HB3229 97TH GENERAL ASSEMBLY

LRB097 06677 CEL 46763 b

97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB3229

Introduced 2/24/2011, by Rep. Dan Brady

SYNOPSIS AS INTRODUCED:

See Index

Amends the Illinois Funeral or Burial Funds Act and the Illinois Pre-Need Cemetery Sales Act to transfer all authority given to the Comptroller under the Acts to the Department of Financial and Professional Regulation. Replaces all references to "Comptroller" with "Department". Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Funeral or Burial Funds Act is amended by changing Sections 1a, 1a-1, 1a-2, 2, 3, 3a, 3a-5, 3b, 3c, 3d, 3e, 3f, 4a, 7.2, 7.3, 8, and 8.1 as follows:

(225 ILCS 45/1a) (from Ch. 111 1/2, par. 73.101a)

Sec. 1a. For the purposes of this Act, the following terms shall have the meanings specified, unless the context clearly requires another meaning:

"Beneficiary" means the person specified in the pre-need contract upon whose death funeral services or merchandise shall be provided or delivered.

"Department" means the Department of Financial and Professional Regulation.

"Licensee" means a seller of a pre-need contract who has been licensed by the Department Comptroller under this Act.

"Outer burial container" means any container made of concrete, steel, wood, fiberglass or similar material, used solely at the interment site, and designed and used exclusively to surround or enclose a separate casket and to support the earth above such casket, commonly known as a burial vault, grave box or grave liner, but not including a lawn crypt as defined in the Illinois Pre-need Cemetery Sales Act.

"Parent company" means a corporation owning more than 12 cemeteries or funeral homes in more than one state.

"Person" means any person, partnership, association, corporation, or other entity.

"Pre-need contract" means any agreement or contract, or any series or combination of agreements or contracts, whether funded by trust deposits or life insurance policies or annuities, which has for a purpose the furnishing or performance of funeral services or the furnishing or delivery of any personal property, merchandise, or services of any nature in connection with the final disposition of a dead human body. Nothing in this Act is intended to regulate the content of a life insurance policy or a tax-deferred annuity.

"Provider" means a person who is obligated for furnishing or performing funeral services or the furnishing or delivery of any personal property, merchandise, or services of any nature in connection with the final disposition of a dead human body.

"Purchaser" means the person who originally paid the money under or in connection with a pre-need contract.

"Sales proceeds" means the entire amount paid to a seller, exclusive of sales taxes paid by the seller, finance charges paid by the purchaser, and credit life, accident or disability insurance premiums, upon any agreement or contract, or series or combination of agreements or contracts, for the purpose of performing funeral services or furnishing personal property, merchandise, or services of any nature in connection with the final disposition of a dead human body, including, but not limited to, the retail price paid for such services and personal property and merchandise.

"Purchase price" means sales proceeds less finance charges on retail installment contracts.

"Seller" means the person who sells or offers to sell the pre-need contract to a purchaser, whether funded by a trust agreement, life insurance policy, or tax-deferred annuity.

"Trustee" means a person authorized to hold funds under this Act.

(Source: P.A. 92-419, eff. 1-1-02.)

(225 ILCS 45/1a-1)

Sec. 1a-1. Pre-need contracts.

(a) It shall be unlawful for any seller doing business within this State to accept sales proceeds from a purchaser, either directly or indirectly by any means, unless the seller enters into a pre-need contract with the purchaser which meets the following requirements:

(1) It states the name and address of the principal office of the seller and the parent company of the seller, if any.

(1.5) If funded by a trust, it clearly identifies the trustee's name and address and the primary state or federal regulator of the trustee as a corporate fiduciary.

(1.7) If funded by life insurance, it clearly identifies the life insurance provider and the primary regulator of the life insurance provider.

(2) It clearly identifies the provider's name and address, the purchaser, and the beneficiary, if other than the purchaser.

(2.5) If the provider has branch locations, the contract gives the purchaser the opportunity to identify the branch at which the funeral will be provided.

(3) It contains a complete description of the funeral merchandise and services to be provided and the price of the merchandise and services, and it clearly discloses whether the price of the merchandise and services is guaranteed or not guaranteed as to price.

(A) Each guaranteed price contract shall contain the following statement in 12 point bold type:

THIS CONTRACT GUARANTEES THE BENEFICIARY THE SPECIFIC GOODS AND SERVICES CONTRACTED FOR. NO ADDITIONAL CHARGES MAY BE REQUIRED. FOR DESIGNATED GOODS AND SERVICES, ADDITIONAL CHARGES MAY BE INCURRED FOR UNEXPECTED EXPENSES INCLUDING, BUT NOT LIMITED TO, CASH ADVANCES, SHIPPING OF REMAINS FROM A DISTANT PLACE, OR DESIGNATED HONORARIA ORDERED OR DIRECTED BY SURVIVORS.

(B) Except as provided in subparagraph (C) of this paragraph (3), each non-guaranteed price contract shall contain the following statement in 12 point bold type:

THIS CONTRACT DOES NOT GUARANTEE THE PRICE THE BENEFICIARY WILL PAY FOR ANY SPECIFIC GOODS OR SERVICES. ANY FUNDS PAID UNDER THIS CONTRACT ARE ONLY A DEPOSIT TO BE APPLIED TOWARD THE FINAL PRICE OF THE GOODS OR SERVICES CONTRACTED FOR. ADDITIONAL CHARGES MAY BE REQUIRED.

(C) If a non-guaranteed price contract may subsequently become guaranteed, the contract shall clearly disclose the nature of the guarantee and the time, occurrence, or event upon which the contract shall become a guaranteed price contract.

(4) It provides that if the particular supplies and services specified in the pre-need contract are unavailable at the time of delivery, the provider shall be required to furnish supplies and services similar in style and at least equal in quality of material and workmanship.

(5) It discloses any penalties or restrictions, including but not limited to geographic restrictions or the inability of the provider to perform, on the delivery of merchandise, services, or pre-need contract guarantees.

(6) Regardless of the method of funding the pre-need contract, the following must be disclosed:

(A) Whether the pre-need contract is to be funded by a trust, life insurance, or an annuity;

(B) The nature of the relationship among the person funding the pre-need contract, the provider, and the seller; and

(C) The impact on the pre-need contract of (i) any changes in the funding arrangement including but not limited to changes in the assignment, beneficiary designation, or use of the funds; (ii) any specific penalties to be incurred by the contract purchaser as a result of failure to make payments; (iii) penalties to be incurred or moneys or refunds to be received as a result of cancellations; and (iv) all relevant information concerning what occurs and whether any entitlements or obligations arise if there is a difference between the proceeds of the particular funding arrangement and the amount actually needed to pay for the funeral at-need.

(D) The method of changing the provider.

(b) All pre-need contracts are subject to the Federal Trade Commission Rule concerning the Cooling-Off Period for Door-to-Door Sales (16 CFR Part 429).

(c) No pre-need contract shall be sold in this State unless there is a provider for the services and personal property being sold. If the seller is not a provider, then the seller must have a binding agreement with a provider, and the identity of the provider and the nature of the agreement between the seller and the provider shall be disclosed in the pre-need contract at the time of the sale and before the receipt of any sales proceeds. The failure to disclose the identity of the provider, the nature of the agreement between the seller and the provider, or any changes thereto to the purchaser and beneficiary, or the failure to make the disclosures required in subdivision (a)(1), constitutes an intentional violation of this Act.

(d) All pre-need contracts must be in writing in at least 11 point type, numbered, and executed in duplicate. A signed copy of the pre-need contract must be provided to the purchaser at the time of entry into the pre-need contract. The Department Comptroller may by rule develop a model pre-need contract form that meets the requirements of this Act.

(e) The Department State Comptroller shall by rule develop a booklet for consumers in plain English describing the scope, application, and consumer protections of this Act. After the adoption of these rules, no pre-need contract shall be sold in this State unless (i) the seller distributes to the purchaser prior to the sale a booklet promulgated or approved for use by the Department State Comptroller; (ii) the seller explains to the purchaser the terms of the pre-need contract prior to the purchaser signing; and (iii) the purchaser initials a statement in the contract confirming that the seller has explained the terms of the contract prior to the purchaser signing.

(f) All sales proceeds received in connection with a pre-need contract shall be deposited into a trust account as provided in Section 1b and Section 2 of this Act, or shall be used to purchase a life insurance policy or tax-deferred annuity as provided in Section 2a of this Act.

(g) No pre-need contract shall be sold in this State unless it is accompanied by a funding mechanism permitted under this Act, and unless the seller is licensed by the Department Comptroller as provided in Section 3 of this Act. Nothing in this Act is intended to relieve sellers of pre-need contracts from being licensed under any other Act required for their profession or business, and being subject to the rules promulgated to regulate their profession or business, including rules on solicitation and advertisement.

(Source: P.A. 96-879, eff. 2-2-10.)

(225 ILCS 45/1a-2)

Sec. 1a-2. Pre-Need Funeral Consumer Protection Fund.

(a) Each licensee shall pay a fee of $5 out of the funds received for each pre-need contract sold and shall forward this sum to the Department Comptroller semi-annually within 30 days of the end of June and December. Fees collected under this Section shall be deposited into the Pre-need Funeral Consumer Protection Fund, which is hereby created as a special fund in the State treasury. Moneys in the Fund may be expended for the purposes specified in subsection (b) and to purchase insurance to cover losses guaranteed by the Fund.

(b) In the event that the purchaser is unable to receive the benefits of his or her pre-need contract or to receive the funds due by reason of cancellation of the contract, the purchaser may apply to the Department Comptroller on a form prescribed by the Department Comptroller for restitution from the Pre-need Funeral Consumer Protection Fund. Upon a finding by the Department Comptroller that the benefits or return of payment is not available to the purchaser, the Department Comptroller may cause restitution to be paid to the purchaser from the Pre-need Funeral Consumer Protection Fund.

(c) In all such cases where a purchaser is paid restitution from the Fund, the Department Comptroller shall be subrogated to that purchaser's claims against the licensee for all amounts paid from the Fund. If the licensee's liability for default is subsequently proven, any award made by a court of law shall be made payable to the Pre-need Funeral Consumer Protection Fund up to the amount paid to the purchaser from the Fund and the Department Comptroller shall request that the Attorney General engage in all reasonable post-judgment collection steps to collect such claims from the judgment debtor and reimburse the Fund.

(d) The Fund shall not be applied toward any restitution for losses in any lawsuit initiated by the Attorney General or Department Comptroller or with respect to any claim made on a pre-need contract that occurred prior to the effective date of this amendatory Act of the 96th General Assembly.

