HB3486 EngrossedLRB100 07813 SMS 17880 b

1    AN ACT concerning business.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Funeral or Burial Funds Act is
5amended by changing Sections 1 and 1a and by adding Section 1c
6as follows:
 
7    (225 ILCS 45/1)  (from Ch. 111 1/2, par. 73.101)
8    Sec. 1. Payment under pre-need contract. Except as
9otherwise provided in this Section, all sales proceeds paid to
10any person, partnership, association or corporation with
11respect to merchandise or services covered by this Act, upon
12any agreement or contract, or any series or combination of
13agreements or contracts, which has for a purpose the furnishing
14or performance of funeral services, or the furnishing or
15delivery of any personal property, merchandise, or services of
16any nature in connection with the final disposition of a dead
17human body, including, but not limited to, outer burial
18containers, urns, combination casket-vault units, caskets and
19clothing, for future use at a time determinable by the death of
20the person or persons whose body or bodies are to be so
21disposed of, shall be held to be trust funds, and shall be
22placed in trust in accordance with Sections 1b and 2, or shall
23be used to purchase life insurance or annuities in accordance

 

 

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1with Section 2a. The person, partnership, association or
2corporation receiving said payments under a pre-need contract
3is hereby declared to be a trustee thereof until deposits of
4funds are made in accordance with Section 1b or 2a of this Act.
5    This Section applies only to pre-need contracts entered
6into prior to the effective date of this amendatory Act of the
7100th General Assembly.
8    Nothing in this Act shall be construed to prohibit the
9inclusion of outer burial containers in sales contracts under
10the Illinois Pre-Need Cemetery Sales Act.
11(Source: P.A. 96-879, eff. 2-2-10.)
 
12    (225 ILCS 45/1a)  (from Ch. 111 1/2, par. 73.101a)
13    Sec. 1a. For the purposes of this Act, the following terms
14shall have the meanings specified, unless the context clearly
15requires another meaning:
16    "Beneficiary" means the person specified in the pre-need
17contract upon whose death funeral services or merchandise shall
18be provided or delivered.
19    "Licensee" means a seller of a pre-need contract who has
20been licensed by the Comptroller under this Act.
21    "Outer burial container" means any container made of
22concrete, steel, wood, fiberglass or similar material, used
23solely at the interment site, and designed and used exclusively
24to surround or enclose a separate casket and to support the
25earth above such casket, commonly known as a burial vault,

 

 

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1grave box or grave liner, but not including a lawn crypt as
2defined in the Illinois Pre-need Cemetery Sales Act.
3    "Parent company" means a corporation owning more than 12
4cemeteries or funeral homes in more than one state.
5    "Person" means any person, partnership, association,
6corporation, or other entity.
7    "Pre-need contract" means any agreement or contract, or any
8series or combination of agreements or contracts, whether
9funded by trust deposits or life insurance policies or
10annuities, which has for a purpose the furnishing or
11performance of funeral services or the furnishing or delivery
12of any personal property, merchandise, or services of any
13nature in connection with the final disposition of a dead human
14body. Nothing in this Act is intended to regulate the content
15of a life insurance policy or a tax-deferred annuity.
16    "Provider" means a person who is obligated for furnishing
17or performing funeral services or the furnishing or delivery of
18any personal property, merchandise, or services of any nature
19in connection with the final disposition of a dead human body.
20    "Purchaser" means the person who originally paid the money
21under or in connection with a pre-need contract.
22    "Sales proceeds" means the entire amount paid to a seller,
23exclusive of sales taxes paid by the seller, finance charges
24paid by the purchaser, and credit life, accident or disability
25insurance premiums, upon any agreement or contract, or series
26or combination of agreements or contracts, for the purpose of

 

 

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1performing funeral services or furnishing personal property,
2merchandise, or services of any nature in connection with the
3final disposition of a dead human body, including, but not
4limited to, the retail price paid for such services and
5personal property and merchandise.
6    "Purchase price" means sales proceeds less finance charges
7on retail installment contracts.
8    "Seller" means a the person, licensed as a funeral director
9or a funeral director and embalmer under the Funeral Directors
10and Embalmers Licensing Code, who sells or offers to sell the
11pre-need contract to a purchaser, whether funded by a trust
12agreement, life insurance policy, or tax-deferred annuity, or
13other means agreed to by the purchaser and seller in the
14pre-need contract.
15    "Trustee" means a person authorized to hold funds under
16this Act.
17(Source: P.A. 92-419, eff. 1-1-02.)
 
