Alabama 2023 Regular Session

Alabama House Bill HB81 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	HB81INTRODUCED
2	2	Page 0
3	3	7GGL22-1
4	4	By Representative Clouse
5	5	RFD: Insurance
6	6	First Read: 07-Mar-23
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11	11	5 7GGL22-1 02/15/2023 KMS (L) cr 2023-432
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13	13	SYNOPSIS:
14	14	Under existing law, the Alabama Board of Funeral
15	15	Service licenses and regulates funeral establishments,
16	16	funeral directors, and embalmers.
17	17	This bill would provide further for definitions
18	18	and the membership of the board.
19	19	This bill would also establish the Alabama
20	20	Preneed Funeral and Cemetery Act of 2023 and would
21	21	transfer the regulation of preneed contracts pursuant
22	22	to the Preneed Funeral and Cemetery Act from the
23	23	Commissioner and the Department of Insurance to the
24	24	board.
25	25	This bill would authorize the Department of
26	26	Insurance to temporarily transfer certain funds to the
27	27	Alabama Board of Funeral Service to defray costs
28	28	associated with the administration and operation of the
29	29	Alabama Preneed Funeral and Cemetery Act of 2023.
30	30	Section 111.05 of the Constitution of Alabama of
31	31	2022, prohibits a general law whose purpose or effect
32	32	would be to require a new or increased expenditure of
33	33	local funds from becoming effective with regard to a
34	34	local governmental entity without enactment by a 2/3
35	35	vote unless: it comes within one of a number of
36	36	specified exceptions; it is approved by the affected
37	37	entity; or the Legislature appropriates funds, or
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67	67	provides a local source of revenue, to the entity for
68	68	the purpose.
69	69	The purpose or effect of this bill would be to
70	70	require a new or increased expenditure of local funds
71	71	within the meaning of the amendment. However, the bill
72	72	does not require approval of a local governmental
73	73	entity or enactment by a 2/3 vote to become effective
74	74	because it comes within one of the specified exceptions
75	75	contained in the amendment.
76	76	A BILL
77	77	TO BE ENTITLED
78	78	AN ACT
79	79	Relating to the Alabama Board of Funeral Service; to
80	80	amend Section 34-13-1, as amended by Act 2022-339, 2022
81	81	Regular Session, Sections 34-13-20, 34-13-21, and 34-13-22,
82	82	Sections 34-13-23 and 34-13-27, as amended by Act 2022-339,
83	83	2022 Regular Session, Code of Alabama 1975, to rename the
84	84	Alabama Board of Funeral Service as the Alabama Board of
85	85	Funeral Services and to provide further for definitions and
86	86	the membership of the board; to add Article 5 to Chapter 13,
87	87	Title 34, Code of Alabama 1975, by amending and renumbering
88	88	Sections 27-17A-1, 27-17A-3, 27-17A-4, 27-17A-10 to 27-17A-25,
89	89	inclusive, 27-17A-30 to 27-17A-34, inclusive, and 27-17A-40 to
90	90	27-17A-57, inclusive, as Sections 34-13-170 to 34-13-172,
91	91	inclusive, 34-13-190 to 34-13-206, inclusive, 34-13-230 to
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121	121	34-13-234, inclusive, and 34-13-260 to 34-13-277, inclusive,
122	122	Code of Alabama 1975; to establish the Alabama Preneed Funeral
123	123	and Cemetery Act of 2023; to transfer the existing Preneed
124	124	Funeral and Cemetery Act, and the regulation of preneed
125	125	contracts, from the Commissioner and Department of Insurance
126	126	to the Alabama Board of Funeral Service; to authorize the
127	127	Department of Insurance to temporarily transfer certain funds
128	128	to the board to defray costs associated with the
129	129	administration and operation of the Alabama Preneed Funeral
130	130	and Cemetery Act of 2023; and in connection therewith would
131	131	have as its purpose or effect the requirement of a new or
132	132	increased expenditure of local funds within the meaning of
133	133	Section 111.05 of the Constitution of Alabama of 2022.
134	134	BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
135	135	Section 1. Sections 34-13-1, as amended by Act
136	136	2022-339, 2022 Regular Session, Sections 34-13-20, 34-13-21,
137	137	and 34-13-22, and Sections 34-13-23 and 34-13-27, as amended
138	138	by Act 2022-339, 2022 Regular Session, of the Code of Alabama
139	139	1975, are amended to read as follows:
140	140	"§34-13-1
141	141	(a) For purposes of this chapter, the following terms
142	142	have the following meanings:
143	143	(1) ACCREDITED SCHOOL or COLLEGE OF MORTUARY SCIENCE. A
144	144	school or college approved by the American Board of Funeral
145	145	Service Education, or a successor organization, which
146	146	maintains a course of instruction of not less than 48 calendar
147	147	weeks or four academic quarters or college terms and which
148	148	gives a course of instruction in the fundamental subjects
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178	178	related to funeral service and mortuary science education as
179	179	approved by the American Board of Funeral Service Education,
180	180	or a successor organization, and other courses of instruction
181	181	in fundamental subjects as may be prescribed by the Alabama
182	182	Board of Funeral Service.
183	183	(2) ALKALINE HYDROLYSIS. The technical process that
184	184	reduces human remains to bone fragments using heat, water, and
185	185	chemical agents.
186	186	(3) ALTERNATIVE CONTAINER. A nonmetal receptacle or
187	187	enclosure, without ornamentation or a fixed interior lining,
188	188	which is designed for the encasement of human remains and
189	189	which is made of cardboard, pressed-wood, composition
190	190	materials, with or without an outside covering, pouches of
191	191	canvas, or other materials.
192	192	(3)(4) AMERICAN BOARD OF FUNERAL SERVICE EDUCATION. The
193	193	national academic accreditation agency for college and
194	194	university programs in funeral service and mortuary science
195	195	education. The accrediting function of the American Board of
196	196	Funeral Service Education is recognized by the United States
197	197	Department of Education and the Council on Higher Education
198	198	Accreditation.
199	199	(4)(5) APPRENTICE EMBALMER or EMBALMER'S APPRENTICE.
200	200	Any person engaged in the study of the art of embalming under
201	201	the instructions and supervision of a licensed embalmer
202	202	practicing in this state.
203	203	(5)(6) APPRENTICE FUNERAL DIRECTOR or FUNERAL
204	204	DIRECTOR'S APPRENTICE. Any person operating under or in
205	205	association with a funeral director for the purpose of
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235	235	learning the business or profession of funeral director, to
236	236	the end that he or she may become licensed under this chapter.
237	237	(7) AT NEED. At the time of death or immediately
238	238	following death.
239	239	(6)(8) AUTHORIZING AGENT. A person at least 18 years of
240	240	age, except in the case of a surviving spouse or parent, who
241	241	is legally entitled to order the cremation or final
242	242	disposition of particular human remains.
243	243	(9) BASIC SERVICES FEE. The fee for the professional
244	244	services of the funeral director and staff that is added to
245	245	the total cost of the funeral arrangements. The term includes
246	246	a charge for services performed in conducting the arrangements
247	247	conference, planning the funeral, securing the necessary
248	248	permits, preparing the notices, and coordinating the cemetery
249	249	or crematory arrangements.
250	250	(10) BELOW-GROUND CRYPT. A preplaced enclosed chamber,
251	251	usually constructed of reinforced concrete, poured in place or
252	252	a precast unit installed in quantity, either side-by-side or
253	253	multiple depth, and covered by earth or sod and known also as
254	254	a lawn crypt or turf-top crypt.
255	255	(11) BENEFICIARY. One who benefits from an act, such as
256	256	one for whom a preneed contract is entered into or the
257	257	successor-in-interest of a life insurance policy.
258	258	(7)(12) BOARD. The Alabama Board of Funeral Service.
259	259	(13) BRANCH. Any person or entity that is part of a
260	260	common business enterprise that has a certificate of authority
261	261	issued pursuant to Article 5 and elects to operate under a
262	262	name other than that of the common business enterprise.
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292	292	(14) BURIAL. The placement of human remains in a grave
293	293	space or lawn crypt.
294	294	(8)(15) CASH ADVANCE ITEMS. Any item of service or
295	295	merchandise described to a purchaser using the term cash
296	296	advance, accommodation, cash disbursement, or similar term. A
297	297	cash advance item is also any item obtained from a third party
298	298	and paid for by a funeral provider on behalf of a purchaser.
299	299	Cash advance items include, but are not limited to, all of the
300	300	following:
301	301	a. Cemetery or crematory services.
302	302	b. Pallbearers.
303	303	c. Public or other transportation.
304	304	d. Clergy honoraria.
305	305	e. Flowers.
306	306	f. Musicians or singers.
307	307	g. Nurses.
308	308	h. Obituary notices.
309	309	i. Funeral programs.
310	310	j. Gratuities.
311	311	k. Death certificates.
312	312	l. Outer burial containers.
313	313	m. Cemetery plots.
314	314	n. Escorts.
315	315	(9)(16) CASKET. A rigid container designed for the
316	316	encasement of human remains which is usually constructed of
317	317	wood, metal, or similar material and ornamented and lined with
318	318	fabric.
319	319	(10)(17) CEMETERY. A place established, maintained,
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349	349	managed, operated, or improved which is dedicated to and used
350	350	or intended to be used for the permanent interment of human
351	351	remains and their memorialization . It may be either land or
352	352	earth interment; a columbarium; a mausoleum for vault or crypt
353	353	entombment; a structure or place used or intended to be used
354	354	for the interment of cremated remains; cryogenic storage; or
355	355	any combination of one or more thereof.
356	356	(11)(18) CEMETERY AUTHORITY. Any individual, person,
357	357	firm, profit or nonprofit corporation, trustee, partnership,
358	358	society, religious society, church association or
359	359	denomination, municipality, or other group or entity, however
360	360	organized, insofar as they or any of them may now or hereafter
361	361	establish, own, operate, lease, control, or manage one or more
362	362	cemeteries, burial parks, mausoleums, columbariums, or any
363	363	combination or variation thereof, or hold lands or structures
364	364	for burial grounds or burial purposes in this state and engage
365	365	in the operation of a cemetery, including any one or more of
366	366	the following: The care and maintenance of a cemetery; the
367	367	interment, entombment, and memorialization of the human dead
368	368	in a cemetery; the sale, installation, care, maintenance, or
369	369	any combination thereof, with respect of monuments, markers,
370	370	foundations, memorials, burial vaults, urns, crypts,
371	371	mausoleums, columbariums, flower vases, floral arrangements,
372	372	and other cemetery accessories for installation or use within
373	373	a cemetery; and the supervision and conduct of funeral and
374	374	burial services within the bounds of the cemetery.
375	375	(19) CEMETERY MERCHANDISE. Any personal property
376	376	offered for sale, contracted for sale, or sold for use in
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406	406	connection with the burial, final disposition,
407	407	memorialization, interment, entombment, or inurnment of human
408	408	remains by a cemetery authority. The term specifically
409	409	includes, but is not limited to, the casket, the alternative
410	410	container, the outer burial container, and the memorial.
411	411	(20) CEMETERY SERVICES. At need or preneed services
412	412	provided by a cemetery authority for interment, entombment,
413	413	inurnment, and installation of cemetery merchandise.
414	414	(21) CERTIFICATE HOLDER. A funeral establishment,
415	415	cemetery authority, third-party seller, or any other person to
416	416	whom a valid certificate of authority to sell preneed
417	417	contracts has been granted by the board.
418	418	(22) COLUMBARIUM. A structure or room or space in a
419	419	building or structure used or intended to be used for the
420	420	inurnment of cremated remains.
421	421	(12)(23) CONVICTION. The entry of a plea of guilty or a
422	422	guilty verdict rendered by any court of competent
423	423	jurisdiction, excluding traffic violations.
424	424	(13)(24) CREMATED REMAINS. Human remains recovered
425	425	after the completion of the cremation process, including
426	426	pulverization, which leaves only bone fragments reduced to
427	427	unidentifiable dimensions, and the residue of any foreign
428	428	materials that were cremated with the human remains.
429	429	(25) CREMATED REMAINS CONTAINER. A receptacle in which
430	430	cremated remains are placed.
431	431	(14)(26) CREMATION. The technical irreversible process,
432	432	using heat, flames, or chemical agents, that reduces human
433	433	remains to bone fragments. The reduction takes place through
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463	463	heat and evaporation. Cremation shall include the processing,
464	464	and may include the pulverization, of the bone fragments.
465	465	Cremation is a process and is a method of final disposition.
466	466	(15)(27) CREMATIONIST. A person licensed by the board
467	467	to perform the procedure of cremation.
468	468	(16)(28) CREMATION CHAMBER. The retort or vessel used
469	469	to reduce human remains to bone fragments.
470	470	(17)(29) CREMATION CONTAINER. The container in which
471	471	human remains are transported to a crematory, in which human
472	472	remains are placed upon arrival at a crematory, or for storage
473	473	and placement in a cremation chamber for cremation.
474	474	(18)(30) CREMATORY. A building or portion of a building
475	475	that houses a cremation chamber and that may house a holding
476	476	facility for purposes of cremation and as part of a funeral
477	477	establishment.
478	478	(31) CREMATORY AUTHORITY. Any person who owns or
479	479	controls a crematory.
480	480	(32) DEATH CERTIFICATE. A legal document containing
481	481	vital statistics pertaining to the life and death of the
482	482	deceased.
483	483	(33) DECEASED or DECEDENT. One who is no longer living.
484	484	(19)(34) EMBALMER. Any person engaged, or holding
485	485	himself or herself out as engaged, in the business, practice,
486	486	science, or profession of embalming, whether on his or her own
487	487	behalf or in the employ of a registered and licensed funeral
488	488	director.
489	489	(20)(35) EMBALMING. The practice, science, or
490	490	profession, as commonly practiced, of preserving,
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520	520	disinfecting, and preparing by application of chemicals or
521	521	other effectual methods, human dead for burial, cremation, or
522	522	transportation.
523	523	(36) ENCASEMENT. The placement of human remains in a
524	524	rigid container including, but not limited to, a casket or
525	525	urn.
526	526	(37) ENDOWMENT CARE. The maintenance and repair of all
527	527	places in a cemetery, subject to the rules of the cemetery
528	528	authority. The term may also be referred to as endowed care,
529	529	perpetual care, improvement care, or permanent care.
530	530	(38) ENDOWMENT CARE TRUST FUND. An irrevocable trust
531	531	fund set aside by law with a trustee, along with the income
532	532	therefrom, to provide for the endowment care of a cemetery.
533	533	(39) ENTOMBMENT. The act of placing human remains in a
534	534	mausoleum crypt.
535	535	(40) FINAL DISPOSITION. The lawful disposal of human
536	536	remains whether by interment, cremation, or other method.
537	537	(21)(41) FUNERAL. A ceremony for celebrating,
538	538	sanctifying, or remembering the life of a person who has died.
539	539	A funeral may be divided into the following two parts:
540	540	a. The funeral service, which may take place at a
541	541	funeral home, church, or other place.
542	542	b. The committal service or disposition, which may take
543	543	place by the grave, tomb, mausoleum, or crematory where the
544	544	body of the decedent is to be buried or cremated.
545	545	(22)(42) FUNERAL ARRANGEMENTS. The completing of
546	546	funeral service arrangements, cremation arrangements, and the
547	547	financial details of a funeral at the time of death. The term
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577	577	includes the collection of vital statistic information, death
578	578	certificate information, obituary and funeral notice
579	579	completion, the completion of a statement of funeral goods and
580	580	services selected, organizing of funeral and memorial services
581	581	for families, and the ordering of cash advance items.
582	582	(43) FUNERAL BENEFICIARY. The person or persons who
583	583	will receive the benefit of the funeral and cemetery goods and
584	584	services to be delivered under a preneed contract at the time
585	585	of his, her, or their death.
586	586	(23)(44) FUNERAL DIRECTING. The practice of directing
587	587	or supervising funerals, the practice of preparing dead human
588	588	bodies for burial by means other than embalming, or the
589	589	preparation for the final disposition of dead human bodies;
590	590	the making of funeral arrangements or providing for funeral
591	591	services or the making of financial arrangements for the
592	592	rendering of these services; the provision or maintenance of a
593	593	place for the preparation for final disposition of dead human
594	594	bodies; the use of the terms funeral director, undertaker,
595	595	mortician, funeral parlor, or any other term from which can be
596	596	implied the practice of funeral directing; or the holding out
597	597	to the public that one is a funeral director or engaged in a
598	598	practice described in this subdivision.
599	599	(24)(45) FUNERAL DIRECTOR. A person required to be
600	600	licensed to practice the profession of funeral directing under
601	601	the laws of this state, who consults with the public, who
602	602	plans details of funeral services with members of the family
603	603	and minister or any other person responsible for such
604	604	planning, or who directs, is in charge, or apparent charge of,
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634	634	and supervises funeral service in a funeral home, church, or
635	635	other place; who enters into the making, negotiation, or
636	636	completion of financial arrangements for funeral services, or
637	637	who uses in connection with the profession of funeral
638	638	directing the terms funeral director, undertaker, funeral
639	639	counselor, mortician, or any other term or picture or
640	640	combination thereof when considered in context in which used,
641	641	from which can be implied the practicing of the profession of
642	642	funeral directing or that the person using such term or
643	643	picture can be implied to be holding himself or herself out to
644	644	the public as being engaged in the profession of funeral
645	645	directing; and for all purposes under Alabama law, a funeral
646	646	director is considered a professional. For the purposes of
647	647	this chapter, the term does not include any cemetery
648	648	authority.
649	649	(25)(46) FUNERAL ESTABLISHMENTS. The term includes any
650	650	funeral home or mortuary service located at a specific street
651	651	address where the profession of funeral directing, embalming,
652	652	or cremation is practiced in the care, planning, and
653	653	preparation for burial, cremation, or transportation of human
654	654	dead. A funeral establishment shall consist of and maintain
655	655	all of the following facilities:
656	656	a. A preparation room equipped with sanitary nonporous
657	657	floor and wall and necessary drainage and ventilation, and
658	658	containing operating embalming equipment, necessary approved
659	659	tables, instruments, hot and cold running water, containers or
660	660	receptacles for soiled linen or clothing, and supplies for the
661	661	preparation and embalming of dead human bodies for burial,
662	662	309
663	663	310
664	664	311
665	665	312
666	666	313
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691	691	cremation, and transportation.
692	692	b. A display room containing a stock of adult caskets
693	693	and funeral supplies displayed in full size, cuts,
694	694	photographs, or electronic images. At no time shall less than
695	695	eight different adult size caskets be on the premises.
696	696	c. At least one operating funeral coach or hearse
697	697	properly licensed and equipped for transporting human remains
698	698	in a casket or urn.
699	699	d. If engaged in the practice of cremation, the
700	700	establishment shall satisfy all crematory requirements
701	701	provided in this chapter and have on site an adequate supply
702	702	of urns for display and sale.
703	703	e. A room suitable for public viewing or other funeral
704	704	services that is a minimum of 1,000 square feet.
705	705	f. An office for holding arrangement conferences with
706	706	relatives or authorizing agents.
707	707	(47) FUNERAL SERVICE. At need or preneed services
708	708	provided by a funeral establishment in connection with funeral
709	709	directing, final disposition of human remains, or installation
710	710	of memorials.
711	711	(26)(48) FUNERAL SUPPLIES or FUNERAL MERCHANDISE. Any
712	712	item offered for sale, contracted for sale, or sold for use in
713	713	connection with funeral directing or funeral services when
714	714	sold by a funeral director including, but not limited to,
715	715	caskets, alternative containers, outer burial containers,
716	716	urns, memorials, clothing used to dress human dead when sold
717	717	by a funeral director, and all equipment and accoutrements
718	718	normally required for the preparation for burial or funeral
719	719	337
720	720	338
721	721	339
722	722	340
723	723	341
724	724	342
725	725	343
726	726	344
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728	728	346
729	729	347
730	730	348
731	731	349
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733	733	351
734	734	352
735	735	353
736	736	354
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738	738	356
739	739	357
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747	747	Page 14
748	748	and other disposition of human dead.
749	749	(49) GRAVE SPACE. A space of ground in a cemetery that
750	750	is used or intended to be used for in-ground burial.
751	751	(27)(50) GROSS IMMORALITY. Willful, flagrant, or
752	752	shameful immorality or showing a moral indifference to the
753	753	opinions of the good and respectable members of the community
754	754	and to the just obligations of the position held by the
755	755	offender.
756	756	(28)(51) HOLDING ROOM. Either of the following:
757	757	a. A room within a funeral establishment that satisfies
758	758	the requirements of a branch location as provided in this
759	759	chapter or board rule, for the retention of human remains
760	760	before final disposition.
761	761	b. A room within a crematory facility, designated for
762	762	the retention of human remains before and after cremation,
763	763	that is not accessible to the public.
764	764	(52) HUMAN REMAINS. The body of a decedent in any stage
765	765	of decomposition, including cremated remains.
766	766	(53) INTERMENT. The final disposition of human remains
767	767	by burial, burial at sea, entombment, or inurnment.
768	768	(54) INTERMENT RIGHT. The right to inter human remains
769	769	in a particular interment space in a cemetery.
770	770	(55) INTERMENT SPACE. A space intended for the final
771	771	disposition of human remains including, but not limited to, a
772	772	grave space, mausoleum crypt, niche, and below-ground crypt.
773	773	(56) INURNMENT. The act of placing cremated remains in
774	774	a receptacle including, but not limited to, an urn and
775	775	depositing it in a niche.
776	776	365
777	777	366
778	778	367
779	779	368
780	780	369
781	781	370
782	782	371
783	783	372
784	784	373
785	785	374
786	786	375
787	787	376
788	788	377
789	789	378
790	790	379
791	791	380
792	792	381
793	793	382
794	794	383
795	795	384
796	796	385
797	797	386
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799	799	388
800	800	389
801	801	390
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804	804	Page 15
805	805	(57) LICENSEE. Any individual, firm, corporation,
806	806	partnership, joint venture, or limited liability company which
807	807	obtains a license, certificate, or registration in accordance
808	808	with this chapter.
809	809	(29)(58) MANAGING CREMATIONIST. A licensed funeral
810	810	director and cremationist who has full charge, control, and
811	811	supervision of all activities involving cremation at a funeral
812	812	establishment or crematory.
813	813	(30)(59) MANAGING EMBALMER. A licensed embalmer who has
814	814	full charge, control, and supervision of all activities
815	815	involving the preparation room and embalming.
816	816	(31)(60) MANAGING FUNERAL DIRECTOR. A licensed funeral
817	817	director who has full charge, control, and supervision of all
818	818	activities involving funeral directing for a funeral
819	819	establishment.
820	820	(61) MAUSOLEUM. A chamber or structure used or intended
821	821	to be used for entombment.
822	822	(62) MAUSOLEUM CRYPT. A chamber of a mausoleum of
823	823	sufficient size for entombment of human remains.
824	824	(63) MEMORIAL. Any product, other than a mausoleum or
825	825	columbarium, used for identifying an interment space or for
826	826	commemoration of the life, deeds, or career of some decedent
827	827	including, but not limited to, a monument, marker, niche
828	828	plate, urn garden plaque, crypt plate, cenotaph, marker bench,
829	829	and vase.
830	830	(64) MEMORIAL RETAILER. Any person offering or selling
831	831	memorials at retail to the public.
832	832	(65) MEMORIALIZATION. Any permanent system designed to
833	833	393
834	834	394
835	835	395
836	836	396
837	837	397
838	838	398
839	839	399
840	840	400
841	841	401
842	842	402
843	843	403
844	844	404
845	845	405
846	846	406
847	847	407
848	848	408
849	849	409
850	850	410
851	851	411
852	852	412
853	853	413
854	854	414
855	855	415
856	856	416
857	857	417
858	858	418
859	859	419
860	860	420 HB81 INTRODUCEDHB81 INTRODUCED
861	861	Page 16
862	862	mark or record the names and other data pertaining to a
863	863	decedent.
864	864	(32)(66) MORAL TURPITUDE. Any unlawful sexual or
865	865	violent act, or any act involving theft, theft of services,
866	866	theft by deception, extortion, receiving stolen property,
867	867	identity theft, forgery, fraud, tampering with records,
868	868	bribery, perjury, or any similar act in any jurisdiction.
869	869	(33)(67) MORTUARY SCIENCE. The scientific,
870	870	professional, and practical aspects, with due consideration
871	871	given to accepted practices, covering the care, preparation
872	872	for burial, or transportation of dead human bodies, which
873	873	shall include the preservation and sanitation of the bodies
874	874	and restorative art and those aspects related to public
875	875	health, jurisprudence, and good business administration.