(e) Notwithstanding any other provision of this Section, the payment of restitution from the Fund shall be a matter of grace and not of right and no purchaser shall have any vested right in the Fund as a beneficiary or otherwise.

(f) The Fund may not be allocated for any purpose other than that specified in this Act.

(Source: P.A. 96-879, eff. 2-2-10.)

(225 ILCS 45/2) (from Ch. 111 1/2, par. 73.102)

Sec. 2. (a) If a purchaser selects a trust arrangement to fund the pre-need contract, all trust deposits as determined by Section 1b shall be made within 30 days of receipt.

(b) A trust established under this Act must be maintained with a corporate fiduciary as defined in Section 1-5.05 of the Corporate Fiduciary Act.

(c) Trust agreements and amendments to the trust agreements used to fund a pre-need contract shall be filed with the Department Comptroller.

(d) (Blank).

(e) A seller or provider shall furnish to the trustee and depositary the name of each payor and the amount of payment on each such account for which deposit is being so made. Nothing shall prevent the trustee from commingling the deposits in any such trust fund for purposes of its management and the investment of its funds as provided in the Common Trust Fund Act. In addition, multiple trust funds maintained under this Act may be commingled or commingled with other funeral or burial related trust funds if all record keeping requirements imposed by law are met.

(f) (Blank).

(g) Upon no less than 30 days prior notice to the Department Comptroller, the seller may change the trustee of the fund. Failure to provide the Department Comptroller with timely prior notice is an intentional violation of this Act.

(h) A trustee shall at least annually furnish to each purchaser a statement containing: (1) the receipts, disbursements, and inventory of the trust, including an explanation of any fees or expenses charged by the trustee under Section 5 of this Act or otherwise, (2) an explanation of the purchaser's right to a refund, if any, under this Act, and (3) identifying the primary regulator of the trust as a corporate fiduciary under state or federal law.

(Source: P.A. 96-879, eff. 2-2-10.)

(225 ILCS 45/3) (from Ch. 111 1/2, par. 73.103)

Sec. 3. Licensing.

(a) No person, firm, partnership, association or corporation may act as seller without first securing from the Department State Comptroller a license to so act. Application for such license shall be in writing, signed by the applicant and duly verified on forms furnished by the Department Comptroller. Each application shall contain at least the following:

(1) The full name and address (both residence and place of business) of the applicant, and every member, officer and director thereof if the applicant is a firm, partnership, association, or corporation, and of every shareholder holding more than 10% of the corporate stock if the applicant is a corporation;

(2) A statement of the applicant's assets and liabilities;

(3) The name and address of the applicant's principal place of business at which the books, accounts, and records shall be available for examination by the Department Comptroller as required by this Act;

(4) The names and addresses of the applicant's branch locations at which pre-need sales shall be conducted and which shall operate under the same license number as the applicant's principal place of business;

(5) For each individual listed under item (1) above, a detailed statement of the individual's business experience for the 10 years immediately preceding the application; any present or prior connection between the individual and any other person engaged in pre-need sales; any felony or misdemeanor convictions for which fraud was an essential element; any charges or complaints lodged against the individual for which fraud was an essential element and which resulted in civil or criminal litigation; any failure of the individual to satisfy an enforceable judgment entered against him based upon fraud; and any other information requested by the Department Comptroller relating to past business practices of the individual. Since the information required by this item (5) may be confidential or contain proprietary information, this information shall not be available to other licensees or the general public and shall be used only for the lawful purposes of the Department Comptroller in enforcing this Act;

(6) The name of the trustee and, if applicable, the names of the advisors to the trustee, including a copy of the proposed trust agreement under which the trust funds are to be held as required by this Act; and

(7) Such other information as the Department Comptroller may reasonably require in order to determine the qualification of the applicant to be licensed under this Act.

(b) Applications for license shall be accompanied by a fidelity bond executed by the applicant and a surety company authorized to do business in this State or an irrevocable, unconditional letter of credit issued by a bank, credit union, or trust company authorized to do business in the State of Illinois, as approved by the Department State Comptroller, in such amount not exceeding $10,000 as the Department Comptroller may require. If, after notice and an opportunity to be heard, it has been determined that a licensee has violated this Act within the past 5 calendar years, the Department Comptroller may require an additional bond or letter of credit from the licensee from time to time in amounts equal to one-tenth of such trust funds, which bond or letter of credit shall run to the Department Comptroller for the use and benefit of the beneficiaries of such trust funds.

The licensee shall keep accurate accounts, books and records in this State, at the principal place of business identified in the licensee's license application or as otherwise approved by the Department Comptroller in writing, of all transactions, copies of all pre-need contracts, trust agreements, and other agreements, dates and amounts of payments made and accepted thereon, the names and addresses of the contracting parties, the persons for whose benefit such funds are accepted, and the names of the depositaries of such funds. Each licensee shall maintain the documentation for a period of 3 years after the licensee has fulfilled his obligations under the pre-need contract. Additionally, for a period not to exceed 6 months after the performance of all terms in a pre-need sales contract, the licensee shall maintain copies of the contract at the licensee branch location where the contract was entered or at some other location agreed to by the Department Comptroller in writing. If an insurance policy or tax-deferred annuity is used to fund the pre-need contract, the licensee under this Act shall keep and maintain accurate accounts, books, and records in this State, at the principal place of business identified in the licensee's application or as otherwise approved by the Department Comptroller in writing, of all insurance policies and tax-deferred annuities used to fund the pre-need contract, the name and address of insured, annuitant, and initial beneficiary, and the name and address of the insurance company issuing the policy or annuity. If a life insurance policy or tax-deferred annuity is used to fund a pre-need contract, the licensee shall notify the insurance company of the name of each pre-need contract purchaser and the amount of each payment when the pre-need contract, insurance policy or annuity is purchased.

The licensee shall make reports to the Department Comptroller annually or at such other time as the Department Comptroller may require, on forms furnished by the Department Comptroller. The licensee shall file the annual report with the Department Comptroller within 75 days after the end of the licensee's fiscal year. The Department Comptroller shall for good cause shown grant an extension for the filing of the annual report upon the written request of the licensee. Such extension shall not exceed 60 days. If a licensee fails to submit an annual report to the Department Comptroller within the time specified in this Section, the Department Comptroller shall impose upon the licensee a penalty of $5 for each and every day the licensee remains delinquent in submitting the annual report. The Department Comptroller may abate all or part of the $5 daily penalty for good cause shown. Every application shall be accompanied by a check or money order in the amount of $25 and every report shall be accompanied by a check or money order in the amount of $10 payable to: the Illinois Department of Financial and Professional Regulation Comptroller, State of Illinois.

The licensee shall make all required books and records pertaining to trust funds, insurance policies, or tax-deferred annuities available to the Department Comptroller for examination. The Department Comptroller, or a person designated by the Department Comptroller who is trained to perform such examinations, may at any time investigate the books, records and accounts of the licensee with respect to trust funds, insurance policies, or tax-deferred annuities and for that purpose may require the attendance of and examine under oath all persons whose testimony he may require. The licensee shall pay a fee for such examination in accordance with a schedule established by the Department Comptroller. The fee shall not exceed the cost of such examination. For pre-need contracts funded by trust arrangements, the cost of an initial examination shall be borne by the licensee if it has $10,000 or more in trust funds, otherwise, by the Department Comptroller. The charge made by the Department Comptroller for an examination shall be based upon the total amount of trust funds held by the licensee at the end of the calendar or fiscal year for which the report is required by this Act and shall be in accordance with the following schedule:

Less than $10,000.................................no charge; $10,000 or more but less than $50,000...................$10; $50,000 or more but less than $100,000..................$40; $100,000 or more but less than $250,000.................$80; $250,000 or more........................................$100.

The Department Comptroller may order additional audits or examinations as he or she may deem necessary or advisable to ensure the safety and stability of the trust funds and to ensure compliance with this Act. These additional audits or examinations shall only be made after good cause is established by the Department Comptroller in the written order. The grounds for ordering these additional audits or examinations may include, but shall not be limited to:

(1) material and unverified changes or fluctuations in trust balances or insurance or annuity policy amounts;

(2) the licensee changing trustees more than twice in any 12-month period;

(3) any withdrawals or attempted withdrawals from the trusts, insurance policies, or annuity contracts in violation of this Act; or

(4) failure to maintain or produce documentation required by this Act for deposits into trust accounts, trust investment activities, or life insurance or annuity policies.

The licensee shall bear the full cost of that examination or audit, up to a maximum of $20,000. The Department Comptroller may elect to pay for the examination or audit and receive reimbursement from the licensee. Payment of the costs of the examination or audit by a licensee shall be a condition of receiving, maintaining, or renewing a license under this Act. All moneys received by the Department Comptroller for examination or audit fees shall be maintained in a separate account to be known as the Department's Comptroller's Administrative Fund. This Fund, subject to appropriation by the General Assembly, may be utilized by the Department Comptroller for enforcing this Act and other purposes that may be authorized by law.

For pre-need contracts funded by life insurance or a tax-deferred annuity, the cost of an examination shall be borne by the licensee. The fee schedule for such examination shall be established in rules promulgated by the Department Comptroller. In the event such investigation or other information received by the Department Comptroller discloses a substantial violation of the requirements of this Act, the Department Comptroller shall revoke the license of such person upon a hearing as provided in this Act. Such licensee may terminate all further responsibility for compliance with the requirements of this Act by voluntarily surrendering the license to the Department Comptroller, or in the event of its loss, furnishing the Department Comptroller with a sworn statement to that effect, which states the licensee's intention to discontinue acceptance of funds received under pre-need contracts. Such license or statement must be accompanied by an affidavit that said licensee has lawfully expended or refunded all funds received under pre-need contracts, and that the licensee will accept no additional sales proceeds. The Department Comptroller shall immediately cancel or revoke said license.

(Source: P.A. 96-879, eff. 2-2-10.)

(225 ILCS 45/3a) (from Ch. 111 1/2, par. 73.103a)

Sec. 3a. Denial, suspension, or revocation of license.

(a) The Department Comptroller may refuse to issue or may suspend or revoke a license on any of the following grounds:

(1) The applicant or licensee has made any misrepresentations or false statements or concealed any material fact.

(2) The applicant or licensee is insolvent.

(3) The applicant or licensee has been engaged in business practices that work a fraud.

(4) The applicant or licensee has refused to give pertinent data to the Department Comptroller.

(5) The applicant or licensee has failed to satisfy any enforceable judgment or decree rendered by any court of competent jurisdiction against the applicant.

(6) The applicant or licensee has conducted or is about to conduct business in a fraudulent manner.

(7) The trust agreement is not in compliance with State or federal law.

(8) The fidelity bond is not satisfactory to the Department Comptroller.

