House Introduced Bill 5833

HOUSE BILL No. 5833

May 7, 1998, Introduced by Reps. Varga, Alley, Brackenridge, Vaughn and Scranton and referred to the Committee on Regulatory Affairs.

A bill to amend 1968 PA 251, entitled

"Cemetery regulation act,"

by amending sections 2, 9, 12, 12a, 16, 18, and 21 (MCL 456.522,

456.529, 456.532, 456.532a, 456.536, 456.538, and 456.541), as

amended by 1982 PA 132, and by adding sections 2b, 2c, 2d, 12b,

16a, 16b, 16c, 16d, 16e, 16f, 16g, 16h, 16i, and 16j.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 Sec. 2. As used in this act:

2 (a) "Cemetery" means 1 or a combination of more than 1 of

3 the following:

4 (i) A burial ground for earth interments.

5 (ii) A mausoleum for crypt entombments.

6 (iii) A crematory for the cremation for human remains.

7 (iv) A columbarium for the deposit of cremated remains.

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1 (b) "Interment" means the disposition of human remains by

2 earth interment, entombment, or inurnment.

3 (c) "Burial right" means a right of earth interment.

4 (d) "Entombment right" means the right of crypt entombment

5 in a mausoleum or in an aboveground vault.

6 (e) "Columbarium right" means the right of inurnment in a

7 columbarium for cremated remains.

8 (f) "Mausoleum" means a structure used, or intended to be

9 used, for the entombment in a crypt or crypts in the structure of

10 the remains of deceased persons.

11 (g) "Crypt" means a chamber in a mausoleum of sufficient

12 size to entomb the uncremated remains of a deceased person.

13 (h) "Columbarium" means a structure or room or other space

14 in a building or structure used or intended to be used for the

15 inurnment or deposit of cremated remains.

16 (i) "Crematory" means a building or structure, within which

17 the remains of deceased persons are or are intended to be

18 cremated.

19 (j) "Cremation" means the incineration of the body of the

20 deceased person.

