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| [ Introduced ] | [ House Amendment 001 ] |
91_HB3988eng HB3988 Engrossed LRB9112160STsb 1 AN ACT to amend certain Acts in relation to cemeteries 2 and burial services. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 5. The State Comptroller Act is amended by adding 6 Sections 22.3 and 22.4 as follows: 7 (15 ILCS 405/22.3 new) 8 Sec. 22.3. Cemetery Preservation Advisory Board. The 9 Comptroller shall appoint a 5-member Cemetery Preservation 10 Advisory Board. The Board shall serve in an advisory capacity 11 to the Comptroller for the purpose of recommending the 12 distribution of funds from the Cemetery Preservation Fund. 13 Members of the Board shall serve a term as determined by the 14 Comptroller. Members shall serve without compensation but 15 may be reimbursed for their reasonable expenses incurred in 16 the performance of their duties. 17 (15 ILCS 405/22.4 new) 18 Sec. 22.4. Cemetery Preservation Fund. 19 (a) The Cemetery Preservation Fund is created as a 20 special fund in the State Treasury. 21 (b) Beginning on January 1, 2001, all fees and penalties 22 for the payment of registration, licensure, annual reporting, 23 and penalties paid to the State Comptroller pursuant to 24 Sections 8, 9, and 12 of the Cemetery Care Act shall be 25 deposited into the Cemetery Preservation Fund. The 26 Comptroller may accept monetary gifts or grants from any 27 nongovernmental source for deposit into the Cemetery 28 Preservation Fund. 29 (c) The State Comptroller shall determine payments from 30 the Cemetery Preservation Fund. All payments from the HB3988 Engrossed -2- LRB9112160STsb 1 Cemetery Preservation Fund shall be used by the Comptroller 2 to clean up or restore abandoned and neglected cemeteries in 3 Illinois including grants to units of local governments, 4 school districts, and not-for-profit associations. 5 (d) Grant payments provided for the cleanup of cemeteries 6 owned by units of municipal, county, or township government 7 shall not exceed 50% of the projected cost to clean up the 8 cemetery. The Comptroller may adopt rules and regulations in 9 administering this subsection. 10 (e) Expenditures from the Cemetery Preservation Fund are 11 subject to appropriation. 12 Section 10. The State Finance Act is amended by adding 13 Section 5.541 as follows: 14 (30 ILCS 105/5.541 new) 15 Sec. 5.541. The Cemetery Preservation Fund. 16 Section 15. The Grave and Cemetery Restoration Act is 17 amended by changing Section 1 as follows: 18 (55 ILCS 70/1) (from Ch. 21, par. 61) 19 Sec. 1. Care by county. 20 (a) The county board of any county may appropriate funds 21 from the county treasury to be used for the purpose of 22 putting any old, neglected graves and cemeteries in the 23 county in a cleaner and more respectable condition. 24 (b) A county that has within its territory an abandoned 25 cemetery may enter the cemetery grounds and cause the grounds 26 to be cleared and made orderly. Provided, in no event shall a 27 county enter an abandoned cemetery under this subsection if 28 the owner of the property or the legally responsible cemetery 29 authority provides written notification to the county, prior 30 to the county's entry (1) demonstrating the ownership or HB3988 Engrossed -3- LRB9112160STsb 1 authority to control or manage the cemetery and (2) declining 2 the county authorization to enter the property. In making a 3 cemetery orderly under this Section, the county may take 4 necessary measures to correct dangerous conditions that exist 5 in regard to markers, memorials, or other cemetery artifacts 6 but may not permanently remove those items from their 7 location on the cemetery grounds. 8 (c) For the purposes of this Section: 9 "Abandoned cemetery" means an area of land containing 10 more than 6 places of interment for which, after diligent 11 search, no owner of the land or currently functioning 12 cemetery authority can be found and (1) at which no 13 interments have taken place in at least 3 years; or (2) for 14 which there has been inadequate maintenance for at least 6 15 months. 16 "Diligent search" includes, but is not limited to, 17 publication of a notice in a newspaper of local circulation 18 not more than 45 but at least 30 days prior to a county's 19 entry and cleanup of cemetery grounds. The notice shall 20 provide (1) notice of the county's intended entry and cleanup 21 of the cemetery; (2) the name, if known, and geographic 22 location of the cemetery; (3) the right of the cemetery 23 authority or owner of the property to deny entry to the 24 county upon written notice to the county; and (4) the date or 25 dates of the intended cleanup. 26 "Inadequate maintenance" includes, but is not limited to, 27 the failure to cut the lawn throughout a cemetery to prevent 28 an overgrowth of grass and weeds; the failure to trim shrubs 29 to prevent excessive overgrowth; the failure to trim trees so 30 as to remove dead limbs; the failure to keep in repair the 31 drains, water lines, roads, buildings, fences, and other 32 structures of the cemetery premises; or the failure to keep 33 the cemetery premises free of trash and debris. 34 (Source: P.A. 86-696.) HB3988 Engrossed -4- LRB9112160STsb 1 Section 20. The Township Code is amended by changing 2 Section 130-5 as follows: 3 (60 ILCS 1/130-5) 4 Sec. 130-5. Cemeteries; permitted activities. 5 (a) A township may establish and maintain cemeteries 6 within and without its territory, may acquire lands for 7 cemeteries by condemnation or otherwise, may lay out lots of 8 convenient size for families, and may sell lots for a family 9 burying ground or to individuals for burial purposes. 10 Associations duly incorporated under the laws of this State 11 for cemetery purposes shall have the same power and authority 12 to purchase lands and sell lots for burial purposes as are 13 conferred upon townships under this Article. 14 (b) A township that has within its territory an 15 abandoned cemetery may enter the cemetery grounds and cause 16 the grounds to be cleared and made orderly. Provided, in no 17 event shall a township enter an abandoned cemetery under this 18 subsection if the owner of the property or the legally 19 responsible cemetery authority provides written notification 20 to the township, prior to the township's entry (1) 21 demonstrating the ownership or authority to control or manage 22 the cemetery and (2) declining the township authorization to 23 enter the property. In making a cemetery orderly under this 24 Section, the township may take necessary measures to correct 25 dangerous conditions that exist in regard to markers, 26 memorials, or other cemetery artifacts but may not 27 permanently remove those items from their location on the 28 cemetery grounds. 29 (c) In this Section: 30 "Abandoned cemetery" means an area of land containing 31 more than 6 places of interment for which, after diligent 32 search, no owner of the land or currently functioning 33 cemetery authority can be found and (1) at which no HB3988 Engrossed -5- LRB9112160STsb 1 interments have taken place in at least 3 years; or (2) for 2 which there has been inadequate maintenance for at least 6 3 months. 4 "Diligent search" includes, but is not limited to, 5 publication of a notice in a newspaper of local circulation 6 not more than 45 but at least 30 days prior to a township's 7 entry and cleanup of cemetery grounds. The notice shall 8 provide (1) notice of the township's intended entry and 9 cleanup of the cemetery; (2) the name, if known, and 10 geographic location of the cemetery; (3) the right of the 11 cemetery authority or owner of the property to deny entry to 12 the township upon written notice to the township; and (4) the 13 date or dates of the intended cleanup. 14 "Inadequate maintenance" includes, but is not limited to, 15 the failure to cut the lawn throughout a cemetery to prevent 16 an overgrowth of grass and weeds; the failure to trim shrubs 17 to prevent excessive overgrowth; the failure to trim trees so 18 as to remove dead limbs; the failure to keep in repair the 19 drains, water lines, roads, buildings, fences, and other 20 structures of the cemetery premises; or the failure to keep 21 the cemetery premises free of trash and debris. 22 (Source: Laws 1963, p. 824; P.A. 88-62.) 23 Section 25. The Illinois Municipal Code is amended by 24 changing Section 11-49-1 as follows: 25 (65 ILCS 5/11-49-1) (from Ch. 24, par. 11-49-1) 26 Sec. 11-49-1. Cemeteries; permitted activities. 27 (a) The corporate authorities of each municipality may 28 establish and regulate cemeteries within or without the 29 municipal limits; may acquire lands therefor, by purchase or 30 otherwise; may cause cemeteries to be removed; and may 31 prohibit their establishment within one mile of the municipal 32 limits. HB3988 Engrossed -6- LRB9112160STsb 1 (b) The corporate authorities also may enter into 2 contracts to purchase existing cemeteries, or lands for 3 cemetery purposes, on deferred installments to be paid solely 4 from the proceeds of sale of cemetery lots. Every such 5 contract shall empower the purchasing municipality, in its 6 own name, to execute and deliver deeds to purchasers of 7 cemetery lots for burial purposes. 8 (c) The corporate authorities of each municipality that 9 has within its territory an abandoned cemetery may enter the 10 cemetery grounds and cause the grounds to be cleared and made 11 orderly. Provided, in no event shall the corporate 12 authorities of a municipality enter an abandoned cemetery 13 under this subsection if the owner of the property or the 14 legally responsible cemetery authority provides written 15 notification to the corporate authorities, prior to the 16 corporate authorities' entry (1) demonstrating the ownership 17 or authority to control or manage the cemetery and (2) 18 declining the corporate authority authorization to enter the 19 property. In making a cemetery orderly under this Section, 20 the corporate authorities of a municipality may take 21 necessary measures to correct dangerous conditions that exist 22 in regard to markers, memorials, or other cemetery artifacts 23 but may not permanently remove those items from their 24 location on the cemetery grounds. 25 (d) In this Section: 26 "Abandoned cemetery" means an area of land containing 27 more than 6 places of interment for which, after diligent 28 search, no owner of the land or currently functioning 29 cemetery authority can be found and (1) at which no 30 interments have taken place in at least 3 years; or (2) for 31 which there has been inadequate maintenance for at least 6 32 months. 33 "Diligent search" includes, but is not limited to, 34 publication of a notice in a newspaper of local circulation HB3988 Engrossed -7- LRB9112160STsb 1 not more than 45 but at least 30 days prior to entry and 2 cleanup of cemetery grounds by the corporate authorities of a 3 municipality. The notice shall provide (1) notice of the 4 corporate authorities' intended entry and cleanup of the 5 cemetery; (2) the name, if known, and geographic location of 6 the cemetery; (3) the right of the cemetery authority or 7 owner of the property to deny entry to the corporate 8 authorities upon written notice to those authorities; and (4) 9 the date or dates of the intended cleanup. 10 "Inadequate maintenance" includes, but is not limited to, 11 the failure to cut the lawn throughout a cemetery to prevent 12 an overgrowth of grass and weeds; the failure to trim shrubs 13 to prevent excessive overgrowth; the failure to trim trees so 14 as to remove dead limbs; the failure to keep in repair the 15 drains, water lines, roads, buildings, fences, and other 16 structures of the cemetery premises; or the failure to keep 17 the cemetery premises free of trash and debris. 18 (Source: Laws 1961, p. 576.) 19 Section 30. The Illinois Funeral or Burial Funds Act is 20 amended by changing Sections 1a, 1a-1, 2, 2a, 3, 3a, 3e, 3f, 21 4, 7.2, and 8 and by adding Sections 3a-5 and 8.1 as follows: 22 (225 ILCS 45/1a) (from Ch. 111 1/2, par. 73.101a) 23 Sec. 1a. For the purposes of this Act, the following 24 terms shall have the meanings specified, unless the context 25 clearly requires another meaning: 26 "Beneficiary" means the person specified in the pre-need 27 contract upon whose death funeral services or merchandise 28 shall be provided or delivered. 29 "Licensee" means a seller of a pre-need contract who has 30 been licensed by the Comptroller under this Act. 31 "Outer burial container" means any container made of 32 concrete, steel, wood, fiberglass or similar material, used HB3988 Engrossed -8- LRB9112160STsb 1 solely at the interment site, and designed and used 2 exclusively to surround or enclose a separate casket and to 3 support the earth above such casket, commonly known as a 4 burial vault, grave box or grave liner, but not including a 5 lawn crypt as defined in the Illinois Pre-need Cemetery Sales 6 Act. 7 "Parent company" means a corporation that has a 8 controlling interest in another corporation. 9 "Person" means any person, partnership, association, 10 corporation, or other entity. 11 "Pre-need contract" means any agreement or contract, or 12 any series or combination of agreements or contracts, whether 13 funded by trust deposits or life insurance policies or 14 annuities, which has for a purpose the furnishing or 15 performance of funeral services or the furnishing or delivery 16 of any personal property, merchandise, or services of any 17 nature in connection with the final disposition of a dead 18 human body. Nothing in this Act is intended to regulate the 19 content of a life insurance policy or a tax-deferred annuity. 20 "Provider" means a person who is obligated for furnishing 21 or performing funeral services or the furnishing or delivery 22 of any personal property, merchandise, or services of any 23 nature in connection with the final disposition of a dead 24 human body. 25 "Purchaser" means the person who originally paid the 26 money under or in connection with a pre-need contract. 27 "Sales proceeds" means the entire amount paid to a 28 seller,exclusive of sales taxes paid by the seller, finance29charges paid by the purchaser,and credit life, accident or 30 disability insurance premiums, upon any agreement or 31 contract, or series or combination of agreements or 32 contracts, for the purpose of performing funeral services or 33 furnishing personal property, merchandise, or services of any 34 nature in connection with the final disposition of a dead HB3988 Engrossed -9- LRB9112160STsb 1 human body, including, but not limited to, the retail price 2 paid for such services and personal property and merchandise. 3 "Purchase price" meansthesales proceedsless finance4charges on retail installment contracts. 5 "Seller" means the person who sells or offers to sell the 6 pre-need contract to a purchaser, whether funded by a trust 7 agreement, life insurance policy, or tax-deferred annuity. 8 "Trustee" means a person authorized to hold funds under 9 this Act. 10 (Source: P.A. 88-477.) 11 (225 ILCS 45/1a-1) 12 Sec. 1a-1. Pre-need contracts. 13 (a) It shall be unlawful for any seller doing business 14 within this State to accept sales proceeds from a purchaser, 15 either directly or indirectly by any means, unless the seller 16 enters into a pre-need contract with the purchaser which 17 meets the following requirements: 18 (1) It states the name and address of the principal 19 office of the sellerprovider, all branch locations, and 20 the parent company of the seller, if anyor clearly21discloses that the provider will be selected by the22purchaser or the purchaser's survivor or legal23representative at a later date, except that no contract24shall contain any provision restricting the right of the25contract purchaser during his or her lifetime in making26his or her own selection of a provider. 27 (2) It clearly identifies the provider'sseller's28 name and address, the purchaser, and the beneficiary, if 29 other than the purchaser, and the provider, if different30than the seller or discloses that the provider will be31selected at a later date. 32 (3) It contains a complete description of the 33 funeral merchandise and services to be provided and the HB3988 Engrossed -10- LRB9112160STsb 1 price of the merchandise and services, and it clearly 2 discloses whether the price of the merchandise and 3 services is guaranteed or not guaranteed as to price. 4 (A) Each guaranteed price contract shall 5 contain the following statement in 12 point bold 6 type: 7 THIS CONTRACT GUARANTEES THE BENEFICIARY THE 8 SPECIFIC GOODS AND SERVICES CONTRACTED FOR. NO 9 ADDITIONAL CHARGES MAY BE REQUIRED. FOR DESIGNATED 10 GOODS AND SERVICES, ADDITIONAL CHARGES MAY BE 11 INCURRED FOR UNEXPECTED EXPENSES INCLUDING, BUT NOT 12 LIMITED TO, CASH ADVANCES, SHIPPING OF REMAINS FROM 13 A DISTANT PLACE, OR DESIGNATED HONORARIA ORDERED OR 14 DIRECTED BY SURVIVORS. 15 (B) Each non-guaranteed price contract shall 16 contain the following statement in 12 point bold 17 type: 18 THIS CONTRACT DOES NOT GUARANTEE THE PRICE THE 19 BENEFICIARY WILL PAY FOR ANY SPECIFIC GOODS OR 20 SERVICES. ANY FUNDS PAID UNDER THIS CONTRACT ARE 21 ONLY A DEPOSIT TO BE APPLIED TOWARD THE FINAL PRICE 22 OF THE GOODS OR SERVICES CONTRACTED FOR. ADDITIONAL 23 CHARGES MAY BE REQUIRED. 24 (4) It provides that if the particular supplies and 25 services specified in the pre-need contract are 26 unavailable at the time of delivery, the provider shall 27 be required to furnish supplies and services similar in 28 style and at least equal in quality of material and 29 workmanship. 30 (5) It discloses any penalties or restrictions, 31 including but not limited to geographic restrictions or 32 the inability of the provider, if selected,to perform, 33 on the delivery of merchandise, services, or pre-need 34 contract guarantees. HB3988 Engrossed -11- LRB9112160STsb 1 (6) Regardless of the method of funding the 2 pre-need contract, the following must be disclosed: 3 (A) Whether the pre-need contract is to be 4 funded by a trust, life insurance, or an annuity; 5 (B) The nature of the relationship among the 6 personentityfunding the pre-need contract, the 7 provider,if selected,and the seller; and 8 (C) The impact on the pre-need contract of (i) 9 any changes in the funding arrangement including but 10 not limited to changes in the assignment, 11 beneficiary designation, or use of the funds; (ii) 12 any specific penalties to be incurred by the 13 contract purchaser as a result of failure to make 14 payments; (iii) penalties to be incurred or moneys 15 or refunds to be received as a result of 16 cancellations; and (iv) all relevant information 17 concerning what occurs and whether any entitlements 18 or obligations arise if there is a difference 19 between the proceeds of the particular funding 20 arrangement and the amount actually needed to pay 21 for the funeral at-need.; and22 (D) The method of changingor selecting the23designation ofthe provider. 24 (b) All pre-need contracts are subject to the Federal 25 Trade Commission Rule concerning the Cooling-Off Period for 26 Door-to-Door Sales (16 CFR Part 429). 27 (c) No pre-need contract shall be sold in this State 28 unless there is a provider for the services and personal 29 property being sold, or unless disclosure has been made by30the seller as provided in subdivision (a)(1). If the seller 31 is not a providerand a provider has been selected, then the 32 seller must have a binding agreement with a provider, and the 33 identity of the provider and the nature of the agreement 34 between the seller and the provider shall be disclosed in the HB3988 Engrossed -12- LRB9112160STsb 1 pre-need contract at the time of the sale and before the 2 receipt of any sales proceeds.Any subsequent change made in3the identity of the provider shall be approved in writing by4the purchaser and beneficiary within 30 days after it occurs.5 The failure to disclose the identity of the provider, the 6 nature of the agreement between the seller and the provider, 7 or any changes thereto to the purchaser and beneficiary, or 8 the failure to make the disclosures required in subdivision 9 (a)(1), constitutes an intentional violation of this Act. 10 (d) All pre-need contracts must be in writing in at 11 least 12 point type, numbered, and executed in duplicateand12no pre-need contract form shall be used without prior filing13with the Comptroller. A signed copy of the pre-need contract 14 must be provided to the purchaser at the time of entry.The15Comptroller shall review all pre-need contract forms and16shall prohibit the use of contract forms which do not meet17the requirements of this Act upon written notification to the18seller.Any use or attempted use of any oral pre-need 19 contract or any written pre-need contract in aform not filed20with the Comptroller or in aform which does not meet the 21 requirements of this Act shall be deemed a violation of this 22 Act and is voidable by the purchaser without penalty.Life23insurance policies, tax-deferred annuities, endorsements,24riders, or applications for life insurance or tax-deferred25annuities are not subject to filing with the Comptroller.26 The Comptroller may by rule develop a model pre-need contract 27 form which meets the requirements of this Act. 28 (e) The State Comptroller shall by rule develop a 29 booklet for consumers in plain English describing the scope, 30 application, and consumer protections of this Act. After the 31 adoption of these rules, no pre-need contract shall be sold 32 in this State unless the seller (i) distributes to the 33 purchaser prior to the sale a booklet promulgated or approved 34 for use by the State Comptroller and (ii) explains to the HB3988 Engrossed -13- LRB9112160STsb 1 purchaser the terms of the pre-need contract prior to the 2 purchaser's signing. 