What's happening
This bill updates rules for cemetery trust funds, allowing certain cemeteries to prudently use a portion of principal for maintenance under new safe harbor and policy standards.
Why it matters
Empowers financially prudent cemeteries. By allowing "qualified corporations" with written investment policies to spend a limited, prudent portion of trust principal (up to 4% of fair market value) for maintenance, the bill gives cemeteries more flexibility to address urgent or ongoing upkeep needs without lengthy court proceedings.
Encourages modern investment and management practices. Requiring cemeteries to adopt written investment policies aligned with the prudent management standards (Article 5-A) incentivizes professional stewardship of cemetery funds, potentially leading to better fund performance and sustainability.
Balances access with oversight and safeguards. The bill maintains oversight by requiring advance notice to the cemetery board and annual reporting, and it allows the board to object in certain cases—especially if appropriations exceed the "safe harbor" limit or if investment policies are inadequate, helping prevent misuse of trust funds.
Addresses changing financial realities. By letting cemeteries use a portion of principal when income from traditional investments (interest/dividends) falls short, the law responds to low-yield environments, which can make it difficult for cemeteries to cover basic maintenance costs using income alone.
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Who cares
Cemetery corporations
The bill would let corporations with qualifying written investment policies spend trust principal on cemetery maintenance, with a safe harbor of up to four percent of prior-year-end principal value minus interest and ordinary dividends received that year.
New York State Cemetery Board
The bill would require 60 days’ advance notice and investment policies for proposed principal withdrawals, while limiting the grounds on which the board could block them.
Cemetery lot and plot owners
The bill would allow perpetual care fund principal to be spent on cemetery grounds generally, replacing authority to spend net appreciation solely on the lots or plots for which the income was provided.
Headline styles
Ease Cemetery Fund Spending
Plain English, a few words. Used as the page title.
Sponsors
Senator · Senate District 14
No co-sponsors yet.
History
- Committed to rules
- Advanced to third reading
- 2nd report cal.
- 1st report cal.509
- Referred to corporations, authorities and commissions
- Returned to senate
- Died in assembly
- Referred to corporations, authorities and commissions
- Delivered to assembly
- Passed senateVote 61–0
- Advanced to third reading
- 2nd report cal.
Show 2 earlier actions
- 1st report cal.781
- Referred to corporations, authorities and commissions
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Update Cemetery Trust Fund Rules
In Assembly Committee · Corporations, Authorities And Commissions · Sponsor Amy Paulin
Full text
4 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5463
2019-2020 Regular Sessions
IN SENATE
May 1, 2019
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 cemetery trust funds
The People of the State of New York, represented in Senate and Assembly, 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 509 of the laws of 2014, 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 maintaining 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 addition, the governing board of the corporation may appropriate for expenditure solely for the maintenance and preservation of the cemetery grounds a portion of the net appreciation, in the fair market value of the principal of the trust, as is prudent under the standard established by 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 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
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11423-01-9
S. 5463 2
the amount of funds to be appropriated for such expenditure and its effect on the permanent maintenance fund. 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 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 maintenance and preservation of the cemetery or otherwise.] In addition, in any year, the governing board of a qualified corporation, as defined below, may appropriate for expenditure solely for the maintenance and preservation of the cemetery grounds, and treat as income for all purposes, an amount of trust principal equal to the excess, if any, of a percentage of the fair market value of the principal of the trust, as of the last day of the cemetery's immediately preceding fiscal year, as is prudent under the standard established by article five-A of this chapter, the prudent management of institutional funds act over interest and ordinary dividends received in such year; provided, however, that an appropriation of an amount (the safe harbor amount) of trust principal equal to the excess of up to four percent of the fair market value of the principal of the trust, as of the last day of the cemetery's immediately preceding fiscal year over interest and ordinary dividends received in such year shall be deemed to be prudent in all events. A "qualified corporation" means a cemetery corporation which adopts a written investment policy setting forth guidelines on investments and delegation of management and investment functions in accord with the standards of article five-A of this chapter. If a cemetery corporation seeks to appropriate any percentage of the principal of the permanent maintenance fund in accordance with this subparagraph, the cemetery corporation shall provide notice of such proposed appropriation and provide a copy of its written investment policy 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 principal to be appropriated for such expenditure and its effect on the permanent maintenance fund. Such proposed appropriation shall become effective sixty days after receipt of such notice, unless the proposed appropriation exceeds the safe harbor amount or the written investment policy is not provided or is not prepared in accordance with the standards of article five-A of this chapter, and the cemetery board within such sixty-day period notifies the cemetery corporation that the board objects to the proposed appropriation. Except to the extent that principal is utilized as the result of the foregoing, all principal of the permanent maintenance fund shall remain inviolate, with the further exception 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 maintenance 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
S. 5463 3
shall determine the method for repayment of such a loan by the cemetery to the fund.
§ 2. Subparagraph 2 of paragraph (c) of section 1507 of the not-forprofit corporation law, as amended by chapter 509 of the laws of 2014, 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 standard established by 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 perpetual care fund in accordance with this subparagraph, the cemetery corporation shall provide notice of such appropriation 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 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.] In addition, in any year, the governing board of a qualified corporation, as defined below, may appropriate for expenditure solely for the maintenance and preservation of the cemetery grounds, and treat as income for all purposes, an amount of trust principal equal to the excess, if any, of a percentage of the fair market value of the principal of the trust, as of the last day of the cemetery's immediately preceding fiscal year, as is prudent under the standard established by article five-A of this chapter, the prudent management of institutional funds act over interest and ordinary dividends received in such year; provided, however, that an appropriation of an amount (the safe harbor amount) of trust principal equal to the excess of up to four percent of the fair market value of the principal of the trust, as of the last day of the cemetery's immediately preceding fiscal year over interest and ordinary dividends received in such year shall be deemed to be prudent in all events. A "qualified corporation" means a cemetery corporation which adopts a written investment policy setting forth guidelines on investments and delegation of management and investment functions in accord with the standards of article five-A of this chapter. If a cemetery corporation seeks to appropriate any percentage of the principal of the perpetual care fund in accordance with this subparagraph, the cemetery corporation shall provide notice of such proposed appropriation and provide a copy of its written investment policy 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,
S. 5463 4
setting forth the amount of principal to be appropriated for such expenditure and its effect on the perpetual care fund. Such proposed appropriation shall become effective sixty days after receipt of such notice, unless the proposed appropriation exceeds the safe harbor amount or the written investment policy is not provided or is not prepared in accordance with the standards of article five-A of this chapter, and the cemetery board within such sixty-day period notifies the cemetery corporation that the board objects to the proposed appropriation.
§ 3. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the not-for-profit corporation law, in relation to cemetery trust funds
Purpose
This bill would provide an option for the application of a conservative total return formula utilized by other state not-for-profits for the expenditure of trust fund revenue solely for the maintenance and preser- vation of cemetery grounds. Such expenditure 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 Corpo- ration Law to provide the option for the expenditure of trust fund revenue solely for the maintenance and preservation of cemetery grounds. Such an application for expenditure of trust funds would be subject to the standards established by the Prudent Management of Institutional Funds Act in Article 5-A of the chapter. This 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 currently conform to a basic application that would be utilized by other not-for- profit organization management in the state.
Justification
The existing statute is cumbersome as it relates to expenditures of net appreciation of cemetery trust funds. The formula is so difficult for cemeteries to utilize that there have been very few applications made utilizing 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 mainte- nance 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.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.