BILL ANALYSIS Ó
AB 180
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Date of Hearing: April 28, 2015
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Susan Bonilla, Chair
AB 180
Bonilla - As Amended April 22, 2015
SUBJECT: Cemetery and Funeral Bureau.
SUMMARY: Requires the Cemetery and Funeral Bureau (Bureau) to
report to the appropriate policy committees of the Legislature,
before January 1, 2020, and conduct a review of endowment care
fund requirements, as specified, by November 1, 2018.
EXISTING LAW:
1)Establishes the Funeral and Directors and Embalmers Law
(Funeral Law) which provides for the licensure and regulation
of funeral directors and embalmers, within the Department of
Consumer Affairs (DCA), and requires the director of the DCA
to administer and enforce the Funeral Law. (Business and
Professions Code (BPC) Section 7600 et seq.)
2)Authorizes the Bureau to adopt and enforce reasonably
necessary rules and regulations relating to: the practice of
embalming; the business of a funeral director; the sanitary
conditions of places where such practice or business is
conducted; specifying conditions for approval of funeral
establishments for apprentices and mortuary science programs;
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the scope of examination; and, carrying out the provisions for
the protection of the peace, health, safety, welfare and
morals of the public. (BPC Section 7606)
3)Authorizes the Bureau to inspect the premises in which the
business of a funeral director is conducted, where embalming
is practiced, or where human remains are stored. (BPC Section
7607)
4)Authorizes the Bureau to employ investigators and attorneys to
assist the Bureau in prosecuting violations of the Funeral
Law, as specified. (BPC Section 7608)
5)Establishes the Cemetery Act which provides for the licensure
and regulation of cemetery salespersons, cemetery managers,
crematory managers, cemetery brokers, and cremated remains
disposers. (BPC Sections 9600 et seq.)
6)Authorizes the Bureau to establish necessary rules and
regulations for the administration and enforcement of the
Cemetery Act. (BPC Section 9630)
7)Excludes: a religious corporation, church, religious society
or denomination; a corporation sole administering
temporalities of any church or religious society or
denomination, or any cemetery organized, controlled, and
operated by any of them; a public cemetery; any private; or,
fraternal burial park not exceeding 10 acres, as specified,
from the requirements of the Cemetery Act. (BPC Section 9609)
8)Requires each cemetery authority to file with the Bureau
annually, on or before June 1, or within 5 months after close
of their fiscal year, as specified, a written report to the
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Bureau that includes: (BPC Section 9650.3)
a) The number of square feet of grave space and the number
of crypts and niches sold or disposed of under endowment
care;
b) The amount collected and deposited as specified;
c) A statement showing separately the total amount of the
general and special care funds invested in each of the
investments as authorized;
d) A statement showing separately the locations,
description, and character of the investments in which the
special endowment care funds are invested; and,
e) A statement showing the transactions entered into
between the corporation or any officer, employee or
stockholder as specified.
9)Permits the Bureau to examine endowment care funds of a
cemetery authority for the following reasons: (BPC Section
9652 (a-c ))
a) Whenever it deems necessary, at least once every five
years;
b) Whenever the cemetery authority in charge of endowment
care funds fails to file the required report; and,
c) Whenever the accountant or auditor qualifies his or her
certification of the report that is prepared and signed by
a licensed certified public accountant.
10)Specifies that the reasonable costs of the examination of
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endowment care funds is to be paid by the cemetery authority,
as specified. (BPC Section 9652(d))
THIS BILL:
11)Requires the powers and duties of the Bureau be reviewed by
the appropriate policy committees of the Legislature before
January 1, 2020.
12)Requires the Bureau to conduct a study of endowment care
funds as specified, by November 1, 2018.
FISCAL EFFECT: Unknown. This bill is keyed fiscal by the
Legislative Council.
COMMENTS:
13)Purpose. This bill is one of five author-sponsored sunset
bills. According to the author, "Although the Bureau is
subject to sunset review, and was subject to a sunset review
oversight hearing on March 18, 2015, its statutory provisions
do not contain a sunset review provision. This bill simply
seeks to make clear that the Bureau is subject to sunset
review, and to reinforce the recommendations contained in the
Bureau's sunset review report, including a review of endowment
care funds, in order to increase accountability."
14)Background. The Bureau licenses and regulates more than
11,000 licensees in 13 different licensing categories. The
Bureau does not license or regulate cemeteries operated by
religious organizations, cities, counties, cemetery districts,
the military, Native American tribal organizations, or other
groups.
The Bureau has the oversight responsibility for both fiduciary
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and operational activities of its licensing population and has
the statutory authority to enforce the licensing and practice
acts in the BPC along with jurisdiction over specified
provisions of the Health and Safety Code (HSC) dealing
specifically with human remains, cemetery, and crematory
provisions.
Joint Oversight Hearings and Sunset Review of DCA Licensing
Boards. In March of 2015, the Assembly Business and
Professions Committee and the Senate Business, Professions and
Economic Development Committee (Committees) conducted multiple
joint oversight hearings to review 10 regulatory boards and
other entities within the DCA. This and other sunset bills
are intended to implement legislative changes recommended in
the respective background reports drafted by the Committees
for all of the agencies reviewed this year.
