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Current Status Bill Number:View additional legislative information at the LPITS web site.3413 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:20010131 Primary Sponsor:Knotts All Sponsors:Knotts Drafted Document Number:l:\council\bills\nbd\11208ac01.doc Residing Body:House Current Committee:Labor, Commerce and Industry Committee 26 HLCI Subject:Cemetery Board reinstated, licensing of cemetery companies; Cemeteries, Secretary of State History Body Date Action Description Com Leg Involved ______ ________ ______________________________________ _______ ____________ House 20010131 Introduced, read first time, 26 HLCI referred to Committee Versions of This Bill
TO AMEND TITLE 39 OF THE CODE OF LAWS OF SOUTH CAROLINA, 1976 BY ADDING CHAPTER 56 SO AS TO REINSTATE THE SOUTH CAROLINA CEMETERY BOARD AND TO FURTHER PROVIDE FOR THE LICENSING AND REGULATION OF CEMETERY COMPANIES UNDER THE SECRETARY OF STATE AND TO REPEAL CHAPTER 55, TITLE 39 RELATING TO THE LICENSURE AND REGULATION OF CEMETERIES.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Title 39 of the 1976 Code is amended by adding:
Section 39-56-10. The State of South Carolina recognizes that purchasers of preneed burial rights, funeral or burial merchandise, may suffer serious economic harm if purchase funds are not set aside for future use as intended by the purchaser and that the failure to maintain cemetery grounds properly may cause significant emotional stress. Therefore, it is necessary in the interest of the public welfare to regulate certificate holders, licensees, registrants, and cemetery companies in this State. However, restrictions must be imposed to the extent necessary to protect the public from significant or discernible harm or damage and not in a manner which will unreasonably affect the competitive market.
For the purposes of administering the provisions of this chapter, there is established as part of the Office of the Secretary of State the South Carolina Cemetery Board with the power and duty to promulgate regulations to carry out the provisions of this chapter.
Section 39-56-20. The board consists of seven members including the Secretary of State who shall serve as chairman of the board, two members appointed by the Governor, one member appointed by the Speaker of the House, one member appointed by the President of the Senate, and two members appointed by the Secretary of State from four nominees submitted by the Cemetery Association. If the Secretary of State declines to appoint any of the nominees submitted, additional nominees must be submitted in the same manner.
At least three members of the board must be consumers. No board member may be a licensee who is associated by employment or ownership with a cemetery which is owned partly or wholly by a person, business, corporation, or other entity which is associated with another board member.
Of the six appointed members, three of the initial board members must be appointed for a term of two years, one appointed member from each appointment method. Three members of the initial board must be appointed for a term of four years, one appointed member from each appointment method. At the end of their respective terms, successors must be selected in the same manner and appointed for terms of four years and until their successors are appointed and qualify. Any appointment to fill a vacancy on the board created by the resignation, dismissal, death, or disability of a member is for the balance of the unexpired term.
Section 39-56-30. The board may promulgate regulations necessary to carry out the duties and authority conferred upon the board by this chapter and as may be necessary to protect the health, safety, and welfare of the public. The board shall promulgate regulations which establish requirements for inspection of cemeteries.
The board shall promulgate and enforce regulations governing the operation of cemeteries in this State and arrange for the preparation, publication, and dissemination to the public of these regulations and other information and material relevant to the operation of cemeteries.
The board shall examine the financial affairs of any cemetery company and preneed sales certificate holder and charge an examination fee.
Section 39-56-40. The board may not adopt any regulation or approve any cemetery bylaw which unreasonably restricts competition or the availability of services in the State or in a significant part of the State or which unnecessarily increases the cost of services without a corresponding or equivalent public benefit. Any person substantially affected by a regulation of the board has standing to challenge the regulation. Upon such challenge, the administrative law judge may declare all or part of a regulation invalid if the regulation:
(1) does not protect the public from any significant and discernible harm or damages;
(2) unreasonably restricts competition or the availability of services in the State or in a significant part of the State; or
(3) unnecessarily increases the cost of services without a corresponding or equivalent public benefit.
However, if a regulation or proposed regulation is challenged, there is not a presumption that any of these enumerated conditions exist.
Section 39-56-50. The principal office of the board is in the Office of the Secretary of State. Notice of all regular meetings may be advertised in four newspapers having general circulation in the State ten or more days in advance of the meetings. Each member of the board shall receive the usual mileage, per diem, and subsistence as provided by law for members of state boards, committees, and commissions. All expenses of the board must be paid from fees and fines received by the board.
Section 39-56-60. The board must meet at least quarterly and may hold special meetings at any time and place within the State, at the call of the chair or upon written request of at least four members.
Section 39-56-70. All fees or fines must be paid to the State Treasurer and appropriated to the Secretary of State for the administration and enforcement of this chapter.