21 (k) "Cemetery services" means all services offered to the

22 public , including grave opening, closings, and foundation

23 installation BY A CEMETERY INCLUDING, BUT NOT LIMITED TO, GRAVE

24 OPENINGS AND CLOSINGS, CREMATIONS, FOUNDATION INSTALLATIONS,

25 FLOWERS, TRANSPORTATION, AND OTHER SERVICES DIRECTLY OR INDI-

26 RECTLY CONNECTED TO THE FINAL DISPOSITION OF DEAD HUMAN REMAINS

27 AND USE OF FACILITIES OR EQUIPMENT FOR VIEWING DEAD HUMAN

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1 REMAINS, VISITATION, MEMORIAL SERVICES, OR SERVICES USED DIRECTLY

2 OR INDIRECTLY IN CONNECTION TO A FUNERAL OR ALTERNATIVE TO A

3 FUNERAL CONDUCTED BY A PERSON LICENSED UNDER ARTICLE 18 OF THE

4 OCCUPATIONAL CODE, 1980 PA 299, MCL 339.1801 TO 339.1812.

5 (l) "Cemetery merchandise" means all merchandise sold to the

6 public by a cemetery , including vaults, concrete boxes, monu-

7 ments, memorials, and foundations INCLUDING VAULTS OR OTHER OUT-

8 SIDE CONTAINERS OF ANY TYPE, MONUMENTS, MARKERS, URNS, CASKETS,

9 CATAFALQUES, OR OTHER CEMETERY OR NONCEMETERY MERCHANDISE

10 DIRECTLY OR INDIRECTLY CONNECTED TO THE FINAL DISPOSITION OF DEAD

11 HUMAN REMAINS AND CASKETS, CATAFALQUES, COMBINATION UNITS, OR

12 OTHER GOODS OF ANY TYPE DIRECTLY OR INDIRECTLY RELATED TO A

13 FUNERAL.

14 (m) "Cemetery commissioner" or "commissioner" means the

15 director of licensing and regulation CONSUMER AND INDUSTRY

16 SERVICES or a designee of the director.

17 SEC. 2B. AS USED IN THIS ACT:

18 (A) "CONSIDERATION" OR "CONTRACT PRICE" MEANS MONEY AND

19 OTHER PROPERTY TO BE PAID AS TOTAL COMPENSATION TO A CONTRACT

20 SELLER OR PROVIDER FOR THE CEMETERY SERVICES AND CEMETERY MER-

21 CHANDISE TO BE PERFORMED OR FURNISHED UNDER A CONTRACT BUT DOES

22 NOT INCLUDE FINANCE CHARGES, LATE PAYMENT PENALTIES, AND PAYMENTS

23 REQUIRED TO BE MADE TO A GOVERNMENTAL AGENCY AT THE TIME THE CON-

24 TRACT IS ENTERED INTO. CONSIDERATION OR CONTRACT PRICE DOES NOT

25 INCLUDE A COMMISSION AS AUTHORIZED BY THIS ACT. MONEY PAID FOR

26 THE SERVICES TO BE PERFORMED UNDER A CONTRACT MAY BE PAID IN A

27 LUMP SUM OR IN INSTALLMENTS.

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1 (B) "CONTRACT" MEANS A WRITTEN, PRENEED CEMETERY CONTRACT

2 AND ALL DOCUMENTS PERTINENT TO THE TERMS OF THE CONTRACT UNDER

3 WHICH, FOR CONSIDERATION PAID TO A CONTRACT SELLER OR A PROVIDER

4 BY OR ON BEHALF OF A CONTRACT BUYER BEFORE THE DEATH OF THE CON-

5 TRACT BENEFICIARY, A PERSON PROMISES TO FURNISH, MAKE AVAILABLE,

6 OR PROVIDE CEMETERY SERVICES OR CEMETERY MERCHANDISE AFTER THE

7 DEATH OF A CONTRACT BENEFICIARY. THE CONTRACT HAS A GUARANTEED

8 FIXED PRICE FOR WHICH SPECIFIED CEMETERY GOODS OR CEMETERY SERV-

9 ICES ARE REQUIRED TO BE SOLD TO OR MADE AVAILABLE FOR A CONTRACT

10 BUYER OR FOR A CONTRACT BENEFICIARY, REGARDLESS OF THE COST OR

11 VALUE OF THE CEMETERY MERCHANDISE OR CEMETERY SERVICES AT THE

12 TIME OF DEATH OF THE CONTRACT BENEFICIARY. ADDITIONAL CONSIDERA-

13 TION IS NOT CHARGED FOR THE ORIGINALLY CONTRACTED-FOR CEMETERY

14 MERCHANDISE AND CEMETERY SERVICES AT THE TIME OF DELIVERY OF THE

15 CEMETERY MERCHANDISE AND CEMETERY SERVICES. A CONTRACT DOES NOT

16 INCLUDE AN AGREEMENT FOR THE SALE OF CEMETERY MERCHANDISE OR CEM-

17 ETERY SERVICES ENTERED INTO AFTER THE DEATH OF THE CONTRACT

18 BENEFICIARY. BEGINNING THE EFFECTIVE DATE OF THE AMENDATORY ACT

19 THAT ADDED THIS SUBDIVISION, CONTRACT INCLUDES A CONTRACT WHERE

20 PHYSICAL DELIVERY AND RETENTION OF THE CEMETERY MERCHANDISE HAS

21 NOT BEEN MADE BEFORE THE DEATH OF THE CONTRACT BENEFICIARY.

22 (C) "CONTRACT BENEFICIARY" MEANS AN INDIVIDUAL SPECIFIED OR

23 IMPLIED IN A CONTRACT FOR WHOM THE CEMETERY SERVICES OR CEMETERY

24 MERCHANDISE IS TO BE PERFORMED OR FURNISHED AFTER DEATH.

25 (D) "CONTRACT BUYER" MEANS AN INDIVIDUAL, INCLUDING A CON-

26 TRACT BENEFICIARY, WHO PURCHASES CEMETERY MERCHANDISE OR CEMETERY

27 SERVICES PURSUANT TO A CONTRACT.

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1 (E) "CONTRACT SELLER" MEANS A PERSON WHO SELLS, MAKES

2 AVAILABLE, OR PROVIDES CONTRACTS.

3 SEC. 2C. AS USED IN THIS ACT:

4 (A) "FUNDS" MEANS ALL MONEY OR OTHER CONSIDERATION ACTUALLY

5 RECEIVED FROM A CONTRACT BUYER BY A CONTRACT SELLER OR PROVIDER

6 OR AN ASSIGNEE FROM THE CONTRACT BUYER IN CONNECTION WITH ANY

7 ASPECT OF THE SALE OF A CONTRACT INCLUDING FINANCE CHARGES, BUT

8 DOES NOT INCLUDE LATE PAYMENT PENALTIES, PAYMENTS REQUIRED TO BE

9 MADE TO A GOVERNMENTAL AGENCY AT THE TIME THE CONTRACT IS ENTERED

10 INTO, OR A COMMISSION AUTHORIZED BY THIS ACT.

11 (B) "GOOD MORAL CHARACTER" MEANS GOOD MORAL CHARACTER AS

12 DEFINED IN 1974 PA 381, MCL 338.41 TO 338.47.

13 (C) "INCOME" MEANS THE MONEY EARNED BY THE INVESTMENT OF THE

14 PRINCIPAL, INCLUDING, BUT NOT LIMITED TO, INTEREST, DIVIDENDS,

15 AND GAINS OR LOSSES ON THE SALE OF, DEPOSIT OF, OR EXCHANGE OF,

16 PROPERTY USING INVESTED PRINCIPAL AMOUNTS.

17 SEC. 2D. AS USED IN THIS ACT:

18 (A) "PERSON" MEANS AN INDIVIDUAL, GROUP OF INDIVIDUALS, SOLE

19 PROPRIETORSHIP, PARTNERSHIP, ASSOCIATION, CORPORATION, LIMITED

20 LIABILITY COMPANY, A GOVERNMENTAL AGENCY, OR OTHER LEGAL ENTITY

21 OR COMBINATION OF THESE LEGAL ENTITIES.

22 (B) BEGINNING THE EFFECTIVE DATE OF THE AMENDATORY ACT THAT

23 ADDED THIS SUBDIVISION, "PHYSICAL DELIVERY AND RETENTION" MEANS

24 ACTUAL CONTROL AND POSSESSION OF CEMETERY MERCHANDISE THAT HAS

25 BEEN PERMANENTLY RELINQUISHED BY A CONTRACT SELLER OR A PROVIDER,

26 OR THE AGENT OF EITHER, TO THE CONTRACT BUYER OR THE CONTRACT

27 BENEFICIARY. PHYSICAL DELIVERY AND RETENTION DOES NOT OCCUR IF

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1 THE CONTRACT SELLER OR PROVIDER TAKES EITHER OF THE FOLLOWING

2 ACTIONS:

3 (i) ARRANGES OR INDUCES THE BUYER TO ARRANGE FOR THE STORAGE

4 OR WAREHOUSING OF CEMETERY MERCHANDISE ORDERED PURSUANT TO A CON-

5 TRACT, WITH OR WITHOUT EVIDENCE THAT LEGAL TITLE HAS PASSED.

6 (ii) ACQUIRES OR REACQUIRES ACTUAL OR CONSTRUCTIVE POSSES-

7 SION OR CONTROL OF CEMETERY MERCHANDISE AFTER ITS INITIAL DELIV-

8 ERY TO THE CONTRACT BUYER OR CONTRACT BENEFICIARY.

9 (C) "PRENEED" MEANS BEFORE THE DEATH OF A CONTRACT BENEFI-

10 CIARY WHEN USED IN CONJUNCTION WITH CEMETERY MERCHANDISE OR CEME-

11 TERY SERVICES.

12 (D) "PRINCIPAL" MEANS THE MONEY, FINANCE CHARGES, OR OTHER

13 CONSIDERATION ACTUALLY DEPOSITED IN THE TRUST ACCOUNTS REQUIRED

14 BY SECTION 16A.

15 (E) "PROVIDER" MEANS ANY PERSON WHO FURNISHES OR AGREES TO

16 FURNISH CEMETERY MERCHANDISE OR CEMETERY SERVICES PURSUANT TO A

17 CONTRACT, WHETHER OR NOT THAT PERSON IS THE CONTRACT SELLER. IN

18 THE CASE OF CEMETERY MERCHANDISE, PROVIDER MEANS THE PERSON WHO

19 ARRANGES FOR DELIVERY OF THE CEMETERY MERCHANDISE AT THE TIME OF

20 THE DEATH OF THE CONTRACT BENEFICIARY BUT DOES NOT INCLUDE THE

21 MANUFACTURER OF THE CEMETERY MERCHANDISE. IN THE CASE OF CEME-

22 TERY SERVICES, PROVIDER MEANS A PERSON REGISTERED PURSUANT TO

23 SECTION 12.

24 (F) "REGISTRANT" MEANS A PERSON WHO HAS REGISTERED WITH THE

25 COMMISSIONER PURSUANT TO SECTION 12.

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1 (G) "TRUSTEE" MEANS A PERSON WHO HOLDS, INVESTS, AND

2 DISBURSES PRINCIPAL AND INCOME FROM THE FUNDS RECEIVED UNDER A

3 PREPAID CEMETERY CONTRACT.

4 Sec. 9. (1) The commissioner may hold ADMINISTRATIVE hear-

5 ings, administer oaths, take testimony under oath, and request in

6 writing the appearance and testimony of witnesses, including the

7 production of books and records PURSUANT TO THE ADMINISTRATIVE

8 PROCEDURES ACT OF 1969, 1969 PA 306, MCL 24.201 TO 24.328. Upon

9 the refusal of a witness to appear, testify, or submit books and

10 records after a written request, the commissioner or a party to a

11 contested case may apply to the circuit court for Ingham county

12 for a subpoena or a subpoena duces tecum. The court shall issue

13 a subpoena when reasonable grounds are shown.

14 (2) When it appears to the commissioner that a person or

15 registrant has violated this act or a rule promulgated or order

16 issued under this act, the commissioner may do 1 or more of the

17 following:

18 (a) Issue a cease and desist order.

19 (b) Accept an assurance of discontinuance.

20 (c) Bring an action in the circuit court for the county in

21 which the person resides or in the circuit court for the county

22 of Ingham, to enforce compliance with this act or a rule promul-

23 gated or order issued under this act. Upon a proper showing, a

24 permanent or temporary injunction or a restraining order may be

25 granted and THE COURT MAY APPOINT THE CEMETERY COMMISSIONER OR

26 OTHER QUALIFIED PERSON AS a receiver or conservator may be

27 appointed for the defendant or the defendant's assets. The

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1 court shall not require the commissioner to post a bond. A

2 RECEIVER APPOINTED UNDER THIS SECTION HAS ALL THE POWERS, AUTHOR-

3 ITY, AND REMEDIES OF AN ASSIGNEE FOR THE BENEFIT OF CREDITORS

4 UNDER CHAPTER 52 OF THE REVISED JUDICATURE ACT OF 1961, 1961

5 PA 236, MCL 600.5201 TO 600.5265. THE RECEIVER MAY FILE FOR PRO-

6 TECTION UNDER THE BANKRUPTCY CODE.

7 (3) In addition to an action taken under this section, the

8 commissioner may deny an application or may suspend or revoke a

9 permit or registration after a AN ADMINISTRATIVE hearing as set

10 forth in this act AND UPON THE SHOWING OF A VIOLATION OF THIS

11 ACT.

12 Sec. 12. (1) A person or business entity shall not estab-

13 lish a cemetery without a valid permit or operate an existing

14 cemetery except under a valid registration ISSUED under this

15 act.

