New York Not-for-Profit Corporation Law

consolidated law of New York (law ID NPC).

CHAPTER 1066 AN ACT in relation to not-for-profit corporations, constituting chapter thirty-five of the consolidated laws, and repealing the membership corporations law Became a law May 26, 1969, with the approval of the Governor. Passed by a majority vote, three-fifths being present The People of the State of New York, represented in Senate and Assembly, do enact as follows: CHAPTER THIRTY-FIVE OF THE CONSOLIDATED LAWS NOT-FOR-PROFIT CORPORATION LAW Article 1. Short title; definitions; application; certificates; miscellaneous. (§§ 101-115) 2. Corporate purposes and powers. (§§ 201-205) 3. Corporate name and service of process. (§§ 301-309) 4. Formation of corporations. (§§ 401-406) 5. Corporate finance. (§§ 501-521) 5-A. Prudent management of institutional funds act. (§§ 550-558). 6. Members. (§§ 601-624) 7. Directors and officers. (§§ 701-726) 8. Amendments and changes. (§§ 801-805) 9. Merger or consolidation. (§§ 901-910) 10. Non-judicial dissolution. (§§ 1001-1014) 11. Judicial dissolution. (§§ 1101-1115) 12. Receivership. (§§ 1201-1218) 13. Foreign corporations. (§§ 1301-1321) 14. Special not-for-profit corporations. (§§ 1401-1412) 15. Public cemetery corporations. (§§ 1501-1518) 16. Land banks. (§§ 1600-1617)

ARTICLE 1 SHORT TITLE; DEFINITIONS; APPLICATION; CERTIFICATES; MISCELLANEOUS Section 101. Short title. 102. Definitions. 103. Application.

104. Certificates; requirements, signing, filing, effectiveness. 104-A. Fees.
105. Certificates; corrections.
106. Certificates as evidence.
107. Corporate seal as evidence.
108. When notice or lapse of time unnecessary; notices dispensed with when delivery is prohibited.
109. Reservation of power.
110. Effect of invalidity of part of chapter; severability.
111. References.
112. Actions or special proceedings by attorney-general.
113. Visitation of supreme court.
114. Power to solicit contributions for charitable purposes.

Text as published by the New York State Senate (Open Legislation).

Article 1

§ 101 Short title.

§ 101. Short title.

This chapter shall be known as the "Not-for-Profit Corporation Law" and may be cited as "N-PCL".

§ 102 Definitions.

§ 102. Definitions. (a) As used in this chapter, unless the context otherwise requires, the term: (1) "Bonds" includes secured and unsecured bonds, debentures, and notes. (2) "By-laws" means the code or codes of rules adopted for the regulation or management of the affairs of the corporation irrespective of the name or names by which such rules are designated. (3) "Certificate of incorporation" includes (A) the original certificate of incorporation or any other instrument filed or issued under any statute to form a domestic or foreign corporation, as amended, supplemented or restated by certificates of amendment, merger or consolidation or other certificates or instruments filed or issued under any statute; or (B) a special act or charter creating a domestic or foreign corporation, as amended, supplemented or restated.

(3-a) "Charitable corporation" means any corporation formed, or for the purposes of this chapter, deemed to be formed, for charitable purposes. (3-b) "Charitable purposes" of a corporation means one or more of the following purposes: charitable, educational, religious, scientific, literary, cultural or for the prevention of cruelty to children or animals. (4) "Conducting of activities" of a corporation means the operations for the conduct of which such corporation is formed and may constitute "doing of business" or "transaction of business" as those terms are used in the statutes of this state. (5) "Corporation" or "domestic corporation" means a corporation (1) formed under this chapter, or existing on its effective date and theretofore formed under any other general statute or by any special act of this state, exclusively for a purpose or purposes, not for pecuniary profit or financial gain, for which a corporation may be formed under this chapter, and (2) no part of the assets, income or profit of which is distributable to, or enures to the benefit of, its members, directors or officers except to the extent permitted under this statute. (6) "Director" means any member of the governing board of a corporation, whether designated as director, trustee, manager, governor, or by any other title. The term "board" means "board of directors" or any other body constituting a "governing board" as defined in this section. (6-a) "Entire board" means the total number of directors entitled to vote which the corporation would have if there were no vacancies. If the by-laws of the corporation provide that the board shall consist of a fixed number of directors, then the "entire board" shall consist of that number of directors. If the by-laws of any corporation provide that the board may consist of a range between a minimum and maximum number of directors, and the number within that range has not been fixed in accordance with paragraph (a) of section seven hundred two of this chapter, then the "entire board" shall consist of the number of directors within such range that were elected or appointed as of the most recently held election of directors, as well as any directors whose terms have not yet expired. (7) "Foreign corporation" means a corporation formed under laws other

than the statutes of this state, which, if formed under the statutes of this state, would be within the term "corporation or domestic corporation" as herein defined. "Authorized", when used with respect to a foreign corporation, means having authority under Article 13 (Foreign Corporations) to conduct activities of the corporation in this state. (7-a) "Infant" or "minor" means any person who has not attained the age of eighteen years. (8) "Insolvent" means being unable to pay debts as they become due in the usual course of the debtor's business. (9) "Member" means one having membership rights in a corporation in accordance with the provisions of its certificate of incorporation or by-laws. (9-a) "Non-charitable corporation" means any corporation formed under this chapter, other than a charitable corporation, including but not limited to one formed for any one or more of the following non-pecuniary purposes: civic, patriotic, political, social, fraternal, athletic, agricultural, horticultural, or animal husbandry, or for the purpose of operating a professional, commercial, industrial, trade or service association. (10) "Not-for-profit corporation" means a corporation as defined in subparagraph (5). (11) "Office of a corporation" means the office the location of which is stated in the certificate of incorporation of a domestic corporation, or in the application for authority of a foreign corporation or an amendment thereof. Such office need not be a place where activities are conducted by such corporation. (12) "Process" means judicial process and all orders, demands, notices or other papers required or permitted by law to be personally served on a domestic or foreign corporation, for the purpose of acquiring jurisdiction of such corporation in any action or proceeding, civil or criminal, whether judicial, administrative, arbitrative or otherwise, in this state or in the federal courts sitting in or for this state. (15) "Governing board" means the body responsible for the management of a corporation or of an institutional fund. (16) "Historic dollar value" means the aggregate fair value in dollars of (i) an endowment fund at the time it became an endowment fund, (ii) each subsequent donation to the fund at the time it is made, and (iii)

each accumulation made pursuant to a direction in the applicable gift instrument at the time the accumulation is added to the fund. The determination of historic dollar value made in good faith by the corporation is conclusive. (18) "Authorized person" means a person, whether or not a member, officer, or director, who is authorized to act on behalf of a corporation or foreign corporation. (19) An "affiliate" of a corporation means any entity controlled by, or in control of, such corporation. (20) "Independent auditor" means any certified public accountant performing the audit of the financial statements of a corporation required by subdivision one of section one hundred seventy-two-b of the executive law. (21) "Independent director" means a director who: (i) is not, and has not been within the last three years, an employee or a key person of the corporation or an affiliate of the corporation, and does not have a relative who is, or has been within the last three years, a key person of the corporation or an affiliate of the corporation; (ii) has not received, and does not have a relative who has received, in any of the last three fiscal years, more than ten thousand dollars in direct compensation from the corporation or an affiliate of the corporation; (iii) is not a current employee of or does not have a substantial financial interest in, and does not have a relative who is a current officer of or has a substantial financial interest in, any entity that has provided payments, property or services to, or received payments, property or services from, the corporation or an affiliate of the corporation if the amount paid by the corporation to the entity or received by the corporation from the entity for such property or services, in any of the last three fiscal years, exceeded the lesser of ten thousand dollars or two percent of such entity's consolidated gross revenues if the entity's consolidated gross revenue was less than five hundred thousand dollars; twenty-five thousand dollars if the entity's consolidated gross revenue was five hundred thousand dollars or more but less than ten million dollars; one hundred thousand dollars if the entity's consolidated gross revenue was ten million dollars or more; or (iv) is not and does not have a relative who is a current owner, whether wholly or partially, director, officer or employee of the corporation's

outside auditor or who has worked on the corporation's audit at any time during the past three years. For purposes of this subparagraph, the terms: "compensation" does not include reimbursement for expenses reasonably incurred as a director or reasonable compensation for service as a director as permitted by paragraph (a) of section 202 (General and special powers) of this chapter; and "payment" does not include charitable contributions, dues or fees paid to the corporation for services which the corporation performs as part of its nonprofit purposes, or payments made by the corporation at fixed or non-negotiable rates or amounts for services received, provided that such services by and to the corporation are available to individual members of the public on the same terms, and such services received by the corporation are not available from another source. (22) "Relative" of an individual means (i) his or her spouse or domestic partner as defined in section twenty-nine hundred ninety-four-a of the public health law; (ii) his or her ancestors, brothers and sisters (whether whole or half blood), children (whether natural or adopted), grandchildren, great-grandchildren; or (iii) the spouse or domestic partner of his or her brothers, sisters, children, grandchildren, and great-grandchildren. (23) "Related party" means (i) any director, officer or key person of the corporation or any affiliate of the corporation; (ii) any relative of any individual described in clause (i) of this subparagraph; or (iii) any 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 or, in the case of a partnership or professional corporation, a direct or indirect ownership interest in excess of five percent. (24) "Related party transaction" means any transaction, agreement or any other arrangement in which a related party has a financial interest and in which the corporation or any affiliate of the corporation is a participant, except that a transaction shall not be a related party transaction if: (i) the transaction or the related party's financial interest in the transaction is de minimis, (ii) the transaction would not customarily be reviewed by the board or boards of similar organizations in the ordinary course of business and is available to others on the same or similar terms, or (iii) the transaction

constitutes a benefit provided to a related party solely as a member of a class of the beneficiaries that the corporation intends to benefit as part of the accomplishment of its mission which benefit is available to all similarly situated members of the same class on the same terms. (25) "Key person" means any person, other than a director or officer, whether or not an employee of the corporation, who (i) has responsibilities, or exercises powers or influence over the corporation as a whole similar to the responsibilities, powers, or influence of directors and officers; (ii) manages the corporation, or a segment of the corporation that represents a substantial portion of the activities, assets, income or expenses of the corporation; or (iii) alone or with others controls or determines a substantial portion of the corporation's capital expenditures or operating budget.

§ 103 Application.

§ 103. Application. (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 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 principal purpose an education purpose and which is a member of the university 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

education purpose, and (2) it is operated, supervised or controlled by or in connection with a religious organization. Any such corporation may at any time after the effective date of this chapter file a restated certificate of incorporation under section 805 (restated certificate of incorporation) including a statement that it elects to have this chapter apply in all respects to it. The restated certificate of incorporation shall conform with the requirements of section 402 (certificate of incorporation; contents) for new corporations. Upon the filing of such certificate by the department of state, this chapter shall apply in all respects to such corporation.

This chapter also applies to any other corporation of any kind, formed not-for-profit under any other chapter of the laws of this state except a chapter of the consolidated laws, to the extent that provisions of this chapter do not conflict with the provisions of such unconsolidated law. If an applicable provision of such unconsolidated law relates to a matter embraced in this chapter but is not in conflict therewith, both provisions shall apply. Any corporation to which this chapter is made applicable by this paragraph shall be treated as a "corporation" or "domestic corporation" as such terms are used in this chapter, except that the purposes of any such corporation formed or formable under such unconsolidated law shall not thereby be extended. For the purpose of this paragraph, the effective date of this chapter as to corporations to which this chapter is made applicable by this paragraph shall be September one, nineteen hundred seventy-three. (b) The general corporation law does not apply to a corporation of any 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 kind to which this chapter is applicable or a reference in any statute of this state, other than the membership corporations law, which makes a provision of the membership corporations law applicable to a corporation of any 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 corporation, formed under a special act, reasonably makes an interpretation as to whether a provision of the special act or this chapter prevails, or both apply, such interpretation shall govern unless and until a court determines otherwise, if such board has acted in good faith for a purpose which it reasonably believes to be in the best interests of the corporation, provided however, that such interpretation shall not bind any governmental body or officer. (d) A corporation whose formation under this chapter is authorized by another corporate law is, unless otherwise provided by such corporate law, subject to all the provisions of this chapter that are applicable to a charitable corporation formed under this chapter. (e) This chapter applies to commerce with foreign nations and among the several states, and to corporations formed by or under any act of congress, only to the extent permitted under the constitution and laws of the United States. (f) The enactment of this chapter shall not affect the duration of a corporation which is existing on the effective date of this chapter. Any such existing corporation, its members, directors and officers shall have the same rights and be subject to the same limitations, restrictions, liabilities and penalties as a corporation formed under this chapter, its members, directors and officers. (g) This chapter shall not affect any cause of action, liability, penalty or action or special proceeding, which on the effective date of this chapter, is accrued, existing, incurred or pending but the same may be asserted, enforced, prosecuted or defended as if this chapter had not been enacted.

§ 104 Certificates; requirements, signing, filing, effectiveness.

§ 104. Certificates; requirements, signing, filing, effectiveness. (a) Every certificate or other instrument relating to a domestic or foreign corporation which is delivered to the department of state for filing under this chapter, other than a certificate of existence under section 1304 (Application for authority; contents), shall be in the

English language, except that the corporate name may be in another language if written in English letters or characters. (c) Whenever such instrument is required to set forth the date of incorporation or the date when a certificate of incorporation was filed, the original certificate of incorporation is meant. This requirement shall be satisfied, in the case of a corporation created by special act, by setting forth the chapter number and year of passage of such act. (d) Every such certificate required under this chapter to be signed and delivered to the department of state shall, except as otherwise specified in the section providing for such certificate, be signed either by an officer, director, attorney-in-fact or duly authorized person and include the name and the capacity in which such person signs such certificate. (e) If an instrument which is delivered to the department of state for filing complies as to form with the requirements of law and there has been attached to it the consent or approval of the supreme court justice, governmental body or officer, or, other person or body, if any, whose consent to or approval of such instrument or the filing thereof is required by any statute of this state and the filing fee and tax, if any, required by any statute of this state in connection therewith have been paid, the instrument shall be filed and indexed by the department of state. No certificate of authentication or conformity or other proof shall be required with respect to any verification, oath or acknowledgment of any instrument delivered to the department of state under this chapter, if such verification, oath or acknowledgment purports to have been made before a notary public, or person performing the equivalent function, of one of the states, or any subdivision thereof, of the United States or the District of Columbia. Without limiting the effect of section four hundred three of this chapter, filing and indexing by the department of state shall not be deemed a finding that a certificate conforms to law, nor shall it be deemed to constitute an approval by the department of state of the name of the corporation or the contents of the certificate, nor shall it be deemed to prevent any person with appropriate standing from contesting the legality thereof in an appropriate forum. (f) Except as otherwise provided in this chapter, such instrument shall become effective upon the filing thereof by the department of

state. (g) The department shall make, certify and transmit electronically a copy of each such instrument to the clerk of the county in which the office of the domestic or foreign corporation is or is to be located. The county clerk shall file and index such copy.

§ 104-A Fees.

§ 104-A. Fees.

Except as otherwise provided, the department of state shall collect the following fees pursuant to this chapter: (b) For the reservation of a corporate name pursuant to section three hundred three of this chapter, ten dollars. (c) For the resignation of a registered agent for service of process pursuant to section three hundred five of this chapter, thirty dollars. (d) For service of process on the secretary of state pursuant to section three hundred six or three hundred seven of this chapter, forty dollars. If the service is in an action brought solely to recover a sum of money not in excess of two hundred dollars and the process is so endorsed, or the process is served on behalf of a county, city, town or village or other subdivision of the state, ten dollars. (e) For filing a certificate of incorporation pursuant to section four hundred two of this chapter, seventy-five dollars. (f) For filing a certificate of amendment pursuant to section eight hundred three of this chapter, thirty dollars. (g) For filing a certificate of change pursuant to section eight hundred three-A of this chapter, twenty dollars. (h) For filing a restated certificate of incorporation pursuant to section eight hundred five of this chapter, thirty dollars. (i) For filing a certificate of merger or consolidation pursuant to section nine hundred four of this chapter, thirty dollars. (j) For filing a certificate of merger or consolidation of domestic and foreign corporations pursuant to section nine hundred six of this chapter, thirty dollars. (k) For filing a certified copy of an order of approval of the supreme court pursuant to section nine hundred seven of this chapter, thirty dollars.

(l) For filing a certificate of dissolution pursuant to section one thousand three of this chapter, thirty dollars. (m) For filing a certificate of annulment of dissolution pursuant to section one thousand twelve of this chapter, thirty dollars. (n) For filing an application by a foreign corporation for authority to do business in New York state pursuant to section thirteen hundred four of this chapter, one hundred thirty-five dollars. (o) For filing a certificate of amendment of an application for authority by a foreign corporation pursuant to section thirteen hundred nine of this chapter, thirty dollars. (p) For filing a certificate of change of application for authority by a foreign corporation pursuant to section thirteen hundred ten of this chapter, twenty dollars. (q) For filing a certificate of surrender of authority pursuant to section thirteen hundred eleven of this chapter, thirty dollars. (r) For filing a statement of the termination of existence of a foreign corporation pursuant to section thirteen hundred twelve of this chapter, thirty dollars. There shall be no fee for the filing by an authorized officer of the jurisdiction of incorporation of a foreign corporation of a certificate that the foreign corporation has been dissolved or its authority or existence has been otherwise terminated or cancelled in the jurisdiction of its incorporation. (s) For filing any other certificate or instrument, thirty dollars.

§ 105 Certificates; corrections.

§ 105. Certificates; corrections. (a) Corrections prior to filing by department of state. 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 instrument, prior to the filing of such certificate or instrument by the department of state. Such correction shall be effected by the department of state upon authorization in writing by the incorporator in a form acceptable to the department. Such authorization may be delivered by mail or sent by electronic mail to the department. (b) Corrections following incorporation. 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 typographical or similar non-material error apparent on the face or defect in the execution thereof including the deletion of any matter not permitted to be stated therein. A certificate, entitled "Certificate of correction of.......... (correct title of certificate and name of corporation)" shall be signed and delivered to the department of state by mail or electronic mail. 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 defective, the proper execution. The filing of the certificate by the department of state shall not alter the effective time of the instrument being corrected, which shall remain as its original effective time, and shall not affect any right or liability accrued or incurred before such filing. (c) A corporate name may not be changed or corrected under this section other than to correct any typographical or similar non-material error.

§ 106 Certificates as evidence.

§ 106. Certificates as evidence. (a) Any certificate or other instrument filed by the department of state relating to a domestic or foreign corporation and containing statements of fact required or permitted by law to be contained therein, shall be received in all courts, public offices and official bodies as prima facie evidence of such facts and of the execution of such instrument. (b) Whenever by the laws of any jurisdiction other than this state, any certificate by any officer in such jurisdiction or a copy of any instrument certified or exemplified by any such officer may be received as prima facie evidence of the incorporation, existence or capacity of any foreign corporation incorporated in such jurisdiction, or claiming so to be, such certificate when exemplified, or such copy of such instrument when exemplified shall be received in all courts, public offices and official bodies of this state, as prima facie evidence with the same force as in such jurisdiction. Such certificate or certified copy of such instrument shall be so received, without being exemplified,

if it is certified by the secretary of state, or official performing the equivalent function as to corporate records, of such jurisdiction.

§ 107 Corporate seal as evidence.

§ 107. Corporate seal as evidence.

The presence of the corporate seal on a written instrument purporting to be executed by authority of a domestic or foreign corporation shall be prima facie evidence that the instrument was so executed.

§ 108 When notice or lapse of time unnecessary; notices dispensed with

§ 108. When notice or lapse of time unnecessary; notices dispensed with when delivery is prohibited. (a) Whenever, under this chapter or the certificate of incorporation or by-laws of any corporation or by the terms of any agreement or instrument, a corporation or the board or any committee thereof is authorized to take any action after notice to any person or persons or after the lapse of a prescribed period of time, such action may be taken without notice and without the lapse of such period of time, if at any time before or after such action is completed the person or persons entitled to such notice or entitled to participate in the action to be taken or, in the case of a member, by his attorney-in-fact, submit a signed waiver of notice of such requirements. (b) Whenever any notice or communication is required to be given to any person by this chapter, the certificate of incorporation or by-laws, or by the terms of any agreement or instrument, or as a condition precedent to taking any corporate action and communication with such person is then unlawful under any statute of this state or of the United States or any regulation, proclamation or order issued under said statutes, then the giving of such notice or communication to such person shall not be required and there shall be no duty to apply for license or other permission to do so. Any affidavit, certificate or other instrument which is required to be made or filed as proof of the giving of any notice or communication required under this chapter shall, if such notice or communication to any person is dispensed with under this paragraph, include a statement that such notice or communication was not given to any person with whom communication is unlawful. Such

affidavit, certificate or other instrument shall be as effective for all purposes as though such notice or communication had been personally given to such person. (c) Whenever any notice or communication is required or permitted by this chapter to be given by mail, it shall, except as otherwise expressly provided in this chapter, be mailed to the person to whom it is directed at the address designated by him for that purpose or, if none is designated, at his last known address. Such notice or communication is given when deposited, with postage thereon prepaid, in a post office or official depository under the exclusive care and custody of the United States post office department. Such mailing shall be by first class mail except where otherwise required by this chapter.

§ 109 Reservation of power.

§ 109. Reservation of power.

The legislature reserves the right, at pleasure, to alter, amend, suspend or repeal in whole or in part this chapter, or any certificate of incorporation or any authority to do business in this state, of any domestic or foreign corporation, whether or not existing or authorized on the effective date of this chapter.

§ 110 Effect of invalidity of part of chapter; severability.

§ 110. Effect of invalidity of part of chapter; severability.

If any provision of this chapter or application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are declared severable.

§ 111 References.

§ 111. References.

Unless otherwise stated, all references in this chapter to articles or sections refer to the articles or sections of this chapter, and all references in any section of this chapter to a lettered or numbered

paragraph or subparagraph refer to the paragraph or subparagraph so lettered or numbered in such section.

§ 112 Actions or special proceedings by attorney-general.

§ 112. Actions or special proceedings by attorney-general. (a) The attorney-general may maintain an action or special proceeding: (1) To annul the corporate existence or dissolve a corporation that has acted beyond its capacity or power or to restrain it from carrying on unauthorized activities; (2) To annul the corporate existence or dissolve any corporation that has not been duly formed; (3) To restrain any person or persons from acting as a domestic or foreign corporation within this state without being duly incorporated or from exercising in this state any corporate rights, privileges or franchises not granted to them by the law of the state; (4) To procure a judgment removing a director of a corporation for cause under section 706 (Removal of directors); (5) To dissolve a corporation under article 11 (Judicial dissolution); (6) To restrain a foreign corporation or to annul its authority to carry on activities in this state under section 1303 (Violations). (7) To enforce any right given under this chapter to members, a director or an officer of a charitable corporation. 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 charitable corporation which has been dissolved under section 1011 (Dissolution for failure to file certificate of type of Not-for-Profit Corporation Law under section 113) to account for the assets of the dissolved corporation. (9) Upon application, ex parte, for an order to the supreme court at a special term held within the judicial district where the office of the corporation is located, and if the court so orders, to enforce any right given under this chapter to members, a director or an officer of a non-charitable 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, seek damages and other appropriate remedies, in law or equity, in addition to any actions pursuant to section 715 (Related party transactions) of this

chapter. (b) In an action or special proceeding brought by the attorney-general under any of the provisions of this chapter: (1) If an action, it is triable by jury as a matter of right. (2) The court may confer immunity in accordance with the provisions of section six hundred nineteen-c of the code of criminal procedure. (3) A temporary restraining order to restrain the commission or continuance of the unlawful acts which form the basis of the action or special proceeding may be granted upon proof, by affidavit, that the defendant or defendants have committed or are about to commit such acts. Application for such restraining order may be made ex parte or upon such notice as the court may direct. (4) If the action or special proceeding is against a foreign corporation, the attorney-general may apply to the court at any stage thereof for the appointment of a temporary receiver of the assets in this state of such foreign corporation, whenever it has assets or property of any kind whatsoever, tangible or intangible, within this state. (5) When final judgment in such action or special proceeding is rendered against the defendant or defendants, the court may direct the costs to be collected by execution against any or all of the defendants or by order of attachment or other process against the person of any director or officer of a corporate defendant. (6) In connection with any such proposed action or special proceeding, the attorney-general may take proof and issue subpoenas in accordance with the civil practice law and rules. (c) In any such action or special proceeding against a foreign corporation which has not designated the secretary of state as its agent for service of process under section 304 (Statutory designation of secretary of state as agent for service of process), any of the following acts in this state by such foreign corporation shall constitute the appointment by it of the secretary of state as its agent upon whom process against such foreign corporation may be served. (1) As used in this paragraph the term "resident" shall include individuals, domestic corporations of any kind and foreign corporations of any kind authorized to do business or carry on activities in the state.

(2) Any act done, or representation made as part of a course of the solicitation of orders, or the issuance, or the delivery of contracts for, or the sale of, property, or the performance of services to residents which involves or promotes a plan or scheme to defraud residents in violation of the laws or the public policy of the state. (3) Any act done as part of a course of conduct of business or activities in the solicitation of orders from residents for property, goods or services, to be delivered or rendered within this state to, or on their behalf, where the orders or contracts are executed by such residents within this state and where such orders or contracts are accompanied or followed by an earnest money deposit or other down payment or any installment payment thereon or any other form of payment, which payment is either delivered in or transmitted from the state. (4) Any act done as part of the conduct of a course of business or activities with residents which defrauds such residents or otherwise involves or promotes an attempt by such foreign corporation to circumvent the laws of this state. (d) Paragraphs (b), (c), (d) and (e) of section 307 (Service of process of unauthorized foreign corporation) shall apply to process served under paragraph (c).

§ 114 Visitation of supreme court.

§ 114. Visitation of supreme court.

Charitable corporations, whether formed under general or special laws, with their books and vouchers, shall be subject to the visitation and inspection of a justice of the supreme court, or of any person appointed by the court for that purpose. If it appears by the verified petition of a member, director, officer or creditor of any such corporation, that it, or its directors, officers, members, key persons or agents, have misappropriated any of the funds or property of the corporation, or diverted them from the purpose of its incorporation, or that the corporation has acquired 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 inventory, account and statement to be filed, and proceed to take and state an account of the property and liabilities of the corporation, or may appoint a referee for that purpose. When such account is taken and stated, after hearing all the parties to the 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.

§ 115 Power to solicit contributions for charitable purposes.

§ 115. Power to solicit contributions for charitable purposes. (a) No corporation required to obtain approval or provide notice of formation pursuant to section 404 (Approvals, notices and consents) of this chapter may solicit contributions for any purpose requiring such approval or notice unless and until such corporation (1) obtains and submits any approval or notice required thereunder, and (2) is in compliance with the registration and reporting requirements of article seven-A of the executive law and section 8-1.4 of the estates, powers and trusts law. (b) The attorney general may maintain an action or proceeding pursuant to the provisions of subparagraph one of paragraph (a) of section one hundred twelve of this article against any corporation that solicits contributions in violation of paragraph (a) of this section. Such an action may also be maintained in relation to a corporation hereinafter

incorporated if the name, purposes, objects or the activities of such corporation may, in any manner, lead to the belief that the corporation possesses or may exercise any of such purposes.

ARTICLE 2 CORPORATE PURPOSES AND POWERS Section 201. Purposes. 202. General and special powers. 203. Defense of ultra vires. 204. Limitation on activities. 205. Conveyance of real property to members for dwelling houses.

Article 2

§ 201 Purposes.

§ 201. Purposes. (a) A corporation, as defined in paragraph (a) of § 102 (Definitions), may be formed under this chapter as a charitable corporation or a non-charitable corporation 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 formed under this chapter on or after July first, two thousand fourteen shall either be a charitable corporation or a non-charitable corporation. Any corporation formed for both charitable purposes and non-charitable purposes shall be deemed a charitable corporation for purposes of this chapter. A type A not-for-profit corporation formed prior to July first, two thousand fourteen shall be deemed a non-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 non-charitable corporation, and any reference in any such filing or submission referring to the status of such corporation as a type A corporation shall be deemed to refer to a non-charitable corporation. (c) A type B or C not-for-profit corporation formed prior to July first, two thousand fourteen shall be deemed a charitable corporation for all purposes under this chapter. Any submission or filing by such corporation to any person or entity shall be deemed to have been submitted or filed by a charitable corporation, and any reference in any

such filing or submission referring to the status of such corporation as a type B or type C corporation shall be deemed to refer to a charitable corporation. (d) A type D not-for-profit corporation formed prior to July first, two thousand fourteen for charitable purposes shall be deemed a charitable corporation. Any submission or filing by such corporation to any person or entity shall be deemed to have been submitted or filed by a charitable corporation, and any reference in any such filing or submission referring to the status of such corporation as a type D corporation shall be deemed to refer to a charitable corporation. Any other type D not-for-profit corporations formed prior to July first, two thousand fourteen shall be deemed a non-charitable corporation. Any submission or filing by such corporation to any person or entity shall be deemed to have been submitted or filed by a non-charitable corporation, and any reference in any such filing or submission referring to the status of such corporation as a type D corporation shall be deemed to refer to a non-charitable corporation.

§ 202 General and special powers.

§ 202. General and special powers. (a) Each corporation, subject to any limitations provided in this chapter or any other statute of this state or its certificate of incorporation, shall have power in furtherance of its corporate purposes: (1) To have perpetual duration. (2) To sue and be sued in all courts and to participate in actions and proceedings, whether judicial, administrative, arbitrative or otherwise, in like cases as natural persons. (3) To have a corporate seal, and to alter such seal at pleasure, and to use it by causing it or a facsimile to be affixed or impressed or reproduced in any other manner. (4) To purchase, receive, take by grant, gift, devise, bequest or otherwise, lease, or otherwise acquire, own, hold, improve, employ, use and otherwise deal in and with, real or personal property, or any interest therein, wherever situated. (5) To sell, convey, lease, exchange, transfer or otherwise dispose of, or mortgage or pledge, or create a security interest in, all or any

of its property, or any interest therein, wherever situated. (6) To purchase, take, receive, subscribe for, or otherwise acquire, own, hold, vote, employ, sell, lend, lease, exchange, transfer, or otherwise dispose of, mortgage, pledge, use and otherwise deal in and with, bonds and other obligations, shares, or other securities or interests issued by others, whether engaged in similar or different business, governmental, or other activities. (7) To make capital contributions or subventions to other not-for-profit corporations. (8) To accept subventions from other persons or any unit of government. (9) To make contracts, give guarantees and incur liabilities, borrow money at such rates of interest as the corporation may determine, issue its notes, bonds and other obligations, and secure any of its obligations by mortgage or pledge of all or any of its property or any interest therein, wherever situated. (10) To lend money, invest and reinvest its funds, and take and hold real and personal property as security for the payment of funds so loaned or invested. (11) To conduct the activities of the corporation and have offices and exercise the powers granted by this chapter in any jurisdiction within or without the United States. (12) To elect or appoint officers, employees and other agents of the corporation, define their duties, fix their reasonable compensation and the reasonable compensation of directors, and to indemnify corporate personnel. Such compensation shall be commensurate with services performed. (13) To adopt, amend or repeal by-laws, including emergency by-laws made pursuant to subdivision seventeen of section twelve of the state defense emergency act, relating to the activities of the corporation, the conduct of its affairs, its rights or powers or the rights or powers of its members, directors or officers. (14) To make donations, irrespective of corporate benefit, for the public welfare or for community fund, hospital, charitable, educational, scientific, civic or similar purposes, and in time of war or other national emergency in aid thereof. (15) To be a member, associate or manager of other non-profit

activities or to the extent permitted in any other jurisdiction to be an incorporator of other corporations, and to be a partner in a redevelopment company formed under the private housing finance law. (16) To have and exercise all powers necessary to effect any or all of the purposes for which the corporation is formed. (b) If any general or special law heretofore passed, or any certificate of incorporation, shall limit the amount of property a corporation may take or hold, or the yearly income from the corporate assets or any part thereof, such corporation may take and hold property of the value of fifty million dollars or less, or the yearly income derived from which shall be six million dollars or less, or may receive yearly income from such corporate assets of six million dollars or less, notwithstanding any such limitations. In computing the value of such property, no increase in value arising otherwise than from improvements made thereon shall be taken into account. (c) When any corporation shall have sold or conveyed any part of its real property, the supreme court, notwithstanding a restriction in any general or special law, may authorize it to purchase and hold from time to time other real property, upon satisfactory proof that the value of the property so purchased does not exceed the value of the property so sold and conveyed within the three years next preceding the application. (d) A corporation formed under general or special law to provide parks, playgrounds or cemeteries, or buildings and grounds for camp or grove meetings. Sunday school assemblies, cemetery purposes, temperance, missionary, educational, scientific, musical and other meetings, subject to the ordinances and police regulations of the county, city, town, or village in which such parks, playgrounds, cemeteries, buildings and grounds are situated, may appoint from time to time one or more special police officers, with power to remove the same at pleasure. Such special police officers shall preserve order in and about such parks, playgrounds, cemeteries, buildings and grounds, and the approaches thereto, and to protect the same from injury, and shall enforce the established rules and regulations of the corporation. Every police officer so appointed shall within fifteen days after his or her appointment and before entering upon the duties of his or her office, take and subscribe the oath of office prescribed in the thirteenth article of the constitution of the state of New York, which oath shall

be filed in the office of the county clerk of the county where such grounds are situated. A police officer appointed under this section when on duty shall wear conspicuously a metallic shield with the name of the corporation which appointed him or her inscribed thereon. The compensation of police officers appointed under this section shall be paid by the corporation by which they are appointed. (e) Any wilful trespass in or upon any of the parks, playgrounds, buildings or grounds provided for the purposes mentioned in the preceding paragraph, or upon the approaches thereto, and any wilful injury to any of the said parks, playgrounds, buildings or grounds, or to any trees, shrubbery, fences, fixtures or other property thereon or pertaining thereto, and any wilful disturbance of the peace thereon by intentional breach of the rules and regulations of the corporation, is a misdemeanor. (f) No corporation shall conduct activities in New York state under any name, other than that appearing in its certificate of incorporation, without compliance with the filing provisions of section one hundred thirty of the general business law governing the conduct of business under an assumed name. (g) Every corporation receiving any kind of state funding shall ensure the provision on any form required to be completed at application or recertification for the purpose of obtaining financial assistance pursuant to this chapter, that the application form shall contain a check-off question asking whether the applicant or recipient or a member of his or her family served in the United States military, and an option to answer in the affirmative. Where the applicant or recipient answers in the affirmative to such question, the not-for-profit corporation shall ensure that contact information for the state department of veterans' services is provided to such applicant or recipient in addition to any other materials provided.

§ 203 Defense of ultra vires.

§ 203. Defense of ultra vires. (a) No act of a corporation and no transfer of real or personal property to or by a corporation, otherwise lawful, shall, if duly approved or authorized by a judge, court or administrative department or agency as required, be invalid by reason of the fact that the

corporation was without capacity or power to do such act or to make or receive such transfer, but such lack of capacity or power may be asserted: (1) In an action by a member against the corporation to enjoin the doing of any act or the transfer of real or personal property by or to the corporation. If the unauthorized act or transfer sought to be enjoined is being, or is to be, performed or made under any contract to which the corporation is a party, the court may, if all of the parties to the contract are parties to the action and if it deems the same to be equitable, set aside and enjoin the performance of such contract, and in so doing may allow to the corporation or to the other parties to the contract, as the case may be, such compensation as may be equitable for the loss or damage sustained by any of them from the action of the court in setting aside and enjoining the performance of such contract; provided that anticipated profits to be derived from the performance of the contract shall not be awarded by the court as a loss or damage sustained. (2) In an action by or in the right of the corporation to procure a judgment in its favor against an incumbent or former officer or director of the corporation for loss or damage due to his unauthorized act. (3) In an action or special proceeding by the attorney-general to annul or dissolve the corporation or to enjoin it from the carrying on of unauthorized activities.

§ 204 Limitation on activities.

§ 204. Limitation on activities.

Notwithstanding any other provision of this chapter or any other general law, a corporation of any 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.

§ 205 Conveyance of real property to members for dwelling houses.

§ 205. Conveyance of real property to members for dwelling houses.

A not-for-profit corporation, if its by-laws so provide, and pursuant to the provisions thereof, and without leave of the court, may convey to a member of the corporation a portion of its real property for the erection thereupon of a cottage or other dwelling-house with suitable outbuildings. When so conveyed the title to such portion, together with the buildings thereon, shall continue in such member and on his death pass to his heirs or devisees, but the land shall not be alienable except to the corporation or to a member thereof.

ARTICLE 3 CORPORATE NAME AND SERVICE OF PROCESS Section 301. Corporate name; general. 302. Corporate name; exceptions. 303. Reservation of name. 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. 305. Registered agent for service of process. 306. Service of process. 306-a. Electronic service of process. 307. Service of process on unauthorized foreign corporation. 308. Records and certificates of department of state. 309. Personal jurisdiction and service of process on non-domiciliary resident director, officer, key employee or agent.

Article 3

§ 301 Corporate name; general.

§ 301. Corporate name; general. (a) Except as otherwise provided in this chapter, the name of a domestic or foreign corporation: (1) Shall, unless the corporation is formed for charitable or religious purposes, or for purposes for which the approval of the commissioner of social services or the public health and health planning council 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 abbreviation thereof. (2) (A) Shall be such as to distinguish it from the names of corporations of any 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 kind, including fictitious names of authorized foreign corporations filed pursuant to article thirteen of this chapter, in the department of state, division of corporations, 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 limited liability companies, (iii) the fictitious names of authorized foreign limited liability companies, (iv) the names of domestic limited partnerships, (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 department of state, or on the index of names of existing domestic or authorized foreign limited partnerships, including fictitious names of authorized foreign limited partnerships, in the department of state, or names the rights to which are reserved; provided, however, that no corporation that was formed prior to the effective date of this clause and no foreign corporation that was qualified to conduct activities in this state prior to such effective date shall be required to change the name or fictitious name it had on such effective date solely by reason of such name or fictitious name being indistinguishable from the name or fictitious name of any domestic or authorized foreign limited liability company or limited partnership or from any name the right to which is reserved by or on behalf of any domestic or foreign limited liability company or limited partnership. (3) Shall not contain any word or phrase, or any abbreviation or derivative thereof, the use of which is prohibited or restricted by section 404 (Approvals, notices and consents) or any other statute of this state, unless in the latter case the restrictions have been

complied with. (4) Shall not contain any word or phrase, or any abbreviation or derivative thereof, in a context which indicates or implies that the corporation, if domestic, is formed or, if foreign, is authorized for any purpose or is possessed in this state of any power other than a purpose for which, or a power with which, the domestic corporation may be and is formed or the foreign corporation is authorized. (5) (A) Shall not contain any of the following phrases, or any abbreviation or derivative thereof: state police state trooper (B) Shall not contain any of the following words, or any abbreviation or derivative thereof: acceptance fidelity mortgage annuity finance savings assurance guaranty surety bank indemnity title bond insurance trust casualty investment underwriter doctor lawyer endowment loan unless the approval of the superintendent of financial services is attached to the certificate of incorporation, or application for authority or amendment thereof; or that the word "doctor", "lawyer", or the phrase "state police" or "state trooper" or an abbreviation or derivation thereof, may be used in the name of a corporation the membership of which is composed exclusively of doctors, lawyers, state police officers or state troopers, respectively. (6) Shall not contain any words or phrases, or any abbreviation or derivative thereof in a context which will tend to mislead the public into believing that the corporation is an agency or instrumentality of the United States or the state of New York or a subdivision thereof or is a public corporation. (7) Shall not contain the word "cooperative" or an abbreviation, contraction or derivative thereof. (8) Shall not contain any word or phrase, or any abbreviation or derivation thereof, which, separately, or in context, shall be indecent

or obscene or shall ridicule or degrade any person, group, belief, business or agency of government or indicate or imply any unlawful activity. (9) Notwithstanding any other provision of this chapter, may, in the case of a foundation organized for the sole purpose of publishing the literary works of a deceased person, include the word "doctor" or any abbreviation or derivative thereof as part of its name if such word, abbreviation or derivative is used to identify the person whose works are to be published.

§ 302 Corporate name; exceptions.

§ 302. Corporate name; exceptions. (a) Any reference to a corporation in this section except as otherwise provided herein shall include both domestic and foreign corporations. (b) The provisions of section 301 (Corporate name; general): (1) Shall not require any corporation, existing or authorized under any statute on the effective date of this chapter, to add to, modify or otherwise change its corporate name. (2) Shall not prevent a corporation with which another corporation is merged, or which is formed by the consolidation of one or more other corporations from having the same name as any of such corporations if at the time such other corporation was authorized or existing under any statute of this state. (3) Shall not prevent a foreign corporation from being authorized under a name which is similar to the name of a corporation of any 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 abbreviations 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".

§ 303 Reservation of name.

§ 303. Reservation of name. (a) A corporate name may be reserved by: (1) Any person intending to form a domestic corporation. (2) Any domestic corporation intending to change its name. (3) Any foreign corporation intending to apply for authority to conduct activities in this state. (4) Any authorized foreign corporation intending to change its name. (5) Any person intending to incorporate a foreign corporation and to have it apply for authority to conduct activities in this state. (6) Any domestic corporation intending to file the consent of the attorney general to reinstate such corporation pursuant to section 1014 of this chapter. (b) A fictitious name for use pursuant to section 1301 of this chapter may be reserved by: (1) Any foreign corporation intending to apply for authority to do business in this state, pursuant to paragraph (d) of section 1301 of this chapter. (2) Any authorized foreign corporation intending to change its fictitious name under which it conducts activities in this state. (3) Any authorized foreign corporation which has changed its corporate name in its jurisdiction, which new corporate name is not available in this state. (c) Application to reserve a corporate name shall be delivered to the department of state. It shall set forth the name and address of the applicant, the name to be reserved and a statement of the basis under paragraph (a) or (b) for the application. The secretary of state may require the applicant to set forth in his application the nature of the activities to be conducted by the corporation. If the name is available for corporate use, the department of state shall reserve the name for the use of the applicant for a period of sixty days and issue a certificate of reservation. The prohibitions, restrictions and qualifications set forth in section 301 (Corporate name; general), section 302 (Corporate name; exceptions) and section 404 (Approvals, notices and consents) are not waived by the issuance of a certificate of

reservation. The certificate of reservation shall include the name of the applicant, the name reserved and the date of the reservation. The certificate of reservation (or in lieu thereof an affidavit by the applicant or by his agent or attorney that the certificate of reservation has been lost or destroyed) shall accompany the certificate of incorporation or the application for authority when either is delivered to the department of state. (d) The secretary of state may extend the reservation for additional periods of not more than sixty days each, upon the written request of the applicant, his attorney or agent delivered to the department of state, to be filed before the expiration of the reservation period then in effect. Such request shall have attached to it the certificate of reservation of name. Not more than two such extensions shall be granted. (e) Upon the request of the applicant, delivered to the department of state before the expiration of the reserved period, together with the certificate of reservation, the department shall cancel the reservation. (f) Any application or request under this section shall be signed by the applicant, his attorney or agent.

§ 304 Statutory designation of secretary of state as agent of domestic

§ 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 corporation 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 designated 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 domestic corporation formed under article four of this chapter or foreign corporation, shall continue until the filing of a certificate or other instrument under this chapter directing the mailing to a different post-office address and any designated email address to which the secretary of state shall email a notice of the fact that process has been electronically served upon him or her as agent of a domestic corporation or foreign corporation, shall continue until the filing of a certificate or other instrument under this chapter changing or deleting the email address.

§ 305 Registered agent for service of process.

§ 305. Registered agent for service of process. (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 kind formed, or authorized to do business in this state, under this chapter or under any other statute of this state. (b) Any such designation of a registered agent may be made, revoked or changed as provided in this chapter. (c) A registered agent may resign as such agent. A certificate, entitled "Certificate of resignation of registered agent of ........... (name of designating corporation) under section 305 of the Not-for-Profit Corporation Law", shall be signed by him and delivered to the department of state. It shall set forth: (1) That he resigns as registered agent for the designating corporation. (2) The date the certificate of incorporation or the application for authority of the designating corporation was filed by the department of state. (3) That he has sent a copy of the certificate of resignation by registered mail to the designating corporation at the post-office

address on file in the department of state specified for the mailing of process or if such address is the address of the registered agent, then to the office of the designating corporation in the jurisdiction of its formation or incorporation. (d) The designation of a registered agent shall terminate thirty days after the filing by the department of state of a certificate of resignation or a certificate containing a revocation or change of the designation, whichever is filed earlier. A certificate designating a new registered agent may be delivered to the department of state by the corporation within the thirty days or thereafter.

§ 306 Service of process.

§ 306. Service of process. (a) Service of process on a registered agent may be made in the manner provided by law for the service of a summons, as if the registered agent was a defendant. (b) * Service of process on the secretary of state as agent of a domestic corporation formed under article four of this chapter or an authorized foreign corporation shall be made in the manner provided by subparagraph one or two of this paragraph.

• NB Effective until February 24, 2027
• Service of process on the secretary of state as agent of a domestic corporation formed under article four of this chapter or an authorized foreign corporation shall be made in the manner provided by subparagraph one, two or three of this paragraph.
• NB Effective February 24, 2027 (1) Personally delivering to and leaving with the secretary of state or his or her deputy, 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 corporation 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. (2) Electronically submitting a copy of the process to the department of state together with the statutory fee, which fee shall be a taxable disbursement, through an electronic system operated by the department of state, provided the domestic or authorized foreign corporation has an email address on file in the department of state to which the secretary of state shall email a notice of the fact that process has been served electronically on the secretary of state. Service of process on such corporation shall be complete when the secretary of state has reviewed and accepted service of such process. The secretary of state shall promptly send a notice of the fact that process against such corporation has been served electronically on him or her to such corporation at the email address on file in the department of state, specified for the purpose and shall make a copy of the process available to such corporation.

• (3) Provided process is served by or on behalf of the state or a city, town, village or other political subdivision of the state, by electronically submitting a copy of the process to the department of state, through an electronic system operated by and with capabilities determined by the department of state, together with the statutory fee, if required, which fee shall be a taxable disbursement. Service of process on such corporation shall be complete when the secretary of state has reviewed and accepted service of such process. The secretary of state shall promptly either: (A) send a copy of such process 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 or, 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; or (B) email a notice of the fact that process against the corporation has been served electronically on the secretary of state to the email address on file in the department of state, specified for the purpose and shall make a copy of the process available to such corporation.

• NB Effective February 24, 2027 (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. (d) Nothing in this section shall affect the right to serve process in any other manner permitted by law.

§ 306-a Electronic service of process.

§ 306-a. Electronic service of process.

The secretary shall advise any corporation subject to the laws of this chapter in prominent written form as follows: (a) electronic service of process authorized by the provisions of this chapter is an optional program at no additional cost to the user; (b) any corporation subject to the laws of this chapter will continue to receive service of process by mail unless such corporation notifies the secretary of an affirmative choice to receive service of process by way of the program through electronic means, in which case digital copies will be made accessible but paper documents will not be mailed; and (c) such choice may be reversed by the corporation at any time and, thereafter, service by mail will resume.

§ 307 Service of process on unauthorized foreign corporation.

§ 307. Service of process on unauthorized foreign corporation. (a) In any case in which a non-domiciliary would be subject to the personal or other jurisdiction of the courts of this state under article three of the civil practice law and rules, a foreign corporation not authorized to conduct activities in this state is subject to a like jurisdiction. In any such case, process against such foreign corporation may be served upon the secretary of state as its agent. Such process may issue in any court in this state having jurisdiction of the subject matter. (b) (1) Service of such process upon the secretary of state shall be made in the manner provided by items (i) or (ii) of this subparagraph. Either option of service authorized pursuant to this paragraph shall be

available at no extra cost to the consumer. (i) Personally delivering to and leaving with him or his deputy, 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, a copy of such process together with the statutory fee, which fee shall be a taxable disbursement. (ii) Electronically submitting a copy of the process to the department of state together with the statutory fee, which fee shall be a taxable disbursement, through an electronic system operated by the department of state. (2) Service under this paragraph shall be sufficient if notice thereof and a copy of the process are: (i) Delivered personally without this state to such foreign corporation by a person and in the manner authorized to serve process by law of the jurisdiction in which service is made, or (ii) Sent by or on behalf of the plaintiff to such foreign corporation by registered mail with return receipt requested, at the post office address specified for the purpose of mailing process, on file in the department of state, or with any official or body performing the equivalent function, in the jurisdiction of its incorporation, or if no such address is there specified, to its registered or other office there specified, or if no such office is there specified, to the last address of such foreign corporation known to the plaintiff. (c) (1) Where service of a copy of process was effected by personal service, proof of service shall be by affidavit of compliance with this section filed, together with the process, within thirty days after such service, with the clerk of the court in which the action or special proceeding is pending. Service of process shall be complete ten days after such papers are filed with the clerk of the court. (2) Where service of a copy of process was effected by mailing in accordance with this section, proof of service shall be by affidavit of compliance with this section filed, together with the process, within thirty days after receipt of the return receipt signed by the foreign corporation, or other official proof of delivery or of the original envelope mailed. If a copy of the process is mailed in accordance with this section, there shall be filed with the affidavit of compliance either the return receipt signed by such foreign corporation or other official proof of delivery or, if acceptance was refused by it, the

original envelope with a notation by the postal authorities that acceptance was refused. If acceptance was refused, a copy of the notice and process together with the notice of the mailing by registered mail and refusal to accept shall be promptly sent to such foreign corporation at the same address by ordinary mail and the affidavit of compliance shall so state. Service of process shall be complete ten days after such papers are filed with the clerk of the court. The refusal to accept delivery of the registered mail or to sign the return receipt shall not affect the validity of the service and such foreign corporation refusing to accept such registered mail shall be charged with knowledge of the contents thereof. (d) Service made as provided in this section shall have the same force as personal service made within this state. (e) Nothing in this section shall affect the right to serve process in any other manner permitted by law.

§ 308 Records and certificates of department of state.

§ 308. Records and certificates of department of state.

The department of state shall keep a record of each process served upon the secretary of state under this chapter, including the date of service. It shall, upon request made within ten years of such service, issue a certificate under its seal certifying as to the receipt of the process by an authorized person, the date and place of such service and the receipt of the statutory fee. Process served upon the secretary of state under this chapter shall be destroyed by him after a period of ten years from such service.

§ 309 Personal jurisdiction and service of process on non-domiciliary

§ 309. Personal jurisdiction and service of process on non-domiciliary resident director, officer, key person or agent.

A person, by becoming a director, officer, key person 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.

ARTICLE 4 FORMATION OF CORPORATIONS Section 401. Incorporators. 402. Certificate of incorporation; contents. 403. Certificate of incorporation; effect. 404. Approvals, notices and consents. 405. Organization meeting. 406. Private foundation, as defined in the United States internal revenue code of 1954: provisions included in the certificate of incorporation.

Article 4

§ 401 Incorporators.

§ 401. Incorporators.

One or more natural persons at least eighteen years of age may act as incorporators of a corporation to be formed under this chapter.

§ 402 Certificate of incorporation; contents.

§ 402. Certificate of incorporation; contents. (a) A certificate, entitled "Certificate of Incorporation of .................... (name of corporation), under section 402 of the Not-for-Profit Corporation Law," shall be signed by each incorporator with his name and address included in such certificate and delivered to the department of state. It shall set forth: (1) The name of the corporation. (2) That the corporation is a corporation as defined in subparagraph (5) of paragraph (a) of section 102 (Definitions). (2-a) the purpose or purposes for which it is formed, it being sufficient to state that the purpose of the corporation is any purpose for which corporations may be organized under this chapter as a charitable or non-charitable corporation, and whether it is a charitable corporation or a non-charitable corporation under section 201 (Purposes). Any corporation may also set forth any activities that it intends to carry out in furtherance of such purpose or purposes;

provided that this subparagraph shall not be interpreted to require that the certificate of incorporation set forth such activities or otherwise state how the corporation's purposes will be achieved. (2-b) If it is not formed to engage in any activity or for any purpose requiring consent or approval of any state official, department, board, agency or other body, a statement that no such consent or approval is required. Such statement shall be deemed conclusive for purposes of filing by the department of state. If subsequent to submitting the certificate of incorporation for filing, the corporation plans to engage in any activity requiring consent or approval pursuant to section 404 (approvals, notices and consents) of this chapter, the corporation shall obtain such consent or approval and accordingly amend its certificate of incorporation pursuant to article eight of this chapter. (3) The county within the state in which the office of the corporation is to be located. It may also set forth the post office address of an office without the state, at which, pursuant to section 621 (Books and records; right of inspection; prima facie evidence), the books and records of account of the corporation shall be kept. (4) The names and addresses of the initial directors. (5) The duration of the corporation if other than perpetual. (6) A designation of the secretary of state as agent of the corporation upon whom process against it may be served and the post office address within or without this state to which the secretary of state shall mail a copy of any process against it served upon him or her. The corporation may include an email address to which the secretary of state shall email a notice of the fact that process against it has been electronically served upon him or her. (7) If the corporation is to have a registered agent, his name and address within this state and a statement that the registered agent is to be the agent of the corporation upon whom process against it may be served. (8) The statements, if any, with respect to special not-for-profit corporations required under article 14 (Special not-for-profit corporations). (b) If the certificate is for the incorporation of an existing unincorporated association or group it shall have annexed thereto an affidavit of the subscribers of such certificate stating that they

constitute a majority of the members of a committee duly authorized to incorporate such association or group. (c) The certificate of incorporation may set forth any provision, not inconsistent with this chapter or any other statute of the state, which provision is (1) for the regulation of the internal affairs of the corporation, including types or classes of membership and the distribution of assets on dissolution or final liquidation, or (2) required by any governmental body or officer or other person or body as a condition for giving the consent or approval required for the filing of such certificate of incorporation.

§ 403 Certificate of incorporation; effect.

§ 403. Certificate of incorporation; effect.

Upon the filing of the certificate of incorporation by the department of state, the corporate existence shall begin, and such certificate shall be conclusive evidence that all conditions precedent have been fulfilled and that the corporation has been formed under this chapter, except in an action or special proceeding brought by the attorney-general. Where the certificate is for the incorporation of an unincorporated association or group, the members of such association or group shall be members of the corporation so created, and all property owned by or held for it shall belong to and vest in the corporation, subject to all existing incumbrances and claims as if incorporation had not taken place. Where the certificate is for the reincorporation of a corporation created by special law for purposes for which a corporation may be formed under this chapter, such reincorporation shall not effect a dissolution of the corporation but shall be a continuation of its corporate existence, without affecting its then existing property rights or liabilities, or the liabilities of its members or officers as such, but thereafter it shall have only such rights, powers and privileges, and be subject to such other duties and liabilities as a corporation formed for the same purposes under this chapter.

§ 404 Approvals, notices and consents.

§ 404. Approvals, notices and consents. (a) Every certificate of incorporation which includes among its

purposes the formation of a trade or business association shall have endorsed thereon or annexed thereto the consent of the attorney-general. (b) (1) Every certificate of incorporation which includes among its purposes the care of destitute, delinquent, abandoned, neglected or dependent children; the establishment or operation of any adult care facility, or the establishment or operation of a residential program for victims of domestic violence as defined in subdivision four of section four hundred fifty-nine-a of the social services law, or the placing-out or boarding-out of children or a home or shelter for unmarried mothers, excepting the establishment or maintenance of a hospital or facility providing health-related services as those terms are defined in article twenty-eight of the public health law and a facility for which an 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 the commissioner of the office of children and family services or with respect to any adult care facility, the commissioner of health. (2) A corporation whose statement of purposes specifically includes the establishment or operation of a child day care center, as that term is defined in section three hundred ninety of the social services law, shall mail a certified copy of the certificate of incorporation, each amendment thereto, and any certificate of merger, consolidation or dissolution involving such corporation to the office of children and family services within thirty days after receipt of confirmation of the filing of such certificate, amendment, merger, consolidation or dissolution with the department of state. This requirement shall also apply to any foreign corporation filing an application for authority under section thirteen hundred four of this chapter, any amendments thereto, and any surrender of authority or termination of authority in this state of such corporation. (c) Every certificate of incorporation which includes among the purposes of the corporation, the establishment, maintenance 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 the superintendent of financial services

and the commissioner of health. (d) Every corporation whose certificate of incorporation includes among its purposes the operation of a school; a college, university or other entity providing post secondary education; a library; or a museum or historical society shall have endorsed thereon or annexed thereto the approval of the commissioner of education, or in the case of a college or a university, the written authorization of the Regents of the university of the state of New York. Any other corporation the certificate of incorporation of which includes a purpose for which a corporation might be chartered by the regents of the university of the State of New York shall mail a certified copy of the certificate of incorporation to the commissioner of education within thirty days after receipt of confirmation of filing. (e) Every certificate of incorporation of a cemetery corporation, except those within the exclusionary provisions of section 1503 (Cemetery corporations) shall have endorsed thereon or annexed thereto the approval of the cemetery board. (f) Every certificate of incorporation of a fire corporation shall have endorsed thereon or annexed thereto the approval, signed and acknowledged, of the authorities of each city, village, town or fire district in which the corporation proposes to act. Such authorities shall be: in a city, the mayor; in a village, a majority of the trustees; in a town, a majority of the members of the town board; in a fire district, a majority of the fire commissioners. The members of the town board of a town, or the trustees of a village, shall not consent to the formation of a fire corporation as hereinbefore provided, until such board shall have held a public hearing on the question of whether the fire company should be incorporated. The notice shall be published at least once in each week for two successive weeks in the official newspaper published in the county in which such fire corporation intends to locate, prior to the regular meeting of such board designated by the chairman of the board to consider the matter. Such notice shall contain the name of the proposed company, the names of the persons signing the certificate of incorporation, a brief description of the territory to be protected by the fire company and that all persons interested shall be heard. If no newspaper is published in the county the publication of the notice shall be in a newspaper in an adjoining county selected by the

chairman of such board. All expenses in connection with such publication shall be borne by the parties making the application and paid before the hearing. (g) Every certificate of incorporation of a corporation for prevention of cruelty to animals shall have endorsed thereon or annexed thereto the approval of 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. (h) Every certificate of incorporation of a Young Men's Christian Association shall have endorsed thereon or annexed thereto the approval of the chairman of the national board of Young Men's Christian Associations. (i) Every certificate of incorporation which indicates that the proposed corporation is 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 the adjutant general. The department of state, in conjunction with the division of military and naval affairs, shall establish and maintain on the department's website a public listing of all approved not-for-profit corporations soliciting funds for or otherwise benefiting the armed forces of the United States or of any foreign country, or their auxiliaries, or of this or any other state or territory. (j) Every certificate of incorporation which includes among its purposes the organization of wage-earners for their mutual betterment, protection and advancement; the regulation of hours of labor, working conditions, or wages; or the performance, rendition or sale of services as labor consultant, labor-management advisor, negotiator, arbitrator, or specialist; and every certificate of incorporation in which the name of the proposed corporation includes "union", "labor", "council" or "industrial organization", or any abbreviation or derivative thereof in a context that indicates or implies that the corporation is formed for any of the above purposes, shall have endorsed thereon or annexed thereto the approval of the industrial board of appeals. The board shall

make such inquiry into the purposes of the proposed corporation as it shall deem advisable and shall order a hearing if necessary to determine whether or not such purposes are in all respects consistent with public policy and the labor law. Notice of the time and place of hearing shall be given to the applicants and such other persons as the board may determine. (k) Every certificate of incorporation for a corporation which has as its exclusive purpose the promotion of the interests of savings bank life insurance or the promotion of the interests of member banks may, if the approval of the superintendent of financial services is endorsed thereon or annexed thereto, use as a part of the corporate name any of the words or phrases, or any abbreviation or derivative thereof, set forth in subparagraph (5) of paragraph (a) of section 301 (Corporate name; general). (l) Every certificate of incorporation for a corporation which has as its exclusive purpose the creation of an association of licensed insurance agents, licensed insurance brokers, or licensed insurance underwriters and every application for authority of a foreign corporation which is an independent laboratory engaged in testing for public safety, or which has as its purpose the advancement of corporate, governmental, and institutional risk and insurance management, or which has as its exclusive purpose the creation of an association of insurers, each of which is duly licensed in this state or, if it does no business or is not licensed in this state, is duly licensed in another state or foreign jurisdiction may, if the approval of the superintendent of financial services is endorsed thereon or annexed thereto, use as a part of the corporate name any of the words or phrases, or any abbreviation or derivative thereof, set forth in subparagraph (5) of paragraph (a) of section 301 (Corporate name; general). (m) Every certificate of incorporation in which the name of the proposed corporation includes the name of a political party shall have endorsed thereon or annexed thereto the consent of the chairman of the county committee of such political party of the county in which the office of the corporation is to be located, except in cases where the supreme court finds that the withholding of such consent of the county chairman is unreasonable. (n) Every certificate of incorporation in which the name of the

proposed corporation includes the words "American Legion," shall have endorsed thereon or annexed thereto the approval of the Department of New York, the American Legion, duly acknowledged by its commander or adjutant. (o) Every certificate of incorporation which includes among its corporate purposes or powers the establishment or maintenance of any hospital, as defined in article twenty-eight of the public health law, or the solicitation of contributions for any such purpose, or purposes, shall have endorsed thereon or annexed thereto the approval of the public health and health planning council. (p) Every certificate of incorporation of a medical corporation as defined in article forty-four of the public health law and organized pursuant thereto and pursuant to this chapter, shall have endorsed thereon or annexed thereto the consent of the commissioner of health and the approval of the public health and health planning council. (q) Every certificate of incorporation which includes among its corporate purposes or powers the establishment, or operation of a facility for which an operating certificate from the commissioner of mental health is required by article thirty-one of the mental hygiene law, or the solicitation of contributions for any such purpose, shall have endorsed thereon or annexed thereto the approval of the commissioner of mental health. (r) Every certificate of incorporation of a health maintenance organization as defined in article forty-four of the public health law and organized pursuant thereto and pursuant to this chapter, shall have endorsed thereon or annexed thereto the consent of the commissioner of health. (t) 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) 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 contributions 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) Every certificate of incorporation which includes among the purposes of the corporation, the establishment, maintenance and operation 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.

§ 405 Organization meeting.

§ 405. Organization meeting. (a) After the corporate existence has begun, an organization meeting of the initial directors, or, if directors are not designated in the certificate of incorporation, of the incorporator or incorporators, shall be held within or without this state, for the purpose of adopting by-laws, electing directors to hold office as provided in the certificate of incorporation or the by-laws, and the transaction of such other business as may come before the meeting. The meeting may be held at the call of any director or, if directors are not designated in the certificate of incorporation, any incorporator who shall give at least five days' notice thereof by mail to each other director or incorporator, which notice shall set forth the time and place of the meeting. Notice need not be given to any director or incorporator who submits a signed waiver of notice before or after the meeting, or who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to him. If there are more than two directors or incorporators, a majority shall constitute a quorum and the act of the majority of those present at a meeting at which a quorum is present shall be the act of the directors or incorporators. For the purposes of this section an incorporator or director may act in person or by proxy signed by him or his attorney in fact. (b) Any action permitted to be taken at an organization meeting may be taken without a meeting if each director or, if directors are not designated in the certificate of incorporation, each incorporator or his

attorney-in-fact signs an instrument setting forth the action so taken. (c) If a designated director or an incorporator dies or is for any reason unable to act, the other or others may act. If there is no designated director or incorporator able to act, any person for whom an incorporator is acting as agent may act in his stead, or if such other person also dies or is for any reason unable to act, his legal representative may act.

§ 406 Private foundation, as defined in the United States internal

§ 406. Private foundation, as defined in the United States internal revenue code of 1954: provisions included in the certificate of incorporation. (a) The following provisions are hereby included in the certificate of incorporation of every domestic corporation, heretofore or hereafter formed, to which this chapter applies in whole or in part, and which is a "private foundation" as defined in section 509 of the United States internal revenue code of 1954 ("code"): (1) The corporation shall distribute such amounts for each taxable year at such time and in such manner as not to subject the corporation to tax on undistributed income under section 4942 of the code. (2) The corporation shall not engage in any act or self-dealing which is subject to tax under section 4941 of the code. (3) The corporation shall not retain any excess business holdings which are subject to tax under section 4943 of the code. (4) The corporation shall not make any investments in such manner as to subject the corporation to tax under section 4944 of the code. (5) The corporation shall not make any taxable expenditures which are subject to tax under section 4945 of the code. Except as provided in paragraph (b), this paragraph applies notwithstanding any other provision of the certificate of incorporation or any direction in a gift instrument. (b) Paragraph (a) shall not apply to the extent that it conflicts with any mandatory direction in a gift instrument executed prior to the effective date of this section unless such conflicting direction is removed as impracticable under article eight of the estates, powers and trusts law or in any other manner provided by law. The absence of a specific provision in the gift instrument for the current use of the

principal of the fund, or the presence in such an instrument of a provision, as to the principal of a fund, limited to the principal's being held, invested and reinvested, is not such a conflicting mandatory direction. (b-1) A domestic, not-for-profit corporation that is a "private foundation" as defined in section 509 of the code and that is required by section 6104(d) of the code to make available for public inspection its annual return shall publish notice of the availability of such return for inspection. Such notice shall be published, not later than the day prescribed for filing such annual return (determined with regard to any extension of time for filing), in a newspaper designated by the clerk of the county in which the principal office of the private foundation is located, having general circulation in that county. When such county is located within a city with a population of one million or more, such designation shall be as though such notice were a notice of judicial proceedings. The notice shall state that the annual return of the private foundation is available at its principal office for inspection during regular business hours by any citizen who requests it within one hundred eighty days after the date of such publication, and shall state the address and the telephone number of the private foundation's principal office and the name of its principal manager. A copy or notice published in a newspaper other than the newspaper or newspapers designated by the county clerk shall not be deemed to be one of the publications required by this paragraph. (c) All references in this section to sections of the code shall be to such sections as amended from time to time, or to corresponding provisions of subsequent internal revenue laws. (d) Nothing in this section shall impair the rights and powers of the courts or the attorney-general of this state. (e) For purposes of this section, the term gift instrument shall have the meaning set forth in section 551 (Definitions).

ARTICLE 5 CORPORATE FINANCE Section 501. Stock and shares prohibited; membership certificates authorized.

502. Members' capital contributions.
503. Capital certificates.
504. Subventions.
505. Subvention certificates.
506. Bonds and security interests.
507. Fees, dues and assessments; fines and penalties.
508. Income from corporate activities.
509. Purchase, sale, mortgage and lease of real property.
510. Disposition of all or substantially all assets.
511. Petition for court approval. 511-a. Petition for attorney general approval.
512. Administration of assets received for specific purposes.
513. Delegation of investment management.
514. Dividends prohibited; certain distributions of cash or property authorized.
515. Distributions to members upon termination of membership.
516. Liabilities of members.
517. Annual report of directors. 519-a. Annual reports for certain transactions required.
518. Reports of corporation.
519. Liability for failure to disclose required information.

Article 5

§ 501 Stock and shares prohibited; membership certificates authorized.

§ 501. Stock and shares prohibited; membership certificates authorized.

A corporation shall not have stock or shares or certificates for stock or for shares, but may issue non-transferable membership certificates or cards to evidence membership, whether or not connected with any financial contribution to the corporation, as provided in section 601 (Members). The fact that the corporation is a not-for-profit corporation, and that the membership certificate or card is non-transferable shall be noted conspicuously on the face or back of each such certificate or card.

§ 502 Members' capital contributions.

