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

                                  7338

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                              May 10, 2013
                               ___________

Introduced  by  M.  of  A.  ENGLEBRIGHT,  BRENNAN  -- (at request of the
  Department of Law) -- read once  and  referred  to  the  Committee  on
  Corporations, Authorities and Commissions

AN ACT to amend the not-for-profit corporation law, in relation to exec-
  utive  compensation  oversight;  and  to amend the estates, powers and
  trusts law, in relation to trust governance

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

  Section  1. Subparagraph 6 of paragraph (a) of section 102 of the not-
for-profit corporation law is amended, and five  new  subparagraphs  19,
20, 21, 22 and 23, are added to read as follows:
  (6)  "Director"  means  any  member of the governing board of a corpo-
ration, whether designated as director, trustee, manager,  governor,  or
by  any  other title. The term "board" means "board of directors" OR ANY
OTHER BODY CONSTITUTING A "GOVERNING BOARD" AS DEFINED IN THIS SECTION.
  (19) AN "AFFILIATE" OF A CORPORATION MEANS ANY ENTITY  CONTROLLED  BY,
IN CONTROL OF, OR UNDER COMMON CONTROL WITH SUCH CORPORATION.
  (20)  "INDEPENDENT DIRECTOR" MEANS A DIRECTOR WHO: (I) IS NOT, AND HAS
NOT BEEN WITHIN THE LAST THREE YEARS, AN EMPLOYEE OF THE CORPORATION  OR
AN AFFILIATE OF THE CORPORATION, AND DOES NOT HAVE A RELATIVE WHO IS, OR
HAS  BEEN WITHIN THE LAST THREE YEARS, A KEY EMPLOYEE OF THE CORPORATION
OR AN AFFILIATE OF THE CORPORATION; (II) HAS NOT RECEIVED, AND DOES  NOT
HAVE A RELATIVE WHO HAS RECEIVED, IN ANY OF THE LAST THREE FISCAL YEARS,
MORE  THAN  TEN  THOUSAND DOLLARS IN DIRECT COMPENSATION FROM THE CORPO-
RATION OR AN AFFILIATE OF THE CORPORATION (OTHER THAN REIMBURSEMENT  FOR
EXPENSES  REASONABLY  INCURRED  AS A DIRECTOR OR REASONABLE COMPENSATION
FOR SERVICE AS A DIRECTOR AS PERMITTED BY PARAGRAPH (A) OF  SECTION  202
(GENERAL AND SPECIAL POWERS)); AND (III) IS NOT A CURRENT EMPLOYEE OF OR
HAVE  A  SUBSTANTIAL FINANCIAL INTEREST IN, AND DOES NOT HAVE A RELATIVE
WHO IS A CURRENT OFFICER OF OR HAS A SUBSTANTIAL FINANCIAL INTEREST  IN,
ANY  ENTITY  THAT  HAS  MADE PAYMENTS TO, OR RECEIVED PAYMENTS FROM, THE

