May 1, 2008, Introduced by Reps. Sak, Farrah, Virgil Smith, Shaffer, Wojno, Hammon, Amos, Pavlov, Knollenberg, Condino, Green, Meadows, Dean and Cushingberry and referred to the Committee on Regulatory Reform.
A bill to amend 1968 PA 251, entitled
"Cemetery regulation act,"
by amending the title and sections 2, 2a, 8, 9, 10, 12, 12a, 13,
15, 16, 18, 19, and 21 (MCL 456.522, 456.522a, 456.528, 456.529,
456.530, 456.532, 456.532a, 456.533, 456.535, 456.536, 456.538,
456.539, and 456.541), the title and sections 2, 8, 9, 10, 12, 12a,
13, 15, 16, 18, 19, and 21 as amended by 2004 PA 22 and section 2a
as added by 1982 PA 132, and by adding sections 9a, 9b, 9c, and
16b; and to repeal acts and parts of acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
TITLE
An act to regulate the creation, ownership, and management of
cemeteries;
to provide for a cemetery commissioner
, and to
prescribe the powers and duties of the commissioner; to require the
registration, investigation, and audit of cemeteries and licensure
of cemetery owners; to provide for long-term care of certain
cemeteries; to regulate persons selling burial, entombment, or
columbarium rights and certain merchandise; to provide for immunity
and indemnification to certain persons under certain circumstances;
and to prescribe remedies and penalties.
Sec. 2. As used in this act:
(a) "Cemetery" means 1 or a combination of more than 1 of the
following:
(i) A burial ground for earth interments.
(ii) A mausoleum for crypt entombments.
(iii) A crematory for the cremation for human remains.
(iv) A columbarium for the inurnment of cremated remains.
(b) "Interment" means the disposition of human remains by
earth interment, entombment, or inurnment.
(c) "Burial right" means a right of earth interment.
(d) "Entombment right" means the right of crypt entombment in
a mausoleum or in an aboveground vault.
(e) "Columbarium right" means the right of inurnment in a
columbarium for cremated remains.
(f) "Mausoleum" means a building or other aboveground
structure that is affixed to land and is a permanent repository for
human remains.
(g) "Crypt" means a chamber in a mausoleum of sufficient size
to entomb the uncremated remains of a deceased person.
(h) "Columbarium" means a building or other aboveground
structure that is affixed to land and is a permanent repository for
cremated human remains.
(i) "Crematory" means a building or structure, within which
the remains of deceased persons are or are intended to be cremated.
(j) "Cremation" means the incineration of the body of the
deceased person.
(k) "Cemetery commissioner" or "commissioner" means the
director of the department of labor and economic growth or a
designee of the director.
(l) "Municipal corporation" means that
term as defined in
section
1 of 1927 PA 10, MCL 456.181 a
county, city, village, or
township.
(m) "Person" means an individual, group of individuals, sole
proprietorship, partnership, limited liability company,
association, corporation, government agency, cemetery, or a
combination of these legal entities.
(n) "Endowment care" and "perpetual care" mean 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.
(o) "Good moral character" means that term as defined and
determined under 1974 PA 381, MCL 338.41 to 338.47.
(p) "Licensee" means a person licensed under this act.
(q) "Cemetery owner" or "owner" means the person who has title
to the cemetery.
(r) "A person directly or indirectly controlling the cemetery
owner" means any of the following:
(i) A person, an officer of a person, a partner of a person, or
a member or manager of a limited liability company, who holds more
than 50% voting rights in a cemetery owner.
(ii) A person who is a member of the board of directors of a
cemetery owner, a partner in a cemetery owner, or a member or
manager of a limited liability company that is a cemetery owner.
(iii) An administrative official of the cemetery owner or the
person described in subparagraph (i), comparable to a chief
administrative officer, chief executive officer, or chief financial
officer.
Sec. 2a. The cemetery commissioner, or the commissioner's
spouse or child, shall not have a direct or indirect financial
interest in a cemetery, cemetery operations, a supplier of cemetery
services or cemetery memorials, or a funeral establishment as
defined
in section 1801 of Act No. 299 of the Public Acts of 1980,
being
section 339.1801 of the Michigan Compiled Laws the
occupational code, 1980 PA 299, MCL 339.1801.
Sec.
8. The commissioner may promulgate rules in accordance
with
and subject to under the administrative procedures act of
1969, 1969 PA 306, MCL 24.201 to 24.328, to implement and
administer this act, including, but not limited to, rules regarding
all of the following:
(a) The maintenance of records relative to the financial
aspects of cemeteries.
(b) Requirements for applications for the granting of
licenses, permits, and registrations required under this act,
including, but not limited to, the good moral character and
financial security and stability, and responsibility, of the actual
or proposed person directly or indirectly controlling the cemetery
owner.
(c) The formal and informal procedures governing the conduct
of
contested cases under this act before the commissioner or an
authorized
a hearing officer designated by the commissioner.
