Private cemeteries: endowment funds.
The bill introduces important protections for cemetery trust funds, making the principal and income exempt from seizure by any private entity, thereby safeguarding community assets meant for cemetery care. Additionally, in the event that a public entity attempts to seize these funds, the law stipulates that any seized amounts can only be used for the care, maintenance, and embellishment of that cemetery. This move seeks to provide stability for cemetery management, ensuring that communities can rely on the integrity and permanence of these funds.
Assembly Bill 795, known as the Private Cemeteries Endowment Fund Act, was enacted to amend the Health and Safety Code regarding private cemeteries and their management through endowment care funds. This legislation authorizes cemetery authorities to apply for a conversion of their endowment care funds from a net income distribution method to a unitrust distribution method starting from January 1, 2021. The conversion allows for more flexible management and distribution of funds, aiming to ensure that cemetery authorities can meet the ongoing care and maintenance needs for their cemeteries while generating adequate income for support.
General sentiment towards AB 795 appears to be supportive among stakeholders in the cemetery management sector, as it represents a significant reform aimed at improving financial management practices within the industry. By allowing greater flexibility in fund management and providing essential protection against financial disruptions, the bill seeks to encourage the long-term viability of private cemeteries. However, the clarity around conditions for trustee compensation might raise discussions about balance between cost and service quality.
Notable points of contention include the required conditions for converting to the unitrust distribution method, specifically regarding trustee compensation, which must align with the net fair market value of the assets. Tuition for oversights or excessive fees were concerns that prompted discussions among stakeholders. Some fear that if such conditions are not properly monitored, there could be a detrimental impact on the funds meant for cemetery care. Additionally, the overall impact of the bill on small cemeteries as compared to larger operations could be a point of specific discussion.