3 (f) All sales proceeds received in connection with a 4 pre-need contract shall be deposited into a trust account as 5 provided in Section 1b and Section 2 of this Act, or shall be 6 used to purchase a life insurance policy or tax-deferred 7 annuity as provided in Section 2a of this Act. 8 (g) No pre-need contract shall be sold in this State 9 unless it is accompanied by a funding mechanism permitted 10 under this Act, and unless the seller is licensed by the 11 Comptroller as provided in Section 3 of this Act. Nothing in 12 this Act is intended to relieve sellers of pre-need contracts 13 from being licensed under any other Act required for their 14 profession or business, and being subject to the rules 15 promulgated to regulate their profession or business, 16 including rules on solicitation and advertisement. 17 (Source: P.A. 90-47, eff. 1-1-98.) 18 (225 ILCS 45/2) (from Ch. 111 1/2, par. 73.102) 19 Sec. 2. (a) If a purchaser selects a trust arrangement 20 to fund the pre-need contract, all trust deposits as 21 determined by Section 1b shall be made within 30 days of 22 receipt. 23 (b) A trust established under this Act must be 24 maintained: 25 (1) in a trust account established in a bank, 26 savings and loan association, savings bank, or credit 27 union authorized to do business in Illinois in which 28 accounts are insured by an agency of the federal 29 government; or 30 (2) in a trust company authorized to do business in 31 Illinois. 32 (c) Trust agreements and amendments to the trust 33 agreements used to fund a pre-need contract shall be filed HB3988 Engrossed -14- LRB9112160STsb 1 with the Comptroller prior to their use. 2 (d) Trust agreements shall follow the format of the 3 standard Funeral Trust Agreements approved by the Comptroller 4 for guaranteed or non-guaranteed price funeral plans. 5 (e) A seller or provider shall furnish to the trustee 6 and depositary the name of each payor and the amount of 7 payment on each such account for which deposit is being so 8 made. Nothing shall prevent the trustee or a seller or 9 provider acting as a trustee in accordance with this Act from 10 commingling the deposits in any such trust fund for purposes 11 of its management and the investment of its funds as provided 12 in the Common Trust Fund Act. In addition, multiple trust 13 funds maintained under this Act may be commingled or 14 commingled with other funeral or burial related trust funds 15 if all record keeping requirements imposed by law are met. 16 (f) Trust funds may be maintained in a financial 17 institution described in subsection (b) which is located in a 18 state adjoining this State where: (1) the financial 19 institution is located within 50 miles of the border of this 20 State, (2) its accounts are federally insured, and (3) it has 21 registered with the Illinois Secretary of State for purposes 22 of service of process. 23 (g) Upon notice to the Comptroller, the seller may 24 change the trustee of the fund. 25 (Source: P.A. 88-477.) 26 (225 ILCS 45/2a) 27 Sec. 2a. Purchase of insurance or annuity. 28 (a) If a purchaser selects the purchase of a life 29 insurance policy or tax-deferred annuity contract to fund the 30 pre-need contract, the application and collected premium 31 shall be mailed within 30 days of signing the pre-need 32 contract. 33 (b) If life insurance or an annuity is used to fund a HB3988 Engrossed -15- LRB9112160STsb 1 pre-need contract, the seller or provider shall not be named 2 as the owner or beneficiary of the policy or annuity. No 3 person whose only insurable interest in the insured is the 4 receipt of proceeds from the policy or in naming who shall 5 receive the proceeds nor any trust acting on behalf of such 6 person or seller or provider shall be named as owner or 7 beneficiary of the policy or annuity. 8 (c) Nothing shall prohibit the purchaser from 9 irrevocably assigning ownership of the policy or annuity used 10 to fund a guaranteed price pre-need contract to a person or 11 trust for the purpose of obtaining favorable consideration 12 for Medicaid, Supplemental Security Income, or another public 13 assistance program, as permitted under federal law, except 14 that neither the seller nor the contract provider shall be 15 named the owner of the policy or annuity. 16 (d) If a life insurance policy or annuity contract is 17 used to fund a pre-need contract, except for guaranteed price 18 contracts permitted in Section 4(a) of this Act, the pre-need 19 contract must be revocable, and the assignment provision in 20 the pre-need contract must contain the following disclosure 21 in 12 point bold type: 22 THIS ASSIGNMENT MAY BE REVOKED BY THE ASSIGNOR OR 23 ASSIGNOR'S SUCCESSOR OR, IF THE ASSIGNOR IS ALSO THE INSURED 24 AND DECEASED, BY THE REPRESENTATIVE OF THE INSURED'S ESTATE 25 BEFORE THE RENDERING TO THE CEMETERY SERVICES OR GOODS OR 26 FUNERAL SERVICES OR GOODS. IF THE ASSIGNMENT IS REVOKED, THE 27 DEATH BENEFIT UNDER THE LIFE INSURANCE POLICY OR ANNUITY 28 CONTRACT SHALL BE PAID IN ACCORDANCE WITH THE BENEFICIARY 29 DESIGNATION UNDER THE INSURANCE POLICY OR ANNUITY CONTRACT. 30 (e) Sales proceeds shall not be used to purchase life 31 insurance policies or tax-deferred annuities unless the 32 company issuing the life insurance policies or tax-deferred 33 annuities is licensed with the Illinois Department of 34 Insurance, and the insurance producer or annuity seller is HB3988 Engrossed -16- LRB9112160STsb 1 licensed to do business in the State of Illinois. 2 (f) The seller or provider must give notice in writing 3 that the cash surrender value of a life insurance policy may 4 be less than the amount provided for by the refund provisions 5 of the trust. 6 (Source: P.A. 88-477.) 7 (225 ILCS 45/3) (from Ch. 111 1/2, par. 73.103) 8 Sec. 3. Licensing. 9 (a) No person, firm, partnership, association or 10 corporation may act as seller without first securing from the 11 State Comptroller a license to so act. Application for such 12 license shall be in writing, signed by the applicant and duly 13 verified on forms furnished by the Comptroller. Each 14 application shall contain at least the following: 15 (1) The full name and address (both residence and 16 place of business) of the applicant, and every member, 17 officer and director thereof if the applicant is a firm, 18 partnership, association, or corporation, and of every 19 shareholder holding more than 10% of the corporate stock 20 if the applicant is a corporation.Any license issued21pursuant to the application shall be valid only at the22address stated in the application for such applicant or23at such new address as may be approved by the24Comptroller; 25 (2) A statement of the applicant's assets and 26 liabilitiesapproximate net worth; 27 (3) The name and address of the applicant's 28 principal place of business at which the books, accounts, 29 and records shall be available for examination by the 30 Comptroller as required by this Act; 31 (4) The names and addresses of the applicant's 32 branch locations at which pre-need sales shall be 33 conducted and which shall operate under the same license HB3988 Engrossed -17- LRB9112160STsb 1 number as the applicant's principal place of business; 2 (5) For each individual listed under item (1) above, 3 a detailed statement of the individual's business 4 experience for the 10 years immediately preceding the 5 application; any present or prior connection between the 6 individual and any other person engaged in pre-need 7 sales; any felony or misdemeanor convictions for which 8 fraud was an essential element; any charges or complaints 9 lodged against the individual for which fraud was an 10 essential element and which resulted in civil or criminal 11 litigation; any failure of the individual to satisfy an 12 enforceable judgment entered against him based upon 13 fraud; and any other information requested by the 14 Comptroller relating to past business practices of the 15 individual. Since the information required by this item 16 (5) may be confidential or contain proprietary 17 information, this information shall not be available to 18 other licensees or the general public and shall be used 19 only for the lawful purposes of the Comptroller in 20 enforcing this Act; 21 (6) The name of the trustee and, if applicable, the 22 names of the advisors to the trustee, including a copy of 23 the proposed trust agreement under which the trust funds 24 are to be held as required by this Act; and 25 (7) Such other information as the Comptroller may 26 reasonably require in order to determine the 27 qualification of the applicant to be licensed under this 28 Act.and (3)29 (b) Applications for license shall be accompanied by a 30 fidelity bond executed by the applicant and a surety company 31 authorized to do business in this State or an irrevocable, 32 unconditional letter of credit issued by a bank, credit 33 union, or trust company authorized to do business in the 34 State of Illinois, as approved by the State Comptroller, in HB3988 Engrossed -18- LRB9112160STsb 1 such amount not exceeding $10,000 as the Comptroller may 2 require.Individual salespersons employed by a licensee3shall not be required to obtain licenses in their individual4capacities. Upon receipt of such application and bond or5letter of credit the Comptroller shall issue a license unless6he or she shall determine that the applicant has made false7statements or representations in such application, or is8insolvent, or has conducted or is about to conduct his9business in a fraudulent manner, or is not duly authorized to10transact business in this State. Such license shall be kept11conspicuously posted in the place of business of the12licensee.If, after notice and an opportunity to be heard, it 13 has been determined that a licensee has violated this Act 14 within the past 5 calendar years, or if a licensee does not 15 retain a corporate fiduciary, as defined in the Corporate 16 Fiduciary Act, to manage the funds in trust pursuant to this 17 Act, the Comptroller may require an additional bond or letter 18 of credit from the licensee from time to time in amounts 19 equal to one-tenth of such trust funds, which bond or letter 20 of credit shall run to the Comptroller for the use and 21 benefit of the beneficiaries of such trust funds. 22 The licensee shall keep accurate accounts, books and 23 records in this State, at the principal place of business 24 identified in the licensee's license application or as 25 otherwise approved by the Comptroller in writing, of all 26 transactions, copies of all pre-need contracts, trust 27 agreements, and other agreements, dates and amounts of 28 payments made and accepted thereon, the names and addresses 29 of the contracting parties, the persons for whose benefit 30 such funds are accepted, and the names of the depositaries of 31 such funds. Each licensee shall maintain the documentation 32 for a period of 3 years after the licensee has fulfilled his 33 obligations under the pre-need contract. Additionally, for a 34 period not to exceed 6 months after the performance of all HB3988 Engrossed -19- LRB9112160STsb 1 terms in a pre-need sales contract, the licensee shall 2 maintain copies of the contract at the licensee branch 3 location where the contract was entered. If an insurance 4 policy or tax-deferred annuity is used to fund the pre-need 5 contract, the licensee under this Act shall keep and maintain 6 accurate accounts, books, and records in this State, at the 7 principal place of business identified in the licensee's 8 application or as otherwise approved by the Comptroller in 9 writing, of all insurance policies and tax-deferred annuities 10 used to fund the pre-need contract, the name and address of 11 insured, annuitant, and initial beneficiary, and the name and 12 address of the insurance company issuing the policy or 13 annuity. If a life insurance policy or tax-deferred annuity 14 is used to fund a pre-need contract, the licensee shall 15 notify the insurance company of the name of each pre-need 16 contract purchaser and the amount of each payment when the 17 pre-need contract, insurance policy or annuity is purchased. 18 The licensee shall make reports to the Comptroller 19 annually or at such other time as the Comptroller may 20 require, on forms furnished by the Comptroller. The licensee 21 shall file the annual report with the Comptroller within 75 22 days after the end of the licensee's fiscal year. The 23 Comptroller shall for good cause shown grant an extension for 24 the filing of the annual report upon the written request of 25 the licensee. Such extension shall not exceed 60 days. If a 26 licensee fails to submit an annual report to the Comptroller 27 within the time specified in this Section, the Comptroller 28 shall impose upon the licensee a penalty of $5 for each and 29 every day the licensee remains delinquent in submitting the 30 annual report. Every application shall be accompanied by a 31 check or money order in the amount of $25 and every report 32 shall be accompanied by a check or money order in the amount 33 of $10 payable to: Comptroller, State of Illinois. 34 The licensee shall make all required books and records HB3988 Engrossed -20- LRB9112160STsb 1 pertaining to trust funds, insurance policies, or 2 tax-deferred annuities available to the Comptroller for 3 examination. The Comptroller, or a person designated by the 4 Comptroller who is trained to perform such examinations, may 5 at any time investigate the books, records and accounts of 6 the licensee with respect to trust funds, insurance policies, 7 or tax-deferred annuities and for that purpose may require 8 the attendance of and examine under oath all persons whose 9 testimony he may require. The licensee shall pay a fee for 10 such examination in accordance with a schedule established by 11 the Comptroller. The fee shall not exceed the cost of such 12 examination. For pre-need contracts funded by trust 13 arrangements, the cost of an initial examination shall be 14 borne by the licensee if it has $10,000 or more in trust 15 funds, otherwise, by the Comptroller. The charge made by the 16 Comptroller for an examination shall be based upon the total 17 amount of trust funds held by the licensee at the end of the 18 calendar or fiscal year for which the report is required by 19 this Act and shall be in accordance with the following 20 schedule: 21 Less than $10,000..................................no charge; 22 $10,000 or more but less than $50,000....................$10; 23 $50,000 or more but less than $100,000...................$40; 24 $100,000 or more but less than $250,000..................$80; 25 $250,000 or more........................................$100. 26 The Comptroller may order additional audits or 27 examinations as he or she may deem necessary or advisable to 28 ensure the safety and stability of the trust funds and to 29 ensure compliance with this Act. These additional audits or 30 examinations shall only be made after good cause is 31 established by the Comptroller in the written order. The 32 grounds for ordering these additional audits or examinations 33 may include, but shall not be limited to: 34 (1) material and unverified changes or fluctuations HB3988 Engrossed -21- LRB9112160STsb 1 in trust balances or insurance or annuity policy amounts; 2 (2) the licensee changing trustees more than twice 3 in any 12-month period; 4 (3) any withdrawals or attempted withdrawals from 5 the trusts, insurance policies, or annuity contracts in 6 violation of this Act; or 7 (4) failure to maintain or produce documentation 8 required by this Act for deposits into trust accounts, 9 trust investment activities, or life insurance or annuity 10 policies. 11 Prior to ordering an additional audit or examination, the 12 Comptroller shall request the licensee to respond and comment 13 upon the factors identified by the Comptroller as warranting 14 the subsequent examination or audit. The licensee shall have 15 30 days to provide a response to the Comptroller. If the 16 Comptroller decides to proceed with the additional 17 examination or audit, the licensee shall bear the full cost 18 of that examination or audit, up to a maximum of $7,500. The 19 Comptroller may elect to pay for the examination or audit and 20 receive reimbursement from the licensee. Payment of the 21 costs of the examination or audit by a licensee shall be a 22 condition of receiving, maintaining, or renewing a license 23 under this Act. All moneys received by the Comptroller for 24 examination or audit fees shall be maintained in a separate 25 account to be known as the Comptroller's Administrative Fund. 26 This Fund, subject to appropriation by the General Assembly, 27 may be utilized by the Comptroller for enforcing this Act and 28 other purposes that may be authorized by law. 29 For pre-need contracts funded by life insurance or a 30 tax-deferred annuity, the cost of an examination shall be 31 borne by the licensee if it has received $10,000 or more in 32 premiums during the preceding calendar year. The fee schedule 33 for such examination shall be established in rules 34 promulgated by the Comptroller. In the event such HB3988 Engrossed -22- LRB9112160STsb 1 investigation or other information received by the 2 Comptroller discloses a substantial violation of the 3 requirements of this Act, the Comptroller shall revoke the 4 license of such person upon a hearing as provided in this 5 Act. Such licensee may terminate all further responsibility 6 for compliance with the requirements of this Act by 7 voluntarily surrendering the license to the Comptroller, or 8 in the event of its loss, furnishing the Comptroller with a 9 sworn statement to that effect, which states the licensee's 10 intention to discontinue acceptance of funds received under 11 pre-need contracts. Such license or statement must be 12 accompanied by an affidavit that said licensee has lawfully 13 expended or refunded all funds received under pre-need 14 contracts, and that the licensee will accept no additional 15 sales proceeds. The Comptroller shall immediately cancel or 16 revoke said license. 17 (Source: P.A. 88-477; 89-615, eff. 8-9-96.) 18 (225 ILCS 45/3a) (from Ch. 111 1/2, par. 73.103a) 19 Sec. 3a. Denial, suspension, or revocation of license. 20 (a) The Comptroller may refuse to issue or may suspend 21 or revoke a license on any of the following grounds: 22 (1) The applicant or licensee has made any 23 misrepresentations or false statements or concealed any 24 material fact. 25 (2) The applicant or licensee is insolvent. 26 (3) The applicant or licensee has been engaged in 27 business practices that work a fraud. 28 (4) The applicant or licensee has refused to give 29 pertinent data to the Comptroller. 30 (5) The applicant or licensee has failed to satisfy 31 any enforceable judgment or decree rendered by any court 32 of competent jurisdiction against the applicant. 33 (6) The applicant or licensee has conducted or is HB3988 Engrossed -23- LRB9112160STsb 1 about to conduct business in a fraudulent manner. 2 (7) The trustee advisors or the trust agreement is 3 not satisfactory to the Comptroller. 4 (8) The fidelity bond is not satisfactory to the 5 Comptroller. 6 (9) As to any individual, the individual has 7 conducted or is about to conduct any business on behalf 8 of the applicant in a fraudulent manner; has been 9 convicted of any felony or misdemeanor, an essential 10 element of which is fraud; has had a judgment rendered 11 against him or her based on fraud in any civil 12 litigation; has failed to satisfy any enforceable 13 judgment or decree rendered against him or her by any 14 court of competent jurisdiction; or has been convicted of 15 any felony or any theft-related offense. 16 (10) The applicant or licensee, including any 17 member, officer, or director thereof if the applicant or 18 licensee is a firm, partnership, association or 19 corporation and any shareholder holding more than 10% of 20 the corporate stock, has violated any provision of this 21 Act or any regulation, decision, order, or finding made 22 by the Comptroller under this Act. 23 (11) The Comptroller finds any fact or condition 24 existing which, if it had existed at the time of the 25 original application for such license, would have 26 warranted the Comptroller in refusing the issuance of the 27 license. 