                            15

  S  29.    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  pay  compensation  in a reasonable amount to
members, directors, or officers for services rendered  AS  PERMITTED  BY
THIS  CHAPTER, INCLUDING WITHOUT LIMITATION, IN ACCORDANCE WITH SECTIONS
SEVEN HUNDRED TWELVE-A AND SEVEN HUNDRED FIFTEEN OF  THIS  CHAPTER,  and
may  make  distributions of cash or property to members upon dissolution
or final liquidation as permitted by this chapter.
  (c) A corporation may confer benefits upon members or  non-members  in
conformity  with  its  purposes  AS PERMITTED BY THIS CHAPTER, INCLUDING
WITHOUT LIMITATION, SECTIONS SEVEN HUNDRED TWELVE-A  AND  SEVEN  HUNDRED
FIFTEEN  OF  THIS  CHAPTER,  may  redeem  its  capital  certificates  or
subvention certificates, and may make other  distributions  of  cash  or
property  to its 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 30. Section 520 of the not-for-profit corporation law, as amended by
chapter 58 of the laws of 1981, is amended to read  as follows:
S 520. Reports of corporation.
  Each domestic corporation, and each foreign corporation authorized  to
conduct  activities  in  this  state,  shall from time to time file such
reports on its activities as may be required by the laws of this  state.
All  registration  and reporting requirements pursuant to [EPTL] ARTICLE
SEVEN-A OF THE EXECUTIVE LAW, AND SECTION 8-1.4 OF THE  ESTATES,  POWERS
AND TRUSTS LAW, or related successor provisions, are, without limitation
on  the foregoing, expressly included as reports required by the laws of
this state to be filed within the meaning of this section. Willful fail-
ure of a corporation to file a report as required by law  shall  consti-
tute  a  breach  of  the  directors'  duty  to the corporation and shall
subject the corporation, at the suit  of  the  attorney-general,  to  an
action  or special proceeding for dissolution under article 11 (Judicial
dissolution) in the case of a domestic  corporation,  or  under  S  1303
(Violations) in the case of a foreign corporation.
  S  31.  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  32.  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

S. 7431                            16

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
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 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 princi-
pal  office of the corporation is located, once a week for three succes-
sive 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 MEETING.
  S 33.  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  34.  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

S. 7431                            17

member or the member's authorized officer, director, employee  or  agent
signing  such  writing  or causing his or her signature to be affixed to
such writing by any reasonable means including, but not limited  to,  by
facsimile signature.
  (2)  A  member  may authorize another person or persons to act for the
member as proxy by [transmitting or authorizing the  transmission  of  a
telegram,  cablegram  or other means of] PROVIDING SUCH AUTHORIZATION BY
electronic [transmission] MAIL to the person who will be the  holder  of
the  proxy or to a proxy solicitation firm, proxy support service organ-
ization or like agent duly authorized by the person  [who  will  be  the
holder  of  the  proxy  to receive such transmission], provided that any
such [telegram, cablegram or other means of] AUTHORIZATION BY electronic
[transmission] MAIL shall either set forth [or be submitted with] infor-
mation from which it can be reasonably determined  that  the  [telegram,
cablegram  or other] AUTHORIZATION BY electronic [transmission] MAIL was
authorized by the member. If it  is  determined  that  such  [telegrams,
cablegrams  or  other]  AUTHORIZATION  BY electronic [transmissions are]
MAIL IS valid, the inspectors or, if there are no inspectors, such other
persons making that determination shall specify the nature of the infor-
mation upon which they relied.
  (c) Any copy, facsimile telecommunication or  other  reliable  reprod-
uction of the writing or [transmission] ELECTRONIC MAIL created pursuant
to  paragraph  (b) of this section may be substituted or used in lieu of
the original writing or transmission for any and all purposes for  which
the  original  writing or transmission could be used, provided that such
copy, facsimile telecommunication  or  other  reproduction  shall  be  a
complete reproduction of the entire original writing or transmission.
  S  35.  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  36.  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

S. 7431                            18

the  holders  of,  at least five percent of any class of the outstanding
capital certificates, the corporation shall [give or  mail]  PROVIDE  to
such  member  an annual balance sheet and profit and loss statement or a
financial  statement  performing  a  similar  function for the preceding
fiscal year, and, if any interim balance sheet or  profit  and  loss  or
similar  financial  statement  has  been  distributed  to its members or
otherwise made available to the public, the  most  recent  such  interim
balance  sheet  or  profit  and loss or similar financial statement. The
corporation shall be allowed a reasonable time to  prepare  such  annual
balance sheet and profit and loss or similar financial statement.
  S 37. Intentionally omitted.
  S  38.  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. If not otherwise fixed under this paragraph, 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  39.  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 40. 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

S. 7431                            19

before or after the meeting, or who attends the meeting without protest-
ing, prior thereto or at its commencement, the lack of  notice  to  him.
SUCH  WAIVER  OF  NOTICE  MAY  BE WRITTEN OR ELECTRONIC. IF WRITTEN, THE
WAIVER  MUST  BE EXECUTED BY THE DIRECTOR SIGNING SUCH WAIVER OR CAUSING
HIS OR HER SIGNATURE TO BE AFFIXED TO  SUCH  WAIVER  BY  ANY  REASONABLE
MEANS  INCLUDING  BUT NOT LIMITED TO FACSIMILE SIGNATURE. IF ELECTRONIC,
THE TRANSMISSION OF THE CONSENT MUST BE SENT BY ELECTRONIC MAIL AND  SET
FORTH, OR BE SUBMITTED WITH, INFORMATION FROM WHICH IT CAN REASONABLY BE
DETERMINED THAT THE TRANSMISSION WAS AUTHORIZED BY THE DIRECTOR.
  S 41. 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.
  S  42.  Paragraph (c) of section 712 of the not-for-profit corporation
law is REPEALED.
  S 43. The not-for-profit corporation law is amended by adding two  new
sections 712-a and 712-b to read as follows:
S 712-A. AUDIT OVERSIGHT.
  (A) EVERY CORPORATION REQUIRED TO FILE AN INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANT'S AUDIT REPORT WITH THE ATTORNEY GENERAL PURSUANT TO SUBDIVI-
SION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B OF THE EXECUTIVE LAW SHALL
DESIGNATE  AN AUDIT COMMITTEE OF THE BOARD, CONSISTING OF AT LEAST THREE
INDEPENDENT DIRECTORS, FOR THE PURPOSE OF OVERSEEING THE ACCOUNTING  AND
FINANCIAL  REPORTING  PROCESSES  OF  THE CORPORATION AND THE INDEPENDENT
CERTIFIED PUBLIC  ACCOUNTANT'S  AUDIT  OF  THE  CORPORATION'S  FINANCIAL
STATEMENTS.  THE  CORPORATION'S  ENTIRE  BOARD  MAY CONSTITUTE THE AUDIT
COMMITTEE, PROVIDED THAT ONLY INDEPENDENT DIRECTORS MAY  BE  PRESENT  AT
AND  PARTICIPATE IN DELIBERATIONS AND VOTING RELATING TO AUDIT COMMITTEE
MATTERS. IF A CORPORATION CONTROLS A GROUP OF  CORPORATIONS,  THE  AUDIT

S. 7431                            20

COMMITTEE  OF  THE CONTROLLING CORPORATION MAY BE DEEMED TO BE THE AUDIT
COMMITTEE FOR ONE OR MORE OF ITS CONTROLLED CORPORATIONS.
  (B) THE AUDIT COMMITTEE SHALL, AT A MINIMUM:
  (1)  RETAIN  AND  EVALUATE  THE  INDEPENDENT  AUDITOR WHO SHALL REPORT
DIRECTLY TO THE AUDIT COMMITTEE;
  (2) REVIEW WITH THE INDEPENDENT AUDITOR THE SCOPE AND PLANNING OF  THE
AUDIT;
  (3) REVIEW AND DISCUSS WITH THE INDEPENDENT AUDITOR, AT A MINIMUM: (A)
THE  RESULTS  OF ANY AUDIT, INCLUDING BUT NOT LIMITED TO: THE MANAGEMENT
LETTER TO THE BOARD AND 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 AND PERFORMANCE OF THE CORPORATION'S ACCOUNTING FUNCTION;
  (4) CONSIDER AT LEAST ANNUALLY THE PERFORMANCE AND INDEPENDENCE OF THE
INDEPENDENT AUDITOR;
  (5)  OVERSEE  ADOPTION,  IMPLEMENTATION  OF,  AND  COMPLIANCE WITH ANY
CONFLICT OF INTEREST POLICY  OR  WHISTLEBLOWER  POLICY  ADOPTED  BY  THE
CORPORATION  PURSUANT  TO  SECTIONS  SEVEN  HUNDRED  FIFTEEN-A  OR SEVEN
HUNDRED FIFTEEN-B OF THIS CHAPTER, IF THIS  FUNCTION  IS  NOT  OTHERWISE
PERFORMED  BY  ANOTHER  COMMITTEE OF THE BOARD COMPRISED SOLELY OF INDE-
PENDENT DIRECTORS; AND
  (6) REPORT ITS ACTIVITIES TO THE BOARD AT LEAST ANNUALLY.
  (C) THE AUDIT COMMITTEE SHALL ADOPT A CHARTER  THAT  SHALL  STATE  ITS
AUTHORITY  AND  RESPONSIBILITIES,  INCLUDING  THOSE  PRESCRIBED  BY THIS
SECTION, AND THAT SHALL STATE THE SIZE, COMPOSITION AND RULES OR  PROCE-
DURES OF THE AUDIT COMMITTEE.
S 712-B. EXECUTIVE COMPENSATION OVERSIGHT.
  (A)  FOR PURPOSES OF THIS SECTION, "TOTAL COMPENSATION" MEANS: (1) ANY
COMPENSATION, WHETHER PAID OR ACCRUED, BY OR ON  BEHALF  OF  THE  CORPO-
RATION OF ANY AFFILIATE OF THE CORPORATION, INCLUDING BUT NOT LIMITED TO
SALARY,  BONUS,  AND  DEFERRED  COMPENSATION; AND (2) ANY BENEFIT HAVING
MONETARY VALUE PROVIDED BY THE CORPORATION OR ON BEHALF  OF  THE  CORPO-
RATION 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.
  (B)  THE  TOTAL  COMPENSATION PAID BY A CORPORATION TO ANY EMPLOYEE OF
THE CORPORATION SHALL BE FAIR, REASONABLE AND COMMENSURATE WITH SERVICES
THE EMPLOYEE PROVIDES TO THE CORPORATION.
  (C) NO EMPLOYEE OR OTHER INDIVIDUAL WHO MAY BENEFIT FROM  COMPENSATION
OR  BENEFITS  PROVIDED BY THE CORPORATION MAY BE PRESENT AT OR OTHERWISE
PARTICIPATE IN ANY BOARD OR COMMITTEE DELIBERATION  OR  VOTE  CONCERNING
SUCH COMPENSATION OR BENEFITS.
  (D)  EVERY  CHARITABLE  CORPORATION  THAT IS REQUIRED TO BE REGISTERED
WITH THE ATTORNEY GENERAL UNDER ARTICLE SEVEN-A OF THE EXECUTIVE LAW AND
THAT IN THE PRIOR FISCAL YEAR HAD  ANNUAL  REVENUES  IN  EXCESS  OF  ONE
MILLION DOLLARS SHALL DESIGNATE A COMPENSATION COMMITTEE OF THE BOARD TO
OVERSEE  EXECUTIVE  COMPENSATION  PROGRAMS  AND RELATED PRACTICES OF THE
CORPORATION.
  (1) THE COMPENSATION COMMITTEE SHALL BE COMPRISED OF  AT  LEAST  THREE
INDEPENDENT DIRECTORS.
  (2)  THE  CORPORATION'S  BOARD MAY PERFORM THE FUNCTION OF THE COMPEN-
SATION COMMITTEE UNLESS THE BYLAWS PROVIDE OTHERWISE, PROVIDED THAT ONLY
INDEPENDENT DIRECTORS MAY BE PRESENT AT AND PARTICIPATE IN ANY  DELIBER-
ATIONS OR VOTING RELATING TO COMPENSATION COMMITTEE MATTERS.