876	876	(34)(68) MORTUARY SERVICE. A location with a specific
877	877	street address where embalming or cremation, or both, is
878	878	practiced for a licensed funeral establishment and where no
879	879	services or merchandise are sold directly or at retail to the
880	880	public. A mortuary service shall consist of and maintain all
881	881	of the following facilities:
882	882	a. A preparation room equipped with sanitary nonporous
883	883	floor and walls, operating embalming equipment, and necessary
884	884	drainage and ventilation and containing necessary approved
885	885	tables, instruments, hot and cold running water, containers or
886	886	receptacles for soiled linen or clothing, and supplies for the
887	887	preparation and embalming of dead human bodies for burial,
888	888	cremation, and transportation.
889	889	b. At least one operating motor vehicle properly
890	890	421
891	891	422
892	892	423
893	893	424
894	894	425
895	895	426
896	896	427
897	897	428
898	898	429
899	899	430
900	900	431
901	901	432
902	902	433
903	903	434
904	904	435
905	905	436
906	906	437
907	907	438
908	908	439
909	909	440
910	910	441
911	911	442
912	912	443
913	913	444
914	914	445
915	915	446
916	916	447
917	917	448 HB81 INTRODUCEDHB81 INTRODUCED
918	918	Page 17
919	919	licensed and equipped for transporting human remains in a
920	920	casket or urn.
921	921	c. If engaged in the practice of cremation, the
922	922	establishment shall satisfy all requirements for a crematory
923	923	provided in this chapter.
924	924	(69) NICHE. A space usually within a columbarium used
925	925	or intended to be used for inurnment of cremated remains.
926	926	(35)(70) OPERATOR. A person, corporation, firm, legal
927	927	representative, managing funeral director, general manager, or
928	928	other organization owning or operating a funeral establishment
929	929	or cemetery.
930	930	(71) OUTER BURIAL CONTAINER. A container that is
931	931	designed for placement in the grave space around the casket or
932	932	the urn including, but not limited to, containers commonly
933	933	known as burial vaults, grave boxes, and grave liners.
934	934	(72) PERSON. Any individual, firm, corporation,
935	935	partnership, joint venture, limited liability company,
936	936	association, trustee, government or governmental subdivision,
937	937	agency, or other entity, or any combination thereof.
938	938	(36)(73) PRACTICAL EMBALMER. Any person who has been
939	939	actively and continuously engaged or employed in the practice
940	940	of embalming under the supervision of a licensed embalmer for
941	941	four consecutive years immediately preceding May 1, 1975, and
942	942	has been issued a license as a practical embalmer under the
943	943	grandfather provisions of this chapter.
944	944	(74) PREARRANGEMENT. The term applied to completing the
945	945	details for selection of merchandise or services on a preneed
946	946	basis, which may or may not include prefunding or prepayment.
947	947	449
948	948	450
949	949	451
950	950	452
951	951	453
952	952	454
953	953	455
954	954	456
955	955	457
956	956	458
957	957	459
958	958	460
959	959	461
960	960	462
961	961	463
962	962	464
963	963	465
964	964	466
965	965	467
966	966	468
967	967	469
968	968	470
969	969	471
970	970	472
971	971	473
972	972	474
973	973	475
974	974	476 HB81 INTRODUCEDHB81 INTRODUCED
975	975	Page 18
976	976	(75) PREDEVELOPED. Designated areas or buildings within
977	977	a cemetery that have been mapped and planned for future
978	978	construction but are not yet completed.
979	979	(76) PREDEVELOPED INTERMENT SPACE. An interment space
980	980	that is planned for future construction but is not yet
981	981	completed.
982	982	(77) PREFUND. The term applied to completing the
983	983	financial details of a prearrangement, which include
984	984	prefunding or prepayment.
985	985	(78) PRENEED. Any time prior to death.
986	986	(79) PRENEED CONTRACT. A written contract to purchase
987	987	funeral merchandise, funeral services, cemetery merchandise,
988	988	or cemetery services from the seller on a preneed basis.
989	989	(80) PRENEED CONTRACT TRUST FUND. The funds received
990	990	pursuant to a preneed contract which are required by law to be
991	991	held in trust until the merchandise or services purchased
992	992	pursuant to the contract are delivered or provided or until
993	993	otherwise lawfully withdrawn.
994	994	(81) PRENEED SALES AGENT. A person who is in the
995	995	business of selling preneed contracts.
996	996	(37)(82) PROCESSING or PULVERIZATION. The reduction of
997	997	identifiable bone fragments after the completion of the
998	998	cremation process to unidentifiable bone fragments or
999	999	granulated particles by manual or mechanical means.
1000	1000	(83) PROVIDER. The person, who may or may not be the
1001	1001	seller, who actually provides merchandise and services under
1002	1002	the terms of a preneed contract.
1003	1003	(84) PURCHASE PRICE. The amount paid by the purchaser
1004	1004	477
1005	1005	478
1006	1006	479
1007	1007	480
1008	1008	481
1009	1009	482
1010	1010	483
1011	1011	484
1012	1012	485
1013	1013	486
1014	1014	487
1015	1015	488
1016	1016	489
1017	1017	490
1018	1018	491
1019	1019	492
1020	1020	493
1021	1021	494
1022	1022	495
1023	1023	496
1024	1024	497
1025	1025	498
1026	1026	499
1027	1027	500
1028	1028	501
1029	1029	502
1030	1030	503
1031	1031	504 HB81 INTRODUCEDHB81 INTRODUCED
1032	1032	Page 19
1033	1033	for merchandise and services purchased under a preneed
1034	1034	contract, exclusive of finance charges, sales tax, charges
1035	1035	relating to interment rights, arrangement conference fees, or
1036	1036	charges for credit life insurance.
1037	1037	(85) PURCHASER. The person who purchases a preneed
1038	1038	contract either on his or her behalf or on behalf of a
1039	1039	third-party beneficiary.
1040	1040	(86) RELIGIOUS INSTITUTION. An organization formed
1041	1041	primarily for religious purposes which has applied and
1042	1042	qualified for exemption from federal income tax as an exempt
1043	1043	organization under Section 501(c)(3) of the Internal Revenue
1044	1044	Code of 1986, as amended.
1045	1045	(87) SCATTERING. The lawful dispersion of cremated
1046	1046	remains.
1047	1047	(88) SELLER. Any person offering or selling merchandise
1048	1048	or services on a preneed basis including, but not limited to,
1049	1049	funeral establishments, cemetery authorities, crematory
1050	1050	authorities, and memorial retailers.
1051	1051	(89) SPECIAL CARE. Any care provided, or to be
1052	1052	provided, that is supplemental to, or in excess of, endowment
1053	1053	care, in accordance with the specific directions of any donor
1054	1054	of funds for those purposes.
1055	1055	(90) SUCCESSOR-IN-INTEREST. A person who lawfully
1056	1056	follows another in ownership or control of property or rights.
1057	1057	(38)(91) TEMPORARY CONTAINER. A receptacle for cremated
1058	1058	remains, usually composed of cardboard, plastic, or similar
1059	1059	material, that can be closed in a manner that prevents the
1060	1060	leakage or spillage of the cremated remains or the entrance of
1061	1061	505
1062	1062	506
1063	1063	507
1064	1064	508
1065	1065	509
1066	1066	510
1067	1067	511
1068	1068	512
1069	1069	513
1070	1070	514
1071	1071	515
1072	1072	516
1073	1073	517
1074	1074	518
1075	1075	519
1076	1076	520
1077	1077	521
1078	1078	522
1079	1079	523
1080	1080	524
1081	1081	525
1082	1082	526
1083	1083	527
1084	1084	528
1085	1085	529
1086	1086	530
1087	1087	531
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1089	1089	Page 20
1090	1090	foreign material, and is a single container of sufficient size
1091	1091	to hold the cremated remains until an urn is acquired or the
1092	1092	cremated remains are scattered or buried.
1093	1093	(92) THIRD-PARTY SELLER. Any person, who is not a
1094	1094	funeral establishment or a cemetery authority, engaged in the
1095	1095	sale of preneed funeral merchandise or cemetery merchandise.
1096	1096	(93) TRUSTEE. Any person, state or national bank, trust
1097	1097	company, or federally insured savings and loan association
1098	1098	lawfully appointed as fiduciary over funds deposited by one or
1099	1099	more purchasers of a preneed contract or deposited pursuant to
1100	1100	an endowment care trust fund. The term does not refer to a
1101	1101	board of trustees.
1102	1102	(39)(94) URN. A receptacle designed to encase cremated
1103	1103	remains.
1104	1104	(b) Nothing in this chapter shall require a funeral
1105	1105	director or funeral establishment to have or provide a chapel
1106	1106	or to restrict the conduct of funeral services from a church
1107	1107	or chapel."
1108	1108	"§34-13-20
1109	1109	(a) There is established the Alabama Board of Funeral
1110	1110	Service Services, consisting of nine 14 members, each of whom
1111	1111	shall be citizens of the United States and residents of the
1112	1112	State of Alabama. The membership of the board shall be divided
1113	1113	into two distinct divisions, the funeral division and the
1114	1114	preneed division, with each division having jurisdiction over
1115	1115	their respective areas of service.
1116	1116	(b) The appointing authorities shall coordinate their
1117	1117	appointments to assure board membership is inclusive and
1118	1118	533
1119	1119	534
1120	1120	535
1121	1121	536
1122	1122	537
1123	1123	538
1124	1124	539
1125	1125	540
1126	1126	541
1127	1127	542
1128	1128	543
1129	1129	544
1130	1130	545
1131	1131	546
1132	1132	547
1133	1133	548
1134	1134	549
1135	1135	550
1136	1136	551
1137	1137	552
1138	1138	553
1139	1139	554
1140	1140	555
1141	1141	556
1142	1142	557
1143	1143	558
1144	1144	559
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1146	1146	Page 21
1147	1147	reflects the racial, gender, geographic, urban/rural urban,
1148	1148	rural, and economic diversity of the state.
1149	1149	(c)(1) Commencing on January 1, 2019, as the terms of
1150	1150	the members serving on the board on August 1, 2017, expire,
1151	1151	the membership of the funeral division of the board shall be
1152	1152	reconstituted to consist of seven professional members and two
1153	1153	consumer members.
1154	1154	(1) Each professional member of the funeral division of
1155	1155	the board shall be a citizen of the United States, a resident
1156	1156	of Alabama, and licensed and in good standing with the board
1157	1157	as an embalmer or funeral director at the time of appointment
1158	1158	and during the entire term of office. Professional members of
1159	1159	the board shall be appointed by the Governor pursuant to
1160	1160	subsection (e). As the terms of the members serving on the
1161	1161	board on October 1, 2023, expire, the professional membership
1162	1162	of the board shall be appointed to reflect the following:
1163	1163	a. Four Three of the professional members of the board
1164	1164	shall hold a current license from the board to practice
1165	1165	embalming in the state, shall have been actively practicing
1166	1166	embalming in the state for the last 10 consecutive years
1167	1167	immediately preceding appointment, and shall be engaged in the
1168	1168	practice of embalming at the time of appointment to the board.
1169	1169	b. Three Four of the professional members of the board
1170	1170	shall hold a current license from the board to practice
1171	1171	funeral directing in the state, shall have been actively
1172	1172	engaged in funeral directing in the state for the last 10
1173	1173	consecutive years immediately preceding appointment, and shall
1174	1174	be the operator of a funeral establishment in this state at
1175	1175	561
1176	1176	562
1177	1177	563
1178	1178	564
1179	1179	565
1180	1180	566
1181	1181	567
1182	1182	568
1183	1183	569
1184	1184	570
1185	1185	571
1186	1186	572
1187	1187	573
1188	1188	574
1189	1189	575
1190	1190	576
1191	1191	577
1192	1192	578
1193	1193	579
1194	1194	580
1195	1195	581
1196	1196	582
1197	1197	583
1198	1198	584
1199	1199	585
1200	1200	586
1201	1201	587
1202	1202	588 HB81 INTRODUCEDHB81 INTRODUCED
1203	1203	Page 22
1204	1204	the time of appointment to the board.
1205	1205	(2) Commencing on October 1, 2023, the preneed division
1206	1206	of the board shall be created to consist of four professional
1207	1207	members and one consumer member. Two professional members
1208	1208	shall be licensed funeral directors and two professional
1209	1209	members shall be licensed preneed sales agents employed by a
1210	1210	cemetery. Each professional member of the preneed division of
1211	1211	the board shall hold a current license from the board to
1212	1212	practice as a preneed sales agent, shall have been actively
1213	1213	engaged in preneed sales in the state for the last five
1214	1214	consecutive years immediately preceding appointment, and shall
1215	1215	be employed by a certificate of authority license holder in
1216	1216	this state at the time of appointment to the board. Two of
1217	1217	these professional members shall also hold a current
1218	1218	certificate of authority to sell preneed services and
1219	1219	merchandise. The initial appointment of two of the preneed
1220	1220	sales agents appointed pursuant to this paragraph shall expire
1221	1221	on December 31, 2025, and for the other two, shall expire on
1222	1222	December 31, 2026. Thereafter, the preneed sales agent members
1223	1223	shall serve pursuant to subsection (e). Professional members
1224	1224	of the board shall be appointed by the Governor pursuant to
1225	1225	subsection (e).
1226	1226	(2)(3) Each consumer member of the board shall
1227	1227	represent the public in general and shall have been a citizen
1228	1228	of the United States and a resident of Alabama for the last 10
1229	1229	consecutive years immediately preceding appointment and during
1230	1230	the entire term of office. A consumer member of the board may
1231	1231	not have held, nor currently hold, a license or certification
1232	1232	589
1233	1233	590
1234	1234	591
1235	1235	592
1236	1236	593
1237	1237	594
1238	1238	595
1239	1239	596
1240	1240	597
1241	1241	598
1242	1242	599
1243	1243	600
1244	1244	601
1245	1245	602
1246	1246	603
1247	1247	604
1248	1248	605
1249	1249	606
1250	1250	607
1251	1251	608
1252	1252	609
1253	1253	610
1254	1254	611
1255	1255	612
1256	1256	613
1257	1257	614
1258	1258	615
1259	1259	616 HB81 INTRODUCEDHB81 INTRODUCED
1260	1260	Page 23
1261	1261	issued by the board, be employed at any time by, or
1262	1262	professionally or financially associated with, the holder of a
1263	1263	license or certificate issued by the board, or be related
1264	1264	within the third degree of consanguinity or affinity to the
1265	1265	holder of a license or certificate issued by the board. One
1266	1266	Two consumer member members of the board shall be appointed by
1267	1267	the Lieutenant Governor and one consumer member shall be
1268	1268	appointed by the Speaker of the House of Representatives
1269	1269	pursuant to a procedure adopted by rule of the board.
1270	1270	(d) Commencing in October of 2018, and each October
1271	1271	thereafter of a year where at least one professional member
1272	1272	term on either division of the board has expired, or is vacant
1273	1273	for any reason, all licensed funeral directors and licensed
1274	1274	embalmers for a funeral division member, and all licensed
1275	1275	preneed sales agents for a preneed division member, shall meet
1276	1276	in Montgomery, at a time and place fixed by the respective
1277	1277	division of the board, for the purpose of nominating and
1278	1278	submitting the names of three licensed persons for each
1279	1279	position on the board to the Governor. The Governor shall
1280	1280	promptly appoint one of the three persons so nominated to
1281	1281	serve as a professional member of the board.
1282	1282	(e)(1) Professional and consumer members of the board
1283	1283	shall serve staggered terms of four years each to provide
1284	1284	continuity of service on the board. If an appointment is not
1285	1285	made before the expiration of a term, the board member then
1286	1286	serving may continue to serve until a successor has been
1287	1287	appointed. A board member may not serve more than two full
1288	1288	consecutive terms on the board.
1289	1289	617
1290	1290	618
1291	1291	619
1292	1292	620
1293	1293	621
1294	1294	622
1295	1295	623
1296	1296	624
1297	1297	625
1298	1298	626
1299	1299	627
1300	1300	628
1301	1301	629
1302	1302	630
1303	1303	631
1304	1304	632
1305	1305	633
1306	1306	634
1307	1307	635
1308	1308	636
1309	1309	637
1310	1310	638
1311	1311	639
1312	1312	640
1313	1313	641
1314	1314	642
1315	1315	643
1316	1316	644 HB81 INTRODUCEDHB81 INTRODUCED
1317	1317	Page 24
1318	1318	(2) A board member who is appointed to fill a vacancy
1319	1319	which occurs before the expiration of the term of the vacating
1320	1320	member shall serve the remaining portion of the term to which
1321	1321	the former member was appointed. A vacancy on the board for
1322	1322	any reason shall be filled by appointment of the Governor for
1323	1323	the unexpired term. The appointee shall serve until his or her
1324	1324	successor is nominated and appointed pursuant to subsection
1325	1325	(d). If a member is appointed to fill an unexpired term of
1326	1326	less than two years, the time may not be counted toward the
1327	1327	maximum eight years of service.
1328	1328	(3) Not more than Only one professional funeral
1329	1329	division member and one professional preneed division member
1330	1330	of the board a division may reside in the sameeach district
1331	1331	as created by Section 34-13-21.
1332	1332	(4) At each meeting where nominations are made for the
1333	1333	professional members of the funeral division of the board,
1334	1334	only one licensed funeral director or licensed embalmer
1335	1335	employed by the same funeral establishment may vote. At each
1336	1336	meeting where nominations are made for the professional
1337	1337	members of the preneed division of the board, only one
1338	1338	licensed preneed sales agent employed by the same certificate
1339	1339	of authority license may vote.
1340	1340	(f)(1) In accordance with applicable law, in addition
1341	1341	to a board member resigning from the board in writing, a board
1342	1342	member may be removed from the board for any of the following
1343	1343	grounds:
1344	1344	a. The refusal or inability to perform board duties in
1345	1345	an efficient, responsible, or professional manner.
1346	1346	645
1347	1347	646
1348	1348	647
1349	1349	648
1350	1350	649
1351	1351	650
1352	1352	651
1353	1353	652
1354	1354	653
1355	1355	654
1356	1356	655
1357	1357	656
1358	1358	657
1359	1359	658
1360	1360	659
1361	1361	660
1362	1362	661
1363	1363	662
1364	1364	663
1365	1365	664
1366	1366	665
1367	1367	666
1368	1368	667
1369	1369	668
1370	1370	669
1371	1371	670
1372	1372	671
1373	1373	672 HB81 INTRODUCEDHB81 INTRODUCED
1374	1374	Page 25
1375	1375	b. The misuse of his or her position on the board to
1376	1376	obtain financial gain or seek personal advantage for himself,
1377	1377	herself, or another person.
1378	1378	c. A final adjudication or determination of guilt by
1379	1379	any lawful authority of the board member or sanction of the
1380	1380	board member for the violation of any law the board determines
1381	1381	is substantially related to any practice governed by this
1382	1382	chapter.
1383	1383	d. The revocation or suspension of the license of a
1384	1384	professional member of the board.
1385	1385	(2) Any board member who fails to qualify after
1386	1386	appointment shall automatically become ineligible to serve as
1387	1387	a member of the board and a new member, properly qualified,
1388	1388	shall be appointed in the same manner as the original
1389	1389	appointment and shall serve the remainder of the term of the
1390	1390	vacating board member.
1391	1391	(3) If a consumer board member fails to attend two or
1392	1392	more meetings within a year, without a valid excuse as
1393	1393	determined by the board, he or she shall be removed from the
1394	1394	board. A new consumer board member shall be appointed in the
1395	1395	same manner as the original appointment and shall serve the
1396	1396	remainder of the term.
1397	1397	(g)(1) The status of any person or entity properly
1398	1398	licensed by the Alabama Board of Funeral Service on the
1399	1399	effective date of this act shall continue under the Alabama
1400	1400	Board of Funeral Services.
1401	1401	(2) All the rights, duties, property, real or personal,
1402	1402	and all other effects existing in the name of the Alabama
1403	1403	673
1404	1404	674
1405	1405	675
1406	1406	676
1407	1407	677
1408	1408	678
1409	1409	679
1410	1410	680
1411	1411	681
1412	1412	682
1413	1413	683
1414	1414	684
1415	1415	685
1416	1416	686
1417	1417	687
1418	1418	688
1419	1419	689
1420	1420	690
1421	1421	691
1422	1422	692
1423	1423	693
1424	1424	694
1425	1425	695
1426	1426	696
1427	1427	697
1428	1428	698
1429	1429	699
1430	1430	700 HB81 INTRODUCEDHB81 INTRODUCED
1431	1431	Page 26
1432	1432	Board of Funeral Service shall be transferred to the Alabama
1433	1433	Board of Funeral Services. Any reference to the Alabama Board
1434	1434	of Funeral Service in any existing law, contract, or other
1435	1435	instrument, shall be deemed a reference to the Alabama Board
1436	1436	of Funeral Services.
1437	1437	(3) A reasonable transition period for the name change
1438	1438	shall be allowed to permit an orderly and cost-effective
1439	1439	transition, relating particularly to the use of equipment and
1440	1440	supplies, all letterhead, business cards, forms, and any other
1441	1441	materials in use by the board containing the name Alabama
1442	1442	Board of Funeral Service shall continue to be used by the
1443	1443	Alabama Board of Funeral Services until the supplies are
1444	1444	exhausted. Replacement supplies shall contain the name of the
1445	1445	Alabama Board of Funeral Services.
1446	1446	(4) The Code Commissioner, pursuant to Section 29-7-8,
1447	1447	at times determined appropriate, shall implement this
1448	1448	statutory name change in applicable sections of this code. "
1449	1449	"§34-13-21
1450	1450	There are created, for the purpose of this chapter,
1451	1451	seven geographical districts which shall be identical with the
1452	1452	seven congressional districts as fixed and established by
1453	1453	Section 17-14-70, as may be amended. It is the purpose and
1454	1454	intention of this section to provide that not more than one
1455	1455	professional member of each division of the board shall be
1456	1456	selected from each district and that three nominees to the
1457	1457	Governor for appointment to the board shall be made from each
1458	1458	district. The two three consumer members of the board may not
1459	1459	reside in the same congressional district."
1460	1460	701
1461	1461	702
1462	1462	703
1463	1463	704
1464	1464	705
1465	1465	706
1466	1466	707
1467	1467	708
1468	1468	709
1469	1469	710
1470	1470	711
1471	1471	712
1472	1472	713
1473	1473	714
1474	1474	715
1475	1475	716
1476	1476	717
1477	1477	718
1478	1478	719
1479	1479	720
1480	1480	721
1481	1481	722
1482	1482	723
1483	1483	724
1484	1484	725
1485	1485	726
1486	1486	727
1487	1487	728 HB81 INTRODUCEDHB81 INTRODUCED
1488	1488	Page 27
1489	1489	"§34-13-22
1490	1490	(a) The Alabama Board of Funeral Service Services shall
1491	1491	hold not less than one joint meeting of both divisions
1492	1492	quarterly, such meeting for the purpose of reviewing
1493	1493	financial, budgetary, and employment matters. The quarterly
1494	1494	meetings to be held at such a time and place as the board may
1495	1495	determine after notice of such the meeting has been given in
1496	1496	the manner prescribed herein at least 15 days prior to such
1497	1497	the meeting. The board may hold such other meetings as it the
1498	1498	board may deem necessary. A majority of the appointed members
1499	1499	shall constitute a quorum authorized to transact general
1500	1500	business in the name of the board. The board shall not meet on
1501	1501	the premises of any embalming school or college of mortuary
1502	1502	science; and, if any such meeting is held, all the proceedings
1503	1503	of such meeting shall be void Upon the executive director
1504	1504	serving on the effective date of the act amending this
1505	1505	subsection leaving office, two-thirds of the appointed members
1506	1506	shall constitute a quorum for the purposes of selecting an
1507	1507	executive director and establishing fees .
1508	1508	(b) Additionally, each division of the board shall hold
1509	1509	at least one division meeting quarterly. "
1510	1510	"§34-13-23
1511	1511	(a)(1) The board appointed under this chapter and each
1512	1512	successor thereto may shall select from its own membership a
1513	1513	chair and to adopt rules for the transaction of its business
1514	1514	and for the betterment and promotion of the standards of
1515	1515	service and practice to be followed in the death care industry
1516	1516	in the State of Alabama as the board may deem expedient and
1517	1517	729
1518	1518	730
1519	1519	731
1520	1520	732
1521	1521	733
1522	1522	734
1523	1523	735
1524	1524	736
1525	1525	737
1526	1526	738
1527	1527	739
1528	1528	740
1529	1529	741
1530	1530	742
1531	1531	743
1532	1532	744
1533	1533	745
1534	1534	746
1535	1535	747
1536	1536	748
1537	1537	749
1538	1538	750
1539	1539	751
1540	1540	752
1541	1541	753
1542	1542	754
1543	1543	755
1544	1544	756 HB81 INTRODUCEDHB81 INTRODUCED
1545	1545	Page 28
1546	1546	consistent with the laws of this state and for the public
1547	1547	good.