(d) Requirements for trust agreements under this act.
(e) The establishment, control, record keeping, and auditing
of endowment care trust or perpetual care trust funds under this
act, merchandise trust accounts, merchandise escrow accounts,
special construction trust funds, cemetery development funds, and
funds regulated under the prepaid funeral and cemetery sales act,
1986 PA 255, MCL 328.211 to 328.235.
(f) The provision of perpetual care.
Sec. 9. (1) The commissioner may hold hearings, conduct
investigations, administer oaths, take testimony under oath, and
request in writing the appearance and testimony of witnesses,
including
the production of books and records. Upon the refusal of
a
witness to appear, testify, or submit books and records after a
written
request, the commissioner or a party to a contested case
may
apply to the circuit court for Ingham county for a subpoena or
a
subpoena duces tecum. The court shall issue a subpoena when
reasonable
grounds are shown.
(2) In furtherance of the commissioner's investigative powers,
the commissioner may petition the Ingham county circuit court or
another court of competent jurisdiction to issue a subpoena or
subpoena duces tecum requiring a person to appear before the
commissioner, or a designee, in reference to a matter within the
scope of an investigation. The commissioner may further petition
the court for an order to compel compliance or an order of contempt
or any other appropriate order in connection with any person's
refusal or neglect to comply with a subpoena.
(3) In furtherance of a hearing or other administrative
proceeding held under this act, the commissioner may issue a
subpoena to require a person to appear or testify or produce
relevant documentary material for examination at the hearing or
proceeding. The commissioner may petition the Ingham county circuit
court or another court of competent jurisdiction for an order to
compel compliance or any other appropriate order in connection with
any person’s refusal or neglect to appear at the hearing or
proceeding after being subpoenaed. If a person fails to appear,
refuses to testify, or refuses to produce documents after an order
is entered by the court, any failure to obey the order may be
punishable by the court as contempt.
(4) The commissioner may do the following:
(a) Conduct investigations reasonable and necessary to
determine whether any person has violated or is about to violate
any provision of this act or any rule promulgated or order issued
under this act.
(b) Require or allow a person to file a statement in writing,
under oath or otherwise as the commissioner determines, as to the
facts and circumstances concerning the matter investigated.
(5) The commissioner shall have the authority to control,
manage, and dispose of or transfer an abandoned cemetery, or to
require acceptance of responsibility for an abandoned cemetery,
according to law. The commissioner may promulgate rules that are
necessary to carry out his or her powers and duties under this
subsection.
(6) For the purpose of any investigation or proceeding under
this act, an authorized employee or agent of the department, who is
an attorney, may represent the commissioner or the department in
such investigation or proceeding brought under this act.
(7) Any person required by this act to take any oath or
affirmation and who makes any false oath or affirmation is
considered to have committed perjury.
(8) (2)
When it reasonably appears to the commissioner that a
person
or registrant has violated engaged in, or is about to engage
in, any act or practice constituting a violation of this act or a
rule promulgated or order issued under this act, the commissioner
may do 1 or more of the following:
(a) Issue a cease and desist order. A person ordered to cease
and desist is entitled to a hearing before the commissioner or
designated hearing officer if a written request for a hearing is
filed within 30 days after the effective date of the order. At the
option of the affected person, the hearing shall be held within 30
days after the written request.
(b) After an investigation, issue a formal complaint or an
order, placing a limitation on the use of a license, registration
or permit.
(c) (b)
Accept an assurance of
discontinuance of the
violation.
(d) (c)
Bring an action in the circuit
court for the county in
which the person resides or has its principal place of business, or
in the circuit court for the county of Ingham, to enforce
compliance with this act or a rule promulgated or order issued
under this act.
(e) Assess administrative fines under section 18 after a
contested case hearing is held resulting in findings of a violation
of this act or a rule promulgated or order issued under this act.
(f) Issue an order to replenish a deficit in trust fund
accounts.
(g) Issue an order prohibiting the withdrawal or transfer of
any trust fund money.
(9) In connection with subsection (8)(b), (e), (f), or (g),
the commissioner shall provide the respondent with an opportunity
to meet and confer with a designated department employee to allow
the respondent to show compliance with this act or a rule
promulgated or order issued under this act prior to a contested
case hearing. The respondent must elect and request a conference
within 15 days after the issuance of an order or a notice of intent
to conduct a contested case hearing. Settlement discussions may
take place at a conference subject to final approval of the
commissioner.
