House Bill 1435

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    Florida House of Representatives - 1999                HB 1435

        By Representative Ritchie






  1                      A bill to be entitled

  2         An act relating to funeral and cemetery

  3         services; amending s. 497.003, F.S.; revising

  4         terminology relating to cemeteries owned by a

  5         religious institution; amending s. 497.005,

  6         F.S.; defining the term "religious

  7         institution"; amending s. 497.103, F.S.;

  8         eliminating a reference to an examination fee;

  9         amending ss. 497.117 and 497.131, F.S.;

10         revising terminology designating a trust fund;

11         amending s. 497.213, F.S.; increasing annual

12         license fees for certain cemeteries; amending

13         s. 497.245, F.S.; eliminating reference to

14         annual examination fees; amending ss. 497.341

15         and 497.405, F.S.; revising terminology

16         relating to cemeteries owned by a religious

17         institution; amending s. 497.407, F.S.;

18         providing initial application and renewal fees

19         for a certificate of authority to sell a

20         preneed contract; revising terminology

21         designating a trust fund; amending s. 497.431,

22         F.S.; eliminating the fee charged to examine

23         the business of any person writing preneed

24         contracts and any guaranteeing organization;

25         revising the expenses the person or

26         organization being examined is responsible for

27         paying in connection with an examination;

28         amending s. 497.435, F.S.; revising terminology

29         designating a trust fund; requiring the

30         Department of Banking and Finance to conduct a

31         comprehensive review of ch. 497, F.S., the

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  1         Florida Funeral and Cemetery Services Act, and

  2         to conduct public workshops and produce

  3         preliminary and final reports thereon;

  4         providing an appropriation; providing effective

  5         dates.

  6

  7  Be It Enacted by the Legislature of the State of Florida:

  8

  9         Section 1.  Subsections (1), (4), and (5) of section

10  497.003, Florida Statutes, are amended to read:

11         497.003  Cemeteries; exemption; investigation and

12  mediation.--

13         (1)  The provisions of this chapter relating to

14  cemeteries and all rules adopted pursuant thereto shall apply

15  to all cemeteries except for:

16         (a)  Church Cemeteries of less than 5 acres which are

17  owned by a religious institution and provide only single-level

18  ground burial.

19         (b)  County and municipal cemeteries.

20         (c)  Community and nonprofit association cemeteries

21  which provide only single-level ground burial and do not sell

22  burial spaces or burial merchandise.

23         (d)  Cemeteries owned and operated or dedicated by a

24  religious institution churches prior to June 23, 1976.

25         (e)  Cemeteries beneficially owned and operated since

26  July 1, 1915, by a fraternal organization or its corporate

27  agent.

28         (f)  A columbarium consisting of less than one-half

29  acre which is owned by and immediately contiguous to an

30  existing church facility owned by a religious institution and

31  is subject to local government zoning.  The religious

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  1  institution church establishing such a columbarium shall

  2  ensure that the columbarium is perpetually kept and maintained

  3  in a manner consistent with the intent of this chapter.  If

  4  the religious institution church relocates, the religious

  5  institution church shall relocate all of the urns and remains

  6  placed in the columbarium which were placed therein during its

  7  use by the religious institution church.

  8         (g)  Family cemeteries of less than 2 acres which do

  9  not sell burial spaces or burial merchandise.

10         (h)  A mausoleum consisting of 2 acres or less which is

11  owned by and immediately contiguous to an existing church or

12  synagogue facility owned by a religious institution and is

13  subject to local government zoning.  The religious institution

14  church or synagogue establishing such a mausoleum must ensure

15  that the mausoleum is kept and maintained in a manner

16  consistent with the intent of this chapter and limit its

17  availability to members of the religious institution church or

18  synagogue.  The religious institution church or synagogue

19  establishing such a mausoleum must have been incorporated for

20  at least 25 years and must have sufficient funds in an

21  endowment fund to cover the costs of construction of the

22  mausoleum.

23         (4)  Any church-owned cemetery that is owned by a

24  religious institution and is exempt under paragraph (1)(d), is

25  located in a county with a population of at least 1.3 million

26  persons on July 1, 1996, and was selling merchandise and

27  services to the religious institution's church's members prior

28  to October 1, 1993, may establish one additional exempt

29  cemetery in such county after December 31, 2020, without

30  establishing need under s. 497.201.

