Bill S5370-2011

Relates to the regulation of cemetery trust funds and finances by the cemetery board

Relates to the regulation of cemetery trust funds and finances by the cemetery board.

Details

Actions

  • Feb 29, 2012: referred to corporations, authorities and commissions
  • Feb 29, 2012: DELIVERED TO ASSEMBLY
  • Feb 29, 2012: PASSED SENATE
  • Feb 15, 2012: ADVANCED TO THIRD READING
  • Feb 14, 2012: 2ND REPORT CAL.
  • Feb 13, 2012: 1ST REPORT CAL.194
  • Jan 4, 2012: REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS
  • Jan 4, 2012: returned to senate
  • Jan 4, 2012: died in assembly
  • Jun 15, 2011: referred to corporations, authorities and commissions
  • Jun 15, 2011: DELIVERED TO ASSEMBLY
  • Jun 15, 2011: PASSED SENATE
  • Jun 13, 2011: ADVANCED TO THIRD READING
  • Jun 7, 2011: 2ND REPORT CAL.
  • Jun 6, 2011: 1ST REPORT CAL.1015
  • May 13, 2011: REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS

Votes

VOTE: COMMITTEE VOTE: - Corporations, Authorities and Commissions - Jun 6, 2011
Ayes (6): Ranzenhofer, Flanagan, Larkin, Martins, Perkins, Squadron
VOTE: COMMITTEE VOTE: - Corporations, Authorities and Commissions - Feb 13, 2012
Ayes (6): Ranzenhofer, Flanagan, Larkin, Martins, Perkins, Squadron

Memo

BILL NUMBER:S5370

TITLE OF BILL: An act to amend the not-for-profit corporation law, in relation to regulation of cemetery trust funds and finances by the cemetery board

PURPOSE OR GENERAL IDEA OF BILL: This bill would modernize and streamline provisions of the Not-for-Profit Corporation Law to provide clear regulatory guidance to the New York State Cemetery Board in approvals of cemetery transactions and financial oversight. The State Cemetery Board is composed of the Secretary of State, Attorney General and Commissioner of Health or their designees.

SUMMARY OF SPECIFIC PROVISIONS: Section 1 of the bill amends paragraph (a) of Section 1506 of Not-for-Profit Corporation Law to grant authority for the approval of the purchase of cemetery land to the State Cemetery Board. It eliminates the unnecessary and duplicative step of having this approval signed off on by the local Supreme Court after the State Cemetery Board has approved the transaction.

Paragraph (i) of Section 1506 of Not-for-Profit Corporation Law to give the State Cemetery Board authority to approve the sale or disposition of cemetery lands.

Paragraph (a) of Section 1507 of Not-for-Profit Corporation Law to grant the authority of the regulation of access to cemetery trust funds to the State Cemetery Board through application and review.

Paragraphs (e) and (e-1) of Section 1507 of Not- for-Profit Corporation Law to modernize the process of the designation of fiduciaries for cemeteries and require that notice shall be provided to the State Cemetery Board for review.

Section 3 of the proposal indicates that this act shall take effect immediately.

EXISTING LAW: The Not-for-Profit Corporation Law regulating cemeteries does not currently reflect a modern and streamlined regulatory approach to cemetery regulation.

JUSTIFICATION: Existing statutes related to cemetery regulation are duplicative and create unnecessary delays in the proper oversight of regulated cemetery entities. New York's regulated cemeteries are among the most supervised in the nation. The State Cemetery Board is already required to approve and be involved in the regulations of cemeteries addressed by this bill.

This legislation would grant clear authority to the State Cemetery Board to regulate these entities.

PRIOR LEGISLATIVE HISTORY: New bill.