(10) (3)
Upon a proper showing regarding In
connection with an
action
brought under subsection (2)(c), a permanent or temporary
injunction
or a restraining order may be granted and (8)(d), the
court may grant injunctive relief and may appoint a receiver or
conservator
may be appointed by the court over
a cemetery, cemetery
owner, or other person who actively participated in, and benefited
from, the violation of this act, rule, or order and who is the
subject of the action. Notwithstanding the provision of any other
statute to the contrary, the qualifications of the receiver or
conservator shall be determined by the court after recommendations
by the commissioner. A receiver or conservator appointed by the
court may operate the cemetery and take possession of the assets,
including all trust accounts of the cemetery, cemetery owner, or
other person who actively participated in, and benefited from, the
violation of this act, rule, or order and who is the subject of the
action, and may sell, assign, transfer, or convey the assets of a
cemetery,
including a cemetery in receivership on the July 26, 2002
date
of the amendatory act that amended this subsection, cemetery
owner, or other person who actively participated in, and benefited
from, the violation of this act, rule, or order, and who is the
subject of the action, to a municipal corporation or other person
other than the holder of a license for the practice of mortuary
science or a person who owns, manages, supervises, operates, or
maintains, either directly or indirectly, a funeral establishment,
under conditions prescribed by the court, in order to discharge
outstanding contractual obligations. A receiver or conservator
appointed under this section has all the powers, authority, and
remedies of an assignee for the benefit of creditors under chapter
52 of the revised judicature act of 1961, 1961 PA 236, MCL 600.5201
to 600.5265. The court may allow the receiver or conservator to
file for protection under the bankruptcy code.
(11) Subject to court approval, a receiver or conservator
appointed under this act may do any of the following:
(a) Take possession of the books, records, and assets of the
cemetery, cemetery owner, or other person who actively participated
in, and benefited from, the violation of this act, rule, or order
and who is the subject of an action under subsection (8)(d).
(b) Employ employees and agents, legal counsel, actuaries,
accountants, appraisers, consultants, and such other personnel as
he or she considers necessary.
(c) Fix the reasonable compensation of employees and agents,
legal counsel, actuaries, accountants, appraisers, and consultants.
(d) Collect all debts and money due or claims belonging to the
cemetery, cemetery owner, or other person who actively participated
in, and benefited from, the violation of this act, rule, or order
and who is the subject of an action under subsection (8)(d).
(e) Sue, defend, compromise, and settle all debts and money
due or claims involving the cemetery, cemetery owner, or other
person who actively participated in, and benefited from, the
violation of this act, rule, or order and who is the subject of an
action under subsection (8)(d).
(f) Sell any and all real and personal property.
(g) Borrow money on the security of the assets of the
cemetery, cemetery owner, or other person who actively participated
in, and benefited from, the violation of this act, rule, or order
and who is the subject of the action under subsection (8)(d) or
borrow money without security and execute and deliver all documents
necessary for that transaction.
(h) Exercise all fiduciary functions of the cemetery, cemetery
owner, or other person who actively participated in, and benefited
from, the violation of this act, rule, or order and who is the
subject of the action under subsection (8)(d) as of the date of the
commencement of the receivership or conservatorship.
(i) Exercise other powers and duties as may be provided by the
court under the laws of this state applicable to the appointment of
receivers or conservators.
(j) Pay all expenses of the receivership or conservatorship,
including any expenses incurred by the state of Michigan, which
expenses shall be a first charge upon the assets of the cemetery,
cemetery owner, or other person who actively participated in, and
benefited from, the violation of this act, rule, or order and who
is the subject of the action under subsection (8)(d), and be fully
paid before any final distribution or payment to creditors,
shareholders, or investors.
(k) Pay pro rata any and all debts of the cemetery, cemetery
owner, or other person who actively participated in, and benefited
from, the violation of this act, rule, or order and who is the
subject of the action under subsection (8)(d), except that debts
not exceeding $50.00 in amount may be paid in full, without
interest.
(l) Borrow money as necessary or expedient in aiding the
liquidation of the cemetery, cemetery owner, or other person who
actively participated in, and benefited from, the violation of this
act, rule, or order and who is the subject of the action under
subsection (8)(d), and secure the borrowings by the pledge,
hypothecation, or mortgage of assets of the cemetery, cemetery
owner, or other person who actively participated in, and benefited
from, the violation of this act, rule, or order and who is the
subject of the action under subsection (8)(d).
(m) Use assets of the cemetery, cemetery owner, or other
person who actively participated in, and benefited from, the
violation of this act, rule, or order and who is the subject of the
action pursuant to subsection (8)(d) under a liquidation order to
transfer obligations.
(n) Enter into contracts necessary to carry out the order to
liquidate and affirm or disavow any contracts to which the
cemetery, cemetery owner, or other person who actively participated
in, and benefited from, the violation of this act, rule, or order
and who is the subject of the action is a party.
(o) Delay the sale of the assets of the cemetery, cemetery
owner, or other person who actively participated in, and benefited
from, the violation of this act, rule, or order and who is the
subject of the action under subsection (8)(d) if the receiver or
conservator determines a delay in the sale would be prudent in
order to obtain a more favorable rate of return on the sale of the
assets.
(p) Report to the commissioner at time intervals requested by
the commissioner with respect to all of his or her acts and
proceedings in connection with the receivership or conservatorship.