S. 7431                            21

  (3)  IF  A  CORPORATION CONTROLS ONE OR MORE CORPORATIONS, THE COMPEN-
SATION COMMITTEE OF THE CONTROLLING CORPORATION MAY BE DEEMED TO BE  THE
COMPENSATION COMMITTEE FOR ITS CONTROLLED CORPORATIONS.
  (4) THE COMPENSATION COMMITTEE SHALL:
  (A)  REVIEW  THE TOTAL COMPENSATION PAID TO THE CORPORATION'S OFFICERS
AND ITS FIVE HIGHEST-COMPENSATED KEY EMPLOYEES.
  (B) AFFIRMATIVELY DETERMINE THAT THE TOTAL COMPENSATION  PAID  TO  ANY
SUCH  INDIVIDUAL  IS  FAIR,  REASONABLE  AND  COMMENSURATE WITH SERVICES
PROVIDED TO THE CORPORATION. IN MAKING THIS DETERMINATION,  THE  COMPEN-
SATION  COMMITTEE SHALL AT A MINIMUM CONSIDER THE FOLLOWING FACTORS: (I)
THE TOTAL COMPENSATION PROVIDED TO THE INDIVIDUAL; (II) RELEVANT  BENCH-
MARK DATA ON THE TOTAL COMPENSATION PAID TO INDIVIDUALS SERVING IN SIMI-
LAR POSITIONS AT CORPORATIONS OF SIMILAR SIZE, TYPE, PURPOSE, AND SCOPE;
(III)  THE  INDIVIDUAL'S  QUALIFICATIONS  AND  PERFORMANCE; (IV) COMPEN-
SATION, PAYMENTS OR ANY OTHER BENEFITS PROVIDED TO THE  INDIVIDUAL  FROM
ANY  AFFILIATE  OF THE CORPORATION; AND (V) THE OVERALL FINANCIAL CONDI-
TION OF THE CORPORATION.
  (C) MAKE AND KEEP A  CONTEMPORANEOUS  WRITTEN  RECORD  DESCRIBING  THE
BASIS  FOR  ITS DETERMINATION, INCLUDING ITS ANALYSIS OF THE FACTORS SET
FORTH IN THIS PARAGRAPH AND HOW ANY RELEVANT DATA WAS OBTAINED AND USED.
  (D) APPROVE BY NOT LESS THAN A MAJORITY VOTE  THE  TOTAL  COMPENSATION
PAID TO EACH SUCH INDIVIDUAL.
  (5) IF, PURSUANT TO SUBPARAGRAPH TWO OF THIS PARAGRAPH, THE BOARD DOES
NOT  PERFORM  THE  FUNCTION OF THE COMPENSATION COMMITTEE, THEN: (I) THE
COMPENSATION COMMITTEE SHALL RECOMMEND TO THE BOARD FOR ITS APPROVAL THE
TOTAL COMPENSATION OF EACH INDIVIDUAL THAT THE  COMMITTEE  HAS  AFFIRMA-
TIVELY  DETERMINED  IS  FAIR, REASONABLE, AND COMMENSURATE WITH SERVICES
PROVIDED TO THE CORPORATION, AND IN CONNECTION THEREWITH, PROVIDE TO THE
BOARD THE WRITTEN RECORD OF ITS DETERMINATION CREATED PURSUANT TO CLAUSE
(C) OF THIS SUBPARAGRAPH; (II) UPON REVIEW OF THE RECOMMENDATIONS OF THE
COMPENSATION COMMITTEE, THE BOARD SHALL  APPROVE  BY  NOT  LESS  THAN  A
MAJORITY  VOTE  OF  THE  INDEPENDENT DIRECTORS THE TOTAL COMPENSATION OF
EACH SUCH INDIVIDUAL, WITH ONLY INDEPENDENT DIRECTORS  PARTICIPATING  IN
ANY  SUCH  VOTE AND ANY DISCUSSION RELATING THERETO; AND (III) THE BOARD
SHALL KEEP A CONTEMPORANEOUS WRITTEN RECORD OF THE BASIS OF ITS DETERMI-
NATION, INCLUDING AREAS OF AGREEMENT OR DISAGREEMENT WITH THE  RECOMMEN-
DATIONS OF THE COMPENSATION COMMITTEE.
  (6) THE COMPENSATION COMMITTEE MAY RETAIN A COMPENSATION CONSULTANT TO
ASSIST  IN  THE  PERFORMANCE  OF  ITS RESPONSIBILITIES. THE COMPENSATION
COMMITTEE SHALL BE DIRECTLY RESPONSIBLE  FOR  THE  APPOINTMENT,  COMPEN-
SATION  AND  OVERSIGHT  OF  THE  WORK  OF  SUCH CONSULTANT, AND ANY SUCH
CONSULTANT SHALL REPORT DIRECTLY TO THE  COMPENSATION  COMMITTEE.    THE
COMPENSATION  COMMITTEE  SHALL,  AMONG ITS RESPONSIBILITIES, APPROVE THE
COMPENSATION PEER GROUP THAT THE COMPENSATION CONSULTANT  RECOMMENDS  BE
USED TO DEVELOP BENCHMARK DATA.
  (I) PRIOR TO RETAINING ANY SUCH CONSULTANT, THE COMPENSATION COMMITTEE
SHALL  DETERMINE  THAT  THE  CONSULTANT  IS INDEPENDENT AND QUALIFIED TO
RENDER ADVICE CONCERNING COMPENSATION; PROVIDED THAT NO  CONSULTANT  MAY
BE  DETERMINED  INDEPENDENT  IF SUCH CONSULTANT OR ANY FIRM THAT EMPLOYS
SUCH CONSULTANT HAS (A) RECEIVED DIRECTLY OR INDIRECTLY ANY PAYMENT, FEE
OR OTHER COMPENSATION FROM THE  CORPORATION  OR  ANY  AFFILIATE  OF  THE
CORPORATION  WITHIN  THE  PRECEDING  TWO  YEARS,  OTHER  THAN REASONABLE
AMOUNTS PAID FOR COMPENSATION CONSULTING SERVICES, OR (B)  ANY  BUSINESS
OR  PERSONAL  RELATIONSHIP WITH THE CORPORATION OR ANY AFFILIATE, OR ANY
OF THEIR OFFICERS, DIRECTORS OR EMPLOYEES, THAT MAY INTERFERE  WITH  THE
ABILITY OF THE CONSULTANT TO PROVIDE OBJECTIVE ADVICE TO THE COMMITTEE.

S. 7431                            22

  (II)  NOTHING  IN THIS PARAGRAPH SHALL BE CONSTRUED TO (A) REQUIRE THE
COMPENSATION COMMITTEE TO IMPLEMENT OR ACT CONSISTENTLY WITH ANY  RECOM-
MENDATIONS  PROVIDED  BY  THE COMPENSATION CONSULTANT; OR (B) AFFECT THE
ABILITY OR OBLIGATION OF MEMBERS OF THE COMPENSATION COMMITTEE TO  EXER-
CISE  THEIR  OWN  JUDGMENT  IN FULFILLMENT OF THEIR DUTIES TO THE CORPO-
RATION, INCLUDING THOSE  DUTIES  PRESCRIBED  BY  SECTION  SEVEN  HUNDRED
SEVENTEEN OF THIS CHAPTER.
  (7) THE COMPENSATION COMMITTEE SHALL ADOPT A CHARTER SETTING FORTH ITS
RESPONSIBILITIES,  INCLUDING  AS  PRESCRIBED BY THIS SECTION, AS WELL AS
REQUIREMENTS CONCERNING THE SIZE, COMPOSITION  AND  FUNCTIONING  OF  THE
COMPENSATION COMMITTEE.
  S  44.  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.
  S  45.   Section 715 of the not-for-profit corporation law, as amended
by chapter 847 of the laws of 1970 and paragraph (f) as amended by chap-
ter 1057 of the laws of 1971, is amended to read as follows:
S 715. [Interested directors and officers] RELATED PARTY TRANSACTIONS.
  (a) [No contract or other transaction between a corporation and one or
more of its directors or officers, or  between  a  corporation  and  any
other  corporation,  firm,  association  or other entity in which one or
more of its directors or officers are directors or officers, or  have  a
substantial  financial  interest,  shall  be either void or voidable for
this reason alone or by reason alone that such director or directors  or
officer  or  officers  are  present at the meeting of the board, or of a
committee thereof, which authorizes such  contract  or  transaction,  or
that his or their votes are counted for such purpose] (1) NO CORPORATION
SHALL ENTER INTO A RELATED PARTY TRANSACTION, UNLESS:
  [(1)  If  the]  (A) THE material facts as to [such director's or offi-
cer's interest in such contract  or  transaction  and  as]  THE  RELATED
PARTY'S  INTEREST IN, AND RELATIONSHIP to [any such common directorship,
officership or financial interest], THE  TRANSACTION  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]  ANY  members  OF THE CORPORATION entitled to vote [thereon, if
any, and] TO APPROVE such [contract or] transaction  [is  authorized  by
vote of such members];
  (B)  THE  BOARD:  (I)  HAS  CONSIDERED ALTERNATIVE TRANSACTIONS TO THE
EXTENT AVAILABLE AND UPON  REASONABLE  DILIGENCE  DETERMINED  THAT  SUCH
ALTERNATIVE  TRANSACTIONS  WOULD  NOT BE MORE ADVANTAGEOUS TO THE CORPO-
RATION; (II) DETERMINES BY A TWO-THIRDS  VOTE  OF  THE  BOARD  THAT  THE
RELATED  PARTY TRANSACTION IS FAIR, REASONABLE AND IN THE BEST INTERESTS

