Alabama House Bill HB81 Latest Draft

                            HB81INTRODUCED
Page 0
7GGL22-1
By Representative Clouse
RFD: Insurance
First Read: 07-Mar-23
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5 7GGL22-1 02/15/2023 KMS (L) cr 2023-432
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SYNOPSIS: 
Under existing law, the Alabama Board of Funeral
Service licenses and regulates funeral establishments,
funeral directors, and embalmers.
This bill would provide further for definitions
and the membership of the board.
This bill would also establish the Alabama
Preneed Funeral and Cemetery Act of 2023 and would
transfer the regulation of preneed contracts pursuant
to the Preneed Funeral and Cemetery Act from the
Commissioner and the Department of Insurance to the
board.
This bill would authorize the Department of
Insurance to temporarily transfer certain funds to the
Alabama Board of Funeral Service to defray costs
associated with the administration and operation of the
Alabama Preneed Funeral and Cemetery Act of 2023.
Section 111.05 of the Constitution of Alabama of
2022, prohibits a general law whose purpose or effect
would be to require a new or increased expenditure of
local funds from becoming effective with regard to a
local governmental entity without enactment by a 2/3
vote unless: it comes within one of a number of
specified exceptions; it is approved by the affected
entity; or the Legislature appropriates funds, or
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provides a local source of revenue, to the entity for
the purpose.
The purpose or effect of this bill would be to
require a new or increased expenditure of local funds
within the meaning of the amendment. However, the bill
does not require approval of a local governmental
entity or enactment by a 2/3 vote to become effective
because it comes within one of the specified exceptions
contained in the amendment.
A BILL
TO BE ENTITLED
AN ACT
Relating to the Alabama Board of Funeral Service; to
amend Section 34-13-1, as amended by Act 2022-339, 2022
Regular Session, Sections 34-13-20, 34-13-21, and 34-13-22,
Sections 34-13-23 and 34-13-27, as amended by Act 2022-339,
2022 Regular Session, Code of Alabama 1975, to rename the
Alabama Board of Funeral Service as the Alabama Board of
Funeral Services and to provide further for definitions and
the membership of the board; to add Article 5 to Chapter 13,
Title 34, Code of Alabama 1975, by amending and renumbering
Sections 27-17A-1, 27-17A-3, 27-17A-4, 27-17A-10 to 27-17A-25,
inclusive, 27-17A-30 to 27-17A-34, inclusive, and 27-17A-40 to
27-17A-57, inclusive, as Sections 34-13-170 to 34-13-172,
inclusive, 34-13-190 to 34-13-206, inclusive, 34-13-230 to
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34-13-234, inclusive, and 34-13-260 to 34-13-277, inclusive,
Code of Alabama 1975; to establish the Alabama Preneed Funeral
and Cemetery Act of 2023; to transfer the existing Preneed
Funeral and Cemetery Act, and the regulation of preneed
contracts, from the Commissioner and Department of Insurance
to the Alabama Board of Funeral Service; to authorize the
Department of Insurance to temporarily transfer certain funds
to the board to defray costs associated with the
administration and operation of the Alabama Preneed Funeral
and Cemetery Act of 2023; and in connection therewith would
have as its purpose or effect the requirement of a new or
increased expenditure of local funds within the meaning of
Section 111.05 of the Constitution of Alabama of 2022.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 34-13-1, as amended by Act
2022-339, 2022 Regular Session, Sections 34-13-20, 34-13-21,
and 34-13-22, and Sections 34-13-23 and 34-13-27, as amended
by Act 2022-339, 2022 Regular Session, of the Code of Alabama
1975, are amended to read as follows:
"§34-13-1
(a) For purposes of this chapter, the following terms
have the following meanings:
(1) ACCREDITED SCHOOL or COLLEGE OF MORTUARY SCIENCE. A
school or college approved by the American Board of Funeral
Service Education, or a successor organization, which
maintains a course of instruction of not less than 48 calendar
weeks or four academic quarters or college terms and which
gives a course of instruction in the fundamental subjects
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related to funeral service and mortuary science education as
approved by the American Board of Funeral Service Education,
or a successor organization, and other courses of instruction
in fundamental subjects as may be prescribed by the Alabama
Board of Funeral Service.
(2) ALKALINE HYDROLYSIS. The technical process that
reduces human remains to bone fragments using heat, water, and
chemical agents.
(3) ALTERNATIVE CONTAINER. A nonmetal receptacle or
enclosure, without ornamentation or a fixed interior lining,
which is designed for the encasement of human remains and
which is made of cardboard, pressed-wood, composition
materials, with or without an outside covering, pouches of
canvas, or other materials.
(3)(4) AMERICAN BOARD OF FUNERAL SERVICE EDUCATION. The
national academic accreditation agency for college and
university programs in funeral service and mortuary science
education. The accrediting function of the American Board of
Funeral Service Education is recognized by the United States
Department of Education and the Council on Higher Education
Accreditation.
(4)(5) APPRENTICE EMBALMER or EMBALMER'S APPRENTICE.
Any person engaged in the study of the art of embalming under
the instructions and supervision of a licensed embalmer
practicing in this state.
(5)(6) APPRENTICE FUNERAL DIRECTOR or FUNERAL
DIRECTOR'S APPRENTICE. Any person operating under or in
association with a funeral director for the purpose of
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learning the business or profession of funeral director, to
the end that he or she may become licensed under this chapter.
(7) AT NEED. At the time of death or immediately
following death.
(6)(8) AUTHORIZING AGENT. A person at least 18 years of
age, except in the case of a surviving spouse or parent, who
is legally entitled to order the cremation or final
disposition of particular human remains.
(9) BASIC SERVICES FEE. The fee for the professional
services of the funeral director and staff that is added to
the total cost of the funeral arrangements. The term includes
a charge for services performed in conducting the arrangements
conference, planning the funeral, securing the necessary
permits, preparing the notices, and coordinating the cemetery
or crematory arrangements.
(10) BELOW-GROUND CRYPT. A preplaced enclosed chamber,
usually constructed of reinforced concrete, poured in place or
a precast unit installed in quantity, either side-by-side or
multiple depth, and covered by earth or sod and known also as
a lawn crypt or turf-top crypt.
(11) BENEFICIARY. One who benefits from an act, such as
one for whom a preneed contract is entered into or the
successor-in-interest of a life insurance policy.
(7)(12) BOARD. The Alabama Board of Funeral Service.
(13) BRANCH. Any person or entity that is part of a
common business enterprise that has a certificate of authority
issued pursuant to Article 5 and elects to operate under a
name other than that of the common business enterprise.
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(14) BURIAL. The placement of human remains in a grave
space or lawn crypt.
(8)(15) CASH ADVANCE ITEMS. Any item of service or
merchandise described to a purchaser using the term cash
advance, accommodation, cash disbursement, or similar term. A
cash advance item is also any item obtained from a third party
and paid for by a funeral provider on behalf of a purchaser.
Cash advance items include, but are not limited to, all of the
following:
a. Cemetery or crematory services.
b. Pallbearers.
c. Public or other transportation.
d. Clergy honoraria.
e. Flowers.
f. Musicians or singers.
g. Nurses.
h. Obituary notices.
i. Funeral programs.
j. Gratuities.
k. Death certificates.
l. Outer burial containers.
m. Cemetery plots.
n. Escorts.
(9)(16) CASKET. A rigid container designed for the
encasement of human remains which is usually constructed of
wood, metal, or similar material and ornamented and lined with
fabric.
(10)(17) CEMETERY. A place established, maintained,
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managed, operated, or improved which is dedicated to and used
or intended to be used for the permanent interment of human
remains and their memorialization . It may be either land or
earth interment; a columbarium; a mausoleum for vault or crypt
entombment; a structure or place used or intended to be used
for the interment of cremated remains; cryogenic storage; or
any combination of one or more thereof.
(11)(18) CEMETERY AUTHORITY. Any individual, person,
firm, profit or nonprofit corporation, trustee, partnership,
society, religious society, church association or
denomination, municipality, or other group or entity, however
organized, insofar as they or any of them may now or hereafter
establish, own, operate, lease, control, or manage one or more
cemeteries, burial parks, mausoleums, columbariums, or any
combination or variation thereof, or hold lands or structures
for burial grounds or burial purposes in this state and engage
in the operation of a cemetery, including any one or more of
the following: The care and maintenance of a cemetery; the
interment, entombment, and memorialization of the human dead
in a cemetery; the sale, installation, care, maintenance, or
any combination thereof, with respect of monuments, markers,
foundations, memorials, burial vaults, urns, crypts,
mausoleums, columbariums, flower vases, floral arrangements,
and other cemetery accessories for installation or use within
a cemetery; and the supervision and conduct of funeral and
burial services within the bounds of the cemetery.
(19) CEMETERY MERCHANDISE. Any personal property
offered for sale, contracted for sale, or sold for use in
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connection with the burial, final disposition,
memorialization, interment, entombment, or inurnment of human
remains by a cemetery authority. The term specifically
includes, but is not limited to, the casket, the alternative
container, the outer burial container, and the memorial.
(20) CEMETERY SERVICES. At need or preneed services
provided by a cemetery authority for interment, entombment,
inurnment, and installation of cemetery merchandise.
(21) CERTIFICATE HOLDER. A funeral establishment,
cemetery authority, third-party seller, or any other person to
whom a valid certificate of authority to sell preneed
contracts has been granted by the board.
(22) COLUMBARIUM. A structure or room or space in a
building or structure used or intended to be used for the
inurnment of cremated remains.
(12)(23) CONVICTION. The entry of a plea of guilty or a
guilty verdict rendered by any court of competent
jurisdiction, excluding traffic violations.
(13)(24) CREMATED REMAINS. Human remains recovered
after the completion of the cremation process, including
pulverization, which leaves only bone fragments reduced to
unidentifiable dimensions, and the residue of any foreign
materials that were cremated with the human remains.
(25) CREMATED REMAINS CONTAINER. A receptacle in which
cremated remains are placed.
(14)(26) CREMATION. The technical irreversible process,
using heat, flames, or chemical agents, that reduces human
remains to bone fragments. The reduction takes place through
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heat and evaporation. Cremation shall include the processing,
and may include the pulverization, of the bone fragments.
Cremation is a process and is a method of final disposition.
(15)(27) CREMATIONIST. A person licensed by the board
to perform the procedure of cremation.
(16)(28) CREMATION CHAMBER. The retort or vessel used
to reduce human remains to bone fragments.
(17)(29) CREMATION CONTAINER. The container in which
human remains are transported to a crematory, in which human
remains are placed upon arrival at a crematory, or for storage
and placement in a cremation chamber for cremation.
(18)(30) CREMATORY. A building or portion of a building
that houses a cremation chamber and that may house a holding
facility for purposes of cremation and as part of a funeral
establishment.
(31) CREMATORY AUTHORITY. Any person who owns or
controls a crematory.
(32) DEATH CERTIFICATE. A legal document containing
vital statistics pertaining to the life and death of the
deceased.
(33) DECEASED or DECEDENT. One who is no longer living.
(19)(34) EMBALMER. Any person engaged, or holding
himself or herself out as engaged, in the business, practice,
science, or profession of embalming, whether on his or her own
behalf or in the employ of a registered and licensed funeral
director.
(20)(35) EMBALMING. The practice, science, or
profession, as commonly practiced, of preserving,
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disinfecting, and preparing by application of chemicals or
other effectual methods, human dead for burial, cremation, or
transportation.
(36) ENCASEMENT. The placement of human remains in a
rigid container including, but not limited to, a casket or
urn.
(37) ENDOWMENT CARE. The maintenance and repair of all
places in a cemetery, subject to the rules of the cemetery
authority. The term may also be referred to as endowed care,
perpetual care, improvement care, or permanent care.
(38) ENDOWMENT CARE TRUST FUND. An irrevocable trust
fund set aside by law with a trustee, along with the income
therefrom, to provide for the endowment care of a cemetery.
(39) ENTOMBMENT. The act of placing human remains in a
mausoleum crypt.
(40) FINAL DISPOSITION. The lawful disposal of human
remains whether by interment, cremation, or other method.
(21)(41) FUNERAL. A ceremony for celebrating,
sanctifying, or remembering the life of a person who has died.
A funeral may be divided into the following two parts:
a. The funeral service, which may take place at a
funeral home, church, or other place.
b. The committal service or disposition, which may take
place by the grave, tomb, mausoleum, or crematory where the
body of the decedent is to be buried or cremated.
(22)(42) FUNERAL ARRANGEMENTS. The completing of
funeral service arrangements, cremation arrangements, and the
financial details of a funeral at the time of death. The term
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includes the collection of vital statistic information, death
certificate information, obituary and funeral notice
completion, the completion of a statement of funeral goods and
services selected, organizing of funeral and memorial services
for families, and the ordering of cash advance items.
(43) FUNERAL BENEFICIARY. The person or persons who
will receive the benefit of the funeral and cemetery goods and
services to be delivered under a preneed contract at the time
of his, her, or their death.
(23)(44) FUNERAL DIRECTING. The practice of directing
or supervising funerals, the practice of preparing dead human
bodies for burial by means other than embalming, or the
preparation for the final disposition of dead human bodies;
the making of funeral arrangements or providing for funeral
services or the making of financial arrangements for the
rendering of these services; the provision or maintenance of a
place for the preparation for final disposition of dead human
bodies; the use of the terms funeral director, undertaker,
mortician, funeral parlor, or any other term from which can be
implied the practice of funeral directing; or the holding out
to the public that one is a funeral director or engaged in a
practice described in this subdivision.