1548	1548	(2) The chair shall preside at all meetings of the
1549	1549	board unless otherwise ordered, and he or she shall exercise
1550	1550	and perform all duties and functions incident to the office of
1551	1551	chair.
1552	1552	(3) The board may also select from its own membership a
1553	1553	vice chair, a secretary, and a treasurer. No two offices shall
1554	1554	be held by the same person.
1555	1555	(b) The treasurer shall give bond to the State of
1556	1556	Alabama in the sum of ten thousand dollars ($10,000), and any
1557	1557	premium payable for the bond shall be paid from the funds of
1558	1558	the board. The bond shall be deposited with the Treasurer of
1559	1559	the State of Alabama.
1560	1560	(c) A board member shall be reimbursed for necessary
1561	1561	travel expenses, per diem, and the necessary expenses incident
1562	1562	to his or her attendance upon the business of the board, and,
1563	1563	in addition thereto, shall receive compensation in the amount
1564	1564	of seventy-five dollars ($75) for every day not to exceed 20
1565	1565	days per year actually spent by the member upon the business
1566	1566	of the board. The board may employ in the unclassified service
1567	1567	an executive director and up to four associate executive
1568	1568	directors who shall each receive and be paid an annual salary
1569	1569	to be fixed by the board pursuant to Section 36-6-6. The
1570	1570	salary shall be paid on a semimonthly basis. In addition, the
1571	1571	executive director and associate executive directors shall
1572	1572	each receive his or her necessary travel and other incidental
1573	1573	expenses as are incurred in the performance of duties, and all
1574	1574	757
1575	1575	758
1576	1576	759
1577	1577	760
1578	1578	761
1579	1579	762
1580	1580	763
1581	1581	764
1582	1582	765
1583	1583	766
1584	1584	767
1585	1585	768
1586	1586	769
1587	1587	770
1588	1588	771
1589	1589	772
1590	1590	773
1591	1591	774
1592	1592	775
1593	1593	776
1594	1594	777
1595	1595	778
1596	1596	779
1597	1597	780
1598	1598	781
1599	1599	782
1600	1600	783
1601	1601	784 HB81 INTRODUCEDHB81 INTRODUCED
1602	1602	Page 29
1603	1603	expenses, per diem, and compensation shall be paid out of the
1604	1604	receipts of the board. At no time shall the operation of the
1605	1605	board be an expense to the state.
1606	1606	(d) The executive director of the board shall have
1607	1607	complete supervision and be held responsible for the direction
1608	1608	of the office of the board, shall have supervision over
1609	1609	employees, field inspections, audits, and enforcement of this
1610	1610	chapter, and shall be responsible and answerable to the board.
1611	1611	The associate executive directors shall assist the executive
1612	1612	director and perform such other duties as may be assigned to
1613	1613	him or her by the executive director.
1614	1614	(e) The executive director shall keep a record in which
1615	1615	shall be registered the name and business address of every
1616	1616	person to whom licenses have been granted in accordance with
1617	1617	this chapter, the number and date of the license and the date
1618	1618	of each renewal. Upon request to do so, the executive director
1619	1619	shall supply a list of all persons and establishments holding
1620	1620	a license under this chapter, then in force, giving the names
1621	1621	of the persons, their business addresses, and the numbers of
1622	1622	their licenses.
1623	1623	(f) It shall be the duty of the executive director to
1624	1624	prepare under the direction of the board and cause to be
1625	1625	printed all forms required by this chapter to be prescribed by
1626	1626	the board. All notices required to be mailed by this chapter
1627	1627	shall be directed to the last known address of the party to
1628	1628	whom the notice is sent.
1629	1629	(g) The executive director shall serve at the pleasure
1630	1630	of the board and shall perform duties as may be necessary for
1631	1631	785
1632	1632	786
1633	1633	787
1634	1634	788
1635	1635	789
1636	1636	790
1637	1637	791
1638	1638	792
1639	1639	793
1640	1640	794
1641	1641	795
1642	1642	796
1643	1643	797
1644	1644	798
1645	1645	799
1646	1646	800
1647	1647	801
1648	1648	802
1649	1649	803
1650	1650	804
1651	1651	805
1652	1652	806
1653	1653	807
1654	1654	808
1655	1655	809
1656	1656	810
1657	1657	811
1658	1658	812 HB81 INTRODUCEDHB81 INTRODUCED
1659	1659	Page 30
1660	1660	the proper functioning of the board as the board may determine
1661	1661	or as may be prescribed in this chapter. During the employment
1662	1662	of the executive director, he or she may not be employed by
1663	1663	any funeral establishment.
1664	1664	(h) All fees and fines received under this chapter
1665	1665	shall be paid into a special fund in the State Treasury to be
1666	1666	known as the Alabama State Funeral Service Fund, which is
1667	1667	hereby created, for the necessary and proper expenses of the
1668	1668	board, and for a reasonable reserve for future use by the
1669	1669	board. All monies in the fund are hereby appropriated, as a
1670	1670	continuing appropriation, to the board to be used for carrying
1671	1671	out this chapter. Commencing on October 1, 2023, the name of
1672	1672	the fund shall be changed to the Alabama Board of Funeral
1673	1673	Services Fund.
1674	1674	(i) Each member of the board, the executive director,
1675	1675	the associate executive directors, designated employees, and
1676	1676	independent contractors of the board appropriately identified
1677	1677	are authorized at any given time to enter the office,
1678	1678	premises, establishment, or place of business where any
1679	1679	practice or activity regulated by this chapter is carried on,
1680	1680	or advertised as being carried on, to investigate complaints
1681	1681	or perform audits or inspections. Each on-site inspection
1682	1682	shall include an inspection of the license, certification, and
1683	1683	registration of each licensee and apprentice trainee operating
1684	1684	therein.
1685	1685	(j) All members of the board or designated employees of
1686	1686	the board may serve and execute any process issued by any
1687	1687	court under this chapter and execute any papers, orders, or
1688	1688	813
1689	1689	814
1690	1690	815
1691	1691	816
1692	1692	817
1693	1693	818
1694	1694	819
1695	1695	820
1696	1696	821
1697	1697	822
1698	1698	823
1699	1699	824
1700	1700	825
1701	1701	826
1702	1702	827
1703	1703	828
1704	1704	829
1705	1705	830
1706	1706	831
1707	1707	832
1708	1708	833
1709	1709	834
1710	1710	835
1711	1711	836
1712	1712	837
1713	1713	838
1714	1714	839
1715	1715	840 HB81 INTRODUCEDHB81 INTRODUCED
1716	1716	Page 31
1717	1717	process issued by the board or any officer or member of the
1718	1718	board under this chapter.
1719	1719	(k) The board may employ clerical assistants and
1720	1720	employees as necessary to carry out this chapter, and the
1721	1721	terms and conditions of employment shall be determined by the
1722	1722	board. The board may establish and equip an office from which
1723	1723	this chapter may be carried out.
1724	1724	(l)(1) The board may acquire and hold, in its own name,
1725	1725	real property by purchase, gift, lease, lease with the option
1726	1726	to purchase, or other lawful means, except eminent domain,
1727	1727	which real property may be used by the board to carry out its
1728	1728	responsibilities. The board may also transfer, sell, convey,
1729	1729	or cause to be conveyed real property and any improvements
1730	1730	thereon, subject to the requirements of this section. In
1731	1731	purchasing any real property, maintaining real property, or
1732	1732	making improvements thereto, the board may expend any funds
1733	1733	contained in the Funeral Board Property Acquisition Fund
1734	1734	established in subdivision (2), and any obligations created in
1735	1735	connection with the purchase or improvement of the real
1736	1736	property shall not create debts, obligations, or liabilities
1737	1737	of the state. As used in this subsection, real property shall
1738	1738	include land, lots, and all things and interests, including
1739	1739	leasehold interests, pertaining thereto, and all other things
1740	1740	annexed or attached to the land which would pass to a vendee
1741	1741	by conveyance of the land or lot, including mineral, gas, and
1742	1742	oil interests. All sales or leases made by the board of any
1743	1743	real property owned or held by the board shall be subject to
1744	1744	the requirements of Article 3, Chapter 15, Title 9.
1745	1745	841
1746	1746	842
1747	1747	843
1748	1748	844
1749	1749	845
1750	1750	846
1751	1751	847
1752	1752	848
1753	1753	849
1754	1754	850
1755	1755	851
1756	1756	852
1757	1757	853
1758	1758	854
1759	1759	855
1760	1760	856
1761	1761	857
1762	1762	858
1763	1763	859
1764	1764	860
1765	1765	861
1766	1766	862
1767	1767	863
1768	1768	864
1769	1769	865
1770	1770	866
1771	1771	867
1772	1772	868 HB81 INTRODUCEDHB81 INTRODUCED
1773	1773	Page 32
1774	1774	Notwithstanding the foregoing, the proceeds from the sale of
1775	1775	real property owned by the board which are distributed
1776	1776	pursuant to Section 9-15-83 shall be paid to the board and
1777	1777	deposited into the property acquisition fund.
1778	1778	(2) There is established the Funeral Board Property
1779	1779	Acquisition Fund within the State Treasury. Any funds received
1780	1780	by the board pursuant to this section shall be deposited into
1781	1781	the property acquisition fund and shall be held by the board
1782	1782	in trust for carrying out the purposes of the property
1783	1783	acquisition fund. Amounts in the property acquisition fund
1784	1784	shall be budgeted and allotted in accordance with Sections
1785	1785	41-4-80 through 41-4-96 and Sections 41-19-1 through 41-19-12.
1786	1786	Not later than May 1, 2022, the executive director shall
1787	1787	transfer from the Alabama State Funeral Service Fund to the
1788	1788	property acquisition fund an amount determined by vote of the
1789	1789	board for the purchase of real property. Thereafter, the board
1790	1790	shall annually, during the month of October, transfer an
1791	1791	amount between two percent and seven percent of the receipts
1792	1792	of the board from the previous fiscal year to the property
1793	1793	acquisition fund.
1794	1794	(3) At the end of each fiscal year, any unencumbered
1795	1795	and unexpended balance in the property acquisition fund shall
1796	1796	not revert to the State General Fund but shall carry over to
1797	1797	the next fiscal year."
1798	1798	"§34-13-27
1799	1799	(a) The board shall adopt a common seal, which may be
1800	1800	altered as often as the board may desire, and the funeral
1801	1801	division of the board may adopt and enforce, for the
1802	1802	869
1803	1803	870
1804	1804	871
1805	1805	872
1806	1806	873
1807	1807	874
1808	1808	875
1809	1809	876
1810	1810	877
1811	1811	878
1812	1812	879
1813	1813	880
1814	1814	881
1815	1815	882
1816	1816	883
1817	1817	884
1818	1818	885
1819	1819	886
1820	1820	887
1821	1821	888
1822	1822	889
1823	1823	890
1824	1824	891
1825	1825	892
1826	1826	893
1827	1827	894
1828	1828	895
1829	1829	896 HB81 INTRODUCEDHB81 INTRODUCED
1830	1830	Page 33
1831	1831	protection of the public health, safety, and welfare,
1832	1832	reasonable rules relating to all of the following:
1833	1833	(1) The practice of the profession of embalming,
1834	1834	including, but not limited to, solicitation of business.
1835	1835	(2) The practice of the profession of funeral
1836	1836	directing, including, but not limited to, solicitation of
1837	1837	business.
1838	1838	(3) The sanitary condition and physical facilities of
1839	1839	funeral homes, mortuaries, and funeral establishments where
1840	1840	the profession of embalming and funeral directing is carried
1841	1841	on, with particular regard to plumbing, sewage, disinfecting,
1842	1842	ventilation, and equipment.
1843	1843	(4) Carrying out generally the various provisions of
1844	1844	this chapter for the protection of the peace, health, safety,
1845	1845	and welfare of the public.
1846	1846	(5) Carrying out a program for training of apprentice
1847	1847	embalmers and apprentice funeral directors.
1848	1848	(6) The sale of goods, services, and merchandise and
1849	1849	the operation of entities and establishments regulated by the
1850	1850	board.
1851	1851	(b) The preneed division of the board may adopt and
1852	1852	enforce, for the protection of the public health, safety, and
1853	1853	welfare, reasonable rules relating to the sale of preneed
1854	1854	funeral merchandise and services. "
1855	1855	Section 2. The following heading is added to Division
1856	1856	1, commencing with Section 34-13-170, of Article 5, Chapter
1857	1857	13, Title 34, Code of Alabama 1975:
1858	1858	"Article 5. Alabama Preneed Funeral and Cemetery Act of
1859	1859	897
1860	1860	898
1861	1861	899
1862	1862	900
1863	1863	901
1864	1864	902
1865	1865	903
1866	1866	904
1867	1867	905
1868	1868	906
1869	1869	907
1870	1870	908
1871	1871	909
1872	1872	910
1873	1873	911
1874	1874	912
1875	1875	913
1876	1876	914
1877	1877	915
1878	1878	916
1879	1879	917
1880	1880	918
1881	1881	919
1882	1882	920
1883	1883	921
1884	1884	922
1885	1885	923
1886	1886	924 HB81 INTRODUCEDHB81 INTRODUCED
1887	1887	Page 34
1888	1888	2023.
1889	1889	"Division 1. General Provisions."
1890	1890	Section 3. Sections 27-17A-1, 27-17A-3, and 27-17A-4 of
1891	1891	the Code of Alabama 1975, are amended and renumbered as
1892	1892	Division 1 of Article 5 of Chapter 13 of Title 34, Code of
1893	1893	Alabama 1975, to read as follows:
1894	1894	"§27-17A-1§34-13-170
1895	1895	(a) This chapter article shall be known and may be
1896	1896	cited as the Alabama Preneed Funeral and Cemetery Act of 2023.
1897	1897	(b)(1) The Alabama Board of Funeral Services succeeds
1898	1898	to and is vested with the powers, duties, and functions of the
1899	1899	Department of Insurance relating to the regulation of
1900	1900	endowment care, preneed sales contracts, and the licensing of
1901	1901	preneed sales agents.
1902	1902	(2) All records of the Department of Insurance relating
1903	1903	to the regulation of preneed sales contracts, endowment care,
1904	1904	and the licensing of preneed sales agents are transferred to
1905	1905	the board.
1906	1906	(3) The status of any person properly licensed by the
1907	1907	Department of Insurance under the former Chapter 17A of Title
1908	1908	27, on the effective date of the act adding this subdivision,
1909	1909	shall continue under the board.
1910	1910	(4) The administrative rules of the Department of
1911	1911	Insurance existing on the effective date of the act adding
1912	1912	this subdivision shall remain in effect as administrative
1913	1913	rules of the board until added, amended, or repealed by the
1914	1914	board.
1915	1915	(5) The existence and functioning of the Alabama
1916	1916	925
1917	1917	926
1918	1918	927
1919	1919	928
1920	1920	929
1921	1921	930
1922	1922	931
1923	1923	932
1924	1924	933
1925	1925	934
1926	1926	935
1927	1927	936
1928	1928	937
1929	1929	938
1930	1930	939
1931	1931	940
1932	1932	941
1933	1933	942
1934	1934	943
1935	1935	944
1936	1936	945
1937	1937	946
1938	1938	947
1939	1939	948
1940	1940	949
1941	1941	950
1942	1942	951
1943	1943	952 HB81 INTRODUCEDHB81 INTRODUCED
1944	1944	Page 35
1945	1945	Preneed Funeral and Cemetery Act, created and functioning
1946	1946	pursuant to Sections 27-17A-1 to 27-17A-57, inclusive, is
1947	1947	continued as the Alabama Preneed Funeral and Cemetery Act of
1948	1948	2023, under this article. All rights, duties, and obligations
1949	1949	existing in the name of the Department of Insurance, relating
1950	1950	to endowment care, preneed sales contracts, and preneed sales
1951	1951	agent licenses, shall continue under the board. Any reference
1952	1952	to the Department of Insurance in any existing law, contract,
1953	1953	or other instrument relating to endowment care, preneed sales
1954	1954	contracts, and preneed sales agent licenses, shall be deemed a
1955	1955	reference to the board.
1956	1956	(6) The transfer of the regulation of preneed contracts
1957	1957	and the licensing of preneed sales agents from the Department
1958	1958	of Insurance to the board shall not affect the rights of any
1959	1959	person held before the effective date of the act adding this
1960	1960	subdivision, as those rights relate to any preneed trust
1961	1961	funds, endowment care trust funds, or any other funds held in
1962	1962	trust pursuant to the Alabama Preneed Funeral and Cemetery
1963	1963	Act."
1964	1964	"§27-17A-3§34-13-171
1965	1965	(a) Nothing in this chapter shall be construed to
1966	1966	prohibit the funding of preneed contracts with multiple
1967	1967	insurance or annuity contracts. Life insurance and annuity
1968	1968	contracts used to fund preneed contracts shall conform with
1969	1969	the provisions of this title Title 27 as they relate to life
1970	1970	insurance and annuities and shall cover not less than the
1971	1971	initial retail price of the preneed contract.
1972	1972	(b) The initial premium payment for a life insurance
1973	1973	953
1974	1974	954
1975	1975	955
1976	1976	956
1977	1977	957
1978	1978	958
1979	1979	959
1980	1980	960
1981	1981	961
1982	1982	962
1983	1983	963
1984	1984	964
1985	1985	965
1986	1986	966
1987	1987	967
1988	1988	968
1989	1989	969
1990	1990	970
1991	1991	971
1992	1992	972
1993	1993	973
1994	1994	974
1995	1995	975
1996	1996	976
1997	1997	977
1998	1998	978
1999	1999	979
2000	2000	980 HB81 INTRODUCEDHB81 INTRODUCED
2001	2001	Page 36
2002	2002	policy or annuity contract shall be made payable to the
2003	2003	issuing insurance company and the preneed seller shall remit
2004	2004	the payment to the insurance company within 10 business days
2005	2005	after the insurance application is signed by the parties. If a
2006	2006	preneed contract provides for installment payments, each
2007	2007	premium payment shall be made payable to the insurance company
2008	2008	and, if collected by the preneed seller, shall be remitted to
2009	2009	the insurance company within 10 business days after receipt by
2010	2010	the preneed seller.
2011	2011	(c) Nothing in this chapter shall prohibit a seller, or
2012	2012	any other person, from receiving commissions earned and
2013	2013	payable in regard to funding preneed contracts with life
2014	2014	insurance or annuity contracts, provided the seller or other
2015	2015	person holds a valid insurance producer license in this state
2016	2016	and is appointed by the insurance company paying the
2017	2017	commission.
2018	2018	(d) A preneed seller may be identified as the
2019	2019	beneficiary or assignee of the death benefit proceeds of a
2020	2020	life insurance policy or annuity contract sold as a future
2021	2021	funding mechanism for a preneed contract, but may not be the
2022	2022	owner of the policy or annuity contract or exercise any
2023	2023	ownership rights in the policy or annuity. If the preneed
2024	2024	contract is cancelled before or after the death of the funeral
2025	2025	beneficiary, the preneed seller shall cancel and relinquish
2026	2026	any assignment of benefits or beneficiary status under the
2027	2027	policy or annuity contract, and deliver the policy or
2028	2028	contract, if in the custody of the preneed seller, to the
2029	2029	policy owner or his or her legal representative."
2030	2030	981
2031	2031	982
2032	2032	983
2033	2033	984
2034	2034	985
2035	2035	986
2036	2036	987
2037	2037	988
2038	2038	989
2039	2039	990
2040	2040	991
2041	2041	992
2042	2042	993
2043	2043	994
2044	2044	995
2045	2045	996
2046	2046	997
2047	2047	998
2048	2048	999
2049	2049	1000
2050	2050	1001
2051	2051	1002
2052	2052	1003
2053	2053	1004
2054	2054	1005
2055	2055	1006
2056	2056	1007
2057	2057	1008 HB81 INTRODUCEDHB81 INTRODUCED
2058	2058	Page 37
2059	2059	"§27-17A-4§34-13-172
2060	2060	Nothing in this chapter shall be construed to prohibit
2061	2061	cemetery authorities from selling funeral merchandise, funeral
2062	2062	establishments from selling cemetery merchandise, or
2063	2063	third-party sellers from selling either funeral merchandise or
2064	2064	cemetery merchandise, or both. Provided, the required amount
2065	2065	of the purchase price to be placed into trust shall be
2066	2066	governed by the appropriate section of this chapter."
2067	2067	Section 4. The following heading is added to Division
2068	2068	2, commencing with Section 34-13-190, of Article 5, Chapter
2069	2069	13, Title 34, Code of Alabama 1975:
2070	2070	"Division 2. Certificate of Authority."
2071	2071	Section 5. Sections 27-17A-10, 27-17A-11, 27-17A-11.1,
2072	2072	27-17A-12, 27-17A-13, 27-17A-14, 27-17A-15, 27-17A-16,
2073	2073	27-17A-17, 27-17A-18, 27-17A-19, 27-17A-20, 27-17A-21,
2074	2074	27-17A-22, 27-17A-23, 27-17A-24, and 27-17A-25 of the Code of
2075	2075	Alabama 1975, are amended and renumbered as Division 2 of
2076	2076	Article 5 of Chapter 13 of Title 34, Code of Alabama 1975, to
2077	2077	read as follows:
2078	2078	"§27-17A-10§34-13-190
2079	2079	(a) No person may sell a preneed contract without first
2080	2080	having a valid certificate of authority.
2081	2081	(b)(1) No person may receive any funds for payment on a
2082	2082	preneed contract who does not hold a valid certificate of
2083	2083	authority.
2084	2084	(2) Any preneed transaction in which a buyer pays to
2085	2085	the seller before need, in whole or in part, a purchase price
2086	2086	for funeral or cemetery merchandise and services, and in which
2087	2087	1009
2088	2088	1010
2089	2089	1011
2090	2090	1012
2091	2091	1013
2092	2092	1014
2093	2093	1015
2094	2094	1016
2095	2095	1017
2096	2096	1018
2097	2097	1019
2098	2098	1020
2099	2099	1021
2100	2100	1022
2101	2101	1023
2102	2102	1024
2103	2103	1025
2104	2104	1026
2105	2105	1027
2106	2106	1028
2107	2107	1029
2108	2108	1030
2109	2109	1031
2110	2110	1032
2111	2111	1033
2112	2112	1034
2113	2113	1035
2114	2114	1036 HB81 INTRODUCEDHB81 INTRODUCED
2115	2115	Page 38
2116	2116	the seller is not obligated to deliver the contracted for
2117	2117	merchandise or to perform the services until need, in whole or
2118	2118	in part, shall be evidenced by a written preneed contract
2119	2119	satisfying the requirements of this chapter and signed by the
2120	2120	seller and the purchaser. No person may receive or accept any
2121	2121	form of consideration in such a transaction without a fully
2122	2122	signed written preneed contract. A transaction not evidenced
2123	2123	by a signed written preneed contract shall be voidable at the
2124	2124	election of the buyer and, if such election is made, the
2125	2125	seller shall refund to the buyer the entire amount paid by the
2126	2126	buyer together with interest thereon at the legal rate within
2127	2127	30 days after notice to the seller.
2128	2128	(3) The provisions of subdivision (1) do not apply to
2129	2129	the purchase of a life insurance policy or annuity, the
2130	2130	benefits of which are assigned to a funeral home and/or or
2131	2131	cemetery authority, or the benefits of which are to be paid to
2132	2132	a funeral home and/or or cemetery authority named as
2133	2133	beneficiary of the policy or annuity, as long as the purchaser
2134	2134	and funeral home and/or or cemetery authority acknowledge in
2135	2135	writing that no preneed contract is entered as a result of the
2136	2136	purchase or assignment of the life insurance policy or annuity
2137	2137	at the time the policy or annuity is purchased. Benefits from
2138	2138	a life insurance policy or annuity issued under this
2139	2139	subdivision shall only be paid to a funeral home and/or or
2140	2140	cemetery authority which provides funeral or cemetery
2141	2141	merchandise and services at the death of the insured whether
2142	2142	or not such funeral home and/or or cemetery has been named as
2143	2143	an assignee or the beneficiary of the policy or annuity. If
2144	2144	1037
2145	2145	1038
2146	2146	1039
2147	2147	1040
2148	2148	1041
2149	2149	1042
2150	2150	1043
2151	2151	1044
2152	2152	1045
2153	2153	1046
2154	2154	1047
2155	2155	1048
2156	2156	1049
2157	2157	1050
2158	2158	1051
2159	2159	1052
2160	2160	1053
2161	2161	1054
2162	2162	1055
2163	2163	1056
2164	2164	1057
2165	2165	1058
2166	2166	1059
2167	2167	1060
2168	2168	1061
2169	2169	1062
2170	2170	1063
2171	2171	1064 HB81 INTRODUCEDHB81 INTRODUCED
2172	2172	Page 39
2173	2173	the amount of the policy or annuity proceeds shall exceed the
2174	2174	actual funeral costs at the time of need, such the excess
2175	2175	amount must shall be paid to a designated beneficiary, other
2176	2176	than a funeral home and/or or cemetery authority, or to the
2177	2177	estate of the insured or annuitant.