§ 502. Members' capital contributions. (a) The certificate of incorporation may provide that members, upon or

subsequent to admission, shall make capital contributions in the amount specified therein. The requirement of a capital contribution may apply to all members, or to the members of a single class, or to members of different classes in different amounts or proportions. (b) A member's capital contribution shall consist of money or other property, tangible or intangible, or labor or services actually received by or performed for the corporation or for its benefit or in its formation or reorganization, or a combination thereof. In the absence of fraud in the transaction, the judgment of the board as to the value of the consideration received by the corporation shall be conclusive. (c) Neither obligations of the member for future payments nor future services shall constitute payment or part payment of a member's capital contribution. (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 non-charitable corporation may provide that its capital certificates, or some of them, may be transferable to other members with the consent of the corporation upon specified terms and conditions. (e) A member's capital contribution shall not be repaid or redeemed by the corporation except upon dissolution of the corporation or upon redemption of the capital certificate as provided in this chapter. A corporation may provide in its certificate of incorporation that its capital certificates, or some of them, shall be redeemable, in whole or in part, at the option of the corporation only, at such price or prices (not to exceed the amount of the capital contribution), within such period or periods, and on such terms and conditions, not inconsistent with this chapter, as are stated in the certificate of incorporation.

§ 503 Capital certificates.

§ 503. Capital certificates. (a) Each capital certificate shall be signed by the chairman or vice-chairman of the board or the president or a vice-president and the secretary or an assistant secretary or the treasurer or an assistant treasurer of the corporation, and may be sealed with the seal of the corporation or a facsimile thereof. The signatures of the officers upon a certificate may be facsimiles if the certificate is countersigned by a

transfer agent or registered by a registrar other than the corporation itself or its employee. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued it may be issued by the corporation with the same effect as if he were such officer at the date of issue. (b) Each capital certificate shall when issued state upon the face thereof: (1) The name of the member to whom issued. (2) The amount of the member's capital contribution evidenced by such certificate. (3) If appropriate, that the corporation is a non-charitable corporation, and that its certificate of incorporation provides that the capital certificate is transferable to other members with the consent of the corporation. (4) The fact that the corporation is a not-for-profit corporation, and that the capital certificate is non-transferable or is transferable to other members, with the consent of the corporation, shall be noted conspicuously on the face or back of each such certificate.

§ 504 Subventions.

§ 504. Subventions. (a) The certificate of incorporation may provide that the corporation shall be authorized by resolution of the board to accept subventions from members or non-members on terms and conditions not inconsistent with this chapter, and to issue certificates therefor. Subvention certificates shall be nontransferable unless such resolution provides that they shall be transferable, either at will or subject to specified restrictions. (b) A subvention shall consist of money or other property, tangible or intangible, actually received by the corporation or expended for its benefit or for its formation or reorganization, or a combination thereof. In the absence of fraud in the transaction, the judgment of the board as to the value of the consideration received by the corporation shall be conclusive. (c) The rights of holders of subvention certificates shall at all times be subordinate to the rights of creditors of the corporation.

(d) The resolution of the board may provide that holders of subvention certificates shall be entitled to a fixed or contingent periodic payment out of the corporate assets equal to a percentage of the original amount or value of the subvention, but such payment shall not exceed two-thirds of the maximum interest rate authorized pursuant to section 5-501 of the general obligations law. (e) The resolution of the board may provide that a subvention shall be redeemable, in whole or in part, at the option of the corporation at such price or prices (not to exceed the original amount or value of the subvention plus any periodic payments due or accrued thereon), within such period or periods, and on such terms and conditions, not inconsistent with this chapter, as are stated in the resolution. (f) The resolution of the board may provide that holders of all or some subvention certificates shall have the right to require the corporation after a specified period of time to redeem such certificates, in whole or in part, at a price or prices that do not exceed the original amount or value of the subvention plus any periodic payments due or accrued thereon, upon an affirmative showing that the financial condition of the corporation will permit the required payment to be made without impairment of its operations or injury to its creditors. The right to require redemption may in addition be conditioned upon the occurrence of a specified event. For the purpose of enforcing their rights under this paragraph, holders of subvention certificates shall be entitled to inspect the books and records of the corporation. (g) Holders of subvention certificates, upon dissolution of the corporation, shall be entitled, after the claims of creditors have been satisfied, to a repayment of the original amount or value of the subvention plus any periodic payments due or accrued thereon, unless a lesser sum is specified in the certificate of incorporation or the resolution of the board concerning such subvention.

§ 505 Subvention certificates.

§ 505. Subvention certificates. (a) Each subvention certificate shall be signed by the chairman or a vice-chairman of the board or the president or a vice-president and the secretary or an assistant secretary or the treasurer or an assistant

treasurer of the corporation, and may be sealed with the seal of the corporation or a facsimile thereof. The signatures of the officers upon a certificate may be facsimiles if the certificate is countersigned by a transfer agent or registered by a registrar other than the corporation itself or its employees. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer at the date of issue. (b) Each subvention certificate shall when issued state upon the face thereof: (1) The name of the person or persons to whom issued. (2) The amount of the subvention evidenced by such certificate. (3) The amount of the periodic payment thereon, if any, authorized by the resolution of the board. (4) If appropriate, that the certificate is redeemable and a summary of the conditions for redemption at the option of the corporation or of the holder. (5) If appropriate, that the certificate is transferable, either at will or subject to specified restrictions. (c) The fact that the corporation is a not-for-profit corporation and, where appropriate, that the certificate is transferable at will or subject to restrictions, shall be noted conspicuously on the face or back of each such certificate.

§ 506 Bonds and security interests.

§ 506. Bonds and security interests. (a) No corporation shall issue bonds except for money or other property, tangible or intangible, or labor or services actually received by or performed for the corporation or for its benefit or in its formation or reorganization, or a combination thereof. In the absence of fraud in the transaction, the judgment of the board as to the value of the consideration received by the corporation shall be conclusive. (b) A corporation may pay reasonable interest on its bonds, may issue its bonds at a reasonable discount and may pay a reasonable premium for the redemption thereof prior to maturity, but the holders of its bonds shall not be entitled at any time to receive any part of the income or

profit of the corporation nor at maturity to receive more than the principal sum thereof plus interest due and accrued thereon. In the absence of fraud in the transaction, the judgment of the board as to the reasonableness of any such interest, discount or premium shall be conclusive. However, with respect to bonds not a part of a public offering, notwithstanding the terms of the instrument, no member of a corporation shall be entitled to receive, directly or indirectly, as a holder or beneficiary of such bond, prior to maturity or redemption, more than simple interest thereon at a rate equal to the higher of (1) the maximum interest authorized pursuant to section 5-501 of the general obligations law or (2) one percent over the prime rate of interest generally prevailing on the interest due date in the Federal Reserve District of New York, nor at maturity or redemption, more than the principal sum thereof plus any interest, not exceeding the maximum interest herein specified, due and accrued thereon. (c) A corporation may, in its certificate of incorporation or by-laws, confer upon the holders of any bonds issued or to be issued by the corporation, rights to inspect the corporate books and records and, upon default of interest or principal, to vote in the election of directors. The certificate of incorporation or the by-laws may apportion the number of votes that may be cast with respect to bonds on the basis of the amount of bonds held. (d) The board may authorize any mortgage or pledge of, or the creation of a security interest in, all or any part of the corporation's personal property, or any interest therein. Unless the certificate of incorporation provides otherwise, no vote or consent of the members shall be required to approve such action by the board.

§ 507 Fees, dues and assessments; fines and penalties.

§ 507. Fees, dues and assessments; fines and penalties. (a) If authorized by its certificate of incorporation or by-laws and subject to any limitations stated therein a corporation may levy initiation fees, dues and assessments on its members, whether or not they are voting members, and may impose reasonable fines or other penalties upon its members for violations of its rules and regulations. (b) Initiation fees, dues or assessments may be levied on all classes of members alike or in different amounts or proportions for different

classes of members, as the certificate of incorporation or the by-laws may provide, but in all cases the fees, dues and assessments payable by members of one class shall be determined upon the same basis. (c) The certificate of incorporation or the by-laws may contain such provisions as are deemed necessary to enforce the collection of fees, dues, assessments, fines or other penalties, including provisions for the termination of membership, upon reasonable notice, for non-payment of such fees, dues, assessments, fines or other penalties, and provisions for reinstatement of membership. (d) Subject to the provisions of this chapter, the certificate of incorporation may provide that members paying initiation fees, dues or assessments shall, upon dissolution of the corporation, have distributive rights in its assets. The distributive rights may be different for different classes of members, but in all cases the rights of members of one class shall be the same.

§ 508 Income from corporate activities.

§ 508. Income from corporate activities.

A corporation whose lawful activities involve among other things the charging of fees or prices for its services or products shall have the right to receive such income and, in so doing, may make an incidental profit. All such incidental profits shall be applied to the maintenance, expansion or operation of the lawful activities of the corporation, and in no case shall be divided or distributed in any manner whatsoever among the members, directors, or officers of the corporation.

§ 509 Purchase, sale, mortgage and lease of real property.

§ 509. Purchase, sale, mortgage and lease of real property. (a) No corporation shall purchase real property unless such purchase is authorized by the vote of a majority of directors of the board or of a majority of a committee authorized by the board, provided that if such property would, upon purchase thereof, constitute all, or substantially all, of the assets of the corporation, then the vote of two-thirds of the entire board shall be required, or, if there are twenty-one or more directors, the vote of a majority of the entire board shall be sufficient.

(b) No corporation shall sell, mortgage, lease, exchange or otherwise dispose of its real property unless authorized by the vote of a majority of directors of the board or of a majority of a committee authorized by the board; provided that if such property constitutes all, or 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. (c) If a corporation authorizes a committee to act pursuant to paragraphs (a) and (b) of this section, the committee shall promptly report any actions taken to the board, and in no event after the next regularly scheduled meeting of the board.

§ 510 Disposition of all or substantially all assets.

§ 510. Disposition of all or substantially all assets. (a) A sale, lease, exchange or other disposition of all, or substantially 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 kind, as may be authorized in accordance 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 consideration, together with a statement that the dissolution of the corporation 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 meeting shall be given to each member and each holder of subvention certificates 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 charitable corporation under section 201 (Purposes) such sale, lease, exchange or other disposition shall in addition require approval of the attorney general or the supreme court in the judicial district or of the county court of the county in which the corporation has its office or principal place of carrying out the purposes for which it was formed in accordance with section 511 (Petition for court approval) or section 511-a (Petition for attorney general approval) of this article. (b) After such authorization the board in its discretion may abandon such sale, lease, exchange or other disposition of assets, subject to the rights of third parties under any contract relating thereto, without further action or approval.

§ 511 Petition for court approval.

§ 511. Petition for court approval. (a) To obtain court approval to sell, lease, exchange or otherwise dispose of all or substantially all its assets, a corporation shall present a verified petition to the supreme court of the judicial district, or the county court of the county, wherein the corporation has its office or principal place of carrying out the purposes for which it was formed. The petition shall set forth:

1. The name of the corporation, the law under or by which it was incorporated.

2. The names of its directors and principal officers, and their places of residence.

3. The activities of the corporation.

4. A description, with reasonable certainty, of the assets to be sold, leased, exchanged, or otherwise disposed of, or a statement that it is proposed to sell, lease, exchange or otherwise dispose of all or substantially all the corporate assets more fully described in a schedule attached to the petition; and a statement of the fair value of such assets, and the amount of the corporation's debts and liabilities and how secured.

5. The consideration to be received by the corporation and the disposition proposed to be made thereof, together with a statement that the dissolution of the corporation is or is not contemplated thereafter.

6. That the consideration and the terms of the sale, lease, exchange or other disposition of the assets of the corporation are fair and reasonable to the corporation, and that the purposes of the corporation, or the interests of its members will be promoted thereby, and a concise statement of the reasons therefor.

7. That such sale, lease, exchange or disposition of corporate assets, has been recommended or authorized by vote of the directors in accordance with law, at a meeting duly called and held, as shown in a schedule annexed to the petition setting forth a copy of the resolution granting such authority with a statement of the vote thereon.

8. Where the consent of members of the corporation is required by law, that such consent has been given, as shown in a schedule annexed to the petition setting forth a copy of such consent, if in writing, or of a resolution giving such consent, adopted at a meeting of members duly called and held, with a statement of the vote thereon.

9. A request for 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. (b) Upon presentation of the petition, the court shall direct that a minimum of fifteen days notice be given by mail or in person to the attorney general, and in its discretion may direct that notice of the application be given, personally or by mail, to any person interested

therein, as member, officer or creditor of the corporation. The court shall have authority to shorten the time for service on the attorney general upon a showing of good cause. The notice shall specify the time and place, fixed by the court, for a hearing upon the application. Any person interested, whether or not formally notified, may appear at the hearing and show cause why the application should not be granted. (c) If the corporation be insolvent, or if its assets be insufficient to liquidate its debts and liabilities in full, the application shall not be granted unless all the creditors of the corporation shall have been served, personally or by mail, with a notice of the time and place of the hearing. (d) If it shall appear, to the satisfaction of the court, 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, it 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 court may prescribe. The order of the court shall direct the disposition of the consideration to be received thereunder by the corporation.

§ 511-a Petition for attorney general approval.

§ 511-a. Petition for attorney general approval. (a) In lieu of obtaining court approval under section 511 (Petition for court approval) of this article to sell, lease, exchange or 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 of this article; or (2) the attorney general, in his or her discretion, concludes that a court should review the petition and make a determination thereon. (b) The verified petition to the attorney general shall set forth (1) all of the information required to be included in a verified petition to obtain court approval pursuant to subparagraphs one through nine of paragraph (a) of section 511 of this article; (2) a statement that the

corporation is not insolvent and will not become insolvent as a result of the transaction; and (3) a statement as to whether any persons have raised, or have a reasonable basis to raise, objections to the sale, lease, exchange or other disposition that is the subject of the 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 petition to any interested person, and the corporation shall provide the attorney general with a certification that such notice has been provided. (c) If it shall appear, to the satisfaction of the attorney general that the consideration and the terms of the transaction are fair and reasonable to the corporation and that the purposes of the corporation or the interests of the members will be promoted, the attorney general may authorize the sale, lease, exchange or other disposition of all or substantially all the assets of the corporation, as described in the petition, for such consideration and upon such terms as the attorney general may prescribe. The authorization of the attorney general shall direct the disposition of the consideration to be received thereunder by the corporation. (d) At any time, including if the attorney general does not approve the petition, or if the attorney general concludes that court review is appropriate, the petitioner may seek court approval on notice to the attorney general pursuant to section 511 (Petition for court approval) of this article.

§ 513 Administration of assets received for specific purposes.

§ 513. Administration of assets received for specific purposes. (a) A corporation which is, or would be if formed under this chapter, a charitable 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. (b) Except as may be otherwise permitted under article eight of the estates, powers and trusts law or section 555 (Release or modification of restrictions on management, investment, or purpose), the governing board shall apply all assets thus received to the purposes specified in the gift instrument as defined in section 551 (Definitions) and to the payment of the reasonable and proper expenses of administration of such assets. The governing board shall cause accurate accounts to be kept of such assets separate and apart from the accounts of other assets of the corporation. Unless the terms of the particular gift instrument provide otherwise, the treasurer shall make an annual report to the members (if there be members) or to the governing board (if there be no members) concerning the assets held under this section and the use made of such assets and of the income thereof.

§ 514 Delegation of investment management.

§ 514. Delegation of investment management. (a) Except as otherwise provided by the applicable gift instrument as defined in section 551 (Definitions), the governing board may delegate to its committees, officers or employees of the corporation or the fund the authority to act in place of the governing board in investment and reinvestment of institutional funds as defined in section 551 (Definitions). Each contract, if any, pursuant to which authority is so delegated shall provide that it may be terminated by the governing board at any time, without penalty, upon not more than sixty days' notice. Section 554 (Delegation of management and investment functions) shall govern external delegation. (b) The governing board shall exercise the standard of care required by section 717 (Duty of directors and officers) in the selection of persons to whom authority is delegated or with whom contracts are made under paragraph (a) of this section and in the continuation or termination of such delegation or contracts. The governing board shall be relieved of all liability for the investment and reinvestment of institutional funds by, and for the other acts or omissions of, persons to whom authority is so delegated or with whom contracts are so made.

§ 515 Dividends prohibited; certain distributions of cash or property

§ 515. Dividends prohibited; certain distributions of cash or property authorized. (a) A corporation shall not pay dividends or distribute any part of its income or profit to its members, directors, or officers. (b) A corporation may pay compensation in a reasonable amount to members, directors, or officers, for services rendered, and may make distributions of cash or property to members upon dissolution or final liquidation as permitted by this chapter. No person who may benefit from such compensation may be present at or otherwise participate in any board or committee deliberation or vote concerning such person's compensation; provided that nothing in this section shall prohibit the board or authorized committee from requesting that a person who may benefit from such compensation present information as background or answer questions at a committee or board meeting prior to the commencement of deliberations or voting relating thereto. Nothing in this section or in paragraph (h) of section seven hundred fifteen of this chapter shall be construed to prohibit a director from deliberating or voting concerning compensation for service on the board that is to be made available or provided to all directors of the corporation on the same or substantially similar terms. (c) A corporation may confer benefits upon members or nonmembers in conformity with its purposes, may redeem its capital certificates or subvention certificates, and may make other distributions of cash or property to its members or former members, directors, or officers prior to dissolution or final liquidation, as authorized by this article, except when the corporation is currently insolvent or would thereby be made insolvent or rendered unable to carry on its corporate purposes, or when the fair value of the corporation's assets remaining after such conferring of benefits, or redemption, or other distribution would be insufficient to meet its liabilities.

§ 516 Distributions to members upon termination of membership.

§ 516. Distributions to members upon termination of membership. (a) Except as provided in this chapter or the certificate of incorporation or the by-laws, the interest of a member in the property of a corporation shall terminate upon the termination of his membership, whether by expiration of the term of membership, or by the death,

voluntary withdrawal, or expulsion of the member, or otherwise. Such termination shall be without prejudice to his rights, if any, as holder of a capital or subvention certificate. (b) In the event of a termination of membership, whether voluntary or involuntary, and subject to any restrictions contained in this chapter or the certificate of incorporation or the by-laws, a corporation may at its option thereafter call for redemption any capital certificate or certificates held by such former member, and redeem the same upon payment of a sum of money equal to the redemption price thereof if such certificates are by their terms redeemable, or upon payment of a sum of money equal to the amount of the capital contribution evidenced by such certificates if they are not by their express terms redeemable. (c) If a member who would upon dissolution of the corporation have distributive rights in its assets under paragraph (d) of section 507 (Fees, dues and assessments; fines and penalties) is expelled other than for cause pursuant to a provision of the certificate of incorporation or by-laws authorizing such expulsion, and the corporation is dissolved within a period of five years after the date of such expulsion, the expelled member shall be entitled to share in the distribution of assets in the same manner as other members of the same class entitled to share at that time, except that his share shall be charged with any arrearages and all dues and assessments which he would have paid if he had remained a member, plus interest on all such items. (d) Nothing in this section shall authorize a corporation to make a distribution of cash or property to a former member in contravention of the provisions of section 515 (Dividends prohibited; certain distributions of cash or property authorized).

§ 517 Liabilities of members.

§ 517. Liabilities of members. (a) The members of a corporation shall not be personally liable for the debts, liabilities or obligations of the corporation. (b) A member shall be liable to the corporation only to the extent of any unpaid portion of the initiation fees, membership dues or assessments which the corporation may have lawfully imposed upon him, or for any other indebtedness owed by him to the corporation. No action shall be brought by any creditor of the corporation to reach and apply

any such liability to any debt of the corporation until after final judgment shall have been rendered against the corporation in favor of the creditor and execution thereon returned unsatisfied, or the corporation shall have been adjudged bankrupt, or a receiver shall have been appointed with power to collect debts, and which receiver, on demand of a creditor to bring suit thereon, has refused to sue for such unpaid amount, or the corporation shall have been dissolved or ceased its activities leaving debts unpaid. No such action shall be brought more than three years after the happening of any one of such events.

§ 519 Annual report of directors.

§ 519. Annual report of directors. (a) The board shall present at the annual meeting of members a report, verified by the president and treasurer or by a majority of the directors, or certified by an independent public or certified public accountant or a firm of such accountants selected by the board, showing in appropriate detail the following: (1) The assets and liabilities, including the trust funds, of the corporation as of the end of a twelve month fiscal period terminating not more than six months prior to said meeting. (2) The principal changes in assets and liabilities, including trust funds, during said fiscal period. (3) The revenue or receipts of the corporation, both unrestricted and restricted to particular purposes during said fiscal period. (4) The expenses or disbursements of the corporation, for both general and restricted purposes, during said fiscal period. (5) The number of members of the corporation as of the date of the report, together with a statement of increase or decrease in such number during said fiscal period, and a statement of the place where the names and places of residence of the current members may be found. (b) The annual report of directors shall be filed with the records of the corporation and either a copy or an abstract thereof entered in the minutes of the proceedings of the annual meeting of members. (c) The board of a corporation having no members shall direct the president and treasurer to present at the annual meeting of the board a report in accordance with paragraph (a), but omitting the requirement of subparagraph (5). This report shall be filed with the minutes of the

annual meeting of the board.

§ 519-a Annual reports for certain transactions required.

§ 519-a. Annual reports for certain transactions required. (a) A condominium created pursuant to the real property law or a cooperative housing corporation created pursuant to the business corporation law, shall, at least once each year: (1) require that each director, as defined in paragraph six of subdivision (a) of section one hundred two of this chapter, receive a copy of section seven hundred fifteen of this chapter; and (2) provide an annual report to the members or to the governing board, if there are no members, which shall be signed by each such director, containing information on any contracts made, entered into, or otherwise voted on by the board of directors that were considered a related party transaction pursuant to section seven hundred fifteen of this chapter. (b) The annual report required by subdivision (a) of this section shall include, but not be limited to, the following: (1) a list of all contracts voted on by the board of directors, including information on the contract recipient, contract amount, and the purpose of entering into the contract; (2) the record of each meeting including director attendance, voting records for contracts, and how each director voted on such contracts; and (3) the date of each vote on each contract, and the date the contract would be and remain valid. (c) If the annual report required by paragraph two of subdivision (a) of this section would, notwithstanding the requirements of this section, contain no information because of the absence of any actions taken by the board that would otherwise qualify for inclusion in such annual report, then the board shall instead submit to the members or to the governing board, if there are no members, a document, signed by each director, indicating: "No actions taken by the board were subject to the annual report required pursuant to section 519-a of the Not-for-Profit Corporation Law".

§ 520 Reports of corporation.

§ 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 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 (Judicial dissolution) in the case of a domestic corporation, or under section 1303 (Violations) in the case of a foreign corporation.

§ 521 Liability for failure to disclose required information.

§ 521. Liability for failure to disclose required information.

Failure of the corporation to comply in good faith with the notice or disclosure or reporting provisions of section 501 (Stock and shares prohibited; membership certificates authorized), or paragraph (c) of section 503 (Capital certificates), or paragraph (c) of section 505 (Subvention certificates), or paragraph (b) of section 513 (Administration of assets received for specific purposes), or section 518 (Reports to comptroller), or section 519 (Annual report of directors), or section 520 (Reports of corporation), shall make the corporation liable for any damage sustained by any person in consequence thereof.

ARTICLE 5-A PRUDENT MANAGEMENT OF INSTITUTIONAL FUNDS ACT Section 550. Short title. 551. Definitions. 552. Standard of conduct in managing and investing an institutional fund.

553. Appropriation for expenditure or accumulation of endowment fund; rules of construction.
554. Delegation of management and investment functions.
555. Release or modification of restrictions on management, investment, or purpose.
556. Reviewing compliance.
557. Application to existing institutional funds.
558. Relation to Electronic Signatures in Global and National Commerce Act.

Article 5-A

§ 550 Short title.

§ 550. Short title.

This article may be known and may be cited as the "New York prudent management of institutional funds act".

§ 551 Definitions.

§ 551. Definitions.

As used in this article: (a) "Charitable purpose" means the relief of poverty, the advancement of education or religion, the promotion of health, the promotion of a governmental purpose, or any other purpose the achievement of which is beneficial to the community including any purpose that is charitable under the laws of the state of New York. (a-1) "Donor" means the person who grants or transfers property to an institution pursuant to a gift instrument, or a person designated in the applicable gift instrument to act in the place of the donor, but does not otherwise include the person's executors, heirs, successors, assigns, transferees, or distributees. (b) "Endowment fund" means an institutional fund or part thereof that, under the terms of a gift instrument, is not wholly expendable by the institution on a current basis. The term does not include assets that an institution may designate as an endowment fund for its own use, consistent with the terms of the applicable gift instrument. (c) "Gift instrument" means a record or records, including an institutional solicitation, under which property is granted to,

transferred to, or held by an institution as an institutional fund. (d) "Institution" means: (1) a person, other than an individual, organized and operated exclusively for charitable purposes; (2) a trust that had both charitable and noncharitable interests, after all noncharitable interests have terminated; or (3) any corporation described in subparagraph five of paragraph (a) of section 102 (Definitions). Whenever any provision of this article imposes any obligation on, or requires any action to be taken by, an institution, such obligation is imposed on, and such action shall be authorized by, the governing board of such institution. (e) "Institutional fund" means a fund held by an institution. This term shall not include: (1) program-related assets; (2) a fund held for an institution by a trustee that is not an institution; or (3) a fund in which a beneficiary that is not an institution has an interest, other than an interest that could arise upon violation or failure of the purposes of the fund. (f) "Notice" means information given by an institution as required by this article. An institution will be considered to have given notice if notice is given personally in writing or sent to the recipient's last known address on record with the institution, or, if no address is on record with the institution, if the institution makes reasonable efforts to attempt to find and notify the recipient. If the notice is mailed, such notice is given when deposited in the United States mail, with postage thereon prepaid. If the notice is delivered by electronic means, such as via facsimile or email, such notice is given when the notice is sent. (g) "Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, or any other legal entity. (h) "Program-related asset" means an asset held by an institution not for investment under the terms of the gift instrument, but primarily to accomplish a programmatic purpose of the institution. (i) "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form. (j) A donor is "available" if such donor (1) is living or, if the donor is not a natural person, is in existence and conducting

activities; and (2) can be identified and located with reasonable efforts. (k) "External agent" means an independent investment advisor, investment counsel or manager, bank, or trust company.

§ 552 Standard of conduct in managing and investing an institutional

§ 552. Standard of conduct in managing and investing an institutional fund. (a) Subject to the intent of a donor expressed in a gift instrument, an institution, in managing and investing an institutional fund, shall consider the purposes of the institution and the purposes of the institutional fund. (b) In addition to complying with the duty of loyalty imposed by law other than this article, each person responsible for managing and investing an institutional fund shall manage and invest the fund in good faith and with the care an ordinarily prudent person in a like position would exercise under similar circumstances. (c) In managing and investing an institutional fund, an institution consistent with section 717 (Duty of Directors and Officers): (1) may incur only costs that are appropriate and reasonable in relation to the assets, the purposes of the institution, and the skills available to the institution; and (2) shall make a reasonable effort to verify facts relevant to the management and investment of the fund. (d) An institution may pool two or more institutional funds for purposes of management and investment. (e) Except as otherwise provided by a gift instrument, the following rules apply: (1) In managing and investing an institutional fund, the following factors, if relevant, must be considered: (A) general economic conditions; (B) the possible effect of inflation or deflation; (C) the expected tax consequences, if any, of investment decisions or strategies; (D) the role that each investment or course of action plays within the overall investment portfolio of the fund; (E) the expected total return from income and the appreciation of investments; (F) other resources of the institution; (G) the needs of the institution and the fund to make distributions and to preserve capital; and (H) an asset's

special relationship or special value, if any, to the purposes of the institution. (2) Management and investment decisions about an individual asset must be made not in isolation but rather in the context of the institutional fund's portfolio of investments as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the fund and to the institution. (3) Except as otherwise provided by law other than this article, an institution may invest in any kind of property or type of investment consistent with this article. (4) An institution shall diversify the investments of an institutional fund unless the institution prudently determines that, because of special circumstances, the purposes of the fund are better served without diversification. An institution shall review a decision not to diversify as frequently as circumstances require, but at least annually. (5) Within a reasonable time after receiving property, an institution shall make and carry out decisions concerning the retention or disposition of the property or to rebalance a portfolio, in order to bring the institutional fund into compliance with the purposes, terms, and distribution requirements of the institution as necessary to meet other circumstances of the institution and the requirements of this article. (6) A person that has special skills or expertise, or is selected in reliance upon the person's representation that the person has special skills or expertise, has a duty to use those skills or that expertise in managing and investing institutional funds. (f) Each institution shall adopt a written investment policy setting forth guidelines on investments and delegation of management and investment functions in accord with the standards of this article.

§ 553 Appropriation for expenditure or accumulation of endowment fund;

§ 553. Appropriation for expenditure or accumulation of endowment fund; rules of construction. (a) Subject to the intent of a donor expressed in the gift instrument, an institution may appropriate for expenditure or accumulate so much of an endowment fund as the institution determines is prudent for the uses, benefits, purposes, and duration for which the endowment fund is

established. Unless stated otherwise in the gift instrument, the assets in an endowment fund are donor-restricted assets until appropriated for expenditure by the institution. In making a determination to appropriate or accumulate, the institution shall act in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances, and shall consider, if relevant, the following factors: (1) the duration and preservation of the endowment fund; (2) the purposes of the institution and the endowment fund; (3) general economic conditions; (4) the possible effect of inflation or deflation; (5) the expected total return from income and the appreciation of investments; (6) other resources of the institution; (7) where appropriate and circumstances would otherwise warrant, alternatives to expenditure of the endowment fund, giving due consideration to the effect that such alternatives may have on the institution; and (8) the investment policy of the institution.

For each determination to appropriate for expenditure, the institution shall keep a contemporaneous record describing the consideration that was given by the governing board to each of the factors enumerated in this paragraph. (b) To limit the authority to appropriate for expenditure or accumulate under paragraph (a) of this section, a gift instrument must specifically state the limitation. Terms in a gift instrument setting forth a specific spending level, rate, or amount, or explicitly modifying or overriding the provisions of paragraph (a) of this section, will limit the authority of the institution to appropriate for expenditure or accumulate under paragraph (a) of this section. (c) Terms in a gift instrument designating a gift as an endowment, or a direction or authorization in the gift instrument to use only "income," "interest," "dividends," or "rents, issues, or profits," or "to preserve the principal intact," or words of similar import: (1) create an endowment fund of permanent duration unless other language in the gift instrument limits the duration or purpose of the

fund; and (2) do not otherwise limit the authority to appropriate for expenditure or accumulate under paragraph (a) of this section. (d) A rebuttable presumption of imprudence shall apply to gift instruments executed upon or after the effective date of this article as follows: The appropriation for expenditure in any year of an amount greater than seven percent of the fair market value of an endowment fund, calculated on the basis of market values determined at least quarterly and averaged over a period of not less than five years immediately preceding the year in which the appropriation for expenditure is made, creates a rebuttable presumption of imprudence. For an endowment fund in existence for fewer than five years, the fair market value of the endowment fund must be calculated for the period the endowment fund has been in existence. This subsection does not: (1) apply to an appropriation for expenditure permitted under law other than the chapter of the laws of 2010 that enacted this article or by the gift instrument; or (2) create a presumption of prudence for an appropriation for expenditure of an amount less than or equal to seven percent of the fair market value of the endowment fund. (e)(1) With respect to a gift instrument executed by the donor before the effective date of this article an institution must provide ninety days notice to the donor, if the donor is then available, before applying paragraph (a) of this section for the first time, during which time the donor may clarify or amend the gift instrument to prohibit the application of paragraph (a) of this section. Such notice shall include a form for use by the donor, which shall contain language substantially as follows: Attention, Donor: Please check Box #1 or #2 below and return to the address shown above. ( ) #1 The institution may spend as much of my gift as may be prudent. ( ) #2 The institution may not spend below the original dollar value of my gift. If you check Box #1 above, the institution may spend as much of your endowment gift (including all or part of the original value of your gift) as may be prudent under the criteria set forth in Article 5-A of the Not-for-Profit Corporation Law (The

Prudent Management of Institutional Funds Act). If you check Box #2 above, the institution may not spend below the original dollar value of your endowment gift but may spend the income and the appreciation over the original dollar value if it is prudent to do so. The criteria for the expenditure of endowment funds set forth in Article 5-A of the Not-for-Profit Corporation Law (The Prudent Management of Institutional Funds Act) will not apply to your gift.

If the donor does not respond within ninety days from the date notice was given, paragraphs (a), (b), and (c) of this section shall be applied. (2) This paragraph shall not apply if: (A) the gift instrument permits appropriation for expenditure from the endowment fund without regard for the fund's historic dollar value; (B) the gift instrument limits the institution's authority to appropriate for expenditure in accordance with paragraph (b) of this section; or (C) the gift consists of funds received as a result of an institutional solicitation without a separate statement by the donor expressing a restriction on the use of funds. (f) When an institution acts pursuant to paragraph (a) or (e) of this section, it shall keep a record of such action.

§ 554 Delegation of management and investment functions.

§ 554. Delegation of management and investment functions. (a) Subject to any specific limitation set forth in a gift instrument or in law other than this article, an institution may delegate to an external agent the management and investment of an institutional fund to the extent that an institution could prudently delegate under the circumstances. An institution shall act in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances as required by section seven hundred seventeen of this chapter, in: (1) selecting, continuing or terminating an agent, including assessing the agent's independence including any conflicts of interest such agent has or may have; (2) establishing the scope and terms of the delegation, including the payment of compensation, consistent with the purposes of the institution

and the institutional fund; and (3) monitoring the agent's performance and compliance with the scope and terms of the delegation. (b) In performing a delegated function, an agent owes a duty to the institution to exercise reasonable care, skill and caution to comply with the scope and terms of the delegation. (c) An institution that complies with paragraph (a) of this section is not liable for the decisions or actions of an agent to which the function was delegated. (d) By accepting delegation of a management or investment function from an institution that is subject to the laws of this state, an agent submits to the jurisdiction of the courts of this state in all proceedings arising from or related to the delegation or the performance of the delegated function. (e) Each contract, if any, pursuant to which authority is so delegated shall provide that it may be terminated by the institution at any time, without penalty, upon not more than sixty days notice. (f) An institution may delegate management and investment functions to its committees, officers, or employees as authorized by the laws of this state other than this article, as set forth in, inter alia, section 514 (Delegation of investment management). (g) Nothing in this article shall impair the operation of section 717 (Duty of directors and officers).

§ 555 Release or modification of restrictions on management,

§ 555. Release or modification of restrictions on management, investment, or purpose. (a) If the donor consents in a record, an institution may release or modify, in whole or in part, a restriction contained in a gift instrument on the management, investment, or purpose of an institutional fund. A release or modification may not allow a fund to be used for a purpose other than a charitable purpose of the institution. (b) A court, upon application of an institution, may modify a restriction contained in a gift instrument regarding the management or investment of an institutional fund if the restriction has become impracticable or wasteful, if it impairs the management or investment of the fund, or if, because of circumstances not anticipated by the donor,

a modification of a restriction will further the purposes of the fund. 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. To the extent practicable, any modification must be made in accordance with the donor's probable intention. (c) If a particular purpose or a restriction contained in a gift instrument on the use of an institutional fund becomes unlawful, impracticable, impossible to achieve, or wasteful, the court, upon application of an institution, may modify the purpose of the fund or the restriction on the use of the fund in a manner consistent with the purposes expressed in the gift instrument. 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. (d)(1) If an institution determines that a restriction contained in a gift instrument on the management, investment, or purpose of an institutional fund is unlawful, impracticable, impossible to achieve, or wasteful, the institution, ninety days after notification to the attorney general, may release or modify the restriction, in whole or part, if: (A) the institutional fund subject to the restriction has a total value of less than one hundred thousand dollars; (B) more than twenty years have elapsed since the fund was established; and (C) the institution uses the property in a manner consistent with the purposes expressed in the gift instrument. (2) Notice to the attorney general shall contain: (A) an explanation of (i) the institution's determination that the restriction meets the requirements set forth in subparagraph one of this paragraph and (ii) the proposed release or modification; (B) a copy of a record of the institution approving the release or modification; and (C) a statement of the proposed use of the institutional fund after such release or modification. (3) If the attorney general does not notify the institution within ninety days, the institution may proceed with the release or modification.

(4) Notice shall also be given to the donor, as defined in paragraph (a-1) of section 551 (Definitions), if available, provided, however, that such notice shall not be required for funds described in clause (B) of subparagraph two of paragraph (e) of section 553 (Appropriation for expenditure or accumulation of endowment fund; rules of construction). (e) For purposes of this section, an institution may apply to the following courts to release or modify a restriction contained in a gift instrument: (1) to the supreme court of the judicial district wherein the institution has its office or principal place of carrying out the purposes for which it was formed; or (2) where the applicable gift instrument is a will, to the surrogate's court in which such will is probated. (f) This chapter shall not limit the application of the doctrines of cy pres and deviation.

§ 556 Reviewing compliance.

§ 556. Reviewing compliance.

Compliance with this article shall be determined in light of the facts and circumstances existing at the time a decision is made or action is taken, and not retrospectively.

§ 557 Application to existing institutional funds.

§ 557. Application to existing institutional funds.

This article shall apply to institutional funds existing on or established after the effective date of this article. As applied to institutional funds existing on the effective date of this article, this article shall govern only decisions made or actions taken on or after that date.

§ 558 Relation to Electronic Signatures in Global and National Commerce

§ 558. Relation to Electronic Signatures in Global and National Commerce Act.

This article modifies, limits, and supersedes the Electronic

Signatures in Global and National Commerce Act, 15 U.S.C. Section 7001 et seq., but does not modify, limit, or supersede Section 101 of that act, 15 U.S.C. Section 7001(a), or authorize electronic delivery of any of the notices described in Section 103 of that act, 15 U.S.C. Section 7003(b).

ARTICLE 6 MEMBERS Section 601. Members. 602. By-laws. 603. Meetings of members. 604. Special meeting for election of directors. 605. Notice of meeting of members. 606. Waivers of notice. 607. List or record of members at meetings. 608. Quorum at meeting of members. 609. Proxies. 610. Selection of inspectors at meetings of members; duties. 611. Qualification of voters; fixing record date to determine eligibility to vote; voting entitlement. 612. Limitations on right to vote. 613. Vote of members. 614. Action by members without a meeting. 615. Greater requirement as to quorum and vote of members. 616. Voting by class of members. 617. Cumulative voting. 618. Power of supreme court respecting elections. 619. Agreements by members as to voting. 620. Preemptive rights. 621. Books and records; right of inspection; prima facie evidence. 622. Infant members. 623. Members' derivative action brought in the right of the corporation to procure a judgment in its favor. 624. Notification to tenants.

Article 6

§ 601 Members.

§ 601. Members. (a) A corporation shall have one or more classes of members, or, in the case of a 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, provided however, that effective July first, two thousand nineteen, no corporation except a corporation that has no members, shall have a membership comprised of fewer than three persons. A corporation may have a corporation, joint-stock association, unincorporated association or partnership as a sole member, if such corporation, joint-stock association, unincorporated association or partnership is owned or controlled by no fewer than three persons. (b) If the corporation has two or more classes of members, the designation and characteristics of each class and the qualifications and rights of, and limitations upon, the members of each class may be set forth in the certificate of incorporation, the by-laws or, if the by-laws so provide, a resolution of the board. (c) If the corporation has members, membership may be effected and evidenced by: (1) Signature on the certificate of incorporation. (2) Designation in the certificate of incorporation or the by-laws. (3) Membership certificate or card or capital certificate. (4) Such method, including but not limited to the foregoing, as is prescribed by the certificate of incorporation or the by-laws. (d) Membership certificates or cards shall not be transferable. If the certificate of incorporation or by-laws permits transfer of membership, upon each such transfer the certificate or card issued to a former member shall be surrendered, and a new certificate or card shall be issued to the new member. (e) Except as otherwise provided in this chapter or the certificate of incorporation or the by-laws, membership shall be terminated by death, resignation, expulsion, expiration of a term of membership or dissolution and liquidation under articles 10 and 11.

§ 602 By-laws.

§ 602. By-laws. (a) The initial by-laws of a corporation may be adopted by its incorporators at the organization meeting and, if not so adopted by the incorporators, by its board. Any reference in this chapter to a "by-law adopted by the members" includes a by-law adopted by the incorporators. (b) Subject to section 612 (Limitations on right to vote), the by-laws may be adopted, amended or repealed by the members at the time entitled to vote in the election of directors and, unless otherwise provided in the certificate of incorporation or the by-laws adopted by the members, by the board. (c) Any by-law adopted by the board may be amended or repealed by the members and, unless otherwise provided in the certificate of incorporation or the by-laws adopted by the members, any by-law adopted by the members may be amended or repealed by the board. (d) In the case of a corporation which is subject, under any other law of this state, to regulation or control by a governmental body or officer, such body or officer may, to the extent provided in such other law, in furtherance of its or his authority to regulate or control: (1) Adopt, amend or repeal by-laws. (2) Amend or repeal any by-law adopted by the members or the board. (e) If any by-law regulating an impending election of directors is adopted, amended or repealed by the board, there shall be set forth in the notice of the next meeting of the members for the election of directors the by-law so adopted, amended or repealed, together with a concise statement of the changes made. (f) The by-laws may contain any provision relating to the business of the corporation, the conduct of its affairs, its rights or powers or the rights or powers of its members, directors or officers, not inconsistent with this chapter or any other statute of this state or the certificate of incorporation. (g) In the case of residential not-for-profit corporations, changes including the adoption, amendment or repeal of the by-laws by the board of directors shall be provided to the members, stockholders, and delegates of such corporation in writing, by physical or electronic means, within ten days of such adoption.

§ 603 Meetings of members.

§ 603. Meetings of members.

• (a) Meetings of members may be held at such place, within or without this state, as may be fixed by or under the by-laws or, if not so fixed, as determined by the board of directors. For the duration of the state disaster emergency declared by executive order two hundred two that began on March seventh, two thousand twenty, or until December thirty-first, two thousand twenty-one, whichever is later, the board of directors may, in its sole discretion, determine that meetings of members be held partially or solely by means of electronic communication, the electronic service and/or platform by which the meeting is held shall be the place of the meeting for purposes of this article if a meeting is held solely by means of electronic communication. Meetings conducted partially or solely by means of electronic communications in reliance upon this paragraph and any member's electronic participation in such meetings shall be subject to those guidelines and procedures as the board adopts, provided the board shall implement reasonable measures to: (1) verify that each person participating electronically is a member or a proxy of a member; (2) provide each member participating electronically with a reasonable opportunity to participate in the meeting, including an opportunity to propose, object to, and vote upon a specific action to be taken by the members, and to see, read or hear the proceedings of the meeting substantially concurrently with those proceedings; and (3) record and maintain a record of any votes or other actions taken by electronic communication at the meeting.
• NB Separately amended; cannot be put together
• (a) Meetings of members may be held at such place, within or without this state, as may be fixed by or under the by-laws or, if not so fixed, as determined by the board of directors. The board of directors may, unless otherwise restricted by the certificate of incorporation or the by-laws, in its sole discretion, determine that meetings of members be held partially or solely by means of electronic communication, the electronic service and/or platform by which the meeting is held shall be the place of the meeting for purposes of this article if a meeting is held solely by means of electronic communication. Meetings conducted partially or solely by means of electronic communications in reliance

upon this paragraph and any member's electronic participation in such meetings shall be subject to those guidelines and procedures as the board adopts, provided the board shall implement reasonable measures to: (1) verify that each person participating electronically is a member or a proxy of a member; (2) provide each member participating electronically with a reasonable opportunity to participate in the meeting, including an opportunity to propose, object to, and vote upon a specific action to be taken by the members, and to see, read or hear the proceedings of the meeting substantially concurrently with those proceedings; and (3) record and maintain a record of any votes or other actions taken by electronic communication at the meeting.

• NB Separately amended; cannot be put together (b) A meeting of the members shall be held annually for the election of directors and the transaction of other business on a date fixed by or under the by-laws. Failure to hold the annual meeting on the date so fixed or to elect a sufficient number of directors to conduct the business of the corporation shall not work a forfeiture or give cause for dissolution of the corporation, except as provided in paragraph (a) of section 1102 (Judicial dissolution; petition by directors or members; petition in case of deadlock among directors or members). (c) Special meetings of the members may be called by the board and by such person or persons as may be authorized by the certificate of incorporation or the by-laws. In any case, such meetings may be convened by the members entitled to cast ten per cent of the total number of votes entitled to be cast at such meeting, who may, in writing, demand the call of a special meeting specifying the date and month thereof, which shall not be less than two nor more than three months from the date of such written demand. The secretary of the corporation upon receiving the written demand shall promptly give notice of such meeting, or if he fails to do so within five business days thereafter, any member signing such demand may give such notice. The meeting shall be held at the place fixed in the by-laws or, if not so fixed, at the office of the corporation. (d) A corporation may provide in its certificate of incorporation or by-laws adopted by the members for the election of representatives or delegates, who, when assembled within or without the state as directed by the certificate of incorporation or the by-laws, shall have and may

exercise all of the powers, rights and privileges of members at an annual meeting. When so exercising the powers, rights and privileges of members, such representatives or delegates shall be subject in all respects to the provisions of this chapter governing members.

§ 604 Special meeting for election of directors.

§ 604. Special meeting for election of directors. (a) If, for a period of one month after the date fixed by or under the by-laws for the annual meeting of members or, if no date has been so fixed, for a period of thirteen months after the formation of the corporation or the last annual meeting, there is a failure to elect a sufficient number of directors to conduct the business of the corporation, the board shall call a special meeting for the election of directors. If such special meeting is not called by the board within two weeks after the expiration of such period or if it is so called but there is a failure to elect such directors for a period of two months after the expiration of such period, members entitled to cast one hundred votes or ten per cent of the total number of votes entitled to be cast in an election of directors, whichever is lesser, may, in writing, demand the call of a special meeting for the election of directors specifying the date and month thereof, which shall not be less than two nor more than three months from the date of such written demand. The secretary of the corporation upon receiving the written demand shall promptly give notice of such meeting or, if he fails to do so within five business days thereafter, any member signing such demand may give such notice. The meeting shall be held at the place fixed in the by-laws or, if not so fixed, at the office of the corporation. (b) At any such special meeting called on the demand of members, notwithstanding section 608 (Quorum of members), the members attending, in person or by proxy, and entitled to vote in an election of directors shall constitute a quorum for the purpose of electing directors, but not for the transaction of any other business.

• § 605. Notice of meeting of members. (a) Whenever under the provisions of this chapter members are required or permitted to take any action at a meeting, written notice shall state

the place, date and hour of the meeting, for the duration of the state disaster emergency declared by executive order two hundred two that began on March seventh, two thousand twenty, or until December thirty-first, two thousand twenty-one, whichever is later, the means of electronic communication, if any, by which members may participate in the proceedings of the meeting pursuant to paragraph (a) of section six hundred three of this article 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, 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, by first class mail or by facsimile telecommunications or by electronic mail, it shall be given not less than ten nor more than fifty days before the date of the meeting; if mailed by any other class of mail, it shall be given not less than thirty nor more than sixty days before such date. If mailed, such notice is given when deposited in the United States mail, with postage thereon prepaid, directed to the member at his address as it appears on the record of members, or, if he shall have filed with the secretary of the corporation a written request that notices to him be mailed to some other address, then directed to him at such other address. If sent by facsimile telecommunication or mailed electronically, such notice is given when directed to the member's fax number or electronic mail address as it appears on the record of members, or, to such fax number or other electronic mail address as filed with the secretary of the corporation. Notwithstanding the foregoing, such notice shall not be deemed to have been given electronically (1) if the corporation is unable to deliver two consecutive notices to the member by facsimile telecommunication or electronic mail; or (2) the corporation otherwise becomes aware that notice cannot be delivered to the member by facsimile telecommunication or electronic mail. An affidavit of the secretary or other person giving the notice or of a transfer agent of the corporation that the notice required by this section has been given shall, in the absence of fraud, be prima facie evidence of the facts therein stated. Whenever a corporation has more than five hundred members, the notice may be served

by publication in a newspaper published in the county in the state in which the principal office of the corporation is located, once a week for three successive weeks next preceding the date of the meeting, provided that the corporation shall also prominently post notice of such meeting on the homepage of any website maintained by the corporation continuously from the date of publication through the date of the meeting. A corporation shall send notice of meetings by first class mail to any member who requests in writing that such notices be delivered by such method. (b) When a meeting is adjourned to another time or place, it shall not be necessary, unless the by-laws require otherwise, to give any notice of the adjourned meeting if the time and place to which the meeting is adjourned and, for the duration of the state disaster emergency declared by executive order two hundred two that began on March seventh, two thousand twenty, or until December thirty-first, two thousand twenty-one, whichever is later, the means of electronic communications, if any, by which members may participate in the proceedings of the meeting pursuant to paragraph (a) of section six hundred three of this article are announced at the meeting at which the adjournment is taken, and at the adjourned meeting any business may be transacted that might have been transacted on the original date of the meeting. However, if after the adjournment the board fixes a new record date for the adjourned meeting, a notice of the adjourned meeting shall be given to each member of record on the new record date entitled to notice under paragraph (a) of this section. (c) Nothing required in paragraphs (a) or (b) of this section shall limit, restrict or supersede other forms of voting and participation.

• NB Separately amended; cannot be put together
• § 605. Notice of meeting of members. (a) Whenever under the provisions of this chapter members are required or permitted to take any action at a meeting, written notice shall state the place, date and hour of the meeting, the means of electronic communication, if any, by which members may participate in the proceedings of the meeting pursuant to paragraph (a) of section six hundred three of this article 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, 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, by first class mail or by facsimile telecommunications or by electronic mail, it shall be given not less than ten nor more than fifty days before the date of the meeting; if mailed by any other class of mail, it shall be given not less than thirty nor more than sixty days before such date. If mailed, such notice is given when deposited in the United States mail, with postage thereon prepaid, directed to the member at his address as it appears on the record of members, or, if he shall have filed with the secretary of the corporation a written request that notices to him be mailed to some other address, then directed to him at such other address. If sent by facsimile telecommunication or mailed electronically, such notice is given when directed to the member's fax number or electronic mail address as it appears on the record of members, or, to such fax number or other electronic mail address as filed with the secretary of the corporation. Notwithstanding the foregoing, such notice shall not be deemed to have been given electronically (1) if the corporation is unable to deliver two consecutive notices to the member by facsimile telecommunication or electronic mail; or (2) the corporation otherwise becomes aware that notice cannot be delivered to the member by facsimile telecommunication or electronic mail. An affidavit of the secretary or other person giving the notice or of a transfer agent of the corporation that the notice required by this section has been given shall, in the absence of fraud, be prima facie evidence of the facts therein stated. Whenever a corporation has more than five hundred members, the notice may be served by publication in a newspaper published in the county in the state in which the principal office of the corporation is located, once a week for three successive weeks next preceding the date of the meeting, provided that the corporation shall also prominently post notice of such meeting on the homepage of any website maintained by the corporation continuously from the date of publication through the date of the meeting. A corporation shall send notice of meetings by first class mail to any member who requests in writing that such notices be delivered by such method.

(b) When a meeting is adjourned to another time or place, it shall not be necessary, unless the by-laws require otherwise, to give any notice of the adjourned meeting if the time and place to which the meeting is adjourned and the means of electronic communications, if any, by which members may participate in the proceedings of the meeting pursuant to paragraph (a) of section six hundred three of this article are announced at the meeting at which the adjournment is taken, and at the adjourned meeting any business may be transacted that might have been transacted on the original date of the meeting. However, if after the adjournment the board fixes a new record date for the adjourned meeting, a notice of the adjourned meeting shall be given to each member of record on the new record date entitled to notice under paragraph (a) of this section. (c) Nothing required in paragraphs (a) or (b) of this section shall limit, restrict or supersede other forms of voting and participation.

• NB Separately amended; cannot be put together

§ 606 Waivers of notice.

§ 606. Waivers of notice.

Notice of meeting need not be given to any member who submits a waiver of notice, in person or by proxy, whether before or after the meeting. Waiver of notice may be written or electronic. If written, the waiver must be executed by the member or the member's authorized officer, director, employee, or agent by signing such waiver or causing his 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 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 or her.

§ 607 List or record of members at meetings.

§ 607. List or record of members at meetings.

A list or record of members entitled to vote, certified by the

corporate officer responsible for its preparation or by a transfer agent, shall be produced at any meeting of members upon the request therefor of any member who has given written notice to the corporation that such request will be made at least ten days prior to such meeting. If the right to vote at any meeting is challenged, the inspectors of election, or the person presiding thereat, shall require such list or record of members to be produced as evidence of the right of the persons challenged to vote at such meeting, and all persons who appear from such list or record to be members entitled to vote thereat may vote at such meeting.

§ 608 Quorum at meeting of members.

§ 608. Quorum at meeting of members. (a) Members entitled to cast a majority of the total number of votes entitled to be cast thereat shall constitute a quorum at a meeting of members for the transaction of any business, provided that when a specified item of business is required to be voted on by a class of members, voting as a class, members entitled to cast a majority of the total number of votes entitled to be cast by such class shall constitute a quorum for the transaction of such specified items of business. (b) The certificate of incorporation or the by-laws may provide for any lesser quorum not less than the members entitled to cast one hundred votes or one-tenth of the total number of votes entitled to be cast, whichever is lesser, and may, under section 615 (Greater requirement as to quorum and vote of members), provide for a greater quorum. (c) Action to amend the certificate of incorporation or by-laws to conform to paragraph (b) may be taken at a special meeting of members at which the quorum requirements applicable to the corporation immediately prior to the effective date of this chapter are fulfilled, but action may be taken only once under this paragraph. (d) The members present may adjourn the meeting despite the absence of a quorum. (e) If for any reason it has proved to be impractical or impossible for a corporation to obtain a quorum in order to conduct a meeting of its members in the manner prescribed by its certificate or by-laws or by statute, then upon the petition of a director, officer or member to the supreme court in the judicial district where the office of the

corporation is or was located on notice to the attorney general or by the attorney general, the supreme court may in its discretion dispense with the requirement as to quorums that would otherwise be imposed by the corporation's certificate of incorporation or by-laws or by statute. The petition shall set forth the reasonable efforts the corporation has made to obtain a quorum, including the manner in which the corporation provided notice to its members of prior meetings. The supreme court shall, in an order issued pursuant to this section, provide for a method of notice reasonably designed to give actual notice to all persons who would be entitled to notice of a meeting held pursuant to the certificate of incorporation or by-laws or the statute, whether or not the method results in actual notice to all such persons or conforms to the notice requirements that would otherwise apply. In a proceeding under this section the court may determine who are the members of the corporation. (f) For purposes of this section "person" means any association, corporation, joint stock company, estate, general partnership (including any registered limited liability partnership or foreign limited liability partnership), limited association, limited liability company (including a professional service limited liability company), foreign limited liability company (including a foreign professional service limited liability company), joint venture, limited partnership, natural person, real estate investment trust, business trust or other trust, custodian, nominee or any other individual or entity in its own or any representative capacity.

§ 609 Proxies.

§ 609. Proxies. (a) Except as otherwise provided in the certificate of incorporation or the by-laws: (1) Every member entitled to vote at a meeting of members or to express consent or dissent without a meeting may authorize another person or persons to act for him by proxy. (2) No proxy shall be valid after the expiration of eleven months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the member executing it, except as otherwise provided in this section.

(3) The authority of the holder of a proxy to act shall not be revoked by the incompetence or death of the member who executed the proxy unless, before the authority is exercised, written notice of an adjudication of such incompetence or of such death is received by the corporate officer responsible for maintaining the list or record of members. (4) Except when other provision shall have been made by written agreement between the parties, the record holder of capital certificates which he holds as pledgee or otherwise as security or which belong to another, shall issue to the pledgor or to such owner of such capital certificates, upon demand therefor and payment of necessary expenses thereof, a proxy to vote or take other action thereon. (5) A member shall not sell his vote or issue a proxy to vote to any person for any sum of money or anything of value, except as authorized in this section and section 619 (Agreements as to voting). (6) A proxy which is entitled "irrevocable proxy" and which states that it is irrevocable is irrevocable when it is held by any of the following or a nominee of any of the following: (A) A pledgee. (B) A person who has purchased or agreed to purchase the capital certificates. (C) A creditor or creditors of the corporation who extend or continue credit to the corporation in consideration of the proxy if the proxy states that it was given in consideration of such extension or continuation of credit, the amount thereof, and the name of the person extending or continuing credit. (D) A person who has contracted to perform services as an officer of the corporation, if a proxy is required by the contract of employment, if the proxy states that it was given in consideration of such contract of employment, the name of the employee and the period of employment contracted for. (E) A person designated by or under an agreement under section 619. (7) Notwithstanding a provision in a proxy, stating that it is irrevocable, the proxy becomes revocable after the pledge is redeemed, or the debt of the corporation is paid, or the period of employment provided for in the contract of employment has terminated, or the agreement under section 619 has terminated; and, in a case provided for

in subparagraphs (6) (C) or (D), becomes revocable three years after the date of the proxy or the end of the period, if any, specified therein, whichever period is less, unless the period of irrevocability is renewed from time to time by the execution of a new irrevocable proxy as provided in this section. This paragraph does not affect the duration of a proxy under subparagraph (2). (8) A proxy may be revoked, notwithstanding a provision making it irrevocable, by a purchaser of capital certificates without knowledge of the existence of the provision unless the existence of the proxy and its irrevocability is noted conspicuously on the face or back of the capital certificate. (b) Without limiting the manner in which a member may authorize another 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 providing such authorization by electronic mail to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person, provided that any such authorization by electronic mail shall either set forth information from which it can be reasonably determined that the authorization by electronic mail was authorized by the member. If it is determined that such authorization by electronic mail is valid, the inspectors or, if there are no inspectors, 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 reproduction of the writing or 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.

§ 610 Selection of inspectors at meetings of members; duties.

§ 610. Selection of inspectors at meetings of members; duties. (a) If the by-laws require inspectors at any meeting of members, such requirement is waived unless compliance therewith is requested by a member present in person or by proxy and entitled to vote at such meeting. Unless otherwise provided in the by-laws, the board, in advance of any meeting of members, may appoint one or more inspectors to act at the meeting or any adjournment thereof. If inspectors are not so appointed, the person presiding at a meeting of members may, and on the request of any member entitled to vote thereat shall, appoint one or more inspectors. In case any person appointed fails to appear or act, the vacancy may be filled by appointment made by the board in advance of the meeting or at the meeting by the person presiding thereat. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his ability. (b) The inspectors shall determine the number of membership certificates or cards and capital certificates outstanding and the voting power of each, the certificates and cards represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges, and questions arising in connection with the right to vote, count and tabulate all votes, ballots or consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all members. On request of the person presiding at the meeting or any members entitled to vote thereat, the inspectors shall make a report in writing of any challenge, question or matter determined by them and execute a certificate of any fact found by them. Any report or certificate made by them shall be prima facie evidence of the facts stated and of the vote as certified by them.

§ 611 Qualification of voters; fixing record date to determine

§ 611. Qualification of voters; fixing record date to determine

eligibility to vote; voting entitlement. (a) The by-laws may provide or, in the absence of such provision, the board may fix, in advance, a date as the record date for the purpose of determining the members entitled to notice of any meeting of members or any adjournment thereof. Such record date shall not be more than fifty nor less than ten days before the date of the meeting. (b) Any member in good standing, otherwise eligible to vote, is entitled to vote at any meeting of members, except that, if the certificate of incorporation or the by-laws so provide, the by-laws may provide or, in the absence of such provision, the board may fix a date as the record date for the purpose of determining the members entitled to vote at any meeting of members or any adjournment thereof, or to express consent to or dissent from any proposal without a meeting, or for the purpose of determining members entitled to receive any distribution or the allotment of any rights, or for the purpose of any other action by the members. Such record date shall not be more than fifty nor less than ten days before the date of the meeting. (c) If the certificate of incorporation or the by-laws provide for a record date, as authorized by paragraph (b), and no record date is fixed: (1) The record date for the determination of members entitled to vote at a meeting of members shall be at the close of business on the day next preceding the day on which notice is given, or, if no notice is given, the day on which the meeting is held. (2) The record date for determining members for any purpose other than that specified in subparagraph (1) shall be at the close of business on the day on which the resolution of the board relating thereto is adopted. (d) When a determination of members of record entitled to notice of or to vote at any meeting of members has been made as provided in this section, such determination shall apply to any adjournment thereof, unless the board fixes a new record date under this section for the adjourned meeting. (e) In any case in which a member is entitled to vote, he shall have no more than, nor less than, one vote; except that if a corporation has an organization as a member, the certificate of incorporation or by-laws may provide that such organization shall be entitled to votes

substantially proportionate to its membership.

§ 612 Limitations on right to vote.

§ 612. Limitations on right to vote.

The certificate of incorporation or the by-laws may provide, either absolutely or contingently, that the members of any class shall not be entitled to vote, or it may limit or define the matters on, and the circumstances in, which a member or a class of members shall be entitled to vote, and, except as otherwise provided in this chapter, such provisions of the certificate of incorporation or the by-laws shall prevail, according to their tenor, in all elections and in all proceedings, over the provisions of this chapter which authorize any action by the members, but no such denial, limitation or definition of voting rights shall be effective unless at the time one or more classes of members, singly or in the aggregate, are entitled to full voting rights.

§ 613 Vote of members.

§ 613. Vote of members. (a) Except as otherwise required by this chapter or by the certificate of incorporation or the by-laws as permitted by this chapter, directors shall be elected by a plurality of the votes cast at a meeting of members by the members entitled to vote in the election. (b) Whenever any corporate action, other than the election of directors, is to be taken under this chapter by vote of the members, it shall, except as otherwise required by this chapter or by the certificate of incorporation or by by-laws as permitted by this chapter, be authorized by a majority of the votes cast at a meeting of members by the members entitled to vote thereon. (c) Except as provided in paragraph (b), any reference in this chapter to corporate action at a meeting of members by "majority vote" or "two-thirds vote" shall require the action to be taken by such proportion of the votes cast at such meeting, provided that the affirmative votes cast in favor of any such action shall be at least equal to the quorum. Blank votes or abstentions shall not be counted in the number of votes cast.

§ 614 Action by members without a meeting.

§ 614. Action by members without a meeting. (a) Whenever, under this chapter, members are required or permitted to take any action by vote, such action may be taken without a meeting upon the consent of all of the members entitled to vote thereon, which consent shall set forth the action so taken. Such consent may be written or electronic. If written, the consent must be executed by the member or the member's authorized officer, director, employee or agent by signing such consent or causing his 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 or other electronic means and set forth, or be submitted with, information from which it can reasonably be determined that the transmission was authorized by the member. This paragraph shall not be construed to alter or modify any provision in a certificate of incorporation not inconsistent with this chapter under which the written consent of less than all of the members is sufficient for corporate action. (b) Written or electronic consent thus given by all members entitled to vote shall have the same effect as a unanimous vote of members and any certificate with respect to the authorization or taking of any such action which is delivered to the department of state shall recite that the authorization was by unanimous written consent. (c) When there are no members of record, such action may be taken on the written consent signed by a majority in interest of the subscribers for capital certificates whose subscriptions have been accepted or their successors in interest or, if no subscription has been accepted, on the written consent signed by the incorporator or a majority of the incorporators. When there are two or more incorporators, if any dies or is for any reason unable to act, the other or others may act. If there is no incorporator able to act, any person for whom an incorporator was acting as agent may act in his or her stead, or if such other person also dies or is for any reason unable to act, his or her legal representative may act.

§ 615 Greater requirement as to quorum and vote of members.

§ 615. Greater requirement as to quorum and vote of members. (a) The certificate of incorporation or a by-law adopted by the members may contain provisions specifying either or both of the following: (1) That the proportion of members, or of a class thereof, who shall be present in person or by proxy at any meeting of members, including a special meeting for election of directors under section 604 (Special meeting for election of directors), in order to constitute a quorum for the transaction of any business or of any specified item of business, including amendments to the certificate of incorporation, shall be greater than the proportion prescribed by this chapter in the absence of such provision. (2) That the proportion of votes of the members, or of a class thereof, that shall be necessary at any meeting of members for the transaction of any business or of any specified item of business, including amendments to the certificate of incorporation, shall be greater than the proportion prescribed by this chapter in the absence of such provision. (b) An amendment of the certificate of incorporation or a by-law adopted by the members which adds a provision permitted by this section or which changes or strikes out such a provision, shall be authorized at a meeting of members by vote of the members entitled to cast two-thirds of the total number of votes entitled to be cast thereon, or of such greater proportion of such total number of votes or the total number of votes of a class, as may be provided specifically in the certificate of incorporation or a by-law adopted by the members for adding, changing or striking out a provision permitted by this section. (c) If the certificate of incorporation or a by-law adopted by the members contains a provision authorized by this section, the existence of such provision shall be noted conspicuously on the face or back of every membership certificate or card or capital certificate issued by such corporation.

§ 616 Voting by class of members.

§ 616. Voting by class of members. (a) The certificate of incorporation or the by-laws may contain provisions specifying that any class or classes of members shall vote as

a class in connection with the transaction of any business or of any specified item of business at a meeting of members, including amendments to the certificate of incorporation. (b) Where voting as a class is provided in the certificate of incorporation or the by-laws, it shall be by the proportionate vote so provided or, if no proportionate vote is provided, in the election of directors, by a plurality of the votes cast at such meeting by the members of such class entitled to vote in the election, or for any other corporate action, by a majority of the votes cast at such meeting by the members of such class entitled to vote thereon. (c) Such voting by class shall be in addition to any other vote, including vote by class, required by this chapter or by the certificate of incorporation or the by-laws as permitted by this chapter.

§ 617 Cumulative voting.

§ 617. Cumulative voting.

The certificate of incorporation or the by-laws of any corporation may provide that in all elections of directors of such corporation each member shall be entitled to as many votes as shall equal the number of votes which, except for such provisions as to cumulative voting, he would be entitled to cast for the election of directors multiplied by the number of directors to be elected, and that he may cast all of such votes for a single director or may distribute them among the number to be voted for, or for any two or more of them, as he may see fit, which right, when exercised, shall be termed cumulative voting.

§ 618 Power of supreme court respecting elections.

§ 618. Power of supreme court respecting elections.

Upon the petition of any member aggrieved by an election and upon notice to the persons declared elected thereat, the corporation and such other persons as the court may direct, the supreme court at a special term held within the judicial district where the office of the corporation is located shall forthwith hear the proofs and allegations of the parties, and confirm the election, order a new election, or take such other action as justice may require.

§ 619 Agreements by members as to voting.

§ 619. Agreements by members as to voting.

An agreement between two or more members, if in writing and signed by the parties thereto, may provide that in exercising their voting rights as members they shall vote as therein provided, or as they may agree, or as determined in accordance with a procedure agreed upon by them.

§ 620 Preemptive rights.

§ 620. Preemptive rights.

There shall be no preemptive rights in relation to membership certificates or cards, capital certificates, subvention certificates, or bonds. In the case of bonds having lawful voting rights, this section shall not invalidate otherwise valid contract provisions designed to protect such voting rights.

§ 621 Books and records; right of inspection; prima facie evidence.

