BILL ANALYSIS
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 124|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 124
Author: Galgiani (D)
Amended: 6/18/09 in Senate
Vote: 27 - Urgency
SENATE BUSINESS, PROF. & ECON. DEVELOP. COMM. : 7-0, 6/8/09
AYES: Negrete McLeod, Aanestad, Corbett, Correa, Romero,
Walters, Yee
NO VOTE RECORDED: Wyland, Florez, Oropeza
ASSEMBLY FLOOR : 77-0, 3/23/09 (Consent) - See last page
for vote
SUBJECT : Cemeteries: temporary manager
SOURCE : Author
DIGEST : This bill authorizes a court of competent
jurisdiction to appoint a temporary manager to manage the
property and service prepaid interments of a private
cemetery, if the court finds that a cemetery manager has
ceased to perform his or her duties, as specified, and
permits the court to authorize reasonable compensation to
the temporary manager to be made from the income from the
cemetery.
Senate Floor Amendments of 6/18/09 of remove the
authorization to use income from the cemetery's trust funds
to compensate the temporary manager.
CONTINUED
AB 124
Page
2
ANALYSIS : Existing law:
1. Licenses and regulates approximately 200 certificates
of authority (cemeteries), and 340 cemetery managers
by the Cemetery and Funeral Bureau (Bureau) within the
Department of Consumer Affairs. Provides for the
Bureau to also license and regulate funeral
establishments, funeral directors, embalmers,
crematories, crematory managers, cemetery brokers,
cemetery salespersons, and cremated remains disposers.
2. Exempts from the Bureau's jurisdiction specified
types of cemeteries, including: religious, public, and
district cemeteries.
3. Defines a "cemetery manager" as a person engaged in
the maintenance, operation, or improvement of a
licensed cemetery, and involved in the interring of
human remains, and the care, preservation, and
embellishment of cemetery property.
4. Requires every licensed cemetery to employ a licensed
cemetery manager to manage, supervise and direct its
operations.
5. Prohibits a person from engaging in the business of,
acting as, or advertising as a cemetery or crematory
manager without a license from the Bureau.
6. Authorizes the Bureau to revoke the license of any
cemetery licensee and the certificate of authority of
any cemetery when certain conditions are met, as
specified.
7. Authorizes the Bureau to serve as conservator of
cemetery endowment care funds under specified
circumstances.
This bill:
1. Authorizes a court of competent jurisdiction to
appoint a temporary manager to manage the property and
service prepaid interments of a private cemetery, if
the court finds that a cemetery manager has ceased to
AB 124
Page
3
perform his or her duties.
2. Requires the temporary manager to be a licensed
cemetery manager.
3. Confers upon the appointed manager the same powers
and duties as a licensed cemetery manager, as provided
for in law, and provides that the temporary manager
shall serve for a limited term not to exceed six
months, or until a new licensed manager has been
hired.
4. Authorizes the court to authorize payment of
reasonable compensation for the temporary manager's
services. The compensation shall be paid from
available income from the cemetery.
Background
This bill is the result of deteriorated conditions and
corresponding public discontent at Evergreen Memorial Park
and Funeral Home (Evergreen) located in Merced, a cemetery
in the Author's district. A January 2008 article in the
Merced Sun-Star chronicled the troubled history of this
cemetery, which surrendered its license to the Bureau in
June 2007. Without this license, cemetery operations
cannot be carried out, nor can the cemetery conduct new
business. The property had been in foreclosure since
October 2007, and public auction of the property had been
postponed at least three times. Since the cemetery is
privately owned, the city and county are limited in their
ability to intervene, according to the author. The author
states that the conditions are so poor and dilapidated that
there are sinking graves, broken headstones, litter and
unkempt grounds in the cemetery.
Cemetery Endowment Care Funds and Care of Cemeteries . The
law requires each cemetery owner, with specified
exceptions, to establish, maintain, and operate an
endowment care fund (ECF) and specifies that the principal
of the ECF must be invested and the income may only be used
for care, maintenance and embellishment of the cemetery.
The law requires that when interment property is sold, the
cemetery must deposit specified minimum amounts into its
AB 124
Page
4
ECF.
The law requires the owner of the cemetery (termed
"cemetery authority") to appoint either a board of
trustees, or a bank or trust company (institutional
trustee) as trustee over the ECF. A board of trustees or
institutional trustee has fiduciary authority over the
endowment care funds and is responsible for investing the
funds in such a way that the funds will earn revenues for
the care, maintenance and embellishment of the cemetery.
