S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6257
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                              April 19, 2021
                                ___________
 
 Introduced  by  Sen.  COMRIE -- read twice and ordered printed, and when
   printed to be committed to the Committee on Corporations,  Authorities
   and Commissions
 
 AN ACT to amend the not-for-profit corporation law, in relation to leas-
   ing cemetery lands
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Legislative  findings  and  declarations.  The  legislature
 finds  and  declares  that  the state has a vital interest in the public
 service that public cemeteries provide and in their  viability  as  not-
 for-profit entities. Many cemeteries face falling demand for traditional
 burial services and other financial pressures. It is therefore necessary
 for  the state to provide greater flexibility for cemeteries to generate
 income to prevent their operational failure  and  abandonment  to  local
 governments  and  impacts on the state fiscal plan, while simultaneously
 protecting the interests of cemetery lot owners and visitors. It  is  in
 the  public  interest  that  cemeteries  with  surplus  land are able to
 receive income from such land for a period of time without altering  the
 purpose  of  public  cemeteries or negatively impacting the operation of
 the cemetery and the use of cemetery land. The following provisions  are
 enacted to grant such cemeteries the ability to lease a portion of their
 land  and  use  the  income  for the maintenance and preservation of the
 cemetery, to ensure that through leasing cemeteries  themselves  do  not
 engage in non-cemetery purposes.
   §  2.  The  not-for-profit  corporation law is amended by adding a new
 section 1506-e to read as follows:
 § 1506-E. LEASE OF CEMETERY LANDS.
   (A) EXCEPT AS SET FORTH IN SUBDIVISION (J) OF THIS SECTION,  NO  CEME-
 TERY  CORPORATION  SHALL LEASE ANY PORTION OF ITS LAND WITHOUT NOTICE TO
 AND APPROVAL OF THE CEMETERY BOARD.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10913-01-1
              