§ 621. Books and records; right of inspection; prima facie evidence. (a) Except as otherwise provided herein, every corporation shall keep, at the office of the corporation, correct and complete books and records of account and minutes of the proceedings of its members, board and executive committee, if any, and shall keep at such office or at the office of its transfer agent or registrar in this state, a list or record containing the names and addresses of all members, the class or classes of membership or capital certificates and the number of capital certificates held by each and the dates when they respectively became the holders of record thereof. A corporation may keep its books and records of account in an office of the corporation without the state, as specified in its certificate of incorporation. Any of the foregoing books, minutes and records may be in written form or in any other form capable of being converted into written form within a reasonable time. (b) Any person who shall have been a member of record of a corporation for at least six months immediately preceding his demand, or any person holding, or thereunto authorized in writing by the holders of, at least five percent of any class of the outstanding capital certificates, upon

at least five days written demand shall have the right to examine in person or by agent or attorney, during usual business hours, its minutes of the proceedings of its members and list or record of members and to make extracts therefrom. (c) An inspection authorized by paragraph (b) may be denied to such member or other person upon his refusal to furnish to the corporation, its transfer agent or registrar an affidavit that such inspection is not desired and will not be used for a purpose which is in the interest of a business or object other than the business of the corporation and that he has not within five years given, sold or offered for sale any list or record of members of any domestic or foreign corporation or aided or abetted, or attempted or offered to aid or abet, any person in procuring any such list or record of members for any such purpose. (d) Upon refusal by the corporation or by an officer or agent of the corporation to permit an inspection of the minutes of the proceedings of its members or of the list or record of members, as herein provided, the person making the demand for inspection may apply to the supreme court in the judicial district where the office of the corporation is located, upon such notice as the court may direct, for an order directing the corporation, its officer or agent to show cause why an order should not be granted permitting such inspection by the applicant. Upon the return day of the order to show cause, the court shall hear the parties summarily, by affidavit or otherwise, and if it appears that the applicant is qualified and entitled to such inspection, the court shall grant an order compelling such inspection and awarding such further relief as to the court may seem just and proper. (e) Upon the written request of any person who shall have been a member of record for at least six months immediately preceding his request, or of any person holding, or thereunto authorized in writing by the holders of, at least five percent of any class of the outstanding capital certificates, the corporation shall provide to such member an annual balance sheet and profit and loss statement or a financial statement performing a similar function for the preceding fiscal year, and, if any interim balance sheet or profit and loss or similar financial statement has been distributed to its members or otherwise made available to the public, the most recent such interim balance sheet or profit and loss or similar financial statement. The corporation shall

be allowed a reasonable time to prepare such annual balance sheet and profit and loss or similar financial statement. (e-1) In addition to those documents described in paragraph (e) of this section, members of a homeowners association incorporated pursuant to the provisions of this chapter shall also be entitled to review, upon request to the homeowners association's governing board, invoices, ledgers, bank accounts, reconciliations, contracts, and any documents related to the expenditure of homeowners association dues. (f) Nothing herein contained shall impair the power of courts to compel the production for examination of the books and records of a corporation. (g) The books and records specified in paragraph (a) shall be prima facie evidence of the facts therein stated in favor of the plaintiff in any action or special proceeding against such corporation or any of its officers, directors or members. (h) Nothing in this chapter shall require an employee organization certified or recognized for any collective negotiating unit of an employer pursuant to article fourteen of the civil service law to disclose the home address of any member or former member of such organization.

§ 622 Infant members.

§ 622. Infant members. (a) If the certificate of incorporation or the by-laws provide that a member shall be of full age: (1) A corporation may treat an infant who holds a membership certificate or card or capital certificate or a bond of such corporation as having capacity to receive and to empower others to receive payments or distributions, to vote or express consent or dissent, in person or by proxy, and to make elections and exercise rights relating to such certificates or bonds, unless, in the case of membership certificates or cards or capital certificates, the corporate officer responsible for maintaining the list or record of members or the transfer agent of the corporation or, in the case of bonds, the treasurer or paying officer or agent has received written notice that such holder is an infant. (2) An infant holder of a membership certificate or card or capital certificate or a bond of a corporation who has received or empowered

others to receive payments or distributions, voted or expressed consent or dissent, or made an election or exercised a right relating thereto, shall have no right thereafter to disaffirm or avoid, as against the corporation, any such act on his part, unless prior to such receipt, vote, consent, dissent, election or exercise, as to membership certificates or cards or capital certificates, the corporate officer responsible for maintaining the list or record of members or its transfer agent or, in the case of bonds, the treasurer or paying officer or agent had received written notice that such holder was an infant.

§ 623 Members' derivative action brought in the right of the

§ 623. Members' derivative action brought in the right of the corporation to procure a judgment in its favor. (a) An action may be brought in the right of a domestic or foreign corporation to procure a judgment in its favor by five percent or more of any class of members or by such percentage of the holders of capital certificates or of the owners of a beneficial interest in the capital certificates of such corporation. (b) In any such action, it shall be made to appear that each plaintiff is such a member, holder or owner at the time of bringing the action. (c) In any such action, the complaint shall set forth with particularity the efforts of the plaintiff or plaintiffs to secure the initiation of such action by the board of the reason for not making such effort. (d) Such action shall not be discontinued, compromised or settled without the approval of the court having jurisdiction of the action. If the court shall determine that the interests of the members or of any class or classes thereof will be substantially affected by such discontinuance, compromise or settlement, the court, in its discretion, may direct that notice, by publication or otherwise, shall be given to the members or class or classes thereof whose interests it determines will be so affected; if notice is so directed to be given, the court may determine which one or more of the parties to the action shall bear the expense of giving the same, in such amount as the court shall determine and find to be reasonable in the circumstances, and the amount of such expense shall be awarded as special costs of the action and recoverable in the same manner as statutory taxable costs.

(e) If the action on behalf of the corporation was successful, in whole or in part, or if anything was received by the plaintiff or plaintiffs or a claimant or claimants as the result of a judgment, compromise or settlement of an action or claim, the court may award the plaintiff or plaintiffs, claimant or claimants, reasonable expenses, including reasonable attorney's fees, and shall direct him or them to account to the corporation for the remainder of the proceeds so received by him or them. This paragraph shall not apply to any judgment rendered for the benefit of injured members or non-record owners only and limited to a recovery of the loss or damage sustained by them.

§ 624 Notification to tenants.

§ 624. Notification to tenants.

Upon the adoption, amendment or repeal of the by-laws by the board of directors pursuant to paragraph (g) of section 602 (By-laws), where such change would have a direct effect on the resident's occupancy or the rules of the building, the board of directors shall post the adopted, amended, or repealed by-laws conspicuously to ensure tenants will be aware of such adoption.

ARTICLE 7 DIRECTORS AND OFFICERS Section 701. Board of directors. 702. Number of directors. 703. Election and term of office of directors; alternates. 704. Classification of directors. 705. Newly created directorships and vacancies. 706. Removal of directors. 707. Quorum of directors. 708. Action by the board. 709. Greater requirement as to quorum and vote of directors. 710. Place and time of meetings of the board. 711. Notice of meetings of the board. 712. Executive committee and other committees. 712-a. Audit oversight.

713. Officers.
714. Removal of officers.
715. Related party transactions. 715-a. Conflict of interest policy. 715-b. Whistleblower policy.
716. Loans to directors, officers and key persons.
717. Duty of directors, officers and key persons.
718. List of directors, officers and key persons.
719. Liability of directors in certain cases.
720. Actions against directors, officers and key persons. 720-a. Liability of directors, officers, trustees and key persons.
721. Nonexclusivity of statutory provisions for indemnification of directors and officers.
722. Authorization for indemnification of directors and officers.
723. Payment of indemnification other than by court award.
724. Indemnification of directors and officers by a court.
725. Other provisions affecting indemnification of directors and officers.
726. Insurance for indemnification of directors and officers.

Article 7

§ 701 Board of directors.

§ 701. Board of directors. (a) Except as otherwise provided in the certificate of incorporation, a corporation shall be managed by its board of directors. Each director shall be at least eighteen years of age; provided, however, that a member of the board of directors of any girl scout council chartered by Girl Scouts of the United States of America, Inc., or any Camp Fire Girls club member serving as a member of the board of directors on the National Board and National Council of Camp Fire Girls, Inc. or on the local board of the Camp Fire Girls, Inc. or any member of Aspira of America Inc. or Aspira of New York Inc. serving on the board of directors, shall be at least sixteen years of age. Notwithstanding the above, a corporation organized for educational purposes primarily for the benefit of individuals below eighteen years of age may include one director below eighteen years of age who is at least sixteen years of

age. Further, a corporation organized for recreational or youth development and delinquency prevention purposes primarily for the benefit of individuals below eighteen years of age may include one or more directors, the number of which shall not exceed one-half of the total number of directors for a quorum for the transaction of business, who are at least sixteen years of age but not over eighteen years of age. The certificate of incorporation or the by-laws may prescribe other qualifications for directors, provided, however, any corporation organized for recreation or youth development and delinquency prevention purposes, when increasing the number of directors between the ages of sixteen and eighteen years old to more than one, shall prescribe in its certificate of incorporation the number of such directors not to exceed the limitations of this paragraph. (b) If the certificate of incorporation vests the management of the corporation, in whole or in part, in one or more persons other than the board, individually or collectively, such other person or persons shall be subject to the same obligations and the same liabilities for managerial acts or omissions as are imposed upon directors by this chapter.

§ 702 Number of directors.

§ 702. Number of directors. (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 by action of the members or of the board under the specific provisions of a by-law allowing such action, or by any number within a range set forth in the by-laws. If not otherwise fixed under this paragraph, the number shall be three. (b) The number of directors may be increased or decreased by amendment of the by-laws or by action of the members, or of the board under the specific provisions of a by-law, subject to the following limitations: (1) If the board is authorized by the by-laws to change the number of directors, whether by amending the by-laws or by taking action under the specific provisions of a by-law, such amendment or action shall require the vote of a majority of the entire board. (2) No decrease shall shorten the term of any incumbent director.

§ 703 Election and term of office of directors; alternates.

§ 703. Election and term of office of directors; alternates. (a) A corporation may provide in its certificate of incorporation or by-laws for directors to be elected or appointed at large, or by special districts or membership sections, or by virtue of their office or former office in the corporation or other entity, public or private, or by bondholders pursuant to paragraph (c) of section 506 (Bonds and security interests) voting as a class, or any combination thereof. (b) Directors shall be elected or appointed in the manner and for the term of office provided in the certificate of incorporation or the by-laws. The term of office of directors, other than those elected or appointed by virtue of their office or former office in the corporation or other entity, public or private, shall not exceed five years; and, if the board is classified under section 704 (Classification of directors), such term shall not exceed a number of years equal to the number of classes into which the board is classified. In the absence of a provision fixing the term, it shall be one year. (c) Each director shall hold office until the expiration of the term for which he is elected or appointed, and until his successor has been elected or appointed and qualified. (d) If the certificate of incorporation or by-laws so provide, a special district or membership section entitled to elect or appoint one or more directors may elect or appoint an alternate for each such director. In the absence of a director from a meeting of the board, his alternate may, upon written notice to the secretary of the corporation, attend such meeting and exercise therein the rights, powers, and privileges of the absent director. When so exercising the rights, powers, and privileges of the absent director, such alternate shall be subject in all respects to the provisions of this chapter governing directors.

§ 704 Classification of directors.

§ 704. Classification of directors. (a) The certificate of incorporation or a by-law may provide that directors elected or appointed at large shall be divided into either two, three, four or five classes for the purpose of staggering their terms of office and that all or some of the directors elected or

appointed otherwise than at large shall be divided into the same or a different number of classes, not exceeding five, for the same purpose. All classes of each type shall be as nearly equal in number as possible and, if provision has been made for cumulative voting under section 617 (Cumulative voting), no class shall include less than three directors. (b) The terms of office of the directors initially classified shall be as follows: that of the first class shall expire at the next annual meeting of members if there be members, or of the board if there be no members, the second class at the second succeeding annual meeting, the third class, if any, at the third succeeding annual meeting, the fourth class, if any, at the fourth succeeding annual meeting and the fifth class, if any, at the fifth succeeding annual meeting. After such initial classification, directors to replace those whose terms expire at each annual meeting shall be elected or appointed at such meeting to hold office for a full term in accordance with such classification. (c) If directors are classified and the number of directors is thereafter changed by action of the board: (1) Any newly created directorships or any decrease in directorships shall be so apportioned among the classes as to make all classes as nearly equal in number as possible. (2) If newly created directorships are filled by the board in a corporation having members, there shall be no classification of the additional directors until the next annual meeting of members.

§ 705 Newly created directorships and vacancies.

§ 705. Newly created directorships and vacancies. (a) Newly created directorships resulting from an increase in the number of directors elected or appointed at large, and vacancies among such directors for any reason, may be filled by vote of a majority of the directors then in office, regardless of their number, unless the certificate of incorporation or the by-laws provide that such newly created directorships or vacancies shall be filled by vote of the members. (b) Vacancies among directors elected or appointed by special districts or membership sections, or by bondholders voting as a class, shall be filled by action of the persons entitled to vote thereon; except that, if a vacancy remains unfilled for six months after it

occurs, and by reason of the absence, illness, or other inability of one or more of the remaining directors a quorum of the board cannot be obtained, the remaining directors, or a majority of them, may appoint a director to fill such vacancy. (c) Unless otherwise provided in the certificate of incorporation or bylaws, a director elected or appointed to fill a vacancy in an unexpired term shall hold office until the end of the term which the director was elected or appointed to fill, or for a term to be determined by the board which ends at an annual meeting, subject to the limitations on terms of office in paragraph (b) of section seven hundred three of this article, and until his successor is elected or appointed and qualified.

§ 706 Removal of directors.

§ 706. Removal of directors. (a) Except as limited in paragraph (c), any or all of the directors may be removed for cause by vote of the members, or by vote of the directors provided there is a quorum of not less than a majority present at the meeting of directors at which such action is taken. (b) Except as limited in paragraph (c), if the certificate of incorporation or the by-laws so provide, any or all of the directors may be removed without cause by vote of the members. (c) The removal of directors, with or without cause, as provided in paragraphs (a) and (b) is subject to the following: (1) In the case of a corporation having cumulative voting, no director may be removed when the votes cast against his removal would be sufficient to elect him if voted cumulatively at an election at which the same total number of votes were cast and the entire board, or the entire class of directors of which he is a member, were then being elected; and (2) When by the provisions of the certificate of incorporation or the by-laws the members of any class or group, or the holders of bonds, voting as a class, are entitled to elect one or more directors, any director so elected may be removed only by the applicable vote of the members of that class or group, or the holders of such bonds, voting as a class. (d) An action to procure a judgment removing a director for cause may

be brought by the attorney-general or by ten percent of the members whether or not entitled to vote. The court may bar from re-election any director so removed for a period fixed by the court.

§ 707 Quorum of directors.

§ 707. Quorum of directors.

Unless a greater proportion is required by this chapter or by the certificate of incorporation or by a by-law adopted by the members, a majority of the entire board shall constitute a quorum for the transaction of business or of any specified item of business, except that the certificate of incorporation or the by-laws may fix the quorum at less than a majority of the entire board, provided that in the case of a board of fifteen members or less the quorum shall be at least one-third of the entire number of members and in the case of a board of more than fifteen members the quorum shall be at least five members plus one additional member for every ten members (or fraction thereof) in excess of fifteen.

§ 708 Action by the board.

§ 708. Action by the board. (a) Except as otherwise provided in this chapter, any reference in this chapter to corporate action to be taken by the board shall mean such action at a meeting of the board. (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 to the adoption of a resolution authorizing the action. Such consent may be written or electronic. 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 or other electronic means and set forth, or be submitted with, information 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 who is not physically present at a meeting of the board or a committee may participate by means of a conference telephone or similar communications equipment 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, including, without limitation, the ability to propose, object to, and vote upon a specific action to be taken by the board or committee. (d) Except as otherwise provided in this chapter, the vote of a majority of the directors present at the time of the vote, if a quorum is present at such time, shall be the act of the board. Directors who are present at a meeting but not present at the time of a vote due to a conflict of interest or related party transaction shall be determined to be present at the time of the vote for purposes of determining if a quorum is present at such time.

§ 709 Greater requirement as to quorum and vote of directors.

§ 709. Greater requirement as to quorum and vote of directors. (a) The certificate of incorporation or a by-law adopted by the members may contain provisions specifying either or both of the following: (1) That the proportion of directors that shall constitute a quorum for the transaction of business or of any specified item of business shall be greater than the proportion prescribed by this chapter in the absence of such provision. (2) That the proportion of votes of directors that shall be necessary for the transaction of business or of any specified item of business shall be greater than the proportion prescribed by this chapter in the absence of such provision. (b) An amendment by the members of the certificate of incorporation or of the by-laws which adds a provision permitted by this section or which changes or strikes out such a provision, shall be authorized by vote of two-thirds of the members entitled to vote or of such greater proportion

as may be provided specifically in the certificate of incorporation or the by-law for adding, changing or striking out a provision permitted by this section. (c) If there are no members, an amendment by the board of directors of the certificate of incorporation or the by-law which adds a provision permitted by this section or which changes or strikes out such a provision, shall be authorized at a meeting by vote of two-thirds of the entire board, or of such greater proportion as may be provided specifically in the certificate of incorporation or the by-law for adding, changing or striking out a provision permitted by this section.

§ 710 Place and time of meetings of the board.

§ 710. Place and time of meetings of the board. (a) Meetings of the board, annual, regular or special, may be held at any place within or without this state, unless otherwise provided by the certificate of incorporation or the by-laws. (b) The time and place for holding annual or regular meetings of the board shall be fixed by or under the by-laws, or, if not so fixed, by the board. (c) A special meeting may be called at any time by the president or other corporate officer as provided in the by-laws or as determined by the board; and, in the case of a corporation without members, by any director upon written demand of not less than one-fifth of the entire board.

§ 711 Notice of meetings of the board.

§ 711. Notice of meetings of the board. (a) Unless otherwise provided by the by-laws, regular meetings of the board may be held without notice if the time and place of such meetings are fixed by the by-laws or the board. Special meetings of the board shall be held upon notice to the directors. (b) The by-laws may prescribe what shall constitute notice of meeting of the board. A notice, or waiver of notice, need not specify the purpose of any regular or special meeting of the board, unless required by the by-laws. (c) Notice of a meeting need not be given to any alternate director, nor to any director who submits a waiver of notice whether before or

after the meeting, or who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to him. Such waiver of notice may be written or electronic. If written, the waiver must be executed by the director signing such waiver or causing his or her signature to be affixed to such waiver by any reasonable means including but not limited to facsimile signature. If electronic, the transmission of the 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 director. (d) A majority of the directors present, whether or not a quorum is present, may adjourn any meeting to another time and place. If the by-laws so provide, notice of any adjournment of a meeting of the board to another time or place shall be given to the directors who were not present at the time of the adjournment and, unless such time and place are announced at the meeting, to the other directors.

§ 712 Executive committee and other committees.

§ 712. Executive committee and other committees. (a) The certificate of incorporation, the by-laws, or the board may create committees of the board, each consisting of three or more directors. The board shall appoint the members of such committee of the board, except that in the case of any executive committee or similar committee however denominated, the appointment shall be made by a majority of the entire board, provided that in the case of a board of thirty members or more, the appointment shall be made by at least three-quarters of the directors present at the time of the vote, if a quorum is present at that time. In addition, the by-laws may provide that directors who are the holders of certain positions in the corporation shall be ex-officio members of specific committees. Each such committee shall have the authority of the board to the extent provided in a board resolution or in the certificate of incorporation or by-laws, except that no committee of any kind 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. (6) The election or removal of officers and directors. (7) The approval of a merger or plan of dissolution. (8) The adoption of a resolution recommending to the members action on the sale, lease, exchange or other disposition of all or substantially all the assets of a corporation or, if there are no members entitled to vote, the authorization of such transaction. (9) The approval of amendments to the certificate of incorporation. (b) The board may designate one or more directors as alternate members of any committee, who may replace any absent member or members at any meeting of such committee. (d) Each committee of the board shall serve at the pleasure of the board. The designation of any such committee and the delegation thereto of authority shall not alone relieve any director of his duty to the corporation under section 717 (Duty of directors and officers). (e) Committees, other than committees of the board, whether created by the board or by the members, shall be committees of the corporation. No such committee shall have the authority to bind the board. Members of such committees of the corporation, who may be non-directors, shall be elected or appointed in the manner set forth in the by-laws, or if not set forth in the by-laws, in the same manner as officers of the corporation.

§ 712-a Audit oversight.

§ 712-a. Audit oversight. (a) The board, or a designated audit committee of the board comprised solely of independent directors, of any corporation required to file an independent certified public accountant's audit report with the attorney general pursuant to subdivision one of section one hundred seventy-two-b of the executive law shall oversee the accounting and financial reporting processes of the corporation and the audit of the corporation's financial statements. The board or designated audit

committee shall annually retain or renew the retention of an independent auditor to conduct the audit and, upon completion thereof, review the results of the audit and any related management letter with the independent auditor. (b) The board, or a designated audit committee of the board comprised solely of independent directors, of any corporation required to file an independent certified public accountant's audit report with the attorney general pursuant to subdivision one of section one hundred seventy-two-b of the executive law and that in the prior fiscal year had or in the current fiscal year reasonably expects to have annual revenue in excess of one million dollars shall, in addition to those duties set forth in paragraph (a) of this section: (1) review with the independent auditor the scope and planning of the audit prior to the audit's commencement; (2) upon completion of the audit, review and discuss with the independent auditor: (A) any material risks and weaknesses in internal controls identified by the auditor; (B) any restrictions on the scope of the auditor's activities or access to requested information; (C) any significant disagreements between the auditor and management; and (D) the adequacy of the corporation's accounting and financial reporting processes; (3) annually consider the performance and independence of the independent auditor; and (4) if the duties required by this section are performed by an audit committee, report on the committee's activities to the board. (d) If a corporation controls a group of corporations, the board or designated audit committee of the board of the controlling corporation may perform the duties required by this section for one or more of the controlled corporations and, if independent directors, directors from one or more of such controlled corporations may serve on any designated audit committee of the board of such controlling corporation, and perform the duties required by this section for each corporation and any controlled corporations. (e) Only independent directors may participate in any board or committee deliberations or voting relating to matters set forth in this section, provided that nothing in this paragraph shall prohibit the board or designated audit committee from requesting that a person with

an interest in the matter present information as background or answer questions at a committee or board meeting prior to the commencement of deliberations or voting relating thereto. (f) Any corporation that is a state authority or a local authority as defined in section two of the public authorities law and that has complied substantially with sections twenty-eight hundred two and twenty-eight hundred twenty-four of such law shall be deemed in compliance with this section.

§ 713 Officers.

§ 713. Officers. (a) The board may elect or appoint a chair or president, or both, one or more vice-presidents, a secretary and a treasurer, and such other officers as it may determine, or as may be provided in the by-laws. These officers may be designated by such alternate titles as may be provided in the certificate of incorporation or the by-laws. Any two or more offices may be held by the same person, except the offices of president and secretary, or the offices corresponding thereto. (b) The certificate of incorporation or a by-law adopted by the members may provide that all officers or that specified officers shall be elected by the members instead of by the board, or it may authorize the president to appoint the other officers, or some of them, subject to approval by the board. (c) Each officer shall hold office for the term for which he is elected or appointed, and until his successor has been elected or appointed and qualified. Unless otherwise provided in the certificate of incorporation or the by-laws, all officers shall be elected or appointed annually. (d) The certificate of incorporation or the by-laws may provide that any one or more officers shall be ex-officio members of the board, with voting rights unless specified otherwise. (e) All officers as between themselves and the corporation shall have such authority and perform such duties in the management of the corporation as may be provided in the by-laws or, to the extent not so provided, by the board. The board may require any officer to give security for the faithful performance of his duties. (f) No employee of the corporation shall serve as chair of the board

or hold any other title with similar responsibilities, unless the board approves such employee serving as chair of the board by a two-thirds vote of the entire board and contemporaneously documents in writing the basis for the board approval; provided, however, that no such employee shall be considered an independent director for the purposes of this chapter.

§ 714 Removal of officers.

§ 714. Removal of officers. (a) Any officer elected or appointed by the board may be removed by the board with or without cause. An officer elected by the members or a class of members may be removed, with or without cause, only by the vote of the members or such class of members, but his authority to act as an officer may be suspended by the board for cause. (b) The removal of an officer without cause shall be without prejudice to his contract rights, if any. The election or appointment of an officer shall not of itself create contract rights. (c) An action to procure a judgment removing an officer for cause may be brought by the attorney-general, by any director, by ten percent of the members, whether or not entitled to vote, or by the holders of ten percent of the face value of the outstanding capital certificates, subvention certificates or bonds having voting rights. The court may bar from re-election or reappointment any officer so removed for a period fixed by the court.

§ 715 Related party transactions.

§ 715. Related party transactions. (a) No corporation shall enter into any related party transaction unless the transaction is determined by the board, or an authorized committee thereof, to be fair, reasonable and in the corporation's best interest at the time of such determination. Any director, officer or key person who has an interest in a related party transaction shall disclose in good faith to the board, or an authorized committee thereof, the material facts concerning such interest. (b) With respect to any related party transaction involving a charitable corporation and in which a related party has a substantial financial interest, the board of such corporation, or an authorized

committee thereof, shall: (1) Prior to entering into the transaction, consider alternative transactions to the extent available; (2) Approve the transaction by not less than a majority vote of the directors or committee members present at the meeting; and (3) Contemporaneously document in writing the basis for the board or authorized committee's approval, including its consideration of any alternative transactions. (c) The certificate of incorporation, by-laws or any policy adopted by the board may contain additional restrictions on related party transactions and additional procedures necessary for the review and approval of such transactions, or provide that any transaction in violation of such restrictions shall be void or voidable. (d) 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. (e) The fixing of compensation 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. (f) The attorney general may bring an action to enjoin, void or rescind any related party transaction or proposed related party transaction that violates any provision of this chapter or was otherwise not reasonable or in the best interests of the corporation at the time the transaction was approved, or to seek restitution, and the removal of directors or officers, or seek to require any person or entity to: (1) Account for any profits made from such transaction, and pay them to the corporation; (2) Pay the corporation the value of the use of any of its property or other assets used in such transaction; (3) Return or replace any property or other assets lost to the corporation as a result of such transaction, together with any income or appreciation lost to the corporation by reason of such transaction, or account for any proceeds of sale of such property, and pay the proceeds to the corporation together with interest at the legal rate; and (4) Pay, in the case of willful and intentional conduct, an amount up to double the amount of any benefit improperly obtained.

(g) 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. (h) No related party may participate in deliberations or voting relating to a related party transaction in which he or she has an interest; provided that nothing in this section shall prohibit the board or authorized committee from requesting that a related party present information as background or answer questions concerning a related party transaction at a board or committee meeting prior to the commencement of deliberations or voting relating thereto. (i) In an action by any person or entity other than the attorney general, it shall be a defense to a claim of violation of any provisions of this section that a transaction was fair, reasonable and in the corporation's best interest at the time the corporation approved the transaction. (j) In an action by the attorney general with respect to a related party transaction not approved in accordance with paragraphs (a) or (b) of this section at the time it was entered into, whichever is applicable, it shall be a defense to a claim of violation of any provisions of this section that (1) the transaction was fair, reasonable and in the corporation's best interest at the time the corporation approved the transaction and (2) prior to receipt of any request for information by the attorney general regarding the transaction, the board has: (A) ratified the transaction by finding in good faith that it was fair, reasonable and in the corporation's best interest at the time the corporation approved the transaction; and, with respect to any related party transaction involving a charitable corporation and in which a related party has a substantial financial interest, considered alternative transactions to the extent available, approving the transaction by not less than a majority vote of the directors or committee members present at the meeting; (B) documented in writing the nature of the violation and the basis for the board's or committee's ratification of the transaction; and (C) put into place procedures to ensure that the corporation complies with paragraphs (a) and (b) of this section as to related party transactions in the future.

§ 715-a Conflict of interest policy.

§ 715-a. Conflict of interest policy. (a) Except as provided in paragraph (d) of this section, the board shall adopt, and oversee the implementation of, and compliance with, a conflict of interest policy to ensure that its directors, officers and key persons act in the corporation's best interest and comply with applicable legal requirements, including but not limited to the requirements set forth in section seven hundred fifteen of this article. (b) The conflict of interest policy shall include, at a minimum, the following provisions: (1) a definition of the circumstances that constitute a conflict of interest; (2) procedures for disclosing a conflict of interest or possible conflict of interest to the board or to a committee of the board, and procedures for the board or committee to determine whether a conflict exists; (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, provided that nothing in this section shall prohibit the board or a committee from requesting that the person with the conflict of interest present information as background or answer questions at a committee or board meeting prior to the commencement of deliberations or voting relating thereto; (4) a prohibition against any attempt by the person with the conflict to influence improperly the deliberation or voting on the matter giving rise to such conflict; (5) a requirement that the existence and resolution of the conflict be documented in the corporation's records, including in the minutes of any meeting at which the conflict was discussed or voted upon; and (6) procedures for disclosing, addressing, and documenting related party transactions in accordance with section seven hundred fifteen of this article. (c) The conflict of interest policy shall require that prior to the initial election of any director, and annually thereafter, such director shall complete, sign and submit to the secretary of the corporation or a designated compliance officer a written statement identifying, to the best of the director's knowledge, any entity of which such director is an officer, director, trustee, member, owner (either as a sole

proprietor or a partner), or employee and with which the corporation has a relationship, and any transaction in which the corporation is a participant and in which the director might have a conflicting interest. The policy shall require that each director annually resubmit such written statement. The secretary of the corporation or the designated compliance officer shall provide a copy of all completed statements to the chair of the audit committee or, if there is no audit committee, to the chair of the board. (d) A corporation that has adopted and possesses a conflict of interest policy pursuant to federal, state or local laws that is substantially consistent with the provisions of paragraph (b) of this section shall be deemed in compliance with provisions of this section. In addition, any corporation that is a state authority or a local authority as defined in section two of the public authorities law, and that has complied substantially with section twenty-eight hundred twenty-four and subdivision three of section twenty-eight hundred twenty-five of such law, shall be deemed in compliance with this section. (e) Nothing in this section shall be interpreted to require a corporation to adopt any specific conflict of interest policy not otherwise required by this section or any other law or rule, or to supersede or limit any requirement or duty governing conflicts of interest required by any other law or rule.

§ 715-b Whistleblower policy.

§ 715-b. Whistleblower policy. (a) Except as provided in paragraph (c) of this section, the board of 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, and oversee the implementation of, and compliance with, a whistleblower policy to protect from retaliation persons who report suspected improper conduct. Such policy shall provide that no director, officer, key person, employee or volunteer of a corporation who in good faith reports any action or suspected action taken by or within the corporation that is illegal, fraudulent or in violation of any adopted policy of the corporation shall suffer intimidation, harassment, discrimination or other retaliation or, in the case of employees,

adverse employment consequence. (b) The whistleblower policy shall include the following provisions: (1) Procedures for the reporting of violations or suspected violations of laws or corporate policies, including procedures for preserving the confidentiality of reported information; (2) A requirement that an employee, officer or director of the corporation be designated to administer the whistleblower policy and to report to the board or an authorized committee thereof, except that directors who are employees may not participate in any board or committee deliberations or voting relating to administration of the whistleblower policy; (3) A requirement that the person who is the subject of a whistleblower complaint not be present at or participate in board or committee deliberations or vote on the matter relating to such complaint, provided that nothing in this subparagraph shall prohibit the board or committee from requesting that the person who is subject to the complaint present information as background or answer questions at a committee or board meeting prior to the commencement of deliberations or voting relating thereto; and (4) A requirement that a copy of the policy be distributed to all directors, officers, key persons, employees and to volunteers who provide substantial services to the corporation. For purposes of this subdivision, posting the policy on the corporation's website or at the corporation's offices in a conspicuous location accessible to employees and volunteers are among the methods a corporation may use to satisfy the distribution requirement. (c) A corporation that has adopted and possesses a whistleblower policy pursuant to federal, state or local laws that is substantially consistent with the provisions of paragraph (b) of this section shall be deemed in compliance with provisions of this section. In addition, any corporation that is a state authority or local authority as defined in section two of the public authorities law, and that has complied substantially with section twenty-eight hundred twenty-four of such law and is subject to the provisions of section twenty-eight hundred fifty-seven of such law, shall be deemed in compliance with the provisions of this section. (d) Nothing in this section shall be interpreted to relieve any

corporation from any additional requirements in relation to internal compliance, retaliation, or document retention required by any other law or rule.

§ 716 Loans to directors, officers and key persons.

§ 716. Loans to directors, officers and key persons.

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 corporation to its directors, officers or key persons, or to any other corporation, firm, association or other entity in which one or more of its directors, officers or key persons are directors, officers or key persons or hold a substantial financial interest, except a loan by one charitable corporation to another 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.

§ 717 Duty of directors, officers and key persons.

§ 717. Duty of directors, officers and key persons. (a) Directors, officers and key persons shall discharge the duties of their respective positions in good faith and with the care an ordinarily prudent person in a like position would exercise under similar circumstances. 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 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). (b) In discharging their duties, directors, officers and key persons, 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, officers or key persons 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, officers or key persons 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. Persons shall not be considered to be acting in good faith if they have knowledge concerning the matter in question that would cause such reliance to be unwarranted. Persons who so perform their duties shall have no liability by reason of being or having been directors, officers or key persons of the corporation.

§ 718 List of directors, officers and key persons.

§ 718. List of directors, officers and key persons. (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, officers and key persons, 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, officers and key persons available, as provided in paragraph (a) of this section, the person making a demand for such list may apply, ex parte, to the supreme court at a special term held within the judicial district where the office of the 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.

§ 719 Liability of directors in certain cases.

§ 719. Liability of directors in certain cases. (a) Directors of a corporation who vote for or concur in any of the

following corporate actions shall be jointly and severally liable to the corporation for the benefit of its creditors or members or the ultimate beneficiaries of its activities, to the extent of any injury suffered by such persons, respectively, as a result of such action, or, if there be no creditors or members or ultimate beneficiaries so injured, to the corporation, to the extent of any injury suffered by the corporation as a result of such action: (1) The distribution of the corporation's cash or property to members, directors or officers, other than a distribution permitted under section 515 (Dividends prohibited; certain distributions of cash or property authorized). (2) The redemption of capital certificates, subvention certificates or bonds, to the extent such redemption is contrary to the provisions of section 502 (Member's capital contributions), section 504 (Subventions), or section 506 (Bonds and security interests). (3) The payment of a fixed or contingent periodic sum to the holders of subvention certificates or of interest to the holders or beneficiaries of bonds to the extent such payment is contrary to the provisions of section 504 or section 506. (4) The distribution of assets in violation of section 1002-a (Carrying out the plan of dissolution and distribution of assets) or without paying or adequately providing for all known liabilities of the corporation, excluding any claims not filed by creditors within the time limit set in a notice given to creditors under articles 10 (Non-judicial dissolution) or 11 (Judicial dissolution). (5) The making of any loan contrary to section 716 (Loans to directors and officers). (b) A director who is present at a meeting of the board, or any committee thereof, at which action specified in paragraph (a) is taken shall be presumed to have concurred in the action unless his dissent thereto shall be entered in the minutes of the meeting, or unless he shall submit his written dissent to the person acting as the secretary of the meeting before the adjournment thereof, or shall deliver or send by registered mail such dissent to the secretary of the corporation promptly after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action. A director who is absent from a meeting of the board, or any committee

thereof, at which such action is taken shall be presumed to have concurred in the action unless he shall deliver or send by registered mail his dissent thereto to the secretary of the corporation or shall cause such dissent to be filed with the minutes of the proceedings of the board or committee within a reasonable time after learning of such action. (c) Any director against whom a claim is successfully asserted under this section shall be entitled to contribution from the other directors who voted for or concurred in the action upon which the claim is asserted. (d) Directors against whom a claim is successfully asserted under this section shall be entitled, to the extent of the amounts paid by them to the corporation as a result of such claims: (1) Upon reimbursement to the corporation of any amount of an improper distribution of the corporation's cash or property, to be subrogated to the rights of the corporation against members, directors or officers who received such distribution with knowledge of facts indicating that it was not authorized by this chapter, in proportion to the amounts received by them respectively. (2) Upon reimbursement to the corporation of an amount representing an improper redemption of a capital certificate, subvention or bond, to have the corporation rescind such improper redemption and recover the amount paid, for their benefit but at their expense, from any member or holder who received such payment with knowledge of facts indicating that such redemption by the corporation was not authorized by this chapter. (3) Upon reimbursement to the corporation of an amount representing all or part of an improper payment of a fixed or contingent periodic sum to the holder of a subvention certificate, or of interest to the holder or beneficiary of a bond, to have the corporation recover the amount so paid, for their benefit but at their expense, from any holder or beneficiary who received such payment with knowledge of facts indicating that such payment by the corporation was not authorized by this chapter. (4) Upon payment to the corporation of the claim of the attorney general or of any creditor by reason of a violation of subparagraph (a) (4), to be subrogated to the rights of the corporation against any person who received an improper distribution of assets. (5) Upon reimbursement to the corporation of the amount of any loan

made contrary to section 716 (Loans to directors and officers), to be subrogated to the rights of the corporation against a director or officer who received the improper loan. (e) A director or officer shall not be liable under this section if, in the circumstances, he discharged his duty to the corporation under section 717 (Duty of directors and officers). (f) This section shall not affect any liability otherwise imposed by law upon any director or officer.

§ 720 Actions against directors, officers and key persons.

§ 720. Actions against directors, officers and key persons. (a) An action may be brought against one or more directors, officers, or key persons 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. (b) An action may be brought for the relief provided in this section and in paragraph (a) of section 719 (Liabilities of directors in certain cases) by the attorney general, by the corporation, or, in the right of the corporation, by any of the following: (1) A director or officer of the corporation. (2) A receiver, trustee in bankruptcy, or judgment creditor thereof. (3) Under section 623 (Members' derivative action brought in the right of the corporation to procure a judgment in its favor), by one or more of the members thereof. (4) If the certificate of incorporation or the by-laws so provide, by

any holder of a subvention certificate or any other contributor to the corporation of cash or property of the value of $1,000 or more. (c) In a corporation having no members, an action may be brought by a director against third parties to obtain a judgment in favor of the corporation. The complaint shall set forth with particularity the efforts of the plaintiff to secure the initiation of such action by the board or the reason for not making such efforts. The court in its discretion shall determine whether it is in the interest of the corporation that the action be maintained, and if the action is successful in whole or in part, what reimbursement if any should be made out of the corporate treasury to the plaintiff for his reasonable expenses including attorney's fees, incurred in the prosecution of the action.

§ 720-a Liability of directors, officers, trustees and key persons.

§ 720-a. Liability of directors, officers, trustees and key persons.

Except as provided in sections seven hundred nineteen and seven hundred twenty of this chapter, and except any action or proceeding brought by the attorney general or, in the case of a charitable trust, an action or proceeding against a trustee brought by a beneficiary of such trust, no person serving without compensation as a director, officer, key person or trustee of a corporation, association, organization or trust described in section 501 (c) (3) of the United States internal revenue code shall be liable to any person other than such corporation, association, organization or trust based solely on his or her conduct in the execution of such office unless the conduct of such director, officer, key person or trustee with respect to the person asserting liability constituted gross negligence or was intended to cause the resulting harm to the person asserting such liability. For purposes of this section, such a director, officer, key person or trustee shall not be considered compensated solely by reason of payment of his or her actual expenses incurred in attending meetings or otherwise in the execution of such office.

§ 721 Nonexclusivity of statutory provisions for indemnification of

§ 721. Nonexclusivity of statutory provisions for indemnification of

directors and officers.

The indemnification and advancement of expenses granted pursuant to, or provided by, this article shall not be deemed exclusive of any other rights to which a director or officer seeking indemnification or advancement of expenses may be entitled, whether contained in the certificate of incorporation or the by-laws or, when authorized by such certificate of incorporation or by-laws, (a) a resolution of members, (b) a resolution of directors, or (c) an agreement providing for such indemnification, provided that no indemnification may be made to or on behalf of any director or officer if a judgment or other final adjudication adverse to the director or officer establishes that his acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled. Nothing contained in this article shall affect any rights to indemnification to which corporate personnel other than directors and officers may be entitled by contract or otherwise under law.

§ 722 Authorization for indemnification of directors and officers.

§ 722. Authorization for indemnification of directors and officers. (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 kind, domestic or foreign, or any partnership, 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 judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys' fees actually and necessarily incurred as a result of such action or proceeding, or any appeal therein, if such director or officer acted, in good faith, for a purpose which he reasonably believed to be

in, or, in the case of service for any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise, 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. (b) The termination of any such civil or criminal action or proceeding by judgment, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not in itself create a presumption that any such director or officer did not act, 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 enterprise, not opposed to, the best interests of the corporation or that he had 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 corporation, or is or was serving at the request of the corporation as a director or officer of any other corporation of any 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 enterprise, 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 otherwise 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. (d) For the purpose of this section, a corporation shall be deemed to have requested a person to serve an employee benefit plan where the performance by such person of his duties to the corporation also imposes duties on, or otherwise involves services by, such person to the plan or participants or beneficiaries of the plan; excise taxes assessed on a person with respect to an employee benefit plan pursuant to applicable law shall be considered fines; and action taken or omitted by a person with respect to an employee benefit plan in the performance of such person's duties for a purpose reasonably believed by such person to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the corporation.

§ 723 Payment of indemnification other than by court award.

§ 723. Payment of indemnification other than by court award. (a) A person who has been successful, on the merits or otherwise, in the defense of a civil or criminal action or proceeding of the character described in section 722 shall be entitled to indemnification as authorized in such section. (b) Except as provided in paragraph (a), any indemnification under section 722 or otherwise permitted by section 721, unless ordered by a court under section 724 (Indemnification of directors and officers by a court), shall be made by the corporation, only if authorized in the specific case: (1) By the board acting by a quorum consisting of directors who are not parties to such action or proceeding upon a finding that the director or officer has met the standard of conduct set forth in section 722 or established pursuant to section 721, as the case may be, or, (2) If a quorum under subparagraph (1) is not obtainable or, even if obtainable, a quorum of disinterested directors so directs: (A) By the board upon the opinion in writing of independent legal counsel that indemnification is proper in the circumstances because the applicable standard of conduct set forth in such sections has been met by such director or officer, or (B) By the members upon a finding that the director or officer has met

the applicable standard of conduct set forth in such sections. (c) Expenses incurred in defending a civil or criminal action or proceeding may be paid by the corporation in advance of the final disposition of such action or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount as, and to the extent, required by paragraph (a) of section 725.

§ 724 Indemnification of directors and officers by a court.

§ 724. Indemnification of directors and officers by a court. (a) Notwithstanding the failure of a corporation to provide indemnification, and despite any contrary resolution of the board or of the members in the specific case under section 723 (Payment of indemnification other than by court award), indemnification shall be awarded by a court to the extent authorized under section 722 (Authorization for indemnification of directors and officers), and paragraph (a) of section 723 (Payment of indemnification other than by court award). Application therefor shall be made on notice to the attorney general and may be made, in every case, either: (1) In the civil action or proceeding in which the expenses were incurred or other amounts were paid, or (2) To the supreme court in a separate proceeding, in which case the application shall set forth the disposition of any previous application made to any court for the same or similar relief and also reasonable cause for the failure to make application for such relief in the action or proceeding in which the expenses were incurred or other amounts were paid. (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. 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. (c) Where indemnification is sought by judicial action, the court may allow a person such reasonable expenses, including attorneys' fees, during the pendency of the litigation as are necessary in connection with his defense therein, if the court shall find that the defendant has by his pleadings or during the course of the litigation raised genuine

issues of fact or law.

§ 725 Other provisions affecting indemnification of directors and

§ 725. Other provisions affecting indemnification of directors and officers. (a) All expenses incurred in defending a civil or criminal action or proceeding which are advanced by the corporation under paragraph (c) of section 723 (Payment of indemnification other than by court award) or allowed by a court under paragraph (c) of section 724 (Indemnification of directors and officers by a court) shall be repaid in case the person receiving such advancement or allowance is ultimately found, under the procedure set forth in this article, not to be entitled to indemnification or, where indemnification is granted, to the extent the expenses so advanced by the corporation or allowed by the court exceed the indemnification to which he is entitled. (b) No indemnification, advancement or allowance shall be made under this article in any circumstance where it appears: (1) That the indemnification would be inconsistent with the law of the jurisdiction of incorporation of a foreign corporation which prohibits or otherwise limits such indemnification; or (2) That the indemnification would be inconsistent with a provision of the certificate of incorporation, a by-law, a resolution of the board or of the members, an agreement or other proper corporate action, in effect at the time of the accrual of the alleged cause of action asserted in the threatened or pending action or proceeding in which the expenses were incurred or other amounts were paid, which prohibits or otherwise limits indemnification; or (3) If there has been a settlement approved by the court, that the indemnification would be inconsistent with any condition with respect to indemnification expressly imposed by the court in approving the settlement. (c) If any expenses or other amounts are paid by way of indemnification, otherwise than by court order or action by the members, the corporation shall prepare a statement specifying the persons paid, the amounts paid, and the nature and status at the time of such payment of the litigation or threatened litigation, and (1) Not later than the next annual meeting of members, unless such

meeting is held within three months from the date of such payment, and, in any event, within fifteen months of the date of such payment, shall mail the statement to its members of record entitled at the time to vote for the election of directors; or (2) If the corporation has no members, shall include the statement in the records of the corporation open to public inspection, or (3) If the corporation is a cemetery corporation, as defined in paragraph (a) of section 1502 (Definitions), which term, for the purposes of this section, shall include a religious corporation having members, (i) by including the statement required by this paragraph or paragraph (d) of section 726 (Insurance for indemnification of directors and officers), as the case may be in the records of the corporation open to public inspection; (ii) by including the information required by the statement in any notice published pursuant to the provisions of section 605 (Notice of meeting of members), except as otherwise provided by law; (iii) by enclosing the statement with the notice of annual meeting if such notice is in fact mailed to the members; and (iv) by raising the issue for approval at the next annual meeting of the members. (d) If any action with respect to indemnification of directors and officers is taken by way of amendment of the by-laws, resolution of directors, or by agreement, then the corporation shall, not later than the next annual meeting of members, unless such meeting is held within three months from the date of such action, and, in any event, within fifteen months from the date of such action, mail to its members of record at the time entitled to vote for the election of directors a statement specifying the action taken. If the corporation has no members, the statement shall be included in the records of the corporation open to public inspection. (e) The provisions of this article relating to indemnification of directors and officers and insurance therefor shall apply to domestic corporations and foreign corporations conducting activities in this state, except as provided in section 1321 (Exemption from certain provisions).

§ 726 Insurance for indemnification of directors and officers.

§ 726. Insurance for indemnification of directors and officers. (a) Subject to paragraph (b), a corporation shall have power to

purchase and maintain insurance: (1) To indemnify the corporation for any obligation which it incurs as a result of the indemnification of directors and officers under the provisions of this article, and (2) To indemnify directors and officers in instances in which they may be indemnified by the corporation under the provisions of this article, and (3) To indemnify directors and officers in instances in which they may not otherwise be indemnified by the corporation under the provisions of this article provided the contract of insurance covering such directors and officers provides, in a manner acceptable to the superintendent of financial services, for a retention amount and for co-insurance. (b) No insurance under paragraph (a) may provide for any payment, other than cost of defense, to or on behalf of any director or officer: (1) if a judgment or other final adjudication adverse to the insured director or officer establishes that his acts of active and deliberate dishonesty were material to the cause of action so adjudicated, or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled, or (2) in relation to any risk the insurance of which is prohibited under the insurance law of this state. (c) Insurance under any or all subparagraphs of paragraph (a) may be included in a single contract or supplement thereto. Retrospective rated contracts are prohibited. (d) The corporation shall, within the time and to the persons provided in paragraph (c) of section 725 (Other provisions affecting indemnification of directors and officers), mail a statement in respect to any insurance it has purchased or renewed under this section, specifying the insurance carrier, date of the contract, cost of the insurance, corporate positions insured, and a statement explaining all sums, not previously reported in a statement to members, paid under any indemnification insurance contract. Notwithstanding any other provision of law, a cemetery corporation or a religious corporation having members which purchases or renews any insurance under this section after the effective date of the act which added this sentence to this paragraph, which corporation had two hundred fifty or more interments in the calendar year preceding such purchase or renewal, shall mail the

statement required by this section to every person to whom a care notice or solicitation for services has been sent during such calendar year and to every person to whom a notice of annual meeting was mailed during such calendar year, but in no event to less than ten per centum of the lot owners of record during such calendar year. Such corporation shall not be required to mail such statement during any subsequent year, unless such corporation elects to mail notices of annual meeting to its members in which event the statement shall be enclosed as provided in clause (iii) of paragraph (c) (3) of section 725 (Other provisions affecting indemnification of directors and officers). A corporation having less than two hundred fifty interments in the calendar year preceding such purchase or renewal shall not be required to mail such statement unless such corporation elects to mail notices of annual meeting to its members in which event the statement shall be enclosed as provided in clause (iii) of paragraph (c) (3) of section 725 (Other provisions affecting indemnification of directors and officers). (e) This section is the public policy of this state to spread the risk of corporate management, notwithstanding any other general or special law of this state or of any other jurisdiction, including the federal government.

ARTICLE 8 AMENDMENTS AND CHANGES Section 801. Right to amend certificate of incorporation. 802. Authorization of amendment or change, class vote. 803. Certificate of amendment; contents. 803-A. Certificate of change; contents. 804. Approvals, notices and effect. 805. Restated certificate of incorporation.

Article 8

§ 801 Right to amend certificate of incorporation.

§ 801. Right to amend certificate of incorporation. (a) A corporation may amend its certificate of incorporation, from time to time, in any and as many respects as may be desired, if such amendment contains only such provisions as might be lawfully contained in an original certificate of incorporation filed at the time of making

such amendment. (b) In particular, and without limitation upon such general power of amendment, a corporation may amend its certificate of incorporation, from time to time, so as: (1) To change its corporate name. (2) To enlarge, limit or otherwise change its corporate purposes. (3) To strike out, change or add any provision not inconsistent with this chapter or any other statute relating to the affairs of the corporation, its rights or powers or the rights or powers of its members, directors or officers, including any provision required or permitted to be set forth in the by-laws. (4) To extend its duration, or revive its existence if it has ceased to exist because of the expiration of its period of duration. A corporation may not however reduce its corporate duration. (5) To specify, change or revoke the voting rights of its directors or members or of any class of members. (6) To specify or change the location of the office of the corporation. (7) To specify or change the post office address to which the secretary of state shall mail a copy of any process against the corporation served upon him. (8) To make, revoke or change the designation of a registered agent, or to specify or change the address of its registered agent. (9) To authorize the issuance of capital certificates and to fix the face value and terms of such certificates and the rights and privileges of their holders and the manner in which the terms, rights and privileges may be amended and to confer upon the holders of such certificates the right to vote in the election of directors and upon any other matters as may be set forth. (10) To specify, change or delete the email address to which the secretary of state shall email a notice that process against the corporation has been electronically served upon him or her. (c) A corporation created by special act may accomplish any or all amendments permitted in this article, in the manner and subject to the conditions provided in this article.

§ 802 Authorization of amendment or change, class vote.

§ 802. Authorization of amendment or change, class vote. (a) Amendment or change of the certificate of incorporation shall be authorized: (1) If there are members entitled to vote thereon, by majority vote of such members at a meeting as provided in paragraph (c) of section 613 (Vote of members). (2) If there are no members entitled to vote thereon, by vote of a majority of the entire board. (b) Notwithstanding any provision in the certificate of incorporation or by-laws, members of a class shall be entitled to vote and to vote as a class upon the authorization of an amendment and, in addition to the authorization of the amendment required by paragraph (a) (1), the amendment shall be authorized by majority vote of the members of the class, when the proposed amendment would exclude or limit their right to vote on any matter except as such right may be limited by voting rights given to members of an existing class or of a new class. (c) Any one or more of the following changes may be authorized by or pursuant to authorization of the board: (1) To specify or change the location of the office of the corporation. (2) To specify or change the post office address to which the secretary of state shall mail a copy of any process against the corporation served upon him. (3) To make, revoke or change the designation of a registered agent, or to specify or change the address of its registered agent. (4) To specify, change or delete the email address to which the secretary of state shall email a notice of the fact that process against the corporation has been electronically served upon him or her. (d) This section shall not alter the vote required under any other section for the authorization of an amendment referred to therein, nor alter the authority of the board to authorize amendments under any other section.

§ 803 Certificate of amendment; contents.

§ 803. Certificate of amendment; contents. (a) To accomplish any amendment, a certificate of amendment entitled "Certificate of amendment of the certificate of incorporation of

............................ (name of corporation) under section 803 of the Not-for-Profit Corporation Law" shall be signed and delivered to the department of state. It shall set forth: (1) The name of the corporation and, if it has been changed, the name under which it was formed. (2) The date its certificate of incorporation was filed by the department of state and the law under which it was formed. (3) That the corporation is a corporation as defined in subparagraph (a) (5) of section 102 (Definitions). (4) Each amendment effected thereby, setting forth the subject matter of each provision of the certificate of incorporation which is to be amended or eliminated and the full text of the provision or provisions, if any, which are to be substituted or added. (5) The manner in which the amendment of the certificate of incorporation was authorized. (6) A designation of the secretary of state as agent of the corporation upon whom process against it may be served and the post office address within or without this state to which the secretary of state shall mail a copy of any process against it served upon the secretary. The corporation may include an email address to which the secretary of state shall email a notice of the fact that process against it has been electronically served upon him or her. (b) Any number of amendments or changes may be included in one certificate under this section. Such certificate may also include any amendments or changes permitted by other sections and in that case the certificate shall set forth any additional statement required by any other section specifying the contents of a certificate to effect such amendment or change.

§ 803-A Certificate of change; contents.

§ 803-A. Certificate of change; contents. (a) Any one or more of the changes authorized by paragraph (c) of section 802 (Authorization of amendment or change, class vote) may be accomplished by filing a certificate of change which shall be entitled "Certificate of Change of .................. (name of corporation) under section 803-A of the Not-for-Profit Corporation Law" and shall be signed and delivered to the department of state. It shall set forth:

(1) The name of the corporation and if it has been changed, the name under which it was formed. (2) The date its certificate of incorporation was filed by the department of state. (3) Each change effected thereby. (4) The manner in which the change was authorized. (b) A certificate of change which changes only the post office address to which the secretary of state shall mail a copy of any process against the corporation served upon him or her, and/or the email address to which the secretary of state shall email a notice of the fact that process against it has been electronically served upon the secretary of state, and/or the address of the registered agent, provided such address being changed is the address of a person, partnership or other corporation whose address, as agent, is the address to be changed, and/or the email address being changed is the email address of a person, partnership or other corporation, whose email address, as agent, is the email address to be changed, and/or who has been designated as registered agent for such corporation, may be signed and delivered to the department of state by such agent. The certificate of change shall set forth the statements required under subparagraphs (1), (2) and (3) of paragraph (a) of this section; that a notice of the proposed change was mailed to the corporation by the party signing the certificate not less than thirty days prior to the date of delivery to the department and that such corporation has not objected thereto; and that the party signing the certificate is the agent of such corporation to whose address the secretary of state is required to mail copies of any process against the corporation served upon him or her, and/or the agent of the corporation to whose the email address the secretary of state is required to email a notice of the fact that process against the corporation has been electronically served upon him or her, and/or the registered agent, if such be the case. A certificate signed and delivered under this paragraph shall not be deemed to effect a change of location of the office of the corporation in whose behalf such certificate is filed.

§ 804 Approvals, notices and effect.

§ 804. Approvals, notices and effect.

(a) (i) A certificate of amendment shall not be filed if the amendment adds, changes or eliminates a purpose, power or provision the inclusion of which in a certificate of incorporation requires consent or approval of a governmental body or officer or any other person or body, or if the amendment changes the name of a corporation whose certificate of incorporation had such consent or approval endorsed thereon or annexed thereto, unless such consent or approval is no longer required or is endorsed on or annexed to the certificate of amendment. 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 such certificate to a governmental body or officer or any other person or body, or if the amendment changes the name of a corporation whose certificate of incorporation was required to be delivered by the incorporator to a governmental body or officer or any other person or body, shall be delivered by the person or entity filing the certificate of amendment within thirty business days after the corporation receives confirmation from the department of state that the certificate has been accepted for filing. (ii) Every certificate of amendment of a charitable corporation 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 enumerated therein, shall have endorsed thereon or annexed thereto the approval of either (A) the attorney general, or (B) a justice of the supreme court of the judicial district in which the office of the corporation is located. At any time, including if the attorney general does not approve a certificate of amendment submitted pursuant to clause (A) of this subparagraph, or if the attorney general concludes that court review is appropriate, the corporation may apply for approval of the amendment to a justice of the supreme court of the judicial district in which the office of the corporation is located. Any application for approval of a certificate of amendment by the supreme court pursuant to this paragraph shall be on ten days' written notice to the attorney general. (b) The department of state shall not file a certificate of amendment reviving the existence of a corporation unless the consent or approval of a governmental body or officer or any other person or body required to be endorsed on or annexed to the certificate of incorporation of a

corporation formed for similar purposes, is attached thereto, or, if notice to the attorney-general was required prior to the filing of its certificate of incorporation, the certificate of amendment should indicate that such notice has been given as required by law. (c) The department of state shall not file a certificate of amendment reviving the existence of a corporation if the name of the corporation being revived is not available under section 301 (Corporate name; general) for use by a corporation then being formed under this chapter, unless the certificate of amendment shall change the name to one which is available for such use. (d) No amendment or change shall affect any existing cause of action in favor of or against the corporation, or any pending suit to which it shall be a party, or the existing rights of persons other than members; and in the event the corporate name shall be changed, no suit brought by or against the corporation under its former name shall abate for that reason. (e) Notwithstanding any law to the contrary, a certificate of amendment of 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 such certificate to the office of children and family services within thirty days after the filing of such certificate with the department of state.

§ 805 Restated certificate of incorporation.

§ 805. Restated certificate of incorporation. (a) A corporation, when authorized by the board, may restate in a single certificate the text of its certificate of incorporation without making any amendment or change thereby, except that it may include any one or more of the amendments or changes which may be authorized by the board without a vote of members under this chapter. Alternatively, a corporation may restate in a single certificate the text of its certificate of incorporation as amended thereby to effect any one or more of the amendments or changes authorized by this chapter, when authorized as required by section 802 (Authorization of amendment or change, class vote). (b) A restated certificate of incorporation, entitled "Restated

certificate of incorporation of .................... (name of corporation) under section 805 of the Not-for-Profit Corporation Law", shall be signed and delivered to the department of state. It shall set forth: (1) The name of the corporation and, if it has been changed, the name under which it was formed. (2) The date its certificate of incorporation was filed by the department of state. (3) If the restated certificate restates the text of the certificate of incorporation without making any amendment or change, then a statement that the text of the certificate of incorporation is thereby restated without amendment or change to read as therein set forth in full. (4) If the restated certificate restates the text of the certificate of incorporation as amended or changed thereby, then a statement that the certificate of incorporation is amended or changed to effect one or more of the amendments or changes authorized by this chapter, specifying each such amendment or change and that the text of the certificate of incorporation is thereby restated as amended or changed to read as therein set forth in full. (5) The manner in which the restatement of the certificate of incorporation was authorized. (c) A restated certificate need not include statements as to the incorporator or incorporators, or the first directors. (d) Any amendment or change under this section shall be subject to any other section, not inconsistent with this section, which would be applicable if a separate certificate were filed to effect such amendment or change. (e) Notwithstanding that the corporation would be required by any statute to secure from any supreme court justice, governmental body or officer, or other person or body, any consent or approval to the filing of its certificate of incorporation or a certificate of amendment, such consent or approval shall not be required with respect to the restated certificate if such certificate makes no amendment and if any previously required consent or approval had been secured. (f) Upon filing by the department, the original certificate of incorporation shall be superseded and the restated certificate of

incorporation, including any amendments and changes made thereby, shall be the certificate of incorporation of the corporation.

ARTICLE 9 MERGER OR CONSOLIDATION Section 901. Power of merger or consolidation. 902. Plan of merger or consolidation. 903. Approval of plan. 904. Certificate of merger or consolidation; contents. 905. Effect of merger or consolidation. 906. Merger or consolidation of domestic and foreign corporations. 907. Approval by the supreme court or attorney general. 907-a. Application for approval of the supreme court. 907-b. Application for approval of the attorney general. 908. Merger or consolidation of business corporations and non-profit corporations. 909. Consent to filing; notices. 910. Merger or consolidation of corporations formed under the religious corporations law and certain other corporations formed for religious purposes.

Article 9

§ 901 Power of merger or consolidation.

§ 901. Power of merger or consolidation. (a) Two or more domestic corporations may, as provided in this chapter: (1) Merge into a single corporation which shall be one of the constituent corporations; or (2) Consolidate into a single corporation which shall be a new corporation to be formed pursuant to the consolidation. (b) Whenever used in this article: (1) "Merger" means a procedure of the character described in subparagraph (a) (1). (2) "Consolidation" means a procedure of the character described in subparagraph (a) (2). (3) "Constituent corporation" means an existing corporation that is

participating in the merger or consolidation with one or more other corporations. (4) "Surviving corporation" means the constituent corporation into which one or more other constituent corporations are merged. (5) "Consolidated corporation" means the new corporation in which two or more constituent corporations are consolidated.

§ 902 Plan of merger or consolidation.

§ 902. Plan of merger or consolidation. (a) The board of each corporation proposing to participate in a merger or consolidation under section 901 (Power of merger or consolidation) shall adopt, by a vote of two-thirds of the directors present at the time of the vote, if a quorum is present at that time, or by a vote of the number of directors required under the certificate of incorporation, by-laws, this chapter and any other applicable law, a plan of merger or consolidation, setting forth: (1) The name of each constituent corporation and if the name of any of them has been changed, the name under which it was formed, and the name of the surviving corporation, or the name or the method of determining it, of the consolidated corporation. (2) As to each constituent corporation, a description of the membership and holders of any certificates evidencing capital contributions or subventions, including their number, classification, and voting rights, if any. (3) The terms and conditions of the proposed merger or consolidation, including the manner and basis of converting membership or other interest in each constituent corporation into membership or other interest in the surviving or consolidated corporation, or the cash or other consideration to be paid or delivered in exchange for membership or other interest in each constituent corporation, or a combination thereof. (4) In case of merger, a statement of any amendments or changes in the certificate of incorporation of the surviving corporation to be effected by such merger; in case of consolidation, all statements required to be included in a certificate of incorporation for a corporation formed under this chapter, except statements as to facts not available at the time the plan of consolidation is adopted by the board.

(5) In case of a merger or consolidation under section 906 (Merger or consolidation of domestic and foreign corporations), a statement of any agreements required by subparagraph (2) (D) of paragraph (d) thereof.

§ 903 Approval of plan.

§ 903. Approval of plan. (a) The board of each constituent corporation, upon approving such plan of merger or consolidation shall submit such plan to a vote of the members in accordance with the following: (1) Notice of meeting shall be given to each member whether or not entitled to vote. A copy of the plan of merger or consolidation or an outline of the material features of the plan shall accompany such notice. (2) The plan of merger or consolidation shall be approved at a meeting of the members by two-thirds vote as provided in paragraph (c) of section 613 (Vote of members). (3) If any merging or consolidating corporation has no members entitled to vote thereon, a plan of merger or consolidation shall be deemed approved by the members of the corporation when it is adopted by the board of such corporation pursuant to section 902 (Plan of merger or consolidation). (b) Notwithstanding authorization as provided herein, at any time prior to the filing of the certificate of merger or consolidation, the plan of merger or consolidation may be abandoned pursuant to a provision for such abandonment, if any, contained in the plan of merger or consolidation.

§ 904 Certificate of merger or consolidation; contents.

§ 904. Certificate of merger or consolidation; contents. (a) After approval of the plan of merger or consolidation unless the merger or consolidation is abandoned in accordance with paragraph (b) of section 903 (Approval of plan) a certificate of merger or consolidation, entitled "Certificate of merger (or consolidation) of .......... and ................ into (names of corporations) under section 904 of the Not-for-Profit Corporation Law," shall be signed on behalf of each constituent corporation and delivered to the department of state. It shall set forth:

(1) The statements required by subparagraphs (a), (1), (2), and (4) of section 902 (Plan of merger or consolidation). (2) The effective date of the merger or consolidation if other than the date of filing of the certificate of merger or consolidation by the department of state. (3) In the case of consolidation, any statement required to be included in a certificate of incorporation for a corporation formed under this chapter but which was omitted under subparagraph (a) (4) of section 902. (4) The date when the certificate of incorporation of each constituent corporation was filed by the department of state or, in the case of constituent corporations created by special law, the chapter number and year of passage of such law. (5) The manner in which the merger or consolidation was authorized with respect to each constituent corporation. (b) The surviving or consolidated corporation shall thereafter cause a copy of such certificate certified by the department of state, to be filed in the office of the clerk of each county in which the office of a constituent corporation, other than the surviving corporation, is located, and in the office of the official who is the recording officer of each county in this state in which real property of a constituent corporation, other than the surviving corporation, is situated.

§ 905 Effect of merger or consolidation.

§ 905. Effect of merger or consolidation. (a) Upon the filing of the certificate of merger and consolidation by the department of state or on such date subsequent thereto, not to exceed thirty days, as shall be set forth in such certificate, the merger or consolidation shall be effected. (b) When such merger or consolidation has been effected: (1) Such surviving or consolidated corporation shall thereafter, consistently with its certificate of incorporation as altered or established by the merger or consolidation, possess all the rights, privileges, immunities, powers and purposes of each of the constituent corporations. (2) All the property, real and personal, including causes of action and every other asset of each of the constituent corporations, shall

vest in such surviving or consolidated corporation without further act or deed, except as otherwise provided in paragraph (b) of section 907 (Approval by the Supreme Court). Except as the court may otherwise direct, as provided in section 8-1.1 of the Estates, Powers and Trusts Law, any disposition made in the will of a person dying domiciled in this state or in any other instrument executed under the laws of this state, taking effect after such merger or consolidation, to or for any of the constituent corporations shall inure to the benefit of the surviving or consolidated corporation. So far as is necessary for that purpose, or for the purpose of a like result with respect to a disposition governed by the law of any other jurisdiction, the existence of each constituent domestic corporation shall be deemed to continue in and through the surviving or consolidated corporation. (3) The surviving or consolidated corporation shall assume and be liable for all the liabilities, obligations and penalties of each of the constituent corporations. No liability or obligation due or to become due, claim or demand for any cause existing against any such corporation, or any member, officer or director thereof, shall be released or impaired by such merger or consolidation. No action or proceeding, whether civil or criminal, then pending by or against any such constituent corporation, or any member, officer or director thereof, shall abate or be discontinued by such merger or consolidation, but may be enforced, prosecuted, settled or comprised as if such merger or consolidation had not occurred, or such surviving or consolidated corporation may be substituted in such action or special proceeding in place of any constituent corporation. (4) In the case of a merger, the certificate of incorporation of the surviving corporation shall be automatically amended to the extent, if any, that changes in its certificate of incorporation are set forth in the plan of merger; and, in the case of a consolidation, the statements set forth in the certificate of consolidation and which are required or permitted to be set forth in a certificate of incorporation of a corporation formed under this chapter shall be its certificate of incorporation.

§ 906 Merger or consolidation of domestic and foreign corporations.

§ 906. Merger or consolidation of domestic and foreign corporations.

