senate Bill S6938

2013-2014 Legislative Session

Authorizes cemetery corporations to designate a community foundation as the trustee of a trust for the perpetual care, maintenance, improvement and embellishment of cemetery property

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Archive: Last Bill Status - In Committee


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

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Senate Actions - UPPERCASE
Apr 02, 2014 referred to judiciary

S6938 - Bill Details

See Assembly Version of this Bill:
A9303
Current Committee:
Law Section:
Estates, Powers and Trusts Law
Laws Affected:
Add §1-2.1-a, amd §§8-1.5 & 8-1.6, EPT L; amd §§1502, 1506-a & 1507, N-PC L

S6938 - Bill Texts

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Authorizes cemetery corporations to designate a community foundation as the trustee of a trust for the perpetual care, maintenance, improvement and embellishment of cemetery property.

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BILL NUMBER:S6938

TITLE OF BILL: An act to amend the estates, powers and trusts law and
the not-for-profit corporation law, in relation to authorizing
cemetery corporations to designate a community foundation as the
trustee of a trust for the perpetual care, maintenance, improvement
and embellishment of cemetery property

PURPOSE: To authorize cemetery corporations the ability to designate
a community foundation as the trustee of a trust for the perpetual
care, maintenance, improvement and embellishment of cemetery property

SUMMARY OF PROVISIONS:

Section 1: Adds new section to Estates, Powers and Trusts Law to add a
definition of community foundation.

Section 2: Amends the Estates, Powers and Trusts Law to authorize a
cemetery association or cemetery corporation to designate a bank,
banking institution or community foundation to act as a trustee.

Section 3: Amends the Estates, Powers and Trusts Law to authorize the
owner of lots in any private unincorporated cemetery to deposit in
trust for the care of such lots a sum not exceeding $400 per lot owned
with a community foundation.

Section 4: Amends the not-for-profit corporation law by adding a new
paragraph to define the meaning of community foundation.

Section 5: Clarifies that subdivision 7 of paragraph (a) of section
1506-a of the not-for-profit corporation law does not prohibit a
cemetery corporation from depositing moneys in trusts with a bank,
banking institution or community foundation for the purpose of the
perpetual care, maintenance, improvement and embellishment of cemetery
property.

Section 6: Amends the not-for-profit corporation law to authorize the
directors or trustees of cemetery corporations to designate a
community foundation 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.

EXISTING LAW: Under existing law, only banks and trust companies are
authorized to serve as custodians and trustees of such cemetery funds.

JUSTIFICATION: This legislation simply gives cemeteries an additional
tool to use to aid their maintenance and preservation. Under current
law, if a cemetery no longer has the means to continue operations it
becomes the financial responsibility of the municipality in which it
is located. This legislation assists cemeteries in their efforts to
remain fiscally solvent by granting cemetery corporations the ability
to designate a Community Foundation to serve as custodians and
trustees of moneys for the perpetual care and maintenance of cemetery
property.

Community Foundations are tax-exempt public charities organized and
operated for the long term benefit of a defined geographic location.


With this legislation Community Foundations will be able to assist
cemetery corporations realize a better rate of return on their funds
and also relieve some of the administrative burdens and costs. In
addition, Community Foundations have ties throughout the local
community which could be utilized to assist a cemetery corporation in
maintaining the minimum number of corporate board members necessary to
remain active.

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
________________________________________________________________________

                                  6938

                            I N  S E N A T E

                              April 2, 2014
                               ___________

Introduced  by  Sen.  LARKIN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Judiciary

AN ACT to amend the estates, powers and trusts law and the  not-for-pro-
  fit  corporation law, in relation to authorizing cemetery corporations
  to designate a community foundation as the trustee of a trust for  the
  perpetual care, maintenance, improvement and embellishment of cemetery
  property