Section 39-56-80. (A) Within the boundaries of the cemetery lands it owns, a cemetery company may perform the following functions:
(1) exclusive care and maintenance of the cemetery;
(2) exclusive interment, entombment, or inurnment of human remains, including the exclusive right to open, prepare for interment, and close all ground, mausoleum, and urn burials. A preneed contract for burial rights or services must disclose, pursuant to board regulation, whether opening and closing of the burial space is included in the contract and, if not, the current prices for opening and closing and a statement that these prices are subject to change. A cemetery which sells preneed contracts must offer opening and closing as part of a preneed contract;
(3) exclusive initial preneed and at-need sale of interment or burial rights in earth, mausoleum, crypt, niche, or columbarium interment; however, nothing in this section limits the right of a person owning interment or burial rights to sell those rights to third parties subject to the transfer of title by the cemetery company;
(4) adoption of bylaws regulating the activities conducted within its boundaries; however, no funeral director licensed pursuant to Title 40, Chapter 19 may be denied access to any cemetery to conduct a funeral for or supervise a disinterment of human remains. All bylaws are subject to the approval of the board before becoming effective. The board may not approve any bylaw which unreasonably restricts the use of interment or burial rights, which unreasonably restricts competition, or which unreasonably increases the cost to the owner of interment or burial rights in utilizing these rights;
(5) entering into sales or management contracts with other persons. The cemetery company is responsible for the deposit of all funds required by the board to be placed in a trust fund. The cemetery board may inspect these financial records.
(B) A full disclosure must be made for all fees required for interment, entombment, or inurnment of human remains.
(C) A cemetery company may adopt bylaws establishing minimum standards for burial merchandise or the installation of burial merchandise which must be published and applied in a non-discriminatory fashion.
Section 39-56-90. (A) No person, including a cemetery exempt under Section 39-56-260, may sell a preneed contract without first having a valid certificate of authority from the Office of the Secretary of State.
(B) No person may receive any funds for payment on a preneed contract who does not hold a valid certificate of authority. However, this does not apply to a trust company or to a national or state bank or savings and loan association having trust powers if the company, bank, or association receives any funds in trust pursuant to the sale of a preneed contract.
(C) No person may obtain a certificate of authority under this chapter for the preneed sale of services unless the person or the person's agent, in the case of a corporate entity, holds a license as a funeral establishment or cemetery company or registration as a direct disposal establishment from the Office of the Secretary of State.
Section 39-56-100. (A) A licensee shall set aside a minimum of five contiguous acres of land for use by the licensee as a cemetery and shall not sell, mortgage, lease, or encumber that property without prior written approval of the board. Lands owned by a licensee and dedicated for use by it as a cemetery, which are contiguous, adjoining, or adjacent to the minimum of five contiguous acres may be sold, conveyed, or disposed of by the licensee after obtaining written approval of the board.
(B) A licensee may convey and transfer to a municipality or county its real and personal property, together with funds deposited in trust funds pursuant to this chapter, if the municipality or county will accept responsibility for maintenance of the property and with prior written approval of the board.
(C) The minimum acreage requirement provided for in subsection (A) does not apply to a cemetery company licensed on or before July 1, 1990, which owns a total less than five acres of land; however, no cemetery company shall dispose of any land used as a cemetery without the prior written approval of the board.
Section 39-56-110. All cemeteries in the State except family burial grounds, shall display a sign at each entrance, containing letters not less than six inches in height, stating 'Perpetual Care' or 'Endowment Care' or 'No Perpetual Care' or 'No Endowment Care', depending upon which method of operation the cemetery is using. Those cemeteries which furnish perpetual care to some portions and no perpetual care to other portions shall display these signs on the appropriate sections of the cemetery to which the sign applies. Portions designated 'Perpetual Care' may not be changed to 'No Perpetual Care' once the designation is made.
Section 39-56-120. (A) No person may operate a cemetery without first obtaining a license from the board, unless specifically exempted from this chapter.
(B) The board may require a person desiring to establish a cemetery company who applies for a license to provide information reasonably necessary to make a determination of the applicant's eligibility for licensure. A person desiring to establish a cemetery company shall:
(1) file an application, which states the exact location of the proposed cemetery, which site shall contain not less than five contiguous acres; provide a financial statement signed by all officers of the company which attests to a net worth of at least fifty thousand dollars and, which must be continuously maintained as a condition of licensure; and pay an application fee of five thousand dollars;
(2) create a legal entity; and
(3) demonstrate to the satisfaction of the board that the applicant possesses the ability, experience, financial stability, and integrity to operate a cemetery.
(C) The board shall determine the need for a new cemetery by considering the adequacy of existing cemetery facilities, licensed and unlicensed, within the community; the solvency of the trust funds of the existing facilities; and the relationship between population, rate of population growth, death rate, and ratio of burials to deaths to meet the projected need for burial spaces for a period of thirty years. In order to promote competition, the board may waive the criteria of this subsection so that each county may have at least six cemeteries operated by different licensees.
(D) If the board finds that the applicant meets the criteria established in subsection (B) and the board determines that a need for the new cemetery in the community exists, the board shall notify the applicant that a license will be issued when:
(1) The establishment of a care and maintenance trust fund containing not less than twenty-five thousand dollars has been certified by a trust company, a state or national bank, or a savings and loan association licensed in this State.
(2) The applicant has filed with the department development plans which are sufficient to ensure the board that the cemetery will provide adequate service to the community and which have been approved by the appropriate local governmental agency regulating zoning in the area of the proposed cemetery.
(3) The applicant holds an unencumbered fee simple title to at least five contiguous acres of land.
(4) The applicant has designated as general manager a person who has integrity, one year of cemetery experience, and the ability to operate a cemetery.