28 (b) Before refusal to issue or renew and before 29 suspension or revocation of a license, the Comptroller shall 30 hold a hearing to determine whether the applicant or 31 licensee, hereinafter referred to as the respondent, is 32 entitled to hold such a license. At least 10 days prior to 33 the date set for such hearing, the Comptroller shall notify 34 the respondent in writing that on the date designated a HB3988 Engrossed -24- LRB9112160STsb 1 hearing will be held to determine his eligibility for a 2 license and that he may appear in person or by counsel. Such 3 written notice may be served on the respondent personally, or 4 by registered or certified mail sent to the respondent's 5 business address as shown in his latest notification to the 6 Comptroller. At the hearing, both the respondent and the 7 complainant shall be accorded ample opportunity to present in 8 person or by counsel such statements, testimony, evidence and 9 argument as may be pertinent to the charges or to any defense 10 thereto. The Comptroller may reasonably continue such 11 hearing from time to time. 12 The Comptroller may subpoena any person or persons in 13 this State and take testimony orally, by deposition or by 14 exhibit, in the same manner and with the same fees and 15 mileage allowances as prescribed in judicial proceedings in 16 civil cases. 17 Any authorized agent of the Comptroller may administer 18 oaths to witnesses at any hearing which the Comptroller is 19 authorized to conduct. 20 (Source: P.A. 84-839.) 21 (225 ILCS 45/3a-5 new) 22 Section 3a-5. License requirements. 23 (a) Every license issued by the Comptroller shall state 24 the number of the license, the business name and address of 25 the licensee's principal place of business, each branch 26 location also operating under the license, and the licensee's 27 parent company, if any. The license shall be conspicuously 28 posted in each place of business operating under the license. 29 The Comptroller may issue such additional licenses as may be 30 necessary for licensee branch locations upon compliance with 31 the provisions of this Act governing an original issuance of 32 a license for each new license. 33 (b) Individual salespersons representing a licensee HB3988 Engrossed -25- LRB9112160STsb 1 shall not be required to obtain licenses in their individual 2 capacities, but must acknowledge, by affidavit, that they 3 have been educated in the provisions of this Act and 4 understand the penalties for failure to comply. The licensee 5 shall retain copies of the affidavits of its sellers for its 6 records and shall make the affidavits available to the 7 Comptroller for examination upon request. 8 (c) The licensee shall be responsible for the activities 9 of any person representing the licensee in selling or 10 offering a pre-need contract for sale. 11 (d) Any person not selling on behalf of a licensee shall 12 obtain its own license. 13 (e) No license shall be transferable or assignable 14 without the express written consent of the Comptroller. A 15 transfer of more than 50% of the ownership of any business 16 licensed hereunder shall be deemed to be an attempted 17 assignment of the license originally issued to the licensee 18 for which consent of the Comptroller shall be required. 19 (f) Every license issued hereunder shall remain in force 20 until it has been suspended, surrendered, or revoked in 21 accordance with this Act. The Comptroller, upon the request 22 of an interested person or on his own motion, may issue new 23 licenses to a licensee whose license or licenses have been 24 revoked, if no factor or condition then exists which would 25 have warranted the Comptroller to originally refuse the 26 issuance of such license. 27 (225 ILCS 45/3e) (from Ch. 111 1/2, par. 73.103e) 28 Sec. 3e. Upon the revocation of, suspension of, or 29 refusal to renew any license, the licensee shall immediately 30 surrender the license or licensesand any branch office31licensesto the Comptroller. If the licensee fails to do so, 32 the Comptroller shall have the right to seize the same. 33 (Source: P.A. 84-839.) HB3988 Engrossed -26- LRB9112160STsb 1 (225 ILCS 45/3f) 2 Sec. 3f. Revocation of license. 3 (a) The Comptroller, upon determination that grounds 4 exist for the revocation or suspension of a license issued 5 under this Act, may revoke or suspend the license issued to a 6 particular branch office location with respect to which the 7 grounds for revocation or suspension may occur or exist or 8 the Comptroller may revoke or suspend as many of the licenses 9 issued to the licensee as may be determined appropriate by 10 the Comptroller. 11 (b) Whenever a license is revoked by the Comptroller, he 12 or she shall apply to the Circuit Court of the county wherein 13 the licensee is located for a receiver to administer the 14 trust funds of the licensee or to maintain the life insurance 15 policies and tax-deferred annuities held by the licensee 16 under a pre-need contract. 17 (Source: P.A. 88-477.) 18 (225 ILCS 45/4) (from Ch. 111 1/2, par. 73.104) 19 Sec. 4. Withdrawal of funds; revocability of contract. 20 (a) The amount or amounts so deposited into trust, with 21 interest thereon, if any, shall not be withdrawn until the 22 death of the person or persons for whose funeral or burial 23 such funds were paid, unless sooner withdrawn and repaid to 24 the person who originally paid the money under or in 25 connection with the pre-need contract or to his or her legal 26 representative. The life insurance policies or tax-deferred 27 annuities shall not be surrendered until the death of the 28 person or persons for whose funeral or burial the policies or 29 annuities were purchased, unless sooner surrendered and 30 repaid to the owner of the policy purchased under or in 31 connection with the pre-need contract or to his or her legal 32 representative. If, however, the agreement or series of 33 agreements provides for forfeiture and retention of any or HB3988 Engrossed -27- LRB9112160STsb 1 all payments as and for liquidated damages as provided in 2 Section 6, then the trustee may withdraw the deposits. In 3 addition, nothing in this Section (i) prohibits the change of 4 depositary by the trustee and the transfer of trust funds 5 from one depositary to another or (ii) prohibits a contract 6 purchaser who is or may become eligible for public assistance 7 under any applicable federal or State law or local ordinance 8 including, but not limited to, eligibility under 24 C.F.R., 9 Part 913 relating to family insurance under federal Housing 10 and Urban Development Policy from irrevocably waiving, in 11 writing, and renouncing the right to cancel a pre-need 12 contract for funeral services in an amount prescribed by rule 13 of the Illinois Department of Public Aid. No guaranteed price 14 pre-need funeral contract may prohibit a purchaser from 15 making a contract irrevocable to the extent that federal law 16 or regulations require that such a contract be irrevocable 17 for purposes of the purchaser's eligibility for Supplemental 18 Security Income benefits, Medicaid, or another public 19 assistance program, as permitted under federal law. 20 (b) If for any reason aseller orprovider who has 21 engaged in pre-need sales has refused, cannot, or does not 22 comply with the terms of the pre-need contract within a 23 reasonable time after he or she is required to do so, the 24 purchaser or his or her heirs or assigns or duly authorized 25 representative shall have the right to a refund of an amount 26 equal to the sales proceedspricepaid for undelivered 27 merchandise or services plus otherwise earned undistributed 28 interest amounts held in trust attributable to the contract, 29 within 30 days of the filing of a sworn affidavit with the 30 trustee setting forth the existence of the contract and the 31 fact of breach. A copy of this affidavit shall be filed with 32 the Comptroller and the seller. In the event a seller is 33 prevented from performing by strike, shortage of materials, 34 civil disorder, natural disaster, or any like occurrence HB3988 Engrossed -28- LRB9112160STsb 1 beyond the control of the seller or provider, the seller or 2 provider's time for performance shall be extended by the 3 length of the delay. Nothing in this Section shall relieve 4 the seller or provider from any liability for non-performance 5 of his or her obligations under the pre-need contract. 6 (c) At any time prior to the performance of a service or 7 delivery of merchandise under a pre-need contractAfter final8payment on a pre-need contract, any purchaser, its legal 9 representative, or all beneficiaries under the pre-need 10 contract may, upon signed written demand to a seller, demand 11 that the pre-need contract with the seller be terminated. 12 The seller shall, within 30 days, initiate a refund to the 13 purchaser, its legal representative, or all beneficiaries 14 under the pre-need contract in an amount as follows: 15 (1) 100% of the sales proceeds, including 16 undistributed interest earned thereon, if the purchaser, 17 its legal representative, or all beneficiaries demand 18 termination of the pre-need contract within 30 days of 19 the date of entry into the pre-need contract; or 20 (2)ofthe entire amount held in trust attributable 21 to undelivered merchandise and unperformed services, 22 including otherwise earned undistributed interest earned 23 thereon, if the purchaser, its legal representative, or 24 all beneficiaries demand termination of the pre-need 25 contract more than 30 days after the date of entry into 26 the pre-need contract; or 27 (3) the cash surrender value of a life insurance 28 policy or tax deferred annuity. 29 (d) If no funeral merchandise or services are provided 30 or if the funeral is conducted by another person, the seller 31 may keep no more than 10% of the payments made under the 32 pre-need contract or $300, whichever sum is less. The 33 remainder of the trust funds or insurance or annuity proceeds 34 shall be forwarded to the legal heirs of the deceased or as HB3988 Engrossed -29- LRB9112160STsb 1 determined by probate action. 2(d) The placement and retention of all or a portion of a3casket, combination casket-vault, urn, or outer burial4container comprised of materials which are designed to5withstand prolonged storage in the manner set forth in this6paragraph without adversely affecting the structural7integrity or aesthetic characteristics of such merchandise in8a specific burial space in which the person or persons for9whose funeral or burial the merchandise was intended has a10right of interment, or the placement of the merchandise in a11specific mausoleum crypt or lawn crypt in which such person12has a right of entombment, or the placement of the13merchandise in a specific niche in which such person has a14right of inurnment, or delivery to such person and retention15by such person until the time of need shall constitute actual16delivery to the person who originally paid the money under or17in connection with said agreement or series of agreements.18Actual delivery shall eliminate, from and after the date of19actual delivery, any requirement under this Act to place or20retain in trust any funds received for the sale of such21merchandise. The delivery, prior to the time of need, of any22funeral or burial merchandise in any manner other than23authorized by this Section shall not constitute actual24delivery and shall not eliminate any requirement under this25Act to place or retain in trust any funds received for the26sale of such merchandise.27 (Source: P.A. 87-1091; 88-477.) 28 (225 ILCS 45/7.2) 29 Sec. 7.2. Investigation of unlawful practices. If it 30 appears to the Comptroller that a person has engaged in, is 31 engaging in, or is about to engage in any practice in 32 violation ofdeclared to be unlawful bythis Act, the 33 Comptroller may: HB3988 Engrossed -30- LRB9112160STsb 1 (1) require that person to file on such terms as 2 the Comptroller prescribes a statement or report in 3 writing, under oath or otherwise, containing all 4 information the Comptroller may consider necessary to 5 ascertain whether a licensee is in compliance with this 6 Act, or whether an unlicensed person is engaging in 7 activities for which a license is required; 8 (2) examine under oath any person in connection 9 with the books and records pertaining to or having an 10 impact upon trust funds, insurance policies, or tax 11 deferred annuities required or allowed to be maintained 12 pursuant to this Act; 13 (3) examine any books and records of the licensee, 14 trustee, or investment advisor that the Comptroller may 15 consider necessary to ascertain compliance with this Act; 16 and 17 (4) require the production of a copy of any record, 18 book, document, account, or paper that is produced in 19 accordance with this Act and retain it in his or her 20 possession until the completion of all proceedings in 21 connection with which it is produced. 22 (Source: P.A. 89-615, eff. 8-9-96.) 23 (225 ILCS 45/8) (from Ch. 111 1/2, par. 73.108) 24 Sec. 8. Any person who intentionally violates any 25 provision of this Act is guilty of a Class 4 felony. 26 If any person intentionally violates this Act or fails or 27 refuses to comply with any order of the Comptroller or any 28 part of an order that has become final to the person and is 29 still in effect, the Comptroller may, after notice and 30 hearing at which it is determined that a violation of this 31 Act or the order has been committed, further order that the 32 person shall forfeit and pay to the State of Illinois a sum 33 not to exceed $10,000$5,000for each violation. This HB3988 Engrossed -31- LRB9112160STsb 1 liability shall be enforced in an action brought in any court 2 of competent jurisdiction by the Comptroller in the name of 3 the People of the State of Illinois. 4 Any person that violates any provision of this Act or 5 fails to comply with an order of the Comptroller shall be 6 liable for a civil penalty not to exceed $10,000 for the 7 violation and an additional civil penalty of not to exceed 8 $1,000 for each day during which the violation continues. The 9 civil penalties provided for in this Section may be recovered 10 in a civil action. These penalties are in addition to any 11 penalties that may be issued under the Consumer Fraud and 12 Deceptive Business Practices Act for knowing violations of 13 this Act. 14Any violation of this Act for which a fine may be15assessed shall be established by rules promulgated by the16Comptroller.17 In addition to the other penalties and remedies provided 18 in this Act, the Comptroller may bring a civil actionin the19county of residence of the licensee or any person accepting20trust fundsto enjoin any violation or threatened violation 21 of this Act. 22 The powers vested in the Comptroller by this Section are 23 in addition to any and all other powers and remedies vested 24 in the Comptroller by law. 25 (Source: P.A. 88-477.) 26 (225 ILCS 45/8.1 new) 27 Sec. 8.1. Sales; liability of purchaser for shortage. In 28 the event of a sale or transfer of all or substantially all 29 of the assets of the licensee, the sale or transfer of the 30 controlling interest of the corporate stock of the licensee 31 if the licensee is a corporation, the sale or transfer of the 32 controlling interest of the partnership if the licensee is a 33 partnership, or the sale of the licensee pursuant to HB3988 Engrossed -32- LRB9112160STsb 1 foreclosure proceedings, the purchaser is liable for any 2 shortages existing before or after the sale in the trust 3 funds required to be maintained in a trust pursuant to this 4 Act and shall honor all pre-need contracts and trusts entered 5 into by the licensee. Any shortages existing in the trust 6 funds constitute a prior lien in favor of the trust for the 7 total value of the shortages, and notice of that lien shall 8 be provided in all sales instruments. 9 In the event of a sale or transfer of all or 10 substantially all of the assets of the licensee, the sale or 11 transfer of the controlling interest of the corporate stock 12 of the licensee if the licensee is a corporation, or the sale 13 or transfer of the controlling interest of the partnership if 14 the licensee is a partnership, the licensee shall, at least 15 21 days prior to the sale or transfer, notify the 16 Comptroller, in writing, of the pending date of sale or 17 transfer so as to permit the Comptroller to audit the books 18 and records of the licensee. The audit must be commenced 19 within 10 business days of the receipt of the notification 20 and completed within the 21-day notification period unless 21 the Comptroller notifies the licensee during that period that 22 there is a basis for determining a deficiency which will 23 require additional time to finalize. The sale or transfer 24 may not be completed by the licensee unless and until: 25 (i) the Comptroller has completed the audit of the 26 licensee's books and records; 27 (ii) any delinquency existing in the trust funds has 28 been paid by the licensee, or arrangements satisfactory 29 to the Comptroller have been made by the licensee on the 30 sale or transfer for the payment of any delinquency; and 31 (iii) the Comptroller issues a license upon 32 application of the new owner, which license must be 33 applied for within 30 days of the anticipated date of the 34 sale or transfer, subject to the payment of any HB3988 Engrossed -33- LRB9112160STsb 1 delinquencies, if any, as stated in item (ii). 2 For purposes of this Section, a person, firm, 3 corporation, partnership, or institution that acquires the 4 licensee through a real estate foreclosure shall be subject 5 to the provisions of this Section. The sale or transfer of 6 the controlling interest of a licensee to an immediate family 7 member is not subject to the license application process 8 required in item (iii) of this Section. 9 Section 32. The Illinois Public Aid Code is amended by 10 changing Section 12-4.11 as follows: 11 (305 ILCS 5/12-4.11) (from Ch. 23, par. 12-4.11) 12 Sec. 12-4.11. Grant amounts. The Department, with due 13 regard for and subject to budgetary limitations, shall 14 establish grant amounts for each of the programs, by 15 regulation. The grant amounts may vary by program, size of 16 assistance unit and geographic area. 17 Aid payments shall not be reduced except: (1) for changes 18 in the cost of items included in the grant amounts, or (2) 19 for changes in the expenses of the recipient, or (3) for 20 changes in the income or resources available to the 21 recipient, or (4) for changes in grants resulting from 22 adoption of a consolidated grant amount. 23 In fixing standards to govern payments or reimbursements 24 for funeral and burial expenses, the Department shall take 25 into account the services essential to a dignified, low-cost 26 funeral and burial, including reasonable amounts that may be 27 necessary for burial space and cemetery charges, and any 28 applicable taxes or other required governmental fees or 29 charges. 30 For the fiscal year beginning July 1, 2000, no payment 31 may be provided for funeral services in excess of $850 and no 32 payment may be provided for cemetery burial costs in excess HB3988 Engrossed -34- LRB9112160STsb 1 of $425. For the fiscal year beginning July 1, 2001, and 2 thereafter, no payment may be provided for funeral services 3 in excess of $1,000 and no payment may be provided for 4 cemetery burial costs in excess of $500. 5 Nothing contained in this Section or in any other Section 6 of this Code shall be construed to prohibit the Illinois 7 Department (1) from consolidating existing standards on the 8 basis of any standards which are or were in effect on, or 9 subsequent to July 1, 1969, or (2) from employing any 10 consolidated standards in determining need for public aid and 11 the amount of money payment or grant for individual 12 recipients or recipient families. 13 (Source: P.A. 90-17, eff. 7-1-97; 90-326, eff. 8-8-97; 14 90-372, eff. 7-1-98; 90-655, eff. 7-30-98; 91-24, eff. 15 7-1-99.) 16 Section 35. The Cemetery Care Act is amended by changing 17 Sections 2a, 4, 8, 9, 10, 11, 11.1, 13, 15b, and 24 as 18 follows: 19 (760 ILCS 100/2a) (from Ch. 21, par. 64.2a) 20 Sec. 2a. Powers and duties of cemetery authorities;21cemetery property maintained by cemetery care funds. 22 (a) With respect to cemetery property maintained by 23 cemetery care funds, a cemetery authority isshall be24 responsible for the performance of: 25 (1)(a)the care and maintenance of the cemetery 26 property it owns; and 27 (2)(b)the opening and closing of all graves, 28 crypts, or niches for human remains in any cemetery 29 property it owns. 30 (b) A cemetery authority owning, operating, controlling 31 or managing a privately operated cemetery shall provide 32 reasonable maintenance of the cemetery property and of the HB3988 Engrossed -35- LRB9112160STsb 1 lots, graves, crypts, and columbariums in the cemetery. 2 Reasonable maintenance includes, but is not limited to: 3 (1) the laying of seed, sod, or other suitable 4 ground cover as soon as practicable following an 5 interment given the weather conditions, climate, season, 6 and the interment's proximity to ongoing burial activity; 7 (2) the cutting of the lawn throughout the cemetery 8 at reasonable intervals to prevent an overgrowth of grass 9 and weeds; 10 (3) the trimming of shrubs to prevent excessive 11 overgrowth; 12 (4) the trimming of trees to remove dead limbs; 13 (5) keeping in repair the drains, water lines, 14 roads, buildings, fences, and other structures; and 15 (6) keeping the cemetery premises free of trash and 16 debris. 