(9) As to any individual required to be listed in the license application, the individual has conducted or is about to conduct any business on behalf of the applicant in a fraudulent manner; has been convicted of any felony or misdemeanor, an essential element of which is fraud; has had a judgment rendered against him or her based on fraud in any civil litigation; has failed to satisfy any enforceable judgment or decree rendered against him or her by any court of competent jurisdiction; or has been convicted of any felony or any theft-related offense.

(10) The applicant or licensee, including any member, officer, or director thereof if the applicant or licensee is a firm, partnership, association or corporation and any shareholder holding more than 10% of the corporate stock, has violated any provision of this Act or any regulation, decision, order, or finding made by the Department Comptroller under this Act.

(11) The Department Comptroller finds any fact or condition existing which, if it had existed at the time of the original application for such license, would have warranted the Department Comptroller in refusing the issuance of the license.

(b) Before refusal to issue or renew and before suspension or revocation of a license, the Department Comptroller shall hold a hearing to determine whether the applicant or licensee, hereinafter referred to as the respondent, is entitled to hold such a license. At least 10 days prior to the date set for such hearing, the Department Comptroller shall notify the respondent in writing that on the date designated a hearing will be held to determine his eligibility for a license and that he may appear in person or by counsel. Such written notice may be served on the respondent personally, or by registered or certified mail sent to the respondent's business address as shown in his latest notification to the Department Comptroller. At the hearing, both the respondent and the complainant shall be accorded ample opportunity to present in person or by counsel such statements, testimony, evidence and argument as may be pertinent to the charges or to any defense thereto. The Department Comptroller may reasonably continue such hearing from time to time.

The Department Comptroller may subpoena any person or persons in this State and take testimony orally, by deposition or by exhibit, in the same manner and with the same fees and mileage allowances as prescribed in judicial proceedings in civil cases.

Any authorized agent of the Department Comptroller may administer oaths to witnesses at any hearing which the Department Comptroller is authorized to conduct.

(Source: P.A. 92-419, eff. 1-1-02.)

(225 ILCS 45/3a-5)

Sec. 3a-5. License requirements.

(a) Every license issued by the Department Comptroller shall state the number of the license, the business name and address of the licensee's principal place of business, each branch location also operating under the license, and the licensee's parent company, if any. The license shall be conspicuously posted in each place of business operating under the license. The Department Comptroller may issue such additional licenses as may be necessary for licensee branch locations upon compliance with the provisions of this Act governing an original issuance of a license for each new license.

(b) Individual salespersons representing a licensee shall not be required to obtain licenses in their individual capacities, but must acknowledge, by affidavit, that they have been provided with a copy of and have read this Act. The licensee shall retain copies of the affidavits of its sellers for its records and shall make the affidavits available to the Department Comptroller for examination upon request.

(c) The licensee shall be responsible for the activities of any person representing the licensee in selling or offering a pre-need contract for sale.

(d) Any person not selling on behalf of a licensee shall obtain its own license.

(e) No license shall be transferable or assignable without the express written consent of the Department Comptroller. A transfer of more than 50% of the ownership of any business licensed hereunder shall be deemed to be an attempted assignment of the license originally issued to the licensee for which consent of the Department Comptroller shall be required.

(f) Every license issued hereunder shall remain in force until it has been suspended, surrendered, or revoked in accordance with this Act. The Department Comptroller, upon the request of an interested person or on his own motion, may issue new licenses to a licensee whose license or licenses have been revoked, if no factor or condition then exists which would have warranted the Department Comptroller to originally refuse the issuance of such license.

(Source: P.A. 92-419, eff. 1-1-02.)

(225 ILCS 45/3b) (from Ch. 111 1/2, par. 73.103b)

Sec. 3b. The Department Comptroller, at his expense, shall provide a certified shorthand reporter to take down the testimony and preserve a record of all proceedings at the hearing of any case involving the refusal to issue or renew a license, the suspension or revocation of a license, the imposition of a monetary penalty, or the referral of a case for criminal prosecution. The record of any such proceeding shall consist of the notice of hearing, complaint, all other documents in the nature of pleadings and written motions filed in the proceedings, the transcript of testimony and the report and orders of the Department Comptroller. Copies of the transcript of such record may be purchased from the certified shorthand reporter who prepared the record.

(Source: P.A. 84-839.)

(225 ILCS 45/3c) (from Ch. 111 1/2, par. 73.103c)

Sec. 3c. Any circuit court may, upon application of the Department Comptroller or of the applicant or licensee against whom proceedings under Section 3a are pending, enter an order requiring witnesses to attend and testify, and requiring the production of documents, papers, files, books and records in connection with any hearing in any proceedings under that Section. Failure to obey such court order may result in the institution of contempt proceedings.

(Source: P.A. 84-839.)

(225 ILCS 45/3d) (from Ch. 111 1/2, par. 73.103d)

Sec. 3d. Any person affected by a final administrative decision of the Department Comptroller may have such decision reviewed judicially by the circuit court of the county where such person resides, or in the case of a corporation, where the registered office is located. If the plaintiff in the review proceeding is not a resident of this State, venue shall be in Sangamon County. The provisions of the Administrative Review Law, as now or hereafter amended, and any rules adopted thereunder shall govern all proceedings for the judicial review of final administrative decisions of the Department Comptroller. The term "administrative decision" is defined as in the Administrative Review Law.

The Department Comptroller is not required to certify the record of the proceeding unless the plaintiff in the review proceedings has purchased a copy of the transcript from the certified shorthand reporter who prepared the record. Exhibits shall be certified without cost.

(Source: P.A. 84-839.)

(225 ILCS 45/3e) (from Ch. 111 1/2, par. 73.103e)

Sec. 3e. Upon the revocation of, suspension of, or refusal to renew any license, the licensee shall immediately surrender the license or licenses to the Department Comptroller. If the licensee fails to do so, the Department Comptroller shall have the right to seize the same.

(Source: P.A. 92-419, eff. 1-1-02.)

(225 ILCS 45/3f)

Sec. 3f. Revocation of license.

(a) The Department Comptroller, upon determination that grounds exist for the revocation or suspension of a license issued under this Act, may revoke or suspend, if appropriate, the license issued to a licensee or to a particular branch office location with respect to which the grounds for revocation or suspension may occur or exist.

(b) Whenever a license is revoked by the Department Comptroller, he or she shall apply to the Circuit Court of the county wherein the licensee is located for a receiver to administer the trust funds of the licensee or to maintain the life insurance policies and tax-deferred annuities held by the licensee under a pre-need contract.

(Source: P.A. 92-419, eff. 1-1-02.)

(225 ILCS 45/4a)

Sec. 4a. Investment of funds.

(a) A trustee has a duty to invest and manage the trust assets pursuant to the Prudent Investor Rule under the Trusts and Trustees Act.

(b) The trust shall be a single-purpose trust fund. In the event of the seller's bankruptcy, insolvency or assignment for the benefit of creditors, or an adverse judgment, the trust funds shall not be available to any creditor as assets of the seller or to pay any expenses of any bankruptcy or similar proceeding, but shall be distributed to the purchasers or managed for their benefit by the trustee holding the funds. Except in an action by the Department Comptroller to revoke a license issued pursuant to this Act and for creation of a receivership as provided in this Act, the trust shall not be subject to judgment, execution, garnishment, attachment, or other seizure by process in bankruptcy or otherwise, nor to sale, pledge, mortgage, or other alienation, and shall not be assignable except as approved by the Department Comptroller. The changes made by Public Act 91-7 are intended to clarify existing law regarding the inability of licensees to pledge the trust.

(c) Because it is not known at the time of deposit or at the time that income is earned on the trust account to whom the principal and the accumulated earnings will be distributed for the purpose of determining the Illinois income tax due on these trust funds, the principal and any accrued earnings or losses related to each individual account shall be held in suspense until the final determination is made as to whom the account shall be paid. The beneficiary's estate shall not be responsible for any funeral and burial purchases listed in a pre-need contract if the pre-need contract is entered into on a guaranteed price basis.

If a pre-need contract is not a guaranteed price contract, then to the extent the proceeds of a non-guaranteed price pre-need contract cover the funeral and burial expenses for the beneficiary, no claim may be made against the estate of the beneficiary. A claim may be made against the beneficiary's estate if the charges for the funeral services and merchandise at the time of use exceed the amount of the amount in trust plus the percentage of the sale proceeds initially retained by the seller or the face value of the life insurance policy or tax-deferred annuity.

(Source: P.A. 96-879, eff. 2-2-10.)

(225 ILCS 45/7.2)

Sec. 7.2. Investigation of unlawful practices. If it appears to the Department Comptroller that a person has engaged in, is engaging in, or is about to engage in any practice in violation of this Act, the Department Comptroller may:

(1) require that person to file on such terms as the Department Comptroller prescribes a statement or report in writing, under oath or otherwise, containing all information the Department Comptroller may consider necessary to ascertain whether a licensee is in compliance with this Act, or whether an unlicensed person is engaging in activities for which a license is required;

(2) examine under oath any person in connection with the books and records pertaining to or having an impact upon trust funds, insurance policies, or tax deferred annuities required or allowed to be maintained pursuant to this Act;

(3) examine any books and records of the licensee, trustee, or investment advisor that the Department Comptroller may consider necessary to ascertain compliance with this Act; and

(4) require the production of a copy of any record, book, document, account, or paper that is produced in accordance with this Act and retain it in his or her possession until the completion of all proceedings in connection with which it is produced.

(Source: P.A. 92-419, eff. 1-1-02.)

(225 ILCS 45/7.3)

Sec. 7.3. Service. Service by the Department Comptroller of any notice requiring a person to file a statement or report shall be made:

(1) personally by delivery of a duly executed copy thereof to the person to be served or, if that person is not a natural person, in the manner provided in the Civil Practice Law when a complaint is filed; or

(2) by mailing by certified mail a duly executed copy thereof to the person to be served at his or her last known abode or principal place of business within this State.

(Source: P.A. 89-615, eff. 8-9-96.)

(225 ILCS 45/8) (from Ch. 111 1/2, par. 73.108)

Sec. 8. Any person who intentionally fails to deposit the required sales proceeds into a trust required under this Act, intentionally and improperly withdraws or uses trust funds for his or her own benefit, or otherwise intentionally violates any provision of this Act is guilty of a Class 4 felony.

If any person intentionally violates this Act or fails or refuses to comply with any order of the Department Comptroller or any part of an order that has become final to the person and is still in effect, the Department Comptroller may, after notice and hearing at which it is determined that a violation of this Act or the order has been committed, further order that the person shall forfeit and pay to the State of Illinois a sum not to exceed $5,000 for each violation. This liability shall be enforced in an action brought in any court of competent jurisdiction by the Department Comptroller in the name of the People of the State of Illinois.

