May 21, 2003, Introduced by Senator TOY and referred to the Committee on Local, Urban and State Affairs.
A bill to amend 1968 PA 251, entitled
"Cemetery regulation act,"
by amending the title and sections 2, 8, 9, 10, 12, 12a, 13, 15,
18, 19, and 21 (MCL 456.522, 456.528, 456.529, 456.530, 456.532,
456.532a, 456.533, 456.535, 456.538, 456.539, and 456.541), the
title and sections 2, 8, 12, 12a, 13, 15, 18, 19, and 21 as
amended by 1982 PA 132, section 9 as amended by 2002 PA 550, and
section 10 as amended by 1982 PA 289; and to repeal acts and
parts of acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 TITLE
2 An act to regulate the creation and management of
3 cemeteries; to
regulate the sale of cemetery services and
4 merchandise; to provide for a cemetery commissioner, and to
5 prescribe the powers and duties of the commissioner; to require
1 the registration and audit of cemeteries; to regulate persons
2 selling burial,
entombment, or columbarium rights; , cemetery
3 services, or cemetery
merchandise; and to prescribe remedies
and
4 penalties.
5 Sec. 2. As used in this act:
6 (a) "Cemetery" means 1 or a combination of more than 1 of the
7 following:
8 (i) A burial ground for earth interments.
9 (ii) A mausoleum for crypt entombments.
10 (iii) A crematory for the cremation for human remains.
11 (iv) A columbarium for the deposit inurnment
of cremated
12 remains.
13 (b) "Interment" means the disposition of human remains by
14 earth interment, entombment, or inurnment.
15 (c) "Burial right" means a right of earth interment.
16 (d) "Entombment right" means the right of crypt entombment in
17 a mausoleum or in an aboveground vault.
18 (e) "Columbarium right" means the right of inurnment in a
19 columbarium for cremated remains.
20 (f)
"Mausoleum" means a structure used, or intended to be
21 used, for the
entombment in a crypt or crypts in the structure of
22 the remains of
deceased persons building or
other aboveground
23 structure that is affixed to land and is a permanent repository
24 for human remains.
25 (g) "Crypt" means a chamber in a mausoleum of sufficient size
26 to entomb the uncremated remains of a deceased person.
27 (h)
"Columbarium" means a structure or room or other space
1 in a building or other aboveground structure used
or intended
2 to be used for the
inurnment or deposit of that is
affixed to
3 land and is a permanent repository for cremated human remains.
4 (i) "Crematory" means a building or structure, within which
5 the remains of deceased persons are or are intended to be
6 cremated.
7 (j) "Cremation" means the incineration of the body of the
8 deceased person.
9 (k)
"Cemetery services" means all services offered to the
10 public, including
grave opening, closings, and foundation
11 installation.
12 (l) "Cemetery merchandise" means all
merchandise sold to the
13 public by a cemetery,
including vaults, concrete boxes,
14 monuments, memorials,
and foundations.
15 (k) (m) "Cemetery
commissioner" or "commissioner" means the
16 director of licensing
and regulation the department of consumer
17 and industry services or a designee of the director.
18 (l) "Municipal corporation" means that term as defined in
19 section 1 of 1927 PA 10, MCL 456.181.
20 (m) "Person" means an individual, group of individuals, sole
21 proprietorship, partnership, limited liability company,
22 association, corporation, government agency, cemetery, or a
23 combination of these legal entities.
24 Sec. 8. The commissioner may promulgate rules in accordance
25 with and subject to Act
No. 306 of the Public Acts of 1969, as
26 amended, being
sections 24.201 to 24.315 of the Michigan Compiled
27 Laws the administrative procedures act of 1969, 1969 PA
306, MCL
1 24.201 to 24.328, to implement and administer this act, including
2 rules regarding all of the following:
3 (a) The maintaining
maintenance of records relative to the
4 financial aspects of cemeteries.
5 (b) Requirements for applications for the granting of permits
6 and registrations required under this act.
7 (c) The formal and informal procedures governing the conduct
8 of contested cases under this act before the commissioner or an
9 authorized hearing officer.
10 (d) Requirements
for the establishment and maintenance of
11 special trust funds to
provide for the future performance
12 obligations and
special care or decoration obligations of
13 cemeteries.
14 Sec. 9. (1) The commissioner may hold administrative
15 hearings, administer oaths, take testimony under oath, and
16 request in writing the appearance and testimony of witnesses,
17 including the production of books and records pursuant to the
18 administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to
19 24.328. Upon the refusal of a witness to appear, testify, or
20 submit books and records after a written request, the
21 commissioner or a party to a contested case may apply to the
22 circuit court for Ingham county for a subpoena or a subpoena
23 duces tecum. The court shall issue a subpoena when reasonable
24 grounds are shown.