18    (225 ILCS 45/1c new)
19    Sec. 1c. Disclosures; contract requirements. Before a
20seller and purchaser enter into a pre-need contract for funeral
21services or merchandise, the seller must disclose and fully
22explain what financial plans are offered by the seller and the
23funeral establishment.
24    If a pre-need contract includes the sale of funeral
25services and merchandise: (1) the seller must be a funeral

 

 

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1director licensed under the Funeral Directors and Embalmers
2Licensing Code who is employed at the time of the sale of the
3contract by the funeral establishment through which the funeral
4services and merchandise will be provided, (2) the contract
5must be filled out by a funeral director licensed under the
6Funeral Directors and Embalmers Licensing Code, and (3) the
7contract may only be executed by a funeral director licensed
8under the Funeral Directors and Embalmers Licensing Code.
 
9    Section 10. The Illinois Pre-Need Cemetery Sales Act is
10amended by changing Sections 4, 15, and 17 and by adding
11Section 15.5 as follows:
 
12    (815 ILCS 390/4)  (from Ch. 21, par. 204)
13    Sec. 4. Definitions. As used in this Act, the following
14terms shall have the meaning specified:
15    (A) "Pre-need sales contract" or "Pre-need sales" means any
16agreement or contract or series or combination of agreements or
17contracts which have for a purpose the sale of cemetery
18merchandise, cemetery services or undeveloped interment,
19entombment or inurnment spaces where the terms of such sale
20require payment or payments to be made at a currently
21determinable time and where the merchandise, services or
22completed spaces are to be provided more than 120 days
23following the initial payment on the account. An agreement or
24contract for or a private sale of a casket, urn, floral

 

 

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1arrangement, memorial, marker, or monument shall not be deemed
2a "pre-need sales contract" or a "pre-need sale" if the casket,
3urn, floral arrangement, memorial, marker, or monument is
4delivered within 180 days following initial payment on the
5account and work thereon commences a reasonably short time
6after initial payment on the account.
7    (B) "Delivery" occurs when:
8        (1) Physical possession of the merchandise is
9    transferred or the easement for burial rights in a
10    completed space is executed, delivered and transferred to
11    the buyer; or
12        (2) Following authorization by a purchaser under a
13    pre-need sales contract, title to the merchandise has been
14    transferred to the buyer and the merchandise has been paid
15    for and is in the possession of the seller who has placed
16    it, until needed, at the site of its ultimate use; or
17        (3) Following authorization by a purchaser under a
18    pre-need sales contract, the merchandise has been
19    permanently identified with the name of the buyer or the
20    beneficiary and delivered to a licensed and bonded
21    warehouse and both title to the merchandise and a warehouse
22    receipt have been delivered to the purchaser or beneficiary
23    and a copy of the warehouse receipt has been delivered to
24    the licensee for retention in its files; except that in the
25    case of outer burial containers, the use of a licensed and
26    bonded warehouse as set forth in this paragraph shall not

 

 

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1    constitute delivery for purposes of this Act. Nothing
2    herein shall prevent a seller from perfecting a security
3    interest in accordance with the Uniform Commercial Code on
4    any merchandise covered under this Act.
5        All warehouse facilities to which sellers deliver
6    merchandise pursuant to this Act shall:
7            (i) be either located in the State of Illinois or
8        qualify as a foreign warehouse facility as defined
9        herein;
10            (ii) submit to the Comptroller not less than
11        annually, by March 1 of each year, a report of all
12        cemetery merchandise stored by each licensee under
13        this Act which is in storage on the date of the report;
14            (iii) permit the Comptroller or his designee at any
15        time to examine stored merchandise and to examine any
16        documents pertaining thereto;
17            (iv) submit evidence satisfactory to the
18        Comptroller that all merchandise stored by said
19        warehouse for licensees under this Act is insured for
20        casualty or other loss normally assumed by a bailee for
21        hire;
22            (v) demonstrate to the Comptroller that the
23        warehouse has procured and is maintaining a
24        performance bond in the form, content and amount
25        sufficient to unconditionally guarantee to the
26        purchaser or beneficiary the prompt shipment of the

 

 

