AB776: Bill Text

LRB-4247/1

MDK:cjs:kjf

2001 - 2002 LEGISLATURE

2001 Assembly BILL 776

February 7, 2002 - Introduced by Representatives Morris-Tatum, Young, Coggs and Williams, cosponsored by Senators George, Moore and Darling. Referred to Committee on Small Business and Consumer Affairs.

AB776,3,21 An Act to repeal 157.062 (9), 157.065 (1) (b) 4., 157.11 (8), 157.11 (11), 157.115 (1) (b) 2., 157.115 (1) (c), 157.62 (1) (a) (intro.), (b) and (c), 157.625, 440.90 (14), 440.91 (2) (b) and (c), 440.91 (8), 440.92 (3) (a) 1. and 2., 440.92 (10) and 440.95 (4) (a); to renumber 157.62 (1) (a) 1., 2., 3., 4. and 5., 157.62 (4), 157.62 (5), 440.90 (1), 440.92 (2) (title), 440.92 (2) (b), 440.92 (2) (cm), 440.92 (2) (d), 440.92 (2) (e), 440.92 (2) (g) and (h), 440.92 (2) (j), 440.92 (5), 440.92 (6) (b) and (c), 440.92 (6) (e) and (f) and 440.947 (1) (c); to renumber and amend 157.061 (1), 157.08 (2) (b), 157.10, 157.11 (9) (a), 157.115 (1) (b) 1., 157.62 (2) (b) 7., 157.62 (6), 440.03 (13), 440.91 (1), 440.91 (7), 440.92 (2) (a), 440.92 (2) (am), 440.92 (2) (c), 440.92 (2) (f), 440.92 (2) (i), 440.92 (2) (k), 440.92 (3) (a) (intro.), 440.92 (6) (title), 440.92 (6) (a), 440.92 (6) (d), 440.92 (6) (g), 440.92 (6) (h), 440.92 (6) (i), 440.92 (6) (j), 440.92 (6) (k) and 440.92 (7); to amend 15.07 (1) (cm), 15.07 (1) (cs), 15.07 (3) (b), 62.23 (7) (c), 69.18 (1) (bm) (intro.), 69.18 (1) (bm) (intro.), 69.22 (1) (a), 157.061 (2m), 157.061 (3), 157.061 (11r), 157.061 (15), 157.061 (17), 157.062 (1), 157.062 (2), 157.062 (3), 157.062 (4) (a), 157.062 (5), 157.062 (6) (b), 157.062 (6) (c), 157.064 (2), 157.064 (6), 157.07 (1), 157.07 (5), 157.07 (6), 157.08 (1), 157.08 (2) (a), 157.08 (5), 157.10 (title), 157.11 (title), 157.11 (2), 157.11 (3), 157.11 (4), 157.11 (5), 157.11 (7) (a), 157.11 (7) (b), 157.11 (7) (c), 157.11 (7) (d), 157.11 (9g) (title), 157.11 (9g) (a) 1. (intro.), 157.11 (9g) (a) 1. c., 157.11 (9g) (a) 2., 157.11 (9g) (c), 157.11 (10), 157.115 (title), 157.115 (2) (title), 157.115 (2) (a) 1. (intro.), 157.115 (2) (a) 1. a., 157.115 (2) (a) 1. b., 157.115 (2) (a) 1. c., 157.115 (2) (a) 1. d., 157.115 (2) (a) 1. e., 157.115 (2) (a) 1. g., 157.115 (2) (a) 2., 157.115 (2) (a) 3., 157.115 (2) (b), 157.115 (2) (c), 157.115 (2) (d) (intro.), 157.115 (2) (d) 1., 157.115 (2) (d) 3., 157.115 (2) (e), 157.115 (2) (f), 157.115 (2) (g), 157.115 (2) (h), 157.12 (2) (b), 157.12 (3) (b), 157.125 (title), 157.125 (2), 157.128 (2) (a), (b) and (c), 157.128 (3) (b), 157.19 (2) (c), 157.19 (5) (a), 157.60, 157.62 (2) (a), 157.62 (2) (b) 1., 157.62 (2) (b) 2., 157.62 (3) (a), 157.62 (3) (b) 3., 157.62 (4) (title), 157.63 (title), 157.63 (1), 157.63 (2) (b), 157.63 (3), 157.63 (4), 157.63 (6), 157.635, 157.64 (2) (d), 157.64 (2) (e), 157.65 (1) (a), 157.65 (1) (b), 157.65 (2), 423.102, 440.03 (1), 440.03 (3), 440.03 (7m), 440.04 (1), 440.04 (2), 440.04 (3), 440.04 (4), 440.04 (5) (intro.), 440.04 (5) (c), 440.045, 440.05 (intro.), 440.08 (2) (a) 21., 440.14 (1) (a), 440.14 (2), (3), (4) and (5), 440.22 (1), 440.91 (2) (intro.), 440.91 (4), 440.91 (9), 440.91 (10), 440.92 (1) (a), 440.92 (1) (b) (intro.), 440.92 (1) (e), 440.92 (3) (c) (intro.), 440.92 (4) (title), 440.92 (4) (a) (intro.), 440.92 (4) (b), 440.92 (9) (title), 440.92 (9) (a), 440.92 (9) (b) 3., 440.92 (9) (c), 440.92 (9) (e), 440.92 (9) (f), 440.93 (1) (intro.), 440.93 (1) (b), 440.93 (1) (c), 440.93 (1) (d), 440.93 (1) (f), 440.93 (1) (g), 440.93 (2), 440.945 (1) (a), 440.945 (2) (a), 440.945 (2) (c), 440.945 (3) (a) (intro.), 440.945 (4) (a) 1., 440.945 (4) (a) 2., 440.945 (4) (a) 3., 440.945 (4) (a) 4., 440.945 (5) (a), 440.945 (5) (b), 440.947 (5), 440.95 (1), 440.95 (2), 440.95 (4) (c) and 440.95 (5); to repeal and recreate 157.11 (9) (title), 440.91 (2) (a), 440.91 (6m) and 440.92 (1) (title); and to create 15.07 (1) (b) 23., 15.07 (3) (bm) 5., 15.07 (5) (z), 15.405 (3m), 20.165 (1) (q), 25.17 (1) (at), 25.86, 60.61 (2) (j), 69.22 (1) (e) and (f), 69.22 (1r), 157.061 (1b), 157.061 (1d), 157.061 (1j), 157.061 (1p), 157.061 (3g), 157.061 (3r), 157.061 (8g), 157.061 (8r), 157.061 (14m), 157.061 (15m), 157.063, 157.066, 157.08 (2) (b) 1. a., b., c. and d., 157.08 (2) (b) 2., 157.10 (1) (b), 157.10 (4), 157.11 (1m), 157.11 (9) (am), 157.115 (1) (d), 157.117, 157.19 (4m), 157.19 (5) (c), 157.61, 157.62 (2) (b) 1m., 157.62 (3) (c), 157.62 (4) (b), 157.62 (5) (a), 157.62 (6) (b), 157.637, 157.64 (2) (h), 157.65 (1) (am), 440.03 (13) (b), 440.08 (2) (a) 21m., 440.13 (2) (d), 440.90 (1b), 440.90 (1c), 440.90 (1g), 440.90 (1r), 440.90 (3g), 440.90 (3r), 440.90 (4e), 440.90 (4m), 440.90 (4r), 440.90 (10m), 440.90 (10r), 440.91 (1) (b), (c), (d) and (e), 440.91 (1m), 440.91 (7) (b), 440.92 (1) (bm), 440.922 (1) (title), (4) (title), (5) (title), (6) (title), (8) (title) and (10) (title), 440.926 (1) (title), (2) (title) and (3) (title), 440.928, 440.929, 440.93 (1) (cm), 440.93 (1m), 440.945 (5) (am), 440.948, 440.949, 440.95 (1m) and 440.95 (2m) of the statutes; relating to: regulating cemeteries, cemetery associations, cemetery authorities, and cemetery salespersons, sales of certain funeral and burial merchandise and services, creating a cemetery board and a cemetery management insurance fund, granting rule-making authority, requiring the exercise of rule-making authority, and providing a penalty.

