98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB5312

 

Introduced , by Rep. Michael Unes

 

SYNOPSIS AS INTRODUCED:
 
760 ILCS 100/3  from Ch. 21, par. 64.3
760 ILCS 100/4  from Ch. 21, par. 64.4
760 ILCS 100/5  from Ch. 21, par. 64.5
760 ILCS 100/12  from Ch. 21, par. 64.12

    Amends the Cemetery Care Act. Provides that a trustee of a nonprofit cemetery may convert a trust fund established under the Act to a total return trust in accordance with provisions of the Trusts and Trustees Act pertaining to total return trusts, provided that the distribution percentage of the total return trust does not exceed 5% of the trust. Makes corresponding changes throughout the Act. Effective immediately.


LRB098 14197 HEP 53079 b

 

 

A BILL FOR

 

HB5312LRB098 14197 HEP 53079 b

1    AN ACT concerning civil law.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Cemetery Care Act is amended by changing
5Sections 3, 4, 5, and 12 as follows:
 
6    (760 ILCS 100/3)  (from Ch. 21, par. 64.3)
7    Sec. 3. Gifts and contributions - Trust funds. Any cemetery
8authority is hereby authorized and empowered to accept any
9gift, grant, contribution, payment, legacy, or pursuant to
10contract, any sum of money, funds, securities or property of
11any kind, or the income or avails thereof, and to establish a
12trust fund to hold the same in perpetuity for the care of its
13cemetery, or for the care of any lot, grave, crypt or niche in
14its cemetery; or for the special care of any lot, grave, crypt
15or niche or of any family mausoleum or memorial, marker, or
16monument in its cemetery.
17    The cemetery authority shall act as trustee of all amounts
18received for care until they have been deposited into the trust
19fund established under this Section. The cemetery authority may
20continue to be the trustee of up to $500,000 of care funds that
21have been deposited into the trust fund, but the cemetery
22authority must retain an independent trustee for any amount of
23care funds held in trust in excess of that $500,000. A cemetery

 

 

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1authority holding care funds in excess of $500,000 on the
2effective date of this amendatory Act of 1996 shall have 36
3months to retain an independent trustee for the excess amounts
4held in trust; any other cemetery authority must retain an
5independent trustee for its care funds in excess of $500,000 as
6soon as may be practical.
7    No gift, grant, legacy, payment or other contribution shall
8be invalid by reason of any indefiniteness or uncertainty as to
9the beneficiary designated in the instrument creating the gift,
10grant, legacy, payment or other contribution. If any gift,
11grant, legacy, payment or other contribution consists of
12non-income producing property, the cemetery authority
13accepting it is authorized and empowered to sell such property
14and to invest the funds obtained in accordance with the
15provisions of the next succeeding paragraph.
16    The care funds authorized by this Section and provided for
17in Section 4 of this Act shall be held intact and, unless
18otherwise restricted by the terms of the gift, grant, legacy,
19contribution, payment, contract or other payment, as to
20investments made after June 11, 1951 the trustee of the care
21funds of the cemetery authority, in acquiring, investing,
22reinvesting, exchanging, retaining, selling and managing
23property for any such trust, shall exercise the judgment and
24care under the circumstances then prevailing, which persons of
25prudence, discretion and intelligence exercise in the
26management of their own affairs, not in regard to speculation

 

 

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1but in regard to the permanent disposition of their funds,
2considering the probable income as well as the probable safety
3of their capital. Within the limitations of the foregoing
4standard, the trustee of the care funds of the cemetery
5authority is authorized to acquire and retain every kind of
6property, real, personal or mixed, and every kind of
7investment, including specifically but without limiting the
8generality of the foregoing, bonds, debentures and other
9corporate obligations, preferred or common stocks and real
10estate mortgages, which persons of prudence, discretion and
11intelligence acquire or retain for their own account. Within
12the limitations of the foregoing standard, the trustee is
13authorized to retain property properly acquired, without
14limitation as to time and without regard to its suitability for
15original purchase. The care funds authorized by this Section
16may be commingled with other trust funds received by such
17cemetery authority for the care of its cemetery or for the care
18or special care of any lot, grave, crypt, niche, private
19mausoleum, memorial, marker, or monument in its cemetery,
20whether received by gift, grant, legacy, contribution,
21payment, contract or other conveyance heretofore or hereafter
22made to such cemetery authority. Such care funds may be
23invested with common trust funds as provided in The Common
24Trust Fund Act. Unless the trust fund has been converted into a
25total return trust, the The net income only from the investment
26of such care funds shall be allocated and used for the purposes

 

 

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1specified in the transaction by which the principal was
2established in the proportion that each contribution bears to
3the entire sum invested.
4    A trustee of a cemetery operating as a nonprofit
5organization exempt from taxation under Section 501(c)(3) of
6the Internal Revenue Code of 1986 may convert a trust
7established under this Act to a total return trust in
8accordance with Section 5.3 of the Trusts and Trustees Act,
9provided that the distribution percentage of the total return
10trust does not exceed 5% of the trust.
11(Source: P.A. 89-615, eff. 8-9-96.)
 