(24)(45) FUNERAL DIRECTOR. A person required to be
licensed to practice the profession of funeral directing under
the laws of this state, who consults with the public, who
plans details of funeral services with members of the family
and minister or any other person responsible for such
planning, or who directs, is in charge, or apparent charge of,
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and supervises funeral service in a funeral home, church, or
other place; who enters into the making, negotiation, or
completion of financial arrangements for funeral services, or
who uses in connection with the profession of funeral
directing the terms funeral director, undertaker, funeral
counselor, mortician, or any other term or picture or
combination thereof when considered in context in which used,
from which can be implied the practicing of the profession of
funeral directing or that the person using such term or
picture can be implied to be holding himself or herself out to
the public as being engaged in the profession of funeral
directing; and for all purposes under Alabama law, a funeral
director is considered a professional. For the purposes of
this chapter, the term does not include any cemetery
authority.
(25)(46) FUNERAL ESTABLISHMENTS. The term includes any
funeral home or mortuary service located at a specific street
address where the profession of funeral directing, embalming,
or cremation is practiced in the care, planning, and
preparation for burial, cremation, or transportation of human
dead. A funeral establishment shall consist of and maintain
all of the following facilities:
a. A preparation room equipped with sanitary nonporous
floor and wall and necessary drainage and ventilation, and
containing operating embalming equipment, necessary approved
tables, instruments, hot and cold running water, containers or
receptacles for soiled linen or clothing, and supplies for the
preparation and embalming of dead human bodies for burial,
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cremation, and transportation.
b. A display room containing a stock of adult caskets
and funeral supplies displayed in full size, cuts,
photographs, or electronic images. At no time shall less than
eight different adult size caskets be on the premises.
c. At least one operating funeral coach or hearse
properly licensed and equipped for transporting human remains
in a casket or urn.
d. If engaged in the practice of cremation, the
establishment shall satisfy all crematory requirements
provided in this chapter and have on site an adequate supply
of urns for display and sale.
e. A room suitable for public viewing or other funeral
services that is a minimum of 1,000 square feet.
f. An office for holding arrangement conferences with
relatives or authorizing agents.
(47) FUNERAL SERVICE. At need or preneed services
provided by a funeral establishment in connection with funeral
directing, final disposition of human remains, or installation
of memorials.
(26)(48) FUNERAL SUPPLIES or FUNERAL MERCHANDISE. Any
item offered for sale, contracted for sale, or sold for use in
connection with funeral directing or funeral services when
sold by a funeral director including, but not limited to,
caskets, alternative containers, outer burial containers,
urns, memorials, clothing used to dress human dead when sold
by a funeral director, and all equipment and accoutrements
normally required for the preparation for burial or funeral
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and other disposition of human dead.
(49) GRAVE SPACE. A space of ground in a cemetery that
is used or intended to be used for in-ground burial.
(27)(50) GROSS IMMORALITY. Willful, flagrant, or
shameful immorality or showing a moral indifference to the
opinions of the good and respectable members of the community
and to the just obligations of the position held by the
offender.
(28)(51) HOLDING ROOM. Either of the following:
a. A room within a funeral establishment that satisfies
the requirements of a branch location as provided in this
chapter or board rule, for the retention of human remains
before final disposition.
b. A room within a crematory facility, designated for
the retention of human remains before and after cremation,
that is not accessible to the public.
(52) HUMAN REMAINS. The body of a decedent in any stage
of decomposition, including cremated remains.
(53) INTERMENT. The final disposition of human remains
by burial, burial at sea, entombment, or inurnment.
(54) INTERMENT RIGHT. The right to inter human remains
in a particular interment space in a cemetery.
(55) INTERMENT SPACE. A space intended for the final
disposition of human remains including, but not limited to, a
grave space, mausoleum crypt, niche, and below-ground crypt.
(56) INURNMENT. The act of placing cremated remains in
a receptacle including, but not limited to, an urn and
depositing it in a niche.
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(57) LICENSEE. Any individual, firm, corporation,
partnership, joint venture, or limited liability company which
obtains a license, certificate, or registration in accordance
with this chapter.
(29)(58) MANAGING CREMATIONIST. A licensed funeral
director and cremationist who has full charge, control, and
supervision of all activities involving cremation at a funeral
establishment or crematory.
(30)(59) MANAGING EMBALMER. A licensed embalmer who has
full charge, control, and supervision of all activities
involving the preparation room and embalming.
(31)(60) MANAGING FUNERAL DIRECTOR. A licensed funeral
director who has full charge, control, and supervision of all
activities involving funeral directing for a funeral
establishment.
(61) MAUSOLEUM. A chamber or structure used or intended
to be used for entombment.
(62) MAUSOLEUM CRYPT. A chamber of a mausoleum of
sufficient size for entombment of human remains.
(63) MEMORIAL. Any product, other than a mausoleum or
columbarium, used for identifying an interment space or for
commemoration of the life, deeds, or career of some decedent
including, but not limited to, a monument, marker, niche
plate, urn garden plaque, crypt plate, cenotaph, marker bench,
and vase.
(64) MEMORIAL RETAILER. Any person offering or selling
memorials at retail to the public.
(65) MEMORIALIZATION. Any permanent system designed to
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mark or record the names and other data pertaining to a
decedent.
(32)(66) MORAL TURPITUDE. Any unlawful sexual or
violent act, or any act involving theft, theft of services,
theft by deception, extortion, receiving stolen property,
identity theft, forgery, fraud, tampering with records,
bribery, perjury, or any similar act in any jurisdiction.
(33)(67) MORTUARY SCIENCE. The scientific,
professional, and practical aspects, with due consideration
given to accepted practices, covering the care, preparation
for burial, or transportation of dead human bodies, which
shall include the preservation and sanitation of the bodies
and restorative art and those aspects related to public
health, jurisprudence, and good business administration.
(34)(68) MORTUARY SERVICE. A location with a specific
street address where embalming or cremation, or both, is
practiced for a licensed funeral establishment and where no
services or merchandise are sold directly or at retail to the
public. A mortuary service shall consist of and maintain all
of the following facilities:
a. A preparation room equipped with sanitary nonporous
floor and walls, operating embalming equipment, and necessary
drainage and ventilation and containing necessary approved
tables, instruments, hot and cold running water, containers or
receptacles for soiled linen or clothing, and supplies for the
preparation and embalming of dead human bodies for burial,
cremation, and transportation.
b. At least one operating motor vehicle properly
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licensed and equipped for transporting human remains in a
casket or urn.
c. If engaged in the practice of cremation, the
establishment shall satisfy all requirements for a crematory
provided in this chapter.
(69) NICHE. A space usually within a columbarium used
or intended to be used for inurnment of cremated remains.
(35)(70) OPERATOR. A person, corporation, firm, legal
representative, managing funeral director, general manager, or
other organization owning or operating a funeral establishment
or cemetery.
(71) OUTER BURIAL CONTAINER. A container that is
designed for placement in the grave space around the casket or
the urn including, but not limited to, containers commonly
known as burial vaults, grave boxes, and grave liners.
(72) PERSON. Any individual, firm, corporation,
partnership, joint venture, limited liability company,
association, trustee, government or governmental subdivision,
agency, or other entity, or any combination thereof.
(36)(73) PRACTICAL EMBALMER. Any person who has been
actively and continuously engaged or employed in the practice
of embalming under the supervision of a licensed embalmer for
four consecutive years immediately preceding May 1, 1975, and
has been issued a license as a practical embalmer under the
grandfather provisions of this chapter.
(74) PREARRANGEMENT. The term applied to completing the
details for selection of merchandise or services on a preneed
basis, which may or may not include prefunding or prepayment.
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(75) PREDEVELOPED. Designated areas or buildings within
a cemetery that have been mapped and planned for future
construction but are not yet completed.
(76) PREDEVELOPED INTERMENT SPACE. An interment space
that is planned for future construction but is not yet
completed.
(77) PREFUND. The term applied to completing the
financial details of a prearrangement, which include
prefunding or prepayment.
(78) PRENEED. Any time prior to death.
(79) PRENEED CONTRACT. A written contract to purchase
funeral merchandise, funeral services, cemetery merchandise,
or cemetery services from the seller on a preneed basis.
(80) PRENEED CONTRACT TRUST FUND. The funds received
pursuant to a preneed contract which are required by law to be
held in trust until the merchandise or services purchased
pursuant to the contract are delivered or provided or until
otherwise lawfully withdrawn.
(81) PRENEED SALES AGENT. A person who is in the
business of selling preneed contracts.
(37)(82) PROCESSING or PULVERIZATION. The reduction of
identifiable bone fragments after the completion of the
cremation process to unidentifiable bone fragments or
granulated particles by manual or mechanical means.
(83) PROVIDER. The person, who may or may not be the
seller, who actually provides merchandise and services under
the terms of a preneed contract.
(84) PURCHASE PRICE. The amount paid by the purchaser
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for merchandise and services purchased under a preneed
contract, exclusive of finance charges, sales tax, charges
relating to interment rights, arrangement conference fees, or
charges for credit life insurance.
(85) PURCHASER. The person who purchases a preneed
contract either on his or her behalf or on behalf of a
third-party beneficiary.
(86) RELIGIOUS INSTITUTION. An organization formed
primarily for religious purposes which has applied and
qualified for exemption from federal income tax as an exempt
organization under Section 501(c)(3) of the Internal Revenue
Code of 1986, as amended.
(87) SCATTERING. The lawful dispersion of cremated
remains.
(88) SELLER. Any person offering or selling merchandise
or services on a preneed basis including, but not limited to,
funeral establishments, cemetery authorities, crematory
authorities, and memorial retailers.
(89) SPECIAL CARE. Any care provided, or to be
provided, that is supplemental to, or in excess of, endowment
care, in accordance with the specific directions of any donor
of funds for those purposes.
(90) SUCCESSOR-IN-INTEREST. A person who lawfully
follows another in ownership or control of property or rights.
(38)(91) TEMPORARY CONTAINER. A receptacle for cremated
remains, usually composed of cardboard, plastic, or similar
material, that can be closed in a manner that prevents the
leakage or spillage of the cremated remains or the entrance of
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foreign material, and is a single container of sufficient size
to hold the cremated remains until an urn is acquired or the
cremated remains are scattered or buried.
(92) THIRD-PARTY SELLER. Any person, who is not a
funeral establishment or a cemetery authority, engaged in the
sale of preneed funeral merchandise or cemetery merchandise.
(93) TRUSTEE. Any person, state or national bank, trust
company, or federally insured savings and loan association
lawfully appointed as fiduciary over funds deposited by one or
more purchasers of a preneed contract or deposited pursuant to
an endowment care trust fund. The term does not refer to a
board of trustees.
(39)(94) URN. A receptacle designed to encase cremated
remains.
(b) Nothing in this chapter shall require a funeral
director or funeral establishment to have or provide a chapel
or to restrict the conduct of funeral services from a church
or chapel."
"§34-13-20
(a) There is established the Alabama Board of Funeral
Service Services, consisting of nine 14 members, each of whom
shall be citizens of the United States and residents of the
State of Alabama. The membership of the board shall be divided
into two distinct divisions, the funeral division and the
preneed division, with each division having jurisdiction over
their respective areas of service.
(b) The appointing authorities shall coordinate their
appointments to assure board membership is inclusive and
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reflects the racial, gender, geographic, urban/rural urban,
rural, and economic diversity of the state.
(c)(1) Commencing on January 1, 2019, as the terms of
the members serving on the board on August 1, 2017, expire,
the membership of the funeral division of the board shall be
reconstituted to consist of seven professional members and two
consumer members.
(1) Each professional member of the funeral division of
the board shall be a citizen of the United States, a resident
of Alabama, and licensed and in good standing with the board
as an embalmer or funeral director at the time of appointment
and during the entire term of office. Professional members of
the board shall be appointed by the Governor pursuant to
subsection (e). As the terms of the members serving on the
board on October 1, 2023, expire, the professional membership
of the board shall be appointed to reflect the following:
a. Four Three of the professional members of the board
shall hold a current license from the board to practice
embalming in the state, shall have been actively practicing
embalming in the state for the last 10 consecutive years
immediately preceding appointment, and shall be engaged in the
practice of embalming at the time of appointment to the board.
b. Three Four of the professional members of the board
shall hold a current license from the board to practice
funeral directing in the state, shall have been actively
engaged in funeral directing in the state for the last 10
consecutive years immediately preceding appointment, and shall
be the operator of a funeral establishment in this state at
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the time of appointment to the board.
(2) Commencing on October 1, 2023, the preneed division
of the board shall be created to consist of four professional
members and one consumer member. Two professional members
shall be licensed funeral directors and two professional
members shall be licensed preneed sales agents employed by a
cemetery. Each professional member of the preneed division of
the board shall hold a current license from the board to
practice as a preneed sales agent, shall have been actively
engaged in preneed sales in the state for the last five
consecutive years immediately preceding appointment, and shall
be employed by a certificate of authority license holder in
this state at the time of appointment to the board. Two of
these professional members shall also hold a current
certificate of authority to sell preneed services and
merchandise. The initial appointment of two of the preneed
sales agents appointed pursuant to this paragraph shall expire
on December 31, 2025, and for the other two, shall expire on
December 31, 2026. Thereafter, the preneed sales agent members
shall serve pursuant to subsection (e). Professional members
of the board shall be appointed by the Governor pursuant to
subsection (e).
(2)(3) Each consumer member of the board shall
represent the public in general and shall have been a citizen
of the United States and a resident of Alabama for the last 10
consecutive years immediately preceding appointment and during
the entire term of office. A consumer member of the board may
not have held, nor currently hold, a license or certification
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issued by the board, be employed at any time by, or
professionally or financially associated with, the holder of a
license or certificate issued by the board, or be related
within the third degree of consanguinity or affinity to the
holder of a license or certificate issued by the board. One
Two consumer member members of the board shall be appointed by
the Lieutenant Governor and one consumer member shall be
appointed by the Speaker of the House of Representatives
pursuant to a procedure adopted by rule of the board.