Analysis by the Legislative Reference Bureau

This bill makes changes regarding each of the following: 1) the regulation of cemetery authorities, cemetery salespersons, and cemetery preneed sellers; 2) the care of abandoned or neglected cemeteries and mausoleums; 3) reporting and record-keeping requirements applicable to cemetery authorities; 4) care fund requirements for cemetery lots; and 5) various other requirements applicable to cemeteries.

Cemetery authorities, cemetery salespersons, and cemetery preneed sellers

Under current law, the department of regulation and licensing (DRL) has various duties regarding the regulation of cemeteries, cemetery salespersons, and cemetery preneed sellers. DRL is also responsible for taking disciplinary action against cemetery authorities, cemetery salespersons, and cemetery preneed sellers who violate certain statutory requirements and rules promulgated by DRL. In addition, with certain exceptions, current law requires cemetery authorities, cemetery salespersons, and cemetery preneed sellers to register with DRL. A "cemetery authority" is a person who owns or operates a cemetery; a "cemetery salesperson" is a person who sells ten or more cemetery lots or mausoleum spaces in a calendar year; and a "cemetery preneed seller" is a person who sells cemetery merchandise and undeveloped mausoleum spaces under preneed contracts. A cemetery authority is exempt from registration under current law if it sells less than ten cemetery lots or mausoleum spaces per year. Also, cemetery salespersons for religious cemeteries do not have to register with DRL and cemetery preneed sellers who work for religious cemeteries do not have to register if the operator of the cemetery files an annual certification with DRL. Other exemptions apply to municipal and nonprofit cemeteries.

This bill creates a cemetery board attached to DRL to investigate and take disciplinary action against cemetery authorities, cemetery salespersons, and preneed sellers. However, the cemetery board has no authority over religious cemeteries, cemetery salespersons who work for religious cemeteries, and cemetery preneed sellers who work for religious cemeteries that file an annual certification with DRL. In addition, the cemetery board does not have any rule-making authority. Instead, the bill allows the cemetery board to comment on any rules that DRL proposes to promulgate regarding cemeteries, cemetery salespersons, or cemetery preneed sellers, except for rules that relate exclusively to religious cemeteries. The cemetery board consists of four business representatives of cemetery authorities, one representative of the department of justice, and two public members. Of the business representative members, one must represent a cemetery authority operated for profit, one must represent a nonprofit cemetery authority, and one must represent a municipal cemetery.

This bill also replaces the registration requirement for cemetery authorities with a licensure requirement. Under the bill, except for a cemetery authority that operates a religious cemetery, a cemetery authority must obtain a separate license from DRL for each cemetery at which it sells 20 or more cemetery lots or other burial spaces in a calendar year or for which it has $100,000 or more in trust fund accounts. Also, except for a cemetery authority that operates a religious cemetery, a cemetery authority must obtain a license for each cemetery that is five acres or more in size. A cemetery authority that is not required to be licensed under the bill must register with DRL, unless the cemetery authority receives no income, other than gifts, from the sale of lots or services or from trust fund earnings or unless the cemetery authority operates a religious cemetery. There is no exception from the licensure or registration requirements for municipal or nonprofit cemeteries. If a cemetery authority licensed under the bill engages in certain transactions regarding changes in ownership or control of the cemetery authority, it must obtain a new license or registration.

The bill also requires cemetery salespersons and preneed sellers to be licensed, rather than registered, by DRL. In addition, the bill requires a person to obtain a cemetery salesperson license if he or she sells 20 or more burial spaces during two calendar years. However, no license is required for a cemetery salesperson who works for a religious cemetery. Also, no license is required for a cemetery preneed seller who works for a religious cemetery if the operator of the cemetery files an annual certification with DRL. Also, the following persons who are exempt from registration under current law must be licensed under the bill: 1) cemetery salespersons who sell cemetery lots or mausoleum spaces in nonreligious cemeteries that are not required to register as cemetery authorities; and 2) preneed sellers for nonprofit cemeteries. However, the bill creates an exception to the requirement to have a cemetery salesperson license for an individual who is supervised by a licensed cemetery salesperson. This exception only applies to individuals who act as cemetery salespersons for cemeteries operated by towns, villages, cities, or fraternal or benevolent societies.

The bill also does each of the following: 1) eliminates references to sale solicitations and applies instead only to actual sales; 2) requires a preneed seller to deposit 40% of each payment of principal received under preneed sales contracts into a preneed trust fund and eliminates the option to deposit a different percentage based on the wholesale cost of the item sold; 3) requires DRL to promulgate rules establishing a code of ethics for operators of licensed cemetery authorities, cemetery salespersons, and cemetery preneed sellers; 4) allows the cemetery board to assess forfeitures against licensed cemetery authorities, cemetery salespersons, and preneed sellers that violate certain requirements and; 5) requires DRL to investigate whether an applicant and specified business associates of the applicant have violated any law relating to the operation or management of a cemetery.

