A. 7772 2
by any other title. The term "board" means "board of directors" OR ANY
OTHER BODY CONSTITUTING A "GOVERNING BOARD" AS DEFINED IN THIS SECTION.
(6-A) "ENTIRE BOARD" MEANS THE TOTAL NUMBER OF DIRECTORS ENTITLED TO
VOTE WHICH THE CORPORATION WOULD HAVE IF THERE WERE NO VACANCIES. IF THE
BY-LAWS OF 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) "BENEFICENT CORPORATION" MEANS LAWFUL NON-BUSINESS CORPORATIONS,
INCLUDING CIVIC LEAGUES, SOCIAL WELFARE ORGANIZATIONS, FRATERNAL BENEFIT
SOCIETIES, BUSINESS LEAGUES, CHAMBERS OF COMMERCE, LABOR, AGRICULTURAL
AND HORTICULTURAL ORGANIZATIONS, SOCIAL AND RECREATIONAL CLUBS, CEMETERY
CORPORATIONS, CERTAIN CREDIT UNIONS, WAR VETERANS POSTS AND ORGANIZA-
TIONS, PATRIOTIC AND POLITICAL ORGANIZATIONS, CERTAIN INSURANCE ORGAN-
IZATIONS, AND CERTAIN EMPLOYEE BENEFIT ORGANIZATIONS, RECOGNIZED BY THE
INTERNAL REVENUE SERVICE AS FEDERAL INCOME TAX EXEMPT UNDER OTHER
SUBSECTIONS OF SECTION 501 OR UNDER SECTION 527 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, OR ANY SUCCESSOR LAW, OTHER THAN THOSE ORGAN-
IZATIONS EXEMPT UNDER SECTION 501(C)(3) THEREOF.
(19) "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 AN AUDIT OF THE FINANCIAL STATEMENTS OF A CORPORATION
REQUIRED BY SUBDIVISION ONE OF SECTION ONE HUNDRED SEVENTY-TWO-B OF THE
EXECUTIVE LAW OR ENVISIONED BY SECTION FIVE HUNDRED NINE OF THIS CHAP-
TER.
(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 DID 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 HAS RECEIVED PAYMENTS FROM, THE CORPORATION OR
ANY AFFILIATE OF THE CORPORATION FOR GOODS, PROPERTY OR SERVICES EQUAL-
ING THE LESSER OF TWENTY-FIVE THOUSAND DOLLARS OR TWO PERCENT OF THE
CORPORATION'S TOTAL REVENUE FOR THE CORPORATION'S TAX YEAR; 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 CORPO-
RATION 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. FOR PURPOSES OF THIS CHAPTER, "PAYMENT"
DOES NOT INCLUDE CONTRIBUTIONS TO A NOT-FOR-PROFIT CORPORATION.
(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.
A. 7772 3
(24) "RELATED PARTY TRANSACTION" MEANS ANY TRANSACTION, AGREEMENT OR
ANY OTHER ARRANGEMENT IN WHICH A RELATED PARTY HAS A FINANCIAL INTEREST
AND IN WHICH THE CORPORATION OR ANY AFFILIATE OF THE CORPORATION IS A
PARTICIPANT.
(25) "KEY EMPLOYEE" MEANS ANY PERSON WHO IS IN A POSITION TO EXERCISE
SUBSTANTIAL INFLUENCE OVER THE AFFAIRS OF THE CORPORATION, AS DEFINED IN
SECTION 4958(F)(1)(A) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
AND THE REGULATIONS THEREUNDER, AND ANY SUCCESSOR LAW OR REGULATION.
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 AND
BEFORE THE EFFECTIVE DATE OF THE CHAPTER OF THE LAWS OF TWO THOUSAND
THIRTEEN WHICH AMENDED THIS PARAGRAPH to file a certificate of type
under section one hundred thirteen (Certificate of type of not-for-pro-
fit corporation). Upon the filing of such certificate [by] TO the
department of state, this chapter shall apply in all respects to such
corporation.
This chapter also applies to any other corporation of any [type or]
kind, formed [not for profit] NOT-FOR-PROFIT under any other chapter of
the laws of this state except a chapter of the consolidated laws, to the
extent that provisions of this chapter do not conflict with the
provisions of such unconsolidated law. If an applicable provision of
such unconsolidated law relates to a matter embraced in this chapter but
is not in conflict therewith, both provisions shall apply. Any corpo-
ration to which this chapter is made applicable by this paragraph shall
be treated as a "corporation" or "domestic corporation" as such terms
are used in this chapter, except that the purposes of any such corpo-
ration formed or formable under such unconsolidated law shall not there-
by be extended. For the purpose of this paragraph, the effective date
of this chapter as to corporations to which this chapter is made appli-
A. 7772 4
cable by this paragraph shall be September one, nineteen hundred seven-
ty-three.
(b) The general corporation law does not apply to a corporation of
any [type or] kind to which this chapter applies. A reference in any
statute of this state which makes a provision of the general corporation
law applicable to a corporation of any [type or] kind to which this
chapter is applicable or a reference in any [statute] LAW of this state,
other than the membership corporations law, which makes a provision of
the membership corporations law applicable to a corporation of any [type
or] kind shall be deemed and construed to refer to and make applicable
the corresponding provision, if any, of this chapter.
(c) If any provision in articles one to thirteen inclusive of this
chapter conflicts with a provision of any subsequent articles or of any
special act under which a corporation to which this chapter applies is
formed, the provision in such subsequent article or special act
prevails. A provision of any such subsequent article or special act
relating to a matter referred to in articles one to thirteen inclusive
and not in conflict therewith is supplemental and both shall apply.
Whenever the board of a [Type B] 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 and paragraphs (b) through (s) are relettered paragraphs
(a) through (r).
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 ACCEPTANCE FOR THE FILING OF SUCH CERTIFICATE OR INSTRU-
MENT 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
A. 7772 5
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. Subparagraphs 7, 8 and 9 of paragraph (a) of section 112 of the
not-for-profit corporation law, subparagraphs 7 and 9 as amended by
chapter 1058 of the laws of 1971, are amended and two new subparagraphs
10 and 11 are added to read as follows:
(7) To enforce any right given under this chapter to members, a
director or an officer of a [Type B or Type C] NOT-FOR-PROFIT corpo-
ration. The attorney-general shall have the same status as such
members, director or officer.
(8) To compel the directors and officers, or any of them, of a [Type
B or Type C] NOT-FOR-PROFIT 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] A NOT-FOR-PROFIT CORPORATION. For such purpose, the
attorney-general shall have the same status as such members, director or
officer.
(10) TO ENJOIN, VOID OR RESCIND ANY RELATED PARTY TRANSACTION, OR SEEK
ADDITIONAL DAMAGES OR REMEDIES PURSUANT TO SECTION 715 (RELATED PARTY
TRANSACTIONS) OF THIS CHAPTER.
(11) TO ENFORCE THE PARENS PATRIAE POWER AND ANY OTHER COMMON LAW
AUTHORITY OF THE ATTORNEY GENERAL AND ANY COMMON-LAW CAUSES OF ACTION
AVAILABLE TO MEMBERS, DIRECTORS, OFFICERS, CREDITORS AND OTHERS AGAINST
A DOMESTIC OR FOREIGN CORPORATION AND ITS MEMBERS, DIRECTORS AND OFFI-
CERS WHICH ARE NOT PREEMPTED BY THIS CHAPTER.
S 6. Subparagraph 1 of paragraph (b) of section 112 of the not-for-
profit corporation law is amended to read as follows:
(1) If an action, it is triable by jury as a matter of right AS GUAR-
ANTEED BY ARTICLE I, SECTION 2 OF THE CONSTITUTION AND PROVIDED BY
SECTION FORTY-ONE HUNDRED ONE OF THE CIVIL PRACTICE LAW AND RULES.
S 7. 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 8. Section 112 of the not-for-profit corporation law is amended by
adding a new paragraph (e) to read as follows:
(E) NO PROVISIONS OF THIS CHAPTER SHALL PREEMPT WELL-PLEADED COMMON
LAW OR EQUITABLE CAUSES OF ACTION OR PROCEEDINGS BROUGHT BY THE ATTORNEY
GENERAL AGAINST CORPORATIONS, DIRECTORS, OFFICERS, KEY EMPLOYEES OR
AGENTS, IF SUCH CAUSES OF ACTION ARE INDEPENDENT OF CAUSES OF ACTION, IF
ANY, BASED ON VIOLATIONS OF THIS CHAPTER.
S 9. Section 113 of the not-for-profit corporation law is REPEALED.
S 10. 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 corporations] 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
A. 7772 6
of any person appointed by the court for that purpose. If it appears by
the verified petition of a member, DIRECTOR, OFFICER, or creditor of any
such corporation, that it, or its directors, officers, MEMBERS, KEY
EMPLOYEES, or agents, have misappropriated any of the funds or property
of the corporation, or diverted them from the purpose of its incorpo-
ration, or that the corporation has acquired property in excess of the
amount which it is authorized by law to hold, or has engaged in any
business other than that stated in its certificate of incorporation, the
court may order that notice of at least eight days, with a copy of the
petition, be served on the corporation, THE ATTORNEY GENERAL, and the
persons charged with misconduct, requiring them to show cause at a time
and place specified, why they should not be required to make and file an
inventory and account of the property, effects and liabilities of such
corporation with a detailed statement of its transactions during the
twelve months next preceding the granting of such order. On the hearing
of such application, the court may make an order requiring such invento-
ry, account and statement to be filed, and proceed to take and state an
account of the property and liabilities of the corporation, or may
appoint a referee for that purpose. When such account is taken and
stated, after hearing all the parties to the application, the court may
enter a final order determining the amount of property so held by the
corporation, its annual income, whether any of the property or funds of
the corporation have been misappropriated or diverted to any other
purpose than that for which such corporation was incorporated, and
whether such corporation has been engaged in any activity not covered by
its certificate of incorporation. An appeal may be taken from the order
by any party aggrieved to the appellate division of the supreme court,
and to the court of appeals, as in a civil action. No corporation shall
be required to make and file more than one inventory and account in any
one year, nor to make a second account and inventory, while proceedings
are pending for the statement of an account under this section.
S 11. Section 115 of the not-for-profit corporation law, as added by
chapter 669 of the laws of 1977, is amended to read as follows:
S 115. Power to solicit contributions [for charitable purposes].
No corporation having the power to solicit contributions [for charita-
ble purposes] may solicit contributions for any purpose [for which
approval of such solicitation is required under the provisions of
section four hundred four of this chapter] unless the certificate
specifically 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
attorney general[, at the request of the officer or body authorized to
grant such approval,] shall maintain an action or proceeding pursuant to
the provisions of subparagraph one of paragraph (a) of section one
hundred twelve of this chapter, OF THE EXECUTIVE LAW AND THE ESTATES,
POWERS AND TRUSTS LAW OR ANY OTHER APPLICABLE LAW AGAINST THE CORPO-
RATION, ITS DIRECTORS, OFFICERS, KEY EMPLOYEES, OR AGENTS THAT SOLICITS
CONTRIBUTIONS IN VIOLATION OF THIS CHAPTER OR THOSE LAWS. 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. OTHERWISE, NO CORPO-
RATION MAY SOLICIT CONTRIBUTIONS FOR ANY PURPOSE UNLESS AND UNTIL SUCH
A. 7772 7
CORPORATION IS IN COMPLIANCE WITH THIS SECTION AND THE APPLICABLE REGIS-
TRATION AND REPORTING REQUIREMENTS OF ARTICLE SEVEN-A OF THE EXECUTIVE
LAW AND SECTION 8-1.4 OF THE ESTATES, POWERS AND TRUSTS LAW.
S 12. Section 201 of the not-for-profit corporation law, paragraph (b)
as amended by chapter 847 of the laws of 1970 and paragraph (c) as
amended by chapter 1058 of the laws of 1971, is amended to read as
follows:
S 201. Purposes.
(a) A corporation, as defined in subparagraph [(5)] (10), paragraph
(a) of S 102 (Definitions), may be formed under this chapter [as
provided in paragraph (b)] unless it may be formed under any other
corporate law of this state in which event it may not be formed under
this chapter unless such other corporate law expressly so provides.
(b) [A corporation, of a type and for a purpose or purposes as
follows, may be formed under this chapter, provided consents required
under any other statute of this state have been obtained: Type A -] A
CORPORATION FORMED ON OR AFTER JANUARY FIRST, TWO THOUSAND FOURTEEN
SHALL BE EITHER A CHARITABLE CORPORATION OR A BENEFICENT CORPORATION. A
not-for-profit corporation [of this type may be formed for any lawful
non-business purpose or purposes including, but not limited to, any one
or more of the following non-pecuniary purposes: civic, patriotic,
political, social, fraternal, athletic, agricultural, horticultural,
animal husbandry, and for a professional, commercial, industrial, trade
or service association.
Type B - A not-for-profit corporation of this type may be formed for
any one or more of the following non-business purposes: charitable,
educational, religious, scientific, literary, cultural or for the
prevention of cruelty to children or animals.
Type C - A not-for-profit corporation of this type may be formed for
any lawful business purpose to achieve a lawful public or quasi-public
objective.