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1        cemetery merchandise.
2    (C) "Cemetery merchandise" means items of personal
3property normally sold by a cemetery authority not covered
4under the Illinois Funeral or Burial Funds Act, including but
5not limited to:
6        (1) memorials,
7        (2) markers,
8        (3) monuments,
9        (4) foundations, and
10        (5) outer burial containers.
11    (D) "Undeveloped interment, entombment or inurnment
12spaces" or "undeveloped spaces" means any space to be used for
13the reception of human remains that is not completely and
14totally constructed at the time of initial payment therefor in
15a:
16        (1) lawn crypt,
17        (2) mausoleum,
18        (3) garden crypt,
19        (4) columbarium, or
20        (5) cemetery section.
21    (E) "Cemetery services" means those services customarily
22performed by cemetery or crematory personnel in connection with
23the interment, entombment, inurnment or cremation of a dead
24human body.
25    (F) "Cemetery section" means a grouping of spaces intended
26to be developed simultaneously for the purpose of interring

 

 

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1human remains.
2    (G) "Columbarium" means an arrangement of niches that may
3be an entire building, a complete room, a series of special
4indoor alcoves, a bank along a corridor or part of an outdoor
5garden setting that is constructed of permanent material such
6as bronze, marble, brick, stone or concrete for the inurnment
7of human remains.
8    (H) "Lawn crypt" means a permanent underground crypt
9usually constructed of reinforced concrete or similar material
10installed in multiple units for the entombment of human
11remains.
12    (I) "Mausoleum" or "garden crypt" means a grouping of
13spaces constructed of reinforced concrete or similar material
14constructed or assembled above the ground for entombing human
15remains.
16    (J) "Memorials, markers and monuments" means the object
17usually comprised of a permanent material such as granite or
18bronze used to identify and memorialize the deceased.
19    (K) "Foundations" means those items used to affix or
20support a memorial or monument to the ground in connection with
21the installation of a memorial, marker or monument.
22    (L) "Person" means an individual, corporation,
23partnership, joint venture, business trust, voluntary
24organization or any other form of entity.
25    (M) "Seller" means any person selling or offering for sale
26cemetery merchandise, cemetery services or undeveloped

 

 

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1interment, entombment, or inurnment spaces in accordance with a
2pre-need sales contract. The seller must be licensed in the
3State of Illinois by the Department of Financial and
4Professional Regulation and shall attend at least 24 hours of
5continuing education in every 2-year period. The continuing
6education shall be approved by the Department of Financial and
7Professional Regulation.
8    (N) "Religious cemetery" means a cemetery owned, operated,
9controlled or managed by any recognized church, religious
10society, association or denomination or by any cemetery
11authority or any corporation administering, or through which is
12administered, the temporalities of any recognized church,
13religious society, association or denomination.
14    (O) "Municipal cemetery" means a cemetery owned, operated,
15controlled or managed by any city, village, incorporated town,
16township, county or other municipal corporation, political
17subdivision, or instrumentality thereof authorized by law to
18own, operate or manage a cemetery. "Municipal cemetery" also
19includes a cemetery placed in receivership pursuant to this Act
20while such cemetery is in receivership.
21    (O-1) "Outer burial container" means a container made of
22concrete, steel, wood, fiberglass, or similar material, used
23solely at the interment site, and designed and used exclusively
24to surround or enclose a separate casket and to support the
25earth above such casket, commonly known as a burial vault,
26grave box, or grave liner, but not including a lawn crypt.

 

 

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1    (P) "Sales price" means the gross amount paid by a
2purchaser on a pre-need sales contract for cemetery
3merchandise, cemetery services or undeveloped interment,
4entombment or inurnment spaces, excluding sales taxes, credit
5life insurance premiums, finance charges and Cemetery Care Act
6contributions.
7    (Q) (Blank).
8    (R) "Provider" means a person who is responsible for
9performing cemetery services or furnishing cemetery
10merchandise, interment spaces, entombment spaces, or inurnment
11spaces under a pre-need sales contract.
12    (S) "Purchaser" or "buyer" means the person who originally
13paid the money under or in connection with a pre-need sales
14contract.
15    (T) "Parent company" means a corporation owning more than
1612 cemeteries or funeral homes in more than one state.
17    (U) "Foreign warehouse facility" means a warehouse
18facility now or hereafter located in any state or territory of
19the United States, including the District of Columbia, other
20than the State of Illinois.
21    A foreign warehouse facility shall be deemed to have
22appointed the Comptroller to be its true and lawful attorney
23upon whom may be served all legal process in any action or
24proceeding against it relating to or growing out of this Act,
25and the acceptance of the delivery of stored merchandise under
26this Act shall be signification of its agreement that any such

