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§ 2. Subdivision one of section two hundred twelve of the banking law, as added by chapter eight hundred sixty-three of the laws of nineteen hundred fifty-five, is amended to read as follows:

1. (a) The purposes of such corporation shall be to assist, promote, encourage and, through the cooperative efforts of the institutions and corporations which shall, from time to time, become members thereof, develop and advance the business prosperity and economic welfare of the state; to encourage and assist in the location of new business and industry in the state and to rehabilitate and retain existing business and industry; to stimulate and assist in the expansion of all kinds of business activity which will tend to promote the business development and maintain the economic stability of the state, provide maximum opportunities for employment, encourage thrift and improve the standard of living of the citizens of the state; to cooperate and act in conjunction with other organizations, public or private, the objects of which are the promotion and advancement of industrial, commercial, agricultural and recreational developments in the state; to furnish money and credit to approved and deserving, applicants, for the promotion, development and conduct of all kinds of business activity in the state, thereby establishing a source of credit not otherwise readily available therefor.

(b) The corporation shall undertake the following programs in furtherance of the above objectives: (i) establish regional offices at locations throughout New York, with sufficient staffing to advise, develop and package financial assistance for small and medium sized businesses; (ii) develop a comprehensive outreach program to increase the visibility and awareness of the corporation's programs, including allocating budget and staff to establish and maintain an aggressive and extension marketing program of the corporation's program of assistance to small and medium sized businesses, providing for specific outreach to the minority and women owned sector of the small business community, and entering into cooperative relationships with local chambers of commerce and local development agencies; (iii) establish and operate a minority enterprise small business investment company (MESBIC); and (iv) establish a pilot export financing program, using personnel from the private sector, to evaluate whether the corporation can play a significant role in the growth of the export industry in the state. The corporation shall undertake the programs enumerated herein at such times as its board of directors determines that the corporation's capital base and available funds are adequate to support the operation of such program. The programs enumerated herein may be modified by the corporation as may be necessary to meet the changing needs of the state's economy, as determined by the board of directors.

§ 3. Sections two hundred thirteen and two hundred fourteen of such law, as added by chapter eight hundred sixty-three of the laws of nineteen hundred fifty-five, are amended to read as follows:

§ 213. Board of directors. 1. All the corporate powers of such corporation_shall be exercised by a board of directors consisting of [fifteen] a maximum of twenty-one persons, all of whom shall be of full age, citizens of the United States and residents of the state.

2. The president of such corporation, who shall be appointed by the board, shall serve as a director.

3. At [the first] each annual meeting of such corporation [and at each annual meeting thereafter], the members of such corporation [from at least nine of the twelve economic regions as defined in section two hundred eleven of this chapter] shall elect [a director from each such region] up to seven directors for a term of one year, who shall be a resident of such region or maintain a regular place of business therein], to the extent possible, represent different economic regions as defined in section two hundred eleven of this article. The exact number shall be established in the by-laws by the board of directors. In such elections, members of such corporation shall have one vote each [and each member having a loan limit, as defined by section two hundred fifteen of this chapter, of more than fifty thousand dollars shall have one additional vote].

[3] 4. At such [first and succeeding] annual meetings the stockholders of such corporation shall elect [two additional] up to five, directors for [terms] a term of one year each. The exact number shall be established in the by-laws by the board of directors.

EXPLANATION-Matter in italics is new; matter in brackets [ ] is old law

[4. The 5. One director shall be appointed by any of the entities that are members or stockholders of such corporation and whose membership or stockholder interest meets a minimum commitment as established in the by-laws by the board of directors.

6. The directors elected by the members and the stockholders shall elect three additional directors: one representing minority interests, representing women's interests, and one representing regional or local development corporations' interests.

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7. As non-voting members, the state commissioner of commerce, the state superintendent of banks, and the state_superintendent of insurance shall be [a director,] directors ex officio, with all the authority as a director, but without liability as such, except for gross negligence or wilful misconduct].

[5] 8. If any director shall lose his citizenship or[, if elected by the members of such corporation, shall cease to be a resident of the economic region from which he was elected or cease to maintain a regular place of business therein or, if elected by the stockholders of such corporation,] shall cease to be a resident of the state, he shall immediately vacate his position as a director and such position shall thereupon be deemed vacant.