(d) Commencing in October of 2018, and each October
thereafter of a year where at least one professional member
term on either division of the board has expired, or is vacant
for any reason, all licensed funeral directors and licensed
embalmers for a funeral division member, and all licensed
preneed sales agents for a preneed division member, shall meet
in Montgomery, at a time and place fixed by the respective
division of the board, for the purpose of nominating and
submitting the names of three licensed persons for each
position on the board to the Governor. The Governor shall
promptly appoint one of the three persons so nominated to
serve as a professional member of the board.
(e)(1) Professional and consumer members of the board
shall serve staggered terms of four years each to provide
continuity of service on the board. If an appointment is not
made before the expiration of a term, the board member then
serving may continue to serve until a successor has been
appointed. A board member may not serve more than two full
consecutive terms on the board.
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(2) A board member who is appointed to fill a vacancy
which occurs before the expiration of the term of the vacating
member shall serve the remaining portion of the term to which
the former member was appointed. A vacancy on the board for
any reason shall be filled by appointment of the Governor for
the unexpired term. The appointee shall serve until his or her
successor is nominated and appointed pursuant to subsection
(d). If a member is appointed to fill an unexpired term of
less than two years, the time may not be counted toward the
maximum eight years of service.
(3) Not more than Only one professional funeral
division member and one professional preneed division member
of the board a division may reside in the sameeach district
as created by Section 34-13-21.
(4) At each meeting where nominations are made for the
professional members of the funeral division of the board,
only one licensed funeral director or licensed embalmer
employed by the same funeral establishment may vote. At each
meeting where nominations are made for the professional
members of the preneed division of the board, only one
licensed preneed sales agent employed by the same certificate
of authority license may vote.
(f)(1) In accordance with applicable law, in addition
to a board member resigning from the board in writing, a board
member may be removed from the board for any of the following
grounds:
a. The refusal or inability to perform board duties in
an efficient, responsible, or professional manner.
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b. The misuse of his or her position on the board to
obtain financial gain or seek personal advantage for himself,
herself, or another person.
c. A final adjudication or determination of guilt by
any lawful authority of the board member or sanction of the
board member for the violation of any law the board determines
is substantially related to any practice governed by this
chapter.
d. The revocation or suspension of the license of a
professional member of the board.
(2) Any board member who fails to qualify after
appointment shall automatically become ineligible to serve as
a member of the board and a new member, properly qualified,
shall be appointed in the same manner as the original
appointment and shall serve the remainder of the term of the
vacating board member.
(3) If a consumer board member fails to attend two or
more meetings within a year, without a valid excuse as
determined by the board, he or she shall be removed from the
board. A new consumer board member shall be appointed in the
same manner as the original appointment and shall serve the
remainder of the term.
(g)(1) The status of any person or entity properly
licensed by the Alabama Board of Funeral Service on the
effective date of this act shall continue under the Alabama
Board of Funeral Services.
(2) All the rights, duties, property, real or personal,
and all other effects existing in the name of the Alabama
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Board of Funeral Service shall be transferred to the Alabama
Board of Funeral Services. Any reference to the Alabama Board
of Funeral Service in any existing law, contract, or other
instrument, shall be deemed a reference to the Alabama Board
of Funeral Services.
(3) A reasonable transition period for the name change
shall be allowed to permit an orderly and cost-effective
transition, relating particularly to the use of equipment and
supplies, all letterhead, business cards, forms, and any other
materials in use by the board containing the name Alabama
Board of Funeral Service shall continue to be used by the
Alabama Board of Funeral Services until the supplies are
exhausted. Replacement supplies shall contain the name of the
Alabama Board of Funeral Services.
(4) The Code Commissioner, pursuant to Section 29-7-8,
at times determined appropriate, shall implement this
statutory name change in applicable sections of this code.	"
"§34-13-21
There are created, for the purpose of this chapter,
seven geographical districts which shall be identical with the
seven congressional districts as fixed and established by
Section 17-14-70, as may be amended. It is the purpose and
intention of this section to provide that not more than one
professional member of each division of the board shall be
selected from each district and that three nominees to the
Governor for appointment to the board shall be made from each
district. The two three consumer members of the board may not
reside in the same congressional district."
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"§34-13-22
(a) The Alabama Board of Funeral Service Services shall
hold not less than one joint meeting of both divisions
quarterly, such meeting for the purpose of reviewing
financial, budgetary, and employment matters. The quarterly
meetings to be held at such a time and place as the board may
determine after notice of such the meeting has been given in
the manner prescribed herein at least 15 days prior to such
the meeting. The board may hold such other meetings as it the
board may deem necessary. A majority of the appointed members
shall constitute a quorum authorized to transact general
business in the name of the board. The board shall not meet on
the premises of any embalming school or college of mortuary
science; and, if any such meeting is held, all the proceedings
of such meeting shall be void Upon the executive director
serving on the effective date of the act amending this
subsection leaving office, two-thirds of the appointed members
shall constitute a quorum for the purposes of selecting an
executive director and establishing fees .
(b) Additionally, each division of the board shall hold
at least one division meeting quarterly. "
"§34-13-23
(a)(1) The board appointed under this chapter and each
successor thereto may shall select from its own membership a
chair and to adopt rules for the transaction of its business
and for the betterment and promotion of the standards of
service and practice to be followed in the death care industry
in the State of Alabama as the board may deem expedient and
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consistent with the laws of this state and for the public
good.
(2) The chair shall preside at all meetings of the
board unless otherwise ordered, and he or she shall exercise
and perform all duties and functions incident to the office of
chair.
(3) The board may also select from its own membership a
vice chair, a secretary, and a treasurer. No two offices shall
be held by the same person.
(b) The treasurer shall give bond to the State of
Alabama in the sum of ten thousand dollars ($10,000), and any
premium payable for the bond shall be paid from the funds of
the board. The bond shall be deposited with the Treasurer of
the State of Alabama.
(c) A board member shall be reimbursed for necessary
travel expenses, per diem, and the necessary expenses incident
to his or her attendance upon the business of the board, and,
in addition thereto, shall receive compensation in the amount
of seventy-five dollars ($75) for every day not to exceed 20
days per year actually spent by the member upon the business
of the board. The board may employ in the unclassified service
an executive director and up to four associate executive
directors who shall each receive and be paid an annual salary
to be fixed by the board pursuant to Section 36-6-6. The
salary shall be paid on a semimonthly basis. In addition, the
executive director and associate executive directors shall
each receive his or her necessary travel and other incidental
expenses as are incurred in the performance of duties, and all
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expenses, per diem, and compensation shall be paid out of the
receipts of the board. At no time shall the operation of the
board be an expense to the state.
(d) The executive director of the board shall have
complete supervision and be held responsible for the direction
of the office of the board, shall have supervision over
employees, field inspections, audits, and enforcement of this
chapter, and shall be responsible and answerable to the board.
The associate executive directors shall assist the executive
director and perform such other duties as may be assigned to
him or her by the executive director.
(e) The executive director shall keep a record in which
shall be registered the name and business address of every
person to whom licenses have been granted in accordance with
this chapter, the number and date of the license and the date
of each renewal. Upon request to do so, the executive director
shall supply a list of all persons and establishments holding
a license under this chapter, then in force, giving the names
of the persons, their business addresses, and the numbers of
their licenses.
(f) It shall be the duty of the executive director to
prepare under the direction of the board and cause to be
printed all forms required by this chapter to be prescribed by
the board. All notices required to be mailed by this chapter
shall be directed to the last known address of the party to
whom the notice is sent.
(g) The executive director shall serve at the pleasure
of the board and shall perform duties as may be necessary for
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the proper functioning of the board as the board may determine
or as may be prescribed in this chapter. During the employment
of the executive director, he or she may not be employed by
any funeral establishment.
(h) All fees and fines received under this chapter
shall be paid into a special fund in the State Treasury to be
known as the Alabama State Funeral Service Fund, which is
hereby created, for the necessary and proper expenses of the
board, and for a reasonable reserve for future use by the
board. All monies in the fund are hereby appropriated, as a
continuing appropriation, to the board to be used for carrying
out this chapter. Commencing on October 1, 2023, the name of
the fund shall be changed to the Alabama Board of Funeral
Services Fund.
(i) Each member of the board, the executive director,
the associate executive directors, designated employees, and
independent contractors of the board appropriately identified
are authorized at any given time to enter the office,
premises, establishment, or place of business where any
practice or activity regulated by this chapter is carried on,
or advertised as being carried on, to investigate complaints
or perform audits or inspections. Each on-site inspection
shall include an inspection of the license, certification, and
registration of each licensee and apprentice trainee operating
therein.
(j) All members of the board or designated employees of
the board may serve and execute any process issued by any
court under this chapter and execute any papers, orders, or
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process issued by the board or any officer or member of the
board under this chapter.
(k) The board may employ clerical assistants and
employees as necessary to carry out this chapter, and the
terms and conditions of employment shall be determined by the
board. The board may establish and equip an office from which
this chapter may be carried out.
(l)(1) The board may acquire and hold, in its own name,
real property by purchase, gift, lease, lease with the option
to purchase, or other lawful means, except eminent domain,
which real property may be used by the board to carry out its
responsibilities. The board may also transfer, sell, convey,
or cause to be conveyed real property and any improvements
thereon, subject to the requirements of this section. In
purchasing any real property, maintaining real property, or
making improvements thereto, the board may expend any funds
contained in the Funeral Board Property Acquisition Fund
established in subdivision (2), and any obligations created in
connection with the purchase or improvement of the real
property shall not create debts, obligations, or liabilities
of the state. As used in this subsection, real property shall
include land, lots, and all things and interests, including
leasehold interests, pertaining thereto, and all other things
annexed or attached to the land which would pass to a vendee
by conveyance of the land or lot, including mineral, gas, and
oil interests. All sales or leases made by the board of any
real property owned or held by the board shall be subject to
the requirements of Article 3, Chapter 15, Title 9.
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Notwithstanding the foregoing, the proceeds from the sale of
real property owned by the board which are distributed
pursuant to Section 9-15-83 shall be paid to the board and
deposited into the property acquisition fund.
(2) There is established the Funeral Board Property
Acquisition Fund within the State Treasury. Any funds received
by the board pursuant to this section shall be deposited into
the property acquisition fund and shall be held by the board
in trust for carrying out the purposes of the property
acquisition fund. Amounts in the property acquisition fund
shall be budgeted and allotted in accordance with Sections
41-4-80 through 41-4-96 and Sections 41-19-1 through 41-19-12.
Not later than May 1, 2022, the executive director shall
transfer from the Alabama State Funeral Service Fund to the
property acquisition fund an amount determined by vote of the
board for the purchase of real property. Thereafter, the board
shall annually, during the month of October, transfer an
amount between two percent and seven percent of the receipts
of the board from the previous fiscal year to the property
acquisition fund.
(3) At the end of each fiscal year, any unencumbered
and unexpended balance in the property acquisition fund shall
not revert to the State General Fund but shall carry over to
the next fiscal year."
"§34-13-27
(a) The board shall adopt a common seal, which may be
altered as often as the board may desire, and the funeral
division of the board may adopt and enforce, for the
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protection of the public health, safety, and welfare,
reasonable rules relating to all of the following:
(1) The practice of the profession of embalming,
including, but not limited to, solicitation of business.
(2) The practice of the profession of funeral
directing, including, but not limited to, solicitation of
business.
(3) The sanitary condition and physical facilities of
funeral homes, mortuaries, and funeral establishments where
the profession of embalming and funeral directing is carried
on, with particular regard to plumbing, sewage, disinfecting,
ventilation, and equipment.
(4) Carrying out generally the various provisions of
this chapter for the protection of the peace, health, safety,
and welfare of the public.
(5) Carrying out a program for training of apprentice
embalmers and apprentice funeral directors.
(6) The sale of goods, services, and merchandise and
the operation of entities and establishments regulated by the
board.
(b) The preneed division of the board may adopt and
enforce, for the protection of the public health, safety, and
welfare, reasonable rules relating to the sale of preneed
funeral merchandise and services. "
Section 2. The following heading is added to Division
1, commencing with Section 34-13-170, of Article 5, Chapter
13, Title 34, Code of Alabama 1975:
"Article 5. Alabama Preneed Funeral and Cemetery Act of
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2023.
"Division 1. General Provisions."
Section 3. Sections 27-17A-1, 27-17A-3, and 27-17A-4 of
the Code of Alabama 1975, are amended and renumbered as
Division 1 of Article 5 of Chapter 13 of Title 34, Code of
Alabama 1975, to read as follows:
"§27-17A-1§34-13-170
(a) This chapter article shall be known and may be
cited as the Alabama Preneed Funeral and Cemetery Act of 2023.
(b)(1) The Alabama Board of Funeral Services succeeds
to and is vested with the powers, duties, and functions of the
Department of Insurance relating to the regulation of
endowment care, preneed sales contracts, and the licensing of
preneed sales agents.
(2) All records of the Department of Insurance relating
to the regulation of preneed sales contracts, endowment care,
and the licensing of preneed sales agents are transferred to
the board.
(3) The status of any person properly licensed by the
Department of Insurance under the former Chapter 17A of Title
27, on the effective date of the act adding this subdivision,
shall continue under the board.
(4) The administrative rules of the Department of
Insurance existing on the effective date of the act adding
this subdivision shall remain in effect as administrative
rules of the board until added, amended, or repealed by the
board.
(5) The existence and functioning of the Alabama
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Preneed Funeral and Cemetery Act, created and functioning
pursuant to Sections 27-17A-1 to 27-17A-57, inclusive, is
continued as the Alabama Preneed Funeral and Cemetery Act of
2023, under this article. All rights, duties, and obligations
existing in the name of the Department of Insurance, relating
to endowment care, preneed sales contracts, and preneed sales
agent licenses, shall continue under the board. Any reference
to the Department of Insurance in any existing law, contract,
or other instrument relating to endowment care, preneed sales
contracts, and preneed sales agent licenses, shall be deemed a
reference to the board.
