June 21, 2006, Introduced by Reps. Gaffney, Waters, McConico, Virgil Smith, Cushingberry and Cheeks and referred to the Committee on Commerce.
A bill to amend 1968 PA 251, entitled
"Cemetery regulation act,"
by amending section 16 (MCL 456.536), as amended by 2004 PA 22.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 16. (1) The commissioner shall require each cemetery to
establish and maintain an irrevocable endowment care fund as
required by section 35a of 1855 PA 87, MCL 456.35a, or section 7a
of 1869 PA 12, MCL 456.107a, and to report annually before July 1
of each year, on forms approved and furnished by the commissioner,
care fund information required to be reported to the commissioner
by other statutes and information regarding the funds as the
commissioner considers pertinent in the public interest. A cemetery
applying to the commissioner as authorized by other statutes for a
care fund deposit modification or waiver shall be assessed the
actual expenses for an examination or investigation by the
commissioner. The commissioner shall require each person engaged as
agent or seller, as a means of livelihood either part time or full
time, in the selling of burial rights, entombment rights, or
columbarium rights owned by a party other than a cemetery or
corporation subject to the irrevocable endowment care fund
requirements of other laws, to deposit 15% of all gross proceeds
received from the sales of those rights into the irrevocable
endowment care fund of the cemetery in which the rights are located
if an irrevocable endowment care fund exists for that cemetery.
Excess sums on deposit in the fund can be applied by a cemetery
against future deposits. Earnings in the form of capital gains from
the sale of an asset in the endowed care trust fund shall be
considered a deposit to the principal or the corpus of the trust
and shall not be considered a part of net income or earnings to be
used for endowment care. However, not more than 50% of the
accumulated net capital gains as of December 31, 2005, and,
thereafter, not more than 50% of the accumulated annual net capital
gains, may be withdrawn from the principal or corpus of the fully
funded endowment care trust fund and used for the sole purpose of
endowment care. A deposit required to be made by those persons
shall be modified or waived if the cemetery has received an
irrevocable endowment care fund deposit modification or waiver
approved by the commissioner. The total deposit for a single adult
burial right sale or assignment shall not be less than $20.00.
(2) Subject to subsection (8), a cemetery which is required to
register pursuant to this act and an agent which is authorized by a
cemetery or acting on its behalf under an agreement or sales
contract to sell cemetery merchandise or cemetery services shall
establish a merchandise trust account and deposit a percentage of
the gross proceeds received from the sales as determined by the
commissioner. The merchandise trust account shall be maintained
exclusively for the deposit of the money into a state or national
bank, a state or federally chartered savings and loan association,
or a trust company under the terms of a written trust agreement
approved by the commissioner. It shall be the responsibility of
each registrant under this act to assure that documents relating to
the merchandise trust account are provided to the commissioner upon
request. If a subpoena is issued to obtain these documents, the
registrant shall pay all costs related to obtaining the documents
regardless of the $100.00 charge limitation contained in section
12a(2). The funds shall be deposited not later than the month
following their receipt.
(3) Subject to subsection (8), the total deposits to a
merchandise trust for the sale of cemetery burial vaults or other
outside containers, other than crypts installed underground and
sold as part of a cemetery lot, shall at all times be not less than
the greater of $100.00 per vault or outside container or 130% of
the total costs of the containers covered by the trust. Money
deposited in connection with a sale shall be repaid within 30 days
upon written demand of purchaser. A burial vault shall be installed
only at need or by separate written authorization of the purchaser.
The cemetery shall have the right to withdraw the amount on deposit
for the delivered vault or outside container.
(4) Subject to subsection (8), a contract or agreement made
with a purchaser of cemetery merchandise and cemetery services
shall contain a complete description of the cemetery merchandise
purchased and of the cemetery services to be rendered.
(5) The commissioner shall require each cemetery or agent
authorized by it acting on its behalf to report annually before
July 1 of each year on forms provided by the commissioner. The
reports shall contain information as the commissioner considers
necessary to ascertain that this act is being implemented.
(6) If, after an audit by the commissioner's staff, a deficit
in the amount of required deposits to the trust funds is found, the
commissioner may assess a penalty not to exceed 10% of the amount
of the deficit. The cemetery or entity of a cemetery may request an
administrative hearing before the commissioner within 30 days after
being notified of a deficit by the commissioner. If, following the
administrative hearing, the commissioner determines that a deficit
does exist, an additional penalty not to exceed 1.5% may be
assessed each month on the unpaid monthly balance until the deficit
is paid in full.
(7) All fees, charges, and penalties collected under this act,
other than fines prescribed in section 21, shall be paid to the
commissioner. Upon receipt, the commissioner shall remit funds
received to the department of treasury for deposit in the general
fund of the state.
(8) Any preneed contracts for cemetery merchandise or services
entered into on or after January 1, 2005 are subject to the prepaid
funeral and cemetery sales act, 1986 PA 255, MCL 328.211 to
328.235.
(9)
As used in this section: , "endowment
(a) "Endowment care" means all general work necessary to keep
the cemetery property in a presentable condition at all times,
including, but not limited to, the cutting of grass at reasonable
intervals; raking, cleaning, filling, seeding, and sodding of
graves; replacement, pruning, or removal of shrubs and trees in
order to assure access to interment rights; and the repair and
maintenance of enclosures, buildings, drives, walks, and the
various memorial gardens.
(b) "Net capital gains" means the amount by which cumulative
capital gains of the fully funded endowment care trust fund exceed
the sum of capital losses of the trust fund.