HB 783 (As Introduced) - 2000 Regular Session

MISSISSIPPI LEGISLATURE

2000 Regular Session

To: Insurance

By: Representatives Stevens, Chism, Masterson, Montgomery (74th)

House Bill 783

AN ACT TO AMEND SECTIONS 75-63-1, 75-63-15, 75-63-18 AND 75-63-19, MISSISSIPPI CODE OF 1972, TO REMOVE CEMETERIES FROM THE PROVISIONS OF LAW WHICH REGULATE SALES OF CEMETERY MERCHANDISE AND FUNERAL SERVICES FOR FUTURE DELIVERY; TO CREATE NEW CODE SECTIONS TO BE CODIFIED AS A SEPARATE ARTICLE IN THE MISSISSIPPI CEMETERY LAW TO PROVIDE REGULATION OF SALES OF CEMETERY MERCHANDISE FOR FUTURE DELIVERY; TO REPEAL SECTION 75-63-5, MISSISSIPPI CODE OF 1972, WHICH CLARIFIES THAT CEMETERIES ARE NOT REQUIRED TO ACCEPT PROPERTY OR PERFORM SERVICES CONTRARY TO LAW; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 75-63-1, Mississippi Code of 1972, is amended as follows:

75-63-1. Except as hereinafter provided, no person, firm, corporation, association or partnership shall, directly or indirectly or through an agent, enter into a contract with any retail consumer whereunder personal property as may be used by or in a funeral establishment in connection with disposing of or commemorating the memory of a deceased person and/or services related to a funeral service or the burial of the dead are deliverable at a future and unspecified date. This shall include but not be limited to the preneed sale of burial vaults, urns, memorials, scrolls, vases, foundations, bases and similar merchandise * * *.

SECTION 2. Section 75-63-15, Mississippi Code of 1972, is amended as follows:

75-63-15. (1) Every trustee of a funeral services trust fund shall annually prepare and file with the funeral services business a detailed accounting and report of such fund on or before March 31 of each year for the calendar year ending the preceding December 31 or within ninety (90) days after the end of the fiscal year of the trust agreement, which report shall include, among other things, properly itemized, the securities in which monies in the fund are invested.

(2) Every seller shall keep accurate books of account and records of all transactions concerning funeral services funds, and a copy of all agreements made in connection with funeral services funds. Such records shall be kept and be available for inspection and copy by any purchaser, or the purchaser's family, legal representative or next of kin, at the usual place of the seller's business, for at least one (1) year after the termination of the agreement which they evidence.

SECTION 3. Section 75-63-18, Mississippi Code of 1972, is amended as follows:

75-63-18. (1) Within thirty (30) days after the end of the calendar or the business' fiscal year, each funeral establishment shall file with the clerk of the chancery court having jurisdiction over the administration of its funeral services trust fund an annual account, which account shall contain the following information:

(a) The name of the business, the date of incorporation, if incorporated, and the location of such business or businesses;

(b) The amounts of sales of all merchandise and services for which payment has been made in full during the preceding calendar or fiscal year;

(c) The amounts paid into the funeral services trust fund, and the income earned therefrom during the preceding fiscal year; and

(d) The names and addresses of the owners of the business and, if incorporated, its officers and directors, and any change of control which has occurred during the past fiscal or calendar year.

(2) Within forty-five (45) days after the time by which the trustee's accounting and report is required to be filed with the funeral establishment, as provided by Section 75-63-15, the business shall file a copy of such accounting and report with the clerk of the chancery court having jurisdiction thereof.

(3) As a condition to the transfer of any funeral services trust fund monies from one trust institution to another, the business for which such fund is maintained shall, not less than thirty (30) days prior to the time when such transfer is to occur, file with the chancery clerk a written notice of intent to transfer accompanied with a letter of intent to receive such trust fund monies from the trust institution to which such trust fund monies are to be transferred. Such fund monies shall be transferred directly from the existing trust institution to the receiving trust institution.

(4) Prior to any sale or transfer of any funeral establishment or a controlling interest therein, an independent audit of the funeral services trust fund shall be performed at the expense of the seller and/or buyer or transferor and transferee and filed with the chancery clerk. Such audit shall be current within thirty (30) days of the proposed sale or transfer.

(5) Each chancery clerk shall maintain a properly indexed book in which there shall be kept, preserved and open for public inspection a copy of each record, report and notice required to be filed with the chancery clerk under the provisions of this chapter. For filing and indexing the records, reports and notices under this chapter, the chancery clerk shall be authorized to charge such fees as are provided in Section 25-7-9 for the recording and indexing of deeds.

