STATE OF NEW YORK
________________________________________________________________________
6971
2021-2022 Regular Sessions
IN ASSEMBLY
April 19, 2021
___________
Introduced by M. of A. PAULIN -- read once and referred to the Committee
on Corporations, Authorities and Commissions
AN ACT to amend the not-for-profit corporation law, in relation to leas-
ing of cemetery lands
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Legislative findings and declarations. The legislature
2 finds and declares that the state has a vital interest in the public
3 service that public cemeteries provide and in their viability as not-
4 for-profit entities. Many cemeteries face falling demand for traditional
5 burial services and other financial pressures. It is therefore necessary
6 for the state to provide greater flexibility for cemeteries to generate
7 income to prevent their operational failure and abandonment to local
8 governments and impacts on the state fiscal plan, while simultaneously
9 protecting the interests of cemetery lot owners and visitors. It is in
10 the public interest that cemeteries with surplus land are able to
11 receive income from such land for a period of time without altering the
12 purpose of public cemeteries or negatively impacting the operation of
13 the cemetery and the use of cemetery land. The following provisions are
14 enacted to grant such cemeteries the ability to lease a portion of their
15 land and use the income for the maintenance and preservation of the
16 cemetery, to ensure that through leasing cemeteries themselves do not
17 engage in non-cemetery activity, and to protect the public interest in
18 land dedicated to cemetery purposes.
19 § 2. The not-for-profit corporation law is amended by adding a new
20 section 1506-e to read as follows:
21 § 1506-e. Lease of cemetery lands.
22 (a) Cemetery board approval. Except as set forth in paragraph (i) of
23 this section, no cemetery corporation shall lease any portion of its
24 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.
LBD10920-01-1
A. 6971 2
1 (b) Requirements for approval of a lease of cemetery land. The appli-
2 cation to the cemetery board for approval to lease cemetery land shall
3 meet the following requirements:
4 (1) The cemetery's lot owners or board of directors have approved the
5 lease.
6 (2) If the cemetery has any existing leases of land, it must disclose
7 them so the board can consider the impact of existing leases on cemetery
8 operations.
9 (3) In addition to its submission to the cemetery board, the cemetery
10 corporation shall, no earlier than ten days prior to such submission,
11 post notices in the immediate proximity of the land proposed to be
12 leased, the cemetery office and, in a manner so as not to violate local
13 zoning ordinances or to create a traffic hazard, all entrances. Each
14 such notice shall provide information written in plain English concern-
15 ing the proposed lease and, if the proposed lease includes construction
16 of new structures or buildings, include a drawing, which shall be an
17 accurate rendition of the proposed construction. In addition, such
18 notices shall state the telephone number and address where comments may
19 be received and the last date on which such comments will be accepted,
20 which shall be no earlier than sixty days following the date the notices
21 are posted.
22 (4) The proposed lease has been negotiated at arm's length for a fair
23 market rent and contains all of the agreements between the parties.
24 Where the proposed lease would be a related party transaction under this
25 chapter, the cemetery shall disclose this fact and demonstrate compli-
26 ance with restrictions related to such transactions, as set forth in
27 section seven hundred fifteen of this chapter, and the cemetery board
28 may require that the lease contain a clause by which the cemetery board
29 may set reasonable reporting requirements that would disclose any finan-
30 cial relationship between the lessor and lessee related to the leased
31 property.
32 (5) The initial lease term is not greater than forty-nine years, and
33 the cemetery demonstrates that such a term will not interfere with land
34 needed for burial purposes. Notwithstanding the provisions of this
35 subparagraph, the cemetery board may approve a lease with extensions of
36 the initial term not to exceed ninety-nine years from the date of the
37 initial lease, provided that the security shall be updated at year
38 forty-nine and every twenty years afterward during the term of the lease
39 and all extensions thereof, if applicable, and approved pursuant to
40 paragraph (h) of this section.
41 (6) If the proposed lease involves land adjacent to cemetery oper-
42 ations, the proposed lease requires the tenant to construct and maintain
43 a physical or visual buffer approved by the cemetery board, which may be
44 vegetative, and that protects visitors to the cemetery, and that other-
45 wise complies with the requirements of this section.
46 (7) The proposed lease requires the tenant to be responsible for any
47 and all taxes, assessments, and charges related to its occupancy and use
48 of the land, whether imposed against the tenant or the cemetery corpo-
49 ration.
50 (8) If the proposed lease includes permission to construct any infras-
51 tructure, buildings or other structures, the application to the cemetery
52 board shall provide for the removal of such infrastructure, buildings or
53 other structures after the cemetery retakes possession of the land,
54 unless the infrastructure, buildings or other structures are to be
55 retained by the cemetery pursuant to paragraph (f) of this section.
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1 (9) The proposed lease shall include an agreement to pay for the
2 removal of any proposed infrastructure, buildings and structures, except
3 any that are approved to be retained as set forth in paragraph (f) of
4 this section, and return the land to a condition suitable for cemetery
5 use upon the expiration or termination of the lease and such agreement
6 shall be secured by a fund, bond, letter of credit or other security
7 sufficient to pay for such future removal. The application shall include
8 a written description of the proposed funding mechanism for the estab-
9 lishment of a fund, written evidence of a bond, or other security to the
10 cemetery board for payment of the cost of restoring the leased premises
11 to a condition suitable for use for cemetery purposes at the end or
12 earlier termination of the term of the lease, including but not limited
13 to the cost of removing any and all buildings and structures that may
14 then be located on the leased premises and will not be retained. Any
15 such bond shall be issued by an entity authorized to do business in the
16 state of New York, and any irrevocable letter of credit or a certificate
17 of deposit shall be from a New York state or federally chartered bank,
18 trust company, savings bank or savings and loan association that is
19 qualified to do business in the state of New York and insured by the
20 federal deposit insurance corporation.