Care of abandoned or neglected cemeteries and mausoleums

Under current law, if the operator of a cemetery fails to care for the cemetery for one year or more, the city, village, or town in which the cemetery is located may, but is not required to, take control of the cemetery. However, if the operator has failed to care for the cemetery for five years or more, the city, village, or town is required to take control of the cemetery. In addition, under certain circumstances, the town board of a town in which an abandoned or neglected cemetery is located may be required to operate the cemetery.

This bill repeals the above provisions and provides instead that, if a city, village, or town determines that a cemetery authority, including the cemetery authority for a religious cemetery, has failed to care for a cemetery for six months or more, the city, village, or town may notify the cemetery authority that it has 90 days to correct the failure. The city, village, or town may give the cemetery authority one 90-day extension of this deadline. If the city, village, or town finds that the cemetery authority failed to correct the failure within the deadline, the city, village, or town may, after a public hearing, take control of the cemetery or any other action necessary to provide for the care of the cemetery. A city, village, or town may collect from the cemetery authority any costs incurred in caring for the cemetery.

The bill also provides for the appointment of trustees for cemeteries and mausoleums, except for religious cemeteries and mausoleums. Under the bill, the circuit court for the county in which a cemetery or mausoleum is located may appoint a person, other than DRL or the cemetery board, as a trustee to operate the cemetery or mausoleum. A trustee may be appointed for a cemetery only if a city, village, or town has not adopted a resolution or enacted an ordinance that has the effect of assuming ownership, control, or management of the cemetery. The attorney general may petition the court for such an appointment. The court is required to appoint a trustee if the court finds, after a hearing, that the cemetery or mausoleum is neglected, abandoned, in disuse, improperly maintained, or financially unsound.

The bill also allows the owner of the cemetery or mausoleum to petition the court to transfer title of the cemetery or mausoleum to a new owner, other than the state.

The bill requires a trustee that is appointed to operate the cemetery or mausoleum and comply with the reporting requirements that apply to operators of cemeteries under current law as affected by the bill. The bill allows a trustee to seek a new owner or operator of the cemetery or mausoleum, to use the procedure under current law for assessing cemetery lots for cleaning, care, or improvement purposes, and to take any other action necessary or useful to the management or trusteeship of the cemetery or mausoleum. In addition, the trustee may petition the court for the following: 1) transfer of ownership of the cemetery or mausoleum to a new owner, other than the state; 2) reversion of ownership and operation of the cemetery or mausoleum to the previous owner; or 3) closure of the cemetery or mausoleum after removal and reinternment of human remains.

The court that appointed a trustee under the bill is required to terminate the trusteeship if the owner or operator of the cemetery or mausoleum demonstrates that the conditions that necessitated the trusteeship have been remedied. The court may also terminate the trusteeship if the court finds that a new owner or operator, other than the state, is competent and capable of managing the cemetery or mausoleum or if the court approves the closure of the cemetery or mausoleum.

The bill also creates a cemetery management insurance fund that may be used by a trustee to exercise its powers and carry out its duties under the bill. The fund consists of moneys collected from the following: 1) a $10 filing fee for death certificates; and 2) a $1 surcharge on copies of death certificates. DRL is required to promulgate rules that establish procedures and requirements for the cemetery board to make disbursements from the fund to trustees.

Cemetery reports and records

Under current law, with certain exceptions, cemetery authorities must submit annual reports to DRL that include financial and other information. Exempt from such requirements are cemetery authorities with annual operating budgets of $2,500 or less and certain nonprofit cemetery authorities. In addition, cemetery authorities for religious cemeteries may submit an annual certification to DRL, rather than the annual report.

Under this bill, any cemetery authority that is required to be licensed by DRL must submit the annual report. In addition, as under current law, a religious cemetery authority must submit an annual report unless the cemetery authority submits an annual certification to DRL. Also, the bill makes other changes regarding the reports, including the following: 1) the bill allows DRL to promulgate rules establishing minimum standards for certain records used to prepare the reports; 2) the bill eliminates a requirement under current law for certain cemetery associations to submit annual reports to the department of financial institutions; and 3) the bill requires licensed cemetery authorities to maintain records regarding the location of burial spaces.

Care funds and preneed trust funds

The bill also makes changes to current law regarding care funds for cemetery lots and preneed trust funds that are paid to preneed sellers under preneed contracts.

