HB5312 98TH GENERAL ASSEMBLY

LRB098 14197 HEP 53079 b

98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB5312

Introduced , by Rep. Michael Unes

SYNOPSIS AS INTRODUCED:

760 ILCS 100/3	from Ch. 21, par. 64.3
760 ILCS 100/4	from Ch. 21, par. 64.4
760 ILCS 100/5	from Ch. 21, par. 64.5
760 ILCS 100/12	from Ch. 21, par. 64.12

Amends the Cemetery Care Act. Provides that a trustee of a nonprofit cemetery may convert a trust fund established under the Act to a total return trust in accordance with provisions of the Trusts and Trustees Act pertaining to total return trusts, provided that the distribution percentage of the total return trust does not exceed 5% of the trust. Makes corresponding changes throughout the Act. Effective immediately.

A BILL FOR

AN ACT concerning civil law.

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

Section 5. The Cemetery Care Act is amended by changing Sections 3, 4, 5, and 12 as follows:

(760 ILCS 100/3) (from Ch. 21, par. 64.3)

Sec. 3. Gifts and contributions - Trust funds. Any cemetery authority is hereby authorized and empowered to accept any gift, grant, contribution, payment, legacy, or pursuant to contract, any sum of money, funds, securities or property of any kind, or the income or avails thereof, and to establish a trust fund to hold the same in perpetuity for the care of its cemetery, or for the care of any lot, grave, crypt or niche in its cemetery; or for the special care of any lot, grave, crypt or niche or of any family mausoleum or memorial, marker, or monument in its cemetery.

The cemetery authority shall act as trustee of all amounts received for care until they have been deposited into the trust fund established under this Section. The cemetery authority may continue to be the trustee of up to $500,000 of care funds that have been deposited into the trust fund, but the cemetery authority must retain an independent trustee for any amount of care funds held in trust in excess of that $500,000. A cemetery authority holding care funds in excess of $500,000 on the effective date of this amendatory Act of 1996 shall have 36 months to retain an independent trustee for the excess amounts held in trust; any other cemetery authority must retain an independent trustee for its care funds in excess of $500,000 as soon as may be practical.

No gift, grant, legacy, payment or other contribution shall be invalid by reason of any indefiniteness or uncertainty as to the beneficiary designated in the instrument creating the gift, grant, legacy, payment or other contribution. If any gift, grant, legacy, payment or other contribution consists of non-income producing property, the cemetery authority accepting it is authorized and empowered to sell such property and to invest the funds obtained in accordance with the provisions of the next succeeding paragraph.

The care funds authorized by this Section and provided for in Section 4 of this Act shall be held intact and, unless otherwise restricted by the terms of the gift, grant, legacy, contribution, payment, contract or other payment, as to investments made after June 11, 1951 the trustee of the care funds of the cemetery authority, in acquiring, investing, reinvesting, exchanging, retaining, selling and managing property for any such trust, shall exercise the judgment and care under the circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital. Within the limitations of the foregoing standard, the trustee of the care funds of the cemetery authority is authorized to acquire and retain every kind of property, real, personal or mixed, and every kind of investment, including specifically but without limiting the generality of the foregoing, bonds, debentures and other corporate obligations, preferred or common stocks and real estate mortgages, which persons of prudence, discretion and intelligence acquire or retain for their own account. Within the limitations of the foregoing standard, the trustee is authorized to retain property properly acquired, without limitation as to time and without regard to its suitability for original purchase. The care funds authorized by this Section may be commingled with other trust funds received by such cemetery authority for the care of its cemetery or for the care or special care of any lot, grave, crypt, niche, private mausoleum, memorial, marker, or monument in its cemetery, whether received by gift, grant, legacy, contribution, payment, contract or other conveyance heretofore or hereafter made to such cemetery authority. Such care funds may be invested with common trust funds as provided in The Common Trust Fund Act. Unless the trust fund has been converted into a total return trust, the The net income only from the investment of such care funds shall be allocated and used for the purposes specified in the transaction by which the principal was established in the proportion that each contribution bears to the entire sum invested.

