Existing law, the Cemetery and Funeral Act, establishes the Cemetery and Funeral Bureau within the Department of Consumer Affairs and sets forth its powers and duties relating to the licensure and regulation of cemeteries, crematories, funeral establishments, and their personnel. Existing law specifies that the powers and duties of the bureau shall be subject to review by the appropriate policy committees of the Legislature as if the chapter is scheduled to repealed on January 1, 2025.

This bill would instead provide that the powers and duties of the bureau are subject to review as if the chapter is scheduled to be repealed on January 1, 2029.

Existing law authorizes a cemetery authority that maintains a cemetery to place its cemetery under endowment care and establish, maintain, and operate an endowment care fund. Existing law requires the bureau to conduct a study to obtain information to determine if the endowment care fund levels of each licensees cemetery are sufficient to cover the cost of future maintenance, as provided, and to report its findings and recommendations to the appropriate policy committees of the Legislature by January 1, 2029.

This bill would require each licensed cemetery authority to provide prescribed information to the bureau for purposes of the above-described report on or before January 1, 2028. The bill would repeal the provisions relating to the above-described study on January 1, 2033, and would require the bureau to submit the report pursuant to a specified law. The bill would require the bureau, on or before July 1, 2027, to convene a workgroup to discuss options for ensuring continued care, maintenance, and embellishment of abandoned cemeteries, and would require the bureau to submit a report to the Legislature, no later than January 1, 2028, summarizing discussions of the workgroup and any recommendations. The bill would repeal those provisions on January 1, 2029.

Existing law makes it a misdemeanor for any cemetery corporation to make any interments without a certificate of authority, and specifies requirements for an application for a certificate of authority. Existing law, under certain conditions, authorizes the bureau to take possession of the endowment care funds and the books, records, and accounts of a cemetery authority.

This bill would require the bureau, 90 days following the cancellation, surrender, or revocation of a certificate of authority, to take title of any endowment care funds of the cemetery authority, take possession of books, records, property, and assets, and act as conservator of the management of the endowment care funds in a prescribed manner, except as specified. The bill would require the bureau to appoint a bank or trust company, as specified, as sole trustee of the endowment care fund and would authorize the sum paid to the bank or trust company to exceed 5% of the net income derived from the endowment care fund, special care fund, or both. By prescribing various requirements related to the management of endowment care funds, the violation of which is a misdemeanor, this bill would impose a state-mandated local program.

This bill would make a technical change to a provision excluding specified entities from the act.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Cemetery and Funeral Act, establishes the Cemetery and Funeral Bureau within the Department of Consumer Affairs and sets forth its powers and duties relating to the licensure and regulation of cemeteries, crematories, funeral establishments, and their personnel. Existing law specifies that the powers and duties of the bureau shall be subject to review by the appropriate policy committees of the Legislature as if the chapter is scheduled to repealed on January 1, 2025.

This bill would instead provide that the powers and duties of the bureau are subject to review as if the chapter is scheduled to be repealed on January 1, 2029.

Existing law authorizes a cemetery authority that maintains a cemetery to place its cemetery under endowment care and establish, maintain, and operate an endowment care fund. Existing law requires the bureau to conduct a study to obtain information to determine if the endowment care fund levels of each licensees cemetery are sufficient to cover the cost of future maintenance, as provided, and to report its findings and recommendations to the appropriate policy committees of the Legislature by January 1, 2029.

This bill would require each licensed cemetery authority to provide prescribed information to the bureau for purposes of the above-described report on or before January 1, 2028. The bill would repeal the provisions relating to the above-described study on January 1, 2033, and would require the bureau to submit the report pursuant to a specified law. The bill would require the bureau, on or before July 1, 2027, to convene a workgroup to discuss options for ensuring continued care, maintenance, and embellishment of abandoned cemeteries, and would require the bureau to submit a report to the Legislature, no later than January 1, 2028, summarizing discussions of the workgroup and any recommendations. The bill would repeal those provisions on January 1, 2029.

Existing law makes it a misdemeanor for any cemetery corporation to make any interments without a certificate of authority, and specifies requirements for an application for a certificate of authority. Existing law, under certain conditions, authorizes the bureau to take possession of the endowment care funds and the books, records, and accounts of a cemetery authority.

This bill would require the bureau, 90 days following the cancellation, surrender, or revocation of a certificate of authority, to take title of any endowment care funds of the cemetery authority, take possession of books, records, property, and assets, and act as conservator of the management of the endowment care funds in a prescribed manner, except as specified. The bill would require the bureau to appoint a bank or trust company, as specified, as sole trustee of the endowment care fund and would authorize the sum paid to the bank or trust company to exceed 5% of the net income derived from the endowment care fund, special care fund, or both. By prescribing various requirements related to the management of endowment care funds, the violation of which is a misdemeanor, this bill would impose a state-mandated local program.

This bill would make a technical change to a provision excluding specified entities from the act.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Cemetery and Funeral Act, establishes the Cemetery and Funeral Bureau within the Department of Consumer Affairs and sets forth its powers and duties relating to the licensure and regulation of cemeteries, crematories, funeral establishments, and their personnel. Existing law specifies that the powers and duties of the bureau shall be subject to review by the appropriate policy committees of the Legislature as if the chapter is scheduled to repealed on January 1, 2025.

This bill would instead provide that the powers and duties of the bureau are subject to review as if the chapter is scheduled to be repealed on January 1, 2029.

Existing law authorizes a cemetery authority that maintains a cemetery to place its cemetery under endowment care and establish, maintain, and operate an endowment care fund. Existing law requires the bureau to conduct a study to obtain information to determine if the endowment care fund levels of each licensees cemetery are sufficient to cover the cost of future maintenance, as provided, and to report its findings and recommendations to the appropriate policy committees of the Legislature by January 1, 2029.

This bill would require each licensed cemetery authority to provide information to the bureau for purposes of the report on or before January 1, 2028. The bill would repeal the provisions relating to the above-described study on January 1, 2033, and would require the bureau to submit the report pursuant to a specified law. The bill would require the bureau, on or before July 1, 2027, to convene a workgroup to discuss options for ensuring continued care, maintenance, and embellishment of abandoned cemeteries, and would require the bureau to submit a report to the Legislature, no later than January 1, 2028, summarizing discussions of the workgroup and any recommendations. The bill would repeal those provisions on January 1, 2029.

Existing law makes it a misdemeanor for any cemetery corporation to make any interments without a certificate of authority, and specifies requirements for an application for a certificate of authority. Existing law, under certain conditions, authorizes the bureau to take possession of the endowment care funds and the books, records, and accounts of a cemetery authority.

This bill would require the bureau, 90 days following the cancellation, surrender, or revocation of a certificate of authority, to take title of any endowment care funds of the cemetery authority, take possession of books, records, property, and assets, and act as conservator of the management of the endowment care funds in a prescribed manner, except as specified. The bill would require the bureau to appoint a bank or trust company, as specified, as sole trustee of the endowment care fund and would authorize the sum paid to the bank or trust company to exceed 5% of the net income derived from the endowment care fund, special care fund, or both. By prescribing various requirements related to the management of endowment care funds, the violation of which is a misdemeanor, this bill would impose a state-mandated local program.

This bill would make a technical change to a provision excluding specified entities from the act.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Cemetery and Funeral Act, establishes the Cemetery and Funeral Bureau within the Department of Consumer Affairs and sets forth its powers and duties relating to the licensure and regulation of cemeteries, crematories, funeral establishments, and their personnel. Existing law specifies that the powers and duties of the bureau shall be subject to review by the appropriate policy committees of the Legislature as if the chapter is scheduled to repealed on January 1, 2025.

This bill would instead provide that the powers and duties of the bureau are subject to review as if the chapter is scheduled to be repealed on January 1, 2029.

Existing law authorizes a cemetery authority that maintains a cemetery to place its cemetery under endowment care and establish, maintain, and operate an endowment care fund. Existing law requires the bureau to conduct a study to obtain information to determine if the endowment care fund levels of each licensees cemetery are sufficient to cover the cost of future maintenance, as provided, and to report its findings and recommendations to the appropriate policy committees of the Legislature by January 1, 2029.

This bill would require each licensed cemetery authority to provide information to the bureau for purposes of the report on or before January 1, 2028. The bill would repeal the provisions relating to the above-described study on January 1, 2033, and would require the bureau to submit the report pursuant to a specified law. The bill would require the bureau, on or before July 1, 2027, to convene a workgroup to discuss options for ensuring continued care, maintenance, and embellishment of abandoned cemeteries, and would require the bureau to submit a report to the Legislature, no later than January 1, 2028, summarizing discussions of the workgroup and any recommendations. The bill would repeal those provisions on January 1, 2029.

Existing law makes it a misdemeanor for any cemetery corporation to make any interments without a certificate of authority, and specifies requirements for an application for a certificate of authority. Existing law, under certain conditions, authorizes the bureau to take possession of the endowment care funds and the books, records, and accounts of a cemetery authority.

The bill would require the bureau, 90 days following the cancellation, surrender, or revocation of a certificate of authority, to take title of any endowment care funds of the cemetery authority, take possession of books, records, property, and assets, and act as conservator of the management of the endowment care funds, funds in a prescribed manner, except as specified. By prescribing various requirements related to the management of endowment care funds, the violation of which is a misdemeanor, this bill would impose a state-mandated local program.

The bill would make a technical change to a provision excluding specified entities from the act.

Existing law, the Cemetery and Funeral Act, establishes the Cemetery and Funeral Bureau within the Department of Consumer Affairs and sets forth its powers and duties relating to the licensure and regulation of cemeteries, crematories, funeral establishments, and their personnel. Existing law authorizes specifies that the powers and duties of the bureau shall be subject to review by the appropriate policy committees of the Legislature as if the chapter is scheduled to repealed on January 1, 2025.

Existing law authorizes a cemetery authority that maintains a cemetery to place its cemetery under endowment care and establish, maintain, and operate an endowment care fund. Existing law requires the bureau to conduct a study to obtain information to determine if the endowment care fund levels of each licensees cemetery are sufficient to cover the cost of future maintenance, as provided, and to report its findings and recommendations to the appropriate policy committees of the Legislature by January 1, 2029.

This bill would require each licensed cemetery authority to provide information to the bureau for purposes of the report on or before January 1, 2028. The bill would repeal the provisions relating to the above-described study on January 1, 2033, and would require the bureau to submit the report pursuant to a specified law. The bill would require the bureau, on or before July 1, 2027, to convene a workgroup to discuss options for ensuring continued care, maintenance, and embellishment of abandoned cemeteries, and would require the bureau to submit a report to the Legislature, no later than January 1, 2028, summarizing discussions of the workgroup and any recommendations. The bill would repeal those provisions on January 1, 2029.