 S. 6257                             2
 
   (B) THE APPLICATION TO THE CEMETERY BOARD FOR APPROVAL TO LEASE  CEME-
 TERY LAND SHALL INCLUDE THE FOLLOWING REQUIREMENTS OR INFORMATION:
   (1)  APPROVAL  FROM THE CEMETERY'S LOT OWNERS OR BOARD OF DIRECTORS TO
 LEASE THE LAND PROPOSED IN SUCH APPLICATION;
   (2) IF THE CEMETERY HAS ANY EXISTING LEASES OF LAND, SUCH LEASES SHALL
 BE DISCLOSED ON THE APPLICATION SO THE BOARD CAN CONSIDER THE IMPACT  OF
 EXISTING LEASES ON CEMETERY OPERATIONS;
   (3)  A  STATEMENT  SHOWING  THE PROPOSED LEASE WAS NEGOTIATED AT ARM'S
 LENGTH FOR A FAIR MARKET RENT AND SHALL CONTAIN ALL  OF  THE  AGREEMENTS
 BETWEEN  THE  PARTIES. WHERE THE PROPOSED LEASE WOULD BE A RELATED PARTY
 TRANSACTION UNDER THIS CHAPTER, THE CEMETERY SHALL  DISCLOSE  THIS  FACT
 AND  DEMONSTRATE  COMPLIANCE  WITH  RESTRICTIONS  RELATED TO SUCH TRANS-
 ACTIONS, AS SET FORTH IN SECTION SEVEN HUNDRED FIFTEEN OF THIS  CHAPTER,
 AND  THE  CEMETERY  BOARD MAY REQUIRE THAT THE LEASE CONTAIN A CLAUSE BY
 WHICH THE CEMETERY BOARD MAY SET REASONABLE REPORTING REQUIREMENTS  THAT
 WOULD  DISCLOSE ANY FINANCIAL RELATIONSHIP BETWEEN THE LESSOR AND LESSEE
 RELATED TO THE LEASED PROPERTY;
   (4) EVIDENCE SHOWING THE  INITIAL  LEASE  TERM  IS  NOT  GREATER  THAN
 FORTY-NINE  YEARS  AND  THE  CEMETERY CORPORATION SHALL DEMONSTRATE THAT
 SUCH A TERM WILL NOT INTERFERE WITH LAND  NEEDED  FOR  BURIAL  PURPOSES.
 NOTWITHSTANDING THE PROVISIONS OF THIS PARAGRAPH, THE CEMETERY BOARD MAY
 APPROVE  A LEASE WITH EXTENSIONS OF THE INITIAL TERM NOT TO EXCEED NINE-
 TY-NINE YEARS FROM THE DATE OF THE  INITIAL  LEASE,  PROVIDED  THAT  THE
 SECURITY  SHALL  BE  UPDATED  AT  YEAR FORTY-NINE AND EVERY TWENTY YEARS
 AFTERWARD DURING THE TERM OF THE LEASE AND ALL  EXTENSIONS  THEREOF,  IF
 APPLICABLE, AND APPROVED PURSUANT TO SUBDIVISION (I) OF THIS SECTION;
   (5)  IF  THE  PROPOSED  LEASE INVOLVES LAND ADJACENT TO CEMETERY OPER-
 ATIONS;
   (6) IF THE PROPOSED LEASE REQUIRES THE TENANT TO CONSTRUCT  AND  MAIN-
 TAIN  A  PHYSICAL OR VISUAL BUFFER APPROVED BY THE CEMETERY BOARD, WHICH
 MAY BE VEGETATIVE;
   (7) HOW THE PROPOSED LEASE PROTECTS VISITORS TO THE CEMETERY;
   (8) IF PROPOSED LEASE REQUIRES THE TENANT TO BE  RESPONSIBLE  FOR  ANY
 AND ALL TAXES, ASSESSMENTS, AND CHARGES RELATED TO ITS OCCUPANCY AND USE
 OF  THE  LAND, WHETHER IMPOSED AGAINST THE TENANT OR THE CEMETERY CORPO-
 RATION;
   (9) IF THE PROPOSED LEASE INCLUDES PERMISSION TO CONSTRUCT ANY INFRAS-
 TRUCTURE, BUILDINGS OR OTHER STRUCTURES, THE APPLICATION TO THE CEMETERY
 BOARD SHALL PROVIDE FOR THE REMOVAL OF SUCH INFRASTRUCTURE, BUILDINGS OR
 OTHER STRUCTURES AFTER THE CEMETERY  RETAKES  POSSESSION  OF  THE  LAND,
 UNLESS  THE  INFRASTRUCTURE,  BUILDINGS  OR  OTHER  STRUCTURES ARE TO BE
 RETAINED BY THE CEMETERY PURSUANT TO SUBDIVISION (G) OF THIS SECTION;
   (10) THE PROPOSED LEASE SHALL INCLUDE AN  AGREEMENT  TO  PAY  FOR  THE
 REMOVAL OF ANY PROPOSED INFRASTRUCTURE, BUILDINGS AND STRUCTURES, EXCEPT
 ANY  THAT ARE APPROVED TO BE RETAINED AS SET FORTH IN SUBDIVISION (G) OF
 THIS SECTION, AND RETURN LEASED PREMISES TO THE CEMETERY CORPORATION  IN
 A CONDITION SUITABLE FOR CEMETERY USE UPON THE EXPIRATION OR TERMINATION
 OF THE LEASE AND SUCH AGREEMENT SHALL BE SECURED BY A FUND, BOND, LETTER
 OF  CREDIT  OR OTHER SECURITY SUFFICIENT TO PAY FOR SUCH FUTURE REMOVAL.
 THE APPLICATION SHALL INCLUDE A  WRITTEN  DESCRIPTION  OF  THE  PROPOSED
 FUNDING MECHANISM FOR THE ESTABLISHMENT OF A FUND, WRITTEN EVIDENCE OF A
 BOND, OR OTHER SECURITY TO THE CEMETERY BOARD FOR PAYMENT OF THE COST OF
 RESTORING  THE LEASED PREMISES TO A CONDITION SUITABLE FOR USE FOR CEME-
 TERY PURPOSES AT THE END OR EARLIER  TERMINATION  OF  THE  TERM  OF  THE
 LEASE,  INCLUDING  BUT  NOT  LIMITED TO THE COST OF REMOVING ANY AND ALL
 BUILDINGS AND STRUCTURES THAT MAY THEN BE LOCATED ON THE LEASED PREMISES