25 (2) When If
it appears to the commissioner that a person or
26 registrant has violated this act or a rule promulgated or order
27 issued under this act, the commissioner may do 1 or more of the
1 following:
2 (a) Issue a cease and desist order.
3 (b) Accept an assurance of discontinuance.
4 (c) Bring an action in the circuit court for the county in
5 which the person resides or in the circuit court for the county
6 of Ingham, to enforce compliance with this act or a rule
7 promulgated or order issued under this act.
8 (3) Upon a proper showing regarding an action brought under
9 subsection (2)(c), a permanent or temporary injunction or a
10 restraining order may be granted and a receiver or conservator
11 may be appointed by the court. A receiver or conservator
12 appointed by the court may take possession of the assets and may
13 sell, assign, transfer, or convey the cemetery to a municipal
14 corporation or other person other than the holder of a license
15 for the practice of mortuary science or a person who owns,
16 manages, supervises, operates, or maintains, either directly or
17 indirectly, a funeral establishment, under conditions prescribed
18 by the court , in
order to discharge outstanding contractual
19 obligations. A receiver appointed under this section has all the
20 powers, authority, and remedies of an assignee for the benefit of
21 creditors under chapter 52 of the revised judicature act of 1961,
22 1961 PA 236, MCL 600.5201 to 600.5265. The court may allow the
23 receiver or conservator to file for protection under the
24 bankruptcy code.
25 (4) In the order of sale of the cemetery, the court shall
26 make provision for notice to creditors and the filing of claims
27 against the receivership or conservatorship. Any remaining funds
1 held by the cemetery in escrow under this act belong to the
2 contract buyers or beneficiaries of the contract buyers and shall
3 not be distributed to the general creditors of the cemetery.
4 This section does not prohibit the court from allowing the sale
5 of the cemetery to a person other than the holder of a license
6 for the practice of mortuary science or a person who owns,
7 manages, supervises, operates, or maintains, either directly or
8 indirectly, a funeral establishment, or to a municipal
9 corporation.
10 (5) In addition to an action taken under this section, the
11 commissioner may deny an application or may suspend or revoke a
12 permit or registration after a hearing as set forth in this act.
13 (6) As used in
this section, "municipal corporation" means
14 that term as defined
in section 1 of 1927 PA 10, MCL 456.181.
15 Sec. 10. (1) The commissioner shall institute and maintain
16 a system of auditing trust funds required by this act and of
17 registering each cemetery authorized to be created, maintained,
18 and operated under Act
No. 12 of the Public Acts of 1869, as
19 amended, being
sections 456.101 to 456.119 of the Michigan
20 Compiled Laws 1869 PA 12, MCL 456.101 to 456.119, and Act
21 No. 87 of the Public
Acts of 1855, as amended, being sections
22 456.1 to 456.36 of the
Michigan Compiled Laws 1855
PA 87, MCL
23 456.1 to 456.36, and conducting sales under the prepaid funeral
24 and cemetery sales act, 1986 PA 255, MCL 328.211 to 328.235, as
25 well as any other cemetery operating under state law or local
26 ordinance. A cemetery
owned and operated by a municipality
27 municipal corporation,
church, or religious institution shall
1 be is exempt from this act. However, a municipality
municipal
2 corporation may pass ordinances necessary for regulating that
3 municipality's municipal corporation's cemeteries.
4 (2) A cemetery for earth interment of 10 acres or less in
5 size, which is owned and operated entirely and exclusively by an
6 existing nonprofit entity and in which a burial has taken place
7 before September 15, 1968, shall
be is exempt from the fee
8 provisions of this act,
. That cemetery shall have its the
9 trust fund required by this act audited at the discretion of the
10 commissioner, .
It shall also be and is exempt from the
11 endowment care trust
fund requirements of section 16 12a of the
12 prepaid funeral and cemetery sales act, 1986 PA 255, MCL
13 328.222a, except as
to the care fund for the report
14 requirements if the
cemetery maintains care or memorial funds.
15 (3) On a periodic basis determined appropriate by the
16 commissioner but not less than once every 3 years, the commission
17 shall inspect the facilities and grounds of a cemetery. The
18 commission may charge the cemetery for the actual expenses for
19 the inspection but not more than $1,000.00.
