Senate Bill No. 643
(By Senator Oliverio (By Request))
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[Introduced March 19, 2009; referred to the Committee on the
Judiciary.]
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A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new article, designated §35-5C-1, §35-5C-2,
§35-5C-3, §35-5C-4 §35-5C-5, §35-5C-6, §35-5C-7, §35-5C-8,
§35-5C-9, §35-5C-10, §35-5C-11, §35-5C-12, §35-5C-13,
§35-5C-14, §35-5C-15, §35-5C-16, §35-5C-17, §35-5C-18,
§35-5C-19, §35-5C-20, §35-5C-21, §35-5C-22, §35-5C-23,
§35-5C-24, §35-5C-25, §35-5C-26, §35-5C-27, §35-5C-28 and
§35-5C-29, all relating generally to establishing the West
Virginia Cemetery Act; scope; providing for definitions;
creating the West Virginia Cemetery Commission; providing for
commission logistics; providing for commission powers and
budget; providing for licensure requirements for various
brokers, companies and organizations; cemetery changes of
control; care and maintenance trust funds; perpetual care
funds; trust fund financial reports; license applications, assignability and transferability; cemetery land acreage;
construction of mausoleums and crypts; providing for
penalties; burial public policy; and validation of cemetery
lot deeds.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new article, designated §35-5C-1, §35-5C-2,
§35-5C-3, §35-5C-4 §35-5C-5, §35-5C-6, §35-5C-7, §35-5C-8,
§35-5C-9, §35-5C-10, §35-5C-11, §35-5C-12, §35-5C-13, §35-5C-14,
§35-5C-15, §35-5C-16, §35-5C-17, §35-5C-18, §35-5C-19, §35-5C-20,
§35-5C-21, §35-5C-22, §35-5C-23, §35-5C-24, §35-5C-25, §35-5C-26,
§35-5C-27, §35-5C-28 and §35-5C-29, all to read as follows:
ARTICLE 5C. WEST VIRGINIA CEMETERY ACT.
§35-5C-1.
Short title.
This article may be cited as "West Virginia Cemetery Act."
§35-5C-2.
Scope.
(a) The provisions of this article shall apply to all persons
engaged in the business of operating a cemetery as defined herein,
except cemeteries owned and operated by governmental agencies or
churches.
(b) Any cemetery beneficially owned and operated by a
fraternal organization or its corporate agent for at least fifty
years prior to September 1, 1975, shall be exempt from the provisions of this article.
§35-5C-3.
Definitions.
As used in this article, unless otherwise stated or unless the
context or subject matter clearly indicates otherwise:
(1) "Bank of belowground crypts" means any construction unit
of belowground crypts acceptable to the commission which a cemetery
uses to initiate its belowground crypt program or to add to
existing belowground crypt structures.
(2) "Belowground crypts" consists of an interment space in
preplaced chambers, either side by side or multiple depth, covered
by earth and sod and are also known as lawn crypts, westminsters or
turf top crypts.
(3) "Cemetery" means any one or a combination of more than one
of the following in a place used or to be used and dedicated or
designated for cemetery purposes: (a) A burial park, for earth
interment; (b) a mausoleum; (c) a columbarium.
(4) "Cemetery broker" means a legal entity engaged in the
business of arranging sales of cemetery products between legal
entities and which sale does not involve a cemetery company, but
does not mean funeral establishments or funeral directors, when
dealing between legal entities operating wherein one such entity
shall be members of the family of a deceased person or other
persons authorized by law to arrange for the burial and funeral of
such deceased human being. The West Virginia Cemetery Act shall not apply to any cemetery broker selling less than five grave
spaces per year.
(5) "Cemetery company" means any legal entity that owns or
controls cemetery lands or property and conducts the business of a
cemetery, including all cemeteries owned and operated by
governmental agencies, churches and fraternal organizations or
their corporate agents for the duration of any sales and management
contracts entered into with cemetery sales organizations or
cemetery management organizations for cemetery purposes, or with
any other legal entity other than direct employees of said
governmental agency, church or fraternal organization.
(6) "Cemetery management organization" means any legal entity
contracting as an independent contractor with a cemetery company to
manage a cemetery but does not mean individual managers employed by
and contracting directly with cemetery companies operating under
this article.