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 FOURTEEN AS A TYPE A CORPORATION UNDER THIS
CHAPTER SHALL BE A BENEFICENT CORPORATION UNDER THIS CHAPTER. ANY
SUBMISSION OR FILING BY SUCH CORPORATION TO ANY PERSON OR ENTITY SHALL
BE DEEMED TO HAVE BEEN SUBMITTED OR FILED BY A BENEFICENT 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 BENEFICENT CORPORATION.
(C) A TYPE B NOT-FOR-PROFIT CORPORATION FORMED PRIOR TO JANUARY FIRST,
TWO THOUSAND FOURTEEN SHALL BE DEEMED A CHARITABLE CORPORATION UNDER
THIS CHAPTER. ANY SUBMISSION OR FILING BY SUCH CORPORATION TO ANY PERSON
OR ENTITY SHALL BE DEEMED TO HAVE BEEN SUBMITTED OR FILED BY A CHARITA-
A. 7772 8
BLE CORPORATION, AND ANY REFERENCE IN ANY SUCH FILING OR SUBMISSION
REFERRING TO THE STATUS OF SUCH CORPORATION AS A TYPE B CORPORATION
SHALL BE DEEMED TO REFER TO A CHARITABLE CORPORATION.
(D) A TYPE C OR D NOT-FOR-PROFIT CORPORATION FORMED PRIOR TO JANUARY
FIRST, TWO THOUSAND FOURTEEN SHALL BE DEEMED A BENEFICENT CORPORATION.
ANY SUBMISSION OR FILING BY SUCH CORPORATION TO ANY PERSON OR ENTITY
SHALL BE DEEMED TO HAVE BEEN SUBMITTED OR FILED BY A BENEFICENT CORPO-
RATION, AND ANY REFERENCE IN ANY SUCH FILING OR SUBMISSION REFERRING TO
THE STATUS OF SUCH CORPORATION AS A TYPE C OR D CORPORATION SHALL BE
DEEMED TO REFER TO A BENEFICENT CORPORATION.
S 13. 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 14. Subparagraphs 1, 2 and 3 of paragraph (a) of section 301 of the
not-for-profit corporation law, subparagraph 1 as amended by section 78
of part A of chapter 58 of the laws of 2010, subparagraph 2 as amended
by chapter 344 of the laws of 2004, are amended to read as follows:
(1) Shall[, unless the corporation is formed for charitable or reli-
gious purposes, or for purposes for which the approval of the commis-
sioner of social services or the public health and health planning coun-
cil is required, or is a bar association,] contain the word
"corporation", "incorporated" or "limited" or an abbreviation of one of
such words; or, in the case of a foreign corporation, it shall, for use
in this state, add at the end of its name one of such words or an abbre-
viation thereof.
(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
A. 7772 9
such name or fictitious name being indistinguishable from the name or
fictitious name of any domestic or authorized foreign limited liability
company or limited partnership or from any name the right to which is
reserved by or on behalf of any domestic or foreign limited liability
company or limited partnership.
(3) Shall not contain any word or phrase, or any abbreviation or
derivative thereof, the use of which is prohibited or restricted by
section 404 [(Approvals] (NOTICES and consents) or any other statute of
this state, unless in the latter case the restrictions have been
complied with.
S 15. 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 16. Section 304 of the not-for-profit corporation law, as amended by
chapter 168 of the laws of 1982, is amended to read as follows:
S 304. Statutory designation of secretary of state as agent of domestic
corporations [formed under article four of this chapter] and
authorized foreign corporations for service of process.
(a) The secretary of state shall be the agent of every domestic corpo-
ration [formed under article four of this chapter] and every authorized
foreign corporation upon whom process against the corporation may be
served.
(b) Any designation by a domestic corporation [formed under article
four of this chapter] or foreign corporation of the secretary of state
as such agent, which designation is in effect on the effective date of
this chapter, shall continue. Every domestic corporation [formed under
article four of this chapter] or foreign corporation, existing or
authorized on the effective date of this chapter, which has not desig-
nated the secretary of state as such agent, shall be deemed to have done
so.
(c) Any designation by a domestic corporation [formed under article
four of this chapter] or foreign corporation of an agent other than the
secretary of state which is in effect on the effective date of this
chapter shall continue in effect until changed or revoked as provided in
this chapter.
(d) Any designated post-office address to which the secretary of state
shall mail a copy of process served upon him OR HER as agent of a domes-
tic corporation [formed under article four of this chapter] or foreign
corporation, shall continue until the filing of a certificate under this
chapter directing the mailing to a different post-office address.
A. 7772 10
S 17. Paragraph (a) of section 305 of the not-for-profit corporation
law, as amended by chapter 131 of the laws of 1985, is amended to read
as follows:
(a) Every domestic corporation or authorized foreign corporation may
designate a registered agent in this state upon whom process against
such corporation may be served. The agent shall be a natural person who
is a resident of or has a business address in this state or a domestic
corporation or foreign corporation of any [type or] kind formed, or
authorized to do business in this state, under this chapter or under any
other statute of this state.
S 18. Paragraphs (b) and (c) of section 306 of the not-for-profit
corporation law, paragraph (b) as amended by chapter 168 of the laws of
1982 and paragraph (c) as amended by chapter 93 of the laws of 1984, are
amended to read as follows:
(b) Service of process on the secretary of state as agent of a domes-
tic corporation [formed under article four of this chapter] or an
authorized foreign corporation shall be made by personally delivering to
and leaving with [him or his] THE deputy OF THE SECRETARY OF STATE, or
with any person authorized by the secretary of state to receive such
service, at the office of the department of state in the city of Albany,
duplicate copies of such process together with the statutory fee, which
fee shall be a taxable disbursement. Service of process on such corpo-
ration shall be complete when the secretary of state is so served. The
secretary of state shall promptly send one of such copies by certified
mail, return receipt requested, to such corporation, at the post office
address, on file in the department of state, specified for the purpose.
If a domestic corporation [formed under article four of this chapter] or
an authorized foreign corporation has no such address on file in the
department of state, the secretary of state shall so mail such copy to
such corporation at the address of its office within this state on file
in the department.
(c) If an action or special proceeding is instituted in a court of
limited jurisdiction, service of process may be made in the manner
provided in this section if the office of the domestic corporation
[formed under article four of this chapter] or foreign corporation is
within the territorial jurisdiction of the court.
S 19. The not-for-profit corporation law is amended by adding a new
section 309 to read as follows:
S 309. PERSONAL JURISDICTION AND SERVICE OF PROCESS ON NON-DOMICILIARY
RESIDENT DIRECTOR, OFFICER, KEY EMPLOYEE OR AGENT.
A PERSON, BY BECOMING A DIRECTOR, OFFICER, KEY EMPLOYEE OR AGENT OF A
CORPORATION IS SUBJECT TO THE PERSONAL JURISDICTION OF THE SUPREME COURT
OF THE STATE OF NEW YORK, AND IN AN ACTION OR PROCEEDING BY THE ATTORNEY
GENERAL UNDER THIS CHAPTER PROCESS MAY BE SERVED UPON SUCH PERSON AS
PROVIDED IN SECTION THREE HUNDRED THIRTEEN OF THE CIVIL PRACTICE LAW AND
RULES.
S 20. 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 BENEFICENT 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
A. 7772 11
CORPORATION MAY ALSO SET FORTH ANY ACTIVITIES THAT IT INTENDS TO CARRY
OUT IN FURTHERANCE OF SUCH PURPOSE OR PURPOSES; PROVIDED, HOWEVER, THAT
THIS SUBPARAGRAPH SHALL NOT BE INTERPRETED TO REQUIRE THAT SUCH ACTIV-
ITIES 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 21. The section heading and paragraphs (a), (b), (c), (d), (e),
(g), (h), (i), (t), (u), (v), and (w) of section 404 of the not-for-pro-
fit corporation law, the section heading, paragraphs (c), (d), (e), (h)
and (i) as amended and paragraph (a) as added by chapter 139 of the laws
of 1993, paragraph (c) as further amended by section 104 of part A of
chapter 62 of the laws of 2011 and paragraphs (a), (c), (d), (e), (g),
(h) and (i) as relettered by chapter 431 of the laws of 1993, paragraph
(b) as amended by section 4 of part D of chapter 58 of the laws of 2006,
paragraph (g) as separately amended by chapters 139 and 201 of the laws
of 1993, paragraph (t) as amended by section 79 of part A of chapter 58
of the laws of 2010, paragraph (u) as amended by chapter 558 of the laws
of 1999, paragraph (v) as added by chapter 598 of the laws of 2000 and
as further amended by section 104 of part A of chapter 62 of the laws of
2011 and paragraph (w) as added by chapter 316 of the laws of 2005, are
amended to read as follows:
[Approvals] NOTICES and consents.
(a) Every [certificate of incorporation] CORPORATION which includes
among its purposes the formation of a trade or business association
shall [have endorsed thereon or annexed thereto the consent of] SEND BY
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED COPY OF ITS
CERTIFICATE OF INCORPORATION TO the attorney-general IMMEDIATELY AFTER
THE FILING OF SUCH CERTIFICATE BY THE SECRETARY OF STATE.
(b) (1) Every [certificate of incorporation] CORPORATION which
includes among its purposes the care of destitute, delinquent, aban-
doned, neglected or dependent children; the establishment or operation
of any adult care facility, or the establishment or operation of a resi-
dential program for victims of domestic violence as defined in subdivi-
sion 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 operating 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] SEND BY
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED COPY OF ITS
CERTIFICATE OF INCORPORATION TO the commissioner of the office of chil-
dren and family services IMMEDIATELY AFTER THE FILING OF SUCH CERTIF-
ICATE BY THE DEPARTMENT OF STATE or with respect to any adult care
facility, SEND BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED
COPY OF ITS CERTIFICATE OF INCORPORATION TO the commissioner of health
IMMEDIATELY AFTER THE FILING OF SUCH CERTIFICATE BY THE DEPARTMENT OF
STATE.
(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]
A. 7772 12
SEND BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED COPY OF
ITS 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
days after the filing of such certificate, amendment, merger, consol-
idation or dissolution with the department of state. This requirement
shall also apply to any foreign corporation filing an application for
authority under section thirteen hundred four of this chapter, any
amendments thereto, and any surrender of authority or termination of
authority in this state of such corporation.
(c) Every [certificate of incorporation] CORPORATION which includes
among [the] ITS purposes [of the corporation,] the establishment, main-
tenance and operation of a hospital service or a health service or a
medical expense indemnity plan or a dental expense indemnity plan as
permitted in article forty-three of the insurance law, shall [have
endorsed thereon or annexed thereto the approval of] SEND BY CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED COPY OF ITS CERTIFICATE OF
INCORPORATION TO the superintendent of financial services and the
commissioner of health IMMEDIATELY AFTER THE FILING OF SUCH CERTIFICATE
BY THE DEPARTMENT OF STATE.
(d) Every [certificate of incorporation] CORPORATION which includes a
purpose for which a corporation [might] MUST be chartered by the regents
of the university of the State of New York shall [have endorsed thereon
or annexed thereto the consent of] APPLY TO THE REGENTS FOR A CHARTER.
SUCH CORPORATIONS ARE THOSE WHICH CARRY OUT ANY OF THE ACTIVITIES FOR
WHICH THE CONSENT OF THE COMMISSIONER OF EDUCATION IS REQUIRED BY PARA-
GRAPH (V) OF THIS SECTION. OTHERWISE A CORPORATION WHICH MAY HAVE
EDUCATIONAL PURPOSES MUST SEND BY CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, A CERTIFIED COPY OF ITS CERTIFICATE OF INCORPORATION TO the
commissioner of education IMMEDIATELY AFTER THE FILING OF SUCH CERTIF-
ICATE BY THE DEPARTMENT OF STATE.
(e) Every [certificate of incorporation of a] cemetery corporation,
except those within the exclusionary provisions of section 1503 (Ceme-
tery corporations) shall [have endorsed thereon or annexed thereto the
approval of] SEND BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTI-
FIED COPY OF ITS CERTIFICATE OF INCORPORATION TO the cemetery board
IMMEDIATELY AFTER THE FILING OF SUCH CERTIFICATE BY THE DEPARTMENT OF
STATE.
(g) Every [certificate of incorporation of a] corporation for
prevention of cruelty to animals shall [have endorsed thereon or annexed
thereto the approval of] SEND BY CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, A CERTIFIED COPY OF ITS CERTIFICATE OF INCORPORATION TO the
American Society for the Prevention of Cruelty to Animals[, or, if such
approval be withheld thirty days after application therefor, a certified
copy of an order of a justice of the supreme court of the judicial
district in which the office of the corporation is to be located,
dispensing with such approval, granted upon eight days' notice to such
society] IMMEDIATELY AFTER THE FILING OF SUCH CERTIFICATE BY THE DEPART-
MENT OF STATE.
(h) Every [certificate of incorporation of] CORPORATION WHICH HAS AS
ITS PURPOSE THE ESTABLISHMENT OF a Young Men's Christian Association
shall [have endorsed thereon or annexed thereto the approval of] SEND BY
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED COPY OF ITS
CERTIFICATE OF INCORPORATION TO the chairman of the national board of
Young Men's Christian Associations IMMEDIATELY AFTER THE FILING OF SUCH
CERTIFICATE BY THE DEPARTMENT OF STATE.