(6) The transfer of the regulation of preneed contracts
and the licensing of preneed sales agents from the Department
of Insurance to the board shall not affect the rights of any
person held before the effective date of the act adding this
subdivision, as those rights relate to any preneed trust
funds, endowment care trust funds, or any other funds held in
trust pursuant to the Alabama Preneed Funeral and Cemetery
Act."
"§27-17A-3§34-13-171
(a) Nothing in this chapter shall be construed to
prohibit the funding of preneed contracts with multiple
insurance or annuity contracts. Life insurance and annuity
contracts used to fund preneed contracts shall conform with
the provisions of this title Title 27 as they relate to life
insurance and annuities and shall cover not less than the
initial retail price of the preneed contract.
(b) The initial premium payment for a life insurance
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policy or annuity contract shall be made payable to the
issuing insurance company and the preneed seller shall remit
the payment to the insurance company within 10 business days
after the insurance application is signed by the parties. If a
preneed contract provides for installment payments, each
premium payment shall be made payable to the insurance company
and, if collected by the preneed seller, shall be remitted to
the insurance company within 10 business days after receipt by
the preneed seller.
(c) Nothing in this chapter shall prohibit a seller, or
any other person, from receiving commissions earned and
payable in regard to funding preneed contracts with life
insurance or annuity contracts, provided the seller or other
person holds a valid insurance producer license in this state
and is appointed by the insurance company paying the
commission.
(d) A preneed seller may be identified as the
beneficiary or assignee of the death benefit proceeds of a
life insurance policy or annuity contract sold as a future
funding mechanism for a preneed contract, but may not be the
owner of the policy or annuity contract or exercise any
ownership rights in the policy or annuity. If the preneed
contract is cancelled before or after the death of the funeral
beneficiary, the preneed seller shall cancel and relinquish
any assignment of benefits or beneficiary status under the
policy or annuity contract, and deliver the policy or
contract, if in the custody of the preneed seller, to the
policy owner or his or her legal representative."
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"§27-17A-4§34-13-172
Nothing in this chapter shall be construed to prohibit
cemetery authorities from selling funeral merchandise, funeral
establishments from selling cemetery merchandise, or
third-party sellers from selling either funeral merchandise or
cemetery merchandise, or both. Provided, the required amount
of the purchase price to be placed into trust shall be
governed by the appropriate section of this chapter."
Section 4. The following heading is added to Division
2, commencing with Section 34-13-190, of Article 5, Chapter
13, Title 34, Code of Alabama 1975:
"Division 2. Certificate of Authority."
Section 5. Sections 27-17A-10, 27-17A-11, 27-17A-11.1,
27-17A-12, 27-17A-13, 27-17A-14, 27-17A-15, 27-17A-16,
27-17A-17, 27-17A-18, 27-17A-19, 27-17A-20, 27-17A-21,
27-17A-22, 27-17A-23, 27-17A-24, and 27-17A-25 of the Code of
Alabama 1975, are amended and renumbered as Division 2 of
Article 5 of Chapter 13 of Title 34, Code of Alabama 1975, to
read as follows:
"§27-17A-10§34-13-190
(a) No person may sell a preneed contract without first
having a valid certificate of authority.
(b)(1) No person may receive any funds for payment on a
preneed contract who does not hold a valid certificate of
authority.
(2) Any preneed transaction in which a buyer pays to
the seller before need, in whole or in part, a purchase price
for funeral or cemetery merchandise and services, and in which
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the seller is not obligated to deliver the contracted for
merchandise or to perform the services until need, in whole or
in part, shall be evidenced by a written preneed contract
satisfying the requirements of this chapter and signed by the
seller and the purchaser. No person may receive or accept any
form of consideration in such a transaction without a fully
signed written preneed contract. A transaction not evidenced
by a signed written preneed contract shall be voidable at the
election of the buyer and, if such election is made, the
seller shall refund to the buyer the entire amount paid by the
buyer together with interest thereon at the legal rate within
30 days after notice to the seller.
(3) The provisions of subdivision (1) do not apply to
the purchase of a life insurance policy or annuity, the
benefits of which are assigned to a funeral home and/or or
cemetery authority, or the benefits of which are to be paid to
a funeral home and/or or cemetery authority named as
beneficiary of the policy or annuity, as long as the purchaser
and funeral home and/or or cemetery authority acknowledge in
writing that no preneed contract is entered as a result of the
purchase or assignment of the life insurance policy or annuity
at the time the policy or annuity is purchased. Benefits from
a life insurance policy or annuity issued under this
subdivision shall only be paid to a funeral home and/or or
cemetery authority which provides funeral or cemetery
merchandise and services at the death of the insured whether
or not such funeral home and/or or cemetery has been named as
an assignee or the beneficiary of the policy or annuity. If
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the amount of the policy or annuity proceeds shall exceed the
actual funeral costs at the time of need, such the excess
amount must shall be paid to a designated beneficiary, other
than a funeral home and/or or cemetery authority, or to the
estate of the insured or annuitant.
(4) The provisions of subdivision Subdivision (1) do
does not apply to any legal reserve insurance company or to
any trust company or to any national or state bank or savings
and loan association having trust powers which company, bank,
or association receives any money in trust pursuant to the
sale of a preneed contract.
(c)(1) No person may obtain a certificate of authority
under this article chapter for the preneed sale of funeral
services or cemetery services unless the person or its agent,
in the case of a corporate entity, holds a license as a
funeral director or a funeral establishment, or is a cemetery
authority. and qualifies as an applicant for a certificate of
authority pursuant to the following standards and
qualifications:
a. The applicant shall be at least the legal age of
majority in this state.
b. The applicant shall be in good standing with the
board.
c. The applicant may not have any felony or misdemeanor
convictions that relate to any activity regulated by this
chapter or a crime involving moral turpitude, as defined by
this chapter.
d. The applicant shall be of good moral character and
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submit to a criminal history background check pursuant to
subdivision (2).
(2) An applicant for a certificate of authority shall
submit to the board, on a form sworn to by the applicant, his
or her name, date of birth, Social Security number, and two
complete sets of fingerprints for completion of a criminal
history background check. The board shall submit the
fingerprints to the Alabama State Law Enforcement Agency for a
state criminal history background check. The fingerprints
shall be forwarded by the agency to the Federal Bureau of
Investigation for a national criminal history background
check. Costs associated with conducting a criminal history
background check shall be paid by the applicant. The board
shall keep information received pursuant to this subdivision
confidential, except that information received and relied upon
in denying the issuance of a certificate of authority may be
disclosed if necessary to support the denial. All character
information, including the information obtained through the
criminal history background checks, shall be considered in
licensure decisions to the extent permissible by all
applicable laws.
(d) The provisions of this This section do does not
apply to a cemetery authority owned or operated by a
governmental agency or a religious institution or to those
cemeteries that do not charge fees or sell plots, interment
rights, or any related cemetery merchandise ."
"§27-17A-11§34-13-191
(a) An application to the commissioner board for a
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certificate of authority shall be accompanied by the statement
and other matters described in this section in the form
prescribed by the commissioner board. Annually thereafter,
within six months after the end of its fiscal period, or
within an extension of time therefor, as the commissioner
board for good cause may grant, the person authorized to
engage in the sale of preneed contracts shall file with the
commissioner board a full and true statement of his or her
financial condition, transactions, and affairs, prepared on a
basis as adopted by a rule of the commissioner board, as of
the preceding fiscal period or at such other time or times as
the commissioner board may provide by rule, together with
information and data which may be required by the commissioner
board.
(b) The statement shall include all of the following:
(1) The types of preneed contracts proposed to be
written and the type of funding vehicle vehicles to be used.
(2) The name and address of the place of business of
the person offering to write preneed contracts.
(3) Evidence that the person offering the statement has
the following qualifications:
a. Has the ability to discharge his or her preneed
liabilities as they become due in the normal course of
business and has sufficient funds available during the
calendar year to perform his or her obligations under the
contract.
b. Has complied with the trust requirements for the
funds received under contracts issued by himself or herself as
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hereinafter described.
c. Has disbursed interest, dividends, or accretions
earned by trust funds, in accordance with this article chapter
and rules promulgated adopted hereunder.
d. Has complied with this chapter and any rules of the
commissioner board.
(4) Any other information considered necessary by the
commissioner board to meet the commissioner's board's
responsibilities under this chapter.
(c) If the person is an individual, the statement shall
be sworn by him or her; if a firm or association, by all
members thereof; or, if a corporation, by any officer of the
corporation.
(d)(1) An application to the commissioner board for an
initial certificate of authority shall be accompanied by an
application fee in an amount to be determined by the
commissioner board, not to exceed one hundred fifty dollars
($150) one hundred ninety-eight dollars ($198) . Thereafter,
each annual application for renewal of a certificate of
authority shall be accompanied by the appropriate fee as
determined by the commissioner board not to exceed
seventy-five dollars ($75) ninety-nine dollars ($99) .
(2) Any person or entity that is part of a common
business enterprise that has a certificate of authority issued
pursuant to this article chapter and elects to operate under a
name other than that of the common business enterprise shall
submit an application on a form adopted prescribed by the
commissioner board to become a branch registrant. Upon the
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approval of the commissioner board that the entity qualifies
to sell preneed contracts under this article chapter except
for the requirements of subparagraph 1., of paragraph a. of
subdivision (3) of subsection (b) and if the certificate
holder meets the requirements of paragraph a. subparagraph 1. ,
a branch registration shall be issued. Each branch registrant
may operate under the certificate of authority of the common
business enterprise upon the payment of a fee established by
the commissioner board not to exceed one hundred fifty dollars
($150) one hundred ninety-eight dollars ($198) accompanying
the application on July September 1 annually.
(e) Upon the commissioner board being satisfied that
the statement and matters which may accompany it the statement
meet the requirements of this article chapter and of its
rules, the commissioner board shall issue or renew the
certificate of authority.
(f) The certificate of authority shall expire annually
on September October 1, unless renewed, or at such other time
or times as the commissioner board may provide by rule.
(g) On or before July 1 of a date adopted by the board
each year, the certificate holder shall file with the
commissioner board in the form prescribed by the commissioner
board a full and true statement as to the activities of any
trust established by it pursuant to this article chapter for
the preceding calendar year.
(h) In addition to any other penalty that may be
provided for under this article chapter, the commissioner
board may levy a fine not to exceed fifty dollars ($50) per
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day for each day the certificate holder fails to file its
annual statement, and the commissioner board may levy a fine
not to exceed fifty dollars ($50) per day for each day the
certificate holder fails to file the statement of activities
of the trust. Upon notice to the certificate holder by the
commissioner board that the certificate holder has failed to
file the annual statement or the statement of activities of
the trust, the certificate holder's authority to sell preneed
contracts shall cease while the default continues.
(i) To facilitate uniformity in financial statements
and to facilitate analysis, the commissioner board may by rule
adopt a form for financial statements. The holder of a
certificate of authority may submit a written request to the
commissioner board to exempt the holder from filing financial
statements at renewal. The commissioner board may waive the
requirement for filing a financial statement at renewal if all
of the following are satisfied:
(1) No valid complaint has been filed since the last
examination audit.
(2) No administrative action against the preneed entity
has been instituted since the last examination audit.
(3) The certificate holder certifies that all
outstanding preneed contracts written by the holder since
April 30, 2002, are fully funded in accordance with this
chapter.
(4) The certificate holder certifies that it will fully
fund all preneed contracts with life insurance, annuity, or
will deposit 100 percent of all funds collected on all preneed
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contracts in trust within 30 days after the end of the
calendar month in which the funds are collected.
(5) The preneed entity has provided to the department
board in a timely manner all required and requested records.
(6) The preneed entity agrees to file quarterly reports
of its preneed activity on a form or, in a format, and as
often as prescribed by the commissioner board.
(j) The commissioner board may authorize the transfer
of certificates of authority and establish fees for the
transfer in an amount not to exceed one hundred dollars ($100)
one hundred thirty-two dollars ($132) . Upon receipt of an
application for transfer, the commissioner board may grant a
temporary certificate of authority to the proposed transferee,
based upon criteria established by the commissioner board by
rule, which criteria shall promote the purposes of this
article chapter in protecting the consumer. A temporary
certificate of authority shall expire 60 days after issuance
unless renewed by the commissioner board."
"§27-17A-11.1§34-13-192
(a) On a semi-annual basis, within 45 days after the
end of each second calendar reporting period or before July 1,
each year, the certificate holder shall file a report of its
preneed contract activity on a form or in a format prescribed
by the commissioner board. The information reported shall
include the total number of preneed contracts in force at the
end of the previous reporting period calendar year, the total
number of preneed contracts sold during the reporting period
previous calendar year , the total number of preneed contracts
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fulfilled during the reporting period previous calendar year ,
the total number of preneed contracts in force at the end of
the reporting period previous calendar year , and such other
information as may be required by the commissioner board. The
report shall be organized by type of funding including, life
insurance, annuity, trust, letter of credit, or surety bond.
The report shall also provide a certification by the trustee
of the amount of assets held by the trust at the beginning of
the reporting period and at the end of the reporting period,
together with the amount of deposits and withdrawals during
the reporting period. If a certificate holder shall twice
default in complying with the requirements of this subsection,
the commissioner board may require that the certificate holder
thereafter submit the report within 45 days after the end of
each calendar quarter and shall continue so reporting for a
time to be determined by the commissioner board.
(b) The certificate holder shall maintain a written log
of preneed sales. The log shall be on a form or in a format
prescribed by the commissioner board, shall detail all
information required by the commissioner board, and shall be
available for inspection at any time by the commissioner
board.
(c) Each cemetery authority shall maintain a written
log of the sale of cemetery interment rights. The log shall be
on a form or in a format prescribed by the commissioner board
and shall detail all information required by the commissioner
board.