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10820-01-3
              

A. 7338                             2

CORPORATION OR AN AFFILIATE OF THE CORPORATION FOR PROPERTY OR  SERVICES
IN  AN  AMOUNT WHICH, IN ANY OF THE LAST THREE FISCAL YEARS, EXCEEDS THE
LESSER OF TWENTY-FIVE THOUSAND DOLLARS OR TWO PERCENT OF  SUCH  ENTITY'S
CONSOLIDATED  GROSS  REVENUES.    FOR  PURPOSES  OF  THIS  SUBPARAGRAPH,
"PAYMENT" DOES NOT INCLUDE CHARITABLE CONTRIBUTIONS.
  (21) "RELATIVE" OF AN INDIVIDUAL MEANS THE (I) SPOUSE, DOMESTIC  PART-
NER  AS  DEFINED  BY  SECTION  TWENTY-EIGHT HUNDRED FIVE-Q OF THE PUBLIC
HEALTH LAW, CHILD, GRANDCHILD, BROTHER OR SISTER (WHETHER BY THE  WHOLE-
OR  HALF-BLOOD) OF THE INDIVIDUAL; AND (II) THE SPOUSE OR DOMESTIC PART-
NER OF A CHILD, GRANDCHILD, BROTHER OR SISTER (WHETHER BY THE WHOLE-  OR
HALF-BLOOD) OF THE INDIVIDUAL.
  (22)  "KEY EMPLOYEE" MEANS ANY PERSON WHO IS IN A POSITION TO EXERCISE
SUBSTANTIAL INFLUENCE OVER THE AFFAIRS OF THE CORPORATION, AS REFERENCED
IN  26  U.S.C.  S4958(F)(1)(A)  AND  FURTHER  SPECIFIED  IN  26  CFR   S
53.4958-3(C) AND (D), OR SUCCEEDING PROVISIONS.
  (23) "TOTAL COMPENSATION" MEANS: (I) ANY COMPENSATION, WHETHER PAID OR
ACCRUED,  BY  OR  ON  BEHALF  OF THE CORPORATION OR ANY AFFILIATE OF THE
CORPORATION FOR SERVICES RENDERED TO, ON BEHALF OF, OR AT THE REQUEST OF
THE CORPORATION,  INCLUDING  BUT  NOT  LIMITED  TO  SALARY,  BONUS,  AND
DEFERRED  COMPENSATION;  AND  (II)  ANY  BENEFIT  HAVING  MONETARY VALUE
PROVIDED BY OR ON BEHALF OF THE CORPORATION  OR  ANY  AFFILIATE  OF  THE
CORPORATION,  INCLUDING  BUT  NOT  LIMITED TO HOUSING ALLOWANCES, LIVING
EXPENSES,  PERQUISITES,  FRINGE  BENEFITS,  EMPLOYER  CONTRIBUTIONS   TO
DEFINED CONTRIBUTION RETIREMENT PLANS AND OTHER RETIREMENT BENEFITS.
  S  2.  The  not-for-profit  corporation law is amended by adding a new
section 712-a to read as follows:
S 712-A. EXECUTIVE COMPENSATION OVERSIGHT.
