BILL ANALYSIS Ó
AB 180
Page 1
ASSEMBLY THIRD READING
AB
180 (Bonilla)
As Amended April 22, 2015
Majority vote
-------------------------------------------------------------------
|Committee |Votes |Ayes |Noes |
| | | | |
| | | | |
|----------------+------+---------------------+---------------------|
|Business & |14-0 |Bonilla, Jones, | |
|Professions | |Baker, Bloom, Burke, | |
| | |Chang, Dodd, Eggman, | |
| | |Gatto, Holden, | |
| | |Mullin, Ting, Wilk, | |
| | |Wood | |
| | | | |
| | | | |
|----------------+------+---------------------+---------------------|
|Appropriations |17-0 |Gomez, Bigelow, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, Eggman, | |
| | |Gallagher, | |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | |Gordon, Holden, | |
| | |Jones, Quirk, | |
| | |Rendon, Wagner, | |
| | |Weber, Wood | |
| | | | |
AB 180
Page 2
| | | | |
-------------------------------------------------------------------
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.
Specifically, this bill:
1)Requires the powers and duties of the Bureau be reviewed by the
appropriate policy committees of the Legislature before January
1, 2020.
2)Requires the Bureau to conduct a study of endowment care funds
as specified, by November 1, 2018.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, this bill will result in ongoing annual Special Fund
costs of approximately $2.5 million to the Cemetery Fund and $1.8
million to the Funeral Fund for operating and personnel expenses
including enforcement, licensing, auditing, and administrative
functions. This fund is self-supporting with fee revenue
COMMENTS:
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."
Background. The Bureau licenses and regulates more than 11,000
AB 180
Page 3
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
and operational activities of its licensing population and has
the statutory authority to enforce the licensing and practice
acts in the Business and Professions Code (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 Department of
Consumer Affairs (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.
AB 180
Page 4
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.
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 Professions 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
AB 180
Page 5
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 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.
Analysis Prepared by:
Elissa Silva / B. & P. / (916) 319-3301 FN:
0000685
AB 180
Page 6