A. 7772 13
(i) Every [certificate of incorporation] CORPORATION which [indicates
that the proposed corporation is] HAS AS ITS PURPOSE to solicit funds
for or otherwise benefit the armed forces of the United States or of any
foreign country, or their auxiliaries, or of this or any other state or
any territory, shall [have endorsed thereon or annexed thereto the
approval of] SEND A CERTIFIED COPY, RETURN RECEIPT REQUESTED, OF ITS
CERTIFICATE OF INCORPORATION TO the chief of staff IMMEDIATELY AFTER THE
FILING OF SUCH CERTIFICATE BY THE DEPARTMENT OF STATE.
[(t)] (S) Every certificate of incorporation which includes among its
purposes and powers 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, or the solicitation of
contributions for any such purpose or two or more of such purposes,
shall have endorsed thereon the approval of the public health and health
planning council.
[(u)] (T) Every certificate of incorporation which includes among the
purposes of the corporation, the establishment or operation of a
substance abuse, substance dependence, alcohol abuse, alcoholism, or
chemical abuse or dependence program, or the solicitation of contrib-
utions for any such purpose, shall have endorsed thereon or annexed
thereto the consent of the commissioner of the office of alcoholism and
substance abuse services to its filing by the department of state.
[(v)] (U) Every certificate of incorporation which includes among the
purposes of the corporation, the establishment, maintenance and opera-
tion of a nonprofit property/casualty insurance company, pursuant to
article sixty-seven of the insurance law, shall have endorsed thereon or
annexed thereto the approval of the superintendent of financial
services.
[(w)] (V) Every certificate of incorporation in which the name of the
proposed corporation includes the terms: "school," "education," "elemen-
tary," "secondary," "kindergarten," "prekindergarten," "preschool,"
"nursery school," "museum," "history," "historical," "historical socie-
ty," "arboretum," "library," "college," "university," "PUBLIC TELE-
VISION," "PUBLIC RADIO STATION," or other term restricted by section two
hundred twenty-four of the education law; "conservatory," "academy," or
"institute," or any abbreviation or derivative of such terms, shall have
endorsed thereon or annexed thereto the consent of the commissioner of
education.
S 22. Section 404 of the not-for-profit corporation law is amended by
adding a new paragraph (w) to read as follows:
(W) EACH AGENCY, PUBLIC OFFICER, ORGANIZATION OR PERSON TO WHOM A
NOTICE OF INCORPORATION IS TO BE SENT OR FROM WHOM A CONSENT TO INCORPO-
RATION MUST BE OBTAINED, AS PROVIDED IN THIS SECTION, SHALL PUBLISH THE
NAME AND ADDRESS OF THE REPRESENTATIVE IT HAS DESIGNATED TO RECEIVE SUCH
NOTICE OR REQUEST FOR CONSENT. IF ANY AGENCY, PUBLIC OFFICER, ORGANIZA-
TION OR PERSON TO WHOM A REQUEST FOR CONSENT HAS BEEN SENT DOES NOT
CONSENT OR OBJECT, SETTING FORTH THE REASONS FOR SUCH OBJECTION, WITHIN
FORTY-FIVE DAYS AFTER THE RECEIPT OF SUCH REQUEST, THE CONSENT SHALL BE
CONCLUSIVELY PRESUMED TO HAVE BEEN GIVEN AND THE SECRETARY OF STATE
SHALL FILE THE CERTIFICATE OF INCORPORATION.
S 23. Paragraph (b-1) of section 406 of the not-for-profit corporation
law is REPEALED.
S 24. Subdivision (d) of section 406 of the not-for-profit corporation
law, as added by chapter 331 of the laws of 1971, is amended to read as
follows:
A. 7772 14
(d) Nothing in this section shall impair the rights and powers of the
courts or the attorney-general of this state INCLUDING THE ENFORCEMENT
OF THE PROVISIONS INCLUDED IN THE CERTIFICATES OF INCORPORATION TO WHICH
THIS SECTION APPLIES.
S 25. 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] BENEFICENT 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 26. Paragraph (b) of section 503 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 capital certificate shall when issued state upon the face
thereof:
(1) That the corporation is a [Type .....] CHARITABLE OR BENEFICENT
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) The amount of the member's capital contribution evidenced by such
certificate.
(4) If appropriate, that the corporation is a [Type A] BENEFICENT
corporation, and that its certificate of incorporation provides that the
capital certificate is transferable to other members with the consent of
the corporation.
S 27. Subparagraph 1 of paragraph (b) of section 505 of the not-for-
profit corporation law, as amended by chapter 847 of the laws of 1970,
is amended to read as follows:
(1) That the corporation is a [Type .....] CHARITABLE OR BENEFICENT
corporation under section 113 or section 402 of the New York Not-for-
Profit Corporation Law.
S 28. 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, HOWEVER, THAT IF SUCH PROPERTY WOULD, UPON
PURCHASE THEREOF, CONSTITUTE ALL, OR SUBSTANTIALLY ALL, OF THE ASSETS OF
THE CORPORATION, THEN THE VOTE OF two-thirds of the entire board[,
provided that if] SHALL BE REQUIRED, OR, IF there are twenty-one or more
directors, the vote of a majority of the entire board shall be suffi-
cient.
(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, HOWEVER, 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 29. Paragraph (a) of section 510 of the not-for-profit corporation
law, the opening paragraph as amended by chapter 961 of the laws of
A. 7772 15
1972, and subparagraph 3 as amended by chapter 847 of the laws of 1970,
is amended to read as follows:
(a) A sale, lease, exchange or other disposition of all, or substan-
tially all, the assets of a corporation may be made upon such terms and
conditions and for such consideration, which may consist in whole or in
part of cash or other property, real or personal, including shares,
bonds or other securities of any other domestic or foreign corporation
or corporations of any [type or] kind, as may be authorized in accord-
ance with the following procedure:
(1) If there are members entitled to vote thereon, the board shall
adopt a resolution recommending such sale, lease, exchange or other
disposition. The resolution shall specify the terms and conditions of
the proposed transaction, including the consideration to be received by
the corporation and the eventual disposition to be made of such consid-
eration, together with a statement that the dissolution of the corpo-
ration is or is not contemplated thereafter. The resolution shall be
submitted to a vote at a meeting of members entitled to vote thereon,
which may be either an annual or a special meeting. Notice of the meet-
ing shall be given to each member and each holder of subvention certif-
icates or bonds of the corporation, whether or not entitled to vote. At
such meeting by two-thirds vote as provided in paragraph (c) of section
613 (Vote of members) the members may approve the proposed transaction
according to the terms of the resolution of the board, or may approve
such sale, lease, exchange or other disposition and may authorize the
board to modify the terms and conditions thereof.
(2) If there are no members entitled to vote thereon, such sale,
lease, exchange or other disposition shall be authorized by the vote of
at least two-thirds of the entire board, provided that if there are
twenty-one or more directors, the vote of a majority of the entire board
shall be sufficient.
(3) If the corporation is, or would be if formed under this chapter,
classified as a [Type B or Type C] CHARITABLE corporation under section
201, (Purposes) such sale, lease, exchange or other disposition shall in
addition require [leave] 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
purposes for which it was formed IN ACCORDANCE WITH SECTION 511 (PETI-
TION FOR COURT APPROVAL) OR (B) APPROVAL OF THE ATTORNEY GENERAL IF
AUTHORIZED UNDER SECTION 511-A (PETITION FOR ATTORNEY GENERAL APPROVAL).
S 30. The section heading, the opening paragraph and subparagraph 9 of
paragraph (a) of section 511 of the not-for-profit corporation law, are
amended to read as follows:
Petition for [leave of] court APPROVAL.
[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 coun-
ty, wherein the corporation has its office or principal place of carry-
ing out the purposes for which it was formed. The petition shall set
forth:
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 31. The not-for-profit corporation law is amended by adding a new
section 511-a to read a follow:
S 511-A. PETITION FOR ATTORNEY GENERAL APPROVAL.
A. 7772 16
(A) IN LIEU OF OBTAINING COURT APPROVAL UNDER SECTION 511 (PETITION
FOR COURT APPROVAL) 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
PARAGRAPH (C) OF SECTION 511 (PETITION FOR COURT APPROVAL); OR
2. THE ATTORNEY GENERAL, IN HIS OR HER DISCRETION, CONCLUDES THAT A
COURT SHOULD REVIEW THE PETITION AND MAKE A DETERMINATION THEREON.
(B) THE VERIFIED PETITION TO THE ATTORNEY GENERAL SHALL SET FORTH: 1.
ALL OF THE INFORMATION REQUIRED TO BE INCLUDED IN A VERIFIED PETITION TO
OBTAIN COURT APPROVAL PURSUANT TO SUBPARAGRAPHS ONE THROUGH NINE OF
PARAGRAPH (A) OF SECTION 511 (PETITION FOR COURT APPROVAL); 2. A STATE-
MENT THAT THE CORPORATION IS NOT INSOLVENT AND WILL NOT BECOME INSOLVENT
AS A RESULT OF THE TRANSACTION; AND 3. A STATEMENT AS TO WHETHER ANY
PERSONS HAVE RAISED, OR HAVE A REASONABLE BASIS TO RAISE, OBJECTIONS TO
THE SALE, LEASE, EXCHANGE OR OTHER DISPOSITION THAT IS THE SUBJECT OF
THE PETITION, 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 PETI-
TION 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 TEN DAYS NOTICE TO THE ATTORNEY GENER-
AL PURSUANT TO SECTION 511 (PETITION FOR COURT APPROVAL).
S 32. 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 corporation] shall hold full ownership 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 similarly hold assets
so received, unless otherwise provided by law or in the certificate of
incorporation.
S 33. 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:
A. 7772 17
(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 SUBPARA-
GRAPH TWELVE OF PARAGRAPH (A) OF SECTION 202 (GENERAL AND SPECIAL
POWERS), AND SECTIONS 712-A (AUDIT OVERSIGHT) AND 715 (RELATED PARTY
TRANSACTIONS), 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 nonmembers in
conformity with its purposes AS PERMITTED BY THIS CHAPTER, INCLUDING
WITHOUT LIMITATION, SECTIONS 712-A (AUDIT OVERSIGHT) AND 715 (RELATED
PARTY TRANSACTIONS), 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 dissol-
ution or final liquidation, as authorized by this article, except when
the corporation is currently insolvent or would thereby be made insol-
vent 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 34. 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 8-1.4]
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 failure of a corporation to file a report as required by law
shall constitute 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 (Judi-
cial dissolution) in the case of a domestic corporation, or under S 1303
(Violations) in the case of a foreign corporation.
S 35. The not-for-profit corporation law is amended by adding a new
section 522 to read as follows:
S 522. CY-PRES AND DEVIATION.
NOTHING IN THIS CHAPTER SHALL LIMIT THE APPLICATION OF THE
DOCTRINES OF CY-PRES AND DEVIATION.
S 36. 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 37. 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
A. 7772 18
the place, date and hour of the meeting and, unless it is an annual
meeting, indicate that it is being issued by or at the direction of the
person or persons calling the meeting. Notice of a special meeting shall
also state the purpose or purposes for which the meeting is called. A
copy of the notice of any meeting shall be given, personally [or], by
mail, OR BY FACSIMILE TELECOMMUNICATIONS OR BY ELECTRONIC MAIL, to each
member entitled to vote at such meeting. If the notice is given
personally [or], by first class mail OR BY FACSIMILE TELECOMMUNICATIONS
OR BY ELECTRONIC MAIL, it shall be given not less than ten nor more than
fifty days before the date of the meeting; if mailed by any other class
of mail, it shall be given not less than thirty nor more than sixty days
before such date. If mailed, such notice is given when deposited in the
United States mail, with postage thereon prepaid, directed to the member
at his address as it appears on the record of members, or, if he shall
have filed with the secretary of the corporation a written request that
notices to him be mailed to some other address, then directed to him at
such other address. IF SENT BY FACSIMILE TELECOMMUNICATIONS OR MAILED
ELECTRONICALLY, SUCH NOTICE IS GIVEN WHEN DIRECTED TO THE MEMBER'S FAX
NUMBER OR ELECTRONIC MAIL ADDRESS AS IT APPEARS ON THE RECORD OF
MEMBERS, OR, TO SUCH FAX NUMBER OR OTHER ELECTRONIC MAIL ADDRESS AS
FILED WITH THE SECRETARY OF THE CORPORATION. NOTWITHSTANDING THE FOREGO-
ING, SUCH NOTICE SHALL NOT BE GIVEN ELECTRONICALLY: (1) IF THE CORPO-
RATION 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 affida-
vit of the secretary or other person giving the notice or of a transfer
agent of the corporation that the notice required by this section has
been given shall, in the absence of fraud, be prima facie evidence of
the facts therein stated. Whenever a corporation has more than five
hundred members, the notice may be served by publication[, in lieu of
mailing,] in a newspaper published in the county in the state in which
the principal office of the corporation is located, once a week for
three successive weeks next preceding the date of the meeting, PROVIDED
THAT THE CORPORATION SHALL ALSO PROMINENTLY POST NOTICE OF SUCH MEETING
ON THE HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE CORPORATION CONTINUOUS-
LY FROM THE DATE OF PUBLICATION THROUGH THE DATE OF THE MEETING.