  (A) NO CORPORATION SHALL PAY TOTAL COMPENSATION  TO  ANY  EMPLOYEE  IN
EXCESS  OF THAT WHICH IS FAIR, REASONABLE AND COMMENSURATE WITH SERVICES
PROVIDED TO THE CORPORATION.
  (B) THE BOARD OR A DESIGNATED  COMPENSATION  COMMITTEE  OF  THE  BOARD
COMPRISED  SOLELY  OF  INDEPENDENT  DIRECTORS OF ANY CORPORATION THAT IS
REQUIRED TO REGISTER WITH THE ATTORNEY GENERAL UNDER ARTICLE SEVEN-A  OF
THE  EXECUTIVE  LAW SHALL REVIEW AND APPROVE THE TOTAL COMPENSATION PAID
TO THE PRINCIPAL EXECUTIVE OFFICER OF  THE  CORPORATION,  AND  DETERMINE
THAT  SUCH  COMPENSATION IS NOT IN EXCESS OF THAT WHICH IS FAIR, REASON-
ABLE AND COMMENSURATE WITH SERVICES PROVIDED TO THE CORPORATION.
  (C) IF, IN THE PRIOR FISCAL YEAR, ANY CORPORATION THAT IS REQUIRED  TO
REGISTER  WITH  THE ATTORNEY GENERAL UNDER ARTICLE SEVEN-A OF THE EXECU-
TIVE LAW HAD, OR IN THE CURRENT FISCAL YEAR REASONABLY EXPECTS TO  HAVE,
ANNUAL  REVENUES  IN  EXCESS OF TWO MILLION DOLLARS, THE BOARD OR DESIG-
NATED COMPENSATION COMMITTEE OF THE BOARD COMPRISED SOLELY OF  INDEPEND-
ENT  DIRECTORS SHALL, IN ADDITION TO THOSE DUTIES SET FORTH IN PARAGRAPH
(B) OF THIS SECTION:
  (1) REVIEW THE TOTAL COMPENSATION PAID TO THE CORPORATION'S  TOP  FIVE
HIGHEST  COMPENSATED  EMPLOYEES  WHO  ARE  OFFICERS OR KEY EMPLOYEES AND
WHOSE COMPENSATION EXCEEDS ONE HUNDRED FIFTY THOUSAND DOLLARS,  OR  SUCH
GREATER AMOUNT AS THE ATTORNEY GENERAL MAY SET BY REGULATION;
  (2) DETERMINE THAT THE TOTAL COMPENSATION PAID TO ANY SUCH EMPLOYEE IS
NOT  IN  EXCESS  OF THAT WHICH IS FAIR, REASONABLE AND COMMENSURATE WITH
SERVICES PROVIDED TO THE CORPORATION.  IN MAKING THIS DETERMINATION, THE
BOARD, OR COMPENSATION  COMMITTEE,  SHALL  AT  A  MINIMUM  CONSIDER  THE
FOLLOWING  FACTORS:  (I) THE TOTAL COMPENSATION PROVIDED TO THE EMPLOYEE
BY THE CORPORATION AND ALL AFFILIATES OF THE CORPORATION; (II)  RELEVANT
DATA  ON  THE  TOTAL COMPENSATION PAID TO INDIVIDUALS SERVING IN SIMILAR
POSITIONS AT CORPORATIONS OF SIMILAR SIZE,  TYPE,  PURPOSE,  AND  SCOPE;