In addition to the other penalties and remedies provided in this Act, the Department Comptroller may bring a civil action in the county of residence of the licensee or any person accepting trust funds to enjoin any violation or threatened violation of this Act.

The powers vested in the Department Comptroller by this Section are in addition to any and all other powers and remedies vested in the Department Comptroller by law.

(Source: P.A. 92-419, eff. 1-1-02.)

(225 ILCS 45/8.1)

Sec. 8.1. Sales; liability of purchaser for shortage. In the event of a sale or transfer of all or substantially all of the assets of the licensee, the sale or transfer of the controlling interest of the corporate stock of the licensee if the licensee is a corporation, the sale or transfer of the controlling interest of the partnership if the licensee is a partnership, or the sale of the licensee pursuant to foreclosure proceedings, the purchaser is liable for any shortages existing before or after the sale in the trust funds required to be maintained in a trust pursuant to this Act and shall honor all pre-need contracts and trusts entered into by the licensee. Any shortages existing in the trust funds constitute a prior lien in favor of the trust for the total value of the shortages, and notice of that lien shall be provided in all sales instruments.

In the event of a sale or transfer of all or substantially all of the assets of the licensee, the sale or transfer of the controlling interest of the corporate stock of the licensee if the licensee is a corporation, or the sale or transfer of the controlling interest of the partnership if the licensee is a partnership, the licensee shall, at least 21 days prior to the sale or transfer, notify the Department Comptroller, in writing, of the pending date of sale or transfer so as to permit the Department Comptroller to audit the books and records of the licensee. The audit must be commenced within 10 business days of the receipt of the notification and completed within the 21-day notification period unless the Department Comptroller notifies the licensee during that period that there is a basis for determining a deficiency which will require additional time to finalize. Failure to provide timely notice to the Department Comptroller under this Section shall be an intentional violation of this Act. The sale or transfer may not be completed by the licensee unless and until:

(i) the Department Comptroller has completed the audit of the licensee's books and records;

(ii) any delinquency existing in the trust funds has been paid by the licensee, or arrangements satisfactory to the Department Comptroller have been made by the licensee on the sale or transfer for the payment of any delinquency; and

(iii) the Department Comptroller issues a license upon application of the new owner, which license must be applied for within 21 days of the anticipated date of the sale or transfer, subject to the payment of any delinquencies, if any, as stated in item (ii).

For purposes of this Section, a person, firm, corporation, partnership, or institution that acquires the licensee through a real estate foreclosure shall be subject to the provisions of this Section.

(Source: P.A. 96-879, eff. 2-2-10.)

Section 10. The Illinois Pre-Need Cemetery Sales Act is amended by changing Sections 4, 5, 6, 7, 8, 8a, 8b, 9, 10, 11, 12, 13, 14, 15, 16, 18, 19, 20, 21, 23, 24, 27, and 27.1 as follows:

(815 ILCS 390/4) (from Ch. 21, par. 204)

Sec. 4. Definitions. As used in this Act, the following terms shall have the meaning specified:

(A) "Pre-need sales contract" or "Pre-need sales" means any agreement or contract or series or combination of agreements or contracts which have for a purpose the sale of cemetery merchandise, cemetery services or undeveloped interment, entombment or inurnment spaces where the terms of such sale require payment or payments to be made at a currently determinable time and where the merchandise, services or completed spaces are to be provided more than 120 days following the initial payment on the account. An agreement or contract for a memorial, marker, or monument shall not be deemed a "pre-need sales contract" or a "pre-need sale" if the memorial, marker, or monument is delivered within 180 days following initial payment on the account and work thereon commences a reasonably short time after initial payment on the account.

(B) "Delivery" occurs when:

(1) Physical possession of the merchandise is transferred or the easement for burial rights in a completed space is executed, delivered and transferred to the buyer; or

(2) Following authorization by a purchaser under a pre-need sales contract, title to the merchandise has been transferred to the buyer and the merchandise has been paid for and is in the possession of the seller who has placed it, until needed, at the site of its ultimate use; or

(3) Following authorization by a purchaser under a pre-need sales contract, the merchandise has been permanently identified with the name of the buyer or the beneficiary and delivered to a licensed and bonded warehouse and both title to the merchandise and a warehouse receipt have been delivered to the purchaser or beneficiary and a copy of the warehouse receipt has been delivered to the licensee for retention in its files; except that in the case of outer burial containers, the use of a licensed and bonded warehouse as set forth in this paragraph shall not constitute delivery for purposes of this Act. Nothing herein shall prevent a seller from perfecting a security interest in accordance with the Uniform Commercial Code on any merchandise covered under this Act.

All warehouse facilities to which sellers deliver merchandise pursuant to this Act shall:

(i) be either located in the State of Illinois or qualify as a foreign warehouse facility as defined herein;

(ii) submit to the Department Comptroller not less than annually, by March 1 of each year, a report of all cemetery merchandise stored by each licensee under this Act which is in storage on the date of the report;

(iii) permit the Department Comptroller or his designee at any time to examine stored merchandise and to examine any documents pertaining thereto;

(iv) submit evidence satisfactory to the Department Comptroller that all merchandise stored by said warehouse for licensees under this Act is insured for casualty or other loss normally assumed by a bailee for hire;

(v) demonstrate to the Department Comptroller that the warehouse has procured and is maintaining a performance bond in the form, content and amount sufficient to unconditionally guarantee to the purchaser or beneficiary the prompt shipment of the cemetery merchandise.

(C) "Cemetery merchandise" means items of personal property normally sold by a cemetery authority not covered under the Illinois Funeral or Burial Funds Act, including but not limited to:

(1) memorials,

(2) markers,

(3) monuments,

(4) foundations, and

(5) outer burial containers.

(D) "Undeveloped interment, entombment or inurnment spaces" or "undeveloped spaces" means any space to be used for the reception of human remains that is not completely and totally constructed at the time of initial payment therefor in a:

(1) lawn crypt,

(2) mausoleum,

(3) garden crypt,

(4) columbarium, or

(5) cemetery section.

(E) "Cemetery services" means those services customarily performed by cemetery or crematory personnel in connection with the interment, entombment, inurnment or cremation of a dead human body.

(F) "Cemetery section" means a grouping of spaces intended to be developed simultaneously for the purpose of interring human remains.

(G) "Columbarium" means an arrangement of niches that may be an entire building, a complete room, a series of special indoor alcoves, a bank along a corridor or part of an outdoor garden setting that is constructed of permanent material such as bronze, marble, brick, stone or concrete for the inurnment of human remains.

(G-5) "Department" means the Department of Financial and Professional Regulation.

(H) "Lawn crypt" means a permanent underground crypt usually constructed of reinforced concrete or similar material installed in multiple units for the entombment of human remains.

(I) "Mausoleum" or "garden crypt" means a grouping of spaces constructed of reinforced concrete or similar material constructed or assembled above the ground for entombing human remains.

(J) "Memorials, markers and monuments" means the object usually comprised of a permanent material such as granite or bronze used to identify and memorialize the deceased.

(K) "Foundations" means those items used to affix or support a memorial or monument to the ground in connection with the installation of a memorial, marker or monument.

(L) "Person" means an individual, corporation, partnership, joint venture, business trust, voluntary organization or any other form of entity.

(M) "Seller" means any person selling or offering for sale cemetery merchandise, cemetery services or undeveloped interment, entombment, or inurnment spaces in accordance with a pre-need sales contract.

(N) "Religious cemetery" means a cemetery owned, operated, controlled or managed by any recognized church, religious society, association or denomination or by any cemetery authority or any corporation administering, or through which is administered, the temporalities of any recognized church, religious society, association or denomination.

(O) "Municipal cemetery" means a cemetery owned, operated, controlled or managed by any city, village, incorporated town, township, county or other municipal corporation, political subdivision, or instrumentality thereof authorized by law to own, operate or manage a cemetery. "Municipal cemetery" also includes a cemetery placed in receivership pursuant to this Act while such cemetery is in receivership.

(O-1) "Outer burial container" means a container made of concrete, steel, wood, fiberglass, or similar material, used solely at the interment site, and designed and used exclusively to surround or enclose a separate casket and to support the earth above such casket, commonly known as a burial vault, grave box, or grave liner, but not including a lawn crypt.

(P) "Sales price" means the gross amount paid by a purchaser on a pre-need sales contract for cemetery merchandise, cemetery services or undeveloped interment, entombment or inurnment spaces, excluding sales taxes, credit life insurance premiums, finance charges and Cemetery Care Act contributions.

(Q) (Blank).

(R) "Provider" means a person who is responsible for performing cemetery services or furnishing cemetery merchandise, interment spaces, entombment spaces, or inurnment spaces under a pre-need sales contract.

(S) "Purchaser" or "buyer" means the person who originally paid the money under or in connection with a pre-need sales contract.

(T) "Parent company" means a corporation owning more than 12 cemeteries or funeral homes in more than one state.

(U) "Foreign warehouse facility" means a warehouse facility now or hereafter located in any state or territory of the United States, including the District of Columbia, other than the State of Illinois.

A foreign warehouse facility shall be deemed to have appointed the Department Comptroller to be its true and lawful attorney upon whom may be served all legal process in any action or proceeding against it relating to or growing out of this Act, and the acceptance of the delivery of stored merchandise under this Act shall be signification of its agreement that any such process against it which is so served, shall be of the same legal force and validity as though served upon it personally.

Service of such process shall be made by delivering to and leaving with the Department Comptroller, or any agent having charge of the Department's Comptroller's Department of Cemetery and Burial Trusts, a copy of such process and such service shall be sufficient service upon such foreign warehouse facility if notice of such service and a copy of the process are, within 10 days thereafter, sent by registered mail by the plaintiff to the foreign warehouse facility at its principal office and the plaintiff's affidavit of compliance herewith is appended to the summons. The Department Comptroller shall keep a record of all process served upon him under this Section and shall record therein the time of such service.

(Source: P.A. 96-879, eff. 2-2-10.)

(815 ILCS 390/5) (from Ch. 21, par. 205)

Sec. 5. It is unlawful for any seller directly or indirectly doing business within this State to engage in pre-need sales without a license issued by the Department Comptroller.

(Source: P.A. 92-419, eff. 1-1-02.)

(815 ILCS 390/6) (from Ch. 21, par. 206)

Sec. 6. License application.

