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91_SB0259
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 Sections 1, 1a, and 4 and adding Section
7 5.5 as follows:
8 (225 ILCS 45/1) (from Ch. 111 1/2, par. 73.101)
9 Sec. 1. Payment under pre-need contract. Except as
10 otherwise provided in this Section, all sales proceeds paid
11 to any person, partnership, association or corporation with
12 respect to merchandise or services covered by this Act, upon
13 any agreement or contract, or any series or combination of
14 agreements or contracts, which has for a purpose the
15 furnishing or performance of funeral services, or the
16 furnishing or delivery of any personal property, merchandise,
17 or services of any nature in connection with the final
18 disposition of a dead human body, including, but not limited
19 to, outer burial containers, urns, combination casket-vault
20 units, caskets and clothing, for future use at a time
21 determinable by the death of the person or persons whose body
22 or bodies are to be so disposed of, shall be held to be trust
23 funds, and shall be placed in trust in accordance with
24 Sections 1b and 2, or shall be used to purchase life
25 insurance or annuities in accordance with Section 2a. The
26 person, partnership, association or corporation receiving
27 said payments under a pre-need contract is hereby declared to
28 be a trustee thereof until deposits of funds are made in
29 accordance with Section 1b or 2a of this Act. Persons
30 holding less than $500,000 in trust funds may continue to act
31 as the trustee after the funds are deposited in accordance
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1 with subsection (d) of Section 1b.
2 Nothing in this Act shall be construed to prohibit the
3 inclusion of outer burial containers in sales contracts under
4 the Illinois Pre-Need Cemetery Sales Act.
5 (Source: P.A. 88-477.)
6 (225 ILCS 45/1a) (from Ch. 111 1/2, par. 73.101a)
7 Sec. 1a. Definitions. For the purposes of this Act, the
8 following terms shall have the meanings specified, unless the
9 context clearly requires another meaning:
10 "Beneficiary" means the person specified in the pre-need
11 contract upon whose death funeral services or merchandise
12 shall be provided or delivered.
13 "Foreign warehouse facility" means a warehouse facility
14 now or hereafter located in any state or territory of the
15 United States, including the District of Columbia, other than
16 the State of Illinois.
17 A foreign warehouse facility shall be deemed to have
18 appointed the Comptroller to be its true and lawful attorney
19 upon whom may be served all legal process in any action or
20 proceeding against it relating to or growing out of this Act,
21 and the acceptance of the delivery of stored merchandise
22 under this Act shall be signification of its agreement that
23 any such process against it which is so served, shall be of
24 the same legal force and validity as though served upon it
25 personally.
26 Service of such process shall be made by delivering to
27 and leaving with the Comptroller, or any agent having charge
28 of the Comptroller's Department of Cemetery and Burial
29 Trusts, a copy of such process and such service shall be
30 sufficient service upon such foreign warehouse facility if
31 notice of such service and a copy of the process are, within
32 10 days thereafter, sent by registered mail by the plaintiff
33 to the foreign warehouse facility at its principal office and
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1 the plaintiff's affidavit of compliance herewith is appended
2 to the summons. The Comptroller shall keep a record of all
3 process served upon him or her under this Section and shall
4 record therein the time of such service.
5 "Licensee" means a seller of a pre-need contract who has
6 been licensed by the Comptroller under this Act.
7 "Outer burial container" means any container made of
8 concrete, steel, wood, fiberglass or similar material, used
9 solely at the interment site, and designed and used
10 exclusively to surround or enclose a separate casket and to
11 support the earth above such casket, commonly known as a
12 burial vault, grave box or grave liner, but not including a
13 lawn crypt as defined in the Illinois Pre-need Cemetery Sales
14 Act.
15 "Person" means any person, partnership, association,
16 corporation, or other entity.
17 "Pre-need contract" means any agreement or contract, or
18 any series or combination of agreements or contracts, whether
19 funded by trust deposits or life insurance policies or
20 annuities, which has for a purpose the furnishing or
21 performance of 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. Nothing in this Act is intended to regulate the
25 content of a life insurance policy or a tax-deferred annuity.
26 "Provider" means a person who is obligated for furnishing
27 or performing funeral services or the furnishing or delivery
28 of any personal property, merchandise, or services of any
29 nature in connection with the final disposition of a dead
30 human body.
31 "Purchaser" means the person who originally paid the
32 money under or in connection with a pre-need contract.