(a) One or more foreign corporations and one or more domestic corporations may be merged or consolidated into a corporation of this state or of another jurisdiction, if such merger or consolidation is permitted by the laws of the jurisdiction under which each such foreign corporation is incorporated. With respect to such merger or consolidation, any reference in paragraph (b) of section 901 (Power of merger or consolidation) to a corporation shall, unless the context otherwise requires, include both domestic and foreign corporations. (b) With respect to procedure, including the requirement of approval by members, each domestic corporation shall comply with the provisions of this chapter relating to merger or consolidation of domestic corporations, and each foreign corporation shall comply with the applicable provisions of the law of the jurisdiction under which it is incorporated. (c) if the surviving or consolidated corporation is, or is to be, a domestic corporation, a certificate of merger or consolidation shall be signed, verified and delivered to the department of state as provided in section 904 (Certificate of merger or consolidation; contents). In addition to the matters specified in such section, the certificate shall set forth as to each constituent foreign corporation the jurisdiction and date of its incorporation and the date when its application for authority to conduct activities in this state was filed by the department of state, and its fictitious name used in this state pursuant to article thirteen of this chapter, if applicable, or, if no such application has been filed, a statement to such effect. (d) If the surviving or consolidated corporation is, or is to be, formed under the law of any jurisdiction other than this state: (1) It shall comply with the provisions of this chapter relating to foreign corporations if it is to conduct activities in this state. (2) It shall deliver to the department of state a certificate, entitled "Certificate of merger (or consolidation) of .......... and .......... into .......... (names of corporations) under section 906 of the Not-for-Profit Corporation Law", which shall be signed on behalf of each constituent domestic and foreign corporation. It shall set forth: (A) The statements required by subparagraphs (a) (1) and (2) of section 902 (Plan of merger or consolidation).

(B) The jurisdiction and date of incorporation of the surviving or consolidated foreign corporation, the date when its application for authority to conduct activities in this state was filed by the department of state, and its fictitious name used in this state pursuant to article thirteen of this chapter, if applicable, or, if no such application has been filed, a statement to such effect and that it is not to conduct activities in this state until an application for such authority shall have been filed by such department. (C) The date when the certificate of incorporation of each constituent domestic corporation was filed by the department of state and the jurisdiction and date of incorporation of each constituent foreign corporation, other than the surviving or consolidated foreign corporation, and; in the case of each such corporation authorized to conduct activities in this state, the date when its application for authority was filed by the department of state. (D) An agreement that the surviving or consolidated foreign corporation may be served with process in this state in any action or special proceeding for the enforcement of any liability or obligation of any domestic corporation or of any foreign corporation, previously amenable to suit in this state, which is a constituent corporation in such merger or consolidation, and an agreement that the surviving or consolidated foreign corporation may be sued in this state in respect of any property transferred or conveyed to it as provided in paragraph (c) of section 907 (Approval by the supreme court), or the use made of such property, or any transaction in connection therewith. (E) A designation of the secretary of state as its agent upon whom process against it may be served in the manner set forth in paragraph (b) of section 306 (Service of process), in any action or special proceeding described in subparagraph (D) and a post office address, within or without this state, to which the secretary of state shall mail a copy of the process in such action or special proceeding. (F) The manner in which the plan of merger or consolidation was approved with respect to each constituent domestic corporation and that the merger or consolidation is permitted by the laws of the jurisdiction of each constituent foreign corporation and is in compliance therewith. (G) The effective date of the merger or consolidation if other than the date of filing of the certificate of merger or consolidation by the

department of state. (e) Upon the filing of the certificate of merger or consolidation by the department of state or on such date subsequent thereto, not to exceed thirty days as shall be set forth in such certificate, the merger or consolidation shall be effected. (f) The surviving or consolidated domestic or foreign corporation shall thereafter cause a copy of such certificate, certified by the department of state, to be filed in the office of the clerk of each county in which the office of a constituent corporation, other than the surviving corporation, is located, and in the office of the official who is the recording officer of each county in this state in which real property of a constituent corporation, other than the surviving corporation, is situated. (g) If the surviving or consolidated corporation is, or is to be, formed under the law of this state, the effect of such merger or consolidation shall be the same as in the case of the merger or consolidation of domestic corporations under section 905 (Effect of merger or consolidation). If the surviving or consolidated corporation is, or is to be, incorporated under the law of any jurisdiction other than this state, the effect of such merger or consolidation shall be the same as in the case of the merger or consolidation of domestic corporations, except in so far as the law of such other jurisdiction provides otherwise.

§ 907 Approval by the supreme court or attorney general.

§ 907. Approval by the supreme court or attorney general.

Where any constituent corporation or the consolidated corporation is, or would be if formed under this chapter, a charitable corporation under section 201 (Purposes) of this chapter, no certificate shall be filed pursuant to section 904 (Certificate of merger or consolidation; contents) or section 906 (Merger or consolidation 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, as provided in section 907-a (Application for approval of the supreme court) of this article or (b) the attorney general has approved the plan of merger or consolidation and authorized

the filing of the certificate, as provided in section 907-b (Application for approval of the attorney general) of this article.

§ 907-a Application for approval of the supreme court.

§ 907-a. Application for approval of the supreme court. (a) Application for an order approving the plan of merger and authorizing the filing of the certificate may be made in the judicial district in which the principal office of the surviving or consolidated corporation is to be located, or in which the office of one of the domestic constituent corporations is located. The application shall be made by all the constituent corporations jointly and shall set forth by affidavit: (1) the plan of merger or consolidation, (2) the approval required by section 903 (Approval of plan) or paragraph (b) of section 906 (Merger or consolidation of domestic and foreign corporations) of this article for each constituent corporation, (3) the objects and purposes of each such corporation to be promoted by the merger or consolidation, (4) a statement of all property, and the manner in which it is held, and of all liabilities and of the amount and sources of the annual income of each such corporation, (5) whether any votes against adoption of the resolution approving the plan of merger or consolidation were cast at the meeting at which the resolution was adopted by each constituent corporation, and (6) facts showing that the consolidation is authorized by the laws of the jurisdictions under which each of the constituent corporations is incorporated. (b) Upon the filing of the application the court shall fix a time for hearing thereof and shall direct that notice thereof be given to such persons as may be interested, including the attorney general, any governmental body or officer and any other person or body whose consent or approval is required by section 909 (Consent to filing) of this article, in such form and manner as the court may prescribe. If no votes against adoption of the resolution approving the plan of merger or consolidation were cast at the meeting at which the resolution was adopted by any constituent corporation the court may dispense with notice to anyone except the attorney-general, any governmental body or officer and any other person or body whose consent or approval is required by section 909 (Consent to filing) of this article. Any person interested may appear and show cause why the application should not be

granted. (c) If the court shall find that any of the assets of any of the constituent corporations are held for a charitable purpose or are 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 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 modification 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 modified without further approval by the members. If the court, upon directing 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 corporations) of this article. (e) If it shall appear, to the satisfaction of the court, that the provisions of this section have been complied with, and that the interests 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.

§ 907-b Application for approval of the attorney general.

§ 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 corporation 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 determination thereon. (b) The application to the attorney general shall be made by all the constituent corporations jointly and shall set forth by affidavit: (i) all of the information required to be included in an application to obtain court approval pursuant to section 907-a (Application for approval of the supreme court) of this article, (ii) all consents and approvals required by section 909 (Consent to filing), and (iii) a statement as to whether any persons have raised, or have a reasonable basis to raise, objections to the merger or consolidation that is the subject of the application, including a statement setting forth the names and addresses of such persons, the nature of their interest, and a description of their objections. (c) Upon the filing of the application, the attorney general, in his or her discretion, may direct that the constituent corporations provide notice to such persons as may be interested, including any governmental body or officer and any other person or body that is required either to give consent or be notified under section 404 (Approvals, notices and consents) of this article or 909 (Consent to filing) of this article. The constituent corporations shall provide the attorney general with a certification that such notice has been provided. (d) If any assets of any of the constituent corporations are held for a charitable purpose or are assets received for a specific purpose and legally required to be used for a particular purpose, but not upon a condition requiring return, transfer or conveyance by reason of the merger or consolidation, the attorney general may, in his or her discretion, direct that such assets be transferred or conveyed to the surviving or consolidated corporation subject to such purpose or use. (e) If the attorney general shall find that the interests of non-consenting 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 modification of the plan of merger or consolidation in accordance with this chapter and any other law or rule. (f) If it shall appear, to the satisfaction of the attorney general, that the provisions of this section have been complied with, and that the interests of the constituent corporations and the public interest will not be adversely affected by the merger or consolidation, the attorney general shall approve the merger or consolidation upon such terms and conditions as it may prescribe. (g) The approval of the attorney general shall be annexed to the certificate of merger or consolidation. (h) At any time, including if the attorney general does not approve the application, or if the attorney general concludes that court review is appropriate, the constituent corporations may seek court approval on notice to the attorney general pursuant to section 907-a (Application for approval of the supreme court) of this article.

§ 908 Merger or consolidation of business and not-for-profit

§ 908. Merger or consolidation of business and not-for-profit corporations. (a) One or more domestic or foreign corporations which is, or would be if formed under this chapter, a non-charitable corporation, or any corporation formed as a type A corporation prior to July first, two thousand fourteen, may be merged or consolidated into a domestic or foreign corporation which is, or would be if formed under the laws of this state, a corporation formed under the business corporation law of this state if such merger or consolidation is not contrary to the law of the state of incorporation of any constituent corporation. With respect to such merger or consolidation, any reference in paragraph (b) of section 901 (Power of merger or consolidation) of this article or paragraph (b) of section 901 (Power of merger or consolidation) of the business corporation law to a corporation shall, unless the context otherwise requires, include both domestic and foreign corporations. (b) With respect to procedure including authorization by shareholders or approval by members, each domestic business corporation shall comply with the business corporation law, each domestic not-for-profit corporation shall comply with the provisions of this chapter and each

foreign corporation shall comply with the applicable provisions of the law of the jurisdiction under which it is incorporated. (c) The plan of merger or consolidation shall set forth all matter required by section 902 of the business corporation law or section 902 of this chapter and the terms and conditions of the proposed merger or consolidation, including the manner and basis of converting shares, membership or other interest in each constituent corporation into shares, bonds or other securities of the surviving or consolidated corporation, or the cash or other consideration to be paid or delivered in exchange for shares, membership or other interest in each constituent corporation, or a combination thereof. (d) After adoption of the plan of merger or consolidation by the board and members or shareholders of each constituent corporation, unless the merger or consolidation is abandoned in accordance with paragraph (b) of section 903 (Approval by members) and paragraph (b) of section 903 (Authorization by shareholders) of the business corporation law, a certificate of merger or consolidation, entitled "Certificate of merger (or consolidation) of .......... and .......... into .............. (names of corporations) under section 908 of the Not-for-Profit Corporation Law", shall be signed on behalf of each constituent corporation and delivered to the department of state. (1) If the surviving or consolidated corporation is, or is to be, a domestic corporation such certificate shall set forth the statements required by section 904(a) of the business corporation law or section 904(a) of this chapter and, as to each constituent foreign corporation the jurisdiction and date of its incorporation and the date when its application for authority to conduct activities or do business in this state was filed by the department of state or, if no such application has been filed, a statement to such effect. (2) If the surviving or consolidated corporation is, or is to be formed under the law of any jurisdiction other than this state such certificate shall set forth: (A) The statements required by subparagraphs (a)(1) and (2) of section 902 of the business corporation law or subparagraphs (a)(1) and (2) of section 902 (Plan of merger or consolidation) of this chapter, and the manner in which the merger or consolidation was authorized with respect to each constituent domestic corporation.

(B) The jurisdiction and date of incorporation of the surviving or consolidated foreign corporation, the date when its application for authority to do business in this state was filed by the department of state or, if no such application has been filed, a statement to such effect and that it is not to do business in this state until an application for such authority shall have been filed by such department. (C) The date when the certificate of incorporation of each constituent domestic corporation was filed by the department of state and the jurisdiction and date of incorporation of each constituent foreign corporation, other than the surviving or consolidated foreign corporation, and, in the case of each such corporation authorized to do business or conduct activities in this state, the date when its application for authority was filed by the department of state. (D) An agreement that the surviving or consolidated foreign corporation may be served with process in this state in any action or special proceeding for the enforcement of any liability or obligation of any domestic corporation or of any foreign corporation, previously amenable to suit in this state, which is a constituent corporation in such merger or consolidation, and for the enforcement, as provided in the business corporation law, of the rights of shareholders of any constituent domestic business corporation to receive payment for their shares against the surviving or consolidated corporation. (E) An agreement that, subject to the provisions of section 623 of the business corporation law, the surviving or consolidated foreign corporation will promptly pay to the shareholders of each constituent domestic business corporation the amount, if any, to which they shall be entitled under the provisions of the business corporation law relating to the right of shareholders to receive payment for their shares. (F) A designation of the secretary of state as his agent upon whom process against it may be served in the manner set forth in paragraph (b) of section 306 (Service of process), in any action or special proceeding described in subparagraph (D) and a post office address, within or without the state, to which the secretary of state shall mail a copy of the process in such action or special proceeding. (e) The department of state shall not file a certificate delivered to it under subparagraph (d) (2) unless the consent of the state tax commission to the merger or consolidation is attached thereto.

(g) Upon the filing of the certificate of merger or consolidation by the department of state or on such dates subsequent thereto, not to exceed thirty days, as shall be set forth in such certificate, the merger or consolidation shall be effected. (h) The surviving or consolidated domestic or foreign corporation shall thereafter cause a copy of such certificate, certified by the department of state, to be filed in the office of the clerk of each county in which the office of a constituent corporation, other than the surviving corporation, is located, and in the office of the official who is the recording officer of each county in this state in which real property of a constituent corporation, other than the surviving corporation, is situated. (i) When such merger or consolidation has been effected: (A) If the surviving or consolidated corporation is, or is to be, formed under the law of this state, it shall be subject to the business corporation law and the effect of such merger or consolidation shall be the same as in the case of the merger or consolidation of domestic corporations under section 906 (Effect of merger or consolidation) of the business corporation law, except that in subparagraph (b) (3) of such section the word "shareholder" shall be read to include the word "member" as the latter is defined in this chapter. (B) If the surviving or consolidated corporation is, or is to be, incorporated under the law of any jurisdiction other than this state, the effect of such merger or consolidation shall be as provided in subparagraph (A), except insofar as the law of such other jurisdiction provides otherwise.

§ 909 Consent to filing; notices.

§ 909. Consent to filing; notices. (a) If the purposes of any constituent or consolidated corporation would require the approval or consent of any governmental body or officer or any other person or body under section 404 (Approvals, notices and consents) of this chapter no certificate of merger or consolidation shall be filed pursuant to this article unless such approval or consent is endorsed thereon or annexed thereto. A corporation whose statement of purposes specifically includes the establishment or operation of a child day care center, as that term is

defined in section three hundred ninety of the social services law, shall mail a certified copy of any certificate of merger or consolidation involving such corporation to the office of children and family services within thirty days after receipt of confirmation of the filing of such merger or consolidation with the department of state. (b) If the purposes of any constituent or consolidated corporation would require the certificate of incorporation or any other notice to be delivered to any person or entity under section 404 (Approvals, notices and consents) of this chapter, the corporation shall provide to such person or entity a certified copy of the certificate of incorporation within thirty days after the corporation receives confirmation from the department of state that the certificate has been accepted for filing.

§ 910 Merger or consolidation of corporations formed under the

§ 910. Merger or consolidation of corporations formed under the religious corporations law and certain other corporations formed for religious purposes. (a) One or more corporations formed under the religious corporations law and one or more corporations formed for religious purposes to which the not-for-profit corporation law applies by virtue of paragraph (a) of section one hundred three of this chapter may be merged or consolidated pursuant to section nine hundred one, with the effect provided in section nine hundred one and paragraph (b) of section nine hundred five of this chapter. (b) Each corporation which is a party to such merger or consolidation shall comply with the provisions of this section and of sections 902, 903, 904 and 907 of this chapter and, if and to the extent applicable, sections 906 and 909 of this chapter. (c) If the surviving corporation or consolidated corporation is a domestic or authorized foreign corporation not formed under the religious corporations law, then, a certificate of merger or consolidation shall be filed with the department of state, and the surviving or consolidated corporation shall thereafter cause a copy of such certificate, certified by the department of state, to be filed in the office of the clerk of the county in which each constituent corporation other than the surviving corporation is located, the county in which the certificate of incorporation of each constituent domestic

corporation or application for authority of each constituent authorized foreign corporation, other than the surviving corporation, is filed and the office of the official who is the recording officer of such county in this state in which real property of a constituent corporation other than the surviving corporation, is located. (d) If the surviving corporation or consolidated corporation is a corporation formed under the religious corporations law, then, the certificate of merger or consolidation shall be filed with the office of the official in which the certificate of incorporation of the surviving or consolidated corporation was filed, and the surviving or consolidated corporation shall thereafter cause a copy of such certificate, certified by such office, to be filed in the office in which the certificate of incorporation of each constituent domestic corporation or application for authority of each authorized foreign corporation other than the surviving corporation was filed, and in the office of the official who is the recording officer of each county in this state in which real property of a constituent corporation, other than the surviving or consolidated corporation, is located. (e) Such merger or consolidation shall become effective with respect to each constituent corporation upon the filing of a certificate of merger or consolidation or certified copy thereof pursuant to paragraph (c) or paragraph (d) of this section with the appropriate state or county official therein specified. With respect to the surviving corporation, such merger may become effective on such date subsequent thereto, not to exceed thirty days, as shall be set forth in such certificate. The filing of a certified copy with the office of a recording officer of a county in which real property is located shall not be a condition precedent to such merger or consolidation becoming effective.

ARTICLE 10 NON-JUDICIAL DISSOLUTION Section 1001. Plan of dissolution and distribution of assets. 1002. Authorization of plan. 1002-a. Carrying out the plan of dissolution and distribution of assets.

1003. Certificate of dissolution; contents; approval.
1004. Certificate of dissolution; filing; effect.
1005. Corporate action and survival of remedies after dissolution.
1006. Notice to creditors by corporations intending to dissolve; filing or barring claims.
1007. Jurisdiction of supreme court to supervise dissolution and liquidation.
1008. Applicability to dissolution under other provisions.
1009. Revocation of voluntary dissolution proceedings.
1010. Certificate of annulment of dissolution and reinstatement of corporate existence.
1011. Dissolution of certain firemen's benevolent associations.
1012. Dissolution of domestic corporations by proclamation.

Article 10

§ 1001 Plan of dissolution and distribution of assets.

§ 1001. Plan of dissolution and distribution of assets. (a) The board shall adopt a plan for the dissolution of the corporation and the distribution of its assets. Such plan shall implement any provision in the certificate of incorporation prescribing the distributive rights of members. (b) If the corporation is a charitable corporation and has no assets to distribute and no liabilities at the time of dissolution, the plan of dissolution shall include a statement to that effect. (c) If the corporation has no assets to distribute, other than a reserve not to exceed twenty-five thousand dollars for the purpose of paying ordinary and necessary expenses of winding up its affairs including attorney and accountant fees, and liabilities not in excess of ten thousand dollars at the time of adoption of the plan of dissolution, the plan of dissolution shall include a statement to that effect. (d) If the corporation has assets to distribute or liabilities, the plan of dissolution shall contain: (1) a description with reasonable certainty of the assets of the corporation and their fair value, and the total amount of debts and other liabilities incurred or estimated by the corporation, including the total amount of any accounting and legal fees incurred or estimated,

in connection with the dissolution procedure. (2) a statement as to whether any gifts or other assets are legally required to be used for a particular purpose. (3) if there are assets received and held by the corporation either for a charitable purpose 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 instrument or to a charitable corporation or organization or organizations exempt from taxation pursuant to federal and state laws and engaged in activities substantially similar to those of the dissolved corporation. Each such recipient organization shall be identified and the governing instrument and amendments thereto of each of the proposed recipient organizations shall be annexed to such statement, along with the most recent financial report of each recipient organization and a sworn affidavit from a director and officer of each recipient organization stating the purposes of the organization, and that it is currently exempt from federal income taxation. (4) if any of the assets of the corporation are to be distributed to a recipient for a particular legally required purpose, an agreement by the recipient to apply the assets received only for such purpose shall be included.

§ 1002 Authorization of plan.

§ 1002. Authorization of plan. (a) Upon adopting a plan of dissolution and distribution of assets, the board shall submit it to a vote of the members, if any, and such plan shall be approved at a meeting of members by two-thirds vote as provided in paragraph (c) of section 613 (Vote of members) of this chapter; provided, however, that if the corporation is a charitable corporation, other than a corporation incorporated pursuant to article 15 (Public cemetery corporations) of this chapter, the vote required by the corporation'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; (ii) two-thirds of the directors present at the time of the vote, if a quorum is present at that time; or (iii) 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. (b) If there are no members entitled to vote on the dissolution of the corporation, the plan of dissolution and distribution of assets shall be deemed authorized upon its adoption by the board. (c) Whenever a statute 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 in the case of a charitable corporation, and in the case of any non-charitable

corporation which at the time of dissolution holds assets legally required to be used for a particular purpose. (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. (3) The attorney general may approve the petition if the corporation has adopted a plan in accordance with the requirements of section 1001 (Plan of dissolution and distribution of assets) of this article, and any other requirements imposed by law or rule. At any time, including if the attorney general does not approve the petition, or the attorney general concludes, in his or her discretion, that court review of the petition is appropriate, the corporation may apply for approval to the supreme court in the judicial district in which the principal office of the corporation is located, or in which the office of one of the domestic constituent corporations is located, for an order dissolving the corporation. Application to the supreme court for an order for such approval shall be by verified petition upon ten days written notice to the attorney general, and shall include all information required to be included in the application to the attorney general pursuant to this section.

§ 1002-a Carrying out the plan of dissolution and distribution of

§ 1002-a. Carrying out the plan of dissolution and distribution of assets.

Prior to filing the certificate of dissolution with the department of state, a corporation, as applicable, shall: (a) Carry out the plan of dissolution and distribution of assets, pay its liabilities and distribute its assets in accordance therewith within two hundred seventy days from the date the plan of dissolution and distribution of assets shall have been (1) authorized as provided in section 1002 (Authorization of plan) of this article, (2) approved by any governmental body or officer whose approval is required pursuant to paragraph (c) of section 1002 (Authorization of plan) of this article, and (3) approved by either the attorney general or a justice of the supreme court pursuant to paragraph (d) of section 1002 (Authorization

of plan) 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 dissolution 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; (b) Pursuant to the plan of dissolution and distribution of assets, fulfill or discharge its contracts, collect and sell its assets for cash at public or private sale, discharge or pay its liabilities, and do all other acts appropriate to liquidate its business; (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 charitable purpose or which are legally required to be used for a particular purpose, shall be distributed to one or more domestic or foreign 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 approved by the attorney general or ordered by the supreme court pursuant to section 1002 (Authorization of plan) of this article. Any disposition of assets contained in a will or other instrument, in trust or otherwise, made before or after the dissolution, to or for the benefit of any corporation so dissolved shall inure to or for the benefit of the corporation or organization acquiring such assets of the dissolved corporation as provided in this section, and so far as is necessary for that purpose the corporation or 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 specifications 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; (d) Within six months from the date fixed for the payment of the final liquidating distribution pursuant to paragraph (a) of this section, pay any assets distributable to a creditor or member who is unknown or cannot be found, to the state comptroller pursuant to the abandoned property law; (e) Distribute assets that are not subject to subparagraph one of paragraph (c) of this section under a plan of distribution, in accordance with the following order of priorities: (1) holders of certificates of subvention. (2) holders of capital certificates. (3) members, if permitted by law.

§ 1003 Certificate of dissolution; contents; approval.

§ 1003. Certificate of dissolution; contents; approval. (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-Profit 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 department of state. (3) The name and address of each of its officers and directors. (4) A statement as to whether the corporation is a charitable corporation or a non-charitable corporation. (5) A statement as to whether or not the corporation holds assets at the time of authorization of its plan of dissolution and distribution of assets as provided in section 1002 of this article (Authorization of

plan) which are legally required to be used for a particular purpose. (6) That the corporation elects to dissolve. (7) The manner in which the dissolution was authorized. If the dissolution 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 (Authorization of plan) of this article, then the certificate of dissolution shall so state. (8) A statement that prior to delivery of such certificate of dissolution to the department of state for filing, the plan of dissolution and distribution of assets has been approved by the attorney general or by a justice of the supreme court, if such approval is required pursuant to section 1002 (Authorization of plan) of this article. A copy of the approval of the attorney general or of the court 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 distribute, 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 endorsed thereon or annexed thereto the approval of the dissolution: (1) By a governmental body or officer, if such approval is required. A corporation whose statement of purposes specifically includes the establishment or operation of a child day care center, as that term is defined in section three hundred ninety of the social services law, shall provide a certified copy of any certificate of dissolution involving such corporation to the office of children and family services within thirty days after the filing of such dissolution with the department of state. (2) By the attorney general in the case of a charitable corporation,

or any other corporation that holds assets at the time of dissolution legally required to be used for a particular purpose. (c) The application to the attorney general for approval of the certificate of dissolution pursuant to paragraph (b) of this section shall be by verified petition and shall include a final financial report showing disposition of all of the corporation's assets and liabilities, the requisite governmental approvals and the appropriate fees, if any, accompanied by the certificate of dissolution.

§ 1004 Certificate of dissolution; filing; effect.

§ 1004. Certificate of dissolution; filing; effect. (a) The department of state shall not file a certificate of dissolution unless the consent of the state department of taxation and finance to the dissolution is attached thereto. Upon filing the certificate, the corporation is dissolved. (b) Notwithstanding paragraph (a) of this section, with respect to any corporation that has done business in the city of New York and incurred liability for any tax or charge under chapter six, seven, eight, ten, eleven, twelve, thirteen, fourteen, fifteen, twenty-one, twenty-four, twenty-five or twenty-seven of title eleven of the administrative code of the city of New York, the department of state shall not file a certificate of dissolution unless the consent of the commissioner of finance of the city of New York to the dissolution is also attached thereto.

§ 1006 Corporate action and survival of remedies after dissolution.

§ 1006. Corporate action and survival of remedies after dissolution. (a) After dissolution, a corporation shall not commence any new activities. A dissolved corporation, its directors, officers and members may continue to function for the purpose of winding up the affairs of the corporation in the same manner as if the dissolution had not taken place, except as otherwise provided in this chapter or by court order. In particular and without limiting the generality of the foregoing: (1) The directors of a dissolved corporation shall not be deemed to be trustees of its assets; title to such assets shall not vest in them, but shall remain in the corporation until transferred by it in its corporate name.

(2) Dissolution shall not change quorum or voting requirements for the board or members, or provisions regarding election, appointment, resignation or removal of, or filling vacancies among, directors or officers, or provisions regarding amendment or repeal of by-laws or adoption of new by-laws. (3) Capital certificates may be transferred and determination of members for any purpose may be made without closing the record of members until such time, if any, as such record may be closed, and either the board or the members may close it. (4) The corporation may sue or be sued in all courts and participate in actions and proceedings, whether judicial, administrative, arbitrative or otherwise, in its corporate name, and process may be served by or upon it. (b) The dissolution of a corporation shall not affect any remedy available to or against such corporation, its directors, officers or members, for any right or claim existing or any liability incurred before such dissolution, except as provided in sections 1007 (Notice to creditors; filing or barring claims) or 1008 (Jurisdiction of supreme court to supervise dissolution and liquidation.)

§ 1007 Notice to creditors by corporations intending to dissolve;

§ 1007. Notice to creditors by corporations intending to dissolve; filing or barring claims. (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 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 creditors and claimants, including any with unliquidated or contingent claims and any with whom the corporation has unfulfilled contracts, to present their claims in writing and in detail at a specified place and by a specified day, which shall not be less than six months after the first publication of such notice. Such notice shall be published at least once a week for two successive weeks in a newspaper of general circulation in

the county in which the office of the corporation was located at the date of authorization of its plan of dissolution and distribution of assets as provided in section 1002 of this article (Authorization of plan). On or before the date of the first publication of such notice, the corporation shall mail a copy thereof, postage prepaid, to each person believed to be a creditor of or claimant against the corporation whose current name and address are known to or can with due diligence be ascertained by the corporation. The giving of such notice shall not 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 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. (b) Any claims which shall have been filed as provided in such notice and which shall be disputed by the corporation may be submitted for determination to the supreme court under section 1008 (Jurisdiction of supreme court to supervise dissolution and liquidation) or pursuant to article 11 (Judicial dissolution). A claim filed by the trustee or paying agent for the holders of bonds or coupons shall have the same effect as if filed by the holder of any such bonds or coupons. Any person whose claim is, at the date of the first publication of such notice, barred by any statute of limitations is not a creditor or claimant entitled to any notice under this section or such section 1008. The claim of any such person and all other claims which are not timely filed as provided in such notice except claims which are the subject of litigation on the date of the first publication of such notice and all claims which are so filed but are disallowed by the court under such section 1008, shall be forever barred as against the corporation, its assets, directors, officers and members, except to such extent, if any, as the court may allow them against any remaining assets of the corporation in the case of a creditor who shows satisfactory reason for failure to file a claim as so provided. If the court requires a further notice under such section 1008, any reference to a notice in this section shall, to the extent that the court so orders, mean such further

notice, except that a claim which has been filed in accordance with a notice under this section need not be refiled under such further notice. (c) Notwithstanding this section and section 1008 (Jurisdiction of supreme court to supervise dissolution and liquidation), tax claims and other claims of this state, of the United States and of the department of finance of the city of New York shall not be required to be filed under those sections, and such claims shall not be barred because not so filed, and distribution of the assets of the corporation, or any part thereof, may be deferred until determination of any such claims. (d) Laborer's wages shall be preferred claims and entitled to payment before any other creditors out of the assets of the corporation in excess of valid prior liens or encumbrances.

§ 1008 Jurisdiction of supreme court to supervise dissolution and

§ 1008. Jurisdiction of supreme court to supervise dissolution and liquidation. (a) At any time after the filing of a certificate of dissolution under this article, the supreme court in the judicial district where the office of the corporation was located at the date of its dissolution, in a special proceeding instituted under this section, upon the petition of the corporation or, in a situation approved by the court, upon the petition of a creditor, claimant, director, officer, member, subscriber for capital certificates, incorporator or the attorney general, may suspend or annul the dissolution or continue the liquidation of the corporation under the supervision of the court and may make all such orders as it may deem proper in all matters in connection with the dissolution or the winding up of the affairs of the corporation, and in particular, and without limiting the generality of the foregoing, in respect of the following: (1) The determination of the validity of the authorization of the dissolution of the corporation and of the execution and delivery of the certificate of dissolution under this article. (2) The adequacy of the notice given to creditors and claimants and, if it is determined to have been inadequate, the requirement of such further notice as the court may deem proper. (3) The determination of the validity and amount of invalidity of any claims which have been presented to the corporation.

(4) The barring of all creditors and claimants who have not timely filed claims as provided in any such notice, or whose claims have been disallowed by the court, as against the corporation, its assets, directors, officers and members. (5) The determination and enforcement of the liability of any director, officer, member or subscriber for capital certificates, to the corporation or for the liabilities of the corporation. (6) The presentation and filing of intermediate and final accounts of the directors, the hearing thereon, the allowance or disallowance thereof, and the discharge of the directors, or any of them, from their liabilities. (7) The administration of any trust, or the disposition of any property held in trust by or for the corporation. (8) The adequacy of a plan of distribution. (9) The payment, satisfaction or compromise of claims against the corporation, the retention of assets for such purpose, and the determination of the adequacy of provisions made for payment of the liabilities of the corporation. (10) The disposition or destruction of records, documents and papers of the corporation. (11) The appointment and removal of a receiver under article 12 (Receivership) who may be a director, officer or member of the corporation. (12) The issuance of injunctions for one or more of the purposes and as provided in section 1113 (Injunction). (13) The return of subscription payments to subscribers for capital certificates, and the making of distributions, in cash or in kind or partly in each, to the members. (14) The payment to the state comptroller, as abandoned property, of assets under paragraph (d) of section 1002-a (Carrying out the plan of dissolution and distribution of assets). (15) Where assets were received and held by the corporation either for a charitable purpose or legally required to be used for a particular purpose, the distribution of such assets to one or more domestic or foreign corporations or other organizations engaged in activities substantially similar to those of the dissolved corporation, on notice to the attorney general and to such other persons, and in such manner,

as the court may deem proper. (b) No order annulling a dissolution shall be made under this section if the name of the corporation whose dissolution is to be annulled is no longer available for use by such corporation, unless such corporation submits with its petition for the annulment of the dissolution a certificate of reservation of another available name. (c) Orders under this section may be entered ex parte, except that if such special proceeding was not instituted upon petition of the corporation, notice shall be given to the corporation in such manner as the court may direct. Notice shall be given to other persons interested, and in such manner, as the court may deem proper, of any hearings and of the entry of any orders on such matters as the court shall deem proper. All orders made by the court under this section shall be binding upon the attorney-general, the corporation, its directors, officers, members, subscribers for capital certificates, incorporators, creditors and claimants.

§ 1009 Applicability to dissolution under other provisions.

§ 1009. Applicability to dissolution under other provisions.

The provisions of paragraphs (c), (d) and (e) of section 1002-a of this article (Carrying out the plan of dissolution and distribution of assets), sections 1006 (Corporate action and survival of remedies after dissolution), 1007 (Notice to creditors; filing or barring claims) and 1008 (Jurisdiction of supreme court to supervise dissolution and liquidation) shall apply to a corporation dissolved by proclamation pursuant to section 1014 (Dissolution of domestic corporations by proclamation), by expiration of its period of duration or under section 203-a of the tax law, or to an incorporated firemen's benevolent association created by act of the legislature if such act is subsequently repealed.

§ 1010 Revocation of voluntary dissolution proceedings.

§ 1010. Revocation of voluntary dissolution proceedings. (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 dissolution action by the board, the board shall adopt a resolution recommending 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, revocation of the voluntary dissolution proceedings shall not be authorized without approval thereof by such body or officer.

§ 1012 Certificate of annulment of dissolution and reinstatement of

§ 1012. Certificate of annulment of dissolution and reinstatement of corporate existence. (a) Any corporation dissolved under former section 57 of the membership corporations law may, at any time after the effective date of this chapter, deliver to the department of state a signed certificate which shall be entitled, "certificate of annulment of dissolution and reinstatement of corporate existence of ............................. (name of corporation) pursuant to section 1012 of the Not-for-Profit Corporation Law", and shall set forth: (1) The name of the corporation and, if it has been changed, the name under which it was formed. (2) The date of the filing of its certificate of incorporation by the department of state. (3) The law under which it was formed. (4) That it failed to deliver to the department of state a certificate, as required by subdivision 1 of section 57 of the membership corporations law. (5) That it elects to be reinstated and to continue its corporate

existence. (6) That it is a charitable corporation or a non-charitable corporation, as applicable. (b) Notwithstanding subparagraph one of paragraph (a) of section 1006 (Corporate action and survival of remedies after dissolution), the directors of a corporation whose dissolution is annulled under this section shall be deemed trustees of its assets, unless such assets have been distributed pursuant to section 1002-a (Carrying out the plan of dissolution and distribution of assets). (c) The filing of such certificate by the department of state shall have the effect of annulling all of the proceedings theretofore taken for the dissolution of such corporation, and it shall thereafter have such corporate powers, rights, privileges, immunities, duties and liabilities as it had on the date of publication of the proclamation of dissolution, as if such proclamation had not been made and published. (d) The department of state shall not file a certificate of annulment of dissolution and reinstatement of corporate existence if the name of the corporation being reinstated is not available under section 301 (Corporate name; general) for use by a corporation then being formed under this chapter, unless such certificate shall change the name to one which is available for such use. (e) If, after the publication of the proclamation of dissolution, it shall appear that the name of any corporation was erroneously included therein, the secretary of state shall make an appropriate entry on the records of the department of state, which entry shall have the effect of annulling all of the proceedings theretofore taken for the dissolution of the corporation under this section, and it shall have such corporate powers, rights, privileges, immunities, duties and liabilities as it had on the date of such publication of the proclamation, as if such proclamation had not been made and published. (f) Whenever a corporation has complied with paragraph (a) or the action specified in paragraph (e) has been taken, the secretary of state shall publish a notice thereof in the state advertising bulletin and shall send a copy of such bulletin to the clerk of the county in which the office of the corporation is located. The county clerk shall file such copy and make appropriate entry on his record without charge. (g) Nothing in this section shall be deemed to extend the duration of

any corporation as stated in its certificate of incorporation. (h) The fee of the secretary of state for filing a certificate under this section shall be ten dollars.

§ 1013 Dissolution of certain firemen's benevolent associations.

§ 1013. Dissolution of certain firemen's benevolent associations. (a) An incorporated firemen's benevolent association created by act of the legislature may dissolve in accordance with the provisions of this article. (b) Any such corporation authorized to have paid to it foreign fire insurance premium taxes imposed under sections 9104 and 9105 of the insurance law shall, in addition to any other requirements of this article, file with the superintendent of financial services a copy of the certificate of dissolution. Moneys then due and owing to the corporation under said sections, and moneys thereafter otherwise payable to the corporation pursuant to such authorization, shall be distributed as provided in said sections.

§ 1014 Dissolution of domestic corporations by proclamation.

§ 1014. Dissolution of domestic corporations by proclamation.

Every corporation incorporated pursuant to this chapter, other than a corporation incorporated pursuant to article 15 (Public cemetery corporations), and registered or required to be registered pursuant to article 7-A of the executive law or article 8 of the estates, powers and trusts law shall be subject to dissolution for failure to register or to file annual financial reports in accordance with the following procedures: (a) On or before the last day of March, June, September and December in each calendar year, the attorney general may certify and transmit to the department of state a list containing the names of any or all corporations formed pursuant to this chapter and registered or required to register pursuant to article 7-A of the executive law or article 8 of the estates, powers and trusts law that have not filed annual financial reports for each of the five years immediately preceding the date of such certification. This section shall not be applicable to corporations that filed reports deemed by the attorney general to be incomplete,

erroneous or otherwise deficient. (b) No corporation shall be included in any list prepared pursuant to paragraph (a) of this section unless (1) in each of the last two years during which such corporation failed to file its annual report, the attorney general has sent to such corporation by certified mail return receipt requested notice that the corporation has failed to file and has three months from the date of such notice to file all delinquent reports and complete all registration requirements, provided, however, that if the last known address of record of the corporation is not within the United States, the notice to such corporation shall be sent by any other reasonable means, (2) the second such notice was sent at least six months prior to the date of the certification required by paragraph (a) of this section and (3) the attorney general used reasonable diligence to identify a current address for the corporation. (c) If the secretary of state, upon comparing the names so certified with his or her records, shall discover error, he or she may return the list to the attorney general for correction. (d) The secretary of state shall make a proclamation under his or her hand and seal of office as to each list received from the attorney general declaring any corporations whose names are included in such list to be dissolved and their certificates of incorporation to be forfeited. The secretary shall file the original proclamation in his or her office and shall publish a copy thereof in the state register no later than three months following receipt of the list by him or her. (e) Upon the publication of such proclamation in the manner proscribed in paragraph (d) of this section, each corporation named therein shall be deemed dissolved without further legal proceedings. (f) The secretary of state shall mail a copy of the state register containing such proclamation to the clerk of each county in the state. The county clerk shall file the copy without charge but need not record it. (g) The names of all corporations so dissolved shall be reserved for a period of one year immediately following the publication of the proclamation, and during such period no domestic business corporation, not-for-profit corporation, limited liability company or limited partnership shall be formed under a name the same as any name so reserved or which may not be distinguished from any name so reserved,

nor shall any foreign business corporation, not-for-profit corporation, limited liability company or limited partnership, within such period, be authorized to do business or conduct activities in this state under a name the same as any name so reserved or which may not be distinguished from such any name so reserved. (h) Any corporation so dissolved may file in the department of state a written consent by the attorney general to the reinstatement of the corporation. Such written consent shall be given if the attorney general shall have received all annual financial reports and fees required by article 7-A of the executive law and article 8 of the estates, powers and trusts law and penalties and interest charges related thereto have been paid or waived. The filing of such consent shall have the effect of annulling all of the proceedings theretofore taken under the provisions of this section for the dissolution of such corporation with the same force and effect as if such proclamation had not been made or published. The fee of the secretary of state for filing such consent shall be fifty dollars. No such consent shall be filed if the name of a domestic not-for-profit corporation, business corporation, not-for-profit corporation, limited liability company or limited partnership formed later than one year after the publication of the proclamation of dissolution, or the name or fictitious name or of a foreign business corporation, not-for-profit corporation, limited liability company or limited partnership which has obtained authority to do business or conduct activities in the state later than one year after such proclamation, or name which has been reserved later than one year after such proclamation, is the same as or may not be distinguished from the name of the corporation filing such consent unless such corporation simultaneously files in the department of state a certificate of amendment to change the name of such corporation. Such certificate of amendment shall be executed in like manner as if such corporation had not been dissolved. (i) If, after the publication of such proclamation, it shall appear that the name of any corporation was erroneously included therein, the attorney general shall so certify to the secretary of state, and the secretary of state shall make appropriate entry on the records of the department of state, which entry shall have the effect of annulling all of the proceedings theretofore taken under the provisions of this

section for the dissolution of such corporation with the same force and effect as if such proclamation had not been made or published. (j) Whenever a corporation shall have complied with paragraph (h) of this section or whenever the procedures specified in paragraph (i) of this section shall have been taken, the secretary of state shall publish a notice thereof in the state register and shall send a copy of such notice to the county clerk of the county in which, according to his or her records, the office of the corporation is located. Such county clerk shall file such copy and make appropriate entry on his or her records without charge. (k) If, after the dissolution of any corporation, assets of the corporation are located, the attorney general shall act with respect to such assets in accordance with this article and article 11 (Judicial dissolution).

ARTICLE 11 JUDICIAL DISSOLUTION Section 1101. Attorney-general's action for judicial dissolution. 1102. Judicial dissolution; petition by directors or members; petition in case of deadlock among directors or members. 1103. Contents of petition for judicial dissolution. 1104. Order to show cause; issuance; publication, service, filing. 1105. Amending papers. 1106. Referee. 1107. Hearing and decision. 1108. Application for final order. 1109. Judgment or final order of dissolution. 1110. Venue. 1111. Preservation of assets; appointment of receiver. 1112. Certain sales, transfers, security interests and judgments void. 1113. Injunction. 1114. Discontinuance of action or special proceeding. 1115. Applicability of other provisions.

Article 11

§ 1101 Attorney-general's action for judicial dissolution.

§ 1101. Attorney-general's action for judicial dissolution. (a) The attorney-general may bring an action for the dissolution of a corporation upon one or more of the following grounds: (1) That the corporation procured its formation through fraudulent misrepresentation or concealment of a material fact. (2) That the corporation has exceeded the authority conferred upon it by law, or has violated any provision of law whereby it has forfeited its charter, or carried on, conducted or transacted its business in a persistently fraudulent or illegal manner, or by the abuse of its powers contrary to public policy of the state has become liable to be dissolved. (b) An action under this section is triable by jury as a matter or right. (c) The enumeration in paragraph (a) of grounds for dissolution shall not exlude actions or special proceedings by the attorney-general or other state officials for the annulment or dissolution of a corporation for other causes as provided in this chapter or in any other statute of this state.

§ 1102 Judicial dissolution; petition by directors or members; petition

§ 1102. Judicial dissolution; petition by directors or members; petition in case of deadlock among directors or members. (a) A petition for the judicial dissolution of a corporation may be presented: (1) By a majority of the directors then in office, or by the members, or such of them as are designated for such purpose, when authorized to do so by a resolution adopted by majority vote as provided in paragraph (c) of section 613 (Vote of members) (provided that, notwithstanding any provision of the certificate of incorporation or the by-laws, a members' meeting to consider such a resolution may be called, no more often than once in any period of twelve consecutive months, by ten percent of the members entitled to vote thereon or by such lesser percentage or number of members as may be provided in the certificate of incorporation or by-laws), in the following cases: (A) The assets of the corporation are not sufficient to discharge its liabilities.

(B) Dissolution will be beneficial to the members. (2) By ten percent of the total number of members or by any director, in the following cases: (A) The directors are so divided respecting the management of the corporation's affairs that the votes required for action by the board cannot be obtained. (B) The members are so divided that the votes required for the election of directors cannot be obtained. (C) There is internal dissension and two or more factions of members are so divided that dissolution would be beneficial to the members. (D) The directors or members in control of the corporation have looted or wasted the corporate assets, have perpetuated the corporation solely for their personal benefit, or have otherwise acted in an illegal, oppressive or fraudulent manner. (E) The corporation is no longer able to carry out its purposes. (b) In any proceeding for judicial dissolution the attorney-general shall be a necessary party.

§ 1103 Contents of petition for judicial dissolution.

§ 1103. Contents of petition for judicial dissolution.

A petition for dissolution shall specify the section, and the subparagraph or subparagraphs thereof, under which it is authorized and state the reasons why the corporation should be dissolved. It shall be verified by the petitioner or by one of the petitioners.

§ 1104 Order to show cause; issuance; publication, service, filing.

§ 1104. Order to show cause; issuance; publication, service, filing. (a) Upon the presentation of such a petition, the court shall make an order requiring the corporation and all persons interested in the corporation to show cause before it, or before a referee designated in the order, at a time and place therein specified, not less than four weeks after the granting of the order, why the corporation should not be dissolved. In connection therewith, the court may order the corporation, its officers and directors, to furnish the court with a schedule of all information, known or ascertainable with due diligence by them, deemed pertinent by the court, including a statement of the

corporate assets and liabilities, and the name and address of each member and of each creditor and claimant, including any with unliquidated or contingent claims and any with whom the corporation has unfulfilled contracts. (b) A copy of the order to show cause shall be published as prescribed therein, at least once in each of the three weeks before the time appointed for the hearing thereon, in one or more newspapers, specified in the order, of general circulation in the county in which the office of the corporation is located at the date of the order. (c) A copy of the order to show cause shall be served upon the state tax commission and the corporation and upon each person named in the petition, or in any schedule provided for in paragraph (a), as a member, creditor or claimant, except upon a person whose address is stated to be unknown and cannot with due diligence be ascertained by the corporation. The service shall be made personally, at least ten days before the time appointed for the hearing, or by mailing a copy of the order, postage prepaid, at least twenty days before the time so appointed, addressed to the person to be served at his last known address. (d) A copy of the order to show cause and the petition shall be filed, within ten days after the order is entered, with the clerk of the county where the office of the corporation is located at the date of the order. A copy of each schedule furnished to the court under this section shall, within ten days thereafter, be filed with such clerk. (e) Publication, service and filing provided for in this section shall be effected by the corporation or such other persons as the court may order.

§ 1105 Amending papers.

§ 1105. Amending papers.

At any stage, before final order, the court may grant an order amending the petition or any other paper filed in the action or special proceeding, with like effect as though originally filed as amended, or otherwise as the court may direct.

§ 1106 Referee.

§ 1106. Referee.

If a referee was not designated in the order to show cause, the court, in its discretion, may appoint a referee when or after the order is returnable. The court may at any time appoint a successor referee.

§ 1107 Hearing and decision.

§ 1107. Hearing and decision.

At the time and place specified in the order to show cause, or at any other time and place to which the hearing is adjourned, the court or the referee shall hear the allegations and proofs of the parties and determine the facts. The decision of the court or the report of the referee shall be made and filed with the clerk of the court with all convenient speed.

§ 1108 Application for final order.

§ 1108. Application for final order.

When the hearing is before a referee, a motion for a final order must be made to the court upon notice to each party to the action or special proceeding who has appeared therein. The notice of motion may be served as prescribed for the service of papers upon an attorney in an action in such court. When the hearing is before the court, a motion for a final order may be made at the hearing or at such time and upon such notice as the court prescribes.

§ 1109 Judgment or final order of dissolution.

§ 1109. Judgment or final order of dissolution. (a) In an action or special proceeding under this article if, in the court's discretion, it shall appear that the corporation should be dissolved, it shall make a judgment or final order dissolving the corporation. (b) In making its decision, the court shall take into consideration the following criteria: (1) In an action brought by the attorney-general, the interest of the public is of paramount importance. (2) In a special proceeding brought by directors or members, the

benefit to the members of a dissolution is of paramount importance. (c) If the judgment or final order shall provide for a dissolution of the corporation, the court may, in its discretion, provide therein for the distribution of the property of the corporation to those entitled thereto according to their respective rights. Any property of the corporation described in subparagraph one of paragraph (c) of section 1002-a (Carrying out the plan of dissolution and distribution of assets) shall be distributed in accordance with that section. (d) The clerk of the court or such other person as the court may direct shall transmit certified copies of the judgment or final order of dissolution to the department of state and to the clerk of the county in which the office of the corporation was located at the date of the judgment or order. Upon filing by the department of state, the corporation shall be dissolved. (e) The corporation shall promptly thereafter transmit a certified copy of the judgment or final order to the clerk of each other county in which its certificate of incorporation was filed.

§ 1110 Venue.

§ 1110. Venue.

An action or special proceeding under this article shall be brought in the supreme court in the judicial district in which the office of the corporation is located at the time of the service on the corporation of a summons in such action or of the presentation to the court of the petition in such special proceeding.

§ 1111 Preservation of assets; appointment of receiver.

§ 1111. Preservation of assets; appointment of receiver.

At any stage of an action or special proceeding under this article, the court may, in its discretion, make all such orders as it may deem proper in connection with preserving the property and carrying on the business of the corporation, including the appointment and removal of a receiver under article 12 (Receivership), who may be a director, officer or member of the corporation.

§ 1112 Certain sales, transfers, security interests and judgments void.

§ 1112. Certain sales, transfers, security interests and judgments void.

A sale, mortgage, conveyance or other transfer of, or the creation of a security interest in any property of a corporation made, without prior approval of the court, after service upon the corporation of a summons in an action, or of an order to show cause in a special proceeding, under this article in payment of or as security for an existing or prior debt or for any other or for no consideration, or a judgment thereafter rendered against the corporation by confession or upon the acceptance of any offer, shall be void as against such persons and, to such extent, if any, as the court shall determine.

§ 1113 Injunction.

§ 1113. Injunction. (a) At any stage of an action or special proceeding under this article, the court may, in its discretion, grant an injunction, effective during the pendency of the action or special proceeding or such shorter period as it may specify in the injunction, for one or more of the following purposes: (1) Restraining the corporation and its directors and officers from conducting any unauthorized activities and from exercising any corporate powers, except by permission of the court. (2) Restraining the corporation and its directors and officers from collecting or receiving any debt or other property of the corporation, and from paying out or otherwise transferring or delivering any property of the corporation, except by permission of the court. (3) Restraining the creditors of the corporation from beginning any action against the corporation, or from taking any proceedings in an action theretofore commenced, except by permission of the court. Such injunction shall have the same effect and be subject to the same provisions of law as if each creditor upon whom it is served was named therein.

§ 1114 Discontinuance of action or special proceeding.

§ 1114. Discontinuance of action or special proceeding.

An action or special proceeding for the dissolution of a corporation may be discontinued at any stage when it is established that the cause for dissolution did not exist or no longer exists. In such event, the court shall dismiss the action or special proceeding and direct any receiver to redeliver to the corporation all its remaining property.

§ 1115 Applicability of other provisions.

§ 1115. Applicability of other provisions. (a) Subject to the provisions of this article, the provisions of sections 1006 (Corporate action and survival of remedies after dissolution), 1007 (Notice to creditors; filing or barring claims) and 1008 (Jurisdiction of supreme court to supervise dissolution and liquidation) shall apply to a corporation dissolved under this article. (b) Any orders provided for in section 1008, may be made at any stage of an action or special proceeding for dissolution of a corporation under this article, and if the corporation is dissolved under this article, the court may retain jurisdiction for the purpose of making such orders, after the dissolution, in such action or special proceeding. The court may also make such orders in separate special proceedings, as provided in section 1008. (c) Notice to creditors and claimants, provided for in section 1007, may also be given, by order of the court, at any stage of an action or special proceeding for dissolution of a corporation under this article.

ARTICLE 12 RECEIVERSHIP Section 1201. Action by judgment creditor for sequestration. 1202. Appointment of receiver of property of a domestic or foreign corporation. 1203. Temporary and permanent receiver. 1204. Oath and security. 1205. Designation of depositories by court. 1206. Powers of permanent receiver. 1207. Duties of receiver upon appointment. 1208. Penalty for concealing property from receiver. 1209. Recovery of assets.

1210. Order of payment by receiver.
1211. Final distribution by receiver.
1212. Disposition of moneys retained; surplus; unclaimed distributions.
1213. Omission or default of receiver.
1214. Application by attorney-general for removal of receiver and to close receivership.
1215. Resignation by receiver; filling any vacancy.
1216. Final accounting; notice; duty of attorney-general.
1217. Commissions.
1218. Special provisions relating to actions or special proceedings against foreign corporations.

Article 12

§ 1201 Action by judgment creditor for sequestration.

§ 1201. Action by judgment creditor for sequestration.

Where final judgment for a sum of money has been rendered against a corporation, and an execution issued thereupon to the sheriff of the county where the corporation conducts its activities, or where its office is located, has been returned wholly or partly unsatisfied, the judgment creditor may maintain an action to procure a judgment sequestrating the property of the corporation and providing for a distribution thereof.

§ 1202 Appointment of receiver of property of a domestic or foreign

§ 1202. Appointment of receiver of property of a domestic or foreign corporation. (a) A receiver of the property of a corporation can be appointed only by the court, and in one of the following cases: (1) An action or special proceeding brought under article 10 (Non-judicial dissolution) or 11 (Judicial dissolution). (2) An action under section 1201 (Action by judgment creditor for sequestration). (3) An action brought by the attorney-general under section 112 (Actions or special proceedings by attorney-general), or brought by the attorney-general or by a member to preserve the assets of a corporation, which has no officer within this state qualified to administer them.

(4) An action to preserve the assets in this state, of any kind, tangible or intangible, of a foreign corporation which has been dissolved, nationalized or its authority or existence otherwise terminated or cancelled in the jurisdiction of its incorporation or which has ceased to conduct its activities, brought by any creditor or member of such corporation or by one on whose behalf an order of attachment against the property of such corporation has been issued. (5) An action brought for the foreclosure of a mortgage upon property of the corporation, where the mortgage debt or the interest thereon has remained unpaid for at least thirty days after payment demanded and where either the income of the property is specifically mortgaged or the property itself appears to be insufficient to pay the mortgage debt. A receiver appointed under this subparagraph shall be receiver only of the property upon which the mortgage is being foreclosed. (6) An application of the regents of the university, in aid of the liquidation of a corporation whose dissolution they contemplate or have decreed; or on the application of the trustees of such a corporation, on notice to the regents. (b) A receiver shall be subject to the control of the court at all times and may be removed by the court at any time. (c) All actions or special proceedings brought by or against a receiver shall have a preference upon the calendars of all courts next in order to actions or special proceedings brought by the people of the state of New York.

§ 1203 Temporary and permanent receiver.

§ 1203. Temporary and permanent receiver. (a) At any stage before final judgment or final order in an action or special proceeding brought under this article, the court may appoint one or more receivers of the property of the corporation or of the property in this state of a foreign corporation against which an action has been brought under subparagraph (4) of paragraph (a) of section 1202 of this article. Notice of an application shall be given to the attorney-general, to each governmental body or officer whose consent is required for the dissolution of such corporation, and to such other persons and in such manner as the court directs. The determination by the court of the necessity or advisability of appointing a receiver or

an attorney for a receiver, and the allowance of expenses, commissions or compensation to the receiver or such attorney, shall be subject to review on appeal. This provision shall not affect any other right to review on appeal. (b) A receiver appointed by or under a final judgment or order in an action or special proceeding, or a temporary receiver who is continued by the final judgment or order, is a permanent receiver. The court may confer upon a temporary receiver the powers, and subject the temporary receiver to the duties of a permanent receiver, or so much thereof as it deems proper.

§ 1204 Oath and security.

§ 1204. Oath and security.

A receiver, before entering upon his or her duties, shall: (a) Take and subscribe an oath that he or she will faithfully, honestly and impartially discharge the trust committed to him or her, and the oath shall be filed with the clerk of the court in which the action or special proceeding is pending. (b) File with the clerk of such court a bond to the people, with at least two sufficient sureties or a bond executed by any fidelity or surety company authorized by the laws of this state to transact business, in a penalty fixed by the court appointing him or her, conditioned for the faithful discharge of his or her duties as receiver. The court may at any time direct a receiver to give a new bond with new sureties and with like condition.

§ 1205 Designation of depositories by court.

§ 1205. Designation of depositories by court.

All orders appointing a receiver of a corporation shall designate therein one or more places of deposit, wherein all funds of the corporation not needed for immediate disbursement shall be deposited and no other deposits and no investment of such funds shall be made, except upon the order of the court.

§ 1206 Powers of permanent receiver.

§ 1206. Powers of permanent receiver. (a) A permanent receiver, upon qualifying under section 1204 (Oath and security), shall be vested with title to all the property of the corporation wherever situated or of the property in this state of a foreign corporation against which an action or special proceeding has been brought under subparagraph (a) (4) of section 1202 (Appointment of receiver of property of a domestic or foreign corporation), for the benefit of the creditors and members of the corporation. (b) A permanent receiver shall have the power: (1) To sue in his own name or otherwise for the recovery of the property, debts and causes of action of the corporation. No set-off or counterclaim shall be allowed in any such action for any demand unless it was owing by the corporation to the defendant before the commencement of the action or special proceeding in which the receiver was appointed or unless it shall have been incurred by the receiver subsequent to his appointment. (2) To sell at public or private sale all the property vested in the permanent receiver, in such manner and on such terms and conditions as the court shall direct, and to make necessary transfers and conveyances thereof. (3) To examine on oath, to be administered by the permanent receiver, any person concerning any matter pertaining to or affecting the receivership. (4) To settle or compound any demands by or against the receivership. (c) When more than one receiver is appointed, all provisions in this article in reference to one receiver shall apply to them. (d) When more than one receiver is appointed, the debts and property of the corporation may be collected and received by any of them; when more than two receivers are appointed, the powers and rights conferred on them may be exercised by any two. (e) When more than one receiver is appointed, the survivor or survivors of such receivers shall have all the powers and rights of the receivers.

§ 1207 Duties of receiver upon appointment.

§ 1207. Duties of receiver upon appointment. (a) Upon appointment and qualification, a receiver shall have the

following duties: (1) To give immediate notice of his or her 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 (4) of paragraph (a) of section 1202 (Appointment of receiver of property of a domestic or foreign corporation), in a newspaper of general circulation as directed by the court, requiring: (A) All persons indebted to the corporation to render an account of all debts owing by them to the corporation and to pay the same to the receiver at a specified place and by a specified day. (B) All persons having in their possession any property of the corporation 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. Whenever a receiver is appointed in dissolution proceedings under article 10 (Non-judicial dissolution) or article 11 (Judicial dissolution), section 1007 (Notice to creditors by corporations intending to dissolve; filing or barring claims) of this chapter shall apply and shall control the giving of notice to creditors and claimants and the filing and barring of claims. (2) To call a general meeting of the creditors of the corporation within four months from the date of his appointment by a notice to be published as directed in subparagraph (a) (1), setting forth the time and place of such meeting, which time shall be not more than two months, nor less than one month after the first publication of such notice. At such meeting, or at an adjournment thereof, the receiver shall present a statement of all accounts and demands for and against the corporation, its subsisting contracts, and the money and other assets in his hands. (3) To keep true books of account of all moneys received and expended by him as receiver, which books shall be open for inspection at reasonable times by creditors or other persons interested therein. On or

before the first day of February in each year, for the preceding calendar year, and at such other times as the court shall direct, the receiver shall file with the clerk of the court by which he was appointed a verified statement showing the assets received, the disposition thereof, the money on hand, all payments made, specifying the persons to whom paid and the purpose of the payments, the amount necessary to be retained to meet necessary expenses and claims against the receiver, and the distributive share in the remainder of each person interested therein. A copy of such statement shall be served by the receiver upon the attorney-general within five days after the filing thereof.

§ 1208 Penalty for concealing property from receiver.

§ 1208. Penalty for concealing property from receiver.

Any persons having possession of property belonging to the corporation, who shall wrongfully withhold such property from the receiver after the day specified in the notice given under section 1207 (Duties of receiver upon appointment), shall forfeit to the receiver double the value of such property, and the same may be recovered in an action by the receiver.

§ 1209 Recovery of assets.

§ 1209. Recovery of assets. (a) Whenever a receiver, by verified petition to the supreme court at a special term held in the judicial district in which the receiver was appointed, shall show that he or she has good reason to believe that any person has in his or her possession or under his or her control, or has wrongfully concealed, withheld or disposed of, any property of the corporation, or that any person can testify concerning such facts, the court, with or without notice, shall make an order requiring such person to appear before the court or a referee, at a time and place designated, and submit to an examination concerning such facts. In such order, or at any time thereafter, in its discretion, the court may enjoin and restrain such person from disposing of any property of the corporation in his or her possession or under his or her control. (b) In any examination under such order, the court may confer immunity

in accordance with the provisions of section six hundred nineteen-c of the code of criminal procedure; provided that no immunity shall be conferred except upon twenty-four hours prior written notice to the appropriate district attorney having an official interest therein. (c) A person so ordered to appear shall be entitled to the same fees and mileage, to be paid at the time of serving the order, as are allowed by law to witnesses subpoenaed to attend and testify in an action in the supreme court, and shall be subject to the same penalties upon failure to appear and testify in obedience to such order as are provided by law in the case of witnesses who fail to obey a subpoena to appear and testify in an action. (d) A person appearing for examination in obedience to such order shall be sworn, and shall be entitled to be represented on such examination by counsel, and may be cross-examined, or may make a voluntary statement in his own behalf concerning the subject of his examination. (e) The testimony taken under such order shall be signed and sworn to by the person examined, and be filed in the office of the clerk of the county where the action or proceeding is pending. If it shall appear that any person is wrongfully concealing or withholding, or has in his or her possession or under his or her control, any property of the corporation, on notice to such person, the court may make an order requiring such person forthwith to deliver it to the receiver, subject to the further order of the court.

§ 1210 Order of payment by receiver.

§ 1210. Order of payment by receiver. (a) Laborers' wages shall be preferred claims and entitled to payment before any other creditors out of the assets of the corporation in excess of valid prior liens or encumbrances. (b) The receiver shall subject to any prior liens or encumbrances distribute the residue of the moneys in his hands, among the creditors whose claims have been proved and allowed, as follows: (1) All debts due by such corporation to the United States, and all debts entitled to a preference under the laws of the United States. (2) All debts that may be owing by the corporation as trustee. (3) Judgments against the corporation, to the extent of the value of

the real property on which they are liens. (4) All other creditors in proportion to their respective demands, without preference to specialty debts.

§ 1211 Final distribution by receiver.

§ 1211. Final distribution by receiver. (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 general circulation in the county where the office of the corporation is located and posted prominently and continuously for two consecutive weeks on the homepage of any website maintained by the corporation. (b) A creditor or claimant who failed to prove his claim before the first distribution and who proves it before the final one shall receive the sum he would have been entitled to on the first distribution before any further distribution shall be made to other creditors or claimants. (c) Unless the court shall otherwise direct, no other distribution shall be made thereafter to creditors, except to those having pending actions against the corporation or the receiver. (d) After the final distribution to creditors, the receiver shall not be answerable to any creditor or claimant, unless his claim shall have been proved before or at the time specified in the notice of the final distribution.

§ 1212 Disposition of moneys retained; surplus; unclaimed

§ 1212. Disposition of moneys retained; surplus; unclaimed distributions. (a) When any action pending at the time of final distribution shall be terminated, the receiver shall apply the moneys retained by the receiver to the payment of the amount recovered, and the receiver's necessary charges and expenses incurred therein. (b) After the final distribution to creditors and after deducting the receiver's charges and expenses, the receiver shall distribute any surplus in the manner prescribed in section 1002-a of this chapter or, if dissolution of the corporation is not involved, in such manner as the

court shall order.

§ 1213 Omission or default of receiver.

§ 1213. Omission or default of receiver.

Upon notice to the attorney-general and upon such notice to creditors or others interested as the court shall direct, the court may, in the furtherance of justice, relieve a receiver from any omission or default, on such conditions as may be imposed, and, on compliance therewith, confirm the receiver's action.

§ 1214 Application by attorney-general for removal of receiver and to

§ 1214. Application by attorney-general for removal of receiver and to close receivership. (a) Whenever he or she deems it to be to the advantage of the members, creditors or other persons interested in the assets of any corporation for which a receiver has been appointed, the attorney-general may move: (1) For an order removing the receiver and appointing another receiver; (2) To compel the receiver to account; (3) For such other and additional orders as may facilitate the closing of the receivership.

§ 1215 Resignation by receiver; filling any vacancy.

§ 1215. Resignation by receiver; filling any vacancy. (a) A receiver may petition the appointing court for an order to show cause why he or she should not be permitted to resign. (b) The petition shall be accompanied by a verified account of all the assets of the corporation received by the receiver, of all payments or other disposition thereof made by the receiver, of the remaining assets of the corporation in respect to which the receiver was appointed receiver and the situation of the same, and of all his or her transactions as receiver. Thereupon, the court shall grant an order directing notice to be given to the sureties on his or her 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 be published once in each week

for six successive weeks in one or more newspapers as the court shall direct. If it shall appear that the proceedings of the receiver in the discharge of his or her trust have been fair and honest and that there is no good cause to the contrary, the court shall make an order permitting such receiver to resign. Thereupon the receiver shall be discharged and his or her powers as receiver shall cease, but he or she shall remain subject to any liability incurred prior to the making of such order. The court, in its discretion, may require the expense of such proceeding to be paid by the receiver presenting the petition. (c) Any vacancy created by resignation, removal, death or otherwise, may be filled by the court, and the property of the receivership shall be delivered to the remaining receivers or, if there are none, to the successor appointed by the court. The court may summarily enforce delivery by order in the action or special proceeding in which the receiver was appointed.

§ 1216 Final accounting; notice; duty of attorney-general.

§ 1216. Final accounting; notice; duty of attorney-general. (a) Within one year after qualifying, the receiver shall apply to the court for a final settlement of his accounts and for an order for distribution, or, upon notice to the attorney-general and to any governmental body or officer whose consent is required for the dissolution of the corporation, for an extension of time, setting forth the reasons therefor. If the receiver has not so applied for a settlement of his accounts or for such extension of time, the attorney-general or any creditor or member may apply for an order that the receiver show cause why an accounting and distribution should not be had, and after the expiration of eighteen months from the time the receiver qualified, it shall be the duty of the attorney-general to apply for such an order on notice to the receiver. (b) Before presenting a final account, the receiver shall give notice of his intention to file it by publication, under subparagraph (a)(1) of section 1207 (Duties of receiver upon appointment), setting forth the time and place of filing and presentation to the court. The receiver shall also give not less than eight days' written notice to the sureties on his official bond. (c) Upon presentation of such account, the court shall hear the

allegations, objections and proofs of all parties interested and allow or disallow such account, in whole or in part, and make a final order. The court may refer the account and the hearing, in whole or in part, to a referee who shall report thereon to the court.

§ 1217 Commissions.

§ 1217. Commissions. (a) A receiver shall be entitled, in addition to his necessary expenses, to such commissions upon the sums received and disbursed as may be allowed by the court, as follows: (1) On the first twenty thousand dollars, not exceeding five percent; (2) On the next eighty thousand dollars, not exceeding two and one-half percent; and (3) On the remainder, not exceeding one percent. (b) If the commissions of the receiver so computed do not amount to one hundred dollars, the court in its discretion may allow such sum not exceeding one hundred dollars as shall be reasonable. (c) When more than one receiver shall be appointed, the compensation herein provided shall be divided between them, as the court directs.