(q) Other reasonable and necessary actions and powers
permitted by law.
(12) (4)
In the order of sale of the
cemetery, the court shall
make provision for notice to creditors and the filing of claims
against
the receivership or conservatorship. Any remaining funds
Funds
held by in trust or escrow for the cemetery in escrow under
this
act belong to the contract buyers or beneficiaries of the
contract
buyers and by the cemetery
owner, trustee, or custodian of
those funds shall not be distributed to the general creditors of
the cemetery owner. This section does not prohibit the court from
allowing the sale of the cemetery to a person other than the holder
of a license for the practice of mortuary science or a person who
owns, manages, supervises, operates, or maintains, either directly
or indirectly, a funeral establishment, or from allowing the sale
of the cemetery to a municipal corporation.
(13) (5)
In addition to an action taken
under this section,
the commissioner may deny an application or may suspend or revoke a
license,
permit, or registration after a
an administrative hearing
as
set forth provided for in this act section 19.
(14) If it appears from an audit or other investigation made
by the commissioner under this act, or from a report made to the
commissioner, that a crime has been committed in violation of a
provision of this act or other law of the state, the commissioner
shall immediately report the crime to the attorney general or the
proper prosecuting attorney in writing, and the attorney general or
prosecuting attorney shall take such action on the report as the
facts warrant.
Sec. 9a. All departments, state agencies, public bodies
corporate, committees, commissioners, or officers of this state,
and any political subdivision of this state, so far as is
compatible with their duties, shall give the commissioner or his or
her designee any necessary assistance required by the commissioner
in the performance of the duties of the commissioner. All
departments, state agencies, public bodies corporate, committees,
commissioners, or officers of this state, and any political
subdivision of this state, shall provide the commissioner free
access to any book, record, or document in their custody relating
to the matters within the scope of the commissioner in the
performance of his or her duties.
Sec. 9b. (1) The commissioner may appoint deputy commissioners
or assistants to perform any duty, act, or function or to take
charge during the commissioner's absence, including the following
distinct activities:
(a) Audit.
(b) Legal affairs.
(c) Licensing or registration.
(d) Investigation.
(2) The commissioner may appoint and employ accountants,
auditors, appraisers, and other necessary assistants or support
staff. The commissioner may designate special deputies from
available personnel to perform specified duties, including
supervision of office operations during the absence of the
commissioner and deputy commissioners.
(3) The commissioner may enter into contracts to accomplish
requirements under this act, including for the engagement of
consultants.
(4) The commissioner may select and appoint a receiver or
conservator in the manner provided for in section 9(10), subject to
approval by a court of competent jurisdiction.
(5) The commissioner may revoke appointments, designations,
and delegations of authority made pursuant to this section, at his
or her discretion. Appointees and designees provided for in this
section shall be paid in the manner prescribed by law or civil
service classification.
Sec. 9c. (1) The commissioner or his or her representatives
are immune from civil liability, both personally and
professionally, for any of their acts or omissions if the following
conditions are met:
(a) The commissioner or his or her representatives acted, or
reasonably believed he or she acted, within the scope of his or her
authority.
(b) The commissioner's or his or her representatives' conduct
did not amount to gross negligence that was the proximate cause of
the injury or damages suffered.
(2) The commissioner or his or her representatives shall not
be personally liable for the acts or omissions of others, unless
the conditions contained in subsection (1) are not met.
(3) Except as otherwise provided in this section, defense and
indemnification of the commissioner or his or her representatives
for an act or omission under this act shall be conducted in
accordance with the government liability for negligence act, 1964
PA 170, MCL 691.1401 to 691.1419.
(4) If a claim is made or a civil action is commenced against
the commissioner or his or her representatives, either personally
or professionally, for an act or omission occurring within the
course of employment as it pertains to this act, or any successor
act, legal representation shall be provided by the attorney general
or a special assistant attorney general appointed to provide such
representation, unless the conditions contained in subsection (1)
are not met.
(5) If a judgment is awarded or a settlement is entered into
in a civil action against the commissioner or his or her
representatives for an act or omission pertaining to this act, or
any successor act, the state shall indemnify the commissioner or
his or her representatives, unless the conditions contained in
subsection (1) are not met.
(6) This section does not apply to those persons appointed on
a contractual basis as a conservator, receiver, consultant,
attorney, or appraiser, or acting as the commissioner's agent
pursuant to a contractual agreement.
(7) As used in this section:
(a) "Gross negligence" means conduct so reckless as to
demonstrate substantial lack of concern for whether injury results.
(b) "Representative" means any employee assigned by, or under
the supervision of, the commissioner or any person exercising power
delegated by the commissioner in accordance with this act, but does
not include accountants, consultants, conservators, receivers,
appraisers, or attorneys retained as independent contractors and
acting in their professional capacity.