33 "Sales proceeds" means the entire amount paid to a
34 seller, exclusive of sales taxes paid by the seller, finance
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1 charges paid by the purchaser, and credit life, accident or
2 disability insurance premiums, upon any agreement or
3 contract, or series or combination of agreements or
4 contracts, for the purpose of performing funeral services or
5 furnishing personal property, merchandise, or services of any
6 nature in connection with the final disposition of a dead
7 human body, including, but not limited to, the retail price
8 paid for such services and personal property and merchandise.
9 "Purchase price" means the sales proceeds less finance
10 charges on retail installment contracts.
11 "Seller" means the person who sells or offers to sell the
12 pre-need contract to a purchaser, whether funded by a trust
13 agreement, life insurance policy, or tax-deferred annuity.
14 "Trustee" means a person authorized to hold funds under
15 this Act.
16 (Source: P.A. 88-477.)
17 (225 ILCS 45/4) (from Ch. 111 1/2, par. 73.104)
18 Sec. 4. Withdrawal of funds; revocability of contract.
19 (a) The amount or amounts so deposited into trust, with
20 interest thereon, if any, shall not be withdrawn until the
21 death of the person or persons for whose funeral or burial
22 such funds were paid, unless sooner withdrawn and repaid to
23 the person who originally paid the money under or in
24 connection with the pre-need contract or to his or her legal
25 representative. The life insurance policies or tax-deferred
26 annuities shall not be surrendered until the death of the
27 person or persons for whose funeral or burial the policies or
28 annuities were purchased, unless sooner surrendered and
29 repaid to the owner of the policy purchased under or in
30 connection with the pre-need contract or to his or her legal
31 representative. If, however, the agreement or series of
32 agreements provides for forfeiture and retention of any or
33 all payments as and for liquidated damages as provided in
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1 Section 6, then the trustee may withdraw the deposits. In
2 addition, nothing in this Section (i) prohibits the change of
3 depositary by the trustee and the transfer of trust funds
4 from one depositary to another or (ii) prohibits a contract
5 purchaser who is or may become eligible for public assistance
6 under any applicable federal or State law or local ordinance
7 including, but not limited to, eligibility under 24 C.F.R.,
8 Part 913 relating to family insurance under federal Housing
9 and Urban Development Policy from irrevocably waiving, in
10 writing, and renouncing the right to cancel a pre-need
11 contract for funeral services in an amount prescribed by rule
12 of the Illinois Department of Public Aid. No guaranteed price
13 pre-need funeral contract may prohibit a purchaser from
14 making a contract irrevocable to the extent that federal law
15 or regulations require that such a contract be irrevocable
16 for purposes of the purchaser's eligibility for Supplemental
17 Security Income benefits, Medicaid, or another public
18 assistance program, as permitted under federal law.
19 (b) If for any reason a seller or provider who has
20 engaged in pre-need sales has refused, cannot, or does not
21 comply with the terms of the pre-need contract within a
22 reasonable time after he or she is required to do so, the
23 purchaser or his or her heirs or assigns or duly authorized
24 representative shall have the right to a refund of an amount
25 equal to the sales price paid for undelivered merchandise or
26 services plus otherwise earned undistributed interest amounts
27 held in trust attributable to the contract, within 30 days of
28 the filing of a sworn affidavit with the trustee setting
29 forth the existence of the contract and the fact of breach.
30 A copy of this affidavit shall be filed with the Comptroller
31 and the seller. In the event a seller is prevented from
32 performing by strike, shortage of materials, civil disorder,
33 natural disaster, or any like occurrence beyond the control
34 of the seller or provider, the seller or provider's time for
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1 performance shall be extended by the length of the delay.
2 Nothing in this Section shall relieve the seller or provider
3 from any liability for non-performance of his or her
4 obligations under the pre-need contract.
5 (c) After final payment on a pre-need contract, any
6 purchaser may, upon written demand to a seller, demand that
7 the pre-need contract with the seller be terminated. The
8 seller shall, within 30 days, initiate a refund to the
9 purchaser of the entire amount held in trust attributable to
10 undelivered merchandise and unperformed services, including
11 otherwise earned undistributed interest earned thereon or the
12 cash surrender value of a life insurance policy or
13 tax-deferred annuity.
14 If no funeral merchandise or services are provided or if
15 the funeral is conducted by another person, the seller may
16 keep no more than 10% of the payments made under the pre-need
17 contract or $300, whichever sum is less. The remainder of
18 the trust funds or insurance or annuity proceeds shall be
19 forwarded to the legal heirs of the deceased or as determined
20 by probate action.
