House Bill 0629

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    Florida House of Representatives - 2000                 HB 629

        By the Committee on Financial Services and Representative
    Crow





  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         authorizing the Department of Banking and

  9         Finance and the Board of Funeral and Cemetery

10         Services to adopt rules to allow for electronic

11         submission of applications, documents, and fees

12         and to provide for certification of compliance

13         in lieu of submission of documents; eliminating

14         a reference to an examination fee; amending ss.

15         497.117 and 497.131, F.S.; revising terminology

16         designating a trust fund; amending s. 497.213,

17         F.S.; increasing annual license fees for

18         certain cemeteries; amending s. 497.245, F.S.;

19         eliminating reference to annual examination

20         fees; amending ss. 497.341 and 497.405, F.S.;

21         revising terminology relating to cemeteries

22         owned by a religious institution; amending s.

23         497.407, F.S.; providing initial application

24         and renewal fees for a certificate of authority

25         to sell preneed contracts; revising terminology

26         designating a trust fund; amending s. 497.431,

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

28         the business of any person writing preneed

29         contracts and any guaranteeing organization;

30         revising the expenses the person or

31         organization being examined is responsible for

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  1         paying in connection with an examination;

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

  3         designating a trust fund; amending s. 497.439,

  4         F.S.; providing for submission of an

  5         application for registration as a preneed sales

  6         agent, with application fee, in a form

  7         prescribed by department rule and approved by

  8         the board; providing an effective date.

  9

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

11

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

13  497.003, Florida Statutes, are amended to read:

14         497.003  Cemeteries; exemption; investigation and

15  mediation.--

16         (1)  The provisions of this chapter relating to

17  cemeteries and all rules adopted pursuant thereto shall apply

18  to all cemeteries except for:

19         (a)  Religious institution Church cemeteries of less

20  than 5 acres which provide only single-level ground burial.

21         (b)  County and municipal cemeteries.

22         (c)  Community and nonprofit association cemeteries

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

24  burial spaces or burial merchandise.

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

26  religious institution churches prior to June 23, 1976.

27         (e)  Cemeteries beneficially owned and operated since

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

29  agent.

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

31  acre which is owned by and immediately contiguous to an

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  1  existing religious institution church facility and is subject

  2  to local government zoning.  The religious institution church

  3  establishing such a columbarium shall ensure that the

  4  columbarium is perpetually kept and maintained in a manner

  5  consistent with the intent of this chapter.  If the religious

  6  institution church relocates, the religious institution church

  7  shall relocate all of the urns and remains placed in the

  8  columbarium which were placed therein during its use by the

  9  religious institution church.

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

11  not sell burial spaces or burial merchandise.

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

13  owned by and immediately contiguous to an existing religious

14  institution church or synagogue facility and is subject to

15  local government zoning.  The religious institution church or

16  synagogue establishing such a mausoleum must ensure that the

17  mausoleum is kept and maintained in a manner consistent with

18  the intent of this chapter and limit its availability to

19  members of the religious institution church or synagogue.  The

20  religious institution church or synagogue establishing such a

21  mausoleum must have been incorporated for at least 25 years

22  and must have sufficient funds in an endowment fund to cover

23  the costs of construction of the mausoleum.

24         (4)  Any religious-institution-owned church-owned

25  cemetery that is exempt under paragraph (1)(d), is located in

26  a county with a population of at least 1.3 million persons on

27  July 1, 1996, and was selling merchandise and services to the

28  religious institution's church's members prior to October 1,

29  1993, may establish one additional exempt cemetery in such

30  county after December 31, 2020, without establishing need

31  under s. 497.201.

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  1         (5)  Any religious-institution-owned church-owned

  2  cemetery exempt under subsection (1), except those cemeteries

  3  qualifying under paragraph (1)(d), which becomes affiliated

  4  with a commercial enterprise must meet the requirements of s.

  5  497.201.