12    (760 ILCS 100/4)  (from Ch. 21, par. 64.4)
13    Sec. 4. Care funds; deposits; investments. Whenever a
14cemetery authority owning, operating, controlling or managing
15a privately operated cemetery accepts care funds, either in
16connection with the sale or giving away at an imputed value of
17an interment right, entombment right or inurnment right, or in
18pursuance of a contract, or whenever, as a condition precedent
19to the purchase or acceptance of an interment right, entombment
20right or inurnment right, such cemetery authority requires the
21establishment of a care fund or a deposit in an already
22existing care fund, then such cemetery authority shall execute
23and deliver to the person from whom received an instrument in
24writing which shall specifically state: (a) the nature and
25extent of the care to be furnished, and (b) that such care

 

 

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1shall be furnished only in so far as the amount deposited in
2trust will allow, as governed by the terms of the trust net
3income derived from the amount deposited in trust will permit
4(the income from the amount so deposited, less necessary
5expenditures of administering the trust, shall be deemed the
6net income), and (c) that not less than the following amounts
7will be set aside and deposited in trust:
8        1. For interment rights, $1 per square foot of the
9    space sold or 15% of the sales price or imputed value,
10    whichever is the greater, with a minimum of $25 for each
11    individual interment right.
12        2. For entombment rights, not less than 10% of the
13    sales price or imputed value with a minimum of $25 for each
14    individual entombment right.
15        3. For inurnment rights, not less than 10% of the sales
16    price or imputed value with a minimum of $15 for each
17    individual inurnment right.
18        4. For any transfer of interment rights, entombment
19    rights, or inurnment rights recorded in the records of the
20    cemetery authority, excepting only transfers between
21    members of the immediate family of the transferor, a
22    minimum of $25 for each such right transferred. For the
23    purposes of this paragraph "immediate family of the
24    transferor" means the spouse, parents, grandparents,
25    children, grandchildren, and siblings of the transferor.
26        5. Upon an interment, entombment, or inurnment in a

 

 

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1    grave, crypt, or niche in which rights of interment,
2    entombment, or inurnment were originally acquired from a
3    cemetery authority prior to January 1, 1948, a minimum of
4    $25 for each such right exercised.
5        6. For the special care of any lot, grave, crypt, or
6    niche or of a family mausoleum, memorial, marker, or
7    monument, the full amount received.
8    Such setting aside and deposit shall be made by such
9cemetery authority not later than 30 days after the close of
10the month in which the cemetery authority gave away for an
11imputed value or received the final payment on the purchase
12price of interment rights, entombment rights, or inurnment
13rights, or received the final payment for the general or
14special care of a lot, grave, crypt or niche or of a family
15mausoleum, memorial, marker or monument; and such amounts shall
16be held by the trustee of the care funds of such cemetery
17authority in trust in perpetuity for the specific purposes
18stated in said written instrument. For all care funds received
19by a cemetery authority, except for care funds received by a
20cemetery authority pursuant to a specific gift, grant,
21contribution, payment, legacy, or contract that are subject to
22investment restrictions more restrictive than the investment
23provisions set forth in this Act, and except for care funds
24otherwise subject to a trust agreement executed by a person or
25persons responsible for transferring the specific gift, grant,
26contribution, payment, or legacy to the cemetery authority that

 

 

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1contains investment restrictions more restrictive than the
2investment provisions set forth in this Act, the cemetery
3authority may, without the necessity of having to obtain prior
4approval from any court in this State, designate a new trustee
5in accordance with this Act and invest the care funds in
6accordance with this Section, notwithstanding any contrary
7limitation contained in the trust agreement.
8    Any such cemetery authority engaged in selling or giving
9away at an imputed value interment rights, entombment rights or
10inurnment rights, in conjunction with the selling or giving
11away at an imputed value any other merchandise or services not
12covered by this Act, shall be prohibited from increasing the
13sales price or imputed value of those items not requiring a
14care fund deposit under this Act with the purpose of allocating
15a lesser sales price or imputed value to items that require a
16care fund deposit.
17    In the event any sale that would require a deposit to such
18cemetery authority's care fund is made by a cemetery authority
19on an installment basis, and the installment contract is
20factored, discounted, or sold to a third party, the cemetery
21authority shall deposit the amount due to the care fund within
2230 days after the close of the month in which the installment
23contract was factored, discounted, or sold. If, subsequent to
24such deposit, the purchaser defaults on the contract such that
25no care fund deposit on that contract would have been required,
26the cemetery authority may apply the amount deposited as a

 

 

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1credit against future required deposits.
2    The trust authorized by this Section shall be a single
3purpose trust fund. In the event of the seller's bankruptcy,
4insolvency, or assignment for the benefit of creditors, or an
5adverse judgment, the trust funds shall not be available to any
6creditor as assets of the cemetery authority or to pay any
7expenses of any bankruptcy or similar proceeding, but shall be
8retained intact to provide for the future maintenance of the
9cemetery. Except in an action by the Comptroller to revoke a
10license issued pursuant to this Act and for creation of a
11receivership as provided in this Act, the trust shall not be
12subject to judgment, execution, garnishment, attachment, or
13other seizure by process in bankruptcy or otherwise, nor to
14sale, pledge, mortgage, or other alienation, and shall not be
15assignable except as approved by the Comptroller. The changes
16made by this amendatory Act of the 91st General Assembly are
17intended to clarify existing law regarding the inability of
18licensees to pledge the trust.
19(Source: P.A. 91-7, eff. 6-1-99.)
 