Existing law, the Cemetery and Funeral Act, establishes the Cemetery and Funeral Bureau within the Department of Consumer Affairs and sets forth its powers and duties relating to the licensure and regulation of cemeteries, crematories, funeral establishments, and their personnel. Existing law authorizes a cemetery authority that maintains a cemetery to place its cemetery under endowment care and establish, maintain, and operate an endowment care fund. Existing law requires the bureau to conduct a study to obtain information to determine if the endowment care fund levels of each licensees cemetery are sufficient to cover the cost of future maintenance, as provided, and to report its findings and recommendations to the appropriate policy committees of the Legislature by January 1, 2029.

This bill would repeal the provisions relating to the above-described study on January 1, 2033, and would require the bureau to submit the report pursuant to a specified law.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 3254

Author:(Berman)

As Amended Ver:August 15, 2024

Majority vote

SUMMARY

Extends the sunset date for the Cemetery and Funeral (Bureau) until January 1, 2029 and makes additional technical changes, statutory improvements, and policy reforms in response to issues raised during the Bureau's sunset review oversight process.

Senate Amendments

1. Require the Bureau's actions as conservator over the management of the endowment care to be consistent with provisions of the Health and Safety Code.
2. Require the Bureau to appoint as sole trustee of an endowment care fund an authorized bank or trust company and provide that the sum paid to the bank or trust company appointed by the Bureau may exceed 5 percent of the net income derived from the endowment care fund, special care fund, or both.

COMMENTS

Sunset review. In order to ensure that California's myriad professional boards and bureaus are meeting the state's public protection priorities, authorizing statutes for these regulatory bodies are subject to statutory dates of repeal, at which point the entity "sunsets" unless the date is extended by the Legislature. The sunset process provides a regular forum for discussion around the successes and challenges of various programs and the consideration of proposed changes to laws governing the regulation of professionals. Currently, the sunset review process applies to approximately three dozen different boards and bureaus under the Department of Consumer Affairs, as well as the Department of Real Estate and three nongovernmental nonprofit councils.

On a schedule averaging every four years, each entity is required to present a report to the Legislature's policy committees, which in return prepare a comprehensive background paper on the efficacy and efficiency of their licensing and enforcement programs. Both the Administration and regulated professional stakeholders actively engage in this process. Legislation is then subsequently introduced extending the repeal date for the entity along with any reforms identified during the sunset review process.

Cemetery and Funeral Bureau. The Bureau was established in 1995 when the previously distinct Cemetery Board and Board of Funeral Directors and Embalmers were merged into a consolidated program under the Department of Consumer Affairs (DCA). As a bureau under the DCA, the Bureau is charged with administering the Cemetery and Funeral Act. A voluntarily established Advisory Committee, comprised of representatives of both the industry and the public, assists the Bureau in engaging consumers and licensees in its regulatory activities.

The Bureau oversees 14 different professional categories within the so-called "death care" industry, with approximately 11,315 licensees currently active with the Bureau. The Bureau's licensing program includes funeral establishments and directors; embalmers and apprentice embalmers; cremated remains disposers, crematories, crematory managers, and hydrolysis facilities; cemetery managers, brokers, branches, and salespersons; and certain private, nonreligious cemeteries. Beginning in 2027, the Bureau will also license reduction facilities. The Bureau is additionally tasked with the fiduciary responsibility of overseeing more than three billion dollars in funds held and invested by funeral establishments and cemeteries, including endowment care funds and preneed trust funds.

Abandoned Cemeteries. Issue #8 in the sunset background paper discussed growing concerns regarding abandoned cemeteries and posed the question as to what steps could be taken to ensure that older cemeteries are appropriately and respectfully maintained by another entity after they have been abandoned. This topic had been discussed during prior sunset reviews, when the Committees cited the specific example of a cemetery in Southern California where grave markers were allowed to become overgrown with dirt and grass and minimum maintenance standards were not met. There continue to be concerns that issues regarding perpetual maintenance will grow more severe and prevalent.

There are two distinct drivers of the problem: older cemeteries have limited spaces remaining to sell and endowment funds are inadequate to perpetually maintain cemeteries that have since sold all available plots. As explained by the Bureau in its report to the Committees, the less income a licensed cemetery business produces through new sales, the more it has to rely on its endowment care fund for the care, maintenance, and embellishment of the cemetery grounds. Meanwhile, an Endowment Care Sufficiency Study published in 2017 found that at least 43 licensed cemeteries have an underfunded endowment care fund with limited spaces to sell. Because these cemeteries are private businesses, properties that no longer generate revenue become abandoned if they cannot be sold, or they are abandoned following disciplinary measures by the Bureau, including revocation of a license. The result is an unlicensed, abandoned cemetery where the resting places of the dead are not treated with dignity.

A recent example of the devastation this situation can cause is the cancelation of the license and subsequent abandonment of Lincoln Memorial Park Cemetery in Carson, California. In August 2023, the Bureau began receiving information from the public that the cemetery had closed its gates. Upon investigation, the Bureau confirmed that the cemetery was no longer being maintained by the cemetery manager and cemetery authority, who requested cancelation of their licenses. The community was devastated as public access for family members had been limited and there was no local entity to oversee new internments of loved ones who had passed away who had previously purchased a plot in the cemetery. Neither the City of Carson nor Los Angeles County were able to assist in providing ongoing care to the abandoned cemetery.

Currently, when a private cemetery that has not interred more than 10 human bodies in the preceding five years threatens or endangers the health, safety, comfort, or welfare of the public, statute allows (but does not require) a city or county to declare that cemetery abandoned. The abandoned cemetery is then declared a pioneer memorial park and is maintained by the city or county. This statute, however, only applied to abandoned cemeteries that never collected endowment care funds—in other words, cemeteries established prior to 1939.

The Act only provides for two options for maintenance by a private cemetery by an entity other than the licensee. One statute authorizes a court to appoint a temporary licensed cemetery manager to manage the property and serve prepaid internments, or the county if there is no appointed temporary manager. The Bureau states that typically when a cemetery is within city limits, a county will not utilize this section and defer to the city (as occurred with Lincoln Memorial Park Cemetery). Statute additionally allows a city or county to perform maintenance within a cemetery when its license has been revoked, suspended, or not renewed. This law only applies to maintenance necessary to protect the health and safety of the public. In other words, while dry weeds creating a fire hazard would be addressed, the law does not provide for cosmetic upkeep to grounds and embellishments, which while not a matter of safety are important for communities whose families are interred in the cemetery.

In all of the above cases, local governments are not required to take action following the abandonment of a cemetery, but are merely permitted to under certain circumstances. The Bureau pointed out in its sunset report that when a cemetery is proposed to be created, the local government in which it will be situated has to authorize and zone a parcel of land as cemetery property with approval to intern decedents. Local authorities are responsible for determining whether a piece of property within their communities will be dedicated as cemetery property, and local governments know that there is no guarantee a private cemetery business will remain active forever.

In its sunset report, the Bureau suggested that the Legislature consider amending current statute to vest the responsibility of perpetual care with the jurisdiction that authorized the underlying use upon abandonment of a cemetery. Such a mandate may create challenges with local governments who may argue that a lack of resources would not allow them to successfully assume responsibility for all private cemeteries within their boundaries. However, the importance of this issue necessitates a thorough discussion of all potential options. This bill would require the Bureau to convene a workgroup comprised of representatives from the cemetery industry, county government, and other interested stakeholders to discuss options for ensuring continued care, maintenance, and embellishment of abandoned cemeteries, including the possibility of requiring counties to assume responsibility for cemeteries located within their boundaries that become abandoned. The Bureau would report on the workgroup's discussions and recommendations no later than January 1, 2028 in advance of its next sunset review.

Endowment Care Sufficiency Study. Issue #9 in the Bureau's sunset background paper questioned whether private cemeteries be required to respond to the Bureau's requests for data relating to endowment care funds. Statute requires the Bureau to conduct a study to determine if the endowment care fund levels of each licensed cemetery are sufficient to cover the cost of future maintenance and to review the levels of endowment care funds. The Bureau is then required to submit its report to the Legislature by January 1, 2029.

The data collected by the Bureau includes the total size of each property including any undeveloped land, how many spaces (by type) have been sold, how many spaces are left to sell, and details about the history of the endowment care fund. This data is needed to make informed policy recommendations to the Legislature. The Bureau has raised concerns that without a mandate to require all licensed cemeteries to respond to the study, the Bureau's report will solely be based on the data received and may not accurately account for the proper level of endowment care funds. The Bureau requested the Legislature consider amending current statute to mandate reporting from all licensed cemeteries. This bill would grant the Bureau's request.

Conservatorship of Endowment Care Funds. Issue #10 in the Bureau's sunset background paper examined whether statute should expressly authorize the Bureau to conserve the endowment care fund of a cemetery authority that has voluntarily surrendered the fund to the Bureau, along with other clarifications. A licensed cemetery's endowment care fund is comprised of consumer deposits for each space sold within the cemetery, and the accumulated income generated on those deposits from investments. Investment decisions must be conservative and are limited under the Cemetery and Funeral Act. Only the accumulated income portion of the fund may be spent on the care, maintenance, and embellishment of the cemetery.

According to the Bureau, some cemeteries have voluntarily surrendered their endowment care funds to the Bureau to avoid the annual audit costs as they transition to fewer employees and limited public access hours. The Cemetery and Funeral Act authorizes Bureau oversight of an endowment care fund, including requirements regarding the number of days deposits must be made into the fund, proper and allowable investments, mandated annual independent audits of funds, and annual reporting to the Bureau. The Act also allows the Bureau to take possession of the fund and act as the conservator under certain conditions. However, the Act does not clearly identify that the Bureau shall conserve, and thus protect, the endowment care fund upon revocation or cancellation of a cemetery license or abandonment of a cemetery property.

The Bureau argued in its sunset report that a private cemetery that is no longer licensed due to the surrender or revocation of a license poses additional risks to the endowment care fund, ranging from it being used for items that are not related to the care and maintenance of the unlicensed cemetery to the fund being liquidated entirely leaving nothing for the care and maintenance of the cemetery for years to come. Once there is no longer a licensee, the cemetery is no longer subject to the Act; however, endowment care funds remain under the authority of the Bureau. The Bureau believes that without clarifying language within the Act, an unlicensed entity outside the Bureau's jurisdiction may take over the fund.

Specifically, the Bureau recommended that the Cemetery and Funeral Act be amended to 1) identify the entities allowed to hold endowment care funds (licensed cemetery authorities, the Bureau, and with Bureau approval, the city or county in which the cemetery is situated if it is transitioned to a public district cemetery or a pioneer cemetery); 2) provide that when a previously licensed cemetery becomes unlicensed due to abandonment, cancellation, surrender, or revocation of the license the Bureau shall conserve the fund; and 3) authorize the Bureau to conserve the endowment care fund when a cemetery authority voluntarily surrenders the fund to the Bureau. This bill would enact these provisions.