[6] 9. If any vacancy occurs in the elected membership of the board of directors through death, resignation or otherwise, [except a vacancy occurring by reason of there being no member of such corporation from an economic region,] the remaining directors shall elect a person to fill such vacancy for the unexpired terms; provided, however, that if the person vacating the position had been elected thereto by the members of such corporation, the person elected to fill such vacancy shall be a resident of or maintain a regular place of business in the same economic region as his predecessor].

[7] 10. Upon the expiration of their terms, the elected directors shall continue as such until their successors have been elected and have qualified.

[8] 11. The board of directors shall elect one of its members as chairman and one of its members as vice-chairman of such board, shall adopt by-laws for such corporation, and may appoint such officers and employees as it deems advisable.

[9. The first annual meeting of such corporation shall be held at a time and place to be fixed by the temporary board of directors, which shall be as soon as reasonably possible after a minimum of five per cent of the capital stock of such corporation shall have been paid into its treasury and a minimum of ten members of such corporation shall have qualified as hereinafter provided, and such meeting shall be called in such manner as may be provided by the temporary board of directors.

10. Notwithstanding the foregoing provisions of this section, until the first annual meeting of such corporation and the election and qualification of a board of directors as here inabove provided, all the corporate powers of such corporation shall be exercised by a temporary board of directors consisting of twenty-five persons, all of whom shall be of full age, citizens of the United States and residents of the state, nine of whom shall be designated by the governor with one of his designees being the state commissioner of commerce, ex officio, which commissioner shall have all the authority as a director but not liability as such, except for gross negligence or willful misconduct, eight of whom shall be designated by the president pro tem of the senate and eight of whom shall be designated by the speaker of the assembly. Each such designation shall be made not later than May first, nineteen hundred fifty-five. Each such designation shall be in writing, signed by the officer making it, and transmitted by him to the secretary of state who shall make and record in his office a copy of such designation and deliver the original to the designee who, if he accepts such designation shall notify the secretary of state of such fact, in writing, and thereupon his designation shall become effective and the secretary of state shall record such acceptance in his office. The state commissioner of commerce shall serve as chairman of the temporary board of directors and he shall fix the time and place of the first meeting of such board. If any vacancy occurs in such temporary board of directors through death, resignation or otherwise, a person shall be designated to fill such vacancy by the officer who made the original designation. Upon the election and qualification of a board of directors pursuant to subdivisions one through four of this section, the temporary board of directors shall be deemed dissolved. ]

§ 214. [Loan committees] Committees. 1. There shall be a loan committee of such corporation for each of the twelve economic regions as defined in section two hundred eleven of this chapter or such other regions as the board of directors shall designate for this purpose. [The members of the board of directors elected from each such region shall serve as members and chairmen of each such loan committee for their respective regions. Each such loan committee shall have four additional members who shall be elected by the members of such corporation from such region and each of whom shall be of full age and a citizen of the United States and shall be a resident of such region or maintain a regular place of business therein. In such elections, members of the corporation from each such region shall have one vote each and each member having a loan limit, as defined by section two hundred fifteen of this chapter, of more than fifty thousand dollars shall have one additional vote. The elected members of each such loan committee shall be elected at the annual meetings of such corporation and shall serve for terms of one year.

2. If a vacancy occurs in the elected membership of any such loan committee, the remaining members of such committee shall elect а person from its economic region to fill such vacancy for the unexpired term. Upon the expiration of their terms the elected members of each such loan committee shall continue as such until their successors have been elected and have qualified. ] Each such committee shall include such persons as the board of directors shall designate.

[3] 2. The board of directors of such corporation may establish an office for any such loan committee, within such committee's economic region.