 

 

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1process against it which is so served, shall be of the same
2legal force and validity as though served upon it personally.
3    Service of such process shall be made by delivering to and
4leaving with the Comptroller, or any agent having charge of the
5Comptroller's Department of Cemetery and Burial Trusts, a copy
6of such process and such service shall be sufficient service
7upon such foreign warehouse facility if notice of such service
8and a copy of the process are, within 10 days thereafter, sent
9by registered mail by the plaintiff to the foreign warehouse
10facility at its principal office and the plaintiff's affidavit
11of compliance herewith is appended to the summons. The
12Comptroller shall keep a record of all process served upon him
13under this Section and shall record therein the time of such
14service.
15(Source: P.A. 96-879, eff. 2-2-10.)
 
16    (815 ILCS 390/15)  (from Ch. 21, par. 215)
17    Sec. 15. (a) Whenever a seller receives anything of value
18under a pre-need sales contract, the person receiving such
19value shall deposit 50% of all proceeds received into one or
20more trust funds maintained pursuant to this Section, except
21that, in the case of proceeds received for the purchase of
22outer burial containers, 85% of the proceeds shall be deposited
23into one or more trust funds. Such deposits shall be made until
24the amount deposited in trust equals 50% of the sales price of
25the cemetery merchandise, cemetery services and undeveloped

 

 

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1spaces included in such contract, except that, in the case of
2deposits for outer burial containers, deposits shall be made
3until the amount deposited in trust equals 85% of the sales
4price. In the event an installment contract is factored,
5discounted or sold to a third party, the seller shall deposit
6an amount equal to 50% of the sales price of the installment
7contract, except that, for the portion of the contract
8attributable to the sale of outer burial containers, the seller
9shall deposit an amount equal to 85% of the sales price.
10Proceeds required to be deposited in trust which are
11attributable to cemetery merchandise and cemetery services
12shall be held in a "Cemetery Merchandise Trust Fund". Proceeds
13required to be deposited in trust which are attributable to the
14sale of undeveloped interment, entombment or inurnment spaces
15shall be held in a "Pre-construction Trust Fund". If
16merchandise is delivered for storage in a bonded warehouse, as
17authorized herein, and payment of transportation or other
18charges totaling more than $20 will be required in order to
19secure delivery to the site of ultimate use, upon such delivery
20to the warehouse the seller shall deposit to the trust fund the
21full amount of the actual or estimated transportation charge.
22Transportation charges which have been prepaid by the seller
23shall not be deposited to trust funds maintained pursuant to
24this Section. As used in this Section, "all proceeds" means the
25entire amount paid by a purchaser in connection with a pre-need
26sales contract, including finance charges and Cemetery Care Act

 

 

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1contributions, but excluding sales taxes and credit life
2insurance premiums.
3    (b) The seller shall act as trustee of all amounts received
4for cemetery merchandise, services, or undeveloped spaces
5until those amounts have been deposited into the trust fund.
6All trust deposits required by this Act shall be made within 30
7days following the end of the month of receipt. The seller must
8retain a corporate fiduciary as an independent trustee for any
9amount of trust funds. Upon 30 days' prior written notice from
10the seller to the Comptroller, the seller may change the
11trustee of the trust fund. Failure to provide the Comptroller
12with timely prior notice is an intentional violation of this
13Act.
14    (c) A trust established under this Act must be maintained
15with a corporate fiduciary as defined in Section 1-5.05 of the
16Corporate Fiduciary Act or with a foreign corporate fiduciary
17recognized by Article IV of the Corporate Fiduciary Act.
18    (d) Funds deposited in the trust account shall be
19identified in the records of the seller by the name of the
20purchaser. Nothing shall prevent the trustee from commingling
21the deposits in any such trust fund for purposes of the
22management thereof and the investment of funds therein as
23provided in the "Common Trust Fund Act", approved June 24,
241949, as amended. In addition, multiple trust funds maintained
25pursuant to this Act may be commingled or commingled with other
26funeral or burial related trust funds, provided that all record

 

 