Continued Regulation. Issue #12 in the Bureau's sunset background paper discussed whether the licensing of the cemetery and funeral professions be continued and be regulated by the Bureau. The staff recommendation in the background paper concluded that the Bureau should be continued. This bill would extend the Bureau's sunset date by four years.

According to the Author

"This bill is the sunset review vehicle for the Cemetery and Funeral Bureau, authored by the Assembly Committee on Business and Professions. The bill extends the sunset date for the Bureau and enacts technical changes, statutory improvements, and policy reforms in response to issues raised during the Bureau's sunset review oversight process."

Arguments in Support

None on file.

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Senate Committee on Appropriations, approximately $6.88 million to support the continued operation of the Bureau; additional costs to the Bureau including one-time initial review and auditing workload of facilities entering conservatorship at a cost of approximately $11,500 per facility; ongoing workload to manage endowment care funds of facilities entering conservatorship at a cost of approximately $2,500 annually; and cost savings ranging from $8,400 to $16,800 per facility, as the Bureau would no longer need to seize endowment care funds through the Attorney General.

VOTES:

ASM BUSINESS AND PROFESSIONS: 17-0-1

YES: Berman, Flora, Alanis, Bains, Juan Carrillo, Chen, Dixon, Aguiar-Curry, Irwin, Jackson, Lowenthal, McKinnor, Stephanie Nguyen, Pellerin, Sanchez, Soria, Zbur

ABS, ABST OR NV: Low

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

ASSEMBLY FLOOR: 71-0-9

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Flora, Mike Fong, Vince Fong, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Calderon, Cervantes, Megan Dahle, Essayli, Friedman, Holden, Mathis, Joe Patterson, Luz Rivas

UPDATED

VERSION: August 15, 2024

CONSULTANT: Robert Sumner / B. & P. / (916) 319-3301 FN: 0004878

 THIRD READING  

Bill No: AB 3254

Author: Berman (D), et al.

Amended: 8/15/24 in Senate

Vote: 21

SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 13-0, 7/1/24

AYES: Ashby, Nguyen, Alvarado-Gil, Archuleta, Becker, Dodd, Eggman, Glazer, Menjivar, Niello, Roth, Smallwood-Cuevas, Wilk

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/15/24

AYES: Caballero, Jones, Ashby, Becker, Bradford, Seyarto, Wahab

ASSEMBLY FLOOR: 71-0, 5/22/24 - See last page for vote

SUBJECT: Endowment care cemeteries: reporting

SOURCE: Author

DIGEST:

This bill requires a cemetery authority licensed by the Cemetery and Funeral Bureau (Bureau) to provide information to the Bureau related to the licensee’s cemetery and endowment care funds, requires the Bureau to establish a work group to discuss abandoned cemeteries, grants the Bureau authority over endowment care funds for a cemetery authority licensee whose license is cancelled, revoked or suspended; and subjects the Bureau to Legislative review by January 1, 2029.

ANALYSIS:

Existing law:

1. Establishes the Bureau under the Department of Consumer Affairs for the licensure and regulation of cemeteries, funeral establishments, crematories, cemetery salespersons, hydrolysis facilities, brokers, managers, cremated remains disposers, and endowment care, as specified. (Business and Professions Code (BPC) § 7600 et seq.)
   
2. Exempts a religious corporation, church, religious society or denomination, as specified; a public cemetery; and any private or fraternal burial park not exceeding 10 acres established prior to September 19, 1939, from the Bureau’s oversight. (BPC § 7312.2)
   
3. Requires the Bureau to conduct a study to obtain information to determine if the endowment care fund levels of each licensee’s cemetery are sufficient to cover the cost of future maintenance and the Bureau is required to additionally review the levels of endowment care funds that have previously been reported by licensed cemeteries, and report the findings to the appropriate policy committees of the Legislature by January 1, 2029. (BPC § 7312.11)
   

This bill:

1. Requires each licensed cemetery authority to provide the following information to the Bureau on or before January 1, 2028, as part of the Bureau’s requirement to conduct an endowment care study:
   
   1. The year the cemetery was established;
      
   2. Total size of developed and undeveloped acres of the cemetery;
      
   3. The total acreage of the developed cemetery property that has been sold for interment, including preneed sales;
      
   4. The total acreage of land sold for internment that contains spaces for which endowment care fees have been collected;
      
   5. The total acreage of developed cemetery property remaining to be sold;
      
   6. The total acreage of undeveloped cemetery property remaining to be sold;
      
   7. The year the cemetery started collecting endowment care fees;
      
   8. The total number of spaces the cemetery has sold for interment, including preneed sales;
      
   9. Of the total number spaces the cemetery has sold for internment, the total number of spaces that have contributed to the endowment care funds of the cemetery;
      
   10. The number of interment spaces remaining to be sold in all undeveloped acreage, if known; and,
       
   11. The number of interment spaces remaining to be sold in all developed acreage.
       
2. Requires the Bureau, on or before January 1, 2027, to convene a workgroup comprised of representatives from the cemetery industry, county government, and other interested stakeholders to discuss options for ensuring continued care, maintenance, and embellishment of abandoned cemeteries, including the possibility of requiring counties to assume responsibility for cemeteries located within their boundaries that become abandoned.
   
3. Requires the Bureau to submit a report to the Legislature no later than January 1, 2028, summarizing the discussions of the workgroup, along with any recommendations.
   
4. Requires the Bureau to take title of any endowment care funds of a cemetery authority, 90-days following the cancellation, surrender, or revocation of a certificate of authority, and take possession of all necessary books, records, property, real and personal, and assets and act as conservator over the management of the endowment care funds, as specified.
   
5. Requires the Bureau to appoint as sole trustee of the endowment care fund, a bank or trust company, as authorized, to engage the in the trust business, and the sum paid to the appointed bank or trust company may exceed five percent of the net income derived from the endowment care fund, special care fund, or both, as specified.
   
6. States that 4) above is not applicable if the ownership of the cemetery is transferred in accordance with Health and Safety Code (HSC) § 8725.

Background

The Bureau licenses, regulates, and investigates complaints against California funeral establishments, funeral directors, embalmers, apprentice embalmers, cemetery brokers, cemetery salespersons, cremated remains disposers, crematories, crematory managers, cemetery brokers and privately-owned cemeteries. The Bureau does not have authority over cemeteries operated by religious organizations, cities, counties, or cemetery districts, and the military or Native American tribal governments. The Bureau has the oversight responsibility for both fiduciary and operational activities of its licensing population. The Bureau has statutory authority to enforce the licensing and practice acts in the BPC along with jurisdiction over specified provisions of the HSC dealing specifically with human remains, cemetery and crematory provisions. With respect to the financial aspect of the industry, the Bureau is responsible for the oversight and regulation of preneed funeral trust funds, cemetery endowment care trust funds, and cemetery special care trust funds. With respect to the sale of insurance policies used to fund preneed funeral arrangements, the Department of Insurance regulates the sales of such policies while the Bureau ensures compliance with price disclosures and contract requirements under the Bureau’s jurisdiction.

Endowment care funds are critical for ensuring that there is adequate funding for the long-term care and maintenance of cemeteries long after the last plot has been sold. AB 651 (Gipson, Chapter 442, Statutes of 2021) required the Bureau to once again conduct a study to obtain information on endowment care fund levels to determine if the fund levels are sufficient, and report its findings to the appropriate policy committees of the Legislature by January 1, 2029.

The Bureau conducted a similar study in 2017. The Bureau has raised concerns that without a mandate to require all licensed cemeteries to respond to the study, the Bureau’s report will be based on the data received, which may not accurately account for the proper level of endowment care funds if not all licensees participate. The Bureau requested in its 2024 Sunset Review Report that the Legislature consider amending current law to mandate reporting from all licensed cemeteries. As a result, this bill will require all licensed cemetery authorities to provide specific data to the Bureau about the cemetery including total acreage of developed and undeveloped areas, total interment spaces that have contributed to the endowment care fund, interment spaces remaining to be sold in developed and undeveloped acreage, if known, among other specifications.

The issue of abandoned of private cemeteries remains a concern. The 2024 staff background paper noted growing concerns regarding abandoned cemeteries and posed the question as to what steps could be taken to ensure that older cemeteries are appropriately and respectfully maintained by another entity after they have been abandoned.

In its 2024 Sunset Review Report, the Bureau suggested that the Legislature consider amending current statute to vest the responsibility of perpetual care with the jurisdiction that authorized the underlying use upon abandonment of a cemetery. Such a mandate may create challenges with local governments who may argue that a lack of resources would not allow them to successfully assume responsibility for all private cemeteries within their boundaries. However, the importance of this issue necessitates a thorough discussion of all potential options. This bill would require the Bureau to convene a workgroup comprised of representatives from the cemetery industry, county government, and other interested stakeholders to discuss options for ensuring continued care and maintenance of abandoned cemeteries, including the possibility of requiring counties to assume responsibility for cemeteries located within their boundaries that become abandoned. The Bureau would report on the workgroup’s discussions and recommendations no later than January 1, 2028 in advance of its next sunset review.

The sunset background paper examined whether statute should expressly authorize the Bureau to conserve the endowment care fund of a cemetery authority that has voluntarily surrendered the fund to the Bureau, along with other clarifications. A licensed cemetery’s endowment care fund is comprised of consumer deposits for each space sold within the cemetery, and the accumulated income generated on those deposits from investments. Investment decisions must be conservative and are limited under the Cemetery and Funeral Act. Only the accumulated income portion of the fund may be spent on the care, maintenance, and embellishment of the cemetery.

According to the Bureau, some cemeteries have voluntarily surrendered their endowment care funds to the Bureau to avoid the annual audit costs as they transition to fewer employees and limited public access hours. The Cemetery and Funeral Act authorizes Bureau oversight of an endowment care fund, including requirements regarding the number of days deposits must be made into the fund, proper and allowable investments, mandated annual independent audits of funds, and annual reporting to the Bureau. The Act also allows the Bureau to take possession of the fund and act as the conservator under certain conditions. However, the Act does not clearly identify that the Bureau shall conserve, and thus protect, the endowment care fund upon revoking or canceling a cemetery license or abandonment of a cemetery property.

Specifically, the Bureau recommended that the Act be amended to: (1) identify the entities allowed to hold endowment care funds (licensed cemetery authorities, the Bureau, and with Bureau approval, the city or county in which the cemetery is situated if it is transitioned to a public district cemetery or a pioneer cemetery); (2) provide that when a previously licensed cemetery becomes unlicensed due to abandonment, cancelation, surrender, or revocation of the license, the Bureau shall conserve the fund; and (3) authorize the Bureau to conserve the endowment care fund when a cemetery authority voluntarily surrenders the fund to the Bureau. This bill would enact these provisions.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Appropriations Committee:

The 2024-25 Budget provides approximately $6.88 million (Cemetery and Funeral Fund) and 28.5 positions to support the continued operation of the Bureau’s licensing and enforcement activities.