S. 7431                            23

OF THE CORPORATION AND APPROVES SUCH TRANSACTION, AND THE RELATED  PARTY
WITH  AN  INTEREST  IN  THE  TRANSACTION  IS NOT PRESENT AT AND DOES NOT
OTHERWISE PARTICIPATE IN ANY DELIBERATION OR  VOTING  RELATING  THERETO;
AND  (III)  CONTEMPORANEOUSLY  DOCUMENTS  IN  WRITING  THE BASIS FOR ITS
DETERMINATION AND APPROVAL OF THE TRANSACTION.  THIS SUBPARAGRAPH  SHALL
NOT  APPLY  TO ANY COMPENSATION REVIEWED AND APPROVED IN ACCORDANCE WITH
PARAGRAPH (D) OF SECTION SEVEN HUNDRED TWELVE-A OF THIS ARTICLE.
  [(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)]  (2)  The  certificate  of  incorporation, BYLAWS OR CONFLICT OF
INTEREST POLICY OF THE CORPORATION may contain  additional  restrictions
on [contracts or] RELATED PARTY transactions [between a corporation] and
[its  directors  or officers or other persons and may] ADDITIONAL PROCE-
DURES NECESSARY FOR THE REVIEW OR  APPROVAL  OF  SUCH  TRANSACTIONS,  OR
provide  that  [contracts  or]  ANY  transactions  in  violation of such
restrictions shall be void or voidable.
  (B) AN OFFICER, DIRECTOR OR KEY EMPLOYEE WHO  HAS  AN  INTEREST  IN  A
RELATED  PARTY  TRANSACTION SHALL, PRIOR TO THE BOARD'S CONSIDERATION OF
THE PROPOSED TRANSACTION, DISCLOSE IN GOOD FAITH TO THE CORPORATION  THE
MATERIAL  FACTS  AS  TO SUCH PERSON'S INTEREST  IN, AND RELATIONSHIP TO,
THE TRANSACTION. THE BOARD SHALL ADOPT AND IMPLEMENT PROCEDURES FOR  THE
TIMELY DISCLOSURE OF SUCH FACTS TO THE BOARD.
  (C)  THE  ATTORNEY  GENERAL  MAY  BRING  AN  ACTION TO ENJOIN, VOID OR
RESCIND ANY RELATED PARTY TRANSACTION OR A PROPOSED RELATED PARTY TRANS-
ACTION THAT VIOLATES ANY LAW OR IS OTHERWISE NOT FAIR, REASONABLE, OR IN
THE BEST INTERESTS OF THE CORPORATION, OR TO SEEK OTHER RELIEF,  INCLUD-
ING BUT NOT LIMITED TO DAMAGES, RESTITUTION, THE REMOVAL OF DIRECTORS OR
OFFICERS, OR SEEK TO REQUIRE ANY PERSON OR ENTITY TO:
  (1)  ACCOUNT  FOR ANY PROFITS MADE FROM SUCH TRANSACTION, AND PAY THEM
TO THE CORPORATION;
  (2) PAY THE CORPORATION THE VALUE OF THE USE OF ANY OF ITS PROPERTY OR
OTHER ASSETS USED IN SUCH TRANSACTION;
  (3) RETURN OR REPLACE ANY PROPERTY OR OTHER ASSETS LOST TO THE  CORPO-
RATION  AS  A  RESULT  OF  SUCH TRANSACTION, TOGETHER WITH ANY INCOME OR
APPRECIATION LOST TO THE CORPORATION BY REASON OF SUCH  TRANSACTION,  OR
ACCOUNT  FOR ANY PROCEEDS OF SALE OF SUCH PROPERTY, AND PAY THE PROCEEDS
TO THE CORPORATION TOGETHER WITH INTEREST AT THE LEGAL RATE; AND
  (4) PAY, IN THE CASE OF WILLFUL CONDUCT, AN AMOUNT UP  TO  DOUBLE  THE
AMOUNT OF ANY BENEFIT IMPROPERLY OBTAINED.

S. 7431                            24

  (D) 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.
  [(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)  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
entire  board  unless  a  higher proportion is set by the certificate of
incorporation or by-laws.]
  S 46. 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, THAT SUCH
DIRECTOR SHALL COMPLETE, SIGN AND SUBMIT TO THE SECRETARY OF THE  CORPO-
RATION 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 WITH WHICH THE CORPORATION HAS, OR
MIGHT BE EXPECTED TO HAVE, A RELATIONSHIP OR A TRANSACTION IN WHICH  THE
DIRECTOR  MIGHT  HAVE  A  CONFLICTING INTEREST. THE POLICY SHALL REQUIRE
THAT EACH DIRECTOR  ANNUALLY  RESUBMIT  SUCH  WRITTEN  STATEMENT.    THE
SECRETARY   OF  THE  CORPORATION  SHALL  PROVIDE A COPY OF ALL COMPLETED
STATEMENTS TO THE CHAIR OF THE AUDIT COMMITTEE OR, IF THERE IS NO  AUDIT
COMMITTEE, TO THE CHAIR OF THE BOARD.
  (D) EVERY CORPORATION REGISTERED OR REQUIRED TO BE REGISTERED PURSUANT
TO  SECTION  ONE  HUNDRED SEVENTY-TWO OF THE EXECUTIVE LAW OR SECTION 8-
1.4 OF THE ESTATES, POWERS AND TRUSTS LAW SHALL TRANSMIT A COPY  OF  ITS
CONFLICT  OF  INTEREST  POLICY  TO  THE ATTORNEY GENERAL IN THE FORM AND
MANNER SPECIFIED BY THE ATTORNEY GENERAL, AND SHALL WITHIN  THIRTY  DAYS
OF  ANY  MATERIAL  CHANGE OF THESE POLICIES PROVIDE THE ATTORNEY GENERAL
WITH THE CHANGED POLICIES.

S. 7431                            25

  (E) NOTHING IN THIS SECTION SHALL BE INTERPRETED TO REQUIRE  A  CORPO-
RATION  TO  ADOPT ANY SPECIFIC CONFLICT OF INTEREST POLICY NOT OTHERWISE
REQUIRED BY LAW, 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 FIVE 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) PROCEDURES FOR HANDLING AND INVESTIGATING VIOLATIONS OR  SUSPECTED
VIOLATIONS OF LAWS OR CORPORATE POLICIES;
  (3) A REQUIREMENT THAT AN EMPLOYEE OF THE CORPORATION BE DESIGNATED TO
ADMINISTER,  IMPLEMENT AND OVERSEE COMPLIANCE OF THE WHISTLEBLOWER POLI-
CY, AND TO REPORT TO THE AUDIT COMMITTEE OR OTHER COMMITTEE OF INDEPEND-
ENT DIRECTORS OR, IF THERE ARE NO SUCH COMMITTEES, TO THE BOARD;
  (4) A REQUIREMENT THAT ALL DOCUMENTS CONCERNING  INFORMATION  REPORTED
UNDER THE WHISTLEBLOWER POLICY AND ANY INVESTIGATION RELATING THERETO BE
RETAINED BY THE CORPORATION FOR A MINIMUM PERIOD OF SIX YEARS; AND
  (5)  A  REQUIREMENT  THAT  A  COPY OF THE POLICY BE DISTRIBUTED TO ALL
DIRECTORS, OFFICERS, EMPLOYEES AND VOLUNTEERS, WITH INSTRUCTIONS ON  HOW
TO COMPLY WITH THE PROCEDURES SET FORTH IN THE POLICY.
  (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 47. 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 48. 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,

S. 7431                            26

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 49. Intentionally omitted.
  S 50. Intentionally omitted.
  S  51.  The  section  heading  and paragraph (a) of section 720 of the
not-for-profit corporation law, the section heading as amended by  chap-
ter 1058 of the laws of 1971, are amended to read as follows:
Actions  [on  behalf of the corporation] AGAINST DIRECTORS, OFFICERS AND
         KEY EMPLOYEES.
  (a) An action may be brought against one or more directors [or], offi-
cers, OR KEY EMPLOYEES of a corporation to procure a  judgment  for  the
following relief:
  (1) To compel the defendant to account for his official conduct in the
following cases:
  (A)  The  neglect of, or failure to perform, or other violation of his
duties in the management and disposition of corporate  assets  committed
to his charge.
  (B)  The  acquisition by himself, transfer to others, loss or waste of
corporate assets due to any neglect of, or failure to perform, or  other
violation of his duties.
  (2)  To  set  aside  an unlawful conveyance, assignment or transfer of
corporate assets, where the transferee knew of its unlawfulness.
  (3) To enjoin a proposed unlawful conveyance, assignment  or  transfer
of  corporate assets, where there are reasonable grounds for belief that
it will be made.
  S 52. 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-

S. 7431                            27

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
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 53. 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  53-a.  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

S. 7431                            28

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  54. 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

S. 7431                            29

persons as may  be  interested,  including  the  attorney  general,  any
governmental  body or officer and any other person or body whose consent
or approval is required by section 909 (Consent to filing), in such form
and  manner  as the court may prescribe. If no votes against adoption of
the resolution approving the plan of merger or consolidation  were  cast
at  the  meeting  at which the resolution was adopted by any constituent
corporation the court may dispense with  notice  to  anyone  except  the
attorney-general,  any governmental body or officer and any other person
or body whose consent or approval is required by section 909 (Consent to
filing). Any person interested may appear and show cause why the  appli-
cation should not be granted.
  (c)  If  the  court  shall  find  that any of the assets of any of the
constituent corporations are held for a purpose specified as Type  B  in
paragraph  (b)  of  section 201 or are legally required to be used for a
particular purpose, but not upon a condition requiring return,  transfer
or  conveyance  by reason of the merger or consolidation, the court may,
in its discretion, direct that such assets be transferred or conveyed to
the surviving or consolidated corporation subject  to  such  purpose  or
use,  or that such assets be transferred or conveyed to the surviving or
consolidated corporation or to one or more  other  domestic  or  foreign
corporations  or  organizations  engaged in substantially similar activ-
ities, upon an express trust the terms of which shall be approved by the
court.
  (d) If the court shall  find  that  the  interests  of  non-consenting
members are or may be substantially prejudiced by the proposed merger or
consolidation, the court may disapprove the plan or may direct a modifi-
cation  thereof. In the event of a modification, if the court shall find
that the interests of any members may be substantially prejudiced by the
proposed merger or consolidation as modified,  the  court  shall  direct
that  the  modified  plan  be  submitted  to  vote of the members of the
constituent corporations, or if the court shall find that there  is  not
such  substantial  prejudice, it shall approve the agreement as so modi-
fied without further approval by the members. If the court, upon direct-
ing a modification of the plan of merger or consolidation, shall  direct
that  a  further  approval  be  obtained from members of the constituent
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 55. 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-