(7) "Cemetery sales organization" means any legal entity
contracting with a cemetery which is exempt or not exempt under
this article to conduct sales of cemetery products, but does not
mean individual salesmen or sales managers employed by and
contracting directly with cemetery companies operating under this
article, nor does it mean funeral establishments or funeral
directors operating under licenses when dealing directly with a
cemetery company and with members of the family of a deceased person or other persons authorized by law to arrange for the burial
and funeral of such deceased human being.
(8) "Columbarium" means a structure or building substantially
exposed aboveground intended to be used for the interment of the
cremated remains of a deceased person.
(9) "Commission" means the West Virginia Cemetery Commission.
(10) "Grave space" means a space of ground in a cemetery
intended to be used for the interment in the ground of the remains
of a deceased person.
(11) "Human remains" or "remains" means the bodies of deceased
persons, and includes the bodies in any stage of decomposition, and
cremated remains.
(12) "Mausoleum" means a structure or building substantially
exposed aboveground intended to be used for the entombment of
remains of a deceased person.
(13) "Mausoleum section" means any construction unit of a
mausoleum acceptable to the commission which a cemetery uses to
initiate its mausoleum program or to add to its existing mausoleum
structures.
(14) "Person" means an individual, corporation, partnership,
joint venture, or association.
(15) "Vault" means a crypt or underground receptacle which is
used for interment in the ground and which is designed to encase
and protect caskets or similar burial devices. For the purposes of this article, a vault is a preneed item until delivery to the
purchaser.
§35-5C-4.
The West Virginia cemetery commission.
There is hereby established in the Department of Commerce a
West Virginia Cemetery Commission with the power and duty to adopt
rules to be followed in the enforcement of this article.
§35-5C-5.
Cemetery commission; members, selection, quorum.
The Cemetery Commission shall consist of seven members
appointed by the Governor. Two members shall be owners or managers
of cemeteries in West Virginia. Three members shall be selected
from six nominees submitted by the West Virginia Cemetery and
Funeral Association. Two members shall be public members who have
no financial interest in, and are not involved in management of,
any cemetery or funeral related business. Four members of the
initial commission shall be appointed for a term to expire June 30,
2010, and three members shall be appointed for a term to expire
June 30, 2011. At the end of the respective terms of office of the
initial members of the commission, their successors shall be
nominated in the same manner, selected from the same categories and
appointed for terms of four years and until their successors are
appointed and qualified. Any appointment to fill a vacancy on the
commission created by the resignation, dismissal, death or
disability of a member shall be for the balance of the unexpired
term. The Governor shall have the power to remove any member of the commission from office for misfeasance, malfeasance and
nonfeasance. A majority of the commission shall constitute a
quorum for the transaction of business. At the first meeting of
the commission held after September 1, 2009, the commission shall
elect one of its members as its chairman and another as its
vice-chairman, both to serve through June 30 of the next following
year. Thereafter, at its first meeting held on or after July 1 of
each year, the commission shall elect from its members a chairman
and vice-chairman to serve through June 30 of the next following
year.
§35-5C-6.
Principal office.
The principal office of the commission shall be in the city of
Charleston, West Virginia. Notice of all regular and special
meetings of the commission shall be advertised five or more days in
advance in at least three newspapers in West Virginia having
inter-county circulation in the state. Each member of the
commission shall receive per diem and allowances. The
administrator of the commission, other employees required to attend
and legal counsel to the commission shall be entitled to actual
expenses while attending regular or special meetings of the
commission held other than in Charleston, West Virginia. All
expenses of the commission shall be paid from funds coming to the
commission pursuant to this article.
§35-5C-7. Regular and special meetings.
The cemetery commission shall meet at least once in each
quarter and may hold special meetings at any time and place within
the state at the call of the chairman or upon the written request
of at least four members.
§35-5C-8. Powers.
In addition to other powers conferred by this article, the
cemetery commission shall have the following powers and duties:
(1) The administrator shall be appointed by the Governor upon
recommendation of the cemetery commission. The compensation of the
administrator and such other personnel as is necessary to operate
the commission is subject to the relevant provisions of the West
Virginia Code. The commission is authorized and empowered to
employ such staff, including legal counsel, as may be necessary.
(2) To examine a cemetery company's records when a person
applies for a change of control of the company.