2178	2178	(4) The provisions of subdivision Subdivision (1) do
2179	2179	does not apply to any legal reserve insurance company or to
2180	2180	any trust company or to any national or state bank or savings
2181	2181	and loan association having trust powers which company, bank,
2182	2182	or association receives any money in trust pursuant to the
2183	2183	sale of a preneed contract.
2184	2184	(c)(1) No person may obtain a certificate of authority
2185	2185	under this article chapter for the preneed sale of funeral
2186	2186	services or cemetery services unless the person or its agent,
2187	2187	in the case of a corporate entity, holds a license as a
2188	2188	funeral director or a funeral establishment, or is a cemetery
2189	2189	authority. and qualifies as an applicant for a certificate of
2190	2190	authority pursuant to the following standards and
2191	2191	qualifications:
2192	2192	a. The applicant shall be at least the legal age of
2193	2193	majority in this state.
2194	2194	b. The applicant shall be in good standing with the
2195	2195	board.
2196	2196	c. The applicant may not have any felony or misdemeanor
2197	2197	convictions that relate to any activity regulated by this
2198	2198	chapter or a crime involving moral turpitude, as defined by
2199	2199	this chapter.
2200	2200	d. The applicant shall be of good moral character and
2201	2201	1065
2202	2202	1066
2203	2203	1067
2204	2204	1068
2205	2205	1069
2206	2206	1070
2207	2207	1071
2208	2208	1072
2209	2209	1073
2210	2210	1074
2211	2211	1075
2212	2212	1076
2213	2213	1077
2214	2214	1078
2215	2215	1079
2216	2216	1080
2217	2217	1081
2218	2218	1082
2219	2219	1083
2220	2220	1084
2221	2221	1085
2222	2222	1086
2223	2223	1087
2224	2224	1088
2225	2225	1089
2226	2226	1090
2227	2227	1091
2228	2228	1092 HB81 INTRODUCEDHB81 INTRODUCED
2229	2229	Page 40
2230	2230	submit to a criminal history background check pursuant to
2231	2231	subdivision (2).
2232	2232	(2) An applicant for a certificate of authority shall
2233	2233	submit to the board, on a form sworn to by the applicant, his
2234	2234	or her name, date of birth, Social Security number, and two
2235	2235	complete sets of fingerprints for completion of a criminal
2236	2236	history background check. The board shall submit the
2237	2237	fingerprints to the Alabama State Law Enforcement Agency for a
2238	2238	state criminal history background check. The fingerprints
2239	2239	shall be forwarded by the agency to the Federal Bureau of
2240	2240	Investigation for a national criminal history background
2241	2241	check. Costs associated with conducting a criminal history
2242	2242	background check shall be paid by the applicant. The board
2243	2243	shall keep information received pursuant to this subdivision
2244	2244	confidential, except that information received and relied upon
2245	2245	in denying the issuance of a certificate of authority may be
2246	2246	disclosed if necessary to support the denial. All character
2247	2247	information, including the information obtained through the
2248	2248	criminal history background checks, shall be considered in
2249	2249	licensure decisions to the extent permissible by all
2250	2250	applicable laws.
2251	2251	(d) The provisions of this This section do does not
2252	2252	apply to a cemetery authority owned or operated by a
2253	2253	governmental agency or a religious institution or to those
2254	2254	cemeteries that do not charge fees or sell plots, interment
2255	2255	rights, or any related cemetery merchandise ."
2256	2256	"§27-17A-11§34-13-191
2257	2257	(a) An application to the commissioner board for a
2258	2258	1093
2259	2259	1094
2260	2260	1095
2261	2261	1096
2262	2262	1097
2263	2263	1098
2264	2264	1099
2265	2265	1100
2266	2266	1101
2267	2267	1102
2268	2268	1103
2269	2269	1104
2270	2270	1105
2271	2271	1106
2272	2272	1107
2273	2273	1108
2274	2274	1109
2275	2275	1110
2276	2276	1111
2277	2277	1112
2278	2278	1113
2279	2279	1114
2280	2280	1115
2281	2281	1116
2282	2282	1117
2283	2283	1118
2284	2284	1119
2285	2285	1120 HB81 INTRODUCEDHB81 INTRODUCED
2286	2286	Page 41
2287	2287	certificate of authority shall be accompanied by the statement
2288	2288	and other matters described in this section in the form
2289	2289	prescribed by the commissioner board. Annually thereafter,
2290	2290	within six months after the end of its fiscal period, or
2291	2291	within an extension of time therefor, as the commissioner
2292	2292	board for good cause may grant, the person authorized to
2293	2293	engage in the sale of preneed contracts shall file with the
2294	2294	commissioner board a full and true statement of his or her
2295	2295	financial condition, transactions, and affairs, prepared on a
2296	2296	basis as adopted by a rule of the commissioner board, as of
2297	2297	the preceding fiscal period or at such other time or times as
2298	2298	the commissioner board may provide by rule, together with
2299	2299	information and data which may be required by the commissioner
2300	2300	board.
2301	2301	(b) The statement shall include all of the following:
2302	2302	(1) The types of preneed contracts proposed to be
2303	2303	written and the type of funding vehicle vehicles to be used.
2304	2304	(2) The name and address of the place of business of
2305	2305	the person offering to write preneed contracts.
2306	2306	(3) Evidence that the person offering the statement has
2307	2307	the following qualifications:
2308	2308	a. Has the ability to discharge his or her preneed
2309	2309	liabilities as they become due in the normal course of
2310	2310	business and has sufficient funds available during the
2311	2311	calendar year to perform his or her obligations under the
2312	2312	contract.
2313	2313	b. Has complied with the trust requirements for the
2314	2314	funds received under contracts issued by himself or herself as
2315	2315	1121
2316	2316	1122
2317	2317	1123
2318	2318	1124
2319	2319	1125
2320	2320	1126
2321	2321	1127
2322	2322	1128
2323	2323	1129
2324	2324	1130
2325	2325	1131
2326	2326	1132
2327	2327	1133
2328	2328	1134
2329	2329	1135
2330	2330	1136
2331	2331	1137
2332	2332	1138
2333	2333	1139
2334	2334	1140
2335	2335	1141
2336	2336	1142
2337	2337	1143
2338	2338	1144
2339	2339	1145
2340	2340	1146
2341	2341	1147
2342	2342	1148 HB81 INTRODUCEDHB81 INTRODUCED
2343	2343	Page 42
2344	2344	hereinafter described.
2345	2345	c. Has disbursed interest, dividends, or accretions
2346	2346	earned by trust funds, in accordance with this article chapter
2347	2347	and rules promulgated adopted hereunder.
2348	2348	d. Has complied with this chapter and any rules of the
2349	2349	commissioner board.
2350	2350	(4) Any other information considered necessary by the
2351	2351	commissioner board to meet the commissioner's board's
2352	2352	responsibilities under this chapter.
2353	2353	(c) If the person is an individual, the statement shall
2354	2354	be sworn by him or her; if a firm or association, by all
2355	2355	members thereof; or, if a corporation, by any officer of the
2356	2356	corporation.
2357	2357	(d)(1) An application to the commissioner board for an
2358	2358	initial certificate of authority shall be accompanied by an
2359	2359	application fee in an amount to be determined by the
2360	2360	commissioner board, not to exceed one hundred fifty dollars
2361	2361	($150) one hundred ninety-eight dollars ($198) . Thereafter,
2362	2362	each annual application for renewal of a certificate of
2363	2363	authority shall be accompanied by the appropriate fee as
2364	2364	determined by the commissioner board not to exceed
2365	2365	seventy-five dollars ($75) ninety-nine dollars ($99) .
2366	2366	(2) Any person or entity that is part of a common
2367	2367	business enterprise that has a certificate of authority issued
2368	2368	pursuant to this article chapter and elects to operate under a
2369	2369	name other than that of the common business enterprise shall
2370	2370	submit an application on a form adopted prescribed by the
2371	2371	commissioner board to become a branch registrant. Upon the
2372	2372	1149
2373	2373	1150
2374	2374	1151
2375	2375	1152
2376	2376	1153
2377	2377	1154
2378	2378	1155
2379	2379	1156
2380	2380	1157
2381	2381	1158
2382	2382	1159
2383	2383	1160
2384	2384	1161
2385	2385	1162
2386	2386	1163
2387	2387	1164
2388	2388	1165
2389	2389	1166
2390	2390	1167
2391	2391	1168
2392	2392	1169
2393	2393	1170
2394	2394	1171
2395	2395	1172
2396	2396	1173
2397	2397	1174
2398	2398	1175
2399	2399	1176 HB81 INTRODUCEDHB81 INTRODUCED
2400	2400	Page 43
2401	2401	approval of the commissioner board that the entity qualifies
2402	2402	to sell preneed contracts under this article chapter except
2403	2403	for the requirements of subparagraph 1., of paragraph a. of
2404	2404	subdivision (3) of subsection (b) and if the certificate
2405	2405	holder meets the requirements of paragraph a. subparagraph 1. ,
2406	2406	a branch registration shall be issued. Each branch registrant
2407	2407	may operate under the certificate of authority of the common
2408	2408	business enterprise upon the payment of a fee established by
2409	2409	the commissioner board not to exceed one hundred fifty dollars
2410	2410	($150) one hundred ninety-eight dollars ($198) accompanying
2411	2411	the application on July September 1 annually.
2412	2412	(e) Upon the commissioner board being satisfied that
2413	2413	the statement and matters which may accompany it the statement
2414	2414	meet the requirements of this article chapter and of its
2415	2415	rules, the commissioner board shall issue or renew the
2416	2416	certificate of authority.
2417	2417	(f) The certificate of authority shall expire annually
2418	2418	on September October 1, unless renewed, or at such other time
2419	2419	or times as the commissioner board may provide by rule.
2420	2420	(g) On or before July 1 of a date adopted by the board
2421	2421	each year, the certificate holder shall file with the
2422	2422	commissioner board in the form prescribed by the commissioner
2423	2423	board a full and true statement as to the activities of any
2424	2424	trust established by it pursuant to this article chapter for
2425	2425	the preceding calendar year.
2426	2426	(h) In addition to any other penalty that may be
2427	2427	provided for under this article chapter, the commissioner
2428	2428	board may levy a fine not to exceed fifty dollars ($50) per
2429	2429	1177
2430	2430	1178
2431	2431	1179
2432	2432	1180
2433	2433	1181
2434	2434	1182
2435	2435	1183
2436	2436	1184
2437	2437	1185
2438	2438	1186
2439	2439	1187
2440	2440	1188
2441	2441	1189
2442	2442	1190
2443	2443	1191
2444	2444	1192
2445	2445	1193
2446	2446	1194
2447	2447	1195
2448	2448	1196
2449	2449	1197
2450	2450	1198
2451	2451	1199
2452	2452	1200
2453	2453	1201
2454	2454	1202
2455	2455	1203
2456	2456	1204 HB81 INTRODUCEDHB81 INTRODUCED
2457	2457	Page 44
2458	2458	day for each day the certificate holder fails to file its
2459	2459	annual statement, and the commissioner board may levy a fine
2460	2460	not to exceed fifty dollars ($50) per day for each day the
2461	2461	certificate holder fails to file the statement of activities
2462	2462	of the trust. Upon notice to the certificate holder by the
2463	2463	commissioner board that the certificate holder has failed to
2464	2464	file the annual statement or the statement of activities of
2465	2465	the trust, the certificate holder's authority to sell preneed
2466	2466	contracts shall cease while the default continues.
2467	2467	(i) To facilitate uniformity in financial statements
2468	2468	and to facilitate analysis, the commissioner board may by rule
2469	2469	adopt a form for financial statements. The holder of a
2470	2470	certificate of authority may submit a written request to the
2471	2471	commissioner board to exempt the holder from filing financial
2472	2472	statements at renewal. The commissioner board may waive the
2473	2473	requirement for filing a financial statement at renewal if all
2474	2474	of the following are satisfied:
2475	2475	(1) No valid complaint has been filed since the last
2476	2476	examination audit.
2477	2477	(2) No administrative action against the preneed entity
2478	2478	has been instituted since the last examination audit.
2479	2479	(3) The certificate holder certifies that all
2480	2480	outstanding preneed contracts written by the holder since
2481	2481	April 30, 2002, are fully funded in accordance with this
2482	2482	chapter.
2483	2483	(4) The certificate holder certifies that it will fully
2484	2484	fund all preneed contracts with life insurance, annuity, or
2485	2485	will deposit 100 percent of all funds collected on all preneed
2486	2486	1205
2487	2487	1206
2488	2488	1207
2489	2489	1208
2490	2490	1209
2491	2491	1210
2492	2492	1211
2493	2493	1212
2494	2494	1213
2495	2495	1214
2496	2496	1215
2497	2497	1216
2498	2498	1217
2499	2499	1218
2500	2500	1219
2501	2501	1220
2502	2502	1221
2503	2503	1222
2504	2504	1223
2505	2505	1224
2506	2506	1225
2507	2507	1226
2508	2508	1227
2509	2509	1228
2510	2510	1229
2511	2511	1230
2512	2512	1231
2513	2513	1232 HB81 INTRODUCEDHB81 INTRODUCED
2514	2514	Page 45
2515	2515	contracts in trust within 30 days after the end of the
2516	2516	calendar month in which the funds are collected.
2517	2517	(5) The preneed entity has provided to the department
2518	2518	board in a timely manner all required and requested records.
2519	2519	(6) The preneed entity agrees to file quarterly reports
2520	2520	of its preneed activity on a form or, in a format, and as
2521	2521	often as prescribed by the commissioner board.
2522	2522	(j) The commissioner board may authorize the transfer
2523	2523	of certificates of authority and establish fees for the
2524	2524	transfer in an amount not to exceed one hundred dollars ($100)
2525	2525	one hundred thirty-two dollars ($132) . Upon receipt of an
2526	2526	application for transfer, the commissioner board may grant a
2527	2527	temporary certificate of authority to the proposed transferee,
2528	2528	based upon criteria established by the commissioner board by
2529	2529	rule, which criteria shall promote the purposes of this
2530	2530	article chapter in protecting the consumer. A temporary
2531	2531	certificate of authority shall expire 60 days after issuance
2532	2532	unless renewed by the commissioner board."
2533	2533	"§27-17A-11.1§34-13-192
2534	2534	(a) On a semi-annual basis, within 45 days after the
2535	2535	end of each second calendar reporting period or before July 1,
2536	2536	each year, the certificate holder shall file a report of its
2537	2537	preneed contract activity on a form or in a format prescribed
2538	2538	by the commissioner board. The information reported shall
2539	2539	include the total number of preneed contracts in force at the
2540	2540	end of the previous reporting period calendar year, the total
2541	2541	number of preneed contracts sold during the reporting period
2542	2542	previous calendar year , the total number of preneed contracts
2543	2543	1233
2544	2544	1234
2545	2545	1235
2546	2546	1236
2547	2547	1237
2548	2548	1238
2549	2549	1239
2550	2550	1240
2551	2551	1241
2552	2552	1242
2553	2553	1243
2554	2554	1244
2555	2555	1245
2556	2556	1246
2557	2557	1247
2558	2558	1248
2559	2559	1249
2560	2560	1250
2561	2561	1251
2562	2562	1252
2563	2563	1253
2564	2564	1254
2565	2565	1255
2566	2566	1256
2567	2567	1257
2568	2568	1258
2569	2569	1259
2570	2570	1260 HB81 INTRODUCEDHB81 INTRODUCED
2571	2571	Page 46
2572	2572	fulfilled during the reporting period previous calendar year ,
2573	2573	the total number of preneed contracts in force at the end of
2574	2574	the reporting period previous calendar year , and such other
2575	2575	information as may be required by the commissioner board. The
2576	2576	report shall be organized by type of funding including, life
2577	2577	insurance, annuity, trust, letter of credit, or surety bond.
2578	2578	The report shall also provide a certification by the trustee
2579	2579	of the amount of assets held by the trust at the beginning of
2580	2580	the reporting period and at the end of the reporting period,
2581	2581	together with the amount of deposits and withdrawals during
2582	2582	the reporting period. If a certificate holder shall twice
2583	2583	default in complying with the requirements of this subsection,
2584	2584	the commissioner board may require that the certificate holder
2585	2585	thereafter submit the report within 45 days after the end of
2586	2586	each calendar quarter and shall continue so reporting for a
2587	2587	time to be determined by the commissioner board.
2588	2588	(b) The certificate holder shall maintain a written log
2589	2589	of preneed sales. The log shall be on a form or in a format
2590	2590	prescribed by the commissioner board, shall detail all
2591	2591	information required by the commissioner board, and shall be
2592	2592	available for inspection at any time by the commissioner
2593	2593	board.
2594	2594	(c) Each cemetery authority shall maintain a written
2595	2595	log of the sale of cemetery interment rights. The log shall be
2596	2596	on a form or in a format prescribed by the commissioner board
2597	2597	and shall detail all information required by the commissioner
2598	2598	board.
2599	2599	(d) The board may maintain a statewide database of
2600	2600	1261
2601	2601	1262
2602	2602	1263
2603	2603	1264
2604	2604	1265
2605	2605	1266
2606	2606	1267
2607	2607	1268
2608	2608	1269
2609	2609	1270
2610	2610	1271
2611	2611	1272
2612	2612	1273
2613	2613	1274
2614	2614	1275
2615	2615	1276
2616	2616	1277
2617	2617	1278
2618	2618	1279
2619	2619	1280
2620	2620	1281
2621	2621	1282
2622	2622	1283
2623	2623	1284
2624	2624	1285
2625	2625	1286
2626	2626	1287
2627	2627	1288 HB81 INTRODUCEDHB81 INTRODUCED
2628	2628	Page 47
2629	2629	preneed contracts reported to the board pursuant to subsection
2630	2630	(a). The board may make information in this database
2631	2631	searchable by the public by means of unique identifiers, or
2632	2632	any other means, that the board determines respects the
2633	2633	privacy of those involved while also protecting consumers from
2634	2634	financial waste by allowing families to determine if a
2635	2635	deceased loved one has an existing preneed contract. Any
2636	2636	preneed consumer who does not wish for his or her information
2637	2637	to appear in this searchable database may opt out by following
2638	2638	a process established by the board. "
2639	2639	"§27-17A-12§34-13-193
2640	2640	(a) Preneed contract forms and related forms shall be
2641	2641	filed with and approved by the commissioner board.
2642	2642	(b) Specific disclosure regarding whether, consistent
2643	2643	with the requirements of this chapter, the certificate holder
2644	2644	is placing certain preneed funds received with the contract in
2645	2645	trust, in an annuity, or in insurance, is required in the
2646	2646	preneed contract.
2647	2647	(c) Preneed contracts which have been submitted to the
2648	2648	commissioner board shall be deemed to have been approved by
2649	2649	the commissioner board in the event that the commissioner
2650	2650	board fails to notify the certificate holder that approval has
2651	2651	been denied within 30 days following submission to the
2652	2652	commissioner board."
2653	2653	"§27-17A-13§34-13-194
2654	2654	(a) Except as provided in Sections 27-17A-3 and
2655	2655	27-17A-14 34-13-171 and 34-13-195 , every preneed contract
2656	2656	shall require the monies paid to the seller or trustee to be
2657	2657	1289
2658	2658	1290
2659	2659	1291
2660	2660	1292
2661	2661	1293
2662	2662	1294
2663	2663	1295
2664	2664	1296
2665	2665	1297
2666	2666	1298
2667	2667	1299
2668	2668	1300
2669	2669	1301
2670	2670	1302
2671	2671	1303
2672	2672	1304
2673	2673	1305
2674	2674	1306
2675	2675	1307
2676	2676	1308
2677	2677	1309
2678	2678	1310
2679	2679	1311
2680	2680	1312
2681	2681	1313
2682	2682	1314
2683	2683	1315
2684	2684	1316 HB81 INTRODUCEDHB81 INTRODUCED
2685	2685	Page 48
2686	2686	placed in trust in accordance with Article 3 Division 3, for
2687	2687	funeral merchandise and services sold by funeral
2688	2688	establishments or third party sellers, or Article 4 Division
2689	2689	4, for cemetery merchandise and services sold by cemetery
2690	2690	authorities.
2691	2691	(b) Although this chapter does not apply to preneed
2692	2692	contracts entered into prior to May 1, 2002, a preneed
2693	2693	provider which contends that a preneed trust fund which was in
2694	2694	effect prior to May 1, 2002, complies with this chapter with
2695	2695	respect to the contracts entered into prior to May 1, 2002,
2696	2696	may provide to the commissioner board documentary proof
2697	2697	thereof. Upon the commissioner board determining that
2698	2698	compliance has been established, the pre-existing preneed
2699	2699	trust fund assets may be merged with or into the trust fund
2700	2700	required under this chapter or continued as the trust fund and
2701	2701	that determination by the commissioner board shall be noted on
2702	2702	the certificate of authority, and thereafter all preneed
2703	2703	contracts covered by the trust fund, including those entered
2704	2704	into prior to May 1, 2002, shall be subject to this chapter."
2705	2705	"§27-17A-14§34-13-195
2706	2706	(a) As an alternative to the trust requirement of
2707	2707	Section 27-17A-13 34-13-194, the details of which are set
2708	2708	forth in Articles 3 and 4 Divisions 3 and 4 , a preneed
2709	2709	provider may, withthe prior approval of the commissioner
2710	2710	board, may purchase a surety bond in an amount not less than
2711	2711	the aggregate value of outstanding liabilities on undelivered
2712	2712	preneed contracts for merchandise, services, and cash
2713	2713	advances. For the purposes of this section, the term
2714	2714	1317
2715	2715	1318
2716	2716	1319
2717	2717	1320
2718	2718	1321
2719	2719	1322
2720	2720	1323
2721	2721	1324
2722	2722	1325
2723	2723	1326
2724	2724	1327
2725	2725	1328
2726	2726	1329
2727	2727	1330
2728	2728	1331
2729	2729	1332
2730	2730	1333
2731	2731	1334
2732	2732	1335
2733	2733	1336
2734	2734	1337
2735	2735	1338
2736	2736	1339
2737	2737	1340
2738	2738	1341
2739	2739	1342
2740	2740	1343
2741	2741	1344 HB81 INTRODUCEDHB81 INTRODUCED
2742	2742	Page 49
2743	2743	outstanding liabilities means the original retail amount of
2744	2744	services and cash advances and the actual cost to the entity
2745	2745	to provide the undelivered merchandise sold on each contract
2746	2746	written after April 30, 2002. The surety bond shall be in an
2747	2747	amount sufficient to cover the outstanding liability at the
2748	2748	time each contract is executed.
2749	2749	(b) The bond shall be made payable to the State of
2750	2750	Alabama for the benefit of the commissioner board and of all
2751	2751	purchasers of preneed merchandise, services, and cash
2752	2752	advances. The bond shall be issued by an insurance company
2753	2753	licensed in the State of Alabama and authorized to issue
2754	2754	surety bonds and approved by the commissioner board.
2755	2755	(c) The amount of the bond shall be based on a report
2756	2756	documenting the outstanding liabilities of the preneed
2757	2757	provider for the previous calendar quarter and the projected
2758	2758	liability for the immediately following quarter, shall be
2759	2759	prepared by the preneed provider using generally accepted
2760	2760	accounting principles, and shall be signed by the chief
2761	2761	executive officer or chief financial officer of the preneed
2762	2762	provider. The report shall be compiled as of the end of the
2763	2763	preneed provider's fiscal year and updated quarterly.
2764	2764	(d) The amount of the bond shall be increased or
2765	2765	decreased as necessary to correlate with changes in the
2766	2766	outstanding liabilities. Further, the commissioner board may
2767	2767	order the bond to be increased as necessary to correlate with
2768	2768	changes in the outstanding liabilities of bonded contracts due
2769	2769	to increases in the consumer price index.