§ 1218 Special provisions relating to actions or special proceedings

§ 1218. Special provisions relating to actions or special proceedings against foreign corporations. (a) In any action or special proceeding brought against a foreign corporation under this article, the following provisions shall apply: (1) Service of the summons in such action may be made personally within the state of New York, by delivery of the same to any officer or director of the corporation, or by publication pursuant to an order obtained as hereinafter provided. (2) An order directing service by publication of the summons shall be made upon application of a plaintiff in any such action and shall be founded upon a verified complaint, alleging that the defendant is a foreign corporation and has or may have or may be entitled to assets, credits, choses in action or other property, tangible or intangible within the state and that such corporation has been dissolved, nationalized or that its authority or existence has been terminated or cancelled in the jurisdiction of its incorporation, or that it has

ceased to conduct its activities, and upon an affidavit reciting that personal service of the summons cannot be effected within the state with due diligence and that a temporary receiver of its property within the state of New York has been appointed pursuant to this article in such action and that a copy of the order appointing the receiver has been served personally by or on behalf of such receiver upon a person, firm or corporation holding property, tangible or intangible, of the said foreign corporation, or against whom a claim or demand in favor of such foreign corporation exists and that demand therefor has been made upon such person, firm or corporation by or on behalf of such receiver. (3) The order directing service of the summons shall require the publication thereof in a newspaper published in the state of New York in the English language at least once a week for four successive weeks, and shall also require the mailing on or before the date of the first publication of a copy of the summons, complaint and order to the corporation at its last known principal or head office in the state or country of its incorporation. (4) In any such action, the summons shall be served personally or an order directing service thereof by publication shall be obtained and the first publication thereof made within sixty days after the appointment of the temporary receiver, and if served by publication, the service shall be made complete by the continuance thereof. (5) If served by publication, service of the summons shall be deemed complete on the date of the last publication. The action shall be deemed commenced upon the issuance of the summons. The order appointing the receiver and the papers upon which the same is granted shall be filed in the office of the clerk of the court where the action is triable within ten days after the order is made. (6) In the event that the defendant defaults in answering, or if after a trial the court is satisfied that the defendant has ceased to conduct its activities by reason of any thing or matter whatsoever, or that it has been dissolved, nationalized, or its authority or existence has been otherwise terminated or cancelled, the court shall thereupon direct judgment, appointing a permanent receiver and directing the receiver to liquidate the assets, credits, choses in action and property, tangible and intangible, in the state of New York of the said defendant, in the manner provided in this article.

(7) The time between the cessation of its activities by the corporation or its dissolution or nationalization or the termination or cancellation of its authority or existence and the appointment of a receiver in this state pursuant to this article, whichever time is longer, plus three years after such appointment, shall not be a part of the time limited by domestic or foreign laws for the commencement of an action or for the assertion of a claim therein by or on behalf of or against said corporation or by or against said receiver, whether or not said action or claim has heretofore been barred by any statute of limitations of this state or of any other state or country. (8) The existence of and causes of action of or against such corporation existing at the time of its dissolution, nationalization, or the termination or cancellation of its authority or existence, or arising thereafter, shall not be deemed ended, abated or affected thereby, nor shall actions brought by or against such corporation or a receiver appointed hereunder or any remedy therein be deemed to have ended or abated or to have been affected by reason of such dissolution, nationalization, or termination or cancellation of its authority or existence. This provision shall apply to all property, tangible and intangible, debts, demands, and choses in action of such corporation within the state of New York, and to all litigation heretofore or hereafter brought in the courts of the state or of the United States to which the corporation or the receiver of said corporation appointed pursuant to the provisions of this article is a party. Any receiver appointed pursuant to the provisions of this article may be substituted for such corporation in any action or proceeding pending in the courts of the state or of the United States to which such corporation is a party and may intervene in any action or proceeding which relates to or affects any of the assets or claims of the corporation and revive any action which shall have heretofore or which may hereafter have abated, and such dissolution, nationalization, or termination or cancellation of its authority or existence in the jurisdiction of its incorporation, or any confiscatory law or decree thereof, shall not be deemed to have any extra-territorial effect or validity as to the property, tangible or intangible, debts, demands or choses in action of such corporation within the state or any debts or obligations owing to such corporation from persons, firms or corporations residing, sojourning or doing

business in the state. Nothing contained in this subdivision shall be deemed to validate claims for or causes of action or actions to recover property located in or moneys payable in the jurisdiction of incorporation which are unenforceable under the laws of such jurisdiction. (9) If any receiver or trustee has heretofore been appointed in this state for such corporation or its property in any action or proceeding, either before or supplementary to judgment, otherwise than in an action brought pursuant to this article, such receiver or trustee may be appointed or continued as the receiver in any action brought pursuant to the provisions of this article. (10) The appointment of a receiver or the pendency of an action for the appointment of such receiver, shall until such receiver shall be discharged or until such action shall have terminated, be a bar to any subsequent application or action for the appointment of a receiver of the assets of the same corporation. (11) An action shall be commenced within three years from the discovery by the plaintiff or his predecessor in interest, of any asset of said corporation in the state of New York.

ARTICLE 13 FOREIGN CORPORATIONS Section 1301. Authorization of foreign corporations. 1302. Application to existing authorized foreign corporations. 1303. Violations. 1304. Application for authority; contents. 1305. Application for authority; effect. 1306. Powers of authorized foreign corporations. 1307. Tenure of real property. 1308. Amendments or changes. 1309. Certificate of amendment; contents, effect. 1310. Certificate of change; contents. 1311. Surrender of authority. 1312. Termination of existence. 1313. Actions or special proceedings by unauthorized foreign corporations.

1314. Actions or special proceedings by foreign corporations.
1315. Actions or special proceedings against foreign corporations.
1316. Record of members.
1317. Voting trust records.
1318. Liabilities of directors and officers of foreign corporations.
1319. Liability of foreign corporations for failure to disclose required information.
1320. Applicability of other provisions.
1321. Exemption from certain provisions.

Article 13

§ 1301 Authorization of foreign corporations.

§ 1301. Authorization of foreign corporations. (a) A foreign corporation shall not conduct activities in this state until it has been authorized to do so as provided in this article. A foreign corporation may be authorized to conduct in this state any activities which may be conducted lawfully in this state by a domestic corporation, to the extent that it is authorized to conduct such activities in the jurisdiction of its incorporation, but no other activities. (b) Without excluding other acts which may not constitute conducting activities in this state, a foreign corporation shall not be considered to be conducting activities in this state, for the purposes of this chapter, by reason of doing in this state any one or more of the following acts: (1) Maintaining or defending any action or proceeding, whether judicial, administrative, arbitrative or otherwise, or effecting settlement thereof or the settlement of claims or disputes. (2) Holding meetings of its directors or its members. (3) Maintaining bank accounts. (4) Maintaining offices or agencies only for the transfer, exchange and registration of its securities, or appointing and maintaining trustees or depositaries with relation to its securities. (5) Granting funds. (6) Distributing information to its members. (c) The specification in paragraph (b) does not establish a standard

for activities which may subject a foreign corporation to service of process under this chapter or any other statute of this state. (d) A foreign corporation whose corporate name is not acceptable for authorization pursuant to sections 301 and 302 of this chapter, may submit in its application for authority pursuant to section thirteen hundred four of this chapter, a fictitious name under which it shall do business in this state. A fictitious name submitted pursuant to this section shall be subject to the provisions of subparagraphs 2 through 9 of paragraph (a) of section 301 and section 302 of this chapter. A foreign corporation authorized to conduct activities in this state under a fictitious name pursuant to this section, shall use such fictitious name in all of its dealings with the secretary of state and in the conduct of its activities in this state. The provisions of section one hundred thirty of the general business law shall not apply to any fictitious name filed by a foreign corporation pursuant to this section.

§ 1302 Application to existing authorized foreign corporations.

§ 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 whether it is a charitable corporation or a non-charitable corporation and in the absence of such amendment an authorized foreign corporation shall be a 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.

§ 1303 Violations.

§ 1303. Violations.

The attorney-general may bring an action to restrain a foreign corporation from conducting in this state without authority any activities for the conduct of which it is required to be authorized in the state, or from conducting in this state any activities not set forth in its application for authority or certificate of amendment filed by the department of state. The attorney-general may bring an action or special proceeding to annul the authority of a foreign corporation to conduct in this state any activities not set forth in its application for authority or certificate of amendment or the authority of which was obtained through fraudulent misrepresentation or concealment of a material fact or to enjoin or annul the authority of any foreign corporation which within this state contrary to law has done or omitted any act which if done by a domestic corporation would be a cause for its dissolution under section 1101 (Attorney-general's action for judicial dissolution) or to annul the authority of a foreign corporation that has been dissolved or has had its authority or existence otherwise terminated or cancelled in the jurisdiction of its incorporation. The attorney-general shall deliver a certified copy of the order of annulment to the department of state. Upon the filing thereof by the department of state the authority of the foreign corporation to conduct activities in this state shall be annulled. The secretary of state shall continue as agent of the foreign corporation upon whom process against it may be served in any action or special proceeding based upon any liability or obligation incurred by the foreign corporation within the state prior to the filing of the certified copy of the order of annulment by the department of state.

§ 1304 Application for authority; contents.

§ 1304. Application for authority; contents. (a) A foreign corporation may apply for authority to conduct activities in this state by filing an application entitled "Application for authority of ........ (name of corporation) under section 1304 of the Not-for-Profit Corporation Law." The application shall be signed and delivered to the department of state. It shall set forth: (1) The name of the foreign corporation.

(2) The fictitious name the corporation agrees to use in this state pursuant to section 1301 of this chapter, if applicable. (3) The jurisdiction and date of its incorporation. (4) That the corporation is a foreign corporation as defined in subparagraph (7) of paragraph (a) of section 102 (Definitions) of this chapter, whether it would be a charitable corporation or non-charitable corporation if formed in this state; a statement of its purposes to be pursued in this state and of the activities which it proposes to conduct in this state; and a statement that it is authorized to conduct those activities in the jurisdiction of its incorporation. (5) The county within this state in which its office is to be located. (6) A designation of the secretary of state as its agent upon whom process against it may be served and the post office address within or without this state to which the secretary of state shall mail a copy of any process against it served upon him. (7) If it is to have a registered agent, the name and address of the agent within this state and a statement that the registered agent is to be its agent upon whom process against it may be served. (8) A statement that the foreign corporation has not, since its incorporation or since the date its authority to conduct activities in this state was last surrendered, done any act in this state, except as set forth in paragraph (b) of section 1301 (Authorization of foreign corporations); or in lieu of such statement the consent of the state tax commission to the filing of the application shall be attached thereto. (9) Any provision required by any governmental body or officer or other person or body as a condition for giving the consent or approval required for the filing of such application for authority, provided such provision is not inconsistent with this chapter or any other statute of this state. A corporation whose statement of purposes to be conducted in this state specifically includes the establishment or operation of a child day care center, as that term is defined in section three hundred ninety of the social services law, shall provide a certified copy of any application for authority and any amendment thereto involving such corporation to the office of children and family services within thirty days after receipt of confirmation of the filing of such application or amendment with the department of state. (b) Attached to the application for authority shall be a certificate

by an authorized officer of the jurisdiction of its incorporation that the foreign corporation is an existing corporation. If such certificate is in a foreign language, a translation thereof under oath of the translator shall be attached thereto. (c) If the application for authority sets forth any purpose or activity for which a domestic corporation could be formed only with the consent or approval of any governmental body or officer, or other person or body under section 404 (Approvals, notices and consents) of this chapter, such consent or approval shall be endorsed thereon or annexed thereto. (d) If the application for authority sets forth any purpose or activity requiring a domestic corporation to provide notice of the filing of a certificate of incorporation to any person or entity under section 404 (Approvals, notices and consents) of this chapter, then the corporation shall send by certified mail, return receipt requested, a certified copy of the certificate of authority to such person or entity within ten business days after the corporation receives confirmation from the department of state that the certificate has been accepted for filing.

§ 1305 Application for authority; effect.

§ 1305. Application for authority; effect.

Upon filing by the department of state of the application for authority the foreign corporation shall be authorized to conduct in this state any activities set forth in the application. Such authority shall continue so long as the corporation retains its authority to conduct such activities in the jurisdiction of its incorporation and its authority to conduct activities in this state has not been surrendered, suspended or annulled in accordance with law.

§ 1306 Powers of authorized foreign corporations.

§ 1306. Powers of authorized foreign corporations.

An authorized foreign corporation shall have such powers as are permitted by the laws of the jurisdiction of its incorporation but no greater powers than those of a domestic corporation formed for the

purposes set forth in the application for authority.

§ 1307 Tenure of real property.

§ 1307. Tenure of real property.

A foreign corporation may acquire and hold real property in this state in furtherance of its corporate purposes and may convey the same by deed or otherwise in the same manner as a domestic corporation.

§ 1308 Amendments or changes.

§ 1308. Amendments or changes. (a) An authorized foreign corporation may amend or change its application for authority from time to time in any and as many of the following respects as may be desired if the amendments contain only such provisions as might be lawfully contained in an application for authority at the time of making such amendment: (1) To change its corporate name if such change has been effected under the laws of the jurisdiction of its incorporation. (2) To change its fictitious name filed pursuant to paragraph (d) of section 1301 of this chapter, to another fictitious name, if its true corporate name is not available for use in this state. (3) To delete its fictitious name filed pursuant to paragraph (d) of section 1301 of this chapter, if its true corporate name is now available for use in this state. (4) To adopt a fictitious name when the corporate name is changed and is not available in this state. (5) To enlarge, limit or otherwise change the activities which it proposes to conduct in this state. (6) To change the location of its office in this state. (7) To specify or change the post office address to which the secretary of state shall mail a copy of any process against it served upon him. (8) To make, revoke or change the designation of a registered agent or to specify or change his address.

§ 1309 Certificate of amendment; contents, effect.

§ 1309. Certificate of amendment; contents, effect.

(a) To accomplish such amendment a certificate, entitled "Certificate of amendment of application for authority of ....... (name of corporation) under section 1309 of the Not-for-Profit Corporation Law," shall be signed and delivered to the department of state. It shall set forth: (1) The name of the foreign corporation as it appears on the index of names of existing domestic and authorized foreign corporations of any 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 article. (2) The jurisdiction of its incorporation. (3) The date it was authorized to conduct activities in this state. (4) Each amendment effected thereby. (5) If the true corporate name of the foreign corporation is to be changed, a statement that the change of name has been effected under the laws of the jurisdiction of its incorporation and the date the change was so effected. (6) If the activities it proposes to conduct in this state are to be enlarged, limited or otherwise changed, a statement that it is authorized to conduct in the jurisdiction of its incorporation the activities which it proposes to conduct in this state. (b) If an authorized foreign corporation has changed its name in the jurisdiction of its incorporation, it shall deliver to the department of state within twenty days after the change became effective in that jurisdiction a certificate of amendment under paragraph (a). Upon its failure to deliver such certificate, its authority to conduct activities in this state shall upon the expiration of said twenty days be suspended. The filing by the department of state of a certificate of amendment changing the corporation name within one hundred twenty days after the effective date of the change of name in the jurisdiction of its incorporation shall annul the suspension and its authority to conduct activities in this state shall be restored and continue as if no suspension had occurred. The secretary of state shall continue, during such suspension, as agent of the foreign corporation upon whom process against the foreign corporation may be served in the manner set forth in paragraph (b) of section 306 (Service of process). (c) A certificate of amendment of application for authority shall not

be filed, if the amendment adds, changes or eliminates a purpose, power or provision the inclusion of which in an application for authority requires consent or approval of any governmental body or officer or other person or body, or if the amendment changes the name of a corporation whose application for authority had such consent or approval endorsed thereon or annexed thereto, unless such consent or approval is endorsed on or annexed to the certificate of amendment of application for authority.

§ 1310 Certificate of change; contents.

§ 1310. Certificate of change; contents. (a) In lieu of a certificate of amendment, an authorized foreign corporation, upon compliance with this section, may make any or all of the following changes in its application for authority: (1) To change the location of its office in this state. (2) To specify or change the post office address to which the secretary of state shall mail a copy of any process against it served upon him. (3) To make, revoke or change the designation of a registered agent or specify or change his address. (4) To specify, change or delete the email address to which the secretary of state shall email a notice of the fact that process against the corporation has been electronically served upon him or her. (b) To accomplish such change, a certificate entitled "Certificate of change of application for authority of .......... (name of corporation) under section 1310 of the Not-for-Profit Corporation Law" shall be signed and delivered to the department of state. It shall set forth: (1) The name of the foreign corporation as it appears on the index of names of existing domestic and authorized foreign corporations of any 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 article. (2) The jurisdiction of its incorporation. (3) The date it was authorized to conduct activities in this state. (4) Each change effected thereby. (c) A certificate of change of application for authority which changes only the post office address to which the secretary of state shall mail

a copy of any process against an authorized foreign corporation served upon him or her, the email address to which the secretary of state shall email a notice of the fact that process against it has been electronically served upon the secretary of state and/or which changes the address of its registered agent, provided such address is the address of a person, partnership or other corporation whose address, as agent, is the address to be changed, and/or the email address being changed is the email address of a person, partnership or other corporation whose email address, as agent, is the email address to be changed, or who has been designated as registered agent for such authorized foreign corporation, may be signed and delivered to the department of state by such agent. The certificate of change of application for authority shall set forth the statements required under subparagraphs (1), (2), (3) and (4) of paragraph (b) of this section; that a notice of the proposed change was mailed by the party signing the certificate to the authorized foreign corporation not less than thirty days prior to the date of delivery to the department and that such corporation has not objected thereto; and that the party signing the certificate is the agent of such foreign corporation to whose address the secretary of state is required to mail copies of process, and/or the agent of such foreign corporation to whose email address the secretary of state is required to email a notice of the fact that process against it has been electronically served upon the secretary of state, and/or the registered agent, if such be the case. A certificate signed and delivered under this paragraph shall not be deemed to effect a change of location of the office of the corporation in whose behalf such certificate is filed.

§ 1311 Surrender of authority.

§ 1311. Surrender of authority. (a) An authorized foreign corporation desiring to surrender its authority shall deliver to the department of state a certificate entitled "Certificate of surrender of authority of ......... (name of corporation) under section 1311 of the Not-for-Profit Corporation Law." The certificate shall be signed. It shall set forth: (1) The name of the foreign corporation as it appears on the index of names of existing domestic and authorized foreign corporations of any

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 article. (2) The jurisdiction of its incorporation. (3) The date it was authorized to conduct activities in this state. (4) That it surrenders its authority to conduct activities in this state. (5) That it revokes the authority of its registered agent, if any, previously designated and consents that process against it in any action or special proceeding based upon any liability or obligation incurred by it within this state before the filing of the certificate of surrender may be served on the secretary of state after the filing thereof in the manner set forth in paragraph (b) of section 306 (Service of process). (6) A post office address within or without this state to which the secretary of state shall mail a copy of any process against it served upon him or her. The corporation may include an email address to which the secretary of state shall email a notice of the fact that process against it has been electronically served upon him or her. (b) The department shall not file such certificate unless the consent of the state tax commission to the surrender of authority is attached thereto. (c) The authority of the foreign corporation to conduct activities in this state shall terminate on the filing by the department of state of the certificate of surrender of authority. (d) The post office address specified under subparagraph (a) (6) may be changed by delivering to the department of state a certificate, entitled "Certificate of amendment of certificate of surrender of authority of .......... (name of corporation) under section 1311 of the Not-for-Profit Corporation Law." The certificate shall be signed. It shall set forth: (1) The name of the foreign corporation. (2) The jurisdiction of its incorporation. (3) The date its certificate of surrender of authority was filed by the department of state. (4) The changed post office address, within or without this state, to which the secretary of state shall mail a copy of any process against it served upon him.

§ 1312 Termination of existence.

§ 1312. Termination of existence.

When an authorized foreign corporation is dissolved or its authority or existence is otherwise terminated or cancelled in the jurisdiction of its incorporation or when such foreign corporation is merged into or consolidated with another foreign corporation, a certificate of the secretary of state, or official performing the equivalent function as to corporate records, of the jurisdiction of incorporation of such foreign corporation attesting to the occurrence of any such event or a certified copy of an order or decree of a court of such jurisdiction directing the dissolution of such foreign corporation, the termination of its existence or the cancellation of its authority shall be delivered to the department of state. The filing of the certificate, order or decree shall have the same effect as the filing of a certificate of surrender of authority under section 1311 (Surrender of authority). The secretary of state shall continue as agent of the foreign corporation upon whom process against it may be served in the manner set forth in paragraph (b) of section 306 (Service of process), in any action or special proceeding based upon any liability or obligation incurred by the foreign corporation within this state prior to the filing of such certificate, order or decree and he shall promptly cause a copy of any such process to be mailed by certified mail, return receipt requested, to such foreign corporation at the post office address on file in his or her office specified for such purpose or a notice of the fact that process against the corporation has been served on him or her to be emailed to the foreign corporation at the email address on file in his or her office specified for such purpose. The post office address and/or email address may be changed by signing and delivering to the department of state a certificate of change setting forth the statements required under section 1310 (Certificate of change; contents) to effect a change in the post office address and/or email address under subparagraph (a) (7) of section 1308 (Amendments or changes).

§ 1313 Actions or special proceedings by unauthorized foreign

§ 1313. Actions or special proceedings by unauthorized foreign

corporations. (a) A foreign corporation conducting activities in this state without authority shall not maintain any action or special proceeding in this state unless and until such corporation has been authorized to conduct activities in this state and it has paid to the state all fees, penalties and franchise taxes, if any, for the years or parts thereof during which it conducted activities in this state without authority. This prohibition shall apply to any successor in interest of such foreign corporation. (b) The failure of a foreign corporation to obtain authority to conduct activities in this state shall not impair the validity of any contract or act of the foreign corporation or the right of any other party to the contract to maintain any action or special proceeding thereon, and shall not prevent the foreign corporation from defending any action or special proceeding in this state.

§ 1314 Actions or special proceedings by foreign corporations.

§ 1314. Actions or special proceedings by foreign corporations.

An action or special proceeding may be maintained by a foreign corporation, in like manner and subject to the same limitations, as an action or special proceeding brought by a domestic corporation, except as otherwise prescribed by statute.

§ 1315 Actions or special proceedings against foreign corporations.

§ 1315. Actions or special proceedings against foreign corporations. (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 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 kind or by a nonresident in the following cases only: (1) Where the action is brought to recover damages for the breach of a contract made or to be performed within this state, or relating to property situated within this state at the time of the making of the contract.

(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 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. (c) Paragraph (b) does not apply to a corporation which was formed under the laws of the United States and which maintains an office in this state.

§ 1316 Record of members.

§ 1316. Record of members. (a) Any resident of this state who shall have been a member of record, for at least six months immediately preceding his demand, of a foreign corporation conducting activities in this state, or any resident of this state authorized in writing by at least five percent of the members, entitled to vote, of the foreign corporation, upon at least five days' written demand may require such foreign corporation to produce a record of its members setting forth the names and addresses of all members, the number and class of capital certificates held by each and the dates when they respectively became the owners of record thereof, and shall have the right to examine in person or by agent or attorney at the office of the foreign corporation in this state or at the office of its transfer agent or registrar in this state or at such other place in any county in this state in which the foreign corporation is conducting activities as may be designated by the foreign corporation during the usual business hours, a record of members or an exact copy of the record of members certified as correct by the corporate officer or agent responsible for keeping or producing such record and to make extracts therefrom. In the case of a foreign corporation having shares, a record of shareholders shall for the purpose of this section be regarded as a record of members, and holders of voting trust certificates representing such

shares shall for the purpose of this section be regarded as members. (b) An examination authorized by paragraph (a) may be denied to such member or other person upon his refusal to furnish to the foreign corporation 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 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. (c) Upon refusal by the foreign corporation or by an officer or agent of the foreign corporation to produce for examination or to permit an examination of the record of members as herein provided, the person making the demand for production and examination may apply to the supreme court in the judicial district where the office of the foreign corporation within this state is located, upon such notice as the court may direct, for an order directing the foreign corporation, its officer or agent, to show cause why an order should not be granted directing such production and permitting such examination by the applicant. Upon the return day of the order to show cause, the court shall hear the parties summarily, by affidavit or otherwise, and if it appears that the applicant is qualified and entitled to such examination, the court shall grant an order compelling such production for examination and awarding such further relief as to the court may seem just and proper. (d) Nothing herein contained shall impair the power of courts to compel the production for examination of the books of a foreign corporation. The record of members specified in paragraph (a) shall be prima facie evidence of the facts therein stated in favor of the plaintiff in any action or special proceeding against such foreign corporation or any of its officers, directors or members.

§ 1317 Voting trust records.

§ 1317. Voting trust records. (a) A voting trustee, appointed under a voting trust agreement to vote the shares of a foreign corporation conducting activities in this state, who either has an office in this state or has designated a

transfer agent within this state, shall produce for examination and permit to be examined in this state, at the office of the foreign corporation or at his office or at the office of such transfer agent, a record of voting trust certificate holders setting forth their names, alphabetically arranged, and addresses, the number and class of shares represented by the certificates held by them respectively and the dates when they respectively became the owners thereof, upon the written demand of any resident of this state who shall have been a voting trust certificate holder or a shareholder of the foreign corporation for at least six months immediately preceding his demand, or of any resident of this state holding, or thereunto authorized in writing by the holders of, at least five percent of any class of the outstanding shares of such foreign corporation, either directly or as holders of voting trust certificates for such shares, subject to the same terms and conditions set forth with respect to the right of examination of the record of members of the foreign corporation in section 1316 (Record of members). (b) The voting trustee shall deposit an exact copy of the voting trust agreement with the foreign corporation at its office in this state or at the office of the transfer agent in this state. (c) The copy of the voting trust agreement shall be subject to the same right of examination by voting trust certificate holders and by shareholders of the foreign corporation as is the record of members of a corporation under section 621 (Books and records; right of inspection, prima facie evidence). (d) Upon refusal by a voting trustee or his transfer agent to produce for examination or to permit an examination of the record of voting trust certificate holders or of such copy of the voting trust agreement as herein provided, the person making the demand may apply to the supreme court, upon such notice as the court may direct, for an order directing the voting trustee or his transfer agent to show cause why an order should not be granted directing such production and permitting such examination. Upon the return day of the order to show cause, the court shall hear the parties summarily, by affidavit or otherwise, and if it appears that the applicant is entitled to such examination, the court shall grant an order compelling such production for examination and awarding such further relief as to the court may seem just and proper.

(e) Where the voting trust agreement shall vest in the voting trustee the right to vote the shares of a foreign corporation which has an office in this state for conducting activities and either the principal activity of which is conducted within this state or the greater part of its property is located within this state, the voting trust agreement is an express trust created under the laws of this state and the supreme court upon the petition of a voting trust certificate holder may exercise such power over the trustee named therein as is granted to the court by section 7-2.6 of the estates, powers and trusts law.

§ 1318 Liabilities of directors and officers of foreign corporations.

§ 1318. Liabilities of directors and officers of foreign corporations. (a) Except as otherwise provided in this chapter, the directors and officers of a foreign corporation conducting activities in this state are subject, to the same extent as directors and officers of a domestic corporation, to the provisions of: (1) Section 719 (Liability of directors in certain cases) except subparagraph (a) (4) thereof, and (2) Section 720 (Action against directors and officers for misconduct) (b) Any liability imposed by paragraph (a) may be enforced in, and such relief granted by, the courts in this state, in the same manner as in the case of a domestic corporation.

§ 1319 Liability of foreign corporations for failure to disclose

§ 1319. Liability of foreign corporations for failure to disclose required information.

A foreign corporation conducting activities in this state shall, in the same manner as a domestic corporation, disclose to its members of record who are residents of this state the information required under Article 5 and shall be liable as provided in section 521 (Liability for failure to disclose required information) for failure to comply in good faith with these requirements.

§ 1320 Applicability of other provisions.

§ 1320. Applicability of other provisions.

(a) In additions to articles 1 (Short title; definitions; application; certificates; miscellaneous) and 3 (Corporate name and service of process) and the other sections of article 13, the following provisions, to the extent provided therein, shall apply to a foreign corporation conducting activities in this state, its directors, officers and members: (1) Section 623 (Members' derivative action brought in the right of the corporation to procure a judgment in its favor). (2) Sections 721 (Exclusivity of statutory provisions for indemnification of directors and officers) through 727 (Insurance for indemnification of directors and officers), inclusive. (3) Section 906 (Merger or consolidation of domestic and foreign corporations).

§ 1321 Exemption from certain provisions.

§ 1321. Exemption from certain provisions. (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 (1) of paragraph (a) of section 1318 (Liabilities of directors and officers of foreign corporations), and subparagraph (2) of paragraph (a) of section 1320 (Applicability of other provisions) of this article if such provision would otherwise apply: (1) The corporation is a non-charitable corporation under this chapter; its principal activities are conducted outside this state; the greater part of its property is located outside this state; and less than one third of its members are residents of this state; or (2) The corporation is a 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.

ARTICLE 14 SPECIAL NOT-FOR-PROFIT CORPORATIONS

Section 1401. Private and family cemetery corporations. 1402. Fire corporations. 1403. Corporations for the prevention of cruelty. 1404. Christian associations. 1405. Soldiers' monument corporations. 1406. Medical societies. 1407. Alumni corporations. 1408. Historical societies. 1409. Agricultural and horticultural corporations. 1410. Boards of trade and chambers of commerce. 1411. Local development corporations 1412. University faculty practice corporations.

Article 14

§ 1401 Private and family cemetery corporations.

§ 1401. Private and family cemetery corporations. (a) Private cemetery corporation. Seven or more persons may become a private cemetery corporation by setting off for a private cemetery enclosed real property, to the extent of not more than three acres, and by electing at a meeting of the owners of the property so set off, at which not less than seven shall be present, three of their number to be directors, to hold office for five years. The chairman and secretary of such meeting shall make, sign and acknowledge, and file in the office of the clerk of the county in which such real property is situated, a certificate containing the name of the corporation, a description of the lands so purchased or set apart, and the names of the directors. No such cemetery shall be located within one hundred rods of any dwelling-house without the written consent of the owner thereof. Additional lands not exceeding three acres may be acquired by a private cemetery corporation; but no additional lands so purchased or otherwise acquired shall be used for the purpose of burial within three hundred feet of any dwelling without the written consent of the owner thereof. (b) Removal of remains from private cemeteries to other cemeteries. The supervisor of any town containing a private cemetery may remove any body interred in such cemetery to any other cemetery within the town, if the owners of such cemeteries and the next of kin of the deceased consent to such removal. The owners of a private cemetery may remove the bodies interred therein to any other cemetery within such town, or to

any cemetery designated by the next of kin of the deceased. Notice of such removal shall be given within twenty days before such removal personally or by certified mail to the next of kin of the deceased if known and to the clerk and historian of the county in which such real property is situated and notice shall be given to the New York state department of state, division of cemeteries. If any of the deceased are known to be veterans, the owners shall also notify the department of veterans' services. In the absence of the next of kin, the county clerk, county historian or the department of veterans' services may act as a guardian to ensure proper reburial. (c) Family cemetery corporations. Any person, by deed or devise, may dedicate land to be used exclusively for a family cemetery. The executors, administrators or trustees of a deceased person, with the written authority of all of his surviving heirs, next of kin, devisees and legatees, executed in person or by an attorney, or if infants, by legal guardian, may dedicate lands of such deceased person exclusively for a family cemetery, or may purchase with the funds of the estate, suitable lands therefor. The land so dedicated shall not exceed three acres, not be located within one hundred rods of a dwelling-house, without the consent of the owner, unless such land, at the time of dedication, is in actual use for burial or cemetery purposes within the limits of a city. The instrument dedicating such land shall describe the same, may appoint directors to manage such cemetery, prescribe, or provide for making rules, directions or by-laws for such management, direct the manner of choosing successors to the directors, specify their qualifications, and grant to them and their successors money or personal property as a fund for maintaining, improving and embellishing the cemetery, in accordance with the deed or will, or the written authority of the heirs, next of kin, devisees and legatees. The instrument dedicating land for a family cemetery, together with the authority, if any, of the heirs, next of kin, devisees and legatees of the deceased person, shall be filed in the office of the county clerk of each county in which the cemetery is to be situated. The directors before entering on their duties, shall file in the office of the county clerk of each such county, a written acceptance of their appointment; and thereupon they and their successors shall constitute a corporation under the name designated in such instrument. A fund created by will for the purpose of

maintaining, improving and embellishing such a cemetery shall not exceed ten per centum of the net value of the estate of the testator. Such corporation before receiving any property, money or funds for improving, maintaining and embellishing the cemetery, shall execute to the surrogate of the county in which such real property is situated, a bond with sureties, or the bond of a surety company, approved by him, in a penalty of twice the principal sum of the fund placed in charge of the corporation, conditioned for the faithful preservation and application thereof according to the rules, directions or by-laws prescribed in the instrument under which the appointment of such directors was made, and renew such bond or execute a new bond whenever required so to do by such surrogate. At least once in each year and oftener if required by the surrogate the corporation shall file with him a verified account of its receipts and expenditures on account of the funds in its hands, or under its control, together with vouchers for all disbursements. Any person may bequeath or transfer to, and any such corporation may take, money or personal property by will, deed or other transfer, upon trust, to hold and apply to dispose of the same for the purpose of maintaining, improving and embellishing any lot, plot or portion of such cemetery, either according to the discretion of the directors, or for such time and upon such terms and conditions, if any, as to the application, investment and reinvestment of the principal and income and otherwise as shall be stated in the instrument creating the trust as agreed upon, but no such trust fund created by will shall exceed ten per centum of the net value of the estate of the testator. The corporation shall give security and account for such money or personal property as hereinbefore provided.

If security is furnished by a surety company bond, the reasonable expense thereof shall be a charge against the funds of the corporation. (d) Type of corporation. A family or private cemetery corporation is a charitable corporation under this chapter. (e) Private and family cemetery corporations; prohibitions. (1) No private or family cemetery corporation shall, directly or indirectly: (i) sell, or have, enter into or perform a lease of any of its real property to a funeral entity, or use any of its property for location of a funeral entity;

(ii) commingle its funds with a funeral entity; (iii) direct or carry on its business or affairs with a funeral entity; (iv) authorize control of its business or affairs by a funeral entity; (v) engage in any sale or cross-marketing of goods or services with a funeral entity; (vi) have, enter into or perform a management or service contract for cemetery operations with a funeral entity; or (vii) have, enter into or perform a management contract with any entity, other than a not-for-profit cemetery corporation. (2) Only the provisions of subparagraphs (i) and (ii) of subdivision one of this paragraph shall apply to cemetery corporations with thirty acres or less of real property dedicated to cemetery purposes, and only to the extent the sale or lease is of real property dedicated to cemetery purposes, and such cemeteries shall not engage in the sale of funeral home goods or services, except if such goods and services are otherwise permitted to be sold by cemeteries. (3) For the purposes of this paragraph, "funeral entity" means a person, partnership, corporation, limited liability company or other form of business organization providing funeral home services, or owning, controlling, conducting or affiliated with a funeral home, any subsidiary thereof or an officer, director or stockholder having a ten per centum or greater proprietary, beneficial, equitable or credit interest in a funeral home.

§ 1402 Fire corporations.

§ 1402. Fire corporations. (a) Certificate of incorporation; additional contents.

In addition to the requirements of section 402 (Certificate of incorporation; contents), the certificate of incorporation of a fire corporation shall state the precise boundaries of the territory in which the corporation intends to operate. (b) Type of corporation.

A fire corporation is a charitable corporation under this chapter. (c) Appointment of firefighters.

(1) A person shall not be eligible to be named in the certificate of incorporation of a fire corporation unless he shall be at least eighteen years of age and a resident of a city, village, fire district, or town outside of villages and fire districts, where the fire corporation intends to operate. (2) If the fire corporation becomes part of the fire department of a city, village or fire district, a person shall not be eligible to be elected as a member or to continue as a member except as provided by law for volunteer members of the fire companies in such city, village or fire district. (3) In towns outside of villages and fire districts, the consent of a majority of the members of the town board to the formation of a fire corporation shall constitute an appointment of the persons named in the certificate of incorporation as town firefighters. Thereafter, other eligible persons may be elected as members pursuant to the by-laws of the fire corporation, but the election of a member must be approved by the town board of each town which consented to the formation of the fire corporation. Such a person shall be a resident of the territory specified in the certificate of incorporation or of territory outside such boundaries which is afforded fire protection by the fire corporation pursuant to a contract for fire protection under which a cash consideration is received by the corporation or for which negotiations for renewal of such a contract are pending. The membership of any volunteer member shall terminate when such member ceases to be a resident of such inside or outside territory, except that the corporation may authorize their continued membership where such member notifies the secretary of the fire corporation (a) that they plan to change their residence to a territory which is not in such inside or outside territory, and (b) that by reason of such member's residence in the vicinity or such member's usual occupation they will be available to render active service as a volunteer firefighter in either such inside or such outside territory. Voting for such authorization shall be pursuant to the by-laws. Such authorization shall not become effective unless approved by resolution of the town board of each town which consented to the formation of the corporation. Any membership so continued shall terminate when the member can no longer meet the requirements of this subparagraph. A person who cannot meet the

residence requirements of this subparagraph may be elected to membership as a volunteer member if by reason of such member's residence in the vicinity or such member's usual occupation they will be available to render active service as a volunteer firefighter in such inside or outside territory. Voting for such election shall be pursuant to the by-laws. Such election shall not become effective unless approved by resolution of the town board of each town which consented to the formation of the corporation. Such membership shall terminate when the member can no longer meet the requirements of this subparagraph. The election or continuance of any person as a member shall be deemed to have been approved by the town board pursuant to this subparagraph in the event that no action is taken by the town board, either approving or disapproving, within forty days in the case of residents of the territory specified in the certificate of incorporation or of outside contract territory, and within seventy days in the case of all others, after service of written notice of such election or continuance of membership shall have been made by the secretary of the corporation upon the town clerk, either personally or by mail. The membership of any volunteer firefighter shall not be continued pursuant to this subparagraph, and persons who do not reside in the territory specified in the certificate of incorporation or in territory protected pursuant to a contract for fire protection shall not be elected to membership, if, by so doing, the percentage of such nonresident members in the fire corporation would exceed forty-five per centum of the actual membership thereof, provided, however, that the forty-five percent limit on non-resident members shall not apply to the membership of the Huguenot Fire Company, Inc., within the town of Deerpark, Orange county, to the membership of the Prospect Terrace Fire Company, Inc., within the town of Dickinson, Broome county, to membership of the Hopewell Volunteer Fire Department, Inc., to membership of the Wales Center Volunteer Fire Company, Inc., within the town of Wales, Erie county, to the membership of the Nedrow Fire Department, within the town of Onondaga, Onondaga county, to the membership of the Howlett Hill Fire Department, within the town of Onondaga, Onondaga county, to the membership of the South Onondaga Fire Department, within the town of Onondaga, Onondaga county, to the membership of the Southwood Volunteer Fire Department, Inc., within the town of Onondaga, Onondaga county, to the membership of the

East Syracuse Fire Department, within the town of Dewitt, Onondaga county, to the membership of the Camillus Volunteer Fire Department, Inc., within the town of Camillus, Onondaga county, to the membership of the Pleasant Square Fire Company, Inc. within the town of Johnstown, Fulton county, to the membership of the East Amherst Fire Department, Inc., within the town of Amherst, Erie county, to the membership of the Crittenden Volunteer Fire Department, Inc., within the town of Alden, Erie county, to membership of the fire departments within the town of Fleming, Cayuga county, to membership of the Bushnell's Basin Fire Department, in the town of Perinton, Monroe county, to the membership of the East Dunkirk Volunteer Fire Company, Inc. within the town of Dunkirk, Chautauqua county, to the membership of the Varna Volunteer Fire Company, Inc., within the town of Dryden, Tompkins county, to the membership of the Leeds Hose Company No. 1, Inc. within the town of Catskill, Greene county or to membership of the Salina Consolidated Fire District #2, in the town of Salina, Onondaga county. Nonresidents of the territory specified in the certificate of incorporation whose volunteer membership has been authorized or continued pursuant to this subparagraph may be elected or appointed to any office in the fire corporation and shall have all the powers, duties, immunities, and privileges of resident volunteer members except a non-resident of this state whose membership has been continued pursuant to this subparagraph, or who was elected to membership pursuant to this subparagraph, shall not be considered to be performing any firefighting duty, or to be engaged in any firefighting activity, as a member of the fire company while such member is outside of this state unless and until such member has first reported to the officer or firefighter in command of their fire department, or any company, squad or other unit thereof, engaged or to be engaged in rendering service outside this state, or has received orders or authorization from an officer of the fire department or fire company to participate in or attend authorized activities outside of this state in the same manner as resident members of the fire company. A person shall not be eligible to volunteer membership in any other fire corporation or fire company at one time. The provisions of this subparagraph shall not be deemed to authorize the election or the continuance of any person as a member of the corporation if such election or continuance of membership shall be contrary to the by-laws,

rules or regulations of the fire corporation. (4) A person who has been convicted of arson in any degree shall not be eligible to be named in the certificate of incorporation of a fire corporation, or to be elected or appointed as a volunteer member of a fire corporation. The membership of any volunteer member of a fire corporation shall immediately terminate if he is convicted of arson in any degree while a member of a fire corporation. (5) Upon application by any person for membership in a fire corporation operating pursuant to this section, the fire chief shall cause the applicant's background to be checked pursuant to section eight hundred thirty-seven-o of the executive law for a criminal history involving a conviction for arson and conviction of a crime which requires the person to register as a sex offender under article six-C of the correction law. Where such criminal history information includes conviction of a crime which requires the person to register as a sex offender under article six-C of the correction law, a fire company shall determine whether or not such person shall be eligible to be elected or appointed as a volunteer member of such fire company. Such determination shall be made in accordance with the criteria established in sections seven hundred fifty-two and seven hundred fifty-three of the correction law. (d) Incorporation of fire corporations in towns legalized.

Any fire, hose, protective or hook and ladder corporation heretofore organized under any general law with the consent of the town board in the territory served by such corporation is hereby legalized and confirmed, notwithstanding the omission of any town board to appoint or confirm the members of such corporations as town firefighters. Any such corporation shall hereafter be subject to the provisions of this section. (e) Powers. (1) A fire, hose, protective or hook and ladder corporation heretofore incorporated under any general law or a fire corporation hereafter incorporated under this section shall be under the control of the city, village, fire district or town authorities having, by law, control over the prevention or extinguishment of fires therein. Such authorities may adopt rules and regulations for the government and control of such

corporations. Notwithstanding the provisions of any such local law, a person who has been convicted of arson in any degree shall not be eligible for nomination, election or appointment to any office of the corporation, nor may such person serve as director of the corporation. Any fire corporation officer or director who is convicted of arson in any degree during his term of office shall be disqualified from completing such term of office. (2) Where a fire corporation formed outside of a city, village or fire district furnishes fire protection to territory outside of the boundaries specified in its certificate of incorporation, the fire corporation and the members thereof shall be under the exclusive control of the town board of the town in which the fire corporation maintains its apparatus. (3) The emergency relief squad of a fire corporation incorporated under this section or subject to the provisions thereof shall have power to furnish general ambulance service when duly authorized under the provisions of section two hundred nine-b of the general municipal law. (4) Any fire company incorporated under this section or subject to the provisions thereof shall have power to engage in fund raising activities pursuant to section two hundred four-a of the general municipal law. (5) Any fire company incorporated under this section or subject to the provisions thereof shall have power, subject to the approval or authorization of the town board, to attend a funeral. (6) Fire, hose, protective or hook and ladder corporations heretofore incorporated under any general law or fire corporations hereafter incorporated under this section or volunteer fire companies or fire departments as defined in section three of the volunteer firefighters' benefits law are hereby authorized to enter into contracts among themselves and among municipal corporations for the joint purchase of goods, supplies and services. Provided that the provisions of article five-A of the general municipal law shall be controlling for any proposed joint purchase between such fire corporation, company, or department and a municipal corporation. For the purposes of this subparagraph the term "municipal corporation" shall mean a county, city, town, village, fire district, or ambulance district. (f) Directors to file report.

It shall be the duty of the directors of all fire, hose, protective or hook and ladder corporations incorporated under a general law or of a fire corporation formed under this section in territory outside of cities or villages, or a majority of them, on or before the fifteenth day of January in each year, to make and file in the county clerk's office, where the certificate of incorporation is filed a verified certificate, stating the names of the directors and officers of the corporation, containing an inventory of its property, a statement of its liabilities and that the corporation has not engaged, directly or indirectly, in any business other than that set forth in its certificate of incorporation. (g) Firefighters' exemption.

Every active firefighter who shall be a member of a corporation subject to the provisions of this section shall be entitled to all the rights granted by law to volunteer firefighters and every such active firefighter who shall meet the requirements of section two hundred of the general municipal law shall be entitled to the additional rights granted by law to exempt volunteer firefighters. (h) Legalization of membership of fire corporations in towns outside villages and fire districts. (1) Any person: (A) who was recognized prior to the first day of July, nineteen hundred fifty-four, as a volunteer member of a fire corporation subject to the provisions of this section located in a town outside villages and fire districts by the town board or by the officers and members of the fire corporation, and (B) who rendered active service with such fire corporation prior to such date, and (C) who was, at the time of his or her election to membership, a resident of the territory specified in the certificate of incorporation or of territory outside such boundaries which was afforded fire protection by the fire corporation pursuant to a contract for fire protection,

shall for all purposes in law be considered to have been duly elected and confirmed as a member in such fire corporation as of the date of

such confirmation, if any, and, if none, then as of the date of such election; notwithstanding that there may have been some legal defect in such election, or the proceedings precedent thereto, or a failure of the town board to confirm such member, as provided by the law in force at the time of such election, and the status of such person as a volunteer firefighter as of the date of such confirmation or election is hereby legalized, validated and confirmed. This subparagraph shall not apply to a person, if any, whose volunteer membership in a fire corporation was declared invalid by a court of competent jurisdiction prior to the first day of January, nineteen hundred fifty-five. (2) Any person: (A) who was recognized on or after the first day of July, nineteen hundred fifty-four and prior to the first day of January, two thousand eleven as a volunteer member of a fire corporation subject to the provisions of this section located in a town outside villages and fire districts by the town board or by the officers and members of the fire corporation, and (B) who rendered active service with such fire corporation between such dates, and (C) who was, at the time of his or her election to membership, a resident of the territory specified in the certificate of incorporation or of territory outside such boundaries which was afforded fire protection by the fire corporation pursuant to a contract for fire protection, or who was a nonresident elected to membership or who was continued as a member, pursuant to the provisions of subparagraph (A)

shall for all purposes in law be considered to have been duly elected and confirmed, or continued, as a member in such fire corporation as of the date of such confirmation, if any, and, if none, then as of the date of such election or, in the case of a continuance, as of the date of approval, if any, by the town board and, if none, as of the date of authorization of continuance by the fire corporation; notwithstanding that there may have been some legal defect in such election, or the proceedings thereto, or a failure of the town board to confirm the election, or approve the continuance of membership, of such member, as provided by the law in force at the time of such election or continuance, and the status of such person as a volunteer firefighter as

of such date is hereby legalized, validated and confirmed. This subparagraph shall not apply to a person, if any, whose volunteer membership in a fire corporation was declared invalid by a court of competent jurisdiction prior to the first day of January, two thousand eleven. (i) Discrimination because of race, color, creed or national origin prohibited. (1) It shall be an unlawful discriminatory practice for any volunteer fire department, fire company or fire corporation, through any member or members thereof, directors, officers, members of a town board, board of fire commissioners or other body or office having power of appointment of volunteer firefighters in any fire department, fire company or fire corporation pursuant to this section, because of the race, creed, color, national origin, sex or marital status of any individual, to exclude or to expel from its volunteer membership such individual, or to discriminate against any of its members because of the race, creed, color, national origin, sex or marital status of such volunteer members. (2) Any person claiming to be aggrieved by an unlawful discriminatory practice pursuant to this paragraph may by himself or his attorney at law make, sign and file with the state division of human rights, a verified complaint which shall set forth the particulars of the alleged unlawful discriminatory practice and contain such other information as the division of human rights may require. The division shall thereupon cause to be made an investigation and disposition of the charges pursuant to the provisions of article fifteen of the executive law.

§ 1403 Corporations for the prevention of cruelty.

§ 1403. Corporations for the prevention of cruelty. (a) Prohibition of new corporations in certain counties. (1) A corporation for the prevention of cruelty to animals shall not hereafter be incorporated for the purpose of conducting its operations in the counties of New York, Kings, Queens, Richmond, Rensselaer, or Westchester outside of the city of Yonkers; or in any other county if thereby two or more such corporations would exist in such county except as provided in subparagraph three hereof. Any corporation for the prevention of cruelty to animals may exercise its powers and conduct its operations in any adjacent county in which no such corporation exists

until the establishment of such a corporation therein. (1-a) No corporation for the prevention of cruelty to children, or for the dual purpose of prevention of cruelty to children and cruelty to animals shall be incorporated on or after November first, nineteen hundred eighty-nine. Any such corporations, incorporated prior to November first, nineteen hundred eighty-nine, may exercise their powers and conduct their operation in any adjacent county in which no such corporations exist until the establishment of such corporations therein prior to November first, nineteen hundred eighty-nine. The Brooklyn society for the prevention of cruelty to children may exercise all its powers in the county of Nassau until a society for the prevention of cruelty to children shall be incorporated prior to November first, nineteen hundred eighty-nine, and located therein, and may exercise all its powers in the county of Suffolk until such a corporation is incorporated prior to November first, nineteen hundred eighty-nine, and located therein. (2) In addition to the requirements of section 402, a certificate of incorporation under which an additional corporation is formed in the City of Yonkers must designate such city as the place where its operations are to be conducted. (3) In any county having a population of one hundred thousand or less, where there is already in existence a corporation duly incorporated for the prevention of cruelty to animals and where it appears that the functions of such corporation are confined to a local area in such county and where it further appears that part of such county is not served by the existing corporation, an application may be made for the incorporation of a second such corporation in such county. If it appears to the satisfaction of the court that such existing corporation does not serve the area from which the application for incorporation of a new corporation is made, the court shall approve the proposed certificate of incorporation. (b) Special powers. (1) A corporation formed for the purpose of preventing cruelty to children, when represented by an attorney duly admitted to the practice of law, may prosecute a complaint before any court, tribunal or magistrate having jurisdiction, for the violation of any law enacted to prevent (i) the abuse, maltreatment or neglect of a child, as those

terms are defined in section four hundred twelve of the social services law and section one thousand twelve of the family court act, or (ii) the exploitation of or harm to a child at the hands of an adult that would constitute a violation of article one hundred twenty, one hundred thirty, one hundred thirty-five, two hundred sixty or two hundred sixty-three of the penal law, and may aid in presenting the law and facts to such court, tribunal or magistrate in any proceeding therein. (2) A corporation formed for the purpose of preventing cruelty to animals may prefer a complaint before any court, tribunal or magistrate having jurisdiction, for the violation of any law relating to or affecting the prevention of cruelty to animals, and may aid in presenting the law and facts to such court, tribunal or magistrate in any proceeding therein. (3) A corporation for the prevention of cruelty to children may be appointed guardian of the person of a minor child during its minority by a court of record, or a judge thereof, and may receive and retain any child at its own expense on commitment by a court or magistrate. (4) All magistrates, peace officers, acting pursuant to their special duties and police officers shall aid such a corporation, its officers, agents and members in the enforcement of laws enacted to prevent (i) the abuse, maltreatment or neglect of a child, as those terms are defined in section four hundred twelve of the social services law and section one thousand twelve of the family court act, or (ii) the exploitation of or harm to a child at the hands of an adult that would constitute a violation of article one hundred twenty, one hundred thirty, one hundred thirty-five, two hundred sixty or two hundred sixty-three of the penal law, and for the prevention of cruelty to animals. (c) Type of corporation.

A corporation for the prevention of cruelty is a charitable corporation under this chapter.

§ 1404 Christian associations.

§ 1404. Christian associations. (a) Certificate of incorporation; additional contents.

In addition to the requirements of section 402, the certificate of

incorporation of a Young Men's or a Young Women's Christian Association shall state the qualifications of active membership; and may name, in addition to the directors, six trustees and shall divide such trustees into three classes to hold office for one, two and three years respectively, or until their successors are elected by the board of directors. (b) Type of corporation.

A christian association is a charitable corporation under this chapter. (c) Directors and trustees. (1) The trustees of a corporation organized for the purposes of a young men's christian association or a young women's christian association, with the president of the corporation shall be a board of trustees thereof, and hold and control the real property of the corporation and all gifts and bequests of money to be held in trust. They or the directors if there is no board of trustees shall pay the income of such property to the treasurer of the corporation so long as the income shall be expended by the directors thereof for the purposes for which the corporation was formed. Such association may, by amendment to its certificate of incorporation, in the manner provided by law, eliminate its board of trustees, in which case the real property, gifts, bequests and other grants held in trust by such trustee shall be transferred to its board of directors which shall hold and control the real property of the corporation and all gifts and bequests of money to be held in trust. (2) The real property of such corporation shall not be liable for any debt or obligation contracted without the approval of the board of trustees. (3) In all proceedings for the purchase, sale, mortgage and lease of real property, the board of trustees of such a corporation shall perform the functions of the board of directors. (4) The board of directors shall have the management and control of the property and affairs of the corporation, except as such management and control is vested by law in the board of trustees. (5) A young men's christian association incorporated prior to eighteen hundred and eighty-seven may create a board of trustees possessing the

qualifications and divided into classes, and such board shall have the powers set forth in this paragraph. (6) A young men's christian association incorporated prior to nineteen hundred and eight may divide its trustees into classes. (d) Dissolution. Whenever any young men's christian association subject to this section shall cease to carry out the objects set forth in its certificate of incorporation, according to the general rules and regulations of the national board of young men's christian associations, or shall abandon or discontinue for one year the use of any of its property for such objects, then upon the verified petition of a majority of the directors of such association upon fourteen days' notice to the national board by service thereof upon its chairman and secretary or in the event of the failure of such directors to act, upon the verified petition of the national board of young men's christian associations, upon fourteen days' notice to such association by service thereof upon its president or any director thereof, and upon one of the trustees thereof, and upon notice to the attorney general, the supreme court, upon satisfactory proof by affidavit or otherwise of such failure or abandonment, must make a final order dissolving such corporation. Upon the entry of such order, the corporation shall be dissolved, and thereupon the national board of young men's christian associations may take possession of the property of the corporation and manage the same, or if authorized by the concurring vote of two-thirds of the members of the national board may sell or lease the same and apply the proceeds thereof after the payment of the debts, if any, of the corporation solely to such purposes as those for which the corporation was organized. (e) Incorporation of county committees. (1) Five or more men resident in any county of this state, appointed by the national board of Young Men's Christian Associations, to act as the county committee of Young Men's Christian Associations for such county, may form a corporation under the provisions of this chapter under the name of "The County Committee of the Young Men's Christian Association of ..................... County," (the blank space being filled by the name of the county in which the incorporators reside.) (2) The management and control of the property and affairs of such corporation shall be vested in its members and their successors in

office, except that the powers and duties of the trustees thereof shall be those specified in paragraph (a); and the successors of such members shall be elected annually at a meeting of the Young Men's Christian Associations of the county for which such committee has been appointed, at which meeting each association may be represented by one delegate for each ten active members of such association. A plurality vote of the delegates present, and voting at such meeting, shall be sufficient to elect. If any vacancy in the membership of such corporation shall occur during the interim between the regular elections, it may be filled by the remaining members. (3) The officers of the corporation shall consist of a chairman, treasurer and secretary, and such other officers as the members may decide; and shall be elected annually by such members from their own number.

§ 1405 Soldiers' monument corporations.

§ 1405. Soldiers' monument corporations. (a) Property; erection of monuments.

A corporation formed for the purpose of erecting and maintaining a monument or memorial, including a memorial hall or building to perpetuate the memory of persons who served in the armed forces of the United Colonies or of the United States in the Revolutionary War, the Civil War, or in any other war in which the United States has been engaged may acquire and hold real property necessary for its corporate purposes, and may erect any such monument, monuments or memorial upon any public street, square or ground of any town, city or village, with the consent of the proper officers thereof, or may purchase or accept the donation of land suitable for that purpose; and may take and hold the property given, devised or bequeathed to it in trust, to apply the same or the income or proceeds thereof for the erection, improvement, embellishment, preservation, repair, renewal, care and maintenance of such monument, monuments or memorial, or of any structure, fences or walks upon its lands, or for planting or cultivating trees, shrubs, flowers and plants, in and around or upon its lands, or for improving or embellishing the same in any manner consistent with the design and purposes of the association, according to the terms of such grant,

devise or bequest. It may take by gift or purchase any lots or lands in any cemetery to be used and occupied exclusively for the burial of honorably discharged members of the armed forces who served in any of such wars, and for the erection of suitable monuments or memorials therein. (b) Type of corporation.

A soldiers' monument corporation is a charitable corporation. (c) Town and village aid.

The town clerk of a town or the board of trustees of a village, upon the petition of twenty-five resident taxpayers, shall submit to a biennial town meeting or village election, as the case may be, a proposition to raise by taxation a sum stated therein, not exceeding five hundred dollars in any one year, to be spent during the fiscal year for which such tax is to be levied, for the purpose of erecting such a monument, or contributing to the expense of such a monument, erected by a corporation specified in this article, or for repairing, improving and maintaining the same and the grounds thereof; and such tax shall be levied in the manner prescribed by law for levying general taxes in such town or village, and when raised shall be applied to the purposes specified in such proposition. (d) Exemptions.

The property of a corporation specified in this section or of a corporation formed under the laws of eighteen hundred and sixty-six, chapter two hundred and seventy-three, as amended by laws of eighteen hundred and eighty-eight, chapter two hundred and ninety-nine, shall be exempt from levy and sale on execution, and from all public taxes, rates and assessments, and no street, road, avenue or thoroughfare shall be laid through the lands of such association held for the purposes aforesaid without the consent of the trustees of such corporation, except by special permission of the legislature of the state. (e) Improvement taxes.

A tax may be levied and collected on the taxable property in a town, village or city in which such monument, monuments or other memorial may

be erected, for the purpose of repairing or improving the same and the grounds thereof; and such tax shall be levied in the manner prescribed by law for levying general taxes in such town, village or city. (f) Transfer of property from unincorporated association.

Any unincorporated association organized solely for one or more of the purposes set forth in paragraph (a) by a majority vote of all its members present at a meeting thereof, called as in this section provided, may transfer to and vest in any incorporated association created by general or special law having like objects any or all money or other property which it shall have accumulated for such objects, but the property so transferred shall be used exclusively for one or more of the purposes mentioned in such paragraph. A vote upon the question of transferring the funds or property of such unincorporated association shall be had only at a meeting of such association called for that purpose by the president or secretary or other managing officer thereof, upon notice stating the object of the meeting of at least ten days before the time fixed for such meeting, served personally or by mail on each member of the association within the United States whose residence or post office address is known.

§ 1406 Medical societies.

§ 1406. Medical societies. (a) Medical societies heretofore formed.

Any medical society now existing in any of the counties of the state set apart prior to or since the passage of the act entitled "An act to incorporate medical societies for the purpose of regulating the practice of physic and surgery in this state," passed April tenth, eighteen hundred and thirteen, and not heretofore duly incorporated under the provisions of said act shall, upon complying with the provisions of this section enjoy the same privileges and possess the same powers as the societies incorporated by virtue of such act now enjoy and possess, but subject, nevertheless, to the provisions of any acts or parts of acts heretofore passed in relation to medical societies or to regulate the practice of physic and surgery in this state. (b) Type of corporation.

A medical society is a non-charitable corporation under this chapter. (c) Certificate of incorporation, additional contents.

In addition to the requirements of section 402, the certificate of incorporation of a medical society shall state: (1) the name of such society; (2) the date of its organization; (3) the names and residences of its members; and (4) that such society, by a majority vote of its members, has elected to become and be a body corporate under and by virtue of the Act described in paragraph (a), and be subject to the provisions of any acts or parts of acts heretofore enacted and now in force, in relation to such societies or the practice of medicine or surgery in this state. (d) Regulations for county medical societies.

It shall be lawful for any county medical society in this state, entitled to representation in the medical society of the state of New York, or in the homeopathic medical society of the state of New York, to establish such rules and regulations, not inconsistent with the laws of the state, for the government of its members as such county society may deem fit, provided such action receives the sanction of the state medical society in which such county medical society is represented. Such county medical society may fix the amount of the annual dues and assessments to be collected from its members. (e) Enforcement of discipline; appeal.

Every county medical society shall have full power and authority to enforce discipline among its members and obedience to its rules and regulations and to expel or otherwise discipline its members as it may deem for the best interests of the society. Any member of such a society who has been disciplined or an applicant for membership therein, who has been refused membership, feeling aggrieved at the action of the society, shall have the right to appeal to the medical society of the state of New York, in which such county medical society is represented. (f) Power to acquire property.

It shall be lawful for any county medical society heretofore or

hereafter incorporated and for the medical society of the state of New York and for the homeopathic medical society of the state of New York to acquire and hold for its corporate purposes real and personal property without limitation of amount or value, notwithstanding any limitation heretofore existing.

§ 1407 Alumni corporations.

§ 1407. Alumni corporations. (a) Alumni may be incorporated.

The alumni of any college or university, or of one or more colleges or schools of any university, may be incorporated by executing and filing a certificate pursuant to article 4 of this chapter. (b) Type of corporation.

An alumni corporation is a charitable corporation. (c) Powers.

An alumni corporation may create, manage and control a fund, to be known as the alumni fund, and for that purpose acquire and hold real and personal property. The principal of such fund, or the income derived therefrom, may be transferred to the college or university with which such corporation is identified, or used for and applied to such object or objects connected with such college or university as such alumni corporation shall direct. (d) Alumni fund.

The directors of an alumni corporation shall have the custody and management of the alumni fund but shall not dispose of the whole or any part of the principal of any invested fund except as authorized by a two-thirds vote of the members of such corporation, present at an annual meeting thereof.

§ 1408 Historical societies.

§ 1408. Historical societies. (a) Historical societies may hold property.

Any incorporated historical society of this state is hereby authorized to have and hold for the purposes of inclosure, preservation and the erection of monuments, but not for business purposes, the sites of old forts, battlegrounds and other historic sites, not exceeding six acres in any one locality, which shall be exempt from taxation; and to receive donations of articles of historic interest on the condition that in case of its dissolution or inability to pay its debts otherwise than from its effects, such articles shall revert to the donors or their heirs. Fees may be charged by any such society for the exhibition of its property or collections only to the extent that the proceeds thereof are used for the preservation, maintenance and development of such property or collections. (b) Type of corporation.

An historical society is a charitable corporation under this chapter. (c) Acquisition.

The acquisition by any such historical society of this state of any real property for the purpose of inclosure, preservation and the erection of monuments, is hereby declared to be for a public use. Such property may be acquired in the manner prescribed by the eminent domain procedure law.

§ 1409 Agricultural and horticultural corporations.

§ 1409. Agricultural and horticultural corporations. (a) Definition.

An agricultural or horticultural corporation or society is a corporation formed under or by a general or special law for promoting agriculture, horticulture and the mechanic arts. (b) Type of corporation. An agricultural or horticultural corporation is a non-charitable corporation under this chapter, except that any such corporation which has received moneys from the state or has acted as agent for the state under paragraph (c) of this section, or has acquired or does acquire real property by condemnation is or becomes a charitable corporation under this chapter. (c) Condemnation.

In case any agricultural or horticultural corporation or any other agricultural society which has received moneys from the state for premiums paid for improving the breed of cattle, sheep and horses, or has acted as agent for the state in disbursing moneys for such purpose can not acquire real property needed for its corporate purposes upon satisfactory terms, it may acquire such real property by condemnation. Any real property acquired by condemnation, or otherwise, shall not be subject to condemnation by any other private corporation except a railroad corporation. (d) Report of corporation receiving aid; disposition of property.

Any county agricultural corporation receiving after May tenth, nineteen hundred and twenty, money from any county shall, through its secretary, make annually to the board of supervisors a detailed statement with vouchers showing the disbursement during the year of all moneys so received. If such a corporation shall cease to exist, or without satisfactory reason shall fail or neglect to hold its annual exhibitions or fairs for a period of two years, the board of supervisors on notice to the corporation may petition the supreme court of the judicial district or the county court of the county to declare a forfeiture to the county of the real and personal property of the corporation in whole or in part or to confer on the county a lien upon such property, whereupon such court may make a decree determining the legal or equitable rights of the county in such property subject to the rights of creditors of the corporation. (e) Restrictions on the formation of corporations.

There shall be but one county corporation in a county, and but one town corporation in a town, except that a second corporation may be formed if it is to be the surviving corporation under a plan of merger with the existing corporation, in which event, the certificate of incorporation of such second corporation 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 such corporation is to be located. Ten days written notice of the application for such approval, accompanied by a copy of the proposed certificate, shall be given to the

attorney general. Whenever a new county shall be or shall have been erected out of a part of an existing county in which a county corporation existed at the time of the erection of such new county, the existing corporation may at its option be continued as the county corporation of both counties. The determination of an existing corporation to be continued as a county corporation for both counties shall be evidenced by a certificate thereof, signed and acknowledged by a majority of the directors, and filed in the office of the secretary of state and in the office of the clerk of each of such counties. A town corporation may be formed for several towns, but the formation of such corporation shall not prevent the formation of a separate town corporation for any such town. (f) Annual fairs and premiums.

Every agricultural or horticultural corporation, the American institute in the city of New York, and the New York state agricultural society, shall hold annual fairs and exhibitions, and distribute premiums. Such corporations and societies shall regulate and award premiums on such articles, productions and improvements as they deem best calculated to promote the agricultural, horticultural, mechanic and domestic arts of the state, having special reference to the net profits which accrue or are likely to accrue from the mode of raising crops, or stock, or fabricating the articles exhibited, so that the award be made to the most economical or profitable mode of production. A county or town corporation, by a two-thirds vote of the members present and voting at a regular meeting or at a special meeting, duly called for that purpose, may fix the place where the annual fair and exhibition of the corporation shall be held. (g) Regulation of shows on exhibition grounds.

Any agricultural or horticultural corporation, or the executive committee of such board, may regulate or prevent all kinds of theatrical, or circus, exhibitions and shows, huckstering and traffic in fruits, goods, wares and merchandise, of whatever description, and shall prevent all kinds of mountebank exhibitions or shows for gain on the fair days on such fair grounds, and also within a distance of two hundred yards of the fair grounds of the corporation, if it shall

determine that they obstruct or interfere with the free and uninterrupted use of the highways around and approaching such fair grounds. (h) Capital stock.

An agricultural or horticultural corporation may have capital stock aggregating not less than five thousand dollars, divided into shares of not less than ten dollars each, and may issue such certificates at not less than the par value thereof to raise money for its corporate purposes, if provision therefor is made in its certificate of incorporation or in a certificate filed pursuant to section 803 (Certificate of amendment; contents). An agricultural or horticultural corporation, which has issued or shall hereafter issue capital stock, entitling its shareholders to dividends from the profits of the corporation, shall be subject to the business corporation law and not to the provisions of this chapter in conflict therewith. (i) Annual report.

On or before December fifteenth in each year, the directors of every agricultural or horticultural corporation shall make a verified report to the commissioner of agriculture and markets of the transactions of the corporation for the preceding twelve months giving full details of the receipts and expenditures thereof, with a list of premiums awarded and to whom and for what awarded. (j) Membership in state society.

The presidents of the county agricultural corporations, or delegates to be chosen by such corporations annually, shall be ex officio members of the New York state agricultural society. (k) Exhibitions and entertainments on fair grounds to be exempt from license.

The provisions of any special or local law or municipal ordinance, requiring the payment of a license fee for exhibitions or entertainments or requiring that an approval be obtained from any local government except an approval required to protect the safety, health and well-being of persons, shall not apply to any exhibition or entertainment held on

the grounds of a town or county corporation whether or not the corporation derives a pecuniary profit from such exhibition or entertainment by the lease of its grounds for such purpose and the provisions of any special or local law or municipal ordinance shall not be construed or applied to unreasonably prohibit or restrict any agricultural or horticultural corporation receiving reimbursement pursuant to article twenty-four of the agriculture and markets law from the construction, improvement, renovation, relocation or demolition of all or any of such agricultural or horticultural corporation grounds, buildings and facilities.

