BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1658| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 1658 Author: Bigelow (R), et al. Introduced:1/13/16 Vote: 21 SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 6/15/16 AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach, Pavley ASSEMBLY FLOOR: 78-0, 5/12/16 - See last page for vote SUBJECT: Happy Homestead Cemetery District: nonresident burial SOURCE: Author DIGEST: This bill allows the Happy Homestead Cemetery District to inter nonresidents from specified communities in Nevada. ANALYSIS: Existing law generally allows cemetery districts to bury only residents, former residents, property taxpayers, former taxpayers, certain eligible nonresidents, and their family members. This bill allows the Happy Homestead Cemetery District to inter nonresidents from specified communities in Nevada. Specifically, this bill allows the District to inter nonresidents of the District who are residents of the Nevada communities of Glenbrook, Cave Rock, Skyland, Zephyr Cove, Round Hill, Elk Point, Kingsbury, and Stateline, if all of the AB 1658 Page 2 following conditions apply: 1)The board of trustees determines that the District's cemetery has adequate space for the foreseeable future; 2)The District has an endowment care fund that requires a contribution for every interment of at least the minimum amount set pursuant to existing law; and, 3)The District requires the payment of a nonresident fee set pursuant to existing law. Background California's 253 public cemetery districts are separate local governments that operate cemeteries and provide interment services, mostly in rural areas and suburbs that were formerly rural communities. County boards of supervisors appoint the cemetery district's board of trustees, composed of three to five registered voters from within the districts' boundaries. Cemetery districts finance their operations with small shares of local property tax revenues, by selling interment rights, and by charging for services. State law limits who may be buried in a district cemetery. Generally, cemetery districts can bury only residents, former residents, property taxpayers, former taxpayers, certain eligible nonresidents, and their family members. Responding to an Attorney General's opinion, the Legislature allowed the Oroville Cemetery District (Butte County) to inter up to 100 nonresidents in a former Jewish cemetery which the District had acquired (SB 1906, Johnson, Chapter 1039, Statutes of 1982). When it revised the Public Cemetery District Law, the Legislature retained Oroville's special provision (SB 341, Senate Local Government Committee, Chapter 57, Statutes of AB 1658 Page 3 2003). The Legislature allowed the Elsinore Valley Cemetery District (Riverside County) to inter up to 536 nonresidents in a former Jewish cemetery, under specified conditions (AB 1969, Jeffries, Chapter 40, Statutes of 2010). In 2011, to facilitate a group purchase of cemetery plots by members of the Congregation Bet Haverim Synagogue, the Legislature allowed the Davis Cemetery District to inter up to 500 nonresidents under specified conditions (AB 966, Yamada, Chapter 111, Statutes of 2011). In 2012, to help the Anderson, Cottonwood, and Silveyville cemetery districts overcome the ongoing loss of business to nearby veteran's cemeteries, the Legislature allowed them an exemption from the state law restricting non-resident burials (SB 1131, La Malfa, Chapter 65, Statutes of 2012). Subsequent legislation added the Kern River Valley Cemetery District (SB 159, Fuller, Chapter 55, Statutes of 2013) and the Halcumb Cemetery District (SB 1291, Nielsen, Chapter 276, Statutes of 2014) to the list of districts that are exempted from the state law restricting non-resident burials. These five districts can use their cemeteries for up to a total of 400 interments each, not to exceed 40 interments each per calendar year, for interment in the ground or a columbarium of any person who is not a resident or a property taxpayer of any cemetery district, and who does not qualify for that interment, if all of the following apply: The board of trustees determines that the district's cemetery has adequate space for the foreseeable future; The cemetery district has an endowment care fund that requires a contribution for every interment of at least the minimum amount set pursuant to existing law; and, The cemetery district requires the payment of a nonresident fee set, pursuant to existing law. The Happy Homestead Cemetery District was formed in 1952 by the El Dorado County Board of Supervisors. According to the El AB 1658 Page 4 Dorado County Local Agency Formation Commission, the District serves an approximately 212 square mile area within the South Lake Tahoe region, which was home to an estimated 30,500 resident as of 2007. The District operates an approximately 10 acre cemetery in South Lake Tahoe and is the only known cemetery service provider, public or private, in the El Dorado County portion of the Tahoe Basin. Some officials want the Legislature to grant the District an exemption from the state law restricting non-resident burials that is similar to exemptions that state law grants to several other cemetery districts. Comments 1)Purpose of the bill. The Happy Homestead Cemetery District operates the only cemetery in the South Lake Tahoe Region. However, despite the fact that Nevada communities on the east shore of Lake Tahoe, from Glenbook down to Stateline, are a part of the contiguous social and economic community of South Lake Tahoe, California state law prevents the District from providing cemetery services to individuals who live outside of the District's boundaries. By allowing the District to inter non-residents who are from specific nearby Nevada communities just across the state border, AB 1658 promotes a cohesive social and economic community in South Lake Tahoe. By requiring the payment of a non-resident premium, this bill will also strengthen the District's fiscal condition. 2)Precedent and limits. The Happy Homestead Cemetery District is only the most recent of numerous public cemetery districts that have asked to be exempted statutory limits on non-resident interments. Changing state law to help the Happy Homestead Cemetery District will likely invite similar proposals from other public cemetery districts. Advocates for private-sector providers of cemetery services worry that continued expansion of state law to allow non-resident interment, as proposed by AB 1658, creates an opportunity and incentive for public agencies to engage in business practices that compete with the private sector. AB 1658 lays the groundwork for incrementally exempting many more public cemetery districts from the statutory restrictions on nonresident interment. AB 1658 Page 5 3)Rethinking nonresident interment. Many public cemetery districts are struggling financially. The loss of business to veterans' cemeteries is one of many factors that contribute to these districts' fiscal plight. Districts have lost property tax revenues both because of decreases in the assessed value of real property and the Educational Revenue Augmentation Fund shifts, which reallocated some districts' property taxes to benefit schools. Cemetery districts' revenues also have been reduced by a shift in funeral practices. Cremation, which is less expensive than burial, is becoming more common. In light of the numerous fiscal challenges facing public cemeteries, revenues from nonresident burials could offer significant financial benefits to districts that are struggling to continue providing cemetery services. As an alternative to exempting cemetery districts one at a time legislators may wish to more broadly reconsider the statutory prohibition against public cemeteries' interring nonresidents. FISCAL EFFECT: Appropriation: No Fiscal Com.:NoLocal: No SUPPORT: (Verified6/16/16) California Special Districts Association El Dorado County Supervisor Sue Novasel Happy Homestead Cemetery District Public Cemetery Alliance Tahoe Chamber of Commerce OPPOSITION: (Verified6/16/16) Cemetery and Mortuary Association of California ARGUMENTS IN SUPPORT: This bill's supporters argue that, by allowing the District to inter non-residents who are from specific nearby Nevada communities just across the state border, AB 1658 Page 6 this bill promotes a cohesive social and economic community in South Lake Tahoe. They also argue that, by requiring the payment of a non-resident premium, this bill will also strengthen the District's fiscal condition. ARGUMENTS IN OPPOSITION: This bill's opponent argues that continued expansion of state law to allow non-resident interment creates an opportunity and incentive for public agencies to engage in business practices that compete with the private sector. They worry that this bill lays the groundwork for incrementally exempting many more public cemetery districts from the statutory restrictions on nonresident interment. ASSEMBLY FLOOR: 78-0, 5/12/16 AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, 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, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon NO VOTE RECORDED: Burke, Jones-Sawyer Prepared by:Brian Weinberger / GOV. & F. / (916) 651-4119 6/17/16 15:03:49 **** END ****