The Bureau reports:

• One-time initial review and auditing workload of facilities entering conservatorship at a cost of approximately $11,500 per facility.
• Ongoing workload to manage endowment care funds of facilities entering conservatorship at a cost of approximately $2,500 annually.
• Cost savings ranging from $8,400 to $16,800 per facility, as the Bureau would no longer need to seize endowment care funds through the Attorney General.
• Absorbable costs associated with the workgroup and development of the report.

SUPPORT: (Verified 8/15/24)

None received

OPPOSITION: (Verified 8/15/24)

None received

ASSEMBLY FLOOR: 71-0, 5/22/24

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Flora, Mike Fong, Vince Fong, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Calderon, Cervantes, Megan Dahle, Essayli, Friedman, Holden, Mathis, Joe Patterson, Luz Rivas

Prepared by: Elissa Silva / B., P. & E.D. / 916-651-4104

8/19/24 17:46:34

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

AB 3254 (Berman) - Endowment care cemeteries: reporting

Bill Summary:

AB 3254 is the sunset bill for the Cemetery and Funeral Bureau and makes changes recommended during the joint sunset review of the Bureau.

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on August 15, 2024

Fiscal Impact:

The 2024-25 Budget provides approximately $6.88 million (Cemetery and Funeral Fund) and 28.5 positions to support the continued operation of the Bureau’s licensing and enforcement activities.

The Bureau reports:

• One-time initial review and auditing workload of facilities entering conservatorship at a cost of approximately $11,500 per facility.
• Ongoing workload to manage endowment care funds of facilities entering conservatorship at a cost of approximately $2,500 annually.
• Cost savings ranging from $8,400 to $16,800 per facility, as the Bureau would no longer need to seize endowment care funds through the Attorney General.
• Absorbable costs associated with the workgroup and development of the report.

Author Amendments:

• Require the Bureau to appoint a bank or trust company as sole trustee of an endowment care fund, as specified.
• Authorize the sum paid to a bank or trust company appointed by the Bureau to exceed 5 percent of the net income derived from the endowment care fund, special care fund, or both.

-- END --

SENATE COMMITTEE ON

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

AB 3254 (Berman) - Endowment care cemeteries: reporting

Bill Summary:

AB 3254 is the sunset bill for the Cemetery and Funeral Bureau and makes changes recommended during the joint sunset review of the Bureau.

Fiscal Impact:

The 2024-25 Budget provides approximately $6.88 million (Cemetery and Funeral Fund) and 28.5 positions to support the continued operation of the Bureau’s licensing and enforcement activities.

The Bureau reports:

• One-time initial review and auditing workload of facilities entering conservatorship at a cost of approximately $11,500 per facility.
• Ongoing workload to manage endowment care funds of facilities entering conservatorship at a cost of approximately $2,500 annually.
• Cost savings ranging from $8,400 to $16,800 per facility, as the Bureau would no longer need to seize endowment care funds through the Attorney General.
• Absorbable costs associated with the workgroup and development of the report.

Background:

The Bureau licenses, regulates, and investigates complaints against California funeral establishments, funeral directors, embalmers, apprentice embalmers, cemetery brokers, cemetery salespersons, cremated remains disposers, crematories, crematory managers, cemetery brokers and privately-owned cemeteries. The Bureau does not have authority over cemeteries operated by religious organizations, cities, counties, or cemetery districts, and the military or Native American tribal governments. Currently, the Bureau licenses and regulates approximately 11,000 licensees.

The Bureau has the oversight responsibility for both fiduciary and operational activities of its licensing population. The Bureau has statutory authority to enforce the licensing and practice acts in the BPC along with jurisdiction over specified provisions of the HSC dealing specifically with human remains, cemetery and crematory provisions. With respect to the financial aspect of the industry, the Bureau is responsible for the oversight and regulation of preneed funeral trust funds, cemetery endowment care trust funds, and cemetery special care trust funds. With respect to the sale of insurance policies used to fund preneed funeral arrangements, the Department of Insurance regulates the sales of such policies while the Bureau ensures compliance with price disclosures and contract requirements under the Bureau’s jurisdiction.

Proposed Law:

• Requires each licensed cemetery authority to provide the following information to the Bureau on or before January 1, 2028, as part of the Bureau’s requirement to conduct an endowment care study:
  • The year the cemetery was established;
  • Total size of developed and undeveloped acres of the cemetery;
  • The total acreage of the developed cemetery property that has been sold for interment, including preneed sales;
  • The total acreage of land sold for internment that contains spaces for which endowment care fees have been collected;
  • The total acreage of developed cemetery property remaining to be sold;
  • The total acreage of undeveloped cemetery property remaining to be sold;
  • The year the cemetery started collecting endowment care fees;
  • The total number of spaces the cemetery has sold for interment, including preneed sales;
  • Of the total number spaces the cemetery has sold for internment, the total number of spaces that have contributed to the endowment care funds of the cemetery;
  • The number of interment spaces remaining to be sold in all undeveloped acreage, if known; and,
  • The number of interment spaces remaining to be sold in all developed acreage.
• Requires the Bureau, on or before January 1, 2027, to convene a workgroup comprised of representatives from the cemetery industry, county government, and other interested stakeholders to discuss options for ensuring continued care, maintenance, and embellishment of abandoned cemeteries, including the possibility of requiring counties to assume responsibility for cemeteries located within their boundaries that become abandoned.
• Requires the Bureau to submit a report to the Legislature no later than January 1, 2028, summarizing the discussions of the workgroup, along with any recommendations.
• Requires the Bureau to take title of any endowment care funds of a cemetery authority, 90-days following the cancellation, surrender, or revocation of a certificate of authority, and take possession of all necessary books, records, property, real and personal, and assets and act as conservator over the management of the endowment care funds, as specified.
  • States that this requirement is not applicable if the ownership of the cemetery is transferred in accordance with Health and Safety Code (HSC) § 8725.

Related Legislation:

SB 1452 (Ashby, 2024) is the California Architects Board and Landscape Architects Technical Committee sunset bill. SB 1452 is pending in the Assembly Appropriations Committee.

SB 1453 (Ashby, 2024) is the Dental Board of California sunset bill. SB 1453 is pending the Assembly Appropriations Committee.

SB 1454 (Ashby, 2024) is the Bureau of Security and Investigative Services sunset bill. SB 1454 is pending in the Assembly Appropriations Committee.

SB 1455 (Ashby, 2024) is the Contractors State License Board sunset bill. SB 1455 is pending in the Assembly Appropriations Committee.

SB 1456 (Ashby, 2024) is the California State Athletic Commission sunset bill. SB 1456 is pending in the Assembly Appropriations Committee.

AB 3251 (Berman, 2024) is the Board of Accountancy sunset bill. AB 3251 is pending in this committee.

AB 3252 (Berman, 2024) is the Court Reporters Board sunset bill. AB 3252 is pending in this committee.

AB 3253 (Berman, 2024) is the Board for Professional Engineers, Land Surveyors and Geologists sunset bill. AB 3253 is pending in this committee.

AB 3255 (Berman, 2024) is the Board of Vocational Nursing and Psychiatric Technicians sunset bill. AB 3255 is pending in the Assembly Appropriations Committee.

-- END --

SENATE COMMITTEE ON

BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT

Senator Angelique Ashby, Chair

2023 - 2024 Regular

Bill No: AB 3254 Hearing Date: July 1, 2024

Subject: Endowment care cemeteries: reporting

SUMMARY:

Requires a cemetery authority licensed by the Cemetery and Funeral Bureau (Bureau) to provide information to the Bureau related to the licensee’s cemetery and endowment care funds, requires the Bureau to establish a work group to discuss abandoned cemeteries, grants the Bureau authority over endowment care funds for a cemetery authority licensee whose license is cancelled, revoked or suspended; and subjects the Bureau to Legislative review by January 1, 2029.

Existing law:

1. Establishes the Cemetery and Funeral Bureau (Bureau) under the Department of Consumer Affairs (DCA) for the licensure and regulation of cemeteries, funeral establishments, crematories, cemetery salespersons, hydrolysis facilities, brokers, managers, cremated remains disposers, and endowment care, as specified. (Business and Professions Code (BPC) § 7600 et seq.)
   
2. States that the powers and duties of the Bureau is subject to review by the appropriate policy committees of the Legislature. (BPC § 7602)
   
3. Authorizes the Bureau to establish necessary rules and regulations for the administration and enforcement of the Cemetery and Funeral Act (Act), as specified. (BPC § 7606)
   
4. Exempts the following from the Bureau’s oversight:
   
5. a religious corporation, church, religious society or denomination, as specified;
   
6. a public cemetery; and,
   
7. any private or fraternal burial park not exceeding 10 acres established prior to September 19, 1939, as specified. (BPC § 7312.2)
   
8. Requires the Bureau to conduct a study to obtain information to determine if the endowment care fund levels of each licensee’s cemetery are sufficient to cover the cost of future maintenance and the Bureau is required to additionally review the levels of endowment care funds that have previously been reported by licensed cemeteries, and report the findings to the appropriate policy committees of the Legislature by January 1, 2029. (BPC § 7312.11)
   
9. Requires the Bureau to adopt regulations that establish minimum standards of maintenance for endowment care cemeteries under the jurisdiction of the Bureau, and the regulations must consider the differences in cemetery sizes, locations, topography, among others, along with the existing endowment funds. The Bureau’ standards may supersede or be higher than those specified in the Health and Safety Code (HSC)). (BPC § 7612.4)

This bill:

1. Requires each licensed cemetery authority to provide the following information to the Bureau on or before January 1, 2028, as part of the Bureau’s requirement to conduct an endowment care study:
   
2. The year the cemetery was established;
   
3. Total size of developed and undeveloped acres of the cemetery;
   
4. The total acreage of the developed cemetery property that has been sold for interment, including preneed sales;
   
5. The total acreage of land sold for internment that contains spaces for which endowment care fees have been collected;
   
6. The total acreage of developed cemetery property remaining to be sold;
   
7. The total acreage of undeveloped cemetery property remaining to be sold;
   
8. The year the cemetery started collecting endowment care fees;
   
9. The total number of spaces the cemetery has sold for interment, including preneed sales;
   
10. Of the total number spaces the cemetery has sold for internment, the total number of spaces that have contributed to the endowment care funds of the cemetery;
    
11. The number of interment spaces remaining to be sold in all undeveloped acreage, if known; and,
    
12. The number of interment spaces remaining to be sold in all developed acreage.
    
13. Requires the Bureau, on or before January 1, 2027, to convene a workgroup comprised of representatives from the cemetery industry, county government, and other interested stakeholders to discuss options for ensuring continued care, maintenance, and embellishment of abandoned cemeteries, including the possibility of requiring counties to assume responsibility for cemeteries located within their boundaries that become abandoned.
    
