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| [ Introduced ] | [ Senate Amendment 001 ] |
91_SB0259eng SB259 Engrossed LRB9100773ACsb 1 AN ACT concerning funeral and cemetery services, amending 2 named Acts. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 5. The Illinois Funeral or Burial Funds Act is 6 amended by changing Section 1 as follows: 7 (225 ILCS 45/1) (from Ch. 111 1/2, par. 73.101) 8 Sec. 1. Payment under pre-need contract. Except as 9 otherwise provided in this Section, all sales proceeds paid 10 to any person, partnership, association or corporation with 11 respect to merchandise or services covered by this Act, upon 12 any agreement or contract, or any series or combination of 13 agreements or contracts, which has for a purpose the 14 furnishing or performance of funeral services, or the 15 furnishing or delivery of any personal property, merchandise, 16 or services of any nature in connection with the final 17 disposition of a dead human body, including, but not limited 18 to, outer burial containers, urns, combination casket-vault 19 units, caskets and clothing, for future use at a time 20 determinable by the death of the person or persons whose body 21 or bodies are to be so disposed of, shall be held to be trust 22 funds, and shall be placed in trust in accordance with 23 Sections 1b and 2, or shall be used to purchase life 24 insurance or annuities in accordance with Section 2a. The 25 person, partnership, association or corporation receiving 26 said payments under a pre-need contract is hereby declared to 27 be a trustee thereof until deposits of funds are made in 28 accordance with Section 1b or 2a of this Act. Persons 29 holding less than $500,000 in trust funds may continue to act 30 as the trustee after the funds are deposited in accordance 31 with subsection (d) of Section 1b. SB259 Engrossed -2- LRB9100773ACsb 1 Nothing in this Act shall be construed to prohibit the 2 inclusion of outer burial containers in sales contracts under 3 the Illinois Pre-Need Cemetery Sales Act. 4 (Source: P.A. 88-477.) 5 Section 10. The Illinois Pre-Need Cemetery Sales Act is 6 amended by changing Sections 4, 14, 15, and 20 as follows: 7 (815 ILCS 390/4) (from Ch. 21, par. 204) 8 Sec. 4. Definitions. As used in this Act, the following 9 terms shall have the meaning specified: 10 (a) "Pre-need sales contract" or "Pre-need sales" means 11 any agreement or contract or series or combination of 12 agreements or contracts which have for a purpose the sale of 13 cemetery merchandise, cemetery services or undeveloped 14 interment, entombment or inurnment spaces where the terms of 15 such sale require payment or payments to be made at a 16 currently determinable time and where the merchandise, 17 services or completed spaces are to be provided more than 120 18 days following the initial payment on the account. 19 (b) "Delivery" occurs when: 20 (1) physical possession of the merchandise is 21 transferred or the easement for burial rights in a 22 completed space is executed, delivered and transferred to 23 the buyer; or 24 (2) title to the merchandise has been transferred 25 to the buyer and the merchandise has been paid for and is 26 in the possession of the seller who has placed it, until 27 needed, at the site of its ultimate use; or 28 (3) (A)A.the merchandise has been permanently 29 identified with the name of the buyer or the beneficiary 30 and delivered to a licensed and bonded warehouse and both 31 title to the merchandise and a warehouse receipt have 32 been delivered to the purchaser or beneficiary; except SB259 Engrossed -3- LRB9100773ACsb 1 that in the case of outer burial containers, the use of a 2 licensed and bonded warehouse as set forth in this 3 paragraph shall not constitute delivery for purposes of 4 this Act. Nothing herein shall prevent a seller from 5 perfecting a security interest in accordance with the 6 Uniform Commercial Code on any merchandise covered under 7 this Act. 8 (B)B.All warehouse facilities to which sellers 9 deliver merchandise pursuant to this Act shall: 10 (i) be either located in the State of Illinois 11 or qualify as a foreign warehouse facility as 12 defined herein; 13 (ii) submit to the Comptroller not less than 14 annually, by March 1 of each year, a report of all 15 cemetery merchandise stored by each licensee under 16 this Act