2770	2770	(e) If the preneed provider fails to maintain a bond
2771	2771	1345
2772	2772	1346
2773	2773	1347
2774	2774	1348
2775	2775	1349
2776	2776	1350
2777	2777	1351
2778	2778	1352
2779	2779	1353
2780	2780	1354
2781	2781	1355
2782	2782	1356
2783	2783	1357
2784	2784	1358
2785	2785	1359
2786	2786	1360
2787	2787	1361
2788	2788	1362
2789	2789	1363
2790	2790	1364
2791	2791	1365
2792	2792	1366
2793	2793	1367
2794	2794	1368
2795	2795	1369
2796	2796	1370
2797	2797	1371
2798	2798	1372 HB81 INTRODUCEDHB81 INTRODUCED
2799	2799	Page 50
2800	2800	pursuant to this section the preneed provider shall cease the
2801	2801	offering for sale and sale of preneed merchandise, services,
2802	2802	and cash advances as provided by rule of the board .
2803	2803	(f) No surety bond used to comply with this section
2804	2804	shall be canceled or subject to cancellation unless at least
2805	2805	60 days' advance notice thereof, in writing, is filed with the
2806	2806	commissioner, board by the surety company. The cancellation of
2807	2807	the bond shall not relieve the obligation of the surety
2808	2808	company for claims arising out of contracts issued or
2809	2809	otherwise covered before cancellation of the bond. In the
2810	2810	event that notice of termination of the bond is filed with the
2811	2811	commissioner board, the certificate holder insured thereunder
2812	2812	shall, within 30 days of the filing of the notice of
2813	2813	termination with the commissioner board, shall provide the
2814	2814	commissioner board with a replacement bond or with evidence
2815	2815	which is satisfactory to the commissioner board demonstrating
2816	2816	that the provisions of this chapter have has been fully
2817	2817	complied with. If within 30 days of filing of the notice of
2818	2818	termination with the commissioner board no replacement bond
2819	2819	acceptable to the commissioner board or no evidence
2820	2820	satisfactory to the commissioner board demonstrating that the
2821	2821	provisions of this chapter have has been complied with is
2822	2822	filed with the commissioner board, the commissioner board
2823	2823	shall suspend the license of the certificate holder until the
2824	2824	certificate holder files a replacement bond acceptable to the
2825	2825	commissioner board or demonstrates to the satisfaction of the
2826	2826	commissioner board that it has complied with the provisions of
2827	2827	this chapter.
2828	2828	1373
2829	2829	1374
2830	2830	1375
2831	2831	1376
2832	2832	1377
2833	2833	1378
2834	2834	1379
2835	2835	1380
2836	2836	1381
2837	2837	1382
2838	2838	1383
2839	2839	1384
2840	2840	1385
2841	2841	1386
2842	2842	1387
2843	2843	1388
2844	2844	1389
2845	2845	1390
2846	2846	1391
2847	2847	1392
2848	2848	1393
2849	2849	1394
2850	2850	1395
2851	2851	1396
2852	2852	1397
2853	2853	1398
2854	2854	1399
2855	2855	1400 HB81 INTRODUCEDHB81 INTRODUCED
2856	2856	Page 51
2857	2857	(g) Upon prior approval by the commissioner board, the
2858	2858	preneed provider may file with the commissioner board a letter
2859	2859	of credit in the amount of the outstanding liabilities in lieu
2860	2860	of a surety bond, in the form and subject to the terms and
2861	2861	conditions evidencing the financial responsibility of the
2862	2862	party or parties issuing the letter of credit, and otherwise,
2863	2863	as may be prescribed by the commissioner board."
2864	2864	"§27-17A-15§34-13-196
2865	2865	(a) The commissioner shall board, as often as he or she
2866	2866	may deem deemed necessary, examine shall audit the business of
2867	2867	any person writing , or holding himself or herself out to be
2868	2868	writing, preneed contracts under this chapter to the extent
2869	2869	applicable. The examination audit shall be made by designated
2870	2870	representatives employed or examiners of the Department of
2871	2871	Insurance contracted by the board .
2872	2872	(b) The written report of each examination audit, when
2873	2873	completed, shall be filed in the office of the commissioner
2874	2874	board and, when so filed, shall not constitute a public
2875	2875	record.
2876	2876	(c) Any person being examined audited shall produce,
2877	2877	upon request, all records of the person. The designated
2878	2878	representative of the commissioner board may at any time
2879	2879	examine the records and affairs of the person, whether in
2880	2880	connection with a formal examination audit or not.
2881	2881	(d) The commissioner may board shall waive the
2882	2882	examination audit requirements of this section if the
2883	2883	certificate holder submits audited financial statements. Upon
2884	2884	receipt of a verifiable complaint, the board may perform a
2885	2885	1401
2886	2886	1402
2887	2887	1403
2888	2888	1404
2889	2889	1405
2890	2890	1406
2891	2891	1407
2892	2892	1408
2893	2893	1409
2894	2894	1410
2895	2895	1411
2896	2896	1412
2897	2897	1413
2898	2898	1414
2899	2899	1415
2900	2900	1416
2901	2901	1417
2902	2902	1418
2903	2903	1419
2904	2904	1420
2905	2905	1421
2906	2906	1422
2907	2907	1423
2908	2908	1424
2909	2909	1425
2910	2910	1426
2911	2911	1427
2912	2912	1428 HB81 INTRODUCEDHB81 INTRODUCED
2913	2913	Page 52
2914	2914	target market conduct audit as a part of an investigation.
2915	2915	(e) The person examined audited shall pay the
2916	2916	examination audit expenses, travel expense , and per diem
2917	2917	subsistence allowance provided for examiners and incurred by
2918	2918	the commissioner's board's representatives or examiners
2919	2919	auditors in connection with an examination in accordance with
2920	2920	Section 27-2-25 audit as prescribed by rule of the board .
2921	2921	(f) Whenever any special audit of the premises,
2922	2922	facilities, books, or records of a licensee is necessary based
2923	2923	on the failure of the licensee to comply with this chapter or
2924	2924	rule adopted by the board, the board shall charge a fee based
2925	2925	on the cost of the special audit including, but not limited
2926	2926	to, the prorated compensation of board employees involved in
2927	2927	the special audit and any expenses incurred.
2928	2928	(g) If the board finds that a certificate of authority
2929	2929	holder or licensee has failed to operate in accordance with
2930	2930	this chapter and, by their action, has created a deficit of
2931	2931	preneed funds entrusted to them by the consumer, then the
2932	2932	board may:
2933	2933	(1) Bring an action for injunctive relief against the
2934	2934	responsible licensee or the holder of the certificate of
2935	2935	authority in the Circuit Court of Montgomery County.
2936	2936	(2) Issue an emergency suspension of all licenses held
2937	2937	by the holder of the certificate of authority, and its
2938	2938	associated personnel, in accordance with the Administrative
2939	2939	Procedure Act.
2940	2940	(3) Take any other disciplinary action authorized by
2941	2941	this chapter."
2942	2942	1429
2943	2943	1430
2944	2944	1431
2945	2945	1432
2946	2946	1433
2947	2947	1434
2948	2948	1435
2949	2949	1436
2950	2950	1437
2951	2951	1438
2952	2952	1439
2953	2953	1440
2954	2954	1441
2955	2955	1442
2956	2956	1443
2957	2957	1444
2958	2958	1445
2959	2959	1446
2960	2960	1447
2961	2961	1448
2962	2962	1449
2963	2963	1450
2964	2964	1451
2965	2965	1452
2966	2966	1453
2967	2967	1454
2968	2968	1455
2969	2969	1456 HB81 INTRODUCEDHB81 INTRODUCED
2970	2970	Page 53
2971	2971	"§27-17A-16§34-13-197
2972	2972	(a) A certificate holder shall be considered inactive
2973	2973	upon the acceptance of the surrender of its license by the
2974	2974	commissioner board or upon the nonreceipt by the commissioner
2975	2975	board of the certificate of authority renewal application and
2976	2976	fees.
2977	2977	(b) A certificate holder shall cease all preneed sales
2978	2978	to the public upon becoming inactive. The certificate holder
2979	2979	shall collect and deposit into trust all of the funds paid
2980	2980	toward preneed contracts sold prior to becoming inactive.
2981	2981	(c) Any certificate holder desiring to surrender its
2982	2982	license to the commissioner board shall first do all of the
2983	2983	following:
2984	2984	(1) File notice with the commissioner board.
2985	2985	(2) Submit copies of its existing trust agreements.
2986	2986	(3) Submit a sample copy of each type of preneed
2987	2987	contract sold.
2988	2988	(4) Resolve to the commissioner's satisfaction of the
2989	2989	board all findings and violations resulting from the last
2990	2990	examination audit conducted.
2991	2991	(5) Pay all outstanding fines and invoices due the
2992	2992	commissioner board.
2993	2993	(6) Submit its current certificate of authority.
2994	2994	(d) Upon receipt of the notice, the commissioner board
2995	2995	shall review the certificate holder's trust funds, trust
2996	2996	agreements, and evidence of all outstanding preneed contracts.
2997	2997	(e) After a review to the commissioner's satisfaction
2998	2998	of the board, the commissioner board shall terminate the
2999	2999	1457
3000	3000	1458
3001	3001	1459
3002	3002	1460
3003	3003	1461
3004	3004	1462
3005	3005	1463
3006	3006	1464
3007	3007	1465
3008	3008	1466
3009	3009	1467
3010	3010	1468
3011	3011	1469
3012	3012	1470
3013	3013	1471
3014	3014	1472
3015	3015	1473
3016	3016	1474
3017	3017	1475
3018	3018	1476
3019	3019	1477
3020	3020	1478
3021	3021	1479
3022	3022	1480
3023	3023	1481
3024	3024	1482
3025	3025	1483
3026	3026	1484 HB81 INTRODUCEDHB81 INTRODUCED
3027	3027	Page 54
3028	3028	certificate of authority by an order which shall set forth the
3029	3029	conditions of termination established by the commissioner
3030	3030	board to ensure that the preneed funds will be available for
3031	3031	their intended purpose.
3032	3032	(f) The trust fund of the certificate holder shall be
3033	3033	held intact and in trust after the certificate holder has
3034	3034	become inactive, and the funds in that trust shall be
3035	3035	disbursed in accordance with the requirements of the written
3036	3036	contracts until the funds have been exhausted.
3037	3037	(g) The commissioner board shall continue to have
3038	3038	jurisdiction over the inactive certificate holder as if the
3039	3039	certificate were active and to require the reports and inspect
3040	3040	the records as the commissioner board deems appropriate so
3041	3041	long as there are funds in trust or preneed contracts that are
3042	3042	not fulfilled.
3043	3043	(h) In addition to any other Other terms of revocation
3044	3044	or suspension ordered pursuant to Chapter 13 of Title 34, the
3045	3045	provisions of this chapter may also apply."
3046	3046	"§27-17A-17§34-13-198
3047	3047	(a) Any dissolution or liquidation of a certificate
3048	3048	holder shall be deemed to be the liquidation of an insurance
3049	3049	company and shall be conducted under the supervision of the
3050	3050	commissioner, who shall have all powers with respect thereto
3051	3051	granted to the commissioner under Chapter 32 with respect to
3052	3052	the liquidation of insurance companies.
3053	3053	(b) The commissioner may apply for an order directing
3054	3054	the commissioner to liquidate a certificate holder upon any
3055	3055	one or more grounds set out in Section 27-32-6 or when, in the
3056	3056	1485
3057	3057	1486
3058	3058	1487
3059	3059	1488
3060	3060	1489
3061	3061	1490
3062	3062	1491
3063	3063	1492
3064	3064	1493
3065	3065	1494
3066	3066	1495
3067	3067	1496
3068	3068	1497
3069	3069	1498
3070	3070	1499
3071	3071	1500
3072	3072	1501
3073	3073	1502
3074	3074	1503
3075	3075	1504
3076	3076	1505
3077	3077	1506
3078	3078	1507
3079	3079	1508
3080	3080	1509
3081	3081	1510
3082	3082	1511
3083	3083	1512 HB81 INTRODUCEDHB81 INTRODUCED
3084	3084	Page 55
3085	3085	commissioner's opinion, the continued operation of the
3086	3086	certificate holder would be hazardous either to purchasers,
3087	3087	beneficiaries, or to the people of this state.
3088	3088	The board may fine and revoke, suspend, or place on
3089	3089	probation the certificate of authority and the establishment
3090	3090	license of a certificate holder on any of the following
3091	3091	grounds:
3092	3092	(1) The certificate holder is impaired or insolvent.
3093	3093	(2) The certificate holder has refused to submit, or
3094	3094	has withheld, any of its books, records, accounts, or affairs
3095	3095	to audit by the board.
3096	3096	(3) The certificate holder has concealed or removed
3097	3097	records or preneed assets, or both.
3098	3098	(4) The certificate holder has failed to comply with an
3099	3099	order of the board.
3100	3100	(5) The certificate holder has transferred, or
3101	3101	attempted to transfer, substantially its entire property or
3102	3102	business, or has entered into any transaction the effect of
3103	3103	which is to merge substantially its entire property or
3104	3104	business with that of any other certificate holder, person,
3105	3105	corporation, or entity without first having obtained the
3106	3106	written approval of the board.
3107	3107	(6) The certificate holder has willfully violated its
3108	3108	articles of incorporation or any law of this state, including
3109	3109	any rule of the board.
3110	3110	(7) The certificate holder has an officer, director, or
3111	3111	manager who has refused to be audited under oath concerning
3112	3112	the affairs of the certificate holder.
3113	3113	1513
3114	3114	1514
3115	3115	1515
3116	3116	1516
3117	3117	1517
3118	3118	1518
3119	3119	1519
3120	3120	1520
3121	3121	1521
3122	3122	1522
3123	3123	1523
3124	3124	1524
3125	3125	1525
3126	3126	1526
3127	3127	1527
3128	3128	1528
3129	3129	1529
3130	3130	1530
3131	3131	1531
3132	3132	1532
3133	3133	1533
3134	3134	1534
3135	3135	1535
3136	3136	1536
3137	3137	1537
3138	3138	1538
3139	3139	1539
3140	3140	1540 HB81 INTRODUCEDHB81 INTRODUCED
3141	3141	Page 56
3142	3142	(8) If the board determines that the continued
3143	3143	operation of the certificate holder would be hazardous to
3144	3144	purchasers, beneficiaries, or residents of this state. "
3145	3145	"§27-17A-18§34-13-199
3146	3146	(a) All individuals who offer preneed contracts to the
3147	3147	public, or who execute preneed contracts on behalf of a
3148	3148	certificate holder, shall be registered with the commissioner
3149	3149	board as preneed sales agents, pursuant to this article
3150	3150	chapter.
3151	3151	(b) All preneed sales agents and funeral directors
3152	3152	acting as preneed sales agents shall be affiliated with the
3153	3153	certificate holder that they are representing.
3154	3154	(c) A certificate holder shall be responsible for the
3155	3155	activities of all preneed sales agents and all funeral
3156	3156	directors acting as preneed sales agents, who are affiliated
3157	3157	with the certificate holder and who perform any type of
3158	3158	preneed-related activity on behalf of the certificate holder.
3159	3159	In addition to the preneed sales agents and funeral directors
3160	3160	acting as preneed sales agents, each certificate holder shall
3161	3161	also be subject to discipline if its preneed sales agents or
3162	3162	funeral directors acting as preneed sales agents violate any
3163	3163	provision of this article chapter.
3164	3164	(d) A preneed sales agent and a funeral director acting
3165	3165	as a preneed sales agent shall be authorized to may sell,
3166	3166	offer, and execute preneed contracts on behalf of all properly
3167	3167	licensed entities owned or operated by the sponsoring
3168	3168	certificate holder.
3169	3169	(e) An individual may begin functioning operating as a
3170	3170	1541
3171	3171	1542
3172	3172	1543
3173	3173	1544
3174	3174	1545
3175	3175	1546
3176	3176	1547
3177	3177	1548
3178	3178	1549
3179	3179	1550
3180	3180	1551
3181	3181	1552
3182	3182	1553
3183	3183	1554
3184	3184	1555
3185	3185	1556
3186	3186	1557
3187	3187	1558
3188	3188	1559
3189	3189	1560
3190	3190	1561
3191	3191	1562
3192	3192	1563
3193	3193	1564
3194	3194	1565
3195	3195	1566
3196	3196	1567
3197	3197	1568 HB81 INTRODUCEDHB81 INTRODUCED
3198	3198	Page 57
3199	3199	preneed sales agent as soon as a completed application for
3200	3200	registration, as set forth in subsection (g), is sent to the
3201	3201	commissioner approved by the board .
3202	3202	(f)(1) The qualifications for a preneed sales agent are
3203	3203	as follows:
3204	3204	(1)a. The applicant must be at least 18 years of age.
3205	3205	(2)b. The applicant must be in good standing with the
3206	3206	commissioner board.
3207	3207	(3)c. The applicant must may not have any felony or
3208	3208	misdemeanor convictions that relate to any activity regulated
3209	3209	by this chapter or a crime involving moral turpitude, as
3210	3210	defined by this chapter .
3211	3211	d. The applicant shall be of good moral character and
3212	3212	submit to a criminal history background check pursuant to
3213	3213	subdivision (2).
3214	3214	(2) An applicant for licensure as a preneed sales agent
3215	3215	shall submit to the board, on a form sworn to by the
3216	3216	applicant, his or her name, date of birth, Social Security
3217	3217	number, and two complete sets of fingerprints for completion
3218	3218	of a criminal history background check. The board shall submit
3219	3219	the fingerprints to the Alabama State Law Enforcement Agency
3220	3220	for a state criminal history background check. The
3221	3221	fingerprints shall be forwarded by the agency to the Federal
3222	3222	Bureau of Investigation for a national criminal history
3223	3223	background check. Costs associated with conducting a criminal
3224	3224	history background check shall be paid by the applicant. The
3225	3225	board shall keep information received pursuant to this
3226	3226	subdivision confidential, except that information received and
3227	3227	1569
3228	3228	1570
3229	3229	1571
3230	3230	1572
3231	3231	1573
3232	3232	1574
3233	3233	1575
3234	3234	1576
3235	3235	1577
3236	3236	1578
3237	3237	1579
3238	3238	1580
3239	3239	1581
3240	3240	1582
3241	3241	1583
3242	3242	1584
3243	3243	1585
3244	3244	1586
3245	3245	1587
3246	3246	1588
3247	3247	1589
3248	3248	1590
3249	3249	1591
3250	3250	1592
3251	3251	1593
3252	3252	1594
3253	3253	1595
3254	3254	1596 HB81 INTRODUCEDHB81 INTRODUCED
3255	3255	Page 58
3256	3256	relied upon in denying the issuance of a certificate of
3257	3257	authority may be disclosed if necessary to support the denial.
3258	3258	All character information, including the information obtained
3259	3259	through the criminal history background checks, shall be
3260	3260	considered in licensure decisions to the extent permissible by
3261	3261	all applicable laws.
3262	3262	(g) An application for registration as a preneed sales
3263	3263	agent shall be submitted to the commissioner board with an
3264	3264	application fee determined by the commissioner board, but not
3265	3265	to exceed twenty-five dollars ($25) thirty-three dollars
3266	3266	($33), by the certificate holder in a form that has been
3267	3267	prescribed by commissioner board rule and approved by the
3268	3268	commissioner. The application shall contain, at a minimum, all
3269	3269	of the following:
3270	3270	(1) The name, address, Social Security number, and date
3271	3271	of birth of the applicant and any other information as the
3272	3272	commissioner board may reasonably require of the applicant.
3273	3273	(2) The name, address, and license number of the
3274	3274	sponsoring certificate holder.
3275	3275	(3) A representation, signed by the applicant, that the
3276	3276	applicant meets the requirements set forth in subsection (f).
3277	3277	(4) A representation, signed by the certificate holder,
3278	3278	that the applicant is authorized to offer, sell, and sign
3279	3279	preneed contracts on behalf of the certificate holder, and
3280	3280	that the certificate holder has trained the applicant in the
3281	3281	provisions of this article chapter relating to preneed sales,
3282	3282	the provisions of the certificate holder's preneed contract,
3283	3283	and the nature of the merchandise, services, or burial rights
3284	3284	1597
3285	3285	1598
3286	3286	1599
3287	3287	1600
3288	3288	1601
3289	3289	1602
3290	3290	1603
3291	3291	1604
3292	3292	1605
3293	3293	1606
3294	3294	1607
3295	3295	1608
3296	3296	1609
3297	3297	1610
3298	3298	1611
3299	3299	1612
3300	3300	1613
3301	3301	1614
3302	3302	1615
3303	3303	1616
3304	3304	1617
3305	3305	1618
3306	3306	1619
3307	3307	1620
3308	3308	1621
3309	3309	1622
3310	3310	1623
3311	3311	1624 HB81 INTRODUCEDHB81 INTRODUCED
3312	3312	Page 59
3313	3313	sold by the certificate holder.
3314	3314	(5) A statement indicating whether the applicant has
3315	3315	any type of working or agency relationship with any other
3316	3316	certificate holder or insurance company.
3317	3317	(h) An individual may be registered as a preneed sales
3318	3318	agent on behalf of more than one certificate holder, provided
3319	3319	that the individual has received the written consent of all
3320	3320	certificate holders.
3321	3321	(i) A certificate holder who has registered a preneed
3322	3322	sales agent shall notify the commissioner board within 30 days
3323	3323	after the individual's status as a preneed sales agent has
3324	3324	been terminated.
3325	3325	(j) Upon receipt of an application that complies with
3326	3326	all of the requirements of subsection (g), the commissioner
3327	3327	board shall register the applicant. The commissioner shall by
3328	3328	rule board, in accordance with this chapter, shall provide for
3329	3329	annual renewal of registration upon receipt of a renewal
3330	3330	application and a renewal fee not to exceed twenty-five
3331	3331	dollars ($25) thirty-three dollars ($33) as set by the
3332	3332	commissioner board."
3333	3333	"§27-17A-19§34-13-200
3334	3334	No person shall engage in this state in any trade
3335	3335	practice which is addressed in the Alabama Deceptive Trade
3336	3336	Practices Act (Section 8-19-1 et seq.) Chapter 19 of Title 8 ,
3337	3337	or as determined pursuant to this chapter to be, an unfair
3338	3338	method of competition or an unfair or deceptive act or
3339	3339	practice."
3340	3340	"§27-17A-20§34-13-201
3341	3341	1625
3342	3342	1626
3343	3343	1627
3344	3344	1628
3345	3345	1629
3346	3346	1630
3347	3347	1631
3348	3348	1632
3349	3349	1633
3350	3350	1634
3351	3351	1635
3352	3352	1636
3353	3353	1637
3354	3354	1638
3355	3355	1639
3356	3356	1640
3357	3357	1641
3358	3358	1642
3359	3359	1643
3360	3360	1644
3361	3361	1645
3362	3362	1646
3363	3363	1647
3364	3364	1648
3365	3365	1649
3366	3366	1650
3367	3367	1651
3368	3368	1652 HB81 INTRODUCEDHB81 INTRODUCED
3369	3369	Page 60
3370	3370	(a) Whenever the commissioner board has reason to
3371	3371	believe that any person has engaged, or is engaging, in this
3372	3372	state in any unfair method of competition or any unfair or
3373	3373	deceptive act or practice as defined in this article chapter,
3374	3374	or is engaging in the sale of preneed contracts without being
3375	3375	properly licensed as required by this article chapter, or is
3376	3376	otherwise acting in violation of this chapter, and that a
3377	3377	proceeding by the commissioner board in respect thereto would
3378	3378	be in the interest of the public, the commissioner board shall
3379	3379	institute a proceeding in accordance with this section.
3380	3380	(b) A statement of charges, notice, or order or other
3381	3381	process under this chapter may be served by anyone duly
3382	3382	authorized by the commissioner board. Service may be made
3383	3383	either in the manner provided by law for service of process in
3384	3384	civil actions or by certifying and mailing a copy of the
3385	3385	statement to the person affected by the statement, notice, or
3386	3386	order or other process at his or her or its residence or
3387	3387	principal office or place of business. The verified return by
3388	3388	the person so serving the statement, notice, or order or other
3389	3389	process, setting forth the manner of the service, shall be
3390	3390	proof of the service; and the return postcard receipt for the
3391	3391	statement, notice, or order or other process, certified and
3392	3392	mailed as provided in this subsection, shall be proof of
3393	3393	service of the statement, notice, or order or other process.