(3) Investigate, upon its own initiative or upon a verified
complaint in writing, the actions of any person engaged in the
business or acting in the capacity of a licensee under this
article. The license of a licensee may be revoked or suspended for
a period not exceeding two years, or until compliance with a lawful
order imposed in the final order of suspension, or both, where the
licensee in performing or attempting to perform any of the acts
specified in this article has been guilty of:
(A) Failing to pay the fees required herein;
(B) Failing to make any reports required by this article;
(C) Failing to remit to the care and maintenance trust fund,
merchandise trust fund, or preconstruction trust fund the required
amounts;
(D) Making any substantial misrepresentation;
(E) Making any false statement of a character likely to
influence or persuade;
(F) A continued and flagrant course of misrepresentation or
making of false promises through cemetery agents or salesmen;
(G) Violating any provision of this article or rule
promulgated by the commission; or
(H) Any other conduct, whether of the same or a different
character than specified in this section, which constitutes fraud
or dishonest dealing.
(4) In all proceedings under this article for the revocation
or suspension of licenses, a license may not be revoked or
suspended except after notice and opportunity for hearing on that
action. The commissioner may issue to a person licensed under this
article an order to show cause why the license should not be
revoked, or should not be suspended for a period not in excess of
six months. The order shall state the place for a hearing and set
a time for the hearing that is no less than ten days from the date
of the order. The hearing shall be conducted in accordance with
the provisions of article five, chapter twenty-nine-a of this code. The commissioner may appoint a hearing examiner to preside at the
hearing and make a recommended decision. After the hearing the
commissioner shall revoke or suspend the license if he or she finds
good cause to do so.
(5) At such time as the commission finds it necessary it may
bring an action in the name of the state in the court of the county
in which the place of business is located against such person to
enjoin such person from engaging in or continuing such violation or
doing any act or acts in furtherance thereof. In any such action,
an order or judgment may be entered awarding such temporary or
permanent injunction as may be deemed proper. However, before any
such action is brought the commission shall give the cemetery at
least twenty days' notice in writing, stating the alleged violation
and giving the cemetery an opportunity within the twenty-day period
to cure the violation. In addition to all other means provided by
law for the enforcement of a temporary restraining order, temporary
injunction, or permanent injunction, the court shall have the power
and jurisdiction to impound and to appoint a receiver for the
property and business of the defendant, including books, papers,
documents, and records appertaining thereto or so much thereof as
the court may deem reasonably necessary to prevent further
violation of this article through or by means of the use of said
property and business. The commission may institute proceedings
against the cemetery or its officers, whereafter an examination, pursuant to this article, a shortage in the care and maintenance
trust fund, merchandise trust fund or mausoleum and belowground
crypts preconstruction trust fund is discovered, to recover said
shortage.
(6) Whenever any special additional audit or examination of a
licensee's premises, facilities, books or records is necessary
because of the failure of the licensee to comply with the
requirements imposed in this article or by the rules of the
commission, to charge a fee based on the cost of the special
examination or audit, taking into consideration the salary of any
employees involved in the special audit or examination and any
expenses incurred.
(7) Promulgate rules requiring licensees to file with the
commission plans and specifications for the minimum quality of any
product sold. The sale of any product for which plans and
specifications required by the rules have not been filed or sale of
any product of a lesser quality than the plans and specifications
filed with the commission is a violation of this article.
(8) When the commission finds that failure by a licensee to
maintain a cemetery properly has caused that cemetery to be a
public nuisance or a health or safety hazard, the commission may
bring an action for injunctive relief, against the responsible
licensee, in the superior court of the county in which the cemetery
or any part thereof is located.
§35-5C-9. Annual budget of commission; collection of funds.
The commission shall prepare an annual budget and shall
collect the sums of money required for this budget from yearly fees
and from any other sources provided in this article. On or before
July 1 of each year, each licensed cemetery shall pay a license fee
to be set by the commission in an amount not to exceed $300. In
addition, each licensed cemetery shall pay to the commission an
inspection fee for each grave space, niche, or mausoleum crypt sold
and shall pay a fee for each vault, niche, belowground crypt,
mausoleum crypt, memorial, or opening and closing of a grave space
that is included in a preneed cemetery contract. The inspection
fee for each grave space, niche, or mausoleum crypt is payable when
the item is sold and may not exceed $2. The fee for each of the
listed items that are included in a preneed cemetery contract is
payable when the contract is made and may not exceed $500.