[4] 3. Every application to such corporation for a loan or financial assistance shall be made through the loan committee for the economic region wherein the applicant resides or maintains a regular place of business, [and] or directly to one of the regional offices of the corporation. Any such applications made to a regional office shall be promptly referred to the loan committee for the economic region wherein the applicant resides or maintains a regular place of business. All such [application] applications shall thereupon be reviewed by such regional loan committee and promptly transmitted by it to the central loan committee established by the board of directors for consideration, along with the recommendations of such regional loan committee with respect thereto; provided, however, that where there is no member of such corporation from the economic region wherein the applicant resides or maintains a regular place of business, such applicant may make his application through the loan committee for any other economic region]. 4. The board of directors shall have the responsibility to appoint all necessary board and officer committees to provide for prudent management and oversight of such corportion*.

§ 4. Section two hundred fifteen of such law, as amended by chapter two hundred eighty-eight of the laws of nineteen hundred seventy-four, is amended to read as follows:

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§ 215. Membership. 1. The members of such corporation shall [consist of] include such banking organizations, insurance and surety companies may make application for membership in such corporation, and membership shall become effective upon the acceptance of such applications by the board of directors. Each member shall lend funds to such corporation as and when called upon by it to do so, but the total amount on loan by any member at any one time shall not exceed the following limit to be determined as of the time it became a member, and such amount shall thereafter be readjusted annually in the event of any change in the base of the loan limit of such member; national banking associations, statechartered commercial banks and trust companies, two per cent of capital stock and surplus; New York savings and loan associations, two per cent of the surplus account determined as provided in article ten, section three hundred eighty-five; [mutual] savings banks, two percent of [surplus fund determined net worth as [provided] defined in article six, section two hundred [forty-three] forty-four; stock insurance companies, two per cent of capital and surplus; surety and casualty companies, two per cent of capital and surplus; mutual insurance companies, two per cent of surplus to policy holders; and comparable limits for

So in original. (Word misspelled.)

EXPLANATION-Matter in italics is new; matter in brackets [ ] is old law

other banking, loaning and insurance organizations, as established by the board of directors; provided, however, that the total amount on loan by any member at anyone* time shall not exceed [two hundred fifty thousand] ten million dollars, provided further, however, that any member having a loan limit in excess of [two hundred fifty thousand] ten million dollars may elect that its total amount on loan at any one time to such corporation shall equal said loan limit but in any event shall not exceed [five hundred thousand] twenty million dollars. In the event that two or more members shall merge or consolidate, the organization as so merged or consolidated shall elect that its total amount on loan to such corporation shall be equal to the combined loan limits of such members determined immediately before the merger or consolidation but in no event to exceed [three] twenty-five million dollars at any one time outstanding. All loan limits shall be established at the thousand dollar nearest to the amount computed on an actual basis. All calls of funds which members are committed to lend to such corporation shall be prorated by such corporation among the members in the same proportion that the maximum loan limit of each bears to the aggregate loan limits of all members of such corporation. Upon six months' prior written notice to the board of directors, a member of such corporation may withdraw from membership, effective at the end of such six month period and, after the effective date of such withdrawal, such member shall be free of obligations hereunder except those accrued or committed by such corporation prior to such effective date of withdrawal. Notwithstanding the provisions of any other law, general or special, the notes or other interestbearing obligations of such corporation, issued in accordance with and by virtue of this article and the by-laws of such corporation, shall be legal investments for the banking, insurance and surety organizations, and other non-public entities who become members of such corporation, up to but in no event exceeding the loan limits established herein.

2. Other entities may make application for membership in such corporation according to such terms and criteria as established by the board of directors; except that such other entities may not include public benefit corporations established under the laws of the state of New York.

§ 5. Section two hundred fifteen of such law is amended by adding a new subdivision three to read as follows:

3. Public pension funds may make application for membership in such corporation, according to such terms and criteria as are established by the board of directors. Notwithstanding the provisions of any other law, general or special, the notes or other interest-bearing obligations of such corporation issued in accordance with and by virtue of this article and the by-laws of such corporation, shall be legal investments for the public pension funds who become members of such corporation.