3394	3394	(c) The commissioner board shall conduct or cause to
3395	3395	have conducted a hearing in accordance with Article 1 of
3396	3396	Chapter 2 this chapter, and shall, during the conduct of the
3397	3397	hearing, have those powers necessary to enforce this chapter
3398	3398	1653
3399	3399	1654
3400	3400	1655
3401	3401	1656
3402	3402	1657
3403	3403	1658
3404	3404	1659
3405	3405	1660
3406	3406	1661
3407	3407	1662
3408	3408	1663
3409	3409	1664
3410	3410	1665
3411	3411	1666
3412	3412	1667
3413	3413	1668
3414	3414	1669
3415	3415	1670
3416	3416	1671
3417	3417	1672
3418	3418	1673
3419	3419	1674
3420	3420	1675
3421	3421	1676
3422	3422	1677
3423	3423	1678
3424	3424	1679
3425	3425	1680 HB81 INTRODUCEDHB81 INTRODUCED
3426	3426	Page 61
3427	3427	and rules of the board ; however, the penalties for failure to
3428	3428	comply with a subpoena or with an order directing discovery
3429	3429	shall be limited to a fine not to exceed one thousand dollars
3430	3430	($1,000) per violation. All evidence introduced and presented
3431	3431	in a hearing conducted under this chapter shall be deemed
3432	3432	public information. "
3433	3433	"§27-17A-21§34-13-202
3434	3434	(a) If the commissioner board finds that one or more
3435	3435	grounds exist for the discretionary suspension or revocation
3436	3436	of a certificate of authority or establishment license issued
3437	3437	under this article chapter, the commissioner may board, in
3438	3438	lieu of the suspension or revocation, may impose a fine upon
3439	3439	the certificate holder in an amount not to exceed one thousand
3440	3440	dollars ($1,000) for each nonwillful violation and in an
3441	3441	amount not to exceed ten thousand dollars ($10,000) for each
3442	3442	willful violation.
3443	3443	(b) The commissioner board may grant not more than 30
3444	3444	days from the date of the order for the payment of any fine."
3445	3445	"§27-17A-22§34-13-203
3446	3446	(a)(1) A person who knowingly receives payments for a
3447	3447	preneed contract without having a valid certificate of
3448	3448	authority:
3449	3449	a. Commits a Class B felony , punishable as provided by
3450	3450	law, as to each contract on which the payments collected equal
3451	3451	or exceed, in the aggregate, two thousand five hundred dollars
3452	3452	($2,500).
3453	3453	b. Commits a Class C felony , punishable as provided by
3454	3454	law, as to each contract on which the payments collected are
3455	3455	1681
3456	3456	1682
3457	3457	1683
3458	3458	1684
3459	3459	1685
3460	3460	1686
3461	3461	1687
3462	3462	1688
3463	3463	1689
3464	3464	1690
3465	3465	1691
3466	3466	1692
3467	3467	1693
3468	3468	1694
3469	3469	1695
3470	3470	1696
3471	3471	1697
3472	3472	1698
3473	3473	1699
3474	3474	1700
3475	3475	1701
3476	3476	1702
3477	3477	1703
3478	3478	1704
3479	3479	1705
3480	3480	1706
3481	3481	1707
3482	3482	1708 HB81 INTRODUCEDHB81 INTRODUCED
3483	3483	Page 62
3484	3484	between, in the aggregate, five hundred dollars ($500) and two
3485	3485	thousand five hundred dollars ($2,500).
3486	3486	c. Commits a Class A misdemeanor , punishable as
3487	3487	provided by law, as to each contract on which the payments
3488	3488	collected do not exceed, in the aggregate, five hundred
3489	3489	dollars ($500).
3490	3490	(2) In addition to the criminal penalty imposed under
3491	3491	subdivision (1), upon conviction of an offense under
3492	3492	subdivision (1), a person may not thereafter obtain a
3493	3493	certificate of authority or register as a preneed sales agent.
3494	3494	(b)(1) A person who willfully fails to timely deposit
3495	3495	the amount required to be so deposited under this chapter in a
3496	3496	preneed merchandise and services trust or endowment care
3497	3497	trust:
3498	3498	a. Commits a Class B felony , punishable as provided by
3499	3499	law, as to each contract on which the amount due for deposit
3500	3500	in trust equals or exceeds, in the aggregate, two thousand
3501	3501	five hundred dollars ($2,500).
3502	3502	b. Commits a Class C felony , punishable as provided by
3503	3503	law, as to each contract on which the amount due for deposit
3504	3504	in trust is less than, in the aggregate, two thousand five
3505	3505	hundred dollars ($2,500).
3506	3506	(2) In addition to the criminal penalty imposed under
3507	3507	subdivision (1), upon conviction of an offense under
3508	3508	subdivision (1), the certificate of authority or preneed sales
3509	3509	agent registration held by the person shall be automatically
3510	3510	revoked and the person may not thereafter obtain a certificate
3511	3511	of authority or register as a preneed sales agent.
3512	3512	1709
3513	3513	1710
3514	3514	1711
3515	3515	1712
3516	3516	1713
3517	3517	1714
3518	3518	1715
3519	3519	1716
3520	3520	1717
3521	3521	1718
3522	3522	1719
3523	3523	1720
3524	3524	1721
3525	3525	1722
3526	3526	1723
3527	3527	1724
3528	3528	1725
3529	3529	1726
3530	3530	1727
3531	3531	1728
3532	3532	1729
3533	3533	1730
3534	3534	1731
3535	3535	1732
3536	3536	1733
3537	3537	1734
3538	3538	1735
3539	3539	1736 HB81 INTRODUCEDHB81 INTRODUCED
3540	3540	Page 63
3541	3541	(c)(1) A person who knowingly withdraws funds or assets
3542	3542	from a preneed merchandise and services trust or endowment
3543	3543	care trust in a manner or under circumstances not authorized
3544	3544	by this chapter or rule of the board :
3545	3545	a. Commits a Class B felony , punishable as provided by
3546	3546	law, if the aggregate amount withdrawn in any single
3547	3547	transaction or series of related transactions equals or
3548	3548	exceeds two thousand five hundred dollars ($2,500).
3549	3549	b. Commits a Class C felony , punishable as provided by
3550	3550	law, if the aggregate amount withdrawn in any single
3551	3551	transaction or series of related transactions is less than two
3552	3552	thousand five hundred dollars ($2,500).
3553	3553	(2) In addition to the criminal penalty imposed under
3554	3554	subdivision (1), upon conviction of an offense under
3555	3555	subdivision (1), the certificate of authority or preneed sales
3556	3556	agent registration held by the person shall be automatically
3557	3557	revoked and the person may not thereafter obtain a certificate
3558	3558	of authority or register as a preneed sales agent.
3559	3559	(d) A person commits a Class C felony , punishable as
3560	3560	provided by law, if any of the following occur:
3561	3561	(1) The person knowingly delivers to the commissioner
3562	3562	board any official form, report, record, data, or other
3563	3563	document required by the commissioner board containing a false
3564	3564	statement or false information concerning a matter material to
3565	3565	the commissioner board in the exercise of his or her its
3566	3566	authority to administer and enforce this chapter.
3567	3567	(2) Incident to, or during the course of, an
3568	3568	examination audit, inspection, investigation, or other inquiry
3569	3569	1737
3570	3570	1738
3571	3571	1739
3572	3572	1740
3573	3573	1741
3574	3574	1742
3575	3575	1743
3576	3576	1744
3577	3577	1745
3578	3578	1746
3579	3579	1747
3580	3580	1748
3581	3581	1749
3582	3582	1750
3583	3583	1751
3584	3584	1752
3585	3585	1753
3586	3586	1754
3587	3587	1755
3588	3588	1756
3589	3589	1757
3590	3590	1758
3591	3591	1759
3592	3592	1760
3593	3593	1761
3594	3594	1762
3595	3595	1763
3596	3596	1764 HB81 INTRODUCEDHB81 INTRODUCED
3597	3597	Page 64
3598	3598	authorized by this chapter, the person knowingly makes
3599	3599	available to a representative of the commissioner board any
3600	3600	official form, report, record, data, or other document
3601	3601	required by the commissioner board containing a false
3602	3602	statement or false information concerning a matter material to
3603	3603	the purpose of the examination audit, inspection,
3604	3604	investigation, or inquiry.
3605	3605	(3) With respect to the business records of a person
3606	3606	engaging in, or who has at any time engaged in, the sale of a
3607	3607	preneed contract, a person, with a purpose to use deception as
3608	3608	defined in subdivision (1) of Section 13A-8-1, makes false
3609	3609	entries in such the records or alters, erases, obliterates,
3610	3610	deletes, or removes a correct entry in such the records, fails
3611	3611	to make a correct entry in such the records, or prevents the
3612	3612	making of a correct entry, or causes the omission of a correct
3613	3613	entry in such the records.
3614	3614	(e) Except as otherwise provided in this section
3615	3615	chapter, the willful violation of this chapter is a Class A
3616	3616	misdemeanor, punishable as provided by law .
3617	3617	(f) The duties and authority of the insurance fraud
3618	3618	unit created under Section 27-12A-40, including the powers of
3619	3619	the unit’s investigators, shall extend to investigations into
3620	3620	violations of this section. "
3621	3621	"§27-17A-23§34-13-204
3622	3622	The commissioner board, the Attorney General, or any
3623	3623	person may bring a civil action against a person or company
3624	3624	violating this chapter or rule of the board in Montgomery
3625	3625	County or the appropriate court of the county in which the
3626	3626	1765
3627	3627	1766
3628	3628	1767
3629	3629	1768
3630	3630	1769
3631	3631	1770
3632	3632	1771
3633	3633	1772
3634	3634	1773
3635	3635	1774
3636	3636	1775
3637	3637	1776
3638	3638	1777
3639	3639	1778
3640	3640	1779
3641	3641	1780
3642	3642	1781
3643	3643	1782
3644	3644	1783
3645	3645	1784
3646	3646	1785
3647	3647	1786
3648	3648	1787
3649	3649	1788
3650	3650	1789
3651	3651	1790
3652	3652	1791
3653	3653	1792 HB81 INTRODUCEDHB81 INTRODUCED
3654	3654	Page 65
3655	3655	alleged violator resides or has his or her or its principal
3656	3656	place of business or in the county wherein the alleged
3657	3657	violation occurred. Upon adverse adjudication, the defendant
3658	3658	shall be liable for actual damages caused by the violation.
3659	3659	The court, as provided by common law, may award punitive
3660	3660	damages and may provide equitable relief as it deems proper or
3661	3661	necessary, including enjoining the defendant from further
3662	3662	violation of this chapter or rule of the board ."
3663	3663	"§27-17A-24§34-13-205
3664	3664	The provisions of this chapter are cumulative to rights
3665	3665	under the general civil and common law, and no action of the
3666	3666	commissioner board may abrogate the rights to damages or other
3667	3667	relief in any court."
3668	3668	"§27-17A-25§34-13-206
3669	3669	(a) All fees collected by the commissioner board
3670	3670	pursuant to this chapter shall be deposited into the State
3671	3671	Treasury to the credit of the Insurance Department Alabama
3672	3672	State Funeral Service Fund.
3673	3673	(b) All fines collected by the commissioner board
3674	3674	pursuant to this chapter shall be deposited into the State
3675	3675	Treasury to the credit of the State General Alabama State
3676	3676	Funeral Service Fund.
3677	3677	(c) The commissioner board may use funds available from
3678	3678	any source including, but not limited to, grants,
3679	3679	appropriations, and gifts, for any purpose in the enforcement
3680	3680	of this chapter."
3681	3681	Section 6. The following heading is added to Division
3682	3682	3, commencing with Section 34-13-230, of Article 5, Chapter
3683	3683	1793
3684	3684	1794
3685	3685	1795
3686	3686	1796
3687	3687	1797
3688	3688	1798
3689	3689	1799
3690	3690	1800
3691	3691	1801
3692	3692	1802
3693	3693	1803
3694	3694	1804
3695	3695	1805
3696	3696	1806
3697	3697	1807
3698	3698	1808
3699	3699	1809
3700	3700	1810
3701	3701	1811
3702	3702	1812
3703	3703	1813
3704	3704	1814
3705	3705	1815
3706	3706	1816
3707	3707	1817
3708	3708	1818
3709	3709	1819
3710	3710	1820 HB81 INTRODUCEDHB81 INTRODUCED
3711	3711	Page 66
3712	3712	13, Title 34, Code of Alabama 1975:
3713	3713	"Division 3. Funeral Merchandise and Services Trust
3714	3714	Fund."
3715	3715	Section 7. Sections 27-17A-30, 27-17A-31, 27-17A-32,
3716	3716	27-17A-33, and 27-17A-34 of the Code of Alabama 1975, are
3717	3717	amended and renumbered as Division 3 of Article 5 of Chapter
3718	3718	13 of Title 34, Code of Alabama 1975, to read as follows:
3719	3719	"§27-17A-30§34-13-230
3720	3720	To comply with the trust requirement of subsection (a)
3721	3721	of Section 27-17A-13 34-13-194, all certificate holders
3722	3722	providing preneed contracts for funeral services or funeral
3723	3723	merchandise shall be subject to this article chapter."
3724	3724	"§27-17A-31§34-13-231
3725	3725	(a) Any person who is paid, collects, or receives funds
3726	3726	under a preneed contract for funeral services or funeral
3727	3727	merchandise to be funded by trust shall deposit in trust an
3728	3728	amount at least equal to the sum of 75 percent of the amount
3729	3729	collected on the purchase price for all funeral services and
3730	3730	funeral merchandise sold, transportation, and facilities
3731	3731	rented other than outer burial containers, 60 percent of the
3732	3732	amount collected on the purchase price for outer burial
3733	3733	containers, 110 percent of the wholesale cost of memorials
3734	3734	from the amount collected on the purchase price of memorials,
3735	3735	and 100 percent of the amount collected on the purchase price
3736	3736	for all cash advance items sold.
3737	3737	(b) All deposits shall be made within 30 days after the
3738	3738	end of the calendar month in which the preneed contract is
3739	3739	paid in full, unless, prior to that time, all liabilities of
3740	3740	1821
3741	3741	1822
3742	3742	1823
3743	3743	1824
3744	3744	1825
3745	3745	1826
3746	3746	1827
3747	3747	1828
3748	3748	1829
3749	3749	1830
3750	3750	1831
3751	3751	1832
3752	3752	1833
3753	3753	1834
3754	3754	1835
3755	3755	1836
3756	3756	1837
3757	3757	1838
3758	3758	1839
3759	3759	1840
3760	3760	1841
3761	3761	1842
3762	3762	1843
3763	3763	1844
3764	3764	1845
3765	3765	1846
3766	3766	1847
3767	3767	1848 HB81 INTRODUCEDHB81 INTRODUCED
3768	3768	Page 67
3769	3769	the seller under the preneed contract to deliver the specific
3770	3770	funeral merchandise or funeral services, or both, or the
3771	3771	specific cash advances, identified by the preneed provider as
3772	3772	properly allocated to the payment, have been satisfied, or the
3773	3773	preneed contract is validly cancelled.
3774	3774	(c) The trustee shall take title to the property
3775	3775	conveyed to the trust for the purpose of investing,
3776	3776	protecting, and conserving it for the certificate holder;
3777	3777	collecting income; and distributing the principal and income
3778	3778	as prescribed in this article chapter.
3779	3779	(d) The certificate holder is prohibited from sharing
3780	3780	in the discharge of these responsibilities, except that the
3781	3781	certificate holder may appoint an adviser to the trustee or
3782	3782	elect tax free investments. Nothing in this chapter shall
3783	3783	prohibit a trustee from electing the qualified funeral trust
3784	3784	option under the Internal Revenue Code.
3785	3785	(e) The trust agreement shall be submitted to the
3786	3786	commissioner board for approval and filing.
3787	3787	(f) The funds shall be held in trust, both as to
3788	3788	principal and income earned thereon, and shall remain intact,
3789	3789	except that the cost of the operation of the trust or trust
3790	3790	account authorized by this section may be deducted from the
3791	3791	income earned thereon.
3792	3792	(g) The contract purchaser shall have no interest
3793	3793	whatsoever in, or power whatsoever over, funds deposited in
3794	3794	trust pursuant to this section.
3795	3795	(h) In no event may such the funds be loaned to a
3796	3796	certificate holder, an affiliate of a certificate holder, or
3797	3797	1849
3798	3798	1850
3799	3799	1851
3800	3800	1852
3801	3801	1853
3802	3802	1854
3803	3803	1855
3804	3804	1856
3805	3805	1857
3806	3806	1858
3807	3807	1859
3808	3808	1860
3809	3809	1861
3810	3810	1862
3811	3811	1863
3812	3812	1864
3813	3813	1865
3814	3814	1866
3815	3815	1867
3816	3816	1868
3817	3817	1869
3818	3818	1870
3819	3819	1871
3820	3820	1872
3821	3821	1873
3822	3822	1874
3823	3823	1875
3824	3824	1876 HB81 INTRODUCEDHB81 INTRODUCED
3825	3825	Page 68
3826	3826	any person directly or indirectly engaged in the burial,
3827	3827	funeral home, or cemetery business. Furthermore, the
3828	3828	certificate holder's interest in the trust shall not be
3829	3829	pledged as collateral for any loans, debts, or liabilities of
3830	3830	the certificate holder and shall not be transferred to any
3831	3831	person without the prior written approval from the
3832	3832	commissioner board and the trustee. Even though the
3833	3833	certificate holder shall be deemed and treated as the settlor
3834	3834	and beneficiary of the trust for all purposes, all of the
3835	3835	trust funds are exempt from all claims of creditors of the
3836	3836	certificate holder except as to the claims of the contract
3837	3837	purchaser, his or her representative, or the commissioner
3838	3838	board.
3839	3839	(i) For all preneed contracts written or entered into
3840	3840	on or after January 1, 2015, all required deposits in trust
3841	3841	shall commence not later than 30 days after the end of the
3842	3842	calendar month in which the sum of the monies collected on the
3843	3843	preneed contract exceeds the amount that is not required to be
3844	3844	deposited in trust as determined under subsection (a) unless,
3845	3845	prior to that time, all liabilities of the preneed seller
3846	3846	under the preneed contract have been satisfied, or the preneed
3847	3847	contract is validly cancelled. Further required deposits on
3848	3848	the contract shall thereafter be made not later than 30 days
3849	3849	after the end of the calendar month in which each contract
3850	3850	payment is collected by the seller."
3851	3851	"§27-17A-32§34-13-232
3852	3852	(a) If amounts paid by the purchaser under a preneed
3853	3853	contract for funeral merchandise have previously been
3854	3854	1877
3855	3855	1878
3856	3856	1879
3857	3857	1880
3858	3858	1881
3859	3859	1882
3860	3860	1883
3861	3861	1884
3862	3862	1885
3863	3863	1886
3864	3864	1887
3865	3865	1888
3866	3866	1889
3867	3867	1890
3868	3868	1891
3869	3869	1892
3870	3870	1893
3871	3871	1894
3872	3872	1895
3873	3873	1896
3874	3874	1897
3875	3875	1898
3876	3876	1899
3877	3877	1900
3878	3878	1901
3879	3879	1902
3880	3880	1903
3881	3881	1904 HB81 INTRODUCEDHB81 INTRODUCED
3882	3882	Page 69
3883	3883	deposited in trust, the seller may withdraw the principal
3884	3884	amount and trust appreciation attributable to the delivered
3885	3885	item at such time as the funeral merchandise is delivered or
3886	3886	installed or, if comprised of materials designed to withstand
3887	3887	prolonged, protected storage without deterioration, the
3888	3888	merchandise is placed in storage with a responsible third
3889	3889	party bonded and insured for the wholesale value thereof and
3890	3890	evidenced by a receipt specifically identifying the item, the
3891	3891	specific preneed contract, the location of the item, and the
3892	3892	identity and address of the bonding and insuring parties. For
3893	3893	purposes of this subsection only, caskets and alternative
3894	3894	containers may not be held in storage by the seller or a third
3895	3895	party storage facility prior to the death of the funeral
3896	3896	beneficiary.
3897	3897	(b) The trustee shall make regular valuations of the
3898	3898	assets it holds in trust and provide a report of the
3899	3899	valuations to the certificate holder at least quarterly. At
3900	3900	all times, the certificate holder shall be able to determine
3901	3901	the amount held in trust attributable to each contract holder.
3902	3902	For all contracts effective on or after January 1, 2015, the
3903	3903	determination shall be based upon the fair market value of the
3904	3904	trust at the time and the proportionate share of the fair
3905	3905	market value attributable to each contract holder. For all
3906	3906	contracts in effect before January 1, 2015, the valuation of
3907	3907	each contract may be calculated using any valuation method
3908	3908	that had been previously approved by the commissioner or the
3909	3909	department Commissioner or the Department of Insurance before
3910	3910	January 1, 2015. Any person who withdraws appreciation in the
3911	3911	1905
3912	3912	1906
3913	3913	1907
3914	3914	1908
3915	3915	1909
3916	3916	1910
3917	3917	1911
3918	3918	1912
3919	3919	1913
3920	3920	1914
3921	3921	1915
3922	3922	1916
3923	3923	1917
3924	3924	1918
3925	3925	1919
3926	3926	1920
3927	3927	1921
3928	3928	1922
3929	3929	1923
3930	3930	1924
3931	3931	1925
3932	3932	1926
3933	3933	1927
3934	3934	1928
3935	3935	1929
3936	3936	1930
3937	3937	1931
3938	3938	1932 HB81 INTRODUCEDHB81 INTRODUCED
3939	3939	Page 70
3940	3940	value of trust, other than the pro rata portion of such the
3941	3941	appreciation which may be withdrawn upon the death of a
3942	3942	contract's funeral beneficiary or upon cancellation of a
3943	3943	preneed contract, shall be required to make additional
3944	3944	deposits from his or her own funds to restore the aggregate
3945	3945	value of assets to the value of funds deposited in trust, but
3946	3946	excluding from the funds deposited those funds paid out upon
3947	3947	preneed contracts which the person has fully performed or
3948	3948	which have been otherwise withdrawn, as provided in this
3949	3949	article chapter. The certificate holder shall be liable to
3950	3950	third parties to the extent that income from the trust is not
3951	3951	sufficient to pay the expenses of the trust.
3952	3952	(c) The trustee of the trust established pursuant to
3953	3953	this article chapter shall have all of the following powers:
3954	3954	(1) Make investments and exercise necessary investment
3955	3955	powers, provided that the commissioner board may by order
3956	3956	require the trustee to liquidate or dispose of any investment
3957	3957	within 30 days after the order.
3958	3958	(2) Commingle the property of the trust with the
3959	3959	property of any other preneed funeral, preneed cemetery, or
3960	3960	endowment care trust established pursuant to this article
3961	3961	chapter and make corresponding allocations and divisions of
3962	3962	assets, liabilities, income, and expenses.
3963	3963	(d) Notwithstanding the provisions of Section 19-3-125,
3964	3964	the trustee may, subject to compliance with the requirements
3965	3965	set forth below, may invest any portion or all of the funds
3966	3966	received under preneed contracts and deposited in trust in
3967	3967	life insurance contracts or annuities issued on the lives of
3968	3968	1933
3969	3969	1934
3970	3970	1935
3971	3971	1936
3972	3972	1937
3973	3973	1938
3974	3974	1939
3975	3975	1940
3976	3976	1941
3977	3977	1942
3978	3978	1943
3979	3979	1944
3980	3980	1945
3981	3981	1946
3982	3982	1947
3983	3983	1948
3984	3984	1949
3985	3985	1950
3986	3986	1951
3987	3987	1952
3988	3988	1953
3989	3989	1954
3990	3990	1955
3991	3991	1956
3992	3992	1957
3993	3993	1958
3994	3994	1959
3995	3995	1960 HB81 INTRODUCEDHB81 INTRODUCED
3996	3996	Page 71
3997	3997	preneed contract purchasers or preneed contract beneficiaries,
3998	3998	hereinafter, the insured or annuitant, without any obligation
3999	3999	to cover at a minimum the retail amount of the preneed
4000	4000	contract at the time of purchase of the life insurance
4001	4001	contracts or annuities as set forth in Section 27-17A-3
4002	4002	34-13-171.
4003	4003	(1) Trust funds shall not be invested by the trustee in
4004	4004	life insurance contracts or annuities unless the following
4005	4005	requirements are met:
4006	4006	a. The company issuing the life insurance contracts or
4007	4007	annuities is licensed by the Department of Insurance and the
4008	4008	insurance producer or annuity seller is properly licensed
4009	4009	within its domiciliary jurisdiction.
4010	4010	b. Prior to the investment, the insured or annuitant
4011	4011	consents, in writing, to the investment in life insurance
4012	4012	contracts or annuities.
4013	4013	c. For life insurance contracts or annuities issued
4014	4014	prior to May 6, 2008, and currently in force, such contracts
4015	4015	shall be construed to have been an authorized investment by
4016	4016	the trustee under this chapter if the insured or annuitant is
4017	4017	notified in writing of the existence of any such contract and
4018	4018	provided with a copy of the contract.
4019	4019	(2) Upon request, the insured or annuitant shall be
4020	4020	provided with a copy of any life insurance contract or annuity
4021	4021	issued to a preened trustee at no expense to the insured or
4022	4022	annuitant.