S. 7431                            30

ER  OR CONSOLIDATION OF DOMESTIC AND FOREIGN CORPORATIONS) OF THIS ARTI-
CLE FOR EACH CONSTITUENT CORPORATION, (3) THE OBJECTS  AND  PURPOSES  OF
EACH SUCH CORPORATION TO BE PROMOTED BY THE MERGER OR CONSOLIDATION, (4)
A  STATEMENT OF ALL PROPERTY, AND THE MANNER IN WHICH IT IS HELD, AND OF
ALL LIABILITIES AND OF THE AMOUNT AND SOURCES OF THE  ANNUAL  INCOME  OF
EACH  SUCH  CORPORATION,  (5)  WHETHER ANY VOTES AGAINST ADOPTION OF THE
RESOLUTION APPROVING THE PLAN OF MERGER OR CONSOLIDATION  WERE  CAST  AT
THE  MEETING  AT  WHICH  THE  RESOLUTION WAS ADOPTED BY EACH CONSTITUENT
CORPORATION, AND (6) FACTS SHOWING THAT THE CONSOLIDATION IS  AUTHORIZED
BY  THE  LAWS  OF  THE JURISDICTIONS UNDER WHICH EACH OF THE CONSTITUENT
CORPORATIONS IS INCORPORATED.
  (B) UPON THE FILING OF THE APPLICATION THE COURT SHALL FIX A TIME  FOR
HEARING  THEREOF  AND  SHALL DIRECT THAT NOTICE THEREOF BE GIVEN TO SUCH
PERSONS AS MAY  BE  INTERESTED,  INCLUDING  THE  ATTORNEY  GENERAL,  ANY
GOVERNMENTAL  BODY OR OFFICER AND ANY OTHER PERSON OR BODY WHOSE CONSENT
OR APPROVAL IS REQUIRED BY SECTION 909 (CONSENT TO FILING) OF THIS ARTI-
CLE, IN SUCH FORM AND MANNER AS THE COURT MAY  PRESCRIBE.  IF  NO  VOTES
AGAINST  ADOPTION  OF  THE  RESOLUTION  APPROVING  THE PLAN OF MERGER OR
CONSOLIDATION WERE CAST AT THE  MEETING  AT  WHICH  THE  RESOLUTION  WAS
ADOPTED  BY  ANY  CONSTITUENT  CORPORATION  THE  COURT MAY DISPENSE WITH
NOTICE TO ANYONE EXCEPT THE ATTORNEY-GENERAL, ANY GOVERNMENTAL  BODY  OR
OFFICER  AND  ANY  OTHER  PERSON  OR  BODY  WHOSE CONSENT OR APPROVAL IS
REQUIRED BY SECTION 909 (CONSENT TO FILING) OF THIS ARTICLE. ANY  PERSON
INTERESTED  MAY  APPEAR AND SHOW CAUSE WHY THE APPLICATION SHOULD NOT BE
GRANTED.
  (C) IF THE COURT SHALL FIND THAT ANY OF  THE  ASSETS  OF  ANY  OF  THE
CONSTITUENT CORPORATIONS ARE HELD FOR A CHARITABLE PURPOSE OR ARE LEGAL-
LY  REQUIRED  TO BE USED FOR A PARTICULAR PURPOSE, BUT NOT UPON A CONDI-
TION REQUIRING RETURN, TRANSFER OR CONVEYANCE BY REASON OF THE MERGER OR
CONSOLIDATION, THE COURT MAY, IN ITS DISCRETION, DIRECT THAT SUCH ASSETS
BE TRANSFERRED OR CONVEYED TO THE SURVIVING OR CONSOLIDATED  CORPORATION
SUBJECT  TO  SUCH  PURPOSE OR USE, OR THAT SUCH ASSETS BE TRANSFERRED OR
CONVEYED TO THE SURVIVING OR CONSOLIDATED CORPORATION OR TO ONE OR  MORE
OTHER  DOMESTIC  OR  FOREIGN  CORPORATIONS  OR  ORGANIZATIONS ENGAGED IN
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

S. 7431                            31

MERGER  OR  CONSOLIDATION  UPON  SUCH  TERMS  AND  CONDITIONS  AS IT MAY
PRESCRIBE.
  (F) A CERTIFIED COPY OF SUCH ORDER SHALL BE ANNEXED TO THE CERTIFICATE
OF MERGER OR CONSOLIDATION.
  S  56.  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-

S. 7431                            32

NEY GENERAL PURSUANT TO SECTION 907-A (APPLICATION FOR APPROVAL  OF  THE
SUPREME COURT) OF THIS ARTICLE.
  S  57.  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  THIRTEEN,  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 58. Section 909 of the not-for-profit corporation law, as amended by
section  6  of  part  D of chapter 58 of the laws of 2006, is amended to
read as follows:
S 909. Consent to filing; NOTICES.
  (A) If the purposes of any  constituent  or  consolidated  corporation
would  require the approval or consent of any governmental body or offi-
cer or any other person or body under section  404  (Approvals,  NOTICES
and  consents) OF THIS CHAPTER no certificate of merger or consolidation
shall be filed pursuant to this article unless such approval or  consent
is endorsed thereon or annexed thereto. A corporation whose statement of
purposes specifically includes the establishment or operation of a child
day care center, as that term is defined in section three hundred ninety
of  the  social  services  law,  shall  provide  a certified copy of any
certificate of merger or consolidation involving such corporation to the
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  59.  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. 7431                            33

  (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 60. Paragraph (c) of section 1001 of the not-for-profit  corporation
law is REPEALED.
  S  61.  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,

S. 7431                            34

the  by-laws,  this  chapter  or any other applicable law, the remaining
directors unanimously;
  (2)  In  the  case of a vote by the members, (i) the number of members
required under the certificate of incorporation, by-laws,  this  chapter
and  any other applicable law; or (ii) by the vote of members authorized
by an order of the supreme court pursuant  to  section  608  (QUORUM  AT
MEETING  OF  MEMBERS)  of  this  chapter  permitting  the corporation to
dispense with the applicable quorum requirement.
  Notice of a special or regular meeting of the board of directors or of
the members entitled to vote on adoption and authorization  or  approval
of  the  plan  of  dissolution  shall  be  sent to all the directors and
members of record entitled to vote. Unless otherwise directed  by  order
of  the  supreme  court  pursuant  to  section 608 (QUORUM AT MEETING OF
MEMBERS) of this chapter, the notice shall be sent  by  certified  mail,
return  receipt  requested,  to the last known address of record of each
director and member not fewer than thirty, and not more than sixty  days
before  the  date  of  each  meeting provided, however, that if the last
known address of record of any director or  member  is  not  within  the
United  States,  the  notice to such director shall be sent by any other
reasonable means.
  (d) (1) The plan of dissolution and distribution of assets shall  have
annexed  thereto  the approval of [a justice of the supreme court in the
judicial district in which the office of the corporation is located] THE
ATTORNEY GENERAL in the case of a [Type B, C  or  D]  CHARITABLE  corpo-
ration,  and in the case of any [other] NON-CHARITABLE corporation which
[holds assets] at the time of dissolution HOLDS ASSETS legally  required
to be used for a particular purpose[, except that no such approval shall
be  required  with  respect to the plan of dissolution of a corporation,
other than a corporation incorporated pursuant  to  article  15  (Public
cemetery corporations), which has no assets to distribute at the time of
dissolution,  other  than  a  reserve not to exceed twenty-five thousand
dollars for the purpose of paying ordinary  and  necessary  expenses  of
winding  up  its  affairs  including  attorney  and accountant fees, and
liabilities not in  excess  of  ten  thousand  dollars,  and  which  has
complied  with the requirements of section 1001 (Plan of dissolution and
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

S. 7431                            35

THE CORPORATION. APPLICATION TO THE SUPREME COURT FOR AN ORDER FOR  SUCH
APPROVAL  SHALL  BE BY VERIFIED PETITION UPON TEN DAYS WRITTEN NOTICE TO
THE ATTORNEY GENERAL, AND SHALL INCLUDE ALL INFORMATION REQUIRED  TO  BE
INCLUDED  IN  THE  APPLICATION  TO THE ATTORNEY GENERAL PURSUANT TO THIS
SECTION.
  S 62. 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. 7431                            36

  S 63.  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:
  (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,

S. 7431                            37

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 64. 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 65. 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. 7431                            38

  S 66.  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 67.  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 68.  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 69.  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

S. 7431                            39

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 70.  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  71.  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 72.  Subparagraph 4 of paragraph (a) of section 1304 of the not-for-
profit  corporation  law,  as amended by chapter 847 of the laws of 1970
and as renumbered by chapter 590 of the laws of 1982, is amended to read
as follows:
  (4) That the corporation  is  a  foreign  corporation  as  defined  in
subparagraph  [(a)]  (7) OF PARAGRAPH (A) of section 102 (Definitions)[;
the type of] OF THIS CHAPTER, WHETHER IT WOULD BE  A  CHARITABLE  corpo-
ration  [it  shall  be  under  section  201  (Purposes); a statement] OR
NON-CHARITABLE CORPORATION IF FORMED IN THIS STATE; A STATEMENT  of  its
purposes  to  be  pursued  in  this state and of the activities which it
proposes to conduct in this state; AND a statement that it is authorized
to conduct those activities in the jurisdiction of  its  incorporation[;

S. 7431                            40

and  in  the  case  of a Type C corporation, the lawful public or quasi-
public objective which each business purpose will achieve].
  S  73. 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 74. 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  75. 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 76. 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  77.  Paragraphs  (a)  and (b) of section 1315 of the not-for-profit
corporation law, subparagraph 5 of paragraph (b) as amended  by  chapter
847 of the laws of 1970, are amended to read as follows:
  (a)  An action or special proceeding against a foreign corporation may
be  maintained  by a resident of this state or by a domestic corporation
of any [type or] kind for any cause of action.
  (b)   Except as otherwise provided  in  this  article,  an  action  or
special  proceeding  against  a foreign corporation may be maintained by
another foreign corporation of any [type or] kind or by a nonresident in
the following cases only:
  (1)  Where the action is brought to recover damages for the breach  of
a  contract  made  or  to be performed within this state, or relating to
property situated within this state at the time of  the  making  of  the
contract.

S. 7431                            41

  (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  78. 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  79. 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  80. 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. 7431                            42

  S  81. 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 82. 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 83. 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  84. 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 85. 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 86. 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  87. 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  88. 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  89. 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 90. 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. 7431                            43

  S 91. 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 92. 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 93. 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  94. 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  95.  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 96. 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 97.  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-

S. 7431                            44

closing  governmental  unit  or units that created the land bank. In the
event that two or more foreclosing governmental units create a land bank
in accordance with section sixteen hundred three of  this  article,  the
withdrawal  of  one  or  more  foreclosing  governmental units shall not
result in the dissolution of the land bank unless the  intergovernmental
agreement  so  provides,  and  there is no foreclosing governmental unit
that desires to continue the existence of the land bank.
  S 98.   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 99.  Paragraph (b-1) of section 8-1.8 of  the  estates,  powers  and
trusts law is REPEALED.
  S  100.  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.