§35-5C-10. License; cemetery company.
(a) No legal entity shall engage in the business of operating
a cemetery company except as authorized by this article and without
first obtaining a license from the commission.
(b) Any legal entity wishing to establish a cemetery shall
file a written application for authority with the commission on
forms provided by the commission.
(c) Upon receipt of the application and filing fee of $800,
the commission shall cause an investigation to be made to establish the following criteria for approval of the application:
(1) The creation of a legal entity to conduct cemetery
business, and its proposed financial structure;
(2) A perpetual care trust fund agreement, with an initial
deposit of not less than $50,000 and with a bank cashier's check or
certified check attached for the amount made payable to the
trustee. The trust fund agreement must be executed by the
applicant, accepted by the trustee, and conditioned only upon
approval of the application;
(3) A plat of the land to be used for the cemetery, showing
the location of the cemetery and the access roads to the cemetery;
(4) Designation by the legal entity wishing to establish a
cemetery of a general manager. The general manager must be a
person of good moral character and have at least one year's
experience in cemeteries;
(5) Development plans sufficient to ensure the community that
the cemetery will provide adequate cemetery services and that the
property is suitable for use as a cemetery.
(d) The commission, after receipt of the investigating report,
shall grant or refuse to grant the authority to organize a cemetery
based upon the criteria set forth in this chapter.
(e) If the commission intends to deny an application, it shall
give written notice to the applicant of its intention to deny. The
notice shall state a time and a place for a hearing before the commission and a summary statement of the reasons for the proposed
denial. The notice of intent shall be mailed by certified mail to
the applicant at the address stated in the application at least
fifteen days prior to the scheduled hearing date. The applicant
shall pay the costs of this hearing as assessed by the commission
unless the applicant notifies the commission by certified mail at
least five days prior to the scheduled hearing date that a hearing
is waived. Any appeals from the commission's decision shall be to
the court having jurisdiction of the applicant or the commission.
(f) If the commission intends to grant the authority, it shall
give written notice that the authority to organize a cemetery has
been granted and that a license to operate will be issued upon the
completion of the following:
(1) Establishment of the care and maintenance trust fund and
receipt by the commission of a certificate from the trust company,
certifying receipt of the initial deposit required under this
article.
(2) Full development, ready for burial, of not less than two
acres including a completed paved road from a public roadway to
said developed section, certified by inspection of the commission
or its representative.
(3) A description, by metes and bounds, of the acreage tract
of such proposed cemetery, together with evidence, by title
insurance policy or by certificate of an attorney-at-law, certifying that the applicant is the owner in fee simple of such
tract of land, which must contain not less than thirty acres, and
that the title to not less than thirty acres is free and clear of
all encumbrances. In counties with a population of less than
thirty-five thousand population according to the latest federal
decennial census the tract need be only fifteen acres.
(4) A plat of the cemetery showing the number and location of
all lots surveyed and permanently staked for sale.
§35-5C-11. Existing companies; effect of article.
Existing cemetery companies at the time of the adoption of
this chapter shall continue in full force and effect and be granted
a license but shall hereafter be operated in accordance with the
provisions of this article.
§35-5C-12
.
Licenses for sales organizations, management
organizations and brokers.
(a) No legal entity shall engage in the business of a cemetery
sales organization, a cemetery management organization or a
cemetery broker except as authorized by this article, and without
first obtaining a license from the commission.
(b) Any legal entity wishing to establish and operate the
business of a cemetery sales organization, a cemetery management
organization or a cemetery broker shall file a written application
for authority with the commission on forms provided by the
commission which must contain such of the following documents and information as may be required by the commission:
(1) The appointment of a West Virginia resident to receive
service of any lawful process in any noncriminal proceedings
arising under this chapter against the applicant, its principal
owners, principal stockholders, directors and general manager or
their personal representatives.
(2) The states or other jurisdictions in which the applicant
presently is conducting the business activity applied for or other
similar businesses and any adverse order, judgment or decree
entered against the applicant in each jurisdiction or by any court.
(3) The applicant's name, address and the form, date and
jurisdiction of the organization and the address of each of its
offices within or without this state.
(4) The name, address, principal occupation for the past five
years of every director and officer of the applicant or person
occupying a similar status or performing similar functions.