 S. 6257                             3
 
 AND WILL NOT BE RETAINED. ANY SUCH BOND SHALL BE  ISSUED  BY  AN  ENTITY
 AUTHORIZED  TO DO BUSINESS IN THE STATE OF NEW YORK, AND ANY IRREVOCABLE
 LETTER OF CREDIT OR A CERTIFICATE OF DEPOSIT SHALL BE FROM  A  NEW  YORK
 STATE  OR  FEDERALLY  CHARTERED  BANK,  TRUST  COMPANY,  SAVINGS BANK OR
 SAVINGS AND LOAN ASSOCIATION THAT IS QUALIFIED TO  DO  BUSINESS  IN  THE
 STATE  OF  NEW  YORK AND INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPO-
 RATION;
   (11) A STATEMENT THAT THE LAND PROPOSED TO BE LEASED SHALL NOT BE USED
 FOR ANY ACTIVITY THAT WOULD BE DISRUPTIVE TO CEMETERY OPERATIONS OR THAT
 WOULD HAVE A SIGNIFICANT IMPACT ON CEMETERY TRAFFIC. IF THE PROPOSED USE
 OR ACTIVITY FOR THE LAND MAY DISTURB NORMAL AND  USUAL  CEMETERY  ACTIV-
 ITIES,  THE  PROPOSED LEASE AND APPLICATION SHALL INCLUDE HOUR LIMITS ON
 SUCH USE OR ACTIVITY;
   (12) A STATEMENT THAT THE PROPOSED LEASE SHALL NOT INCLUDE  THE  MANU-
 FACTURE  OR  DISPOSAL  OF  HAZARDOUS  MATERIAL  OR THE USE OR STORAGE OF
 HAZARDOUS MATERIAL IN VIOLATION OF ANY LAW OR OTHERWISE CREATE A SIGNIF-
 ICANT RISK OF ENVIRONMENTAL HARM TO THE CEMETERY PROPERTY;
   (13) IF THE  PROPOSED  LEASE  MAY  PERMIT  ASSIGNMENT  OR  SUB-LEASES,
 INCLUDING SUB-LEASING AND ASSIGNMENT OF SPACE ON CELL TOWERS TO COMMUNI-
 CATIONS PROVIDERS, PROVIDED THE ORIGINAL LEASE REMAINS IN EFFECT AND THE
 USE REMAINS THE SAME.
   (C)  IN  ADDITION TO THE APPLICATION SUBMISSION TO THE CEMETERY BOARD,
 NO EARLIER THAN TEN DAYS PRIOR TO SUCH SUBMISSION, THE  CEMETERY  CORPO-
 RATION  SHALL  POST  NOTICES  IN  THE  IMMEDIATE  PROXIMITY  OF THE LAND
 PROPOSED TO BE LEASED, THE CEMETERY OFFICE, ALL ENTRANCES OF  THE  CEME-
 TERY  AND IN A MANNER SO AS NOT TO VIOLATE LOCAL ZONING ORDINANCES OR TO
 CREATE A TRAFFIC HAZARD. EACH NOTICE SHALL PROVIDE  INFORMATION  WRITTEN
 IN  PLAIN  ENGLISH  CONCERNING  THE  PROPOSED LEASE AND, IF THE PROPOSED
 LEASE INCLUDES CONSTRUCTION OF NEW STRUCTURES OR  BUILDINGS,  INCLUDE  A
 DRAWING,   WHICH   SHALL  BE  AN  ACCURATE  RENDITION  OF  THE  PROPOSED
 CONSTRUCTION. IN ADDITION, SUCH NOTICES SHALL STATE THE TELEPHONE NUMBER
 AND ADDRESS WHERE COMMENTS MAY BE RECEIVED AND THE LAST  DATE  ON  WHICH
 SUCH COMMENTS WILL BE ACCEPTED. THE LAST DAY TO ACCEPT COMMENTS SHALL BE
 NO EARLIER THAN SIXTY DAYS FOLLOWING THE DATE SUCH NOTICES ARE POSTED.
   (D)  THE  FOLLOWING USES ARE DEEMED TO COMPLY WITH PARAGRAPH ELEVEN OF
 SUBDIVISION (B) OF THIS SECTION:
   (1) COMMUNICATIONS SERVICE FACILITIES, ALSO KNOWN AS CELL TOWERS;
   (2) SOLAR PANELS; AND
   (3) "ELECTRIC ENERGY STORAGE EQUIPMENT," AS DEFINED  IN  SECTION  FOUR
 HUNDRED NINETY-NINE-AAAA OF THE REAL PROPERTY TAX LAW;
   (E)  FOR  ANY  LEASE  INVOLVING RELATED PARTY TRANSACTIONS PURSUANT TO
 SECTION SEVEN HUNDRED FIFTEEN OF THIS CHAPTER, THE CEMETERY BOARD  SHALL
 SET  REASONABLE REPORTING REQUIREMENTS THAT WOULD DISCLOSE ANY FINANCIAL
 RELATIONSHIP BETWEEN THE LESSOR AND LESSEE RELATED TO THE LEASED PROPER-
 TY.
   (F) ANY MATERIAL MODIFICATION, ALTERATION OR EXPANSION OF THE LEASE OR
 ADDITIONS OF ANY STRUCTURES OR BUILDINGS OUTSIDE THE SCOPE OF THE  PRIOR
 APPROVAL REQUIRES CEMETERY BOARD APPROVAL.
   (G)  IF  THE  CEMETERY  CORPORATION  INTENDS  THAT ANY INFRASTRUCTURE,
 STRUCTURE OR BUILDINGS PROPOSED UNDER THE LEASE BE RETAINED AND USED FOR
 CEMETERY PURPOSES AFTER THE LEASE TERMINATES OR EXPIRES, THE APPLICATION
 TO APPROVE THE LEASE SHALL ALSO INCLUDE AN APPLICATION FOR  APPROVAL  OF
 SUCH  INFRASTRUCTURE,  STRUCTURES OR BUILDINGS AS INTENDED TO BE USED BY
 THE CEMETERY. THE BOARD SHALL RENDER DECISION ON THE APPLICATION  FOR  A
 MAJOR  ALTERATION IN CONJUNCTION WITH THE DECISION ON THE APPLICATION TO
 LEASE CEMETERY LAND. IF THAT APPLICATION IS APPROVED,  SUCH  INFRASTRUC-