  6         Section 2.  Present subsections (31), (32), and (33) of

  7  section 497.005, Florida Statutes, 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 an organization

12  formed solely for religious purposes which has qualified for

13  exemption from federal income tax as an exempt organization

14  under the provisions of s. 501(c)(3) of the Internal Revenue

15  Code of 1986, as amended.

16         Section 3.  Subsections (1) and (4) of section 497.103,

17  Florida Statutes, are amended to read:

18         497.103  Rulemaking authority of board and

19  department.--

20         (1)  The board has authority to adopt rules pursuant to

21  ss. 120.536(1) and 120.54 to implement provisions of this

22  chapter conferring duties upon it.  The department may adopt

23  rules pursuant to ss. 120.536(1) and 120.54 to administer

24  provisions of this chapter conferring duties upon it. The

25  board or the department may also adopt rules to allow for the

26  electronic submission of any applications, documents, or fees

27  required by this chapter. The board or the department may

28  adopt rules to authorize the board or the department to accept

29  certification of compliance with certain requirements of this

30  chapter in lieu of requiring submission of the documents.

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  1         (4)  The department shall examine the financial affairs

  2  of any cemetery company and any preneed sales

  3  certificateholder and charge an examination fee as prescribed

  4  in s. 497.431.

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

  6  Statutes, is amended to read:

  7         497.117  Legal and investigative services.--

  8         (1)  The Department of Legal Affairs shall provide

  9  legal services to the board within the Department of Banking

10  and Finance, but the primary responsibility of the Department

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

12  citizens of the state by vigorously counseling the board with

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

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

15  board may retain independent legal counsel to provide legal

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

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

18  the Department of Banking and Finance.

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

20  Statutes, is amended to read:

21         497.131  Disciplinary proceedings.--

22         (4)  The determination as to whether probable cause

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  6  probable cause panel must include a former or present

  7  professional board member. However, any former professional

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

  9  active valid license for that profession. All probable cause

10  proceedings conducted pursuant to the provisions of this

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

12  24(b), Art. I of the State Constitution. The probable cause

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

14  department shall provide such additional investigative

15  information as is necessary to the determination of probable

16  cause. A request for additional investigative information

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

18  probable cause panel of the investigative report of the

19  department. The probable cause panel shall make its

20  determination of probable cause within 30 days after receipt

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

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

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

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

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

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

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

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

29  probable cause panel finds that probable cause exists, it

30  shall direct the department to file a formal complaint against

31  the licensee. The department shall follow the directions of

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  1  the probable cause panel regarding the filing of a formal

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

  3  formal complaint against the subject of the investigation and

  4  prosecute that complaint pursuant to the provisions of chapter

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

  6  complaint if it finds that probable cause had been

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

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

  9  then file a formal complaint and prosecute the complaint

10  pursuant to the provisions of chapter 120. The department

11  shall also refer to the board any investigation or

12  disciplinary proceeding not before the Division of

13  Administrative Hearings pursuant to chapter 120 or otherwise

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

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

16  independent legal counsel, employ investigators, and continue

17  the investigation as it deems necessary; all costs thereof

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

19  proceedings of the probable cause panel shall be exempt from

20  the provisions of s. 120.525.

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

22  Statutes, is amended to read:

23         497.213  Annual license fees.--

24         (1)  The department shall collect from each cemetery

25  company operating under the provisions of this chapter an

26  annual license fee as follows:

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

28  sales....................................................$250.

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

30  $100,000 annual gross sales..............................$350.

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

  2  $100,000 but less than $250,000..........................$600.

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

  4  $250,000 but less than $500,000..........................$900.

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

  6  $500,000 but less than $750,000........................$1,350.

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

  8  $750,000 but less than $1,000,000...............$2,250 $1,750.

  9         (g)  For a cemetery with annual gross sales of at least

10  $1,000,000 but less than $5,000,000 or more.....$3,250 $2,650.

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

12  $5,000,000 or more.....................................$4,900.

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

14  Statutes, is amended to read:

15         497.245  Care and maintenance trust fund, percentage of

16  payments for burial rights to be deposited.--

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

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

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

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

21  installments, the percentage of the installment payment placed

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

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

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

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

26  limited to:  reasonable trustee and custodian fees, investment

27  adviser fees, allocation fees, and taxes, and annual

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

29  the fees and other expenses, the fees and other expenses shall

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

31  paid from the corpus.