S. 7431                            45

  (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, ANCESTOR, CHIL-
DREN, GRANDCHILDREN, GREAT GRANDCHILDREN, BROTHER OR SISTER (WHETHER  BY
THE  WHOLE-  OR  HALF-BLOOD)  OF THE INDIVIDUAL; AND (II) THE SPOUSES OF
CHILDREN, GRANDCHILDREN, GREAT GRANDCHILDREN, BROTHER, OR SISTER (WHETH-
ER BY THE WHOLE- OR HALF-BLOOD) OF THE INDIVIDUAL.
  (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.
  (7) "INDEPENDENT TRUSTEE" MEANS A TRUSTEE WHO IN THE PAST THREE YEARS:
(I) WAS NOT EMPLOYED BY, AND DID NOT HAVE A RELATIVE  WHO  WAS  EMPLOYED
BY,  THE  TRUST  OR AN AFFILIATE OF THE TRUST; (II) WAS NOT EMPLOYED BY,
AND DOES NOT HAVE A RELATIVE WHO WAS EMPLOYED BY, ANY ENTITY  THAT  MADE
PAYMENTS  TO,  OR  RECEIVED PAYMENTS FROM, THE TRUST OR ANY AFFILIATE OF
THE TRUST  FOR  GOODS,  PROPERTY  OR  SERVICES  EXCEEDING  TEN  THOUSAND
DOLLARS;  (III) HAS NOT HAD, AND DOES NOT HAVE A RELATIVE WHO HAS HAD, A
MATERIAL FINANCIAL INTEREST IN ANY ENTITY  THAT  MADE  PAYMENTS  TO,  OR
RECEIVED  PAYMENTS  FROM,  THE  TRUST  OR ANY AFFILIATE OF THE TRUST FOR
GOODS, PROPERTY OR SERVICES EXCEEDING TEN THOUSAND DOLLARS; AND (IV) HAS
NOT RECEIVED, AND DOES NOT HAVE ANY RELATIVE WHO HAS RECEIVED, ANY OTHER
COMPENSATION, PAYMENT OR BENEFIT HAVING MONETARY VALUE FROM THE TRUST OR
ANY AFFILIATE OF THE TRUST, OTHER THAN REIMBURSEMENT FOR EXPENSES OR THE
PAYMENT OF TRUSTEE COMMISSIONS OR OTHER TRUSTEE COMPENSATION AS  PERMIT-
TED BY LAW AND THE GOVERNING INSTRUMENT.
  (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 REQUIRED TO FILE AN  INDEPENDENT  CERTIFIED  PUBLIC
ACCOUNTANT'S AUDIT REPORT WITH THE ATTORNEY GENERAL PURSUANT TO SUBDIVI-
SION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B OF THE EXECUTIVE LAW SHALL
DESIGNATE  AN  AUDIT  COMMITTEE,  CONSISTING  OF ONE OR MORE INDEPENDENT
TRUSTEES, FOR THE PURPOSE OF OVERSEEING  THE  ACCOUNTING  AND  FINANCIAL
REPORTING  PROCESSES  OF  THE TRUST AND THE INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANT'S AUDIT OF THE TRUST'S FINANCIAL STATEMENTS. AN AUDIT COMMIT-
TEE THAT IS NOT MADE UP OF ALL TRUSTEES SHALL  BE  OVERSEEN  BY  AND  BE
RESPONSIBLE  TO  THE  TRUSTEES.  IF  A  TRUST  REQUIRED TO HAVE AN AUDIT
COMMITTEE PURSUANT TO THIS PARAGRAPH IS UNDER  THE  CONTROL  OF  ANOTHER
TRUST  OR  CORPORATION, THE AUDIT COMMITTEE FUNCTION MAY BE CONDUCTED BY
THE TRUSTEES OR THE BOARD OF  DIRECTORS  OF  THE  CONTROLLING  TRUST  OR
CORPORATION.
  (2) THE AUDIT COMMITTEE SHALL, AT A MINIMUM:
  (A)  RETAIN  AND  EVALUATE THE INDEPENDENT AUDITOR, WHICH SHALL REPORT
DIRECTLY TO THE AUDIT COMMITTEE;
  (B) REVIEW WITH THE INDEPENDENT AUDITOR THE SCOPE AND PLANNING OF  THE
AUDIT;
  (C) REVIEW AND DISCUSS WITH THE INDEPENDENT AUDITOR, AT A MINIMUM: (I)
THE  RESULTS  OF ANY AUDIT, INCLUDING BUT NOT LIMITED TO: THE MANAGEMENT
LETTER TO THE TRUST AND ANY MATERIAL RISKS AND  WEAKNESSES  IN  INTERNAL

S. 7431                            46

CONTROLS  IDENTIFIED  BY THE AUDITOR; (II) ANY RESTRICTIONS ON THE SCOPE
OF THE AUDITOR'S ACTIVITIES OR ACCESS TO  REQUESTED  INFORMATION;  (III)
ANY  SIGNIFICANT  DISAGREEMENTS  BETWEEN THE AUDITOR AND MANAGEMENT; AND
(IV) THE ADEQUACY AND PERFORMANCE OF THE TRUST'S ACCOUNTING FUNCTION.
  (D) CONSIDER AT LEAST ANNUALLY THE PERFORMANCE AND INDEPENDENCE OF THE
INDEPENDENT AUDITOR;
  (E)  OVERSEE  ADOPTION,  IMPLEMENTATION  OF  AND  COMPLIANCE  WITH ANY
CONFLICT OF INTEREST POLICY ADOPTED BY THE TRUST PURSUANT  TO  PARAGRAPH
(E)  OF  THIS  SECTION,  AND IF APPLICABLE, ANY WHISTLEBLOWER POLICY, IF
THIS FUNCTION IS NOT OTHERWISE PERFORMED BY ANOTHER COMMITTEE  COMPRISED
SOLELY OF INDEPENDENT TRUSTEES; AND
  (F) REPORT ITS ACTIVITIES TO THE TRUSTEES AT LEAST ANNUALLY.
  (3)  THE  AUDIT  COMMITTEE  SHALL ADOPT A CHARTER THAT SHALL STATE ITS
AUTHORITY AND RESPONSIBILITIES, INCLUDING THOSE PRESCRIBED BY THIS PARA-
GRAPH, AND THAT SHALL STATE THE SIZE, COMPOSITION AND FUNCTIONING OF THE
AUDIT COMMITTEE.
  (C)(1) FOR PURPOSES OF THIS PARAGRAPH, "TOTAL COMPENSATION" MEANS  (1)
ANY  COMPENSATION, WHETHER PAID OR ACCRUED, BY OR ON BEHALF OF THE TRUST
OR ANY AFFILIATE OF THE TRUST, INCLUDING  BUT  NOT  LIMITED  TO  SALARY,
BONUS,  AND  DEFERRED  COMPENSATION, AND (2) ANY BENEFIT HAVING MONETARY
VALUE PROVIDED BY THE TRUST OR ON BEHALF OF THE TRUST OR  ANY  AFFILIATE
OF  THE  TRUST,  INCLUDING BUT NOT LIMITED TO HOUSING ALLOWANCES, LIVING
EXPENSES,  PERQUISITES,  FRINGE  BENEFITS,  EMPLOYER  CONTRIBUTIONS   TO
DEFINED CONTRIBUTION RETIREMENT PLANS AND OTHER RETIREMENT BENEFITS.
  (2)  THE  TOTAL  COMPENSATION  PAID  BY A TRUST TO ANY EMPLOYEE OF THE
TRUST SHALL BE FAIR,  REASONABLE  AND  COMMENSURATE  WITH  SERVICES  THE
EMPLOYEE PROVIDES TO THE TRUST.
  (3)  NO EMPLOYEE OR OTHER INDIVIDUAL WHO MAY BENEFIT FROM COMPENSATION
OR BENEFITS PROVIDED BY THE TRUST MAY BE PRESENT AT OR OTHERWISE PARTIC-
IPATE IN TRUSTEE OR  COMMITTEE  DELIBERATION  OR  VOTE  CONCERNING  SUCH
COMPENSATION OR BENEFITS.
  (4)  EVERY  TRUST  THAT IS REQUIRED TO BE REGISTERED WITH THE ATTORNEY
GENERAL UNDER ARTICLE SEVEN-A OF THE EXECUTIVE LAW AND THAT IN THE PRIOR
FISCAL YEAR HAD ANNUAL REVENUES IN EXCESS OF ONE MILLION  DOLLARS  SHALL
DESIGNATE  A COMPENSATION COMMITTEE OF THE TRUSTEES TO OVERSEE EXECUTIVE
COMPENSATION PROGRAMS AND RELATED PRACTICES OF THE TRUST.
  (A) THE COMPENSATION COMMITTEE SHALL BE COMPRISED OF ONE OR MORE INDE-
PENDENT TRUSTEES. IF A TRUST CONTROLS  ONE  OR  MORE  TRUSTS  OR  CORPO-
RATIONS,  THE  COMPENSATION  COMMITTEE  OF  THE CONTROLLING TRUST MAY BE
DEEMED TO BE THE COMPENSATION COMMITTEE FOR ITS CONTROLLED ENTITIES.
  (B) THE COMPENSATION COMMITTEE SHALL:
  (I) REVIEW THE TOTAL COMPENSATION PAID TO THE TRUST'S OFFICERS AND ITS
FIVE HIGHEST-COMPENSATED KEY EMPLOYEES.
  (II) AFFIRMATIVELY DETERMINE THAT THE TOTAL COMPENSATION PAID  TO  ANY
SUCH  INDIVIDUAL  IS  FAIR,  REASONABLE  AND  COMMENSURATE WITH SERVICES
PROVIDED TO THE TRUST. IN MAKING THIS  DETERMINATION,  THE  COMPENSATION
COMMITTEE  SHALL  AT  A  MINIMUM CONSIDER THE FOLLOWING FACTORS: (1) THE
TOTAL COMPENSATION PROVIDED TO THE INDIVIDUAL;  (2)  RELEVANT  BENCHMARK
DATA  ON  THE  TOTAL COMPENSATION PAID TO INDIVIDUALS SERVING IN SIMILAR
POSITIONS AT TRUSTS OR CORPORATIONS OF SIMILAR SIZE, TYPE, PURPOSE,  AND
SCOPE;  (3) THE INDIVIDUAL'S QUALIFICATIONS AND PERFORMANCE; (4) COMPEN-
SATION, PAYMENTS OR ANY OTHER BENEFITS PROVIDED TO THE  INDIVIDUAL  FROM
ANY  AFFILIATE  OF THE TRUST; AND (5) THE OVERALL FINANCIAL CONDITION OF
THE TRUST.