which is in storage on the date of the 17 report; 18 (iii) permit the Comptroller or his designee 19 at any time to examine stored merchandise and to 20 examine any documents pertaining thereto; 21 (iv) submit evidence satisfactory to the 22 Comptroller that all merchandise stored by said 23 warehouse for licensees under this Act is insured 24 for casualty or other loss normally assumed by a 25 bailee for hire; 26 (v) demonstrate to the Comptroller that the 27 warehouse has procured and is maintaining a 28 performance bond in the form, content and amount 29 sufficient to unconditionally guarantee to the 30 purchaser or beneficiary the prompt shipment of the 31 cemetery merchandise. 32 (C)C."Cemetery merchandise" means items of 33 personal property normally sold by a cemetery authority 34 not covered under the Illinois Funeral or Burial Funds SB259 Engrossed -4- LRB9100773ACsb 1 Act"An Act concerning agreements for furnishing or2delivery of personal property, merchandise or services in3connection with the final disposition of dead human4bodies and regulating use or disposition of funds paid on5said agreements and providing penalties for violation6thereof", approved July 14, 1955, as amended, including 7 but not limited to: 8 (1) memorials, 9 (2) markers, 10 (3) monuments,and11 (4) foundations, and.12 (5) outer burial containers. 13 (D)D."Undeveloped interment, entombment or 14 inurnmentintermentspaces" or "undeveloped spaces" means 15 any space to be used for the reception of human remains 16 that is not completely and totally constructed at the 17 time of initial payment thereforthereforein a: 18 (1) lawn crypt, 19 (2) mausoleum, 20 (3) garden crypt, 21 (4) columbarium, or 22 (5) cemetery section. 23 (E)E."Cemetery services" means those services 24 customarily performed byacemetery or crematory 25 personnel in connection with the interment, entombment, 26 inurnment or cremation of a dead human body. 27 (F)F."Cemetery section" means a grouping of 28 spaces intended to be developed simultaneously for the 29 purpose of interring human remains. 30 (G)G."Columbarium" means an arrangement of niches 31 that may be an entire building, a complete room, a series 32 of special indoor alcoves, a bank along a corridor or 33 part of an outdoor garden setting that is constructed of 34 permanent material such as bronze, marble, brick, stone SB259 Engrossed -5- LRB9100773ACsb 1 or concrete for the inurnment of human remains. 2 (H)H."Lawn crypt" means a permanent underground 3 crypt usually constructed of reinforced concrete or 4 similar material installed in multiple units for the 5 interment of human remains. 6 (I)I."Mausoleum" or "garden crypt" means a 7 grouping of spaces constructed of reinforced concrete or 8 similar material constructed or assembled above the 9 ground for entombing human remains. 10 (J)J."Memorials, markers and monuments" means the 11 object usually comprised of a permanent material such as 12 granite or bronze used to identify and memorialize the 13 deceased. 14 (K)K."Foundations" means those items used to 15 affix or support a memorial or monument to the ground in 16 connection with the installation of a memorial, marker or 17 monument. 18 (L)L."Person" means an individual, corporation, 19 partnership, joint venture, business trust, voluntary 20 organization or any other form of entity. 21 (M)M."Seller" means any person selling or 22 offering for sale cemetery merchandise, cemetery services 23 or undeveloped spaces on a pre-need basis. 24 (N)N."Religious cemetery" meansmeana cemetery 25 owned, operated, controlled or managed by any recognized 26 church, religious society, association or denomination or 27 by any cemetery authority or any corporation 28 administering, or through which is administered, the 29 temporalities of any recognized church, religious 30 society, association or denomination. 31 (O)O."Municipal cemetery" means a cemetery owned, 32 operated, controlled or managed by any city, village, 33 incorporated town, township, county or other municipal 34 corporation, political subdivision, or instrumentality SB259 Engrossed -6- LRB9100773ACsb 1 thereof authorized by law to own, operate or manage a 2 cemetery. 