(a) An application for a license shall be made in writing to the Department Comptroller on forms prescribed by him or her, signed by the applicant under oath verified by a notary public, and accompanied by a non-returnable $25 application fee. The Department Comptroller may prescribe abbreviated application forms for persons holding a license under the Cemetery Care Act. Applications (except abbreviated applications) must include at least the following information:

(1) The full name and address, both residence and business, of the applicant if the applicant is an individual; of every member if applicant is a partnership; of every member of the Board of Directors if applicant is an association; and of every officer, director and shareholder holding more than 10% of the corporate stock if applicant is a corporation;

(2) A detailed statement of applicant's assets and liabilities;

(2.1) The name and address of the applicant's principal place of business at which the books, accounts, and records are available for examination by the Department Comptroller as required by this Act;

(2.2) The name and address of the applicant's branch locations at which pre-need sales will be conducted and which will operate under the same license number as the applicant's principal place of business;

(3) For each individual listed under (1) above, a detailed statement of the individual's business experience for the 10 years immediately preceding the application; any present or prior connection between the individual and any other person engaged in pre-need sales; any felony or misdemeanor convictions for which fraud was an essential element; any charges or complaints lodged against the individual for which fraud was an essential element and which resulted in civil or criminal litigation; any failure of the individual to satisfy an enforceable judgment entered against him or her based upon fraud; and any other information requested by the Department Comptroller relating to the past business practices of the individual. Since the information required by this paragraph may be confidential or contain proprietary information, this information shall not be available to other licensees or the general public and shall be used only for the lawful purposes of the Department Comptroller in enforcing this Act;

(4) The name of the trustee and, if applicable, the names of the advisors to the trustee, including a copy of the proposed trust agreement under which the trust funds are to be held as required by this Act;

(5) Where applicable, the name of the corporate surety company providing the performance bond for the construction of undeveloped spaces and a copy of the bond; and

(6) Such other information as the Department Comptroller may reasonably require in order to determine the qualification of the applicant to be licensed under this Act.

(b) Applications for license shall be accompanied by a fidelity bond executed by the applicant and a security company authorized to do business in this State in such amount, not exceeding $10,000, as the Department Comptroller may require. The Department Comptroller may require additional bond from time to time in amounts equal to one-tenth of such trust funds but not to exceed $100,000, which bond shall run to the Department Comptroller for the use and benefit of the beneficiaries of such trust funds. Such licensee may by written permit of the Department Comptroller be authorized to operate without additional bond, except such fidelity bond as may be required by the Department Comptroller for the protection of the licensee against loss by default by any of its employees engaged in the handling of trust funds.

(c) Any application not acted upon within 90 days may be deemed denied.

(Source: P.A. 92-419, eff. 1-1-02.)

(815 ILCS 390/7) (from Ch. 21, par. 207)

Sec. 7. The Department Comptroller may refuse to issue or may suspend or revoke a license on any of the following grounds:

(a) The applicant or licensee has made any misrepresentations or false statements or concealed any material fact;

(b) The applicant or licensee is insolvent;

(c) The applicant or licensee has been engaged in business practices that work a fraud;

(d) The applicant or licensee has refused to give pertinent data to the Department Comptroller;

(e) The applicant or licensee has failed to satisfy any enforceable judgment or decree rendered by any court of competent jurisdiction against the applicant;

(f) The applicant or licensee has conducted or is about to conduct business in a fraudulent manner;

(g) The trust agreement is not in compliance with State or federal law;

(h) The pre-construction performance bond, if applicable, is not satisfactory to the Department Comptroller;

(i) The fidelity bond is not satisfactory to the Department Comptroller;

(j) As to any individual listed in the license application as required pursuant to Section 6, that individual has conducted or is about to conduct any business on behalf of the applicant in a fraudulent manner, has been convicted of any felony or misdemeanor an essential element of which is fraud, has had a judgment rendered against him or her based on fraud in any civil litigation, has failed to satisfy any enforceable judgment or decree rendered against him by any court of competent jurisdiction, or has been convicted of any felony or any theft-related offense;

(k) The applicant or licensee has failed to make the annual report required by this Act or to comply with a final order, decision, or finding of the Department Comptroller made pursuant to this Act;

(l) The applicant or licensee, including any member, officer, or director thereof if the applicant or licensee is a firm, partnership, association, or corporation and any shareholder holding more than 10% of the corporate stock, has violated any provision of this Act or any regulation or order made by the Department Comptroller under this Act; or

(m) The Department Comptroller finds any fact or condition existing which, if it had existed at the time of the original application for such license would have warranted the Department Comptroller in refusing the issuance of the license.

(Source: P.A. 92-419, eff. 1-1-02.)

(815 ILCS 390/8) (from Ch. 21, par. 208)

Sec. 8. (a) Every license issued by the Department Comptroller shall state the number of the license, the business name and address of the licensee's principal place of business, each branch location also operating under the license, and the licensee's parent company, if any. The license shall be conspicuously posted in each place of business operating under the license. The Department Comptroller may issue additional licenses as may be necessary for license branch locations upon compliance with the provisions of this Act governing an original issuance of a license for each new license.

(b) Individual salespersons representing a licensee shall not be required to obtain licenses in their individual capacities but must acknowledge, by affidavit, that they have been provided a copy of and have read this Act. The licensee must retain copies of the affidavits of its salespersons for its records and must make the affidavits available to the Department Comptroller for examination upon request.

(c) The licensee shall be responsible for the activities of any person representing the licensee in selling or offering a pre-need contract for sale.

(d) Any person not selling on behalf of a licensee shall be required to obtain his or her own license.

(e) Any person engaged in pre-need sales, as defined herein, prior to the effective date of this Act may continue operations until the application for license under this Act is denied; provided that such person shall make application for a license within 60 days of the date that application forms are made available by the Department Comptroller.

(f) No license shall be transferable or assignable without the express written consent of the Department Comptroller. A transfer of more than 50% of the ownership of any business licensed hereunder shall be deemed to be an attempted assignment of the license originally issued to the licensee for which consent of the Department Comptroller shall be required.

(g) Every license issued hereunder shall remain in force until the same has been suspended, surrendered or revoked in accordance with this Act, but the Department Comptroller, upon the request of an interested person or on his own motion, may issue new licenses to a licensee whose license or licenses have been revoked, if no factor or condition then exists which would have warranted the Department Comptroller in refusing originally the issuance of such license.

(Source: P.A. 92-419, eff. 1-1-02.)

(815 ILCS 390/8a)

Sec. 8a. Investigation of unlawful practices. If it appears to the Department Comptroller that a person has engaged in, is engaging in, or is about to engage in any practice in violation of this Act, the Department Comptroller may:

(1) require that person to file on such terms as the Department Comptroller prescribes a statement or report in writing, under oath or otherwise, containing all information the Department Comptroller may consider necessary to ascertain whether a licensee is in compliance with this Act, or whether an unlicensed person is engaging in activities for which a license is required;

(2) examine under oath any person in connection with the books and records pertaining to or having an impact upon the trust funds required to be maintained pursuant to this Act;

(3) examine any books and records of the licensee, trustee, or investment advisor that the Department Comptroller may consider necessary to ascertain compliance with this Act; and

(4) require the production of a copy of any record, book, document, account, or paper that is produced in accordance with this Act and retain it in his or her possession until the completion of all proceedings in connection with which it is produced.

(Source: P.A. 92-419, eff. 1-1-02.)

(815 ILCS 390/8b)

Sec. 8b. Service. Service by the Department Comptroller of any notice requiring a person to file a statement or report shall be made:

(1) personally by delivery of a duly executed copy thereof to the person to be served or, if that person is not a natural person, in the manner provided in the Civil Practice Law when a complaint is filed; or

(2) by mailing by certified mail a duly executed copy thereof to the person to be served at his or her last known abode or principal place of business within this State.

(Source: P.A. 89-615, eff. 8-9-96.)

(815 ILCS 390/9) (from Ch. 21, par. 209)

Sec. 9. The Department Comptroller may upon his own motion investigate the actions of any person providing, selling, or offering pre-need sales contracts or of any applicant or any person or persons holding or claiming to hold a license under this Act. The Department Comptroller shall make such an investigation on receipt of the verified written complaint of any person setting forth facts which, if proved, would constitute grounds for refusal, suspension, or revocation of a license. Before refusing to issue, and before suspension or revocation of a license, the Department Comptroller shall hold a hearing to determine whether the applicant or licensee, hereafter called the respondent, is entitled to hold such a license. At least 10 days prior to the date set for such hearing, the Department Comptroller shall notify the respondent in writing that on the date designated a hearing will be held to determine his eligibility for a license and that he may appear in person or by counsel. Such written notice may be served on the respondent personally, or by registered or certified mail sent to the respondent's business address as shown in his latest notification to the Department Comptroller and shall include sufficient information to inform the respondent of the general nature of the charge. At the hearing, both the respondent and the complainant shall be accorded ample opportunity to present in person or by counsel such statements, testimony, evidence and argument as may be pertinent to the charges or to any defense thereto. The Department Comptroller may reasonably continue such hearing from time to time.

The Department Comptroller may subpoena any person or persons in this State and take testimony orally, by deposition or by exhibit, in the same manner and with the same fees and mileage as prescribed in judicial proceedings in civil cases.

Any authorized agent of the Department Comptroller may administer oaths to witnesses at any hearing which the Department Comptroller is authorized to conduct.

The Department Comptroller, at his expense, shall provide a certified shorthand reporter to take down the testimony and preserve a record of all proceedings at the hearing of any case involving the refusal to issue a license, the suspension or revocation of a license, the imposition of a monetary penalty, or the referral of a case for criminal prosecution. The record of any such proceeding shall consist of the notice of hearing, complaint, all other documents in the nature of pleadings and written motions filed in the proceedings, the transcript of testimony and the report and orders of the Department Comptroller. Copies of the transcript of such record may be purchased from the certified shorthand reporter who prepared the record or from the Department Comptroller.

(Source: P.A. 92-419, eff. 1-1-02.)

(815 ILCS 390/10) (from Ch. 21, par. 210)

Sec. 10. Any circuit court may, upon application of the Department Comptroller or of the applicant or licensee against whom proceedings under Section 9 are pending, enter an order requiring witnesses to attend and testify, and requiring the production of documents, papers, files, books and records in connection with any hearing in any proceedings under that Section. Failure to obey such court order may result in contempt proceedings.

(Source: P.A. 84-239.)

(815 ILCS 390/11) (from Ch. 21, par. 211)

Sec. 11. Any person affected by a final administrative decision of the Department Comptroller may have such decision reviewed judicially by the circuit court of the county where such person resides, or in the case of a corporation, where the registered office is located. If the plaintiff in the review proceeding is not a resident of this State, venue shall be in Sangamon County. The provisions of the "Administrative Review Law", approved August 19, 1981, all amendments and modifications thereto, and any rules adopted under it govern all proceedings for the judicial review of final administrative decisions of the Department Comptroller. The term "administrative decision" is defined as in the "Administrative Review Law".

