BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                        AB 180|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |
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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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           (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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            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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