3 (O-1) "Outer burial container" means a container 4 made of concrete, steel, wood, fiberglass, or similar 5 material, used solely at the interment site, and designed 6 and used exclusively to surround or enclose a separate 7 casket and to support the earth above such casket, 8 commonly known as a burial vault, grave box, or grave 9 liner, but not including a lawn crypt. 10 (P)P."Sales price" means the gross amount paid by 11 a purchaser on a pre-need sales contract for cemetery 12 merchandise, cemetery services or undeveloped interment, 13 entombment or inurnment spaces, excluding sales taxes, 14 credit life insurance premiums, finance charges and 15"Cemetery Care Act"contributions. 16 (Q)Q."Foreign warehouse facility" means a 17 warehouse facility now or hereafter located in any state 18 or territory of the United States, including the District 19 of Columbia, other than the State of Illinois. 20 A foreign warehouse facility shall be deemed to have 21 appointed the Comptroller to be its true and lawful 22 attorney upon whom may be served all legal process in any 23 action or proceeding against it relating to or growing 24 out of this Act, and the acceptance of the delivery of 25 stored merchandise under this Act shall be signification 26 of its agreement that any such process against it which 27 is so served, shall be of the same legal force and 28 validity as though served upon it personally. 29 Service of such process shall be made by delivering 30 to and leaving with the Comptroller, or any agent having 31 charge of the Comptroller's Department of Cemetery and 32 Burial Trusts, a copy of such process and such service 33 shall be sufficient service upon such foreign warehouse 34 facility if notice of such service and a copy of the SB259 Engrossed -7- LRB9100773ACsb 1 process are, within 10 days thereafter, sent by 2 registered mail by the plaintiff to the foreign warehouse 3 facility at its principal office and the plaintiff's 4 affidavit of compliance herewith is appended to the 5 summons. The Comptroller shall keep a record of all 6 process served upon him under this Section and shall 7 record therein the time of such service. 8 (Source: P.A. 85-1209; revised 10-31-98.) 9 (815 ILCS 390/14) (from Ch. 21, par. 214) 10 Sec. 14. A written sales contract shall be executed in 11 duplicate for each pre-need sale made by a licensee, and a 12 signed copy given to the purchaser. Each completed contract 13 shall be numbered and shall contain the name of the purchaser 14 and the seller, the name of the person, if known, who is to 15 receive the cemetery merchandise, cemetery services or the 16 completed interment, entombment or inurnment spaces under the 17 contract and specifically identify such merchandise, services 18 or spaces. In addition, such contracts must contain a 19 provision in distinguishing typeface substantially as follow: 20 "Notwithstanding anything in this contract to the 21 contrary, you are afforded certain specific rights of 22 cancellation and refund under Sections 18 and 19 of the 23 Illinois Pre-Need Cemetery Sales Act, enacted by the 84th 24 General Assembly of the State of Illinois". 25 All pre-need sales contracts shall be sold on a 26 guaranteed price basis. At the time of performance of the 27 service or delivery of the merchandise, the seller shall be 28 prohibited from assessing the purchaser or his heirs or 29 assigns or duly authorized representative any additional 30 charges for the specific merchandise and services listed on 31 the pre-need sales contract. 32 All pre-need sales contracts must be in writing and no 33 pre-need contract form shall be used without prior filing SB259 Engrossed -8- LRB9100773ACsb 1 with the Comptroller. The Comptroller shall review all 2 pre-need sales contract forms and shall prohibit the use of 3 contract forms that do not meet the requirements of this Act 4 upon written notification to the seller. Any use or 5 attempted use of any oral pre-need sales contract or any 6 written pre-need sales contract in a form not filed with the 7 Comptroller or in a form that does not meet the requirements 8 of this Act shall be deemed a violation of this Act. 9 (Source: P.A. 85-805.) 