21 (d) The placement and retention of all or a portion of a
22 casket, combination casket-vault, urn, or outer burial
23 container comprised of materials which are designed to
24 withstand prolonged storage in the manner set forth in this
25 paragraph without adversely affecting the structural
26 integrity or aesthetic characteristics of such merchandise in
27 a specific burial space in which the person or persons for
28 whose funeral or burial the merchandise was intended has a
29 right of interment, or the placement of the merchandise in a
30 specific mausoleum crypt or lawn crypt in which such person
31 has a right of entombment, or the placement of the
32 merchandise in a specific niche in which such person has a
33 right of inurnment, or delivery to such person and retention
34 by such person until the time of need shall constitute actual
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1 delivery to the person who originally paid the money under or
2 in connection with said agreement or series of agreements.
3 Actual delivery shall eliminate, from and after the date of
4 actual delivery, any requirement under this Act to place or
5 retain in trust any funds received for the sale of such
6 merchandise. The delivery, prior to the time of need, of any
7 funeral or burial merchandise in any manner other than
8 authorized by this Section shall not constitute actual
9 delivery and shall not eliminate any requirement under this
10 Act to place or retain in trust any funds received for the
11 sale of such merchandise.
12 In addition, and solely with respect to outer burial
13 containers, "delivery" occurs when:
14 (1) Physical possession of the outer burial
15 container is transferred or the easement for burial
16 rights in a completed space is executed, delivered, and
17 transferred to the buyer; or
18 (2) Title to the outer burial container has been
19 transferred to the buyer and the outer burial container
20 has been paid for and is in the possession of the seller
21 who has placed it, until needed, at the site of its
22 ultimate use; or
23 (3)(A) The outer burial container has been
24 permanently identified with the name of the buyer or the
25 beneficiary and delivered to a licensed and bonded
26 warehouse and both title to the outer burial container
27 and a warehouse receipt have been delivered to the
28 purchaser or beneficiary. Nothing herein shall prevent a
29 seller from perfecting a security interest in accordance
30 with the Uniform Commercial Code on any outer burial
31 container covered under this Act.
32 (B) All warehouse facilities to which sellers
33 deliver outer burial containers pursuant to this Act
34 shall:
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1 (i) be either located in the State of
2 Illinois or qualify as a foreign warehouse
3 facility as defined herein;
4 (ii) submit to the Comptroller not less
5 than annually, by March 1 of each year, a
6 report of all outer burial containers stored by
7 each licensee under this Act which is in
8 storage on the date of the report;
9 (iii) permit the Comptroller or his or
10 her designee at any time to examine stored
11 outer burial containers and to examine any
12 documents pertaining thereto;
13 (iv) submit evidence satisfactory to the
14 Comptroller that all outer burial containers
15 stored by said warehouse for licensees under
16 this Act are insured for casualty or other loss
17 normally assumed by a bailee for hire;
18 (v) demonstrate to the Comptroller that
19 the warehouse has procured and is maintaining a
20 performance bond in the form, content, and
21 amount sufficient to unconditionally guarantee
22 to the purchaser or beneficiary the prompt
23 shipment of the outer burial container.
24 (Source: P.A. 87-1091; 88-477.)
25 (225 ILCS 45/5.5 new)
26 Sec. 5.5. (a) Every seller of a pre-need contract shall
27 pay to the Comptroller $5 for each pre-need contract entered
28 into, to be paid into a special income earning fund hereby
29 created in the State Treasury, known as the Funeral Consumer
30 Protection Fund. The fees required under this subsection
31 shall be remitted to the Comptroller semi-annually within 30
32 days after the end of June and December for all contracts
33 that have been entered in such 6-month period.
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1 (b) All moneys paid into the Fund together with all
2 accumulated undistributed income thereon shall be held as a
3 special fund in the State Treasury. The Fund shall be used
4 solely for the purpose of providing restitution to consumers
5 who have suffered pecuniary loss arising out of a pre-need
6 contract.
7 (c) The Fund shall be applied only to restitution or
8 delivery of the merchandise or services, where such
9 restitution or delivery has been ordered by the Circuit Court
10 in a lawsuit brought under this Act by the Attorney General
11 of the State of Illinois on behalf of the Comptroller and in
12 which it has been determined by the Court that the obligation
13 is non-collectible from the judgment debtor. Restitution
14 shall not exceed the amount of the sales price paid plus
15 interest at the statutory rate. The Fund shall not be used
16 for the payment of any attorney fees or other fees.
17 (d) Whenever restitution is paid by the Fund, the Fund
18 shall be subrogated to the amount of the restitution, and the
19 Comptroller shall request the Attorney General to engage in
20 all reasonable post-judgment collection steps to collect the
21 restitution from the judgment debtor and reimburse the Fund.