(6) The clerk of the chancery court having jurisdiction shall, upon the failure to timely receive any of the records, reports or notices provided for under this chapter, immediately give notice by registered letter to the owner or owners of such business, or, if incorporated, its officers and directors at its or their last-known address, that such records, reports or notices have not been received. Failure of such persons to file such records, reports or notices within fifteen (15) days after such registered letter is mailed shall, in the absence of clear justification or excuse, constitute a misdemeanor and each owner and, if incorporated, its officers and directors, shall be subject to the penalties provided for in Section 75-63-23.

(7) Whenever it reasonably appears to the court upon complaint filed with the chancery court having jurisdiction thereof by any purchaser, or the family, legal representative or next of kin of any such purchaser, of any merchandise or services contracted for under the provisions of this chapter that (a) such business is insolvent or about to become insolvent; or (b) that no funeral services trust fund has been established for such business or, if established, the trust fund does not contain such funds as are required to be contained therein, the court shall order a private audit and examination of any funeral services trust fund of such business and of all the books, records and papers employed in the transaction of such business.

In the event that such audit and examination shows that the business is insolvent or is about to become insolvent or that a sufficient trust fund is not established or being maintained for such business, the court shall exercise such jurisdiction and make and issue such orders and decrees as may be necessary to correct and enforce compliance with the provisions of this chapter and all such other orders and decrees as shall be just, equitable and in the public interest, including the appointment of receivers to continue or terminate the operation of such business.

(8) All the necessary expenses of any examination or audit performed or court proceedings conducted under the provisions of subsection (7) of this section shall be paid by the owner or owners of such business or, if incorporated, its officers and directors, and in the event that a sale of any such business is ordered by the court, the proceeds of such sale shall first be applied to the costs expended under the provisions of subsection (7) of this section.

SECTION 4. Section 75-63-19, Mississippi Code of 1972, is amended as follows:

75-63-19. This chapter shall not apply to: (a) the sale of burial vaults, urns, memorials, scrolls, vases, foundations, bases or any other similar merchandise where the seller delivers at the time of the execution of the contract or upon final payment, should the payment be made in installments, a valid warehouse receipt as contemplated in Uniform Commercial Code-Documents of Title, Section 75-7-101 et seq.; * * * (b) merchandise or services included within the coverage provisions of insurance policies or contracts of insurance; or (c) the sale of merchandise or services provided by a cemetery which are governed by Sections 5 through 17 of House Bill No. ____, 2000 Regular Session.

SECTION 5. Except as provided in Sections 5 through 17 of this act, no person, firm, corporation, association or partnership shall, directly or indirectly or through an agent, enter into a contract with any retail consumer whereunder merchandise as may be used by or in a cemetery in connection with disposing of or commemorating the memory of a deceased person and/or services related to the burial of the dead are deliverable at a future and unspecified date. This shall include, but not be limited to, the pre-need sale of burial vaults, urns, grave markers, memorials, scrolls, vases, foundations, bases and similar merchandise, and to the advance sale of funeral service.

SECTION 6. (1) Any person, firm, corporation, association or partnership entering into any such contract as the seller or the party responsible for providing such services shall deposit into a trust fund an amount of money not less than fifty percent (50%) of the retail price collected for services, including:

(a) The opening and closing of the grave; and

(b) The erecting/setting of the memorial/monument/grave marker;

and one hundred ten percent (110%) of the wholesale price of all tangible merchandise, including:

(a) Burial vaults/outer containers; and

(b) Memorial markers/monuments/grave markers, bases and foundations of memorial markers, grave markers, monuments.

(2) The deposit shall be made not later than forty-five (45) days after the end of the month in which the contract is executed; except in the event that payment for the merchandise and/or service shall be made by the consumer in installments, fifty percent (50%) of each installment payment shall be deposited to the trust within forty-five (45) days of the last day of the month within which such payment was made.

(3) Each initial deposit as to each contract into the trust fund shall be identified by the seller by furnishing the trustee with the name of the purchaser, a copy of the contract containing a statement of the value of such merchandise or services and a description of the merchandise and/or services to be furnished or provided by the seller thereunder. Nothing therein contained shall prohibit the trustee from commingling the deposits in any such trust fund for purposes of the management thereof and the investment of funds therein.

(4) Each such contract shall contain the name and address of the purchaser, the merchandise/services obtained by the purchaser and the price per merchandise/service.

(5) Each such contract shall be numbered and all voided contracts shall be submitted with the annual report to the clerk of the chancery court.

SECTION 7. Nothing contained in Sections 5 through 17 of this act shall be construed to require any cemetery to accept any merchandise, or perform any personal services contrary to law or ordinances pertaining to the burial of deceased human beings, or contrary to rules and regulations of a cemetery pertaining to the quality and kind of merchandise that may be used in connection with the burial of deceased human beings in any such cemetery.