16 (2) BEGINNING ON THE EFFECTIVE DATE OF THE AMENDATORY ACT

17 THAT ADDED THIS SUBSECTION, A PERSON SHALL NOT ESTABLISH OR OPER-

18 ATE A CREMATORY UNLESS REGISTERED AS A CEMETERY UNDER THIS ACT OR

19 LICENSED AS A FUNERAL ESTABLISHMENT UNDER ARTICLE 18 OF THE OCCU-

20 PATIONAL CODE, 1980 PA 299, MCL 339.1801 TO 339.1811. THE COM-

21 MISSIONER SHALL PROMULGATE RULES UNDER THE ADMINISTRATIVE PROCE-

22 DURES ACT OF 1969, 1969 PA 306, MCL 24.201 TO 24.328, TO SET

23 STANDARDS OF OPERATION OF CREMATORIES. THE COMMISSIONER MAY

24 ADOPT STANDARDS OR PARTS OF STANDARDS ESTABLISHED BY 1 OR MORE

25 INDUSTRY OR TRADE ASSOCIATIONS DETERMINED APPROPRIATE BY THE

26 COMMISSIONER.

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1 (3) A PERSON SHALL NOT SELL, PROVIDE, OR ATTEMPT TO SELL OR

2 PROVIDE CEMETERY MERCHANDISE, CEMETERY SERVICES, OR BOTH, UNLESS

3 THE CEMETERY POSSESSES A VALID REGISTRATION ISSUED UNDER THIS ACT

4 OR UNDER THE PREPAID FUNERAL CONTRACT FUNDING ACT, 1986 PA 255,

5 MCL 328.211 TO 328.235.

6 (4) (2) If a person or business entity proposes to pur-

7 chase or otherwise acquire a controlling interest in an existing

8 cemetery company, that person or business entity shall first

9 make application APPLY to the commissioner for a certificate of

10 approval of a proposed change of control of a cemetery company.

11 The application shall contain the name and address of the pro-

12 posed new owner or operator and other information as the commis-

13 sioner requires. The commissioner shall issue a certificate of

14 approval only after he or she is satisfied that the proposed new

15 owner is qualified by character, experience, and financial

16 responsibility to control and operate the cemetery in a legal and

17 proper manner, and that the interest of the public generally will

18 not be jeopardized by the proposed change in ownership and

19 management. The application for a purchase or change of control

20 must be accompanied by an initial filing or investigation fee of

21 $500.00. As used in this section, "controlling interest" means

22 the capability to decide the operating and financial policies of

23 the cemetery company or to select a majority of the officers or

24 directors of the cemetery company. In deciding whether a person

25 or business entity has or proposes to acquire a controlling

26 interest, the percentage of the stock, assets, or other indicia

27 of ownership which a person or business entity acquires or

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1 proposes to acquire need not be the only factor considered by the

2 commissioner. If a person or business entity fails to comply

3 with this section, the commissioner shall order that a AN

4 ADMINISTRATIVE hearing be held.

5 (5) A PERSON SHALL NOT DEVELOP OR BUILD A CEMETERY UNLESS

6 THE PERSON PRESENTS A PERFORMANCE BOND TO THE COMMISSIONER IN AN

7 AMOUNT DETERMINED SUFFICIENT BY THE COMMISSIONER TO COVER THE

8 COSTS OF DEVELOPMENT AS WELL AS AN AMOUNT DETERMINED SUFFICIENT

9 BY THE COMMISSIONER TO COVER ANY LIABILITY FOR FAILURE TO SATISFY

10 ANY PRENEED SALES IN THE EVENT THE DEVELOPMENT IS NOT COMPLETED.

11 (6) If a transfer of controlling interest is found to have

12 taken place without prior commissioner approval, the commissioner

13 in his or her discretion may suspend or revoke the registration

14 of the cemetery or take other appropriate action to insure com-

15 pliance with this section.

16 (7) THE COMMISSIONER MAY DENY AN APPLICATION IF THE APPLI-

17 CANT LACKS GOOD MORAL CHARACTER OR HAS BEEN FOUND BY THE COMMIS-

18 SIONER OR A COURT OF COMPETENT JURISDICTION TO HAVE VIOLATED THIS

19 ACT, ARTICLE 18 OF THE OCCUPATIONAL CODE, 1980 PA 299,

20 MCL 339.1801 TO 339.1811, OR THE PREPAID FUNERAL CONTRACT FUNDING

21 ACT, 1986 PA 255, MCL 328.211 TO 328.235, OR WHOSE LICENSE OR

22 REGISTRATION HAS BEEN SUSPENDED OR REVOKED.

23 (8) THIS ACT DOES NOT PREVENT A REGISTRANT FROM OWNING AN

24 INTEREST IN A FUNERAL HOME AND DOES NOT PREVENT A REGISTRANT FROM

25 HAVING A CONTRACTUAL RELATIONSHIP WITH A FUNERAL HOME SO LONG AS

26 THIS CONTRACTUAL RELATIONSHIP IS DISCLOSED TO POTENTIAL

27 CUSTOMERS.

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1 (9) A REGISTRANT SELLING CEMETERY MERCHANDISE OR SERVICES

2 SHALL DISCLOSE ON ALL CONTRACTS AND STATIONERY THE NAME OF ANY

3 OTHER ENTITY THAT OWNS AN INTEREST IN THE CEMETERY INCLUDING, BUT

4 NOT LIMITED TO, A FUNERAL HOME, ANOTHER CEMETERY, OR AN ENTITY

5 CONSISTING OF A GROUP OF FUNERAL HOMES OR CEMETERIES.

6 Sec. 12a. (1) The commissioner or an examiner, investiga-

7 tor, or other person the commissioner may appoint, may visit and

8 examine the affairs of any cemetery or business entity PERSON

9 required to register under this act and shall have free access to

10 the books, papers, records, and documents that relate to the

11 business of the cemetery corporation, business entity PERSON,

12 or agent acting on its behalf. THE COMMISSIONER OR AN EXAMINER

13 MAY MAKE PHOTOCOPIES OF ANY RELEVANT DOCUMENTS, RECORDS, BOOKS,

14 AND PAPERS.

15 (2) The books, papers, records, and documents shall be

16 available for inspection or audit at any time during regular

17 business hours with reasonable notice. One qualified person

18 shall conduct the audit whose services shall be charged to and

19 paid by the cemetery at the rate of $10.00 per hour, but not more

20 than $100.00 total.

21 (3) THE COMMISSIONER MAY REQUEST THE ADVICE AND AID OF THE

22 FINANCIAL INSTITUTIONS BUREAU IN CARRYING OUT THE AUDIT AND

23 INVESTIGATION FUNCTION UNDER THIS ACT.

24 SEC. 12B. A CEMETERY SHALL MAINTAIN A LIST OF ALL FUTURE

25 PERFORMANCE OBLIGATIONS. THIS LIST WILL BE CURRENT AT ALL TIMES

26 AND SHALL INCLUDE THE FOLLOWING:

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1 (A) A COMPLETE DESCRIPTION OF THE FUTURE PERFORMANCE

2 OBLIGATIONS INVOLVED. THESE OBLIGATIONS SHALL SEGREGATE VAULTS,

3 MEMORIALS, SERVICES BY TYPE, AND CASKETS BY MODEL. THE LIST

4 SHALL BE TOTALED BY ITEM TYPE AND MODEL.

5 (B) A TOTAL COST OF FULL PERFORMANCE OF ALL OBLIGATIONS AS

6 OF THE DATE OF STATEMENT.

7 (C) COMPLETE INFORMATION ON THE MEANS, PROVISION, TRUST, OR

8 OTHER VEHICLE WHICH WILL ASSURE FULFILLMENT OF ALL OBLIGATIONS,

9 STATING LEDGER AND MARKET VALUES OF THE VEHICLE, ITS LOCATION,

10 NATURE OF INVESTMENTS, AND TRUSTEES INCLUDING FEES PAID TO

11 TRUSTEES.

12 Sec. 16. (1) The commissioner shall require each cemetery

13 to establish and maintain an irrevocable endowment care fund as

14 required by section 35a of Act No. 87 of the Public Acts of

15 1855, being section 456.35a of the Michigan Compiled Laws 1855

16 PA 87, MCL 456.35A, or section 7a of Act No. 12 of the Public

17 Acts of 1869, as amended, being section 456.107a of the Michigan

18 Compiled Laws 1869 PA 12, MCL 456.107A, and to report annually

19 before July 1 of each year, on forms approved and furnished by

20 the commissioner, care fund information required to be reported

21 to the commissioner by other statutes and information regarding

22 the funds as the commissioner considers pertinent in the public

23 interest. A cemetery applying to the commissioner as authorized

24 by other statutes for a care fund deposit modification or waiver

25 shall be assessed the actual expenses for an examination or

26 investigation by the commissioner. The commissioner shall

27 require each person engaged as agent or seller, as a means of

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1 livelihood either part time or full time, in the selling of