(5) The applicant has fully developed not less than two acres for use as burial space, including a paved road from a paved road from a public roadway to the developed section.
(6) The applicant has recorded, in the public records of the county in which the land is located, a notice which contains the following language:
The property described herein may not be sold, conveyed, leased, mortgaged, or encumbered without the prior written approval of the South Carolina Cemetery Board, as provided in the South Carolina Cemetery Board Act.
This notice must be clearly printed in boldface type of not less than twelve points and may be included on the face of the deed of conveyance to the licensee or may be contained in a separate recorded instrument which contains a description of the property.
(E) The board shall issue a license to operate a cemetery company to an applicant who, within twelve months after notice that a license may be issued, meets the criteria of subsection (D). With respect to any application for which the board has given notice under the above subsection on or after July 1, 2001, the board may, for good cause shown, grant up to two extensions of the twelve month period within which the applicant must meet the criteria of subsection (D).
(F) If the board intends to deny an application, the board shall give written notice to the applicant of its intention to deny the application. The notice shall state a time and place for a hearing before the board and a summary statement of the reasons for the proposed denial. The notice of intent must be mailed by certified mail to applicant at the address stated in the application at least fifteen days before the scheduled hearing date. Notwithstanding any other provision of law, an appeal from the board's decision must be to the circuit court.
Section 39-56-130. (A) A license issued to operate a cemetery pursuant to this chapter is not transferable or assignable; and a licensee may not develop or operate a cemetery authorized by this chapter at a location other than that contained in the application for the license.
(B) A person who seeks to purchase or acquire control of an existing licensed cemetery shall first apply to the board for approval of the proposed change of ownership. The application shall contain the name and address of the proposed new owner, a financial statement signed by all officers of the company attesting to a net worth of at least twenty-five thousand dollars, and other information required by the board. The board may approve a change of ownership only after it has conducted an investigation of the applicant and determined that the proposed new owner is qualified by character, experience, and financial responsibility to control and operate the cemetery in a legal and proper manner. The board may examine the records of the cemetery company as part of the investigation in accordance with this chapter. The application must be accompanied by an investigation fee of five thousand dollars. Upon consummation of the purchase or acquisition of control and upon receipt of all documents required by the board, the board shall issue the new license for that cemetery effective on the date of that purchase or acquisition of control.
Section 39-56-140. (A) The board shall collect from each cemetery company operating under this chapter an annual license fee as follows for a cemetery with:
(1) less than $25,000 annual gross sales... . $250.
(2) at least $25,000 but less than $100,000 annual gross sales $350.
(3) annual gross sales of at least $100,000 but less than $250,000 .... $600.
(4) annual gross sales of at least $250,000 but less than $500,000 .... $900.
(5) annual gross sales of at least $500,000 but less than $750,000 .... $1,350.
(6) annual gross sales of at least $750,000 but less than $1,000,000 .... $1,750.
(7) annual gross sales of $1,000,000 or more ....$2,650.
(B) An application for license renewal must be submitted, with the applicable license fee before January 1 each year in the case of an existing cemetery company and before any sale of cemetery property in the case of a new cemetery company or a change of ownership or control. If the renewal application and fee are not received before January 1, the board shall collect a penalty in the amount of two hundred dollars a month or fraction of a month for each month delinquent. For the purposes of this subsection, a renewal application and fee submitted by mail must be considered timely submitted and received if postmarked before January 1 of the applicable year.
Section 39-56-150. Stockholders or partners who intend to acquire control of an existing cemetery company from other stockholders or partners shall first apply to the board for approval for the proposed change of control. The application shall contain the names and addresses of the stockholders or partners seeking to acquire control and a financial statement signed by all officers of the company attesting to a net worth of at least fifty thousand dollars. The board may approve the change of control only after it has conducted an investigation of the applicants and determined that these individuals are qualified by character, experience, and financial responsibility to control and operate the cemetery company in a legal and proper manner and that the interest of the public generally will not be jeopardized by the change in ownership and management. The board may examine the records of the cemetery company as part of the investigation in accordance with this chapter. The application must be accompanied by an investigation fee of twenty-five hundred dollars.
Section 39-56-160. The relatives and descendants of a person buried in a cemetery have an easement for ingress and egress for the purpose of visiting the cemetery at reasonable times and in a reasonable manner. The owner of the land may designate the easement. If the cemetery is abandoned or otherwise not being maintained, these relatives and descendents may request the owner to provide reasonable maintenance of the cemetery, and if the owner refuses or fails to maintain the cemetery, the relatives and descendents have the right to maintain the cemetery.
Section 39-56-170. (A) A cemetery company shall start construction of that section of a mausoleum or bank of below ground crypts in which sales or contracts for sales are being made within four years after the date of the first such sale or fifty percent of the mausoleum or below ground crypts have been sold and the purchase price has been received, whichever occurs first. The construction must be completed within five years after the date the first sale is made. However, an extension for completion, not to exceed one year, may be granted by the board for good cause shown. If the units have not been completely constructed at the time of need or time specified in this section, all funds paid must be refunded upon request, plus interest, for that portion of the funds deposited in the trust fund and an amount equal to the interest that would have been earned on that portion of the funds that were not in trust.
