Section 31.31. Improper expenditure of moneys

(a)  No  provider  of services licensed pursuant to this article shall
  make any charitable contribution of  state  moneys,  medical  assistance
  payments  or  social  security  or  supplemental  security income or any
  interest or other income earned thereon, except  as  authorized  by  the
  commissioner.    Provided, however, the provisions of this section shall
  not apply to receipts or  donations  from  private  or  non-governmental
  sources and any interest or other income earned thereon.
    (b) No loans, other than through the purchase of bonds, debentures, or
  similar obligations of the type customarily sold in public offerings, or
  through  ordinary  deposit  of  funds  in  a  bank,  shall  be made by a
  not-for-profit corporation which is licensed as a provider  of  services
  pursuant  to  this article to its employee who receives an annual salary
  in excess of thirty thousand dollars, or to any other corporation, firm,
  association or other entity in which such  employee  is  a  director  or
  officer  or employee or holds a direct or indirect substantial financial
  interest, except a loan by one corporation  incorporated  as  a  type  B
  corporation  pursuant  to  the not-for-profit corporation law to another
  type B corporation, or a loan for a temporary or emergency purpose which
  will further the health and welfare of  the  employee  so  long  as  the
  purpose  and  amount  of  such loan are disclosed to and approved by the
  board of directors of such agency. Such disclosure shall be  filed  with
  the  secretary  of  the  corporation  and  entered in the minutes of the
  meeting, and, if approved by such board, such disclosure shall  also  be
  forwarded  in  writing  to  the  commissioner  and  to  the  director of
  community services of each local governmental unit that has, at the time
  of such disclosure, a contract with such corporation for  the  rendition
  of  services  pursuant to article forty-one of this chapter. A loan made
  in violation of this section shall be a violation of  the  duty  to  the
  not-for-profit  corporation  of the directors or officers authorizing it
  or participating in it, but the obligation of the borrower with  respect
  to the loan shall not be affected thereby.
    (c)  (1)  No  contract  or  other transaction between a not-for-profit
  corporation which is licensed as a provider of services pursuant to this
  article and one or more of its employees who receive an annual salary in
  excess  of  thirty  thousand  dollars,  or  between   a   not-for-profit
  corporation and any other corporation, firm, association or other entity
  in  which  one  or more of such persons are directors or officers of the
  board or corporation, or employee  who  receives  an  annual  salary  in
  excess  of  thirty  thousand  dollars,  or  have  an  indirect or direct
  substantial financial interest, shall be either  void  or  voidable  for
  this reason alone:
    a. If the material facts as to such person's interest in such contract
  or  transaction  and  as to any such common directorship, officership or
  financial interest are disclosed in good faith or known to the board  or
  committee,  and  the  board  or  committee  authorizes  such contract or
  transaction by a vote sufficient for such purpose without  counting  the
  vote or votes of such interested person; or
    b. If the material facts as to such person's interest in such contract
  or  transaction  and  as to any such common directorship, officership or
  financial interest are disclosed in good faith or known to  the  members
  entitled  to  vote  thereon, if any, and such contract or transaction is
  authorized by vote of such members.
    (2) If such good faith disclosure of the  material  facts  as  to  the
  person's  interest  in  the  contract  or transaction and as to any such
  common directorship, officership or financial interest, is made  to  the
  directors  or  members,  or  known  to the board or committee or members
  authorizing such contract or transaction, as provided in  paragraph  one

  of  this  subdivision,  the contract or transaction may not be voided by
  the corporation for the reasons set  forth  in  paragraph  one  of  this
  subdivision.   If   there  was  no  such  disclosure  or  knowledge  the
  corporation  may  void  the  contract or transaction unless the party or
  parties thereto shall  establish  affirmatively  that  the  contract  or
  transaction was fair and reasonable as to the corporation at the time it
  was authorized by the board, a committee or the members.