2 burial rights, entombment rights, or columbarium rights owned by

3 a party other than a cemetery or corporation subject to the care

4 fund requirements of other laws, to deposit 15% of all gross pro-

5 ceeds received from the sales of those rights into the irrevoca-

6 ble care fund of the cemetery in which the rights are located if

7 an irrevocable care fund exists for that cemetery. Excess sums

8 on deposit in the fund can be applied by a cemetery against

9 future deposits. A deposit required to be made by those persons

10 shall be modified or waived if the cemetery has received a care

11 fund deposit modification or waiver approved by the

12 commissioner. The total deposit for a single adult burial right

13 sale or assignment shall not be less than $20.00. $50.00. THE

14 COMMISSIONER SHALL ADJUST THIS DEPOSIT AMOUNT TO REFLECT THE

15 DETROIT CONSUMER PRICE INDEX AS PROVIDED BY THE UNITED STATES

16 DEPARTMENT OF LABOR, BUREAU OF LABOR STATISTICS.

17 (2) A cemetery which is required to register pursuant to

18 this act and an agent which is authorized by a cemetery or acting

19 on its behalf under an agreement or sales contract to sell ceme-

20 tery merchandise or cemetery services shall establish a merchan-

21 dise trust account WITH A TRUSTEE and deposit a percentage of the

22 gross proceeds received from the sales as determined by the

23 commissioner. The merchandise trust account shall be maintained

24 exclusively for the deposit of the money into a bank or trust

25 company DEPOSITORY located in this state OR A NONPROFIT CORPORA-

26 TION CONSISTING OF AT LEAST 25 CEMETERIES under the terms of a

27 written trust agreement approved by the commissioner. The funds

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1 shall be deposited not later than the month following their

2 receipt.

3 (3) The total deposits to a merchandise trust for the sale

4 of cemetery burial vaults or other outside containers, other than

5 crypts installed underground and sold as part of a cemetery lot,

6 shall at all times be not less than the greater of $100.00 per

7 vault or outside container or 130% of the total costs of the con-

8 tainers covered by the trust. Money deposited in connection with

9 a sale shall be repaid within 30 days upon written demand of

10 purchaser. A burial vault shall be installed only at need or by

11 separate written authorization of the purchaser. The cemetery

12 shall have the right to withdraw the amount on deposit for the

13 delivered vault or outside container.

14 (3) (4) A contract or agreement made with a purchaser of

15 cemetery merchandise and CEMETERY services shall contain a com-

16 plete description of the cemetery merchandise purchased and of

17 the CEMETERY services to be rendered.

18 (4) (5) The commissioner shall require each cemetery or

19 agent authorized by it acting on its behalf to report annually

20 EVERY THIRD YEAR before July 1 of each THAT year on forms pro-

21 vided by the commissioner. The reports shall contain information

22 as the commissioner considers necessary to ascertain that this

23 act is being implemented. THE REPORT FOR A CEMETERY WITH GREATER

24 THAN $50,000.00 IN CEMETERY MERCHANDISE AND CEMETERY SERVICE

25 LIABILITIES SHALL BE SIGNED BY AN INDEPENDENT CERTIFIED PUBLIC

26 ACCOUNTANT.

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1 (5) (6) If, after an audit by the commissioner's staff, a

2 deficit in the amount of required deposits to the trust funds is

3 found, the commissioner may assess a penalty not to exceed 10% of

4 the amount of the deficit. The cemetery or entity of a OTHER

5 PERSON ACTING ON BEHALF OF THE cemetery may request a hearing

6 AN INFORMAL COMPLIANCE AND SETTLEMENT CONFERENCE before the com-

7 missioner within 30 days after being notified of a deficit by the

8 commissioner. If, following the hearing, the commissioner deter-

9 mines that a deficit does exist, an additional penalty not to

10 exceed 1.5% may be assessed each month on the unpaid monthly bal-

11 ance until the deficit is paid in full.

12 (6) (7) All fees, charges, and penalties collected under

13 this act, other than fines prescribed in section 21, shall be

14 paid to the commissioner. Upon receipt, the commissioner shall

15 remit funds received to the department of treasury for deposit in

16 the general fund of the state.

17 SEC. 16A. (1) A REGISTRANT RECEIVING FUNDS FROM A CONTRACT

18 SELLER ACTING ON THE BEHALF OF OR AT THE DIRECTION OF A REGIS-

19 TRANT SHALL DEPOSIT INTO A MERCHANDISE TRUST ACCOUNT 70% OF THE

20 RETAIL COST OF ALL PRENEED CEMETERY SERVICES AND 70% OF THE

21 RETAIL COST OF ALL PRENEED CEMETERY MERCHANDISE. A CONTRACT

22 SELLER MAY ALSO CHARGE A PRE-ARRANGEMENT FEE NOT TO EXCEED 10% OF

23 THE RETAIL COST OF ALL PRENEED CEMETERY SERVICES AND CEMETERY

24 MERCHANDISE.

25 (2) NOTWITHSTANDING SUBSECTION (1), INSCRIBED MARKERS MAY BE

26 STORED UNTIL THE TIME OF NEED, SO LONG AS THE MERCHANDISE IS

27 INSURED IN AN AMOUNT IN EXCESS OF THEIR TOTAL REPLACEMENT COST.

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1 THE REGISTRANT SHALL ANNUALLY FILE WITH THE COMMISSIONER A

2 CURRENT CERTIFICATE OF INSURANCE COVERAGE.

3 SEC. 16B. (1) A CEMETERY THAT MAINTAINS AN ENDOWMENT CARE

4 FUND OR A MERCHANDISE TRUST ACCOUNT SHALL PROVIDE A REPORT PRE-

5 PARED BY A CERTIFIED PUBLIC ACCOUNTANT FOR EACH FUND OR ACCOUNT

6 WHICH SHALL COVER THE IMMEDIATELY PRECEDING 3 CALENDAR YEARS.

7 THE REPORT SHALL BE ON FORMS PROVIDED BY THE COMMISSIONER OR IN

8 ANY OTHER FORMAT CONSIDERED APPROPRIATE BY THE CERTIFIED PUBLIC

9 ACCOUNTANT AND APPROVED BY THE COMMISSIONER. THE CERTIFIED

10 PUBLIC ACCOUNTANT IS REQUIRED TO UTILIZE ACCEPTED ACCOUNTING

11 PRINCIPLES. THE REPORT SHALL PROVIDE A DETERMINATION OF WHETHER

12 THE CEMETERY HAS APPARENTLY COMPLIED WITH ALL OF THE FOLLOWING

13 AND SHALL INDICATE AREAS OF NONCOMPLIANCE, IF APPLICABLE:

14 (A) THE DEPOSIT REQUIREMENTS.

15 (B) THE INVESTMENT REQUIREMENTS.

16 (C) THE WITHDRAWAL PROCEDURES AND REQUIREMENTS.