S 38. 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 THE MEMBER'S 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 39. 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:
A. 7772 19
(b) Without limiting the manner in which a member may authorize anoth-
er person or persons to act for him as proxy pursuant to paragraph (a)
of this section, the following shall constitute a valid means by which a
member may grant such authority:
(1) A member may execute a writing authorizing another person or
persons to act for him as proxy. Execution may be accomplished by the
member or the member's authorized officer, director, employee or agent
signing such writing or causing his or her signature to be affixed to
such writing by any reasonable means including, but not limited to, by
facsimile signature.
(2) A member may authorize another person or persons to act for the
member as proxy by [transmitting or authorizing the transmission of a
telegram, cablegram or other means of] PROVIDING SUCH AUTHORIZATION BY
electronic [transmission] MAIL to the person who will be the holder of
the proxy or to a proxy solicitation firm, proxy support service organ-
ization or like agent duly authorized by the person [who will be the
holder of the proxy to receive such transmission], provided that any
such [telegram, cablegram or other means of electronic transmission]
AUTHORIZATION BY ELECTRONIC MAIL shall either set forth [or be submitted
with] information from which it can be reasonably determined that the
[telegram, cablegram or other] AUTHORIZATION BY electronic [trans-
mission] MAIL was authorized by the member. If it is determined that
such [telegrams, cablegrams or other] AUTHORIZATION BY electronic [tran-
smissions are] MAIL IS valid, the inspectors or, if there are no inspec-
tors, such other persons making that determination shall specify the
nature of the information 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 40. 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 THE MEMBER'S SIGNATURE TO BE AFFIXED TO SUCH WAIVER
BY ANY REASONABLE MEANS INCLUDING BUT NOT LIMITED TO FACSIMILE SIGNA-
TURE. 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 AUTHOR-
IZED 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.
A. 7772 20
S 41. 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 42. 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 43. Paragraph (c) of section 711 of the not-for-profit corporation
law, as amended by chapter 847 of the laws of 1970, is amended to read
as follows:
(c) Notice of a meeting need not be given to any alternate director,
nor to any director who submits a [signed] waiver of notice whether
before or after the meeting, or who attends the meeting without protest-
ing, prior thereto or at its commencement, the lack of notice to him OR
HER. 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.
A. 7772 21
S 44. 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)] (D) Committees, other than [standing or special] committees of
the board, whether created by the board or by the members, shall be
committees 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 45. Paragraph (c) of section 712 of the not-for-profit corporation
law is REPEALED and paragraphs (d) and (e) are relettered paragraphs (c)
and (d).
S 46. 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 OR
WHICH PRESENTS SUCH A REPORT AS PART OF THE ANNUAL REPORT REQUIRED BY
SECTION 519 (ANNUAL REPORT OF DIRECTORS) SHALL DESIGNATE AN AUDIT
COMMITTEE OF THE BOARD, CONSISTING OF AT LEAST THREE INDEPENDENT DIREC-
TORS, FOR THE PURPOSE OF OVERSEEING THE ACCOUNTING AND FINANCIAL REPORT-
ING PROCESSES OF THE CORPORATION AND THE INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANT'S AUDIT OF THE CORPORATION'S FINANCIAL STATEMENTS. THE CORPO-
RATION'S ENTIRE BOARD MAY CONSTITUTE THE AUDIT COMMITTEE, PROVIDED THAT
ONLY INDEPENDENT DIRECTORS MAY BE PRESENT AT AND PARTICIPATE IN DELIBER-
ATIONS AND VOTING RELATING TO AUDIT COMMITTEE MATTERS. IF A CORPORATION
CONTROLS A GROUP OF CORPORATIONS, THE AUDIT 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;
A. 7772 22
(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 715-A (CONFLICT OF INTEREST POLICY) OR
715-B (WHISTLEBLOWER POLICY), 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 OR 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 OR
ARTICLE EIGHT OF THE ESTATES, POWERS AND TRUSTS LAW OR BOTH AND THAT IN
THE PRIOR FISCAL YEAR HAD ANNUAL REVENUES IN EXCESS OF TWO MILLION
DOLLARS SHALL DESIGNATE A COMPENSATION COMMITTEE OF THE BOARD TO OVERSEE
EXECUTIVE COMPENSATION PROGRAMS AND RELATED PRACTICES OF THE CORPO-
RATION.
(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.
(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. 7772 23
(A) REVIEW THE TOTAL COMPENSATION PAID TO THE CORPORATION'S OFFICERS
AND ITS FIVE HIGHEST-COMPENSATED KEY EMPLOYEES; (B) AFFIRMATIVELY DETER-
MINE 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 COMPENSATION COMMITTEE SHALL AT A
MINIMUM CONSIDER THE FOLLOWING FACTORS: (I) THE TOTAL COMPENSATION
PROVIDED TO THE INDIVIDUAL; (II) RELEVANT BENCHMARK DATA ON THE TOTAL
COMPENSATION PAID TO INDIVIDUALS SERVING IN SIMILAR POSITIONS AT CORPO-
RATIONS OF SIMILAR SIZE, TYPE, PURPOSE, AND SCOPE; (III) THE INDIVID-
UAL'S QUALIFICATIONS AND PERFORMANCE; (IV) COMPENSATION, PAYMENTS OR ANY
OTHER BENEFITS PROVIDED TO THE INDIVIDUAL FROM ANY AFFILIATE OF THE
CORPORATION; AND (V) THE OVERALL FINANCIAL CONDITION 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
(A) 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 (I) 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 (II) 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.
(B) NOTHING IN THIS PARAGRAPH SHALL BE CONSTRUED TO (I) REQUIRE THE
COMPENSATION COMMITTEE TO IMPLEMENT OR ACT CONSISTENTLY WITH ANY RECOM-
MENDATIONS PROVIDED BY THE COMPENSATION CONSULTANT; OR (II) 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-
A. 7772 24
RATION, INCLUDING THOSE DUTIES PRESCRIBED BY SECTION 717 (DUTIES OF
DIRECTORS AND OFFICERS).
(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 47. 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 48. Section 715 of the not-for-profit corporation law, as amended by
chapter 847 of the laws of 1970, paragraph (f) as amended by chapter
1057 of the laws of 1971, is amended to read as follows:
S 715. [Interested directors and officers] RELATED PARTY TRANSACTIONS.
(a) [No contract or other transaction between a corporation and one or
more of its directors or officers, or between a corporation and any
other corporation, firm, association or other entity in which one or
more of its directors or officers are directors or officers, or have a
substantial financial interest, shall be either void or voidable for
this reason alone or by reason alone that such director or directors or
officer or officers are present at the meeting of the board, or of a
committee thereof, which authorizes such contract or transaction, or
that his or their votes are counted for such purpose] NO CORPORATION
SHALL ENTER INTO A RELATED PARTY TRANSACTION, UNLESS:
(1) [If the] material facts as to [such director's or officer's inter-
est 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 author-
izes such contract or transaction by a vote sufficient for such purpose
without counting the vote or votes of such interested director or offi-
cer; 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) 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-
A. 7772 25
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 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
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 712-A (AUDIT OVERSIGHT). 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 PROCEDURES NECESSARY FOR THE REVIEW OR
APPROVAL OF SUCH TRANSACTIONS, OR provide that [contracts or] ANY trans-
actions in violation of such restrictions shall be void or voidable.
[(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.]
(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.
A. 7772 26
(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.
S 49. 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 715
(RELATED PARTY TRANSACTIONS).
(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 715 (RELATED PARTY TRANS-
ACTIONS).
(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 SECRE-
TARY 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.
(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 TWENTY OR MORE EMPLOYEES AND IN THE
PRIOR FISCAL YEAR HAD ANNUAL REVENUE IN EXCESS OF ONE MILLION DOLLARS
SHALL ADOPT A WHISTLEBLOWER POLICY TO PROTECT FROM RETALIATION PERSONS
A. 7772 27
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 50. 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 51. Section 717 of the not-for-profit corporation law, paragraph (a)
as amended by chapter 490 of the laws of 2010, and paragraph (b) as
amended by chapter 734 of the laws of 1988, is amended to read as
follows:
S 717. Duty of directors and officers.
(a) Directors and officers shall discharge the duties of their respec-
tive positions in good faith and with the care an ordinarily prudent
person in a like position would exercise under similar circumstances IN
LIKE POSITIONS. [The factors set forth in subparagraph one of paragraph
(e) of section 552 (Standard of conduct in managing and investing an
institutional fund), if relevant, must be considered by a governing
board delegating] IN THE ADMINISTRATION OF THE POWERS TO MAKE AND RETAIN
INVESTMENTS PURSUANT TO SECTION 511-A (PETITION FOR ATTORNEY GENERAL
APPROVAL), TO APPROPRIATE APPRECIATION PURSUANT TO SECTION 513 (ADMINIS-
A. 7772 28
TRATION OF ASSETS RECEIVED FOR SPECIFIC PURPOSES), AND TO DELEGATE
investment management of institutional funds pursuant to section 514
(Delegation of investment management) [For purposes of this paragraph,
the term institutional fund is defined in section 551 (Definitions).], A
GOVERNING BOARD SHALL CONSIDER AMONG OTHER RELEVANT CONSIDERATIONS THE
LONG AND SHORT TERM NEEDS OF THE CORPORATION IN CARRYING OUT ITS
PURPOSES, ITS PRESENT AND ANTICIPATED FINANCIAL REQUIREMENTS, EXPECTED
TOTAL RETURN ON ITS INVESTMENTS, PRICE LEVEL TRENDS, AND GENERAL ECONOM-
IC CONDITIONS.
(b) In discharging their duties, directors and officers, when acting
in good faith, may rely on information, opinions, reports or statements
including financial statements and other financial data, in each case
prepared or presented by: (1) one or more officers or employees of the
corporation, whom the director believes to be reliable and competent in
the matters presented, (2) counsel, public accountants or other persons
as to matters which the directors or officers believe to be within such
person's professional or expert competence or (3) a committee of the
board upon which they do not serve, duly designated in accordance with a
provision of the certificate of incorporation or the bylaws, as to
matters within its designated authority, which committee the directors
or officers believe to merit confidence, so long as in so relying they
shall be acting in good faith and with that degree of care specified in
paragraph (a) of this section, BUT IF THE DIRECTOR OR OFFICER HAS KNOW-
LEDGE CONCERNING THE MATTER IN QUESTION REPORTED BY THE COMMITTEE THAT
WOULD CAUSE SUCH RELIANCE TO BE UNWARRANTED, THE DIRECTOR OR OFFICER
SHALL NOT BE CONSIDERED TO BE ACTING IN GOOD FAITH. Persons shall not
be considered to be acting in good faith if they have knowledge concern-
ing the matter in question that would cause such reliance to be unwar-
ranted. Persons who so perform their duties shall have no liability by
reason of being or having been directors or officers of the corporation.
(C) IN TAKING ACTION, INCLUDING, WITHOUT LIMITATION, ACTION WHICH MAY
INVOLVE OR RELATE TO A CHANGE OR POTENTIAL CHANGE IN THE CONTROL OF
CORPORATION, A DIRECTOR SHALL BE ENTITLED TO CONSIDER, WITHOUT LIMITA-
TION, (1) BOTH THE LONG-TERM AND THE SHORT-TERM INTERESTS OF THE CORPO-
RATION AND ITS MEMBERS AND (2) THE EFFECTS THAT THE CORPORATION'S ACTION
MAY HAVE IN THE SHORT-TERM OR IN THE LONG-TERM UPON ANY OF THE FOLLOW-
ING: (A) THE PROSPECTS FOR POTENTIAL GROWTH, DEVELOPMENT, PRODUCTIVITY
AND FINANCIAL STABILITY OF THE CORPORATION; (B) THE CORPORATION'S
CURRENT EMPLOYEES; (C) THE CORPORATION'S RETIRED EMPLOYEES AND OTHER
BENEFICIARIES RECEIVING OR ENTITLED TO RECEIVE RETIREMENT, WELFARE OR
SIMILAR BENEFITS FROM OR PURSUANT TO ANY PLAN SPONSORED, OR AGREEMENT
ENTERED INTO, BY THE CORPORATION; (D) THE BENEFICIARIES OR RECIPIENTS OF
THE CORPORATION'S SERVICES; (E) THE CORPORATION'S CREDITORS; (F) THE
ABILITY OF THE CORPORATION TO PROVIDE, AS A GOING CONCERN, BENEFITS,
GOODS, SERVICES, EMPLOYMENT OPPORTUNITIES AND EMPLOYMENT BENEFITS AND
OTHERWISE TO CONTRIBUTE TO THE COMMUNITIES IN WHICH IT CONDUCTS ACTIV-
ITIES; AND (G) THE ACCOMPLISHMENT OF THE CORPORATION'S PURPOSES AS STAT-
ED IN THE CERTIFICATE OF INCORPORATION. NOTHING IN THIS PARAGRAPH SHALL
CREATE ANY DUTIES OWED BY ANY DIRECTOR TO ANY PERSON OR ENTITY TO
CONSIDER OR AFFORD ANY PARTICULAR WEIGHT TO ANY OF THE FOREGOING OR
ABROGATE ANY DUTY OF THE DIRECTORS, EITHER STATUTORY OR RECOGNIZED BY
COMMON LAW OR COURT DECISIONS. FOR PURPOSES OF THIS PARAGRAPH, "CONTROL"
SHALL MEAN THE POSSESSION, DIRECTLY OR INDIRECTLY, OF THE POWER TO
DIRECT OR CAUSE THE DIRECTION OF THE MANAGEMENT AND POLICIES OF THE
CORPORATION, WHETHER THROUGH MEMBERSHIP OR OTHERWISE.
