HOUSE BILL No. 4782 June 11, 1999, Introduced by Rep. LaSata and referred to the Committee on Family and Civil Law. A bill to amend 1968 PA 251, entitled "Cemetery regulation act," by amending sections 2, 16, and 18 (MCL 456.522, 456.536, and 456.538), as amended by 1982 PA 132. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 2. As used in this act: 2 (a) "Cemetery" means 1 or a combination of more than 1 of 3 the following: 4 (i) A burial ground for earth interments. 5 (ii) A mausoleum for crypt entombments. 6 (iii) A crematory for the cremation for human remains. 7 (iv) A columbarium for the deposit of cremated remains. 8 (b) "Interment" means the disposition of human remains by 9 earth interment, entombment, or inurnment. 03118'99 LBO 2 1 (c) "Burial right" means a right of earth interment. 2 (d) "Entombment right" means the right of crypt entombment 3 in a mausoleum or in an aboveground vault. 4 (e) "Columbarium right" means the right of inurnment in a 5 columbarium for cremated remains. 6 (f) "Mausoleum" means a structure used, or intended to be 7 used, for the entombment in a crypt or crypts in the structure of 8 the remains of deceased persons. 9 (g) "Crypt" means a chamber in a mausoleum of sufficient 10 size to entomb the uncremated remains of a deceased person. 11 (h) "Columbarium" means a structure or room or other space 12 in a building or structure used or intended to be used for the 13 inurnment or deposit of cremated remains. 14 (i) "Crematory" means a building or structure, within which 15 the remains of deceased persons are or are intended to be 16 cremated. 17 (j) "Cremation" means the incineration of the body of the 18 deceased person. 19 (k) "Cemetery services" means all services offered to the 20 public, including grave opening, closings, and foundation 21 installation. 22 (l) "Cemetery merchandise" means all merchandise sold to the 23 public by a cemetery, including vaults, concrete boxes, monu- 24 ments, memorials, and foundations. 25 (m) "Cemetery commissioner" or "commissioner" means the 26 director oflicensing and regulationTHE DEPARTMENT OF CONSUMER 27 AND INDUSTRY SERVICES or a designee of the director. 03118'99 3 1 (N) "REGISTRANT" MEANS AN INDIVIDUAL, SOLE PROPRIETORSHIP, 2 PARTNERSHIP, ASSOCIATION, CORPORATION, COMMON LAW TRUST, OR A 3 COMBINATION OF THOSE LEGAL OR BUSINESS ENTITIES. 4 Sec. 16. (1) The commissioner shall require each cemetery 5 to establish and maintain an irrevocable endowment care fund as 6 required by section 35a ofAct No. 87 of the Public Acts of71855, being section 456.35a of the Michigan Compiled Laws1855 8 PA 87, MCL 456.35A, or section 7a ofAct No. 12 of the Public9Acts of 1869, as amended, being section 456.107a of the Michigan10Compiled Laws1869 PA 12, MCL 456.107A, and to report annually 11 before July 1 of each year, on forms approved and furnished by 12 the commissioner, ENDOWMENT care fund information required to be 13 reported to the commissioner byother statutesLAW and informa- 14 tion regarding the funds as the commissioner considers pertinent 15 in the public interest. A cemetery applying to the commissioner 16 as authorized byother statutesLAW foraAN ENDOWMENT care 17 fund deposit modification or waiver shall be assessed the actual 18 expenses for an examination or investigation by the 19 commissioner. The commissioner shall require each person engaged 20 as agent or seller,as a means of livelihoodeither part time 21 or full time, in the selling of burial rights, entombment rights, 22 or columbarium rights owned by a party other than a cemetery or 23 corporation subject to the ENDOWMENT care fund requirements of 24 other laws, to deposit 15% of all gross proceeds received from 25 the sales of those rights into theirrevocableENDOWMENT care 26 fund of the cemetery in which the rights are located if an 27irrevocableENDOWMENT care fund exists for that cemetery. 03118'99 4 1 Excess sums on deposit in the ENDOWMENT CARE fundcanMAY be 2 applied by a cemetery against future deposits. A deposit 3 required to be made by those persons shall be modified or waived 4 if the cemetery has receivedaAN ENDOWMENT care fund deposit 5 modification or waiver approved by the commissioner. The total 6 deposit for a single adult burial right sale or assignment shall 7 not be less than $20.00. 8 (2) A cemetery which is required to register pursuant to 9 this act and an agentwhich isauthorized by a cemetery or 10 acting on its behalf under an agreement or sales contract to sell 11 cemetery merchandise or cemetery services shall establish a mer- 12 chandise trust account and deposit a percentage of the gross pro- 13 ceeds received from the sales as determined by the commissioner. 14 The merchandise trust account shall be maintained exclusively for 15 the deposit of the money into a bank or trust company located in 16 this state under the terms of a written trust agreement approved 17 by the commissioner. The funds shall be deposited not later than 18 the month following their receipt. 19 (3) The total deposits to a merchandise trust for the sale 20 of cemetery burial vaults or other outside containers, other than 21 crypts installed underground and sold as part of a cemetery lot, 22 shall at all times be not less than the greater of $100.00 per 23 vault or outside container or 130% of the total costs of the con- 24 tainers covered by the MERCHANDISE trust. Money deposited in 25 connection with a sale shall be repaid within 30 days upon writ- 26 ten demand of purchaser. A burial vault shall be installed only 27 at need or by separate written authorization of the purchaser. 