10 (815 ILCS 390/15) (from Ch. 21, par. 215) 11 Sec. 15. (a) Whenever a seller receives anything of 12 value under a pre-need sales contract, the person receiving 13 such value shall deposit 50% of all proceeds received into 14 one or more trust funds maintained pursuant to this Section, 15 except that, in the case of proceeds received for the 16 purchase of outer burial containers, 85% of the proceeds 17 shall be deposited into one or more trust funds. Such 18 deposits shall be made until the amount deposited in trust 19 equals 50% of the sales price of the cemetery merchandise, 20 cemetery services and undeveloped spaces included in such 21 contract, except that, in the case of deposits for outer 22 burial containers, deposits shall be made until the amount 23 deposited in trust equals 85% of the sales price. In the 24 event an installment contract is factored, discounted or sold 25 to a third party, the seller shall deposit an amount equal to 26 50% of the sales price of the installment contract, except 27 that, for the portion of the contract attributable to the 28 sale of outer burial containers, the seller shall deposit an 29 amount equal to 85% of the sales price. Proceeds required to 30 be deposited in trust which are attributable to cemetery 31 merchandise and cemetery services shall be held in a 32 "Cemetery Merchandise Trust Fund". Proceeds required to be 33 deposited in trust which are attributable to the sale of SB259 Engrossed -9- LRB9100773ACsb 1 undeveloped interment, entombment or inurnment spaces shall 2 be held in a "Pre-construction Trust Fund". If merchandise is 3 delivered for storage in a bonded warehouse, as authorized 4 herein, and payment of transportation or other charges 5 totaling more than $20 will be required in order to secure 6 delivery to the site of ultimate use, upon such delivery to 7 the warehouse the seller shall deposit to the trust fund the 8 full amount of the actual or estimated transportation charge. 9 Transportation charges which have been prepaid by the seller 10 shall not be deposited to trust funds maintained pursuant to 11 this Section. As used in this Section, "all proceeds" means 12 the entire amount paid by a purchaser in connection with a 13 pre-need sales contract, including finance charges and 14 Cemetery Care Act contributions, but excluding sales taxes 15 and credit life insurance premiums. 16 (b) All trust deposits required by this Act shall be 17 made within 30 days following the end of the month of 18 receipt. 19 (c) A trust established under this Act must be 20 maintained: 21 (1) in a trust account established in a bank, savings 22 and loan association or credit union authorized to do 23 business in Illinois where such accounts are insured by an 24 agency of the federal government; 25 (2) in a trust company authorized to do business in 26 Illinois; or 27 (3) in an investment company authorized to do business 28 in Illinois insured by the Securities Brokers Insurance 29 Corporation. 30 (d) Funds deposited in the trust account shall be 31 identified in the records of the seller by the name of the 32 purchaser. Nothing shall prevent the trustee from commingling 33 the deposits in any such trust fund for purposes of the 34 management thereof and the investment of funds therein as SB259 Engrossed -10- LRB9100773ACsb 1 provided in the "Common Trust Fund Act", approved June 24, 2 1949, as amended. In addition, multiple trust funds 3 maintained pursuant to this Act may be commingled or 4 commingled with other funeral or burial related trust funds, 5 provided that all record keeping requirements imposed by or 6 pursuant to law are met. 7 (e) In lieu of a pre-construction trust fund, a seller 8 of undeveloped interment, entombment or inurnment spaces may 9 obtain and file with the Comptroller a performance bond in an 10 amount at least equal to 50% of the sales price of the 11 undeveloped spaces or the estimated cost of completing 12 construction, whichever is greater. The bond shall be 13 conditioned on the satisfactory construction and completion 14 of the undeveloped spaces as required in Section 19 of this 15 Act. 16 Each bond obtained under this Section shall have as 17 surety thereon a corporate surety company incorporated under 18 the laws of the United States, or a State, the District of 19 Columbia or a territory or possession of the United States. 