20 Sec. 12. (1) A
person or business entity shall not
21 establish a cemetery without a valid permit or operate an
22 existing cemetery except under a valid registration issued under
23 this act.
24 (2) If a person or
business entity proposes to purchase or
25 otherwise acquire a controlling interest in an existing cemetery
26 company, that person or
business entity shall first make
27 application apply to the commissioner for a certificate of
1 approval of a proposed change of control of a cemetery company.
2 The application shall contain the name and address of the
3 proposed new owner or operator and other information as the
4 commissioner requires. The commissioner shall issue a
5 certificate of approval only after he or she is satisfied that
6 the proposed new owner is qualified by character, experience, and
7 financial responsibility to control and operate the cemetery in a
8 legal and proper manner, and that the interest of the public
9 generally will not be jeopardized by the proposed change in
10 ownership and management. The application for a purchase or
11 change of control must be accompanied by an initial filing or
12 investigation fee of
$500.00. As used in this section,
13 "controlling interest"
means the capability to decide the
14 operating and
financial policies of the cemetery company or to
15 select a majority of
the officers or directors of the cemetery
16 company. In deciding
whether a person or business entity has or
17 proposes to acquire a
controlling interest, the percentage of the
18 stock, assets, or
other indicia of ownership which a person or
19 business entity
acquires or proposes to acquire need not be the
20 only factor considered
by the commissioner. If a person or
21 business entity fails to comply with this section, the
22 commissioner shall order
that a an administrative hearing be
23 held. If a transfer of controlling interest is found to have
24 taken place without prior commissioner approval, the commissioner
25 in his or her
discretion may shall suspend
or revoke the
26 registration of the
cemetery or take other appropriate action to
27 insure until it demonstrates compliance with this
section.
1 (3) A cemetery that operates under a name other than the name
2 under which it is registered pursuant to this act shall include
3 the name under which it is registered in all printed matter or
4 marketing material created by, at the direction of, or on behalf
5 of the cemetery. In addition, the name of the person having a
6 controlling interest in the cemetery shall appear as the owner in
7 all printed matter or marketing material created by, at the
8 direction of, or on behalf of the cemetery. If the cemetery has
9 a sales office, the name of the person having a controlling
10 interest in the cemetery shall be conspicuously displayed in the
11 lobby of that office.
12 (4) As used in this section, "controlling interest" means the
13 capability to decide the operating and financial policies of the
14 cemetery company or to select the officers or directors with
15 majority control of the cemetery company or the right to receive
16 more than 50% of the dividends or profits.
17 Sec. 12a. (1) The commissioner or an examiner,
18 investigator, or other person the commissioner may appoint, may
19 visit and examine the
affairs of any cemetery or business
20 entity person required to register under this act and
shall have
21 free access to the books, papers, records, and documents that
22 relate to the business of
the cemetery corporation, business
23 entity person, or agent acting on its behalf.
24 (2) The books, papers, records, and documents shall be
25 available for inspection or audit at any time during regular
26 business hours with reasonable notice. One or more qualified
27 person persons shall conduct the audit whose services
shall be
1 charged to and paid by the cemetery at the rate of $10.00 per
2 hour, but not more than $100.00
$1,000.00 total.
3 Sec. 13. (1)
Any person or business entity desiring to
4 establish a cemetery shall file with the commissioner, on forms
5 furnished by the commissioner, an application for a permit to
6 establish a cemetery. The application shall be accompanied by an
7 investigation fee of $500.00.
8 (2) After a receipt of an application, the commissioner shall
9 make conduct an investigation pertaining to the
physical plans,
10 the community need for the planned cemetery, and pertinent
11 information pertaining to the applicant's experience, financial
12 stability, ability, and
integrity. If the applicant is other
13 than not a natural person, the same investigation
shall be made
14 of the general manager and principal owners.
15 Sec. 15. (1)
Each individual or business entity person
16 operating a cemetery shall register the cemetery by filing with
17 the commissioner a registration application before June 2 of each
18 year, on a form furnished by the commissioner, and accompanied by
19 the registration fee. Registrations
shall expire A
20 registration expires on July 1 of each year.
21 (2) If the commissioner intends to deny registration, the
22 procedure set forth in section 19 shall be followed. The
23 commissioner may impose a late penalty filing fee of $10.00 per
24 day on an individual
or business entity a person which filed a
25 registration application
after June 1. or on an individual or
26 business entity which
files a trust fund report after the due
27 date set forth in this
act.