17 (D) OTHER REQUIREMENTS OF THIS ACT OR OTHER ACTS WITHIN THE

18 KNOWLEDGE OF THE CERTIFIED PUBLIC ACCOUNTANT AND READILY APPARENT

19 FROM REVIEW OF THE RECORDS AND INFORMATION USED TO COMPILE THE

20 REPORT.

21 (2) THE COMMISSIONER SHALL EXAMINE EACH REPORT REQUIRED BY

22 THIS SECTION AND IF THE COMMISSIONER DETERMINES FROM THAT EXAMI-

23 NATION THAT THE CEMETERY HAS NOT DEPOSITED, INVESTED, OR WITH-

24 DRAWN FUNDS IN ACCORDANCE WITH THIS OR OTHER ACTS OR HAS FAILED

25 TO FILE A REPORT COMPLYING WITH THE REQUIREMENTS OF SECTION

26 16(4), THE COMMISSIONER SHALL TAKE ANY APPROPRIATE ACTION

27 AUTHORIZED BY SECTION 18.

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1 (3) ANY MERCHANDISE TRUST ACCOUNTS IN EXISTENCE ON THE

2 EFFECTIVE DATE OF THE AMENDATORY ACT THAT ADDED THIS SUBSECTION

3 MAY REMAIN IN EFFECT UNDER THE TERMS AND CONDITIONS UNDER WHICH

4 THEY WERE CREATED SO LONG AS THEY COMPLY WITH THE STANDARDS IN

5 EFFECT BEFORE THE EFFECTIVE DATE OF THE AMENDATORY ACT THAT ADDED

6 THIS SUBSECTION.

7 SEC. 16C. A REGISTRANT WHO DEPOSITS FUNDS WITH A TRUSTEE

8 UNDER THIS ACT SHALL HAVE IN EFFECT AT ALL TIMES AN AGREEMENT

9 UNDER WHICH THE TRUSTEE HAS, UNDER THE FOLLOWING CIRCUMSTANCES,

10 AGREED TO ALLOW INSPECTION AND COPYING OF RECORDS MAINTAINED BY

11 IT PERTAINING TO FUNDS HELD OR MANAGED BY IT:

12 (A) UPON THE REQUEST BY THE COMMISSIONER, TO INSPECT OR COPY

13 RECORDS PERTAINING TO ANY OR ALL FUNDS HELD OR MANAGED BY THE

14 TRUSTEE.

15 (B) UPON THE REQUEST OF THE REGISTRANT OR ITS AGENT, TO

16 INSPECT OR COPY RECORDS PERTAINING TO ANY OR ALL FUNDS DEPOSITED

17 BY THE REGISTRANT WITH THE TRUSTEE.

18 (C) UPON THE REQUEST OF A CONTRACT BUYER OR A CONTRACT BENE-

19 FICIARY TO INSPECT OR COPY RECORDS PERTAINING TO FUNDS HELD OR

20 MANAGED BY THE TRUSTEE PURSUANT TO A CONTRACT TO WHICH THE CON-

21 TRACT BUYER IS A PARTY OR FOR WHOSE BENEFIT IT WAS ENTERED INTO.

22 (D) UPON ORDER OF A COURT OF COMPETENT JURISDICTION.