(B) A cemetery company which plans to offer for sale space in a section of a mausoleum or bank of below ground crypts before construction shall establish a preconstruction trust fund by written instrument. The preconstruction trust fund must be administered by a corporate trustee and operated in conformity with state law. The preconstruction trust fund must be separate from any other trust fund that may be required by this chapter.
(C) Before a sale, contract for sale, reservation for sale, or agreement for sale in a mausoleum section or bank of below ground crypts may be made, the cemetery company shall compute the amount to be deposited to the preconstruction trust fund. The total amount to be deposited in the fund for each unit of the project must be computed by dividing the cost of the project plus ten percent of the cost, as computed by a licensed contractor, engineer, or architect, by the number of crypts in the section or bank of below ground crypts; for purposes of this computation, the cost of t he project must be computed by a licensed contractor, engineer, or architect. When payments are received in installments, the percentage of the installment payment placed in trust must be identical to the percentage which the payment received bears to the total cost of the contract, including other merchandise and services purchased. Preconstruction trust fund payments must be made within thirty days after the end of the month in which payment is received.
(D) When the cemetery company delivers a completed crypt acceptable to the purchaser in lieu of the crypt purchased before construction, all sums deposited to the preconstruction trust fund for that purchaser must be paid to the cemetery company.
(E) Each cemetery company may negotiate, at the time of establishment of the preconstruction trust fund, a procedure for withdrawal of the escrowed funds as a part of the construction cost of the mausoleum section or bank of below ground crypts contemplated, subject to the approval of the board. Upon completion of the mausoleum section or bank of underground crypts, the cemetery company shall certify completion to the trustee and are entitled to withdraw all funds deposited to the account.
(F) If the mausoleum section or bank of below ground crypts is not completed within the time required by this section, the trustee shall contract for and cause the project to be completed and paid for from the trust funds deposited to the project's account paying any balance, less cost and expenses, to the cemetery company. The refund provision of subsection (A) applies only to the extent there are funds remaining in excess of the costs to complete the facilities, before any payments to the cemetery company.
(G) Before April first of each year, the trustee shall file with the board in the form prescribed by the board a full and true statement as to the activities of any trust established by the board pursuant to this chapter for the preceding calendar year and must be certified by a Certified Public Accountant.
(H) In lieu of the payments to the preconstruction trust fund, the cemetery company may deliver to the board a performance bond in an amount and issued by a surety company acceptable to the board.
Section 39-56-180. (A) A record must be kept of every burial in the cemetery of a cemetery company, showing the date of burial and the name of the person buried and the lot, plot, and space in which the burial was made.
(B) All financial records of the cemetery company must be available at its principle place of business in this State and must be readily available at all reasonable times for examination by the board. However, the board may, upon request, authorize a cemetery company to maintain its financial records at a location other than its principal place of business and may, if necessary, require the company to make its books, accounts, records, and documents available at a reasonable and convenient location in this State. The board may prescribe the minimum information to be shown in the books, accounts, records, and documents of a cemetery company to enable the board to determine the company's compliance with this chapter.
Section 39-56-190. (A) Each cemetery company shall set aside and deposit in its care and maintenance trust fund the following percentages or amounts for all sums received from sales of burial rights:
(1) For graves, ten percent of all payments received; however, no deposit may be less than twenty-five dollars per grave. For each burial right, grave, or space which is provided without charge, the deposit to the fund must be twenty-five dollars.
(2) For mausoleums or columbaria, ten percent of payments received.
(3) For general endowments for the care and maintenance of the cemetery, the full amount of sums received when received.
(4) For special endowments for a specific lot or grave or a family mausoleum, memorial, marker, or monument, the cemetery company may set aside the full amount received for this individual special care in a separate trust fund or by a deposit to a savings account in a bank or savings and loan association located within and authorized to do business in the State. However, if the licensee does not set up a separate trust fund or savings account for the special endowment, the full amount must be deposited into the care and maintenance trust fund as required of general endowments.
(B) Deposits to the care and maintenance trust fund must be made by the cemetery company not later than thirty days following the close of the calendar month in which any payment was received; however, when these payments are received in installments, the percentage of the installment payment placed in trust must be identical to the percentage which the payment received bears to the total cost for the burial rights. Trust income may be used to pay for all usual and customary services for the operation of a trust account including, but not limited to, reasonable trustee and custodian fees, investment adviser fees, taxes, and annual examination fees. If the net income is not sufficient to pay the fees and other expenses, the fees and other expenses must be paid by the cemetery company. Capital gains taxes must be paid from the corpus.
(C) Any payments made to the care and maintenance trust fund on contracts which are canceled must be credited against future obligations to the care and maintenance trust fund, if they have been refunded to the purchaser.
(D) When a cemetery which is exempt from the provisions of this chapter changes ownership so as to lose its exempt status, it shall establish and maintain a care and maintenance trust fund pursuant to this chapter. The initial deposit for establishment of this trust fund must be twenty-five dollars per space for all spaces either previously sold or contracted for sale in the cemetery at the time of conversion or twenty-five thousand dollars, whichever is greater.