§ 1410 Boards of trade and chambers of commerce.

§ 1410. Boards of trade and chambers of commerce. (a) Definitions. (1) A board of trade is a corporation formed for the purpose of fostering trade and commerce, or the interests of those having a common trade, business, financial or professional interest, to reform abuses relative thereto, to secure freedom from unjust or unlawful exactions, to diffuse accurate and reliable information as to the standing of merchants and other matters, to procure uniformity and certainty in the customs and usages of trade and commerce, and of those having a common trade, business, financial or professional interest; to settle and adjust differences between its members and others and to promote a more enlarged and friendly intercourse among business people; to advance the civic, commercial, industrial and agricultural interests of the territory where the corporation is situate; to promote the general welfare and prosperity of such territory and to stimulate public sentiment to these ends; and to provide such civic, commercial, industrial, agricultural and social features as will promote these purposes. (2) A chamber of commerce is a corporation, the members of which are in diverse lines of business, membership in which is not restricted to, nor in practice consists primarily of, persons, partnerships or corporations engaged in or carrying on the same, allied or interdependent lines of business, and which is formed for the purpose of fostering trade and commerce, or the interests of those carrying on such trade and commerce; to promote the general welfare and prosperity of the

state, territory or community in which such corporation is situate; to reform abuses involving business, professional or financial interests, to secure freedom from unjust or unlawful exactions, to diffuse accurate and reliable information as to the standing of merchants and other matters, to procure uniformity and certainty in the customs and usages of trade and commerce; to settle and adjust differences between its members and others, and to promote a more enlarged and friendly intercourse among businessmen; to advance the civic, commercial, industrial and agricultural interests of the territory where the corporation is situate; to provide such features as will promote these purposes, and to stimulate public sentiment to these ends. A corporation formed before the first day of January, eighteen hundred seventy-five, the purposes and activities of which are those of a chamber of commerce as herein defined, shall be a chamber of commerce regardless of its name, and shall not be required to change its existing name by reason of this subparagraph. (b) Type of corporation.

A board of trade or a chamber of commerce is a non-charitable corporation under this chapter. (c) Special powers. (1) A board of trade or a chamber of commerce organized for the purposes set forth in paragraph (a), shall have the power to be appointed and to act under the order or appointment of any court of competent jurisdiction as receiver or trustee of the property or estate of any person or corporation in insolvency and bankruptcy proceedings, and to act as assignee or trustee for the benefit of creditors in any case in which a member or members of such board of trade or a chamber of commerce are creditors of such insolvent or bankrupt estate; or of such assignor for the benefit of creditors; or in any other instance where the purposes of the corporation might reasonably be involved. (2) A board of trade or chamber of commerce organized for the purposes set forth in paragraph (a) may make loans to its members, directors or officers, or to any other corporation, firm, association or other entity in which one or more of its members, directors or officers are directors or officers or hold a financial interest, in any case where its board of directors finds that the making of such loan will be in furtherance of

its corporate purposes and for a lawful public or quasi-public objective. (3) A board of trade organized for the purposes set forth in paragraph (a) of this section may make distributions of cash or property to, or confer other benefits upon, its members, or former members, prior to dissolution or final liquidation in any case where the board of directors of such corporation finds that such cash, property or other benefit is not required for the conduct of its corporate purposes; provided, however, that no such action shall be taken when the corporation is currently insolvent or would thereby be made insolvent or rendered unable to carry on its corporate purposes, or when the fair value of the corporation's assets remaining after the taking of such action would be insufficient to meet its liabilities. (4) A board of trade organized for the purposes set forth in paragraph (a) of this section may provide in its certificate of incorporation or by-laws that the members or any class of members shall, with respect to any matter on which the members of such class are entitled to vote, have more than, or less than, one vote.

§ 1411 Local development corporations.

§ 1411. Local development corporations. (a) Purposes.

This section shall provide an additional and alternate method of incorporation or reincorporation of not-for-profit corporations for any of the purposes set forth in this paragraph and shall not be deemed to alter, impair or diminish the purposes, rights, powers or privileges of any corporation heretofore or hereafter incorporated under this section or under the stock or business corporation laws. Corporations may be incorporated or reincorporated under this section as not-for-profit local development corporations operated for the exclusively charitable or public purposes of relieving and reducing unemployment, promoting and providing for additional and maximum employment, bettering and maintaining job opportunities, instructing or training individuals to improve or develop their capabilities for such jobs, carrying on scientific research for the purpose of aiding a community or geographical area by attracting new industry to the community or area or

by encouraging the development of, or retention of, an industry in the community or area, and lessening the burdens of government and acting in the public interest, and any one or more counties, cities, towns or villages of the state, or any combination thereof, or the New York job development authority in exercising its power under the public authorities law to encourage the organization of local development corporations, may cause such corporations to be incorporated by public officers or private individuals or reincorporated upon compliance with the requirements of this section, and it is hereby found, determined and declared that in carrying out said purposes and in exercising the powers conferred by paragraph (b) such corporations will be performing an essential governmental function. (b) Type of corporation.

A local development corporation is a charitable corporation under this chapter. (c) Powers.

In furtherance of its purposes set forth in paragraph (a) but not for any other purposes, a local development corporation incorporated or reincorporated under this section shall have the following powers: to construct, acquire, rehabilitate and improve for use by others industrial or manufacturing plants in the territory in which its operations are principally to be conducted, to assist financially in such construction, acquisition, rehabilitation and improvement, to maintain such plants for others in such territory, to disseminate information and furnish advice, technical assistance and liaison with federal, state and local authorities with respect thereto, to acquire by purchase, lease, gift, bequest, devise or otherwise real or personal property or interests therein, to borrow money and to issue negotiable bonds, notes and other obligations therefor, and notwithstanding section 510 (Disposition of all or substantially all assets) without leave of the court, to sell, lease, mortgage or otherwise dispose of or encumber any such plants or any of its real or personal property or any interest therein upon such terms as it may determine and, in connection with loans from the New York job development authority, to enter into covenants and agreements and to comply with all the terms, conditions

and provisions thereof, and otherwise to carry out its corporate purposes and to foster and encourage the location or expansion of industrial or manufacturing plants in the territory in which the operations of such corporation are principally to be conducted, provided, however, that no such corporation shall attempt to influence legislation by propaganda or otherwise, or participate or intervene, directly or indirectly, in any political campaign on behalf of or in opposition to any candidate for public office. (d) Purchase or lease of real property owned by a county, city, town or village. (1) The local legislative body of a county, city, town or village or, if there is a board of estimate in a city, then the board of estimate, may by resolution determine that specifically described real property owned by the county, city, town or village is not required for use by such county, city, town or village and authorize the county, city, town or village to sell or lease such real property to a local development corporation incorporated or reincorporated under this article; provided, however, that title to such land be not declared inalienable as a forest preserve or a parkland. (2) Notwithstanding the provisions of any general, special or local law, charter or ordinance to the contrary, such sale or lease may be made without appraisal, public notice, (except as provided in subparagraph (4)) or public bidding for such price or rental and upon such terms as may be agreed upon between the county, city, town or village and said local development corporation; provided, however, that in case of a lease the term may not exceed ninety-nine years and provided, further, that in cities having a population of one million or more, no such sale or lease shall be made without the approval of a majority of the members of the borough improvement board of the borough in which such real property is located. (3) Before any sale or lease to a local development corporation incorporated or reincorporated under this article shall be authorized, a public hearing shall be held by the local legislative body, or by the board of estimate, as the case may be, to consider the proposed sale or lease. (4) Notice of such hearing shall be published at least ten days before the date set for the hearing in such publication and in such manner as

may be designated by the local legislative body, or the board of estimate as the case may be.

• (5) A local development corporation, incorporated or reincorporated under this section, which purchases or leases real property from a county, city, town or village, shall not, without the written approval of the county, city, town or village, use such real property for any purpose except the purposes set forth in the certificate of incorporation or reincorporation of said local development corporation. In the event such real property is used in violation of the restrictions of this paragraph, the attorney-general may bring an action or special proceeding to enjoin the unauthorized use. With respect to the Orange County Funding Corporation, the independent monitor appointed pursuant to paragraph (a) of subdivision three of section nine hundred twelve-b of the general municipal law may also bring an action or special proceeding to enjoin the unauthorized use of any real property purchased or leased by such corporation in violation of the restrictions of this paragraph.
• NB Effective until May 3, 2030
• (5) A local development corporation, incorporated or reincorporated under this section, which purchases or leases real property from a county, city, town or village, shall not, without the written approval of the county, city, town or village, use such real property for any purpose except the purposes set forth in the certificate of incorporation or reincorporation of said local development corporation. In the event such real property is used in violation of the restrictions of this paragraph, the attorney-general may bring an action or special proceeding to enjoin the unauthorized use.
• NB Effective May 3, 2030 (e) Certificate of incorporation.

In addition to the requirements of section 402 (Certificate of incorporation; contents) the certificate of incorporation or reincorporation of a local development corporation incorporated or reincorporated under this article shall state (1) that all income and earnings of such corporation shall be used exclusively for its corporate purposes or accrue and be paid to the New York job development authority, (2) that no part of the income or earnings of such

corporation shall inure to the benefit or profit of, nor shall any distribution of its property or assets be made to any member or private person, corporate or individual, or any other private interest, except that the certificate of incorporation or reincorporation may authorize the repayment of loans and may also authorize the repayment of contributions (other than dues) to the local development corporation but only if and to the extent that any such contribution may not be allowable as a deduction in computing taxable income under the internal revenue code of nineteen hundred fifty-four, (3) that if such corporation accepts a mortgage loan or loans from the New York job development authority, such corporation shall be dissolved in accordance with the provisions of paragraph (g) upon the repayment or other discharge in full by such corporation of all such loans. (f) Exemption of income from taxation.

The income and operations of corporations incorporated or reincorporated under this section shall be exempt from taxation. (g) Dissolution.

Upon the dissolution of any local development corporation incorporated or reincorporated under this section no member or private person, corporate or individual, or other private interest, shall be entitled to any distribution or division of its remaining funds and other property and rights and interests in property, and the balance thereof, after the payment of all debts and liabilities of the corporation of whatsoever kind and nature, (including the payment of loans and contributions the repayment of which has been authorized in its certificate of incorporation or reincorporation) shall be distributed to one or more counties, cities, towns or villages within the territory designated in its certificate of incorporation or reincorporation as the territory in which its operations are principally to be conducted, for furtherance of the purposes set forth in paragraph (a), or to the New York job development authority, as shall be provided by said corporation or by order of the supreme court of the state of New York pursuant to section 1008 (Jurisdiction of supreme court to supervise dissolution and liquidation). (h) Corporations heretofore incorporated.

Any corporation heretofore incorporated under the membership corporations law or this chapter, or under the stock or business corporation law for any of the purposes set forth in paragraph (a) of this section may amend its certificate of incorporation and be reincorporated as a local development corporation organized under this section by making and filing in the office of the secretary of state a certificate, stating the name of such corporation, and, if it has been changed, the name under which it was originally incorporated, the date of its incorporation, the names and post-office addresses of its members or of the holders of record of all of the outstanding shares of such corporation entitled to vote with relation to the proceedings provided for in the certificate and that such corporation has elected to become and be a local development corporation organized and operated under and by virtue of this section. Such certificate shall be either (1) subscribed in person or by proxy by all of the members or the holders of record of all of the outstanding shares of such corporation entitled to vote with relation to such proceedings and shall have annexed an affidavit of the secretary or an assistant secretary that the persons who have executed the certificate, in person or by proxy, constitute all of the members or the holders of record of all of the outstanding shares of the corporation entitled to vote with relation to the proceedings provided for in the certificate, or (2) subscribed by the president or a vice president and the secretary or an assistant secretary and shall have annexed an affidavit of such officers stating that they have been authorized to execute and file such certificate by the votes, cast in person or by proxy, of all of the members or of the holders of record of all of the outstanding shares of such corporation entitled to vote with relation to such proceedings at the meeting at which such votes were cast, and that such votes were cast at a meeting of members or stockholders held on a date specified, upon notice pursuant to section 605 (Notice of meeting of members) or to section 605 of the Business Corporation Law. Every certificate filed under this paragraph 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 to be located. A reincorporation pursuant to this paragraph shall not effect a dissolution of the corporation, but shall

be deemed a continuation of its corporate existence, without affecting its then existing property rights or liabilities, or the liabilities of its members or officers as such, but thereafter it shall have only such rights, powers and privileges, and be subject only to such other duties and liabilities, as a corporation created for the same purposes under this article. (i) Effect of section.

Corporations incorporated or reincorporated under this section shall be organized and operated exclusively for the purposes set forth in paragraph (a), shall have, in addition to the powers otherwise conferred by law, the powers conferred by paragraph (c) and shall be subject to all the restrictions and limitations imposed by paragraph (e) and paragraph (g). In so far as the provisions of this section are inconsistent with the provisions of any other law, general or special, the provisions of this section shall be controlling as to corporations incorporated or reincorporated hereunder.

§ 1412 University faculty practice corporations.

§ 1412. University faculty practice corporations. (a) Organization. Notwithstanding any other provision of law, one or more individuals who are duly authorized by law to render the same professional service, which shall be the practice of medicine, the practice of dentistry, the practice of chiropractics, the practice of physical therapy or the practice of optometry, and who are members of the faculty of the same accredited medical school, dental school, chiropractic college, college or university with an accredited doctor of physical therapy program or optometry college, as applicable, in the state of New York may organize, or cause to be organized, a university faculty practice corporation under this article (1) for the purpose of supporting the educational mission of such school by providing clinical instruction and supervision of students of such school, interns and residents and, incident thereto, rendering professional services and (2) which shall be operated in compliance with (A) section 501(c)(3) of the United States internal revenue code and (B) the faculty practice plan with which members of the faculty of such school are required to comply, as amended from time to time.

(b) Definition. "University faculty practice corporation" means a corporation organized or reincorporated under this section. (c) Certificate of incorporation. The certificate of incorporation of a university faculty practice corporation shall meet the requirements of this chapter and shall have attached thereto a certificate or certificates issued by the licensing authority certifying that each of the proposed members, if any, directors and officers is authorized by law to practice the profession which the corporation is being organized to practice. The certificate shall also state (1) the name of the medical school, dental school, chiropractic college, college or university with an accredited doctor of physical therapy program or optometry college, as applicable, in the state of New York of which the proposed members, if any, directors and officers are faculty and (2) that such corporation shall operate in compliance with (A) section 501(c)(3) of the United States internal revenue code and (B) the faculty practice plan with which members of the faculty of such school are required to comply, as amended from time to time. (d) Type. A university faculty practice corporation is a charitable corporation under this chapter. (e) Applicability of laws; members, directors and officers. This chapter shall be applicable to a university faculty practice corporation except to the extent that the provisions thereof conflict with this section. A university faculty practice corporation may consolidate or merge only with another university faculty practice corporation. The following provisions of article fifteen of the business corporation law shall be applicable to a university faculty practice corporation except that each reference in such provisions to a "shareholder" shall be deemed to be a reference to a "member" and each reference in such provisions to "shareholders" shall be deemed a reference to "members": paragraphs (a), (b), (c) and (e) of section fifteen hundred one; paragraphs (b), (c) and (d) of section fifteen hundred three; paragraphs (a), (c) and (g) of section fifteen hundred four; section fifteen hundred five; section fifteen hundred nine except to the extent such section refers to section fifteen hundred ten; paragraph (a) of section fifteen hundred twelve; section fifteen hundred fourteen; and section fifteen hundred fifteen. No individual may be a member, director or officer of a university faculty practice corporation unless such

individual is authorized by law to practice in this state the profession which such corporation is authorized to practice and is a member of the faculty of the medical school, dental school, chiropractic college, college or university with an accredited doctor of physical therapy program or optometry college which such corporation is organized to support. (f) Corporations heretofore incorporated. Any corporation heretofore incorporated under article fifteen of the business corporation law and operated in compliance with the requirements of section 501(c)(3) of the United States internal revenue code may amend its certificate of incorporation and be reincorporated as a university faculty practice corporation organized under this section by making and filing in the office of the secretary of state a certificate entitled "Certificate of Reincorporation of...(name of incorporation) under section 1412 of the Not-for-Profit Corporation Law." (1) Such reincorporation certificate shall contain the provisions required, and any other provisions permitted, by section 402 of this chapter and shall also set forth (A) a statement that such corporation is filing such reincorporation certificate under this section, (B) if the name of such corporation has been changed, the name under which such corporation was originally incorporated, (C) the date of incorporation of such corporation, (D) the names and post-office addresses of the holders of record of all of the outstanding shares of such corporation entitled to vote, (E) a statement that such corporation has elected to become and be a university faculty practice corporation organized and operated under by virtue of this section and (F) the statements required by paragraph (c) of this section. (2) Such reincorporation certificate shall be either (A) subscribed in person or by proxy by all of the holders of record of all of the outstanding shares of such corporation entitled to vote and shall have annexed an affidavit of the secretary or an assistant secretary that the persons who have executed the certificate, in person or by proxy, constitute all of the holders of record of all of the outstanding shares of the corporation entitled to vote or (B) subscribed by the president or a vice president and the secretary or an assistant secretary and shall have annexed an affidavit of such officers stating that they have been authorized to execute and file such reincorporation certificate by the votes, cast in person or by proxy, of all of the

holders of record of all of the outstanding shares of such corporation entitled to vote at the meeting at which such votes were cast, and that such votes were cast at a meeting of shareholders held on a date specified, upon notice pursuant to section six hundred five of the business corporation law. (3) A reincorporation pursuant to this paragraph shall not effect a dissolution of such corporation, but shall be deemed a continuation of its corporate existence, without affecting its then-existing property rights or liabilities, or the liabilities of its shareholders, directors or officers as such, but thereafter it shall have only such rights, powers and privileges, and it and such shareholders, directors and officers shall be subject only to such other duties and liabilities, as a university faculty practice corporation and members, directors and officers thereof. (4) Upon the filing of a reincorporation certificate in the office of the secretary of state, (A) any issued and outstanding shares of such corporation shall be purchased by such corporation at a purchase price equal to the price for which such shares were originally issued, or such other price as such corporation shall agree to, such price to be paid out of the surplus of the corporation, whereupon such shares shall be deemed cancelled as of the date of such filing and (B) such reincorporation certificate shall be deemed to replace the certificate of incorporation of such corporation. The department of state shall not file such certificate of reincorporation unless the consent of the commissioner of taxation and finance is attached thereto. Such certificate of consent shall only be given if the commissioner of taxation and finance ascertains that all taxes imposed under article nine-A of the tax law, as well as penalties and interest charges related thereto, accrued against the corporation have been paid. (g) Effect of section. University faculty practice corporations incorporated or reincorporated under this section shall be organized and operated exclusively for the purposes set forth in paragraph (a) of this section and shall be subject to the restrictions and limitations imposed by or pursuant to paragraphs (a) and (e) of this section. Notwithstanding anything to the contrary in article twenty-eight of the public health law or the regulations adopted pursuant thereto, no corporation organized under this section shall be deemed to be establishing or operating a hospital, diagnostic center and/or treatment

center requiring establishment or construction approval solely by reason of being organized as a not-for-profit corporation. Insofar as the provisions of this section are inconsistent with the provisions of any other law, general or special, the provisions of this section shall be controlling as to the corporations incorporated or reincorporated hereunder.

ARTICLE 15 PUBLIC CEMETERY CORPORATIONS Section 1501. Declaration of policy. 1502. Definitions. 1503. Application. 1504. Cemetery board and general administration. 1505. Special requirements of incorporation. 1505-a. Additional requirements for incorporation of crematories. 1505-b. Additional requirements for incorporation of natural organic reduction facilities. 1506. Cemetery lands. 1506-a. Cemetery corporations; restrictions. 1506-b. Transfer of lands of Valley View Rural Cemetery. 1506-c. Abandoned cemetery maintenance by cemetery corporations. 1506-d. Additional requirements for merger or consolidation of cemetery corporations in certain circumstances. 1506-e. Lease of cemetery lands. 1507. Trust funds. 1507-a. State cemetery board citizens advisory council. 1508. Reports by cemeteries. 1509. Cemetery rules and regulations; charges and lot tax assessments. 1510. Cemetery duties. 1510-a. Repair or removal of monuments. 1510-b. Availability for interment on six-day basis. 1510-c. Form of authorizations. 1511. Cemetery indebtedness. 1512. Rights of lot owners.

1513. Sale of burial rights. 1513-a. Reacquisition of a lot, plot or part thereof by a cemetery corporation.
1514. Misdemeanor; general penalty.
1515. Actions affecting cemetery corporations.
1516. Sale of monuments.
1517. Crematory operations.
1518. Crematory operations during emergency declaration. 1518*2. Natural organic reduction facility operations.

Article 15

§ 1501 Declaration of policy.

§ 1501. Declaration of policy.

The people of this state have a vital interest in the establishment, maintenance and preservation of public burial grounds and the proper operation of the corporations which own and manage the same. This article is determined an exercise of the police powers of this state to protect the well-being of our citizens, to promote the public welfare and to prevent cemeteries from falling into disrepair and dilapidation and becoming a burden upon the community, and in furtherance of the public policy of this state that cemeteries shall be conducted on a non-profit basis for the mutual benefit of plot owners therein.

§ 1502 Definitions. As used in this article:

§ 1502. Definitions. As used in this article: (a) The term "cemetery corporation" means any corporation formed under a general or special law for the disposal or burial of deceased human beings, by cremation, natural organic reduction or in a grave, mausoleum, vault, columbarium or other receptacle but does not include a family cemetery corporation or a private cemetery corporation. (b) The term "lot owner" or "owner of a lot" means any person having a lawful title to the use of a niche, crypt, lot, plot or part thereof, in a cemetery, mausoleum or columbarium. (c) The term "cemetery board" means the cemetery board in the division of cemeteries in the department of state. (d) A public mausoleum, crematory, natural organic reduction facility or columbarium shall be included within the term "cemetery".

(e) The sale of a lot, plot or part thereof, grave, niche or crypt shall mean the sale of the right of use thereof for burial purposes. (f) The term "monuments" means a memorial erected in a cemetery on a lot, plot or part thereof, except private mausoleums. (g) The term "interment" means the permanent disposition of human remains by inurnment, entombment or ground burial. (h) The term "cremation" means the technical process, using heat and flame, that reduces human remains to ashes and other residue. "Cremation" shall include the processing, and may include the pulverization, of such ashes and other residue. (i) The term "cremains" means ashes and other residue recovered after the completion of cremation, which may include residue of foreign matter that may have been cremated with the human remains. (j) The term "alternative container" or "external wrappings" means a nonmetal receptacle or enclosure, without ornamentation or a fixed interior lining, which is designed for the encasement of human remains and which is made of cardboard, pressed wood, composite materials (with or without an outside covering), or pouches of canvas or other material. (k) The term "casket" means a rigid container that is designed for the encasement of human remains and customarily ornamented and lined with fabric. (l) The term "crematory" means a facility or portion of a building in which the remains of deceased human beings are processed by cremation. (m) The term "holding facility" or "temporary storage facility" means an area that (i) is designated for the retention of human remains prior to cremation or natural organic reduction; (ii) complies with all applicable public health laws, (iii) preserves the health and safety of the crematory or natural organic reduction facility personnel; and (iv) is secure from access by anyone other than authorized persons. The interior of such facility shall not be visible from any area accessible to the general public. (n) The terms "cremation permit" and "natural organic reduction permit" mean the burial and removal permit required pursuant to section forty-one hundred forty-five of the public health law that is annotated for disposition of the remains of a deceased human being by cremation or natural organic reduction. (o) The terms "cremation authorization" and "natural organic reduction

authorization" mean the crematory or natural organic reduction form authorizing a cremation or natural organic reduction which is signed by the next of kin or authorizing agent. This crematory or natural organic reduction form must be a separate document and cannot be a part of another form or document. (p) The term "authorizing agent" shall mean the person with the right to control the disposition of the decedent pursuant to section forty-two hundred one of the public health law. (q) The term "pet cremated remains" means ashes and/or other residue recovered after the completion of cremation of any domestic animal that has been adapted or tamed to live in intimate association with people where such cremation has occurred at a pet crematorium as defined in section seven hundred fifty-a of the general business law. (r) The term "nonsectarian burial society" means a corporation or unincorporated association or society having among its activities or its former activities the provision of burial benefits for its members and not supervised or controlled by a religious corporation. (s) The term "religious burial society" means a corporation or unincorporated association or society having among its activities or its former activities the provision of burial benefits for its members and supervised or controlled by a religious corporation. (t) The term "natural organic reduction" means the contained, accelerated conversion of human remains to soil. (u) The term "natural organic reduction facility" means a structure, room, or other space in a building or real property where natural organic reduction of a human body occurs.

§ 1503 Application.

§ 1503. Application. (a) Except as otherwise provided in paragraph (b) of this section, section fifteen hundred five-b, paragraph (c) of section fifteen hundred seven, paragraph (m) of section fifteen hundred ten, and section fifteen hundred eighteen of this article does not apply to (1) a religious corporation, (2) a municipal corporation, (3) a cemetery corporation owning a cemetery operated, supervised or controlled by or in connection with a religious corporation or (4) a cemetery belonging to a religious or a municipal corporation, or operated, supervised or controlled by or

in connection with a religious corporation unless any officer, member or employee of any such corporation shall receive or may be lawfully entitled to receive any pecuniary profit from the operations thereof, other than reasonable compensation for services in effecting one or more of the purposes of such corporation or as proper beneficiaries of its strictly charitable purposes or unless the organization of any such corporation for any of its avowed purposes be a guise or pretense for directly or indirectly making any other pecuniary profit for such corporation, or for any of its officers, members or employees, and unless any such corporation is not, in good faith, organized or conducted exclusively for one or more of its stated purposes. (b) All crematories or natural organic reduction facilities shall be subject to inspection by the division of cemeteries. Upon inspection, the crematory or natural organic reduction facility may be asked to produce any and all records for the operation and maintenance of the crematory or natural organic reduction facility. These records may include but not be limited to cremation or natural organic reduction authorizations, rules and regulations of the crematory or natural organic reduction facility, procedures as set forth in section fifteen hundred seventeen of this article, or section fifteen hundred eighteen of this article, as applicable, and the written procedure of the identification of remains. (c) Except as otherwise provided in paragraph (c) of section fifteen hundred seven and paragraph (m) of section fifteen hundred ten of this article, this article does not apply to a burial site as defined in paragraph (a) of subdivision one of section one hundred seventy-one of the executive law.

§ 1504 Cemetery board and general administration.

§ 1504. Cemetery board and general administration. (a) A cemetery board is hereby created within the division of cemeteries in the department of state, subject to the following requirements: (1) The members of such board shall be the secretary of state, the attorney general and the commissioner of health, who shall serve without additional compensation. (2) The secretary of state, attorney general and commissioner of health may each, by official order filed in the office of his respective department and in the office of

the board, designate a deputy or other representative in his department to perform any or all of the duties under this section of the department head making such designation, as may be provided in such order. Such designation shall be deemed temporary only and shall not affect the civil service or retirement rights of any person so designated. Such designees shall serve without additional compensation. (3) The secretary of state shall be chairman of such board, provided that in his absence at any meeting of the board the attorney general or the commissioner of health, in such order, if either or both be present, shall act as chairman. When designees of such officers, in the absence of all such officers, are present at any meeting of the board, the designee of the secretary of state, if present, and in his absence one of the other designees present, in the same order of preference as provided for the officer appointing him, shall act as chairman. (4) Technical, legal or other services shall be performed in so far as practicable by personnel of the departments of state, law and health without additional compensation but the board may employ and compensate within appropriations available therefor such assistants and employees as may be necessary to carry out the provisions of this section and may prescribe their powers and duties. (5) Two members of the board shall constitute a quorum to transact the business of the board at both regular and special meetings. (6) The board shall meet at least once a month, shall keep a record of all its proceedings and shall determine the rules of its own proceedings. (7) Special meetings may be called by the chairman upon his initiative, and must be called by him upon receipt of a written request therefor signed by another member of the board. Written notice of the time and place of such special meeting shall be delivered to the office of each member of the board. (8) The board shall have the duty of administering the provisions of this chapter which deal with cemetery corporations other than the cemeteries and cemetery corporations enumerated in section fifteen hundred three and shall have all the powers herein provided and such other powers and duties as may be otherwise prescribed by law. (b) Director of the division of cemeteries. The cemetery board shall appoint a director of the division of cemeteries who shall hold his office for a term of six years. He shall receive an annual salary to be fixed by the board within the appropriations available to the board.

Subject to the supervision, direction and control of the board, the director of the division of cemeteries shall be responsible for the administration of this article and he shall exercise and perform such duties and functions of the board as it may assign or delegate to him from time to time. (c) Powers and duties of the cemetery board. With respect to any cemetery or cemetery corporation, the cemetery board shall have the following duties and powers: (1) To adopt such reasonable rules and regulations as the cemetery board shall deem necessary for the proper administration of this article. (2) To order any cemetery corporation to do such acts as may be necessary to comply with the provisions of this article or any rule or regulation adopted by the cemetery board or to refrain from doing any act in violation thereof. (2-a) To adopt reasonable rules and regulations to exempt those cemetery corporations from the provisions of paragraph (h) of section fifteen hundred ten of this chapter which because of a limited number of paid employees or appropriate resources are unable to carry out such provisions. (2-b) To adopt reasonable rules and regulations to extend the time period mandated by the provisions of paragraph (h) of section fifteen hundred ten of this chapter when necessary because compliance by a cemetery corporation within such time period is impossible. (3) To enforce its orders by mandamus or injunction in a summary proceeding or otherwise. In connection with such action or proceeding, the attorney general is authorized to take proof, issue subpoenas and administer oaths in the manner provided in the civil practice law and rules. (4) To impose a civil penalty upon a cemetery corporation not exceeding one thousand dollars, after conducting an adjudicatory hearing pursuant to the provisions of the state administrative procedure act, for a violation of or a failure to comply with any provisions contained in this article or any regulation, directive or order of the board, and without the need to maintain a civil action pursuant to subdivision five of this paragraph. (5) To maintain a civil action in the name of the people of the state to recover a judgment for a money penalty imposed under the provisions of this article. (d) Judicial review. Any order or determination of the cemetery board made pursuant to this article shall be subject to review by the supreme court in the manner provided by article seventy-eight of the

civil practice law and rules; provided, however, that an application for review of such order or determination must be made within one hundred twenty days from the date of the filing of such order or determination, and provided further that no stay shall be granted pending the determination of the matter except on notice to the cemetery board and for a period not exceeding thirty days. Proceedings to review such order shall be entitled to a preference.

§ 1505 Special requirements of incorporation.

§ 1505. Special requirements of incorporation. (a) Certificate of incorporation; additional contents. In addition to the requirements of section four hundred two (Certificate of incorporation; contents), the certificate of incorporation of a cemetery corporation shall be filed in the office of the clerk of each county in which any part of the cemetery is proposed to be, or is, situated, and shall state: (1) each city, village or town, and county, in which any part of the cemetery is or is proposed to be situated; and (2) the time of the annual meeting. (b) Cemetery board endorsement. Every certificate of incorporation of a cemetery corporation, except those within the exclusionary provisions of section fifteen hundred three, shall have endorsed thereon or annexed thereto the approval of the cemetery board as required in subdivision (e) of section four hundred four of this chapter. (c) Type of corporation. A cemetery corporation is a charitable corporation under this chapter. (d) Lot owners in unincorporated cemeteries may incorporate. (1) Not less than three owners of lots in an unincorporated cemetery may cause a notice to be posted in at least six conspicuous places in the city, town or village in which such cemetery is located, and to be published once in each week for three successive weeks in a newspaper, if any, published in such municipality, stating that at a time and place specified, a meeting of the lot owners will be held to determine whether such cemetery shall be incorporated, pursuant to this chapter. (2) The meeting shall be held at a convenient place in the city, town or village in which the cemetery is located, not less that twenty-five nor more than thirty days after the first posting and publication of the notice of the meeting. At such meeting every lot owner shall be entitled to one

vote in person or by proxy for each lot owned by him. The persons entitled to vote at such meeting shall select a chairman and secretary, and determine by ballot whether or not the lot owners shall incorporate pursuant to this chapter. (3) If a majority of the ballots are in favor of incorporation, the persons entitled to vote at such meeting shall select three lot owners to incorporate and the provisions of this chapter shall be applicable, except that three persons may incorporate, and the corporation shall not be required to have more than three directors. Upon such incorporation, the lot owners shall be members of the corporation, and it shall be vested with the title to such cemetery and the personal property appertaining thereto. If the title to the cemetery has prior to such incorporation vested in the town, pursuant to section two hundred and ninety-one of the town law of section one of title seven of chapter eleven of part one of the revised statute, the supervisor of such town shall on request of the directors of such corporation, execute to it a deed of such cemetery lands releasing all interest of the town therein, and thereafter the title shall be vested in the corporation.

§ 1505-a Additional requirements for incorporation of crematories.

§ 1505-a. Additional requirements for incorporation of crematories. (a) Approval. A cemetery corporation seeking the approval to operate a crematory must submit for approval by the cemetery board the following: (1) a list of the directors, employees, and certificate holders of the cemetery corporation; (2) a certified survey of the site and location within the county it will be situated; (3) a business plan for the operation of the crematory to include, but not be limited to, number of expected cremations per year, number of cremation units, manufacture, capital costs, financing, anticipated number of employees, types of services provided, pricing thereof; (4) a description of the impact of the proposed crematory on other crematories within the county or whether the crematory will have an adverse impact on the surrounding community; (5) plans, designs, and costs of any structures to be erected or retrofitted for the crematory use; (6) a description of any approvals or permits required by state or local law. No crematory shall be approved until such other approvals or permits have been obtained. Any board approval of a crematory shall be so conditioned.

(b) Further information. Within thirty-five days following receipt of the information required by paragraph (a) of this section, the cemetery board or the division of cemeteries may request from the cemetery corporation any additional information or documentation and technical assistance deemed necessary to review such information. Such information shall not be deemed complete until the requested additional information has been received. If no such request is made, the submission shall be deemed complete on the thirty-fifth day after its receipt by the division. (c) Determination. The cemetery board shall approve or deny the proposed crematory within ninety days of the completed submission. (d) Notification. The cemetery board shall provide written notice of its determination to the cemetery corporation. If a negative determination is made, such notice shall state the reasons therefor. Notice shall be made by registered or certified mail addressed to the corporation at its principal office.

§ 1505-b Additional requirements for incorporation of natural organic

§ 1505-b. Additional requirements for incorporation of natural organic reduction facilities. (a) Approval. A cemetery corporation seeking the approval to operate a natural organic reduction facility shall submit for approval by the cemetery board the following: (1) a list of the directors, employees, and certificate holders of the cemetery corporation; (2) a certified survey of the site and location within the county it will be situated; (3) a business plan for the operation of the natural organic reduction facility to include, but not be limited to, number of expected natural organic reductions per year, number of natural organic reduction units, manufacture, capital costs, financing, anticipated number of employees, types of services provided, pricing thereof; (4) a description of the impact of the proposed natural organic reduction facility on other natural organic reduction facilities, if any, within the county or impact on the surrounding community; (5) plans, designs, and costs of any structures to be erected or retrofitted for the natural organic reduction facility use; and

(6) a description of any approvals or permits required by state or local law. No natural organic reduction facility shall be approved until such other approvals or permits have been obtained. (b) Further information. Within thirty-five days following receipt of the information required by paragraph (a) of this section, the cemetery board or the division of cemeteries may request from the cemetery corporation any additional information or documentation and technical assistance deemed necessary to review such information. Such information shall not be deemed complete until the requested additional information has been received. If no such request is made, the submission shall be deemed complete on the thirty-fifth day after its receipt by the division of cemeteries. (c) Determination. The cemetery board shall approve or deny the proposed natural organic reduction facility within ninety days of the completed submission. (d) Notification. The cemetery board shall provide written notice of its determination to the cemetery corporation. If a negative determination is made, such notice shall state the reasons therefor. Notice shall be made by registered or certified mail addressed to the cemetery corporation at its principal office.

§ 1506 Cemetery lands.

§ 1506. Cemetery lands. (a) Purchase of land; notice to cemetery board. (1) No cemetery corporation, in purchasing real property hereafter, shall pay or agree to pay more than the fair and reasonable market value thereof. The terms of the purchase, including the price to be paid and the method of payment, shall be subject to notice and approval of the cemetery board. In determining the fair and reasonable market value, the cemetery board may take into consideration the method by which the purchase price is to be paid. (2) Notwithstanding the restrictions set forth in subparagraph three of paragraph (h) of this section, a cemetery corporation may purchase real property for cemetery purposes that is not adjacent to existing cemetery property or that would result in the cemetery corporation owning more than two hundred acres of land in the aggregate upon proving to the satisfaction of the cemetery board:

i. that the proposed purchase will benefit the cemetery corporation and the owners of plots and graves in the cemetery;

ii. that the cemetery has sufficient funds and sufficient ability to take on any debt required by the proposed terms of purchase;

iii. that the cemetery corporation fully investigated available land in reasonable proximity to its existing cemetery and that the proposed purchase is prudent, taking into consideration the proximity of the land to the existing cemetery, the quantity of land, the proposed purchase price, and if applicable, the number of lot sales and income the land is reasonably expected to generate, and the future needs of the cemetery; and

iv. that the municipalities that would be required to assume the care and control of any part of the cemetery if the cemetery corporation were to be abandoned have been notified of the proposed purchase. (b) Consent of local authorities. (1) No cemetery shall hereafter be located in any city or village without the consent of the local legislative body of such city, or the board of trustees of such village. (2) No cemetery shall hereafter be located in any town, outside of an incorporated village in Suffolk county, without the consent of the town board of such town. (c) Cemeteries in Kings, Queens, Rockland, Westchester, Nassau, Suffolk, Putnam and Erie counties. A cemetery corporation shall not take by deed, devise, merger or otherwise any land in the counties of Kings, Queens, Rockland, Westchester, Nassau, Suffolk, Putnam or Erie for cemetery purposes, or set apart any ground therefor in any of such counties, unless the consent of the board of supervisors or legislative body thereof, or of the city council of the city of New York, in respect to Kings or Queens county, be first obtained. Such consent may be granted upon such conditions and under such regulations and restrictions as the public health and welfare may require. Notice of application for such consent shall be published, once a week for six weeks, in the newspapers designated to publish the session laws and in such other newspapers published in the county as such board or body may direct,

stating the time when the application will be made, a brief description of the lands proposed to be acquired, their location and the area thereof. Any person interested therein may be heard on such presentation. If such consent is granted the corporation may take and hold the lands designated therein. The consent shall not authorize any one corporation to take or hold more than two hundred fifty acres of land unless the acquisition is by an abandonment pursuant to section fifteen hundred six-c of this article or a merger or consolidation of cemetery corporations pursuant to article nine of this chapter that complies with the additional requirement of section fifteen hundred six-d of this article, except that such limitation shall not apply to paragraph (n) of this section and the provisions of subparagraph two of paragraph (a) of this section. Nothing contained in this subdivision shall prevent any religious corporation in existence on April fifteenth, eighteen hundred fifty-four, in any of said counties from using as heretofore any burial ground then belonging to it within such county. Such board or body, from time to time, may make such regulation as to burials in any cemetery in the county as the public health may require. (d) Limitation on the acquisition of land by rural cemetery corporations. It shall not be lawful for any rural cemetery corporation hereafter to acquire or take by deed, devise or otherwise, any land in any county within the state of New York, having a population of between one hundred seventy-five thousand and two hundred thousand, according to the federal census of nineteen hundred, or set apart any ground for cemetery purposes therein, where there has already been set apart in any such county, five hundred acres of land for rural cemetery purposes, and the consent of the board of supervisors of any such county shall not be granted where there has already been granted five hundred acres of land, or upwards, within such county, to rural cemetery corporations unless the acquisition is by an abandonment pursuant to section fifteen hundred six-c of this article or a merger or consolidation of cemetery corporations pursuant to article nine of this chapter that complies with the additional requirements of section fifteen hundred six-d of this article. Nothing herein contained shall affect any lawful consent or grant hitherto made by the board of supervisors of any such county. (e) Limitations on the acquisition of land for cemetery purposes in certain counties. (1) It shall not be lawful for any corporation,

association or person hereafter to set aside or use for cemetery purposes any lands in any county within the state erected on and after January first, eighteen hundred ninety, adjoining a city of the first class and having a population of between eighty thousand and eighty-five thousand according to the federal census of nineteen hundred ten; but nothing herein contained shall prevent cemetery corporations formed prior to January first, nineteen hundred seventeen, which own in such county a cemetery in which burials have been made prior to such date, from setting apart and using for burial purposes lands lying contiguous or adjacent to such cemetery which lands have been heretofore acquired by a recorded deed of conveyance made to such a cemetery corporation either for burial purposes, or for the purposes of the convenient transaction of its general business, which lands shall have been acquired with the consent of the board of supervisors; nor to prohibit the dedication or use of land within such county for a family cemetery as provided in paragraph (c) of section fourteen hundred one of this chapter. Nothing herein contained shall prohibit a cemetery corporation from assuming management and maintenance of an abandoned cemetery pursuant to section fifteen hundred six-c of this article or a merger or consolidation of cemetery corporations pursuant to article nine of this chapter that complies with the additional requirements of section fifteen hundred six-d of this article. (2) The provisions of this paragraph shall not operate to prevent any such cemetery corporation located in Nassau county from using for burial purposes contiguous or adjacent land acquired by it provided that such use shall be consented to by the Nassau county legislature. (f) Conveyance by religious corporations or by trustees. A cemetery corporation may accept a conveyance of real property held by a religious corporation for burial purposes, or by trustees for such purposes if all such trustees living and residing in this state unite in the conveyance, subject to all trusts, restrictions and conditions upon the title or use. Lots previously sold and grants for burial purposes shall not be affected by any such conveyance; nor shall any grave, monument or other erection, or any remains, be disturbed or removed without the consent of the lot owner, or if there be no such owner, without the consent of the heirs of the persons whose remains are buried in such grave. (g) Certain conveyances to cemetery corporations authorized. Upon

approval of the cemetery board first having been obtained, a cemetery corporation which maintains and operates a cemetery may accept a conveyance of title to the fee of or to burial rights in lands within the confines of said cemetery and it shall be lawful for any cemetery or business corporation to make such conveyances. Lots previously sold and grants previously made for burial purposes shall not be affected by such conveyance. The cemetery corporation, in consideration of the conveyance to it of burial rights in lands within the confines of said cemetery, may, with the approval of the cemetery board, issue participating certificates of the kind and nature provided for in paragraph three of subdivision (e) of section fifteen hundred eleven of this article. In making its determination the cemetery board shall consider and may condition its approval on the purposes of this section. (h) Acquisition of property by condemnation or otherwise. (1) If the certificate of incorporation or by-laws of a cemetery corporation do not exclude any person, on equal terms with other persons, from the privilege of purchasing a lot or of burial in its cemetery, such corporation may, from time to time, acquire by condemnation, exclusively for the purposes of a cemetery, not more than two hundred acres of land in the aggregate, forming one continuous tract, wholly or partly within the county in which its certificate of incorporation is filed or recorded, except as in this section otherwise provided as to the counties of Erie, Nassau, Suffolk, Putnam, Kings, Queens, Rockland and Westchester. (2) A cemetery corporation may acquire by condemnation, exclusively for the purposes of a cemetery, any real property or any interest therein necessary to supply water for the uses of such cemetery, and the right to lay, relay, repair and maintain conduits and water pipes with connections and fixtures, in, through or over the lands of others and the right to intercept and divert the flow of waters from the lands of riparian owners, and from persons owning or interested in any waters. But no such cemetery corporation shall have power to take or use water from any of the canals of this state, or any canal reservoirs as feeders, or any streams which have been taken by the state for the purpose of supplying the canals with water. (3) A cemetery corporation may acquire, otherwise than by condemnation, real property exclusively for the purposes of a cemetery

as aforesaid in subparagraph 1 of this paragraph and additional real property for the purposes of the convenient transactions of its business, no portion of which shall be used for the purposes of a cemetery. Notwithstanding the foregoing or any other provision of law to the contrary, a cemetery corporation that holds real property for cemetery purposes that exceeds two hundred acres in the aggregate or that does not form one continuous tract as a result of acquisitions of real property that occurred prior to the effective date of the chapter of the laws of two thousand twenty which amended this paragraph and for which all approvals and consents required at the time to acquire such real property were obtained, may continue to use such real property for cemetery purposes. (i) Sale or disposition of cemetery lands. (1) No cemetery corporation may sell or dispose of the fee of all or any part of its lands dedicated to cemetery use, unless it shall prove to the satisfaction of the supreme court in the district where any portion of the cemetery lands is located or the cemetery board, that either: (A) all bodies have been removed from each and every part of the cemetery, that all the lots in the entire cemetery have been reconveyed to the corporation and are not used for burial purposes, and that it has no debts and liabilities, or (B) the land to be sold or disposed of is not used or is not physically adaptable for burial purposes and that the sale or disposition will benefit the cemetery corporation and the owners of plots and graves in the cemetery, and (C) the sale or disposition is not to a funeral entity as defined in paragraph (c) of section fifteen hundred six-a of this article. (2) If the sale or disposition is made pursuant to subparagraph (A) of subdivision one of this paragraph, the cemetery shall satisfy the court or the cemetery board that it is in the public interest to dispose of such cemetery land in the manner proposed; that the subject land is not suitable for cemetery purposes or is no longer needed by the community for such cemetery uses or purposes; and that the subject land is being sold for its current market value. (3) If the sale or disposition of the land is made pursuant to subparagraph (B) of subdivision one of this paragraph, the court or cemetery board shall order that the consideration received by the cemetery corporation, less the necessary expenses incurred, shall be deposited into the permanent maintenance fund established by the cemetery corporation pursuant to

paragraph (a) of section fifteen hundred seven of this article. (4) Notice of any application hereunder shall be given in addition to the cemetery board, to the holders of certificates of indebtedness and land shares of the cemetery corporation, to any person having informed the cemetery board by petition or notice of interest in the proceeding and to any person interested in the proceeding pursuant to section five hundred eleven of this chapter (Petition for leave of court). (j) Conveyance by cemetery corporation to city or village. A cemetery corporation may convey and transfer its real property held for burial purposes, together with its other assets, to a city having a population of less than one million inhabitants in which such real property is located, or to a village, provided such real property is located within such village or wholly within three miles of the boundaries thereof, or to a town, in which such real property is located, if all the directors and trustees of such cemetery corporation living and residing in the state of New York unite in the conveyance and transfer. Such conveyance and transfer shall be subject to all agreements as to lots sold and all trusts, restrictions and conditions upon the title or use of such real property and assets. Lots previously sold and grants previously made for burial purposes shall not be affected by such conveyance, nor shall any grave, monument or other erection be disturbed or removed except in accordance with law. No such conveyance shall be effective unless and until the legislative body of such city, town or village shall by ordinance or resolution accept the same subject to the conditions and restrictions hereinabove imposed, which ordinance or resolution said legislative body is hereby authorized and empowered to adopt by a majority vote of such body. Upon such conveyance and transfer such property shall be and become a municipal cemetery of such city, town or village and such property and assets so conveyed and transferred shall be administered as any other municipal cemetery of such city, town or village and the said cemetery corporation shall be dissolved by the recording of such conveyance and transfer. (k) Streets or highways not to be laid out through certain cemetery lands. So long as the lands of a rural cemetery corporation organized under the act entitled "An act authorizing the incorporation of rural cemetery associations," constituting chapter one hundred thirty-three of the laws of eighteen hundred forty-seven, and the acts amendatory

thereof, shall remain dedicated to the purpose of a cemetery, no street, road, avenue or public thoroughfare shall be laid out through such cemetery, or any part of the lands held by such association for the purposes aforesaid, without the consent of the trustees of such association and the cemetery board. (l) Exclusive right of cemetery corporation to provide annual care services. Notwithstanding any provision of this article to the contrary, it shall be the right of each cemetery corporation, at its option, to exclusively provide all annual care services to be performed for consideration on all or any part of its lands at rates to be reviewed by the cemetery board. In the event that the cemetery board determines that an excessive, unauthorized or improper charge has been made for such services or that the services have not been properly performed, he or she may direct the cemetery corporation to pay to the person from whom such charge was collected a sum equivalent to three times the excess as determined by the cemetery board, or in the case of work not properly performed, it may direct the cemetery corporation to perform the work properly. Every cemetery corporation that chooses to provide, on an exclusive basis, such annual care services shall include in any contract for the sale of any part of its lands the following notice, in at least ten point bold type: Notice

The (name of cemetery corporation), pursuant to state law, provides annual care services on an exclusive basis. Therefore, the purchaser of the plot or lot being transferred by this agreement may not contract with any outside party for such annual care services. For purposes of this paragraph, the term "annual care" shall mean the maintenance of a lot, plot or part thereof, and may include care of lawns, trees, shrubs, monuments and markers within the plot. The provisions of this paragraph shall not be construed to prohibit a lot owner from placing, or arranging to place, floral or similar arrangements on such cemetery lots or plots. (m) Prohibition of stand-alone mausoleum and columbarium. No application for the construction of a mausoleum or columbarium to be located in any city, town or village shall be approved by the cemetery board when such mausoleum or columbarium shall be the only form of

interment offered by a cemetery corporation, unless a management contract has been entered into with an existing cemetery corporation regulated under this article, that will provide operational management of the mausoleum or columbarium, and the owner of the mausoleum or columbarium has reserved interment space and secured interment services in a cemetery regulated under this article, in order to assure continued perpetual care of the remains contained in the mausoleum or columbarium should such mausoleum or columbarium become abandoned or choose to cease operations. (n) The provisions of this section shall not operate to prevent any two cemeteries located in Suffolk county with contiguous or adjacent land dedicated for cemetery purposes and previously operating as public cemetery corporations, from effectuating a merger of such cemeteries where their total acreage does not exceed three hundred twenty-five acres.

§ 1506-a Cemetery corporations; restrictions.

§ 1506-a. Cemetery corporations; restrictions. (a) No cemetery corporation shall, directly or indirectly: (1) sell, or have, enter into or perform a lease of any of its real property to a funeral entity, or use any of its property for location of a funeral entity; (2) commingle its funds with a funeral entity; (3) direct or carry on its business or affairs with a funeral entity; (4) authorize control of its business or affairs by a funeral entity; (5) engage in any sale or cross-marketing of goods or services with a funeral entity; (6) have or enter into or perform a management or service contract for cemetery operations with a funeral entity; or (7) have, enter into or perform a management contract with any entity other than a not-for-profit cemetery corporation; provided, however, that a not-for-profit cemetery corporation may enter into or perform a management contract with a private cemetery corporation for the operational management of a mausoleum or columbarium by such private cemetery corporation provided such contract shall have first been authorized by the board of the not-for-profit cemetery corporation. (b) Only the provisions of subdivisions one and two of paragraph (a)

of this section shall apply to cemetery corporations with thirty acres or less of real property dedicated to cemetery purposes, and only to the extent the sale or lease is of real property dedicated to cemetery purposes, and such cemeteries shall not engage in the sale of funeral home goods or services, except if such goods and services are otherwise permitted to be sold by cemeteries, nor shall a majority of the members of the board of directors or trustees of such cemeteries be made up of the representatives of a funeral entity. (c) For the purposes of this section, "funeral entity" means a person, partnership, corporation, limited liability company or other form of business organization providing funeral home services, or owning, controlling, conducting or affiliated with a funeral home, any subsidiary thereof or an officer, director or stockholder having a ten per centum or greater proprietary, beneficial, equitable or credit interest in a funeral home.

§ 1506-b Transfer of lands of Valley View Rural Cemetery.

§ 1506-b. Transfer of lands of Valley View Rural Cemetery.

Notwithstanding any other provision of law to the contrary, the board of trustees of the Valley View Rural Cemetery Association in the town of Dover Plains, New York, may by resolution of such board, sell, lease or transfer any portion of the lands of Valley View Rural Cemetery to the parish of St. Charles Borromeo in the town of Dover Plains, New York, for cemetery purposes for the adjoining and contiguous cemetery of the parish of St. Charles Borromeo.

§ 1506-c Abandoned cemetery maintenance by cemetery corporations.

§ 1506-c. Abandoned cemetery maintenance by cemetery corporations. (a) Upon application and approval by the cemetery board, a cemetery corporation may assume management and maintenance of an abandoned cemetery. For the purposes of this section, abandoned cemetery means a cemetery which was organized pursuant to this chapter or existing by virtue of the membership corporation law, for which there no longer exists any corporate board or body to maintain it, and for which there is no sufficient trust fund or endowment to provide ordinary and necessary care and maintenance. Provided, however, that in no event

shall the cemetery board approve the assumption of the management and maintenance of an abandoned cemetery under this section if the abandoned cemetery was affiliated with any religious denomination or tradition or if the majority of the persons whose bodies were interred in such cemetery were affiliated with any religious denomination or tradition unless the cemetery assuming the management and maintenance of such abandoned cemetery follows the customs and practices of the same religious denomination or tradition. (b) A cemetery corporation assuming management and maintenance of an abandoned cemetery may make application for funds pursuant to paragraph (h) of section fifteen hundred seven of this article and section ninety-seven-r of the state finance law for maintenance of abandoned cemeteries. Within sixty days of submission of a completed application, the cemetery board shall approve or deny such application. (c) Monies disbursed under such assumption shall be used exclusively for the purpose of the management and maintenance of an abandoned cemetery as provided in subparagraph three of paragraph (h) of section fifteen hundred seven of this article. (d) Any residual funds disbursed to a cemetery corporation after the maintenance of an abandoned cemetery has been performed must be returned to the cemetery board for redeposit into the state cemetery vandalism restoration, monument repair or removal and administration fund established by section ninety-seven-r of the state finance law. (e) Within ninety days of its receipt of disbursements, the cemetery corporation shall make a report to the cemetery board setting forth details of the maintenance and clean-up undertaken and the amount of funds, if any, to be redeposited into the fund. If the maintenance and clean-up have not been completed, or necessary equipment has not been purchased, the reasons therefor shall be set forth, and the anticipated date for a subsequent, final report shall be disclosed.

§ 1506-d Additional requirements for merger or consolidation of

§ 1506-d. Additional requirements for merger or consolidation of cemetery corporations in certain circumstances. (a) A merger or consolidation of cemetery corporations may be approved notwithstanding that the surviving corporation or consolidated corporation will own land that does not form one continuous tract or that exceeds two hundred

acres in the aggregate, but only with the recommendation of the cemetery board. The cemeteries proposing such a merger or consolidation shall first prove to the satisfaction of the cemetery board that: (1) the plan of merger or consolidation is economically feasible and financially responsible; (2) the merger or consolidation does not harm the interests of each cemetery corporation, their lot owners, the communities in which the constituent cemeteries are located, or the state; (3) the surviving or consolidated corporation will have the resources, ability and commitment of directors and officers to ensure that all the constituent cemeteries are properly operated and maintained, that they will not fall into disrepair and dilapidation and become a burden upon the community, that they will be operated for the mutual benefit of lot owners, and that they will continue to serve the local communities in which they are located; (4) the municipalities which would be required to assume the care and control of any part of the cemetery if the surviving or consolidated cemetery corporation were to be abandoned have been notified of the proposed merger or consolidation; and (5) the plan of merger or consolidation submitted to the cemetery board shall include the following: (i) a description of the financial assets of each constituent cemetery corporation demonstrating that the surviving or consolidated cemetery will have sufficient financial resources to operate all locations subsequent to merger or consolidation; (ii) a proposal for management of financial assets of the surviving or consolidated cemetery, including management of trust funds of the constituent cemeteries; (iii) a proposal for maintenance, storage and availability of all corporate and cemetery records of the surviving or consolidated cemetery including procedures for physical or remote access to such records by persons entitled to access; (iv) a proposal for maintenance, storage and availability of all corporate and cemetery records relating to the constituent cemeteries, including procedures for physical or remote access to such records by persons entitled to access; (v) a plan for maintenance and operation of all locations in an

equitable manner; (vi) an agreement that contact information for the surviving or consolidated cemetery will be posted at the entrance to each location of the surviving or consolidated cemetery and on any website maintained by it; (vii) a proposal for the conduct of annual and special lot owner meetings that permits lot owners who were lot owners of a constituent cemetery to attend, actively participate in, and vote at such meetings remotely; and (viii) a proposal for providing notice to lot owners who were lot owners of a constituent cemetery of the place, date and hour of the annual and any special lot owner meetings in compliance with section six hundred five of this chapter, and that also provides for: notice to be published in a newspaper located in each county in which any constituent cemetery was located, and notice to be prominently posted on the homepage of any website maintained by the surviving or consolidated cemetery. (b) In addition to the requirements of section nine hundred three of this chapter, lot owner approval of the plan of merger or consolidation must meet these requirements: (1) Notice of the meeting to lot owners by a constituent cemetery corporation that will not be a surviving cemetery corporation may not be served by publication, unless the constituent cemetery demonstrates that notice by means other than publication would cause undue hardship; (2) Additional notice of the meeting shall be conspicuously posted at the cemetery at least sixty days prior to the meeting and shall provide the name, telephone number and address of a person from whom a copy of the plan of merger or consolidation may be obtained; and (3) Additional notice of the meeting, along with the plan of merger or consolidation or an outline of the material features of the plan, shall be conspicuously posted, by each constituent corporation, on any website it maintains or through which it conducts business. (c) The cemetery board may adopt rules and regulations as are necessary to carry out the purposes and provisions of this section.

§ 1506-e Lease of cemetery lands.

§ 1506-e. Lease of cemetery lands.

(a) Cemetery board approval. Except as set forth in paragraph (i) of this section, no cemetery corporation shall lease any portion of its land without notice to and approval of the cemetery board. (b) Requirements for approval of a lease of cemetery land. The application to the cemetery board for approval to lease cemetery land shall meet the following requirements: (1) The cemetery's lot owners or board of directors have approved the lease. (2) If the cemetery has any existing leases of land, it must disclose them so the board can consider the impact of existing leases on cemetery operations. (3) In addition to its submission to the cemetery board, the cemetery corporation shall, no earlier than ten days prior to such submission, post notices in the immediate proximity of the land proposed to be leased, the cemetery office and, in a manner so as not to violate local zoning ordinances or to create a traffic hazard, all entrances. Each such notice shall provide information written in plain English concerning the proposed lease and, if the proposed lease includes construction of new structures or buildings, include a drawing, which shall be an accurate rendition of the proposed construction. In addition, such notices shall state the telephone number and address where comments may be received and the last date on which such comments will be accepted, which shall be no earlier than sixty days following the date the notices are posted. (4) The proposed lease has been negotiated at arm's length for a fair market rent and contains all of the agreements between the parties. Where the proposed lease would be a related party transaction under this chapter, the cemetery shall disclose this fact and demonstrate compliance with restrictions related to such transactions, as set forth in section seven hundred fifteen of this chapter, and the cemetery board may require that the lease contain a clause by which the cemetery board may set reasonable reporting requirements that would disclose any financial relationship between the lessor and lessee related to the leased property. (5) The initial lease term is not greater than forty-nine years, and the cemetery demonstrates that such a term will not interfere with land needed for burial purposes. Notwithstanding the provisions of this

subparagraph, the cemetery board may approve a lease with extensions of the initial term not to exceed ninety-nine years from the date of the initial lease, provided that the security shall be updated at year forty-nine and every twenty years afterward during the term of the lease and all extensions thereof, if applicable, and approved pursuant to paragraph (h) of this section. (6) If the proposed lease involves land adjacent to cemetery operations, the proposed lease requires the tenant to construct and maintain a physical or visual buffer approved by the cemetery board, which may be vegetative, and that protects visitors to the cemetery, and that otherwise complies with the requirements of this section. (7) The proposed lease requires the tenant to be responsible for any and all taxes, assessments, and charges related to its occupancy and use of the land, whether imposed against the tenant or the cemetery corporation. (8) If the proposed lease includes permission to construct any infrastructure, buildings or other structures, the application to the cemetery board shall provide for the removal of such infrastructure, buildings or other structures after the cemetery retakes possession of the land, unless the infrastructure, buildings or other structures are to be retained by the cemetery pursuant to paragraph (f) of this section. (9) The proposed lease shall include an agreement to pay for the removal of any proposed infrastructure, buildings and structures, except any that are approved to be retained as set forth in paragraph (f) of this section, and return the land to a condition suitable for cemetery use upon the expiration or termination of the lease and such agreement shall be secured by a fund, bond, letter of credit or other security sufficient to pay for such future removal. The application shall include a written description of the proposed funding mechanism for the establishment of a fund, written evidence of a bond, or other security to the cemetery board for payment of the cost of restoring the leased premises to a condition suitable for use for cemetery purposes at the end or earlier termination of the term of the lease, including but not limited to the cost of removing any and all buildings and structures that may then be located on the leased premises and will not be retained. Any such bond shall be issued by an entity authorized to do

business in the state of New York, and any irrevocable letter of credit or a certificate of deposit shall be from a New York state or federally chartered bank, trust company, savings bank or savings and loan association that is qualified to do business in the state of New York and insured by the federal deposit insurance corporation. (10) The land proposed to be leased will not be used for any activity that would be disruptive to cemetery operations or that would have a significant impact on cemetery traffic. (11) If the proposed use or activity arising therefrom could disturb normal and usual cemetery activities, the proposed lease limits the hours of activity. (12) The proposed lease will not include the manufacture or disposal of hazardous material or the use or storage of hazardous material in violation of any law or otherwise create a significant risk of environmental harm to the cemetery property. (13) The proposed lease may permit assignment or sub-leases, including sub-leasing and assignment of space on cell towers to communications providers, provided the original lease remains in effect and the use remains the same. (c) The following uses are deemed to comply with subparagraph ten of paragraph (b) of this section: (1) Communications service facilities, also known as cell towers; (2) Solar panels; and (3) Energy storage equipment, as defined in section four hundred ninety-nine-aaaa of the real property tax law. (d) For any lease involving related party transactions pursuant to section seven hundred fifteen of this chapter, the cemetery board may set reasonable reporting requirements that would disclose any financial relationship between the lessor and lessee related to the leased property. (e) Any material modification, alteration or expansion of the lease or additions of any infrastructure, structures or buildings outside the scope of the prior approval requires cemetery board approval. (f) If the cemetery corporation intends that any infrastructure, structures or buildings proposed under the lease be retained and used for cemetery purposes after the lease terminates or expires, the application to approve the lease shall also include an application for

approval of such infrastructure, structures or buildings as intended to be used by the cemetery. The board shall render decision on the application for a major alteration in conjunction with the decision on the application to lease cemetery land. If that application is approved, such infrastructure, buildings or structures shall be excluded from the requirements of subparagraph nine of paragraph (b) of this section. (g) The application shall include at least two written estimates of the cost of removing the infrastructure, buildings and structures excluding retained infrastructure and associated structures and returning the land to a condition suitable for burial purposes at the conclusion of the lease. (h) (1) The cemetery board shall approve the type and amount of the security which shall be maintained in full force and effect, in an amount not less than that which was approved by the cemetery board, until: (i) the leased premises shall have been restored to a condition suitable for use for cemetery purposes at the end or earlier termination of the term of the lease, (ii) any and all buildings and structures then located on the leased premises shall have been removed, (iii) proof in form acceptable to the cemetery board demonstrating that all costs of such restoration and removal work have been paid in full and that no person or entity performing labor or furnishing materials for such work has filed a notice of mechanic's lien that shall have been delivered to the cemetery board, provided however that a cemetery may contest such lien as long as such contest prevents the foreclosure of a lien, and (iv) if applicable, each governmental unit or agency that issued any permit for such restoration and removal work shall have issued a certificate of compliance or other similar instrument indicating that such work has been completed in a due and proper manner. The parties directed to perform the restoration and removal work contemplated by this paragraph and as approved by the cemetery board shall not be limited by the amount of the bond, letter of credit, or certificate of deposit or by any inability to recover all or any part of such bond, letter of credit, or certificate of deposit from the issuing surety, bank, trust company, savings bank, or savings and loan association. Neither the cemetery board nor the department of state shall be liable to the tenant, the cemetery, or any other person or entity by reason or any determination or approval made under this paragraph.

(2) Prior to the commencement of construction, the cemetery shall submit proof to the cemetery board that such security in such amount is in place. (i) Leases for the following uses do not require cemetery board approval: (1) A lease or license to grow and harvest crops with a term less than five years; (2) A lease of a dwelling to the caretaker or other officer or employee of the cemetery that is actually used and occupied as that person's residence; and (3) A renewal or assignment of an existing lease of existing structures on land owned by the cemetery, not dedicated to cemetery purposes and that was subject to a lease, provided that such purchase or acquisition was approved by a court or the cemetery board, if such renewal does not change the scope of the existing lease. (j) All lease payments and other consideration received by the cemetery corporation, less the necessary expenses incurred, shall be deposited into the permanent maintenance fund established by the cemetery corporation pursuant to paragraph (a) of section fifteen hundred seven of this article, except that upon a showing of a need to fund specific projects, maintain and preserve, or expand current cemetery operations, the cemetery board may permit any portion of the lease payments or other consideration to be used for such purposes, with the remainder to be deposited to the permanent maintenance fund.

§ 1507 Trust funds.

