S T A T E O F N E W Y O R K
________________________________________________________________________
6257--A
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 -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee
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:
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 activity, and to protect the public interest in
land dedicated to 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.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10913-02-1
S. 6257--A 2
(A) CEMETERY BOARD APPROVAL. EXCEPT AS SET FORTH IN PARAGRAPH (I) OF
THIS SECTION, NO CEMETERY CORPORATION SHALL LEASE ANY PORTION OF ITS
LAND WITHOUT NOTICE TO AND APPROVAL OF THE CEMETERY BOARD.
(B) REQUIREMENTS FOR APPROVAL OF A LEASE OF CEMETERY LAND. THE APPLI-
CATION TO THE CEMETERY BOARD FOR APPROVAL TO LEASE CEMETERY LAND SHALL
MEET THE FOLLOWING REQUIREMENTS:
(1) THE CEMETERY'S LOT OWNERS OR BOARD OF DIRECTORS HAVE APPROVED THE
LEASE.
(2) IF THE CEMETERY HAS ANY EXISTING LEASES OF LAND, IT MUST DISCLOSE
THEM SO THE BOARD CAN CONSIDER THE IMPACT OF EXISTING LEASES ON CEMETERY
OPERATIONS.
(3) IN ADDITION TO ITS SUBMISSION TO THE CEMETERY BOARD, THE CEMETERY
CORPORATION SHALL, NO EARLIER THAN TEN DAYS PRIOR TO SUCH SUBMISSION,
POST NOTICES IN THE IMMEDIATE PROXIMITY OF THE LAND PROPOSED TO BE
LEASED, THE CEMETERY OFFICE AND, IN A MANNER SO AS NOT TO VIOLATE LOCAL
ZONING ORDINANCES OR TO CREATE A TRAFFIC HAZARD, ALL ENTRANCES. EACH
SUCH NOTICE SHALL PROVIDE INFORMATION WRITTEN IN PLAIN ENGLISH CONCERN-
ING 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,
WHICH SHALL BE NO EARLIER THAN SIXTY DAYS FOLLOWING THE DATE THE NOTICES
ARE POSTED.
(4) THE PROPOSED LEASE HAS BEEN NEGOTIATED AT ARM'S LENGTH FOR A FAIR
MARKET RENT AND CONTAINS 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 COMPLI-
ANCE WITH RESTRICTIONS RELATED TO SUCH TRANSACTIONS, 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 FINAN-
CIAL RELATIONSHIP BETWEEN THE LESSOR AND LESSEE RELATED TO THE LEASED
PROPERTY.
(5) THE INITIAL LEASE TERM IS NOT GREATER THAN FORTY-NINE YEARS, AND
THE CEMETERY DEMONSTRATES THAT SUCH A TERM WILL NOT INTERFERE WITH LAND
NEEDED FOR BURIAL PURPOSES. NOTWITHSTANDING THE PROVISIONS OF THIS
SUBPARAGRAPH, THE CEMETERY BOARD MAY APPROVE A LEASE WITH EXTENSIONS OF
THE INITIAL TERM NOT TO EXCEED NINETY-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
PARAGRAPH (H) OF THIS SECTION.
(6) IF THE PROPOSED LEASE INVOLVES LAND ADJACENT TO CEMETERY OPER-
ATIONS, THE PROPOSED LEASE REQUIRES THE TENANT TO CONSTRUCT AND MAINTAIN
A PHYSICAL OR VISUAL BUFFER APPROVED BY THE CEMETERY BOARD, WHICH MAY BE
VEGETATIVE, AND THAT PROTECTS VISITORS TO THE CEMETERY, AND THAT OTHER-
WISE COMPLIES WITH THE REQUIREMENTS OF THIS SECTION.
(7) THE 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.
(8) 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,
S. 6257--A 3
UNLESS THE INFRASTRUCTURE, BUILDINGS OR OTHER STRUCTURES ARE TO BE
RETAINED BY THE CEMETERY PURSUANT TO PARAGRAPH (F) OF THIS SECTION.
(9) 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 PARAGRAPH (F) OF
THIS SECTION, AND RETURN THE LAND TO 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 ESTAB-
LISHMENT 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 CEMETERY 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 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 CORPORATION.
(10) THE LAND PROPOSED TO BE LEASED WILL NOT BE USED FOR ANY ACTIVITY
THAT WOULD BE DISRUPTIVE TO CEMETERY OPERATIONS OR THAT WOULD HAVE A
SIGNIFICANT IMPACT ON CEMETERY TRAFFIC.
