Assembly Bill A7523

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7523
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                                May 8, 2019
                                ___________
 
 Introduced  by  M.  of A. DINOWITZ -- (at request of the Office of Court
   Administration) -- read once and referred to the Committee on  Judici-
   ary
 
 AN  ACT to amend the surrogate's court procedure act, in relation to the
   computation and allocation of the commissions of trustees of  charita-
   ble  trusts;  and  repealing  certain  provisions of such law relating
   thereto
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Paragraphs (a) and (b) of subdivision 5 of section 2308 of
 the surrogate's court procedure act, paragraph (a) as amended by chapter
 936 of the laws of 1984, are amended to read as follows:
   (a) During the continuance of a trust created solely for public, reli-
 gious, charitable, scientific, literary, educational or  fraternal  uses
 and  during  the period of continuance of such a trust ESTABLISHED after
 the termination of a life use or uses the trustee shall be  entitled  to
 and  may  retain  ANNUAL  commissions [from income in an amount annually
 equal to 6 per cent of income collected in each year] ACCORDING  TO  THE
 TERMS SPECIFIED IN SUBDIVISION 2 OF THIS SECTION, BUT ONLY TO THE EXTENT
 OF  80  PERCENT  OF  THE RATES STATED THEREIN. NOTWITHSTANDING ANY OTHER
 PROVISION OF LAW, WITH RESPECT  TO  ANY  PORTION  OF  SUCH  TRUST  WHICH
 EXCEEDS  A  PRINCIPAL  VALUE  OF TWENTY MILLION DOLLARS, THE TRUSTEE MAY
 ONLY TAKE ANNUAL COMMISSIONS TO THE EXTENT OF 50  PERCENT  OF  THE  RATE
 SPECIFIED IN PARAGRAPH (C) OF SUBDIVISION 2 OF THIS SECTION.
   (b)  In  the  case  of  a trust [created solely for public, religious,
 charitable, scientific, literary, educational  or  fraternal  uses  the]
 DESCRIBED  IN  PARAGRAPH (A) OF THIS SUBDIVISION, A trustee shall not be
 entitled to any commission from principal AS SPECIFIED IN SUBDIVISION  1
 OF THIS SECTION FOR PAYING OUT PRINCIPAL.
   § 2. Paragraph (c) of subdivision 6 of section 2308 of the surrogate's
 court procedure act is REPEALED.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD10139-02-9

 A. 7523                             2
 
   § 3. Subdivision 12 of section 2308 of the surrogate's court procedure
 act,  as added by chapter 237 of the laws of 1978, is amended to read as
 follows:
   12.  If a trustee of a trust is authorized or required by the terms of
 the will to accumulate income for any  purpose  permitted  by  law,  any
 income so accumulated which is not added to principal of the trust shall
 be  deemed  a  separate  trust  for purposes of this subdivision and the
 trustee shall be entitled to commissions in respect thereof at the rates
 and according to the terms and provisions of subdivisions 1 [and], 2 AND
 5 of this section as though, for purposes of  computing  commissions  of
 the trustee, income so accumulated was principal.
   §  4. Subdivision 3 of section 2309 of the surrogate's court procedure
 act, as amended by chapter 243 of the laws of 2001, is amended  to  read
 as follows:
   3.  Unless  the will or lifetime trust instrument otherwise explicitly
 provides the annual commissions allowed by [subdivision 2] THIS  SECTION
 shall  be  payable one-third from the income of the trust and two-thirds
 from the principal of the trust. However, in the case of a  trust  whose
 definition  of  income  is governed by 11-2.4 of the estates, powers and
 trusts law or a charitable  remainder  annuity  trust  or  a  charitable
 remainder  unitrust, as defined in section six hundred sixty-four of the
 Internal Revenue Code of nineteen hundred eighty-six, as  amended,  such
 annual  commissions  shall  be payable from the corpus of any such trust
 after allowance for the annuity or unitrust amounts  and  shall  not  be
 payable out of such annuity or unitrust amounts.
   §  5.  Paragraphs  (a) and (b) of subdivision 5 of section 2309 of the
 surrogate's court procedure act, paragraph (a) as amended by chapter 936
 of the laws of 1984, are amended to read as follows:
   (a) During the continuance of a trust created solely for public, reli-
 gious, charitable, scientific, literary, educational or  fraternal  uses
 and  during  the period of continuance of such a trust ESTABLISHED after
 the termination of a life use or uses the trustee shall be  entitled  to
 and  may  retain  ANNUAL  commissions [from income in an amount annually
 equal to 6 per cent of income collected in each year] ACCORDING  TO  THE
 TERMS SPECIFIED IN SUBDIVISION 2 OF THIS SECTION, BUT ONLY TO THE EXTENT
 OF  80  PERCENT  OF  THE RATES STATED THEREIN. NOTWITHSTANDING ANY OTHER
 PROVISION OF LAW, WITH RESPECT  TO  ANY  PORTION  OF  SUCH  TRUST  WHICH
 EXCEEDS  A  PRINCIPAL  VALUE  OF TWENTY MILLION DOLLARS, THE TRUSTEE MAY
 ONLY TAKE ANNUAL COMMISSIONS TO THE EXTENT OF 50  PERCENT  OF  THE  RATE
 SPECIFIED IN PARAGRAPH (C) OF SUBDIVISION 2 OF THIS SECTION.
   (b)  In  the  case  of  a trust [created solely for public, religious,
 charitable, scientific, literary, educational  or  fraternal  uses  the]
 DESCRIBED  IN  PARAGRAPH (A) OF THIS SUBDIVISION, A trustee shall not be
 entitled to any commission from principal AS SPECIFIED IN SUBDIVISION  1
 OF THIS SECTION FOR PAYING OUT PRINCIPAL.
   §  6.  Paragraphs  (a) and (b) of subdivision 3 of section 2312 of the
 surrogate's court procedure act, as amended by chapter 511 of  the  laws
 of 1987, are amended to read as follows:
   (a) during the continuance of a trust created solely for public, reli-
 gious,  charitable,  scientific, literary, educational or fraternal uses
 and during the period of continuance of such a trust  ESTABLISHED  after
 the termination of a life use or uses a corporate trustee shall be enti-
 tled  to  and  may retain ANNUAL commissions [from income] in accordance
 with the provisions of subdivision 1 or 2 [hereof] OF THIS  SECTION,  as
 the  case  may  be,  EXCEPT  THAT THE TRUSTEE SHALL NOT BE ENTITLED TO A
 COMMISSION FOR PAYING OUT PRINCIPAL.

 A. 7523                             3
 
   (b) In the case of a trust created solely for public, religious, char-
 itable, scientific, literary, educational or fraternal uses a  corporate
 trustee  shall  not  be entitled to any commission [from] FOR PAYING OUT
 principal.
   §  7.  This  act  shall take effect immediately and shall apply to all
 trusts in existence on or after such effective date;  provided,  however
 that  a trustee of a trust in existence on such effective date may elect
 to continue to take commissions under the law in effect  prior  to  such
 effective date until December 31 of the year this act takes effect.