§ 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, 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
shall determine the method for repayment of such a loan by the cemetery
to the fund. If the cemetery clearly demonstrates it lacks sufficient
future revenue to make repayment such allowance from the permanent
maintenance fund shall be in the form of a grant that the cemetery is
not required to repay into its permanent maintenance fund. A cemetery,
including a surviving cemetery following a merger or consolidated
cemetery following a consolidation, may seek a modification of the
method of repayment, or conversion of a loan to a grant, if the cemetery
can clearly demonstrate that the cemetery merged or consolidated into
the surviving cemetery will not produce sufficient future revenue to
make repayment under the existing loan. (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, 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, 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) 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, 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 ordinary and
necessary care of a cemetery, such as the construction of cemetery
fences, placement of cemetery lights, removal of grass and weeds,
demolition or restoration of any buildings or structures in disrepair,
the refilling of graves, 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,
replacement of cemetery doors and locks, and the care of crypts, niches,
grave sites, monuments, and memorials paid for by means of the general
fund or special fund or the income applied from the permanent
maintenance fund, perpetual care fund or monument maintenance fund of
the abandoned cemetery. For the purposes of this paragraph, the term
"abandoned cemetery" may include cemeteries in imminent danger of
abandonment as determined by the New York state cemetery board.

(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, or a solvent
not-for-profit cemetery corporation that merges with an abandoned
cemetery in a city pursuant to section fifteen hundred six-d of this
article, for fair and reasonable expenses required to be made by the
municipality, other solvent not-for-profit cemetery corporation for
maintenance of an abandoned cemetery, or a solvent not-for-profit
cemetery corporation that merges with an abandoned cemetery in a city
pursuant to section fifteen hundred six-d of this article; provided,
however, that the cemetery board shall not approve any such application
unless the municipality, other solvent not-for-profit cemetery
corporation, or solvent not-for-profit cemetery corporation that merges
with an abandoned cemetery in a city pursuant to section fifteen hundred
six-d of this article 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, or the solvent not-for-profit
cemetery corporation that merges with an abandoned cemetery in a city
pursuant to section fifteen hundred six-d of this article. 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). The New York state
cemetery board shall approve or deny any application made pursuant to
this section no later than sixty days after receipt of a completed
application.

(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.