A trustee of a cemetery operating as a nonprofit organization exempt from taxation under Section 501(c)(3) of the Internal Revenue Code of 1986 may convert a trust established under this Act to a total return trust in accordance with Section 5.3 of the Trusts and Trustees Act, provided that the distribution percentage of the total return trust does not exceed 5% of the trust.

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

(760 ILCS 100/4) (from Ch. 21, par. 64.4)

Sec. 4. Care funds; deposits; investments. Whenever a cemetery authority owning, operating, controlling or managing a privately operated cemetery accepts care funds, either in connection with the sale or giving away at an imputed value of an interment right, entombment right or inurnment right, or in pursuance of a contract, or whenever, as a condition precedent to the purchase or acceptance of an interment right, entombment right or inurnment right, such cemetery authority requires the establishment of a care fund or a deposit in an already existing care fund, then such cemetery authority shall execute and deliver to the person from whom received an instrument in writing which shall specifically state: (a) the nature and extent of the care to be furnished, and (b) that such care shall be furnished only in so far as the amount deposited in trust will allow, as governed by the terms of the trust net income derived from the amount deposited in trust will permit (the income from the amount so deposited, less necessary expenditures of administering the trust, shall be deemed the net income), and (c) that not less than the following amounts will be set aside and deposited in trust:

1. For interment rights, $1 per square foot of the space sold or 15% of the sales price or imputed value, whichever is the greater, with a minimum of $25 for each individual interment right.

2. For entombment rights, not less than 10% of the sales price or imputed value with a minimum of $25 for each individual entombment right.

3. For inurnment rights, not less than 10% of the sales price or imputed value with a minimum of $15 for each individual inurnment right.

4. For any transfer of interment rights, entombment rights, or inurnment rights recorded in the records of the cemetery authority, excepting only transfers between members of the immediate family of the transferor, a minimum of $25 for each such right transferred. For the purposes of this paragraph "immediate family of the transferor" means the spouse, parents, grandparents, children, grandchildren, and siblings of the transferor.

5. Upon an interment, entombment, or inurnment in a grave, crypt, or niche in which rights of interment, entombment, or inurnment were originally acquired from a cemetery authority prior to January 1, 1948, a minimum of $25 for each such right exercised.

6. For the special care of any lot, grave, crypt, or niche or of a family mausoleum, memorial, marker, or monument, the full amount received.

Such setting aside and deposit shall be made by such cemetery authority not later than 30 days after the close of the month in which the cemetery authority gave away for an imputed value or received the final payment on the purchase price of interment rights, entombment rights, or inurnment rights, or received the final payment for the general or special care of a lot, grave, crypt or niche or of a family mausoleum, memorial, marker or monument; and such amounts shall be held by the trustee of the care funds of such cemetery authority in trust in perpetuity for the specific purposes stated in said written instrument. For all care funds received by a cemetery authority, except for care funds received by a cemetery authority pursuant to a specific gift, grant, contribution, payment, legacy, or contract that are subject to investment restrictions more restrictive than the investment provisions set forth in this Act, and except for care funds otherwise subject to a trust agreement executed by a person or persons responsible for transferring the specific gift, grant, contribution, payment, or legacy to the cemetery authority that contains investment restrictions more restrictive than the investment provisions set forth in this Act, the cemetery authority may, without the necessity of having to obtain prior approval from any court in this State, designate a new trustee in accordance with this Act and invest the care funds in accordance with this Section, notwithstanding any contrary limitation contained in the trust agreement.

Any such cemetery authority engaged in selling or giving away at an imputed value interment rights, entombment rights or inurnment rights, in conjunction with the selling or giving away at an imputed value any other merchandise or services not covered by this Act, shall be prohibited from increasing the sales price or imputed value of those items not requiring a care fund deposit under this Act with the purpose of allocating a lesser sales price or imputed value to items that require a care fund deposit.

