BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 180|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
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THIRD READING
Bill No: AB 180
Author: Bonilla (D), et al.
Amended: 6/29/15 in Senate
Vote: 21
SENATE BUS, PROF. & ECON. DEV. COMMITTEE: 9-0, 7/6/15
AYES: Hill, Bates, Berryhill, Block, Galgiani, Hernandez,
Jackson, Mendoza, Wieckowski
SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/17/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
ASSEMBLY FLOOR: 80-0, 6/1/15 - See last page for vote
SUBJECT: Cemetery and Funeral Bureau
SOURCE: Author
DIGEST: This bill 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.
ANALYSIS:
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.
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Page 2
(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
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)
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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 § 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
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Page 4
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.
5)Makes other technical and conforming changes.
Background
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)Cemetery and Funeral Bureau. 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 dealing specifically
with human remains, cemetery, and crematory provisions.
3)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 Assembly and
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Senate 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.
4)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
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.
FISCAL EFFECT: Appropriation: Yes Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations analysis:
No significant ongoing operational costs are anticipated under
this bill. Under current law, the Bureau enforces both the
Funeral Law and the Cemetery Act. Neither body of law has a
statutory sunset and this bill does not impose a new sunset on
the combined body of law.
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No significant costs are anticipated by the Bureau to conduct
the required study of endowment care funds. According to the
Bureau, it already intends to conduct the required study and
will be able to do so within existing resources.
SUPPORT: (Verified8/18/15)
None received
OPPOSITION: (Verified8/18/15)
None received
ASSEMBLY FLOOR: 80-0, 6/1/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,
Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,
Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder,
Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina,
Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen,
Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
Prepared by:Mark Mendoza / B., P. & E.D. / (916) 651-4104
8/19/15 20:42:48
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