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

  Section 1. The estates, powers and trusts law is amended by  adding  a
new section 1-2.1-a to read as follows:
S 1-2.1-A COMMUNITY FOUNDATION
  A  COMMUNITY  FOUNDATION IS A TAX-EXEMPT PUBLIC CHARITY, IN ACCORDANCE
WITH INTERNAL REVENUE CODE SECTION  501(C)(3);  THAT  IS  ORGANIZED  AND
OPERATED FOR THE LONG TERM BENEFIT OF A DEFINED GEOGRAPHIC AREA.
  S  2.  Section  8-1.5 of the estates, powers and trusts law, as renum-
bered by chapter 686 of the laws of 1967, is amended to read as follows:
S 8-1.5 Trusts for cemetery purposes
  Dispositions of property in trust for the  purpose  of  the  perpetual
care, maintenance, improvement or embellishment of cemeteries or private
burial lots in cemeteries, and the roadways, lawns, hedges, walks, fenc-
es,  monuments,  structures  and  tombs  in  such  cemeteries or on such
private burial lots are permitted and shall be deemed to be for charita-
ble and benevolent purposes. Such dispositions are not invalid by reason
of any indefiniteness or uncertainty of the persons designated as  bene-
ficiaries,  nor  shall  they  be  invalid as violating any existing rule
against perpetuities. Nothing herein contained shall affect any existing
authority of the courts to determine the reasonableness of the amount of
such disposition.  Any  cemetery  association  OR  CEMETERY  CORPORATION
SUBJECT  TO  THE  PROVISIONS  OF  ARTICLE  FIFTEEN OF THE NOT-FOR-PROFIT
CORPORATION LAW may act as trustee, OR DESIGNATE A BANK, BANKING  INSTI-
TUTION  OR  COMMUNITY  FOUNDATION  TO ACT AS TRUSTEE, of and execute any
such trust with respect to lots, roadways, lawns, hedges, walks, fences,
monuments, structures and tombs both within its own cemetery limits  and

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13842-04-4

S. 6938                             2

outside  of  any  cemetery under its control but within the county where
such cemetery is located, whether or not such power  is  included  among
its corporate powers.
  S  3.  Section 8-1.6 of the estates, powers and trusts law, as amended
by chapter 686 of the laws of 1967, is amended to read as follows:
S 8-1.6 Deposit of money in trust by owner of lots in private unincorpo-
          rated cemetery
  The owner of lots in any private unincorporated cemetery  may  deposit
in  trust  for  the  care  of such lots a sum not exceeding four hundred
dollars for each lot so owned with any bank [or], banking institution OR
COMMUNITY FOUNDATION located [in a city, town or  village]  conveniently
near  such  private  unincorporated  cemetery,  provided such bank [or],
banking institution OR COMMUNITY FOUNDATION is willing  to  accept  such
money  in trust and agrees to apply the proceeds of the interest thereon
to the care and upkeep of such lots.   Such banks [or],  banking  insti-
tutions  AND  COMMUNITY FOUNDATIONS are hereby authorized to accept such
money for the purpose described herein and to apply the proceeds of  the
interest thereon to the care and upkeep of any such lots. The provisions
of this section do not apply to savings banks.
  S  4. Section 1502 of the not-for-profit corporation law is amended by
adding a new paragraph (q) to read as follows:
  (Q) THE TERM "COMMUNITY FOUNDATION" MEANS ANY TAX-EXEMPT PUBLIC CHARI-
TY, IN ACCORDANCE WITH INTERNAL REVENUE CODE SECTION 501(C)(3), THAT  IS
ORGANIZED AND OPERATED FOR THE LONG TERM BENEFIT OF A DEFINED GEOGRAPHIC
AREA.
  S  5. Subdivision 7 of paragraph (a) of section 1506-a of the not-for-
profit corporation law, as added by chapter 560 of the laws of 1998,  is
amended to read as follows:
  (7)  have, enter into or perform a management contract with any entity
other than a not-for-profit  cemetery  corporation;  PROVIDED,  HOWEVER,
THAT  THIS SUBDIVISION SHALL NOT BE DEEMED TO PROHIBIT A CEMETERY CORPO-
RATION FROM DEPOSITING MONEYS IN TRUST WITH A BANK, BANKING  INSTITUTION
OR  COMMUNITY  FOUNDATION FOR THE PURPOSE OF THE PERPETUAL CARE, MAINTE-
NANCE, IMPROVEMENT AND EMBELLISHMENT OF CEMETERY PROPERTY.
  S 6. Paragraph (e) of section 1507 of the  not-for-profit  corporation
law,  as added by chapter 871 of the laws of 1977, is amended to read as
follows:
  (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, OR COMMUNITY FOUNDATION 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]  PARAGRAPH  (b)[,]  of this section, the permanent mainte-
nance of such cemetery pursuant to [subdivision] PARAGRAPH (a)  of  this
section,  and  for  special purposes pursuant to [subdivision] PARAGRAPH
(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 cemetery 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. Any bank [or], trust company,
OR  COMMUNITY FOUNDATION accepting any such cemetery fund shall keep the

S. 6938                             3

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] PARAGRAPHS (a), (b) and (f) of this section.
  S 7. This act shall take effect immediately.

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