S. 7431                            47

  (III) MAKE AND KEEP A CONTEMPORANEOUS WRITTEN  RECORD  DESCRIBING  THE
BASIS  FOR  ITS DETERMINATION, INCLUDING ITS ANALYSIS OF THE FACTORS SET
FORTH IN THIS PARAGRAPH AND HOW ANY RELEVANT DATA WAS OBTAINED AND USED.
  (IV)  APPROVE  BY NOT LESS THAN A MAJORITY VOTE THE TOTAL COMPENSATION
PAID TO EACH SUCH INDIVIDUAL.
  (C) IF THE COMPENSATION COMMITTEE IS COMPRISED OF FEWER  THAN  ALL  OF
THE  INDEPENDENT  TRUSTEES,  THEN:  (I) THE COMPENSATION COMMITTEE SHALL
RECOMMEND TO ALL OF THE INDEPENDENT  TRUSTEES  FOR  THEIR  APPROVAL  THE
TOTAL  COMPENSATION  OF  EACH INDIVIDUAL THAT THE COMMITTEE HAS AFFIRMA-
TIVELY DETERMINED IS FAIR, REASONABLE, AND  COMMENSURATE  WITH  SERVICES
PROVIDED  TO  THE TRUST, AND INCLUDE THEREWITH THE WRITTEN RECORD OF ITS
DETERMINATION CREATED PURSUANT TO ITEM  (III)  OF  CLAUSE  (B)  OF  THIS
SUBPARAGRAPH;  (II)  UPON  REVIEW  OF THE RECOMMENDATIONS OF THE COMPEN-
SATION COMMITTEE, THE TRUSTEES SHALL APPROVE BY NOT LESS THAN A MAJORITY
VOTE OF THE INDEPENDENT TRUSTEES THE TOTAL  COMPENSATION  OF  EACH  SUCH
INDIVIDUAL,  WITH  ONLY  INDEPENDENT  TRUSTEES PARTICIPATING IN ANY SUCH
VOTE AND ANY DISCUSSION RELATING  THERETO;  AND  (III)  THE  INDEPENDENT
TRUSTEES SHALL KEEP A CONTEMPORANEOUS WRITTEN RECORD OF THE BASIS OF ITS
DETERMINATION,  INCLUDING  AREAS  OF  AGREEMENT OR DISAGREEMENT WITH THE
RECOMMENDATIONS OF THE COMPENSATION COMMITTEE.
  (5) THE COMPENSATION COMMITTEE MAY RETAIN A COMPENSATION CONSULTANT TO
ASSIST IN THE PERFORMANCE  OF  ITS  RESPONSIBILITIES.  THE  COMPENSATION
COMMITTEE  SHALL  BE  DIRECTLY  RESPONSIBLE FOR THE APPOINTMENT, COMPEN-
SATION AND OVERSIGHT OF THE  WORK  OF  SUCH  CONSULTANT,  AND  ANY  SUCH
CONSULTANT  SHALL  REPORT  DIRECTLY  TO THE COMPENSATION COMMITTEE.  THE
COMPENSATION COMMITTEE SHALL, AMONG ITS  RESPONSIBILITIES,  APPROVE  THE
COMPENSATION  PEER  GROUP THAT THE COMPENSATION CONSULTANT RECOMMENDS BE
USED TO DEVELOP BENCHMARK DATA.
  (A) PRIOR TO RETAINING ANY SUCH CONSULTANT, THE COMPENSATION COMMITTEE
SHALL DETERMINE THAT THE CONSULTANT  IS  INDEPENDENT  AND  QUALIFIED  TO
RENDER  ADVICE  TO  THE  TRUST CONCERNING COMPENSATION; PROVIDED THAT NO
CONSULTANT MAY BE DETERMINED INDEPENDENT IF SUCH CONSULTANT OR ANY  FIRM
THAT EMPLOYS SUCH CONSULTANT HAS (I) RECEIVED DIRECTLY OR INDIRECTLY ANY
PAYMENT,  FEE  OR  OTHER COMPENSATION FROM THE TRUST OR ANY AFFILIATE OF
THE TRUST WITHIN THE PRECEDING TWO YEARS, OTHER THAN REASONABLE  AMOUNTS
PAID  FOR  COMPENSATION  CONSULTING  SERVICES,  OR  (II) ANY BUSINESS OR
PERSONAL RELATIONSHIP WITH THE TRUST OR ANY AFFILIATE OF THE  TRUST,  OR
ANY OF ITS OR THEIR OFFICERS, DIRECTORS OR EMPLOYEES, THAT MAY INTERFERE
WITH  THE  ABILITY  OF THE CONSULTANT TO PROVIDE OBJECTIVE ADVICE TO THE
COMMITTEE.
  (B) NOTHING IN THIS SUBPARAGRAPH SHALL BE CONSTRUED TO (I) REQUIRE THE
COMPENSATION COMMITTEE TO IMPLEMENT OR ACT CONSISTENTLY WITH THE  ADVICE
OR  RECOMMENDATIONS  PROVIDED  BY  THE  COMPENSATION  CONSULTANT  TO THE
COMPENSATION COMMITTEE; OR (II) AFFECT  THE  ABILITY  OR  OBLIGATION  OF
MEMBERS  OF THE COMPENSATION COMMITTEE TO EXERCISE THEIR OWN JUDGMENT IN
FULFILLMENT OF THEIR DUTIES TO THE TRUST AND ITS BENEFICIARIES.
  (6) THE COMPENSATION COMMITTEE SHALL ADOPT A CHARTER SETTING FORTH ITS
RESPONSIBILITIES, INCLUDING AS PRESCRIBED BY THIS PARAGRAPH, AS WELL  AS
REQUIREMENTS  CONCERNING  THE  SIZE,  COMPOSITION AND FUNCTIONING OF THE
COMPENSATION COMMITTEE.
  (D) (1) NOTWITHSTANDING ANY PROVISION IN THE TRUST INSTRUMENT  TO  THE
CONTRARY, NO TRUST SHALL ENTER INTO A RELATED PARTY TRANSACTION, UNLESS:
  (A)  THE  MATERIAL  FACTS  AS  TO THE RELATED PARTY'S INTEREST IN, AND
RELATIONSHIP TO, THE TRANSACTION ARE DISCLOSED  IN  GOOD  FAITH  TO  THE
TRUSTEES;

S. 7431                            48

  (B)  THE TRUSTEES: (I) CONSIDER ALTERNATIVE TRANSACTIONS TO THE EXTENT
AVAILABLE AND UPON REASONABLE DILIGENCE DETERMINE THAT SUCH  ALTERNATIVE
TRANSACTIONS   WOULD NOT BE MORE ADVANTAGEOUS TO THE TRUST AND ITS BENE-
FICIARIES UNDER THE CIRCUMSTANCES;
  (II)  DETERMINE  BY A TWO-THIRDS VOTE OF THE TRUSTEES THAT THE RELATED
PARTY TRANSACTION IS FAIR, REASONABLE AND IN THE BEST INTERESTS  OF  THE
TRUST  AND  ITS  BENEFICIARIES  AND  APPROVE  SUCH  TRANSACTION, AND THE
RELATED PARTY WITH AN INTEREST IN THE TRANSACTION IS NOT PRESENT AT  AND
OTHERWISE  DOES  NOT OTHERWISE PARTICIPATE IN ANY DELIBERATION OR VOTING
RELATING THERETO; AND
  (III) CONTEMPORANEOUSLY DOCUMENT IN WRITING THE BASIS FOR THEIR DETER-
MINATION AND APPROVAL OF THE TRANSACTION.  THIS SUBPARAGRAPH  SHALL  NOT
APPLY  TO  ANY  COMPENSATION  REVIEWED  AND  APPROVED IN ACCORDANCE WITH
SUBPARAGRAPH FOUR OF PARAGRAPH (C) OF THIS SECTION.
  (2) THE TRUST INSTRUMENT, BYLAWS OR CONFLICT OF INTEREST POLICY OF THE
TRUST MAY CONTAIN ADDITIONAL RESTRICTIONS ON RELATED PARTY  TRANSACTIONS
AND  ADDITIONAL  PROCEDURES NECESSARY FOR THE REVIEW OR APPROVAL OF SUCH
TRANSACTIONS, OR PROVIDE THAT ANY  TRANSACTIONS  IN  VIOLATION  OF  SUCH
RESTRICTIONS SHALL BE VOID OR VOIDABLE.
  (3) ANY TRUSTEE OR KEY EMPLOYEE WHO HAS AN INTEREST IN A RELATED PARTY
TRANSACTION  SHALL, PRIOR TO THE TRUSTEES' CONSIDERATION OF THE PROPOSED
TRANSACTION, DISCLOSE IN GOOD FAITH TO THE TRUSTEES THE  MATERIAL  FACTS
AS  TO  SUCH PERSON'S INTEREST IN, AND RELATIONSHIP TO, THE TRANSACTION.
THE TRUSTEES SHALL ADOPT AND IMPLEMENT PROCEDURES FOR THE TIMELY DISCLO-
SURE OF SUCH FACTS TO THE TRUSTEES.
  (4) THE ATTORNEY GENERAL MAY  BRING  AN  ACTION  TO  ENJOIN,  VOID  OR
RESCIND ANY RELATED PARTY TRANSACTION OR A PROPOSED RELATED PARTY TRANS-
ACTION THAT VIOLATES ANY LAW OR IS OTHERWISE NOT FAIR, REASONABLE, OR IN
THE  BEST  INTERESTS OF THE TRUST OR ITS BENEFICIARIES, OR TO SEEK OTHER
RELIEF, INCLUDING BUT NOT LIMITED TO DAMAGES, RESTITUTION,  THE  REMOVAL
OF TRUSTEES, 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
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.
  (5) THE POWERS AND DUTIES OF THE ATTORNEY  GENERAL  PROVIDED  IN  THIS
PARAGRAPH  ARE  IN  ADDITION TO ALL OTHER POWERS AND DUTIES THE ATTORNEY
GENERAL MAY HAVE UNDER THIS CHAPTER OR ANY OTHER LAW.
  (E)(1) EVERY TRUST SHALL ADOPT A CONFLICT OF INTEREST POLICY TO ENSURE
THAT ITS TRUSTEES AND KEY EMPLOYEES ACT IN  THE  BEST  INTEREST  OF  THE
TRUST  AND  ITS  BENEFICIARIES AND COMPLY WITH APPLICABLE LEGAL REQUIRE-
MENTS, INCLUDING BUT NOT LIMITED TO THE REQUIREMENTS SET FORTH IN  PARA-
GRAPH (D) 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;