The ECF trustee authorizes expenditures from the earnings
of the fund to care for the cemetery.
When there is no board of trustees, or if the integrity of
the ECF is in jeopardy, the Bureau may take action, which
is ultimately secured through an order of the Superior
Court, to seize and take possession of the ECF. In some
circumstances, the Bureau may also order the cemetery
authority to appoint an institutional trustee over the ECF.
Caring for a cemetery that has been abandoned or for which
there is no longer a cemetery license has been a
problematic issue for a number of years. When there is an
ECF that is sufficiently large enough to generate an
appropriate amount of income, the trustees of the ECF could
arguably authorize expenditures from the income for care of
the cemetery grounds. However, institutional trustees
(banks and trust companies) have been reluctant over the
years to authorize such expenditures.
Furthermore, a local government such as a city or county,
based upon its charter, ordinance or inherent police power,
may exercise its authority to address public health,
safety, or welfare issues in connection with a cemetery
within its jurisdiction. In such cases, if the Bureau
holds the ECF, the city or county could be reimbursed for
its costs from the ECF income.
While it appears that the city or county may have the
authority to perform some care at the cemetery under its
general powers, the reality often is that local governments
are reluctant to take action in such cases. Institutional
trustees are also usually reluctant to authorize
expenditures for cemetery maintenance when there is not a
AB 124
Page
5
current cemetery license. In such situations it is
essential for cooperative and collaborative efforts to be
made among members of the public, the local authorities,
the cemetery owner, the ECF trustee, and the Bureau. This
measure is intended to facilitate solutions to these kinds
of difficult situations where a cemetery has been left to
fall into disrepair and neglect by authorizing a court to
appoint a qualified individual to care for the cemetery and
conduct burials that have already been paid for by
customers.
In light of the discussion above, it is important to
clarify that the cemetery manager does not administer the
ECF. It is the ECF trustees (whether a board of trustees
appointed by the cemetery authority, or a bank or trust
company) that manages the trust funds and authorizes any
expenditures from the trust fund earnings. The cemetery
manager may request funds from the ECF trustees for
cemetery care and maintenance, but the trustees are
ultimately responsible for making fiscal decisions on
spending the ECF earnings.
Prior Legislation
This bill is a reintroduction of last year's AB 1816
(Galgiani) which passed the Senate by a vote of 35-0. The
bill was ultimately vetoed by the Governor stating, "This
bill is unnecessary because the courts already maintain and
have exercised authority to appoint temporary cemetery
managers when circumstances warrant."
SB 1135 (Ducheny), Chapter 545, Statutes of 2008, increases
the minimum amounts an endowment care cemetery is required
to have deposited in its endowment care fund.
AB 1911 (Galgiani), Chapter 490, Statutes of 2008, requires
a managing funeral director, cemetery manager, crematory
manager, or cemetery broker to notify the Bureau if an
employee or prospective employee has had a license or
registration from the Bureau revoked or suspended, as
specified. Provides a civil penalty of $2,500 to $25,000
for knowingly making a false statement to the Bureau
regarding a transfer of cemetery ownership.
AB 124
Page
6
SB 1490 (Ducheny), Chapter 401, Statutes of 2006, requires
the Bureau to adopt regulations that establish minimum
standards of maintenance for endowment care cemeteries
under its jurisdiction, and requires the Bureau to disclose
specific information about cemeteries on its Internet site.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Conway, Cook, Coto, De La Torre, De Leon,
DeVore, Duvall, Emmerson, Eng, Evans, Feuer, Fletcher,
Fong, Fuentes, Fuller, Furutani, Gaines, Galgiani,
Garrick, Gilmore, Hagman, Hall, Harkey, Hayashi,
Hernandez, Hill, Huber, Huffman, Jeffries, Jones, Knight,
Krekorian, Lieu, Logue, Bonnie Lowenthal, Ma, Mendoza,
Miller, Monning, Nava, Nestande, Niello, Nielsen, John A.
Perez, V. Manuel Perez, Portantino, Ruskin, Salas,
Saldana, Silva, Skinner, Smyth, Solorio, Audra
Strickland, Swanson, Torlakson, Torres, Torrico, Tran,
Yamada, Bass
NO VOTE RECORDED: Davis, Price, Villines
JA:nl 6/22/09 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
**** END ****