23 SEC. 16D. (1) A REGISTRANT SHALL KEEP, IN THIS STATE, ACCU-

24 RATE ACCOUNTS, BOOKS, AND RECORDS OF ALL TRANSACTIONS AND

25 ACCOUNTS REGULATED BY THIS ACT. RECORDS INCLUDE COPIES OF ALL

26 CONTRACTS, THE DATES AND AMOUNTS OF PAYMENTS MADE AND ACCEPTED

27 UNDER THESE CONTRACTS, THE NAME AND ADDRESS OF EACH CONTRACT

05006'97 a *
18

1 BUYER, THE NAME AND ADDRESS OF THE CONTRACT BENEFICIARIES, THE

2 NAME AND ADDRESS OF EACH TRUSTEE, AND ANY OTHER RECORDS AS THE

3 COMMISSIONER MAY REQUIRE TO ENABLE IT TO DETERMINE WHETHER THE

4 REGISTRANT IS COMPLYING WITH THE REQUIREMENTS OF THIS ACT. THE

5 REGISTRANT SHALL KEEP RECORDS FOR AT LEAST 36 MONTHS AFTER PER-

6 FORMANCE OF ALL OBLIGATIONS OF EACH CONTRACT OR AFTER THE FILING

7 OF THE FINAL SPECIAL REPORT WHICH INCLUDES A CONTRACT WHICH HAS

8 BEEN PERFORMED.

9 (2) EVERY THIRD YEAR A REGISTRANT WHICH SERVES AS A TRUSTEE

10 OR WHICH HAS DEPOSITED FUNDS WITH AN ESCROW AGENT PURSUANT TO

11 SECTION 16H SHALL SECURE A SPECIAL REPORT OF LIMITED REVIEW PRE-

12 PARED BY A LICENSED INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT PER-

13 TAINING TO CONTRACT FUNDS. THE SPECIAL REPORT SHALL BE ON FORMS

14 PROVIDED BY THE COMMISSIONER OR IN ANY OTHER FORMAT CONSIDERED

15 APPROPRIATE BY THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT AND

16 APPROVED BY THE COMMISSIONER. THE SPECIAL REPORT SHALL BE PRE-

17 PARED AND DATED WITHIN 90 DAYS BEFORE THE EXPIRATION OF THE

18 REGISTRANT'S CERTIFICATE OF REGISTRATION AND SHALL BE FURNISHED

19 TO THE COMMISSIONER WITH THE REGISTRANT'S APPLICATION FOR RENEWAL

20 OR, IF AN APPLICATION FOR RENEWAL IS NOT FILED, BEFORE THE EXPI-

21 RATION OF THE CERTIFICATE OF REGISTRATION. IN PREPARING THE SPE-

22 CIAL REPORT, THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT IS NOT

23 REQUIRED TO REVIEW ALL CONTRACTS, MERCHANDISE TRUST AGREEMENTS,

24 MERCHANDISE TRUST ACCOUNTS, OR RECORDS OF THE REGISTRANT AND THE

25 INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT IS NOT REQUIRED TO REVIEW

26 ANY RECEIPTS OR DEPOSITS BY THE REGISTRANT OF CONTRACT FUNDS.

05006'97 a *
19

1 THE SPECIAL REPORT OF THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT

2 SHALL PROVIDE THE FOLLOWING ASSURANCES:

3 (A) BASED EITHER UPON A REVIEW OF THE REGISTRANT'S AGREE-

4 MENTS WITH TRUSTEES OR DEPOSITORIES WHICH LIMIT INVESTMENTS OF

5 THE FUNDS BY THE TRUSTEES OR DEPOSITORIES TO THOSE INVESTMENTS

6 PERMITTED BY THIS ACT, OR UPON A REVIEW OF THE INVESTMENTS OF THE

7 MERCHANDISE TRUST ACCOUNTS, THAT THE REGISTRANT HAS COMPLIED WITH

8 THE INVESTMENT REQUIREMENTS OF THIS ACT.

9 (B) IN THE CASE OF MERCHANDISE TRUST ACCOUNTS WHERE THE REG-

10 ISTRANT SERVES AS THE TRUSTEE, THAT WITHDRAWALS, AS DETAILED IN

11 THE PERIODIC STATEMENTS OF THE DEPOSITORIES IN WHICH THE TRUST

12 ACCOUNTS ARE MAINTAINED, HAVE BEEN MADE IN COMPLIANCE WITH THIS

13 ACT.

14 (C) MATTERS HAVE NOT COME TO THE ATTENTION OF THE INDEPEN-

15 DENT CERTIFIED PUBLIC ACCOUNTANT DURING THE REVIEW OF MERCHANDISE

16 TRUST ACCOUNT INVESTMENTS AND WITHDRAWALS THAT GAVE CAUSE TO

17 BELIEVE THAT THE REGISTRANT HAS NOT COMPLIED WITH THIS ACT. IF

18 ANY MATTERS HAVE COME TO HIS OR HER ATTENTION, THE INDEPENDENT

19 CERTIFIED PUBLIC ACCOUNTANT SHALL INCLUDE AN EXPLANATION OF THE

20 MATTERS WHICH CAUSED THE BELIEF THAT THE REGISTRANT HAS NOT COM-

21 PLIED WITH THIS ACT.

22 (3) THE COMMISSIONER MAY EXAMINE EACH SPECIAL REPORT

23 REQUIRED BY THIS SECTION AND IF THE COMMISSIONER DETERMINES ON

24 THE BASIS OF ITS REVIEW THAT THE REGISTRANT OR ITS AGENT HAS NOT

25 HELD OR INVESTED FUNDS IN COMPLIANCE WITH THE REQUIREMENTS OF

26 THIS ACT OR HAS FAILED TO FILE A SPECIAL REPORT AS REQUIRED, THE

05006'97 a *
20

1 COMMISSIONER SHALL TAKE ANY APPROPRIATE CORRECTIVE OR PENAL

2 ACTION AUTHORIZED BY THIS ACT.

3 (4) THE COMMISSIONER MAY EXAMINE, REVIEW, OR AUDIT THE BOOKS

4 AND RECORDS OF A CONTRACT SELLER OR PROVIDER PERTAINING TO FUNDS

5 RECEIVED IN PAYMENT FOR CONTRACTS. AN AUDIT MAY INCLUDE AN EXAM-

6 INATION OF THE BOOKS AND FINANCIAL RECORDS OF THE REGISTRANT AS

7 WELL AS BOOKS AND FINANCIAL RECORDS OF TRUSTEES USED BY THE

8 REGISTRANT. A REGISTRANT SHALL AUTHORIZE TRUSTEES TO OPEN THEIR

9 RECORDS OF THE REGISTRANT ACCOUNTS TO THE COMMISSIONER UPON

10 REQUEST.

11 (5) FOR THE PURPOSES OF COMPLYING WITH THE REQUIREMENTS OF

12 THIS SECTION, A REGISTRANT WHO HAS NOT SOLD, PROVIDED, OR AGREED

13 TO PROVIDE CEMETERY MERCHANDISE OR CEMETERY SERVICES IN ACCORD-

14 ANCE WITH A CONTRACT AND WHO HAS NO OBLIGATIONS WITH RESPECT TO

15 AN OUTSTANDING CONTRACT MAY SUBMIT A SWORN STATEMENT ACCOMPANIED

16 BY A LETTER FROM A MICHIGAN-LICENSED CERTIFIED PUBLIC ACCOUNTANT

17 THAT NO CEMETERY MERCHANDISE OR CEMETERY SERVICES WERE SOLD OR

18 PROVIDED BASED UPON A REVIEW OF THE REGISTRANT'S BUSINESS RECORDS

19 THAT A CONTRACT HAS NOT BEEN SOLD, PROVIDED, OR AGREED TO AND

20 THERE ARE NO OBLIGATIONS OUTSTANDING. THE COMMISSIONER SHALL

21 ACCEPT THIS STATEMENT IN LIEU OF THE SPECIAL REPORT.

22 SEC. 16E. A REGISTRANT WHO DISCONTINUES ITS BUSINESS OPERA-

23 TIONS SHALL NOTIFY THE COMMISSIONER AND THE CONTRACT BUYER OF

24 EACH EXISTING CONTRACT AND SHALL PROVIDE WRITTEN DOCUMENTATION

25 THAT IT HAS ARRANGED FOR AN ASSIGNMENT OF THESE CONTRACTS TO

26 ANOTHER PROVIDER WHO SATISFIES THE REQUIREMENTS OF SECTION 16B.

05006'97 a *
21

1 SEC. 16F. A CONTRACT SHALL DESIGNATE A PROVIDER WHO HAS

2 AGREED TO FURNISH THE CEMETERY MERCHANDISE OR CEMETERY SERVICES

3 SPECIFIED IN THE CONTRACT UPON THE DEATH OF THE CONTRACT

4 BENEFICIARY. IF THE PROVIDER DESIGNATED IS NOT THE CONTRACT

5 SELLER OF THE CONTRACT, THE PROVIDER SHALL HAVE PREVIOUSLY CON-

6 TRACTED WITH THE CONTRACT SELLER TO PROVIDE THE MERCHANDISE AND

7 SERVICES SPECIFIED IN THE CONTRACT AND THE CONTRACT SHALL INDI-

8 CATE THIS CONTRACTUAL RELATIONSHIP OR THE PROVIDER SHALL BE MADE

9 A PARTY TO THE CONTRACT BEFORE ANY CONSIDERATION IS PAID AND THE

10 CONTRACT IS NOT BINDING ON THE CONTRACT BUYER UNTIL THE PROVIDER

11 HAS BEEN MADE A PARTY TO THE CONTRACT.

12 SEC. 16G. (1) A CONTRACT BUYER MAY CANCEL A CONTRACT BEFORE

13 THE DEATH OF THE CONTRACT BENEFICIARY UPON WRITTEN NOTICE TO THE

14 PROVIDER DESIGNATED TO FURNISH CEMETERY MERCHANDISE OR CEMETERY

15 SERVICES. THE CONTRACT SELLER OR PROVIDER SHALL PROMPTLY NOTIFY

16 THE TRUSTEE OF THE CANCELLATION AND OF ITS EFFECTIVE DATE, IF THE

17 TRUSTEE IS OTHER THAN THE CONTRACT SELLER OR THE PROVIDER. AFTER

18 RECEIPT OF THE NOTICE OF CANCELLATION, THE TRUSTEE SHALL DISBURSE

19 PRINCIPAL AND INCOME TO THE CONTRACT BUYER PURSUANT TO THIS SUB-

20 SECTION AND SHALL DISBURSE THE REMAINDER OF THE PRINCIPAL AND

21 INCOME, IF ANY, TO THE CONTRACT SELLER OR THE PROVIDER. THE

22 AMOUNTS DISBURSED TO THE CONTRACT BUYER SHALL BE 100% OF THE CON-