31

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  1         (5)  Any church-owned cemetery that is owned by a

  2  religious institution and is exempt under subsection (1),

  3  except those cemeteries qualifying under paragraph (1)(d),

  4  which becomes affiliated with a commercial enterprise must

  5  meet the requirements of s. 497.201.

  6         Section 2.  Subsections (31), (32), and (33) of section

  7  497.005, Florida Statutes, 1998 Supplement, are renumbered as

  8  subsections (32), (33), and (34), respectively, and a new

  9  subsection (31) is added to said section to read:

10         497.005  Definitions.--As used in this chapter:

11         (31)  "Religious institution" means a church,

12  synagogue, mosque, or any other established physical place for

13  worship in this state at which nonprofit religious services

14  and activities are regularly conducted.

15         Section 3.  Subsection (4) of section 497.103, Florida

16  Statutes, 1998 Supplement, is amended to read:

17         497.103  Rulemaking authority of board and

18  department.--

19         (4)  The department shall examine the financial affairs

20  of any cemetery company and any preneed sales

21  certificateholder and charge an examination fee as prescribed

22  in s. 497.431.

23         Section 4.  Subsection (1) of section 497.117, Florida

24  Statutes, is amended to read:

25         497.117  Legal and investigative services.--

26         (1)  The Department of Legal Affairs shall provide

27  legal services to the board within the Department of Banking

28  and Finance, but the primary responsibility of the Department

29  of Legal Affairs shall be to represent the interests of the

30  citizens of the state by vigorously counseling the board with

31  respect to its obligations under the laws of the state.

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  1  Subject to the prior approval of the Attorney General, the

  2  board may retain independent legal counsel to provide legal

  3  advice to the board on a specific matter. Fees and costs of

  4  such counsel shall be paid from the Regulatory Trust Fund of

  5  the Department of Banking and Finance.

  6         Section 5.  Subsection (4) of section 497.131, Florida

  7  Statutes, is amended to read:

  8         497.131  Disciplinary proceedings.--

  9         (4)  The determination as to whether probable cause

10  exists shall be made by majority vote of the probable cause

11  panel of the board. The board shall provide, by rule, that the

12  determination of probable cause shall be made by a panel of

13  its members or by the department. The board may provide, by

14  rule, for multiple probable cause panels composed of at least

15  two members. The board may provide, by rule, that one or more

16  members of the panel or panels may be a former board member.

17  The length of term or repetition of service of any such former

18  board member on a probable cause panel may vary according to

19  the direction of the board when authorized by board rule. Any

20  probable cause panel must include one of the board's former or

21  present consumer members, if one is available, willing to

22  serve, and is authorized to do so by the board chair. Any

23  probable cause panel must include a present board member. Any

24  probable cause panel must include a former or present

25  professional board member. However, any former professional

26  board member serving on the probable cause panel must hold an

27  active valid license for that profession. All probable cause

28  proceedings conducted pursuant to the provisions of this

29  section are exempt from the provisions of s. 286.011 and s.

30  24(b), Art. I of the State Constitution. The probable cause

31  panel may make a reasonable request, and upon such request the

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  1  department shall provide such additional investigative

  2  information as is necessary to the determination of probable

  3  cause. A request for additional investigative information

  4  shall be made within 15 days from the date of receipt by the

  5  probable cause panel of the investigative report of the

  6  department. The probable cause panel shall make its

  7  determination of probable cause within 30 days after receipt

  8  by it of the final investigative report of the department. The

  9  Comptroller may grant extensions of the 15-day and the 30-day

10  time limits. If the probable cause panel does not find

11  probable cause within the 30-day time limit, as may be

12  extended, or if the probable cause panel finds no probable

13  cause, the department may determine, within 10 days after the

14  panel fails to determine probable cause or 10 days after the

15  time limit has elapsed, that probable cause exists. If the

16  probable cause panel finds that probable cause exists, it

17  shall direct the department to file a formal complaint against

18  the licensee. The department shall follow the directions of

19  the probable cause panel regarding the filing of a formal

20  complaint. If directed to do so, the department shall file a

21  formal complaint against the subject of the investigation and

22  prosecute that complaint pursuant to the provisions of chapter

23  120. However, the department may decide not to prosecute the

24  complaint if it finds that probable cause had been

25  improvidently found by the panel. In such cases, the

26  department shall refer the matter to the board. The board may

27  then file a formal complaint and prosecute the complaint

28  pursuant to the provisions of chapter 120. The department

29  shall also refer to the board any investigation or

30  disciplinary proceeding not before the Division of

31  Administrative Hearings pursuant to chapter 120 or otherwise

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  1  completed by the department within 1 year after the filing of