4023	4023	(3) Any life insurance contract or annuity issued in
4024	4024	accordance with this subsection and otherwise in compliance
4025	4025	1961
4026	4026	1962
4027	4027	1963
4028	4028	1964
4029	4029	1965
4030	4030	1966
4031	4031	1967
4032	4032	1968
4033	4033	1969
4034	4034	1970
4035	4035	1971
4036	4036	1972
4037	4037	1973
4038	4038	1974
4039	4039	1975
4040	4040	1976
4041	4041	1977
4042	4042	1978
4043	4043	1979
4044	4044	1980
4045	4045	1981
4046	4046	1982
4047	4047	1983
4048	4048	1984
4049	4049	1985
4050	4050	1986
4051	4051	1987
4052	4052	1988 HB81 INTRODUCEDHB81 INTRODUCED
4053	4053	Page 72
4054	4054	therewith shall be valid and in full force according to the
4055	4055	terms and conditions thereof.
4056	4056	(4) A trustee that invests all or any portion of the
4057	4057	funds received under preneed contracts and deposited in trust
4058	4058	in life insurance contracts or annuities issued by one company
4059	4059	licensed by the department State Department of Insurance shall
4060	4060	be considered to satisfy the standards and requirements of
4061	4061	Section 19-3-120.2 and Chapter 3B of Title 19.
4062	4062	(5) It is the intention of the Legislature that this
4063	4063	subsection shall be retroactive and shall apply to all life
4064	4064	insurance contracts or annuities issued prior to May 6, 2008."
4065	4065	"§27-17A-33§34-13-233
4066	4066	(a) A purchaser, by providing written notice to the
4067	4067	certificate holder, may cancel a preneed contract within 30
4068	4068	days of the date that the contract was executed provided that
4069	4069	the funeral merchandise and funeral services have not yet been
4070	4070	used. Upon providing the notice, the purchaser shall be
4071	4071	entitled to a complete refund of the amount paid, except for
4072	4072	the amount allocable to any funeral merchandise or funeral
4073	4073	services that have been used, and shall be released from all
4074	4074	obligations under the contract. This subsection shall apply to
4075	4075	all items that are purchased as part of a preneed contract.
4076	4076	(b) After 30 days from the date the preneed contract
4077	4077	was executed, a purchaser, by providing written notice to the
4078	4078	certificate holder, may cancel the funeral services, funeral
4079	4079	merchandise, facilities, and cash advance items portions of a
4080	4080	preneed contract at any time, and shall be entitled to the
4081	4081	refund defined in the preneed contract allocable to those
4082	4082	1989
4083	4083	1990
4084	4084	1991
4085	4085	1992
4086	4086	1993
4087	4087	1994
4088	4088	1995
4089	4089	1996
4090	4090	1997
4091	4091	1998
4092	4092	1999
4093	4093	2000
4094	4094	2001
4095	4095	2002
4096	4096	2003
4097	4097	2004
4098	4098	2005
4099	4099	2006
4100	4100	2007
4101	4101	2008
4102	4102	2009
4103	4103	2010
4104	4104	2011
4105	4105	2012
4106	4106	2013
4107	4107	2014
4108	4108	2015
4109	4109	2016 HB81 INTRODUCEDHB81 INTRODUCED
4110	4110	Page 73
4111	4111	items. Any accumulated earnings allocable to the preneed
4112	4112	contract shall be paid to the certificate holder upon the
4113	4113	cancellation.
4114	4114	(c) Upon breach of contract or failure of the
4115	4115	certificate holder to provide funeral merchandise or services
4116	4116	under a preneed contract, the contract purchaser shall be
4117	4117	entitled to a refund of 100 percent of all money paid on the
4118	4118	contract. The refund shall be made within 30 days after
4119	4119	receipt by the certificate holder of the contract purchaser's
4120	4120	written request for refund.
4121	4121	(d) If a purchaser is 90 days past due in making
4122	4122	payments on a preneed contract, the contract shall be
4123	4123	considered to be in default, and the certificate holder shall
4124	4124	be entitled to cancel the contract and withdraw all funds in
4125	4125	trust. Upon making the withdrawal, the certificate holder
4126	4126	shall refund to the purchaser the amount defined in the
4127	4127	preneed contract in the event of default of the purchaser,
4128	4128	provided that the certificate holder has provided the
4129	4129	purchaser with 30 days' written notice of its intention to
4130	4130	exercise any of its rights under this provision.
4131	4131	(e) All preneed contracts are cancelable and revocable
4132	4132	as provided in this section during the lifetime of the
4133	4133	purchaser, provided that a preneed contract does not restrict
4134	4134	any contract purchaser who is a qualified applicant for, or a
4135	4135	recipient of, supplemental security income, temporary cash
4136	4136	assistance, or Medicaid from making his or her contract
4137	4137	irrevocable.
4138	4138	(f) In the event that the preneed contract is made
4139	4139	2017
4140	4140	2018
4141	4141	2019
4142	4142	2020
4143	4143	2021
4144	4144	2022
4145	4145	2023
4146	4146	2024
4147	4147	2025
4148	4148	2026
4149	4149	2027
4150	4150	2028
4151	4151	2029
4152	4152	2030
4153	4153	2031
4154	4154	2032
4155	4155	2033
4156	4156	2034
4157	4157	2035
4158	4158	2036
4159	4159	2037
4160	4160	2038
4161	4161	2039
4162	4162	2040
4163	4163	2041
4164	4164	2042
4165	4165	2043
4166	4166	2044 HB81 INTRODUCEDHB81 INTRODUCED
4167	4167	Page 74
4168	4168	irrevocable pursuant to subsection (e), the purchaser or the
4169	4169	authorizing agent shall have the right to appoint a provider
4170	4170	other than the seller of the preneed contract. In the event
4171	4171	that a provider is appointed pursuant to this subsection, the
4172	4172	seller shall transfer to the appointed provider the amount
4173	4173	paid by the purchaser to the seller and those amounts
4174	4174	deposited into trust, less a reasonable transfer fee
4175	4175	determined by the seller board. In the event the preneed
4176	4176	contract was funded by an insurance or annuity policy, the
4177	4177	seller shall cancel and relinquish any assignment of benefits
4178	4178	or beneficiary status under the policy or annuity contract,
4179	4179	and deliver the policy, if in the custody of the preneed
4180	4180	seller, to the policy owner or his or her legal
4181	4181	representative, and the seller may collect a reasonable
4182	4182	transfer fee as determined by rule of the board . No transfer
4183	4183	hereunder shall occur without the acceptance of the appointed
4184	4184	provider.
4185	4185	(g) All refunds required to be made under this section
4186	4186	to a purchaser who has canceled a contract must be made within
4187	4187	30 days after the date the written notice of cancellation is
4188	4188	received by the certificate holder."
4189	4189	"§27-17A-34§34-13-234
4190	4190	(a) Disbursement of funds discharging any preneed
4191	4191	contract for funeral services or funeral merchandise fulfilled
4192	4192	after May 1, 2002, shall be made by the trustee to the
4193	4193	certificate holder upon receipt by the trustee of a
4194	4194	certification of the certificate holder that the preneed
4195	4195	contract has been performed in whole or in part or the preneed
4196	4196	2045
4197	4197	2046
4198	4198	2047
4199	4199	2048
4200	4200	2049
4201	4201	2050
4202	4202	2051
4203	4203	2052
4204	4204	2053
4205	4205	2054
4206	4206	2055
4207	4207	2056
4208	4208	2057
4209	4209	2058
4210	4210	2059
4211	4211	2060
4212	4212	2061
4213	4213	2062
4214	4214	2063
4215	4215	2064
4216	4216	2065
4217	4217	2066
4218	4218	2067
4219	4219	2068
4220	4220	2069
4221	4221	2070
4222	4222	2071
4223	4223	2072 HB81 INTRODUCEDHB81 INTRODUCED
4224	4224	Page 75
4225	4225	contract has been cancelled. Before the trustee may disburse
4226	4226	any trust funds, the certificate holder shall provide to the
4227	4227	trustee a death certificate or other valid proof of death, a
4228	4228	letter from the preneed contract holder cancelling the preneed
4229	4229	contract or valid proof the contract has been cancelled in
4230	4230	accordance with Section 27-17A-33 34-13-233, or valid proof
4231	4231	the merchandise has been delivered and installed, and services
4232	4232	have been performed. Any trustee accepting preneed contract
4233	4233	proceeds under this article chapter may rely upon the
4234	4234	certification of the certificate holder accompanied by the
4235	4235	required proof, and shall not be liable to anyone for such
4236	4236	reliance. If the contract is only partially performed, the
4237	4237	disbursement shall only cover that portion of the contract
4238	4238	performed. In the event of any contract default by the
4239	4239	contract purchaser, or in the event that the funeral
4240	4240	merchandise or funeral service contracted for is not provided,
4241	4241	the trustee shall return, within 30 days after its receipt of
4242	4242	a written request therefor, 100 percent of the funds deposited
4243	4243	into the trust on the contract and the income and accretion
4244	4244	thereon to the certificate holder or to its assigns, subject
4245	4245	to Section 27-17A-33 34-13-233.
4246	4246	(b) For all contracts effective on or after January 1,
4247	4247	2015, the amount that may be withdrawn from the trust upon
4248	4248	fulfillment or cancellation of any particular preneed contract
4249	4249	may not exceed the amount attributable to that preneed
4250	4250	contract in proportion to the total amount held in trust for
4251	4251	all preneed contracts as of the date of withdrawal. For all
4252	4252	contracts in effect before January 1, 2015, the valuation of
4253	4253	2073
4254	4254	2074
4255	4255	2075
4256	4256	2076
4257	4257	2077
4258	4258	2078
4259	4259	2079
4260	4260	2080
4261	4261	2081
4262	4262	2082
4263	4263	2083
4264	4264	2084
4265	4265	2085
4266	4266	2086
4267	4267	2087
4268	4268	2088
4269	4269	2089
4270	4270	2090
4271	4271	2091
4272	4272	2092
4273	4273	2093
4274	4274	2094
4275	4275	2095
4276	4276	2096
4277	4277	2097
4278	4278	2098
4279	4279	2099
4280	4280	2100 HB81 INTRODUCEDHB81 INTRODUCED
4281	4281	Page 76
4282	4282	each contract and the amount that may be withdrawn from the
4283	4283	trust may be calculated using any valuation method that had
4284	4284	been approved by the commissioner or the department
4285	4285	Commissioner or the Department of Insurance before January 1,
4286	4286	2015."
4287	4287	Section 8. The following heading is added to Division
4288	4288	4, commencing with Section 34-13-260, of Article 5, Chapter
4289	4289	13, Title 34, Code of Alabama 1975:
4290	4290	"Division 4. Cemetery Merchandise and Services Trust
4291	4291	Fund."
4292	4292	Section 9. Sections 27-17A-40, 27-17A-41, 27-17A-42,
4293	4293	27-17A-43, 27-17A-44, 27-17A-45, 27-17A-46, 27-17A-47,
4294	4294	27-17A-48, 27-17A-49, 27-17A-50, 27-17A-51, 27-17A-52,
4295	4295	27-17A-53, 27-17A-54, 27-17A-55, 27-17A-56, and 27-17A-57 of
4296	4296	the Code of Alabama 1975, are amended and renumbered as
4297	4297	Division 4 of Article 5 of Chapter 13 of Title 34, Code of
4298	4298	Alabama 1975, to read as follows:
4299	4299	"§27-17A-40§34-13-260
4300	4300	To comply with the trust requirement of subsection (a)
4301	4301	of Section 27-17A-13 34-13-194, all certificate holders who
4302	4302	are cemetery authorities providing preneed contracts for
4303	4303	cemetery services or cemetery merchandise shall be subject to
4304	4304	this article chapter."
4305	4305	"§27-17A-41§34-13-261
4306	4306	(a) Any person who receives or collects any funds on
4307	4307	account of a preneed contract in this state for cemetery
4308	4308	services or cemetery merchandise, or both, entered into after
4309	4309	May 1, 2002, shall have the obligation to pay over and
4310	4310	2101
4311	4311	2102
4312	4312	2103
4313	4313	2104
4314	4314	2105
4315	4315	2106
4316	4316	2107
4317	4317	2108
4318	4318	2109
4319	4319	2110
4320	4320	2111
4321	4321	2112
4322	4322	2113
4323	4323	2114
4324	4324	2115
4325	4325	2116
4326	4326	2117
4327	4327	2118
4328	4328	2119
4329	4329	2120
4330	4330	2121
4331	4331	2122
4332	4332	2123
4333	4333	2124
4334	4334	2125
4335	4335	2126
4336	4336	2127
4337	4337	2128 HB81 INTRODUCEDHB81 INTRODUCED
4338	4338	Page 77
4339	4339	contribute into a trust fund as hereinafter described, those
4340	4340	amounts or proportions of the funds as hereinafter provided.
4341	4341	(b) Whether or not the preneed contract provides for
4342	4342	cemetery merchandise or cemetery services, or any combination
4343	4343	thereof, the trust fund shall be referred to in this section
4344	4344	as the Cemetery Merchandise and Services Trust Fund.
4345	4345	(c) The trustee of the Cemetery Merchandise and
4346	4346	Services Trust Fund shall be qualified as such within the
4347	4347	definition of the trustee.
4348	4348	(d) The trustee shall take title to the property
4349	4349	conveyed to the Cemetery Merchandise and Services Trust Fund
4350	4350	subject to this section.
4351	4351	(e) The contract purchaser shall have no interest
4352	4352	whatsoever in, or power whatsoever over, the funds deposited
4353	4353	in the Cemetery Merchandise and Services Trust Fund.
4354	4354	(f) The party contracting to deliver the cemetery
4355	4355	merchandise or cemetery services or cash advances, whether or
4356	4356	not a preneed provider, shall be referred to in this section
4357	4357	as the "seller."
4358	4358	(g) The seller shall be the beneficiary of the Cemetery
4359	4359	Merchandise and Services Trust Fund."
4360	4360	"§27-17A-42§34-13-262
4361	4361	(a) The obligation of the seller under a preneed
4362	4362	contract shall be to make contributions into the Cemetery
4363	4363	Merchandise and Services Trust Fund in accordance with the
4364	4364	following formulae:
4365	4365	(1) With respect to all cemetery merchandise, 110
4366	4366	percent of wholesale cost.
4367	4367	2129
4368	4368	2130
4369	4369	2131
4370	4370	2132
4371	4371	2133
4372	4372	2134
4373	4373	2135
4374	4374	2136
4375	4375	2137
4376	4376	2138
4377	4377	2139
4378	4378	2140
4379	4379	2141
4380	4380	2142
4381	4381	2143
4382	4382	2144
4383	4383	2145
4384	4384	2146
4385	4385	2147
4386	4386	2148
4387	4387	2149
4388	4388	2150
4389	4389	2151
4390	4390	2152
4391	4391	2153
4392	4392	2154
4393	4393	2155
4394	4394	2156 HB81 INTRODUCEDHB81 INTRODUCED
4395	4395	Page 78
4396	4396	(2) With respect to outer burial containers, 60 percent
4397	4397	of the purchase price specified in the preneed contract.
4398	4398	(3) With respect to cemetery services, 60 percent of
4399	4399	the purchase price specified in the preneed contract.
4400	4400	(4) With respect to all cash advance items sold, 100
4401	4401	percent of the purchase price specified for the same in the
4402	4402	preneed contract.
4403	4403	(5) With respect to caskets, 75 percent of the purchase
4404	4404	price.
4405	4405	(b) All contributions shall be made within 30 days
4406	4406	after the end of the calendar month in which the preneed
4407	4407	contract is paid in full, unless, prior to that time, all
4408	4408	liabilities of the seller under the preneed contract to
4409	4409	deliver the specific cemetery merchandise or cemetery
4410	4410	services, or both, or the specific cash advances, identified
4411	4411	by the preneed provider as properly allocated to the payment,
4412	4412	have been satisfied, or the preneed contract is validly
4413	4413	cancelled.
4414	4414	(c) For all preneed contracts entered into on or after
4415	4415	January 1, 2015, all contributions shall be made not later
4416	4416	than 30 days after the end of the calendar month in which the
4417	4417	sum of the monies collected on the preneed contract exceeds
4418	4418	the amount that is not required to be contributed as
4419	4419	determined under subsection (a), unless, prior to that time,
4420	4420	all liabilities of the seller under the preneed contract have
4421	4421	been satisfied, or the preneed contract is validly cancelled.
4422	4422	Further required trust contributions on the contract shall
4423	4423	thereafter be made not later than 30 days after the end of the
4424	4424	2157
4425	4425	2158
4426	4426	2159
4427	4427	2160
4428	4428	2161
4429	4429	2162
4430	4430	2163
4431	4431	2164
4432	4432	2165
4433	4433	2166
4434	4434	2167
4435	4435	2168
4436	4436	2169
4437	4437	2170
4438	4438	2171
4439	4439	2172
4440	4440	2173
4441	4441	2174
4442	4442	2175
4443	4443	2176
4444	4444	2177
4445	4445	2178
4446	4446	2179
4447	4447	2180
4448	4448	2181
4449	4449	2182
4450	4450	2183
4451	4451	2184 HB81 INTRODUCEDHB81 INTRODUCED
4452	4452	Page 79
4453	4453	calendar month in which each contract payment is collected by
4454	4454	the seller.
4455	4455	(d) The trustee shall invest and reinvest the Cemetery
4456	4456	Merchandise and Services Trust Fund.
4457	4457	(e) The trustee shall make regular evaluations of the
4458	4458	fair market value of assets held in and liabilities, if any,
4459	4459	of the Cemetery Merchandise and Services Trust Fund and
4460	4460	provide a report of the evaluations to the seller at least
4461	4461	quarterly. Upon receipt of each quarterly report, the seller
4462	4462	may submit to the trustee a written and detailed analysis
4463	4463	concerning the balance of funds in the Cemetery Merchandise
4464	4464	and Services Trust Fund, certified under oath as being true
4465	4465	and correct upon information and belief by a responsible
4466	4466	officer of the seller.
4467	4467	(f) While the obligation of the seller to make
4468	4468	contributions to the Cemetery Merchandise and Services Trust
4469	4469	Fund is set forth in this section, the obligation of the
4470	4470	seller at the time of making certain withdrawals from the
4471	4471	Cemetery Merchandise and Services Trust Fund as herein
4472	4472	provided for shall be calculated with respect to the current
4473	4473	wholesale cost of cemetery merchandise and current retail
4474	4474	price of cemetery services and cash advances at the time of
4475	4475	withdrawal. If the fair market value as reported by the
4476	4476	trustee exceeds 110 percent of the total of the following, the
4477	4477	seller shall be entitled to withdraw and retain from the
4478	4478	merchandise trust fund, the excess funds therein: 110 percent
4479	4479	of the current wholesale cost of the liability to deliver all
4480	4480	cemetery merchandise, 60 percent of the current retail price
4481	4481	2185
4482	4482	2186
4483	4483	2187
4484	4484	2188
4485	4485	2189
4486	4486	2190
4487	4487	2191
4488	4488	2192
4489	4489	2193
4490	4490	2194
4491	4491	2195
4492	4492	2196
4493	4493	2197
4494	4494	2198
4495	4495	2199
4496	4496	2200
4497	4497	2201
4498	4498	2202
4499	4499	2203
4500	4500	2204
4501	4501	2205
4502	4502	2206
4503	4503	2207
4504	4504	2208
4505	4505	2209
4506	4506	2210
4507	4507	2211
4508	4508	2212 HB81 INTRODUCEDHB81 INTRODUCED
4509	4509	Page 80
4510	4510	for all cemetery services, 60 percent of the current retail
4511	4511	price of outer burial containers, 75 percent of the current
4512	4512	retail price of caskets, and 100 percent of the current retail
4513	4513	price of all cash advances, for the total of all preneed
4514	4514	contracts for which the purchasers have paid in full, all
4515	4515	calculated as of the time of withdrawal; and concerning the
4516	4516	total of all preneed contracts for which the purchasers have
4517	4517	not paid in full, 25 percent of the total of the following:
4518	4518	110 percent of the current wholesale cost of the liability to
4519	4519	deliver all cemetery merchandise, 60 percent of the current
4520	4520	retail price for all cemetery services, and 100 percent of the
4521	4521	current retail price of all cash advances, all calculated as
4522	4522	of the time of withdrawal.
4523	4523	(g) At least annually the seller shall make the
4524	4524	aforesaid analysis and certification and provide the same to
4525	4525	the trustee. If the certification discloses that the fair
4526	4526	market value of the Cemetery Merchandise and Services Trust
4527	4527	Fund is less than 100 percent of the aggregate calculated
4528	4528	amount the seller shall from its own funds contribute to the
4529	4529	Cemetery Merchandise and Services Trust Fund within the 12
4530	4530	months succeeding the annual computation the amount necessary
4531	4531	to restore the trust fund to an amount equal to not less than
4532	4532	100 percent of the aggregate amount so calculated."
4533	4533	"§27-17A-43§34-13-263
4534	4534	(a) Upon cancellation of a preneed contract by mutual
4535	4535	agreement between the seller and purchaser, or upon unilateral
4536	4536	cancellation of a preneed contract by the seller by reason of
4537	4537	default on the part of the purchaser, or other valid
4538	4538	2213
4539	4539	2214
4540	4540	2215
4541	4541	2216
4542	4542	2217
4543	4543	2218
4544	4544	2219
4545	4545	2220
4546	4546	2221
4547	4547	2222
4548	4548	2223
4549	4549	2224
4550	4550	2225
4551	4551	2226
4552	4552	2227
4553	4553	2228
4554	4554	2229
4555	4555	2230
4556	4556	2231
4557	4557	2232
4558	4558	2233
4559	4559	2234
4560	4560	2235
4561	4561	2236
4562	4562	2237
4563	4563	2238
4564	4564	2239
4565	4565	2240 HB81 INTRODUCEDHB81 INTRODUCED
4566	4566	Page 81
4567	4567	cancellation by reason of transfers to another seller or
4568	4568	otherwise, the seller may, upon submission of a certification
4569	4569	under oath by a responsible officer of the seller to the
4570	4570	trustee, may withdraw from the Cemetery Merchandise and
4571	4571	Services Trust Fund and retain an amount equal to the amount
4572	4572	of all funds contributed to the trust fund with respect to the
4573	4573	preneed contract. Any trustee accepting preneed contract
4574	4574	proceeds under this article chapter may rely on the seller's
4575	4575	certification under oath as required herein to be made, and
4576	4576	shall not be liable to anyone for such reliance.
4577	4577	(b) At such time as the seller undertakes to perform
4578	4578	its obligations under a preneed contract by delivery or
4579	4579	installation, or both, of cemetery merchandise and the
4580	4580	provision of cemetery services and disbursement on account of
4581	4581	cash advances, or otherwise, upon certification to the trustee
4582	4582	under oath by a responsible officer of the seller that the
4583	4583	obligations of the seller under the contract have been
4584	4584	completely fulfilled, the seller may withdraw from the
4585	4585	Cemetery Merchandise and Services Trust Fund and retain an
4586	4586	amount equal to the current wholesale cost to the fund with
4587	4587	respect to the preneed contract.
4588	4588	(c) At such time as the seller has fulfilled all of its
4589	4589	obligations under all preneed contracts with respect to which
4590	4590	funds have been contributed to the trust fund, and
4591	4591	certification under oath to the trustee by a responsible
4592	4592	officer of the seller of those facts, the seller may withdraw
4593	4593	from the trust fund and retain all of the remaining assets
4594	4594	thereof."
4595	4595	2241
4596	4596	2242
4597	4597	2243
4598	4598	2244
4599	4599	2245
4600	4600	2246
4601	4601	2247
4602	4602	2248
4603	4603	2249
4604	4604	2250
4605	4605	2251
4606	4606	2252
4607	4607	2253
4608	4608	2254
4609	4609	2255
4610	4610	2256
4611	4611	2257
4612	4612	2258
4613	4613	2259
4614	4614	2260
4615	4615	2261
4616	4616	2262
4617	4617	2263
4618	4618	2264
4619	4619	2265
4620	4620	2266
4621	4621	2267
4622	4622	2268 HB81 INTRODUCEDHB81 INTRODUCED
4623	4623	Page 82
4624	4624	"§27-17A-44§34-13-264
4625	4625	If the amounts paid by the purchaser under a preneed
4626	4626	contract for cemetery merchandise have previously been
4627	4627	deposited in trust, the seller may withdraw the principal
4628	4628	amount there, at such time as the cemetery merchandise is
4629	4629	delivered or installed or, if comprised of materials designed
4630	4630	to withstand prolonged, protected storage without
4631	4631	deterioration, the merchandise is placed in storage with a
4632	4632	responsible third party bonded and insured for the wholesale
4633	4633	value thereof and evidenced by a receipt specifically
4634	4634	identifying the item, the specific preneed contract, the
4635	4635	location of the item, and the identity and address of the
4636	4636	bonding and insuring parties. For purposes of this section
4637	4637	only, caskets and alternative containers may not be held in
4638	4638	storage by the seller or a third party storage facility prior
4639	4639	to the death of the funeral beneficiary."