23 TRACT PRICE PAID TO THE PROVIDER.

24 (2) A PROVIDER DESIGNATED TO FURNISH CEMETERY MERCHANDISE OR

25 CEMETERY SERVICES MAY CANCEL A CONTRACT ONLY IF THE CONTRACT

26 BUYER IS MORE THAN 90 DAYS' DELINQUENT IN MAKING ANY INSTALLMENT

27 PAYMENT OR PARTIAL PAYMENT OR IF THE CONTRACT BUYER IS OTHERWISE

05006'97 a *
22

1 IN DEFAULT AS TO ANY OTHER OBLIGATION UNDER THE CONTRACT. UPON

2 CANCELLATION, THE CONTRACT BUYER SHALL RECEIVE A REFUND AS DETER-

3 MINED PURSUANT TO SUBSECTION (1).

4 (3) AFTER THE DEATH OF THE CONTRACT BENEFICIARY, THE MER-

5 CHANDISE TRUST MAY BE CANCELED OR CHANGED ONLY BY A COURT ORDER

6 ISSUED PURSUANT TO SECTION 2851 OF THE PUBLIC HEALTH CODE, 1978

7 PA 368, MCL 333.2851.

8 (4) AFTER THE DEATH OF THE CONTRACT BENEFICIARY, IF THE MER-

9 CHANDISE TRUST ACCOUNT IS NOT USED BY PERSONS LEGALLY ENTITLED TO

10 MAKE FUNERAL ARRANGEMENTS FOR THE CONTRACT BENEFICIARY, THE

11 TRUSTEE SHALL DISBURSE THE PRINCIPAL AND INCOME IN THE TRUST

12 ACCOUNT PURSUANT TO SUBSECTION (1) WITHIN 30 DAYS AFTER RECEIPT

13 OF A REQUEST FOR PAYMENT FROM THE PROVIDER DESIGNATED TO FURNISH

14 CEMETERY MERCHANDISE OR CEMETERY SERVICES PURSUANT TO THE CON-

15 TRACT, THE CONTRACT BUYER, OR THE CONTRACT BUYER'S ESTATE.

16 (5) A CONTRACT SELLER OR A PROVIDER WHICH ASSIGNS OR TRANS-

17 FERS ITS OBLIGATIONS UNDER A CONTRACT TO ANOTHER PROVIDER SHALL

18 NOTIFY THE CONTRACT BUYER OF THE ASSIGNMENT IN WRITING. IF THE

19 CONTRACT BUYER CANCELS THE CONTRACT WITHIN 30 DAYS OF THE NOTIFI-

20 CATION OF THE ASSIGNMENT, THE BUYER IS ENTITLED TO A REFUND OF

21 100% OF THE REMAINING PRINCIPAL AND INCOME. THIS SUBSECTION DOES

22 NOT APPLY TO AN ASSIGNMENT OF A FINANCIAL INTEREST IN AN INSTALL-

23 MENT CONTRACT TO A FINANCIAL INSTITUTION. AT THE TIME THAT THE

24 CONTRACT SELLER OR PROVIDER RECEIVES PAYMENT IN EXCHANGE FOR

25 SELLING OR ASSIGNING ITS FINANCIAL INTEREST IN AN INSTALLMENT

26 CONTRACT TO A FINANCIAL INSTITUTION, THE CONTRACT SELLER OR

05006'97 a *
23

1 PROVIDER IS REQUIRED TO PLACE IN TRUST THE AMOUNT REQUIRED BY

2 THIS ACT.

3 SEC. 16H. (1) PAYMENTS OF PRINCIPAL AND INCOME BY A DEPOSI-

4 TORY OR A TRUSTEE MADE IN GOOD FAITH UNDER THIS ACT RELIEVE THAT

5 DEPOSITORY OR TRUSTEE OF ANY FURTHER LIABILITY FOR THAT PRINCIPAL

6 AND INCOME.

7 (2) A TRUSTEE SHALL INVEST FUNDS HELD OR MANAGED UNDER THIS

8 ACT ONLY AS EXPRESSLY AUTHORIZED BY THIS ACT AND SHALL NOT INVEST

9 FUNDS BY PURCHASING LIFE INSURANCE OR ANNUITIES THE PROCEEDS OF

10 WHICH ARE NOT PAYABLE IN FULL UNTIL THE HAPPENING OF SOME EVENT

11 INCLUDING, BUT NOT LIMITED TO, DEATH OF THE CONTRACT

12 BENEFICIARY.

13 (3) A PROVIDER OR TRUSTEE MAY, WITHOUT APPROVAL OF ANY OTHER

14 PARTY, CHANGE THE DEPOSITORY OF ANY MERCHANDISE TRUST ACCOUNT,

15 WITH OR WITHOUT CAUSE, AT ANY TIME. THE PROVIDER OR TRUSTEE

16 SHALL NOTIFY THE CONTRACT BUYER IF THE TRUSTEE OR DEPOSITORY IS

17 CHANGED.

18 SEC. 16I. (1) ALL PRICES OR QUOTATIONS OF PRICES CONTAINED

19 IN A CONTRACT, OFFER, OR SOLICITATION SHALL BE STATED IN COMPLI-

20 ANCE WITH APPLICABLE FEDERAL AND STATE LAWS AND REGULATIONS. IN

21 ADDITION, A PERSON WHO OFFERS EITHER CEMETERY MERCHANDISE OR CEM-

22 ETERY SERVICES ON A PRENEED OR AT-NEED BASIS SHALL COMPLY WITH

23 THE PRICE DISCLOSURE RULES OF THE FEDERAL TRADE COMMISSION, CODE

24 OF FEDERAL REGULATIONS, 16 C.F.R., PART 453, WHETHER OR NOT THE

25 RULES BY THEIR OWN TERMS APPLY TO THE OFFERING. THIS SUBSECTION

26 DOES NOT APPLY TO THE SALE OF ANY INTEREST IN LAND COVERED BY THE

05006'97 a *
24

1 ENDOWMENT CARE REQUIREMENTS OF SECTION 35A OF 1855 PA 87,

2 MCL 456.35A.

3 (2) A PERSON WHO SELLS OR OFFERS TO SELL BOTH CEMETERY MER-

4 CHANDISE OR SERVICES AND NONCEMETERY MERCHANDISE OR SERVICES AS

5 PART OF THE SAME TRANSACTION OR SERIES OF TRANSACTIONS SHALL NOT

6 MANIPULATE THE RELATIVE PRICES OF THE MERCHANDISE OR SERVICES SO

7 AS TO ALLOCATE A DISPROPORTIONATE SHARE OF THE TOTAL PRICE TO

8 NONCEMETERY MERCHANDISE OR SERVICES.

9 (3) ALL CONTRACTS SHALL ALLOW A CONTRACT BUYER TO REVOKE THE

10 CONTRACT WITHIN 10 BUSINESS DAYS AFTER ENTERING INTO THE CONTRACT

11 AND PROVIDE THAT, UPON REVOCATION, ALL FUNDS PAID TO THE CONTRACT

12 SELLER OR PROVIDER SHALL BE REFUNDED. THIS PROVISION SHALL BE

13 CONSPICUOUSLY SET FORTH IN THE CONTRACT AT A PLACE IMMEDIATELY

14 BEFORE THE PLACE WHERE THE CONTRACT BUYER IS TO SIGN HIS OR HER

15 NAME.

16 (4) A CONTRACT SHALL DISCLOSE THE CONTRACT BUYER'S RIGHT TO

17 CANCEL THE CONTRACT AND THE AMOUNT OF THE REFUND TO WHICH THE

18 CONTRACT BUYER IS ENTITLED UPON CANCELLATION. IF A COMMISSION IS

19 CHARGED PURSUANT TO SECTION 16A, THE AMOUNT OF THE COMMISSION AND

20 THE FACT THAT IT IS A CHARGE WHICH IS IN ADDITION TO THE CONTRACT

21 PRICE SHALL BE STATED IN THE PREPAID CEMETERY CONTRACT. IF A

22 PRINTED CONTRACT FORM IS USED, THE DISCLOSURES REQUIRED BY THIS

23 SUBSECTION SHALL BE STATED IN BOLD-FACED TYPE.

24 (5) THIS ACT DOES NOT AUTHORIZE A CONTRACT SELLER OR PRO-

25 VIDER TO PERFORM OR OFFER TO PERFORM SERVICES FOR WHICH A MORTU-

26 ARY SCIENCE LICENSE OR FUNERAL ESTABLISHMENT LICENSED IS REQUIRED

27 BY ARTICLE 18 OF THE OCCUPATIONAL CODE, 1980 PA 299, MCL 339.1801

05006'97 a *
25

1 TO 339.1811, UNLESS THAT PERSON HOLDS THE REQUIRED LICENSE OR

2 LICENSES. THIS ACT DOES NOT REQUIRE A CONTRACT SELLER OR A PRO-

3 VIDER TO POSSESS THIS LICENSE OR ANY OTHER LICENSE TO ENGAGE IN

4 AN ACTIVITY REGULATED UNDER THIS ACT FOR WHICH A LICENSE IS NOT

5 REQUIRED BY ANY OTHER ACT.

6 (6) A CONTRACT SHALL PROVIDE THAT THE CONTRACT BUYER MAY

7 DESIGNATE A NEW CONTRACT BENEFICIARY ANY TIME BEFORE THE DEATH OF

8 THE CONTRACT BENEFICIARY ORIGINALLY SPECIFIED IN THE CONTRACT BY

9 PROVIDING WRITTEN NOTICE TO THE PROVIDER DESIGNATED TO FURNISH

10 CEMETERY MERCHANDISE OR CEMETERY SERVICES PURSUANT TO THE

11 CONTRACT. NOTWITHSTANDING ANY OTHER PROVISIONS OF LAW, A CON-

12 TRACT BUYER MAY DESIGNATE THE ESTATE OF A DECEASED PERSON AS THE

13 CONTRACT BENEFICIARY OR PROVIDE THAT THE CONTRACT BENEFICIARY BE

14 THE FIRST OF 2 OR MORE DESIGNATED PERSONS TO DIE.

15 SEC. 16J. (1) A CONTRACT NOT IN WRITING IS VOIDABLE BY ANY

16 PARTY TO THE CONTRACT.

17 (2) A CONTRACT MADE IN VIOLATION OF THIS ACT OR WITH A

18 PERSON WHO IS NOT REGISTERED PURSUANT TO SECTION 16 IS VOIDABLE

19 BY THE CONTRACT BUYER OR BY A PERSONAL REPRESENTATIVE OF THE CON-

20 TRACT BENEFICIARY.

21 (3) THE PARTIES TO A CONTRACT MAY AGREE IN WRITING FOR THE

22 PAYMENT OF A RATE OF INTEREST NOT TO EXCEED 10.5% PER ANNUM WITH

23 THE FOLLOWING CONDITIONS:

24 (A) A CONTRACT MADE UNDER THIS ACT SHALL NOT PROVIDE FOR A

25 RATE OF INTEREST ADDED OR DEDUCTED IN ADVANCE. INTEREST SHALL BE

26 COMPUTED FROM TIME TO TIME ONLY ON THE BASIS OF UNPAID BALANCES.

05006'97 a *
26

1 (B) A CONTRACT MADE UNDER THIS ACT SHALL NOT PROVIDE THAT