The Department Comptroller is not required to certify the record of the proceeding unless the plaintiff in the review proceedings has purchased a copy of the transcript from the certified shorthand reporter who prepared the record or from the Department Comptroller. Exhibits shall be certified without cost.

(Source: P.A. 84-239.)

(815 ILCS 390/12) (from Ch. 21, par. 212)

Sec. 12. License revocation or suspension.

(a) The Department Comptroller may, upon determination that grounds exist for the revocation or suspension of a license issued under this Act, revoke or suspend, if appropriate, the license issued to a licensee or to a particular branch office location with respect to which the grounds for revocation or suspension may occur or exist.

(b) Upon the revocation or suspension of any license, the licensee shall immediately surrender the license or licenses to the Department Comptroller. If the licensee fails to do so, the Department Comptroller has the right to seize the license or licenses.

(Source: P.A. 92-419, eff. 1-1-02.)

(815 ILCS 390/13) (from Ch. 21, par. 213)

Sec. 13. A licensee may surrender any license by delivering to the Department Comptroller written notice that he thereby surrenders such license but such surrender shall not affect such licensee's civil or criminal liability for acts committed prior to such surrender, or affect his bond. The Department Comptroller shall not permit a license to be surrendered by licensee unless and until the trust funds of such licensee have been transferred to a successor licensee who shall be licensed by the Department Comptroller in conformity with the provisions of this Act. Any purported transfer of trust funds without compliance with this Section is void and the Department Comptroller shall have the right to petition for the appointment of a receiver to administer the business of the licensee.

(Source: P.A. 84-239.)

(815 ILCS 390/14) (from Ch. 21, par. 214)

Sec. 14. Contract required.

(a) It is unlawful for any person doing business within this State to accept sales proceeds, either directly or indirectly, by any means unless the seller enters into a pre-need sales contract with the purchaser which meets the following requirements:

(1) A written sales contract shall be executed in at least 11 point type in duplicate for each pre-need sale made by a licensee, and a signed copy given to the purchaser. Each completed contract shall be numbered and shall contain: (i) the name and address of the purchaser, the principal office of the licensee, and the parent company of the licensee; (ii) the name of the person, if known, who is to receive the cemetery merchandise, cemetery services or the completed interment, entombment or inurnment spaces under the contract; and (iii) specific identification of such merchandise, services or spaces to be provided, if a specific space or spaces are contracted for, and the price of the merchandise, services, or space or spaces.

(2) In addition, such contracts must contain a provision in distinguishing typeface as follows:

"Notwithstanding anything in this contract to the contrary, you are afforded certain specific rights of cancellation and refund under the Illinois Pre-Need Cemetery Sales Act, enacted by the 84th General Assembly of the State of Illinois".

(3) All pre-need sales contracts shall be sold on a guaranteed price basis. At the time of performance of the service or delivery of the merchandise, the seller shall be prohibited from assessing the purchaser or his heirs or assigns or duly authorized representative any additional charges for the specific merchandise and services listed on the pre-need sales contract.

(4) Each contract shall clearly disclose that the price of the merchandise or services is guaranteed and shall contain the following statement in 12 point bold type:

"THIS CONTRACT GUARANTEES THE BENEFICIARY THE SPECIFIC GOODS, SERVICES, INTERMENT SPACES, ENTOMBMENT SPACES, AND INURNMENT SPACES CONTRACTED FOR. NO ADDITIONAL CHARGES MAY BE REQUIRED FOR DESIGNATED GOODS, SERVICES, AND SPACES. ADDITIONAL CHARGES MAY BE INCURRED FOR UNEXPECTED EXPENSES."

(5) The pre-need sales contract shall provide that if the particular cemetery services, cemetery merchandise, or spaces specified in the pre-need contract are unavailable at the time of delivery, the seller shall be required to furnish services, merchandise, and spaces similar in style and at least equal in quality of material and workmanship.

(6) The pre-need contract shall also disclose any specific penalties to be incurred by the purchaser as a result of failure to make payments; and penalties to be incurred or moneys or refunds to be received as a result of cancellation of the contract.

(7) The pre-need contract shall disclose the nature of the relationship between the provider and the seller.

(8) Each pre-need contract that authorizes the delivery of cemetery merchandise to a licensed and bonded warehouse shall provide that prior to or upon delivery of the merchandise to the warehouse the title to the merchandise and a warehouse receipt shall be delivered to the purchaser or beneficiary. The pre-need contract shall contain the following statement in 12 point bold type:

"THIS CONTRACT AUTHORIZES THE DELIVERY OF MERCHANDISE TO A LICENSED AND BONDED WAREHOUSE FOR STORAGE OF THE MERCHANDISE UNTIL THE MERCHANDISE IS NEEDED BY THE BENEFICIARY. DELIVERY OF THE MERCHANDISE IN THIS MANNER MAY PRECLUDE REFUND OF SALE PROCEEDS THAT ARE ATTRIBUTABLE TO THE DELIVERED MERCHANDISE."

The purchaser shall initial the statement at the time of entry into the pre-need contract.

(9) Each pre-need contract that authorizes the placement of cemetery merchandise at the site of its ultimate use prior to the time that the merchandise is needed by the beneficiary shall contain the following statement in 12 point bold type:

"THIS CONTRACT AUTHORIZES THE PLACEMENT OF MERCHANDISE AT THE SITE OF ITS ULTIMATE USE PRIOR TO THE TIME THAT THE MERCHANDISE IS NEEDED BY THE BENEFICIARY. DELIVERY OF THE MERCHANDISE IN THIS MANNER MAY PRECLUDE REFUND OF SALE PROCEEDS THAT ARE ATTRIBUTABLE TO THE DELIVERED MERCHANDISE."

The purchaser shall initial the statement at the time of entry into the pre-need contract.

(10) Each pre-need contract that is funded by a trust shall clearly identify the trustee's name and address and the primary state or federal regulator of the trustee as a corporate fiduciary.

(b) Every pre-need sales contract must be in writing. The Department Comptroller may by rule develop a model pre-need sales contract form that meets the requirements of this Act.

(c) To the extent the Rule is applicable, every pre-need sales contract is subject to the Federal Trade Commission Rule concerning the Cooling-Off Period for Door-to-Door Sales (16 CFR Part 429).

(d) No pre-need sales contract may be entered into in this State unless there is a provider for the cemetery merchandise, cemetery services, and undeveloped interment, inurnment, and entombment spaces being sold. If the seller is not the provider, then the seller must have a binding agreement with a provider, and the identity of the provider and the nature of the agreement between the seller and the provider must be disclosed in the pre-need sales contract at the time of sale and before the receipt of any sale proceeds. The failure to disclose the identity of the provider, the nature of the agreement between the seller and the provider, or any changes thereto to the purchaser and beneficiary, or the failure to make the disclosures required by this Section constitutes an intentional violation of this Act.

(e) No pre-need contract may be entered into in this State unless it is accompanied by a funding mechanism permitted under this Act and unless the seller is licensed by the Department Comptroller as provided in this Act. Nothing in this Act is intended to relieve providers or sellers of pre-need contracts from being licensed under any other Act required for their profession or business or from being subject to the rules promulgated to regulate their profession or business, including rules on solicitation and advertisement.

(f) No pre-need contract may be entered into in this State unless the seller explains to the purchaser the terms of the pre-need contract prior to the purchaser signing and the purchaser initials a statement in the contract confirming that the seller has explained the terms of the contract prior to the purchaser signing.

(g) The Department State Comptroller shall develop a booklet for consumers in plain English describing the scope, application, and consumer protections of this Act. After the booklet is developed, no pre-need contract may be sold in this State unless the seller distributes to the purchaser prior to the sale a booklet developed or approved for use by the Department State Comptroller.

(Source: P.A. 96-879, eff. 2-2-10.)

(815 ILCS 390/15) (from Ch. 21, par. 215)

Sec. 15. (a) Whenever a seller receives anything of value under a pre-need sales contract, the person receiving such value shall deposit 50% of all proceeds received into one or more trust funds maintained pursuant to this Section, except that, in the case of proceeds received for the purchase of outer burial containers, 85% of the proceeds shall be deposited into one or more trust funds. Such deposits shall be made until the amount deposited in trust equals 50% of the sales price of the cemetery merchandise, cemetery services and undeveloped spaces included in such contract, except that, in the case of deposits for outer burial containers, deposits shall be made until the amount deposited in trust equals 85% of the sales price. In the event an installment contract is factored, discounted or sold to a third party, the seller shall deposit an amount equal to 50% of the sales price of the installment contract, except that, for the portion of the contract attributable to the sale of outer burial containers, the seller shall deposit an amount equal to 85% of the sales price. Proceeds required to be deposited in trust which are attributable to cemetery merchandise and cemetery services shall be held in a "Cemetery Merchandise Trust Fund". Proceeds required to be deposited in trust which are attributable to the sale of undeveloped interment, entombment or inurnment spaces shall be held in a "Pre-construction Trust Fund". If merchandise is delivered for storage in a bonded warehouse, as authorized herein, and payment of transportation or other charges totaling more than $20 will be required in order to secure delivery to the site of ultimate use, upon such delivery to the warehouse the seller shall deposit to the trust fund the full amount of the actual or estimated transportation charge. Transportation charges which have been prepaid by the seller shall not be deposited to trust funds maintained pursuant to this Section. As used in this Section, "all proceeds" means the entire amount paid by a purchaser in connection with a pre-need sales contract, including finance charges and Cemetery Care Act contributions, but excluding sales taxes and credit life insurance premiums.

(b) The seller shall act as trustee of all amounts received for cemetery merchandise, services, or undeveloped spaces until those amounts have been deposited into the trust fund. All trust deposits required by this Act shall be made within 30 days following the end of the month of receipt. The seller must retain a corporate fiduciary as an independent trustee for any amount of trust funds. Upon 30 days' prior written notice from the seller to the Department Comptroller, the seller may change the trustee of the trust fund. Failure to provide the Department Comptroller with timely prior notice is an intentional violation of this Act.

(c) A trust established under this Act must be maintained with a corporate fiduciary as defined in Section 1-5.05 of the Corporate Fiduciary Act.

(d) Funds deposited in the trust account shall be identified in the records of the seller by the name of the purchaser. Nothing shall prevent the trustee from commingling the deposits in any such trust fund for purposes of the management thereof and the investment of funds therein as provided in the "Common Trust Fund Act", approved June 24, 1949, as amended. In addition, multiple trust funds maintained pursuant to this Act may be commingled or commingled with other funeral or burial related trust funds, provided that all record keeping requirements imposed by or pursuant to law are met.