  2  a complaint. A probable cause panel or the board may retain

  3  independent legal counsel, employ investigators, and continue

  4  the investigation as it deems necessary; all costs thereof

  5  shall be paid from the department's Regulatory Trust Fund. All

  6  proceedings of the probable cause panel shall be exempt from

  7  the provisions of s. 120.525.

  8         Section 6.  Subsection (1) of section 497.213, Florida

  9  Statutes, is amended to read:

10         497.213  Annual license fees.--

11         (1)  The department shall collect from each cemetery

12  company operating under the provisions of this chapter an

13  annual license fee as follows:

14         (a)  For a cemetery with less than $25,000 annual gross

15  sales....................................................$250.

16         (b)  For a cemetery with at least $25,000 but less than

17  $100,000 annual gross sales..............................$350.

18         (c)  For a cemetery with annual gross sales of at least

19  $100,000 but less than $250,000..........................$600.

20         (d)  For a cemetery with annual gross sales of at least

21  $250,000 but less than $500,000..........................$900.

22         (e)  For a cemetery with annual gross sales of at least

23  $500,000 but less than $750,000........................$1,350.

24         (f)  For a cemetery with annual gross sales of at least

25  $750,000 but less than $1,000,000...............$2,250 $1,750.

26         (g)  For a cemetery with annual gross sales of

27  $1,000,000 or more but less than $5,000,000.............$3,250

28  $2,650.

29         (h)  For a cemetery with annual gross sales of

30  $5,000,000 or more.....................................$4,900.

31

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  1         Section 7.  Subsection (2) of section 497.245, Florida

  2  Statutes, is amended to read:

  3         497.245  Care and maintenance trust fund, percentage of

  4  payments for burial rights to be deposited.--

  5         (2)  Deposits to the care and maintenance trust fund

  6  shall be made by the cemetery company not later than 30 days

  7  following the close of the calendar month in which any payment

  8  was received; however, when such payments are received in

  9  installments, the percentage of the installment payment placed

10  in trust must be identical to the percentage which the payment

11  received bears to the total cost for the burial rights.  Trust

12  income may be used to pay for all usual and customary services

13  for the operation of a trust account, including, but not

14  limited to:  reasonable trustee and custodian fees, investment

15  adviser fees, allocation fees, and taxes, and annual

16  examination fees. If the net income is not sufficient to pay

17  the fees and other expenses, the fees and other expenses shall

18  be paid by the cemetery company.  Capital gains taxes shall be

19  paid from the corpus.

20         Section 8.  Subsection (1) of section 497.341, Florida

21  Statutes, is amended to read:

22         497.341  Burial without regard to race or color.--

23         (1)  No cemetery company or other legal entity

24  conducting or maintaining any public or private cemetery may

25  deny burial space to any person because of race or color.  A

26  cemetery company or other entity operating any cemetery may

27  designate parts of cemeteries or burial grounds for the

28  specific use of persons whose religious code requires

29  isolation.  Church Cemeteries that are owned by a religious

30  institution may limit burials to church members of the

31  religious institution and their families.

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  1         Section 9.  Subsection (4) of section 497.405, Florida

  2  Statutes, is amended to read:

  3         497.405  Certificate of authority required.--

  4         (4)  The provisions of this section do not apply to

  5  church-owned cemeteries that are owned by a religious

  6  institution and are exempt under s. 497.003(1)(d), in counties

  7  with a population of at least 960,000 persons on July 1, 1996,

  8  with respect to the sale to the religious institution's

  9  church's members and their families of interment rights,

10  mausoleums, crypts, cremation niches, vaults, liners, urns,

11  memorials, vases, foundations, memorial bases, floral

12  arrangements, monuments, markers, engraving, and the opening

13  and closing of interment rights, mausoleums, crypts and

14  cremation niches, if such cemeteries have engaged in the sale

15  of preneed contracts prior to October 1, 1993, and maintain a

16  positive net worth at the end of each fiscal year of the

17  cemetery.