The Sunset Review Process. The sunset review process provides a
formal mechanism for the DCA; the Legislature; the regulatory
boards, bureaus and committees; interested parties; and
stakeholders to make recommendations for improvements to the
authority of consumer protection boards and bureaus. This is
performed on a standard four-year cycle and was mandated by SB
2036 (McCorquodale), Chapter 908, Statutes of 1994. Each
eligible agency is required to submit to the Committees a
report covering the entire period since last reviewed that
includes, among other things, the purpose and necessity of the
agency and any recommendations of the agency for changes or
reorganization in order to better fulfill its purpose. During
"sunset review", the Committees take public testimony and
evaluate the eligible agency prior to the date the agency is
scheduled to be repealed. An eligible agency is allowed to
sunset unless the Legislature enacts a law to extend,
consolidate, or reorganize the eligible agency. The
legislation pertaining to this bill was based on specific
issues raised and addressed in the background report prepared
by the Assembly Business and Professions Committee. This is
the Bureau's second sunset review.
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Cemetery Bureau. Prior to regulation as a Bureau, cemetery and
funeral issues were handled by two separate entities, the
California State Board of Funeral Directors and Embalmers and
the California State Cemetery Board, which were created in
1939 and 1949, respectively. Ultimately, the Legislature
determined that the DCA was the best structure for managing
the Programs, and through a memorandum of understanding with
the Cemetery Board, the DCA assumed responsibility for the
Cemetery Program in October 1995. The DCA was vested with all
of the duties, powers, purpose, responsibilities, and
jurisdiction of both the Cemetery Board and the Board of
Funeral Directors and Embalmers, and consolidated the
functions into the Bureau.
During the sunset review of the Bureau, several issues were
raised in the Assembly Business and Profession Committee's
background paper, and suggestions were raised by Committee
staff regarding the functions and operations of the Bureau,
including: the fund condition of both the Cemetery Fund and
the Funeral Director Fund and the accompanying practice acts;
ensuring compliance with required General Price Lists (GPL)
disclosure information for consumers by funeral
establishments; the enforcement for cemeteries with
disciplinary concerns; the need for a review of endowment care
funds requirements; and, the Bureau's preparation for the
changing death care industry.
Endowment Care Funds. As noted in the sunset review report, BPC
Section 9650 requires cemeteries to file an annual report
regarding the amount collected for endowment care funds and
special care funds (preneed cemetery merchandise and
services), the manner of investment of the funds, as well as
other financial information and related documents. The annual
report must be submitted with an audit report signed by a
certified public accountant. The Bureau's audit unit reviews
each of those annual reports and assesses any potential risk
to the funds. In 2008, the Bureau reported to the Legislature
the results from its Endowment Care Fund Survey, which
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addressed the need to increase endowment care fund
requirements. The Bureau's survey requested all licensed
cemeteries, as of December 31, 2006, to provide information
regarding maintenance expenses, cemetery space and
availability, and a five-year forecast for maintenance and
expenses.
While an increase in funding for endowment care was enacted in
2008. It was recommended in the background paper that the
Bureau conduct an updated study on endowment care fund
requirements and needs. This bill will require the Bureau to
conduct a study of endowment care funds and report back to the
Legislature by November 1, 2018.
This bill will authorize the continued operation of the Bureau
as it is currently functioning under the DCA and request the
Bureau to be reviewed by the Legislature again in four years.
By continuing the functions of the Bureau, this bill will
allow the Bureau to continue in its regulatory capacity for
the protection of consumers and the regulation of all aspects
of the funeral and cemetery industries.
Previous Related Legislation.
AB 2946 (Hayashi), Chapter 504, Statutes of 2008, deleted the
December 31, 2007, sunset date of, thereby extending
indefinitely, the $8.50 quarterly fee the Bureau charges
cemeteries for each burial, entombment, inurnment, or
cremation made during the preceding quarter.
SB 658 (Negrete McLeod), Chapter 386, Statutes of 2011, required
funeral establishments to make their general price list
available by mail, facsimile, or electronic mail, or to post
that information on its Internet Web site, as specified, by
January 1, 2013.
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SB 363 (Figueroa), Chapter 874, Statutes of 2003, implemented
several changes to the provisions regarding the California
Council for Interior Design Review pursuant to recommendations
of the Joint Legislative Sunset Review Committee (JLSRC), made
changes to several other boards and commissions, including the
Bureau, within the DCA, and extends the sunset for the JLSRC.
SB 1952 (Figueroa) Chapter 825, Statutes of 2002, required the
Bureau to report to the Legislature on certain specified
topics; extended the sunset date requiring cemetery
authorities and crematories to pay a fee of $8.50 per
cremation, burial, entombment or inurnment; authorized the
Bureau to assess a fee for developing, purchasing, grading,
and administering the cemetery manager and crematory manager
examinations; and made other changes regulating the Bureau
pursuant to recommendations of the JLSRC and DCA.
REGISTERED SUPPORT:
None on file.
REGISTERED OPPOSITION:
None on file.
Analysis Prepared by:Elissa Silva / B. & P. / (916) 319-3301
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