(e) In lieu of a pre-construction trust fund, a seller of undeveloped interment, entombment or inurnment spaces may obtain and file with the Department Comptroller a performance bond in an amount at least equal to 50% of the sales price of the undeveloped spaces or the estimated cost of completing construction, whichever is greater. The bond shall be conditioned on the satisfactory construction and completion of the undeveloped spaces as required in Section 19 of this Act.

Each bond obtained under this Section shall have as surety thereon a corporate surety company incorporated under the laws of the United States, or a State, the District of Columbia or a territory or possession of the United States. Each such corporate surety company must be authorized to provide performance bonds as required by this Section, have paid-up capital of at least $250,000 in cash or its equivalent and be able to carry out its contracts. Each pre-need seller must provide to the Department Comptroller, for each corporate surety company such seller utilizes, a statement of assets and liabilities of the corporate surety company sworn to by the president and secretary of the corporation by January 1 of each year.

The Department Comptroller shall prohibit pre-need sellers from doing new business with a corporate surety company if the company is insolvent or is in violation of this Section. In addition the Department Comptroller may direct a pre-need seller to reinstate a pre-construction trust fund upon the Department's Comptroller's determination that the corporate surety company no longer is sufficient security.

All performance bonds issued pursuant to this Section must be irrevocable during the statutory term for completing construction specified in Section 19 of this Act, unless terminated sooner by the completion of construction.

(f) Whenever any pre-need contract shall be entered into and include 1) items of cemetery merchandise and cemetery services, and 2) rights to interment, inurnment or entombment in completed spaces without allocation of the gross sale price among the items sold, the application of payments received under the contract shall be allocated, first to the right to interment, inurnment or entombment, second to items of cemetery merchandise and cemetery services, unless some other allocation is clearly provided in the contract.

(g) Any person engaging in pre-need sales who enters into a combination sale which involves the sale of items covered by a trust or performance bond requirement and any item not covered by any entrustment or bond requirement, shall be prohibited from increasing the gross sales price of those items not requiring entrustment with the purpose of allocating a lesser gross sales price to items which require a trust deposit or a performance bond.

(Source: P.A. 96-879, eff. 2-2-10.)

(815 ILCS 390/16) (from Ch. 21, par. 216)

Sec. 16. Trust funds; disbursements.

(a) A trustee shall make no disbursements from the trust fund except as provided in this Act.

(b) A trustee has a duty to invest and manage the trust assets pursuant to the Prudent Investor Rule under the Trusts and Trustees Act. Whenever the seller changes trustees pursuant to this Act, the trustee must provide written notice of the change in trustees to the Department Comptroller no less than 28 days prior to the effective date of such a change in trustee. The trustee has an ongoing duty to provide the Department Comptroller with a current and true copy of the trust agreement under which the trust funds are held pursuant to this Act.

(c) The trustee may rely upon certifications and affidavits made to it under the provisions of this Act, and shall not be liable to any person for such reliance.

(d) A trustee shall be allowed to withdraw from the trust funds maintained pursuant to this Act a reasonable fee pursuant to the Trusts and Trustees Act.

(e) The trust shall be a single-purpose trust fund. In the event of the seller's bankruptcy, insolvency or assignment for the benefit of creditors, or an adverse judgment, the trust funds shall not be available to any creditor as assets of the seller or to pay any expenses of any bankruptcy or similar proceeding, but shall be distributed to the purchasers or managed for their benefit by the trustee holding the funds. Except in an action by the Department Comptroller to revoke a license issued pursuant to this Act and for creation of a receivership as provided in this Act, the trust shall not be subject to judgment, execution, garnishment, attachment, or other seizure by process in bankruptcy or otherwise, nor to sale, pledge, mortgage, or other alienation, and shall not be assignable except as approved by the Department Comptroller. The changes made by this amendatory Act of the 91st General Assembly are intended to clarify existing law regarding the inability of licensees to pledge the trust.

(f) Because it is not known at the time of deposit or at the time that income is earned on the trust account to whom the principal and the accumulated earnings will be distributed, for purposes of determining the Illinois Income Tax due on these trust funds, the principal and any accrued earnings or losses relating to each individual account shall be held in suspense until the final determination is made as to whom the account shall be paid.

(g) A trustee shall at least annually furnish to each purchaser a statement identifying: (1) the receipts, disbursements, and inventory of the trust, including an explanation of any fees or expenses charged by the trustee under paragraph (d) of this Section or otherwise, (2) an explanation of the purchaser's right to a refund, if any, under this Act, and (3) the primary regulator of the trust as a corporate fiduciary under state or federal law.

(Source: P.A. 96-879, eff. 2-2-10.)

(815 ILCS 390/18) (from Ch. 21, par. 218)

Sec. 18. (a) If for any reason a seller who has engaged in pre-need sales has refused, cannot or does not comply with the terms of the pre-need sales contract within a reasonable time after he is required to do so, the purchaser or his heirs or assigns or duly authorized representative shall have the right to a refund of an amount equal to the sales price paid for undelivered merchandise, services or spaces plus undistributed interest amounts held in trust attributable to such contract, within 30 days of the filing of a sworn affidavit with the trustee setting forth the existence of the contract and the fact of breach. A copy of this affidavit shall be filed with the Department Comptroller and the seller. In the event a seller is prevented from performing by strike, shortage of materials, civil disorder, natural disaster or any like occurrence beyond the control of the seller, the seller's time for performance shall be extended by the length of such delay. Nothing in this Section shall relieve the seller from any liability for non-performance of his obligations under the pre-need sales contract.

(b) If the purchaser defaults in making payments, the seller shall have the right to cancel the contract and withdraw from the trust fund the entire balance to the credit of the defaulting purchaser's account as liquidating damages. In such event, the trustee shall deliver said balance to the seller upon its certification, and upon receiving said certification the trustee may rely thereon and shall not be liable to anyone for such reliance.

(c) After final payment on a pre-need contract, any beneficiary may upon written demand of a seller, demand that the pre-need contract with such seller be terminated. The seller shall, within 30 days, initiate a refund to such purchaser or beneficiary of the entire amount held in trust attributable to undelivered cemetery merchandise and unperformed cemetery services, including undistributed interest earned thereon. Where more than one beneficiary is included in a pre-need contract, a seller need not honor a demand for cancellation under this paragraph unless all beneficiaries assent and their signatures are included in written demand for refund.

(Source: P.A. 85-805.)

(815 ILCS 390/19) (from Ch. 21, par. 219)

Sec. 19. Construction or development of spaces.

(a) The construction or development of undeveloped interment, entombment or inurnment spaces shall be commenced on that phase, section or sections of undeveloped ground or section of lawn crypts, mausoleums, garden crypts, columbariums or cemetery spaces in which sales are made within 3 years of the date of the first such sale. The seller shall give written notice to the Department Comptroller no later than 30 days after the first sale. Such notice shall include a description of the project. Once commenced, construction or development shall be pursued diligently to completion. The construction must be completed within 6 years of the first sale. If construction or development is not commenced or completed within the times specified herein, any purchaser may surrender and cancel the contract and upon cancellation shall be entitled to a refund of the actual amounts paid toward the purchase price plus interest attributable to such amount earned while in trust; provided however that any delay caused by strike, shortage of materials, civil disorder, natural disaster or any like occurrence beyond the control of the seller shall extend the time of such commencement and completion by the length of such delay.

(b) At any time within 12 months of a purchaser's entering into a pre-need contract for undeveloped interment, entombment or inurnment spaces, a purchaser may surrender and cancel his or her contract and upon cancellation shall be entitled to a refund of the actual amounts paid toward the purchase price plus interest attributable to such amount earned while in trust. Notwithstanding the foregoing, the cancellation and refund rights specified in this paragraph shall terminate as of the date the seller commences construction or development of the phase, section or sections of undeveloped spaces in which sales are made. After the rights of cancellation and refund specified herein have terminated, if a purchaser defaults in making payments under the pre-need contract, the seller shall have the right to cancel the contract and withdraw from the trust fund the entire balance to the credit of the defaulting purchaser's account as liquidated damages. In such event, the trustee shall deliver said balance to the seller upon its certification, and upon receiving said certification the trustee may rely thereon and shall not be liable to anyone for such reliance.

(c) During the construction or development of interment, entombment or inurnment spaces, upon the sworn certification by the seller and the contractor to the trustee the trustee shall disburse from the trust fund the amount equivalent to the cost of performed labor or delivered materials as certified. Said certification shall be substantially in the following form:

We, the undersigned, being respectively the Seller and Contractor, do hereby certify that the Contractor has performed labor or delivered materials or both to (address of property) .........., in connection with a contract to .........., and that as of this date the value of the labor performed and materials delivered is $.......

We do further certify that in connection with such contract there remains labor to be performed, and materials to be delivered, of the value of $........

This Certificate is signed (insert date).

............ ............ Seller Contractor

A person who executes and delivers a completion certificate with actual knowledge of a falsity contained therein shall be considered in violation of this Act and subject to the penalties contained herein.

(d) Except as otherwise authorized by this Section, every seller of undeveloped spaces shall provide facilities for temporary interment, entombment or inurnment for purchasers or beneficiaries of contracts who die prior to completion of the space. Such temporary facilities shall be constructed of permanent materials, and, insofar as practical, be landscaped and groomed to the extent customary in the cemetery industry in that community. The heirs, assigns, or personal representative of a purchaser or beneficiary shall not be required to accept temporary underground interment spaces where the undeveloped space contracted for was an above ground entombment or inurnment space. In the event that temporary facilities as described in this paragraph are not made available, upon the death of a purchaser or beneficiary, the heirs, assigns, or personal representative is entitled to a refund of the entire sales price paid plus undistributed interest attributable to such amount while in trust.

(e) If the seller delivers a completed space acceptable to the heirs, assigns or personal representative of a purchaser or beneficiary, other than the temporary facilities specified herein, in lieu of the undeveloped space purchased, the seller shall provide the trustee with a delivery certificate and all sums deposited under the pre-need sales contract, including the undistributed income, shall be paid to the seller.

(f) Upon completion of the phase, section or sections of the project as certified to the trustee by the seller and the contractor and delivery of the deed or certificate of ownership to the completed interment, entombment, or inurnment space to all of the purchasers entitled to receive those ownership documents, the trust fund requirements set forth herein shall terminate and all funds held in the preconstruction trust fund attributable to the completed phase, section or sections, including interest accrued thereon, shall be returned to the seller.