(E) In a sales contract, reservation, or agreement in which burial rights are priced separately, the purchase price of the burial rights must be the only item subject to care and maintenance trust fund deposits; however, if the burial rights are not priced separately, the full amount of the contract, reservation, or agreement must be subject to care and maintenance trust fund deposits as provided in this section, unless the purchase price of the burial rights can be determined from the accounting records of the cemetery company. If an installment contract or promissory note for the purchase of a burial space is sold or discounted to a third party, the entire amount due the care and maintenance trust fund must be payable no later than thirty days following the close of the calendar month in which the contract was sold or discounted.
Section 39-56-200. (A) No cemetery company may establish a cemetery, or operate a cemetery if already established, without providing for the future care and maintenance of the cemetery, for which a care and maintenance trust fund must be established, to be known as 'the care and maintenance trust fund of ____'. The trust fund must be established with a trust company operating with a state or national bank holding trust powers. Trust funds which are with a state or national bank or savings and loan association licensed in this State, shall remain in force; however, when the amount of the trust fund exceeds the amount that is insured by an agency of the federal government, the cemetery company shall transfer that trust fund to a trust company operating pursuant to a state or national bank holding trust powers.
(B) The cemetery company may appoint a person to advise the trustee in the investment of the trust fund. The board must approve the appointment of the initial trustee, and any subsequent changes of the trustee must also be approved by the board. If a cemetery company refuses or otherwise fails to provide or maintain an adequate care and maintenance trust fund in accordance with this chapter, the board, after reasonable notice, shall enforce compliance. However, a nonprofit cemetery corporation which has been incorporated and engaged in the cemetery business before and continuously since 1990 and which has current trust assets exceeding two million dollars is not required to designate a corporate trustee. The trust fund agreement shall specify the name, location, and address of the licensee and the trustee, the date of the agreement, and the percentages required to be deposited pursuant to this chapter.
(C) No person may withdraw or transfer any portion of the corpus of the care and maintenance trust fund without first obtaining written consent from the board. Funds deposited pursuant to this chapter may not be loaned to a cemetery company or person who is directly or indirectly engaged in the burial, funeral home, or cemetery business.
(D) The trustee of the trust established pursuant to this section may only invest in investments as prescribed. The trustee shall take title to the property conveyed to the trust for the purposes of investing, protecting, and conserving it for the cemetery company, collecting income, and distributing the principle and income as prescribed in this chapter. The cemetery company is prohibited from sharing in the discharge of the trustee's responsibilities under this section, except that the cemetery company may request the trustee to invest in tax-free investments.
Section 39-56-210. (A) As an alternative to the requirements that relate to trust funds, a certificate holder may purchase a surety bond in an amount not less than the aggregate value of outstanding liabilities on undelivered preneed contracts, merchandise, and services. For the purpose of this section, the term 'outstanding liabilities' means the gross replacement or wholesale value of the preneed contracts. The bond must be made payable to the State of South Carolina for the benefit of the board and all purchasers of preneed services. The bond must be approved by the board.
The amount of the bond must be based on a report documenting the outstanding liabilities of the certificate holder and must be prepared by the certificate holder using generally accepted accounting principles and signed by the certificate holder's chief financial officer. The report must be compiled as of the end of the certificate holder's fiscal year and updated annually. The amount of the bond must be increased or decreased as necessary to correlate with changes in the outstanding liabilities.
The certificate holder shall maintain accurate records of the bond and premium payments on it, and these records must be open to inspection by the board.
If a certificate holder fails to maintain a bond pursuant to this section, the certificate holder shall cease the sale of preneed services.
Upon prior approval by the board, the certificate holder may file a letter of credit with the board in lieu of a surety bond. The letter of credit must be in a form, and is subject to terms and conditions, prescribed by the board. It may be revoked only with the express approval of the board.
(B) A buyer of preneed services who does not receive these services due to the economic failure, closing, or bankruptcy of the certificate holder must file a claim with the surety as a prerequisite to payment of the claim and if the claim is not paid, may bring an action based on the bond and recover against the surety. In the case of a letter of credit or cash deposit that has been filed with the board, the buyer may file a claim with the board.
In order to qualify for recovery on a claim, the buyer must file the claim no later than one year after the date on which the certificate holder closed or bankruptcy was filed.
The board may file a claim with the surety on behalf of any buyer. The surety shall pay the amount of the claims to the board for distribution to claimants entitled to restitution and must be relieved of liability to that extent.
(C) This chapter does not relieve the certificate holder or other entity from liability for nonperformance of contractual terms unless the certificate holder cannot deliver the merchandise or services because of a national emergency, strike, or act of God.
The board may require the holder of any assets of the certificate holder to furnish written verification of the financial report required to be submitted by the certificate holder or other entity.
A preneed contract which promises future delivery of merchandise at no cost constitutes a paid-up contract. Merchandise which has been delivered is not covered by the required performance bond or letter of credit even though the contract is not completely paid. The certificate holder may not cancel a contract unless the purchaser is in default according to the terms of the contract. A contract sold, discounted, and transferred to a third party constitutes a paid-up contract for purposes of the performance bond or letter of credit.
A contract must state the type, size, and design of merchandise and the description of service to be delivered or performed.
A purchaser and a certificate holder who are parties to a preneed contract executed before July 1, 2001, may enter into an amended preneed contract which is made subject to this section.
(D) The board may adopt forms and regulations necessary to implement this section, including, but not limited to, regulations which ensure that the surety bond and line of credit provide liability coverage for preneed services.