In the event any sale that would require a deposit to such cemetery authority's care fund is made by a cemetery authority on an installment basis, and the installment contract is factored, discounted, or sold to a third party, the cemetery authority shall deposit the amount due to the care fund within 30 days after the close of the month in which the installment contract was factored, discounted, or sold. If, subsequent to such deposit, the purchaser defaults on the contract such that no care fund deposit on that contract would have been required, the cemetery authority may apply the amount deposited as a credit against future required deposits.

The trust authorized by this Section 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 cemetery authority or to pay any expenses of any bankruptcy or similar proceeding, but shall be retained intact to provide for the future maintenance of the cemetery. Except in an action by the 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 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.

(Source: P.A. 91-7, eff. 6-1-99.)

(760 ILCS 100/5) (from Ch. 21, par. 64.5)

Sec. 5. No cemetery authority, nor any agent, servant, or employee of it, nor any other person, shall advertise, represent, guarantee, promise, or contract that perpetual care, permanent care, perpetual or permanent maintenance, care forever, continuous care, eternal care, everlasting care, or any similar or equivalent care, or care for any number of years of any cemetery or of any lot, grave, crypt or niche, or of any family mausoleum, memorial, marker, or monument, will be furnished: Provided, however, that any cemetery authority may advertise, represent, guarantee, promise or contract that care will be furnished from the net income only derived from funds held in trust as provided in Section 3 of this Act; and may advertise, represent, guarantee, promise or contract that care will be given any lot, grave, crypt, or niche, or any family mausoleum, memorial, marker, or monument for any definite number of years, such care to be furnished under a contract providing that the principal of the amount paid under the contract shall be used to furnish the care and further providing specifically the care to be given and the number of years for which it is to be given.

(Source: Laws 1947, p. 338.)

(760 ILCS 100/12) (from Ch. 21, par. 64.12)

Sec. 12. Annual reports. Every licensee shall prepare a written report as of the end of the preceding calendar year or fiscal year, as the case may be, showing:

(a) The amount of the principal of the care funds held in trust by the trustee of the care funds at the beginning of such year and in addition thereto all moneys or property received during such year (1) under and by virtue of the sale of a lot, grave, crypt or niche; (2) under or by virtue of the terms of the contract authorized by the provisions of Section 3 of this Act; (3) under or by virtue of any gift, grant, legacy, payment or other contribution made either prior to or subsequent to the effective date of this Act, and (4) under or by virtue of any contract or conveyance made either prior to or subsequent to the effective date of this Act;

(b) The securities in which such care funds are invested and the cash on hand as of the date of the report;

(c) The income received from such care funds during the preceding calendar year, or fiscal year, as the case may be;

(d) The expenditures made from said income, or, in the case of a total return trust, the total distributions made during the preceding calendar year, or fiscal year, as the case may be; and

(e) The number of interments made during the preceding calendar year, or fiscal year, as the case may be.

Where any of the care funds of a licensee are held by an independent trustee, the report filed by the licensee shall contain a certificate signed by the trustee of the care funds of such licensee certifying to the truthfulness of the statements in the report as to (1) the total amount of principal of the care funds held by the trustee, (2) the securities in which such care funds are invested and the cash on hand as of the date of the report and (3) the income received from such care funds during the preceding calendar year, or fiscal year, as the case may be.

Such report shall be filed by such licensee on or before March 15 of each calendar year, in the office of the Comptroller. If the fiscal year of such licensee is other than on a calendar year basis, then such licensee shall file the report required by this Section within 2 1/2 months of the end of its fiscal year. The 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 Comptroller within the time specified in this Section, the 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 Comptroller may abate all or part of the $5 daily penalty for good cause shown.

Such report shall be made under oath and shall be in the form furnished by the Comptroller. Each report shall be accompanied by a check or money order in the amount of $10, payable to: Comptroller, State of Illinois.

If any annual report shows that the amount of the care funds held in trust at the end of the preceding calendar year or fiscal year, as the case may be, has increased in amount over that shown by the next preceding report, then the fidelity bond theretofore filed shall be increased to the amount required by Section 9 of this Act. Such increased fidelity bond shall accompany the report and no report shall be accepted by the Comptroller unless accompanied by such bond, except where the filing of a bond is excused by Section 18 of this Act.

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

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