A. 7338                             3

(III)  THE EMPLOYEE'S QUALIFICATIONS AND PERFORMANCE; AND (IV) THE OVER-
ALL FINANCIAL CONDITION OF THE CORPORATION;
  (3)  MAKE  AND  KEEP  A  CONTEMPORANEOUS WRITTEN RECORD DESCRIBING THE
BASIS FOR SUCH DETERMINATION; AND
  (4) APPROVE BY NOT LESS THAN A MAJORITY VOTE  THE  TOTAL  COMPENSATION
PAID TO EACH SUCH EMPLOYEE.
  (D) ANY REVIEW AND APPROVAL REQUIRED BY PARAGRAPHS (B) AND (C) OF THIS
SECTION  SHALL  OCCUR  WHENEVER  THE  TERM OF EMPLOYMENT, IF ANY, OF THE
EMPLOYEE IS RENEWED OR EXTENDED, AND WHENEVER SUCH COMPENSATION IS MATE-
RIALLY CHANGED. IF A CORPORATION CONTROLS ONE OR MORE CORPORATIONS,  THE
BOARD  OR  COMPENSATION  COMMITTEE  OF  THE  CONTROLLING CORPORATION MAY
CONDUCT SUCH REVIEW AND APPROVAL ON  BEHALF  OF  ANY  CONTROLLED  CORPO-
RATION.
  (E)  IF  THE  BOARD  OR  COMPENSATION COMMITTEE RETAINS A COMPENSATION
CONSULTANT TO ASSIST IN THE PERFORMANCE OF  ITS  RESPONSIBILITIES,  SUCH
CONSULTANT SHALL REPORT DIRECTLY TO THE BOARD OR COMPENSATION COMMITTEE.
THE  BOARD  OR  COMPENSATION COMMITTEE SHALL BE DIRECTLY RESPONSIBLE FOR
THE APPOINTMENT, COMPENSATION AND OVERSIGHT OF THE WORK OF SUCH CONSULT-
ANT, AND SHALL APPROVE THE COMPENSATION PEER GROUP THAT THE COMPENSATION
CONSULTANT RECOMMENDS BE USED TO DEVELOP COMPARABLE DATA.
  (1) PRIOR TO RETAINING ANY SUCH CONSULTANT, THE BOARD OR  COMPENSATION
COMMITTEE  SHALL DETERMINE THAT THE CONSULTANT IS INDEPENDENT AND QUALI-
FIED TO RENDER ADVICE CONCERNING COMPENSATION; PROVIDED THAT NO CONSULT-
ANT MAY BE DETERMINED INDEPENDENT IF SUCH CONSULTANT OR  ANY  FIRM  THAT
EMPLOYS  SUCH  CONSULTANT  HAS  (A)  RECEIVED DIRECTLY OR INDIRECTLY ANY
PAYMENT, FEE OR OTHER COMPENSATION FROM THE CORPORATION OR ANY AFFILIATE
OF THE CORPORATION WITHIN THE PRECEDING TWO YEARS, OTHER THAN REASONABLE
AMOUNTS PAID FOR COMPENSATION CONSULTING SERVICES, OR (B)  ANY  BUSINESS
OR  PERSONAL  RELATIONSHIP  WITH THE CORPORATION OR ANY AFFILIATE OF THE
CORPORATION, OR ANY OF THEIR OFFICERS, DIRECTORS, TRUSTEES,  OR  EMPLOY-
EES,  THAT  MAY  INTERFERE WITH THE ABILITY OF THE CONSULTANT TO PROVIDE
OBJECTIVE ADVICE TO THE BOARD OR COMPENSATION COMMITTEE.
  (2) NOTHING IN THIS PARAGRAPH SHALL BE CONSTRUED TO REQUIRE THE  BOARD
OR  COMPENSATION  COMMITTEE  TO  IMPLEMENT  OR ACT CONSISTENTLY WITH ANY
RECOMMENDATIONS PROVIDED BY THE COMPENSATION CONSULTANT; OR  AFFECT  THE
ABILITY  OR OBLIGATION OF MEMBERS OF THE BOARD OR COMPENSATION COMMITTEE
TO EXERCISE THEIR OWN JUDGMENT IN FULFILLMENT OF  THEIR  DUTIES  TO  THE
CORPORATION,  INCLUDING  THOSE DUTIES PRESCRIBED BY SECTION 717 (DUTY OF
DIRECTORS AND OFFICERS).
  (F) ONLY INDEPENDENT DIRECTORS MAY  PARTICIPATE  IN  DELIBERATIONS  OR
VOTING RELATING TO MATTERS SET FORTH IN THIS SECTION.
  S  3.  The  estates,  powers and trusts law is amended by adding a new
section 8-1.9 to read as follows:
S 8-1.9 TRUST GOVERNANCE
  (A) FOR PURPOSES OF THIS SECTION:
  (1) A "TRUST" MEANS A TRUST CREATED SOLELY FOR CHARITABLE PURPOSES, OR
A TRUST THAT CONTINUES SOLELY FOR SUCH PURPOSES AFTER ALL NON-CHARITABLE
INTERESTS HAVE TERMINATED.
  (2) "CHARITABLE PURPOSE" MEANS ANY RELIGIOUS, CHARITABLE,  EDUCATIONAL
OR BENEVOLENT PURPOSE.
  (3)  "KEY  EMPLOYEE" MEANS ANY PERSON WHO HAS RESPONSIBILITIES, POWERS
OR INFLUENCE OVER THE  TRUST  SIMILAR  TO  THOSE  OF  AN  OFFICER  OF  A
NOT-FOR-PROFIT  CORPORATION,  OR  IS OTHERWISE IN A POSITION TO EXERCISE
SUBSTANTIAL INFLUENCE OVER THE AFFAIRS OF THE TRUST, AS REFERENCED IN 26
U.S.C. S4958(F)(1)(A) AND FURTHER SPECIFIED IN 26 CFR S53.4958-3(C)  AND
(D), OR SUCCEEDING PROVISIONS.