S. 7431                            49

  (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 (D) OF THIS SECTION.
  (3) THE CONFLICT OF INTEREST POLICY SHALL  REQUIRE  THAT  PRIOR  TO  A
TRUSTEE'S  INITIAL  APPOINTMENT,  AND  ANNUALLY THEREAFTER, SUCH TRUSTEE
SHALL COMPLETE, SIGN AND FILE WITH THE RECORDS OF THE  TRUST  A  WRITTEN
STATEMENT  IDENTIFYING  ANY  ENTITY  OF  WHICH  HE OR SHE IS AN OFFICER,
DIRECTOR, TRUSTEE, MEMBER, OWNER (EITHER AS A SOLE PROPRIETOR OR A PART-
NER), OR EMPLOYEE WITH WHICH THE TRUST HAS,  OR  MIGHT  BE  EXPECTED  TO
HAVE,  A RELATIONSHIP OR A TRANSACTION IN WHICH THE TRUSTEE MIGHT HAVE A
CONFLICTING INTEREST. THE POLICY SHALL REQUIRE THAT EACH TRUSTEE ANNUAL-
LY 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)  EVERY  TRUST  REGISTERED OR REQUIRED TO BE REGISTERED PURSUANT TO
SECTION ONE HUNDRED SEVENTY-TWO OF THE EXECUTIVE LAW OR SECTION 8-1.4 OF
THIS PART SHALL TRANSMIT SUCH POLICIES TO THE ATTORNEY  GENERAL  IN  THE
FORM  AND  MANNER  SPECIFIED  BY  THE ATTORNEY GENERAL, AND SHALL WITHIN
THIRTY DAYS OF ANY MATERIAL CHANGE OF THESE POLICIES PROVIDE THE  ATTOR-
NEY GENERAL WITH THE CHANGED POLICIES.
  (5)  NOTHING IN THIS PARAGRAPH SHALL BE INTERPRETED TO REQUIRE A TRUST
TO ADOPT ANY SPECIFIC CONFLICT OF INTEREST POLICY NOT OTHERWISE REQUIRED
BY LAW, OR TO SUPERSEDE OR  LIMIT  ANY  REQUIREMENT  OR  DUTY  GOVERNING
CONFLICTS OF INTEREST REQUIRED BY ANY OTHER LAW OR RULE.
  (F)(1)  EVERY  TRUST  THAT HAS FIVE 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
TRUSTEE,  EMPLOYEE OR VOLUNTEER OF A TRUST WHO IN GOOD FAITH REPORTS ANY
ACTION OR SUSPECTED ACTION TAKEN BY OR WITHIN THE TRUST THAT IS ILLEGAL,
FRAUDULENT OR IN VIOLATION OF ANY ADOPTED  POLICY  OF  THE  TRUST  SHALL
SUFFER INTIMIDATION, HARASSMENT, DISCRIMINATION OR OTHER RETALIATION OR,
IN THE CASE OF EMPLOYEES, ADVERSE EMPLOYMENT CONSEQUENCE.
  (2) THE WHISTLEBLOWER POLICY SHALL INCLUDE THE FOLLOWING PROVISIONS:
  (A) PROCEDURES FOR THE REPORTING OF VIOLATIONS OR SUSPECTED VIOLATIONS
OF  LAWS  OR  TRUST  POLICIES,  INCLUDING  PROCEDURES FOR PRESERVING THE
CONFIDENTIALITY OF REPORTED INFORMATION;
  (B) PROCEDURES FOR HANDLING AND INVESTIGATING VIOLATIONS OR  SUSPECTED
VIOLATIONS OF LAWS OR TRUST POLICIES;
  (C) A REQUIREMENT THAT A TRUSTEE OR AN EMPLOYEE OF THE TRUST BE DESIG-
NATED  TO  ADMINISTER,  IMPLEMENT AND OVERSEE COMPLIANCE OF THE WHISTLE-
BLOWER POLICY AND TO REPORT TO THE AUDIT COMMITTEE OR OTHER COMMITTEE OF
INDEPENDENT TRUSTEES, OR TO THE TRUSTEES;
  (D) A REQUIREMENT THAT ALL DOCUMENTS CONCERNING  INFORMATION  REPORTED
UNDER THE WHISTLEBLOWER POLICY AND ANY INVESTIGATION RELATING THERETO BE
RETAINED BY THE TRUST FOR A MINIMUM PERIOD OF SIX YEARS; AND

S. 7431                            50

  (E)  A  REQUIREMENT  THAT  A  COPY OF THE POLICY BE DISTRIBUTED TO ALL
TRUSTEES, EMPLOYEES AND VOLUNTEERS, WITH INSTRUCTIONS ON HOW  TO  COMPLY
WITH THE PROCEDURES SET FORTH IN THE POLICY.
  (3)  NOTHING IN THIS SECTION SHALL BE INTERPRETED TO RELIEVE ANY TRUST
FROM ANY ADDITIONAL REQUIREMENTS IN  RELATION  TO  INTERNAL  COMPLIANCE,
RETALIATION, OR DOCUMENT RETENTION REQUIRED BY ANY OTHER LAW OR RULE.
  S 101. 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 102. Section 202 of the racing, pari-mutuel  wagering  and  breeding
law, as amended by chapter 18 of the laws of 2008, is amended to read as
follows:
  S  202.  Restriction upon commencement of business. No business corpo-
ration organized under the provisions of this article  shall  engage  in
the  prosecution  or  management  of its business until the whole of its
capital stock shall have been subscribed, nor until it shall have  filed
in the offices where certificates of incorporation were filed, a further
certificate stating that the whole of its capital stock has been in good
faith  subscribed,  executed  and acknowledged by its president or vice-
president and treasurer or secretary, and verified by them to the effect
that the statements contained in it are true.
  Notwithstanding the foregoing, [corporation] NO CHARITABLE CORPORATION
AS  DEFINED  IN  PARAGRAPH  (A)  OF  SECTION  ONE  HUNDRED  TWO  OF  THE
NOT-FOR-PROFIT  CORPORATION  LAW  OR ANY CORPORATIONS organized PRIOR TO
JANUARY FIRST, TWO THOUSAND THIRTEEN AS A TYPE C CORPORATION pursuant to
section two hundred one of the not-for-profit corporation law [as type C
corporations] shall [not] engage in the prosecution or management of its
business until its certificate of incorporation has  been  accepted  for
filing  by  the  secretary  of state and such confirmation of filing has
been filed with the board and the franchise oversight board.
  S 103. 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 104. Subdivision 1 of section 172 of the executive law is amended by
adding a new paragraph (k) to read as follows:
  (K) ANY CONFLICT OF  INTEREST  POLICY  AND  ANY  WHISTLEBLOWER  POLICY
ADOPTED  PURSUANT  TO SECTIONS SEVEN HUNDRED FIFTEEN-A AND SEVEN HUNDRED
FIFTEEN-B OF THE NOT-FOR-PROFIT CORPORATION LAW OR SECTION 8-1.9 OF  THE
ESTATES, POWERS AND TRUSTS LAW.

S. 7431                            51

  S  104-a.  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
persons who are unpaid for such services] shall file with  the  attorney
general  an  annual written financial report, on forms prescribed by the
attorney general, on or before the fifteenth day of the  fifth  calendar
month  after  the close of such fiscal year. The annual financial report
shall be accompanied by an annual financial statement which includes  an
independent  certified  public  accountant's  audit report containing an
opinion that the financial statements are presented fairly in all  mate-
rial respects and in conformity with generally accepted accounting prin-
ciples,  including  compliance  with all pronouncements of the financial
accounting standards board  and  the  American  Institute  of  Certified
Public  Accountants  that  establish  accounting  principles relevant to
not-for-profit organizations. Such  financial  report  shall  include  a
statement  of any changes in the information required to be contained in
the registration form filed on behalf of such organization.  The  finan-
cial report shall be signed by the president or other authorized officer
and the chief fiscal officer of the organization who shall certify under
penalties  for  perjury that the statements therein are true and correct
to the best of their knowledge, and shall be accompanied by  an  opinion
signed  by an independent public accountant that the financial statement
and balance sheet therein present fairly the  financial  operations  and
position  of  the  organization. A fee of twenty-five dollars payable to
the attorney general shall accompany such financial report at  the  time
of  filing,  provided however, that any such organization that is regis-
tered with the  attorney  general  pursuant  to  article  eight  of  the
estates,  powers  and  trusts  law  is  required to file only one annual
financial report which meets the filing requirements of this article and
section 8-1.4 of the estates, powers and trusts law.
  2. Every charitable organization registered or required to  be  regis-
tered  pursuant to section one hundred seventy-two of this article which
shall receive in gross revenue and support in any fiscal year  at  least
[one  hundred] TWO HUNDRED FIFTY thousand dollars but not more than [two
hundred fifty] FIVE HUNDRED thousand dollars shall file an annual finan-
cial report. The annual financial report  shall  be  accompanied  by  an
annual  financial  statement  which  includes  an  independent certified
public accountant's review report  in  accordance  with  "statements  on
standards  for  accounting  and  review services" issued by the American
Institute of Certified Public Accountants. The annual  financial  state-
ment  shall be prepared in conformity with generally accepted accounting
principles, including compliance with all pronouncements of  the  finan-
cial  accounting standards board and the American Institute of Certified
Public Accountants that  establish  accounting  principles  relevant  to
not-for-profit  organizations. Such financial report shall be filed with
the attorney general, upon forms prescribed by the attorney  general  on
an  annual  basis  on  or before the fifteenth day of the fifth calendar
month after the close of such fiscal year, which shall include a  finan-
cial  report  covering such fiscal year in accordance with such require-
ments as the attorney general may prescribe. Such financial report shall
include a statement of any changes in the  information  required  to  be

S. 7431                            52

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 dollars payable
to  the  attorney  general  shall accompany such financial report at the
time of filing, provided, however, that any such  organization  that  is
registered  with  the  attorney general pursuant to article eight of the
estates, powers and trusts law is  required  to  file  only  one  annual
financial report which meets the filing requirements of this article and
section 8-1.4 of the estates, powers and trusts law. 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 105. 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 106. Section 223 of the education law, as amended by chapter 106  of
the laws of 1974, is amended to read as follows:
  S 223.   Consolidation  OR  MERGER  of corporations.   Any two or more
corporations chartered under the powers of the regents  or  incorporated
under  a  special  act  of  the  legislature  or under a general law for
purposes for which a charter may be granted by  the  regents  may  enter
into  an agreement for the consolidation OR MERGER of such corporations,
setting forth the terms and conditions of consolidation OR  MERGER,  the
name  of  the  proposed CONSOLIDATED OR MERGED corporation, the place or

S. 7431                            53

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  107. 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 108. 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