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: This act shall take immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 5370 2011-2012 Regular Sessions IN SENATE May 13, 2011 ___________
Introduced by Sen. RANZENHOFER -- read twice and ordered printed, and when printed to be committed to the Committee on Corporations, Author- ities and Commissions AN ACT to amend the not-for-profit corporation law, in relation to regu- lation of cemetery trust funds and finances by the cemetery board THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraphs (a) and (i) of section 1506 of the not-for-pro- fit corporation law, paragraph (a) as added by chapter 871 of the laws of 1977 and paragraph (i) as amended by chapter 292 of the laws of 1999, are amended to read as follows: (a) Purchase of land; notice to CEMETERY board [and court approval]. No cemetery corporation, in purchasing real property hereafter, shall pay or agree to pay more than the fair and reasonable market value ther- eof. The terms of the purchase, including the price to be paid and the method of payment, shall be subject[, upon notice] to NOTICE AND APPROVAL OF the cemetery board[, to approval by the supreme court in a district where any portion of the land is located]. In determining the fair and reasonable market value, the [court] CEMETERY BOARD may take into consideration the method by which the purchase price is to be paid. (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] CEMETERY BOARD, either: (A) that 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) that the land to be sold or disposed of is not used or is not phys- ically 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) that the sale or disposition is not to a funer- al 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] CEMETERY BOARD that it is in the public inter- est to dispose of such cemetery land in the manner proposed; that the subject land is not suitable for cemetery purposes or is no longer need- ed 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] 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, and to any person [interested] HAVING INFORMED THE CEMETERY BOARD BY PETITION OR NOTICE OF INTEREST in the proceeding [pursuant to section five hundred eleven of this chapter (Petition for leave of court)]. S 2. Subparagraph 2 of paragraph (a), paragraph (e) and subparagraph 2 of paragraph (e-1) of section 1507 of the not-for-profit corporation law, subparagraph 2 of paragraph (a) as amended by chapter 679 of the laws of 2004, paragraph (e) as added by chapter 871 of the laws of 1977 and subparagraph 2 of paragraph (e-1) as amended by chapter 111 of the laws of 2000, are amended to read as follows: (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 maintain- ing 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 addi- tion, the governing board of the corporation may appropriate for expend- iture solely for the maintenance and preservation of the cemetery grounds a portion of the net appreciation, realized (with respect to all assets) and unrealized (with respect only to readily marketable assets), in the fair market value of the principal of the trust in excess of its adjusted historic dollar value, as defined in this subparagraph, as is prudent under the standard established by section seven hundred seven- teen of this chapter (duty of directors and officers) and as limited by the maximum annual appropriation defined in this subparagraph. For the purposes of this subparagraph, the adjusted historic dollar value of the trust principal shall be the market value of the principal three full calendar years prior to the effective date of the amendments made to this subparagraph, plus all subsequent additions thereto, minus all allowable deductions therefrom, adjusted by the rate of inflation as measured by the applicable consumer price index. The maximum annual appropriation shall be sixty percent of the average of the net appreci- ation in the fund for the immediately preceding three years, but only to the extent that it exceeds the adjusted historical dollar value of the fund in the current year. Cemetery corporations shall keep complete records of the adjusted historic dollar value of the permanent mainte- nance fund. In the event that a cemetery corporation seeks to appropri-
ate any percentage of its net appreciation in its permanent maintenance fund in accordance with this subparagraph, the cemetery corporation shall send a notice of such proposed appropriation by certified mail to the cemetery board, setting forth the amount of funds to be appropriated for such expenditure and its effect on the permanent maintenance fund, and certifying that such amount does not exceed the maximum annual appropriation defined in this subparagraph. Such proposed appropriation shall become effective sixty days after receipt of such notice, unless the cemetery board within such sixty-day period notifies the cemetery corporation that the board objects to the proposed appropriation. Notwithstanding the foregoing provisions of this subparagraph, all prin- cipal of the permanent maintenance fund shall remain inviolate, except that, upon application to the [supreme court in a district where a portion of the cemetery grounds is located, the court] CEMETERY BOARD, THE CEMETERY BOARD may make an order permitting the principal or a part thereof to be used for the purpose of current maintenance and preserva- tion 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 demon- strate 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. Any loan from the permanent maintenance fund shall be ignored for the purpose of computing the adjusted dollar value of the fund. In the event that the [court] CEME- TERY BOARD determines that an outright grant of principal from the permanent maintenance fund is necessary, the amount of such grant shall be deducted from the adjusted historic dollar value of the trust princi- pal for the purposes of this subparagraph. (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 subdivision (b), of this section, the permanent maintenance of such cemetery pursuant to subdivision (a) of this section, and for special purposes pursuant to subdivision (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 ceme- tery of said corporation is located]; 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. NOTICE OF SUCH A CHANGE IN DESIGNATION SHALL BE PROVIDED TO THE CEMETERY BOARD WITHIN SIXTY DAYS OF SUCH DESIGNATION BY THE BOARD OF DIRECTORS OR TRUSTEES OF THE CEMETERY CORPORATION. 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 subdivisions (a), (b) and (f) of this section. (2) The principal of the fund shall be invested in securities permit- ted 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 [supreme court in a district where a portion of the cemetery grounds is located, the court] 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. S 3. This act shall take effect immediately.

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