22 (e) The Fund shall not be applied toward any restitution
23 for losses in any lawsuit initiated by the Attorney General
24 or Comptroller or with respect to any claim made on a
25 pre-need contract entered into prior to the effective date of
26 this amendatory Act of the 91st General Assembly.
27 (f) The Fund may not be allocated for any purpose other
28 than that specified in this Act.
29 (g) Notwithstanding any other provision of this Section,
30 the payment of restitution from the Fund shall be a matter of
31 grace and not of right and no purchaser shall have any vested
32 rights in the Fund as a beneficiary or otherwise.
33 (h) Annually, the status of the Fund shall be reviewed
34 by the Comptroller, and if he or she determines that the Fund
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1 together with all accumulated income earned thereon, equals
2 or exceeds $10,000,000 and that the total number of
3 outstanding claims filed against the Fund is less than 10% of
4 the Fund's current balance, then payments to the fund shall
5 be suspended until such time as the Fund's balance drops
6 below $10,000,000 or the total number of outstanding claims
7 filed against the Fund is more than 10% of the Fund's current
8 balance, but on such suspension, the Fund shall not be
9 considered inactive.
10 Section 10. The Illinois Pre-Need Cemetery Sales Act is
11 amended by changing Sections 4 and 15 as follows:
12 (815 ILCS 390/4) (from Ch. 21, par. 204)
13 Sec. 4. Definitions. As used in this Act, the following
14 terms shall have the meaning specified:
15 (a) "Pre-need sales contract" or "Pre-need sales" means
16 any agreement or contract or series or combination of
17 agreements or contracts which have for a purpose the sale of
18 cemetery merchandise, cemetery services or undeveloped
19 interment, entombment or inurnment spaces where the terms of
20 such sale require payment or payments to be made at a
21 currently determinable time and where the merchandise,
22 services or completed spaces are to be provided more than 120
23 days following the initial payment on the account.
24 (b) "Delivery" occurs when:
25 (1) physical possession of the merchandise is
26 transferred or the easement for burial rights in a
27 completed space is executed, delivered and transferred to
28 the buyer; or
29 (2) title to the merchandise has been transferred
30 to the buyer and the merchandise has been paid for and is
31 in the possession of the seller who has placed it, until
32 needed, at the site of its ultimate use; or
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1 (3) (A) A. the merchandise has been permanently
2 identified with the name of the buyer or the beneficiary
3 and delivered to a licensed and bonded warehouse and both
4 title to the merchandise and a warehouse receipt have
5 been delivered to the purchaser or beneficiary. Nothing
6 herein shall prevent a seller from perfecting a security
7 interest in accordance with the Uniform Commercial Code
8 on any merchandise covered under this Act.
9 (B) B. All warehouse facilities to which sellers
10 deliver merchandise pursuant to this Act shall:
11 (i) be either located in the State of Illinois
12 or qualify as a foreign warehouse facility as
13 defined herein;
14 (ii) submit to the Comptroller not less than
15 annually, by March 1 of each year, a report of all
16 cemetery merchandise stored by each licensee under
17 this Act which is in storage on the date of the
18 report;
19 (iii) permit the Comptroller or his designee
20 at any time to examine stored merchandise and to
21 examine any documents pertaining thereto;
22 (iv) submit evidence satisfactory to the
23 Comptroller that all merchandise stored by said
24 warehouse for licensees under this Act is insured
25 for casualty or other loss normally assumed by a
26 bailee for hire;
27 (v) demonstrate to the Comptroller that the
28 warehouse has procured and is maintaining a
29 performance bond in the form, content and amount
30 sufficient to unconditionally guarantee to the
31 purchaser or beneficiary the prompt shipment of the
32 cemetery merchandise.
33 (C) C. "Cemetery merchandise" means items of
34 personal property normally sold by a cemetery authority
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1 not covered under the Illinois Funeral or Burial Funds
2 Act "An Act concerning agreements for furnishing or
3 delivery of personal property, merchandise or services in
4 connection with the final disposition of dead human
5 bodies and regulating use or disposition of funds paid on
6 said agreements and providing penalties for violation
7 thereof", approved July 14, 1955, as amended, including
8 but not limited to:
9 (1) memorials,
10 (2) markers,
11 (3) monuments, and
12 (4) foundations, and.
13 (5) outer burial containers.