S. 7431                            54

charge conference of each church and approved by the  superintendent  or
superintendents  of the district or districts in which the consolidating
churches are located, and by the majority of the members of each of such
churches,  over  the  age  of  twenty-one years, present and voting at a
meeting thereof held in the usual place of public worship and called for
the purpose of considering such agreement by announcement made at public
service in such churches on two Sundays, the first  not  less  than  ten
days  next  preceding the date of such meeting. Such agreement shall not
be valid unless approved in the case of Protestant Episcopal churches by
the bishop and standing committee of the diocese in which such  churches
are  situated  and in the case of churches of other denominations by the
governing body of  the  denomination,  if  any,  to  which  each  church
belongs,  having  jurisdiction  over such church. Each corporation shall
thereupon make a separate petition to the supreme  court  for  an  order
consolidating  OR  MERGING  the  corporations, setting forth the denomi-
nation, if any, to which the church belongs, that  the  consent  of  the
governing  body  to the consolidation OR MERGER, if any, of that denomi-
nation having jurisdiction over  such  church  has  been  obtained,  the
agreement  therefor, and a statement of all the property and liabilities
and the amount and sources of the  annual  income  of  such  petitioning
corporation.  In  its discretion the court may direct that notice of the
hearing of such petition be given to the parties interested  therein  in
such  manner  and  for such time as it may prescribe.  After hearing all
the parties interested, present and desiring to be heard, the court  may
make an order for the consolidation OR MERGER of the corporations on the
terms  of  such  agreement and such other terms and conditions as it may
prescribe, specifying the name of such new OR SURVIVING corporation  and
the  [first]  trustees thereof, and the method by which their successors
shall be chosen and the date of its first OR NEXT annual corporate meet-
ing. When such order is made and duly entered, the persons  constituting
such  CONSOLIDATED OR MERGED corporations shall BE OR become an incorpo-
rated church by, and said petitioning churches shall become consolidated
OR MERGED under, the name designated in  the  order,  and  the  trustees
therein  named  shall  be  the  [first] trustees thereof, and the future
trustees thereof shall be chosen by the method therein  designated,  and
all the estate, rights, powers and property of whatsoever nature belong-
ing to either corporation shall without further act or deed be vested in
and  transferred  to  the new OR SURVIVING corporation as effectually as
they were vested in or belonging to the  former  corporations;  and  the
said  new OR SURVIVING corporation shall be liable for all the debts and
liabilities of the former corporations in the same manner and as  effec-
tually  as  if said debts or liabilities had been contracted or incurred
by the new OR SURVIVING corporation. A  certified  copy  of  such  order
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 109. 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

S. 7431                            55

either a new corporation or one of the [constitutent] CONSTITUENT corpo-
rations.  Said agreement shall set forth the name of  the  proposed  new
corporation  or  the name of the existing corporation if it is to become
the consolidated OR MERGED corporation, the method of choosing trustees,
the names of the persons to be the first trustees of the new corporation
if the consolidated OR MERGED corporation is to be a new corporation and
the date of the first annual corporate meeting.
  2.  Such  agreement must be authorized and approved by a majority vote
of the members of each contracting presbytery  taken  at  a  meeting  at
which  a  quorum  is  present duly called in accordance with the form of
government of the Presbyterian Church (U.S.A.) and the  notice  of  such
meeting shall state the purpose of the meeting.
  3.  Before such agreement is approved as aforesaid, such consolidation
OR MERGER must be directed and approved by the Synod  of  the  Northeast
and the General Assembly of the Presbyterian Church (U.S.A.).
  4.  Each presbytery shall thereafter join in a petition to the supreme
court for an order consolidating OR  MERGING  the  corporation,  setting
forth  the  agreement of the contracting presbyteries, the direction and
approval of the bodies as set forth in  subdivision  three  [hereof]  OF
THIS  SECTION,  a  statement of all the property and liabilities and the
sources of the annual income of each presbytery and a description of any
property held by such presbyteries in trust for  specific  purposes.  In
its  discretion  the court may direct that notice of the hearing of such
petition be given to the parties interested therein in such manner as it
may prescribe.
  5. After hearing all the parties interested, present and  desiring  to
be heard, the court may make an order for the consolidation OR MERGER of
the presbyteries on the terms of such agreement and such other terms and
conditions  as  it  may prescribe, specifying the name of the new corpo-
ration or the name the continuing corporation will have if  one  of  the
[constitutent] CONSTITUENT corporations is to become the consolidated OR
MERGED  corporation,  the first trustees thereof if a new corporation is
to be created and the method by which their successors shall  be  chosen
and  the date of the first annual corporate meeting if a new corporation
is to be created.
  6. When such order is made and duly entered, the persons  constituting
such  corporate  presbyteries shall become one incorporated consolidated
OR MERGED presbytery by, and said petitioning presbyteries shall  become
consolidated  OR MERGED under, the name designated in the order, and the
trustees therein named, if it is a new corporation, shall be  the  first
trustees  thereof,  and  if it is a new corporation the trustees thereof
shall be chosen by the method therein designated, and  all  the  estate,
rights,  powers  and  property of whatsoever nature, belonging to either
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. 7431                            56

  S  110.  Section  208  of  the religious corporations law, as added by
chapter 117 of the laws of 1927, is amended to read as follows:
  S  208. Consolidation.   Any two or more religious corporations of the
Jewish faith, incorporated under or by  general  or  special  laws,  may
enter  into  an agreement for the consolidation OR MERGER of such corpo-
rations, setting forth the terms and conditions  of  consolidation,  the
name  of  the proposed OR SURVIVING corporation, the number of its trus-
tees, the time of the annual election and the names of the persons to be
its trustees until the first OR NEXT annual  meeting.  Each  corporation
may petition the supreme court for an order consolidating OR MERGING the
corporations,  setting  forth the agreement for consolidation  OR MERGER
and a statement of its real property and of its liabilities. Before  the
presentation  of  the  petition  to the court the agreement and petition
must be approved by two-thirds of the votes cast in person or  by  proxy
at  a  meeting of the members of each corporation called for the purpose
of considering the  proposed  consolidation  OR  MERGER  in  the  manner
prescribed  by  section [forty-three of the membership corporations law]
SIX HUNDRED FIVE OF THE NOT-FOR-PROFIT CORPORATION LAW. An affidavit  by
the  president  and  the secretary of each corporation stating that such
approval has been given shall be annexed to the petition.  On  presenta-
tion  to  the  court of such petition and agreement for consolidation OR
MERGER and on such notice as the court may direct, the court after hear-
ing all the parties interested desiring to be heard, may make  an  order
approving the consolidation OR MERGER.  When such order is made and duly
entered  and  a certified copy thereof filed with the secretary of state
and in the offices of the clerks of the counties in  which  the  certif-
icates  of  incorporation  of  the several constituent corporations were
recorded, or if no such certificate was recorded, then in the office  of
the  clerk  of the county in which the principal place of worship of the
new OR SURVIVING corporation is intended to  be  situated,  such  corpo-
rations shall become one corporation by the name designated in the order
and  the  trustees  named  in  the agreement for consolidation OR MERGER
shall be the [first] trustees of the consolidated corporation.
  S 111. Section 209 of the religious  corporations  law,  as  added  by
chapter 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  inter-
est,  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

S. 7431                            57

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  112. Paragraph (c) of subdivision 1 of section 2-b of the religious
corporations law, as amended by chapter 490 of  the  laws  of  2010,  is
amended to read as follows:
  (c)  The  following  provisions  of the not-for-profit corporation law
shall not apply to religious corporations: subparagraphs (7) and (8)  of
paragraph  (a) of section one hundred twelve, [section one hundred thir-
teen,] section one hundred fourteen, section two  hundred  one,  section
three  hundred  three, section three hundred four, section three hundred
five, section three  hundred  six,  article  four  except  section  four
hundred one, section five hundred fourteen, that portion of section five
hundred  fifty-five  (b)  and  section five hundred fifty-five (c) which
reads "The institution shall notify the donor,  if  available,  and  the
attorney  general  of the application, and the attorney general and such
donor must be given an opportunity to be  heard",  section  six  hundred
five, section six hundred seven, section six hundred nine, section eight
hundred  four, article nine except section nine hundred ten, article ten
except as provided in section eleven  hundred  fifteen,  section  eleven
hundred two, and article fifteen except paragraph (c) of section fifteen
hundred seven.
  S  113.   Paragraph (c) of subdivision 1 of section 1-a of the benevo-
lent 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  114.   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 115.  Subdivision 1 of section 1840-q of the public authorities law,
as added by chapter 273 of the laws of  1979,  is  amended  to  read  as
follows:

S. 7431                            58

  1.  The  corporation shall be incorporated or reincorporated under the
not-for-profit corporation law, in addition to other purposes, [to adopt
those purposes of the authority specified in  section  eighteen  hundred
forty-c,  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 bi-county region which includes such areas[, and
have complied with the requirements of section one hundred  thirteen  of
the not-for-profit corporation law].
  S  116.  Subsection (a) of section 3435 of the insurance law, as added
by chapter 220 of the laws of 1986, is amended to read as follows:
  (a) This section shall apply to public entities as defined in  section
one  hundred  seven  of this chapter, organizations described by section
501(c)(3) of the United States internal revenue code, [Type B]  CHARITA-
BLE  corporations AS DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO
(DEFINITIONS) OF THE NOT-FOR-PROFIT CORPORATION LAW AND formed  pursuant
to  paragraph [(b)] (A) of section two hundred one of the not-for-profit
corporation law, and organizations  described  by  section  two  hundred
sixteen-a of the education law.
  S  117.  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  118. 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  119.  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

S. 7431                            59

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  120.  Section  202 of the racing, pari-mutuel wagering and breeding
law, as amended by chapter 18 of the laws of 2008, is amended to read as
follows:
  S 202. Restriction upon commencement of business. No  business  corpo-
ration  organized  under  the provisions of this article shall engage in
the prosecution or management of its business until  the  whole  of  its
capital  stock shall have been subscribed, nor until it shall have filed
in the offices where certificates of incorporation were filed, a further
certificate stating that the whole of its capital stock has been in good
faith subscribed, executed and acknowledged by its  president  or  vice-
president and treasurer or secretary, and verified by them to the effect
that the statements contained in it are true.
  Notwithstanding  the  foregoing,  corporations  organized  pursuant to
section two hundred one of the not-for-profit corporation law  as  [type
C]  CHARITABLE  corporations  AS DEFINED IN PARAGRAPH (A) OF SECTION ONE
HUNDRED TWO (DEFINITIONS) OF THE NOT-FOR-PROFIT  CORPORATION  LAW  shall
not  engage  in  the prosecution or management of its business until its
certificate of incorporation has been accepted for filing by the  secre-
tary  of  state  and such confirmation of filing has been filed with the
board and the franchise oversight board.
  S 121. 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  122.  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  123.  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 124. 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. 7431                            60

  S 125. 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 126. Paragraph (a) of  subdivision 1 of section 458-b of the general
business law, as added by chapter 386 of the laws of 1986, is amended to
read as follows:
  (a)  Any  [type B not-for-profit] CHARITABLE corporation AS DEFINED IN
PARAGRAPH  (A)  OF  SECTION  ONE  HUNDRED  TWO  (DEFINITIONS)   OF   THE
NOT-FOR-PROFIT  CORPORATION LAW licensed pursuant to article twelve-c of
the banking law.
  S 127. 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 128. 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,

S. 7431                            61

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  129.  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

S. 7431                            62

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  130.  This  act  shall  take  effect January 1, 2013, provided that
section forty-four of this act shall take effect January 1, 2014.

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