A. 7338                             4

  (4)  AN  "AFFILIATE"  OF  A  TRUST  MEANS ANY ENTITY CONTROLLED BY, IN
CONTROL OF, OR UNDER COMMON CONTROL WITH SUCH TRUST.
  (5) "INDEPENDENT TRUSTEE" MEANS A TRUSTEE WHO: (I) IS NOT, AND HAS NOT
BEEN  WITHIN THE LAST THREE YEARS, AN EMPLOYEE OF THE TRUST OR AN AFFIL-
IATE OF THE TRUST, AND DOES NOT HAVE A RELATIVE  WHO  IS,  OR  HAS  BEEN
WITHIN THE LAST THREE YEARS, A KEY EMPLOYEE OF THE TRUST OR AN AFFILIATE
OF  THE  TRUST;  (II) HAS NOT RECEIVED, AND DOES NOT HAVE A RELATIVE WHO
HAS RECEIVED, IN ANY OF THE LAST THREE FISCAL YEARS, MORE THAN TEN THOU-
SAND DOLLARS IN DIRECT COMPENSATION FROM THE TRUST OR  AN  AFFILIATE  OF
THE TRUST (OTHER THAN REIMBURSEMENT FOR EXPENSES OR THE PAYMENT OF TRUS-
TEE  COMMISSIONS  AS PERMITTED BY LAW AND THE GOVERNING INSTRUMENT); AND
(III) IS NOT A CURRENT EMPLOYEE  OF  OR  HAVE  A  SUBSTANTIAL  FINANCIAL
INTEREST IN, AND DOES NOT HAVE A RELATIVE WHO IS A CURRENT OFFICER OF OR
HAVE  A  SUBSTANTIAL  FINANCIAL  INTEREST  IN,  ANY ENTITY THAT HAS MADE
PAYMENTS TO, OR RECEIVED PAYMENTS FROM, THE TRUST OR AN AFFILIATE OF THE
TRUST FOR PROPERTY OR SERVICES IN AN AMOUNT WHICH, IN ANY  OF  THE  LAST
THREE  FISCAL  YEARS, EXCEEDS THE LESSER OF TWENTY-FIVE THOUSAND DOLLARS
OR TWO  PERCENT  OF  SUCH  ENTITY'S  CONSOLIDATED  GROSS  REVENUES.  FOR
PURPOSES  OF  THIS  SUBPARAGRAPH,  "PAYMENT" DOES NOT INCLUDE CHARITABLE
CONTRIBUTIONS.
  (B)(1) FOR PURPOSES OF THIS  PARAGRAPH,  "TOTAL  COMPENSATION"  MEANS:
(A)  ANY  COMPENSATION,  WHETHER PAID OR ACCRUED, BY OR ON BEHALF OF THE
TRUST OR ANY AFFILIATE OF THE TRUST FOR SERVICES RENDERED TO, ON  BEHALF
OF, OR AT THE REQUEST OF THE TRUST OR AN AFFILIATE OF THE TRUST, INCLUD-
ING BUT NOT LIMITED TO SALARY, BONUS, AND DEFERRED COMPENSATION; AND (B)
ANY  BENEFIT HAVING MONETARY VALUE PROVIDED BY OR ON BEHALF OF THE TRUST
OR ANY AFFILIATE OF THE TRUST, INCLUDING BUT NOT LIMITED TO  HOUSING  OR