Sec. 10. (1) The commissioner shall institute and maintain a
system of auditing trust funds required by this act, of licensing
cemetery owners, and of registering each cemetery authorized to be
created,
maintained, and operated under 1869 PA 12, MCL 456.101 to
456.119,
and 1855 PA 87, MCL 456.1 to 456.36 in Michigan, and
conducting sales under the prepaid funeral and cemetery sales act,
1986 PA 255, MCL 328.211 to 328.235, as well as any other cemetery
operating under state law or local ordinance. A cemetery owned and
operated by a municipal corporation, church, or religious
institution is exempt from this act. However, a municipal
corporation may pass ordinances necessary for regulating that
municipal corporation's cemeteries.
(2) A cemetery for earth interment of 10 acres or less in
size, which is owned and operated entirely and exclusively by an
existing nonprofit entity and in which a burial has taken place
before September 15, 1968, is exempt from the fee provisions of
this act, shall have the trust fund required by this act audited at
the discretion of the commissioner, and is exempt from the
endowment care trust fund requirements of section 16, except for
the report requirements if the cemetery maintains endowment or
perpetual
care or memorial trust funds.
Sec. 12. (1) A person shall not establish a cemetery without a
valid
permit or operate and
shall not own an existing cemetery
except
under a valid registration license
issued under this act and
a registration for each cemetery.
(2) If a person proposes to purchase or otherwise acquire a
controlling
interest in regarding an existing cemetery company or
cemetery owner, that person shall first apply to the commissioner
for
a certificate of approval of a proposed change of control of a
cemetery
company or approval as a
successor before acquiring a
controlling interest in an existing cemetery or cemetery owner and
before purchasing or otherwise acquiring a cemetery or cemetery
owner. The application shall be in a form approved by the
commissioner and contain the following:
(a)
The name and address of the proposed
new owner. or
operator
and
(b) The name and address of the proposed successor.
(c) A listing of the assets and liabilities related to the
cemetery, including all trust accounts and the value of the trust
accounts, and a statement of who will assume those assets and
liabilities.
(d) A statement that the principal from the endowment care
trust or perpetual care trust accounts will be held in escrow for 6
months from the later of the following:
(i) The commissioner's approval of the application.
(ii) The close of the sale of a controlling interest in the
cemetery owner or the sale of a substantial portion of the assets
of the cemetery owner.
(iii) The transfer of title of the cemetery.
(e) Proof that the proposed new owner has, or will have, title
to the cemetery or, if leased pursuant to section 2 of 1855 PA 87,
MCL 456.2, a copy of the lease.
(f) The name and address of the trustees and consent to
service of process for the trustees.
(g) A $1,500.00 nonrefundable processing and investigation
fee.
(h) Any other information as the commissioner requires.
(3) The commissioner shall issue a certificate of approval for
a change of control or the issuance of a license to a successor
only after he or she is satisfied that the proposed new owner or
successor is qualified by good moral character, experience, and
financial security and stability, and responsibility to control and
operate the cemetery in a legal and proper manner, and that the
interest of the public generally will not be jeopardized by the
proposed
change in ownership and management. The application for a
purchase
or change of control must be accompanied by an initial
filing
or investigation fee of $500.00.
(4) if the applicant is not an individual, the investigation
described in subsection (3) may be made of any person directly or
indirectly controlling the cemetery owner. The investigation
described in subsection (3) may be made of any proposed trustees of
funds regulated under this act for the purpose of determining past
criminal activity and compliance with this act, related acts, rule,
or order and any similar relevant information.
(5)
If a person fails to comply with
this section, the
commissioner
shall order that an administrative hearing be held. If
a transfer of controlling interest is found to have taken place
without
prior commissioner approval, the commissioner may suspend
do
any of the following:
(a) Suspend or revoke the license of the cemetery owner or
registration
of the cemetery, or take both.
(b) Issue a cease and desist order or other order requiring a
person to immediately take curative or remedial action.
(c) Seek injunctive or other equitable action from a court of
competent jurisdiction.
(d)
Take other appropriate action until
it demonstrates
compliance
with this section authorized
under this act.
(6) (3)
As used in this section,
"controlling interest" means
the capability to decide the operating and financial policies of
the
cemetery company owner or to select the officers or directors
with
majority control of the cemetery company owner.
Sec. 12a. (1) The commissioner or an examiner, investigator,
or other person the commissioner may appoint, may visit and examine
the affairs of any of the following:
(a)
A cemetery or person required to
register under cemetery
owner
subject to this act. and
(b) Trustees of funds regulated under this act as they pertain
to cemetery trust funds.
(2) The commissioner shall have free access to the books,
papers, records, and documents that relate to the business of the
cemetery
corporation, or cemetery
owner or person, or agent, or
trustee acting on its behalf for matters related to this act.
(2)
The books, papers, records, and
documents shall be
available for inspection or audit at any time during regular
business hours with reasonable notice. One or more qualified
persons designated by the commissioner shall conduct the audit,
whose services shall be charged to and paid by the cemetery owner
at
the rate of $10.00 per hour, but not more than $1,000.00 total
determined by the commissioner, not to exceed the actual cost of
the inspection or audit.