17 Reasonable maintenance by the cemetery authority shall 18 not preclude the exercise of lawful rights by an owner of an 19 interment, inurnment, or entombment right, or the owner's 20 family and heirs, in accordance with the reasonable rules and 21 regulations of the cemetery or other agreement of the 22 cemetery authority. 23 (c) A cemetery authority owning, operating, controlling 24 or managing a privately operated cemetery shall conspicuously 25 post in each of its offices its rules, regulations, charges, 26 and prices of lots, plots or parts thereof. 27 (d) A cemetery authority owning, operating, controlling 28 or managing a privately operated cemetery shall, from time to 29 time as land in its cemetery may be required for burial 30 purposes, survey and subdivide those lands and make and file 31 in its office a map thereof delineating the lots or plots, 32 avenues, paths, alleys, and walks and their respective 33 designations. The map shall be open to public inspection. 34 The cemetery authority shall make available a true copy of HB3988 Engrossed -36- LRB9112160STsb 1 the map upon written request and payment of reasonable 2 photocopy fees. Any unsold lots, plots or parts thereof, in 3 which there are not human remains, may be resurveyed and 4 altered in shape or size, and properly designated on such 5 map. Nothing contained in this subsection, however, shall 6 prevent the cemetery authority from enlarging an interment 7 right by selling to the owner thereof the excess space next 8 to such interment right and permitting interments therein, 9 provided reasonable access to such interment right and to 10 adjoining interment rights is not thereby eliminated. 11 (e) A cemetery authority owning, operating, controlling, 12 or managing a privately operated cemetery shall keep a record 13 of every interment, entombment, and inurnment in the 14 cemetery. The record shall include the deceased's name, age, 15 and date of burial, when these particulars can be 16 conveniently obtained, and the lot, plot, or section where 17 the human remains are interred, entombed, or inurned. The 18 record shall be open to public inspection. The cemetery 19 authority shall make available a true copy of the record upon 20 written request and payment of reasonable copy costs. 21 (f) A cemetery authority owning, operating, controlling, 22 or managing a privately operated cemetery shall provide 23 access to the cemetery under the cemetery authority's 24 reasonable rules and regulations. 25 (Source: P.A. 87-747.) 26 (760 ILCS 100/4) (from Ch. 21, par. 64.4) 27 Sec. 4. Care funds; deposits; investments. Whenever a 28 cemetery authority owning, operating, controlling or managing 29 a privately operated cemetery accepts care funds, either in 30 connection with the sale or giving away at an imputed value 31 of an interment right, entombment right or inurnment right, 32 or in pursuance of a contract, or whenever, as a condition 33 precedent to the purchase or acceptance of an interment HB3988 Engrossed -37- LRB9112160STsb 1 right, entombment right or inurnment right, such cemetery 2 authority requires the establishment of a care fund or a 3 deposit in an already existing care fund, then such cemetery 4 authority shall execute and deliver to the person from whom 5 received an instrument in writing which shall specifically 6 state: (a) the nature and extent of the care to be furnished, 7 and (b) that such care shall be furnished only in so far as 8 the net income derived from the amount deposited in trust 9 will permit (the income from the amount so deposited, less 10 necessary expenditures of administering the trust, shall be 11 deemed the net income), and (c) that not less than the 12 following amounts will be set aside and deposited in trust: 13 1. For interment rights, $1 per square foot of the 14 space sold or 15% of the sales price or imputed value, 15 whichever is the greater, with a minimum of $25 for each 16 individual interment right. 17 2. For entombment rights, not less than 10% of the 18 sales price or imputed value with a minimum of $25 for 19 each individual entombment right. 20 3. For inurnment rights, not less than 10% of the 21 sales price or imputed value with a minimum of $15 for 22 each individual inurnment right. 23 4. For any transfer of interment rights, entombment 24 rights, or inurnment rights recorded in the records of 25 the cemetery authority, excepting only transfers between 26 members of the immediate family of the transferor, a 27 minimum of $25 for each such right transferred. For the 28 purposes of this paragraph "immediate family of the 29 transferor" means the spouse, parents, grandparents, 30 children, grandchildren, and siblings of the transferor. 31 5. Upon an interment, entombment, or inurnment in a 32 grave, crypt, or niche in which rights of interment, 33 entombment, or inurnment were originally acquired from a 34 cemetery authority prior to January 1, 1948, a minimum of HB3988 Engrossed -38- LRB9112160STsb 1 $25 for each such right exercised. 2 6. For the special care of any lot, grave, crypt, 3 or niche or of a family mausoleum, memorial, marker, or 4 monument, the full amount received. 5 Such setting aside and deposit shall be made by such 6 cemetery authority not later than 30 days after the close of 7 the month in which the cemetery authority gave away for an 8 imputed value or received athe finalpayment on the purchase 9 price of interment rights, entombment rights, or inurnment 10 rights, or received athe finalpayment for the general or 11 special care of a lot, grave, crypt or niche or of a family 12 mausoleum, memorial, marker or monument. If a sale that would 13 require a deposit to the care fund is made on an installment 14 basis, the cemetery authority shall deposit to the care fund 15 each installment payment within 30 days of the close of the 16 month in which the cemetery authority received the payment 17 until the amount due the care fund has been deposited. 18 Deposits to the care funds; and such amountsshall be held by 19 the trustee of the care funds of such cemetery authority in 20 trust in perpetuity for the specific purposes stated in said 21 written instrument. For all care funds received by a cemetery 22 authority, except for care funds received by a cemetery 23 authority pursuant to a specific gift, grant, contribution, 24 payment, legacy, or contract that are subject to investment 25 restrictions more restrictive than the investment provisions 26 set forth in this Act, and except for care funds otherwise 27 subject to a trust agreement executed by a person or persons 28 responsible for transferring the specific gift, grant, 29 contribution, payment, or legacy to the cemetery authority 30 that contains investment restrictions more restrictive than 31 the investment provisions set forth in this Act, the cemetery 32 authority may, without the necessity of having to obtain 33 prior approval from any court in this State, designate a new 34 trustee in accordance with this Act and invest the care funds HB3988 Engrossed -39- LRB9112160STsb 1 in accordance with this Section, notwithstanding any contrary 2 limitation contained in the trust agreement. 3 Any such cemetery authority engaged in selling or giving 4 away at an imputed value interment rights, entombment rights 5 or inurnment rights, in conjunction with the selling or 6 giving away at an imputed value any other merchandise or 7 services not covered by this Act, shall be prohibited from 8 increasing the sales price or imputed value of those items 9 not requiring a care fund deposit under this Act with the 10 purpose of allocating a lesser sales price or imputed value 11 to items that require a care fund deposit. 12 In the event any sale that would require a deposit to 13 such cemetery authority's care fund is made by a cemetery 14 authority on an installment basis, and the installment 15 contract is factored, discounted, or sold to a third party, 16 the cemetery authority shall deposit the amount due to the 17 care fund within 30 days after the close of the month in 18 which the installment contract was factored, discounted, or 19 sold.If, subsequent to such deposit, the purchaser defaults20on the contract such that no care fund deposit on that21contract would have been required, the cemetery authority may22apply the amount deposited as a credit against future23required deposits.24 The trust authorized by this Section shall be a single 25 purpose trust fund. In the event of the seller's bankruptcy, 26 insolvency, or assignment for the benefit of creditors, or an 27 adverse judgment, the trust funds shall not be available to 28 any creditor as assets of the cemetery authority or to pay 29 any expenses of any bankruptcy or similar proceeding, but 30 shall be retained intact to provide for the future 31 maintenance of the cemetery. Except in an action by the 32 Comptroller to revoke a license issued pursuant to this Act 33 and for creation of a receivership as provided in this Act, 34 the trust shall not be subject to judgment, execution, HB3988 Engrossed -40- LRB9112160STsb 1 garnishment, attachment, or other seizure by process in 2 bankruptcy or otherwise, nor to sale, pledge, mortgage, or 3 other alienation, and shall not be assignable except as 4 approved by the Comptroller. The changes made by this 5 amendatory Act of the 91st General Assembly are intended to 6 clarify existing law regarding the inability of licensees to 7 pledge the trust. 8 If, subsequent to a deposit of care funds required under 9 this Section, the purchaser defaults on the contract such 10 that no care fund deposits on that contract would have been 11 required, the cemetery authority may apply the amount 12 deposited as a credit against future required deposits. 13 (Source: P.A. 91-7, eff. 6-1-99.) 14 (760 ILCS 100/8) (from Ch. 21, par. 64.8) 15 Sec. 8. Every cemetery authority shall register with the 16 Comptroller upon forms furnished by him or her. Such 17 registration statement shall state whether the cemetery 18 authority claims that the cemetery owned, operated, 19 controlled, or managed by it is a fraternal cemetery, 20 municipal, State, or federal cemetery, or religious cemetery, 21 or a family burying ground, as the case may be, as defined in 22 Section 2 of this Act, and shall state the date of 23 incorporation if a corporation and whether incorporated under 24 general or private act of the legislature. Such registration 25 statement shall be accompanied by a fee of $5. Such fee shall 26 be paid to the Comptroller and no registration statement 27 shall be accepted by him without the payment of such fee. 28 Every cemetery authority that is not required to file an 29 annual report under this Act shall bear the responsibility of 30 informing the Comptroller whenever a change takes place 31 regarding status of cemetery, name of contact person, and 32 that person's address and telephone number. 33 Upon receipt of a registration statement, if a claim is HB3988 Engrossed -41- LRB9112160STsb 1 made that a cemetery is a fraternal cemetery, municipal 2 cemetery, or religious cemetery, or a family burying ground, 3 as the case may be, as defined in Section 2 of this Act, and 4 the Comptroller shall determine that such cemetery is not a 5 fraternal cemetery, a municipal cemetery, or a religious 6 cemetery, or a family burying ground, as the case may be, as 7 defined in Section 2 of this Act, the Comptroller shall 8 notify the cemetery authority making the claim of such 9 determination; provided, however, that no such claim shall be 10 denied until the cemetery authority making such claim has had 11 at least 10 days' notice of a hearing thereon and an 12 opportunity to be heard. When any such claim is denied, the 13 Comptroller shall within 20 days thereafter prepare and keep 14 on file in his office the transcript of the evidence taken 15 and a written order or decision of denial of such claim and 16 shall send by United States mail a copy of such order or 17 decision of denial to the cemetery authority making such 18 claim within 5 days after the filing in his office of such 19 order, finding or decision. A review of any such order, 20 finding or decision may be had as provided in the 21 Administrative Review Law, as now or hereafter amended. 22Where no claim is made that a cemetery is a fraternal23cemetery, municipal cemetery or religious cemetery or family24burying ground, as the case may be, as defined in Section 225of this Act, the registration statement shall be accompanied26by a fidelity bond in the amount required by Section 9 of27this Act. Upon receipt of such application, statement and28bond, the Comptroller shall issue a license to accept the29care funds authorized by the provisions of Section 3 of this30Act to each cemetery authority owning, operating, controlling31or managing a privately operated cemetery. However, the32Comptroller shall issue a license without the filing of a33bond where the filing of a bond is excused by Section 18 of34this Act.HB3988 Engrossed -42- LRB9112160STsb 1The license issued by the Comptroller shall remain in2full force and effect until it is surrendered by the licensee3or revoked by the Comptroller as hereinafter provided.4 (Source: P.A. 88-477.) 5 (760 ILCS 100/9) (from Ch. 21, par. 64.9) 6 Sec. 9. Application for license. 7 (a) Prior to or concurrent with the acceptance of care 8 funds authorized by Section 3 of this Act or the sale or 9 transfer of the controlling interest of a licensed cemetery 10 authority, a cemetery authority owning, operating, 11 controlling, or managing a privately operated cemetery shall 12 make application to the Comptroller for a license to hold the 13 funds.Whenever a cemetery authority owning, operating,14controlling or managing a privately operated cemetery is15newly organized and such cemetery authority desires to be16licensed to accept the care funds authorized by Section 3 of17this Act, or whenever there is a sale or transfer of the18controlling interest of a licensed cemetery authority, it19shall make application for such license.20 In the case of a sale or transfer of the controlling 21 interest of the cemetery authority, the prior license shall 22 remain in effect until the Comptroller issues a new license 23 to the newly-controlled cemetery authority as provided in 24 Section 15b. Upon issuance of the new license, the prior 25 license shall be deemed surrendered if the licensee has 26 agreed to the sale and transfer and has consented to the 27 surrender of the license. A sale or transfer of the 28 controlling interest of a cemetery authority to an immediate 29 family member is not considered a transfer of the controlling 30 interest for purposes of this Section. 31 (b) Applications for license shall be filed with the 32 Comptroller. Applications shall be in writing under oath, 33 signed by the applicant, and in the form furnished by the HB3988 Engrossed -43- LRB9112160STsb 1 Comptroller. The form furnished by the Comptroller shall 2 enable a cemetery authority to apply for license of multiple 3 cemetery locations within a single license application. A 4 check or money order in the amount of $25 per license seeking 5 to be issued under the application, payable to: Comptroller, 6 State of Illinois, shall be included. Each application shall 7 contain the following: 8 (1) the full name and address (both of residence 9 and of place of business) of the applicant, if an 10 individual; of every member, if the applicant is a 11 partnership or association; of every officer, manager, or 12 director, if the applicant is a corporation, and of any 13 party owning 10% or more of the cemetery authority, and 14 the full name and address of the parent company, if any; 15 (2) a detailed statement of the applicant's assets 16 and liabilities; 17 (2.1) the name, address, and legal boundaries of 18 each cemetery for which the care funds shall be entrusted 19 and at which books, accounts, and records shall be 20 available for examination by the Comptroller as required 21 by Section 13 of this Act; 22 (3) as to the name of each individual person listed 23 under (1) above, a detailed statement of each person's 24 business experience for the 10 years immediately 25 preceding the application; the present and previous 26 connection, if any, of each person with any other 27 cemetery or cemetery authority; whether each person has 28 ever been convicted of anyafelony or has ever been 29 convicted of any misdemeanor of which an essential 30 element is fraud or has been involved in any civil 31 litigation in which a judgment has been entered against 32 him or her based on fraud; whether each person is 33 currently a defendant in any lawsuit in which the 34 complaint against the person is based upon fraud; whether HB3988 Engrossed -44- LRB9112160STsb 1 such person has failed to satisfy any enforceable 2 judgment entered by a court of competent jurisdiction in 3 any civil proceedings against such individual;and4 (4) the total amount in trust and now available 5 from sales of lots, graves, crypts or niches where part 6 of the sale price has been placed in trust; the amount of 7 money placed in the care funds of each applicant; the 8 amount set aside in care funds from the sale of lots, 9 graves, crypts and niches for the general care of the 10 cemetery and the amount available for that purpose; the 11 amount received in trust by special agreement for special 12 care and the amount available for that purpose; the 13 amount of principal applicable to trust funds received by 14 the applicant; and.15 (5) any other information that the Comptroller may 16 reasonably require in order to determine the 17 qualifications of the applicant to be licensed under this 18 Act. 19 Such information shall be furnished whether the care 20 funds are held by the applicant as trustee or by an 21 independent trustee. If the funds are not held by the 22 applicant, the name of the independent trustee holding them 23 is also to be furnished by the applicant. 24 (c) Applications for license shall also be accompanied 25 by a fidelity bond issued by a bonding company or insurance 26 company authorized to do business in this State or by an 27 irrevocable, unconditional letter of credit issued by a bank 28 or trust company authorized to do business in the State of 29 Illinois, as approved by the State Comptroller, where such 30 care funds exceed the sum of $15,000. Such bond or letter of 31 credit shall run to the Comptroller and his or her successor 32 for the benefit of the care funds held by such cemetery 33 authority or by the trustee of the care funds of such 34 cemetery authority. Such bonds or letters of credit shall be HB3988 Engrossed -45- LRB9112160STsb 1 in an amount equal to 1/10 of such care funds. However, such 2 bond or letter of credit shall not be in an amount less than 3 $1,000; the first $15,000 of such care funds shall not be 4 considered in computing the amount of such bond or letter of 5 credit. No application shall be accepted by the Comptroller 6 unless accompanied by such bond or letter of credit. 7 Applications for license by newly organized cemetery 8 authorities after January 1, 1960 shall also be accompanied 9 by evidence of a minimum care fund deposit in an amount to be 10 determined as follows: if the number of inhabitants, either 11 in the county in which the cemetery is to be located or in 12 the area included within a 10 mile radius from the cemetery 13 if the number of inhabitants therein is greater, is 25,000 or 14 less the deposit shall be $7,500; if the number of 15 inhabitants is 25,001 to 50,000, the deposit shall be 16 $10,000; if the number of inhabitants is 50,001 to 125,000, 17 the deposit shall be $15,000; if the number of inhabitants is 18 over 125,000, the deposit shall be $25,000. 19 After an amount equal to and in addition to the required 20 minimum care fund deposit has been deposited in trust, the 21 cemetery authority may withhold 50% of all future care funds 22 until it has recovered the amount of the minimum care fund 23 deposit. 24 (d) (Blank).The applicant shall have a permanent25address and any license issued pursuant to the application is26valid only at the address or at any new address approved by27the Comptroller.28 (e) All bonds and bonding deposits made by any cemetery 29 authority may be returned to the cemetery authority or 30 cancelled as to care funds invested with an investment 31 company. 32 (Source: P.A. 89-615, eff. 8-9-96; 90-655, eff. 7-30-98.) 