State of Illinois
91st General Assembly

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[ Introduced ][ Senate Amendment 001 ]


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  or
 2        delivery of personal property, merchandise or services in
 3        connection  with  the  final  disposition  of  dead human
 4        bodies and regulating use or disposition of funds paid on
 5        said agreements and  providing  penalties  for  violation
 6        thereof",  approved  July 14, 1955, as amended, including
 7        but not limited to:
 8             (1)  memorials,
 9             (2)  markers,
10             (3)  monuments, and
11             (4)  foundations, and.
12             (5)  outer burial containers.
13             (D)  D.  "Undeveloped   interment,   entombment   or
14        inurnment interment spaces" 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 therefor therefore in 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  by  a   cemetery   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" means mean a 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.

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