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1keeping requirements imposed by or pursuant to law are met.
2    (e) In lieu of a pre-construction trust fund, a seller of
3undeveloped interment, entombment or inurnment spaces may
4obtain and file with the Comptroller a performance bond in an
5amount at least equal to 50% of the sales price of the
6undeveloped spaces or the estimated cost of completing
7construction, whichever is greater. The bond shall be
8conditioned on the satisfactory construction and completion of
9the undeveloped spaces as required in Section 19 of this Act.
10    Each bond obtained under this Section shall have as surety
11thereon a corporate surety company incorporated under the laws
12of the United States, or a State, the District of Columbia or a
13territory or possession of the United States. Each such
14corporate surety company must be authorized to provide
15performance bonds as required by this Section, have paid-up
16capital of at least $250,000 in cash or its equivalent and be
17able to carry out its contracts. Each pre-need seller must
18provide to the Comptroller, for each corporate surety company
19such seller utilizes, a statement of assets and liabilities of
20the corporate surety company sworn to by the president and
21secretary of the corporation by January 1 of each year.
22    The Comptroller shall prohibit pre-need sellers from doing
23new business with a corporate surety company if the company is
24insolvent or is in violation of this Section. In addition the
25Comptroller may direct a pre-need seller to reinstate a
26pre-construction trust fund upon the Comptroller's

 

 

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1determination that the corporate surety company no longer is
2sufficient security.
3    All performance bonds issued pursuant to this Section must
4be irrevocable during the statutory term for completing
5construction specified in Section 19 of this Act, unless
6terminated sooner by the completion of construction.
7    (f) Whenever any pre-need contract shall be entered into
8and include 1) items of cemetery merchandise and cemetery
9services, and 2) rights to interment, inurnment or entombment
10in completed spaces without allocation of the gross sale price
11among the items sold, the application of payments received
12under the contract shall be allocated, first to the right to
13interment, inurnment or entombment, second to items of cemetery
14merchandise and cemetery services, unless some other
15allocation is clearly provided in the contract.
16    (g) Any person engaging in pre-need sales who enters into a
17combination sale which involves the sale of items covered by a
18trust or performance bond requirement and any item not covered
19by any entrustment or bond requirement, shall be prohibited
20from increasing the gross sales price of those items not
21requiring entrustment with the purpose of allocating a lesser
22gross sales price to items which require a trust deposit or a
23performance bond.
24    (h) This Section applies only to pre-need sales entered
25into prior to the effective date of this amendatory Act of the
26100th General Assembly.

 

 

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1(Source: P.A. 96-879, eff. 2-2-10; 97-593, eff. 8-26-11.)
 
2    (815 ILCS 390/15.5 new)
3    Sec. 15.5. Disclosures; options. Beginning on the
4effective date of this amendatory Act of the 100th General
5Assembly, before a seller and purchaser enter into a pre-need
6sales contract, the seller must disclose and fully explain that
7the purchaser may fund the pre-need sales contract by choosing
8one of the following options:
9        (1) depositing funds into a local banking institution
10    of the purchaser's choosing;
11        (2) depositing funds into a trust program operated by
12    the seller; or
13        (3) other means offered by the seller.
14    The purchaser shall then choose one of those options.
 
15    (815 ILCS 390/17)  (from Ch. 21, par. 217)
16    Sec. 17. (a) The principal and undistributed income of the
17trust created pursuant to Section 15 or Section 15.5 of this
18Act shall be paid to the seller if:
19    (1) the seller certifies by sworn affidavit to the trustee
20that the purchaser or the beneficiary named in the pre-need
21contract has deceased and that seller has fully delivered or
22installed all items included in the pre-need contract and fully
23performed all pre-need cemetery services he is required to
24perform under the pre-need contract; or

 

 

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1    (2) the seller certifies by sworn affidavit to the trustee
2that seller has made full delivery, as defined herein.
3(Source: P.A. 84-239.)
 
4    Section 99. Effective date. This Act takes effect upon
5becoming law.

 

 

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1 INDEX
2 Statutes amended in order of appearance
3    225 ILCS 45/1from Ch. 111 1/2, par. 73.101
4    225 ILCS 45/1afrom Ch. 111 1/2, par. 73.101a
5    225 ILCS 45/1c new
6    815 ILCS 390/4from Ch. 21, par. 204
7    815 ILCS 390/15from Ch. 21, par. 215
8    815 ILCS 390/15.5 new
9    815 ILCS 390/17from Ch. 21, par. 217