(E) For purposes of this section, a preneed contract is a contract requiring delivery of merchandise and services in the future and entered into before the death of the prospective recipient.
Section 39-56-220. (A) No person authorized to sell grave space may tie the purchase of any grave space to the purchase of a monument from or through the seller of any other designated person or corporation.
(B) Noncemetery licensed persons and firms have the right to sell monuments and to perform or provide on cemetery property foundation, preparation, and installation services for monuments. However, a cemetery company may establish reasonable regulations regarding the style and size of a monument or its foundation, if these regulations are applicable to all monuments from whatever source obtained and are enforced uniformly as to all monuments. These regulations must be conspicuously posted and readily accessible to inspection and copy by interested persons.
(C) No person who is authorized to sell grave space and no cemetery company may:
(1) require the payment of a setting or service charge, by whatever name known, from third party installers for the placement of a monument;
(2) refuse to provide care or maintenance for any portion of a gravesite on which a monument has been placed; or
(3) waive liability with respect to damage caused by cemetery employees or agents to a monument after installation, where the monument or installation service is not purchased from the person authorized to sell grave space or from or through any other person or corporation designated by the person authorized to sell grave space or the cemetery company providing grave space. No cemetery company may be held liable for the improper installation of a monument if the monument is not installed by the cemetery company or its agents.
(D) No program offering free burial rights may be conditioned by any requirement to purchase additional burial rights, funeral merchandise, or services. A program offering free burial rights shall comply with state law.
Section 39-56-230. (A) It is unlawful for a person, firm, or corporation to sell, offer for sale, or advertise for sale cemetery lots or mausoleum space upon the guarantee, promise, representation, or inducement to the purchaser that the same may be sold or repurchased at a financial profit.
(B) A person, firm, or corporation that violates subsection (A) is guilty of a misdemeanor and upon conviction must be fined two hundred fifty dollars.
Section 39-56-240. (A) No cemetery company or legal entity conducting or maintaining any public or private cemetery may deny burial space to any person because of race and color. A cemetery company or other entity operating any cemetery may designate parts of cemeteries or burial grounds for specific use of persons whose religious code requires isolation. Church cemeteries may limit burials to church members and their families.
(B) A cemetery company or legal entity which violates the provisions of subsection (A) is guilty of a misdemeanor and upon conviction must be fined two hundred fifty dollars and each violation of this section constitutes a separate offense.
Section 39-56-250. In addition to other restrictions provided for in this chapter, a cemetery company may not:
(1) require lot owners or current customers to make unnecessary visits to the cemetery company office for the purpose of solicitation.
(2) engage in soliciting that overreaches and takes advantage of a customer's ignorance or emotional vulnerability.
(3) fail to disclose all fees and costs the customer may incur to use the burial rights purchased.
(4) fail to honor cancellations and issue refunds.
(5) misrepresent any burial rights or services when offered for sale to the public.
(6) fail to obtain written authorization from the family or next of kin of the deceased before disinterment, disentombment, or disinurnment.
Section 39-56-260. (A) The provisions of this chapter relating to cemeteries and all regulations promulgated under this chapter apply to all cemeteries except:
(1) church cemeteries of less than five acres which provide only single-level ground burial. Cemeteries owned and operated by churches.
(2) county and municipal cemeteries.
(3) community and nonprofit association cemeteries which provide only single-level ground burial and do not sell burial spaces or burial merchandise.
(4) a columbarium consisting of less than one-half acre which is owned by and immediately contiguous to an existing church facility and is subject to local government zoning. A church establishing a columbarium shall ensure that the columbarium is perpetually kept and maintained in a manner consistent with the intent of this chapter. If the church relocates, the church shall relocate all of the urns and remains placed in the columbaium which were placed there during its use by the church.
(5) family cemeteries of less than two acres which do not sell burial spaces or burial merchandise.
(6) a mausoleum consisting of two acres or less which is owned by and immediately contiguous to an existing church or synagogue facility and is subject to local government zoning. The church or synagogue establishing a mausoleum must ensure that the mausoleum is kept and maintained in a manner consistent with the intent of this chapter and limit its availability to members of the church or synagogue. The church or synagogue establishing a mausoleum must have been incorporated for at least twenty-five years and must have sufficient funds in an endowment fund to cover the costs of construction of the mausoleum and must provide proof to the board of financial integrity.
(B) If a consumer complaint is filed against a cemetery which is in excess of five acres and exempt under this chapter, the cemetery shall make every effort to first resolve the consumer complaint. If the complaint is not resolved, the cemetery shall advise the consumer of the right to seek an investigation and mediation by the board. If the board receives a complaint, it shall attempt to resolve it telephonically with the parties involved. If the complaint remains unresolved, the board shall conduct an investigation and mediate the complaint. If the board conducts an onsite investigation and face-to-face mediation with the parties, it may charge the cemetery a single investigation and mediation fee established in regulation not to exceed three hundred dollars, which must be calculated on an hourly basis. If all attempts to resolve the consumer complaint fail, the cemetery is subject to proceedings for penalties and discipline under this chapter.