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

  2  Statutes, is amended to read:

  3         497.341  Burial without regard to race or color.--

  4         (1)  No cemetery company or other legal entity

  5  conducting or maintaining any public or private cemetery may

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

  7  cemetery company or other entity operating any cemetery may

  8  designate parts of cemeteries or burial grounds for the

  9  specific use of persons whose religious code requires

10  isolation. Religious institution Church cemeteries may limit

11  burials to church members of the religious institution and

12  their families.

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

14  Statutes, is amended to read:

15         497.405  Certificate of authority required.--

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

17  religious-institution-owned church-owned cemeteries exempt

18  under s. 497.003(1)(d), in counties with a population of at

19  least 960,000 persons on July 1, 1996, with respect to the

20  sale to the religious institution's church's members and their

21  families of interment rights, mausoleums, crypts, cremation

22  niches, vaults, liners, urns, memorials, vases, foundations,

23  memorial bases, floral arrangements, monuments, markers,

24  engraving, and the opening and closing of interment rights,

25  mausoleums, crypts and cremation niches, if such cemeteries

26  have engaged in the sale of preneed contracts prior to October

27  1, 1993, and maintain a positive net worth at the end of each

28  fiscal year of the cemetery.

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

30  497.407, Florida Statutes, are amended to read:

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  1         497.407  Certificate of authority; annual statement;

  2  renewal; transfer.--

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

  4  certificate of authority shall be accompanied by an

  5  application fee of $500. Thereafter, each annual application

  6  for renewal of a certificate of authority shall be accompanied

  7  by the appropriate fee as follows:

  8         1.  For a certificateholder with no preneed contract

  9  sales during the immediately preceding year..............$300.

10         2.  For a certificateholder with at least 1 but fewer

11  than 50 preneed contract sales during the immediately

12  preceding year...........................................$400.

13         3.  For a certificateholder with at least 50 but fewer

14  than 250 preneed contract sales during the immediately

15  preceding year...........................................$500.

16         4.  For a certificateholder with at least 250 but fewer

17  than 1,000 preneed contract sales during the immediately

18  preceding year...........................................$850.

19         5.  For a certificateholder with at least 1,000 but

20  fewer than 2,500 preneed contract sales during the immediately

21  preceding year.........................................$1,500.

22         6.  For a certificateholder with at least 2,500 but

23  fewer than 5,000 preneed contract sales during the immediately

24  preceding year.........................................$2,500.

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

26  fewer than 15,000 preneed contract sales during the

27  immediately preceding year.............................$6,000.

28         8.  For a certificateholder with at least 15,000 but

29  fewer than 30,000 preneed contract sales during the

30  immediately preceding year............................$12,500.

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  1         9.  For a certificateholder with 30,000 preneed

  2  contract sales or more during the immediately preceding year

  3  ......................................................$18,500.

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

  5  the original certificate of authority and each annual renewal

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

  7  $500 and shall accompany each application for an original

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

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

10  has a certificate of authority issued pursuant to this section

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

12  common business enterprise shall submit an application on a

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

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

15  preneed contracts under this chapter except for the

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

17  certificateholder meets the requirements of such subparagraph,

18  a branch registration shall be issued. Each branch registrant

19  may operate under the certificate of authority of the common

20  business enterprise upon the payment of a fee established by

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

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

23  department's Regulatory Trust Fund under the department.

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

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

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

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

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

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

30  notice to the certificateholder by the board that the

31  certificateholder has failed to file the annual statement or

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  1  the statement of activities of the trust, the

  2  certificateholder's authority to sell preneed contracts shall

  3  cease while such default continues. The board shall deposit

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

  5  department's Regulatory Trust Fund under the department.