 S. 6257                             4

 TURE, BUILDINGS OR STRUCTURES SHALL BE EXCLUDED FROM THE REQUIREMENTS OF
 PARAGRAPH TEN OF SUBDIVISION (B) OF THIS SECTION.
   (H)  THE  APPLICATION  SHALL INCLUDE AT LEAST TWO WRITTEN ESTIMATES OF
 THE COST OF  REMOVING  THE  INFRASTRUCTURE,  BUILDINGS  AND  STRUCTURES,
 EXCLUDING  RETAINED  INFRASTRUCTURE, ASSOCIATED STRUCTURES AND RETURNING
 THE LAND TO A CONDITION SUITABLE FOR BURIAL PURPOSES AT  THE  CONCLUSION
 OF THE LEASE.
   (I)  (1)  THE  CEMETERY BOARD SHALL APPROVE THE TYPE AND AMOUNT OF THE
 SECURITY WHICH SHALL BE MAINTAINED IN  FULL  FORCE  AND  EFFECT  ON  THE
 PROPOSED  LEASED  PROPERTY,  IN  AN  AMOUNT NOT LESS THAN THAT WHICH WAS
 APPROVED BY THE CEMETERY BOARD, UNTIL: (I)  THE  LEASED  PREMISES  SHALL
 HAVE BEEN RESTORED TO A CONDITION SUITABLE FOR USE FOR CEMETERY PURPOSES
 AT THE END OR EARLIER TERMINATION OF THE TERM OF THE LEASE; (II) ANY AND
 ALL  BUILDINGS  AND STRUCTURES THEN LOCATED ON THE LEASED PREMISES SHALL
 HAVE BEEN REMOVED; (III) PROOF IN FORM ACCEPTABLE TO THE CEMETERY  BOARD
 DEMONSTRATING  THAT  ALL COSTS OF SUCH RESTORATION AND REMOVAL WORK HAVE
 BEEN PAID IN FULL AND THAT NO  PERSON  OR  ENTITY  PERFORMING  LABOR  OR
 FURNISHING MATERIALS FOR SUCH WORK HAS FILED A NOTICE OF MECHANIC'S LIEN
 THAT  SHALL  HAVE BEEN DELIVERED TO THE CEMETERY BOARD, PROVIDED HOWEVER
 THAT A CEMETERY MAY CONTEST SUCH LIEN AS LONG AS SUCH  CONTEST  PREVENTS
 THE  FORECLOSURE  OF  A  LIEN; AND (IV) IF APPLICABLE, EACH GOVERNMENTAL
 UNIT OR AGENCY THAT ISSUED ANY PERMIT FOR SUCH RESTORATION  AND  REMOVAL
 WORK  SHALL  HAVE  ISSUED  A  CERTIFICATE OF COMPLIANCE OR OTHER SIMILAR
 INSTRUMENT INDICATING THAT SUCH WORK HAS BEEN COMPLETED  IN  A  DUE  AND
 PROPER  MANNER.  THE  PARTIES  DIRECTED  TO  PERFORM THE RESTORATION AND
 REMOVAL WORK CONTEMPLATED BY THIS SUBDIVISION AND  AS  APPROVED  BY  THE
 CEMETERY BOARD SHALL NOT BE LIMITED BY THE AMOUNT OF THE BOND, LETTER OF
 CREDIT,  OR CERTIFICATE OF DEPOSIT OR BY ANY INABILITY TO RECOVER ALL OR
 ANY PART OF SUCH BOND, LETTER OF CREDIT, OR CERTIFICATE OF DEPOSIT  FROM
 THE  ISSUING  SURETY,  BANK, TRUST COMPANY, SAVINGS BANK, OR SAVINGS AND