Section 39-56-270. (A) The following acts constitute grounds for which disciplinary actions may be taken:
(1) violating any provision of this chapter;
(2) failing to comply with a regulation or lawful order of the board;
(3) failing to pay the fees required by this chapter;
(4) failing to remit the required amounts to a trust fund required by this chapter;
(5) attempting to procure or procuring by bribery, material misstatement, or fraudulent misrepresentation a license to operate a cemetery company, a certificate of authority, or any other license or registration authorized by this chapter;
(6) having a license to operate a cemetery company, a certificate of authority to sell preneed contracts, or a registration to undertake any other activity which is regulated by this chapter revoked, suspended, or otherwise acted against, including having a license denied by the licensing authority of another jurisdiction;
(7) being convicted or found guilty in any jurisdiction, regardless of adjudication, of a crime which directly relates to the operation of a cemetery, the sale of preneed contracts, or any other activity authorized by this chapter;
(8) making or filing a report required by this chapter which the licensee, certificate holder, or registrant knows to be false or wilfully failing to make or file a report required by this chapter;
(9) fraud, deceit, misrepresentation, incompetency, or misconduct in the operation of a cemetery, the sale of preneed contracts, or any other activity authorized by this chapter;
(10) negligence in the operation of a cemetery, the sale of preneed contracts, or any other activity authorized by this chapter;
(11) advertising goods or services in a manner which is fraudulent, false, deceptive, or misleading in form or content;
(12) making a false or misleading statement of the legal requirement as to the necessity of any particular burial or funeral merchandise or services;
(13) making a false or misleading statement regarding the sale of services or merchandise;
(14) making a false or misleading statement that natural decomposition or decay of human remains can be prevented or substantially delayed by use of a sealed or unsealed casket or outer burial container;
(15) soliciting through the use of fraud, undue influence, intimidation, overreaching, or other form of vexatious conduct;
(16) failing to provide to a person, upon request, a copy of the cemetery bylaws;
(17) assessing fees and costs which have not been disclosed to the consumer;
(18) failure, upon proper request, to cancel a contract or refund that part paid on the contract;
(19) failure to maintain one or more of the qualifications for the certificate of authority;
(20) refusal to produce records in connection with any activity regulated pursuant to this chapter.
(B) When the board finds a person guilty of any of the acts specified in subsection (A), the board may enter an order imposing one or more of the following penalties:
(1) denial of an application for a license, certificate of authority, or registration;
(2) revocation or suspension of a license, certificate of authority, or registration;
(3) imposition of an administrative fine not to exceed five thousand dollars for each count or separate offense;
(4) issuance of a reprimand;
(5) placement of the licensee, certificate holder, or registrant on probation for a period of time subject to conditions that the board may specify.
(C) For purposes of this section, an act or omission of a person employed by or under contract to the licensee must be treated as an act or omission of the licensee. However, the board may determine that disciplinary action may be more appropriately taken against an individual registered preneed agent or registered branch rather than taking action against the licensee or certificate holder. An order imposing a penalty pursuant to this section shall recite the grounds upon which the penalty is based.
(D) A suspension or revocation of a license must be by order of the board. A person whose license has been suspended or revoked may not solicit or write a new preneed contract regulated by this chapter in this State during the period of a suspension or revocation. The board may cause notice of a suspension or revocation to be published in one or more newspapers of general circulation published in this State. During the period of suspension, the person whose license has been suspended shall file the annual statement and pay license fees as required under this
chapter as if the license had continued in full force.
Upon expiration of the suspension period, if within that period the license has not otherwise terminated, the suspended license must automatically be reinstated unless the board finds that the causes of the suspension have not been resolved or that the person is otherwise not in compliance with the requirements of this chapter. If not reinstated automatically, the license is deemed to have expired as of the end of the suspension period or upon the failure of the licensee to continue the license during the suspension period, whichever event occurs first.
(E) An appeal of the board's decision taken pursuant to this section must be to an administrative law judge.
Section 39-56-280. The board may issue and serve upon a cemetery company a complaint whenever the board has reason to believe that the cemetery company is violating or has violated any law, board regulation, board order, or written agreement entered into with the board. The complaint shall contain a statement of facts and notice of opportunity for a hearing. The cemetery company shall have thirty days in which to request a hearing. The failure of a cemetery company to request a hearing within the time allowed, constitutes a default and is grounds for the issuance of a cease and desist order.
If a hearing is held and the board finds that any of the allegations in the complaint are true, the board may enter an order directing the cemetery company to cease and desist from engaging in the conduct complained of and to take corrective action.
A cease and desist order issued pursuant to this section is effective when reduced to writing and served upon the cemetery company by certified mail. A consent order is effective as agreed between the parties to the order.
An appeal of the board's action taken pursuant to this section must be to an administrative law judge.
Section 39-56-290. The cemetery owners and the officers and directors of a cemetery company may be held jointly and severally liable for any income from the care and maintenance trust fund which income is not used directly for the care and maintenance of a cemetery. The board or receiver or administrator appointed pursuant to this chapter may bring suit in circuit court to recover these funds.
Section 39-56-300. In addition to all other means provided by law for the enforcement of a temporary restraining order or an injunction, the property of the cemetery company may be impounded, including books, papers, documents, and records and a receiver or administrator may be appointed to prevent further violation of this chapter.
A court-appointed receiver or administrator may take action to implement the court order, to ensure the performance of the order, and to remedy a breach.