20 Each such corporate surety company must be authorized to 21 provide performance bonds as required by this Section, have 22 paid-up capital of at least $250,000 in cash or its 23 equivalent and be able to carry out its contracts. Each 24 pre-need seller must provide to the Comptroller, for each 25 corporate surety company such seller utilizes, a statement of 26 assets and liabilities of the corporate surety company sworn 27 to by the president and secretary of the corporation by 28 January 1 of each year. 29 The Comptroller shall prohibit pre-need sellers from 30 doing new business with a corporate surety company if the 31 company is insolvent or is in violation of this Section. In 32 addition the Comptroller may direct a pre-need seller to 33 reinstate a pre-construction trust fund upon the 34 Comptroller's determination that the corporate surety company SB259 Engrossed -11- LRB9100773ACsb 1 no longer is sufficient security. 2 All performance bonds issued pursuant to this Section 3 must be irrevocable during the statutory term for completing 4 construction specified in Section 19 of this Act, unless 5 terminated sooner by the completion of construction. 6 (f) Whenever any pre-need contract shall be entered into 7 and include 1) items of cemetery merchandise and cemetery 8 services, and 2) rights to interment, inurnment or entombment 9 in completed spaces without allocation of the gross sale 10 price among the items sold, the application of payments 11 received under the contract shall be allocated, first to the 12 right to interment, inurnment or entombment, second to items 13 of cemetery merchandise and cemetery services, unless some 14 other allocation is clearly provided in the contract. 15 (g) Any person engaging in pre-need sales who enters 16 into a combination sale which involves the sale of items 17 covered by a trust or performance bond requirement and any 18 item not covered by any entrustment or bond requirement, 19 shall be prohibited from increasing the gross sales price of 20 those items not requiring entrustment with the purpose of 21 allocating a lesser gross sales price to items which require 22 a trust deposit or a performance bond. 23 (Source: P.A. 85-1209.) 24 (815 ILCS 390/20) (from Ch. 21, par. 220) 25 Sec. 20. (a) Each licensee must keep accurate accounts, 26 books and records in this State of all transactions, copies 27 of agreements, dates and amounts of payments made or 28 received, the names and addresses of the contracting parties, 29 the names and addresses of persons for whose benefit funds 30 are received, if known, and the names of the trust 31 depositories. 32 (b) Each licensee must maintain such records for a 33 period of 3 years after the licensee shall have fulfilled his SB259 Engrossed -12- LRB9100773ACsb 1 obligation under the pre-need contract or 3 years after any 2 stored merchandise shall have been provided to the purchaser 3 or beneficiary, whichever is later. 4 (c) Each licensee shall submit reports to the 5 Comptroller annually, under oath, on forms furnished by the 6 Comptroller. The annual report shall contain, but shall not 7 be limited to, the following: 8 (1) An accounting of the principal deposit and 9 additions of principal during the fiscal year. 10 (2) An accounting of any withdrawal of principal or 11 earnings. 12 (3) An accounting at the end of each fiscal year, 13 of the total amount of principal and earnings held. 14 (d) The annual report shall be filed by the licensee 15 with the Comptroller within 75 days after the end of the 16 licensee's fiscal year. An extension of up to 60 days may be 17 granted by the Comptroller, upon a showing of need by the 18 licensee. Any other reports shall be in the form furnished 19 or specified by the Comptroller. If a licensee fails to 20 submit an annual report to the Comptroller within the time 21 specified in this Section, the Comptroller shall impose upon 22 the licensee a penalty of $5 for each and every day the 23 licensee remains delinquent in submitting the annual report. 24 Each report shall be accompanied by a check or money order in 25 the amount of $10 payable to: Comptroller, State of 26 Illinois. 27 (e) On and after the effective date of this amendatory 28 Act, a licensee may report all required information 29 concerning the sale of outer burial containers on the 30 licensee's annual report required to be filed under this Act 31 and shall not be required to report that information under 32 the Illinois Funeral or Burial Funds Act. 33 (Source: P.A. 88-477.) SB259 Engrossed -13- LRB9100773ACsb 1 Section 99. Effective date. This Act takes effect 2 January 1, 2000.