senate Bill S5111A

Signed By Governor
2013-2014 Legislative Session

Relates to cemetery trust funds

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Sponsored By

Archive: Last Bill Status - Signed by Governor


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed by Governor

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Actions

view actions (23)
Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Dec 17, 2014 signed chap.509
Dec 05, 2014 delivered to governor
Jun 18, 2014 returned to senate
passed assembly
ordered to third reading rules cal.393
substituted for a7802a
Jun 11, 2014 referred to corporations, authorities and commissions
delivered to assembly
passed senate
Jun 02, 2014 amended on third reading 5111a
Mar 12, 2014 advanced to third reading
Mar 11, 2014 2nd report cal.
Mar 10, 2014 1st report cal.248
Jan 08, 2014 referred to corporations, authorities and commissions
returned to senate
died in assembly
Jun 11, 2013 referred to corporations, authorities and commissions
delivered to assembly
passed senate
Jun 10, 2013 advanced to third reading
Jun 05, 2013 2nd report cal.
Jun 04, 2013 1st report cal.1110
May 10, 2013 referred to corporations, authorities and commissions

Votes

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Mar 10, 2014 - Corporations, Authorities and Commissions committee Vote

S5111
6
0
committee
6
Aye
0
Nay
0
Aye with Reservations
0
Absent
0
Excused
0
Abstained
show committee vote details

Committee Vote: Mar 10, 2014

Jun 4, 2013 - Corporations, Authorities and Commissions committee Vote

S5111
6
0
committee
6
Aye
0
Nay
0
Aye with Reservations
0
Absent
0
Excused
0
Abstained
show committee vote details

Committee Vote: Jun 4, 2013

Bill Amendments

Original
A (Active)
Original
A (Active)

S5111 - Bill Details

See Assembly Version of this Bill:
A7802A
Law Section:
Not-for-Profit Corporation Law
Laws Affected:
Amd §1507, N-PC L

S5111 - Bill Texts

view summary

Relates to cemetery trust funds; requires that when a cemetery corporation seeks to appropriate any percentage of its net appreciation in its perpetual care fund the cemetery corporation shall provide notice of such appropriation to the division of cemeteries as part of and in addition to their annual reporting requirements.

view sponsor memo
BILL NUMBER:S5111

TITLE OF BILL: An act to amend the not-for-profit corporation law, in
relation to cemetery trust funds

PURPOSE:

This bill would provide that the appropriation for expenditure of net
appreciation of cemetery trust funds would be subject to the standards
established by the Prudent Management of Institutional Funds Act which
governs expenditures by not-for-profit entities in the state.

SUMMARY OF PROVISIONS:

This bill would amend and update § 1507 of the Not-for-Profit
Corporation Law to direct that expenditure of net appreciation of
cemetery trust funds would be subject to the standards established by
the Prudent Management of Institutional Funds Act in Article 5-A of
the chapter.

The bill requires additional reporting requirements to the New York
State Division of Cemeteries and the New York State Cemetery Board
outlining a cemetery corporation's application of this standard.

EXISTING LAW:

Section 1507 of the Not-for-Profit Corporation Law does not provide
for application of the Prudent Management of Institutional Funds Act
but instead outlines a formula that is not consistent with other
not-for-profit organization management in the state.

JUSTIFICATION:

The existing statute is outdated and cumbersome as it relates to
expenditures of net appreciation of cemetery trust funds. The formula
is so difficult for cemeteries to utilize or understand that there are
almost no reports of the use of the existing process for expenditures.

This bill would conform these cemetery expenditures to the uniform
not-for-profit standard of the Prudent Management of Institutional
Funds Act. By providing this vital change, cemeteries will have
increased tools to aid their maintenance and preservation.

Review of this investment strategy will remain under the current
purview of the Division of Cemeteries and the State Cemetery Board
which is composed of the Secretary of State, Attorney General and
Commissioner of Health or their designees.