Section 39-56-310. (A) A licensee is considered inactive upon the acceptance of the surrender of its license by the board or upon the nonreceipt by the board of the license renewal fees required. A licensee shall cease all preneed sales to the public upon becoming inactive. At-need sales to the public shall cease within thirty days after becoming inactive.
(B) A licensee desiring to surrender its license to the board shall:
(1) file notice with the board;
(2) submit copies of its existing trust agreements;
(3) resolve to the board's satisfaction all findings and violations resulting from the last examination conducted;
(4) pay all outstanding fines and invoices due the board; and
(5) submit its current license.
(C) Upon receipt of the notice, the board shall review the licensee's trust funds, trust agreements, and care and maintenance of the cemetery grounds. After a review to the board's satisfaction, the board must terminate the license. The care maintenance trust fund of a licensee must be held intact and in trust after the licensee has become inactive, and funds in that trust fund must be disbursed to the cemetery on a regular basis for the upkeep of the grounds.
Section 39-56-320. The net income of the care and maintenance trust fund must be used solely for:
(1) the care and maintenance of the cemetery, including maintenance of monuments, which does not include the cleaning, refinishing, repairing, or replacement of monuments; and
(2) reasonable costs of administering the trust fund. At the time of making a sale or receiving an initial deposit, the cemetery company shall deliver to the person to whom the sale is made, or who makes a deposit, a written instrument which shall specifically state the purposes for which the income of the trust will be used.
Section 39-56-330. (A) Notwithstanding any provision of law to the contrary, a county or municipality which has within its jurisdiction an abandoned cemetery or a cemetery that has not been reasonably maintained for a period in excess of six months may, upon notice to the board, take action as is necessary and appropriate to provide for maintenance and security of the cemetery. The county or municipality may solicit private funds and expend public funds for maintenance and security; however, no action taken by the county or municipality under this subsection establishes an ongoing obligation or duty to provide continuous security or maintenance for any cemetery.
(B) No county or municipality or a person under the supervision or direction of a county or municipality, providing good faith assistance in securing or maintaining a cemetery under subsection (A), is subject to civil liabilities or penalties of any type for damages to property at the cemetery.
(C) A county or municipality that has maintained or secured a cemetery pursuant to subsection (A) may maintain an action at law against the owner of the cemetery to recover an amount equal to the value of the maintenance or security.
Section 39-56-340. (A) For purposes of this section, all owners of burial rights in a cemetery licensed under this chapter have the legal duty to keep the cemetery companies informed in writing of their residence address. Cemetery companies shall notify their present burial rights owners by letter at the owner's last known address and notify all future burial rights owners, in the contract for sale and the certificate of ownership, of the requirement to keep the cemetery company informed in writing of their current residence address.
(B) There is created a presumption that burial rights in a cemetery licensed under this chapter have been abandoned when an owner of unused burial rights has failed to provide the cemetery with a current residence address for a period of fifty consecutive years and the cemetery is unable to communicate by certified letter with the owner of unused burial rights for lack of address. No presumption of abandonment exists for burial rights held in common ownership which are adjoining, whether in a grave space, plot, mausoleum, columbarium, or other place of interment, if any burial rights have been used within the common ownership.
(C) Upon the occurrence of a presumption of abandonment as set forth in subsection (B), a cemetery may file with the board a certified notice attesting to the abandonment of burial rights. The notice shall:
(1) describe the burial rights certified to have been abandoned;
(2) set forth the name of the owner or owners of the burial rights, or if the owner is known to the cemetery to be deceased, the names, if known to the cemetery, of claimants as are heirs at law, next of kin, or specific devisees under the will of the owner;
(3) detail the facts with respect to the failure of the owner or survivors as provided for in this section to keep the cemetery informed of the owner's address for a period of fifty consecutive years or more; and
(4) certify that no burial right has been exercised which is held in common ownership with any abandoned burial rights as set forth in subsection (B).
(D) Irrespective of diversity of ownership of the burial rights, a cemetery may include in its certification burial rights in as many owners as are certified to have been abandoned. The board shall notice and publish the approved abandoned burial rights. Within 120 days from the final notice and publication, the board shall notify the cemetery if there has been no claim filed for the burial rights, and the cemetery has the right to sell these burial rights.
Section 39-56-350. All cemeteries in excess of five acres located in this State that are exempt from this chapter shall file a report of identification with the board and pay a twenty-five dollar fee. The board shall maintain these reports as public records. This report of identification must be refiled every five years pursuant to a schedule set by board regulation. The report of identification must be considered a registration with the board.
The report must be submitted on a form approved by the board and shall list the name and address of the authorized agent who is responsible for conducting the business of the cemetery and to whom inquires about the cemetery can be directed.
The board may institute proceedings in an appropriate court for injunctive relief to enforce this section.
Section 39-56-360. Cemetery companies existing on July 1, 2001, shall continue in full force and effect but must be operated in accordance with the provisions of Chapter 56, Title 39 of the 1976 Code, as added by Section 1 of this act, and regulations that may be promulgated by the South Carolina Cemetery Board, pursuant to Chapter 56, Title 39, for the licensure and regulation of existing cemeteries."
SECTION 2. Chapter 55 of Title 39 of the 1976 Code is repealed.
SECTION 3. This act takes effect July 1, 2001.
This web page was last updated on Tuesday, December 8, 2009 at 11:20 A.M.