The rule has been substantially revised to clarify: (1) the general requirements applicable to all museums and historical societies with collections and (2) the registration requirements applicable to museums and historical societies seeking an absolute charter, by reorganizing these respective requirements into separate subdivisions, lettered 3.27(c) and 3.27(d), respectively.

Section 3.27(b)(2) has been revised to provide that, to be eligible for an absolute charter, a museum or historical society with collections shall submit a petition for an absolute charter together with evidence in writing establishing, in the judgment of the Board of Regents, the institution's compliance with the provisions of section 3.27, including but not limited to, the general requirements for museums and historical societies with collections under section 3.27(c) and the provisions for registration under section 3.27(d),

Section 3.27(c) prescribes general requirements for museums and historical societies with collections, including requirements relating to organization, mission, governance, finance, facilities, collections care and management, and education and interpretation.

Section 3.27(c)(1) establishes general organizational criteria, including requirements relating to being in compliance with all applicable local, state and federal laws and regulations; and maintaining a mailing address within New York State adequate for legal service.

Section 3.27(c)(2) establishes general mission criteria, including requirements for a written mission statement and that the mission statement be reviewed, and revised as necessary, at least every 5 years.

Section 3.27(c)(3) establishes general governance criteria, including requirements that a board of trustees shall have no more than one-third (1/3) of its members related to each other by birth, marriage or domicile; that in any instance where there is a relationship between the institution and another entity, there shall be no more than a one-third (1/3) overlap between the officers and/or directors; and that the museum or historical society with collections have a written and board-approved code of ethics that applies to trustees, administrators, staff and volunteers and is reviewed each year.

Section 3.27(c)(4) establishes general finance criteria, including requirements for a board-constituted audit committee for all institutions regardless of size of operating budget; for an independent audit by a certified public accountant for institutions whose operating budget exceeds $250,000; and for an independent review by a certified public accountant if the institution's operating budget is at least $100,000 but no more than $250,000. There is no requirement for an independent audit or review if the institution's operating budget is below $100,000. An institution will conduct its financial affairs in such a way as not to jeopardize the ownership or integrity of its collections; and will obtain and continue to maintain tax-exempt status under section 501(c)(3) or other applicable section of the Internal Revenue Code. The rule has been revised to clarify that the requirement that each institution appoint a board-constituted audit committee shall apply to every institution regardless of size of operating budget and whether the institution has conducted a financial review pursuant to section 3.27(c)(4)(iv).

Section 3.27(c)(5) establishes general criteria for facilities, including requirements for accessibility to those with disabilities, emergency action and disaster preparedness plans, and an adequate, working alarm system; and that the institution ensure its physical plant is adequately insured.

Section 3.27(c)(6) establishes general criteria for collections care and management, including a statement that collections or proceeds derived therefrom shall not be used as collateral for a loan, and a requirement that collections shall not be capitalized. The section retains existing language that the acquisition and deaccessioning of collections by a museum shall be consistent with the mission and purposes of the museum; that requires a collection management policy; and requires that all or any part of proceeds from deaccessioning of collections may not be used for any purpose other than acquisition, preservation, protection or care of collections. The section also eliminates an existing provision that the Regents may grant an exception on application by a museum that wishes to apply all or any part of proceeds from deaccessioning of collections to any purpose other than acquisition, preservation, protection or care of collections.

Section 3.27(c)(7) establishes general criteria for education and interpretation.

Section 3.27(d) prescribes requirements for the registration of museums and historical societies with collections, including requirements relating to organization, governance, finance, facilities, and education and interpretation. Section 3.27(d), as revised, provides that a museum or historical society with collections shall be deemed registered upon the granting of an absolute charter, and further revised to provide that to be eligible for registration, an institution shall meet the requirements for an absolute charter pursuant to section 3.27(b) and the additional requirements in section 3.27(d)(1) through (6).

Section 3.27(d)(1) establishes additional organizational criteria for registration including requirements that an institution seeking registration be chartered, incorporated or in operation a minimum of 5 years, have sufficient financial and physical resources, and be open and accessible to the public on a regular basis, including a requirement that institutions having an operating budget in excess of $100,000 per year shall be open to the public a minimum of 1,000 hours per year.

Section 3.27(d)(2) establishes additional governance criteria for registration, including a requirement that an institution organize its governing authority, staff, financial resources, collections, public programs and other activities to effectively achieve its mission statement and fulfill its public trust obligations; and that the institution effectively advances diversity of membership and participation in the institution's mission.

Section 3.27(d)(3) establishes additional finance criteria for registration, including that the institution has obtained and continue to maintain tax-exempt status under section 501(c)(3) or other applicable section of the Internal Revenue Code.

Section 3.27(d)(4) establishes additional registration criteria relating to facilities, including requirements that the institution own or occupy through lease or other legally enforceable agreement safe, well-maintained and accessible facilities; that any lease or agreement be sufficiently long as to be convenient for the public and accommodate the institution's need for operational stability; that ensure the physical plant is adequately maintained; and that historic structures owned by the institution and that are eligible for or listed on the State and/or National Registers of Historic Places, be restored and/or maintained according to accepted historic preservation practices.

Section 3.27(d)(5) establishes additional registration criteria for education and interpretation.

Previous proposed section 3.27(d), relating to annual reports, was relettered as section 3.27(e).

Previous proposed section 3.27(e), relating to the use of corporate names by a museum or historical society with collections, was relettered as section 3.27(f).

Previous section 3.27(f), relating to dissolution, was relettered as section 3.27(g).

Section 3.30(a)(2) was revised to clarify the definition of "cultural agency" by specifying that such agency as defined is not authorized to own or hold collections as defined in section 3.27(a)(7), except to borrow items owned by others for brief periods of time for purposes of study or short-term, temporary exhibition. Section 3.30(a) was also revised to add a paragraph (11) to provide a definition of "public trust."

Section 3.30(c), relating to the registration of historical societies without collections or cultural agencies, was revised to provide that an historical society without collections or a cultural agency shall be deemed registered upon the granting of a certificate of incorporation by the Board of Regents, and further revised to provide that to be eligible for registration, a historical society without collections or a cultural agency shall meet the requirements for incorporation under subdivision (b) of section 3.30 and the requirements in paragraphs (1) through (7) of subdivision (c).

Section 3.30(c)(4)(iv) has been revised to clarify that the requirement that each historical society without collections or cultural agency appoint a board-constituted audit committee shall apply to every corporation regardless of size of operating budget and whether the corporation has conducted a financial review pursuant to section 3.27(c)(4)(iv).

Section 3.30(c)(4)(vi) was revised to specify that an historical society without collections or a cultural agency must obtain and continue to maintain tax-exempt status under Internal Revenue Code section 501(c)(3) or other applicable section.

Section 3.30(c)(6) has been revised to clarify that a historical society without collections or a cultural agency shall not be authorized to acquire, accession or own collections, but that in the event such corporation does so, for any reason, the corporation shall be treated and be subject to the provisions of section 3.27 with respect to collections, in particular, but not limited to, section 3.27(c)(6) and any applicable definitions in section 3.27(a).

The above revisions to the proposed rule do not require any further changes to the previously published Regulatory Impact Statement.