LEGISLATIVE HISTORY:

New Bill

FISCAL IMPLICATIONS:

None

EFFECTIVE DATE:


This act shall take effect immediately.

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

                                  5111

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              May 10, 2013
                               ___________

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 ceme-
  tery trust funds

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

  Section  1.  Subparagraph  2  of  paragraph (a) of section 1507 of the
not-for-profit corporation law, as amended by chapter 679 of the laws of
2004, is 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 subpar-
agraph],  as is prudent under the standard established by [section seven
hundred seventeen of this chapter (duty of directors and  officers)  and
as  limited by the maximum annual appropriation defined in this subpara-
graph. 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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10878-01-3

S. 5111                             2

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  appreciation  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 maintenance fund] ARTICLE FIVE-A OF THIS CHAPTER, THE  PRUDENT
MANAGEMENT  OF  INSTITUTIONAL  FUNDS  ACT.  In the event that a cemetery
corporation seeks to appropriate any percentage of its net  appreciation
in  its permanent maintenance fund in accordance with this subparagraph,
the cemetery corporation shall [send a notice] PROVIDE  NOTICE  of  such
[proposed]  appropriation  [by  certified  mail] to the [cemetery board]
DIVISION OF CEMETERIES AS PART  OF  AND  IN  ADDITION  TO  THEIR  ANNUAL
REPORTING  REQUIREMENTS  AS  DEFINED IN SECTION FIFTEEN HUNDRED EIGHT OF
THIS ARTICLE, 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 appropri-
ation  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 corpo-
ration  that  the board objects to the proposed appropriation]. Notwith-
standing the foregoing provisions of this subparagraph, all principal 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 may make an order permitting the
principal or a part thereof to be used for the purpose of current  main-
tenance  and preservation 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  demonstrate  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
determines  that an outright grant of principal from the permanent main-
tenance fund is necessary, the amount of such grant  shall  be  deducted
from  the  adjusted historic dollar value of the trust principal for the
purposes of this subparagraph.]
  S 2. Subparagraph 2 of paragraph (c) of section 1507 of  the  not-for-
profit  corporation  law, as amended by chapter 111 of the laws of 2000,
is amended to read as follows:
  (2) The principal of such funds, whether kept in  the  perpetual  care
fund  or  otherwise, and unless already so invested when received, shall
be invested within a reasonable time after  receipt  thereof,  and  kept
invested,  in  such  securities  as  are permitted for the investment of
trust funds by sections 11-2.2 and 11-2.3 of  the  estates,  powers  and
trusts  law.  The  income arising therefrom shall be used solely for the
perpetual care and maintenance of the lot or plots or parts thereof  for
which such income has been provided. IN ADDITION, THE GOVERNING BOARD OF
THE CORPORATION MAY APPROPRIATE FOR EXPENDITURE SOLELY FOR THE PERPETUAL
CARE AND MAINTENANCE OF THE LOT OR PLOTS OR PARTS THEREOF FOR WHICH SUCH
INCOME  HAS BEEN PROVIDED, A PORTION OF THE NET APPRECIATION IN THE FAIR
MARKET VALUE OF THE PRINCIPAL OF THE TRUST AS IS PRUDENT UNDER THE STAN-
DARD ESTABLISHED BY ARTICLE FIVE-A OF THIS CHAPTER, THE PRUDENT  MANAGE-

S. 5111                             3

MENT  OF  INSTITUTIONAL  FUNDS  ACT. IN THE EVENT THAT A CEMETERY CORPO-
RATION SEEKS TO APPROPRIATE ANY PERCENTAGE OF ITS  NET  APPRECIATION  IN
ITS  PERPETUAL CARE FUND IN ACCORDANCE WITH THIS SUBPARAGRAPH, THE CEME-
TERY CORPORATION SHALL PROVIDE NOTICE OF SUCH APPROPRIATION TO THE DIVI-
SION  OF CEMETERIES AS PART OF AND IN ADDITION TO THEIR ANNUAL REPORTING
REQUIREMENTS AS DEFINED IN SECTION FIFTEEN HUNDRED EIGHT OF THIS ARTICLE
SETTING FORTH THE AMOUNT OF FUNDS APPROPRIATED FOR SUCH EXPENDITURE  AND
ITS EFFECT ON THE PERPETUAL CARE FUNDS.
  S 3. This act shall take effect immediately.

