NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

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(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

Financial Institutions Division, Regulation and Licensing Department

SUMMARY

Synopsis of Bill

House Bill 585 will amend the Endowed Care Cemetery Act to accomplish the following objectives:

• •Allows the pooling of trust funds by cemeteries to obtain economic efficiencies.
• •Clarifies exemptions which result in additional cemeteries being subject to the Act.
• •Allows trust fund deposits in all state and federally chartered financial institutions.
• •Requires a new registration upon sale of a cemetery.
• •Clarifies administrative procedures to enforce the Act including establishing criteria for denial, suspension or revocation of registration.
• •Establishes late fees for failure to file and fourth degree felony charges for violating the Act.
• •Requires an increased amount of initial trust fund deposit or a bond in lieu of deposit.
• •Increases the initial deposit requirement from $20.0 to $25.0. The bond requirement is increased from $30.0 to $35.0.

Significant Issues

This bill allows cemetery trust funds to be commingled, upon approval of the Financial Institutions Division Director. This is significant for smaller cemeteries to allow greater efficiencies through economies of scale and lower maintenance costs of the trust funds. This will increase funding availability for endowed care.

The bill clarifies the exemption for municipal, fraternal, religious and family cemeteries that provide burial only for family members.

The bill establishes new provisions concerning establishment of a cemetery authority, transfer of ownership, denial or revocation of registration and judicial review.

PERFORMANCE IMPLICATIONS

This bill may affect the Financial Institution Division's performance output measure which states that 80 percent of the applications will be processed within a standard number of days.

FISCAL IMPLICATIONS

There is no additional cost to the department anticipated with the passage of this bill.

The clarification of exemptions may result in minimal additional new revenue according to the department.

ADMINISTRATIVE IMPLICATIONS

No impact.

MV/ar/njw