03118'99 5 1 The cemetery shall have the right to withdraw the amount on 2 deposit for the delivered vault or outside container. 3 (4) A contract or agreementmadewith a purchaser of ceme- 4 tery merchandise and CEMETERY services shall contain a complete 5 description of the cemetery merchandise purchased and of the 6 CEMETERY services to be rendered. 7 (5) The commissioner shall require each cemetery oragent8 authorizedby it acting on its behalfAGENT to FILE A report 9 annually before July 1 of each year on forms provided by the 10 commissioner. ThereportsREPORT shall contain information 11asthe commissioner considers necessary to ascertainthat12 COMPLIANCE WITH this act.is being implemented.13 (6) If, after an audit by the commissioner's staff, a defi- 14 cit in the amount of required deposits to the trust funds is 15 found, the commissioner may assess a penalty not to exceed 10% of 16 the amount of the deficit. The cemeteryor entity of a17cemeterymay request a hearing before the commissioner within 30 18 days after being notified of a deficit by the commissioner.If,19following theAFTER NOTICE AND OPPORTUNITY FOR A hearing, IF the 20commissioner determines thatFINDING OF a deficitdoes exist,21 IS NOT REVERSED OR MODIFIED, THE COMMISSIONER MAY ASSESS an addi- 22 tional penalty not to exceed 1.5%may be assessed each monthon 23 the unpaid monthly balance FOR EACH MONTH until the deficit is 24 paid in full. 25 (7) IF THE COMMISSIONER FINDS THAT A REGISTRANT HAS VIOLATED 26 THIS ACT OR A RULE PROMULGATED UNDER THIS ACT REGARDING THE 27 OPERATION OR MAINTENANCE OF AN ENDOWMENT CARE FUND INCLUDING, BUT 03118'99 6 1 NOT LIMITED TO, VIOLATIONS REGARDING DEPOSITS TO AND WITHDRAWALS 2 FROM AN ENDOWMENT CARE FUND REGULATED BY THIS ACT, THE COMMIS- 3 SIONER MAY INVESTIGATE ANY ENDOWMENT CARE FUND MAINTAINED OR 4 OPERATED UNDER 1855 PA 87, MCL 456.1 TO 456.36, OR 1869 PA 12, 5 MCL 456.101 TO 456.119, AND ORDER THE REGISTRANT TO PLACE THAT 6 ENDOWMENT CARE FUND UNDER THE CONTROL OF A FINANCIAL INSTITUTION 7 OR TRUST COMPANY, ACCEPTABLE TO THE COMMISSIONER, AS TRUSTEE OF 8 THE FUND. CONTROL OF THE ENDOWMENT CARE FUND BY THE FINANCIAL 9 INSTITUTION OR TRUST COMPANY SHALL BE AUTHORIZED PURSUANT TO A 10 WRITTEN TRUST AGREEMENT APPROVED BY THE COMMISSIONER AND SHALL 11 PROVIDE THAT THE AGREEMENT OPERATE UNTIL FURTHER ORDER OF THE 12 COMMISSIONER. 13 (8)(7)All fees, charges, and penalties collected under 14 this act, other than fines prescribed in section 21, shall be 15 paid to the commissioner. Upon receipt, the commissioner shall 16 remit funds received to the department of treasury for deposit in 17 the general fund of the state. 18 Sec. 18. (1) The commissioner may deny an application filed 19 under this act,and refuse to issue a permit or registration,20or'may suspend or revoke a permit or registration, or may repri- 21 mand, place on probation, or take other disciplinary action 22 against the applicant OR REGISTRANT if the commissioner's inves- 23 tigation reveals facts which, with reference to the establishment 24 of a cemetery, showinappropriateANY OF THE FOLLOWING: 25 (A) INAPPROPRIATE physical plans.; lack26 (B) LACK of community need.; inadequate03118'99 7 1 (C) INADEQUATE experience, financial stability, or integrity 2 to protect the public welfare.; or when the commissioner finds3that the4 (D) THE applicant OR REGISTRANT or its officers or general 5 manager has done 1 or more of the following: 6 (i)(a)Made a false statement of a material fact in the 7 application. 8 (ii)(b) Not compliedFAILED TO COMPLY with this act. 9 (iii)(c)Been FOUND guilty of a fraudulent act in connec- 10 tion with selling or otherwise dealing in cemetery lots, burial 11 rights, or services of a type required to be registered under 12 this act. 13 (iv)(d)Been FOUND guiltyin the judgment of the14commissionerof other conduct, whether of the same or different 15 character, than specified in this act which constitutes dishonest 16 and unfair dealing AS DETERMINED BY THE COMMISSIONER. 17 (v)(e)Violated the terms of an assurance of discontinu- 18 ance entered into with the commissioner pursuant to section 19 9(2). 20 (vi)(f)Adopted, enforced, or attempted to enforce, a 21 regulation of the cemetery which prohibits the installation of a 22 grave memorial or burial vault unless the grave memorial or 23 burial vault was purchased from the cemetery. However, this sub- 24 divisionshallDOES not prohibit a cemetery from adopting and 25 enforcing consistent rules and regulations to be followed by both 26 the cemetery and outside vendors as to the quality, size, shape, 03118'99 8 1 type, installation, and maintenance of the grave memorial or 2 burial vault. 3 (2) If the commissioner denies an application for a permit 4 or registration, or suspends or revokes an existing permit or 5 registration required by this act, the denial, revocation, or 6 suspension shallrevokeOPERATE AS A REVOCATION OF the cemetery 7 operation as to the sale or assignment of burial rights, entomb- 8 ment rights, columbarium rights, cemetery merchandise, or ceme- 9 tery services after the date of the suspension, revocation, or 10 denial. The corporation shall fulfill all contractual obliga- 11 tions and agreements entered into before the date of the suspen- 12 sion, revocation, or denial, and shall make required interments 13 for the owners of burial rights, entombment rights, or columbar- 14 ium rights purchased before the date of suspension, revocation, 15 or denial. 03118'99 Final page. LBO