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A06971 Summary:

Add §1506-e, N-PC L
Provides for leasing of cemetery lands upon notice to and approval of the cemetery board.
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A06971 Text:

                STATE OF NEW YORK
                               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.

        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.

        A. 6971                             3
     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,

        A. 6971                             4
     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.
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