 LOAN ASSOCIATION. NEITHER THE CEMETERY BOARD NOR THE DEPARTMENT OF STATE
 SHALL BE LIABLE TO THE TENANT, THE CEMETERY,  OR  ANY  OTHER  PERSON  OR
 ENTITY  BY REASON OF ANY DETERMINATION OR APPROVAL MADE UNDER THIS PARA-
 GRAPH.
   (2) PRIOR TO THE COMMENCEMENT  OF  CONSTRUCTION,  THE  CEMETERY  SHALL
 SUBMIT  PROOF TO THE CEMETERY BOARD THAT SUCH SECURITY IN SUCH AMOUNT IS
 IN PLACE.
   (J) LEASES FOR THE  FOLLOWING  USES  DO  NOT  REQUIRE  CEMETERY  BOARD
 APPROVAL:
   (1) A LEASE OR LICENSE TO GROW AND HARVEST CROPS WITH A TERM LESS THAN
 FIVE YEARS;
   (2) A LEASE OF A DWELLING TO THE CARETAKER OR OTHER OFFICER OR EMPLOY-
 EE  OF  THE CEMETERY THAT IS ACTUALLY USED AND OCCUPIED AS THAT PERSON'S
 RESIDENCE; OR
   (3) A RENEWAL OR ASSIGNMENT OF AN EXISTING LEASE  OF  EXISTING  STRUC-
 TURES  ON LAND OWNED BY THE CEMETERY, NOT DEDICATED TO CEMETERY PURPOSES
 AND THAT WAS SUBJECT TO A LEASE, PROVIDED THAT SUCH PURCHASE OR ACQUISI-
 TION WAS APPROVED BY A COURT OR THE CEMETERY BOARD, IF SUCH RENEWAL DOES
 NOT CHANGE THE SCOPE OF THE EXISTING LEASE.
   (K) ALL LEASE PAYMENTS AND OTHER CONSIDERATION RECEIVED BY  THE  CEME-
 TERY  CORPORATION, LESS THE NECESSARY EXPENSES INCURRED, SHALL BE DEPOS-
 ITED INTO THE PERMANENT MAINTENANCE FUND  ESTABLISHED  BY  THE  CEMETERY
 CORPORATION  PURSUANT  TO PARAGRAPH (A) OF SECTION FIFTEEN HUNDRED SEVEN
 OF THIS ARTICLE, EXCEPT THAT UPON A SHOWING OF A NEED TO  FUND  SPECIFIC
 PROJECTS,  MAINTAIN AND PRESERVE, OR EXPAND CURRENT CEMETERY OPERATIONS,
 THE CEMETERY BOARD MAY PERMIT ANY PORTION OF THE LEASE PAYMENTS OR OTHER

 S. 6257                             5
 
 CONSIDERATION TO BE USED FOR SUCH PURPOSES, WITH  THE  REMAINDER  TO  BE
 DEPOSITED TO THE PERMANENT MAINTENANCE FUND.
   §  3. Notwithstanding any provision of law to the contrary, a lease of
 cemetery land that was entered into prior to the effective date of  this
 act  shall continue under the terms and conditions and for the period of
 time set forth in the lease as of such  effective  date,  including  any
 right  of  renewal,  unless  the  cemetery did not obtain cemetery board
 approval.
   § 4. This act shall take effect immediately.