VEHICLE  ALLOWANCES,  LIVING  EXPENSES,  PERQUISITES,  FRINGE  BENEFITS,
EMPLOYER CONTRIBUTIONS TO  DEFINED  CONTRIBUTION  RETIREMENT  PLANS  AND
OTHER RETIREMENT BENEFITS.
  (2) NO TRUST SHALL PAY TOTAL COMPENSATION TO ANY EMPLOYEE IN EXCESS OF
THAT  WHICH  IS FAIR, REASONABLE AND COMMENSURATE WITH SERVICES PROVIDED
TO THE TRUST.
  (3) THE TRUSTEES OR A DESIGNATED COMPENSATION COMMITTEE CONSISTING  OF
ONE OR MORE INDEPENDENT TRUSTEES OF ANY TRUST THAT IS REQUIRED TO REGIS-
TER WITH THE ATTORNEY GENERAL UNDER ARTICLE SEVEN-A OF THE EXECUTIVE LAW
SHALL  REVIEW  AND  APPROVE THE TOTAL COMPENSATION PAID TO THE PRINCIPAL
EXECUTIVE OFFICER OF THE TRUST, AND DETERMINE THAT SUCH COMPENSATION  IS
NOT  IN  EXCESS  OF THAT WHICH IS FAIR, REASONABLE AND COMMENSURATE WITH
SERVICES PROVIDED TO THE TRUST.
  (4) IF, IN THE PRIOR FISCAL YEAR, ANY TRUST THAT IS REQUIRED TO REGIS-
TER WITH THE ATTORNEY GENERAL UNDER ARTICLE SEVEN-A OF THE EXECUTIVE LAW
HAD, OR IN THE CURRENT FISCAL YEAR REASONABLY EXPECTS  TO  HAVE,  ANNUAL
REVENUES  IN  EXCESS  OF TWO MILLION DOLLARS, THE TRUSTEES OR DESIGNATED
COMPENSATION COMMITTEE CONSISTING OF ONE OR  MORE  INDEPENDENT  TRUSTEES
SHALL,  IN  ADDITION  TO THOSE DUTIES SET FORTH IN SUBPARAGRAPH THREE OF
THIS PARAGRAPH:
  (A) REVIEW THE TOTAL COMPENSATION PAID TO THE TRUST'S TOP FIVE HIGHEST
COMPENSATED EMPLOYEES WHO  ARE  OFFICERS  OR  KEY  EMPLOYEES  AND  WHOSE
COMPENSATION EXCEEDS ONE HUNDRED FIFTY THOUSAND DOLLARS, OR SUCH GREATER
AMOUNT AS THE ATTORNEY GENERAL MAY SET BY REGULATION;
  (B) DETERMINE THAT THE TOTAL COMPENSATION PAID TO ANY SUCH EMPLOYEE IS
NOT  IN  EXCESS  OF THAT WHICH IS FAIR, REASONABLE AND COMMENSURATE WITH
SERVICES PROVIDED TO THE TRUST. IN MAKING THIS DETERMINATION, THE  TRUS-
TEES OR COMPENSATION COMMITTEE SHALL AT A MINIMUM CONSIDER THE FOLLOWING
FACTORS:  (I)  THE  TOTAL  COMPENSATION  PROVIDED TO THE EMPLOYEE BY THE