14 (D) D. "Undeveloped interment, entombment or
15 inurnment interment spaces" or "undeveloped spaces" means
16 any space to be used for the reception of human remains
17 that is not completely and totally constructed at the
18 time of initial payment therefor therefore in a:
19 (1) lawn crypt,
20 (2) mausoleum,
21 (3) garden crypt,
22 (4) columbarium, or
23 (5) cemetery section.
24 (E) E. "Cemetery services" means those services
25 customarily performed by a cemetery or crematory
26 personnel in connection with the interment, entombment,
27 inurnment or cremation of a dead human body.
28 (F) F. "Cemetery section" means a grouping of
29 spaces intended to be developed simultaneously for the
30 purpose of interring human remains.
31 (G) G. "Columbarium" means an arrangement of niches
32 that may be an entire building, a complete room, a series
33 of special indoor alcoves, a bank along a corridor or
34 part of an outdoor garden setting that is constructed of
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1 permanent material such as bronze, marble, brick, stone
2 or concrete for the inurnment of human remains.
3 (H) H. "Lawn crypt" means a permanent underground
4 crypt usually constructed of reinforced concrete or
5 similar material installed in multiple units for the
6 interment of human remains.
7 (I) I. "Mausoleum" or "garden crypt" means a
8 grouping of spaces constructed of reinforced concrete or
9 similar material constructed or assembled above the
10 ground for entombing human remains.
11 (J) J. "Memorials, markers and monuments" means the
12 object usually comprised of a permanent material such as
13 granite or bronze used to identify and memorialize the
14 deceased.
15 (K) K. "Foundations" means those items used to
16 affix or support a memorial or monument to the ground in
17 connection with the installation of a memorial, marker or
18 monument.
19 (L) L. "Person" means an individual, corporation,
20 partnership, joint venture, business trust, voluntary
21 organization or any other form of entity.
22 (M) M. "Seller" means any person selling or
23 offering for sale cemetery merchandise, cemetery services
24 or undeveloped spaces on a pre-need basis.
25 (N) N. "Religious cemetery" means mean a cemetery
26 owned, operated, controlled or managed by any recognized
27 church, religious society, association or denomination or
28 by any cemetery authority or any corporation
29 administering, or through which is administered, the
30 temporalities of any recognized church, religious
31 society, association or denomination.
32 (O) O. "Municipal cemetery" means a cemetery owned,
33 operated, controlled or managed by any city, village,
34 incorporated town, township, county or other municipal
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1 corporation, political subdivision, or instrumentality
2 thereof authorized by law to own, operate or manage a
3 cemetery.
4 (O-1) "Outer burial container" means a container
5 made of concrete, steel, wood, fiberglass, or similar
6 material, used solely at the interment site, and designed
7 and used exclusively to surround or enclose a separate
8 casket and to support the earth above such casket,
9 commonly known as a burial vault, grave box, or grave
10 liner, but not including a lawn crypt.
11 (P) P. "Sales price" means the gross amount paid by
12 a purchaser on a pre-need sales contract for cemetery
13 merchandise, cemetery services or undeveloped interment,
14 entombment or inurnment spaces, excluding sales taxes,
15 credit life insurance premiums, finance charges and
16 "Cemetery Care Act" contributions.
17 (Q) Q. "Foreign warehouse facility" means a
18 warehouse facility now or hereafter located in any state
19 or territory of the United States, including the District
20 of Columbia, other than the State of Illinois.
21 A foreign warehouse facility shall be deemed to have
22 appointed the Comptroller to be its true and lawful
23 attorney upon whom may be served all legal process in any
24 action or proceeding against it relating to or growing
25 out of this Act, and the acceptance of the delivery of
26 stored merchandise under this Act shall be signification
27 of its agreement that any such process against it which
28 is so served, shall be of the same legal force and
29 validity as though served upon it personally.
30 Service of such process shall be made by delivering
31 to and leaving with the Comptroller, or any agent having
32 charge of the Comptroller's Department of Cemetery and
33 Burial Trusts, a copy of such process and such service
34 shall be sufficient service upon such foreign warehouse
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1 facility if notice of such service and a copy of the
2 process are, within 10 days thereafter, sent by
3 registered mail by the plaintiff to the foreign warehouse
4 facility at its principal office and the plaintiff's
5 affidavit of compliance herewith is appended to the
6 summons. The Comptroller shall keep a record of all
7 process served upon him under this Section and shall
8 record therein the time of such service.
9 (Source: P.A. 85-1209; revised 10-31-98.)
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
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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
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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
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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 Section 99. Effective date. This Act takes effect
25 January 1, 2000.