(11) IF THE PROPOSED USE OR ACTIVITY ARISING THEREFROM COULD DISTURB
NORMAL AND USUAL CEMETERY ACTIVITIES, THE PROPOSED LEASE LIMITS THE
HOURS OF ACTIVITY.
(12) THE PROPOSED LEASE WILL NOT INCLUDE THE MANUFACTURE OR DISPOSAL
OF HAZARDOUS MATERIAL OR THE USE OR STORAGE OF HAZARDOUS MATERIAL IN
VIOLATION OF ANY LAW OR OTHERWISE CREATE A SIGNIFICANT RISK OF ENVIRON-
MENTAL HARM TO THE CEMETERY PROPERTY.
(13) THE PROPOSED LEASE MAY PERMIT ASSIGNMENT OR SUB-LEASES, INCLUDING
SUB-LEASING AND ASSIGNMENT OF SPACE ON CELL TOWERS TO COMMUNICATIONS
PROVIDERS, PROVIDED THE ORIGINAL LEASE REMAINS IN EFFECT AND THE USE
REMAINS THE SAME.
(C) THE FOLLOWING USES ARE DEEMED TO COMPLY WITH SUBPARAGRAPH TEN OF
PARAGRAPH (B) OF THIS SECTION:
(1) COMMUNICATIONS SERVICE FACILITIES, ALSO KNOWN AS CELL TOWERS;
(2) SOLAR PANELS; AND
(3) ENERGY STORAGE EQUIPMENT, AS DEFINED IN SECTION FOUR HUNDRED NINE-
TY-NINE-AAAA OF THE REAL PROPERTY TAX LAW.
(D) FOR ANY LEASE INVOLVING RELATED PARTY TRANSACTIONS PURSUANT TO
SECTION SEVEN HUNDRED FIFTEEN OF THIS CHAPTER, THE CEMETERY BOARD MAY
SET REASONABLE REPORTING REQUIREMENTS THAT WOULD DISCLOSE ANY FINANCIAL
RELATIONSHIP BETWEEN THE LESSOR AND LESSEE RELATED TO THE LEASED PROPER-
TY.
(E) ANY MATERIAL MODIFICATION, ALTERATION OR EXPANSION OF THE LEASE OR
ADDITIONS OF ANY INFRASTRUCTURE, STRUCTURES OR BUILDINGS OUTSIDE THE
SCOPE OF THE PRIOR APPROVAL REQUIRES CEMETERY BOARD APPROVAL.
(F) IF THE CEMETERY CORPORATION INTENDS THAT ANY INFRASTRUCTURE,
STRUCTURES OR BUILDINGS PROPOSED UNDER THE LEASE BE RETAINED AND USED
FOR CEMETERY PURPOSES AFTER THE LEASE TERMINATES OR EXPIRES, THE APPLI-
CATION 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 APPLICA-
S. 6257--A 4
TION FOR A MAJOR ALTERATION IN CONJUNCTION WITH THE DECISION ON THE
APPLICATION TO LEASE CEMETERY LAND. IF THAT APPLICATION IS APPROVED,
SUCH INFRASTRUCTURE, BUILDINGS OR STRUCTURES SHALL BE EXCLUDED FROM THE
REQUIREMENTS OF SUBPARAGRAPH NINE OF PARAGRAPH (B) OF THIS SECTION.
(G) THE APPLICATION SHALL INCLUDE AT LEAST TWO WRITTEN ESTIMATES OF
THE COST OF REMOVING THE INFRASTRUCTURE, BUILDINGS AND STRUCTURES
EXCLUDING RETAINED INFRASTRUCTURE AND ASSOCIATED STRUCTURES AND RETURN-
ING THE LAND TO A CONDITION SUITABLE FOR BURIAL PURPOSES AT THE CONCLU-
SION OF THE LEASE.
(H) (1) THE CEMETERY BOARD SHALL APPROVE THE TYPE AND AMOUNT OF THE
SECURITY WHICH SHALL BE MAINTAINED IN FULL FORCE AND EFFECT, 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 CERTIF-
ICATE 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 PARA-
GRAPH 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 OR ANY DETERMINATION
OR APPROVAL MADE UNDER THIS PARAGRAPH.
(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.
(I) 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; AND
(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.
(J) 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,
S. 6257--A 5
THE CEMETERY BOARD MAY PERMIT ANY PORTION OF THE LEASE PAYMENTS OR OTHER
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 may 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.
