NY Not for Profit Corp L § 1507 (2021)
2021 New York Laws NPC - Not-For-Profit Corporation Article 15 - Public Cemetery Corporations 1507 - Trust Funds.

§ 1507. Trust funds.  (a)  Maintenance and preservation; permanent maintenance fund; current maintenance fund. Subject to  rules  and  regulations  of  the  cemetery board:  (1)  Every  cemetery corporation shall maintain and preserve the cemetery, including all lots, plots and  parts  thereof.  For  the  sole purpose of such maintenance and preservation, every cemetery corporation shall establish and maintain (A) a permanent maintenance fund, and (B) a current  maintenance fund. At the time of making the sale of a lot, plot or part thereof, the cemetery corporation shall deposit  not  less  than ten  per  centum  of  the  gross proceeds of the sale into the permanent maintenance fund. An additional fifteen per centum of the gross proceeds of the sale shall be deposited  in  the  current  maintenance  fund.  In addition to the foregoing, at the time the cemetery corporation receives payment  for  the performance of an interment or inurnment, the cemetery corporation shall collect and deposit  into  the  permanent  maintenance fund  the sum of thirty-five dollars. (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 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. 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. (3) The current maintenance fund shall be used and applied  for  the sole purpose of ordinary and necessary expenses of the care and maintenance of the cemetery. When  all  burial  rights  in  the cemetery  have  been  conveyed,  the fund remaining on deposit or to the credit of the current maintenance fund shall  be  transferred  into  the  permanent  maintenance fund. (4) The percentage of the proceeds of sales required to be deposited in the permanent maintenance  fund  or  current maintenance  fund  by a particular cemetery corporation may be increased or  diminished  by  order  of  the supreme court in a district where any portion of the cemetery is located. Such application may be made by  the cemetery  board  on  notice  to the corporation or by the corporation on notice to the cemetery board.  (b) Perpetual care of lots. (1) Upon the application of a  prospective purchaser  of  any  lot,  plot  or  part thereof and upon payment of the purchase price and the amount fixed  as  a  reasonable  charge  for  the perpetual  care  of  any  lot,  plot  or  part  thereof,  every cemetery corporation shall include with  the  deed  of  conveyance  an  agreement perpetually  to  care for such lot, plot, or part thereof, to the extent that the income derived by the corporation from such amount will permit. (2) Such corporation also, upon the application of an owner  or  of  the executor  or  administrator  of a deceased owner of any lot and upon the payment of the amount fixed as a reasonable  charge  for  the  perpetual care  of  such  lot, shall, and upon the application of any other person and the payment of such amount, may enter into  a  like  agreement  with him.  Such  agreement  shall be executed and may be recorded in the same manner as a deed. (3) Any corporation organized under or subject to  the provisions  of  this section may enter into an agreement in writing with any executor or executors, trustee or trustees, under a  last  will  and testament  to  whom  there  has  heretofore  been,  or may hereafter be, bequeathed a sum for the perpetual care of any lot, plot or part thereof in any such cemetery or with any administrator  or  administrators  with the  will  annexed under any such will perpetually to care for such lot, plot or part thereof under the provisions of the terms of such last will and testament,  and  subject  in  all  cases  to  the  approval  of  the surrogate's  court  having  jurisdiction  over  such  trust estate. Such approval may be evidenced by the written endorsement of the surrogate on a duplicate original of such agreement filed in the  surrogate's  court. In  case  the  surrogate shall approve such agreement any such executor, trustee or administrator with the will annexed thereupon shall pay  over to   the  treasurer  of  such  perpetual  care  fund  of  such  cemetery corporation any moneys remaining or being in his hands belonging to such trust, and upon making such payment  and  accounting  therefore  to  the surrogate's  court  may  be discharged from said trust as such executor, trustee or administrator with the will annexed.  (c) Perpetual care fund. (1)  Every  cemetery  corporation  and  every religious  corporation  having  charge  and  control of a cemetery which heretofore has been or which hereafter may be used  for  burials,  shall keep  separate  and  apart from its other funds, all moneys and property received by it, whether by contract, in  trust  or  otherwise,  for  the perpetual  care  and maintenance of any lot, plot or part thereof in its cemetery, and all such moneys  or  property  so  received  by  any  such corporation  are  hereby  declared  to  be,  and  shall  be  held by the corporation as trust funds. Any moneys and property so received,  unless otherwise provided in the instrument under which such moneys or property were  received,  shall  be  kept  in  a separate fund to be known as the perpetual care fund. (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.   (3)   The corporation  may,  for  the  purpose  of  investing and reinvesting such funds, add the same to any similar trust fund  or  funds  and  apportion shares  or  interest to each trust fund, showing upon its records at all times every share or interest. (4) The corporation may accept  in  trust for  the  perpetual care of a lot, plot or part thereof in its cemetery, property not made eligible for the investment of trust funds  under  the foregoing provisions of this subdivision and may retain such property in the  form  in which received, separate and apart from the perpetual care fund, if directed so to do by the instrument under which  such  property is  received,  so  long as such property remains in the form in which it was received; but whenever such property is sold or  otherwise  disposed of,  the proceeds of such sale or other disposition shall be invested in the manner heretofore provided in this subdivision for the investment of trust funds. The exchange of stock or evidences of  indebtedness  issued by  a  corporation  for  stock  or evidences of indebtedness of the same corporation, or for stock, evidences of indebtedness, warrants or script received as a result of merger, consolidation or reorganization of  such corporation,  or  the  receipt  of  additional  stock  or  evidences  of indebtedness of such corporation, as a distribution by such corporation, shall not be deemed to be  a  disposition  of  the  property  originally received  in  trust,  and  such  exchanged or additional property may be retained in place and stead of the  property  originally  received,  and under  the same conditions. The corporation shall keep accurate accounts of all funds for the perpetual care and maintenance  of  cemetery  lots, plots  or parts thereof, separate and apart from its other funds. A copy of the record pertaining to each such perpetual care fund  shall  be  at all  times  available  at  the  office  of  the corporation during usual business hours, for inspection and copy by any owner of an  endowed  lot or his representative.  (d)  Perpetual  care  fund;  allocation of income and cost of care and maintenance. On or before the fifteenth day of March  in  each  calendar year  the officers of every cemetery corporation shall fix and determine that portion of the income on the investment of  the  principal  of  the perpetual  care  fund  during  the  calendar  or fiscal year immediately preceding, to be apportioned to each separate lot or  part  thereof  for which  a  perpetual  care  agreement has been made. The cost during such previous calendar or fiscal year of the care of each lot or part thereof shall be allocated and charged against the income so apportioned to  it. Any  excess  of  the  income so apportioned over and above the allocated cost of the care and maintenance of such lot or part  thereof  shall  be  credited  to such lot or part thereof, to be used in any future years to make up the deficiency if the income apportioned to  such  lot  or  part thereof  should,  in  any  year  since September first, nineteen hundred forty-nine,  or in any future year, fall, or have fallen, below the cost of care thereof.  (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 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 paragraph (b), of this section, the permanent maintenance of such cemetery pursuant to paragraph (a) of this section, and for special purposes pursuant  to  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 or the cemetery board; 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 accepting any such cemetery fund shall keep the 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 paragraphs (a), (b) and (f) of this section.  (e-1)  Monument  maintenance  fund.  (1)  A  cemetery corporation may, subject to the approval of the cemetery board, establish and maintain  a monument  maintenance  fund.  Such  a  fund is hereby declared to be and shall be held by the cemetery corporation  as  a  trust  fund,  for  the purpose  of providing notice if such monuments are damaged or defaced by an act of vandalism and for the restoration of such  monuments.  Two  or more  cemetery  corporations  may establish a joint monument maintenance fund.  (2) The  principal  of  the  fund  shall  be  invested  in  securities permitted  for  the  investment  of  trust  funds by sections 11-2.2 and 11-2.3 of the estates, powers and trusts law. The principal of such fund shall remain inviolate, except that upon  application  to  the  cemetery board,  which  may  make  an  order  permitting  the principal or a part thereof to be used for the purpose of  restoring  monuments  damaged  or defaced  by an act of vandalism. The income arising from such investment shall be used solely for the costs and expenses resulting from an act of vandalism against monuments in such cemetery.  (3) The fund shall be financed by a charge levied at the time of  each interment  at  a rate established by each cemetery creating such a fund, subject to cemetery board approval pursuant to section  fifteen  hundred nine  of  this article. Such a charge shall be levied in addition to the approved rates for interment. The fund may also accept gifts,  donations and bequests.  (4)  Each  cemetery  creating  such  a fund shall promulgate rules and regulations to administer the fund, subject to cemetery  board  approval pursuant  to  section  fifteen  hundred nine of this article. Such rules  shall include the conditions under which the income from such  fund  may be properly expended.  (5)  The  cemetery  corporation  shall  keep  accurate accounts of all moneys for the fund, separate and apart from its other funds.  (f) Acquisition of property for special purposes and in trust.  (1)  A cemetery  corporation  may acquire, otherwise than by condemnation, real or  personal  property,  absolutely  or  in  trust,  in  perpetuity   or otherwise,  and  shall use the same or the income therefrom in pursuance of the terms of the  instrument  by  which  it  was  acquired,  for  the following  purposes  only: (i) The improvement or embellishment, but not the enlargement, of its cemetery; (ii) The construction, preservation or replacement of any building, structure, fence, wall,  or  walk  therein; (iii)  The  erection,  renewal  or  preservation  of any tomb, monument, stone, fence, wall, railing or other erection or structure on or  around its  cemetery  or  any  lot  or  plot  therein;  (iv)  The  planting  or cultivation of trees, grass, shrubs, flowers or plants in or  about  its cemetery  or  any  lot or plot therein; (v) The construction, operation, maintenance, repair and replacement of a  crematory  or  columbarium  or both  in its cemetery; (vi) The care, keeping in order and embellishment of any lot, plot or part thereof  or  the  structures  thereon,  in  its cemetery,  as prescribed in the instrument transferring such property to the cemetery corporation, or by the person or persons from time to  time having  possession,  care and control of such lot, plot or part thereof, as the case may be. (2) All moneys and property received by  a  cemetery corporation  in  trust under this subdivision, unless otherwise provided in the instrument under which such moneys or property were received  and unless  already  so  invested  when received, shall be invested within a reasonable time after the 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 corporation  may,  for  the  purpose  of  investing and reinvesting such funds, add the same to any similar trust fund  or  funds  and  apportion shares  or interests to each trust fund, showing upon its records at all times every share or interest. The cemetery corporation shall maintain a record for each such trust fund. Such  record  shall  be  at  all  times available  at the office of the corporation during usual business hours, for inspection  and  copy  by  any  owner  of  an  endowed  lot  or  his representative.  (g)  Trust  for  the  care  of  burial ground. A cemetery corporation, incorporated under or by a general or special law, may receive  tangible property, securities or funds in trust, and hold and invest the same and apply  the  principal or income thereof, in accordance with the terms of the trust, for the  purpose  of  repairing,  maintaining,  improving  or embellishing a burial ground, not constituting a part of the cemetery of such  cemetery  corporation,  and located outside of a city of more than one million inhabitants and within ten miles  of  the  cemetery  of  the corporation  accepting such trust. The directors of such corporation, or a majority of them and the treasurer, shall annually within  sixty  days after  the  close  of each calendar or fiscal year, make, sign and shall file at the office of the corporation a detailed accounting  and  report of such trust funds held under this subdivision and the use made of such funds  or  of  the  income  thereof for the preceding calendar or fiscal year, which shall include among other  things,  properly  itemized,  the securities  in which the same is then invested, and any purchases, sales or other changes made therein during the period covered by such  report. Such accounting and report shall be at all times available at the office of the corporation, during usual business hours, for inspection and copy by any lot owner or any contributor to such trust fund.  (h)  Vandalism,  abandonment  and  monument  repair  or  removal.  (1) Cemeteries incorporated under this article shall contribute  to  a  fund created  pursuant to section ninety-seven-r of the state finance law for the maintenance of abandoned cemeteries, including the  construction  of cemetery  fences,  placement  of  cemetery  lights  and  replacement  of cemetery doors and locks, for the restoration  of  property  damaged  by acts  of  vandalism, and for the repair or removal of monuments or other markers not owned by the cemetery  corporation  that  have  fallen  into disrepair  or  dilapidation  so as to create a dangerous condition. Such fund shall be administered by a  board  of  trustees  comprised  of  the secretary of state, the attorney general and the commissioner of health, or their designees, who shall serve without additional compensation.  (2)  The  fund  shall  be  financed  by  contributions by the cemetery corporations of not more than five  dollars  ($5.00)  per  interment  or cremation  in  a  manner to be determined by the New York state cemetery board. No contributions shall be collected upon  the  interment  of  the cremains  of  a  deceased person where a contribution was collected upon cremations.  (3) The  moneys  of  the  fund  shall  be  expended  equally  for  the maintenance  of  abandoned  cemeteries previously owned by a corporation incorporated pursuant to this chapter or the membership corporations law and the repair of cemetery vandalism damage and the repair or removal of monuments or other  markers  not  owned  by  the  cemetery  corporation, provided,   however,   that   the  cemetery  board  may  determine  that circumstances necessitate an unequal distribution due to specific  needs and may provide for such distribution. For purposes of this section, the maintenance  of  abandoned  cemeteries  may  include the construction of cemetery  fences,  placement  of  cemetery  lights  and  replacement  of cemetery doors and locks.  (4)  Authorization  for  payments  by  the  fund for maintenance of an abandoned cemetery shall be made by the secretary  of  state  only  upon approval  by  the  cemetery board of an application by a municipality or other  solvent  not-for-profit  cemetery  corporation   for   fair   and reasonable  expenses  required  to  be made by the municipality or other solvent  not-for-profit  cemetery  corporation  for  maintenance  of  an abandoned cemetery; provided, however, that the cemetery board shall not approve  any  such  application unless the municipality or other solvent not-for-profit cemetery corporation acknowledges that the responsibility for restoration and future care, preservation, and maintenance  of  such cemetery   has  been  assumed  by  the  municipality  or  other  solvent not-for-profit cemetery corporation. For the purposes of this paragraph, such cemetery shall always be deemed an abandoned cemetery.  (5) Authorization for payments by the fund for the repair of vandalism damage shall be made by the secretary of state only on approval  by  the New York state cemetery board which shall determine:  (i)  that  an act of vandalism to the extent described by the cemetery corporation did take place;  (ii) that either a written report of the vandalism was filed with  the local  police  or  sheriff's  department,  or,  that  the cemetery, upon consent of the division, made a determination not  to  file  the  report because  the publicity generated by filing the report would have adverse consequences for the cemetery;  (iii) that the cost of repairs is fair and reasonable; and  (iv) that the cemetery corporation has been  unable  to  obtain  funds from  the  lot  owner,  his  spouse,  devisees  or  descendants within a reasonable period of time nor are there adequate funds in  the  cemetery corporations  monument  maintenance  fund,  if  such  a  fund  has  been established by the cemetery.  (6) Authorization for payments by the fund for the repair  or  removal of  monuments  or  other  markers  not owned by the cemetery corporation shall be made by the secretary of state only on approval by the New York state cemetery board on application by the cemetery corporation showing:  (i)  that  the  monuments  or  markers  are  so badly out of repair or dilapidated as to create a dangerous condition;  (ii) that the cost of remedying the condition is fair and reasonable;  (iii) that the cemetery corporation has given not less than sixty days notice to the last known owner to repair or remove the monument or other marker and the said owner has failed to do so within the time prescribed in said notice.  (7) The New York state cemetery board shall promulgate rules  defining standards  of  maintenance,  as well as what type of vandalism or out of repair or dilapidated monuments  or  other  markers  shall  qualify  for payment  of  repair  or removal by the fund and the method and amount of payment of contributions described in subparagraph two of this paragraph upon the recommendation of the state cemetery  board  citizens  advisory council  created  by  section  fifteen  hundred  seven-a of this article (State cemetery board citizens advisory council).  (8) Nothing contained in this paragraph is to be construed as giving a cemetery corporation an  "insurable  interest"  in  monuments  or  other embellishments  on a plot, lot or part thereof, nor is it meant to imply that the cemetery  corporation  has  any  responsibility  for  repairing vandalism damage not covered by this fund, nor for repairing or removing out of repair or dilapidated monuments or other markers not owned by the cemetery  corporation, nor shall it constitute the doing of an insurance business.