With respect to care funds, the requirements that apply to cemetery lots under current law apply to any burial space under the bill. Also, the bill eliminates the exemption from the requirements under current law that applies to nonprofit cemeteries. However, the bill maintains the exemption under current law that applies to religious cemeteries. In addition, the bill makes other changes, including the following: 1) the bill eliminates the exemption for certain nonprofit cemeteries from the requirement under current law to deposit 15% of each payment of principal on a cemetery lot into a care fund; and 2) the bill requires similar deposits into care funds for sales of lawn crypts or columbarium spaces, in addition to sales of cemetery lots.

The bill also requires DRL to request proposals from financial institutions located in this state for the purpose of selecting a financial institution that cemetery authorities and preneed sellers may use as the trustee for care funds and preneed trust funds. A cemetery authority or preneed seller is not required to use the trustee selected by DRL, unless DRL determines that the cemetery authority or preneed seller has violated any requirement regarding care funds or preneed trust funds.

Other changes

The bill makes other changes to current law regarding cemeteries, including the following:

1. The bill replaces certain references to "cemetery lot" with "burial space" and defines "burial space" as any space used or intended to be used for the burial of human remains, including by entombment, inurnment, interment, or placement in a mausoleum, vault, crypt, or columbarium.

2. The bill requires DRL approval before a cemetery authority may do any of the following: sell or encumber cemetery land; transfer ownership or control of 50% or more of the assets or stock of the cemetery; engage in a transaction that results in a person acquiring ownership or control of 50% or more of the stock of the cemetery; or transfer responsibility for management or operation of the cemetery authority. Only religious cemetery authorities and cemetery authorities that are not required to be licensed are exempt from this requirement.

3. The bill allows DRL to apply to a court for an injunction to prohibit a person from acquiring ownership or control of a cemetery, including a religious cemetery, if the person has abandoned another cemetery or has owned or operated another cemetery that is subsequently controlled by a municipality.

4. The bill imposes certain requirements on agreements for purchasing burial spaces from cemetery authorities, other than religious cemetery authorities.

5. The bill requires DRL to promulgate rules for the approval of cemetery merchandise warehouses located in and outside the state. Under current law, authority to approve in-state warehouses rests primarily with the department of agriculture, trade and consumer protection.

6. The bill allows DRL or the cemetery board to require registered or licensed cemetery authorities to conduct independent audits if DRL has cause to believe that the cemetery authority has not complied with certain requirements regarding trust funds and accounts.

7. The bill allows a person to convey an interest in a burial space to a spouse, child, brother, sister, or parent without the consent of a cemetery authority, which is required under current law. However, this provision does not apply if the spouse, child, brother, sister, or parent is in a class whose burial is prohibited in a religious cemetery.

8. The bill creates an exception for religious cemeteries from a current law that provides that the human remains of a husband, wife, or relative of a person with an interest in a burial space may be buried in the space. Under the bill, this provision does not apply if the husband, wife, or relative is in a class whose burial is prohibited in a religious cemetery. Also, the bill clarifies that "relative" includes a brother or sister.

9. The bill requires DRL to promulgate rules interpreting the requirements regarding interests in burial spaces. In addition, DRL must promulgate rules that require a person who transfers an interest in a burial space to provide the transferee with a written notice, prepared by DRL, that describes those requirements.

10. The bill requires a cemetery authority, other than a religious cemetery authority, to maintain a cemetery in a reasonable manner at all times.

11. The bill eliminates a requirement under current law for a cemetery authority to increase its surety bonds to cover gifts that are received and requires instead that a cemetery authority maintain a gift ledger accounting for all receipts and disbursements of gifts.

12. The bill requires a person who provides an outer burial container or casket to a cemetery authority for the burial of human remains to identify the decedent on the exterior of the container or casket. This requirement does not apply to outer burial containers and caskets provided to religious cemetery authorities.

13. The bill allows a city, village, or town to enact and enforce an ordinance that allows a person to bury human remains in a burial space that is not located in a cemetery. If a city, village, or town has not enacted such an ordinance, a person may not bury human remains in the city, village, or town in a burial space that is not located in a cemetery.

14. The bill increases the penalty for violating requirements regarding the reburial of human remains to a fine of no more than $1,000, imprisonment for no more than 90 days, or both. Under current law, the penalty is a forfeiture of no more than $200.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB776, s. 1 Section 1. 15.07 (1) (b) 23. of the statutes is created to read:

AB776,9,2 15.07 (1) (b) 23. Cemetery board.