20    (760 ILCS 100/5)  (from Ch. 21, par. 64.5)
21    Sec. 5. No cemetery authority, nor any agent, servant, or
22employee of it, nor any other person, shall advertise,
23represent, guarantee, promise, or contract that perpetual
24care, permanent care, perpetual or permanent maintenance, care
25forever, continuous care, eternal care, everlasting care, or

 

 

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1any similar or equivalent care, or care for any number of years
2of any cemetery or of any lot, grave, crypt or niche, or of any
3family mausoleum, memorial, marker, or monument, will be
4furnished: Provided, however, that any cemetery authority may
5advertise, represent, guarantee, promise or contract that care
6will be furnished from the net income only derived from funds
7held in trust as provided in Section 3 of this Act; and may
8advertise, represent, guarantee, promise or contract that care
9will be given any lot, grave, crypt, or niche, or any family
10mausoleum, memorial, marker, or monument for any definite
11number of years, such care to be furnished under a contract
12providing that the principal of the amount paid under the
13contract shall be used to furnish the care and further
14providing specifically the care to be given and the number of
15years for which it is to be given.
16(Source: Laws 1947, p. 338.)
 
17    (760 ILCS 100/12)  (from Ch. 21, par. 64.12)
18    Sec. 12. Annual reports. Every licensee shall prepare a
19written report as of the end of the preceding calendar year or
20fiscal year, as the case may be, showing:
21    (a) The amount of the principal of the care funds held in
22trust by the trustee of the care funds at the beginning of such
23year and in addition thereto all moneys or property received
24during such year (1) under and by virtue of the sale of a lot,
25grave, crypt or niche; (2) under or by virtue of the terms of

 

 

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1the contract authorized by the provisions of Section 3 of this
2Act; (3) under or by virtue of any gift, grant, legacy, payment
3or other contribution made either prior to or subsequent to the
4effective date of this Act, and (4) under or by virtue of any
5contract or conveyance made either prior to or subsequent to
6the effective date of this Act;
7    (b) The securities in which such care funds are invested
8and the cash on hand as of the date of the report;
9    (c) The income received from such care funds during the
10preceding calendar year, or fiscal year, as the case may be;
11    (d) The expenditures made from said income, or, in the case
12of a total return trust, the total distributions made during
13the preceding calendar year, or fiscal year, as the case may
14be; and
15    (e) The number of interments made during the preceding
16calendar year, or fiscal year, as the case may be.
17    Where any of the care funds of a licensee are held by an
18independent trustee, the report filed by the licensee shall
19contain a certificate signed by the trustee of the care funds
20of such licensee certifying to the truthfulness of the
21statements in the report as to (1) the total amount of
22principal of the care funds held by the trustee, (2) the
23securities in which such care funds are invested and the cash
24on hand as of the date of the report and (3) the income
25received from such care funds during the preceding calendar
26year, or fiscal year, as the case may be.

 

 

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1    Such report shall be filed by such licensee on or before
2March 15 of each calendar year, in the office of the
3Comptroller. If the fiscal year of such licensee is other than
4on a calendar year basis, then such licensee shall file the
5report required by this Section within 2 1/2 months of the end
6of its fiscal year. The Comptroller shall for good cause shown
7grant an extension for the filing of the annual report upon the
8written request of the licensee. Such extension shall not
9exceed 60 days. If a licensee fails to submit an annual report
10to the Comptroller within the time specified in this Section,
11the Comptroller shall impose upon the licensee a penalty of $5
12for each and every day the licensee remains delinquent in
13submitting the annual report. The Comptroller may abate all or
14part of the $5 daily penalty for good cause shown.
15    Such report shall be made under oath and shall be in the
16form furnished by the Comptroller. Each report shall be
17accompanied by a check or money order in the amount of $10,
18payable to: Comptroller, State of Illinois.
19    If any annual report shows that the amount of the care
20funds held in trust at the end of the preceding calendar year
21or fiscal year, as the case may be, has increased in amount
22over that shown by the next preceding report, then the fidelity
23bond theretofore filed shall be increased to the amount
24required by Section 9 of this Act. Such increased fidelity bond
25shall accompany the report and no report shall be accepted by
26the Comptroller unless accompanied by such bond, except where

 

 

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1the filing of a bond is excused by Section 18 of this Act.
2(Source: P.A. 92-419, eff. 1-1-02.)
 
3    Section 99. Effective date. This Act takes effect upon
4becoming law.