A. 7338                             5

TRUST AND ALL AFFILIATES OF THE TRUST; (II) RELEVANT DATA ON  THE  TOTAL
COMPENSATION  PAID TO INDIVIDUALS SERVING IN SIMILAR POSITIONS AT TRUSTS
OR CORPORATIONS OF SIMILAR SIZE, TYPE,  PURPOSE  AND  SCOPE;  (III)  THE
EMPLOYEE'S  QUALIFICATIONS  AND PERFORMANCE; AND (IV) THE OVERALL FINAN-
CIAL CONDITION OF THE TRUST;
  (C) MAKE AND KEEP A  CONTEMPORANEOUS  WRITTEN  RECORD  DESCRIBING  THE
BASIS FOR SUCH DETERMINATION; AND
  (D)  APPROVE  BY  NOT LESS THAN A MAJORITY VOTE THE TOTAL COMPENSATION
PAID TO EACH SUCH EMPLOYEE.
  (5) ANY REVIEW AND APPROVAL REQUIRED BY SUBPARAGRAPHS THREE  AND  FOUR
OF  THIS  PARAGRAPH SHALL OCCUR WHENEVER THE TERM OF EMPLOYMENT, IF ANY,
OF THE EMPLOYEE IS RENEWED OR EXTENDED, AND WHENEVER  SUCH  COMPENSATION
IS  MATERIALLY CHANGED. IF A TRUST IS UNDER THE CONTROL OF ANOTHER TRUST
OR A CORPORATION, THE TRUSTEES OR COMPENSATION COMMITTEE OF THE CONTROL-
LING TRUST, OR THE BOARD OR DESIGNATED  COMPENSATION  COMMITTEE  OF  THE
BOARD OF THE CONTROLLING CORPORATION, MAY PERFORM THE DUTIES REQUIRED BY
THIS PARAGRAPH.
  (6)  IF  A  COMPENSATION  CONSULTANT  IS  RETAINED  BY THE TRUSTEES OR
COMPENSATION COMMITTEE TO ASSIST IN THE PERFORMANCE OF  THEIR  RESPONSI-
BILITIES,  SUCH  CONSULTANT  SHALL  REPORT  DIRECTLY  TO THE TRUSTEES OR
COMPENSATION COMMITTEE. THE TRUSTEES OR COMPENSATION COMMITTEE SHALL  BE
DIRECTLY  RESPONSIBLE FOR THE APPOINTMENT, COMPENSATION AND OVERSIGHT OF
THE WORK OF SUCH CONSULTANT, AND SHALL  APPROVE  THE  COMPENSATION  PEER
GROUP  THAT  THE  COMPENSATION  CONSULTANT RECOMMENDS BE USED TO DEVELOP
COMPARABLE DATA.
  (A) PRIOR TO RETAINING ANY SUCH CONSULTANT, THE  TRUSTEES  OR  COMPEN-
SATION  COMMITTEE SHALL DETERMINE THAT THE CONSULTANT IS INDEPENDENT AND
QUALIFIED TO RENDER ADVICE CONCERNING  COMPENSATION;  PROVIDED  THAT  NO
CONSULTANT  MAY BE DETERMINED INDEPENDENT IF SUCH CONSULTANT OR ANY FIRM
THAT EMPLOYS SUCH CONSULTANT HAS (I) RECEIVED DIRECTLY OR INDIRECTLY ANY
PAYMENT, FEE OR OTHER COMPENSATION FROM THE TRUST OR  ANY  AFFILIATE  OF
THE  TRUST WITHIN THE PRECEDING TWO YEARS, OTHER THAN REASONABLE AMOUNTS
PAID FOR COMPENSATION CONSULTING  SERVICES,  OR  (II)  ANY  BUSINESS  OR
PERSONAL  RELATIONSHIP  WITH THE TRUST OR ANY AFFILIATE OF THE TRUST, OR
ANY OF THEIR OFFICERS, DIRECTORS, TRUSTEES OR EMPLOYEES, THAT MAY INTER-
FERE WITH THE ABILITY OF THE CONSULTANT TO PROVIDE OBJECTIVE  ADVICE  TO
THE TRUSTEES OR COMPENSATION COMMITTEE.
  (B)  NOTHING  IN  THIS  SUBPARAGRAPH SHALL BE CONSTRUED TO REQUIRE THE
TRUSTEES OR COMPENSATION COMMITTEE TO IMPLEMENT OR ACT CONSISTENTLY WITH
ANY RECOMMENDATIONS PROVIDED BY THE COMPENSATION CONSULTANT;  OR  AFFECT
THE ABILITY OR OBLIGATION OF THE TRUSTEES TO EXERCISE THEIR OWN JUDGMENT
IN FULFILLMENT OF THEIR DUTIES TO THE TRUST AND ITS BENEFICIARIES.
  (7)  ONLY  INDEPENDENT  TRUSTEES  MAY  PARTICIPATE IN DELIBERATIONS OR
VOTING RELATING TO MATTERS SET FORTH IN THIS SECTION.
  S 4. This act shall take effect January 1, 2014, provided that section
two of this act and paragraph (b)  of  section  8-1.9  of  the  estates,
powers and trusts law as added by section three of this act shall not be
applicable  until  January 1, 2015 for any corporation or trust that had
annual revenues of less than 10,000,000 dollars in the last fiscal  year
ending prior to January 1, 2014.