Sec. 13. (1) Any person desiring to establish a cemetery shall
file with the commissioner, on forms furnished by the commissioner,
an application for a permit to establish a cemetery. The
application
shall be accompanied by an a
nonrefundable
investigation
fee of $500.00 $1,500.00.
(2) After a receipt of an application, the commissioner shall
conduct an investigation pertaining to the physical plans, the
community need for the planned cemetery, and pertinent information
pertaining
to the applicant's experience, financial stability,
security
and stability, responsibility, ability,
and integrity, and
good
moral character. If the applicant is
not a natural person an
individual, the same investigation shall be made of the
general
manager
and principal owners any
person directly or indirectly
controlling the cemetery owner. An investigation may be made of any
proposed trustees of funds regulated under this act for the purpose
of determining past criminal activity and compliance with this act,
related act, rule, or order, and any similar relevant information.
Sec.
15. (1) Each person operating a cemetery licensee shall
register
the each cemetery it
owns by filing with the commissioner
a
registration application before June 2 of each year, on a form
furnished
by the commissioner , and
accompanied by the registration
fee.
A registration expires on July 1 of each year.
(2)
If the commissioner intends to deny registration, the
procedure
set forth in section 19 shall be followed. The
commissioner
may impose a late penalty filing fee of $10.00 per day
on
a person which filed a registration application after June 1.
(2) A license and registration issued under this act expires
on July 1 of each year and shall be renewed annually unless the
commissioner determines that, under the provisions of this act, the
cemetery owner does not qualify for licensure or that the cemetery
does not qualify for registration.
(3) The commissioner shall charge an annual fee of $100.00 per
year for each cemetery registered. Not less than 90 days before the
expiration date of the license and registration, the commissioner
shall mail a renewal application to each licensee, together with a
notice advising of the time and procedures for renewal of the
license and registration. The commissioner may impose a late
penalty filing fee of $25.00 per day on a licensee which filed a
renewal application after June 1.
(4) If the name of the cemetery is different from the name of
the cemetery owner, the cemetery shall submit a copy of the
certificate of assumed name to the commissioner. A cemetery owner
may transact business under an assumed name after the certificate
has been filed with the appropriate filing official and a copy
submitted to the commissioner.
Sec.
16. (1) The commissioner shall require each Each cemetery
to
owner shall establish and maintain an irrevocable endowment care
trust
fund or perpetual care trust 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 for each cemetery
under its ownership or control,
the income or proceeds from which shall be perpetually devoted for
endowment care or perpetual care of that particular cemetery. Each
cemetery owner shall 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 this
act, 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 The report shall
be certified to by the cemetery owner and the trustees of funds.
Financial information for the cemetery owner or trustees not
related to the cemetery or cemetery operations is exempt from
disclosure under the freedom of information act, 1976 PA 442, MCL
15.231 to 15.246.
(2) All records pertinent to the maintenance, establishment,
and reporting of a cemetery owner’s required trust funds shall be
available for inspection by the commissioner at the cemetery
owner’s registered office in Michigan or at another Michigan
location on file with the department. The commissioner shall be
immediately notified of any change in the location of the records.
(3) An irrevocable endowment care trust fund or perpetual care
trust fund shall be created by the deposit of at least $75,000.00
into the fund before any sale of burial rights, entombment rights,
or columbarium rights is made.
(4) Each month, the cemetery owner shall add to the endowment
care trust or perpetual care trust fund for each cemetery by
payment of not less than 15% of all proceeds received during the
previous month from the sales of burial rights, entombment rights,
or columbarium rights. No total deposit for a single adult burial
right sale or assignment shall be less than $20.00. Excess sums on
deposit in the fund can be applied by a cemetery owner against
future deposits, but shall not be withdrawn.
(5) 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 owner or corporation other person subject to
the irrevocable endowment care or perpetual care trust fund
requirements
of this act and other laws, to shall deposit 15% of
all gross proceeds received from the sales of those rights into the
irrevocable endowment care or perpetual care trust fund of the
cemetery in which the rights are located if an irrevocable
endowment care or perpetual care trust fund exists for that
cemetery.
Excess sums on deposit in the fund can be applied by a
cemetery
against future deposits. The
total deposit for a single
adult burial, entombment, or columbarium right sale or assignment
shall be not less than $20.00.
(6) Notwithstanding the minimum amount required to be paid
into the irrevocable endowment care trust or perpetual care trust
fund from the proceeds of sales of lots or burial rights, the owner
of any cemetery that has an irrevocable endowment care trust or
perpetual care trust fund of more than $750,000.00 and exceeding
$60,000.00 per acre of the developed portion of the cemetery may
apply to the commissioner for a waiver of the 15% or $20.00 minimum
requirement for future contributions. A cemetery owner applying to
the commissioner as authorized by this act and other statutes for
an irrevocable endowment care trust or perpetual care trust fund
deposit modification or waiver shall be assessed the actual
expenses for an examination or investigation by the commissioner.