14. Requires the Bureau to submit a report to the Legislature no later than January 1, 2028, summarizing the discussions of the workgroup, along with any recommendations.
    
15. Requires the Bureau to take title of any endowment care funds of a cemetery authority, 90-days following the cancellation, surrender, or revocation of a certificate of authority, and take possession of all necessary books, records, property, real and personal, and assets and act as conservator over the management of the endowment care funds, as specified.
    
16. States that 4) above is not applicable if the ownership of the cemetery is transferred in accordance with Health and Safety Code (HSC) § 8725.
    

FISCAL EFFECT:

This bill is keyed fiscal by Legislative Counsel. According to the Assembly Committee on Appropriations, the bill will result in ongoing special fund costs of approximately $6.8 million annually for the continued operation of the Bureau. Operations of the Bureau are self-supporting with fee revenue. The Bureau projects a three-month reserve in fiscal year (FY) 2023-24, but expects this reserve to decrease significantly over the next several years. Despite its recent fee increases, the Bureau believes its ongoing workload revenue projections will lead to its fund becoming insolvent in FY 2028-29.

The Bureau indicates the increased workload associated with the workgroup and development of the report for the Legislature is currently absorbable within existing resources, but notes if the workload increases as the Bureau nears the implementation date, it may require additional resources.

The Bureau anticipates an increase in workload to conserve endowment care funds of cemeteries that no longer have authority, but indicates the impact is unquantifiable at this time and will depend on the number of cemeteries that choose to surrender, cancel, or revoke their certificate of authority. The Bureau estimates the workload at 120 hours per review or audit. The Bureau currently conserves approximately one endowment care fund every other year. The annual workload for a conserved endowment care fund is approximately 26 hours per year.

COMMENTS:

1. Purpose. The author is the sponsor of this bill. This bill is a result of the joint committee sunset review process.
2. Background.

Oversight Hearings and Sunset Review of Licensing Boards and Programs. In early 2024, the Senate Business, Professions and Economic Development Committee and the Assembly Committee on Business and Professions (Committees) began their comprehensive sunset review oversight of 10 regulatory entities, including the Bureau. The Committees conducted two oversight hearings in March of this year. This bill and the accompanying sunset bills aim to implement legislative changes as recommended by staff of the Committees, which are reflected in the Background Papers prepared by Committee staff for each agency and program reviewed this year, and the subsequent sunset review oversight hearings.

Background on the Cemetery and Funeral Bureau. The Bureau licenses, regulates, and investigates complaints against California funeral establishments, funeral directors, embalmers, apprentice embalmers, cemetery brokers, cemetery salespersons, cremated remains disposers, crematories, crematory managers, cemetery brokers and privately-owned cemeteries. The Bureau does not have authority over cemeteries operated by religious organizations, cities, counties, or cemetery districts, and the military or Native American tribal governments. Currently, the Bureau licenses and regulates approximately 11,000 licensees. The Bureau has the oversight responsibility for both fiduciary and operational activities of its licensing population. The Bureau has statutory authority to enforce the licensing and practice acts in the BPC along with jurisdiction over specified provisions of the HSC dealing specifically with human remains, cemetery and crematory provisions. With respect to the financial aspect of the industry, the Bureau is responsible for the oversight and regulation of preneed funeral trust funds, cemetery endowment care trust funds, and cemetery special care trust funds. With respect to the sale of insurance policies used to fund preneed funeral arrangements, the Department of Insurance regulates the sales of such policies while the Bureau ensures compliance with price disclosures and contract requirements under the Bureau’s jurisdiction.

a) Issue #9. Endowment Care Sufficiency Study.

Background. Endowment care funds are critical for ensuring that there is adequate funding for the long-term care and maintenance of cemeteries long after the last plot has been sold.

AB 651 (Gipson, Chapter 442, Statutes of 2021) required the Bureau to again conduct a study to obtain information on endowment care fund levels to determine if the fund levels are sufficient, and report its findings to the appropriate policy committees of the Legislature by January 1, 2029. The Bureau conducted a similar study in 2017. The Bureau has raised concerns that without a mandate to require all licensed cemeteries to respond to the study, the Bureau’s report will be based on the data received but may not accurately account for the proper level of endowment care funds. The Bureau requested in its 2024 Sunset Review Report that the Legislature consider amending current law to mandate reporting from all licensed cemeteries. As a result, this bill will require all licensed cemetery authorities to provide specific data to the Bureau about the cemetery including total acreage of developed and undeveloped areas, total interment spaces that have contributed to the endowment care fund, interment spaces remaining to be sold in developed and undeveloped acreage, if known, among other specifications. This bill does not change the 2029 due date to the appropriate policy committees of the Legislature.

b) Issue #8. Abandoned Cemeteries.

Background. Many of today’s bureau-regulated cemeteries were licensed before a time when endowment care funds were required. As noted in the Bureau’s 2017 endowment care study, of the 195 privately-owned cemeteries the Bureau licenses, 142 (73 percent) were established before the law requiring endowment care was enacted. Based on the language in the statute, these 142 cemeteries did not need to create endowment care trusts. Specifically, with a few exceptions, the law required any cemetery established on or after September 7, 1955, to be an endowment care cemetery, but did not grandfather-in cemeteries established before that date. Although the Bureau found the majority of cemeteries established endowment care trusts, funds were likely not sufficient to maintain cemeteries in perpetuity.

The issue of abandoned of private cemeteries remains a concern. The Bureau’s 2024 sunset background paper noted growing concerns regarding abandoned cemeteries and posed the question as to what steps could be taken to ensure that older cemeteries are appropriately and respectfully maintained by another entity after they have been abandoned.

There are two distinct drivers of the problem: older cemeteries have limited spaces remaining to sell and endowment funds are inadequate to perpetually maintain cemeteries that have since sold all available plots. As explained by the Bureau in its report to the Committees, the less income a licensed cemetery business produces through new sales, the more it has to rely on its endowment care fund for the care, and maintenance of the cemetery grounds. Because these cemeteries are private businesses, properties that no longer generate revenue become abandoned if they cannot be sold, or they are abandoned following disciplinary measures by the Bureau, including revocation of a license. The result is an unlicensed, abandoned cemetery where the resting places of the dead are not treated with dignity.

A recent example of the devastation this situation can cause is the cancelation of the license and subsequent abandonment of Lincoln Memorial Park Cemetery in Carson, California. In August 2023, the Bureau began receiving information from the public that the cemetery had closed its gates. Upon investigation, the Bureau confirmed that the cemetery was no longer being maintained by the cemetery manager and cemetery authority, who requested cancelation of their licenses. The community was devastated as public access for family members had been limited and there was no local entity to oversee new internments of loved ones who had passed away who had previously purchased a plot in the cemetery. Neither the City of Carson nor Los Angeles County were able to assist in providing ongoing care to the abandoned cemetery.

In its sunset report, the Bureau suggested that the Legislature consider amending current statute to vest the responsibility of perpetual care with the jurisdiction that authorized the underlying use upon abandonment of a cemetery. Such a mandate may create challenges with local governments who may argue that a lack of resources would not allow them to successfully assume responsibility for all private cemeteries within their boundaries. However, the importance of this issue necessitates a thorough discussion of all potential options. This bill would require the Bureau to convene a workgroup comprised of representatives from the cemetery industry, county government, and other interested stakeholders to discuss options for ensuring continued care and maintenance of abandoned cemeteries, including the possibility of requiring counties to assume responsibility for cemeteries located within their boundaries that become abandoned. The Bureau would report on the workgroup’s discussions and recommendations no later than January 1, 2028 in advance of its next sunset review.

c) Issue #10. Conservatorship of Endowment Care Funds.

Background. The Bureau’s sunset background paper examined whether statute should expressly authorize the Bureau to conserve the endowment care fund of a cemetery authority that has voluntarily surrendered the fund to the Bureau, along with other clarifications. A licensed cemetery’s endowment care fund is comprised of consumer deposits for each space sold within the cemetery, and the accumulated income generated on those deposits from investments. Investment decisions must be conservative and are limited under the Cemetery and Funeral Act. Only the accumulated income portion of the fund may be spent on the care, maintenance, and embellishment of the cemetery.

According to the Bureau, some cemeteries have voluntarily surrendered their endowment care funds to the Bureau to avoid the annual audit costs as they transition to fewer employees and limited public access hours. The Cemetery and Funeral Act authorizes Bureau oversight of an endowment care fund, including requirements regarding the number of days deposits must be made into the fund, proper and allowable investments, mandated annual independent audits of funds, and annual reporting to the Bureau. The Act also allows the Bureau to take possession of the fund and act as the conservator under certain conditions. However, the Act does not clearly identify that the Bureau shall conserve, and thus protect, the endowment care fund upon revoking or canceling a cemetery license or abandonment of a cemetery property.

Specifically, the Bureau recommended that the Act be amended to: 1) identify the entities allowed to hold endowment care funds (licensed cemetery authorities, the Bureau, and with Bureau approval, the city or county in which the cemetery is situated if it is transitioned to a public district cemetery or a pioneer cemetery); 2) provide that when a previously licensed cemetery becomes unlicensed due to abandonment, cancelation, surrender, or revocation of the license, the Bureau shall conserve the fund; and 3) authorize the Bureau to conserve the endowment care fund when a cemetery authority voluntarily surrenders the fund to the Bureau. This bill would enact these provisions.

d) Issue #12. Continued Regulation.

Background. The sunset background paper discussed whether the licensing of the cemetery and funeral professions be continued and be regulated by the Bureau. The staff recommendation in the background paper concluded that the Bureau should be continued, to be reviewed again on a future date to be determined. This bill would extend the Bureau’s sunset review date by an additional four years to January 1, 2029.

SUPPORT AND OPPOSITION:

Support:

None received

Opposition:

None received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 3254

Author:(Committee on Business and Professions)

As Amended Ver:April 16, 2024

Majority vote

SUMMARY

Extends the sunset date for the Cemetery and Funeral (Bureau) until January 1, 2029 and makes additional technical changes, statutory improvements, and policy reforms in response to issues raised during the Bureau's sunset review oversight process.