4640	4640	"§27-17A-45§34-13-265
4641	4641	An endowment care fund and all payments or
4642	4642	contributions to it are expressly permitted as and for
4643	4643	charitable and eleemosynary purposes. No payment, gift, grant,
4644	4644	bequest, or other contribution for endowment care is invalid
4645	4645	by reason of any indefiniteness or uncertainty of the persons
4646	4646	designated as beneficiaries in the instruments creating the
4647	4647	fund, nor is the fund or any contributions to it invalid as
4648	4648	violating any law against perpetuities, or the suspension of
4649	4649	the power of alienation of title to property."
4650	4650	"§27-17A-46§34-13-266
4651	4651	Any cemetery now existing or hereafter established,
4652	4652	2269
4653	4653	2270
4654	4654	2271
4655	4655	2272
4656	4656	2273
4657	4657	2274
4658	4658	2275
4659	4659	2276
4660	4660	2277
4661	4661	2278
4662	4662	2279
4663	4663	2280
4664	4664	2281
4665	4665	2282
4666	4666	2283
4667	4667	2284
4668	4668	2285
4669	4669	2286
4670	4670	2287
4671	4671	2288
4672	4672	2289
4673	4673	2290
4674	4674	2291
4675	4675	2292
4676	4676	2293
4677	4677	2294
4678	4678	2295
4679	4679	2296 HB81 INTRODUCEDHB81 INTRODUCED
4680	4680	Page 83
4681	4681	excluding those operated by governmental agencies or religious
4682	4682	institutions, shall be may be qualified as an endowment care
4683	4683	cemetery, except those cemeteries which do not charge fees or
4684	4684	sell plots, interment rights, or any related cemetery ."
4685	4685	"§27-17A-47§34-13-267
4686	4686	(a) Every cemetery authority operating an endowment
4687	4687	care cemetery shall establish an endowment care fund which
4688	4688	shall be placed with and held by a bank, trust company,
4689	4689	savings and loan association, or other financial institution
4690	4690	authorized to provide trust services under Title 5, as
4691	4691	amended, or under the applicable laws of the United States or
4692	4692	any other state, or a board of trustees, consisting of at
4693	4693	least three members, who shall reside in the State of Alabama,
4694	4694	one of whom is engaged in outside cemetery management, and
4695	4695	each of whom shall be bonded to honestly perform the duties of
4696	4696	trustee under a formal trust agreement.
4697	4697	(b) Except as specifically provided in this subsection,
4698	4698	commencing on July 1, 2014, a person serving on a board of
4699	4699	trustees or cemetery authority may not also serve as a trustee
4700	4700	of an endowment care fund for the cemetery authority. A board
4701	4701	of trustees in existence on July 1, 2014, may continue to
4702	4702	serve as the trustee of an endowment care fund if the board of
4703	4703	trustees otherwise complies with this subsection. Unless
4704	4704	exempted by the commissioner board pursuant to this
4705	4705	subsection, on or before January 1, 2015, each member of a
4706	4706	board of trustees in existence on July 1, 2014, shall furnish
4707	4707	the bond required by subsection (a) in the greater of one
4708	4708	hundred thousand dollars ($100,000) or the amount in each
4709	4709	2297
4710	4710	2298
4711	4711	2299
4712	4712	2300
4713	4713	2301
4714	4714	2302
4715	4715	2303
4716	4716	2304
4717	4717	2305
4718	4718	2306
4719	4719	2307
4720	4720	2308
4721	4721	2309
4722	4722	2310
4723	4723	2311
4724	4724	2312
4725	4725	2313
4726	4726	2314
4727	4727	2315
4728	4728	2316
4729	4729	2317
4730	4730	2318
4731	4731	2319
4732	4732	2320
4733	4733	2321
4734	4734	2322
4735	4735	2323
4736	4736	2324 HB81 INTRODUCEDHB81 INTRODUCED
4737	4737	Page 84
4738	4738	endowment care fund for which the board of trustees acts as
4739	4739	trustee as of December 31, 2014. Thereafter, the amount of the
4740	4740	bonds shall be increased on January 1 of each succeeding year
4741	4741	to equal the amount in each endowment care fund as of the
4742	4742	immediately preceding December 31. The commissioner board
4743	4743	shall exempt a board of trustees from the bond requirement if
4744	4744	the board of trustees provides to the commissioner board an
4745	4745	annual audit report that satisfies all of the following
4746	4746	criteria:
4747	4747	(1) The report is prepared by a certified public
4748	4748	accountant authorized to practice in Alabama.
4749	4749	(2) The report evidences that the review made the
4750	4750	subject of the report by the accountant encompasses each
4751	4751	endowment care fund for which the board of trustees acts as
4752	4752	trustee.
4753	4753	(3) The report notes relating to the endowment care
4754	4754	fund or funds are in a form that is reasonably acceptable to
4755	4755	the commissioner board.
4756	4756	(4) The report does not evidence any material violation
4757	4757	of or noncompliance with this chapter relating to an endowment
4758	4758	care fund.
4759	4759	(c) The corporate trustee or board of trustees shall be
4760	4760	referred to as a qualified trustee. Unless otherwise specified
4761	4761	in this article chapter or in the terms of the trust
4762	4762	instrument, the trustee of any trust established under or
4763	4763	pursuant to this article chapter shall have all powers granted
4764	4764	to trustees under Article 14 of Chapter 3 of Title 19. The
4765	4765	incorporation herein of such powers shall not be deemed to
4766	4766	2325
4767	4767	2326
4768	4768	2327
4769	4769	2328
4770	4770	2329
4771	4771	2330
4772	4772	2331
4773	4773	2332
4774	4774	2333
4775	4775	2334
4776	4776	2335
4777	4777	2336
4778	4778	2337
4779	4779	2338
4780	4780	2339
4781	4781	2340
4782	4782	2341
4783	4783	2342
4784	4784	2343
4785	4785	2344
4786	4786	2345
4787	4787	2346
4788	4788	2347
4789	4789	2348
4790	4790	2349
4791	4791	2350
4792	4792	2351
4793	4793	2352 HB81 INTRODUCEDHB81 INTRODUCED
4794	4794	Page 85
4795	4795	imply any duties of trustees of trusts established under or
4796	4796	pursuant to this article chapter not expressly delineated in
4797	4797	this article chapter.
4798	4798	(d) The cemetery authority may employ a person to
4799	4799	advise the trustee in the management of the fund.
4800	4800	(e) The cemetery authority may enter into a contract
4801	4801	with the qualified trustee for the management and investment
4802	4802	of the endowment care fund, which contract may provide for the
4803	4803	payment of income from the fund of reasonable fees or
4804	4804	commissions to the trustee, and its reasonable expenses for
4805	4805	administering the trust.
4806	4806	(f) As often as he or she the board may deem necessary,
4807	4807	the commissioner board may examine audit the records or
4808	4808	facilities, or both, of any cemetery authority operating an
4809	4809	endowment care cemetery."
4810	4810	"§27-17A-48§34-13-268
4811	4811	(a) Each cemetery authority shall comply with this
4812	4812	chapter and maintain at each place of business a list of the
4813	4813	names and addresses of its owners and directors, which shall
4814	4814	be available to the public.
4815	4815	(b) Each cemetery authority shall maintain a record of
4816	4816	all property interment space owners by name and last known
4817	4817	address with a description of merchandise and location of
4818	4818	burial lots, crypts, or niches and the records shall be on a
4819	4819	form or in a format prescribed by the board and shall detail
4820	4820	all information required by the board . A plat map shall be
4821	4821	maintained for each cemetery location at the cemetery business
4822	4822	office. A book or file shall be kept as to the date, location
4823	4823	2353
4824	4824	2354
4825	4825	2355
4826	4826	2356
4827	4827	2357
4828	4828	2358
4829	4829	2359
4830	4830	2360
4831	4831	2361
4832	4832	2362
4833	4833	2363
4834	4834	2364
4835	4835	2365
4836	4836	2366
4837	4837	2367
4838	4838	2368
4839	4839	2369
4840	4840	2370
4841	4841	2371
4842	4842	2372
4843	4843	2373
4844	4844	2374
4845	4845	2375
4846	4846	2376
4847	4847	2377
4848	4848	2378
4849	4849	2379
4850	4850	2380 HB81 INTRODUCEDHB81 INTRODUCED
4851	4851	Page 86
4852	4852	by lot, and space number of each person interred or entombed
4853	4853	in the cemetery. A written copy of the cemetery rules and
4854	4854	regulations shall be maintained at each location and made
4855	4855	available to the public upon request. "
4856	4856	"§27-17A-49§34-13-269
4857	4857	(a) From the sale price of each plot, crypt, or niche
4858	4858	sold by the cemetery authority, of an endowment care cemetery,
4859	4859	it shall pay an amount, not less than as determined in
4860	4860	accordance with the following schedule, to the trustee of the
4861	4861	endowment care fund, which payment shall be paid over to the
4862	4862	trustee not more than four months after the close of the month
4863	4863	in which the total or final payment on the sale has been
4864	4864	received:
4865	4865	(1) Fifteen percent of the sale price of each grave or
4866	4866	lawn crypt space.
4867	4867	(2) Five percent of the sale price of each mausoleum
4868	4868	crypt or niche.
4869	4869	(3) The amount received for special care funds, gifts,
4870	4870	grants, contribution devises, or bequests made with respect to
4871	4871	the separate or special care of a particular lot, grave,
4872	4872	crypt, niche, mausoleum, monument, or marker or that of a
4873	4873	particular family, as distinguished from the general endowed
4874	4874	care of a cemetery or of a garden.
4875	4875	(b) In addition to subsection (a), a cemetery authority
4876	4876	may receive, and transfer to the trustee, as a part of or
4877	4877	incident to the endowment care fund, any property, real,
4878	4878	personal, or mixed, bequeathed, devised, given, or otherwise
4879	4879	contributed to it for endowment care purposes. Any contractual
4880	4880	2381
4881	4881	2382
4882	4882	2383
4883	4883	2384
4884	4884	2385
4885	4885	2386
4886	4886	2387
4887	4887	2388
4888	4888	2389
4889	4889	2390
4890	4890	2391
4891	4891	2392
4892	4892	2393
4893	4893	2394
4894	4894	2395
4895	4895	2396
4896	4896	2397
4897	4897	2398
4898	4898	2399
4899	4899	2400
4900	4900	2401
4901	4901	2402
4902	4902	2403
4903	4903	2404
4904	4904	2405
4905	4905	2406
4906	4906	2407
4907	4907	2408 HB81 INTRODUCEDHB81 INTRODUCED
4908	4908	Page 87
4909	4909	endowment care deposits shall fall under this article chapter.
4910	4910	(c) Any cemetery authority which is organized and
4911	4911	engaged in business prior to May 1, 2002, shall qualify as an
4912	4912	endowment care cemetery if the following occur:
4913	4913	(1) Not already placed, it shall within 90 days of May
4914	4914	1, 2002, have placed the entire principal of any endowment
4915	4915	care fund in its possession, custody, or control, into the
4916	4916	hands of a qualified trustee designated by it, to be
4917	4917	administered as set forth in this article chapter; and
4918	4918	principal of its endowment care fund, or the aggregate
4919	4919	principal of its endowment care funds, if more than one, shall
4920	4920	have a fair market value on either May 1, 2002, or on the date
4921	4921	of transfer to the trustee of not less than twenty-five
4922	4922	thousand dollars ($25,000); or it shall substitute 25 percent
4923	4923	for each percentage of each sale for the next five years or
4924	4924	five thousand dollars ($5,000) per year, whichever is greater,
4925	4925	until the balance of twenty-five thousand dollars ($25,000) is
4926	4926	reached. In such case, the entire amount of twenty-five
4927	4927	thousand dollars ($25,000) shall be paid into the fund before
4928	4928	the end of the fifth year, and no interest may be removed from
4929	4929	the fund until the twenty-five thousand dollars ($25,000)
4930	4930	minimum has been reached.
4931	4931	(2) It shall at all times after May 1, 2002, comply
4932	4932	with the minimum requirements for payments to the trustee for
4933	4933	endowment care.
4934	4934	(d) Any cemetery authority organizing a cemetery after
4935	4935	May 1, 2002, whether it be by incorporation, association,
4936	4936	individually, or by any other means, or having its first
4937	4937	2409
4938	4938	2410
4939	4939	2411
4940	4940	2412
4941	4941	2413
4942	4942	2414
4943	4943	2415
4944	4944	2416
4945	4945	2417
4946	4946	2418
4947	4947	2419
4948	4948	2420
4949	4949	2421
4950	4950	2422
4951	4951	2423
4952	4952	2424
4953	4953	2425
4954	4954	2426
4955	4955	2427
4956	4956	2428
4957	4957	2429
4958	4958	2430
4959	4959	2431
4960	4960	2432
4961	4961	2433
4962	4962	2434
4963	4963	2435
4964	4964	2436 HB81 INTRODUCEDHB81 INTRODUCED
4965	4965	Page 88
4966	4966	burial after May 1, 2002, before disposing of any burial lot
4967	4967	or right or making any sale thereof or making its first
4968	4968	burial, or both, shall cause to be deposited with a qualified
4969	4969	trustee, in cash, the sum of twenty-five thousand dollars
4970	4970	($25,000) in the endowment care fund.
4971	4971	(e) When a cemetery authority has placed with a
4972	4972	trustee, pursuant to this article chapter, a sum of money in
4973	4973	excess of the aggregate which would be required only under
4974	4974	subsection (a), the cemetery authority shall not be required
4975	4975	under this article chapter to make further payments to the
4976	4976	trustee until such time thereafter as, taking into account all
4977	4977	sales of plots, crypts, and niches in the cemetery property
4978	4978	since the first of the sales, the aggregate of payments to the
4979	4979	trustee if made in accordance with subsection (a) would equal
4980	4980	the applicable minimum amount paid to the trustee under
4981	4981	subdivision (1) of subsection (c) , or subsection (d) of this
4982	4982	section.
4983	4983	(f) Any deposit previously made, or represented to be
4984	4984	made to an existing endowment care fund which exceeds 10
4985	4985	percent of the gross selling price of all plots, crypts, and
4986	4986	niches sold since representation of endowment care shall be
4987	4987	made a permanent part of the endowment care fund and
4988	4988	transferred to the qualified trustee under this article
4989	4989	chapter."
4990	4990	"§27-17A-50§34-13-270
4991	4991	(a) No cemetery authority may directly or indirectly
4992	4992	require or direct the investment, reinvestment, or retention
4993	4993	by a qualified trustee of any part of an endowment care trust
4994	4994	2437
4995	4995	2438
4996	4996	2439
4997	4997	2440
4998	4998	2441
4999	4999	2442
5000	5000	2443
5001	5001	2444
5002	5002	2445
5003	5003	2446
5004	5004	2447
5005	5005	2448
5006	5006	2449
5007	5007	2450
5008	5008	2451
5009	5009	2452
5010	5010	2453
5011	5011	2454
5012	5012	2455
5013	5013	2456
5014	5014	2457
5015	5015	2458
5016	5016	2459
5017	5017	2460
5018	5018	2461
5019	5019	2462
5020	5020	2463
5021	5021	2464 HB81 INTRODUCEDHB81 INTRODUCED
5022	5022	Page 89
5023	5023	in any asset or business in which the cemetery authority or
5024	5024	any officer, director, owner, partner, or employee of the
5025	5025	cemetery authority has a financial interest. Nothing contained
5026	5026	in this subsection shall prevent the trustee, subject to the
5027	5027	provisions regarding investment and reinvestment of the trust
5028	5028	estate as are contained in the governing instrument creating
5029	5029	the trust, from investing, reinvesting, or retaining any asset
5030	5030	or business in which the cemetery authority or any officer,
5031	5031	director, owner, partner, or employee of the cemetery
5032	5032	authority has an insubstantial or nonmaterial financial
5033	5033	interest, provided that the trustee, in the exercise of the
5034	5034	trustee's discretion, deems the investment, reinvestment, or
5035	5035	retention to be for the best interest of the trust estate.
5036	5036	(b) The net income from the endowment care fund, to the
5037	5037	extent that the same is distributed from the fund, shall be
5038	5038	used exclusively for covering the costs of endowment care of
5039	5039	the cemetery.
5040	5040	(c) For the purposes of this section, net income does
5041	5041	not include realized or unrealized capital gains or losses.
5042	5042	All realized capital gains and losses shall be recorded to
5043	5043	corpus, which is the sum of deposits made by a cemetery
5044	5044	authority into an endowment care fund, pursuant to Section
5045	5045	27-17A-49 34-13-269, and all realized capital gains or losses.
5046	5046	Capital gains taxes, if any, may be paid from the corpus.
5047	5047	Unrealized capital gains and losses, if any, shall be recorded
5048	5048	as an adjustment to the fair market value of the endowment
5049	5049	care fund."
5050	5050	"§27-17A-51§34-13-271
5051	5051	2465
5052	5052	2466
5053	5053	2467
5054	5054	2468
5055	5055	2469
5056	5056	2470
5057	5057	2471
5058	5058	2472
5059	5059	2473
5060	5060	2474
5061	5061	2475
5062	5062	2476
5063	5063	2477
5064	5064	2478
5065	5065	2479
5066	5066	2480
5067	5067	2481
5068	5068	2482
5069	5069	2483
5070	5070	2484
5071	5071	2485
5072	5072	2486
5073	5073	2487
5074	5074	2488
5075	5075	2489
5076	5076	2490
5077	5077	2491
5078	5078	2492 HB81 INTRODUCEDHB81 INTRODUCED
5079	5079	Page 90
5080	5080	The trustee shall not be required to inquire into the
5081	5081	propriety of the expenditures made by the cemetery authority
5082	5082	in connection with endowment care of the cemetery, and it
5083	5083	shall not be held responsible in any manner whatsoever for and
5084	5084	on account of payments of the income from the endowment care
5085	5085	fund made to the cemetery authority."
5086	5086	"§27-17A-52§34-13-272
5087	5087	The trustee shall, not less than annually, shall file
5088	5088	with the cemetery authority an account which shall include a
5089	5089	complete disclosure of all activity since the previous account
5090	5090	and a statement detailing fund investments."
5091	5091	"§27-17A-53§34-13-273
5092	5092	To the extent that any endowment care trust existing on
5093	5093	May 1, 2002, includes investments or assets, the retention of
5094	5094	which the trustee in the free exercise of its discretion deems
5095	5095	not in the best interest of the trust estate, the trustee
5096	5096	shall dispose of the investments or assets as soon as
5097	5097	practicable without undue sacrifice to the trust estate, and
5098	5098	in any event within two years after May 1, 2002."
5099	5099	"§27-17A-54§34-13-274
5100	5100	An annual report of the endowment care fund shall be
5101	5101	made to the commissioner board by each cemetery authority
5102	5102	within 90 days of the close of each calendar year. This report
5103	5103	shall include the qualified trustee's name or names, the bond
5104	5104	numbers if individual trustees or the name and address of the
5105	5105	financial institution in which the fund is maintained, and the
5106	5106	affidavit of the cemetery authority affirming compliance with
5107	5107	this article chapter. Prior to the sale or transfer of a
5108	5108	2493
5109	5109	2494
5110	5110	2495
5111	5111	2496
5112	5112	2497
5113	5113	2498
5114	5114	2499
5115	5115	2500
5116	5116	2501
5117	5117	2502
5118	5118	2503
5119	5119	2504
5120	5120	2505
5121	5121	2506
5122	5122	2507
5123	5123	2508
5124	5124	2509
5125	5125	2510
5126	5126	2511
5127	5127	2512
5128	5128	2513
5129	5129	2514
5130	5130	2515
5131	5131	2516
5132	5132	2517
5133	5133	2518
5134	5134	2519
5135	5135	2520 HB81 INTRODUCEDHB81 INTRODUCED
5136	5136	Page 91
5137	5137	cemetery, the cemetery authority shall report and document to
5138	5138	the commissioner board that the endowment care fund is
5139	5139	currently funded in accordance with this article chapter."
5140	5140	"§27-17A-55§34-13-275
5141	5141	A cemetery authority shall start construction of that
5142	5142	section of a mausoleum or bank of below-ground crypts in which
5143	5143	sales, contracts for sale, reservations for sale, or
5144	5144	agreements for sale are being made, within five years after
5145	5145	the date of the first sale or when 75 percent of the mausoleum
5146	5146	or below-ground crypts have been sold and the purchase price
5147	5147	has been received, whichever occurs first. The construction
5148	5148	shall be completed within six years after the date of the
5149	5149	first sale made. Extensions for completion, not to exceed one
5150	5150	year, may be granted by the commissioner board for good cause
5151	5151	shown. If the units have not been completely constructed at
5152	5152	the time of need or the time specified herein, unless
5153	5153	otherwise specified in the preneed contract, all monies paid
5154	5154	shall be refunded upon request, plus interest earned thereon
5155	5155	if deposited by the cemetery authority in an escrow or trust
5156	5156	fund, and if not so deposited in an escrow or trust fund
5157	5157	earning interest, then plus interest in an amount equal to the
5158	5158	interest or discount which would have been earned thereon had
5159	5159	the funds been invested in United States Treasury Bills having
5160	5160	a 90-day maturity."
5161	5161	"§27-17A-56§34-13-276
5162	5162	(a) Cemetery Each cemetery shall adopt rules and
5163	5163	regulations are adopted for the mutual protection of the
5164	5164	cemetery owners and the owners of interment rights in the
5165	5165	2521
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5187	5187	2543
5188	5188	2544
5189	5189	2545
5190	5190	2546
5191	5191	2547
5192	5192	2548 HB81 INTRODUCEDHB81 INTRODUCED
5193	5193	Page 92
5194	5194	cemetery. All owners of interment rights and other persons
5195	5195	within the cemetery shall be subject to these rules and
5196	5196	regulations as they now exist and as they may be amended or
5197	5197	altered by the cemetery. The cemetery authority has the right
5198	5198	to shall enforce these rules and regulations . The cemetery
5199	5199	authority expressly reserves the right and, at any time and
5200	5200	without prior notice to any owners, to may adopt new rules and
5201	5201	regulations or to amend, modify, or repeal any section,
5202	5202	paragraph, or sentence of these rules and regulations.
5203	5203	(b) This section shall not apply to the officers,
5204	5204	directors, shareholders, partners, employees, agents, or
5205	5205	representatives of a cemetery authority who intentionally
5206	5206	commit an act of vandalism or other illegal act. "
5207	5207	"§27-17A-57§34-13-277
5208	5208	The commissioner board shall have the same jurisdiction
5209	5209	over funeral establishments, funeral directors, cemetery
5210	5210	authorities, or third party sellers who sell preneed contracts
5211	5211	without a preneed certificate of authority as he or she the
5212	5212	board has over those preneed sellers who possess a preneed
5213	5213	certificate of authority."
5214	5214	Section 10. Beginning with the 2024 fiscal year, the
5215	5215	Department of Insurance may transfer to the Alabama Board of
5216	5216	Funeral Service and Cemetery Service quarterly, for deposit by
5217	5217	the board into the Alabama Board of Funeral Service and
5218	5218	Cemetery Service Fund, the total amount of three hundred
5219	5219	thousand dollars ($300,000) per fiscal year, to defray costs
5220	5220	associated with the administration and operation of the
5221	5221	Alabama Preneed Funeral and Cemetery Act of 2023 by the board.
5222	5222	2549
5223	5223	2550
5224	5224	2551
5225	5225	2552
5226	5226	2553
5227	5227	2554
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5246	5246	2573
5247	5247	2574
5248	5248	2575
5249	5249	2576 HB81 INTRODUCEDHB81 INTRODUCED
5250	5250	Page 93
5251	5251	Unless extended by an act of the Legislature, this section
5252	5252	shall be repealed at the end of the 2027 fiscal year.
5253	5253	Section 11. Although this bill would have as its
5254	5254	purpose or effect the requirement of a new or increased
5255	5255	expenditure of local funds, the bill is excluded from further
5256	5256	requirements and application under Section 111.05 of the
5257	5257	Constitution of Alabama of 2022, because the bill defines a
5258	5258	new crime or amends the definition of an existing crime.
5259	5259	Section 12. This act shall become effective on the
5260	5260	October 1, 2023, following its passage and approval by the
5261	5261	Governor, or its otherwise becoming law.
5262	5262	2577
5263	5263	2578
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