§ 1507. Trust funds. (a) Maintenance and preservation; permanent maintenance fund; current maintenance fund. Subject to rules and regulations of the cemetery board: (1) Every cemetery corporation shall maintain and preserve the cemetery, including all lots, plots and parts thereof. For the sole purpose of such maintenance and preservation, every cemetery corporation shall establish and maintain (A) a permanent maintenance fund, and (B) a current maintenance fund. At the time of making the sale of a lot, plot or part thereof, the cemetery corporation shall deposit not less than ten per centum of the gross proceeds of the sale into the permanent maintenance fund. An additional fifteen per centum of the gross proceeds

of the sale shall be deposited in the current maintenance fund. In addition to the foregoing, at the time the cemetery corporation receives payment for the performance of an interment or inurnment, the cemetery corporation shall collect and deposit into the permanent maintenance fund the sum of thirty-five dollars. (2) The permanent maintenance fund is hereby declared to be and shall be held by the corporation as a trust fund, for the purpose of maintaining and preserving the cemetery, including all lots, crypts, niches, plots, and parts thereof. The principal of such fund shall be invested in such securities as are permitted for the investment of trust funds by section 11-2.3 of the estates, powers and trusts law. The income in the form of interest and ordinary dividends therefrom shall be used solely for the maintenance and preservation of the cemetery grounds. In addition, in any year, the governing board of a qualified corporation, as defined below, may appropriate for expenditure solely for the maintenance and preservation of the cemetery grounds, and treat as income for all purposes, an amount of trust principal equal to the excess, if any, of a percentage of the fair market value of the principal of the trust, as of the last day of the cemetery's immediately preceding fiscal year, as is prudent under the standard established by article five-A of this chapter, the prudent management of institutional funds act over interest and ordinary dividends received in such year; provided, however, that an appropriation of an amount (the safe harbor amount) of trust principal equal to the excess of up to four percent of the fair market value of the principal of the trust, as of the last day of the cemetery's immediately preceding fiscal year over interest and ordinary dividends received in such year shall be deemed to be prudent in all events. A "qualified corporation" means a cemetery corporation which adopts a written investment policy setting forth guidelines on investments and delegation of management and investment functions in accord with the standards of article five-A of this chapter. If a cemetery corporation seeks to appropriate any percentage of the principal of the permanent maintenance fund in accordance with this subparagraph, the cemetery corporation shall provide notice of such proposed appropriation and provide a copy of its written investment policy by certified mail to the cemetery board not less than sixty days in advance of such proposed appropriation and shall disclose such appropriation as part of and in

addition to their annual reporting requirements as defined in section fifteen hundred eight of this article, setting forth the amount of principal to be appropriated for such expenditure and its effect on the permanent maintenance fund. Such proposed appropriation shall become effective sixty days after receipt of such notice, unless the proposed appropriation exceeds the safe harbor amount or the written investment policy is not provided or is not prepared in accordance with the standards of article five-A of this chapter, and the cemetery board within such sixty-day period notifies the cemetery corporation that the board objects to the proposed appropriation. Except to the extent that principal is utilized as the result of the foregoing, all principal of the permanent maintenance fund shall remain inviolate, with the further exception that, upon application to the supreme court in a district where a portion of the cemetery grounds is located, the court may make an order permitting the principal or a part thereof to be used for the purpose of current maintenance and preservation of the cemetery or otherwise. Such application may be made by the cemetery board on notice to the corporation or by the corporation on notice to the cemetery board. Unless the cemetery can clearly demonstrate that it lacks sufficient future revenue to make repayment, any such allowance from the permanent maintenance fund shall be in the form of a loan, and the court shall determine the method for repayment of such a loan by the cemetery to the fund. If the cemetery clearly demonstrates it lacks sufficient future revenue to make repayment such allowance from the permanent maintenance fund shall be in the form of a grant that the cemetery is not required to repay into its permanent maintenance fund. A cemetery, including a surviving cemetery following a merger or consolidated cemetery following a consolidation, may seek a modification of the method of repayment, or conversion of a loan to a grant, if the cemetery can clearly demonstrate that the cemetery merged or consolidated into the surviving cemetery will not produce sufficient future revenue to make repayment under the existing loan. (3) The current maintenance fund shall be used and applied for the sole purpose of ordinary and necessary expenses of the care and maintenance of the cemetery. When all burial rights in the cemetery have been conveyed, the fund remaining on deposit or to the credit of the current maintenance fund shall be transferred into the permanent maintenance fund. (4) The percentage of

the proceeds of sales required to be deposited in the permanent maintenance fund or current maintenance fund by a particular cemetery corporation may be increased or diminished by order of the supreme court in a district where any portion of the cemetery is located. Such application may be made by the cemetery board on notice to the corporation or by the corporation on notice to the cemetery board. (b) Perpetual care of lots. (1) Upon the application of a prospective purchaser of any lot, plot or part thereof and upon payment of the purchase price and the amount fixed as a reasonable charge for the perpetual care of any lot, plot or part thereof, every cemetery corporation shall include with the deed of conveyance an agreement perpetually to care for such lot, plot, or part thereof, to the extent that the income derived by the corporation from such amount will permit. (2) Such corporation also, upon the application of an owner or of the executor or administrator of a deceased owner of any lot and upon the payment of the amount fixed as a reasonable charge for the perpetual care of such lot, shall, and upon the application of any other person and the payment of such amount, may enter into a like agreement with him. Such agreement shall be executed and may be recorded in the same manner as a deed. (3) Any corporation organized under or subject to the provisions of this section may enter into an agreement in writing with any executor or executors, trustee or trustees, under a last will and testament to whom there has heretofore been, or may hereafter be, bequeathed a sum for the perpetual care of any lot, plot or part thereof in any such cemetery or with any administrator or administrators with the will annexed under any such will perpetually to care for such lot, plot or part thereof under the provisions of the terms of such last will and testament, and subject in all cases to the approval of the surrogate's court having jurisdiction over such trust estate. Such approval may be evidenced by the written endorsement of the surrogate on a duplicate original of such agreement filed in the surrogate's court. In case the surrogate shall approve such agreement any such executor, trustee or administrator with the will annexed thereupon shall pay over to the treasurer of such perpetual care fund of such cemetery corporation any moneys remaining or being in his hands belonging to such trust, and upon making such payment and accounting therefore to the surrogate's court may be discharged from said trust as such executor,

trustee or administrator with the will annexed. (c) Perpetual care fund. (1) Every cemetery corporation and every religious corporation having charge and control of a cemetery which heretofore has been or which hereafter may be used for burials, shall keep separate and apart from its other funds, all moneys and property received by it, whether by contract, in trust or otherwise, for the perpetual care and maintenance of any lot, plot or part thereof in its cemetery, and all such moneys or property so received by any such corporation are hereby declared to be, and shall be held by the corporation as trust funds. Any moneys and property so received, unless otherwise provided in the instrument under which such moneys or property were received, shall be kept in a separate fund to be known as the perpetual care fund. (2) The principal of such funds, whether kept in the perpetual care fund or otherwise, and unless already so invested when received, shall be invested within a reasonable time after receipt thereof, and kept invested, in such securities as are permitted for the investment of trust funds by sections 11-2.2 and 11-2.3 of the estates, powers and trusts law. The income arising therefrom shall be used solely for the perpetual care and maintenance of the lot or plots or parts thereof for which such income has been provided. In addition, in any year, the governing board of a qualified corporation, as defined below, may appropriate for expenditure solely for the maintenance and preservation of the cemetery grounds, and treat as income for all purposes, an amount of trust principal equal to the excess, if any, of a percentage of the fair market value of the principal of the trust, as of the last day of the cemetery's immediately preceding fiscal year, as is prudent under the standard established by article five-A of this chapter, the prudent management of institutional funds act over interest and ordinary dividends received in such year; provided, however, that an appropriation of an amount (the safe harbor amount) of trust principal equal to the excess of up to four percent of the fair market value of the principal of the trust, as of the last day of the cemetery's immediately preceding fiscal year over interest and ordinary dividends received in such year shall be deemed to be prudent in all events. A "qualified corporation" means a cemetery corporation which adopts a written investment policy setting forth guidelines on investments and delegation of management and investment functions in accord with the

standards of article five-A of this chapter. If a cemetery corporation seeks to appropriate any percentage of the principal of the perpetual care fund in accordance with this subparagraph, the cemetery corporation shall provide notice of such proposed appropriation and provide a copy of its written investment policy by certified mail to the cemetery board not less than sixty days in advance of such proposed appropriation and shall disclose such appropriation as part of and in addition to their annual reporting requirements as defined in section fifteen hundred eight of this article, setting forth the amount of principal to be appropriated for such expenditure and its effect on the perpetual care fund. Such proposed appropriation shall become effective sixty days after receipt of such notice, unless the proposed appropriation exceeds the safe harbor amount or the written investment policy is not provided or is not prepared in accordance with the standards of article five-A of this chapter, and the cemetery board within such sixty-day period notifies the cemetery corporation that the board objects to the proposed appropriation. (3) The corporation may, for the purpose of investing and reinvesting such funds, add the same to any similar trust fund or funds and apportion shares or interest to each trust fund, showing upon its records at all times every share or interest. (4) The corporation may accept in trust for the perpetual care of a lot, plot or part thereof in its cemetery, property not made eligible for the investment of trust funds under the foregoing provisions of this subdivision and may retain such property in the form in which received, separate and apart from the perpetual care fund, if directed so to do by the instrument under which such property is received, so long as such property remains in the form in which it was received; but whenever such property is sold or otherwise disposed of, the proceeds of such sale or other disposition shall be invested in the manner heretofore provided in this subdivision for the investment of trust funds. The exchange of stock or evidences of indebtedness issued by a corporation for stock or evidences of indebtedness of the same corporation, or for stock, evidences of indebtedness, warrants or script received as a result of merger, consolidation or reorganization of such corporation, or the receipt of additional stock or evidences of indebtedness of such corporation, as a distribution by such corporation, shall not be deemed to be a disposition of the property originally received in trust, and such

exchanged or additional property may be retained in place and stead of the property originally received, and under the same conditions. The corporation shall keep accurate accounts of all funds for the perpetual care and maintenance of cemetery lots, plots or parts thereof, separate and apart from its other funds. A copy of the record pertaining to each such perpetual care fund shall be at all times available at the office of the corporation during usual business hours, for inspection and copy by any owner of an endowed lot or his representative. (d) Perpetual care fund; allocation of income and cost of care and maintenance. On or before the fifteenth day of March in each calendar year the officers of every cemetery corporation shall fix and determine that portion of the income on the investment of the principal of the perpetual care fund during the calendar or fiscal year immediately preceding, to be apportioned to each separate lot or part thereof for which a perpetual care agreement has been made. The cost during such previous calendar or fiscal year of the care of each lot or part thereof shall be allocated and charged against the income so apportioned to it. Any excess of the income so apportioned over and above the allocated cost of the care and maintenance of such lot or part thereof shall be credited to such lot or part thereof, to be used in any future years to make up the deficiency if the income apportioned to such lot or part thereof should, in any year since September first, nineteen hundred forty-nine, or in any future year, fall, or have fallen, below the cost of care thereof. (e) Designation of fiduciary corporation by directors or trustees of cemetery corporation to act as custodians of funds. Notwithstanding the provisions of any other law, the directors or trustees of cemetery corporations are hereby authorized to designate a bank or trust company to act as custodian and trustee of any or all of the respective funds of such cemetery corporation received by it for the perpetual care of lots in the cemetery thereof pursuant to paragraph (b), of this section, the permanent maintenance of such cemetery pursuant to paragraph (a) of this section, and for special purposes pursuant to paragraph (f) of this section. Such corporate trustee shall be designated by a resolution duly adopted by the board of directors or trustees and approved by a justice of the supreme court of the judicial district in which the cemetery of said corporation is located or the cemetery board; and the directors or

trustees of such cemetery corporation may, with the approval of the justice of the supreme court, revoke such trust, and either take over such trust fund or name another trustee to handle the same, but if not so revoked, such trust shall be perpetual. Any bank or trust company accepting any such cemetery fund shall keep the same separate from all other funds, except that it may, irrespective of any provision contained in this article invest the same in a legal common trust fund or in shares of a mutual trust investment company organized under the banking law, and shall pay over the net income to the directors or trustees of the cemetery corporation by whom it shall be expended and applied to the purpose for which such trust fund was paid to the cemetery corporations and accounted for in accordance with such paragraphs (a), (b) and (f) of this section. (e-1) Monument maintenance fund. (1) A cemetery corporation may, subject to the approval of the cemetery board, establish and maintain a monument maintenance fund. Such a fund is hereby declared to be and shall be held by the cemetery corporation as a trust fund, for the purpose of providing notice if such monuments are damaged or defaced by an act of vandalism and for the restoration of such monuments. Two or more cemetery corporations may establish a joint monument maintenance fund. (2) The principal of the fund shall be invested in securities permitted for the investment of trust funds by sections 11-2.2 and 11-2.3 of the estates, powers and trusts law. The principal of such fund shall remain inviolate, except that upon application to the cemetery board, which may make an order permitting the principal or a part thereof to be used for the purpose of restoring monuments damaged or defaced by an act of vandalism. The income arising from such investment shall be used solely for the costs and expenses resulting from an act of vandalism against monuments in such cemetery. (3) The fund shall be financed by a charge levied at the time of each interment at a rate established by each cemetery creating such a fund, subject to cemetery board approval pursuant to section fifteen hundred nine of this article. Such a charge shall be levied in addition to the approved rates for interment. The fund may also accept gifts, donations and bequests. (4) Each cemetery creating such a fund shall promulgate rules and

regulations to administer the fund, subject to cemetery board approval pursuant to section fifteen hundred nine of this article. Such rules shall include the conditions under which the income from such fund may be properly expended. (5) The cemetery corporation shall keep accurate accounts of all moneys for the fund, separate and apart from its other funds. (f) Acquisition of property for special purposes and in trust. (1) A cemetery corporation may acquire, otherwise than by condemnation, real or personal property, absolutely or in trust, in perpetuity or otherwise, and shall use the same or the income therefrom in pursuance of the terms of the instrument by which it was acquired, for the following purposes only: (i) The improvement or embellishment, but not the enlargement, of its cemetery; (ii) The construction, preservation or replacement of any building, structure, fence, wall, or walk therein; (iii) The erection, renewal or preservation of any tomb, monument, stone, fence, wall, railing or other erection or structure on or around its cemetery or any lot or plot therein; (iv) The planting or cultivation of trees, grass, shrubs, flowers or plants in or about its cemetery or any lot or plot therein; (v) The construction, operation, maintenance, repair and replacement of a crematory or columbarium or both in its cemetery; (vi) The care, keeping in order and embellishment of any lot, plot or part thereof or the structures thereon, in its cemetery, as prescribed in the instrument transferring such property to the cemetery corporation, or by the person or persons from time to time having possession, care and control of such lot, plot or part thereof, as the case may be. (2) All moneys and property received by a cemetery corporation in trust under this subdivision, unless otherwise provided in the instrument under which such moneys or property were received and unless already so invested when received, shall be invested within a reasonable time after the receipt thereof, and kept invested in such securities as are permitted for the investment of trust funds by sections 11-2.2 and 11-2.3 of the estates, powers and trusts law. The corporation may, for the purpose of investing and reinvesting such funds, add the same to any similar trust fund or funds and apportion shares or interests to each trust fund, showing upon its records at all times every share or interest. The cemetery corporation shall maintain a record for each such trust fund. Such record shall be at all times

available at the office of the corporation during usual business hours, for inspection and copy by any owner of an endowed lot or his representative. (g) Trust for the care of burial ground. A cemetery corporation, incorporated under or by a general or special law, may receive tangible property, securities or funds in trust, and hold and invest the same and apply the principal or income thereof, in accordance with the terms of the trust, for the purpose of repairing, maintaining, improving or embellishing a burial ground, not constituting a part of the cemetery of such cemetery corporation, and located outside of a city of more than one million inhabitants and within ten miles of the cemetery of the corporation accepting such trust. The directors of such corporation, or a majority of them and the treasurer, shall annually within sixty days after the close of each calendar or fiscal year, make, sign and shall file at the office of the corporation a detailed accounting and report of such trust funds held under this subdivision and the use made of such funds or of the income thereof for the preceding calendar or fiscal year, which shall include among other things, properly itemized, the securities in which the same is then invested, and any purchases, sales or other changes made therein during the period covered by such report. Such accounting and report shall be at all times available at the office of the corporation, during usual business hours, for inspection and copy by any lot owner or any contributor to such trust fund. (h) Vandalism, abandonment and monument repair or removal. (1) Cemeteries incorporated under this article shall contribute to a fund created pursuant to section ninety-seven-r of the state finance law for the maintenance of abandoned cemeteries, for the restoration of property damaged by acts of vandalism, and for the repair or removal of monuments or other markers not owned by the cemetery corporation that have fallen into disrepair or dilapidation so as to create a dangerous condition. Such fund shall be administered by a board of trustees comprised of the secretary of state, the attorney general and the commissioner of health, or their designees, who shall serve without additional compensation. (2) The fund shall be financed by contributions by the cemetery corporations of not more than five dollars ($5.00) per interment or cremation in a manner to be determined by the New York state cemetery board. No contributions shall be collected upon the interment of the

cremains of a deceased person where a contribution was collected upon cremations. (3) The moneys of the fund shall be expended equally for the maintenance of abandoned cemeteries previously owned by a corporation incorporated pursuant to this chapter or the membership corporations law and the repair of cemetery vandalism damage and the repair or removal of monuments or other markers not owned by the cemetery corporation, provided, however, that the cemetery board may determine that circumstances necessitate an unequal distribution due to specific needs and may provide for such distribution. For purposes of this section, the maintenance of abandoned cemeteries may include the ordinary and necessary care of a cemetery, such as the construction of cemetery fences, placement of cemetery lights, removal of grass and weeds, demolition or restoration of any buildings or structures in disrepair, the refilling of graves, the repair or removal of monuments or other markers not owned by the cemetery corporation that have fallen into disrepair or dilapidation so as to create a dangerous condition, replacement of cemetery doors and locks, and the care of crypts, niches, grave sites, monuments, and memorials paid for by means of the general fund or special fund or the income applied from the permanent maintenance fund, perpetual care fund or monument maintenance fund of the abandoned cemetery. For the purposes of this paragraph, the term "abandoned cemetery" may include cemeteries in imminent danger of abandonment as determined by the New York state cemetery board. (4) Authorization for payments by the fund for maintenance of an abandoned cemetery shall be made by the secretary of state only upon approval by the cemetery board of an application by a municipality or other solvent not-for-profit cemetery corporation, or a solvent not-for-profit cemetery corporation that merges with an abandoned cemetery in a city pursuant to section fifteen hundred six-d of this article, for fair and reasonable expenses required to be made by the municipality, other solvent not-for-profit cemetery corporation for maintenance of an abandoned cemetery, or a solvent not-for-profit cemetery corporation that merges with an abandoned cemetery in a city pursuant to section fifteen hundred six-d of this article; provided, however, that the cemetery board shall not approve any such application unless the municipality, other solvent not-for-profit cemetery

corporation, or solvent not-for-profit cemetery corporation that merges with an abandoned cemetery in a city pursuant to section fifteen hundred six-d of this article acknowledges that the responsibility for restoration and future care, preservation, and maintenance of such cemetery has been assumed by the municipality or other solvent not-for-profit cemetery corporation, or the solvent not-for-profit cemetery corporation that merges with an abandoned cemetery in a city pursuant to section fifteen hundred six-d of this article. For the purposes of this paragraph, such cemetery shall always be deemed an abandoned cemetery. (5) Authorization for payments by the fund for the repair of vandalism damage shall be made by the secretary of state only on approval by the New York state cemetery board which shall determine: (i) that an act of vandalism to the extent described by the cemetery corporation did take place; (ii) that either a written report of the vandalism was filed with the local police or sheriff's department, or, that the cemetery, upon consent of the division, made a determination not to file the report because the publicity generated by filing the report would have adverse consequences for the cemetery; (iii) that the cost of repairs is fair and reasonable; and (iv) that the cemetery corporation has been unable to obtain funds from the lot owner, his spouse, devisees or descendants within a reasonable period of time nor are there adequate funds in the cemetery corporations monument maintenance fund, if such a fund has been established by the cemetery. (6) Authorization for payments by the fund for the repair or removal of monuments or other markers not owned by the cemetery corporation shall be made by the secretary of state only on approval by the New York state cemetery board on application by the cemetery corporation showing: (i) that the monuments or markers are so badly out of repair or dilapidated as to create a dangerous condition; (ii) that the cost of remedying the condition is fair and reasonable; (iii) that the cemetery corporation has given not less than sixty days notice to the last known owner to repair or remove the monument or other marker and the said owner has failed to do so within the time prescribed in said notice.

(7) The New York state cemetery board shall promulgate rules defining standards of maintenance, as well as what type of vandalism or out of repair or dilapidated monuments or other markers shall qualify for payment of repair or removal by the fund and the method and amount of payment of contributions described in subparagraph two of this paragraph upon the recommendation of the state cemetery board citizens advisory council created by section fifteen hundred seven-a of this article (State cemetery board citizens advisory council). The New York state cemetery board shall approve or deny any application made pursuant to this section no later than sixty days after receipt of a completed application. (8) Nothing contained in this paragraph is to be construed as giving a cemetery corporation an "insurable interest" in monuments or other embellishments on a plot, lot or part thereof, nor is it meant to imply that the cemetery corporation has any responsibility for repairing vandalism damage not covered by this fund, nor for repairing or removing out of repair or dilapidated monuments or other markers not owned by the cemetery corporation, nor shall it constitute the doing of an insurance business.

§ 1507-a State cemetery board citizens advisory council.

§ 1507-a. State cemetery board citizens advisory council. (a) There is hereby created a state cemetery board citizens advisory council, to study, investigate, monitor and make recommendations with respect to the maintenance and operation of the state cemetery vandalism restoration, monument repair or removal and administration fund. Such advisory council shall study and investigate incidents of cemetery abandonment, vandalism and desecration, monitor the administration of such fund and recommend changes to improve the management of and expenditures from the state cemetery vandalism restoration, monument repair or removal and administration fund. (b) The advisory council shall be composed of a member designated by the secretary of state, a member designated by the attorney general, a member designated by the commissioner of health, a member designated by the comptroller and a member designated by the commissioner of taxation and finance. The appointees to the advisory council shall not be employees of the department of state, department of law, department of

health, department of audit and control or department of taxation and finance. Each of the members shall serve for a term of two years, provided, however, that the first appointments by the comptroller and commissioner of taxation and finance shall serve for a term of one year. Vacancies occurring other than by expiration of term shall be filled in the same manner as the original appointments for the balance of the unexpired term. Persons designated or appointed to the advisory council shall have demonstrated a long-standing interest, knowledge and experience in the care and preservation of gravesites. One member shall be elected chairman of the advisory council by a majority vote of the members of such council. (c) The members of the advisory council shall receive no compensation for their services but shall be reimbursed for travel expenses incurred in the performance of their duties. (d) The advisory council shall meet at least quarterly at the call of the chairman. (e) The advisory council may request and shall receive from any department, division, board, bureau, commission, agency, public authority of the state or any political subdivision thereof such assistance and data as will enable it properly to carry out its activities hereunder and effectuate the purposes set forth herein.

§ 1508 Reports by cemeteries.

§ 1508. Reports by cemeteries. (a) Annual report. Each cemetery corporation shall, on or before the fifteenth day of March after the end of its calendar year, or if on a fiscal year the seventy-fifth day after the close of such year, file with the cemetery board (1) a statement as to the condition of the permanent maintenance trust fund and a schedule of the assets of such fund. (2) a statement as to the condition of the perpetual care fund and a schedule of the assets of such fund. (3) a statement as to the condition of the moneys and properties received by the cemetery corporation in trust under the provisions of subdivisions (f) and (g) of section fifteen hundred seven of this article. (4) a statement of the gross proceeds of the sale of plots, lots and parts thereof, graves, niches and crypts showing the disposition of such proceeds and (5) a statement of changes in the number and amount of certificates of

indebtedness in accordance with the provisions of paragraph three of subdivision (a) of section fifteen hundred eleven of this article. (6) a statement as to the condition of the monument maintenance fund, if any, and a schedule of the assets of such fund. (b) Additional reports. The cemetery board may address to any cemetery corporations or its officers or any person any inquiry in relation to the transactions or conditions of the cemetery corporation or any matter connected therewith, and may require that a reply be verified. Failure to submit such reply within the time designated by the cemetery board shall subject the corporation, officer or person so addressed to the penalties provided in subdivision (d) hereof. (c) Cemetery payment for administration. To defray the expenses of examination and administration, each cemetery corporation shall not later than March fifteenth in each calendar year, pay to the cemetery board the sum of three dollars per interment and cremation or natural organic reduction in excess of fifteen interments, cremations, or natural organic reductions for the preceding calendar year. No contribution shall be collected upon the interment of the remains of a deceased person where a contribution was collected upon cremation or natural organic reduction. (d) Failure to file report. Any cemetery corporation or individual failing to file any report or any schedule of rules, regulations and charges required by this article shall forfeit to the people of the state the sum of one hundred dollars for each day that each such report shall be delayed or withheld, except that the cemetery board may extend the time for filing any such report and may waive payment of any penalty or part thereof provided herein.

§ 1509 Cemetery rules and regulations; charges and lot tax assessments.

§ 1509. Cemetery rules and regulations; charges and lot tax assessments. (a) Rules and regulations. The directors of a cemetery corporation shall make reasonable rules and regulations for the use, care, management and protection of the property of the corporation and of all lots, plots and parts thereof; for regulating the dividing marks between the lots, plots and parts thereof; for prohibiting or regulating the erection of structures upon such lots, plots or parts thereof; for preventing unsightly monuments, effigies and structures within the

cemetery grounds, and for the removal thereof; for regulating the introduction and care of plants, trees and shrubs within such grounds; for the prevention of the burial in a lot, plot or part thereof, of a body not entitled to burial therein; for regulating or preventing disinterments; for regulating the conduct of persons while within the cemetery grounds; for excluding improper persons and preventing improper assemblages therein. The directors may prescribe penalties for the violation of any such rule or regulation, not exceeding twenty-five dollars for each violation, which shall be recoverable by the corporation in a civil action. (b) Charges for services. The directors of a cemetery corporation shall fix and make reasonable charges for any acts and services ordered by the owner and rendered by the corporation in connection with the use, care, including perpetual, annual and special care, management and protection of lots, plots and parts thereof. In determining said charges the directors shall consider the propriety and the fair and reasonable cost and expense of rendering the services or performing the work for which such charges are made. (c) Cemetery board approval. (1) A cemetery corporation's rules, regulations and original charges shall not become effective unless and until approved by the cemetery board as hereinafter provided. (2) The directors of any cemetery corporation, organized on or before August thirty-first, nineteen hundred forty-nine, shall file in the office of the cemetery board the name and address of the corporation together with its rules, regulations and charges, and a statement showing the basis upon which they were made, within ninety days after the time this section as hereby amended takes effect. The directors of any cemetery corporation organized on or after September first, nineteen hundred forty-nine, shall file in the office of the cemetery board the name and address of the corporation together with its rules, regulations and charges, and a statement showing the basis on which they were made, within ninety days after the date of the filing of the certificate of incorporation in the department of state. (3) Within six months after the date of such filing, the cemetery board shall make and file in its office an order approving, disapproving or amending such rules, regulations and original charges in whole or part. Such rules, regulations and charges, if approved with or without amendment, shall

become effective as approved upon the filing of such order by the cemetery board in its office. The cemetery board shall notify the directors of the action taken by it and its reasons therefor by registered mail addressed to the corporation at its principal office. In making its determination as to the schedule of charges the cemetery board shall consider the propriety and the fair and reasonable cost and expense of rendering the services or performing the work for which such charges are made. In passing upon the rules and regulations, the cemetery board shall consider the interests of the members of the corporation and the public interest in the proper maintenance and operation of burial grounds. (4) The rules, regulations and charges of any cemetery corporation existing on or before August thirty-first, nineteen hundred forty-nine, shall remain in effect until the cemetery board files in its office an order pursuant to the provisions of subdivision three hereof. A cemetery corporation organized on or after September first, nineteen hundred forty-nine, may enforce the rules, regulations and charges filed by it in the office of the cemetery board until the cemetery board files in its office an order pursuant to the provisions of subdivision three hereof. (d) Services not in list of charges. In the event that a cemetery corporation provides any services not included in the list of charges, and for which a charge cannot reasonably be fixed in advance, the charges made therefor shall be reviewable by the cemetery board. In the event that the cemetery board determines that an excessive, unauthorized or improper charge has been made for such services or that the services have not been properly performed, it may direct the cemetery corporation to pay to the person from whom such charge was collected a sum equivalent to three times the amount of the excess as determined by the cemetery board, or in the case of work not properly performed, it may direct the cemetery corporation to perform the work properly. (e) Amendment and modification. (1) The rules and regulations of a cemetery corporation may be amended or added to by the corporation by filing such proposed amendments or additions in the office of the cemetery board but no such amendment or addition shall be effective unless and until an order approving such amendments or additions is made by the cemetery board and filed in its office in the same manner as that applicable to the original filing of the rules, regulations and charges

of the cemetery corporation. (2) The charges of a cemetery corporation may be amended or added to by the corporation by filing an application containing such proposed amendment or addition in the office of the division of cemeteries and shall be processed in accordance with subparagraph three of this paragraph. The cemetery board shall consider the propriety and the fair and reasonable costs and expense of rendering the services or performing the work for which such charges are made. The effective rules, regulations or charges of a cemetery corporation may be amended, modified or vacated by the cemetery board at any time. The cemetery board shall notify the directors of the action taken by it and its reasons therefor by registered or certified mail addressed to the corporation at its principal office. In amending, modifying or vacating any rule, regulation or charge, the cemetery board shall be guided by the standards set forth in subparagraph three of paragraph (c) of this section. (3) Any application setting forth the proposed amendment of, or addition to, the charges of a cemetery corporation as provided for by subparagraph two of this paragraph shall be processed in accordance either with clauses A, B and C of this subparagraph or in accordance with clause D of this subdivision.

A. Within thirty-five days following receipt of the application, the board or the division may request from the cemetery corporation any additional information or documentation deemed necessary to complete such application, and such application shall not be complete for the purposes of compliance with this subparagraph until the requested information has been received. If no such request is made, the application shall be deemed to be complete on the thirty-fifth day after its receipt by the division.

B. An application setting forth the proposed amendment of, or addition to, the charges of a cemetery corporation shall be deemed to be approved for any cemetery corporation holding, including unrestricted funds, cash and investments totalling less than four hundred thousand dollars, if the board does not object to the proposed charges within sixty days following: (i) the date on which the application shall have been deemed to be complete or (ii) the date on which the requested information necessary to complete the application shall have been received,

whichever is later. If the board objects to the proposed charges, it shall notify the directors in writing with the reasons therefor, such notice to be mailed by registered or certified mail to the corporation at its principal office, not less than three business days before the end of such sixty day period. If the board approves such amendment of or addition to the charges, it shall do so by order.

C. An application setting forth the proposed amendment of, or addition to, the charges of a cemetery corporation shall be deemed to be approved for any cemetery corporation holding, including unrestricted funds, cash and investments totalling more than four hundred thousand dollars, if the board does not object to the proposed charges within ninety days following: (i) the date on which the application shall have been deemed to be complete or (ii) the date on which the requested information necessary to complete the application shall have been received, whichever is later. If the board objects to the proposed charges, it shall notify the directors in writing with the reasons therefor, such notice to be mailed by registered or certified mail to the corporation at its principal office, not less than three business days before the end of such ninety day period. If the board approves such amendment of or addition to the charges, it shall do so by order.

D. A cemetery may apply to the cemetery board for an increase in any or all of its approved charges by submitting a schedule to the cemetery board showing its currently approved charges and the proposed charges after applying the employment cost index to said charges as it appears in the United States Department of Labor, Bureau of Labor Statistics, Series ECU10001A, not seasonally adjusted, total compensation, civilian, twelve month percent change for all workers schedule or any subsequent schedule that may be adopted by the United States Department of Labor, Bureau of Labor Statistics, as a replacement for the aforementioned schedule. Any application by a cemetery under this subparagraph will prohibit application under subparagraph two of this paragraph for one year from the effective date of the approved increase under this subparagraph. An application setting forth the proposed changes in charges shall be deemed to be approved if the board does not object to the proposed charges within sixty-days following the date on which the

application is submitted by a cemetery. If the board objects to the proposed charges, it shall notify the directors in writing with the reasons therefore, such notice to be mailed to the corporation at its principal office, not less than three business days before the end of such sixty day period. If the board approves such amendment of or addition to the charges, it shall do so by order. The cemetery board shall not approve application by a cemetery under this subparagraph if (i) the proposed percentage increases exceed the employment cost index percentages as provided in this subparagraph; (ii) there have been invasions of the permanent maintenance fund by the cemetery that have not been repaid or are not currently being repaid; (iii) the cemetery is currently not in compliance with any court order or any cemetery board order that is not under judicial review under paragraph (d) of section 1504; (iv) the cemetery has not filed in a timely manner its annual reports with the division of cemeteries as required under section 1508 (Reports by cemeteries); (v) all assessments as required under paragraph (c) of section 1508 (Reports by cemeteries) and vandalism fund payments as required under subparagraph two of paragraph (h) of section 1507 (Trust funds) have not been paid. (f) Lot tax assessment. (1) If the funds of a cemetery corporation applicable to the improvement and care of its cemetery, or applicable to the construction of a receiving vault therein for the common use of lot owners, be insufficient for such purposes, the directors of the corporation, not oftener than once in any year and for such purposes only, may, upon the prior approval of the cemetery board, which shall determine the necessity and propriety thereof, levy a tax on some basis to be determined by the directors of such corporation, but no such tax shall exceed two dollars on any one lot, except that with the written consent of two-thirds of the lot owners or by the vote of a majority of the lot owners present at an annual meeting, or at a special meeting duly called for such purpose, such tax may be for an amount which shall not exceed a total of five dollars per annum per lot, and the tax on any one lot shall not exceed five dollars per annum but the taxes may be levied upon each lot in the first instance for a sum sufficient for the improvement and care of the lot, but no greater sum than five dollars shall be collected in any one year. The whole tax levied may be collected in sums of five dollars in successive years in the manner

herein provided. (2) Notice of such tax shall be served on the lot owners or where two or more persons are owners of the same lot, on one of them, either personally, or by leaving it at his residence, with a person of mature age and discretion, or by mail, if he resides in a city, town or village where the office of the corporation is not located, or in case the residence or whereabouts of the owner cannot be ascertained, by publication once a week for four successive weeks in a newspaper published in the town where such cemetery is located, or if no newspaper is published in such town then in some newspaper published in the county where such cemetery is located. (3) If such tax remain unpaid for more than thirty days after the service of such notice, the president and secretary of the corporation may issue a warrant to the treasurer of the corporation, requiring him to collect such tax in the same manner as school collectors are required to collect school taxes; and such treasurer shall have the same power and be subject to the same liabilities in executing such warrant as a collector of school taxes has or is subject to by law in executing a warrant for the collection of school taxes. (4) If the taxes so levied remain unpaid for five years after the levying of such tax the amount thereof with interest shall be a lien on the unused portion of the lot which is subject to such tax, and no portion of the lot so taxed shall be used by the owner thereof for burial purposes, while any such tax remains unpaid. (5) If at the expiration of five years from the date of the service of the first notice of assessment as herein provided, any such assessment or the interest thereon shall remain unpaid, the corporation may sell the unused portion of such lot at public auction upon the cemetery grounds, in the following manner: If the person owning such lot resides within the state, a written notice, under the seal of such cemetery corporation, if it have a seal, and the hand of the president or secretary thereof, stating the amount of such tax or taxes unpaid and that such unused portion of such lot will be sold at a time therein to be specified, not less than twenty days from the date of the service of such notice, shall be personally served upon such owner; if such owner is not a resident of the state, or if the place of his residence cannot with due diligence be ascertained, or if, for any other reason satisfactory to the court, personal service cannot with due diligence be made upon such owner, such cemetery corporation, or any of its officers,

may present a duly verified petition stating the facts to the county court of the county in which such cemetery lands are situated, or to the supreme court, and such court may upon satisfactory proof, by its order, direct the service of such notice in the manner provided by the civil practice law and rules for the substituted service of a summons. The president or secretary of such corporation, or any suitable and proper person appointed by it or by the court, upon filing proof of publication and service of such notice as provided by section three hundred fourteen of the surrogate's court procedure act may make such sale, and such sale may be adjourned from time to time for the accommodation of the parties or for other proper reasons. Previous notice of such sale shall be posted at the main entrance of the cemetery. Prior to such sale such corporation shall cause such lot to be resurveyed and replotted showing the part thereof not used for burial purposes and only such unused portion shall be sold. The cemetery corporation may at any such sale purchase any such lots or parts of lots. The surplus remaining after paying all assessments, interest, cost and charges shall be set aside by the corporation, as a fund for the care and improvement of the portion of such lot that has been used for burial purposes. In case the proceeds of such sale shall amount to more than thirty dollars the person making it shall make his report, under oath, to the court, of the proceedings and shall state the amount for which such lot was sold and that it was sold to the highest responsible bidder, together with the names of the purchasers, and the court may and in a proper case shall, by order, confirm the sale; in all other cases the person making such sale shall file in the office of the county clerk of the county in which the cemetery lands are situated a like report duly verified; on the filing of such order of confirmation or such report, as the case may be, the ownership of the unoccupied portion of such lot shall vest in the purchaser thereof. (6) The directors of any such corporation may make a contract with a lot owner which shall provide for the payment by him of an agreed gross sum in lieu of further taxes and assessments and that upon the payment of such gross sum the lot of such owner shall be thereafter exempt from taxes and assessments. (g) Purchases through office of general services. Notwithstanding the provisions of any general, special or local law, any officer or agent of a cemetery corporation subject to the provisions of this article

authorized to make purchases of commodities and services may make such purchases through the office of general services subject to such rules as may be established from time to time pursuant to section one hundred sixty-three of the state finance law; provided that any such purchase shall exceed five hundred dollars and that the cemetery corporation for which such officer or agent acts shall accept sole responsibility for any payment due the vendor. All purchases shall be subject to audit and inspection by the cemetery corporation for which made. Two or more cemetery corporations may join in making purchases pursuant to this section and, for the purposes of this section, such groups shall be deemed a cemetery corporation.

§ 1510 Cemetery duties.

§ 1510. Cemetery duties. (a) Posting and distribution of rules, regulations, charges and prices. The rules, regulations, charges, and prices of goods, lots, plots or parts thereof shall be suitably printed and shall be conspicuously posted by the corporation in each of its offices, if any, and conspicuously displayed on any website the corporation maintains or through which it conducts business. A printed copy of charges and prices of goods, lots, plots or parts thereof shall be made available upon request by any person for up to the actual price of the printing of the copy. For each day in which the corporation fails to post or display the rules, regulations, charges and prices the corporation shall be subject to a penalty of twenty-five dollars which may be recovered in a civil action by the cemetery board. For each instance in which the corporation fails to make available a copy of the prices of goods, lots, plots, or parts thereof, to a person who requests such copy, the corporation shall be subject to a penalty of twenty-five dollars which may be recovered in a civil action by the cemetery board. The cemetery board may waive the payment of the penalty or any part thereof. (b) Surveys and maps of cemetery. (1) Every cemetery corporation, from time to time, as land in its cemetery may be required for burial purposes, shall survey and subdivide such lands and make and file in the office of the corporation a map thereof, open to public inspection, delineating the lots or plots, avenues, paths, alleys and walks and their respective designations; a true copy thereof shall upon its

written request, be filed with the cemetery board. Any unsold lots, plots or parts thereof, in which there are no remains, by order of the directors, may be resurveyed and altered in shape or size, and properly designated on such map. (2) Every cemetery corporation shall provide reasonable access to every lot, plot and grave. This provision shall not be applicable where on September first, nineteen hundred forty-nine such access cannot be provided without the disinterment of a body or bodies. A cemetery corporation shall not permit or allow a body to be interred hereafter in a path, alley, avenue or walk shown on the cemetery maps or actually in existence. Nothing herein contained, however, shall prevent a cemetery corporation in special cases from enlarging a lot by selling to the owner thereof the access space next to such lot, and permitting interments therein, provided reasonable access to such lot and to adjoining lots is not thereby eliminated, and provided the approval of the cemetery board shall have first been obtained. (c) Record of burials, natural organic reductions or cremations. A record shall be kept of every burial in the cemetery of a cemetery corporation, showing the date of burial, the name, age, and place of birth of the person buried, when these particulars can be conveniently obtained, and the lot, plot, or part thereof, in which such burial was made. A copy of such record, duly certified by the secretary of such corporation, shall be furnished on demand and payment of such fees therefor as are allowed the county clerk for certified copies of records. Notwithstanding any other provision of this section, all cemetery corporations which conduct cremations or natural organic reductions shall maintain permanent records of the name of the deceased human being, the funeral home from which the remains were received, the receipt of delivery of the deceased human remains, the authorizing agent for the cremation or natural organic reduction, and the manner of disposition of the remains. Such records may be reviewed by the division of cemeteries at any time. (d) When burial not to be refused. No cemetery corporation shall refuse or deny the right of burial and the privileges incidental thereto in any lot, plot or part thereof to those otherwise lawfully entitled to be buried therein, for any reason except for the non-payment of interment charges and the purchase price of the lot, plot or part thereof, in accordance with the terms of the contract of purchase or

except as provided in subdivision (f) of section fifteen hundred nine of this article. (e) Removals. A body interred in a lot in a cemetery owned or operated by a corporation incorporated by or under a general or special law may be removed therefrom, with the consent of the corporation, and the written consent of the owners of the lot, and of the surviving wife, husband, children, if of full age, and parents of the deceased. If the consent of any such person or of the corporation can not be obtained, permission by the county court of the county, or by the supreme court in the district, where the cemetery is situated, shall be sufficient. Notice of application for such permission must be given, at least eight days prior thereto, personally, or, at least sixteen days prior thereto, by mail, to the corporation or to the persons not consenting, and to every other person or corporation on whom service of notice may be required by the court. (f) Expenses of improving vacant lot. Whenever a person having a lot in a cemetery shall vacate the same by a removal of all the bodies therefrom, and leave such lot in an unsightly condition for one month, the corporation may grade, cut, fill or otherwise change the surface thereof, without reducing the area of the lot. The expense, not exceeding ten dollars, shall be chargeable to the lot. If the owners of such lot, within six months after such expense has been incurred, shall not repay such expense, the corporation may sell the lot at public auction upon the cemetery grounds, previous notice of such sale having been posted at the main entrance of the cemetery, and mailed to the owners of such lot at their last-known post office address, at least ten days prior to the day of sale, and shall pay the surplus, if any, on demand to the owners of such lot. (g) Removal or correction of dangerous conditions in cemetery lots. Any plant life, fencing or embellishment or structure other than a mausoleum, monument or mound, in a lot, plot or part thereof which becomes so worn, neglected, broken or deteriorated that its continued existence is a danger to persons or property within the cemetery grounds may be removed, repaired or corrected by the cemetery corporation at its own cost and expense, provided it first gives not less than fifteen days notice by registered or certified mail to the last known owner at his last known address to repair or remove such object and the said owner

shall fail to repair or remove the object within the time provided in said notice. In the event of such removal, correction or repair by the cemetery corporation it shall, within twenty days thereafter, notify the lot owner, by registered or certified mail addressed to him at his last known address, of the action taken by the cemetery corporation. Nothing herein contained shall be construed to affect, supersede or impair any contract, rule or regulation duly approved by the cemetery board, or right or obligation of the cemetery corporation, nor shall it be construed as placing any legal duty or obligation to exercise any right authorized by this subdivision. (h) Repair or notice as to non-dangerous damage or defacement. Except as otherwise provided by rule or regulation of the cemetery board pursuant to subparagraph two-a of paragraph (c) of section fifteen hundred four of this article, in the event a lot, plot or part thereof is substantially damaged or defaced which does not present a dangerous condition to persons or property, or in the event a mausoleum, monument or mound in a lot, plot or part thereof is substantially damaged or defaced, and the correction of such condition is not subject to the provisions of paragraph (g) of this section or section fifteen hundred ten-a of this article, the cemetery corporation within thirty days of the discovery of this condition may at its own cost and expense repair the damage or defacement, or if it determines not to do so, the corporation shall within such thirty day period notify the owner, his or her distributee or the person filing an affidavit with such corporation pursuant to the provisions of paragraph (e) of section fifteen hundred twelve of this article of such condition at the last address of such owner, distributee or person appearing on the books and records of the corporation. The notice shall be sent by first class mail and a certificate of mailing shall be obtained. Nothing herein contained shall be construed as establishing any right of damages not otherwise provided by law, rule or contract in any person against the cemetery corporation for failure to repair any condition described or give notice thereof as provided for in this paragraph. (i) Record of inscriptions to be filed. Whenever, under any general or special law, any cemetery is abandoned or is taken for a public use, the town board of the town or the governing body of the city in which such cemetery is located, shall cause to be made, at the time of the removal

of the bodies interred therein, an exact copy of all inscriptions on each headstone, monument, slab or marker erected on each lot or plot in such cemetery and shall cause the same to be duly certified and shall file one copy thereof in the office of the town or city clerk of the town or city in which such cemetery was located and one copy in the office of the state historian and chief of the division of history in the department of education at Albany. In addition to such inscriptions, such certificate shall state the name and location of the cemetery so abandoned or taken for a public use, the cemetery in which each such body was so interred and the disposition of each such headstone, monument, slab or marker. (j) Grave markers. No cemetery corporation, which provides for the burial of persons of the Jewish faith, shall promulgate any rule or regulation prohibiting the use of cement beds as a means of demarcating a specific grave area. Such cemetery corporations shall provide this service to all persons of the Jewish faith requesting this method of marking a grave when such grave area is provided through the agency of a membership or religious corporation or unincorporated association or society which provides burial benefits for the members. Subject to the rules and regulations promulgated by the cemetery board, such cemetery corporations shall establish the schedule of charges to be assessed for installation and maintenance of cement beds. The schedule of charges shall be filed with and approved by the cemetery board. Such regulation may require the payment of the cost of perpetual care as a condition to such installation and maintenance. The charges assessed shall be paid by the person requesting the service. The provisions of this paragraph shall only be applicable within the counties contained within the first, second, tenth and eleventh judicial districts as such districts are arranged pursuant to section one hundred forty of the judiciary law. (k) Notice and restoration as to damage and defacement due to vandalism. In the event a monument is damaged or defaced by an act of vandalism, the cemetery corporation shall, within thirty days of the discovery of such damage, notify the owner, his distributee or the person filing an affidavit with such corporation pursuant to the provisions of paragraph one of subdivision (e) of section fifteen hundred twelve of this article of such damage in the manner provided in subdivision (h) of this section. The cost and expense of such notice may

be provided from the fund where such fund exists. If a fund has been established, the cemetery corporation shall restore the monument with moneys from such fund. If such a fund has not been established or where such fund is inadequate to restore the monument, the cemetery corporation may restore such monument at its own cost and expense. Nothing herein contained shall be construed as establishing any right of damages not otherwise provided by law, rule or contract in any person against the cemetery corporation for failure to restore any monument if no monument maintenance fund exists or if such fund is inadequate to restore such monument. (l) Removal of monument. No person or organization shall remove a monument without authorization in the form of a court order from a court of competent jurisdiction, or without the written authorization of the owner of a burial plot, or the lineal descendants of the deceased, if such owner or lineal descendants are known, and without obtaining written approval from a duly incorporated cemetery association, which association shall keep a record of all such written approvals. The provisions of this section shall not prohibit the removal, in accordance with rules and regulations promulgated by the secretary of state, of a monument for the purpose of repair, nonpayment or adding inscriptions as authorized by a cemetery association or as permitted in this article. A violation of any provision of this paragraph shall be punishable by a fine not to exceed five hundred dollars. (m) Use of construction and demolition debris for burial. No cemetery corporation or religious corporation having charge and control of a cemetery which heretofore has been or which hereafter may be used for burials, shall use construction and demolition debris, as that term is defined in 6 NYCRR 360-1.2, for the purpose of burying human remains. (n) Interment of pet cremated remains. The interment of pet cremated remains in a cemetery corporation shall be available to a lot owner only in those circumstances where the interment is incidental to the burial of human remains and where authorization has been provided in a written statement from the cemetery corporation. The cemetery corporation shall provide a list of approved charges for the interment of such remains. All payments received for interment of such remains shall be deposited in the cemetery corporation's permanent maintenance fund. Pet cremated remains must be disposed of by placing them in a grave, crypt, or niche.

Nothing in this section shall obligate a cemetery corporation to allow interment of such cremated pet remains where prior approval at the time of sale or in advance of need has not been received. The provisions of this section shall not apply to an incorporated or unincorporated cemetery operated, supervised or controlled by a religious corporation or a lot, plot or part thereof whose record owner is an incorporated or unincorporated religious association or society. (o) Posting and distribution of the New York state cemetery disclosure form. (1) New York state cemetery disclosure forms shall be created by the state cemetery board and shall be posted on the website of the division of cemeteries in the department of state. Copies of such forms shall be suitably printed by the cemetery corporation and conspicuously displayed in each of its offices, if any, so that all persons visiting such place may readily see the form and inspect its contents. Physical copies of the forms shall be made available to any person inquiring about cemetery lots, goods, or services. A corporation may offer a customer the option of receiving the forms through the use of a quick response (QR) code in lieu of receiving a paper copy. (2) The New York state cemetery disclosure forms shall be in the form and manner as prescribed by the state cemetery board, shall include the contact information of the New York department of state division of cemeteries, and shall contain an explanation of the rights of lot owners and family members including, but not be limited to, the following: (A) a website address, and a hyperlink in the case of electronic copies, for information about the regulation of cemeteries in New York, the New York department of state division of cemeteries and the state cemetery board, and a description of those types of cemeteries that are not regulated by the state cemetery board; (B) the process of purchasing and re-selling a burial lot, plot or part thereof; (C) the right to interment and disposition options; (D) inheritance rights of a burial lot, plot or part thereof; (E) a listing of reasons that interment may be denied; (F) the requirements in regards to the use of outer enclosures; (G) the rights of lot owners as members of the cemetery corporation; (H) cemeteries' duties regarding charges, prices, rules, and regulations;

(I) the right to make burial arrangements and provide for memorialization; and (J) any other information deemed appropriate. (3) The state cemetery board may, from time to time, update and amend the New York state cemetery disclosure form as it deems necessary.

§ 1510-a Repair or removal of monuments.

§ 1510-a. Repair or removal of monuments. (a) Cemetery corporations may repair or remove any monuments or other markers not owned by the cemetery corporation that have fallen into disrepair or dilapidation so as to create a dangerous condition, provided that the cemetery corporation has given not less than sixty days notice by registered or certified mail to the last known owner at that person's last known address to repair or remove the monument or other marker and the said owner has failed to do so within the time provided in said notice. (b) In the event that the last known owner cannot be found, the notice may be given by publishing the same once each week for three consecutive weeks in a newspaper published or circulated in the county in which the cemetery is located. Such notice shall be addressed to the last known owner and to all persons having or claiming any interest in or to the burial lot on which the monument or other marker is located. The notice shall date from the date of mailing such notice by registered or certified mail, or the date of the third publication in the newspaper. (c) Any monument or other marker that is removed as provided for in this section shall be replaced with a flush bronze or granite marker suitably inscribed if replacement is appropriate for identification purposes. (d) Nothing contained herein shall be construed as establishing any right of damages not otherwise provided by law, rule or contract in any person against the cemetery corporation for failure to repair or remedy any condition described or give notice thereof as provided for in this section.

§ 1510-b Availability for interment on six-day basis.

§ 1510-b. Availability for interment on six-day basis.

Every cemetery corporation shall be available for interments at least six days per week, excluding legal holidays, as set forth in the cemetery's regulations or in accordance with its practices. Any cemetery which maintains and designates a burial section for persons of a particular religious belief must remain available for grave openings and interments Sunday through Friday or other six-day period in accordance with the religious and/or ethnic traditions of the persons interred in said religious section. Nothing in this section shall require a cemetery to provide grave openings and/or interments if they are otherwise unable to do so as to direct consequence of severe weather conditions or other similar conditions.

§ 1510-c Form of authorizations.

§ 1510-c. Form of authorizations.

Any form, authorization, permit or designation required by this article may be signed by written instrument or the use of an electronic signature, as that term is defined in subdivision three of section three hundred two of the state technology law, with the intent to execute the instrument, writing or electronic record.

§ 1511 Cemetery indebtedness.

§ 1511. Cemetery indebtedness. (a) Certificates of indebtedness. (1) If a cemetery corporation be indebted for lands purchased for cemetery purposes, or for services rendered or materials furnished in connection with the necessary and proper preservation or improvement of its cemetery or for moneys borrowed exclusively for payment of such services or materials, the directors, by the concurring vote of a majority of their whole number, with the consent of the creditor to whom such indebtedness is owing, may issue certificates under the corporate seal, signed by the president and secretary, for such amount, payable at the times and at the rate of interest agreed upon but not to exceed six per centum per annum; provided, however, that there be first obtained from the cemetery board an order approving the issuance of such certificates. In the case of certificates of indebtedness issued for moneys borrowed exclusively for payment for services rendered or materials furnished in connection with

the necessary and proper preservation or improvement of its cemetery the consent of the creditor to whom such indebtedness is owing shall not be required. (2) Such approval shall be given by the cemetery board only if it determines that the amount of the certificates proposed to be issued does not exceed the fair and reasonable value of the services rendered or materials furnished or the purchase price of real property as fixed in accordance with subdivision (b) of this section. No certificate issued shall be valid or enforceable unless there has first been issued by the cemetery board an order of approval as herein provided. No certificate shall be for less than one hundred dollars. The certificate shall be transferable by delivery, unless therein otherwise provided. (3) The directors shall keep an account of the number and amount of such certificates, the persons to whom issued, the date of maturity, the rate of interest and the purpose for which the same were issued. Each cemetery corporation shall file with the cemetery board a verified statement setting forth all changes in such account during the previous calendar or fiscal year. (4) The directors shall set aside from the proceeds of sales of lots, plots and parts thereof such sums to pay such certificates at maturity as they deem necessary. Until the certificates are paid the holders thereof shall be entitled at all meetings of the corporation, to one vote for each one hundred dollars of indebtedness remaining unpaid, except that those certificates of indebtedness issued for moneys borrowed exclusively for payment of services or materials shall have no voting power. The certificates shall not be a lien upon any lot, plot or part thereof belonging to a lot owner. (b) Application of proceeds of sales of lots. (1) At least one-half of the proceeds of sales of lots or the use thereof remaining after the deductions for the portion thereof required to be deposited in the permanent maintenance fund and current maintenance fund together with the expenses of sale shall be applied by a cemetery corporation to the payment of the purchase price of the real property acquired by it. The remainder of such proceeds shall be applied by the corporation to preserving, improving and embellishing the cemetery grounds and the avenues and roads leading thereto, and to defraying its expenses and discharging its liabilities. After the payment of such purchase price, and the expense of surveying and laying out the cemetery, all the

proceeds of such sales shall be applied to the improvement, preservation and embellishment of the cemetery and to such expenses and liabilities. (2) Where a corporation has agreed with a person from whom any such lands were purchased to pay therefor a specified share not exceeding one-half of the proceeds of sales of lots therein or the use thereof, such corporation may continue to make payments as so agreed, provided however that there be first deducted from said proceeds of sales the amount required to be deposited in the permanent maintenance fund and current maintenance fund as aforesaid together with the expenses of sale. The balance of such proceeds shall continue to be applied by the corporation to the preservation, improvement and embellishment of the cemetery, and the expenses and liabilities of the corporation. Where the corporation has heretofore agreed to pay a specified share of the proceeds as aforesaid in payment of the purchase price of land, the prices of lots or the use thereof in force when such purchase was made, shall not be changed, while the purchase price remains unpaid, without the written consent of a majority in interest of the persons from whom the lands were purchased or their legal representatives. (3) A corporation which has hertofore issued certificates of land shares which entitle the owner to a specified share in the proceeds of the sale of lots, may purchase such certificates with its surplus or reserve funds and hold such certificates for the benefit of its surplus or reserve funds, but such certificates may not thereafter be sold or reissued. (c) Certificates of stock formerly issued. If a cemetery corporation, incorporated under a law repealed by the membership corporations law, prior to September first, eighteen hundred ninety-five, converted its outstanding indebtedness or certificates of indebtedness into certificates of stock, in pursuance of law, no interest shall accrue to the holders of such stock, but they shall receive annually or semi-annually a dividend thereon for their proportional part of the entire surplus or net receipts of the corporation over and above current expenses; or if the proportion of the net receipts or surplus which stockholders shall be entitled to receive shall have been fixed by agreement at the time of issuing such stock, such stockholders shall be entitled to receive dividends in accordance with such agreement. Such certificates of stock shall be transferable only on the books of the corporation on the surrender of the

certificate, unless otherwise provided on the face thereof, and on every such surrender a new certificate of stock shall be issued to the person to whom the same has been transferred; and the holders of such stock shall be entitled, in person or by proxy, to one vote for every share thereof, at each meeting of the corporation. A register of the stock issued by the corporation shall be kept by its directors showing the date of issue, the number of shares, the par value thereof, the name of each person to whom issued, the number of the certificates therefor; and all transfers of such stock shall be noted and entered in such register, and the certificates surrendered shall be deemed canceled by the issue of a new certificate, and the surrendered certificate shall be destroyed. Any director may become the holder or transferee of such stock for his own individual use or benefit. No such stock shall be a lien on the lot of any individual lot owner within the cemetery limits; and no other or greater liability of the corporation issuing such stock shall be created or deemed to exist than may be necessary to enforce the faithful application of the surplus or net receipts of the corporation to and among the holders of the stock in the manner hereinbefore specified. A cemetery which has heretofore issued such certificates of stock is a membership corporation and not a stock corporation. (d) Retirement of certificates of stock of certain cemetery corporations. If a cemetery association, incorporated under a law repealed by chapter five hundred fifty-nine of the laws of eighteen hundred ninety-five has changed certificates of indebtedness into certificates of stock, pursuant to chapter one hundred seven of the laws of eighteen hundred seventy-nine, and such stock remains unimpaired, such association may retire such stock and issue in exchange therefor certificates of indebtedness representing the par value of such stock, such certificates of indebtedness to bear interest at a rate not exceeding six per centum per annum from the date of the last preceding dividend payment; provided, however, the exchange of such stock for certificates of indebtedness shall be authorized at a duly called meeting of such association by the affirmative vote of at least two-thirds of the stock issued and outstanding and of at least two-thirds of all votes cast at such meeting in favor of such exchange. Any holder of such stock not voting in favor of the exchange of such stock for certificates of indebtedness may at any time prior to the vote

upon such exchange, or if notice of the meeting to vote upon such exchange was not mailed to him at least twenty days prior to the taking of such vote, then within twenty days after the mailing of such notice, object to such exchange and demand payment for his stock and thereupon such stockholder or the corporation shall have the right, subject to the same conditions and provisions contained in section six hundred twenty-three of the business corporation law, to have such stock appraised and paid for as provided in such section. Such objection and demand must be in writing and filed with the corporation. The provisions of this section relating to certificates of indebtedness and the rights of the holders thereof shall apply to certificates of indebtedness issued as provided in this subdivision. The stocks so retired shall not be reissued by such association and it shall have no right thereafter to issue any certificates of stock. (e) Purchase, retirement and exchange of stock. (1) A cemetery corporation which has issued certificates of stock, pursuant to chapter one hundred seven of the laws of eighteen hundred seventy-nine, or chapter two hundred sixty-seven of the laws of eighteen hundred ninety-four, may purchase such certificates of stock with its surplus or reserve funds, and hold such certificates for the benefit of its surplus or reserve funds, but such certificates of stock so purchased may not thereafter be sold or reissued. (2) A cemetery corporation which has issued certificates of stock may also effect the retirement of such stock as follows: The board of directors of such corporation shall adopt by vote of a majority of the entire number of such directors a plan for such retirement which shall include the fixing of a price which the corporation will pay for all shares of stock then outstanding, which price shall, in the opinion of such directors, represent the fair value of such stock. The said plan shall be submitted to a duly called meeting of the members of such corporation and, if approved by the affirmative vote of at least two-thirds of all votes cast at such meeting, including the affirmative vote of the holders of record of at least two-thirds of all shares of stock issued and then outstanding exclusive of any shares of stock held by the corporation, shall become binding upon all stockholders, and they shall proceed to transfer and surrender to the corporation their certificates of stock and to receive payment therefor in accordance with the terms of such plan. Any holder

of shares of such stock not voting in favor of such plan may at any time prior to the vote approving such plan, or if notice of the meeting to vote upon such plan was not mailed to him at least twenty days prior to the taking of such vote, then within twenty days after the mailing of such notice, but in any event within ten days after the taking of such vote, by written notice filed with such corporation, object to such plan and demand appraisal of his shares. Thereupon, such stockholder or the corporation shall have the right, subject to the same conditions and provisions contained in section six hundred twenty-three of the business corporation law, to have such stock appraised and paid for as provided in such section. (3) A cemetery corporation which has issued certificates of stock may also effect the exchange of such stock as follows: The board of directors of such corporation shall adopt by a vote of a majority of the entire number of such directors a plan for the exchange of all shares of stock then outstanding for a like number of participating certificates. Such participating certificates shall entitle the owners to a specified share not exceeding, collectively, one-half of the proceeds of sales of lots therein or the use thereof after first deducting from such proceeds of sale the amount required to be deposited in the permanent maintenance fund and current maintenance fund as provided in and pursuant to subdivision (a) of section fifteen hundred seven of this article, together with the expenses of sale. Such plan shall then be submitted to the cemetery board for its approval. In making its determination the cemetery board shall consider and may condition its approval on the purposes of this section. Thereafter, if the cemetery board approves such plan, or in the event the cemetery board conditioned its approval and the conditions imposed have been accepted by a vote of a majority of the entire board of directors of the corporation, such plan shall be submitted to a duly called meeting of the members of such corporation, and, if approved by the affirmative vote of at least two-thirds of all votes cast at such meeting, including the affirmative vote of the holders of record of at least ninety per centum of all shares of stock issued and then outstanding exclusive of any shares of stock held by the corporation, shall become binding upon all stockholders. The stockholders shall then proceed to transfer and surrender to the corporation their shares of stock and to receive in exchange therefor participating certificates in accordance with the

terms of such plan. Any holder of shares of such stock not voting in favor of such plan may at any time prior to the vote approving such plan, or if notice of the meeting to vote upon such plan was not mailed to him at least twenty days prior to the taking of such vote, then within twenty days after the mailing of such notice, but in any event within ten days after the taking of such vote, by written notice filed with such corporation, object to such plan and demand appraisal of his shares. Thereupon, such stockholder or the corporation shall have the right, subject to the same conditions and provisions contained in section six hundred twenty-three of the business corporation law, to have such stock appraised and paid for as provided in such section. Each such participating certificate issued in exchange for a share of stock shall entitle the holder thereof to one vote for each certificate at all meetings of the corporation. The prices of lots or the use thereof at the time when such exchange is made shall not be changed, while such participating certificates remain outstanding, without the written consent of a majority in interest of the holders thereof except as now or hereafter authorized by law. The shares of stock so exchanged shall not be reissued by such corporation and it shall have no right thereafter to issue any shares of stock. (f) Exchange of certificates for shares. The directors of a cemetery corporation, which has issued certificates for shares, from time to time by resolution, may fix the value of each of such shares and authorize the acceptance by the corporation of such certificates at the value so fixed in payment for land. All certificates so accepted shall be immediately cancelled and shall not be again issued.

§ 1512 Rights of lot owners.

§ 1512. Rights of lot owners. (a) Lots; indivisible and inalienable. All lots, plots or parts thereof, the use of which has been conveyed as a separate lot, shall be indivisible, except with the consent of the lot owner or lot owners and the corporation, or as in this section provided. After a burial therein, the same shall be inalienable, except as otherwise provided. (b) Interest of deceased lot owner. Upon the death of an owner or co-owner of any lot, plot or part thereof, unless the same shall be held in joint tenancy, or tenancy by the entirety, the interest of the

deceased lot owner shall pass to the devises of such lot owner, but, if such interest be not effectually devised, then to his or her descendants then surviving, and if there be none, then to the surviving spouse, and if there be none, then to those entitled to take the real and personal property of the deceased lot owner pursuant to article four of the estates, powers and trust law provided, however, that no interest in any lot, plot or part thereof shall pass by any residuary or other general clause in a will and such interest shall pass by will only if the lot, plot or part thereof sought to be devised is specifically referred to in such will. The surviving spouse of a deceased lot owner during his or her life and the owners from time to time of the deceased lot owner's lot, plot or part thereof, shall have in common the possession, care and control of such lot, plot or part thereof. (c) Purchase for burial of decedent. Whenever a lot, plot or part thereof shall be purchased by the executor, administrator or representative of a decedent from estate funds for the burial of the decedent, the surviving spouse of the decedent shall have the right of interment therein, and the deed shall run to the names of the distributees, other than the surviving spouse, of the decedent, or to "The distributees, other than the surviving spouse, of ........., deceased", if there be such surviving spouse, otherwise to "The distributees of............., deceased." If the deed shall run to "The distributees, other than the surviving spouse of ........., deceased," or to "The distributees of ........., deceased," the executor, administrator or representative shall, at the time of delivery of the deed to such lot, plot or part thereof, file with the corporation an affidavit setting forth the names and places of residence of all the decedent's distributees, and the corporation shall be entitled to rely upon the truth of the statements contained in such affidavit. (d) Right of interment. A deceased person shall have the right of interment in any lot, plot or part thereof of which he or she was the owner or co-owner at the time of his or her death, or in any tomb erected thereon. The surviving spouse shall have the right of interment for his or her body in a lot or tomb in which the deceased spouse was an owner or co-owner at the time of his or her death, except where all the available burial spaces in a lot or tomb have been designated for the interment of persons other than the surviving spouse, pursuant to

subdivision (f) of this section, and a right to have his or her body remain permanently interred or entombed therein, except, that such body may be removed therefrom as provided in subdivision (e) of section fifteen hundred ten of this article. Such right may be enforced and protected by his or her personal representatives. The remains of a spouse, parent or child of a person who is an owner or co-owner thereof may be interred in such lot or tomb without the consent of any person claiming any interest therein, subject, however, to the following rules and exceptions: (A) The place of interment in such lot shall be subject to the reasonable determination by a majority of the co-owners or in the absence of such determination by the cemetery corporation or its officer or agent having immediate charge of interments. (B) Any husband or wife living separate from the other and owning a lot in which the other, but for this section, would have no right of burial, at least thirty days before the death of the other, may file with the cemetery corporation a written objection to the interment of the other, and thereupon there shall be no right of interment under this subdivision. (C) A parent or child owning a lot in which the other would have no right of burial but for this section, at least thirty days before the death of the other, may file with the cemetery corporation a written objection to the interment of the other, and thereupon there shall be no right of interment under this subdivision. In such case, if the parent or child so excluded from burial in such lot shall die without having any place of interment, then the person filing such objection shall at once provide for the other a suitable place of burial in a convenient cemetery. The cost of such place of interment shall be chargeable to the decedent's estate, if any. (D) This section shall not permit a burial in any ground or place contrary to or in violation of any precept, rule, regulation or usage of any church or religious society, association or corporation restricting burial therein. This subdivision shall not limit any existing right of burial under other provisions of law, nor shall it limit or curtail the right of alienation, under the rules of the cemetery corporation wherein such lot is situated, by the owner of a lot before the death of the person for whose remains the right of burial is provided herein, and there shall be no right of burial in any lot sold by its owner, before the death of the person for whose remains the right of burial is provided herein.

