BILL ANALYSIS Ó
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: AB 180 Hearing Date: July 6,
2015
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|Author: |Bonilla |
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|Version: |June 29, 2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Mark Mendoza |
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Subject: Cemetery and Funeral Bureau.
SUMMARY: Requires the Cemetery and Funeral 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) § 7600 et seq.)
2)Authorizes the Cemetery and Funeral Bureau (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; the scope of examination; and,
carrying out the provisions for the protection of the peace,
health, safety, welfare and morals of the public. (BPC §
7606)
3)Authorizes the Bureau to inspect the premises in which the
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business of a funeral director is conducted, where embalming
is practiced, or where human remains are stored. (BPC § 7607)
4)Authorizes the Bureau to employ investigators and attorneys to
assist the Bureau in prosecuting violations of the Funeral
Law, as specified. (BPC § 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 § 9600 et seq.)
6)Authorizes the Bureau to establish necessary rules and
regulations for the administration and enforcement of the
Cemetery Act. (BPC § 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 § 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
Bureau that includes: (BPC § 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;
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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 § 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
endowment care funds is to be paid by the cemetery authority,
as specified. (BPC § 9652(d))
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.
3)Combines the Cemetery Fund and the Funeral Directors and
Embalmers Fund to create the Cemetery and Funeral Fund.
4)Merges the Funeral and Directors and Embalmers Law with the
Cemetery Act to create the Cemetery and Funeral Act.
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5)Makes other technical and conforming changes.
FISCAL
EFFECT: This bill is keyed "fiscal" by Legislative Counsel.
According to the Assembly Appropriations Committee analysis
dated May 13, 2015, the Bureau operates as a single entity from
two separate special funds, the Cemetery Fund and the Funeral
Directors and Embalmers Fund. The funds are both supported by
fees from licensees, are solvent, and have reserves. The
analysis notes that the bill will result in on-going annual
Special Fund costs of approximately $2.5 million for the
Cemetery Fund and $1.8 million for the Funeral Directors and
Embalmers Fund for operating and personnel expenses including
enforcement, licensing, auditing and administrative functions.
This fund is self-supporting with fee revenue.
COMMENTS:
1. 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."
2. 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 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.
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3. 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 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.
4. Cemetery and Funeral 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.
5. Endowment Care Funds. As noted in the sunset review report,
BPC Section 9650 requires cemeteries to file an annual report
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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 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.
6. Related Legislation This Year. SB 465 (Hill) extends the
operation of the Contractors' State License Board until 2020
and makes various changes to the Contractors' State License
Law. ( Status: The bill is pending in the Assembly Committee
on Business and Professions.)
SB 466 (Hill) sunsets the Board of Registered Nursing.
( Status: The bill is pending in the Assembly Committee on
Business and Professions.)
SB 467 (Hill) extends the operation of the California Board
of Accountancy until 2020 and makes various changes in
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regards to the DCA. ( Status: The bill is pending in the
Assembly Committee on Business and Professions.)
SB 468 (Hill) extends the operation of the Bureau of Security
and Investigative Services and the Alarm Company Act,
Locksmith Act, Private Investigator Act, Private Security
Services Act, Proprietary Security Services Act, and
Collateral Recovery Act until January 1, 2020. It also
subjects the Bureau to review by the appropriate committees
of the Legislature and makes various changes to provisions in
the aforementioned Acts to improve the oversight, enforcement
and regulation by the Bureau of licensees under each Act.
( Status: The bill is pending in the Assembly Committee on
Business and Professions.)
SB 469 (Hill) extends the operation of the California State
Athletic Commission until January 1, 2020. Makes changes to
the laws governing the Commission's operations and the
Commission's oversight of professional and amateur boxing,
professional and amateur kickboxing, all forms and
combinations of full contact martial arts contests, including
mixed martial arts and matches or exhibitions conducted, held
or given in California. ( Status: The bill is pending in the
Assembly Committee on Business and Professions.)
AB 177 (Bonilla) extends the operation of the Board for
Professional Engineers, Land Surveyors and Geologists and
California Architects Board and Landscape Architects
Committee until January 1, 2020. ( Status: The bill is also
set for a hearing before this Committee on July 6.)
AB 178 (Bonilla) extends the operation of the Board of
Vocational Nursing and Psychiatric Technicians until January
1, 2020. ( Status: The bill is pending in the Senate
Appropriations Committee.)
AB 179 (Bonilla) extends the operation of the Dental Board of
California until January 1, 2020. ( Status: The bill is also
set for a hearing before this Committee on July 6.)
AB 181 (Bonilla) extends the operation of the California
State Board of Barbering and Cosmetology (BBC) until January
1, 2020. Makes changes to the laws governing the Board's
regulation of barbers, cosmetologists, estheticians,
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electrologists, manicurists, apprentices and establishments.
( Status: The bill is also set for a hearing before this
Committee on July 6.)
7. Technical Amendments.
a) The Bureau has requested to move the deadline from
November 1, 2018 to January 1, 2018 to complete the study of
endowment care funds. This change will allow the Bureau to
focus to its efforts on the study prior to its Sunset
Review. The Author has agreed to take this technical
amendment on the Senate Floor.
b) There is a typographical error on page 38, line 37. The
code section should read "Section 7711.1" rather than
"Section 7700.1". The Author has agreed to take this
technical amendment on the Senate Floor.
SUPPORT AND OPPOSITION:
Support:
None of file as of June 30, 2015.
Opposition:
None of file as of June 30, 2015.
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