(g) This Section shall not apply to the sale of undeveloped spaces if there has been any such sale in the same phase, section or sections of the project prior to the effective date of this Act.

(Source: P.A. 91-357, eff. 7-29-99; 92-419, eff. 1-1-02.)

(815 ILCS 390/20) (from Ch. 21, par. 220)

Sec. 20. Records.

(a) Each licensee must keep accurate accounts, books and records in this State at the principal place of business identified in the licensee's license application or as otherwise approved by the Department Comptroller in writing of all transactions, copies of agreements, dates and amounts of payments made or received, the names and addresses of the contracting parties, the names and addresses of persons for whose benefit funds are received, if known, and the names of the trust depositories. Additionally, for a period not to exceed 6 months after the performance of all terms in a pre-need sales contract, the licensee shall maintain copies of each pre-need contract at the licensee branch location where the contract was entered or at some other location agreed to by the Department Comptroller in writing.

(b) Each licensee must maintain such records for a period of 3 years after the licensee shall have fulfilled his or her obligation under the pre-need contract or 3 years after any stored merchandise shall have been provided to the purchaser or beneficiary, whichever is later.

(c) Each licensee shall submit reports to the Department Comptroller annually, under oath, on forms furnished by the Department Comptroller. The annual report shall contain, but shall not be limited to, the following:

(1) An accounting of the principal deposit and additions of principal during the fiscal year.

(2) An accounting of any withdrawal of principal or earnings.

(3) An accounting at the end of each fiscal year, of the total amount of principal and earnings held.

(d) The annual report shall be filed by the licensee with the Department Comptroller within 75 days after the end of the licensee's fiscal year. An extension of up to 60 days may be granted by the Department Comptroller, upon a showing of need by the licensee. Any other reports shall be in the form furnished or specified by the Department Comptroller. If a licensee fails to submit an annual report to the Department Comptroller within the time specified in this Section, the Department Comptroller shall impose upon the licensee a penalty of $5 for each and every day the licensee remains delinquent in submitting the annual report. The Department Comptroller may abate all or part of the $5 daily penalty for good cause shown. Each report shall be accompanied by a check or money order in the amount of $10 payable to: the Illinois Department of Financial and Professional Regulation Comptroller, State of Illinois.

(e) On and after the effective date of this amendatory Act of the 91st General Assembly, a licensee may report all required information concerning the sale of outer burial containers on the licensee's annual report required to be filed under this Act and shall not be required to report that information under the Illinois Funeral or Burial Funds Act, as long as the information is reported under this Act.

(Source: P.A. 91-7, eff. 1-1-00; 92-419, eff. 1-1-02.)

(815 ILCS 390/21) (from Ch. 21, par. 221)

Sec. 21. Audits.

(a) The Department Comptroller may audit the records of any licensee with respect to the trust funds created or pre-construction performance bonds obtained pursuant to this Act as they pertain to the deposits to and withdrawals from the trust fund and the maintenance of the required bond, at reasonable times no more than annually unless there is reasonable cause to suspect a deficiency. For that purpose, the Department Comptroller shall have free access to the office and places of business of all licensees and all trustees or depositories as it relates to the deposit, withdrawal and investment of funds. The fee for an initial audit shall be borne by the licensee if it has $10,000 or more in trust funds; otherwise, by the Department Comptroller. The fee charged by the Department Comptroller for such audit shall be paid by the licensee and shall be based upon the total amount of pre-need sales made by the licensee pursuant to this Act as of the end of the calendar or fiscal year for which an annual report is required and shall be in accordance with the following schedule:

(b) The Department Comptroller may order additional audits or examinations as he or she may deem necessary or advisable to ensure the safety and stability of the trust funds and to ensure compliance with this Act. These additional audits or examinations shall only be made after good cause is established by the Department Comptroller in the written order. The grounds for ordering these additional audits or examinations may include, but shall not be limited to:

(1) material and unverified changes or fluctuations in trust balances;

(2) the licensee changing trustees more than twice in any 12-month period;

(3) any withdrawals or attempted withdrawals from the trusts in violation of this Act; or

(4) failure to maintain or produce documentation required by this Act for deposits into trust accounts or trust investment activities.

Prior to ordering an additional audit or examination, the Department Comptroller shall request the licensee to respond and comment upon the factors identified by the Department Comptroller as warranting the subsequent examination or audit. The licensee shall have 30 days to provide a response to the Department Comptroller. If the Department Comptroller decides to proceed with the additional examination or audit, the licensee shall bear the full cost of that examination or audit up to a maximum of $7,500. The Department Comptroller may elect to pay for the examination or audit and receive reimbursement from the licensee. Payment of the costs of the examination or audit by a licensee shall be a condition of receiving or maintaining a license under this Act. All moneys received by the Department Comptroller for examination or audit fees shall be maintained in a separate account to be known as the Department's Comptroller's Administrative Fund. This Fund, subject to appropriation by the General Assembly, may be utilized by the Department Comptroller for enforcing this Act and other purposes that may be authorized by law.

(Source: P.A. 88-477; 89-615, eff. 8-9-96.)

(815 ILCS 390/23) (from Ch. 21, par. 223)

Sec. 23. (a) Any person who fails to deposit the required amount into a trust provided for in this Act, improperly withdraws or uses trust funds for his or her own benefit, or otherwise violates any provision of this Act is guilty of a Class 4 felony.

(b) If any person violates this Act or fails or refuses to comply with any order of the Department Comptroller or any part thereof which to such person has become final and is still in effect, the Department Comptroller may, after notice and hearing at which it is determined that a violation of this Act or such order has been committed, further order that such person shall forfeit and pay to the State of Illinois a sum not to exceed $5,000 for each violation. Such liability shall be enforced in an action brought in any court of competent jurisdiction by the Department Comptroller in the name of the people of the State of Illinois.

(c) Whenever a license is revoked by the Department Comptroller, or the Department Comptroller determines that any person is engaged in pre-need sales without a license, he shall apply to the circuit court of the county where such person is located for a receiver to administer the business of such person.

(d) Whenever a licensee fails or refuses to make a required report or whenever it appears to the Department Comptroller from any report or examination that such licensee has committed a violation of law or that the trust funds have not been administered properly or that it is unsafe or inexpedient for such licensee or the trustee of the trust funds of such licensee to continue to administer such funds or that any officer of such licensee or of the trustee of the trust funds of such licensee has abused his trust or has been guilty of misconduct or breach of trust in his official position injurious to such licensee or that such licensee has suffered as to its trust funds a serious loss by larceny, embezzlement, burglary, repudiation or otherwise, the Department Comptroller shall, by order, direct the discontinuance of such illegal, unsafe or unauthorized practices and shall direct strict conformity with the requirements of the law and safety and security in its transactions and may apply to the circuit court of the county where such licensee is located to prevent any disbursements or expenditures by such licensee until the trust funds are in such condition that it would not be jeopardized thereby and the Department Comptroller shall communicate the facts to the Attorney General of the State of Illinois who shall thereupon institute such proceedings against the licensee or its trustee or the officers of either or both as the nature of the case may require.

(e) In addition to the other penalties and remedies provided in this Act, the Department Comptroller may bring a civil action in the county of residence of the licensee or any person engaging in pre-need sales, to enjoin any violation or threatened violation of this Act.

(f) The powers vested in the Department Comptroller by this Section are additional to any and all other powers and remedies vested in the Department Comptroller by law, and nothing herein contained shall be construed as requiring that the Department Comptroller shall employ the powers conferred herein instead of or as a condition precedent to the exercise of any other power or remedy vested in the Department Comptroller.

(Source: P.A. 92-419, eff. 1-1-02.)

(815 ILCS 390/24) (from Ch. 21, par. 224)

Sec. 24. The Department Comptroller may adopt, amend or repeal such rules, not inconsistent with the law, as may be necessary to enable him to administer and enforce the provisions of this Act. All such action shall be taken according to the provisions of "The Illinois Administrative Procedure Act", approved September 22, 1975, as amended.

(Source: P.A. 84-239.)

(815 ILCS 390/27) (from Ch. 21, par. 227)

Sec. 27. (a) The provisions of this Act shall not apply to any pre-need sale that was executed prior to the effective date of this Act. Any seller, with the written approval of the purchaser, shall have the option to become subject to this Act on any pre-need sales made prior to the effective date of this Act by giving written notice to its purchasers and to the Department Comptroller.

(b) The provisions of this Act shall not apply to the isolated or occasional sale by a consumer to another consumer of cemetery merchandise, cemetery services or undeveloped spaces by an individual who does not hold himself out as being engaged in, or who does not engage in, making pre-need sales.

(Source: P.A. 85-805.)

(815 ILCS 390/27.1)

Sec. 27.1. Sales; liability of purchaser for shortage. In the event of a sale or transfer of all or substantially all of the assets of the licensee, the sale or transfer of the controlling interest of the corporate stock of the licensee if the licensee is a corporation, the sale or transfer of the controlling interest of the partnership if the licensee is a partnership, or sale pursuant to foreclosure proceedings, the purchaser is liable for any shortages existing before or after the sale in the trust funds required to be maintained in a trust under this Act and shall honor all pre-need contracts and trusts entered into by the licensee. Any shortages existing in the trust funds constitute a prior lien in favor of the trust for the total value of the shortages, and notice of that lien must be provided in all sales instruments.

In the event of a sale or transfer of all or substantially all of the assets of the licensee, the sale or transfer of the controlling interest of the corporate stock of the licensee if the licensee is a corporation, or the sale or transfer of the controlling interest of the partnership if the licensee is a partnership, the licensee shall, at least 21 days prior to the sale or transfer, notify the Department Comptroller, in writing, of the pending date of sale or transfer so as to permit the Department Comptroller to audit the books and records of the licensee. The audit must be commenced within 10 business days after the receipt of the notification and completed within the 21-day notification period unless the Department Comptroller notifies the licensee during that period that there is a basis for determining a deficiency which will require additional time to finalize. The sale or transfer may not be completed by the licensee unless and until:

(i) the Department Comptroller has completed the audit of the licensee's books and records;

(ii) any delinquency existing in the trust funds has been paid by the licensee, or arrangements satisfactory to the Department Comptroller have been made by the licensee on the sale or transfer for the payment of any delinquency;

(iii) the Department Comptroller issues a license upon application of the new owner, which license must be applied for within 30 days after the anticipated date of the sale or transfer, subject to the payment of any delinquencies, if any, as stated in item (ii).

For purposes of this Section, a person, firm, corporation, partnership, or institution that acquires the licensee through a real estate foreclosure is subject to the provisions of this Section.

(Source: P.A. 92-419, eff. 1-1-02.)

Section 99. Effective date. This Act takes effect upon becoming law.