§ 6. Section two hundred sixteen of such law as added by chapter eight hundred sixty-three of the laws of nineteen hundred fifty-five, is amended to read as follows:

§ 216. Capital stock. The capital stock of such corporation shall be [twenty five hundred thousand shares of [no par value, which shall be Issued for one hundred dollars per share in cash. At least five per cent of the capital stock of such corporation shall be paid into its treasury in cash before it shall be authorized to transact any business other than such as relates to its organization] common and preferred stock, in such amounts as shall be established in the by-laws by the board of directors, with the preferred stock having such relative rights, preferences and limitations as shall be established in the by-laws by the board of directors. At least a majority of the capital stock of such corporation shall at all times be held by residents of the state or by persons, firms or corporations engaged in doing business therein.

§ 7. Subdivision two of section two hundred seventeen of such law, as added by chapter eight hundred sixty-three of the laws of nineteen hundred fifty-five, is amended to read as follows:

2. At no time shall the total obligations of such corporation exceed ten times the amount of its paid-in capital and surplus, not including therein the earned surplus, or two hundred fifty million dollars, whichever is greater.

§ 8. Section two hundred eighteen of such law, as added by chapter eight hundred sixty-three of the laws of nineteen hundred fifty-five, is amended to read as follows:

§ 218. Supervision and reports. Such corporation shall be subject to the supervision, examination and control of the superintendent of banks

So in original. ("anyone" should be "any one". )

in the same manner as banking organizations are so supervised, examined and controlled by him pursuant to this chapter, and shall be examined by him annually, but such corporation shall not be deemed to be a banking organization nor be required to pay a fee for such an examination. Such corporation shall make an annual report of its condition to the governor, legislature and superintendent of banks, on or before January first of each year.

Commencing January first, nineteen hundred eighty-six, such annual report shall contain but not be limited to the following:

8.

information on the cost and sources of funds and capital and the total allowable maximum amount available from members, the maximum amount committed by each individual member, and the corporation's outstanding liabilities to members;

b. classification of firms in the corporation's portfolio by standard industrial code, including a breakdown of (i) size of firms by sales and number of employees, (ii) number and percentage of loans to manufacturing, service and wholesale businesses, and (iii) number and percentage of loans to traditional industries and to high technology firms within the manufacturing sector;

c.

information on the types of financing provided by the corporation, including guaranteed loans, the size and term of loans, and a breakdown of investments by senior debt, subordinated debt and equity financings; d. information on interest rates of loans, including percentage of fixed rate and variable rate loans;

e.

information on the use of capital provided by the corporation, including number of working capital loans, loans to assist leveraged buyouts by by employees, management or others, and secured mortgages for plant expansion or new production facilities;

f. information on how the corporation is fulfilling its mission to assist women and minority owned businesses;

g. information on resources and actions taken to advance the corporation's marketing program;

h. information on the corporation's regional offices, including a description of the volume of business and the nature of loan activity at each office;

i. information on the activities of the corporation's MESBIC; and j. information on the corporation's pilot export financing program, including the number of firms serviced and the types of assistance provided.

§ 9. Subdivisions three and four of section two hundred twenty of such law, as added by chapter eight hundred sixty-three of the laws of nineteen hundred fifty-five, are amended to read as follows:

3. [A banking organization which does not become a member of the corporation established by this article shall not acquire any shares of the capital stock of such corporation;

4. Each] All banking [organization which becomes a member of the corporation established by this article is] organizations are hereby authorized to acquire, purchase, hold, sell, assign, transfer, mortgage, pledge, or otherwise dispose of any bonds, securities or other evidences of Indebtedness issued by such corporation or the shares of its capital stock, and while owners of said stock, to exercise all the rights, powers and privileges of ownership, including the right to vote thereon, all without the approval of any regulatory authority of this state[; provided, however, that the amount of the capital stock of such corporation which may be acquired by any member pursuant to the authority granted herein, shall not exceed ten percent of the loan limit of such member as defined by section two hundred fifteen of this chapter]. The amount of capital stock of such corporation which any [member] banking organization is authorized to acquire pursuant to the authority granted herein shall be in addition to the amount of capital stock in corporations which such [member] banking organization may otherwise be authorized to acquire.

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§ 10. This act shall take effect immediately; provided however, that subdivision three of section two hundred fifteen of the banking, law, added by section five of this act, shall be repealed on June thirtieth, nineteen hundred eighty-six.

EXPLANATION-Matter in italics is new; matter in brackets [] is old law

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