(d) The board may maintain a statewide database of
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preneed contracts reported to the board pursuant to subsection
(a). The board may make information in this database
searchable by the public by means of unique identifiers, or
any other means, that the board determines respects the
privacy of those involved while also protecting consumers from
financial waste by allowing families to determine if a
deceased loved one has an existing preneed contract. Any
preneed consumer who does not wish for his or her information
to appear in this searchable database may opt out by following
a process established by the board. "
"§27-17A-12§34-13-193
(a) Preneed contract forms and related forms shall be
filed with and approved by the commissioner board.
(b) Specific disclosure regarding whether, consistent
with the requirements of this chapter, the certificate holder
is placing certain preneed funds received with the contract in
trust, in an annuity, or in insurance, is required in the
preneed contract.
(c) Preneed contracts which have been submitted to the
commissioner board shall be deemed to have been approved by
the commissioner board in the event that the commissioner
board fails to notify the certificate holder that approval has
been denied within 30 days following submission to the
commissioner board."
"§27-17A-13§34-13-194
(a) Except as provided in Sections 27-17A-3 and
27-17A-14 34-13-171 and 34-13-195 , every preneed contract
shall require the monies paid to the seller or trustee to be
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placed in trust in accordance with Article 3 Division 3, for
funeral merchandise and services sold by funeral
establishments or third party sellers, or Article 4 Division
4, for cemetery merchandise and services sold by cemetery
authorities.
(b) Although this chapter does not apply to preneed
contracts entered into prior to May 1, 2002, a preneed
provider which contends that a preneed trust fund which was in
effect prior to May 1, 2002, complies with this chapter with
respect to the contracts entered into prior to May 1, 2002,
may provide to the commissioner board documentary proof
thereof. Upon the commissioner board determining that
compliance has been established, the pre-existing preneed
trust fund assets may be merged with or into the trust fund
required under this chapter or continued as the trust fund and
that determination by the commissioner board shall be noted on
the certificate of authority, and thereafter all preneed
contracts covered by the trust fund, including those entered
into prior to May 1, 2002, shall be subject to this chapter."
"§27-17A-14§34-13-195
(a) As an alternative to the trust requirement of
Section 27-17A-13 34-13-194, the details of which are set
forth in Articles 3 and 4 Divisions 3 and 4 , a preneed
provider may, withthe prior approval of the commissioner
board, may purchase a surety bond in an amount not less than
the aggregate value of outstanding liabilities on undelivered
preneed contracts for merchandise, services, and cash
advances. For the purposes of this section, the term
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outstanding liabilities means the original retail amount of
services and cash advances and the actual cost to the entity
to provide the undelivered merchandise sold on each contract
written after April 30, 2002. The surety bond shall be in an
amount sufficient to cover the outstanding liability at the
time each contract is executed.
(b) The bond shall be made payable to the State of
Alabama for the benefit of the commissioner board and of all
purchasers of preneed merchandise, services, and cash
advances. The bond shall be issued by an insurance company
licensed in the State of Alabama and authorized to issue
surety bonds and approved by the commissioner board.
(c) The amount of the bond shall be based on a report
documenting the outstanding liabilities of the preneed
provider for the previous calendar quarter and the projected
liability for the immediately following quarter, shall be
prepared by the preneed provider using generally accepted
accounting principles, and shall be signed by the chief
executive officer or chief financial officer of the preneed
provider. The report shall be compiled as of the end of the
preneed provider's fiscal year and updated quarterly.
(d) The amount of the bond shall be increased or
decreased as necessary to correlate with changes in the
outstanding liabilities. Further, the commissioner board may
order the bond to be increased as necessary to correlate with
changes in the outstanding liabilities of bonded contracts due
to increases in the consumer price index.
(e) If the preneed provider fails to maintain a bond
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pursuant to this section the preneed provider shall cease the
offering for sale and sale of preneed merchandise, services,
and cash advances as provided by rule of the board .
(f) No surety bond used to comply with this section
shall be canceled or subject to cancellation unless at least
60 days' advance notice thereof, in writing, is filed with the
commissioner, board by the surety company. The cancellation of
the bond shall not relieve the obligation of the surety
company for claims arising out of contracts issued or
otherwise covered before cancellation of the bond. In the
event that notice of termination of the bond is filed with the
commissioner board, the certificate holder insured thereunder
shall, within 30 days of the filing of the notice of
termination with the commissioner board, shall provide the
commissioner board with a replacement bond or with evidence
which is satisfactory to the commissioner board demonstrating
that the provisions of this chapter have has been fully
complied with. If within 30 days of filing of the notice of
termination with the commissioner board no replacement bond
acceptable to the commissioner board or no evidence
satisfactory to the commissioner board demonstrating that the
provisions of this chapter have has been complied with is
filed with the commissioner board, the commissioner board
shall suspend the license of the certificate holder until the
certificate holder files a replacement bond acceptable to the
commissioner board or demonstrates to the satisfaction of the
commissioner board that it has complied with the provisions of
this chapter.
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(g) Upon prior approval by the commissioner board, the
preneed provider may file with the commissioner board a letter
of credit in the amount of the outstanding liabilities in lieu
of a surety bond, in the form and subject to the terms and
conditions evidencing the financial responsibility of the
party or parties issuing the letter of credit, and otherwise,
as may be prescribed by the commissioner board."
"§27-17A-15§34-13-196
(a) The commissioner shall board, as often as he or she
may deem deemed necessary, examine shall audit the business of
any person writing , or holding himself or herself out to be
writing, preneed contracts under this chapter to the extent
applicable. The examination audit shall be made by designated
representatives employed or examiners of the Department of
Insurance contracted by the board .
(b) The written report of each examination audit, when
completed, shall be filed in the office of the commissioner
board and, when so filed, shall not constitute a public
record.
(c) Any person being examined audited shall produce,
upon request, all records of the person. The designated
representative of the commissioner board may at any time
examine the records and affairs of the person, whether in
connection with a formal examination audit or not.
(d) The commissioner may board shall waive the
examination audit requirements of this section if the
certificate holder submits audited financial statements. Upon
receipt of a verifiable complaint, the board may perform a
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target market conduct audit as a part of an investigation.
(e) The person examined audited shall pay the
examination audit expenses, travel expense , and per diem
subsistence allowance provided for examiners and incurred by
the commissioner's board's representatives or examiners
auditors in connection with an examination in accordance with
Section 27-2-25 audit as prescribed by rule of the board .
(f) Whenever any special audit of the premises,
facilities, books, or records of a licensee is necessary based
on the failure of the licensee to comply with this chapter or
rule adopted by the board, the board shall charge a fee based
on the cost of the special audit including, but not limited
to, the prorated compensation of board employees involved in
the special audit and any expenses incurred.
(g) If the board finds that a certificate of authority
holder or licensee has failed to operate in accordance with
this chapter and, by their action, has created a deficit of
preneed funds entrusted to them by the consumer, then the
board may:
(1) Bring an action for injunctive relief against the
responsible licensee or the holder of the certificate of
authority in the Circuit Court of Montgomery County.
(2) Issue an emergency suspension of all licenses held
by the holder of the certificate of authority, and its
associated personnel, in accordance with the Administrative
Procedure Act.
(3) Take any other disciplinary action authorized by
this chapter."
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"§27-17A-16§34-13-197
(a) A certificate holder shall be considered inactive
upon the acceptance of the surrender of its license by the
commissioner board or upon the nonreceipt by the commissioner
board of the certificate of authority renewal application and
fees.
(b) A certificate holder shall cease all preneed sales
to the public upon becoming inactive. The certificate holder
shall collect and deposit into trust all of the funds paid
toward preneed contracts sold prior to becoming inactive.
(c) Any certificate holder desiring to surrender its
license to the commissioner board shall first do all of the
following:
(1) File notice with the commissioner board.
(2) Submit copies of its existing trust agreements.
(3) Submit a sample copy of each type of preneed
contract sold.
(4) Resolve to the commissioner's satisfaction of the
board all findings and violations resulting from the last
examination audit conducted.
(5) Pay all outstanding fines and invoices due the
commissioner board.
(6) Submit its current certificate of authority.
(d) Upon receipt of the notice, the commissioner board
shall review the certificate holder's trust funds, trust
agreements, and evidence of all outstanding preneed contracts.
(e) After a review to the commissioner's satisfaction
of the board, the commissioner board shall terminate the
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certificate of authority by an order which shall set forth the
conditions of termination established by the commissioner
board to ensure that the preneed funds will be available for
their intended purpose.
(f) The trust fund of the certificate holder shall be
held intact and in trust after the certificate holder has
become inactive, and the funds in that trust shall be
disbursed in accordance with the requirements of the written
contracts until the funds have been exhausted.
(g) The commissioner board shall continue to have
jurisdiction over the inactive certificate holder as if the
certificate were active and to require the reports and inspect
the records as the commissioner board deems appropriate so
long as there are funds in trust or preneed contracts that are
not fulfilled.
(h) In addition to any other Other terms of revocation
or suspension ordered pursuant to Chapter 13 of Title 34, the
provisions of this chapter may also apply."
"§27-17A-17§34-13-198
(a) Any dissolution or liquidation of a certificate
holder shall be deemed to be the liquidation of an insurance
company and shall be conducted under the supervision of the
commissioner, who shall have all powers with respect thereto
granted to the commissioner under Chapter 32 with respect to
the liquidation of insurance companies.
(b) The commissioner may apply for an order directing
the commissioner to liquidate a certificate holder upon any
one or more grounds set out in Section 27-32-6 or when, in the
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commissioner's opinion, the continued operation of the
certificate holder would be hazardous either to purchasers,
beneficiaries, or to the people of this state.
The board may fine and revoke, suspend, or place on
probation the certificate of authority and the establishment
license of a certificate holder on any of the following
grounds:
(1) The certificate holder is impaired or insolvent.
(2) The certificate holder has refused to submit, or
has withheld, any of its books, records, accounts, or affairs
to audit by the board.
(3) The certificate holder has concealed or removed
records or preneed assets, or both.
(4) The certificate holder has failed to comply with an
order of the board.
(5) The certificate holder has transferred, or
attempted to transfer, substantially its entire property or
business, or has entered into any transaction the effect of
which is to merge substantially its entire property or
business with that of any other certificate holder, person,
corporation, or entity without first having obtained the
written approval of the board.
(6) The certificate holder has willfully violated its
articles of incorporation or any law of this state, including
any rule of the board.
(7) The certificate holder has an officer, director, or
manager who has refused to be audited under oath concerning
the affairs of the certificate holder.
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(8) If the board determines that the continued
operation of the certificate holder would be hazardous to
purchasers, beneficiaries, or residents of this state. "
"§27-17A-18§34-13-199
(a) All individuals who offer preneed contracts to the
public, or who execute preneed contracts on behalf of a
certificate holder, shall be registered with the commissioner
board as preneed sales agents, pursuant to this article
chapter.
(b) All preneed sales agents and funeral directors
acting as preneed sales agents shall be affiliated with the
certificate holder that they are representing.
(c) A certificate holder shall be responsible for the
activities of all preneed sales agents and all funeral
directors acting as preneed sales agents, who are affiliated
with the certificate holder and who perform any type of
preneed-related activity on behalf of the certificate holder.
In addition to the preneed sales agents and funeral directors
acting as preneed sales agents, each certificate holder shall
also be subject to discipline if its preneed sales agents or
funeral directors acting as preneed sales agents violate any
provision of this article chapter.
(d) A preneed sales agent and a funeral director acting
as a preneed sales agent shall be authorized to may sell,
offer, and execute preneed contracts on behalf of all properly
licensed entities owned or operated by the sponsoring
certificate holder.
(e) An individual may begin functioning operating as a
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preneed sales agent as soon as a completed application for
registration, as set forth in subsection (g), is sent to the
commissioner approved by the board .
(f)(1) The qualifications for a preneed sales agent are
as follows:
(1)a. The applicant must be at least 18 years of age.
(2)b. The applicant must be in good standing with the
commissioner board.
(3)c. The applicant must may not have any felony or
misdemeanor convictions that relate to any activity regulated
by this chapter or a crime involving moral turpitude, as
defined by this chapter .
d. The applicant shall be of good moral character and
submit to a criminal history background check pursuant to
subdivision (2).
(2) An applicant for licensure as a preneed sales agent
shall submit to the board, on a form sworn to by the
applicant, his or her name, date of birth, Social Security
number, and two complete sets of fingerprints for completion
of a criminal history background check. The board shall submit
the fingerprints to the Alabama State Law Enforcement Agency
for a state criminal history background check. The
fingerprints shall be forwarded by the agency to the Federal
Bureau of Investigation for a national criminal history
background check. Costs associated with conducting a criminal
history background check shall be paid by the applicant. The
board shall keep information received pursuant to this
subdivision confidential, except that information received and
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relied upon in denying the issuance of a certificate of
authority may be disclosed if necessary to support the denial.
All character information, including the information obtained
through the criminal history background checks, shall be
considered in licensure decisions to the extent permissible by
all applicable laws.
(g) An application for registration as a preneed sales
agent shall be submitted to the commissioner board with an
application fee determined by the commissioner board, but not
to exceed twenty-five dollars ($25) thirty-three dollars
($33), by the certificate holder in a form that has been
prescribed by commissioner board rule and approved by the
commissioner. The application shall contain, at a minimum, all
of the following:
(1) The name, address, Social Security number, and date
of birth of the applicant and any other information as the
commissioner board may reasonably require of the applicant.
(2) The name, address, and license number of the
sponsoring certificate holder.
(3) A representation, signed by the applicant, that the
applicant meets the requirements set forth in subsection (f).
(4) A representation, signed by the certificate holder,
that the applicant is authorized to offer, sell, and sign
preneed contracts on behalf of the certificate holder, and
that the certificate holder has trained the applicant in the
provisions of this article chapter relating to preneed sales,
the provisions of the certificate holder's preneed contract,
and the nature of the merchandise, services, or burial rights
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sold by the certificate holder.
(5) A statement indicating whether the applicant has
any type of working or agency relationship with any other
certificate holder or insurance company.