The commissioner, or his or her designee, may take testimony and
investigate as he or she considers advisable pursuant to the
application for modification or waiver.
(7)
A deposit required to be made by
those persons pursuant to
subsection (4) shall be modified or waived if the cemetery owner
has received an irrevocable endowment care trust or perpetual care
trust 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.
(8) (2)
Subject to subsection (8) (14),
a cemetery which is
owner
required to register be licensed 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
for each cemetery 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.
(9) (3)
Subject to subsection (8) (14),
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.
(10) (4)
Subject to subsection (8) (14),
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.
(11) (5)
The commissioner shall require each Each cemetery or
agent
authorized by it acting on its behalf to owner shall 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 the licensee is
complying
with this act is being implemented and rules promulgated
under this act. Individual reports shall be submitted for each
cemetery. All documents, reports, and records regarding any trust
accounts required under this act shall be kept at the cemetery
owner’s registered office in Michigan or at another Michigan
location on file with the department. The cemetery owner shall
immediately notify the commissioner of any change in the location
of the records. It is the responsibility of each cemetery owner
required to be licensed under this act to assure that documents
relating to any accounts required under this act are provided to
the commissioner upon request. If a subpoena is issued to obtain
these documents, the cemetery owner shall pay all costs related to
obtaining the documents.
(12) (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
up
to the amount of the deficit allowed under this act. The
cemetery
or entity of a cemetery owner
may request an
administrative hearing before the commissioner or a hearing officer
designated by 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.
(13) (7)
All fees, charges, and penalties, or other money from
any source, collected under this act, other than fines prescribed
in
section 21 this act, shall be paid to the commissioner and
deposited into the cemetery regulation fund created within the
state treasury. Upon receipt of funds, the commissioner shall remit
the
funds received to the department
of treasury for deposit in the
general
fund. of the state. The fund shall be used solely by the
commissioner in carrying out requirements of this act. Money
remaining at the end of the fiscal year shall be carried forward to
the next fiscal year and shall not revert to the general fund. Any
interest or earnings from the fund shall be credited to the fund.
The state treasurer shall direct the investment of the fund. The
department of labor and economic growth shall be the administrator
of the fund for auditing purposes.
(14) (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 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.
(15) No portion of the irrevocable endowment care trust or
perpetual care trust funds or merchandise trust funds required to
be set aside under this section shall be used directly or
indirectly for salaries of a person who is a member of the board of
directors of a cemetery owner, a partner in a cemetery owner, or a
member or manager of a limited liability company that is a cemetery
owner, and only the earnings from endowment care trust or perpetual
care trust funds shall be used for endowment care or perpetual
care.
(16) Each trust fund required under this act shall be under
the control of at least 2 trustees. At least 1 of the trustees
shall be a resident of Michigan, and at least 1 of the trustees
shall be licensed in the state of Michigan as a certified public
accountant, attorney, investment advisor, or securities broker or
dealer.
(17) For the purposes of the statutory authorization required
by section 1105(2)(e) of the banking code of 1999, 1999 PA 276, MCL
487.11105, to act as a fiduciary in this state, if the commissioner
approves a profit or nonprofit corporation organized under the laws
of this state or formed in another jurisdiction with a certificate
of authority to transact business in this state to serve in a
fiduciary capacity under this act, the nonbanking corporation is
authorized to act in that fiduciary capacity. The authorization
under this subsection confers the fiduciary capacity only to the
extent necessary regarding the particular approved cemetery and
trust funds and is not a general grant of fiduciary authority. A
nonbanking corporation is not authorized to act in any other
fiduciary capacity.
(18) The commissioner may approve trustees, notwithstanding
the requirements of subsection (16), if an approved surety bond is
placed on file with the commissioner equal to, or greater than, the
sum of the trust money required, or if the total trust money does
not exceed $150,000.00.
(19) The assets of each trust fund regulated under this act
shall be invested pursuant to section 7302 of the estates and
protected individuals code, 1998 PA 386, MCL 700.7302.
Sec. 16b. (1) Separate accounts shall be established for each
cemetery for all endowment care trust or perpetual care trust
accounts, merchandise trust accounts, merchandise escrow accounts,
construction accounts, development accounts, and prepaid funeral
and cemetery sales trust accounts related to that particular
cemetery.
(2) Bundling or pooling of trust funds, from each cemetery or
among cemeteries with common ownership, is not permissible except
upon the terms and conditions approved in writing by the
commissioner and only after the commissioner is reasonably
satisfied that the title to, character of, and accounting for each
trust fund is preserved.
(3) A separate development trust account shall be established
for each development project individually.