33 (760 ILCS 100/10) (from Ch. 21, par. 64.10) HB3988 Engrossed -46- LRB9112160STsb 1 Sec. 10. Upon receipt of such application for license, 2 the Comptroller shall issue a license to the applicant unless 3 the Comptroller determines that: 4 (a) The applicant has made any misrepresentations or 5 false statements or has concealed any essential or material 6 fact, or 7 (b) The applicant is insolvent; or 8 (c) The applicant is or has been using practices in the 9 conducting of the cemetery business that work or tend to work 10 a fraud; or 11 (d) The applicant has refused to furnish or give 12 pertinent data to the Comptroller; or 13 (e) The applicant has failed to notify the Comptroller 14 with respect to any material facts required in the 15 application for license under the provisions of this Act; or 16 (f) The applicant has failed to satisfy any enforceable 17 judgment entered by the circuit court in any civil 18 proceedings against such applicant; or 19 (g) The applicant has conducted or is about to conduct 20 its business in a fraudulent manner; or 21 (h) The applicant or anyAs to the name of any22 individual listed in the license application, such individual23 has conducted or is about to conduct any business on behalf 24 of the applicant in a fraudulent manner; or has been 25 convicted of a felony or any misdemeanor of which an 26 essential element is fraud; or has been involved in any civil 27 litigation in which a judgment has been entered against him 28 or her based on fraud; or has failed to satisfy any 29 enforceable judgment entered by the circuit court in any 30 civil proceedings against such individual; or has been 31 convicted of any felony; or has been convicted of any 32 theft-related offense; or has failed to comply with the 33 requirements of this Act; or has demonstrated a pattern of 34 failing to open or close any graves, crypts, or niches for HB3988 Engrossed -47- LRB9112160STsb 1 human remains in the cemetery within a reasonable time frame; 2 or has demonstrated a pattern of placing human remains in a 3 final resting place other than that required under an 4 agreement with a consumer; or has demonstrated a pattern of 5 improperly failing to honor a contract with a consumer; or 6 (i) The applicant has ever had a license involving 7 cemeteries or funeral homes revoked, suspended, or refused to 8 be issued in Illinois or elsewhere. 9 If the Comptroller so determines, then he or she shall 10 conduct a hearing to determine whether to deny the 11 application. However, no application shall be denied unless 12 the applicant has had at least 10 days' notice of a hearing 13 on the application and an opportunity to be heard thereon. If 14 the application is denied, the Comptroller shall within 20 15 days thereafter prepare and keep on file in his or her office 16 the transcript of the evidence taken and a written order of 17 denial thereof, which shall contain his or her findings with 18 respect thereto and the reasons supporting the denial, and 19 shall send by United States mail a copy of the written order 20 of denial to the applicant at the address set forth in the 21 application, within 5 days after the filing of such order. A 22 review of such decision may be had as provided in Section 20 23 of this Act. 24The license issued by the Comptroller shall remain in25full force and effect until it is surrendered by the licensee26or revoked by the Comptroller as hereinafter provided.27 (Source: P.A. 88-477.) 28 (760 ILCS 100/11) (from Ch. 21, par. 64.11) 29 Sec. 11. Issuance and display of license. A license 30 issued under this Act authorizes the cemetery authority to 31 accept care funds for the cemetery identified in the license. 32 If a license application seeks licensure to accept care funds 33 on behalf of more than one cemetery location, the HB3988 Engrossed -48- LRB9112160STsb 1 Comptroller, upon approval of the license application, shall 2 issue to the cemetery authority a separate license for each 3 cemetery location indicated on the application. Each license 4 issued by the Comptroller under this Act is independent of 5 any other license that may be issued to a cemetery authority 6 under a single license application. 7 Every license issued by the Comptroller shall state the 8 number of the license and the address at which the business 9 is to be conducted. Such license shall be kept conspicuously 10 posted in the place of business of the licensee and shall not 11 be transferable or assignable. 12 No more than one place of business shall be maintained 13 under the same license, but the Comptroller may issue more 14 than one license to the same licensee upon compliance with 15 the provisions of this Act governing an original issuance of 16 a license, for each new license. 17 Whenever a licensee shall wish to change the name as 18 originally set forth in his license, he shall give written 19 notice thereof to the Comptroller together with the reasons 20 for the change and if the change is approved by the 21 Comptroller he shall issue a new license. 22 A license issued by the Comptroller shall remain in full 23 force and effect until it is surrendered by the licensee or 24 suspended or revoked by the Comptroller as provided in this 25 Act. 26 (Source: P.A. 78-592.) 27 (760 ILCS 100/11.1) 28 Sec. 11.1. Investigation of unlawful practices. If it 29 appears to the Comptroller that a person has engaged in, is 30 engaging in, or is about to engage in any practice declared 31 to be unlawful by this Act, the Comptroller may: 32 (1) require that person to file on such terms as 33 the Comptroller prescribes a statement or report in HB3988 Engrossed -49- LRB9112160STsb 1 writing, under oath or otherwise, containing all 2 information the Comptroller may consider necessary to 3 ascertain whether a privately operated cemetery authority 4licenseeis in compliance with this Act, or whether an 5 unlicensed person is engaging in activities for which a 6 license is required; 7 (2) examine under oath any person in connection 8 with the books and records pertaining to or having an 9 impact upon the trust funds required to be maintained 10 pursuant to this Act; 11 (2.1) examine under oath any person in connection 12 with the performance of duties required to be performed 13 under this Act; 14 (3) examine any books and records of the privately 15 operated cemetery authority, licensee, trustee, or 16 investment advisor that the Comptroller may consider 17 necessary to ascertain compliance with this Act; and 18 (4) require the production of a copy of any record, 19 book, document, account, or paper that is produced in 20 accordance with this Act and retain it in his or her 21 possession until the completion of all proceedings in 22 connection with which it is produced. 23 (Source: P.A. 89-615, eff. 8-9-96.) 24 (760 ILCS 100/13) (from Ch. 21, par. 64.13) 25 Sec. 13. Books, accounts, and records. Every licensee 26 and the trustee of the care funds of every licensee shall be 27 a resident of this State and shall keep in this State and use 28 in its business such books, accounts and records as will 29 enable the Comptroller to determine whether such licensee or 30 trustee is complying with the provisions of this Act and with 31 the rules, regulations and directions made by the Comptroller 32 hereunder. The licensee shall update books, accounts, and 33 records no less often than monthly. The licensee shall keep HB3988 Engrossed -50- LRB9112160STsb 1 the books, accounts, and records at the location identified 2 in the license issued by the Comptroller or as otherwise 3 agreed by the Comptroller in writing. The books, accounts, 4 and records shall be accessible for review upon demand of the 5 Comptroller. 6 (Source: P.A. 78-592.) 7 (760 ILCS 100/15b) 8 Sec. 15b. Sales; liability of purchaser for shortage. 9 In the case of a sale of any privately operated cemetery 10 or any part thereof or of any related personal property by a 11 cemetery authority to a purchaser or pursuant to foreclosure 12 proceedings, except the sale of burial rights, services, or 13 merchandise to a person for his or her personal or family 14 burial or interment, the purchaser is liable for any 15 shortages existing before or after the sale in the care funds 16 required to be maintained in a trust pursuant to this Act and 17 shall honor all instruments issued under Section 4 for that 18 cemetery. Any shortages existing in the care funds constitute 19 a prior lien in favor of the trust for the total value of the 20 shortages, and notice of such lien shall be provided in all 21 sales instruments. 22 Prior to or concurrent with the sale of any portion of 23 cemetery land in which no human remains have been interred, 24 the licensee shall deposit $1 per square foot of the cemetery 25 land to be sold that is suitable for human interment into the 26 cemetery authority's care fund authorized under this Act. 27 The Comptroller may waive or lessen the amount of the 28 required deposit when the licensee has made arrangements 29 satisfactory to the Comptroller. 30 In the event of a sale or transfer of all or 31 substantially all of the assets of the cemetery authority, a 32 sale or transfer of any cemetery land, including any portion 33 of cemetery land in which no human remains have been HB3988 Engrossed -51- LRB9112160STsb 1 interred, the sale or transfer of the controlling interest of 2 the corporate stock of the cemetery authority if the cemetery 3 authority is a corporation, or the sale or transfer of the 4 controlling of the partnership if the cemetery authority is a 5 partnership, the cemetery authority shall, at least 21 days 6 prior to the sale or transfer, notify the Comptroller, in 7 writing, of the pending date of sale or transfer so as to 8 permit the Comptroller to audit the books and records of the 9 cemetery authority. The audit must be commenced within 10510 business days of the receipt of the notification and 11 completed within the 21 day notification period unless the 12 Comptroller notifies the cemetery authority during that 13 period that there is a basis for determining a deficiency 14 which will require additional time to finalize. The sale or 15 transfer may not be completed by the cemetery authority 16 unless and until: 17 (a) The Comptroller has completed the audit of the 18 cemetery authority's books and records; 19 (b) Any delinquency existing in the care funds has 20 been paid by the cemetery authority, or arrangements 21 satisfactory to the Comptroller have been made by the 22 cemetery authority on the sale or transfer for the 23 payment of any delinquency; 24 (c) The Comptroller issues a new cemetery care 25 license upon application of the newly controlled 26 corporation or partnership, which license must be applied 27 for within 30 days of the anticipated date of the sale or 28 transfer, subject to the payment of any delinquencies, if 29 any, as stated in item (b) above. 30 For purposes of this Section, a person, firm, 31 corporation, partnership, or institution that acquires the 32 cemetery through a real estate foreclosure shall be subject 33 to the provisions of this Section. The sale or transfer of 34 the controlling interest of a cemetery authority to an HB3988 Engrossed -52- LRB9112160STsb 1 immediate family member is not subject to the license 2 application process required in item (c) of this Section. 3 (Source: P.A. 90-623, eff. 7-10-98.) 4 (760 ILCS 100/24) (from Ch. 21, par. 64.24) 5 Sec. 24. Penalties; civil action. 6 (a) Whoever intentionally violates any provision of this 7 Act except the provisions of Section 23 and subsections (b), 8 (c), (d), and (f) of Section 2a shall be guilty of a Class 4 9 felony, and each day such provisions are violated shall 10 constitute a separate offense. 11 (b) If any person intentionally violates this Act or 12 fails or refuses to comply with any order of the Comptroller 13 or any part of an order that has become final to such person 14 and is still in effect, the Comptroller may, after notice and 15 hearing at which it is determined that a violation of this 16 Act or such order has been committed, further order that such 17 person shall forfeit and pay to the State of Illinois a sum 18 not to exceed $10,000$5,000for each violation. Such 19 liability shall be enforced in an action brought in any court 20 of competent jurisdiction by the Comptroller in the name of 21 the People of the State of Illinois. 22 (c) In addition to the other penalties and remedies 23 provided in this Act, the Comptroller may bring a civil 24 actionin the county of residence of the licensee or any25person accepting care fundsto enjoin any violation or 26 threatened violation of this Act. 27 (d) Any person that violates any provision of this Act 28 or fails to comply with an order of the Comptroller shall be 29 liable for a civil penalty of not to exceed $10,000 for the 30 violation and an additional civil penalty not to exceed 31 $1,000 for each day during which the violation continues. The 32 civil penalties provided for in this subsection may be 33 recovered in a civil action and are in addition to any HB3988 Engrossed -53- LRB9112160STsb 1 penalties that may be issued under the Consumer Fraud and 2 Deceptive Practices Act for knowing violations of this Act. 3 (e) The powers vested in the Comptroller by this Section 4 are additional to any and all other powers and remedies 5 vested in the Comptroller by law. 6 (Source: P.A. 86-1359.) 7 Section 40. The Cemetery Protection Act is amended by 8 changing Section 1 as follows: 9 (765 ILCS 835/1) (from Ch. 21, par. 15) 10 Sec. 1. (a) Any person who acts without proper legal 11 authority and who willfully and knowingly destroys or damages 12 the remains of a deceased human being or who desecrates human 13 remains is guilty of a Class 3 felony. 14 (a-5) Any person who acts without proper legal authority 15 and who willfully and knowingly removes any portion of the 16 remains of a deceased human being from a burial ground where 17 skeletal remains are buried or from a grave, crypt, vault, 18 mausoleum, or other repository of human remains is guilty of 19 a Class 4 felony. 20 (b) Any person who acts without proper legal authority 21 and who willfully and knowingly: 22 (1) obliterates, vandalizes, or desecrates a burial 23 ground where skeletal remains are buried or a grave, 24 crypt, vault, mausoleum, or other repository of human 25 remains; 26 (2) obliterates, vandalizes, or desecrates a park 27 or other area clearly designated to preserve and 28 perpetuate the memory of a deceased person or group of 29 persons; 30 (3) obliterates, vandalizes, or desecrates plants, 31 trees, shrubs, or flowers located upon or around a 32 repository for human remains or within a human graveyard HB3988 Engrossed -54- LRB9112160STsb 1 or cemetery; or 2 (4) obliterates, vandalizes, or desecrates a fence, 3 rail, curb, or other structure of a similar nature 4 intended for the protection or for the ornamentation of 5 any tomb, monument, gravestone, or other structure of 6 like character; 7 is guilty of a Class A misdemeanor if the amount of the 8 damage is less than $500, a Class 4 felony if the amount of 9 the damage is at least $500 and less than $10,000, a Class 3 10 felony if the amount of the damage is at least $10,000 and 11 less than $100,000, or a Class 2 felony if the damage is 12 $100,000 or more and shall provide restitution to the 13 cemetery authority or property owner for the amount of any 14 damage caused. 15 (b-5) Any person who acts without proper legal authority 16 and who willfully and knowingly defaces, vandalizes, injures, 17 or removes a gravestone or other memorial, monument, or 18 marker commemorating a deceased person or group of persons, 19 whether located within or outside of a recognized cemetery, 20 memorial park, or battlefield is guilty of a Class 4 felony 21 for damaging at least one but no more than 4 gravestones, a 22 Class 3 felony for damaging at least 5 but no more than 10 23 gravestones, or a Class 2 felony for damaging more than 10 24 gravestones and shall provide restitution to the cemetery 25 authority or property owner for the amount of any damage 26 caused. 27 (b-7) Any person who acts without proper legal authority 28 and who willfully and knowingly removes with the intent to 29 resell a gravestone or other memorial, monument, or marker 30 commemorating a deceased person or group of persons, whether 31 located within or outside a recognized cemetery, memorial 32 park, or battlefield, is guilty of a Class 2 felony. 33 (c) The provisions of this Section shall not apply to 34 the removal or unavoidable breakage or injury by a cemetery HB3988 Engrossed -55- LRB9112160STsb 1 authority of anything placed in or upon any portion of its 2 cemetery in violation of any of the rules and regulations of 3 the cemetery authority, nor to the removal of anything placed 4 in the cemetery by or with the consent of the cemetery 5 authority that in the judgment of the cemetery authority has 6 become wrecked, unsightly, or dilapidated. 7 (d) If an unemancipated minor is found guilty of 8 violating any of the provisions of subsection (b) of this 9 Section and is unable to provide restitution to the cemetery 10 authority or property owner, the parents or legal guardians 11 of that minor shall provide restitution to the cemetery 12 authority or property owner for the amount of any damage 13 caused, up to the total amount allowed under the Parental 14 Responsibility Law. 15 (e) Any person who shall hunt, shoot or discharge any 16 gun, pistol or other missile, within the limits of any 17 cemetery, or shall cause any shot or missile to be discharged 18 into or over any portion thereof, or shall violate any of the 19 rules made and established by the board of directors of such 20 cemetery, for the protection or government thereof, is guilty 21 of a Class C misdemeanor. 22 (f) Any person who knowingly enters or knowingly remains 23 upon the premises of a public or private cemetery without 24 authorization during hours that the cemetery is posted as 25 closed to the public is guilty of a Class A misdemeanor. 26 (g) All fines when recovered, shall be paid over by the 27 court or officer receiving the same to the cemetery 28 association and be applied, as far as possible in repairing 29 the injury, if any, caused by such offense. Provided, 30 nothing contained in this Act shall deprive such cemetery 31 association, or the owner of any lot or monument from 32 maintaining an action for the recovery of damages caused by 33 any injury caused by a violation of the provisions of this 34 Act, or of the rules established by the board of directors of HB3988 Engrossed -56- LRB9112160STsb 1 such cemetery association. Nothing in this Section shall be 2 construed to prohibit the discharge of firearms loaded with 3 blank ammunition as part of any funeral, any memorial 4 observance or any other patriotic or military ceremony. 5 (Source: P.A. 89-36, eff. 1-1-96.) 6 Section 45. The Illinois Pre-Need Cemetery Sales Act is 7 amended by changing Sections 1, 4, 5, 6, 7, 8, 8a, 9, 12, 14, 8 15, 16, 18, 19, 20, 22, and 23, and by adding Section 27.1, 9 as follows: 10 (815 ILCS 390/1) (from Ch. 21, par. 201) 11 Sec. 1. Purpose. It is the purpose of this Act to 12 assure adequate protection for those who contract through 13 pre-need contracts for the purchase of certain cemetery 14 merchandise and cemetery services and undeveloped interment, 15 entombment or inurnment space, when the seller may delay 16 delivery or performance more than 120 days following initial 17 payment on the account. 18 (Source: P.A. 85-805.) 19 (815 ILCS 390/4) (from Ch. 21, par. 204) 20 Sec. 4. Definitions. As used in this Act, the following 21 terms shall have the meaning specified: 22 (a)A."Pre-need sales contract" or "Pre-need sales" 23 means any agreement or contract or series or combination of 24 agreements or contracts which have for a purpose the sale of 25 cemetery merchandise, cemetery services or undeveloped 26 interment, entombment or inurnment spaces where the terms of 27 such sale require payment or payments to be made at a 28 currently determinable time and where the merchandise, 29 services or completed spaces are to be provided more than 120 30 days following the initial payment on the account. 31 (b)B."Delivery" occurs when: HB3988 Engrossed -57- LRB9112160STsb 1 (1) Physical possession of the merchandise is 2 transferred or the easement for burial rights in a 3 completed space is executed, delivered and transferred to 4 the buyer; or 5 (2) Following authorization by a purchaser under a 6 pre-need sales contract, title to the merchandise has 7 been transferred to the buyer and the merchandise has 8 been paid for and is in the possession of the seller who 9 has placed it, until needed, at the site of its ultimate 10 use; except that burial of any item at the site of its 11 ultimate use shall not constitute delivery for purposes 12 of this Act; or 13 (3) (A) Following authorization by a purchaser 14 under a pre-need sales contract, the merchandise has been 15 permanently identified with the name of the buyer or the 16 beneficiary and delivered to a licensed and bonded 17 warehouse and both title to the merchandise and a 18 warehouse receipt have been delivered to the purchaser or 19 beneficiary and a copy of the warehouse receipt has been 20 delivered to the licensee for retention in its files; 21 except that in the case of outer burial containers, the 22 use of a licensed and bonded warehouse as set forth in 23 this paragraph shall not constitute delivery for purposes 24 of this Act. Nothing herein shall prevent a seller from 25 perfecting a security interest in accordance with the 26 Uniform Commercial Code on any merchandise covered under 27 this Act. 28 (B) All warehouse facilities to which sellers 29 deliver merchandise pursuant to this Act shall: 30 (i) be either located in the State of Illinois 31 or qualify as a foreign warehouse facility as 32 defined herein; 33 (ii) submit to the Comptroller not less than 34 annually, by March 1 of each year, a report of all HB3988 Engrossed -58- LRB9112160STsb 1 cemetery merchandise stored by each licensee under 2 this Act which is in storage on the date of the 3 report; 4 (iii) permit the Comptroller or his designee 5 at any time to examine stored merchandise and to 6 examine any documents pertaining thereto; 7 (iv) submit evidence satisfactory to the 8 Comptroller that all merchandise stored by said 9 warehouse for licensees under this Act is insured 10 for casualty or other loss normally assumed by a 11 bailee for hire; 12 (v) demonstrate to the Comptroller that the 13 warehouse has procured and is maintaining a 14 performance bond in the form, content and amount 15 sufficient to unconditionally guarantee to the 16 purchaser or beneficiary the prompt shipment of the 17 cemetery merchandise. 