21 (10) The land proposed to be leased will not be used for any activity
22 that would be disruptive to cemetery operations or that would have a
23 significant impact on cemetery traffic.
24 (11) If the proposed use or activity arising therefrom could disturb
25 normal and usual cemetery activities, the proposed lease limits the
26 hours of activity.
27 (12) The proposed lease will not include the manufacture or disposal
28 of hazardous material or the use or storage of hazardous material in
29 violation of any law or otherwise create a significant risk of environ-
30 mental harm to the cemetery property.
31 (13) The proposed lease may permit assignment or sub-leases, including
32 sub-leasing and assignment of space on cell towers to communications
33 providers, provided the original lease remains in effect and the use
34 remains the same.
35 (c) The following uses are deemed to comply with subparagraph ten of
36 paragraph (b) of this section:
37 (1) Communications service facilities, also known as cell towers;
38 (2) Solar panels; and
39 (3) Energy storage equipment, as defined in section four hundred nine-
40 ty-nine-aaaa of the real property tax law.
41 (d) For any lease involving related party transactions pursuant to
42 section seven hundred fifteen of this chapter, the cemetery board may
43 set reasonable reporting requirements that would disclose any financial
44 relationship between the lessor and lessee related to the leased proper-
45 ty.
46 (e) Any material modification, alteration or expansion of the lease or
47 additions of any infrastructure, structures or buildings outside the
48 scope of the prior approval requires cemetery board approval.
49 (f) If the cemetery corporation intends that any infrastructure,
50 structures or buildings proposed under the lease be retained and used
51 for cemetery purposes after the lease terminates or expires, the appli-
52 cation to approve the lease shall also include an application for
53 approval of such infrastructure, structures or buildings as intended to
54 be used by the cemetery. The board shall render decision on the applica-
55 tion for a major alteration in conjunction with the decision on the
56 application to lease cemetery land. If that application is approved,
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1 such infrastructure, buildings or structures shall be excluded from the
2 requirements of subparagraph nine of paragraph (b) of this section.
3 (g) The application shall include at least two written estimates of
4 the cost of removing the infrastructure, buildings and structures
5 excluding retained infrastructure and associated structures and return-
6 ing the land to a condition suitable for burial purposes at the conclu-
7 sion of the lease.
8 (h) (1) The cemetery board shall approve the type and amount of the
9 security which shall be maintained in full force and effect, in an
10 amount not less than that which was approved by the cemetery board,
11 until: (i) the leased premises shall have been restored to a condition
12 suitable for use for cemetery purposes at the end or earlier termination
13 of the term of the lease, (ii) any and all buildings and structures then
14 located on the leased premises shall have been removed, (iii) proof in
15 form acceptable to the cemetery board demonstrating that all costs of
16 such restoration and removal work have been paid in full and that no
17 person or entity performing labor or furnishing materials for such work
18 has filed a notice of mechanic's lien that shall have been delivered to
19 the cemetery board, provided however that a cemetery may contest such
20 lien as long as such contest prevents the foreclosure of a lien, and
21 (iv) if applicable, each governmental unit or agency that issued any
22 permit for such restoration and removal work shall have issued a certif-
23 icate of compliance or other similar instrument indicating that such
24 work has been completed in a due and proper manner. The parties directed
25 to perform the restoration and removal work contemplated by this para-
26 graph and as approved by the cemetery board shall not be limited by the
27 amount of the bond, letter of credit, or certificate of deposit or by
28 any inability to recover all or any part of such bond, letter of credit,
29 or certificate of deposit from the issuing surety, bank, trust company,
30 savings bank, or savings and loan association. Neither the cemetery
31 board nor the department of state shall be liable to the tenant, the
32 cemetery, or any other person or entity by reason or any determination
33 or approval made under this paragraph.
34 (2) Prior to the commencement of construction, the cemetery shall
35 submit proof to the cemetery board that such security in such amount is
36 in place.
37 (i) Leases for the following uses do not require cemetery board
38 approval:
39 (1) A lease or license to grow and harvest crops with a term less than
40 five years;
41 (2) A lease of a dwelling to the caretaker or other officer or employ-
42 ee of the cemetery that is actually used and occupied as that person's
43 residence; and
44 (3) A renewal or assignment of an existing lease of existing struc-
45 tures on land owned by the cemetery, not dedicated to cemetery purposes
46 and that was subject to a lease, provided that such purchase or acquisi-
47 tion was approved by a court or the cemetery board, if such renewal does
48 not change the scope of the existing lease.
49 (j) All lease payments and other consideration received by the ceme-
50 tery corporation, less the necessary expenses incurred, shall be depos-
51 ited into the permanent maintenance fund established by the cemetery
52 corporation pursuant to paragraph (a) of section fifteen hundred seven
53 of this article, except that upon a showing of a need to fund specific
54 projects, maintain and preserve, or expand current cemetery operations,
55 the cemetery board may permit any portion of the lease payments or other
A. 6971 5
1 consideration to be used for such purposes, with the remainder to be
2 deposited to the permanent maintenance fund.
3 § 3. Notwithstanding any provision of law to the contrary, a lease of
4 cemetery land that was entered into prior to the effective date of this
5 act may continue under the terms and conditions and for the period of
6 time set forth in the lease as of such effective date, including any
7 right of renewal, unless the cemetery did not obtain cemetery board
8 approval.
9 § 4. This act shall take effect immediately.