Major Provisions

1. Extends the sunset date for the Bureau until January 1, 2029.
2. Requires licensed cemeteries to provide specified information to the Bureau as part of the Bureau's endowment care sufficiency study.
3. Requires the Bureau to convene a workgroup comprised of representatives from the cemetery industry, county government, and other interested stakeholders to discuss options for ensuring continued care, maintenance, and embellishment of abandoned cemeteries, including the possibility of requiring counties to assume responsibility for cemeteries located within their boundaries that become abandoned.
4. Requires the workgroup to convene on or before July 1, 2027, and requires the Bureau to submit a report to the Legislature summarizing the discussions of the workgroup, along with any recommendations, no later than January 1, 2028.
5. Provides that 90 days following the cancellation, surrender, or revocation of a certificate of authority, the Bureau shall take title of any endowment care funds of that cemetery authority; shall take possession of all necessary books, records, property, real and personal, and assets; and shall act as conservator over the management of the endowment care funds.

COMMENTS

Sunset review. In order to ensure that California's myriad professional boards and bureaus are meeting the state's public protection priorities, authorizing statutes for these regulatory bodies are subject to statutory dates of repeal, at which point the entity "sunsets" unless the date is extended by the Legislature. The sunset process provides a regular forum for discussion around the successes and challenges of various programs and the consideration of proposed changes to laws governing the regulation of professionals. Currently, the sunset review process applies to approximately three dozen different boards and bureaus under the Department of Consumer Affairs, as well as the Department of Real Estate and three nongovernmental nonprofit councils.

On a schedule averaging every four years, each entity is required to present a report to the Legislature's policy committees, which in return prepare a comprehensive background paper on the efficacy and efficiency of their licensing and enforcement programs. Both the Administration and regulated professional stakeholders actively engage in this process. Legislation is then subsequently introduced extending the repeal date for the entity along with any reforms identified during the sunset review process.

Cemetery and Funeral Bureau. The Bureau was established in 1995 when the previously distinct Cemetery Board and Board of Funeral Directors and Embalmers were merged into a consolidated program under the Department of Consumer Affairs (DCA). As a bureau under the DCA, the Bureau is charged with administering the Cemetery and Funeral Act. A voluntarily established Advisory Committee, comprised of representatives of both the industry and the public, assists the Bureau in engaging consumers and licensees in its regulatory activities.

The Bureau oversees 14 different professional categories within the so-called "death care" industry, with approximately 11,315 licensees currently active with the Bureau. The Bureau's licensing program includes funeral establishments and directors; embalmers and apprentice embalmers; cremated remains disposers, crematories, crematory managers, and hydrolysis facilities; cemetery managers, brokers, branches, and salespersons; and certain private, nonreligious cemeteries. Beginning in 2027, the Bureau will also license reduction facilities. The Bureau is additionally tasked with the fiduciary responsibility of overseeing more than three billion dollars in funds held and invested by funeral establishments and cemeteries, including endowment care funds and preneed trust funds.

Abandoned Cemeteries. Issue #8 in the sunset background paper discussed growing concerns regarding abandoned cemeteries and posed the question as to what steps could be taken to ensure that older cemeteries are appropriately and respectfully maintained by another entity after they have been abandoned. This topic had been discussed during prior sunset reviews, when the Committees cited the specific example of a cemetery in Southern California where grave markers were allowed to become overgrown with dirt and grass and minimum maintenance standards were not met. There continue to be concerns that issues regarding perpetual maintenance will grow more severe and prevalent.

There are two distinct drivers of the problem: older cemeteries have limited spaces remaining to sell and endowment funds are inadequate to perpetually maintain cemeteries that have since sold all available plots. As explained by the Bureau in its report to the Committees, the less income a licensed cemetery business produces through new sales, the more it has to rely on its endowment care fund for the care, maintenance, and embellishment of the cemetery grounds. Meanwhile, an Endowment Care Sufficiency Study published in 2017 found that at least 43 licensed cemeteries have an underfunded endowment care fund with limited spaces to sell. Because these cemeteries are private businesses, properties that no longer generate revenue become abandoned if they cannot be sold, or they are abandoned following disciplinary measures by the Bureau, including revocation of a license. The result is an unlicensed, abandoned cemetery where the resting places of the dead are not treated with dignity.

A recent example of the devastation this situation can cause is the cancelation of the license and subsequent abandonment of Lincoln Memorial Park Cemetery in Carson, California. In August 2023, the Bureau began receiving information from the public that the cemetery had closed its gates. Upon investigation, the Bureau confirmed that the cemetery was no longer being maintained by the cemetery manager and cemetery authority, who requested cancelation of their licenses. The community was devastated as public access for family members had been limited and there was no local entity to oversee new internments of loved ones who had passed away who had previously purchased a plot in the cemetery. Neither the City of Carson nor Los Angeles County were able to assist in providing ongoing care to the abandoned cemetery.

Currently, when a private cemetery that has not interred more than 10 human bodies in the preceding five years threatens or endangers the health, safety, comfort, or welfare of the public, statute allows (but does not require) a city or county to declare that cemetery abandoned. The abandoned cemetery is then declared a pioneer memorial park and is maintained by the city or county. This statute, however, only applied to abandoned cemeteries that never collected endowment care funds—in other words, cemeteries established prior to 1939.

The Act only provides for two options for maintenance by a private cemetery by an entity other than the licensee. One statute authorizes a court to appoint a temporary licensed cemetery manager to manage the property and serve prepaid internments, or the county if there is no appointed temporary manager. The Bureau states that typically when a cemetery is within city limits, a county will not utilize this section and defer to the city (as occurred with Lincoln Memorial Park Cemetery). Statute additionally allows a city or county to perform maintenance within a cemetery when its license has been revoked, suspended, or not renewed. This law only applies to maintenance necessary to protect the health and safety of the public. In other words, while dry weeds creating a fire hazard would be addressed, the law does not provide for cosmetic upkeep to grounds and embellishments, which while not a matter of safety are important for communities whose families are interred in the cemetery.

In all of the above cases, local governments are not required to take action following the abandonment of a cemetery, but are merely permitted to under certain circumstances. The Bureau pointed out in its sunset report that when a cemetery is proposed to be created, the local government in which it will be situated has to authorize and zone a parcel of land as cemetery property with approval to intern decedents. Local authorities are responsible for determining whether a piece of property within their communities will be dedicated as cemetery property, and local governments know that there is no guarantee a private cemetery business will remain active forever.

In its sunset report, the Bureau suggested that the Legislature consider amending current statute to vest the responsibility of perpetual care with the jurisdiction that authorized the underlying use upon abandonment of a cemetery. Such a mandate may create challenges with local governments who may argue that a lack of resources would not allow them to successfully assume responsibility for all private cemeteries within their boundaries. However, the importance of this issue necessitates a thorough discussion of all potential options. This bill would require the Bureau to convene a workgroup comprised of representatives from the cemetery industry, county government, and other interested stakeholders to discuss options for ensuring continued care, maintenance, and embellishment of abandoned cemeteries, including the possibility of requiring counties to assume responsibility for cemeteries located within their boundaries that become abandoned. The Bureau would report on the workgroup’s discussions and recommendations no later than January 1, 2028 in advance of its next sunset review.

Endowment Care Sufficiency Study. Issue #9 in the Bureau's sunset background paper questioned whether private cemeteries be required to respond to the Bureau's requests for data relating to endowment care funds. Statute requires the Bureau to conduct a study to determine if the endowment care fund levels of each licensed cemetery are sufficient to cover the cost of future maintenance and to review the levels of endowment care funds. The Bureau is then required to submit its report to the Legislature by January 1, 2029.

The data collected by the Bureau includes the total size of each property including any undeveloped land, how many spaces (by type) have been sold, how many spaces are left to sell, and details about the history of the endowment care fund. This data is needed to make informed policy recommendations to the Legislature. The Bureau has raised concerns that without a mandate to require all licensed cemeteries to respond to the study, the Bureau's report will solely be based on the data received and may not accurately account for the proper level of endowment care funds. The Bureau requested the Legislature consider amending current statute to mandate reporting from all licensed cemeteries. This bill would grant the Bureau's request.

Conservatorship of Endowment Care Funds. Issue #10 in the Bureau's sunset background paper examined whether statute should expressly authorize the Bureau to conserve the endowment care fund of a cemetery authority that has voluntarily surrendered the fund to the Bureau, along with other clarifications. A licensed cemetery's endowment care fund is comprised of consumer deposits for each space sold within the cemetery, and the accumulated income generated on those deposits from investments. Investment decisions must be conservative and are limited under the Cemetery and Funeral Act. Only the accumulated income portion of the fund may be spent on the care, maintenance, and embellishment of the cemetery.

According to the Bureau, some cemeteries have voluntarily surrendered their endowment care funds to the Bureau to avoid the annual audit costs as they transition to fewer employees and limited public access hours. The Cemetery and Funeral Act authorizes Bureau oversight of an endowment care fund, including requirements regarding the number of days deposits must be made into the fund, proper and allowable investments, mandated annual independent audits of funds, and annual reporting to the Bureau. The Act also allows the Bureau to take possession of the fund and act as the conservator under certain conditions. However, the Act does not clearly identify that the Bureau shall conserve, and thus protect, the endowment care fund upon revocation or cancellation of a cemetery license or abandonment of a cemetery property.

The Bureau argued in its sunset report that a private cemetery that is no longer licensed due to the surrender or revocation of a license poses additional risks to the endowment care fund, ranging from it being used for items that are not related to the care and maintenance of the unlicensed cemetery to the fund being liquidated entirely leaving nothing for the care and maintenance of the cemetery for years to come. Once there is no longer a licensee, the cemetery is no longer subject to the Act; however, endowment care funds remain under the authority of the Bureau. The Bureau believes that without clarifying language within the Act, an unlicensed entity outside the Bureau's jurisdiction may take over the fund.

Specifically, the Bureau recommended that the Cemetery and Funeral Act be amended to 1) identify the entities allowed to hold endowment care funds (licensed cemetery authorities, the Bureau, and with Bureau approval, the city or county in which the cemetery is situated if it is transitioned to a public district cemetery or a pioneer cemetery); 2) provide that when a previously licensed cemetery becomes unlicensed due to abandonment, cancellation, surrender, or revocation of the license the Bureau shall conserve the fund; and 3) authorize the Bureau to conserve the endowment care fund when a cemetery authority voluntarily surrenders the fund to the Bureau. This bill would enact these provisions.

Continued Regulation. Issue #12 in the Bureau's sunset background paper discussed whether the licensing of the cemetery and funeral professions be continued and be regulated by the Bureau. The staff recommendation in the background paper concluded that the Bureau should be continued. This bill would extend the Bureau’s sunset date by four years.

According to the Author

"This bill is the sunset review vehicle for the Cemetery and Funeral Bureau, authored by the Assembly Committee on Business and Professions. The bill extends the sunset date for the Bureau and enacts technical changes, statutory improvements, and policy reforms in response to issues raised during the Bureau’s sunset review oversight process."

Arguments in Support

None on file.