S5111A (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A7802A
Law Section:
Not-for-Profit Corporation Law
Laws Affected:
Amd §1507, N-PC L

S5111A (ACTIVE) - Bill Texts

view summary

Relates to cemetery trust funds; requires that when a cemetery corporation seeks to appropriate any percentage of its net appreciation in its perpetual care fund the cemetery corporation shall provide notice of such appropriation to the division of cemeteries as part of and in addition to their annual reporting requirements.

view sponsor memo
BILL NUMBER:S5111A

TITLE OF BILL: An act to amend the not-for-profit corporation law, in
relation to cemetery trust funds

PURPOSE:

This bill would provide that the appropriation for expenditure of net
appreciation of cemetery trust funds would be subject to the standards
established by the Prudent Management of Institutional Funds Act which
governs expenditures by not-for-profit entities in the state.

SUMMARY OF PROVISIONS:

This bill would amend and update § 1507 of the Not-for-Profit
Corporation Law to direct that expenditure of net appreciation of
cemetery trust funds would be subject to the standards established by
the Prudent Management of Institutional Funds Act in Article 5-A of
the chapter.

The bill requires additional reporting requirements to the New York
State Division of Cemeteries and the New York State Cemetery Board
outlining a cemetery corporation's application of this standard.

EXISTING LAW:

Section 1507 of the Not-for-Profit Corporation Law does not provide
for application of the Prudent Management of Institutional Funds Act
but instead outlines a formula that is not consistent with other
not-for-profit organization management in the state.

JUSTIFICATION:

The existing statute is outdated and cumbersome as it relates to
expenditures of net appreciation of cemetery trust funds.

The formula is so difficult for cemeteries to utilize or understand
that there are almost no reports of the use of the existing process
for expenditures.

This bill would conform these cemetery expenditures to the uniform
not-for-profit standard of the Prudent Management of Institutional
Funds Act. By providing this vital change, cemeteries will have
increased tools to aid their maintenance and preservation.

Review of this investment strategy will remain under the current
purview of the Division of Cemeteries and the State Cemetery Board
which is composed of the Secretary of State, Attorney General and
Commissioner of Health or their designees.

LEGISLATIVE HISTORY:

New Bill

FISCAL IMPLICATIONS:

None


EFFECTIVE DATE:

This act shall take effect immediately.

view full text
download pdf
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 5111--A
    Cal. No. 248

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              May 10, 2013
                               ___________

Introduced  by  Sen.  RANZENHOFER -- read twice and ordered printed, and
  when printed to be committed to the Committee on Corporations, Author-
  ities and Commissions -- recommitted to the Committee on Corporations,
  Authorities and Commissions in accordance with Senate Rule 6,  sec.  8
  -- reported favorably from said committee, ordered to first and second
  report,  ordered  to  a  third reading, amended and ordered reprinted,
  retaining its place in the order of third reading

AN ACT to amend the not-for-profit corporation law, in relation to ceme-
  tery trust funds

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

  Section  1.  Subparagraph  2  of  paragraph (a) of section 1507 of the
not-for-profit corporation law, as amended by chapter 679 of the laws of
2004, is 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 subpar-
agraph], as is prudent under the standard established by [section  seven
hundred  seventeen  of this chapter (duty of directors and officers) and
as limited by the maximum annual appropriation defined in this  subpara-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10878-03-4