18         Section 10.  Subsections (4), (9), and (12) of section

19  497.407, Florida Statutes, are amended to read:

20         497.407  Certificate of authority; initial application

21  and renewal fees; annual statement; renewal; transfer.--

22         (4)(a)  An application to the board for an initial

23  certificate of authority shall be accompanied by an

24  application fee of $250. Thereafter, each annual application

25  for renewal of a certificate of authority shall be accompanied

26  by the appropriate fee as follows:

27         1.  For a certificateholder with less than $100,000 in

28  gross sales during the immediate preceding year..........$250.

29         2.  For a certificateholder with at least $100,000 but

30  less than $250,000 in gross sales during the immediate

31  preceding year...........................................$400.

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  1         3.  For a certificateholder with at least $250,000 but

  2  less than $500,000 in gross sales during the immediate

  3  preceding year...........................................$600.

  4         4.  For a certificateholder with at least $500,000 but

  5  less than $750,000 in gross sales during the immediate

  6  preceding year.........................................$1,000.

  7         5.  For a certificateholder with at least  $750,000 but

  8  less than $1,000,000 ingross sales during the immediate

  9  preceding year.........................................$1,500.

10         6.  For a certificateholder with at least $1,000,000

11  but less than $5,000,000 in gross sales during he immediate

12  preceding year.........................................$2,000.

13         7.  For a certificateholder with annual gross sales of

14  $5,000,000 or more.....................................$4,900.

15         (b)  The fee payable to the department for issuance of

16  the original certificate of authority and each annual renewal

17  thereof shall be set by the board at an amount not to exceed

18  $500 and shall accompany each application for an original

19  certificate and, thereafter, each annual statement. Any person

20  or entity that is part of a common business enterprise that

21  has a certificate of authority issued pursuant to this section

22  and elects to operate under a name other than that of the

23  common business enterprise shall submit an application on a

24  form adopted by the board to become a branch registrant. Upon

25  the approval of the board that such entity qualifies to sell

26  preneed contracts under this chapter except for the

27  requirements of subparagraph (2)(c)1. and if the

28  certificateholder meets the requirements of such subparagraph,

29  a branch registration shall be issued. Each branch registrant

30  may operate under the certificate of authority of the common

31  business enterprise upon the payment of a fee established by

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  1  the board not to exceed $150 $100 accompanying the application

  2  on April 1 annually. The fee shall be payable to the

  3  department's Regulatory Trust Fund under the Division of

  4  Finance.

  5         (9)  In addition to any other penalty that may be

  6  provided for under this chapter, the board may levy a fine not

  7  to exceed $50 a day for each day the certificateholder fails

  8  to file its annual statement, and the board may levy a fine

  9  not to exceed $50 a day for each day the certificateholder

10  fails to file the statement of activities of the trust. Upon

11  notice to the certificateholder by the board that the

12  certificateholder has failed to file the annual statement or

13  the statement of activities of the trust, the

14  certificateholder's authority to sell preneed contracts shall

15  cease while such default continues. The board shall deposit

16  all sums collected under this section to the credit of the

17  department's Regulatory Trust Fund under the Division of

18  Finance.

19         (12)  Each certificateholder shall pay to the

20  department's Regulatory Trust Fund under the Division of

21  Finance an amount established by the board not to exceed $10

22  $5 for each preneed contract entered into. This amount must be

23  paid within 60 days after the end of each quarter. These funds

24  must be used to defray the cost of the board and the

25  department in administering the provisions of this chapter.

26         Section 11.  Section 497.431, Florida Statutes, is

27  amended to read:

28         497.431  Examinations and investigations.--The

29  department shall, as often as it may deem necessary but at

30  least once every 3 years, examine the business of any person

31  writing preneed contracts and any guaranteeing organization

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  1  existing under this chapter to the extent applicable. The