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Committee on Appropriations, ongoing special fund costs of approximately $6.8 million annually for the continued operation of the Bureau; increased workload associated with the workgroup and development of the report for the Legislature is currently absorbable within existing resources; unquantifiable increased workload to conserve endowment care funds of cemeteries that no longer have authority.

VOTES

ASM BUSINESS AND PROFESSIONS: 17-0-1

YES: Berman, Flora, Alanis, Bains, Juan Carrillo, Chen, Dixon, Aguiar-Curry, Irwin, Jackson, Lowenthal, McKinnor, Stephanie Nguyen, Pellerin, Sanchez, Soria, Zbur

ABS, ABST OR NV: Low

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

UPDATED

VERSION: April 16, 2024

CONSULTANT: Robert Sumner / B. & P. / (916) 319-3301 FN: 0003015

Date of Hearing: May 8, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 3254

Author:(Committee on Business and Professions) – As Amended Ver:April 16, 2024

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill extends the sunset date for the Cemetery and Funeral Bureau (Bureau), within the Department of Consumer Affairs (DCA), by four years until January 1, 2029, and makes additional technical changes, statutory improvements, and policy reforms in response to issues raised during the Bureau’s sunset review oversight process.

Specifically, this bill:

1. Extends the authority for the Bureau to license and regulate professions established under the Cemetery and Funeral Act, to January 1, 2029.
2. Requires licensed cemeteries to provide specified information to the Bureau as part of the Bureau’s endowment care sufficiency study.
3. Requires the Bureau to convene a workgroup comprised of representatives from the cemetery industry, county government, and other interested stakeholders to discuss options for ensuring continued care, maintenance, and embellishment of abandoned cemeteries, including the possibility of requiring counties to assume responsibility for cemeteries located within their boundaries that become abandoned.
4. Requires the workgroup to convene on or before July 1, 2027, and requires the Bureau to submit a report to the Legislature summarizing the discussions of the workgroup, along with any recommendations, by January 1, 2028.
5. Requires the Bureau, 90 days following the cancellation, surrender, or revocation of a certificate of authority, to take title of endowment care funds of that cemetery authority, take possession of all necessary books, records, property, real and personal, and assets, and to act as conservator over the management of the endowment care funds.
6. Makes additional technical and clarifying changes to the Cemetery and Funeral Act.

FISCAL EFFECT:

1. Ongoing special fund costs of approximately $6.8 million annually (Cemetery and Funeral Fund) for the continued operation of the Bureau. Operations of the Bureau are self-supporting with fee revenue. The Bureau projects a three-month reserve in fiscal year (FY) 2023-24, but expects this reserve to decrease significantly over the next several years. Despite its recent fee increases, the Bureau believes its ongoing workload revenue projections will lead to its fund becoming insolvent in FY 2028-29.
2. The Bureau indicates the increased workload associated with the workgroup and development of the report for the Legislature is currently absorbable within existing resources, but notes if the workload increases as the Bureau nears the implementation date, it may require additional resources.
3. The Bureau anticipates an increase in workload to conserve endowment care funds of cemeteries that no longer have authority, but indicates the impact is unquantifiable at this time and will depend on the number of cemeteries that choose to surrender, cancel, or revoke their certificate of authority. The Bureau estimates the workload at 120 hours per review or audit. The Bureau currently conserves approximately one endowment care fund every other year. The annual workload for a conserved endowment care fund is approximately 26 hours per year.

COMMENTS:

1. Purpose. This bill is authored by the Assembly Committee on Business and Professions as part of its review of the authorities and activities of the boards and bureaus under DCA. Existing law sunsets the operation of the Bureau on January 1, 2025. The issues raised concerning the Bureau in the Assembly Committee on Business and Professions' staff background paper and during its sunset review hearing in March of this year are addressed in this bill. Any remaining issues will to be addressed as the bill moves forward.
2. Background. The Bureau licenses and regulates approximately 11,300 licensees in 14 different licensing categories, including funeral establishments (about 1,089 currently licensed locations), funeral directors, embalmers, apprentice embalmers, cemetery brokers, cemetery salespersons, cremated remains disposers, crematories, crematory managers, cemetery managers, cemetery brokers and certain privately-owned cemeteries in the state. Beginning in 2027, the Bureau will also license reduction facilities. The Bureau enforces the licensing and practices dealing specifically with human remains, cemetery and crematory provisions; and regulates preneed funeral trust fund price disclosure compliance, cemetery endowment care trust funds and cemetery special care trust funds.
3. Related Legislation. This bill is one of several sunset review bills authored by the chairs of the Senate and Assembly business and professions committees to review and extend the operation of licensing boards and bureaus within DCA. Specifically, AB 3251 – Board of Accountancy, AB 3252 – Court Reporters Board of California (Board), AB 3253 – The Board for Professional Engineers, Land Surveyors and Geologists, and AB 3255 – the Board of Vocational Nursing and Psychiatric Technicians of the State of California, are pending in this committee.
4. Prior Legislation. SB 606 (Glazer, Chapter 375, Statutes of 2019), extended the sunset date for the Bureau and made additional reforms identified through the sunset review process.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing:

ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS

Marc Berman, Chair

ABPCA Bill Id:AB 3254

Author:(Committee on Business and Professions) – As Amended Ver:April 16, 2024

SUBJECT: Endowment care cemeteries: reporting.

SUMMARY: Extends the sunset date for the Cemetery and Funeral (Bureau) until January 1, 2029 and makes additional technical changes, statutory improvements, and policy reforms in response to issues raised during the Bureau’s sunset review oversight process.

EXISTING LAW:

1. Establishes the Cemetery and Funeral Act, which provides for the licensing and oversight of 14 professional categories within the death care industry. (Business and Professions Code (BPC) §§ 7600 et seq.)
2. Establishes the Bureau within the Department of Consumer Affairs to administer and enforce the Cemetery and Funeral Act, subject to review by the Legislature as though it were scheduled to be repealed on January 1, 2025. (BPC § 7602)
3. Exempts religiously-affiliated cemeteries, public cemeteries, and private or fraternal burial parks not exceeding 10 acres in area and established prior to September 19, 1939 from the Bureau’s licensing requirements. (BPC § 7612.2)
4. Requires the Bureau to conduct a study to obtain information to determine if the endowment care fund levels of each licensee’s cemetery are sufficient to cover the cost of future maintenance. (BPC § 7612.11)
5. Declares that upon finding by a court that a cemetery manager of a private cemetery has ceased to perform their duties due to a lapse, suspension, surrender, abandonment or revocation of their license, the court shall appoint a temporary manager to manage the cemetery property. (BPC § 7653.9)
6. Authorizes a cemetery authority to place its cemetery under endowment care and establish, maintain, and operate an endowment care fund. (Health and Safety Code (HSC) § 8725)
7. Requires the principal of all funds for endowment care to be invested and the income only to be used for the care, maintenance, and embellishment of the cemetery in accordance with the provisions of law and the resolutions, bylaws, rules, and regulations or other actions or instruments of the cemetery authority and for no other purpose. (HSC § 8726)
8. Establishes minimum amounts which an endowment care cemetery must deposit into its endowment care fund at the time of, or not later than, completion of the initial sale of internment space in the cemetery. (HSC § 8738)
9. Authorizes a city or county that determines an abandoned cemetery threatens or endangers the health, safety, comfort, or welfare of the public to dedicate such abandoned cemetery as a pioneer memorial park and take over maintenance of the cemetery. (HSC §§ 8825 – 8829)

THIS BILL:

1. Extends the sunset date for the Bureau until January 1, 2029.
2. Requires licensed cemeteries to provide specified information to the Bureau as part of the Bureau’s endowment care sufficiency study.
3. Requires the Bureau to convene a workgroup comprised of representatives from the cemetery industry, county government, and other interested stakeholders to discuss options for ensuring continued care, maintenance, and embellishment of abandoned cemeteries, including the possibility of requiring counties to assume responsibility for cemeteries located within their boundaries that become abandoned.
4. Requires the workgroup to convene on or before July 1, 2027, and requires the Bureau to submit a report to the Legislature summarizing the discussions of the workgroup, along with any recommendations, no later than January 1, 2028.
5. Provides that 90 days following the cancellation, surrender, or revocation of a certificate of authority, the Bureau shall take title of any endowment care funds of that cemetery authority; shall take possession of all necessary books, records, property, real and personal, and assets; and shall act as conservator over the management of the endowment care funds.
6. Makes additional technical and clarifying changes to the Cemetery and Funeral Act.

FISCAL EFFECT: Unknown; this bill is keyed fiscal by the Legislative Counsel.

COMMENTS:

Purpose. This bill is the sunset review vehicle for the Cemetery and Funeral Bureau, authored by the Assembly Committee on Business and Professions. The bill extends the sunset date for the Bureau and enacts technical changes, statutory improvements, and policy reforms in response to issues raised during the Bureau’s sunset review oversight process.

Background.

Sunset review. In order to ensure that California’s myriad professional boards and bureaus are meeting the state’s public protection priorities, authorizing statutes for these regulatory bodies are subject to statutory dates of repeal, at which point the entity “sunsets” unless the date is extended by the Legislature. The sunset process provides a regular forum for discussion around the successes and challenges of various programs and the consideration of proposed changes to laws governing the regulation of professionals. Currently, the sunset review process applies to approximately three dozen different boards and bureaus under the Department of Consumer Affairs, as well as the Department of Real Estate and three nongovernmental nonprofit councils.

On a schedule averaging every four years, each entity is required to present a report to the Legislature’s policy committees, which in return prepare a comprehensive background paper on the efficacy and efficiency of their licensing and enforcement programs. Both the Administration and regulated professional stakeholders actively engage in this process. Legislation is then subsequently introduced extending the repeal date for the entity along with any reforms identified during the sunset review process.

Cemetery and Funeral Bureau. The Bureau was established in 1995 when the previously distinct Cemetery Board and Board of Funeral Directors and Embalmers were merged into a consolidated program under the Department of Consumer Affairs (DCA). As a bureau under the DCA, the Bureau is charged with administering and enforcing the Cemetery and Funeral Act. A voluntarily established Advisory Committee, comprised of representatives of both the industry and the public, assists the Bureau in engaging consumers and licensees in its regulatory activities.

The Bureau oversees 14 different professional categories within the so-called “death care” industry, with approximately 11,315 licensees currently active with the Bureau. The Bureau’s licensing program includes funeral establishments and directors; embalmers and apprentice embalmers; cremated remains disposers, crematories, crematory managers, and hydrolysis facilities; cemetery managers, brokers, branches, and salespersons; and certain private, nonreligious cemeteries. Beginning in 2027, the Bureau will also license reduction facilities. The Bureau is additionally tasked with the fiduciary responsibility of overseeing more than three billion dollars in funds held and invested by funeral establishments and cemeteries, including endowment care funds and preneed trust funds.