A. 7772 29
S 52. Section 718 of the not-for-profit corporation law, as amended by
chapter 992 of the laws of 1970, is amended to read as follows:
S 718. List of directors and officers.
(a) If a member or creditor of a corporation, in person or by his
attorney or agent, or a representative of the district attorney or of
the secretary of state, the attorney general, or other state official,
makes a written demand on a corporation to inspect a current list of its
directors and officers and their [residence] CURRENT 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] CURRENT addresses avail-
able, 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
corporation 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 53. 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 54. 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
A. 7772 30
of such action or proceeding, or any appeal therein, if such director or
officer acted, in good faith, for a purpose which he reasonably believed
to be in, or, in the case of service for any other corporation or any
partnership, joint venture, trust, employee benefit plan or other enter-
prise, not opposed to, the best interests of the corporation and, in
criminal actions or proceedings, in addition, had no reasonable cause to
believe that his conduct was unlawful.
(c) A corporation may indemnify any person made, or threatened to be
made, a party to an action by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he, his
testator or intestate, is or was a director or officer of the corpo-
ration, or is or was serving at the request of the corporation as a
director or officer of any other corporation of any [type or] kind,
domestic or foreign, of any partnership, joint venture, trust, employee
benefit plan or other enterprise, against amounts paid in settlement and
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 55. Paragraph (c) of section 723 of the not-for-profit corporation
law, as amended by chapter 368 of the laws of 1987, is amended to read
as follows:
(c) Expenses incurred in defending a civil or criminal action or
proceeding may be paid by the corporation in advance of the final dispo-
sition of such action or proceeding upon receipt of an undertaking by or
on behalf of such director or officer [to repay] SUFFICIENT TO ENSURE
THE REPAYMENT OF such amount as, and to the extent, required by para-
graph (a) of section 725.
S 56. Paragraph (b) of section 724 of the not-for-profit corporation
law, as amended by chapter 368 of the laws of 1987, is amended to read
as follows:
(b) The application shall be made in such manner and form as may be
required by the applicable rules of court or, in the absence thereof, by
direction of a court to which it is made. Such application shall be upon
notice to the corporation AND THE ATTORNEY GENERAL. The court may also
direct that notice be given at the expense of the corporation to the
members and such other persons as it may designate in such manner as it
may require.
S 57. 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
A. 7772 31
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 58. 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, CONSENTS, 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. IF A CERTIFICATE OF
AMENDMENT ADDING, CHANGING OR ELIMINATING A PURPOSE, POWER OR PROVISION
THE INCLUSION OF WHICH IN A CERTIFICATE OF INCORPORATION REQUIRES THE
INCORPORATOR TO SEND A CERTIFIED COPY OF ITS CERTIFICATE OF INCORPO-
RATION TO A GOVERNMENTAL BODY OR OFFICER OR ANY OTHER PERSON OR ENTITY
UNDER SECTION 404 (NOTICES AND CONSENTS), OR IF THE AMENDMENT CHANGES
THE NAME OF A CORPORATION WHOSE INCORPORATOR WAS REQUIRED TO DELIVER A
CERTIFIED COPY OF ITS CERTIFICATE OF INCORPORATION TO A GOVERNMENTAL
BODY OR OFFICER OR ANY OTHER PERSON OR ENTITY UNDER SECTION 404 (NOTICES
AND CONSENTS), A CERTIFIED COPY OF THE CERTIFICATE OF AMENDMENT SHALL BE
SENT BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE GOVERNMENT BODY
OR OFFICER OR OTHER PERSON OR ENTITY IMMEDIATELY AFTER THE FILING OF
SUCH CERTIFICATE WITH THE DEPARTMENT OF STATE.
(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 a justice of the supreme court of the judicial district in
which the office of the corporation is located. Ten days' written notice
of the application for such approval shall be given to the attorney-gen-
eral.
S 59. Section 907 of the not-for-profit corporation law is amended to
read as follows:
S 907. Approval by the supreme court OR THE 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 chap-
ter], 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
A. 7772 32
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) 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).
[(b) Upon the filing of the application the court shall fix a time for
hearing thereof and shall direct that notice thereof be given to such
persons as may be interested, including the attorney general, any
governmental body or officer and any other person or body whose consent
or approval is required by section 909 (Consent to filing), in such form
and manner as the court may prescribe. If no votes against adoption of
the resolution approving the plan of merger or consolidation were cast
at the meeting at which the resolution was adopted by any constituent
corporation the court may dispense with notice to anyone except the
attorney-general, any governmental body or officer and any other person
or body whose consent or approval is required by section 909 (Consent to
filing). Any person interested may appear and show cause why the appli-
cation should not be granted.
(c) If the court shall find that any of the assets of any of the
constituent corporations are held for a purpose specified as Type B in
paragraph (b) of section 201 or are legally required to be used for a
particular purpose, but not upon a condition requiring return, transfer
or conveyance by reason of the merger or consolidation, the court may,
in its discretion, direct that such assets be transferred or conveyed to
the surviving or consolidated corporation subject to such purpose or
use, or that such assets be transferred or conveyed to the surviving or
consolidated corporation or to one or more other domestic or foreign
corporations or organizations engaged in substantially similar activ-
ities, upon an express trust the terms of which shall be approved by the
court.
(d) If the court shall find that the interests of non-consenting
members are or may be substantially prejudiced by the proposed merger or
consolidation, the court may disapprove the plan or may direct a modifi-
cation thereof. In the event of a modification, if the court shall find
that the interests of any members may be substantially prejudiced by the
proposed merger or consolidation as modified, the court shall direct
that the modified plan be submitted to vote of the members of the
constituent corporations, or if the court shall find that there is not
such substantial prejudice, it shall approve the agreement as so modi-
fied without further approval by the members. If the court, upon direct-
ing a modification of the plan of merger or consolidation, shall direct
that a further approval be obtained from members of the constituent
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.
A. 7772 33
(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 60. The not-for-profit corporation law is amended by adding a new
section 907-a to read as follows:
S 907-A. APPLICATION FOR APPROVAL OF THE SUPREME COURT.
(A) APPLICATION FOR AN ORDER APPROVING THE PLAN OF MERGER AND AUTHOR-
IZING THE FILING OF THE CERTIFICATE MAY BE MADE IN THE JUDICIAL DISTRICT
IN WHICH THE PRINCIPAL OFFICE OF THE SURVIVING OR CONSOLIDATED CORPO-
RATION IS TO BE LOCATED, OR IN WHICH THE OFFICE OF ONE OF THE DOMESTIC
CONSTITUENT CORPORATIONS IS LOCATED. THE APPLICATION SHALL BE MADE BY
ALL THE CONSTITUENT CORPORATIONS JOINTLY AND SHALL SET FORTH BY AFFIDA-
VIT: (1) THE PLAN OF MERGER OR CONSOLIDATION, (2) THE APPROVAL REQUIRED
BY SECTION 903 (APPROVAL OF PLAN) OR PARAGRAPH (B) OF SECTION 906 (MERG-
ER OR CONSOLIDATION OF DOMESTIC AND FOREIGN CORPORATIONS) FOR EACH
CONSTITUENT CORPORATION, (3) THE OBJECTS AND PURPOSES OF EACH SUCH
CORPORATION TO BE PROMOTED BY THE MERGER OR CONSOLIDATION, (4) A STATE-
MENT 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 RESOL-
UTION APPROVING THE PLAN OF MERGER OR CONSOLIDATION WERE CAST AT THE
MEETING AT WHICH THE RESOLUTION WAS ADOPTED BY EACH CONSTITUENT CORPO-
RATION, AND (6) FACTS SHOWING THAT THE CONSOLIDATION IS AUTHORIZED BY
THE LAWS OF THE JURISDICTIONS UNDER WHICH EACH OF THE CONSTITUENT CORPO-
RATIONS IS INCORPORATED.
(B) UPON THE FILING OF THE APPLICATION THE COURT SHALL FIX A TIME FOR
A HEARING THEREOF AND SHALL DIRECT THAT NOTICE THEREOF BE GIVEN TO SUCH
PERSONS AS MAY BE INTERESTED, INCLUDING THE ATTORNEY GENERAL, ANY
GOVERNMENTAL BODY OR OFFICER AND ANY OTHER PERSON OR BODY WHOSE CONSENT
OR APPROVAL IS REQUIRED BY SECTION 909 (CONSENT TO FILING), IN SUCH FORM
AND MANNER AS THE COURT MAY PRESCRIBE. IF NO VOTES AGAINST ADOPTION OF
THE RESOLUTION APPROVING THE PLAN OF MERGER OR CONSOLIDATION WERE CAST
AT THE MEETING AT WHICH THE RESOLUTION WAS ADOPTED BY ANY CONSTITUENT
CORPORATION THE COURT MAY DISPENSE WITH NOTICE TO ANYONE EXCEPT THE
ATTORNEY GENERAL, ANY GOVERNMENTAL BODY OR OFFICER AND ANY OTHER PERSON
OR BODY WHOSE CONSENT OR APPROVAL IS REQUIRED BY SECTION 909 (CONSENT TO
FILING). ANY PERSON INTERESTED MAY APPEAR AND SHOW CAUSE WHY THE APPLI-
CATION SHOULD NOT BE GRANTED.
(C) IF THE COURT SHALL FIND THAT ANY OF THE ASSETS OF ANY OF THE
CONSTITUENT CORPORATIONS ARE HELD FOR A 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
A. 7772 34
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).
(E) IF IT SHALL APPEAR, TO THE SATISFACTION OF THE COURT, THAT THE
PROVISIONS OF THIS SECTION HAVE BEEN COMPLIED WITH, AND THAT THE INTER-
ESTS OF THE CONSTITUENT CORPORATIONS AND THE PUBLIC INTEREST WILL NOT BE
ADVERSELY AFFECTED BY THE MERGER OR CONSOLIDATION, IT SHALL APPROVE THE
MERGER OR CONSOLIDATION UPON SUCH TERMS AND CONDITIONS AS IT MAY
PRESCRIBE.
(F) A CERTIFIED COPY OF SUCH ORDER SHALL BE ANNEXED TO THE CERTIFICATE
OF MERGER OR CONSOLIDATION.
S 61. 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), (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 (NOTICES AND CONSENTS) OR
SECTION 909 (CONSENT TO FILING). 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.
A. 7772 35
(E) IF THE ATTORNEY GENERAL SHALL FIND THAT THE INTERESTS OF NON-CON-
SENTING MEMBERS ARE OR MAY BE SUBSTANTIALLY PREJUDICED BY THE PROPOSED
MERGER OR CONSOLIDATION, THE ATTORNEY GENERAL MAY DISAPPROVE OF THE
APPLICATION OR MAY CONDITION APPROVAL OF THE APPLICATION UPON MODIFICA-
TION OF THE PLAN OF MERGER OR CONSOLIDATION IN ACCORDANCE WITH THIS
CHAPTER AND ANY OTHER LAW OR RULE.
(F) IF IT SHALL APPEAR, TO THE SATISFACTION OF THE ATTORNEY GENERAL,
THAT THE PROVISIONS OF THIS SECTION HAVE BEEN COMPLIED WITH, AND THAT
THE INTERESTS OF THE CONSTITUENT CORPORATIONS AND THE PUBLIC INTEREST
WILL NOT BE ADVERSELY AFFECTED BY THE MERGER OR CONSOLIDATION, THE
ATTORNEY GENERAL SHALL APPROVE THE MERGER OR CONSOLIDATION UPON SUCH
TERMS AND CONDITIONS AS IT MAY PRESCRIBE.
(G) THE APPROVAL OF THE ATTORNEY GENERAL SHALL BE ANNEXED TO THE
CERTIFICATE OF MERGER OR CONSOLIDATION.
(H) IF THE ATTORNEY GENERAL DOES NOT APPROVE THE APPLICATION, OR IF
THE ATTORNEY GENERAL CONCLUDES THAT COURT REVIEW IS APPROPRIATE, THE
CONSTITUENT CORPORATIONS MAY SEEK COURT APPROVAL ON NOTICE TO THE ATTOR-
NEY GENERAL PURSUANT TO SECTION 907-A (APPLICATION FOR APPROVAL OF THE
SUPREME COURT).
S 62. 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, BENEFICENT CORPORATION, OR ANY CORPORATION
FORMED AS a type A or type C corporation [under section 201 (Purposes)]
PRIOR TO JANUARY FIRST, TWO THOUSAND FOURTEEN, may be merged or consol-
idated 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 constit-
uent corporation. With respect to such merger or consolidation, any
reference in paragraph (b) of section 901 (POWER OF MERGER OR CONSOL-
IDATION) of this article or paragraph (b) of section 901 (POWER OF MERG-
ER OR CONSOLIDATION) of the business corporation law to a corporation
shall, unless the context otherwise requires, include both domestic 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).
S 63. 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 AND NOTICES.