(h) An individual may be registered as a preneed sales
agent on behalf of more than one certificate holder, provided
that the individual has received the written consent of all
certificate holders.
(i) A certificate holder who has registered a preneed
sales agent shall notify the commissioner board within 30 days
after the individual's status as a preneed sales agent has
been terminated.
(j) Upon receipt of an application that complies with
all of the requirements of subsection (g), the commissioner
board shall register the applicant. The commissioner shall by
rule board, in accordance with this chapter, shall provide for
annual renewal of registration upon receipt of a renewal
application and a renewal fee not to exceed twenty-five
dollars ($25) thirty-three dollars ($33) as set by the
commissioner board."
"§27-17A-19§34-13-200
No person shall engage in this state in any trade
practice which is addressed in the Alabama Deceptive Trade
Practices Act (Section 8-19-1 et seq.) Chapter 19 of Title 8 ,
or as determined pursuant to this chapter to be, an unfair
method of competition or an unfair or deceptive act or
practice."
"§27-17A-20§34-13-201
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(a) Whenever the commissioner board has reason to
believe that any person has engaged, or is engaging, in this
state in any unfair method of competition or any unfair or
deceptive act or practice as defined in this article chapter,
or is engaging in the sale of preneed contracts without being
properly licensed as required by this article chapter, or is
otherwise acting in violation of this chapter, and that a
proceeding by the commissioner board in respect thereto would
be in the interest of the public, the commissioner board shall
institute a proceeding in accordance with this section.
(b) A statement of charges, notice, or order or other
process under this chapter may be served by anyone duly
authorized by the commissioner board. Service may be made
either in the manner provided by law for service of process in
civil actions or by certifying and mailing a copy of the
statement to the person affected by the statement, notice, or
order or other process at his or her or its residence or
principal office or place of business. The verified return by
the person so serving the statement, notice, or order or other
process, setting forth the manner of the service, shall be
proof of the service; and the return postcard receipt for the
statement, notice, or order or other process, certified and
mailed as provided in this subsection, shall be proof of
service of the statement, notice, or order or other process.
(c) The commissioner board shall conduct or cause to
have conducted a hearing in accordance with Article 1 of
Chapter 2 this chapter, and shall, during the conduct of the
hearing, have those powers necessary to enforce this chapter
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and rules of the board ; however, the penalties for failure to
comply with a subpoena or with an order directing discovery
shall be limited to a fine not to exceed one thousand dollars
($1,000) per violation. All evidence introduced and presented
in a hearing conducted under this chapter shall be deemed
public information. "
"§27-17A-21§34-13-202
(a) If the commissioner board finds that one or more
grounds exist for the discretionary suspension or revocation
of a certificate of authority or establishment license issued
under this article chapter, the commissioner may board, in
lieu of the suspension or revocation, may impose a fine upon
the certificate holder in an amount not to exceed one thousand
dollars ($1,000) for each nonwillful violation and in an
amount not to exceed ten thousand dollars ($10,000) for each
willful violation.
(b) The commissioner board may grant not more than 30
days from the date of the order for the payment of any fine."
"§27-17A-22§34-13-203
(a)(1) A person who knowingly receives payments for a
preneed contract without having a valid certificate of
authority:
a. Commits a Class B felony , punishable as provided by
law, as to each contract on which the payments collected equal
or exceed, in the aggregate, two thousand five hundred dollars
($2,500).
b. Commits a Class C felony , punishable as provided by
law, as to each contract on which the payments collected are
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between, in the aggregate, five hundred dollars ($500) and two
thousand five hundred dollars ($2,500).
c. Commits a Class A misdemeanor , punishable as
provided by law, as to each contract on which the payments
collected do not exceed, in the aggregate, five hundred
dollars ($500).
(2) In addition to the criminal penalty imposed under
subdivision (1), upon conviction of an offense under
subdivision (1), a person may not thereafter obtain a
certificate of authority or register as a preneed sales agent.
(b)(1) A person who willfully fails to timely deposit
the amount required to be so deposited under this chapter in a
preneed merchandise and services trust or endowment care
trust:
a. Commits a Class B felony , punishable as provided by
law, as to each contract on which the amount due for deposit
in trust equals or exceeds, in the aggregate, two thousand
five hundred dollars ($2,500).
b. Commits a Class C felony , punishable as provided by
law, as to each contract on which the amount due for deposit
in trust is less than, in the aggregate, two thousand five
hundred dollars ($2,500).
(2) In addition to the criminal penalty imposed under
subdivision (1), upon conviction of an offense under
subdivision (1), the certificate of authority or preneed sales
agent registration held by the person shall be automatically
revoked and the person may not thereafter obtain a certificate
of authority or register as a preneed sales agent.
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(c)(1) A person who knowingly withdraws funds or assets
from a preneed merchandise and services trust or endowment
care trust in a manner or under circumstances not authorized
by this chapter or rule of the board :
a. Commits a Class B felony , punishable as provided by
law, if the aggregate amount withdrawn in any single
transaction or series of related transactions equals or
exceeds two thousand five hundred dollars ($2,500).
b. Commits a Class C felony , punishable as provided by
law, if the aggregate amount withdrawn in any single
transaction or series of related transactions is less than two
thousand five hundred dollars ($2,500).
(2) In addition to the criminal penalty imposed under
subdivision (1), upon conviction of an offense under
subdivision (1), the certificate of authority or preneed sales
agent registration held by the person shall be automatically
revoked and the person may not thereafter obtain a certificate
of authority or register as a preneed sales agent.
(d) A person commits a Class C felony , punishable as
provided by law, if any of the following occur:
(1) The person knowingly delivers to the commissioner
board any official form, report, record, data, or other
document required by the commissioner board containing a false
statement or false information concerning a matter material to
the commissioner board in the exercise of his or her its
authority to administer and enforce this chapter.
(2) Incident to, or during the course of, an
examination audit, inspection, investigation, or other inquiry
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authorized by this chapter, the person knowingly makes
available to a representative of the commissioner board any
official form, report, record, data, or other document
required by the commissioner board containing a false
statement or false information concerning a matter material to
the purpose of the examination audit, inspection,
investigation, or inquiry.
(3) With respect to the business records of a person
engaging in, or who has at any time engaged in, the sale of a
preneed contract, a person, with a purpose to use deception as
defined in subdivision (1) of Section 13A-8-1, makes false
entries in such the records or alters, erases, obliterates,
deletes, or removes a correct entry in such the records, fails
to make a correct entry in such the records, or prevents the
making of a correct entry, or causes the omission of a correct
entry in such the records.
(e) Except as otherwise provided in this section
chapter, the willful violation of this chapter is a Class A
misdemeanor, punishable as provided by law .
(f) The duties and authority of the insurance fraud
unit created under Section 27-12A-40, including the powers of
the unit’s investigators, shall extend to investigations into
violations of this section. "
"§27-17A-23§34-13-204
The commissioner board, the Attorney General, or any
person may bring a civil action against a person or company
violating this chapter or rule of the board in Montgomery
County or the appropriate court of the county in which the
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alleged violator resides or has his or her or its principal
place of business or in the county wherein the alleged
violation occurred. Upon adverse adjudication, the defendant
shall be liable for actual damages caused by the violation.
The court, as provided by common law, may award punitive
damages and may provide equitable relief as it deems proper or
necessary, including enjoining the defendant from further
violation of this chapter or rule of the board ."
"§27-17A-24§34-13-205
The provisions of this chapter are cumulative to rights
under the general civil and common law, and no action of the
commissioner board may abrogate the rights to damages or other
relief in any court."
"§27-17A-25§34-13-206
(a) All fees collected by the commissioner board
pursuant to this chapter shall be deposited into the State
Treasury to the credit of the Insurance Department Alabama
State Funeral Service Fund.
(b) All fines collected by the commissioner board
pursuant to this chapter shall be deposited into the State
Treasury to the credit of the State General Alabama State
Funeral Service Fund.
(c) The commissioner board may use funds available from
any source including, but not limited to, grants,
appropriations, and gifts, for any purpose in the enforcement
of this chapter."
Section 6. The following heading is added to Division
3, commencing with Section 34-13-230, of Article 5, Chapter
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13, Title 34, Code of Alabama 1975:
"Division 3. Funeral Merchandise and Services Trust
Fund."
Section 7. Sections 27-17A-30, 27-17A-31, 27-17A-32,
27-17A-33, and 27-17A-34 of the Code of Alabama 1975, are
amended and renumbered as Division 3 of Article 5 of Chapter
13 of Title 34, Code of Alabama 1975, to read as follows:
"§27-17A-30§34-13-230
To comply with the trust requirement of subsection (a)
of Section 27-17A-13 34-13-194, all certificate holders
providing preneed contracts for funeral services or funeral
merchandise shall be subject to this article chapter."
"§27-17A-31§34-13-231
(a) Any person who is paid, collects, or receives funds
under a preneed contract for funeral services or funeral
merchandise to be funded by trust shall deposit in trust an
amount at least equal to the sum of 75 percent of the amount
collected on the purchase price for all funeral services and
funeral merchandise sold, transportation, and facilities
rented other than outer burial containers, 60 percent of the
amount collected on the purchase price for outer burial
containers, 110 percent of the wholesale cost of memorials
from the amount collected on the purchase price of memorials,
and 100 percent of the amount collected on the purchase price
for all cash advance items sold.
(b) All deposits shall be made within 30 days after the
end of the calendar month in which the preneed contract is
paid in full, unless, prior to that time, all liabilities of
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the seller under the preneed contract to deliver the specific
funeral merchandise or funeral services, or both, or the
specific cash advances, identified by the preneed provider as
properly allocated to the payment, have been satisfied, or the
preneed contract is validly cancelled.
(c) The trustee shall take title to the property
conveyed to the trust for the purpose of investing,
protecting, and conserving it for the certificate holder;
collecting income; and distributing the principal and income
as prescribed in this article chapter.
(d) The certificate holder is prohibited from sharing
in the discharge of these responsibilities, except that the
certificate holder may appoint an adviser to the trustee or
elect tax free investments. Nothing in this chapter shall
prohibit a trustee from electing the qualified funeral trust
option under the Internal Revenue Code.
(e) The trust agreement shall be submitted to the
commissioner board for approval and filing.
(f) The funds shall be held in trust, both as to
principal and income earned thereon, and shall remain intact,
except that the cost of the operation of the trust or trust
account authorized by this section may be deducted from the
income earned thereon.
(g) The contract purchaser shall have no interest
whatsoever in, or power whatsoever over, funds deposited in
trust pursuant to this section.
(h) In no event may such the funds be loaned to a
certificate holder, an affiliate of a certificate holder, or
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any person directly or indirectly engaged in the burial,
funeral home, or cemetery business. Furthermore, the
certificate holder's interest in the trust shall not be
pledged as collateral for any loans, debts, or liabilities of
the certificate holder and shall not be transferred to any
person without the prior written approval from the
commissioner board and the trustee. Even though the
certificate holder shall be deemed and treated as the settlor
and beneficiary of the trust for all purposes, all of the
trust funds are exempt from all claims of creditors of the
certificate holder except as to the claims of the contract
purchaser, his or her representative, or the commissioner
board.
(i) For all preneed contracts written or entered into
on or after January 1, 2015, all required deposits in trust
shall commence not later than 30 days after the end of the
calendar month in which the sum of the monies collected on the
preneed contract exceeds the amount that is not required to be
deposited in trust as determined under subsection (a) unless,
prior to that time, all liabilities of the preneed seller
under the preneed contract have been satisfied, or the preneed
contract is validly cancelled. Further required deposits on
the contract shall thereafter be made not later than 30 days
after the end of the calendar month in which each contract
payment is collected by the seller."
"§27-17A-32§34-13-232
(a) If amounts paid by the purchaser under a preneed
contract for funeral merchandise have previously been
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deposited in trust, the seller may withdraw the principal
amount and trust appreciation attributable to the delivered
item at such time as the funeral merchandise is delivered or
installed or, if comprised of materials designed to withstand
prolonged, protected storage without deterioration, the
merchandise is placed in storage with a responsible third
party bonded and insured for the wholesale value thereof and
evidenced by a receipt specifically identifying the item, the
specific preneed contract, the location of the item, and the
identity and address of the bonding and insuring parties. For
purposes of this subsection only, caskets and alternative
containers may not be held in storage by the seller or a third
party storage facility prior to the death of the funeral
beneficiary.
(b) The trustee shall make regular valuations of the
assets it holds in trust and provide a report of the
valuations to the certificate holder at least quarterly. At
all times, the certificate holder shall be able to determine
the amount held in trust attributable to each contract holder.
For all contracts effective on or after January 1, 2015, the
determination shall be based upon the fair market value of the
trust at the time and the proportionate share of the fair
market value attributable to each contract holder. For all
contracts in effect before January 1, 2015, the valuation of
each contract may be calculated using any valuation method
that had been previously approved by the commissioner or the
department Commissioner or the Department of Insurance before
January 1, 2015. Any person who withdraws appreciation in the
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value of trust, other than the pro rata portion of such the
appreciation which may be withdrawn upon the death of a
contract's funeral beneficiary or upon cancellation of a
preneed contract, shall be required to make additional
deposits from his or her own funds to restore the aggregate
value of assets to the value of funds deposited in trust, but
excluding from the funds deposited those funds paid out upon
preneed contracts which the person has fully performed or
which have been otherwise withdrawn, as provided in this
article chapter. The certificate holder shall be liable to
third parties to the extent that income from the trust is not
sufficient to pay the expenses of the trust.
(c) The trustee of the trust established pursuant to
this article chapter shall have all of the following powers:
(1) Make investments and exercise necessary investment
powers, provided that the commissioner board may by order
require the trustee to liquidate or dispose of any investment
within 30 days after the order.
(2) Commingle the property of the trust with the
property of any other preneed funeral, preneed cemetery, or
endowment care trust established pursuant to this article
chapter and make corresponding allocations and divisions of
assets, liabilities, income, and expenses.