The Bureau plays a vital role in protecting consumers from fraud, negligence, and other misconduct in the course of obtaining cemetery and funeral services, a time when consumers are frequently grieving and vulnerable to dishonest dealings. In its enforcement of the Cemetery and Funeral Act, the Bureau is authorized to inspect any premises in which the business of a funeral establishment, reduction facility, cemetery, or crematory is conducted; where embalming is practiced; or where human remains are stored. The Bureau is then empowered to take disciplinary action against a licensee for violations of the law. The Cemetery and Funeral Act declares that protection of the public shall be the Bureau’s highest priority.

Not every aspect of the cemetery industry is overseen by the Bureau. For example, the Bureau does not have jurisdiction over cemeteries operated by religious institutions, nor does the Cemetery and Funeral Act apply to public cemeteries. Private cemeteries under ten acres that were established prior to 1939 also do not need to comply with the Act unless they collect an endowment care fund. For all other cemeteries, the Bureau is entrusted with ensuring that the remains of loved ones are treated with dignity and respect in perpetuity.

Issues Raised during Sunset Review. The background paper for the Bureau’s sunset review oversight hearing^[1] contained a total of 12 issues and recommendations, each of which is eligible to result in statutory changes enacted through the Bureau’s sunset bill.

Abandoned Cemeteries. Issue #8 in the sunset background paper discussed growing concerns regarding abandoned cemeteries and posed the question as to what steps could be taken to ensure that older cemeteries are appropriately and respectfully maintained by another entity after they have been abandoned. This topic had been discussed during prior sunset reviews, when the Committees cited the specific example of a cemetery in Southern California where grave markers were allowed to become overgrown with dirt and grass and minimum maintenance standards were not met. There continue to be concerns that issues regarding perpetual maintenance will grow more severe and prevalent.

There are two distinct drivers of the problem: older cemeteries have limited spaces remaining to sell and endowment funds are inadequate to perpetually maintain cemeteries that have since sold all available plots. As explained by the Bureau in its report to the Committees, the less income a licensed cemetery business produces through new sales, the more it has to rely on its endowment care fund for the care, maintenance, and embellishment of the cemetery grounds. Meanwhile, an Endowment Care Sufficiency Study published in 2017 found that at least 43 licensed cemeteries have an underfunded endowment care fund with limited spaces to sell. Because these cemeteries are private businesses, properties that no longer generate revenue become abandoned if they cannot be sold, or they are abandoned following disciplinary measures by the Bureau, including revocation of a license. The result is an unlicensed, abandoned cemetery where the resting places of the dead are not treated with dignity.

A recent example of the devastation this situation can cause is the cancelation of the license and subsequent abandonment of Lincoln Memorial Park Cemetery in Carson, California. In August 2023, the Bureau began receiving information from the public that the cemetery had closed its gates. Upon investigation, the Bureau confirmed that the cemetery was no longer being maintained by the cemetery manager and cemetery authority, who requested cancelation of their licenses. The community was devastated as public access for family members had been limited and there was no local entity to oversee new internments of loved ones who had passed away who had previously purchased a plot in the cemetery. Neither the City of Carson nor Los Angeles County were able to assist in providing ongoing care to the abandoned cemetery.

Currently, when a private cemetery that has not interred more than 10 human bodies in the preceding five years threatens or endangers the health, safety, comfort, or welfare of the public, statute allows (but does not require) a city or county to declare that cemetery abandoned. The abandoned cemetery is then declared a pioneer memorial park and is maintained by the city or county. This statute, however, only applied to abandoned cemeteries that never collected endowment care funds—in other words, cemeteries established prior to 1939.

The Act only provides for two options for maintenance by a private cemetery by an entity other than the licensee. One statute authorizes a court to appoint a temporary licensed cemetery manager to manage the property and serve prepaid internments, or the county if there is no appointed temporary manager. The Bureau states that typically when a cemetery is within city limits, a county will not utilize this section and defer to the city (as occurred with Lincoln Memorial Park Cemetery). Statute additionally allows a city or county to perform maintenance within a cemetery when its license has been revoked, suspended, or not renewed. This law only applies to maintenance necessary to protect the health and safety of the public. In other words, while dry weeds creating a fire hazard would be addressed, the law does not provide for cosmetic upkeep to grounds and embellishments, which while not a matter of safety are important for communities whose families are interred in the cemetery.

In all of the above cases, local governments are not required to take action following the abandonment of a cemetery, but are merely permitted to under certain circumstances. The Bureau points out that when a cemetery is proposed to be created, the local government in which it will be situated has to authorize and zone a parcel of land as cemetery property with approval to intern decedents. Local authorities are responsible for determining whether a piece of property within their communities will be dedicated as cemetery property, and local governments know that there is no guarantee a private cemetery business will remain active forever.

In its sunset report, the Bureau suggested that the Legislature consider amending current statute to vest the responsibility of perpetual care with the jurisdiction that authorized the underlying use upon abandonment of a cemetery. Such a mandate may create challenges with local governments who may argue that a lack of resources would not allow them to successfully assume responsibility for all private cemeteries within their boundaries. However, the importance of this issue necessitates a thorough discussion of all potential options. This bill would require the Bureau to convene a workgroup comprised of representatives from the cemetery industry, county government, and other interested stakeholders to discuss options for ensuring continued care, maintenance, and embellishment of abandoned cemeteries, including the possibility of requiring counties to assume responsibility for cemeteries located within their boundaries that become abandoned. The Bureau would report on the workgroup’s discussions and recommendations no later than January 1, 2028 in advance of its next sunset review.

Endowment Care Sufficiency Study. Issue #9 in the Bureau’s sunset background paper questioned whether private cemeteries be required to respond to the Bureau’s requests for data relating to endowment care funds. Statute requires the Bureau to conduct a study to determine if the endowment care fund levels of each licensed cemetery are sufficient to cover the cost of future maintenance and to review the levels of endowment care funds. The Bureau is then required to submit its report to the Legislature by January 1, 2029.

The data collected by the Bureau includes the total size of each property including any undeveloped land, how many spaces (by type) have been sold, how many spaces are left to sell, and details about the history of the endowment care fund. This data is needed to make informed policy recommendations to the Legislature. The Bureau has raised concerns that without a mandate to require all licensed cemeteries to respond to the study, the Bureau’s report will solely be based on the data received and may not accurately account for the proper level of endowment care funds. The Bureau requested the Legislature consider amending current statute to mandate reporting from all licensed cemeteries. This bill would grant the Bureau’s request.

Conservatorship of Endowment Care Funds. Issue #10 in the Bureau’s sunset background paper examined whether statute should expressly authorize the Bureau to conserve the endowment care fund of a cemetery authority that has voluntarily surrendered the fund to the Bureau, along with other clarifications. A licensed cemetery’s endowment care fund is comprised of consumer deposits for each space sold within the cemetery, and the accumulated income generated on those deposits from investments. Investment decisions must be conservative and are limited under the Cemetery and Funeral Act. Only the accumulated income portion of the fund may be spent on the care, maintenance, and embellishment of the cemetery.

According to the Bureau, some cemeteries have voluntarily surrendered their endowment care funds to the Bureau to avoid the annual audit costs as they transition to fewer employees and limited public access hours. The Cemetery and Funeral Act authorizes Bureau oversight of an endowment care fund, including requirements regarding the number of days deposits must be made into the fund, proper and allowable investments, mandated annual independent audits of funds, and annual reporting to the Bureau. The Act also allows the Bureau to take possession of the fund and act as the conservator under certain conditions. However, the Act does not clearly identify that the Bureau shall conserve, and thus protect, the endowment care fund upon revocation or cancellation of a cemetery license or abandonment of a cemetery property.

The Bureau argued in its sunset report that a private cemetery that is no longer licensed due to the surrender or revocation of a license poses additional risks to the endowment care fund, ranging from it being used for items that are not related to the care and maintenance of the unlicensed cemetery to the fund being liquidated entirely leaving nothing for the care and maintenance of the cemetery for years to come. Once there is no longer a licensee, the cemetery is no longer subject to the Act; however, endowment care funds remain under the authority of the Bureau. The Bureau believes that without clarifying language within the Act, an unlicensed entity outside the Bureau’s jurisdiction may take over the fund.

Specifically, the Bureau recommended that the Cemetery and Funeral Act be amended to 1) identify the entities allowed to hold endowment care funds (licensed cemetery authorities, the Bureau, and with Bureau approval, the city or county in which the cemetery is situated if it is transitioned to a public district cemetery or a pioneer cemetery); 2) provide that when a previously licensed cemetery becomes unlicensed due to abandonment, cancellation, surrender, or revocation of the license the Bureau shall conserve the fund; and 3) authorize the Bureau to conserve the endowment care fund when a cemetery authority voluntarily surrenders the fund to the Bureau. This bill would enact these provisions.

Continued Regulation. Issue #12 in the Bureau’s sunset background paper discussed whether the licensing of the cemetery and funeral professions be continued and be regulated by the Bureau. The staff recommendation in the background paper concluded that the Bureau should be continued, to be reviewed again on a future date to be determined. This bill would extend the Bureau’s sunset date by an additional four years.

Current Related Legislation.

AB 3251 (Committee on Business and Professions) is the sunset bill for the California Board of Accountancy. This bill is pending in this committee.

AB 3252 (Committee on Business and Professions) is the sunset bill for the Court Reporters Board. This bill is pending in this committee.

AB 3253 (Committee on Business and Professions) is the sunset bill for the Board for Professional Engineers, Land Surveyors, and Geologists. This bill is pending in this committee.

AB 3255 (Committee on Business and Professions) is the sunset bill for the Board of Vocational Nursing and Psychiatric Technicians of the State of California. This bill is pending in this committee.

SB 1452 (Ashby) is the sunset bill for the California Architects Board and the Landscape Architects Technical Committee. This bill is pending in the Senate Committee on Judiciary.

SB 1453 (Ashby) is the sunset bill for the Dental Board of California. This bill is pending in the Senate Committee on Business, Professions, and Economic Development.

SB 1454 (Ashby) is the sunset bill for the Bureau of Security and Investigative Services. This bill is pending in the Senate Committee on Judiciary.

SB 1455 (Ashby) is the sunset bill for the Contractors’ State License Board. This bill is pending in the Senate Committee on Business, Professions, and Economic Development.

Prior Related Legislation.

SB 606 (Glazer, Chapter 375, Statutes of 2019) extended the sunset date for the Bureau and made additional reforms identified through the sunset review process.

REGISTERED SUPPORT:

None on file.

REGISTERED OPPOSITION:

None on file.

Analysis Prepared by: Robert Sumner / B. & P. / (916) 319-3301

1. https://abp.assembly.ca.gov/media/1172 ↑