(5) Copies of the articles of incorporation or articles of
partnership or joint venture agreement or other instrument
establishing the legal entity of the applicant.
(c) The application shall be accompanied by an initial filing
fee of $400 for cemetery sales organization and cemetery management
organization and an initial filing fee of $200 for a cemetery
broker. If ninety percent or more of the applicant is owned by an
existing cemetery company operating under the West Virginia Cemetery Act, then the initial filing fee shall be one half of the
sums set out herein. On or before July 1 of each year, each
licensed cemetery sales organization, cemetery management
organization, or cemetery broker shall pay a license renewal fee of
$100 per year.
(d) Upon receipt of the application and filing fee, the
commission shall cause an investigation to be made of the legal
entity to conduct the business applied for and the qualification of
said legal entity to do business in West Virginia.
(e) The commission, after receipt of the investigation report,
shall grant or refuse to grant the authority to organize the
organization applied for after it determines that the applicant
possesses good character and general fitness or, in the case of a
business association, employs and is directed by personnel of good
character and general fitness.
(f) If the commission intends to deny an application, it shall
give written notice to the applicant of its intention to deny. The
notice shall state a time and a place for hearing before the
commission and a summary statement of the reasons for the proposed
denial. The notice of intent shall be mailed by certified mail to
the applicant at the address stated in the application at least
fifteen days prior to the scheduled hearing date. Any appeals from
the commission's decision shall be to the court having jurisdiction
of the applicant, or in the event of an out-of-state applicant, then to the court having jurisdiction of the commission.
(g) If the commission intends to grant the authority, it shall
give written notice that the authority to organize the business
applied for has been granted and that a license to operate will be
issued upon presentment to the commission of a statement of
employment between the applicant and the cemetery or cemeteries to
be serviced thereby.
(h) Any person or any cemetery sales organization or any
cemetery management organization or any cemetery broker violating
this section is guilty of a misdemeanor and, shall be subject to
revocation of the license to operate.
§35-5C-13. Licenses for persons selling preneed grave space.
(a) No person shall offer to sell preneed grave spaces,
mausoleum crypts, niches, memorials, vaults or any other preneed
cemetery merchandise or services under any plan authorized for any
cemetery, cemetery sales group, or cemetery management group,
before obtaining a license from the commission.
(b) Persons wishing to obtain a license shall file a written
application with the commission on forms provided by the
commission. The commission may require such information and
documents as it deems necessary to protect the public interest.
(c) The application shall be accompanied by a filing fee of
$15 to cover the expenses of processing and investigation. After
processing and investigation the commission shall grant, or refuse to grant, the license applied for. The annual license fee shall be
set by the commission but shall not exceed $10.
(d) If the commission refuses to grant the license applied
for, it shall give written notice to the applicant. The notice
shall state a time and a place for hearing before the commission,
and a summary statement of the reasons for the refusal to grant the
license. The notice shall be mailed by registered mail or
certified mail to the applicant at the address stated in the
application at least thirty days prior to the scheduled hearing
date.
(e) If the commission intends to grant the license, it shall
give written notice that the license will be issued upon
presentment to the commission of a duly executed statement of
employment between the applicant and the cemetery or cemeteries to
be serviced thereby.
(f) All of the pertinent provisions of section four, article
five, chapter twenty-nine-a of this code, shall apply to and govern
to appeals or petitions for judicial review by any person or
persons aggrieved by an order or decision of the commission. The
judgment of the circuit court shall be final unless reversed,
vacated or modified on appeal to the Supreme Court of Appeals in
accordance with the provisions of section one, article six, chapter
twenty-nine-a of this code. Legal counsel and services for the
commission in all appeal proceedings in any circuit court and the Supreme Court of Appeals shall be provided by the Attorney General
or the Attorney General's assistants and in any circuit court by
the prosecuting attorney of the county as well, all without
additional compensation. The commission, with the written approval
of the Attorney General, may employ special counsel to represent
the commission at any such appeal proceedings.
§35-5C-14. Application for a change of control; filing fee.
A person who proposes to acquire control of an existing
cemetery company, whether by purchasing the capital stock of the
company, purchasing an owner's interest in the company, or
otherwise acting to effectively change the control of the company,
shall first make application on a form supplied by the commission
for a certificate of approval of the proposed change of control.