(d) Notwithstanding the provisions of Section 19-3-125,
the trustee may, subject to compliance with the requirements
set forth below, may invest any portion or all of the funds
received under preneed contracts and deposited in trust in
life insurance contracts or annuities issued on the lives of
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preneed contract purchasers or preneed contract beneficiaries,
hereinafter, the insured or annuitant, without any obligation
to cover at a minimum the retail amount of the preneed
contract at the time of purchase of the life insurance
contracts or annuities as set forth in Section 27-17A-3
34-13-171.
(1) Trust funds shall not be invested by the trustee in
life insurance contracts or annuities unless the following
requirements are met:
a. The company issuing the life insurance contracts or
annuities is licensed by the Department of Insurance and the
insurance producer or annuity seller is properly licensed
within its domiciliary jurisdiction.
b. Prior to the investment, the insured or annuitant
consents, in writing, to the investment in life insurance
contracts or annuities.
c. For life insurance contracts or annuities issued
prior to May 6, 2008, and currently in force, such contracts
shall be construed to have been an authorized investment by
the trustee under this chapter if the insured or annuitant is
notified in writing of the existence of any such contract and
provided with a copy of the contract.
(2) Upon request, the insured or annuitant shall be
provided with a copy of any life insurance contract or annuity
issued to a preened trustee at no expense to the insured or
annuitant.
(3) Any life insurance contract or annuity issued in
accordance with this subsection and otherwise in compliance
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therewith shall be valid and in full force according to the
terms and conditions thereof.
(4) A trustee that invests all or any portion of the
funds received under preneed contracts and deposited in trust
in life insurance contracts or annuities issued by one company
licensed by the department State Department of Insurance shall
be considered to satisfy the standards and requirements of
Section 19-3-120.2 and Chapter 3B of Title 19.
(5) It is the intention of the Legislature that this
subsection shall be retroactive and shall apply to all life
insurance contracts or annuities issued prior to May 6, 2008."
"§27-17A-33§34-13-233
(a) A purchaser, by providing written notice to the
certificate holder, may cancel a preneed contract within 30
days of the date that the contract was executed provided that
the funeral merchandise and funeral services have not yet been
used. Upon providing the notice, the purchaser shall be
entitled to a complete refund of the amount paid, except for
the amount allocable to any funeral merchandise or funeral
services that have been used, and shall be released from all
obligations under the contract. This subsection shall apply to
all items that are purchased as part of a preneed contract.
(b) After 30 days from the date the preneed contract
was executed, a purchaser, by providing written notice to the
certificate holder, may cancel the funeral services, funeral
merchandise, facilities, and cash advance items portions of a
preneed contract at any time, and shall be entitled to the
refund defined in the preneed contract allocable to those
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items. Any accumulated earnings allocable to the preneed
contract shall be paid to the certificate holder upon the
cancellation.
(c) Upon breach of contract or failure of the
certificate holder to provide funeral merchandise or services
under a preneed contract, the contract purchaser shall be
entitled to a refund of 100 percent of all money paid on the
contract. The refund shall be made within 30 days after
receipt by the certificate holder of the contract purchaser's
written request for refund.
(d) If a purchaser is 90 days past due in making
payments on a preneed contract, the contract shall be
considered to be in default, and the certificate holder shall
be entitled to cancel the contract and withdraw all funds in
trust. Upon making the withdrawal, the certificate holder
shall refund to the purchaser the amount defined in the
preneed contract in the event of default of the purchaser,
provided that the certificate holder has provided the
purchaser with 30 days' written notice of its intention to
exercise any of its rights under this provision.
(e) All preneed contracts are cancelable and revocable
as provided in this section during the lifetime of the
purchaser, provided that a preneed contract does not restrict
any contract purchaser who is a qualified applicant for, or a
recipient of, supplemental security income, temporary cash
assistance, or Medicaid from making his or her contract
irrevocable.
(f) In the event that the preneed contract is made
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irrevocable pursuant to subsection (e), the purchaser or the
authorizing agent shall have the right to appoint a provider
other than the seller of the preneed contract. In the event
that a provider is appointed pursuant to this subsection, the
seller shall transfer to the appointed provider the amount
paid by the purchaser to the seller and those amounts
deposited into trust, less a reasonable transfer fee
determined by the seller board. In the event the preneed
contract was funded by an insurance or annuity policy, the
seller shall cancel and relinquish any assignment of benefits
or beneficiary status under the policy or annuity contract,
and deliver the policy, if in the custody of the preneed
seller, to the policy owner or his or her legal
representative, and the seller may collect a reasonable
transfer fee as determined by rule of the board . No transfer
hereunder shall occur without the acceptance of the appointed
provider.
(g) All refunds required to be made under this section
to a purchaser who has canceled a contract must be made within
30 days after the date the written notice of cancellation is
received by the certificate holder."
"§27-17A-34§34-13-234
(a) Disbursement of funds discharging any preneed
contract for funeral services or funeral merchandise fulfilled
after May 1, 2002, shall be made by the trustee to the
certificate holder upon receipt by the trustee of a
certification of the certificate holder that the preneed
contract has been performed in whole or in part or the preneed
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contract has been cancelled. Before the trustee may disburse
any trust funds, the certificate holder shall provide to the
trustee a death certificate or other valid proof of death, a
letter from the preneed contract holder cancelling the preneed
contract or valid proof the contract has been cancelled in
accordance with Section 27-17A-33 34-13-233, or valid proof
the merchandise has been delivered and installed, and services
have been performed. Any trustee accepting preneed contract
proceeds under this article chapter may rely upon the
certification of the certificate holder accompanied by the
required proof, and shall not be liable to anyone for such
reliance. If the contract is only partially performed, the
disbursement shall only cover that portion of the contract
performed. In the event of any contract default by the
contract purchaser, or in the event that the funeral
merchandise or funeral service contracted for is not provided,
the trustee shall return, within 30 days after its receipt of
a written request therefor, 100 percent of the funds deposited
into the trust on the contract and the income and accretion
thereon to the certificate holder or to its assigns, subject
to Section 27-17A-33 34-13-233.
(b) For all contracts effective on or after January 1,
2015, the amount that may be withdrawn from the trust upon
fulfillment or cancellation of any particular preneed contract
may not exceed the amount attributable to that preneed
contract in proportion to the total amount held in trust for
all preneed contracts as of the date of withdrawal. For all
contracts in effect before January 1, 2015, the valuation of
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each contract and the amount that may be withdrawn from the
trust may be calculated using any valuation method that had
been approved by the commissioner or the department
Commissioner or the Department of Insurance before January 1,
2015."
Section 8. The following heading is added to Division
4, commencing with Section 34-13-260, of Article 5, Chapter
13, Title 34, Code of Alabama 1975:
"Division 4. Cemetery Merchandise and Services Trust
Fund."
Section 9. Sections 27-17A-40, 27-17A-41, 27-17A-42,
27-17A-43, 27-17A-44, 27-17A-45, 27-17A-46, 27-17A-47,
27-17A-48, 27-17A-49, 27-17A-50, 27-17A-51, 27-17A-52,
27-17A-53, 27-17A-54, 27-17A-55, 27-17A-56, and 27-17A-57 of
the Code of Alabama 1975, are amended and renumbered as
Division 4 of Article 5 of Chapter 13 of Title 34, Code of
Alabama 1975, to read as follows:
"§27-17A-40§34-13-260
To comply with the trust requirement of subsection (a)
of Section 27-17A-13 34-13-194, all certificate holders who
are cemetery authorities providing preneed contracts for
cemetery services or cemetery merchandise shall be subject to
this article chapter."
"§27-17A-41§34-13-261
(a) Any person who receives or collects any funds on
account of a preneed contract in this state for cemetery
services or cemetery merchandise, or both, entered into after
May 1, 2002, shall have the obligation to pay over and
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contribute into a trust fund as hereinafter described, those
amounts or proportions of the funds as hereinafter provided.
(b) Whether or not the preneed contract provides for
cemetery merchandise or cemetery services, or any combination
thereof, the trust fund shall be referred to in this section
as the Cemetery Merchandise and Services Trust Fund.
(c) The trustee of the Cemetery Merchandise and
Services Trust Fund shall be qualified as such within the
definition of the trustee.
(d) The trustee shall take title to the property
conveyed to the Cemetery Merchandise and Services Trust Fund
subject to this section.
(e) The contract purchaser shall have no interest
whatsoever in, or power whatsoever over, the funds deposited
in the Cemetery Merchandise and Services Trust Fund.
(f) The party contracting to deliver the cemetery
merchandise or cemetery services or cash advances, whether or
not a preneed provider, shall be referred to in this section
as the "seller."
(g) The seller shall be the beneficiary of the Cemetery
Merchandise and Services Trust Fund."
"§27-17A-42§34-13-262
(a) The obligation of the seller under a preneed
contract shall be to make contributions into the Cemetery
Merchandise and Services Trust Fund in accordance with the
following formulae:
(1) With respect to all cemetery merchandise, 110
percent of wholesale cost.
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(2) With respect to outer burial containers, 60 percent
of the purchase price specified in the preneed contract.
(3) With respect to cemetery services, 60 percent of
the purchase price specified in the preneed contract.
(4) With respect to all cash advance items sold, 100
percent of the purchase price specified for the same in the
preneed contract.
(5) With respect to caskets, 75 percent of the purchase
price.
(b) All contributions shall be made within 30 days
after the end of the calendar month in which the preneed
contract is paid in full, unless, prior to that time, all
liabilities of the seller under the preneed contract to
deliver the specific cemetery merchandise or cemetery
services, or both, or the specific cash advances, identified
by the preneed provider as properly allocated to the payment,
have been satisfied, or the preneed contract is validly
cancelled.
(c) For all preneed contracts entered into on or after
January 1, 2015, all contributions shall be made not later
than 30 days after the end of the calendar month in which the
sum of the monies collected on the preneed contract exceeds
the amount that is not required to be contributed as
determined under subsection (a), unless, prior to that time,
all liabilities of the seller under the preneed contract have
been satisfied, or the preneed contract is validly cancelled.
Further required trust contributions on the contract shall
thereafter be made not later than 30 days after the end of the
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calendar month in which each contract payment is collected by
the seller.
(d) The trustee shall invest and reinvest the Cemetery
Merchandise and Services Trust Fund.
(e) The trustee shall make regular evaluations of the
fair market value of assets held in and liabilities, if any,
of the Cemetery Merchandise and Services Trust Fund and
provide a report of the evaluations to the seller at least
quarterly. Upon receipt of each quarterly report, the seller
may submit to the trustee a written and detailed analysis
concerning the balance of funds in the Cemetery Merchandise
and Services Trust Fund, certified under oath as being true
and correct upon information and belief by a responsible
officer of the seller.
(f) While the obligation of the seller to make
contributions to the Cemetery Merchandise and Services Trust
Fund is set forth in this section, the obligation of the
seller at the time of making certain withdrawals from the
Cemetery Merchandise and Services Trust Fund as herein
provided for shall be calculated with respect to the current
wholesale cost of cemetery merchandise and current retail
price of cemetery services and cash advances at the time of
withdrawal. If the fair market value as reported by the
trustee exceeds 110 percent of the total of the following, the
seller shall be entitled to withdraw and retain from the
merchandise trust fund, the excess funds therein: 110 percent
of the current wholesale cost of the liability to deliver all
cemetery merchandise, 60 percent of the current retail price
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for all cemetery services, 60 percent of the current retail
price of outer burial containers, 75 percent of the current
retail price of caskets, and 100 percent of the current retail
price of all cash advances, for the total of all preneed
contracts for which the purchasers have paid in full, all
calculated as of the time of withdrawal; and concerning the
total of all preneed contracts for which the purchasers have
not paid in full, 25 percent of the total of the following:
110 percent of the current wholesale cost of the liability to
deliver all cemetery merchandise, 60 percent of the current
retail price for all cemetery services, and 100 percent of the
current retail price of all cash advances, all calculated as
of the time of withdrawal.
(g) At least annually the seller shall make the
aforesaid analysis and certification and provide the same to
the trustee. If the certification discloses that the fair
market value of the Cemetery Merchandise and Services Trust
Fund is less than 100 percent of the aggregate calculated
amount the seller shall from its own funds contribute to the
Cemetery Merchandise and Services Trust Fund within the 12
months succeeding the annual computation the amount necessary
to restore the trust fund to an amount equal to not less than
100 percent of the aggregate amount so calculated."
"§27-17A-43§34-13-263
(a) Upon cancellation of a preneed contract by mutual
agreement between the seller and purchaser, or upon unilateral
cancellation of a preneed contract by the seller by reason of
default on the part of the purchaser, or other valid
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cancellation by reason of transfers to another seller or
otherwise, the seller may, upon submission of a certification
under oath by a responsible officer of the seller to the
trustee, may withdraw from the Cemetery Merchandise and
Services Trust Fund and retain an amount equal to the amount
of all funds contributed to the trust fund with respect to the
preneed contract. Any trustee accepting preneed contract
proceeds under this article chapter may rely on the seller's
certification under oath as required herein to be made, and
shall not be liable to anyone for such reliance.
(b) At such time as the seller undertakes to perform
its obligations under a preneed contract by delivery or
installation, or both, of cemetery merchandise and the
provision of cemetery services and disbursement on account of
cash advances, or otherwise, upon certification to the trustee
under oath by a responsible officer of the seller that the
obligations of the seller under the contract have been
completely fulfilled, the seller may withdraw from the
Cemetery Merchandise and Services Trust Fund and retain an
amount equal to the current wholesale cost to the fund with
respect to the preneed contract.
(c) At such time as the seller has fulfilled all of its
obligations under all preneed contracts with respect to which
funds have been contributed to the trust fund, and
certification under oath to the trustee by a responsible
officer of the seller of those facts, the seller may withdraw
from the trust fund and retain all of the remaining assets
thereof."