1 Sec. 18. (1) The commissioner may deny an application filed
2 under this act and refuse to issue a permit or registration, or
3 may suspend or revoke a permit or registration, or may reprimand,
4 place on probation, or take other disciplinary action against the
5 applicant if the commissioner's investigation reveals facts
6 which, with reference to the establishment of a cemetery, show
7 inappropriate physical plans; lack of community need; inadequate
8 experience, financial stability, or integrity to protect the
9 public welfare; or when the commissioner finds that the applicant
10 or its officers or general manager has done 1 or more of the
11 following:
12 (a) Made a false statement of a material fact in the
13 application.
14 (b) Not complied with this act.
15 (c) Been guilty of a
an unlawful or fraudulent act in
16 connection with selling
or otherwise dealing in cemetery lots,
17 burial rights, funeral or cemetery merchandise or
services of a
18 type required to be registered
under this regulated by the
19 prepaid funeral and cemetery sales act, 1986 PA 255, MCL 328.211
20 to 328.235.
21 (d) Been guilty in the judgment of the commissioner of other
22 conduct whether of the same or different character than specified
23 in this act which constitutes dishonest and unfair dealing.
24 (e) Violated article 18 of the occupational code, 1980 PA
25 299, MCL 339.1801 to 339.1812.
26 (f) (e) Violated
the terms of an assurance of
27 discontinuance entered into with the commissioner pursuant to
1 section 9(2).
2 (g) Violated the prepaid funeral and cemetery sales act, 1986
3 PA 255, MCL 328.211 to 328.235.
4 (h) Failed to comply with section 2080 of the insurance code
5 of 1956, 1956 PA 218, MCL 500.2080.
6 (i) (f) Adopted,
enforced, or attempted to enforce a
7 regulation of the
cemetery which that prohibits the
8 installation of a grave memorial or burial vault unless the grave
9 memorial or burial vault was purchased from the cemetery.
10 However, this This subdivision shall does
not prohibit a
11 cemetery from adopting and enforcing consistent rules and
12 regulations to be followed by both the cemetery and outside
13 vendors as to the quality, size, shape, type, installation, and
14 maintenance of the grave memorial or burial vault.
15 (2) If the commissioner denies an application for a permit or
16 registration, or suspends or revokes an existing permit or
17 registration required by this act, the denial, revocation, or
18 suspension shall revoke the cemetery operation as to the sale or
19 assignment of burial rights, entombment rights, or columbarium
20 rights, cemetery merchandise, or cemetery services after the date
21 of the suspension, revocation, or denial. The corporation shall
22 fulfill all contractual obligations and agreements entered into
23 before the date of the suspension, revocation, or denial, and
24 shall make required interments for the owners of burial rights,
25 entombment rights, or columbarium rights purchased before the
26 date of suspension, revocation, or denial.
27 (3) The commissioner may impose an administrative fine of not
1 more than $5,000.00 for each separate violation of this act.
2 Sec. 19. If the commissioner intends to deny an application
3 for a permit to establish a cemetery, to refuse registration of
4 an existing cemetery, or to suspend or revoke a registration, the
5 commissioner shall give
written notice to the person or
6 business involved of that intent. The notice shall state a
time
7 and a place for hearing before the commissioner or a designated
8 hearing officer, and a summary statement of the reasons for the
9 proposed action. The notice of intent shall be mailed by
10 certified mail to the applicant at least 15 days before the
11 scheduled hearing date. The commissioner shall hold a hearing
12 pursuant to the notice in
the manner required by Act No. 306 of
13 the Public Acts of
1969, as amended, being sections 24.201 to
14 24.315 of the Michigan
Compiled Laws administrative
procedures
15 act of 1969, 1969 PA 306, MCL 24.201 to 24.328, and the rules of
16 procedure adopted by the
commissioner. , and The commissioner
17 shall make issue
a written decision.
18 Sec. 21. (1)
A person , firm, partnership, association, or
19 corporation who violates this act is guilty of a misdemeanor,
20 and, if a natural person, the first offense shall be punishable
21 by a fine of not more than $100.00 or imprisonment for not more
22 than 90 days, and a second offense shall be punishable by a fine
23 of not more than $500.00 or imprisonment for not more than 1
24 year, or both.
25 (2) If the violator is other than a natural person, the first
26 offense shall be punishable by a fine of not more than $100.00
27 and the second offense shall be punishable by a fine of not more
1 than $1,000.00.
2 Enacting section 1. This amendatory act does not take
3 effect unless Senate Bill No. 512
4 of the 92nd Legislature is enacted into
5 law.
6 Enacting section 2. Section 16 of the cemetery regulation
7 act, 1968 PA 251, MCL 456.536, is repealed.