  2  examination shall be at the expense of the person or

  3  organization examined as provided in this section and shall be

  4  made by the designated representatives or examiners

  5  representative or examiner of the department. The written

  6  report of each such examination, when completed, shall be

  7  filed in the office of the board and, when so filed, shall

  8  constitute a public record. Any such person or organization

  9  being examined shall produce, upon request, all records of the

10  company or organization. The designated representative of the

11  board may at any time examine the records and affairs of any

12  such person or organization, whether in connection with a

13  formal examination or not. The board may waive the examination

14  requirements of this section if the certificateholder or

15  guaranteeing organization submits audited financial

16  statements. The department may charge an examination fee

17  prescribed by rule, but such fee may not exceed $300 per

18  8-hour day for each examiner. Such examination fee shall be

19  calculated on an hourly basis and shall be rounded to the

20  nearest hour. The person or organization examined For

21  out-of-state travel, the licensee shall also pay the travel

22  expense and per diem subsistence allowance provided for state

23  employees under s. 112.061 for out-of-state travel incurred by

24  department representatives or examiners in connection with an

25  examination. The department shall be entitled to recover the

26  reasonable and justifiable costs of investigation if the

27  investigation results in judicial or administrative

28  disciplinary action.

29         Section 12.  Subsection (3) of section 497.435, Florida

30  Statutes, is amended to read:

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  1         497.435  Administrative fine in lieu of revocation or

  2  suspension of certificate of authority.--

  3         (3)  The fine shall be deposited into the department's

  4  Regulatory Trust Fund under the Division of Finance.

  5         Section 13.  (1)  The Department of Banking and Finance

  6  shall conduct a comprehensive review of chapter 497, Florida

  7  Statutes, the Florida Funeral and Cemetery Services Act. In

  8  conducting its review, the department shall:

  9         (a)  Examine ways to promote and increase competition

10  in the cemetery industry and streamline the regulatory process

11  under the chapter.

12         (b)  Examine ways to eliminate the determination of

13  need for new cemeteries required by s. 497.201, Florida

14  Statutes, address constitutional concerns, and minimize

15  negative impacts on existing cemeteries.

16         (c)  Examine and determine the cost of providing

17  perpetual care for cemeteries.

18         (d)  Examine the statutory requirements for care and

19  maintenance trust funds to determine if the requirements are

20  adequate to provide perpetual care for cemeteries.

21         (e)  Examine the disciplinary powers of the department

22  and the Board of Funeral and Cemetery Services to ensure clear

23  and concise enforcement.

24         (f)  Examine other sections of the chapter, as

25  necessary.

26         (g)  Report findings and make recommendations

27  concerning solutions to problems identified by the department,

28  including proposed legislation deemed advisable to implement

29  recommended solutions.

30         (h)  Conduct at least two public workshops prior to

31  December 1, 1999, in order to receive public comment.

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  1         (2)  The department shall produce a preliminary report

  2  by December 1, 1999, and a final report by January 15, 2000,

  3  detailing its findings and recommendations. The department

  4  shall conduct at least one public workshop between December 1,

  5  1999, and January 15, 2000, to solicit public testimony

  6  concerning the preliminary draft. A copy of the final report

  7  shall be presented to the President and the Minority Leader of

  8  the Senate, the Speaker and the Minority Leader of the House

  9  of Representatives, the Governor, and the Office of Program

10  Policy Analysis and Government Accountability.

11         (3)  This section shall take effect upon this act

12  becoming a law.

13         Section 14.  There is hereby appropriated $115,000 for

14  fiscal year 1999-2000 to the Department of Banking and Finance

15  from the department's Regulatory Trust Fund for the purpose of

16  carrying out the provisions of this act.

17         Section 15.  Except as otherwise provided herein, this

18  act shall take effect July 1, 1999.

19

20            *****************************************

21                          HOUSE SUMMARY

22
      Revises various provisions of ch. 497, F.S., the Florida
23    Funeral and Cemetery Services Act. Defines the term
      "religious institution" and revises terminology relating
24    to cemeteries owned by such institutions, to conform.
      Revises other terminology designating a trust fund.
25    Increases annual license fees for cemeteries with annual
      gross sales above a certain amount. Eliminates references
26    to annual and other examination fees. Provides initial
      application and renewal fees for a certificate of
27    authority to sell a preneed contract. Eliminates the fee
      charged to examine the business of any person writing
28    preneed contracts and any guaranteeing organization, and
      revises the expenses the person or organization being
29    examined is responsible for paying in connection with an
      examination. Requires the Department of Banking and
30    Finance to conduct a comprehensive review of ch. 497,
      F.S., and to conduct public workshops and produce
31    preliminary and final reports thereon. See bill for
      details.
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