If the purposes of any constituent or consolidated corporation would
require the approval or consent of any governmental body or officer or
any other person or body under section 404 ([Approvals] NOTICES and
consents) 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] SEND BY CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, a certified copy of any certificate of merger or
consolidation involving such corporation to the office of children and
A. 7772 36
family services within thirty days after the filing of such merger or
consolidation with the department of state. IF THE PURPOSES OF ANY
CONSTITUENT OR CONSOLIDATED CORPORATION WOULD REQUIRE NOTICE TO ANY
GOVERNMENTAL BODY OR OFFICER OR ANY OTHER PERSON OR ENTITY UNDER SECTION
404 (NOTICES AND CONSENTS), A CERTIFIED COPY OF THE CERTIFICATE OF MERG-
ER OR CONSOLIDATION SHALL BE SENT, CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO THE GOVERNMENTAL BODY OR OFFICER OR ANY OTHER PERSON OR
ENTITY IMMEDIATELY AFTER THE FILING OF SUCH MERGER OR CONSOLIDATION BY
THE DEPARTMENT OF STATE.
S 64. Paragraphs (b), (c) and (d) of section 1001 of the not-for-pro-
fit corporation law, as amended by chapter 434 of the laws of 2006, are
amended to read as follows:
(b) If the corporation is a [Type B, C or D corporation and] has no
assets to distribute and no liabilities at the time of dissolution, the
plan of dissolution shall include a statement to that effect.
(c) If the corporation [is a Type B, C or D corporation and] has no
assets to distribute, other than a reserve not to exceed twenty-five
thousand dollars for the purpose of paying ordinary and necessary
expenses of winding up its affairs including attorney and accountant
fees, and liabilities not in excess of ten thousand dollars at the time
of adoption of the plan of dissolution, the plan of dissolution shall
include a statement to that effect.
(d) If the corporation has assets to distribute or liabilities, the
plan of dissolution shall contain:
(1) a description with reasonable certainty of the assets of the
corporation and their fair value, and the total amount of debts and
other liabilities incurred or estimated by the corporation, including
the total amount of any accounting and legal fees incurred or estimated,
in connection with the dissolution procedure.
(2) a statement as to whether any gifts or other assets are legally
required to be used for a particular purpose.
(3) if there are assets received and held by the corporation either
for a CHARITABLE CORPORATION OR BENEFICENT CORPORATION purpose [speci-
fied 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 corporation, subject to any unpaid liabilities
of the corporation, shall be distributed as required by any gift instru-
ment or to a charitable CORPORATION OR organization or organizations OR
A BENEFICENT CORPORATION 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 financial reports of each recipient organization
for the last three years and a sworn affidavit from a director and offi-
cer of each recipient organization stating the purposes of the organiza-
tion, 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 65. Paragraphs (a), (c) and (d) of section 1002 of the not-for-pro-
fit 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
A. 7772 37
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]
corporation, other than a corporation incorporated pursuant to article
15 (Public cemetery corporations), and has no assets to distribute, OR
NO ASSETS TO DISTRIBUTE other than a reserve not to exceed twenty-five
thousand dollars for the purpose of paying ordinary and necessary
expenses of winding up its affairs including attorney and accountant
fees, and liabilities not in excess of ten thousand dollars at the time
of adoption of the plan of dissolution, the vote required by the corpo-
ration's board of directors for adoption of the plan of dissolution of
such a corporation or by the corporation's members for the authorization
thereof shall be:
(1) In the case of a vote by the board of directors: (i) the number of
directors required under the certificate of incorporation, by-laws, this
chapter and any other applicable law; or
(ii) if the number of directors actually holding office as such at the
time of the vote to adopt the plan is less than the number required to
constitute a quorum of directors under the certificate of incorporation,
the by-laws, this chapter or any other applicable law, the remaining
directors unanimously;
(2) In the case of a vote by the members, (i) the number of members
required under the certificate of incorporation, by-laws, this chapter
and any other applicable law; or (ii) by the vote of members authorized
by an order of the supreme court pursuant to section 608 (QUORUM AT
MEETING OF MEMBERS) of this chapter permitting the corporation to
dispense with the applicable quorum requirement.
Notice of a special or regular meeting of the board of directors or of
the members entitled to vote on adoption and authorization or approval
of the plan of dissolution shall be sent to all the directors and
members of record entitled to vote. Unless otherwise directed by order
of the supreme court pursuant to section 608 (QUORUM AT MEETING OF
MEMBERS) of this chapter, the notice shall be sent by certified mail,
return receipt requested, to the last known address of record of each
director and member not fewer than thirty, and not more than sixty days
before the date of each meeting provided, however, that if the last
known address of record of any director or member is not within the
United States, the notice to such director shall be sent by any other
reasonable means.
(c) [Whenever] EXCEPT IN THE CASE OF A CORPORATION WITH NO ASSETS TO
DISTRIBUTE OR WITH NO ASSETS NOT TO EXCEED TWENTY-FIVE THOUSAND DOLLARS
AND LIABILITIES NOT IN EXCESS OF TEN THOUSAND DOLLARS, WHENEVER a stat-
ute creating, or authorizing the formation of, a corporation requires
approval by a governmental body or officer for the formation of such
corporation, dissolution shall not be authorized without the approval of
such body or officer.
(d) (1) The plan of dissolution and distribution of assets shall have
annexed thereto the approval of THE ATTORNEY GENERAL OR a justice of the
supreme court in the judicial district in which the office of the corpo-
ration is located in the case of a Type B, C or D corporation, and in
the case of any other corporation which holds assets at the time of
dissolution 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, OR NO ASSETS TO
A. 7772 38
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, 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 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. 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 IF THE ATTORNEY
GENERAL CONCLUDES THAT COURT REVIEW IS APPROPRIATE, THE PETITIONER MAY
SEEK COURT APPROVAL UPON TEN DAYS WRITTEN NOTICE TO THE ATTORNEY GENER-
AL.
(3) Application to the supreme court for an order for such approval
shall be by verified petition, with the plan of dissolution and distrib-
ution of assets and certified copies of the consents prescribed by this
section annexed thereto, and upon ten days written notice to the attor-
ney general accompanied by copies of such petition, plan and consents.
(4) In such case where approval of a justice of the supreme court OR
THE ATTORNEY GENERAL 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.
S 66. 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, is
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 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 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. Evidence of
the disposition of its assets and payment of its liabilities pursuant to
the plan of dissolution 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 dissol-
ution and distribution 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 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] CHARITABLE
A. 7772 39
corporations, BENEFICENT CORPORATIONS or other organizations engaged in
activities substantially similar to those of the dissolved corporation
pursuant to the plan of dissolution and distribution or, if applicable,
as ordered by the court to which such plan is submitted for approval
under section 1002 (Authorization of plan). 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 corpo-
ration 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 organization 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 67. 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.
(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), 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 EITHER THE ATTORNEY GENERAL
OR a justice of the supreme court, if such approval is required. A copy
A. 7772 40
of the order shall be attached to the certificate of dissolution. In the
case of a corporation, other than a corporation incorporated pursuant to
article 15 (Public cemetery corporations), having no assets to distrib-
ute, OR HAVING NO ASSETS TO DISTRIBUTE other than a reserve not to
exceed twenty-five thousand dollars for the purpose of paying ordinary
and necessary expenses of winding up its affairs including attorney and
accountant fees, and liabilities not in excess of ten thousand dollars
at the time of dissolution, a statement that a copy of the plan of
dissolution which contains the statement prescribed by paragraph (b) of
section 1001 (Plan of dissolution and distribution of assets) has been
duly filed with the attorney general, if required.
(b) Such certificate of dissolution shall have indorsed thereon or
annexed thereto the approval of the dissolution:
(1) By a governmental body or officer, if such approval is required. A
corporation whose statement of purposes specifically includes the estab-
lishment or operation of a child day care center, as that term is
defined in section three hundred ninety of the social services law,
shall provide a certified copy of any certificate of dissolution involv-
ing such corporation to the office of children and family services with-
in thirty days after the filing of such dissolution with the department
of state.
(2) By the attorney general in the case of a [Type B, C or D] CHARITA-
BLE corporation, or any other corporation that holds assets at the time
of dissolution legally required to be used for a particular purpose.
S 68. Paragraph (a) of section 1007 of the not-for-profit corporation
law, as amended by chapter 434 of the laws of 2006, is amended to read
as follows:
(a) At any time after the plan of dissolution and distribution of
assets shall have been (1) authorized as provided in section 1002 of
this article (Authorization of plan), (2) approved by any governmental
body or officer whose approval is required pursuant to paragraph (c) of
section 1002 of this article, and (3) approved by EITHER BY THE ATTORNEY
GENERAL OR a justice of the supreme court, if such approval is required
pursuant to paragraph (d) of section 1002 of this article, or filed with
the attorney general, if such filing is required pursuant to paragraph
(d) of section 1002 of this article, and prior to filing the certificate
of dissolution, the corporation may give a notice requiring all credi-
tors and claimants, including any with unliquidated or contingent claims
and any with whom the corporation has unfulfilled contracts, to present
their claims in writing and in detail at a specified place and by a
specified day, which shall not be less than six months after the first
publication of such notice. Such notice shall be published at least once
a week for two successive weeks in a newspaper of general circulation in
the county in which the office of the corporation was located at the
date of authorization of its plan of dissolution and distribution of
assets as provided in section 1002 of this article (Authorization of
plan). On or before the date of the first publication OR POSTING ON A
WEBSITE of such notice, the corporation shall mail a copy thereof, post-
age 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 recognition 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
A. 7772 41
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 69. 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 CORPORATION OR A BENEFICENT CORPORATION 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] CHARITABLE corporations,
BENEFICENT 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 70. Paragraph (a) of section 1010 of the not-for-profit corporation
law is amended to read as follows:
[(a)] At any time prior to the filing of a certificate of dissolution
by the department of state, a corporation may revoke the action taken to
dissolve the corporation in the following manner:
(1) If there are members entitled to vote thereon:
(A) Unless the certificate of incorporation dispenses with dissol-
ution action by the board, the board shall adopt a resolution recommend-
ing that the voluntary dissolution proceedings be revoked and directing
submission of the proposed revocation to a vote of the members entitled
to vote thereon.
(B) Revocation of the voluntary dissolution proceedings shall be
authorized by two-thirds vote as provided in paragraph (c) of section
613 (Vote of members).
(2) If there are no members entitled to vote thereon, revocation of
the voluntary dissolution proceedings shall be authorized by the vote of
a majority of the directors then in office.
(3) If approval of the dissolution of a corporation by a governmental
body or officer is required, as provided in paragraph (c) of section
1002 (Authorization of plan), and such approval has been given, revoca-
tion of the voluntary dissolution proceedings shall not be authorized
without approval thereof by such body or officer.
S 71. 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)] CHARITABLE OR BENEFICENT not-for-profit corpo-
ration.
S 72. 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. 7772 42
(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) shall apply and shall control the giving of notice to
creditors and claimants and the filing and barring of claims.
S 73. 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 74. Paragraph (b) of section 1215 of the not-for-profit corporation
law is amended to read as follows:
(b) The petition shall be accompanied by a verified account of all
the assets of the corporation received by him, of all payments or other
disposition thereof made by him, of the remaining assets of the corpo-
ration in respect to which he was appointed receiver and the situation
of the same, and of all his transactions as receiver. Thereupon, the
court shall grant an order directing notice to be given to the sureties
on his official bond and to all persons interested in the property of
the corporation to show cause, at a time and place specified, why the
receiver should not be permitted to resign. Such notice shall EITHER,
AS DIRECTED BY THE COURT, be published once in each week for six succes-
sive weeks in one or more newspapers [as the court shall direct] OR
POSTED PROMINENTLY AND CONTINUOUSLY FOR SIX SUCCESSIVE WEEKS ON THE
HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE CORPORATION. If it shall
appear that the proceedings of the receiver in the discharge of his
trust have been fair and honest and that there is no good cause to the
contrary, the court shall make an order permitting such receiver to
resign. Thereupon he shall be discharged and his powers as receiver
shall cease, but he shall remain subject to any liability incurred prior
to the making of such order. The court, in its discretion, may require
the expense of such proceeding to be paid by the receiver presenting the
petition.
S 75. 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
A. 7772 43
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 76. 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 BENEFICENT 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 application 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 77. 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 A
BENEFICENT CORPORATION IF FORMED IN THIS STATE; A STATEMENT of its
purposes to be pursued in this state and of the activities which it
proposes to conduct in this state; AND a statement that it is authorized
to conduct those activities in the jurisdiction of its incorporation[;
and in the case of a Type C corporation, the lawful public or quasi-
public objective which each business purpose will achieve].
S 78. Paragraph (c) of section 1304 of the not-for-profit corporation
law is amended 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), such
consent or approval shall be endorsed thereon or annexed thereto. IF THE
APPLICATION FOR AUTHORITY SETS FORTH ANY PURPOSE OR ACTIVITY REQUIRING A
DOMESTIC CORPORATION TO PROVIDE NOTICE OF THE FILING OF A CERTIFICATE OF
INCORPORATION TO ANY GOVERNMENT BODY OR OFFICER OR OTHER ENTITY UNDER
SECTION 404 (NOTICES AND CONSENTS) OF THIS CHAPTER, THEN THE CORPORATION
SHALL SEND BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, A CERTIFIED COPY
OF THE CERTIFICATE OF AUTHORITY TO SUCH PERSON OR ENTITY IMMEDIATELY
AFTER FILING THE CERTIFICATE OF AUTHORITY BY THE DEPARTMENT OF STATE.
