BILL ANALYSIS                                                                                                                                                                                                    




                     SENATE GOVERNANCE & FINANCE COMMITTEE
                            Senator Lois Wolk, Chair
          

          BILL NO:  SB 159                      HEARING:  3/13/13
          AUTHOR:  Fuller                       FISCAL:  No
          VERSION:  2/1/13                      TAX LEVY:  No
          CONSULTANT:  Austin                   

                      KERN RIVER VALLEY CEMETERY DISTRICT
          

          Allows the Kern River Valley Cemetery District to inter  
          nonresidents under specified conditions.


                           Background and Existing Law  

          California's 253 public cemetery districts are separate  
          local governments that operate cemeteries and provide  
          interment services, mostly in rural areas and suburbs that  
          were formerly rural communities.  County boards of  
          supervisors appoint the cemetery district's board of  
          trustees, composed of three to five registered voters from  
          within the districts' boundaries.  Cemetery districts  
          finance their operations with small shares of local  
          property tax revenues, by selling interment rights, and by  
          charging for services. 

          State law limits who may be buried in a district cemetery.   
          Generally, cemetery districts can bury only residents,  
          former residents, property taxpayers, former taxpayers,  
          certain eligible nonresidents, and their family members. 

          Responding to an Attorney General's opinion, the  
          Legislature allowed the Oroville Cemetery District (Butte  
          County) to inter up to 100 nonresidents in a former Jewish  
          cemetery which the District had acquired (SB 1906, Johnson,  
          1982). When it revised the Public Cemetery District Law,  
          the Legislature retained Oroville's special provision (SB  
          341, Senate Local Government Committee, 2003). The  
          Legislature allowed the Elsinore Valley Cemetery District  
          (Riverside County) to inter up to 536 nonresidents in a  
          former Jewish cemetery, under specified conditions (AB  
          1969, Jeffries, 2010).  In 2011, to facilitate a group  
          purchase of cemetery plots by members of the Congregation  
          Bet Haverim Synagogue, the Legislature allowed the Davis  
          Cemetery District to inter up to 500 nonresidents under  




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          specified conditions (AB 966, Yamada, 2011).  Last year, to  
          help the Anderson, Cottonwood, and Silveyville cemetery  
          districts overcome the ongoing loss of business to nearby  
          veteran's cemeteries, the Legislature allowed them an  
          exemption from the state law restricting non-resident  
          burials (SB 1131, La Malfa, 2012).

          The Kern Valley Cemetery District (Kern County) was  
          established in 1950 to provide cemetery services to  
          residents within its boundaries.  In July 2009, the Federal  
          Veterans Administration opened the Bakersfield National  
          Cemetery some 40 miles from the District's cemetery that  
          will accommodate burials for roughly 200,000 veterans and  
          their families.  During the most recent fiscal year, the  
          Bakersfield National Cemetery performed 642 burials, up  
          from the 588 burials performed in the prior year and the  
          221 burials performed in the cemetery's first year.  After  
          the veterans' cemetery opened, annual interments in the  
          Districts' cemeteries decreased, creating significant  
          fiscal challenges.

          To help the Kern River Valley Cemetery District overcome  
          the ongoing loss of business to the nearby veteran's  
          cemetery, a district official wants the Legislature to  
          grant the Kern River Valley cemetery an exemption from the  
          state law restricting non-resident burials.


                                   Proposed Law  

          Senate Bill 159 allows the Kern River Valley Cemetery  
          District to inter in the ground or a columbarium -- a vault  
          with niches for urns containing ashes of the dead -- up to  
          40 people per calendar year who are neither residents nor  
          property taxpayers in any cemetery district and who do not  
          otherwise qualify for interment under the state law  
          governing public cemetery districts' interment of eligible  
          nonresidents, if: 

                 The board of trustees determines that the  
               District's cemetery has adequate space for the  
               foreseeable future; 

                 The District has an endowment care fund that  
               requires a contribution for every interment of at  
               least a minimum payment as prescribed by law; and 





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                 The District requires the payment of a non-resident  
               fee, as set by law. 


                               State Revenue Impact
           
          No estimate.


                                     Comments  

          1.   Purpose of the bill  .   Responding to a special request  
          nearly 30 years ago, the Legislature allowed the Oroville  
          Cemetery District to bury nonresidents, if three conditions  
          existed.  Subject to the same conditions, the Legislature  
          approved similar exceptions for the Elsinore Valley, Davis,  
          Anderson, Cottonwood, and Silveyville Cemetery Districts.   
          To help the Kern River Valley Cemetery District overcome  
          fiscal challenges caused by its proximity to a new veteran  
          cemetery, SB 159 grants the District a similar exception.

          2.   Precedent and limits  . The Kern River Valley Cemetery  
          District is not the only public cemetery district that  
          faces challenges because of its proximity to recently  
          opened veterans cemeteries.  The federal government also  
          recently established the Northern California Veteran's  
          Cemetery (Shasta County) and Miramar National Cemetery (San  
          Diego County).  SB 159 builds on the precedent set by SB  
          1131 last year.  Changing state law to help the Kern River  
          Valley cemetery district will likely invite similar  
          proposals from other cemetery districts that are located  
          near veterans' cemeteries.  SB 159 may lay the groundwork  
          for incrementally exempting many more public cemetery  
          districts from the statutory restrictions on nonresident  
          interment.  To limit the number of districts that may seek  
          an exemption, the Committee may wish to consider amending  
          SB 159 to apply the exemption, only to all districts within  
          50 miles of the exterior boundaries of a veteran's  
          cemetery.

          3.   Rethinking nonresident interment  .  Many public cemetery  
          districts are struggling financially. The loss of business  
          to veterans' cemeteries is only one of many factors that  
          contribute to these districts' fiscal plight. Districts  
          have lost property tax revenues both because of decreases  





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          in the assessed value of real property and the Educational  
          Revenue Augmentation Fund (ERAF) shifts, which reallocated  
          some districts' property taxes to benefit schools.   
          Cemetery districts' revenues also have been reduced by a  
          shift in funeral practices.  Cremation, which is less  
          expensive than burial, is becoming more common.  In light  
          of the numerous fiscal challenges facing public cemeteries,  
          revenues from nonresident burials could offer significant  
          financial benefits to districts that are struggling to  
          continue providing cemetery services.  As an alternative to  
          exempting cemetery districts one at a time, or exempting  
          only those located near veterans cemeteries, legislators  
          may wish to reconsider the statutory prohibition against  
          public cemeteries' interring nonresidents.  


                         Support and Opposition  (3/7/13)

           Support  :  Kern River Valley Cemetery District 

           Opposition  : Cemetery and Mortuary Association of  
          California.