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"§27-17A-44§34-13-264
If the amounts paid by the purchaser under a preneed
contract for cemetery merchandise have previously been
deposited in trust, the seller may withdraw the principal
amount there, at such time as the cemetery merchandise is
delivered or installed or, if comprised of materials designed
to withstand prolonged, protected storage without
deterioration, the merchandise is placed in storage with a
responsible third party bonded and insured for the wholesale
value thereof and evidenced by a receipt specifically
identifying the item, the specific preneed contract, the
location of the item, and the identity and address of the
bonding and insuring parties. For purposes of this section
only, caskets and alternative containers may not be held in
storage by the seller or a third party storage facility prior
to the death of the funeral beneficiary."
"§27-17A-45§34-13-265
An endowment care fund and all payments or
contributions to it are expressly permitted as and for
charitable and eleemosynary purposes. No payment, gift, grant,
bequest, or other contribution for endowment care is invalid
by reason of any indefiniteness or uncertainty of the persons
designated as beneficiaries in the instruments creating the
fund, nor is the fund or any contributions to it invalid as
violating any law against perpetuities, or the suspension of
the power of alienation of title to property."
"§27-17A-46§34-13-266
Any cemetery now existing or hereafter established,
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excluding those operated by governmental agencies or religious
institutions, shall be may be qualified as an endowment care
cemetery, except those cemeteries which do not charge fees or
sell plots, interment rights, or any related cemetery ."
"§27-17A-47§34-13-267
(a) Every cemetery authority operating an endowment
care cemetery shall establish an endowment care fund which
shall be placed with and held by a bank, trust company,
savings and loan association, or other financial institution
authorized to provide trust services under Title 5, as
amended, or under the applicable laws of the United States or
any other state, or a board of trustees, consisting of at
least three members, who shall reside in the State of Alabama,
one of whom is engaged in outside cemetery management, and
each of whom shall be bonded to honestly perform the duties of
trustee under a formal trust agreement.
(b) Except as specifically provided in this subsection,
commencing on July 1, 2014, a person serving on a board of
trustees or cemetery authority may not also serve as a trustee
of an endowment care fund for the cemetery authority. A board
of trustees in existence on July 1, 2014, may continue to
serve as the trustee of an endowment care fund if the board of
trustees otherwise complies with this subsection. Unless
exempted by the commissioner board pursuant to this
subsection, on or before January 1, 2015, each member of a
board of trustees in existence on July 1, 2014, shall furnish
the bond required by subsection (a) in the greater of one
hundred thousand dollars ($100,000) or the amount in each
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endowment care fund for which the board of trustees acts as
trustee as of December 31, 2014. Thereafter, the amount of the
bonds shall be increased on January 1 of each succeeding year
to equal the amount in each endowment care fund as of the
immediately preceding December 31. The commissioner board
shall exempt a board of trustees from the bond requirement if
the board of trustees provides to the commissioner board an
annual audit report that satisfies all of the following
criteria:
(1) The report is prepared by a certified public
accountant authorized to practice in Alabama.
(2) The report evidences that the review made the
subject of the report by the accountant encompasses each
endowment care fund for which the board of trustees acts as
trustee.
(3) The report notes relating to the endowment care
fund or funds are in a form that is reasonably acceptable to
the commissioner board.
(4) The report does not evidence any material violation
of or noncompliance with this chapter relating to an endowment
care fund.
(c) The corporate trustee or board of trustees shall be
referred to as a qualified trustee. Unless otherwise specified
in this article chapter or in the terms of the trust
instrument, the trustee of any trust established under or
pursuant to this article chapter shall have all powers granted
to trustees under Article 14 of Chapter 3 of Title 19. The
incorporation herein of such powers shall not be deemed to
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imply any duties of trustees of trusts established under or
pursuant to this article chapter not expressly delineated in
this article chapter.
(d) The cemetery authority may employ a person to
advise the trustee in the management of the fund.
(e) The cemetery authority may enter into a contract
with the qualified trustee for the management and investment
of the endowment care fund, which contract may provide for the
payment of income from the fund of reasonable fees or
commissions to the trustee, and its reasonable expenses for
administering the trust.
(f) As often as he or she the board may deem necessary,
the commissioner board may examine audit the records or
facilities, or both, of any cemetery authority operating an
endowment care cemetery."
"§27-17A-48§34-13-268
(a) Each cemetery authority shall comply with this
chapter and maintain at each place of business a list of the
names and addresses of its owners and directors, which shall
be available to the public.
(b) Each cemetery authority shall maintain a record of
all property interment space owners by name and last known
address with a description of merchandise and location of
burial lots, crypts, or niches and the records shall be on a
form or in a format prescribed by the board and shall detail
all information required by the board . A plat map shall be
maintained for each cemetery location at the cemetery business
office. A book or file shall be kept as to the date, location
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by lot, and space number of each person interred or entombed
in the cemetery. A written copy of the cemetery rules and
regulations shall be maintained at each location and made
available to the public upon request. "
"§27-17A-49§34-13-269
(a) From the sale price of each plot, crypt, or niche
sold by the cemetery authority, of an endowment care cemetery,
it shall pay an amount, not less than as determined in
accordance with the following schedule, to the trustee of the
endowment care fund, which payment shall be paid over to the
trustee not more than four months after the close of the month
in which the total or final payment on the sale has been
received:
(1) Fifteen percent of the sale price of each grave or
lawn crypt space.
(2) Five percent of the sale price of each mausoleum
crypt or niche.
(3) The amount received for special care funds, gifts,
grants, contribution devises, or bequests made with respect to
the separate or special care of a particular lot, grave,
crypt, niche, mausoleum, monument, or marker or that of a
particular family, as distinguished from the general endowed
care of a cemetery or of a garden.
(b) In addition to subsection (a), a cemetery authority
may receive, and transfer to the trustee, as a part of or
incident to the endowment care fund, any property, real,
personal, or mixed, bequeathed, devised, given, or otherwise
contributed to it for endowment care purposes. Any contractual
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endowment care deposits shall fall under this article chapter.
(c) Any cemetery authority which is organized and
engaged in business prior to May 1, 2002, shall qualify as an
endowment care cemetery if the following occur:
(1) Not already placed, it shall within 90 days of May
1, 2002, have placed the entire principal of any endowment
care fund in its possession, custody, or control, into the
hands of a qualified trustee designated by it, to be
administered as set forth in this article chapter; and
principal of its endowment care fund, or the aggregate
principal of its endowment care funds, if more than one, shall
have a fair market value on either May 1, 2002, or on the date
of transfer to the trustee of not less than twenty-five
thousand dollars ($25,000); or it shall substitute 25 percent
for each percentage of each sale for the next five years or
five thousand dollars ($5,000) per year, whichever is greater,
until the balance of twenty-five thousand dollars ($25,000) is
reached. In such case, the entire amount of twenty-five
thousand dollars ($25,000) shall be paid into the fund before
the end of the fifth year, and no interest may be removed from
the fund until the twenty-five thousand dollars ($25,000)
minimum has been reached.
(2) It shall at all times after May 1, 2002, comply
with the minimum requirements for payments to the trustee for
endowment care.
(d) Any cemetery authority organizing a cemetery after
May 1, 2002, whether it be by incorporation, association,
individually, or by any other means, or having its first
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burial after May 1, 2002, before disposing of any burial lot
or right or making any sale thereof or making its first
burial, or both, shall cause to be deposited with a qualified
trustee, in cash, the sum of twenty-five thousand dollars
($25,000) in the endowment care fund.
(e) When a cemetery authority has placed with a
trustee, pursuant to this article chapter, a sum of money in
excess of the aggregate which would be required only under
subsection (a), the cemetery authority shall not be required
under this article chapter to make further payments to the
trustee until such time thereafter as, taking into account all
sales of plots, crypts, and niches in the cemetery property
since the first of the sales, the aggregate of payments to the
trustee if made in accordance with subsection (a) would equal
the applicable minimum amount paid to the trustee under
subdivision (1) of subsection (c) , or subsection (d) of this
section.
(f) Any deposit previously made, or represented to be
made to an existing endowment care fund which exceeds 10
percent of the gross selling price of all plots, crypts, and
niches sold since representation of endowment care shall be
made a permanent part of the endowment care fund and
transferred to the qualified trustee under this article
chapter."
"§27-17A-50§34-13-270
(a) No cemetery authority may directly or indirectly
require or direct the investment, reinvestment, or retention
by a qualified trustee of any part of an endowment care trust
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in any asset or business in which the cemetery authority or
any officer, director, owner, partner, or employee of the
cemetery authority has a financial interest. Nothing contained
in this subsection shall prevent the trustee, subject to the
provisions regarding investment and reinvestment of the trust
estate as are contained in the governing instrument creating
the trust, from investing, reinvesting, or retaining any asset
or business in which the cemetery authority or any officer,
director, owner, partner, or employee of the cemetery
authority has an insubstantial or nonmaterial financial
interest, provided that the trustee, in the exercise of the
trustee's discretion, deems the investment, reinvestment, or
retention to be for the best interest of the trust estate.
(b) The net income from the endowment care fund, to the
extent that the same is distributed from the fund, shall be
used exclusively for covering the costs of endowment care of
the cemetery.
(c) For the purposes of this section, net income does
not include realized or unrealized capital gains or losses.
All realized capital gains and losses shall be recorded to
corpus, which is the sum of deposits made by a cemetery
authority into an endowment care fund, pursuant to Section
27-17A-49 34-13-269, and all realized capital gains or losses.
Capital gains taxes, if any, may be paid from the corpus.
Unrealized capital gains and losses, if any, shall be recorded
as an adjustment to the fair market value of the endowment
care fund."
"§27-17A-51§34-13-271
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The trustee shall not be required to inquire into the
propriety of the expenditures made by the cemetery authority
in connection with endowment care of the cemetery, and it
shall not be held responsible in any manner whatsoever for and
on account of payments of the income from the endowment care
fund made to the cemetery authority."
"§27-17A-52§34-13-272
The trustee shall, not less than annually, shall file
with the cemetery authority an account which shall include a
complete disclosure of all activity since the previous account
and a statement detailing fund investments."
"§27-17A-53§34-13-273
To the extent that any endowment care trust existing on
May 1, 2002, includes investments or assets, the retention of
which the trustee in the free exercise of its discretion deems
not in the best interest of the trust estate, the trustee
shall dispose of the investments or assets as soon as
practicable without undue sacrifice to the trust estate, and
in any event within two years after May 1, 2002."
"§27-17A-54§34-13-274
An annual report of the endowment care fund shall be
made to the commissioner board by each cemetery authority
within 90 days of the close of each calendar year. This report
shall include the qualified trustee's name or names, the bond
numbers if individual trustees or the name and address of the
financial institution in which the fund is maintained, and the
affidavit of the cemetery authority affirming compliance with
this article chapter. Prior to the sale or transfer of a
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cemetery, the cemetery authority shall report and document to
the commissioner board that the endowment care fund is
currently funded in accordance with this article chapter."
"§27-17A-55§34-13-275
A cemetery authority shall start construction of that
section of a mausoleum or bank of below-ground crypts in which
sales, contracts for sale, reservations for sale, or
agreements for sale are being made, within five years after
the date of the first sale or when 75 percent of the mausoleum
or below-ground crypts have been sold and the purchase price
has been received, whichever occurs first. The construction
shall be completed within six years after the date of the
first sale made. Extensions for completion, not to exceed one
year, may be granted by the commissioner board for good cause
shown. If the units have not been completely constructed at
the time of need or the time specified herein, unless
otherwise specified in the preneed contract, all monies paid
shall be refunded upon request, plus interest earned thereon
if deposited by the cemetery authority in an escrow or trust
fund, and if not so deposited in an escrow or trust fund
earning interest, then plus interest in an amount equal to the
interest or discount which would have been earned thereon had
the funds been invested in United States Treasury Bills having
a 90-day maturity."
"§27-17A-56§34-13-276
(a) Cemetery Each cemetery shall adopt rules and
regulations are adopted for the mutual protection of the
cemetery owners and the owners of interment rights in the
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cemetery. All owners of interment rights and other persons
within the cemetery shall be subject to these rules and
regulations as they now exist and as they may be amended or
altered by the cemetery. The cemetery authority has the right
to shall enforce these rules and regulations . The cemetery
authority expressly reserves the right and, at any time and
without prior notice to any owners, to may adopt new rules and
regulations or to amend, modify, or repeal any section,
paragraph, or sentence of these rules and regulations.
(b) This section shall not apply to the officers,
directors, shareholders, partners, employees, agents, or
representatives of a cemetery authority who intentionally
commit an act of vandalism or other illegal act. "
"§27-17A-57§34-13-277
The commissioner board shall have the same jurisdiction
over funeral establishments, funeral directors, cemetery
authorities, or third party sellers who sell preneed contracts
without a preneed certificate of authority as he or she the
board has over those preneed sellers who possess a preneed
certificate of authority."
Section 10. Beginning with the 2024 fiscal year, the
Department of Insurance may transfer to the Alabama Board of
Funeral Service and Cemetery Service quarterly, for deposit by
the board into the Alabama Board of Funeral Service and
Cemetery Service Fund, the total amount of three hundred
thousand dollars ($300,000) per fiscal year, to defray costs
associated with the administration and operation of the
Alabama Preneed Funeral and Cemetery Act of 2023 by the board.
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Unless extended by an act of the Legislature, this section
shall be repealed at the end of the 2027 fiscal year.
Section 11. Although this bill would have as its
purpose or effect the requirement of a new or increased
expenditure of local funds, the bill is excluded from further
requirements and application under Section 111.05 of the
Constitution of Alabama of 2022, because the bill defines a
new crime or amends the definition of an existing crime.
Section 12. This act shall become effective on the
October 1, 2023, following its passage and approval by the
Governor, or its otherwise becoming law.
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