S 79. 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
A. 7772 44
[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.
S 80. 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.
S 81. 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.
S 82. 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 prop-
erty situated within this state at the time of the making of the
contract.
(2) Where the subject matter of the litigation is situated within this
state.
(3) Where the cause of action arose within this state, except where
the object of the action or special proceeding is to affect the title of
real property situated outside this state.
(4) Where, in any case not included in the preceding subparagraphs, a
non-domiciliary would be subject to the personal jurisdiction of the
courts of this state under section [302] THREE HUNDRED TWO of the civil
practice law and rules.
(5) Where the defendant is a foreign corporation conducting activities
or authorized to conduct activities in this state.
S 83. 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.
A. 7772 45
S 84. 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) if when such provision would otherwise apply:
(1) The corporation is a [Type A] BENEFICENT 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 85. 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 86. 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 87. 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 88. 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 89. 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 90. 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] BENEFICENT corporation under this
chapter.
A. 7772 46
S 91. 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] BENEFICENT corporation.
S 92. 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 93. 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] BENEFICENT
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 corpo-
ration 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 94. 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] BENEFICENT
corporation under this chapter.
S 95. 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 96. 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 97. 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 98. 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 not-
for-profit] CHARITABLE corporation under this chapter and in accordance
with the provisions of this article and pursuant to this article;
S 99. 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.
A. 7772 47
S 100. 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 not-for-profit] CHARITABLE
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 101. 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 102. 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 not-for-profit] CHARITABLE
corporation sixty calendar days after an affirmative resolution approved
by two-thirds of the membership of the board of directors. Sixty calen-
dar days advance written notice of consideration of a resolution of
dissolution shall be given to the foreclosing governmental unit or units
that created the land bank, shall be published in a local newspaper of
general circulation, and POSTED PROMINENTLY AND CONTINUOUSLY ON THE
HOMEPAGE OF ANY WEBSITE MAINTAINED BY THE LAND BANK, AND shall be sent
certified mail to the trustee of any outstanding bonds of the land bank.
Upon dissolution of the land bank all real property, personal property
and other assets of the land bank shall become the assets of the fore-
closing governmental unit or units that created the land bank. In the
event that two or more foreclosing governmental units create a land bank
in accordance with section [sixteen hundred three] 1603 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 103. 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.
A. 7772 48
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 104. Paragraph (b-1) of section 8-1.8 of the estates, powers and
trusts law is REPEALED.
S 105. 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 DEFINED IN
SECTION 4958(F)(1)(A) OF THE INTERNAL REVENUE CODE OF 1986 AS AMENDED,
AND THE REGULATIONS THEREUNDER, AND ANY SUCCESSOR LAW OR REGULATION.
(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 BENEFICIAL 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
A. 7772 49
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 AND
THIS CHAPTER 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 COMMITTEE 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:
(I) RETAIN AND EVALUATE THE INDEPENDENT AUDITOR, WHICH SHALL REPORT
DIRECTLY TO THE AUDIT COMMITTEE;
(II) REVIEW WITH THE INDEPENDENT AUDITOR THE SCOPE AND PLANNING OF THE
AUDIT;
(III) REVIEW AND DISCUSS WITH THE INDEPENDENT AUDITOR, AT A MINIMUM:
(A) THE RESULTS OF ANY AUDIT, INCLUDING BUT NOT LIMITED TO: THE MANAGE-
MENT LETTER TO THE TRUST AND ANY MATERIAL RISKS AND WEAKNESSES IN INTER-
NAL 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 TRUST'S ACCOUNTING FUNCTION.
(IV) CONSIDER AT LEAST ANNUALLY THE PERFORMANCE AND INDEPENDENCE OF
THE INDEPENDENT AUDITOR;
(V) OVERSEE ADOPTION, IMPLEMENTATION OF AND COMPLIANCE WITH ANY
CONFLICT OF INTEREST POLICY ADOPTED BY THE TRUST PURSUANT TO PARAGRAPH
(F) 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
(VI) 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
A. 7772 50
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 THIS CHAPTER AND
THAT IN THE PRIOR FISCAL YEAR HAD ANNUAL REVENUES IN EXCESS OF TWO
MILLION DOLLARS SHALL DESIGNATE A COMPENSATION COMMITTEE OF THE TRUSTEES
TO OVERSEE EXECUTIVE COMPENSATION PROGRAMS AND RELATED PRACTICES OF THE
TRUST. (I) THE COMPENSATION COMMITTEE SHALL BE COMPRISED OF ONE OR MORE
INDEPENDENT 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.
(II) THE COMPENSATION COMMITTEE SHALL:
(A) REVIEW THE TOTAL COMPENSATION PAID TO THE TRUST'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 TRUST. IN MAKING THIS
DETERMINATION, THE COMPENSATION COMMITTEE SHALL AT A MINIMUM CONSIDER
THE FOLLOWING FACTORS: 1. THE TOTAL COMPENSATION PROVIDED TO THE INDI-
VIDUAL; 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 QUALIFICA-
TIONS AND PERFORMANCE; 4. COMPENSATION, PAYMENTS OR ANY OTHER BENEFITS
PROVIDED TO THE INDIVIDUAL FROM ANY AFFILIATE OF THE TRUST; AND 5. THE
OVERALL FINANCIAL CONDITION OF THE TRUST. (C) MAKE AND KEEP A CONTEMPO-
RANEOUS 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 INDIVID-
UAL.
(D) IF THE COMPENSATION COMMITTEE IS COMPRISED OF FEWER THAN ALL OF
THE INDEPENDENT TRUSTEES, THEN: (1) 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 SUBPARAGRAPH THREE OF THIS PARAGRAPH;
(2) UPON REVIEW OF THE RECOMMENDATIONS OF THE COMPENSATION COMMITTEE,
THE TRUSTEES SHALL APPROVE BY NOT LESS THAN A MAJORITY VOTE OF THE INDE-
PENDENT TRUSTEES THE TOTAL COMPENSATION OF EACH SUCH INDIVIDUAL, WITH
ONLY INDEPENDENT TRUSTEES PARTICIPATING IN ANY SUCH VOTE AND ANY
DISCUSSION RELATING THERETO; AND (3) 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. (4) THE COMPENSATION COMMITTEE MAY RETAIN A
COMPENSATION CONSULTANT TO ASSIST IN THE PERFORMANCE OF ITS RESPONSIBIL-
ITIES. THE COMPENSATION COMMITTEE SHALL BE DIRECTLY RESPONSIBLE FOR THE
APPOINTMENT, COMPENSATION 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,
A. 7772 51
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 TO THE TRUST
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 TRUST OR ANY AFFILIATE OF THE TRUST WITHIN THE
PRECEDING TWO YEARS, OTHER THAN REASONABLE AMOUNTS PAID FOR COMPENSATION
CONSULTING SERVICES, OR (B) ANY BUSINESS OR PERSONAL RELATIONSHIP WITH
THE TRUST OR ANY AFFILIATE OF THE TRUST, OR ANY OF ITS OR THEIR OFFI-
CERS, DIRECTORS OR EMPLOYEES, THAT MAY INTERFERE WITH THE ABILITY OF THE
CONSULTANT TO PROVIDE OBJECTIVE ADVICE TO THE COMMITTEE. (II) NOTHING IN
THIS SUBPARAGRAPH SHALL BE CONSTRUED TO (A) REQUIRE THE COMPENSATION
COMMITTEE TO IMPLEMENT OR ACT CONSISTENTLY WITH THE ADVICE OR RECOMMEN-
DATIONS PROVIDED BY THE COMPENSATION CONSULTANT TO THE COMPENSATION
COMMITTEE; OR (B) 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. (5) 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.
(E) (1) NOTWITHSTANDING ANY PROVISION IN THE TRUST INSTRUMENT TO THE
CONTRARY, NO TRUST SHALL ENTER INTO A RELATED PARTY TRANSACTION, UNLESS:
(I) THE MATERIAL FACTS AS TO THE RELATED PARTY'S INTEREST IN, AND
RELATIONSHIP TO, THE TRANSACTION ARE DISCLOSED IN GOOD FAITH TO THE
TRUSTEES; (II) THE TRUSTEES: (A) 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 BENEFICIARIES UNDER THE CIRCUMSTANCES; (B) DETERMINE BY A TWO-THIRDS
VOTE OF THE TRUSTEES THAT THE RELATED PARTY TRANSACTION IS FAIR, REASON-
ABLE 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 PARTIC-
IPATE IN ANY DELIBERATION OR VOTING RELATING THERETO; AND (C) CONTEMPO-
RANEOUSLY DOCUMENT IN WRITING THE BASIS FOR THEIR DETERMINATION 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
A. 7772 52
OF TRUSTEES, OR SEEK TO REQUIRE ANY PERSON OR ENTITY TO: (I) ACCOUNT
FOR ANY PROFITS MADE FROM SUCH TRANSACTION, AND PAY THEM TO THE TRUST;
(II) PAY THE TRUST THE VALUE OF THE USE OF ANY OF ITS PROPERTY OR OTHER
ASSETS USED IN SUCH TRANSACTION; (III) RETURN OR REPLACE ANY PROPERTY OR
OTHER ASSETS LOST TO THE TRUST AS A RESULT OF SUCH TRANSACTION, TOGETHER
WITH ANY INCOME OR APPRECIATION 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 (IV) 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.
(F)(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:
(I) A DEFINITION OF THE CIRCUMSTANCES THAT CONSTITUTE A CONFLICT OF
INTEREST; (II) PROCEDURES FOR DISCLOSING A CONFLICT OF INTEREST TO THE
AUDIT COMMITTEE OR, IF THERE IS NO AUDIT COMMITTEE, TO THE TRUSTEES;
(III) 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; (IV) 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; (V) A REQUIREMENT THAT THE
EXISTENCE AND RESOLUTION OF THE CONFLICT BE DOCUMENTED IN THE TRUST'S
RECORDS, INCLUDING IN THE MINUTES OF ANY MEETING AT WHICH THE CONFLICT
WAS DISCUSSED OR VOTED UPON; AND (VI) 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.
(G)(1) EVERY TRUST THAT HAS TWENTY OR MORE EMPLOYEES AND IN THE PRIOR
FISCAL YEAR HAD ANNUAL REVENUE IN EXCESS OF ONE MILLION DOLLARS SHALL
A. 7772 53
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:
(I) PROCEDURES FOR THE REPORTING OF VIOLATIONS OR SUSPECTED VIOLATIONS
OF LAWS OR TRUST POLICIES, INCLUDING PROCEDURES FOR PRESERVING THE
CONFIDENTIALITY OF REPORTED INFORMATION;
(II) PROCEDURES FOR HANDLING AND INVESTIGATING VIOLATIONS OR SUSPECTED
VIOLATIONS OF LAWS OR TRUST POLICIES;
(III) A REQUIREMENT THAT A TRUSTEE OR AN EMPLOYEE OF THE TRUST BE
DESIGNATED TO ADMINISTER, IMPLEMENT AND OVERSEE COMPLIANCE OF THE WHIS-
TLE-BLOWER POLICY AND TO REPORT TO THE AUDIT COMMITTEE OR OTHER COMMIT-
TEE OF INDEPENDENT TRUSTEES, OR TO THE TRUSTEES;
(IV) 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
(V) 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 106. 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 107. 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] 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 FOURTEEN AS A TYPE C CORPORATION pursuant
to section two hundred one of the not-for-profit corporation law [as
type C corporations] OR AS A CHARITABLE CORPORATION AS DEFINED IN PARA-
GRAPH (A) OF SECTION ONE HUNDRED TWO 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
A. 7772 54
the secretary of state and such confirmation of filing has been filed
with the board and the franchise oversight board.
S 108. 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 FIVE HUNDRED ONE (C)(3) OF THE INTERNAL REVENUE CODE, shall not
be deemed a fund raising counsel.
S 109. 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 110. Subdivisions 1 and 2 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
A. 7772 55
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 thousand dollars but not more than [two hundred fifty] FIVE
HUNDRED thousand dollars shall file an annual financial report. The
annual financial report shall be accompanied by an annual financial
statement which includes an independent certified public accountant's
review report in accordance with "statements on standards for accounting
and review services" issued by the American Institute of Certified
Public Accountants. The annual financial statement shall be prepared in
conformity with generally accepted accounting principles, 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 organiza-
tions. 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 financial report covering such
fiscal year in accordance with such requirements as the attorney general
may prescribe. Such financial report shall include a statement of any
changes in the information required to be contained in the registration
form filed on behalf of such organization. The financial report shall be
signed by the president or other authorized officer and the chief fiscal
officer of the organization who shall certify under penalties for perju-
ry 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, 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. 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.
S 111. 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 112. 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
A. 7772 56
into an agreement for the consolidation OR MERGER of such corporations,
setting forth the terms and conditions of consolidation OR MERGER, the
name of the proposed CONSOLIDATED OR MERGED corporation, the place or
places where the institution or institutions to be maintained is or are
to be located, the number of its directors, which may be five or more,
the time of the annual election and the names of the persons to be
directors until the first OR NEXT annual meeting.