Sec. 18. (1) The commissioner may deny an application filed
under this act and refuse to issue or renew a permit, license, or
registration, or may suspend or revoke a permit, license, or
registration, or may reprimand, place on probation, or take other
disciplinary action against the applicant if the commissioner's
investigation reveals facts which, with reference to the
establishment of a cemetery, show inappropriate physical plans;
lack of community need; inadequate experience, financial stability,
or integrity to protect the public welfare; or when the
commissioner finds that the applicant or licensee or its officers,
owners, directors, members, or general manager has done 1 or more
of the following:
(a) Made a false statement of a material fact in the
application.
(b) Not complied with this act.
(c)
Been guilty convicted of an unlawful or fraudulent act in
connection with selling or otherwise dealing in cemetery lots and
burial rights regulated by this act or funeral or cemetery
merchandise and services regulated by the prepaid funeral and
cemetery sales act, 1986 PA 255, MCL 328.211 to 328.235.
(d)
Been guilty in the judgment of the commissioner of other
Demonstrated a lack of good moral character or engaged in conduct,
whether of the same or different character than specified in this
act, which
that constitutes dishonest and unfair dealing.
(e) Violated article 18 of the occupational code, 1980 PA 299,
MCL 339.1801 to 339.1812.
(f) Violated the terms of an assurance of discontinuance
entered
into with the commissioner pursuant to section 9(2) 9(6).
(g) Violated the prepaid funeral and cemetery sales act, 1986
PA 255, MCL 328.211 to 328.235.
(h) Failed to comply with section 2080 of the insurance code
of 1956, 1956 PA 218, MCL 500.2080.
(i) Adopted, enforced, or attempted to enforce a regulation of
the cemetery that prohibits the installation of a grave memorial or
burial vault unless the grave memorial or burial vault was
purchased from the cemetery. This subdivision does not prohibit a
cemetery
licensee from adopting and enforcing consistent rules and
regulations to be followed by both the cemetery and outside vendors
as to the quality, size, shape, type, installation, and maintenance
of the grave memorial or burial vault.
(2) If the commissioner denies an application for a permit,
license, or registration, or suspends or revokes an existing
permit, license, or registration required by this act, the denial,
revocation,
or suspension shall revoke prohibit
the cemetery
operation
as to applicant or licensee
from conducting cemetery
operations including, but not limited to, the sale or assignment of
burial rights, entombment rights, or columbarium rights, cemetery
merchandise, or cemetery services after the date of the suspension,
revocation, or denial except to the extent expressly permitted in
the
order of denial, suspension, or revocation.
The corporation
cemetery owner shall fulfill all contractual obligations and
agreements entered into before the date of the suspension,
revocation, or denial, and shall make required interments for the
owners of burial rights, entombment rights, or columbarium rights
purchased before the date of suspension, revocation, or denial.
(3) The commissioner may impose an administrative fine of not
more
than $5,000.00 $10,000.00 for each separate violation of this
act.
Sec. 19. If the commissioner intends to deny, suspend, or
revoke an application for a permit, to
establish a cemetery, to
refuse
registration of an existing cemetery, or to suspend or
revoke
a registration license, or
registration, the commissioner
shall give written notice to the person involved of that intent.
The notice shall state a time and a place for hearing before the
commissioner or a designated hearing officer, and a summary
statement of the reasons for the proposed action. The notice of
intent shall be mailed by certified mail to the applicant,
licensee, permittee, or registrant at least 15 days before the
scheduled
hearing date. The commissioner hearing
shall hold a
hearing
be held pursuant to the notice in the manner required by
the administrative procedures act of 1969, 1969 PA 306, MCL 24.201
to 24.328, and the rules of procedure adopted by the commissioner.
The commissioner shall issue a written decision.
Sec.
21. (1) A Except as
otherwise provided for in subsections
(2) and (3), a person who violates this act is guilty of a
misdemeanor ,
and, if a natural person, the first offense shall be
punishable
by a fine of not more than $100.00 or imprisonment for
not
more than 90 days, and a second offense shall be punishable by
a
fine of not more than $500.00 or imprisonment for not more than 1
year,
or both $10,000.00.
(2)
If the violator is other than a natural person an
individual, the first offense shall be is punishable
by a fine of
not
more than $100.00 $10,000.00
and the second offense shall be
punishable
by a fine of not more than $1,000.00 imprisonment for
not more than 1 year, or both.
(3) A violation of section 18 involving the misuse of trust
accounts is subject to section 180a of the Michigan penal code,
1931 PA 328, MCL 750.180a.
Enacting section 1. Section 11 of the cemetery regulation act,
1968 PA 251, MCL 456.531, is repealed.
Enacting section 2. This amendatory act does not take effect
unless all of the following bills of the 94th Legislature are
enacted into law:
(a) Senate Bill No.____ or House Bill No. 6036(request no.
03314'07 **).
(b) Senate Bill No.____ or House Bill No. 6037(request no.
03315'07 **).