  6         (12)  Each certificateholder shall pay to the

  7  department's Regulatory Trust Fund under the department an

  8  amount established by the board not to exceed $10 $5 for each

  9  preneed contract entered into. This amount must be paid within

10  60 days after the end of each quarter. These funds must be

11  used to defray the cost of the board and the department in

12  administering the provisions of this chapter.

13         Section 11.  Section 497.431, Florida Statutes, is

14  amended to read:

15         497.431  Examinations and investigations.--The

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

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

18  writing preneed contracts and any guaranteeing organization

19  existing under this chapter to the extent applicable. The

20  examination shall be at the expense of the person or

21  organization examined as provided in this section and shall be

22  made by the designated representatives or examiners

23  representative or examiner of the department. The written

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

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

26  constitute a public record. Any such person or organization

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

28  company or organization. The designated representative of the

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

30  such person or organization, whether in connection with a

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

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  1  requirements of this section if the certificateholder or

  2  guaranteeing organization submits audited financial

  3  statements. The department may charge an examination fee

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

  5  8-hour day for each examiner. Such examination fee shall be

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

  7  nearest hour. The person or organization examined For

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

  9  expense and per diem subsistence allowance provided for state

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

11  department representatives or examiners in connection with an

12  examination. The department shall be entitled to recover the

13  reasonable and justifiable costs of investigation if the

14  investigation results in judicial or administrative

15  disciplinary action.

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

17  Statutes, is amended to read:

18         497.435  Administrative fine in lieu of revocation or

19  suspension of certificate of authority.--

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

21  Regulatory Trust Fund under the department.

22         Section 13.  Subsection (7) of section 497.439, Florida

23  Statutes, is amended to read:

24         497.439  Preneed sales agents.--

25         (7)  An application for registration as a preneed sales

26  agent shall be submitted to the department with an application

27  fee of $100 by certified mail, return receipt requested, by

28  the certificateholder in on a form that has been prescribed by

29  department rule and approved by the board. Such application

30  and shall contain, at a minimum, the following:

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  1         (a)  The name, address, social security number, and

  2  date of birth of the applicant and such other information as

  3  the board may reasonably require of the applicant.

  4         (b)  The name, address, and license number of the

  5  sponsoring certificateholder.

  6         (c)  A representation, signed by the applicant, that

  7  the applicant meets the requirements set forth in subsection

  8  (6).

  9         (d)  A representation, signed by the certificateholder,

10  that the applicant is authorized to offer, sell, and sign

11  preneed contracts on behalf of the certificateholder, and that

12  the certificateholder has trained the applicant in the

13  provisions of this chapter relating to preneed sales as

14  determined by the board, the provisions of the

15  certificateholder's preneed contract, and the nature of the

16  merchandise, services, or burial rights sold by the

17  certificateholder.

18         (e)  A statement indicating whether the applicant has

19  any type of working relationship with any other

20  certificateholder or insurance company.

21         Section 14.  This act shall take effect July 1, 2000.

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  1            *****************************************

  2                          HOUSE SUMMARY

  3
      Revises various provisions of ch. 497, F.S., the Florida
  4    Funeral and Cemetery Services Act. Defines the term
      "religious institution" and revises terminology relating
  5    to cemeteries owned by such institutions, to conform.
      Revises other terminology designating a trust fund.
  6

  7    Authorizes the Board of Funeral and Cemetery Services or
      the Department of Banking and Finance to adopt rules to
  8    allow for electronic submission of any applications,
      documents, or fees and to authorize the board or
  9    department to accept a certification of compliance in
      lieu of requiring the actual documents.
10

11    Increases annual license fees for cemeteries with annual
      gross sales above a certain amount. Provides initial
12    application and renewal fees for a certificate of
      authority to sell a preneed contract. Deletes the
13    requirement that preneed sales agents submit their
      application and fee for registration via certified mail,
14    and provides for such submission to be as provided by
      department rule and approved by the board. Eliminates the
15    fee charged to examine the business of any person writing
      preneed contracts and any guaranteeing organization, and
16    revises the expenses the person or organization being
      examined is responsible for paying in connection with an
17    examination. Eliminates references to annual and other
      examination fees, to conform. See bill for details.
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