The agreement must be approved by three-fourths of the trustees or
directors of such [corporation] CORPORATIONS at a meeting of the trus-
tees or directors of each corporation, separately and specially called
for that purpose, which approval, duly verified by the chairman and
clerk of such meeting, shall be annexed to the petition. On presenta-
tion of a petition, together with the certificate of approval and the
agreement for consolidation OR MERGER, and on such notice to interested
parties as the regents shall prescribe, and after hearing such inter-
ested parties as desire to be heard, the regents may make and execute an
order for the consolidation OR MERGER of the corporations on such terms
and conditions as the regents may prescribe. When such order is made,
such corporations shall become one corporation by the name designated in
the order, and shall be subject only to such duties and obligations as a
corporation formed under this chapter for the same purposes; and all the
property belonging to the corporations so consolidated OR MERGED shall
be vested in and transferred to the new OR SURVIVING corporation, which
shall be subject to all the liabilities of the former corporations, to
the same extent as if they had been contracted or incurred by it. If
any corporation so consolidated OR MERGED was incorporated under a
special act of the legislature or under a general law pursuant to which
its certificate of incorporation was filed with the department of state,
the regents shall deliver a certified copy of the order of consolidation
OR MERGER to such department.
S 113. 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 114. 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
A. 7772 57
be the first trustees of the new corporation, and the date of its first
annual corporate meeting. Such an agreement shall not be valid for
United Methodist churches unless proposed by a majority vote of the
charge conference of each church and approved by the superintendent or
superintendents of the district or districts in which the consolidating
churches are located, and by the majority of the members of each of such
churches, over the age of twenty-one years, present and voting at a
meeting thereof held in the usual place of public worship and called for
the purpose of considering such agreement by announcement made at public
service in such churches on two Sundays, the first not less than ten
days next preceding the date of such meeting. Such agreement shall not
be valid unless approved in the case of Protestant Episcopal churches by
the bishop and standing committee of the diocese in which such churches
are situated and in the case of churches of other denominations by the
governing body of the denomination, if any, to which each church
belongs, having jurisdiction over such church. Each corporation shall
thereupon make a separate petition to the supreme court for an order
consolidating OR MERGING the corporations, setting forth the denomi-
nation, if any, to which the church belongs, that the consent of the
governing body to the consolidation OR MERGER, if any, of that denomi-
nation having jurisdiction over such church has been obtained, the
agreement therefor, and a statement of all the property and liabilities
and the amount and sources of the annual income of such petitioning
corporation. In its discretion the court may direct that notice of the
hearing of such petition be given to the parties interested therein in
such manner and for such time as it may prescribe. After hearing all
the parties interested, present and desiring to be heard, the court may
make an order for the consolidation OR MERGER of the corporations on the
terms of such agreement and such other terms and conditions as it may
prescribe, specifying the name of such new OR SURVIVING corporation and
the [first] trustees thereof, and the method by which their successors
shall be chosen and the date of its first OR NEXT annual corporate meet-
ing. When such order is made and duly entered, the persons constituting
such CONSOLIDATED OR MERGED corporations shall BE OR become an incorpo-
rated church by, and said petitioning churches shall become consolidated
OR MERGED under, the name designated in the order, and the trustees
therein named shall be the [first] trustees thereof, and the future
trustees thereof shall be chosen by the method therein designated, and
all the estate, rights, powers and property of whatsoever nature belong-
ing to either corporation shall without further act or deed be vested in
and transferred to the new OR SURVIVING corporation as effectually as
they were vested in or belonging to the former corporations; and the
said new OR SURVIVING corporation shall be liable for all the debts and
liabilities of the former corporations in the same manner and as effec-
tually as if said debts or liabilities had been contracted or incurred
by the new OR SURVIVING corporation. A certified copy of such order
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 115. 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:
A. 7772 58
S 15-a. Consolidation of incorporated presbyteries. 1. Two or more
incorporated presbyteries may enter into an agreement for the consol-
idation OR MERGER of such corporations and such corporations may be
consolidated OR MERGED so as to form a single corporation which may be
either a new corporation or one of the [constitutent] CONSTITUENT corpo-
rations. Said agreement shall set forth the name of the proposed new
corporation or the name of the existing corporation if it is to become
the consolidated OR MERGED corporation, the method of choosing trustees,
the names of the persons to be the first trustees of the new corporation
if the consolidated OR MERGED corporation is to be a new corporation and
the date of the first annual corporate meeting.
2. Such agreement must be authorized and approved by a majority vote
of the members of each contracting presbytery taken at a meeting at
which a quorum is present duly called in accordance with the form of
government of the Presbyterian Church (U.S.A.) and the notice of such
meeting shall state the purpose of the meeting.
3. Before such agreement is approved as aforesaid, such consolidation
OR MERGER must be directed and approved by the Synod of the Northeast
and the General Assembly of the Presbyterian Church (U.S.A.).
4. Each presbytery shall thereafter join in a petition to the supreme
court for an order consolidating OR MERGING the corporation, setting
forth the agreement of the contracting presbyteries, the direction and
approval of the bodies as set forth in subdivision three [hereof] OF
THIS SECTION, a statement of all the property and liabilities and the
sources of the annual income of each presbytery and a description of any
property held by such presbyteries in trust for specific purposes. In
its discretion the court may direct that notice of the hearing of such
petition be given to the parties interested therein in such manner as it
may prescribe.
5. After hearing all the parties interested, present and desiring to
be heard, the court may make an order for the consolidation OR MERGER of
the presbyteries on the terms of such agreement and such other terms and
conditions as it may prescribe, specifying the name of the new corpo-
ration or the name the continuing corporation will have if one of the
[constitutent] CONSTITUENT corporations is to become the consolidated OR
MERGED corporation, the first trustees thereof if a new corporation is
to be created and the method by which their successors shall be chosen
and the date of the first annual corporate meeting if a new corporation
is to be created.
6. When such order is made and duly entered, the persons constituting
such corporate presbyteries shall become one incorporated consolidated
OR MERGED presbytery by, and said petitioning presbyteries shall become
consolidated OR MERGED under, the name designated in the order, and the
trustees therein named, if it is a new corporation, shall be the first
trustees thereof, and if it is a new corporation the trustees thereof
shall be chosen by the method therein designated, and all the estate,
rights, powers and property of whatsoever nature, belonging to either
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
A. 7772 59
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 116. 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 OR MERGER. Any two or more religious corpo-
rations of the Jewish faith, incorporated under or by general or special
laws, may enter into an agreement for the consolidation OR MERGER of
such corporations, setting forth the terms and conditions of consol-
idation, the name of the proposed OR SURVIVING corporation, the number
of its trustees, 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 affida-
vit by the president and the secretary of each corporation stating that
such approval has been given shall be annexed to the petition. On pres-
entation to the court of such petition and agreement for consolidation
OR MERGER and on such notice as the court may direct, the court after
hearing 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
certificates 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 corporations 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 117. 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 OR MERGER. The consolidated OR MERGED
corporation shall possess all the powers of the constituent corporations
and shall have the power and be subject to the duties and obligations of
a congregation of the Jewish faith formed for like purposes under the
religious corporations law. All the rights, privileges and interests of
each of the constituent corporations, all the property, real, personal
and mixed, and all the debts due on whatever account to either of them,
and all things in action, belonging to either of them, shall be deemed
to be transferred to and vested in such new corporation without further
act or deed; and all claims, demands[.], property, and every other
interest, belonging to the several constituent corporations, shall be as
effectually the property of the new corporation as they were of the
constituent corporations, and the title to all real property, held or
taken by deed or otherwise under the laws of this state, vested in the
several constituent corporations shall not be deemed to revert or to be
in any way impaired by reason of the consolidation but shall be vested
A. 7772 60
in the new corporation. Any devise, bequest, gift, grant, or declaration
of trust, contained in any deed, will, or other instrument, in trust or
otherwise, made before or after such consolidation, OR MERGER to or for
any of the constituent corporations, shall inure to the benefit of the
consolidated OR MERGED corporation. The consolidated corporation shall
be deemed to have assumed and shall be liable for all debts and obli-
gations of the constituent corporations in the same manner as if such
new corporation had itself incurred such debts or obligations.
S 118. 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 119. Paragraph (c) of subdivision 1 of section 1-a of the benevolent
orders law, as added by chapter 703 of the laws of 1970, is amended to
read as follows:
(c) The following provisions of the not-for-profit corporation law
shall not apply to benevolent orders: [section one hundred thirteen,]
section two hundred one, article four, paragraphs (a), (b), and (c) of
section eight hundred four, section nine hundred seven, section nine
hundred eight, section nine hundred nine, [section ten hundred eleven,]
section ten hundred twelve, and article fourteen.
S 120. 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
A. 7772 61
requirements of section one hundred thirteen of the not-for-profit
corporation law].
S 121. 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 122. 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 123. 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 124. Subsection (a) of section 6706 of the insurance law, as added
by chapter 598 of the laws of 2000, is amended to read as follows:
(a) Except as otherwise provided in this article, where inconsistent
with this article, or where the context otherwise requires, all of the
provisions of this chapter and the rules and regulations of the super-
intendent, relating to all insurers and those relating to
property/casualty insurance companies transacting the same kind or kinds
of insurance shall be applicable to a nonprofit property/casualty insur-
ance company organized as a [type B] CHARITABLE corporation AS DEFINED
IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) OF THE
NOT-FOR-PROFIT CORPORATION LAW AND FORMED pursuant to paragraph (b) of
section two hundred one of the not-for-profit corporation law and
licensed pursuant to subsection (b) of section six thousand seven
hundred four of this article. Where any of such provisions of law refer
to a corporation, company or insurer, such references, when read in
connection with and applicable to this article, shall mean such a
nonprofit property/casualty insurance company.
S 125. 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:
A. 7772 62
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 126. 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 127. 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 128. 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 129. 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 130. 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]
TWELVE-C of the banking law.
S 131. 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
A. 7772 63
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 132. Subdivision (b) of section 31.31 of the mental hygiene law, as
amended by chapter 669 of the laws of 1995, is amended to read as
follows:
(b) No loans, other than through the purchase of bonds, debentures, or
similar obligations of the type customarily sold in public offerings, or
through ordinary deposit of funds in a bank, shall be made by a not-for-
profit corporation which is licensed as a provider of services pursuant
to this article to its employee who receives an annual salary in excess
of thirty thousand dollars, or to any other corporation, firm, associ-
ation or other entity in which such employee is a director or officer or
employee or holds a direct or indirect substantial financial interest,
except a loan by one corporation incorporated as [a type B] CHARITABLE
corporation [pursuant to] AS DEFINED IN PARAGRAPH (A) OF SECTION ONE
HUNDRED TWO (DEFINITIONS) OF the not-for-profit corporation law to
another type B corporation, or a loan for a temporary or emergency
purpose which will further the health and welfare of the employee so
long as the purpose and amount of such loan are disclosed to and
approved by the board of directors of such agency. Such disclosure shall
be filed with the secretary of the corporation and entered in the
minutes of the meeting, and, if approved by such board, such disclosure
shall also be forwarded in writing to the commissioner and to the direc-
tor of community services of each local governmental unit that has, at
the time of such disclosure, a contract with such corporation for the
rendition of services pursuant to article forty-one of this chapter. A
loan made in violation of this section shall be a violation of the duty
to the not-for-profit corporation of the directors or officers authoriz-
ing it or participating in it, but the obligation of the borrower with
respect to the loan shall not be affected thereby.
S 133. 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
A. 7772 64
in his or her judgment are reasonable and necessary to protect the
interests of the people in such lands underwater. Such regulations shall
include without being limited to: the fees to be charged, consistent
with the provisions of this section, including mitigation of such fees
in the event of economic hardship on existing commercial enterprises;
fee limitations to administrative expenses for municipal uses which are
public, non-commercial and offer services free or for nominal fees, and
for uses undertaken and operated for public and non-commercial purposes
by not-for-profit corporations characterized as ["Type B"] CHARITABLE
corporations [pursuant to paragraph (b) of section two hundred one] AS
DEFINED IN PARAGRAPH (A) OF SECTION ONE HUNDRED TWO (DEFINITIONS) of the
not-for-profit corporation law, and for uses undertaken and operated for
public purposes by a corporation formed pursuant to the religious corpo-
ration law or by a corporation formed pursuant to A special act of this
state and which has as its principal purpose a religious purpose; such
further exemptions for projects as the commissioner determines do not
represent significant encroachments; limitations on grants, including
conversion grants, with respect to underwater lands consistent with the
public purposes of this subdivision and limiting such grants to excep-
tional circumstances; and factors to be examined in considering an
application for a lease, easement or other interest. Those factors shall
include without limitation the following: (i) the environmental impact
of the project; (ii) the values for natural resource management, recre-
ational uses, and commercial uses of the pertinent underwater land;
(iii) the size, character and effects of the project in relation to
neighboring uses; (iv) the potential for interference with navigation,
public uses of the waterway and rights of other riparian owners; (v) the
effect of the project on the natural resource interests of the state in
the lands; (vi) the water-dependent nature of the use; (vii) and any
adverse economic impact on existing commercial enterprises. The final
promulgation of rules establishing fees or fee structures shall be
subject to the approval of the director of the budget.
S 134. This act shall take effect January 1, 2014, provided, however,
that section forty-five of this act shall take effect January 1, 2015.