2 THE RATE OF INTEREST INITIALLY EFFECTIVE MAY BE INCREASED FOR ANY

3 REASON.

4 (C) A CONTRACT SELLER SHALL NOT IMPOSE ANY FEES OR CHARGES

5 IN ADDITION TO INTEREST IN CONNECTION WITH THE FINANCING OF A

6 CONTRACT.

7 (4) A CONTRACT SELLER SHALL NOT OFFER FINANCING OR OFFER TO

8 OBTAIN FINANCING OF A CONTRACT UNDER TERMS AND CONDITIONS OTHER

9 THAN ALLOWED BY THIS SECTION.

10 (5) AN AGENT OR EMPLOYEE OF A REGISTRANT SHALL NOT ENGAGE IN

11 DOOR-TO-DOOR SALES OF CEMETERY MERCHANDISE OR CEMETERY SERVICES

12 WITHOUT PRIOR CONSENT.

13 (6) A PERSON THAT SELLS OR OFFERS TO SELL EITHER CEMETERY

14 MERCHANDISE OR SERVICES OR FUNERAL MERCHANDISE OR SERVICES AS

15 PART OF THE SAME TRANSACTION OR SERIES OF TRANSACTIONS SHALL DO

16 ALL OF THE FOLLOWING:

17 (A) REFRAIN FROM MANIPULATING THE RELATIVE PRICES OF THE

18 MERCHANDISE OR SERVICES SO AS TO ALLOCATE A DISPROPORTIONATE

19 SHARE OF THE TOTAL PRICE TO ANY OF THE MERCHANDISE OR SERVICES.

20 (B) CHARGE THE SAME PRICES TO ALL CUSTOMERS WITHOUT REGARD

21 TO WHETHER THE CUSTOMER DOES BUSINESS WITH BOTH A FUNERAL ESTAB-

22 LISHMENT AND AN AFFILIATED CEMETERY. HOWEVER, THE PRICE FOR

23 FUNERAL OR CEMETERY GOODS AND SERVICES MAY PROVIDE FOR A DISCOUNT

24 FOR GROUPINGS OF THOSE GOODS AND SERVICES WITHIN THE SEPARATE

25 CATEGORIES OF FUNERAL OR CEMETERY GOODS AND SERVICES ONLY.

26 DISCOUNTS FOR GOODS AND SERVICES SHALL NOT BE PROVIDED FOR BOTH

27 CEMETERY AND FUNERAL GOODS AND SERVICES.

05006'97 a *
27

1 (C) REFRAIN FROM BASING ANY BENEFIT, DISCOUNT, OR OTHER

2 PREFERENTIAL PRICE OR TREATMENT ON THE CONDITION THAT THE CUS-

3 TOMER AGREES TO DO BUSINESS WITH BOTH A FUNERAL ESTABLISHMENT AND

4 ITS AFFILIATED CEMETERY.

5 (7) A PERSON SELLING OR OFFERING TO SELL PRENEED CEMETERY

6 MERCHANDISE OR CEMETERY SERVICES SHALL NOT SELL OR OFFER TO SELL

7 MERCHANDISE OR SERVICES THAT ARE NOT DIRECTLY RELATED TO CEMETERY

8 MERCHANDISE OR CEMETERY SERVICES OR MERCHANDISE OR SERVICES OF

9 ANY KIND AT BELOW THEIR ACTUAL COST.

10 (8) THE COMMISSIONER OR A CONTRACT BENEFICIARY OR HIS OR HER

11 REPRESENTATIVE, IN ORDER TO FORCE COMPLIANCE WITH THIS ACT, MAY

12 BRING AN ACTION IN A CIRCUIT COURT IN ANY COUNTY IN WHICH THE

13 REGISTRANT OR ANY OTHER PERSON HAS SOLICITED OR SOLD PRENEED CON-

14 TRACTS, WHETHER OR NOT THAT PERSON HAS PURCHASED A PRENEED CON-

15 TRACT OR IS PERSONALLY AGGRIEVED BY A VIOLATION OF THIS ACT. THE

16 COURT MAY AWARD DAMAGES AND REASONABLE ATTORNEY FEES AND ISSUE

17 EQUITABLE ORDERS IN ACCORDANCE WITH THE MICHIGAN COURT RULES TO

18 RESTRAIN CONDUCT IN VIOLATION OF THIS ACT.

19 Sec. 18. (1) The commissioner may deny an application filed

20 under this act and refuse to issue a permit or registration, or

21 may suspend or revoke a permit or registration, or may reprimand,

22 place on probation, or take other disciplinary action against the

23 applicant if the commissioner's investigation reveals facts

24 which, with reference to the establishment of a cemetery, show

25 inappropriate physical plans; lack of community need; inadequate

26 experience, financial stability, or integrity to protect the

27 public welfare; or when the commissioner finds that the applicant

05006'97 a *
28

1 or its officers or general manager has done 1 or more of the

2 following:

3 (a) Made a false statement of a material fact in the

4 application.

5 (b) Not complied with this act.

6 (c) Been guilty of a fraudulent act in connection with sell-

7 ing or otherwise dealing in cemetery lots, burial rights, or

8 services of a type required to be registered under this act THE

9 PREPAID FUNERAL CONTRACT FUNDING ACT, 1986 PA 255, MCL 328.211 TO

10 328.235.

11 (d) Been guilty in the judgment of the commissioner of other

12 conduct whether of the same or different character than specified

13 in this act which constitutes dishonest and unfair dealing.

14 (E) VIOLATED ARTICLE 18 OF THE OCCUPATIONAL CODE, 1980

15 PA 299, MCL 339.1801 TO 339.1812.

16 (F) (e) Violated the terms of an assurance of discontinu-

17 ance entered into with the commissioner pursuant to section

18 9(2).

19 (G) FAILED TO PROPERLY TRUST FUNDS IN COMPLIANCE WITH THIS

20 ACT.

21 (H) (f) Adopted, enforced, or attempted to enforce a regu-

22 lation of the cemetery which prohibits the installation of a

23 grave memorial or burial vault unless the grave memorial or

24 burial vault was purchased from the cemetery. However, this

25 THIS subdivision shall DOES not prohibit a cemetery from adopt-

26 ing and enforcing consistent rules and regulations to be followed

27 by both the cemetery and outside vendors as to the quality, size,

05006'97 a *
29

1 shape, type, installation, and maintenance of the grave memorial

2 or burial vault.

3 (2) If the commissioner denies an application for a permit

4 or registration, or suspends or revokes an existing permit or

5 registration required by this act, the denial, revocation, or

6 suspension shall revoke the cemetery operation as to the sale or

7 assignment of burial rights, entombment rights, columbarium

8 rights, cemetery merchandise, or cemetery services after the date

9 of the suspension, revocation, or denial. The corporation shall

10 fulfill all contractual obligations and agreements entered into

11 before the date of the suspension, revocation, or denial, and

12 shall make required interments for the owners of burial rights,

13 entombment rights, or columbarium rights purchased before the

14 date of suspension, revocation, or denial.

15 Sec. 21. (1) A person, firm, partnership, association, or

16 corporation who violates this act is guilty of a misdemeanor. ,

17 and, if a natural person, IF THE VIOLATOR IS AN INDIVIDUAL, the

18 first offense shall be IS punishable by a fine of not more than

19 $100.00 or imprisonment for not more than 90 days , and a

20 second OR SUBSEQUENT offense shall be IS punishable by a fine

21 of not more than $500.00 or imprisonment for not more than 1

22 year, or both. If the violator is other than a natural

23 person BUT NOT AN INDIVIDUAL, the first offense shall be IS

24 punishable by a fine of not more than $100.00 and the second OR

25 SUBSEQUENT offense shall be IS punishable by a fine of not more

26 than $1,000.00.

05006'97 a *
30

1 (2) A PERSON FOUND GUILTY OF VIOLATING SECTION 18(G) IS

2 GUILTY OF A FELONY.

3 Enacting section 1. This amendatory act does not take

4 effect unless all of the following bills of the 89th Legislature

5 are enacted into law:

6 (a) Senate Bill No. ______ or House Bill No. ______ (request

7 no. 05006'97 *).

8 (b) Senate Bill No. ______ or House Bill No. ______ (request

9 no. 05007'97 *).

10 (c) Senate Bill No. ______ or House Bill No. ______ (request

11 no. 05214'97 **).

05006'97 a * Final page. LBO