18 (C) "Cemetery merchandise" means items of personal 19 property normally sold by a cemetery authority not covered 20 under the Illinois Funeral or Burial Funds Act, including but 21 not limited to: 22 (1) memorials, 23 (2) markers, 24 (3) monuments, 25 (4) foundations, and 26 (5) outer burial containers. 27 (D) "Undeveloped interment, entombment or inurnment 28 spaces" or "undeveloped spaces" means any space to be used 29 for the reception of human remains that is not completely and 30 totally constructed at the time of initial payment therefor 31 in a: 32 (1) lawn crypt, 33 (2) mausoleum, 34 (3) garden crypt, HB3988 Engrossed -59- LRB9112160STsb 1 (4) columbarium, or 2 (5) cemetery section. 3 (E) "Cemetery services" means those services customarily 4 performed by cemetery or crematory personnel in connection 5 with the interment, entombment, inurnment or cremation of a 6 dead human body. 7 (F) "Cemetery section" means a grouping of spaces 8 intended to be developed simultaneously for the purpose of 9 interring human remains. 10 (G) "Columbarium" means an arrangement of niches that 11 may be an entire building, a complete room, a series of 12 special indoor alcoves, a bank along a corridor or part of an 13 outdoor garden setting that is constructed of permanent 14 material such as bronze, marble, brick, stone or concrete for 15 the inurnment of human remains. 16 (H) "Lawn crypt" means a permanent underground crypt 17 usually constructed of reinforced concrete or similar 18 material installed in multiple units for the interment of 19 human remains. 20 (I) "Mausoleum" or "garden crypt" means a grouping of 21 spaces constructed of reinforced concrete or similar material 22 constructed or assembled above the ground for entombing human 23 remains. 24 (J) "Memorials, markers and monuments" means the object 25 usually comprised of a permanent material such as granite or 26 bronze used to identify and memorialize the deceased. 27 (K) "Foundations" means those items used to affix or 28 support a memorial or monument to the ground in connection 29 with the installation of a memorial, marker or monument. 30 (L) "Person" means an individual, corporation, 31 partnership, joint venture, business trust, voluntary 32 organization or any other form of entity. 33 (M) "Seller" means any person selling or offering for 34 sale cemetery merchandise, cemetery services or undeveloped HB3988 Engrossed -60- LRB9112160STsb 1 interment, entombment, or inurnment spaces in accordance with 2 a pre-need sales contracton a pre-need basis. 3 (N) "Religious cemetery" means a cemetery owned, 4 operated, controlled or managed by any recognized church, 5 religious society, association or denomination or by any 6 cemetery authority or any corporation administering, or 7 through which is administered, the temporalities of any 8 recognized church, religious society, association or 9 denomination. 10 (O) "Municipal cemetery" means a cemetery owned, 11 operated, controlled or managed by any city, village, 12 incorporated town, township, county or other municipal 13 corporation, political subdivision, or instrumentality 14 thereof authorized by law to own, operate or manage a 15 cemetery. 16 (O-1) "Outer burial container" means a container made of 17 concrete, steel, wood, fiberglass, or similar material, used 18 solely at the interment site, and designed and used 19 exclusively to surround or enclose a separate casket and to 20 support the earth above such casket, commonly known as a 21 burial vault, grave box, or grave liner, but not including a 22 lawn crypt. 23 (P) "Sales price" or "sales proceeds" means the gross 24 amount paid by a purchaser on a pre-need sales contract for 25 cemetery merchandise, cemetery services or undeveloped 26 interment, entombment or inurnment spaces including care 27 funds contributions required for entrustment under the,28excluding sales taxes, credit life insurance premiums,29finance charges andCemetery Care Actcontributions. 30 (Q) (Blank). 31 (R) "Provider" means a person who is responsible for 32 performing cemetery services or furnishing cemetery 33 merchandise, interment spaces, entombment spaces, or 34 inurnment spaces under a pre-need sales contract. HB3988 Engrossed -61- LRB9112160STsb 1 (S) "Purchase price" means sales proceeds. 2 (T) "Purchaser" or "buyer" means the person who 3 originally paid the money under or in connection with a 4 pre-need sales contract. 5 (U) "Parent company" means a corporation that has a 6 controlling interest in another corporation. 7 (W) "Foreign warehouse facility" means a warehouse 8 facility now or hereafter located in any state or territory 9 of the United States, including the District of Columbia, 10 other than the State of Illinois. 11 A foreign warehouse facility shall be deemed to have 12 appointed the Comptroller to be its true and lawful attorney 13 upon whom may be served all legal process in any action or 14 proceeding against it relating to or growing out of this Act, 15 and the acceptance of the delivery of stored merchandise 16 under this Act shall be signification of its agreement that 17 any such process against it which is so served, shall be of 18 the same legal force and validity as though served upon it 19 personally. 20 Service of such process shall be made by delivering to 21 and leaving with the Comptroller, or any agent having charge 22 of the Comptroller's Department of Cemetery and Burial 23 Trusts, a copy of such process and such service shall be 24 sufficient service upon such foreign warehouse facility if 25 notice of such service and a copy of the process are, within 26 10 days thereafter, sent by registered mail by the plaintiff 27 to the foreign warehouse facility at its principal office and 28 the plaintiff's affidavit of compliance herewith is appended 29 to the summons. The Comptroller shall keep a record of all 30 process served upon him under this Section and shall record 31 therein the time of such service. 32 (Source: P.A. 91-7, eff. 1-1-2000; 91-357, eff. 7-29-99; 33 revised 8-30-99.) HB3988 Engrossed -62- LRB9112160STsb 1 (815 ILCS 390/5) (from Ch. 21, par. 205) 2 Sec. 5. It is unlawful for any sellerpersondirectly or 3 indirectly doing business within this Statethrough an agent4or otherwiseto engage in pre-need sales without a license 5 issued by the Comptroller. 6 (Source: P.A. 84-239.) 7 (815 ILCS 390/6) (from Ch. 21, par. 206) 8 Sec. 6. License application. 9 (a) An application for a license shall be made in 10 writing to the Comptroller on forms prescribed by him or her, 11 signed by the applicant under oath verified by a notary 12 public appointed and commissioned under the Illinois Notary 13 Public Act, andshall beaccompanied by a non-returnable $25 14 application fee. The Comptroller may prescribe abbreviated 15 application forms for persons holding a license under the 16 Cemetery Care Act. Applications (except abbreviated 17 applications) must include at least the following 18 information: 19 (1) The full name and address, both residence and 20 business, of the applicant if the applicant is an 21 individual; of every member if applicant is a 22 partnership; of every member of the Board of Directors if 23 applicant is an association; and of every officer, 24 manager, director and shareholder holding more than 10% 255%of the corporate stock if applicant is a corporation; 26 (2) A detailed statement of applicant's assets and 27 liabilities; 28 (2.1) The name and address of the applicant's 29 principal place of business at which the books, accounts, 30 and records are available for examination by the 31 Comptroller as required by this Act; 32 (2.2) The name and address of the applicant's 33 branch locations at which pre-need sales will be HB3988 Engrossed -63- LRB9112160STsb 1 conducted and which will operate under the same license 2 number as the applicant's principal place of business; 3 (3) For each individual listed under (1) above, a 4 detailed statement of the individual's business 5 experience for the 10 years immediately preceding the 6 application; any present or prior connection between the 7 individual and any other person engaged in pre-need 8 sales; any felony or misdemeanor convictions for which 9 fraud was an essential element; any charges or complaints 10 lodged against the individual for which fraud was an 11 essential element and which resulted in civil or criminal 12 litigation; any failure of the individual to satisfy an 13 enforceable judgment entered against him or her based 14 upon fraud; and any other information requested by the 15 Comptroller relating to the past business practices of 16 the individual. Since the information required by this 17 paragraph may be confidential or contain proprietary 18 information, this information shall not be available to 19 other licensees or the general public and shall be used 20 only for the lawful purposes of the Comptroller in 21 enforcing this Act; 22 (4) The name of the trustee and, if applicable, the 23 names of the advisors to the trustee, including a copy of 24 the proposed trust agreement under which the trust funds 25 are to be held as required by this Act; 26 (5) Where applicable, the name of the corporate 27 surety company providing the performance bond for the 28 construction of undeveloped spaces and a copy of the 29 bond; and 30 (6) Such other information as the Comptroller may 31 reasonably require in order to determine the 32 qualification of the applicant to be licensed under this 33 Act. 34 (b) Applications for license shall be accompanied by a HB3988 Engrossed -64- LRB9112160STsb 1 fidelity bond executed by the applicant and a security 2 company authorized to do business in this State in such 3 amount, not exceeding $10,000, as the Comptroller may 4 require. The Comptroller may require additional bond from 5 time to time in amounts equal to one-tenth of such trust 6 funds but not to exceed $100,000, which bond shall run to the 7 Comptroller for the use and benefit of the beneficiaries of 8 such trust funds. Such licensee may by written permit of the 9 Comptroller be authorized to operate without additional bond, 10 except such fidelity bond as may be required by the 11 Comptroller for the protection of the licensee against loss 12 by default by any of its employees engaged in the handling of 13 trust funds. 14 (c) Any application not acted upon within 90 days may be 15 deemed denied. 16 (Source: P.A. 88-477.) 17 (815 ILCS 390/7) (from Ch. 21, par. 207) 18 Sec. 7. The Comptroller may refuse to issue or may 19 suspend or revoke a license on any of the following grounds: 20 (a) The applicant or licensee has made any 21 misrepresentations or false statements or concealed any 22 material fact; 23 (b) The applicant or licensee is insolvent; 24 (c) The applicant or licensee has been engaged in 25 business practices that work a fraud; 26 (d) The applicant or licensee has refused to give 27 pertinent data to the Comptroller; 28 (e) The applicant or licensee has failed to satisfy any 29 enforceable judgment or decree rendered by any court of 30 competent jurisdiction against the applicant; 31 (f) The applicant or licensee has conducted or is about 32 to conduct business in a fraudulent manner; 33 (g) The trustee advisors or the trust agreement is not HB3988 Engrossed -65- LRB9112160STsb 1 satisfactory to the Comptroller; 2 (h) The pre-construction performance bond, if 3 applicable, is not satisfactory to the Comptroller; 4 (i) The fidelity bond is not satisfactory to the 5 Comptroller; 6 (j) As to any individual listed, thatsuchindividual 7 has conducted or is about to conduct any business on behalf 8 of the applicant in a fraudulent manner,;has been convicted 9 of any felony or misdemeanor an essential element of which is 10 fraud, has had a judgment rendered against him or her based 11 on fraud in any civil litigation,orhas failed to satisfy 12 any enforceable judgment or decree rendered against him by 13 any court of competent jurisdiction, or has been convicted of 14 any felony or any theft-related offense; 15 (k) The applicant or licensee has failed to make the 16 annual report required by this Act or to comply with a final 17 order, decision, or finding of the Comptroller made pursuant 18 to this Act; 19 (l) The applicant or licensee, including any member, 20 officer, or director thereof if the applicant or licensee is 21 a firm, partnership, association, or corporation and any 22 shareholder holding more than 10% of the corporate stock, has 23 violated any provision of this Act or any regulation or order 24 made by the Comptroller under this Act; or 25 (m) The Comptroller finds any fact or condition existing 26 which, if it had existed at the time of the original 27 application for such license would have warranted the 28 Comptroller in refusing the issuance of the license. 29 (Source: P.A. 85-842.) 30 (815 ILCS 390/8) (from Ch. 21, par. 208) 31 Sec. 8. (a) Every license issued by the Comptroller 32 shall state the number of the license, the business name and 33 address of the licensee's principal place of business, each HB3988 Engrossed -66- LRB9112160STsb 1 branch location also operating under the license, and the 2 licensee's parent company, if any.licensee at which the3business is to be conducted, andThe license shall be 4 conspicuously posted in eachtheplace of business operating 5 under the license.No more than one place of business shall6be maintained under the same license, butThe Comptroller 7 may issue additional licenses as may be necessary for license 8 branch locationsmore than one license to a licenseeupon 9 compliance with the provisions of this Act governing an 10 original issuance of a license for each new license. 11 (b) Individual salespersons representingemployed bya 12 licensee shall not be required to obtain licenses in their 13 individual capacities but must acknowledge, by affidavit, 14 that they have been educated in the provisions of this Act 15 and must understand the penalties for failure to comply. The 16 licensee must retain copies of the affidavits of its 17 salespersons for its records and must make the affidavits 18 available to the Comptroller for examination upon request. 19 (c) The licensee shall be responsible for the activities 20 of any person representing the licensee in selling or 21 offering a pre-need contract for saleall individuals or22sales organizations selling under contract with, as agents or23on behalf of the licensee. 24 (d) Anysales company or otherperson not selling on 25 behalf of a licensee shall be required to obtain his or her 26itsown license. 27 (e) Any person engaged in pre-need sales, as defined 28 herein, prior to the effective date of this Act may continue 29 operations until the application for license under this Act 30 is denied; provided that such person shall make application 31 for a license within 60 days of the date that application 32 forms are made available by the Comptroller. 33 (f) No license shall be transferable or assignable 34 without the express written consent of the Comptroller. A HB3988 Engrossed -67- LRB9112160STsb 1 transfer of more than 50% of the ownership of any business 2 licensed hereunder shall be deemed to be an attempted 3 assignment of the license originally issued to the licensee 4 for which consent of the Comptroller shall be required. 5 (g) Every license issued hereunder shall remain in force 6 until the same has been suspended, surrendered or revoked in 7 accordance with this Act, but the Comptroller, upon the 8 request of an interested person or on his own motion, may 9 issue new licenses to a licensee whose license or licenses 10 have been revoked, if no factor or condition then exists 11 which would have warranted the Comptroller in refusing 12 originally the issuance of such license. 13 (Source: P.A. 84-239.) 14 (815 ILCS 390/8a) 15 Sec. 8a. Investigation of unlawful practices. If it 16 appears to the Comptroller that a person has engaged in, is 17 engaging in, or is about to engage in any practice in 18 violation ofdeclared to be unlawful bythis Act, the 19 Comptroller may: 20 (1) require that person to file on such terms as 21 the Comptroller prescribes a statement or report in 22 writing, under oath or otherwise, containing all 23 information the Comptroller may consider necessary to 24 ascertain whether a licensee is in compliance with this 25 Act, or whether an unlicensed person is engaging in 26 activities for which a license is required; 27 (2) examine under oath any person in connection 28 with the books and records pertaining to or having an 29 impact upon the trust funds required to be maintained 30 pursuant to this Act; 31 (3) examine any books and records of the licensee, 32 trustee, or investment advisor that the Comptroller may 33 consider necessary to ascertain compliance with this Act; HB3988 Engrossed -68- LRB9112160STsb 1 and 2 (4) require the production of a copy of any record, 3 book, document, account, or paper that is produced in 4 accordance with this Act and retain it in his or her 5 possession until the completion of all proceedings in 6 connection with which it is produced. 7 (Source: P.A. 89-615, eff. 8-9-96.) 8 (815 ILCS 390/9) (from Ch. 21, par. 209) 9 Sec. 9. The Comptroller may,upon his own motion 10 investigate the actions of any person providing, selling, or 11 offering pre-need sales contracts or of any applicant or any 12 person or persons holding or claiming to hold a license under 13 this Act. The Comptroller shall make such an investigation 14 on receipt of the verified written complaint of any person 15 setting forth facts which, if proved, would constitute 16 grounds for refusal, suspension, or revocation of a license 17with respect to which grounds for revocation may occur or18exist, or if he shall find that such grounds for revocation19are of general application to all offices or to more than one20office operated by such licensee, he may revoke all of the21licenses issued to such licensee or such number of licensees22to which grounds apply, as the case may be. Before refusing 23 to issue, and before suspension or revocation of a license, 24 the Comptroller shall hold a hearing to determine whether the 25 applicant or licensee, hereafter called the respondent, is 26 entitled to hold such a license. At least 10 days prior to 27 the date set for such hearing, the Comptroller shall notify 28 the respondent in writing that on the date designated a 29 hearing will be held to determine his eligibility for a 30 license and that he may appear in person or by counsel. 31 Such written notice may be served on the respondent 32 personally, or by registered or certified mail sent to the 33 respondent's business address as shown in his latest HB3988 Engrossed -69- LRB9112160STsb 1 notification to the Comptroller and shall include sufficient 2 information to inform the respondent of the general nature of 3 the charge. At the hearing, both the respondent and the 4 complainant shall be accorded ample opportunity to present in 5 person or by counsel such statements, testimony, evidence and 6 argument as may be pertinent to the charges or to any defense 7 thereto. The Comptroller may reasonably continue such 8 hearing from time to time. 9 The Comptroller may subpoena any person or persons in 10 this State and take testimony orally, by deposition or by 11 exhibit, in the same manner and with the same fees and 12 mileage as prescribed in judicial proceedings in civil cases. 13 Any authorized agent of the Comptroller may administer 14 oaths to witnesses at any hearing which the Comptroller is 15 authorized to conduct. 16 The Comptroller, at his expense, shall provide a 17 certified shorthand reporter to take down the testimony and 18 preserve a record of all proceedings at the hearing of any 19 case involving the refusal to issue a license, the suspension 20 or revocation of a license, the imposition of a monetary 21 penalty, or the referral of a case for criminal prosecution. 