SECTION 8. To insure the adequacy of the trust funds for their intended purpose, the net income therefrom shall remain therein and be reinvested and compounded except the income of the trust fund may be used to defer reasonable expenses of the trustee in connection with the administration of the trust funds. Except as provided in Section 9 of this act, none of the original principal shall be returned to the seller even though such principal, at the end of any annual period, on December 31, is in excess of the then requirements to fulfill any particular contract or portion thereof.

SECTION 9. Except as provided in Section 8 of this act, the funds held in trust shall remain intact until detailed certification of seller has been delivered to the trustee of the delivery of the merchandise and/or services provided for in such contract, at which time funds on deposit covering such items plus the net income shall be delivered to the seller. Any trustee accepting the trust fund under Sections 5 through 17 of this act may rely upon the detailed certification of seller as herein required to be made and shall not be liable to anyone for such reliance. If, after payment to the seller for items delivered pursuant to contract, the contract is completed but there remain funds with the trustee or there are still funds allocated to the particular item which has been delivered, in either event, such excess funds shall be delivered to the seller. All funds still in the trustee's hands seventy-five (75) years after their receipt shall be then returned to the seller.

SECTION 10. If for any reason the seller, who has entered into a contract for the sale of such merchandise or the performing of such services, or both, and has made the deposit herein required to be made, cannot or does not perform all provisions of the contract promptly as to delivery of the merchandise covered by the contract after request to do so, the family, legal representative or next of kin of the purchaser shall be entitled to receive from the trustee the amount of money on deposit to the credit of that particular contract, including interest. An affidavit of the family, legal representative or next of kin to that effect, delivered to the trustee, shall be sufficient authority to the trustee to make such a payment without any liability to the person making the deposit of such money into the trust fund or to any other person. Nothing herein contained shall relieve the seller under any such contract of his liability for nonperformance. Each contract covered by Sections 5 through 17 of this act shall provide that in the event that the retail consumer, his family, legal representative or next of kin requests the seller to deliver the merchandise or provide the service described in the contract to or at a location which is more than fifty (50) miles from the location where the contract was executed by the purchaser and which is deemed by the seller to be impractical for the seller to deliver the merchandise or provide the services, then the seller shall return to the retail consumer, his family, legal representative or next of kin all sums, including interest, paid by the consumer for such merchandise and/or services.

SECTION 11. A trustee of a trust fund created under Sections 5 through 17 of this act, upon the exercise of due care, shall not be liable to the person creating such fund, to the purchaser, or to any person for any disbursements made from the trust fund pursuant to Sections 5 through 17 of this act.

SECTION 12. (1) Every trustee of a cemetery merchandise trust fund shall annually prepare and file with the cemetery business a detailed accounting and report of such fund on or before March 31 of each year for the calendar year ending the preceding December 31 or within ninety (90) days after the end of the fiscal year of the trust agreement, which report shall include, among other things, properly itemized, the securities in which monies in the fund are invested.

(2) Every seller shall keep accurate books of account and records of all transactions concerning merchandise funds, and a copy of all agreements made in connection with merchandise funds. Such records shall be kept and be available for inspection and copy by any purchaser, or the purchaser's family, legal representative or next of kin, at the usual place of the seller's business, for at least one (1) year after the termination of the agreement which they evidence.

SECTION 13. All trusts created pursuant to Sections 5 through 17 of this act shall have corporate entities as trustees. The trust fund established under Sections 5 through 17 of this act shall be administered under the jurisdiction of the chancery court of the chancery court district wherein the seller is located or if the seller be located outside of the State of Mississippi then in the chancery court of the chancery court district wherein the purchaser resides. The chancery courts so having jurisdiction shall have full jurisdiction over the reports and accounting of trustees, amount of surety bond required, and investment of funds. The courts may waive the surety bond and control over investments in the case of trusts placed with an established bank or corporate trustee.

SECTION 14. (1) Within thirty (30) days after the end of the calendar or the business' fiscal year, each cemetery merchandise business shall file with the clerk of the chancery court having jurisdiction over the administration of its merchandise trust fund an annual account, which account shall contain the following information:

(a) The name of the business, the date of incorporation, if incorporated, and the location of such business or businesses;

(b) The amounts of sales of all merchandise and services for which payment has been made in full during the preceding calendar or fiscal year;

(c) The amounts deposited into the trust funds, the names and addresses of the institutions holding the trust funds, and the income earned therefrom during the preceding fiscal year;

(d) The names and addresses of the owners of the business and, if incorporated, its officers and directors, and any change of control which has occurred during the past fiscal or calendar year; and

(e) For all preneed sales, the names of purchasers, the merchandise purchased, the cemetery wholesale cost of merchandise/services purchased and the retail price of merchandise/services.