(e) More than one person entitled to possession and control. (1) At any time when more than one person is entitled to the possession, care and control of such lot, any of the persons so entitled thereto may file with the corporation an affidavit setting forth the names and places of residence of all the persons entitled to the possession, care and control of such lot, and the corporation shall be entitled to rely upon the truth of the statements contained in such affidavit. The corporation shall be entitled to collect a reasonable fee for filing and recording such affidavit and other documents filed in its office. (2) At any time when more than one person is entitled to the possession, care or control of such lot, plot or part thereof, the persons so entitled thereto shall file with the corporation a designation of a person who shall represent the lot, plot or part thereof, and so long as they shall fail to designate, the corporation may make such designation. A distributee may release his or her interest in a lot, plot or part thereof, to the other distributees, and a joint owner may release or devise to the other joint owners, his or her right in the lot, plot or part thereof, on conditions specified in the release or will, the original or certified copy of which shall be filed in the office of the corporation. The surviving spouse not excluded from the right of burial under the provisions of subdivision (d) of this section, at any time may release his or her right in such lot, plot or part thereof, but no conveyance or devise by any other person shall deprive him or her of such right. (f) Designation of persons who may be interred. At any time all the owners of a lot, and any surviving spouse having a right of interment therein, may execute, acknowledge and file with the corporation an instrument, and the sole owner of a lot may, in a testamentary instrument admitted to probate, make a provision, which may (A) designate the person or persons or class of persons who may thereafter be interred in said lot or in a tomb in such lot and the places of their interment; (B) direct that upon the interment of certain named persons, the lot or tomb in such lot shall be closed to further interments; (C) direct that the title of the lot shall upon the death of any one or more of the owners, descend in perpetuity to his, her or their distributees, unaffected by any devise. In any case in which an irrevocable designation of a person, persons or class of persons who may be interred in any lot or tomb has been made pursuant to this subdivision and in

which the designated person or persons, or all of the known class of designated persons, have died and have not been buried in the places designated in said lot or tomb, or have by a written instrument duly signed and acknowledged and filed with the corporation, renounced the right of interment pursuant to such designation, then, and in any such event, the then owner or owners of said lot or tomb and any surviving spouse having the right of interment therein, may designate another person or persons or class of persons who may thereafter be interred in said lot or in a tomb in said lot, and the places of their interment, unless the original designation clearly indicated not only that it was irrevocable, but also that no further designations were to be made. Any designation provided for by this subdivision except a designation by testamentary instrument, shall be deemed revocable unless such instrument provides otherwise. In the event an owner or co-owner of a lot is under the age of eighteen years, any designation provided for by this subdivision, except a designation by testamentary instrument, may be executed and acknowledged by the parent or general or testamentary guardian for and on behalf of such owner or co-owner, provided, however, that no such designation may be made unless a place of interment shall remain available in said lot or in a tomb in such lot for the interment of each owner or co-owner of the lot under the age of eighteen years, and any designation so made may be revoked by the owner or co-owner upon reaching the age of eighteen years except with respect to burials effected before that time. A designation made by a parent or guardian on behalf of an infant owner or co-owner who is over the age of fourteen years must contain the written consent of such infant owner or co-owner. (g) Lot owner voting. Each owner of full age of a lot in the cemetery of the corporation, as shown in the records of the cemetery at the time of the purchase of the lot from the corporation, or if there be two or more owners, then one of them designated in writing by a majority of them, may cast, in person or by proxy, one vote at meetings of the corporation in respect to each such lot so owned. At such meetings, each owner of a certificate of stock heretofore lawfully issued shall be entitled to one vote for each share of stock owned by him and each owner of a certificate of indebtedness shall be entitled to one vote for each one hundred dollars of such indebtedness remaining unpaid. No lot owner shall be entitled to vote unless all assessments against the lot of such

owner shall have been paid. A quorum for the transaction of business, unless the certificate of incorporation or by-laws otherwise provide, shall be five members entitled to vote at the meeting. In the event a lot owner has executed a proxy which has been in effect for five or more years, the cemetery corporation shall not honor such proxy unless it is presented with proof that the lot owner has been sent a written notice at the address listed in the records of the corporation at least thirty days prior to the meeting at which the proxy is to be exercised advising the lot owner that the proxy is still effective. The notice shall identify the date, time and place of such meeting, and the name of the person holding the proxy and shall state that it may, unless the proxy provides otherwise, be terminated at any time. Such notice need not be mailed more frequently than every fifth year. (h) Plots owned by religious corporations, unincorporated associations, or other entities that provide burial benefits for its members. With respect to any lot, plot or part thereof owned by a membership or religious corporation or unincorporated association or other entity that provides burial benefits for its members, and requires the cemetery to obtain a burial authorization from the membership, religious corporation, unincorporated association, or other entity, the following rules shall apply: (1) If a cemetery receives a request to bury an individual who was a member of a membership, religious corporation, unincorporated association, or other entity that owns the lot, plot or part thereof in which the burial would be made, and despite reasonable efforts on the part of the family of the deceased, the funeral home, and/or the cemetery, no representative of the membership, religious corporation, unincorporated association, or other entity that owns the lot, plot or part thereof in which the burial would be made can be located to authorize the burial, the cemetery may, at its discretion, proceed with the interment provided that documentary evidence indicating a specific grave reservation in the lot, plot or part thereof, for the deceased individual is provided to the cemetery and further that the cemetery has recorded such reservation on its books and in its records; (2) If the decedent is within the first degree of consanguinity to an individual already interred in the lot, plot or part thereof, or the spouse of the decedent is already interred in the lot, plot or part

thereof, the cemetery may, at its discretion, proceed with the interment, provided some form of documentary evidence is provided to the cemetery as to the decedent's right of burial in the lot, plot or part thereof; (3) The right of memorialization shall, under the circumstances described in this paragraph, pass to the person with the right of possession of the body at the time of burial; and (4) Neither the cemetery nor the funeral director shall be liable for any claims, in law or equity, relating to the failure to obtain authorization from the membership, religious corporation, unincorporated association, or other entity for the use of the plot, lot, or portion thereof provided that the requirements of this paragraph have been met.

§ 1513 Sale of burial rights.

§ 1513. Sale of burial rights. (a) Conveyance of lots. (1) Except as otherwise provided in this paragraph the right to use any lot, plot or part thereof may be sold or conveyed only by the cemetery corporation. (2) It shall be unlawful for any person, firm or corporation to purchase or for a cemetery corporation to sell a lot, plot or part thereof for the purpose of resale. This provision, however, shall not prohibit the sale to its members of lots, plots or parts thereof, or the right to use any lot, plot or part thereof, by a membership or religious corporation or unincorporated association or society which provides burial benefits for its members. (3) It shall be unlawful for a cemetery corporation to pay or offer to pay, or for any person, firm or corporation to receive, directly or indirectly, a commission, bonus, rebate or other things of value for, or in connection with, the sale of any lot, plot or part thereof, or the sale of space in a public mausoleum, or the furnishing by or through the cemetery corporation of any service, merchandise, wares, goods or articles. The provisions of this paragraph shall not apply to a person regularly employed and supervised by the cemetery corporation. (4) Notwithstanding any inconsistent provision of this paragraph, and subject to the provisions of section fifteen hundred sixteen of this article, a cemetery corporation may enter into a contract with a third-party vendor to create and maintain a website for the purposes of the sale of any lot, plot or part thereof, or the sale

of space in a public mausoleum, or the furnishing by or through the cemetery corporation of any service, merchandise, wares, goods or articles. The third-party vendor may charge a fee for a transaction made through this website, provided that a fee for all such transactions is specified in the contract and is not dependent on or related to the value of the lot, goods or services to be sold by the cemetery corporation. (5) A violation of this paragraph shall constitute a misdemeanor and shall be punishable by a fine of not more than five hundred dollars or not more than six months imprisonment or both. Each violation shall constitute a separate offense. (b) Prices for burial rights and instruments of conveyance. (1) The directors must fix and determine the prices of the burial lots, plots or parts thereof, and keep a plainly printed copy of the schedules of such prices conspicuously posted in each of the offices of the corporation, open at all reasonable times to inspection, and shall file a schedule of such prices in the office of the cemetery board. (2) Unless its certificate of incorporation or by-laws otherwise provide, and subject to its rules and regulations, the corporation shall sell and convey to any person the use of the lots, plots or parts thereof designated on the map filed in the office of the corporation, on payment of the prices so fixed and determined, but need not sell and convey more than one lot, plot or part thereof to any one person. Conveyances of lots, plots and parts thereof shall be signed by the president or vice-president and treasurer or assistant treasurer of the corporation. A written contract for the sale or use of a lot, plot or part thereof shall have attached thereto and made a part thereof a copy of the rules and regulations of the cemetery corporation or such parts of such rules and regulations as relate to the size and placement of monuments, restrictions on plot usage, warranties, obligations of the cemetery corporation and financial obligations and duties of the lot owner. If a lot, plot or part thereof is sold without a written contract, the corporation shall, before any part of the purchase price is paid by the purchaser, deliver to the purchaser a copy of the rules and regulations or such parts thereof as would be required to be attached to a written contract. Nothing in this subdivision shall prevent the subsequent amendment of such rules and regulations to increase the charges for services rendered by the corporation or in other particulars by or with the consent of the

cemetery board under section fifteen hundred nine of this article. (3) A cemetery corporation that shall sell a lot, plot or part thereof, in excess of the price shown on the schedule filed in the office of the cemetery board, and any person acting for or on behalf of the cemetery corporation in connection with such sale, shall each forfeit to the people of the state of New York a sum equivalent to three times the excess amount so paid. Such penalty may be recovered in a civil action by the cemetery board. (4) The instrument of conveyance of any burial lot, plot or part thereof shall include the actual amount paid therefor and a description showing the dimensions of the property conveyed, and the plot number, section and block number as they appear on the cemetery map. (c) Resale by lot owner. Before any burial shall have been made in any such lot, plot or part thereof, or, if all the bodies therein have been lawfully removed, the lot owner may sell or convey such lot, plot or part thereof upon notice to the cemetery. Such sale shall only occur in those instances where the owner of such lot, plot or part thereof shall have offered it to the cemetery corporation within one year prior to the sale, in writing by registered or certified mail, at the price paid therefor by said lot owner, together with simple interest at the rate of four per centum per annum, and the cemetery corporation shall have failed to accept such offer within thirty days after the making thereof. Subsequent to the receipt of notice of sale of such lot, plot or part thereof, the secretary of the cemetery corporation shall file and record in its books all instruments of transfer. An owner may convey or devise to the corporation his right and title in and to any such lot, plot or part thereof. (d) Lots held in inalienable form. (1) No portion of the cemetery of a cemetery corporation which any person other than the corporation is entitled to use for burial purposes, or in which bodies have been buried and not removed, shall be sold, mortgaged or leased by the corporation. A cemetery corporation may convey any lot so that upon such conveyance, or after an interment therein, such lot shall be forever inalienable, and upon the death of the lot owner shall pass to such person or persons as may be designated in the conveyance or if no such designation be made, shall descend as provided in section fifteen hundred twelve of this article. Any one or more of the owners of such a lot may release or

devise to any other owner of the lot his interest therein on such conditions as shall be specified in the release or will. (2) Any person who is the sole owner of the burial rights in a cemetery lot, plot or any part thereof, in which a burial has been made, may give his entire interest, or, if not prohibited by the rules and regulations of the cemetery corporation, any portion thereof to any person within the third degree of consanguinity to the owner, or, in the event that no such person exists, within the fourth degree of consanguinity to such owner. Such conveyance shall be made subject to the right of interment of the spouse of any deceased owner, which right said spouse may release at any time, but no conveyance or devise by any other person shall deprive the surviving spouse of such right. Burial rights shall not be conveyed pursuant to the provisions of this subparagraph more frequently than once in any ten-year period. (3) A cemetery corporation may take and hold any lot conveyed or devised to it by the lot owner so that thereafter it will be inalienable, and the interments therein shall be restricted to such person or class of persons as may be designated in the conveyance or devise. (4) The title of a lot owner shall not be affected by the dissolution of the corporation, by non-user of its corporate rights and franchises by any act of forfeiture on its part, by any alienation of its property or by incumbrance thereon made or suffered by it.

§ 1513-a Reacquisition of a lot, plot or part thereof by a cemetery

§ 1513-a. Reacquisition of a lot, plot or part thereof by a cemetery corporation.

A cemetery corporation may, upon application and approval by the cemetery board, reacquire, resubdivide, and resell a lot, plot or part thereof under the following circumstances: (a)(i) If the records of the corporation demonstrate that the lot, plot or part thereof was purchased more than seventy-five years prior to the application of the corporation; and (ii) if no burials have been made in the lot, plot or part thereof or all the bodies therein have been lawfully removed; and (iii) if neither the owner or owners of the lot, plot or part thereof nor any person having a credible claim to ownership who has visited, made payments in respect of or engaged in any

other proprietary activities with respect to the lot, plot or part thereof can be identified after a reasonable search conducted by the cemetery corporation, it shall be conclusively presumed that the owner or owners of the lot, plot or part thereof have abandoned their burial rights. A reasonable search consists of a search of: (1) all cemetery records to determine the name of the owner or owners of the lot, plot or part thereof, their last known addresses and all information available to the cemetery relating to any person buried in the lot, plot or part thereof and the names and last known addresses of any persons making inquiry about or visiting the lot, plot or part thereof; (2) a search for the death certificates and the probated wills of the owner or owners of the lot, plot or part thereof; (3) the posting of notice by the cemetery at the entrance to the cemetery and in the cemetery office, if any, of its intention to declare the lot, plot or part thereof abandoned; (4) the mailing of such notice certified mail with return receipt requested to the owner or owners of the lot, plot or part thereof and each person identified during the reasonable search at their last known addresses; (5) publication of such notice once in each week for three successive weeks, in two newspapers of regular commercial circulation by subscription and/or newsstand sale, to be designated by the county clerk of the county where the cemetery is located which in his or her judgement, given the ethnic, religious, geographic or other related demographic characteristics of the owner or owners of the lot, plot or part thereof and each person identified through the reasonable search and the predominant readership of such newspapers are best calculated to inform the owner or owners of the lot, plot or part thereof and each person identified through the reasonable search of any application pursuant to the provisions of this section; and (6) the preparation of an affidavit describing the steps taken by the cemetery corporation to ascertain the identity of and to contact the current owner or owners of the lot, plot or part thereof or next-of-kin thereof or any other persons identified in the course of the reasonable search who might have relevant information and the results of such steps. After the filing with the cemetery board of proof of compliance with the above requirements in form and substance reasonably satisfactory to such board and upon approval by the cemetery board, the lot, plot or part thereof may be resold by the cemetery to any party in compliance with the

cemetery rules and regulations provided, however, that any monument subsequently placed on such lot, plot or part thereof shall conform to the general appearance of any existing monuments in said section of lots, plots or parts thereof, if any. (b) If (i) the circumstances described in paragraph (a) of this section exist except that one or more burials have been made in a lot, and the last burial was made more than seventy-five years prior to the application, (ii) the lot, plot or part thereof can be subdivided to create new graves, (iii) the bodies have not been lawfully removed, and (iv) the cemetery submits an application to the cemetery board which complies with the requirements set forth in paragraph (a) of this section, it shall be conclusively presumed that the lot owner has abandoned the right to make further burials in the lot, the lot may be subdivided, and the resubdivided lot, plot or parts thereof which do not contain the remains of the deceased persons may be resold by the cemetery corporation as provided in this section. Nothing in this section shall permit a cemetery corporation to declare abandoned a lot, plot or part thereof, where such lot, plot or part thereof was purchased for multiple depth burials and where one or more burials has occurred or authorized a cemetery corporation to remove a monument or other embellishment to facilitate the resale of such lot, plot or part thereof, except as provided by section fifteen hundred ten of this article. (c) If the owner or owners of a lot, plot or part thereof can be identified, the cemetery corporation, with the consent of the owner or owners of the lot, plot or part thereof, the lot, plot or part thereof may be resubdivided, and the resubdivided lot, plot or part thereof which does not contain the remains of deceased persons may be resold by the cemetery corporation, provided, however, if no burial has been made in the lot, plot or part thereof, in the twenty-five year period preceding such application, the owner of a lot, plot or part thereof has notified his or her parents, spouse, issue, brothers, sisters, grandparents, and grandchildren, if any, of the application to the cemetery board, and provided further, however, if a burial has been made in this lot, plot or part thereof during such twenty-five year period, the spouse and issue of such deceased person are also notified, and provided further, in either case the owner of the lot, plot or part

thereof satisfies the cemetery board that none of the persons notified have agreed within forty-five days of notification to purchase the lot, plot or part thereof at the price provided under paragraph (c) of section fifteen hundred thirteen of this article. (d) Upon the sale of a lot, plot or part thereof reacquired by the corporation under the provisions of paragraph (a), (b), or (c) of this section, thirty-five percent of the net proceeds shall be placed in the permanent maintenance fund and sixty-five percent shall be placed in the current maintenance fund. Provided, however, that if their property was reacquired under paragraph (i) of this section, thirty-five percent of the net proceeds shall be placed in the permanent maintenance fund, fifty percent shall be placed in the current maintenance fund and fifteen percent shall be placed in a perpetual care fund which the cemetery shall establish in the name of the defunct society for the exclusive purpose of maintenance of the grounds on which the graves were reacquired. (e) If the owner of the lot, plot or part thereof is subsequently identified, the cemetery corporation shall: (i) return all unsold lots, plots or parts thereof if any, to the owner if so requested; and (ii) with respect to any lots, plots or parts thereof that have been sold pursuant to this section, at the option of the owner of the lot, plot or part thereof; either (1) provide the owner, at no cost to the owner, with a lot, plot or part thereof comparable to any lot, plot or part thereof that was sold by the cemetery corporation or (2) provide the owner with the proceeds from the sale of the lot, plot or part thereof reacquired under this section with interest thereon from the date of the sale at six percent per annum. (f) The provisions of this section shall not apply to a lot, plot or part thereof whose record owner is a religious burial society. (g) The provisions of this section shall not violate the burial requirements of sectarian sections of cemetery corporations. (h) Monuments to be erected on a lot, plot or parts thereof, following the resale of a lot, plot or part thereof, shall conform to the rules and regulations or other requirements of the cemetery corporation and shall conform to the size, style and type of monuments in the section of the cemetery where such resale occurs. (i) A cemetery corporation may, upon application and approval by the

cemetery board, reacquire, resubdivide, and resell a lot, plot or part thereof formerly owned by a nonsectarian burial society under the following circumstances: (1) If the cemetery corporation has received a request to make a burial on the grounds of a nonsectarian burial society and the provisions of paragraph (h) of section fifteen hundred twelve of this article had to be invoked to make the burial then the cemetery corporation may, at its discretion, commence the process of reacquiring the unused graves on the grounds of the nonsectarian burial society, except that any graves that have been reserved for individuals where such reservations have been recorded on the books and records of the cemetery corporation shall be exempt from reclamation; or (2) If routine mailings or proxy mailings are sent to the officers of record of a nonsectarian burial society and such mailings are returned by the post office, the cemetery corporation may, at its discretion, make a second mailing by certified mail return receipt requested to each officer of record of the nonsectarian burial society as recorded on the cemetery's books and records and, if each of these mailings is returned by the post office, the cemetery corporation may, at its discretion, commence the process of reacquiring the unused graves on the grounds of the nonsectarian burial society, except that any graves that have been reserved for individuals where such reservations have been recorded on the books and records of the cemetery corporation shall be exempt from reacquisition. (j) If a cemetery corporation has decided to commence the process of reacquiring graves owned by a nonsectarian burial society it shall: (1) send by certified mail return receipt requested to each individual who has engaged in proprietary activities in connection with graves on the grounds of a nonsectarian burial society, seeking the names and addresses of any current officers of the nonsectarian burial society and informing those individuals of the cemetery corporation's intentions of reacquiring the unused graves on the grounds of the nonsectarian burial society; (2) send by certified mail return receipt requested to each individual who has a grave reserved or deeded to them a letter seeking the names and addresses of any current officers of the nonsectarian burial society and informing such individuals of the cemetery corporation's intentions

or reacquiring the unused graves on the grounds of the nonsectarian burial society; (3) post a notice as provided in clause three of subparagraph (iii) of paragraph (a) of this section; (4) publish a notice as provided in clause five of subparagraph (iii) of paragraph (a) of this section; (5) prepare and submit an affidavit as provided in clause six of subparagraph (iii) of paragraph (a) of this section; and (6) upon the sale of any grave or graves on the grounds of the nonsectarian burial society which have been reacquired by the cemetery corporation, the cemetery corporation shall distribute the net proceeds of the sale as provided in paragraph (d) of this section. (k) The cemetery corporation shall delay the sale of ten percent of the graves it reacquires from the nonsectarian burial society for twenty years as a reserve in the event an individual or individuals are identified who have a valid claim for burial on the grounds of the nonsectarian burial society. (l) At the time the graves that have been reacquired by a cemetery corporation from a nonsectarian burial society are sold, the contract of sale shall contain a clause in bold type which specifies that the monuments to be erected on such lot, plot or part thereof, shall conform to the size, style and type of monuments in the section of the cemetery where such graves are located.

§ 1514 Misdemeanor; general penalty.

§ 1514. Misdemeanor; general penalty.

Wherever under the provisions of this article a person violating any part thereof is deemed to be guilty of a misdemeanor and no specific penalty is provided, the penalty for each separate violation shall be imprisonment for not more than six months or a fine of not more than five hundred dollars, or both.

§ 1515 Actions affecting cemetery corporations.

§ 1515. Actions affecting cemetery corporations.

In any action or proceeding affecting or instituted by any cemetery

corporation the cemetery board shall be served with notice thereof in the same manner as any necessary party and shall take such steps in the action or proceeding as it may deem necessary to protect the public interest.

§ 1516 Sale of monuments.

§ 1516. Sale of monuments. (a) No cemetery corporation shall engage in the sale of monuments, not including flush bronze markers, nor shall such monuments be displayed for sale on the property of a cemetery corporation. (b) No cemetery corporation shall authorize or permit any employee or director thereof to advertise or make known his or her relationship to such corporation while engaged in the sale of monuments outside of his or her employment by the cemetery corporation. (c) With regard to the sale of flush granite markers, the cemetery board shall adopt reasonable rules and regulations to exempt cemetery corporations from the provisions of paragraph (a) of this section where a practice for the sale of such flush granite markers was established with the knowledge and approval of the cemetery board prior to the effective date of this section.

§ 1517 Crematory operations.

§ 1517. Crematory operations.

Cemetery corporations that operate a crematory shall have the following duties and obligations: (a) Maintenance and privacy. (1) A crematory facility shall be maintained in a clean, orderly, and sanitary manner, with adequate ventilation and shall have a temporary storage area available to store the remains of deceased human beings pending disposition by cremation, the interior of which shall not be accessible to the general public. (2) Entrances and windows of the crematory facility shall be maintained at all times to secure privacy, including (i) doors shall be tightly closed and rigid; (ii) windows shall be covered; and (iii) entrances shall be locked and secured when not actively attended by authorized crematory personnel. (b) Cremation process. (1) The cremation process shall be conducted in

privacy. No person except authorized persons shall be admitted into the retort area, holding facility, or the temporary storage facility while the remains of deceased human beings are being cremated. Authorized persons, on admittance, shall comply with all rules of the crematory corporation and not infringe upon the privacy of the remains of deceased human beings. (2) The following are authorized persons: (i) licensed, registered funeral directors, registered residents, and enrolled students of mortuary science; (ii) officers and trustees of the cemetery corporation; (iii) authorized employees or their authorized agents of the cemetery corporation; (iv) public officers acting in the discharge of their duties; (v) authorized instructors of funeral directing schools; (vi) licensed physicians or nurses; and (vii) members of the immediate family of the deceased and their authorized agents and designated representatives. (c) Identification of deceased human beings. (1) No crematory shall cremate the remains of any deceased human being without the accompanying cremation permit, required pursuant to section four thousand one hundred forty-five of the public health law which permit shall constitute presumptive evidence of the identity of the said remains. In addition, all crematories situated outside the city of New York, must comply with paragraph (b) of subdivision two of section four thousand one hundred forty-five of the public health law pertaining to the receipt for the deceased human being. From the time of such delivery to the crematory, until the time the crematory delivers the cremains as directed, the crematory shall be responsible for the remains of the deceased human being. Further, a cremation authorization form must accompany the permit required in section four thousand one hundred forty-five of the public health law. This form, provided or approved by the crematory, must be signed by the next of kin or authorizing agent attesting to the permission for the cremation of the deceased, and disclosing to the crematory that such body does not contain a battery, battery pack, power cell, radioactive implant, or radioactive device, if any, and that these materials were removed prior to the cremation process. (2) Upon good cause being shown rebutting the presumption of the identity of such remains, the cremation shall not commence until reasonable confirmation of the identity of the deceased human being is

made. This proof may be in the form of, but not limited to, a signed affidavit from a licensed physician, a member of the family of the deceased human being, the authorizing agent or a court order from the state supreme court within the county of the cemetery corporation. Such proof shall be provided by the authorizing agent. (3) The crematory shall have a written plan to assure that the identification established by the cremation permit accompanies the remains of the deceased human being through the cremation process and until the identity of the deceased is accurately and legibly inscribed on the container in which the cremains are placed. (d) Opening of container holding the remains of the deceased human being. (1) The casket, alternative container, or external wrappings holding the remains of the deceased human being shall not be opened after delivery to the crematory unless there exists good cause to confirm the identity of the deceased, or to assure that no material is enclosed which might cause injury to employees or damage to crematory property, or upon reasonable demand by members of the immediate family or the authorized agent. (2) In such instances in which the casket, alternative container, or wrappings are opened after delivery to the crematory, such action shall only be conducted by the licensed funeral director or registered resident delivering the remains of the deceased human being and if necessary, with the assistance of crematory personnel and a record shall be made, which shall include the reason for such action, the signature of the person authorizing the opening thereof, and the names of the person opening the container and the witness thereto, which shall be retained in the permanent file of the crematory. The opening of the container shall be conducted in the presence of the witness and shall comply with all rules and regulations intended to protect the health and safety of crematory personnel. (e) Ceremonial casket cremation disclosure. In those instances in which the remains of deceased human beings are to be delivered to a crematory in a casket that is not to be cremated with the deceased, timely disclosure thereof must be made by the person making the funeral arrangements to the crematory that prior to cremation the remains of the deceased human being shall be transferred to an alternative container. Such signed acknowledgement of the authorizing person, that the timely

disclosure has been made, shall be retained by the crematory in its permanent records. (f) Transferring remains. (1) The remains of a deceased human being shall not be removed from the casket, alternative container, or external wrappings in which it is delivered to the crematory unless explicit, signed authorization is provided by the person making funeral arrangements or by a public officer discharging his or her statutory duty, which signed authorization shall be retained by the crematory in its permanent records. (2) When the remains of a deceased human being are to be transferred to an alternative container, the transfer shall be conducted in privacy with dignity and respect and by the licensed funeral director or registered resident who delivered those remains and if necessary, with the assistance of crematory personnel. The transferring operation shall comply with all rules and regulations intended to protect the health and safety of crematory personnel. (g) Commingling human remains. The cremation of remains of more than one deceased human being in a retort at any one time is unlawful, except upon the explicit, signed authorization provided by the persons making funeral arrangements and the signed approval of the crematory, which shall be retained by the crematory in its permanent records. (h) Processing of cremains. (1) Upon the completion of the cremation of the remains of a deceased human being, the interior of the retort shall be thoroughly swept so as to render the retort reasonably free of all matter. The contents thereof shall be placed into an individual container and not commingled with other cremains. The cremation permit shall be attached to the individual container preparatory to final processing. (2) A magnet and sieve, or other appropriate method of separation, may be used to divide the cremains from unrecognizable incidental or foreign material. (3) The incidental and foreign material of the cremation process shall be disposed of in a safe manner in compliance with all sanitary rules and regulations as byproducts. (4) The cremains shall be pulverized until no single fragment is recognizable as skeletal tissue. (5) The pulverized cremains shall be transferred to a sealable

container or containers whose inside dimension shall be of suitable size to contain the entire cremains of the person who was cremated. (6) The prescribed sealable container or containers shall be accurately and legibly labeled with the identification of the human being whose cremains are contained therein, in a manner acceptable to the division of cemeteries. (i) Disposition of cremains. The authorizing agent shall be responsible for the final disposition of the cremains. Cremains must be disposed of by placing them in a grave, crypt, or niche, by scattering them in a designated scattering garden or area, or in any manner whatever on the private property of a consenting owner or by delivery to the authorizing agent or a person specifically designated by the authorizing agent. Upon completion of the cremation process, if the cemetery corporation has not been instructed to arrange for the interment, entombment, inurnment or scattering of the cremains, the cemetery corporation shall deliver the cremains to the individual specified on the cremation authorization form or the funeral firm of record. The delivery may be made in person or by registered mail. Upon receipt of the cremains, the individual receiving them may transport them in any manner in the state without a permit, and may dispose of them in accordance with this section. After delivery, the cemetery corporation shall be discharged from any legal obligation or liability concerning the cremains. If, after a period of one hundred twenty days from the date of the cremation, the authorizing agent has not instructed the cemetery corporation to arrange for the final disposition of the cremains or claimed the cremains, the cemetery corporation may dispose of the cremains in any manner permitted by this section. The cemetery corporation, however, shall keep a permanent record identifying the site of final disposition. The authorizing agent shall be responsible for reimbursing the cemetery corporation for all reasonable expenses incurred in disposing of the cremains. Upon disposing of the cremains, the cemetery corporation shall be discharged from any legal obligation or liability concerning the cremains. Except with the express written permission of the authorizing agent, no person shall: (1) dispose of cremains in a manner or in a location so that the cremains are commingled with those of another person. This prohibition shall not apply to the scattering of cremains at sea, by air, or in an

area located in a cemetery and used exclusively for those purposes; and (2) place cremains of more than one person in the same temporary container or urn. (j) Crematory operation certification. Any employee of a crematory whose function is to conduct the daily operations of the cremation process shall be certified by an organization approved by the division of cemeteries. Proof of such certification must be posted in the crematory and available for inspection at any time. Any new employees of a crematory required to be certified under this section shall be certified within one year of their employment. Any employees of a crematory required to be certified under this section and retained prior to the effective date of this paragraph shall be certified within one year of such effective date. Renewal of such certification shall be completed every five years from the date of certification.

• § 1518. Crematory operations during emergency declaration.

Notwithstanding any other provision of law, for the duration of a state or county disaster emergency declared pursuant to an executive order, crematories located in any county of the state may provide emergency transportation and disposition assistance in such instances where the crematories in affected areas are inoperable or unable to provide sufficient capacity for the disposition of human remains during any period of the declared emergency. Such crematories electing to provide emergency assistance shall contract for or otherwise utilize any mode of transportation necessary to transport human remains from areas of a declared emergency to other crematory operations within the state with cremation capacity. Transportation and disposition of human remains from such affected areas shall be conducted by any agent of the regulated crematory and shall only be permitted with a cremation permit required pursuant by section four thousand one hundred forty-five of the public health law attesting to the permission for the cremation of the deceased and their identity. In all instances of emergency crematory operations, a fully executed cremation authorization form shall accompany the human remains and provide the information necessary to return the cremated remains to the individual authorizing such

cremation. Nothing in this section shall require a crematory to provide such transportation or additional crematory resources if they are unable to do so.

• NB There are 2 § 1518's

• § 1518. Natural organic reduction facility operations.

Cemetery corporations that operate a natural organic reduction facility shall have the following duties and obligations: (a) Maintenance and privacy. (1) A natural organic reduction facility shall be maintained in a clean, orderly, and sanitary manner, with adequate ventilation and shall have a temporary storage area available to store the remains of deceased human beings pending disposition by natural organic reduction, the interior of which shall not be accessible to the general public. (2) Entrances and windows of the facility shall be maintained at all times to secure privacy, including (i) doors shall be tightly closed and rigid; (ii) windows shall be covered; and (iii) entrances shall be locked and secured when not actively attended by authorized facility personnel. (b) Natural organic reduction process. (1) The natural organic reduction process shall be conducted in privacy. No person except authorized persons shall be admitted into the reduction area, holding facility, or the temporary storage facility while the remains of deceased human beings are being naturally organically reduced. Authorized persons, on admittance, shall comply with all rules of the cemetery corporation and not infringe upon the privacy of the remains of deceased human beings. (2) The following are authorized persons: (i) licensed, registered funeral directors, registered residents, and enrolled students of mortuary science; (ii) officers and trustees of the cemetery corporation; (iii) authorized employees or their authorized agents of the cemetery corporation; (iv) public officers acting in the discharge of their duties; (v) authorized instructors of funeral directing schools; (vi) licensed physicians or nurses; and (vii) members of the immediate family of the deceased and their authorized agents and

designated representatives. (c) Identification of deceased human beings. (1) No natural organic reduction facility shall naturally organically reduce the remains of any deceased human being without the accompanying natural organic reduction permit, required pursuant to section forty-one hundred forty-five of the public health law which permit shall constitute presumptive evidence of the identity of the said remains. In addition, all natural organic reduction facilities situated outside the city of New York, must comply with paragraph (b) of subdivision two of section forty-one hundred forty-five of the public health law pertaining to the receipt for the deceased human being. From the time of such delivery to the natural organic reduction facility, until the time the natural organic reduction facility distributes the remains as directed, the facility shall be responsible for the remains of the deceased human being. Further, a natural organic reduction authorization form shall accompany the permit required in section forty-one hundred forty-five of the public health law. This form, provided or approved by the facility, shall be signed by the next of kin or authorizing agent attesting to the permission for the natural organic reduction of the deceased, and disclosing to the natural organic reduction facility that such body does not contain a battery, battery pack, power cell, radioactive implant, or radioactive device, if any, and that these materials were removed prior to the natural organic reduction process. (2) Upon good cause being shown rebutting the presumption of the identity of such remains, the natural organic reduction shall not commence until reasonable confirmation of the identity of the deceased human being is made. This proof may be in the form of, but not limited to, a signed affidavit from a licensed physician, a member of the family of the deceased human being, the authorizing agent or a court order from the state supreme court within the county of the cemetery corporation. Such proof shall be provided by the authorizing agent. (3) The facility shall have a written plan to assure that the identification established by the natural organic reduction permit accompanies the remains of the deceased human being through the natural organic reduction process and until the identity of the deceased is accurately and legibly inscribed on the container in which the remains are placed.

(d) Opening of a container holding the remains of the deceased human being. (1) The remains of a deceased human being shall be delivered to the natural organic reduction facility in an alternative container or in external wrappings sufficient to contain the remains and also designed to fully decompose in the natural reduction process. Such alternative container or external wrappings holding the remains of the deceased human being shall not be opened after delivery to the natural organic reduction facility unless there exists good cause to confirm the identity of the deceased, or to assure that no material is enclosed which might cause injury to employees or damage to natural organic reduction facility property, or upon reasonable demand by members of the immediate family or the authorized agent. (2) In such instances in which alternative container or wrappings are opened after delivery to the natural organic reduction facility, such action shall only be conducted by the licensed funeral director or registered resident delivering the remains of the deceased human being and a record shall be made, which shall include the reason for such action, the signature of the person authorizing the opening thereof, and the names of the person opening the container or wrappings and the witness thereto, which shall be retained in the permanent file of the natural organic reduction facility. The opening of the container or wrapping shall be conducted in the presence of the witness and shall comply with all rules and regulations intended to protect the health and safety of natural organic reduction facility personnel. (e) Ceremonial casket natural organic reduction disclosure. In those instances in which the remains of deceased human beings are to be delivered to a natural organic reduction facility in a casket or other container that is not to be naturally organically reduced with the deceased, timely disclosure thereof must be made by the person making the funeral arrangements to the natural organic reduction facility that prior to natural organic reduction the remains of the deceased human being shall be transferred to a container or in external wrappings sufficient to contain the remains and also designed to fully decompose in the natural reduction process. Such signed acknowledgement of the authorizing person, that the timely disclosure has been made, shall be retained by the natural organic reduction facility in its permanent records.

(f) Transferring remains. (1) The remains of a deceased human being shall not be removed from the casket, alternative container, or external wrappings in which it is delivered to the natural organic reduction facility unless explicit, signed authorization is provided by the person making funeral arrangements or by a public officer discharging their statutory duty, which signed authorization shall be retained by the natural organic reduction facility in its permanent records. (2) When the remains of a deceased human being are to be transferred to an alternative container, the transfer shall be conducted in privacy with dignity and respect and by the licensed funeral director or registered resident who delivered those remains. The transferring operation shall comply with all rules and regulations intended to protect the health and safety of facility personnel. (g) Commingling human remains. The natural organic reduction of remains of more than one deceased human being in a reduction container at any one time is unlawful, except upon the explicit, signed authorization provided by the persons making funeral arrangements and the signed approval of the natural organic reduction facility, which shall be retained by the natural organic reduction facility in its permanent records. (h) Processing of remains. (1) Upon the completion of the natural organic reduction of the remains of a deceased human being, the interior of the natural organic reduction container shall be thoroughly swept or otherwise cleaned so as to render the natural organic reduction container reasonably free of all matter. The contents thereof shall be placed into an individual container and not commingled with other remains. The natural organic reduction permit shall be attached to the individual container preparatory to final processing. (2) A magnet and sieve, or other appropriate method of separation, may be used to divide the remains from unrecognizable incidental or foreign material. (3) The incidental and foreign material of the natural organic reduction process shall be disposed of in a safe manner in compliance with all sanitary rules and regulations as byproducts. (4) The remains shall be pulverized until no single fragment is recognizable as skeletal tissue. (5) The pulverized remains shall be transferred to a container or to

multiple containers, if so requested in writing by the person making the funeral arrangements for the natural organic reduction. Such container or containers shall have inside dimensions of suitable size to contain the remains of the person who was naturally organically reduced. (6) The prescribed container or containers shall be accurately and legibly labeled with the identification of the human being whose remains are contained therein, in a manner acceptable to the division of cemeteries. (i) Disposition of remains. The authorizing agent shall be responsible for the final disposition of the remains. Disposition of remains resulting from the natural organic reduction process are not recoverable once scattered or interred. Remains shall be disposed of by scattering them in a designated scattering garden or area in a cemetery, or by prior authorization by the cemetery corporation, by placing them in a grave, crypt, or niche, or retrieval of the remains pursuant to prior authorization by the authorizing agent or a person specifically designated by the authorizing agent. Upon completion of the natural organic reduction process, the cemetery corporation shall notify the authorizing agent and funeral firm making such arrangements that the natural organic reduction process has been completed and that the remains are prepared to be disposed of in accordance with this paragraph. Upon receipt of the remains, the individual receiving them may transport them in any manner in the state without a permit, and may dispose of them in accordance with this section. After disposition, the cemetery corporation shall be discharged from any legal obligation or liability to deliver the remains to the authorizing agent or any other person enumerated under paragraph (a) of subdivision two of section forty-two hundred one of the public health law concerning the remains. If, after a period of one hundred twenty days from the date of the natural organic reduction, the authorizing agent has not instructed the cemetery corporation to arrange for the final disposition of the remains or claimed the remains, the cemetery corporation may dispose of the remains in any manner permitted by this section. The cemetery corporation, however, shall keep a permanent record identifying the site of final disposition. The authorizing agent shall be responsible for reimbursing the cemetery corporation for all reasonable expenses incurred in disposing of the remains. Upon disposing of the remains, the

cemetery corporation shall be discharged from any legal obligation or liability to deliver the remains to the authorizing agent or any other person enumerated under paragraph (a) of subdivision two of section forty-two hundred one of the public health law concerning the remains. Except with the express written permission of the authorizing agent, no person shall place remains of more than one person in the same temporary container or urn. (j) Natural organic reduction facility operation certification. Any employee of a natural organic reduction facility whose function is to conduct the daily operations of the cremation or natural organic reduction process shall be certified by an organization approved by the division of cemeteries. Proof of such certification shall be posted in the natural organic reduction facility and available for inspection at any time. Any new employees of a natural organic reduction facility required to be certified under this section shall be certified within one year of their employment. Any employees of a natural organic reduction facility required to be certified under this section and retained prior to the effective date of this paragraph shall be certified within one year of such effective date. Renewal of such certification shall be completed every five years from the date of certification. (k) The cemetery board, in consultation with the department of health, the department of environmental conservation, and any other state agency deemed necessary, may promulgate rules and regulations consistent with law to effectuate the provisions of this section.

• NB There are 2 § 1518's

ARTICLE 16 LAND BANKS Section 1600. Short title. 1601. Legislative intent. 1602. Definitions. 1603. Creation and existence. 1604. Applicability of New York law. 1605. Board of directors. 1606. Staff.

1607. Powers.
1608. Acquisition of property.
1609. Disposition of property.
1610. Financing of land bank operations.
1611. Borrowing and issuance of bonds.
1612. Public records and public meetings.
1613. Dissolution of land bank.
1614. Conflicts of interest.
1615. Construction, intent and scope.
1616. Delinquent property tax enforcement.
1617. Contracts.

Article 16

§ 1600 Short title.

§ 1600. Short title.

This article shall be known and may be cited as the "land bank act".

§ 1601 Legislative intent.

§ 1601. Legislative intent.

The legislature finds and declares that New York's communities are important to the social and economic vitality of the state. Whether urban, suburban, or rural, many communities are struggling to cope with vacant, abandoned, and tax-delinquent properties.

There exists a crisis in many cities and their metro areas caused by disinvestment in real property and resulting in a significant amount of vacant and abandoned property. For example, Cornell Cooperative Extension Association of Erie county estimates that the city of Buffalo has thirteen thousand vacant parcels, four thousand vacant structures and an estimated twenty-two thousand two hundred ninety vacant residential units. This condition of vacant and abandoned property represents lost revenue to local governments and large costs ranging from demolition, effects of safety hazards and spreading deterioration of neighborhoods including resulting mortgage foreclosures.

The need exists to strengthen and revitalize the economy of the state

and its local units of government by solving the problems of vacant and abandoned property in a coordinated manner and to foster the development of such property and promote economic growth. Such problems may include multiple taxing jurisdictions lacking common policies, ineffective property inspection, code enforcement and property rehabilitation support, lengthy and/or inadequate foreclosure proceedings and lack of coordination and resources to support economic revitalization.

There is an overriding public need to confront the problems caused by vacant, abandoned and tax-delinquent properties through the creation of new tools to be available to communities throughout New York enabling them to turn vacant spaces into vibrant places.

Land banks are one of the tools that can be utilized by communities to facilitate the return of vacant, abandoned, and tax-delinquent properties to productive use. The primary focus of land bank operations is the acquisition of real property that is tax delinquent, tax foreclosed, vacant, abandoned, and the use of tools authorized in this article to eliminate the harms and liabilities caused by such properties.

§ 1602 Definitions.

§ 1602. Definitions.

The following words and phrases when used in this article shall have the meanings given to them in this section unless the context clearly indicates otherwise: (a) "board of directors" or "board" shall mean the board of directors of a land bank; (b) "land bank" shall mean a land bank established as a charitable not-for-profit corporation under this chapter and in accordance with the provisions of this article and pursuant to this article; (c) "foreclosing governmental unit" shall mean "tax district" as defined in subdivision six of section eleven hundred two of the real property tax law; (d) "municipality" shall mean a city, village, town or county other than a county located wholly within a city;

(e) "school district" shall mean a school district as defined under the education law; and (f) "real property" shall mean lands, lands under water, structures and any and all easements, air rights, franchises and incorporeal hereditaments and every estate and right therein, legal and equitable, including terms for years and liens by way of judgment, mortgage or otherwise, and any and all fixtures and improvements located thereon.

§ 1603 Creation and existence.

§ 1603. Creation and existence. (a) Any foreclosing governmental unit may create a land bank by the adoption of a local law, ordinance, or resolution as appropriate to such foreclosing governmental unit which action specifies the following: (1) the name of the land bank; (2) the number of members of the board of directors, which shall consist of an odd number of members, and shall be not less than five members nor more than fifteen members; (3) the initial individuals to serve as members of the board of directors, and the length of terms for which they are to serve; (4) the qualifications, manner of selection or appointment, and terms of office of members of the board; and (5) the articles of incorporation for the land bank, which shall be filed with the secretary of state in accordance with the procedures set forth in this chapter. (b) Two or more foreclosing governmental units may enter into an intergovernmental cooperation agreement which creates a single land bank to act on behalf of such foreclosing governmental units, which agreement shall be authorized by and be in accordance with the provisions of paragraph (a) of this section. Such intergovernmental agreement shall include provisions for dissolution of such land bank. (c) Any foreclosing governmental units and any municipality may enter into an intergovernmental cooperation agreement which creates a single land bank to act on behalf of such foreclosing governmental unit or units and municipality, which agreement shall be authorized by and be in accordance with the provisions of paragraph (a) of this section. Such intergovernmental agreement shall include provisions for dissolution of such land bank.

(d) Except when a land bank is created pursuant to paragraph (b) or (c) of this section, in the event a county creates a land bank, such land bank shall have the power to acquire real property only in those portions of such county located outside of the geographical boundaries of any other land bank created by any other foreclosing governmental unit located partially or entirely within such county. (e) A school district may participate in a land bank pursuant to an intergovernmental cooperation agreement with the foreclosing governmental unit or units that create the land bank, which agreement shall specify the membership, if any, of such school district on the board of directors of the land bank, or the actions of the land bank which are subject to approval by the school district. (f) Each land bank created pursuant to this act shall be a 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. (g) Nothing in this article shall be construed to authorize the existence of more than forty-five land banks located in the state at one time, provided further that each foreclosing governmental unit or units proposing to create a land bank shall submit such local law, ordinance or resolution as required by paragraph (a) of this section, to the urban development corporation, for its review and approval. The creation of a land bank shall be conditioned upon approval of the urban development corporation. (h) The office of the state comptroller shall have the authority to audit any land bank pursuant to this article.

§ 1604 Applicability of New York law.

§ 1604. Applicability of New York law.

This article shall apply only to land banks created pursuant to this article.

§ 1605 Board of directors.

§ 1605. Board of directors. (a) (1) The initial size of the board shall be determined in accordance with section sixteen hundred three of this article. Unless

restricted by the actions or agreements specified in section sixteen hundred three of this article, the provisions of this section shall apply. (2) The size of the board may be adjusted in accordance with by-laws of the land bank. (b) In the event that a land bank is created pursuant to an intergovernmental agreement in accordance with section sixteen hundred three of this article, such intergovernmental cooperation agreement shall specify matters identified in paragraph (a) of section sixteen hundred three of this article; provided, however, that each foreclosing governmental unit shall have at least one appointment to the board. (c) Any public officer shall be eligible to serve as a board member and the acceptance of the appointment shall neither terminate nor impair such public office. For purposes of this section, "public officer" shall mean a person who is elected to a municipal office. Any municipal employee or appointed officer shall be eligible to serve as a board member. (d) The members of the board of directors shall select annually from among themselves a chairman, a vice-chairman, a treasurer, and such other officers as the board may determine, and shall establish their duties as may be regulated by rules adopted by the board. (e) The board shall establish rules and requirements relative to the attendance and participation of members in its meetings, regular or special. Such rules and regulations may prescribe a procedure whereby, should any member fail to comply with such rules and regulations, such member may be disqualified and removed automatically from office by no less than a majority vote of the remaining members of the board, and that member's position shall be vacant as of the first day of the next calendar month. Any person removed under the provisions of this paragraph shall be ineligible for reappointment to the board, unless such reappointment is confirmed unanimously by the board. (f) A vacancy on the board shall be filled in the same manner as the original appointment. (g) Board members shall serve without compensation, shall have the power to organize and reorganize the executive, administrative, clerical, and other departments of the land bank and to fix the duties, powers, and compensation of all employees, agents, and consultants of

the land bank. The board may reimburse any member for expenses actually incurred in the performance of duties on behalf of the land bank. (h) The board shall meet in regular session according to a schedule adopted by the board, and also shall meet in special session as convened by the chairman or upon written notice signed by a majority of the members. (i) A majority of the members of the board, not including vacancies, shall constitute a quorum for the conduct of business. All actions of the board shall be approved by the affirmative vote of a majority of the members of that board present and voting; provided, however, no action of the board shall be authorized on the following matters unless approved by a majority of the total board membership: (1) adoption of by-laws and other rules and regulations for conduct of the land bank's business; (2) hiring or firing of any employee or contractor of the land bank. This function may, by majority vote of the total board membership, be delegated to a specified officer or committee of the land bank, under such terms and conditions, and to the extent, that the board may specify; (3) the incurring of debt; (4) adoption or amendment of the annual budget; and (5) sale, lease, encumbrance, or alienation of real property, improvements, or personal property. (j) Members of a board shall not be liable personally on the bonds or other obligations of the land bank, and the rights of creditors shall be solely against such land bank. (k) Vote by proxy shall not be permitted. Any member may request a recorded vote on any resolution or action of the land bank. (l) Each director, officer and employee shall be a state officer or employee for the purposes of sections seventy-three and seventy-four of the public officers law.

§ 1606 Staff.

§ 1606. Staff.

A land bank may employ a secretary, an executive director, its own counsel and legal staff, and such technical experts, and such other

agents and employees, permanent or temporary, as it may require, and may determine the qualifications and fix the compensation and benefits of such persons. A land bank may also enter into contracts and agreements with municipalities for staffing services to be provided to the land bank by municipalities or agencies or departments thereof, or for a land bank to provide such staffing services to municipalities or agencies or departments thereof.

§ 1607 Powers.

§ 1607. Powers. (a) A land bank shall constitute a charitable not-for-profit corporation under New York law, which powers shall include all powers necessary to carry out and effectuate the purposes and provisions of this article, including the following powers in addition to those herein otherwise granted: (1) adopt, amend, and repeal bylaws for the regulation of its affairs and the conduct of its business; (2) sue and be sued in its own name and plead and be impleaded in all civil actions, including, but not limited to, actions to clear title to property of the land bank; (3) to adopt a seal and to alter the same at pleasure; (4) to make contracts, give guarantees and incur liabilities, borrow money at such rates of interest as the land bank may determine; (5) to issue negotiable revenue bonds and notes according to the provisions of this article; (6) to procure insurance or guarantees from the state of New York or federal government of the payments of any debts or parts thereof incurred by the land bank, and to pay premiums in connection therewith; (7) to enter into contracts and other instruments necessary to the performance of its duties and the exercise of its powers, including, but not limited to, intergovernmental agreements under section one hundred nineteen-o of the general municipal law for the joint exercise of powers under this article; (8) to enter into contracts and other instruments necessary to the performance of functions by the land bank on behalf of municipalities or agencies or departments of municipalities, or the performance by municipalities or agencies or departments of municipalities of functions

on behalf of the land bank; (9) to make and execute contracts and other instruments necessary to the exercise of the powers of the land bank; and any contract or instrument when signed by the chairman or vice-chairman of the land bank, or by an authorized use of their facsimile signatures, and by the secretary or assistant secretary, or, treasurer or assistant treasurer of the land bank, or by an authorized use of their facsimile signatures, shall be held to have been properly executed for and on its behalf; (10) to procure insurance against losses in connection with the real property, assets, or activities of the land bank; (11) to invest money of the land bank, at the discretion of the board of directors, in instruments, obligations, securities, or property determined proper by the board of directors, and name and use depositories for its money; (12) to enter into contracts for the management of, the collection of rent from, or the sale of real property of the land bank; (13) to design, develop, construct, demolish, reconstruct, rehabilitate, renovate, relocate, and otherwise improve real property or rights or interests in real property; (14) to fix, charge, and collect rents, fees and charges for the use of real property of the land bank and for services provided by the land bank; (15) to grant or acquire a license, easement, lease (as lessor and as lessee), or option with respect to real property of the land bank; (16) to enter into partnership, joint ventures, and other collaborative relationships with municipalities and other public and private entities for the ownership, management, development, and disposition of real property; (17) to inventory vacant, abandoned and tax foreclosed properties; (18) to develop a redevelopment plan to be approved by the foreclosing governmental unit or units; (19) to be subject to municipal building codes and zoning laws; (20) to enter in agreements with a foreclosing governmental unit for the distribution of revenues to the foreclosing governmental unit and school district; (21) to organize a subsidiary for a project or projects which the land bank has the power to pursue under this article when the primary reason

for which the subsidiary shall be organized shall be to limit the potential liability impact of the subsidiary's project or projects on the land bank or because state or federal law requires that the purpose of a subsidiary be undertaken through a specific corporate or business structure. All real property of a subsidiary organized under this article shall be maintained on the inventory lists required in this article of the land bank of which it is a subsidiary and the subsidiary shall make all reports and other disclosures as are required of land banks under this article and as local public authorities, unless the subsidiary's operations and finances are consolidated with those of the land bank of which it is a subsidiary. Subsidiaries organized under this article shall be established in the form of a New York charitable not-for-profit corporation or a New York single member limited liability company. Subsidiaries shall not have the authority to issue bonds, notes or other debts, provided, however, that such subsidiaries may issue notes or other debt to the land bank of which it is a subsidiary. The organizational documents filed to create a subsidiary under this article shall state that the land bank is organizing the subsidiary for the purposes set forth in this article and the name of the subsidiary shall be reasonably related to the name of the land bank of which it is a subsidiary. The real property of a subsidiary organized under this article and its income and operations are exempt from all taxation by the state of New York and by any of its political subdivisions; and (22) to do all other things necessary to achieve the objectives and purposes of the land bank or other laws that relate to the purposes and responsibility of the land bank. (b) A land bank shall neither possess nor exercise the power of eminent domain.

§ 1608 Acquisition of property.

§ 1608. Acquisition of property. (a) The real property of a land bank and its income and operations are exempt from all taxation by the state of New York and by any of its political subdivisions. The real property of a land bank shall be exempt from: (i) all special ad valorem levies and special assessments as defined in section one hundred two of the real property tax law; (ii) sewer rent imposed under article fourteen-F of the general municipal

law; and (iii) any and all user charges imposed by any municipal corporation, special district or other political subdivisions of the state, provided, however, that real property of a land bank for which such land bank receives rent, fees, or other charges for the use of such real property shall not be exempt from subparagraphs (ii) and (iii) of this paragraph. Such exempt status shall be effective upon the date of transfer of title to a land bank, notwithstanding the applicable taxable status date. Notwithstanding any other general, special or local law relating to fees of clerks, no clerk shall charge or collect a fee for filing, recording or indexing any paper, document, map or proceeding filed, recorded or indexed for a land bank, or an officer thereof acting in an official capacity, nor for furnishing a transcript, certification or copy of any paper, document, map or proceeding to be used for land bank purposes. (b) The land bank may acquire real property or interests in real property by gift, devise, transfer, exchange, foreclosure, purchase, or otherwise on terms and conditions and in a manner the land bank considers proper. (c) The land bank may acquire real property by purchase contracts, lease purchase agreements, installment sales contracts, land contracts, and may accept transfers from municipalities upon such terms and conditions as agreed to by the land bank and the municipality. Notwithstanding any other law to the contrary, any municipality may transfer to the land bank real property and interests in real property of the municipality on such terms and conditions and according to such procedures as determined by the municipality. (d) The land bank shall maintain all of its real property in accordance with the laws and ordinances of the jurisdiction in which the real property is located. (e) The land bank shall not own or hold real property located outside the jurisdictional boundaries of the foreclosing governmental unit or units which created the land bank; provided, however, that a land bank may be granted authority pursuant to an intergovernmental cooperation agreement with another municipality to manage and maintain real property located within the jurisdiction of such other municipality. (f) Notwithstanding any other provision of law to the contrary, any municipality may convey to a land bank real property and interests in

real property on such terms and conditions, form and substance of consideration, and procedures, all as determined by the transferring municipality in its discretion. (g) The acquisition of real property by a land bank pursuant to the provisions of this article, from entities other than political subdivisions, shall be limited to real property that is tax delinquent, tax foreclosed, vacant or abandoned; provided, however, that a land bank shall have authority to enter into agreements to purchase other real property consistent with an approved redevelopment plan. (h) The land bank shall maintain and make available for public review and inspection a complete inventory of all property received by the land bank. Such inventory shall include: the location of the parcel; the purchase price, if any, for each parcel received; the current value assigned to the property for purposes of real property taxation; the amount, if any, owed to the locality for real property taxation; the identity of the transferor; and any conditions or restrictions applicable to the property. (i) All parcels received by the land bank shall be listed on the received inventory established pursuant to paragraph (h) of this section within one week of acquisition and shall remain in such inventory for one week prior to disposition. (j) Failure to comply with the requirements in paragraphs (h) and (i) of this section with regard to any particular parcel shall cause such acquisition by the land bank to be null and void.

§ 1609 Disposition of property.

§ 1609. Disposition of property. (a) The land bank shall hold in its own name, or in the name of a lawfully organized subsidiary, all real property acquired by the land bank irrespective of the identity of the transferor of such property. (a-1) This section governing the disposition of property by land banks shall supersede section twenty-eight hundred ninety-seven of the public authorities law in the governance of property dispositions by land banks and, as such, notwithstanding any other general, special or local law to the contrary, section twenty-eight hundred ninety-seven of the public authorities law shall not apply to land banks. (b) The land bank shall maintain and make available for public review

and inspection a complete inventory of all real property dispositions by the land bank. Such inventory shall include a complete copy of the sales contract including all terms and conditions including, but not limited to, any form of compensation received by the land bank or any other party which is not included within the sale price. (c) The land bank shall determine and set forth in policies and procedures of the board of directors the general terms and conditions for consideration to be received by the land bank for the transfer of real property and interests in real property, which consideration may take the form of monetary payments and secured financial obligations, covenants and conditions related to the present and future use of the property, contractual commitments of the transferee, and such other forms of consideration as are consistent with state and local law. (d) The land bank may convey, exchange, sell, transfer, lease as lessor, grant, release and demise, pledge any and all interests in, upon or to real property of the land bank. (e) A foreclosing governmental unit may, in its local law, resolution or ordinance creating a land bank, or, in the case of multiple foreclosing governmental units creating a single land bank in the applicable intergovernmental cooperation agreement, establish a hierarchical ranking of priorities for the use of real property conveyed by a land bank including but not limited to: (1) use for purely public spaces and places, including community gardens; (2) use for affordable housing; (3) use for retail, commercial and industrial activities; (4) use as wildlife conservation areas; and (5) such other uses and in such hierarchical order as determined by the foreclosing governmental unit or units. (f) A foreclosing governmental unit may, in its local law, resolution or ordinance creating a land bank, or, in the case of multiple foreclosing governmental units creating a single land bank in the applicable intergovernmental cooperation agreement, require that any particular form of disposition of real property, or any disposition of real property located within specified jurisdictions, be subject to specified voting and approval requirements of the board of directors. Except and unless restricted or constrained in this manner, the board of

directors may delegate to officers and employees the authority to enter into and execute agreements, instruments of conveyance and all other related documents pertaining to the conveyance of real property by the land bank. (g) All property dispositions shall be listed on the property disposition inventory established pursuant to paragraph (b) of this section within one week of disposition. Such records shall remain available for public inspection in the property disposition inventory indefinitely. (h) Failure to comply with the requirements in paragraph (g) of this section shall subject the land bank to a civil penalty of one hundred dollars per violation up to a maximum of ten thousand dollars for each parcel, recoverable in an action brought by the attorney general or district attorney. The attorney general or district attorney may also seek rescission of the real property transaction.

§ 1610 Financing of land bank operations.

§ 1610. Financing of land bank operations. (a) A land bank may receive funding through grants and loans from the foreclosing governmental unit or units which created the land bank, from other municipalities, from the state of New York, from the federal government, and from other public and private sources. (b) A land bank may receive and retain payments for services rendered, for rents and leasehold payments received, for consideration for disposition of real and personal property, for proceeds of insurance coverage for losses incurred, for income from investments, and for any other asset and activity lawfully permitted to a land bank under this article. (c) Upon the adoption of a local law, ordinance, or resolution by municipality, school district or any taxing district, fifty percent of the real property taxes collected on any specific parcel of real property identified by such municipality, school district or any taxing jurisdiction may be remitted to the land bank, in accordance with procedures established by regulations promulgated by the department of taxation and finance. Such allocation of real property tax revenues shall commence with the first taxable year following the date of conveyance and shall continue for a period of five years.

§ 1611 Borrowing and issuance of bonds.

§ 1611. Borrowing and issuance of bonds. (a) A land bank shall have power to issue bonds for any of its corporate purposes, the principal and interest of which are payable from its revenues generally. Any of such bonds may be secured by a pledge of any revenues, including grants or contributions from the state of New York, the federal government, or any agency, and instrumentality thereof, or by a mortgage of any property of the land bank. (b) The bonds issued by a land bank are hereby declared to have all the qualities of negotiable instruments under New York state law. (c) The bonds of a land bank created under the provisions of this article and the income therefrom shall at all times be free from taxation for the state of New York or local purposes under any provision of New York law. (d) Bonds issued by the land bank shall be authorized by resolution of the board and shall be limited obligations of the land bank; the principal and interest, costs of issuance, and other costs incidental thereto shall be payable solely from the income and revenue derived from the sale, lease, or other disposition of the assets of the land bank. In the discretion of the land bank, the bonds may be additionally secured by mortgage or other security device covering all or part of the project from which the revenues so pledged may be derived. Any refunding bonds issued shall be payable from any source described above or from the investment of any of the proceeds of the refunding bonds and shall not constitute an indebtedness or pledge of the general credit of any foreclosing governmental unit or municipality within the meaning of any constitutional or statutory limitation of indebtedness and shall contain a recital to that effect. Bonds of the land bank shall be issued in such form, shall be in such denominations, shall bear interest, shall mature in such manner, and be executed by one or more members of the board as provided in the resolution authorizing the issuance thereof. Such bonds may be subject to redemption at the option of and in the manner determined by the board in the resolution authorizing the issuance thereof. (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. (f) Neither the members of a land bank nor any person executing the bonds shall be liable personally on any such bonds by reason of the issuance thereof. Such bonds or other obligations of a land bank shall not be a debt of any municipality or of the state of New York, and shall so state on their face, nor shall any municipality or the state of New York nor any revenues or any property of any municipality or of the state of New York be liable therefor.

§ 1612 Public records and public meetings.

§ 1612. Public records and public meetings. (a) The board shall cause minutes and a record to be kept of all its proceedings. Except as otherwise provided in this section, the land bank shall be subject to the open meetings law and the freedom of information law. (b) A land bank shall hold a public hearing prior to financing or issuance of bonds. The land bank shall schedule and hold a public hearing and solicit public comment. After the conclusion of the public hearing and comments, the land bank shall consider the results of the public hearing and comments with respect to the proposed actions. Such consideration by the land bank shall include the accommodation of the public interest with respect to such actions; if such accommodation is deemed in the best interest of the community proposed actions shall include such accommodation. (c) In addition to any other report required by this chapter, the land bank, through its chairperson, shall annually deliver, in oral and written form, a report to the municipality. Such report shall be presented by March fifteenth of each year to the governing body or board of the municipality. The report shall describe in detail the projects undertaken by the land bank during the past year, the monies expended by the land bank during the past year, and the administrative activities of the land bank during the past year. At the conclusion of the report, the

chairperson of the land bank shall be prepared to answer the questions of the municipality with respect to the projects undertaken by the authority during the past year, the monies expended by the municipality during the past year, and the administrative activities of the municipality during the past year.

§ 1613 Dissolution of land bank.

§ 1613. Dissolution of land bank.

A land bank may be dissolved as a charitable not-for-profit corporation sixty calendar days after an affirmative resolution approved by two-thirds of the membership of the board of directors. Sixty calendar 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 foreclosing governmental unit or units that created the land bank. In the event that two or more foreclosing governmental units create a land bank in accordance with section sixteen hundred three of this article, the withdrawal of one or more foreclosing governmental units shall not result in the dissolution of the land bank unless the intergovernmental agreement so provides, and there is no foreclosing governmental unit that desires to continue the existence of the land bank.

§ 1614 Conflicts of interest.

§ 1614. Conflicts of interest.

No member of the board or employee of a land bank shall acquire any interest, direct or indirect, in real property of the land bank, in any real property to be acquired by the land bank, or in any real property to be acquired from the land bank. No member of the board or employee of a land bank shall have any interest, direct or indirect, in any contract or proposed contract for materials or services to be furnished or used

by a land bank. The board may adopt supplemental rules and regulations addressing potential conflicts of interest and ethical guidelines for members of the board and land bank employees.

§ 1615 Construction, intent and scope.

§ 1615. Construction, intent and scope.

The provisions of this article shall be construed liberally to effectuate the legislative intent and the purposes as complete and independent authorization for the performance of each and every act and thing authorized by this article, and all powers granted shall be broadly interpreted to effectuate the intent and purposes and not as a limitation of powers. Except as otherwise expressly set forth in this article, in the exercise of its powers and duties under this article and its powers relating to property held by the land bank, the land bank shall have complete control as fully and completely as if it represented a private property owner and shall not be subject to restrictions imposed by the charter, ordinances, or resolutions of a local unit of government.

§ 1616 Delinquent property tax enforcement.

§ 1616. Delinquent property tax enforcement.

The municipality may enter into a contract to sell some or all of the delinquent tax liens held by it to a land bank, subject to the following conditions: (a) The consideration to be paid may be more or less than the face amount of the tax liens sold. (b) Property owners shall be given at least thirty days advance notice of such sale in the same form and manner as is provided by subdivision two of section eleven hundred ninety of the real property tax law. Failure to provide such notice or the failure of the addressee to receive the same shall not in any way affect the validity of any sale of a tax lien or tax liens or the validity of the taxes or interest prescribed by law with respect thereto. (c) The municipality shall set the terms and conditions of the contract of sale.

(d) The land bank must thirty days prior to the commencement of any foreclosure action provide to the municipality a list of liens to be foreclosed. The municipality may, at its sole option and discretion, repurchase a lien or liens on the foreclosure list from the land bank. The repurchase price shall be the amount of the lien or liens plus any accrued interest and collection fees incurred by the land bank. The land bank shall provide the foreclosure list to the municipality, along with the applicable repurchase price of each lien, by certified mail, and the municipality shall have thirty days from receipt to notify the land bank of its option to purchase one or more of the liens. If the municipality opts to purchase the lien, it shall provide payment within thirty days of receipt of the repurchase price of said lien or liens. If the municipality shall fail to opt to repurchase the lien or liens the land bank shall have the right to commence a foreclosure action immediately. (e) The sale of a tax lien pursuant to this article shall not operate to shorten the otherwise applicable redemption period or change the otherwise applicable interest rate. (f) Upon the expiration of the redemption period prescribed by law, the purchaser of a delinquent tax lien, or its successors or assigns, may foreclose the lien as in an action to foreclose a mortgage as provided in section eleven hundred ninety-four of the real property tax law. The procedure in such action shall be the procedure prescribed by article thirteen of the real property actions and proceedings law for the foreclosure of mortgages. At any time following the commencement of an action to foreclose a lien, the amount required to redeem the lien, or the amount received upon sale of a property, shall include reasonable and necessary collection costs, attorneys' fees, legal costs, allowances, and disbursements. (g) The provisions of title five of article eleven of the real property tax law shall apply so far as is practicable to a contract for the sale of tax liens pursuant to this article. (h) If the court orders a public sale pursuant to section eleven hundred thirty-six of the real property tax law, and the purchaser of the property is the land bank, then the form, substance, and timing of the land bank's payment of the sales price may be according to such agreement as is mutually acceptable to the plaintiff and the land bank. The obligation of the land bank to perform in accordance with such

agreement shall be deemed to be in full satisfaction of the tax claim which was the basis for the judgment. (i) Notwithstanding any other provision of law to the contrary, in the event that no municipality elects to tender a bid at a public sale pursuant to the provisions of section eleven hundred sixty-six of the real property tax law or sale pursuant to the provisions of a county charter, city charter, administrative code, or special law when applicable under section eleven hundred four of the real property tax law, the land bank may tender a bid at such sale in an amount equal to the total amount of all municipal claims and liens which were the basis for the judgment. In the event of such tender by the land bank the property shall be deemed sold to the land bank regardless of any bids by any other third parties. The bid of the land bank shall be paid as to its form, substance, and timing according to such agreement as is mutually acceptable to the plaintiff and the land bank. The obligation of the land bank to perform in accordance with such agreement shall be deemed to be in full satisfaction of the municipal claim which was the basis for the judgment. The land bank, as purchaser at such public sale or sale pursuant to the provisions of a county charter, city charter, administrative code, or special law when applicable under section eleven hundred four of the real property tax law, shall take and forever thereafter have, an absolute title to the property sold, free and discharged of all tax and municipal claims, liens, mortgages, charges and estates of whatsoever kind. The deed to the land bank shall be executed, acknowledged and delivered within thirty days of the sale. Alternatively, the land bank can assign all rights resulting from the land bank's successful tender for the property to the foreclosing governmental unit, which would allow the property to be deeded directly to the foreclosing governmental unit. All land bank acquisitions pursuant to this paragraph shall comply with section sixteen hundred eight of this article and all dispositions of property acquired pursuant to this paragraph shall comply with section sixteen hundred nine of this article.

§ 1617 Contracts.

§ 1617. Contracts. (a) The land bank may, in its discretion, assign contracts for

supervision and coordination to the successful bidder for any subdivision of work for which the land bank receives bids. Any construction, demolition, renovation and reconstruction contract awarded by the land bank shall contain such other terms and conditions as the land bank may deem desirable. The land bank shall not award any construction, demolition, renovation and reconstruction contract greater than ten thousand dollars except to the lowest bidder who, in its opinion, is qualified to perform the work required and who is responsible and reliable. The land bank may, however, reject any or all bids or waive any informality in a bid if it believes that the public interest will be promoted thereby. The land bank may reject any bid, if, in its judgment, the business and technical organization, plant, resources, financial standing, or experience of the bidder justifies such rejection in view of the work to be performed. (b) For the purposes of article fifteen-A of the executive law only, the land bank shall be deemed a state agency as that term is used in such article, and all contracts for procurement, design, construction, services and materials shall be deemed state contracts within the meaning of that term as set forth in such article.