22 The record of any such proceeding shall consist of the notice 23 of hearing, complaint, all other documents in the nature of 24 pleadings and written motions filed in the proceedings, the 25 transcript of testimony and the report and orders of the 26 Comptroller. Copies of the transcript of such record may be 27 purchased from the certified shorthand reporter who prepared 28 the record or from the Comptroller. 29 (Source: P.A. 84-239.) 30 (815 ILCS 390/12) (from Ch. 21, par. 212) 31 Sec. 12. License revocation or suspension. 32 (a) The Comptroller may, upon determination that grounds 33 exist for the revocation or suspension of a license issued HB3988 Engrossed -70- LRB9112160STsb 1 under this Act, revoke or suspend the license issued to a 2 particular branch office location with respect to which the 3 grounds for revocation or suspension may occur or exist, or 4 as many of the licenses issued to the licensee as may be 5 determined appropriate by the Comptroller. 6 (b) Upon the revocation or suspension of any license, 7 the licensee shall immediately surrender the license or 8 licensesand any branch office licensesto the Comptroller. 9 If the licensee fails to do so, the Comptroller has the right 10 to seize the license or licensessame. 11 (Source: P.A. 84-239.) 12 (815 ILCS 390/14) (from Ch. 21, par. 214) 13 Sec. 14. Contract required. 14 (a) It is unlawful for any personsellerdoing business 15 within this State to accept sales proceeds, either directly 16 or indirectly, by any means,unless the seller enters into a 17 pre-need sales contract with the purchaser which meets the 18 following requirements: 19 (1) A written sales contract shall be executed in 20 at least 12 point type in duplicate for each pre-need 21 sale made by a licensee, and a signed copy given to the 22 purchaser. Each completed contract shall be numbered and 23 shall contain the name and address of the purchaser, the 24 principal office and all branch locations of the 25 licensee, the parent company, and the providerseller, 26 the name of the person, if known, who is to receive the 27 cemetery merchandise, cemetery services or the completed 28 interment, entombment or inurnment spaces under the 29 contract and specifically identify such merchandise, 30 services or spaces to be provided and the price of the 31 merchandise, services, or space or spaces. 32 (2) In addition, such contracts must contain a 33 provision in distinguishing typeface as follows: HB3988 Engrossed -71- LRB9112160STsb 1 "Notwithstanding anything in this contract to the 2 contrary, you are afforded certain specific rights of 3 cancellation and refund underSections 18 and 19 ofthe 4 Illinois Pre-Need Cemetery Sales Act, enacted by the 84th 5 General Assembly of the State of Illinois". 6 (3) All pre-need sales contracts shall be sold on a 7 guaranteed price basis. At the time of performance of the 8 service or delivery of the merchandise, the seller shall 9 be prohibited from assessing the purchaser or his heirs 10 or assigns or duly authorized representative any 11 additional charges for the specific merchandise and 12 services listed on the pre-need sales contract. 13 (4) Each contract shall clearly disclose that the 14 price of the merchandise or services is guaranteed and 15 shall contain the following statement in 12 point bold 16 type: 17 "THIS CONTRACT GUARANTEES THE BENEFICIARY THE 18 SPECIFIC GOODS,ANDSERVICES, INTERMENT SPACES, 19 ENTOMBMENT SPACES, AND INURNMENT SPACES CONTRACTED FOR. 20 NO ADDITIONAL CHARGES MAY BE REQUIRED.FOR DESIGNATED 21 GOODS,ANDSERVICES, AND SPACES. ADDITIONAL CHARGES MAY 22 BE INCURRED FOR UNEXPECTED EXPENSES." 23 (5) The pre-need sales contract shall provide that 24 if the particular cemetery services, cemetery 25 merchandise, or spaces specified in the pre-need contract 26 are unavailable at the time of delivery, the seller shall 27 be required to furnish services, merchandise, and spaces 28 similar in style and at least equal in quality of 29 material and workmanship. 30 (6) The pre-need contract shall also disclose any 31 specific penalties to be incurred by the purchaser as a 32 result of failure to make payments; and penalties to be 33 incurred or moneys or refunds to be received as a result 34 of cancellation of the contract. HB3988 Engrossed -72- LRB9112160STsb 1 (7) The pre-need contract shall disclose the nature 2 of the relationship between the provider and the seller. 3 (8) Each pre-need contract that authorizes the 4 delivery of cemetery merchandise to a licensed and bonded 5 warehouse shall provide that prior to or upon delivery of 6 the merchandise to the warehouse (i) the merchandise 7 shall be permanently identified with the name of the 8 buyer; and (ii) the title to the merchandise and a 9 warehouse receipt shall be delivered to the purchaser or 10 beneficiary. The pre-need contract shall contain the 11 following statement in 12 point bold type: 12 "THIS CONTRACT AUTHORIZES THE DELIVERY OF MERCHANDISE TO 13 A LICENSED AND BONDED WAREHOUSE FOR STORAGE OF THE 14 MERCHANDISE UNTIL THE MERCHANDISE IS NEEDED BY THE 15 BENEFICIARY. DELIVERY OF THE MERCHANDISE IN THIS MANNER 16 MAY PRECLUDE REFUND OF SALE PROCEEDS THAT ARE 17 ATTRIBUTABLE TO THE DELIVERED MERCHANDISE." 18 The purchaser shall initial the statement at the 19 time of entry into the pre-need contract. 20 (9) Each pre-need contract that authorizes the 21 placement of cemetery merchandise at the site of its 22 ultimate use prior to the time that the merchandise is 23 needed by the beneficiary shall contain the following 24 statement in 12 point bold type: 25 "THIS CONTRACT AUTHORIZES THE PLACEMENT OF MERCHANDISE AT 26 THE SITE OF ITS ULTIMATE USE PRIOR TO THE TIME THAT THE 27 MERCHANDISE IS NEEDED BY THE BENEFICIARY. DELIVERY OF THE 28 MERCHANDISE IN THIS MANNER MAY PRECLUDE REFUND OF SALE 29 PROCEEDS THAT ARE ATTRIBUTABLE TO THE DELIVERED 30 MERCHANDISE." 31 The purchaser shall initial the statement at the 32 time of entry into the pre-need contract. 33 (b) Every pre-need sales contract must be in writing.,34and no pre-need sales contract form may be used unless it hasHB3988 Engrossed -73- LRB9112160STsb 1previously been filed with the Comptroller. The Comptroller2shall review all pre-need sales contract forms and, upon3written notification to the seller, shall prohibit the use of4contract forms that do not meet the requirements of this Act.5 Any use or attempted use of any oral pre-need sales contract 6 or any written pre-need sales contractin a form not filed7with the Comptroller orin a form that does not meet the 8 requirements of this Act shall be deemed a violation of this 9 Act and is voidable by the purchaser without penalty. The 10 Comptroller may by rule develop a model pre-need sales 11 contract form that meets the requirements of this Act. 12 (c) To the extent the Rule is applicable, every pre-need 13 sales contract is subject to the Federal Trade Commission 14 Rule concerning the Cooling-Off Period for Door-to-Door Sales 15 (16 CFR Part 429). 16 (d) No pre-need sales contract may be entered into in 17 this State unless there is a provider for the cemetery 18 merchandise, cemetery services, and undeveloped interment, 19 inurnment, and entombment spaces being sold. If the seller 20 is not the provider, then the seller must have a binding 21 agreement with a provider, and the identity of the provider 22 and the nature of the agreement between the seller and the 23 provider must be disclosed in the pre-need sales contract at 24 the time of sale and before the receipt of any sale proceeds. 25 The failure to disclose the identity of the provider, the 26 nature of the agreement between the seller and the provider, 27 or any changes thereto to the purchaser and beneficiary, or 28 the failure to make the disclosures required by this Section 29 constitutes an intentional violation of this Act. 30 (e) No pre-need contract may be entered into in this 31 State unless it is accompanied by a funding mechanism 32 permitted under this Act and unless the seller is licensed by 33 the Comptroller as provided in this Act. Nothing in this Act 34 is intended to relieve providers or sellers of pre-need HB3988 Engrossed -74- LRB9112160STsb 1 contracts from being licensed under any other Act required 2 for their profession or business or from being subject to the 3 rules promulgated to regulate their profession or business, 4 including rules on solicitation and advertisement. 5 (f) No pre-need contract may be entered into in this 6 State unless the seller explains to the purchaser the terms 7 of the pre-need contract prior to the purchaser's signing. 8 (g) The State Comptroller shall develop a booklet for 9 consumers in plain English describing the scope, application, 10 and consumer protections of this Act. After the booklet is 11 developed, no pre-need contract may be sold in this State 12 unless the seller distributes to the purchaser prior to the 13 sale a booklet developed or approved for use by the State 14 Comptroller. 15 (Source: P.A. 91-7, eff. 1-1-2000.) 16 (815 ILCS 390/15) (from Ch. 21, par. 215) 17 Sec. 15. (a) Whenever a seller receives sales proceeds 18anything of valueunder a pre-need sales contract, the person 19 receiving such value shall deposit 50% of the salesall20 proceeds received into one or more trust funds maintained in 21 accordance withpursuant tothis Section, except that, in the 22 case of proceeds received for the purchase of outer burial 23 containers, 85% of the sales proceeds shall be deposited into 24 one or more trust funds. Such deposits shall be made until 25 the amount deposited in trust equals 50% of the sales price 26 of the cemetery merchandise, cemetery services and 27 undeveloped spaces included in such contract, except that, in 28 the case of deposits for outer burial containers, deposits 29 shall be made until the amount deposited in trust equals 85% 30 of the sales price. In the event an installment contract is 31 factored, discounted or sold to a third party, the seller 32 shall deposit an amount equal to 50% of the sales price of 33 the installment contract, except that, for the portion of the HB3988 Engrossed -75- LRB9112160STsb 1 contract attributable to the sale of outer burial containers, 2 the seller shall deposit an amount equal to 85% of the sales 3 price. Proceeds required to be deposited in trust which are 4 attributable to cemetery merchandise and cemetery services 5 shall be held in a "Cemetery Merchandise Trust Fund". 6 Proceeds required to be deposited in trust which are 7 attributable to the sale of undeveloped interment, entombment 8 or inurnment spaces shall be held in a "Pre-construction 9 Trust Fund". If merchandise is delivered for storage in a 10 bonded warehouse, as authorized herein, and payment of 11 transportation or other charges totaling more than $20 will 12 be required in order to secure delivery to the site of 13 ultimate use, upon such delivery to the warehouse the seller 14 shall deposit to the trust fund the full amount of the actual 15 or estimated transportation charge. Transportation charges 16 which have been prepaid by the seller shall not be deposited 17 to trust funds maintained pursuant to this Section. As used 18 in this Section, "all proceeds" means the entire amount paid 19 by a purchaser in connection with a pre-need sales contract, 20 including finance charges and Cemetery Care Act 21 contributions, but excluding sales taxes and credit life 22 insurance premiums. 23 (b) All trust deposits required by this Act shall be 24 made within 30 days following the end of the month of 25 receipt. 26 (c) A trust established under this Act must be 27 maintained: 28 (1) in a trust account established in a bank, 29 savings and loan association or credit union authorized 30 to do business in Illinois where such accounts are 31 insured by an agency of the federal government; 32 (2) in a trust company authorized to do business in 33 Illinois; or 34 (3) in an investment company authorized to do HB3988 Engrossed -76- LRB9112160STsb 1 business in Illinois insured by the Securities Brokers 2 Insurance Corporation. 3 (d) Funds deposited in the trust account shall be 4 identified in the records of the seller by the name of the 5 purchaser. Nothing shall prevent the trustee from commingling 6 the deposits in any such trust fund for purposes of the 7 management thereof and the investment of funds therein as 8 provided in the "Common Trust Fund Act", approved June 24, 9 1949, as amended. In addition, multiple trust funds 10 maintained pursuant to this Act may be commingled or 11 commingled with other funeral or burial related trust funds, 12 provided that all record keeping requirements imposed by or 13 pursuant to law are met. 14 (e) In lieu of a pre-construction trust fund, a seller 15 of undeveloped interment, entombment or inurnment spaces may 16 obtain and file with the Comptroller a performance bond in an 17 amount at least equal to 50% of the sales price of the 18 undeveloped spaces or the estimated cost of completing 19 construction, whichever is greater. The bond shall be 20 conditioned on the satisfactory construction and completion 21 of the undeveloped spaces as required in Section 19 of this 22 Act. 23 Each bond obtained under this Section shall have as 24 surety thereon a corporate surety company incorporated under 25 the laws of the United States, or a State, the District of 26 Columbia or a territory or possession of the United States. 27 Each such corporate surety company must be authorized to 28 provide performance bonds as required by this Section, have 29 paid-up capital of at least $250,000 in cash or its 30 equivalent and be able to carry out its contracts. Each 31 pre-need seller must provide to the Comptroller, for each 32 corporate surety company such seller utilizes, a statement of 33 assets and liabilities of the corporate surety company sworn 34 to by the president and secretary of the corporation by HB3988 Engrossed -77- LRB9112160STsb 1 January 1 of each year. 2 The Comptroller shall prohibit pre-need sellers from 3 doing new business with a corporate surety company if the 4 company is insolvent or is in violation of this Section. In 5 addition the Comptroller may direct a pre-need seller to 6 reinstate a pre-construction trust fund upon the 7 Comptroller's determination that the corporate surety company 8 no longer is sufficient security. 9 All performance bonds issued pursuant to this Section 10 must be irrevocable during the statutory term for completing 11 construction specified in Section 19 of this Act, unless 12 terminated sooner by the completion of construction. 13 (f) Whenever any pre-need contract shall be entered into 14 and include 1) items of cemetery merchandise and cemetery 15 services, and 2) rights to interment, inurnment or entombment 16 in completed spaces without allocation of the gross sale 17 price among the items sold, the application of payments 18 received under the contract shall be allocated, first to the 19 right to interment, inurnment or entombment, second to items 20 of cemetery merchandise and cemetery services, unless some 21 other allocation is clearly provided in the contract. 22 (g) Any person engaging in pre-need sales who enters 23 into a combination sale which involves the sale of items 24 covered by a trust or performance bond requirement and any 25 item not covered by any entrustment or bond requirement, 26 shall be prohibited from increasing the gross sales price of 27 those items not requiring entrustment with the purpose of 28 allocating a lesser gross sales price to items which require 29 a trust deposit or a performance bond. 30 (Source: P.A. 91-7; eff. 1-1-2000.) 31 (815 ILCS 390/16) (from Ch. 21, par. 216) 32 Sec. 16. Trust funds; disbursements. 33 (a) A trustee shall make no disbursements from the trust HB3988 Engrossed -78- LRB9112160STsb 1 fund except as provided in this Act. 2 (b) A trustee shall, with respect to the investment of 3 such trust funds, exercise the judgment and care under the 4 circumstances then prevailing which persons of prudence, 5 discretion and intelligence exercise in the management of 6 their own affairs, not in regard to speculation, but in 7 regard to the permanent disposition of their funds, 8 considering the probable income as well as the probable 9 safety of their capital. 10 The seller shall act as trustee of all amounts received 11 for cemetery merchandise, services, or undeveloped spaces 12 until those amounts have been deposited into the trust fund. 13 The seller may continue to be the trustee of up to $500,000 14 that has been deposited into the trust fund, but the seller 15 must retain an independent trustee for any amount of trust 16 funds in excess of $500,000. A seller holding trust funds in 17 excess of $500,000on the effective date of this amendatory18Act of 1996 shall have 36 months to retain an independent19trustee for the amounts over $500,000; any other sellermust 20 retain an independent trustee for its trust funds in excess 21 of $500,000 as soon as may be practical. The Comptroller 22 shall have the right to disqualify the trustee upon the same 23 grounds as for refusing to grant or revoking a license 24 hereunder. Upon notice to the Comptroller, the seller may 25 change the trustee of the trust fund. 26 (c) The trustee may rely upon certifications and 27 affidavits made to it under the provisions of this Act, and 28 shall not be liable to any person for such reliance. 29 (d) A trustee shall be allowed to withdraw from the 30 trust funds maintained pursuant to this Act, payable solely 31 from the income earned on such trust funds, a reasonable fee 32 for all usual and customary services for the operation of the 33 trust fund, including, but not limited to trustee fees, 34 investment advisor fees, allocation fees, annual audit fees HB3988 Engrossed -79- LRB9112160STsb 1 and other similar fees. The maximum amount allowed to be 2 withdrawn for these fees each year shall be the lesser of 3% 3 of the balance of the trust calculated on an annual basis or 4 the amount of annual income generated therefrom. 5 (e) The trust shall be a single-purpose trust fund. In 6 the event of the seller's bankruptcy, insolvency or 7 assignment for the benefit of creditors, or an adverse 8 judgment, the trust funds shall not be available to any 9 creditor as assets of the seller or to pay any expenses of 10 any bankruptcy or similar proceeding, but shall be 11 distributed to the purchasers or managed for their benefit by 12 the trustee holding the funds. Except in an action by the 13 Comptroller to revoke a license issued pursuant to this Act 14 and for creation of a receivership as provided in this Act, 15 the trust shall not be subject to judgment, execution, 16 garnishment, attachment, or other seizure by process in 17 bankruptcy or otherwise, nor to sale, pledge, mortgage, or 18 other alienation, and shall not be assignable except as 19 approved by the Comptroller. The changes made by this 20 amendatory Act of the 91st General Assembly are intended to 21 clarify existing law regarding the inability of licensees to 22 pledge the trust. 23 (f) Because it is not known at the time of deposit or at 24 the time that income is earned on the trust account to whom 25 the principal and the accumulated earnings will be 26 distributed, for purposes of determining the Illinois Income 27 Tax due on these trust funds, the principal and any accrued 28 earnings or losses relating to each individual account shall 29 be held in suspense until the final determination is made as 30 to whom the account shall be paid. 31 (Source: P.A. 91-7, eff. 6-1-99.) 32 (815 ILCS 390/18) (from Ch. 21, par. 218) 33 Sec. 18. Remedies. HB3988 Engrossed -80- LRB9112160STsb 1 (a) If for any reason a seller who has engaged in 2 pre-need sales has refused, cannot or does not comply with 3 the terms of the pre-need sales contract within a reasonable 4 time after he is required to do so, the purchaser or his 5 heirs or assigns or duly authorized representative shall have 6 the right to a refund of an amount equal to the sales price 7 paid for undelivered merchandise, services or spaces plus 8 undistributed interest amounts held in trust attributable to 9 such contract, within 30 days of the filing of a sworn 10 affidavit with the trustee setting forth the existence of the 11 contract and the fact of breach. A copy of this affidavit 12 shall be filed with the Comptroller and the seller. In the 13 event a seller is prevented from performing by strike, 14 shortage of materials, civil disorder, natural disaster or 15 any like occurrence beyond the control of the seller, the 16 seller's time for performance shall be extended by the length 17 of such delay. Nothing in this Section shall relieve any 18 personthe sellerfrom any liability for non-performance of 19 his obligations under the pre-need sales contract. 20 (b) If the purchaser defaults in making payments, the 21 seller shall have the right to cancel the contract and 22 withdraw from the trust fund the entire balance to the credit 23 of the defaulting purchaser's account as liquidating damages. 24 In such event, the trustee shall deliver said balance to the 25 seller upon its certification, and upon receiving said 26 certification the trustee may rely thereon and shall not be 27 liable to anyone for such reliance. 