(2) Within forty-five (45) days after the time by which the trustee's accounting and report is required to be filed with the cemetery business, as provided by Section 75-63-15, the business shall file a copy of such accounting and report with the clerk of the chancery court having jurisdiction thereof.

(3) As a condition to the transfer of any merchandise trust fund monies from one trust institution to another, the business for which such fund is maintained shall, not less than thirty (30) days before the time when such transfer is to occur, file with the chancery clerk a written notice of intent to transfer accompanied with a letter of intent to receive such trust fund monies from the trust institution to which such trust fund monies are to be transferred. Such fund monies shall be transferred directly from the existing trust institution to the receiving trust institution.

(4) Before to any sale or transfer of any cemetery merchandise business or a controlling interest therein, an independent audit of the merchandise trust fund shall be performed at the expense of the seller or buyer, or both, or transferor and transferee and filed with the chancery clerk. Such audit shall be current within thirty (30) days of the proposed sale or transfer.

(5) Each chancery clerk shall maintain a properly indexed book in which there shall be kept, preserved and open for public inspection a copy of each record, report and notice required to be filed with the chancery clerk under Sections 5 through 17 of this act. For filing and indexing the records, reports and notices under Sections 5 through 17 of this act, the chancery clerk shall be authorized to charge such fees as are provided in Section 25-7-9 for the recording and indexing of deeds.

(6) The clerk of the chancery court having jurisdiction shall, upon the failure to timely receive any of the records, reports or notices provided for under Sections 5 through 17 of this act, immediately give notice by registered letter to the owner or owners of such business, or, if incorporated, its officers and directors at its or their last-known address, that such records, reports or notices have not been received. Failure of such persons to file such records, reports or notices within fifteen (15) days after such registered letter is mailed shall, in the absence of clear justification or excuse, constitute a misdemeanor and each owner and, if incorporated, its officers and directors, shall be subject to the penalties provided for in Section 75-63-23.

(7) Whenever it reasonably appears to the court upon complaint filed with the chancery court having jurisdiction thereof by any purchaser, or the family, legal representative or next of kin of any such purchaser, of any merchandise or services contracted for under Sections 5 through 17 of this act that (a) such business is insolvent or about to become insolvent; or (b) that no merchandise trust fund has been established for such business or, if established, the trust fund does not contain such funds as are required to be contained therein, the court shall order a private audit and examination of any merchandise trust fund of such business and of all the books, records and papers employed in the transaction of such business.

In the event that such audit and examination shows that the business is insolvent or is about to become insolvent or that a sufficient trust fund is not established or being maintained for such business, the court shall exercise such jurisdiction and make and issue such orders and decrees as may be necessary to correct and enforce compliance with Sections 5 through 17 of this act and all such other orders and decrees as shall be just, equitable and in the public interest, including the appointment of receivers to continue or terminate the operation of such business.

SECTION 15. Sections 5 through 17 of this act shall not apply to: (a) the sale of burial vaults, urns, memorials, scrolls, vases, foundations, bases or any other similar merchandise where the seller delivers at the time of the execution of the contract or upon final payment, should the payment be made in installments, a valid warehouse receipt as contemplated in Uniform Commercial Code-Documents of Title, Section 75-7-101 et seq.; (b) the sale of merchandise as may be used by or in a cemetery in connection with disposing or commemorating the memory of a deceased person or services related to the burial of the dead when such merchandise/services are delivered by the seller within forty-five (45) days from the date of the execution of the contract; (c) merchandise or services included within the coverage provisions of insurance policies or contracts of insurance; or (d) merchandise or services provided by funeral establishments which are governed by Sections 75-63-1 through 75-63-23.

SECTION 16. Any provision of any such contract which purports to waive the provisions of Sections 5 through 17 of this act shall be void.

SECTION 17. Any person, partnership, corporation or organization violating the provisions of Sections 5 through 17 of this act shall be punished by a fine of not less than One Hundred Dollars ($100.00) nor more than One Thousand Dollars ($1,000.00) or confined in the county jail for a period not exceeding one (1) year, or both. If the person violating the provisions of Sections 5 through 17 of this act is a corporation or association, any prison term imposed shall be upon the officer responsible for the violation.

SECTION 18. Section 75-63-5, Mississippi Code of 1972, which provides that cemeteries are not required to accept property or perform services contrary to law, is repealed.

SECTION 19. Sections 5 through 17 of this act shall be codified as a separate article within Chapter 43 of Title 41, Mississippi Code of 1972.

SECTION 20. This act shall take effect and be in force from and after its passage.