S. 5111--A                          2

graph.  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  appreciation  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 maintenance fund] ARTICLE FIVE-A OF THIS CHAPTER, THE  PRUDENT
MANAGEMENT  OF  INSTITUTIONAL  FUNDS  ACT.  In the event that a cemetery
corporation seeks to appropriate any percentage of its net  appreciation
in  its permanent maintenance fund in accordance with this subparagraph,
the cemetery corporation shall [send a notice] PROVIDE  NOTICE  of  such
proposed  appropriation by certified mail to the cemetery board NOT LESS
THAN SIXTY DAYS IN ADVANCE OF  SUCH  PROPOSED  APPROPRIATION  AND  SHALL
DISCLOSE  SUCH  APPROPRIATION AS PART OF AND IN ADDITION TO THEIR ANNUAL
REPORTING REQUIREMENTS AS DEFINED IN SECTION FIFTEEN  HUNDRED  EIGHT  OF
THIS  ARTICLE,  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 appropri-
ation  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 corpo-
ration  that  the  board objects to the proposed appropriation. Notwith-
standing the foregoing provisions of this subparagraph, all principal 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 may make an order permitting the
principal or a part thereof to be used for the purpose of current  main-
tenance  and preservation 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  demonstrate  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
determines  that an outright grant of principal from the permanent main-
tenance fund is necessary, the amount of such grant  shall  be  deducted
from  the  adjusted historic dollar value of the trust principal for the
purposes of this subparagraph.]
  S 2. Subparagraph 2 of paragraph (c) of section 1507 of  the  not-for-
profit  corporation  law, as amended by chapter 111 of the laws of 2000,
is amended to read as follows:
  (2) The principal of such funds, whether kept in  the  perpetual  care
fund  or  otherwise, and unless already so invested when received, shall
be invested within a reasonable time after  receipt  thereof,  and  kept
invested,  in  such  securities  as  are permitted for the investment of
trust funds by sections 11-2.2 and 11-2.3 of  the  estates,  powers  and
trusts  law.  The  income arising therefrom shall be used solely for the
perpetual care and maintenance of the lot or plots or parts thereof  for
which such income has been provided. IN ADDITION, THE GOVERNING BOARD OF

S. 5111--A                          3

THE CORPORATION MAY APPROPRIATE FOR EXPENDITURE SOLELY FOR THE PERPETUAL
CARE AND MAINTENANCE OF THE LOT OR PLOTS OR PARTS THEREOF FOR WHICH SUCH
INCOME  HAS BEEN PROVIDED, A PORTION OF THE NET APPRECIATION IN THE FAIR
MARKET VALUE OF THE PRINCIPAL OF THE TRUST AS IS PRUDENT UNDER THE STAN-
DARD  ESTABLISHED BY ARTICLE FIVE-A OF THIS CHAPTER, THE PRUDENT MANAGE-
MENT OF INSTITUTIONAL FUNDS ACT. IN THE EVENT  THAT  A  CEMETERY  CORPO-
RATION  SEEKS  TO  APPROPRIATE ANY PERCENTAGE OF ITS NET APPRECIATION IN
ITS PERPETUAL CARE FUND IN ACCORDANCE WITH THIS SUBPARAGRAPH, THE  CEME-
TERY CORPORATION SHALL PROVIDE NOTICE OF SUCH APPROPRIATION TO THE CEME-
TERY  BOARD  NOT LESS THAN SIXTY DAYS IN ADVANCE OF SUCH PROPOSED APPRO-
PRIATION AND SHALL  DISCLOSE  SUCH  APPROPRIATION  AS  PART  OF  AND  IN
ADDITION  TO  THEIR  ANNUAL REPORTING REQUIREMENTS AS DEFINED IN SECTION
FIFTEEN HUNDRED EIGHT OF THIS ARTICLE SETTING FORTH THE AMOUNT OF  FUNDS
APPROPRIATED  FOR  SUCH EXPENDITURE AND ITS EFFECT ON THE PERPETUAL CARE
FUNDS. 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.
  S 3. This act shall take effect immediately.

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