28 (c) At any time prior to the performance of a service or 29 delivery of merchandise under a pre-need contract, any 30 purchaser, its legal representative, or all beneficiaries 31 under the contractAfter final payment on a pre-need32contract, any beneficiarymay upon written demand of a 33 seller, demand that the pre-need contract with such seller be 34 terminated. The seller shall, within 30 days, initiate a HB3988 Engrossed -81- LRB9112160STsb 1 refund to such purchaser, its legal representative, or all 2 beneficiaries under the pre-need contract in an amount as 3 follows: 4 (1) 100% of the sales proceeds, including 5 undistributed interest earned thereon, if the purchaser, 6 its legal representative, or all beneficiaries demand 7 termination of the pre-need contract within 30 days after 8 the date of entry into the pre-need contract; 9 (2)beneficiary ofThe entire amount held in trust 10 attributable to undelivered cemetery merchandise and 11 underperformed cemetery services, including undistributed 12 interest earned thereon, if the purchaser, its legal 13 representative, or all beneficiaries demand termination 14 of the pre-need contract more than 30 days after the date 15 of entry into the pre-need contract.Where more than one16beneficiary is included in a pre-need contract, a seller17need not honor a demand for cancellation under this18paragraph unless all beneficiaries assent and their19signatures are included in written demand for refund.20 (Source: P.A. 85-805.) 21 (815 ILCS 390/19) (from Ch. 21, par. 219) 22 Sec. 19. Construction or development of spaces. 23 (a) The construction or development of undeveloped 24 interment, entombment or inurnment spaces shall be commenced 25 on that phase, section or sections of undeveloped ground or 26 section of lawn crypts, mausoleums, garden crypts, 27 columbariums or cemetery spaces in which sales are made 28 within 3 years of the date of the first such sale. The 29 seller shall give written notice to the Comptroller no later 30 than 30 days after the first sale. Such notice shall include 31 a description of the project. Once commenced, construction 32 or development shall be pursued diligently to completion. 33 The construction must be completed within 6 years of the HB3988 Engrossed -82- LRB9112160STsb 1 first sale. If construction or development is not commenced 2 or completed within the times specified herein, any purchaser 3 may surrender and cancel the contract and upon cancellation 4 shall be entitled to a refund of the actual amounts paid 5 toward the purchase price plus interest attributable to such 6 amount earned while in trust; provided however that any delay 7 caused by strike, shortage of materials, civil disorder, 8 natural disaster or any like occurrence beyond the control of 9 the seller shall extend the time of such commencement and 10 completion by the length of such delay. 11 (b) At any time within 12 months of a purchaser's 12 entering into a pre-need contract for undeveloped interment, 13 entombment or inurnment spaces, a purchaser may surrender and 14 cancel his or her contract and upon cancellation shall be 15 entitled to a refund of the sales proceeds paid towards the 16 undeveloped interment, entombment, or inurnment spacesthe17actual amounts paid toward the purchase priceplus interest 18 attributable to such amount earned while in trust. 19 Notwithstanding the foregoing, the cancellation and refund 20 rights specified in this paragraph shall terminate as of the 21 date the seller commences construction or development of the 22 phase, section or sections of undeveloped spaces in which 23 sales are made. After the rights of cancellation and refund 24 specified herein have terminated, if a purchaser defaults in 25 making payments under the pre-need contract, the seller shall 26 have the right to cancel the contract and withdraw from the 27 trust fund the entire balance to the credit of the defaulting 28 purchaser's account as liquidated damages. In such event, 29 the trustee shall deliver said balance to the seller upon its 30 certification, and upon receiving said certification the 31 trustee may rely thereon and shall not be liable to anyone 32 for such reliance. 33 (c) During the construction or development of interment, 34 entombment or inurnment spaces, upon the sworn certification HB3988 Engrossed -83- LRB9112160STsb 1 by the seller and the contractor to the trustee,the trustee 2 shall disburse from the trust fund the amount equivalent to 3 the cost of performed labor or delivered materials as 4 certified. Said certification shall be substantially in the 5 following form: 6 We, the undersigned, being respectively the Seller and 7 Contractor, do hereby certify that the Contractor has 8 performed labor or delivered materials or both to (address of 9 property) .........., in connection with a contract to 10 .........., and that as of this date the value of the labor 11 performed and materials delivered is $....... 12 We do further certify that in connection with such 13 contract there remains labor to be performed, and materials 14 to be delivered, of the value of $........ 15 This Certificate is signed (insert date). 16 ............ ............ 17 Seller Contractor 18 A person who executes and delivers a completion 19 certificate with actual knowledge of a falsity contained 20 therein shall be considered in violation of this Act and 21 subject to the penalties contained herein. 22 (d) Except as otherwise authorized by this Section, 23 every seller of undeveloped spaces shall provide facilities 24 for temporary interment, entombment or inurnment for 25 purchasers or beneficiaries of contracts who die prior to 26 completion of the space. Such temporary facilities shall be 27 constructed of permanent materials, and, insofar as 28 practical, be landscaped and groomed to the extent customary 29 in the cemetery industry in that community. The heirs, 30 assigns, or personal representative of a purchaser or 31 beneficiary shall not be required to accept temporary 32 underground interment spaces where the undeveloped space 33 contracted for was an above ground entombment or inurnment 34 space. In the event that temporary facilities as described HB3988 Engrossed -84- LRB9112160STsb 1 in this paragraph are not made available, upon the death of a 2 purchaser or beneficiary, the heirs, assigns, or personal 3 representative is entitled to a refund of the entire sales 4 price paid plus undistributed interest attributable to such 5 amount while in trust. 6 (e) If the seller delivers a completed space acceptable 7 to the heirs, assigns or personal representative of a 8 purchaser or beneficiary, other than the temporary facilities 9 specified herein, in lieu of the undeveloped space purchased, 10 the seller shall provide the trustee with a delivery 11 certificate and all sums deposited under the pre-need sales 12 contract, including the undistributed income, shall be paid 13 to the seller. 14 (f) Upon completion of the phase, section or sections of 15 the project as certified to the trustee by the seller and the 16 contractor and delivery of the completed interment, 17 entombment, or inurnment space to the purchaser, the trust 18 fund requirements set forth herein shall terminate and all 19 funds held in the preconstruction trust fund attributable to 20 the completed phase, section or sections, including interest 21 accrued thereon, shall be returned to the seller. 22 (g) This Section shall not apply to the sale of 23 undeveloped spaces if there has been any such sale in the 24 same phase, section or sections of the project prior to the 25 effective date of this Act. 26 (Source: P.A. 91-357, eff. 7-29-99.) 27 (815 ILCS 390/20) (from Ch. 21, par. 220) 28 Sec. 20. Records. 29 (a) Each licensee must keep accurate accounts, books and 30 records in this State at the principal place of business 31 identified in the licensee's license application or as 32 otherwise approved by the Comptroller in writing of all 33 transactions, copies of agreements, dates and amounts of HB3988 Engrossed -85- LRB9112160STsb 1 payments made or received, the names and addresses of the 2 contracting parties, the names and addresses of persons for 3 whose benefit funds are received, if known, and the names of 4 the trust depositories. Additionally, for a period not to 5 exceed 6 months after the performance of all terms in a 6 pre-need sales contract, the licensee shall maintain copies 7 of each pre-need contract at the licensee branch location 8 where the contract was entered. 9 (b) Each licensee must maintain such records for a 10 period of 3 years after the licensee shall have fulfilled his 11 or her obligation under the pre-need contract or 3 years 12 after any stored merchandise shall have been provided to the 13 purchaser or beneficiary, whichever is later. 14 (c) Each licensee shall submit reports to the 15 Comptroller annually, under oath, on forms furnished by the 16 Comptroller. The annual report shall contain, but shall not 17 be limited to, the following: 18 (1) An accounting of the principal deposit and 19 additions of principal during the fiscal year. 20 (2) An accounting of any withdrawal of principal or 21 earnings. 22 (3) An accounting at the end of each fiscal year, 23 of the total amount of principal and earnings held. 24 (d) The annual report shall be filed by the licensee 25 with the Comptroller within 75 days after the end of the 26 licensee's fiscal year. An extension of up to 60 days may be 27 granted by the Comptroller, upon a showing of need by the 28 licensee. Any other reports shall be in the form furnished 29 or specified by the Comptroller. If a licensee fails to 30 submit an annual report to the Comptroller within the time 31 specified in this Section, the Comptroller shall impose upon 32 the licensee a penalty of $5 for each and every day the 33 licensee remains delinquent in submitting the annual report. 34 Each report shall be accompanied by a check or money order in HB3988 Engrossed -86- LRB9112160STsb 1 the amount of $10 payable to: Comptroller, State of 2 Illinois. 3 (e) On and after the effective date of this amendatory 4 Act of the 91st General Assembly, a licensee may report all 5 required information concerning the sale of outer burial 6 containers on the licensee's annual report required to be 7 filed under this Act and shall not be required to report that 8 information under the Illinois Funeral or Burial Funds Act, 9 as long as the information is reported under this Act. 10 (Source: P.A. 91-7, eff. 1-1-2000.) 11 (815 ILCS 390/22) (from Ch. 21, par. 222) 12 Sec. 22. Cemetery Consumer Protection Fund. 13 (a) Every seller engaging in pre-need sales shall pay to 14 the Comptroller $5 for each said contract entered into, to be 15 paid into a special income earning fund hereby created in the 16 State Treasury, known as the Cemetery Consumer Protection 17 Fund. The above said fees shall be remitted to the 18 Comptroller semi-annually within 30 days after the end of 19 June and December for all contracts that have been entered in 20 such 6 month period. 21 (b) All monies paid into the fund together with all 22 accumulated undistributed income thereon shall be held as a 23 special fund in the State Treasury. The fund shall be used 24 solely for the purpose of providing restitution to consumers 25 who have suffered pecuniary loss arising out of pre-need 26 sales. 27 (c) The fund shall be applied only to restitution or 28 completion of the project or delivery of the merchandise or 29 services, where such has been ordered by the Circuit Court in 30 a lawsuit brought under this Act by the Attorney General of 31 the State of Illinois on behalf of the Comptroller and in 32 which it has been determined by the Court that the obligation 33 is non-collectible from the judgment debtor. Restitution HB3988 Engrossed -87- LRB9112160STsb 1 shall not exceed the amount of the sales price paid plus 2 interest at the statutory rate. The fund shall not be used 3 for the payment of any attorney or other fees. 4 (d) Whenever restitution is paid by the fund, the fund 5 shall be subrogated to the amount of such restitution, and 6 the Comptroller shall request the Attorney General to engage 7 in all reasonable post judgment collection steps to collect 8 said restitution from the judgment debtor and reimburse the 9 fund. 10 (e) The fund shall not be applied toward any restitution 11 for losses in any lawsuit initiated by the Attorney General 12 or Comptroller or with respect to any claim made on pre-need 13 sales which occurred prior to the effective date of this Act. 14 (f) The fund may not be allocated for any purpose other 15 than that specified in this Act. 16 (g) Notwithstanding any other provision of this Section, 17 the payment of restitution from the fund shall be a matter of 18 grace and not of right and no purchaser shall have any vested 19 rights in the fund as a beneficiary or otherwise. Prior to 20 seeking restitution from the fund, a purchaser or beneficiary 21 seeking payment of restitution shall apply for restitution on 22 a form provided by the Comptroller. The form shall include 23 any information the Comptroller may reasonably require in 24 order for the Court to determine that restitution or 25 completion of the project or delivery of merchandise or 26 service is appropriate. 27 (h) Annually, the status of the fund shall be reviewed 28 by the Comptroller, and if he determines that the fund 29 together with all accumulated income earned thereon, equals 30 or exceeds $10,000,000 and that the total number of 31 outstanding claims filed against the fund is less than 10% of 32 the fund's current balance, then payments to the fund shall 33 be suspended until such time as the fund's balance drops 34 below $10,000,000 or the total number of outstanding claims HB3988 Engrossed -88- LRB9112160STsb 1 filed against the fund is more than 10% of the fund's current 2 balance, but on such suspension, the fund shall not be 3 considered inactive. 4 (Source: P.A. 84-239.) 5 (815 ILCS 390/23) (from Ch. 21, par. 223) 6 Sec. 23. Violations and penalties. 7 (a) Any person intentionally violating any provision of 8 this Act is guilty of a Class 4 felony. 9 (b) If any person violates this Act or fails or refuses 10 to comply with any order of the Comptroller or any part 11 thereof which to such person has become final and is still in 12 effect, the Comptroller may, after notice and hearing at 13 which it is determined that a violation of this Act or such 14 order has been committed, further order that such person 15 shall forfeit and pay to the State of Illinois a sum not to 16 exceed $10,000$5,000for each violation. Such liability 17 shall be enforced in an action brought in any court of 18 competent jurisdiction by the Comptroller in the name of the 19 people of the State of Illinois. 20 (c) Whenever a license is revoked by the Comptroller, or 21 the Comptroller determines that any person is engaged in 22 pre-need sales without a license, he shall apply to the 23 circuit court of the county where such person is located for 24 a receiver to administer the business of such person. 25 (d) Whenever a licensee fails or refuses to make a 26 required report or whenever it appears to the Comptroller 27 from any report or examination that such licensee has 28 committed a violation of law or that the trust funds have not 29 been administered properly or that it is unsafe or 30 inexpedient for such licensee or the trustee of the trust 31 funds of such licensee to continue to administer such funds 32 or that any officer of such licensee or of the trustee of the 33 trust funds of such licensee has abused his trust or has been HB3988 Engrossed -89- LRB9112160STsb 1 guilty of misconduct or breach of trust in his official 2 position injurious to such licensee or that such licensee has 3 suffered as to its trust funds a serious loss by larceny, 4 embezzlement, burglary, repudiation or otherwise, the 5 Comptroller shall, by order, direct the discontinuance of 6 such illegal, unsafe or unauthorized practices and shall 7 direct strict conformity with the requirements of the law and 8 safety and security in its transactions and may apply to the 9 circuit court of the county where such licensee is located to 10 prevent any disbursements or expenditures by such licensee 11 until the trust funds are in such condition that it would not 12 be jeopardized thereby and the Comptroller shall communicate 13 the facts to the Attorney General of the State of Illinois 14 who shall thereupon institute such proceedings against the 15 licensee or its trustee or the officers of either or both as 16 the nature of the case may require. 17 (e) In addition to the other penalties and remedies 18 provided in this Act, the Comptroller may bring a civil 19 actionin the county of residence of the licensee or any20person engaging in pre-need sales,to enjoin any violation or 21 threatened violation of this Act. 22 (e-5) Any person that violates any provision of this Act 23 or fails to comply with an order of the Comptroller is liable 24 for a civil penalty of not to exceed $10,000 for the 25 violation and an additional civil penalty of not to exceed 26 $1,000 for each day during which the violation continues. 27 These penalties are in addition to any penalties that may be 28 issued under the Consumer Fraud and Deceptive Business 29 Practices Act for knowing violations of this Act. The civil 30 penalties provided for in this subsection may be recovered in 31 a civil action. 32 (f) The powers vested in the Comptroller by this Section 33 are additional to any and all other powers and remedies 34 vested in the Comptroller by law, and nothing herein HB3988 Engrossed -90- LRB9112160STsb 1 contained shall be construed as requiring that the 2 Comptroller shall employ the powers conferred herein instead 3 of or as a condition precedent to the exercise of any other 4 power or remedy vested in the Comptroller. 5 (Source: P.A. 88-477.) 6 (815 ILCS 390/27.1 new) 7 Sec. 27.1. Sales; liability of purchaser for shortage. 8 In the event of a sale or transfer of all or substantially 9 all of the assets of the licensee, the sale or transfer of 10 the controlling interest of the corporate stock of the 11 licensee if the licensee is a corporation, the sale or 12 transfer of the controlling interest of the partnership if 13 the licensee is a partnership, or sale pursuant to 14 foreclosure proceedings, the purchaser is liable for any 15 shortages existing before or after the sale in the trust 16 funds required to be maintained in a trust under this Act and 17 shall honor all pre-need contracts and trusts entered into by 18 the licensee. Any shortages existing in the trust funds 19 constitute a prior lien in favor of the trust for the total 20 value of the shortages, and notice of that lien must be 21 provided in all sales instruments. 22 In the event of a sale or transfer of all or 23 substantially all of the assets of the licensee, the sale or 24 transfer of the controlling interest of the corporate stock 25 of the licensee if the licensee is a corporation, or the sale 26 or transfer of the controlling interest of the partnership if 27 the licensee is a partnership, the licensee shall, at least 28 21 days prior to the sale or transfer, notify the 29 Comptroller, in writing, of the pending date of sale or 30 transfer so as to permit the Comptroller to audit the books 31 and records of the licensee. The audit must be commenced 32 within 10 business days after the receipt of the notification 33 and completed within the 21-day notification period unless HB3988 Engrossed -91- LRB9112160STsb 1 the Comptroller notifies the licensee during that period that 2 there is a basis for determining a deficiency which will 3 require additional time to finalize. The sale or transfer 4 may not be completed by the licensee unless and until: 5 (i) the Comptroller has completed the audit of the 6 licensee's books and records; 7 (ii) any delinquency existing in the trust funds has 8 been paid by the licensee, or arrangements satisfactory 9 to the Comptroller have been made by the licensee on the 10 sale or transfer for the payment of any delinquency; 11 (iii) the Comptroller issues a license upon 12 application of the new owner, which license must be 13 applied for within 30 days after the anticipated date of 14 the sale or transfer, subject to the payment of any 15 delinquencies, if any, as stated in item (ii). 16 For purposes of this Section, a person, firm, 17 corporation, partnership, or institution that acquires the 18 licensee through a real estate foreclosure is subject to the 19 provisions of this Section. The sale or transfer of the 20 controlling interest of a licensee to an immediate family 21 member is not subject to the license application process 22 required in item (iii) of this Section. 23 Section 50. Severability. If any provision of this Act or 24 its application to any person or circumstance is held 25 invalid, the invalidity of that provision or application does 26 not affect other provisions or applications of this Act that 27 can be given effect without the invalid provision or 28 application. 29 Section 99. Effective date. This Act takes effect 30 January 1, 2001.