The application shall contain the name and address of each proposed
new owner. The commission shall issue a certificate of approval
only after it determines that the proposed new owners 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 proposed change in control. An application for approval of
a change of control must be completed and accompanied by a filing
fee of $200.
§35-5C-15. Records.
A record shall be kept of every burial in the cemetery of a cemetery company, showing the date of burial, name of the person
buried, together with lot, plot, and space in which such burial was
made therein. All sales, trust funds, accounting records, and all
other records of the licensee shall be available at the licensee's
principal place of business in this state and shall be readily
available at all reasonable times for examination by an authorized
representative of the commission.
§35-5C-16. Trustees; qualifications; examination of records;
enforcement.
(a) The term "corporate trustee" as used in this article shall
mean either a bank or trust company authorized to do business in
West Virginia under the supervision of the commissioner of banks or
any other corporate entity. However, any corporate entity other
than a bank or trust company which acts as trustee under this
article shall first be approved by the cemetery commission and
shall be subject to supervision by the cemetery commission as
provided herein.
(b) Any corporate entity, other than a bank or trust company,
which desires to act as trustee for cemetery funds under this
article shall make application to the commission for approval. The
commission shall approve the trustee when it has become satisfied
that:
(1) The applicant employs and is directed by persons who are
qualified by character, experience, and financial responsibility to care for and invest the funds of others.
(2) The applicant will perform its duties in a proper and
legal manner and the trust funds and interest of the public
generally will not be jeopardized.
(3) The applicant will act as trustee for cemetery funds which
will exceed $500,000 in the aggregate.
(4) The applicant is authorized to do business in West
Virginia and has adequate facilities to perform its duties as
trustee.
(c) Any trustee under this article, other than a bank or trust
company under the supervision of the commissioner of banks, shall
maintain records relative to cemetery trust funds as the commission
may by regulation prescribe. The records shall be available at the
trustee's place of business in West Virginia and shall be available
at all reasonable times for examination by a representative of the
commission. The records shall be audited annually, within ninety
days from the end of the trust fund's fiscal year, by an
independent certified public accountant, and a copy of the audit
report shall be promptly forwarded to the commission.
(d) Whenever it appears that an officer, director, or employee
of a trustee, other than a bank or trust company, is dishonest,
incompetent, or reckless in the management of a cemetery trust
fund, the commission may bring an action in the courts to remove
the trustee and to impound the property and business of the trustee as may be reasonably necessary to protect the trust funds.
(e) Any trustee shall invest and reinvest cemetery trust funds
in the same manner as provided by law for the investment of trust
funds by the Clerk of the Supreme Court of Appeals.
§35-5C-17. Required trust fund for care and maintenance; remedy of
commission for noncompliance.
No cemetery company shall be permitted to establish, or
operate if already established, a cemetery unless provision is made
for the future care and maintenance of such cemetery by
establishing a trust fund and designating a corporate trustee to
administer said fund in accordance with a written trust agreement.
If any cemetery company refuses or otherwise fails to provide or
maintain an adequate care and maintenance trust fund in accordance
with the provisions of this article, the commission, after
reasonable notice, shall proceed to enforce compliance under the
powers vested in it under this article. However, any nonprofit
cemetery corporation, incorporated and engaged in the cemetery
business continuously since and prior to the year 1915 and whose
current trust assets exceed $750,000 shall not be required to
designate a corporate trustee. The trust fund agreement shall
contain and include the following: Name, location, and address of
both the licensee and the trustee showing the date of agreement
together with the amounts required deposited as stated in this
article. No person shall withdraw or transfer any portion of the corpus of the care and maintenance trust fund without first
obtaining written consent from the commission.
§35-5C-18. Individual contracts for care and maintenance.
At the time of making a sale or receiving the initial deposit
hereunder, the cemetery company shall deliver to the person to whom
such sale is made, or who makes such deposit, an instrument in
writing which shall specifically state that the net income of the
care and maintenance trust fund shall be used solely for the care
and maintenance of the cemetery, for reasonable costs of
administering such care and maintenance and for reasonable costs of
administering the trust fund.
§35-5C-19. Requirements for perpetual care fund.
A cemetery company may not cause or permit advertising of a
perpetual care fund in connection with the sale or offer for sale
of its property unless the amount deposited in the fund is at least
$40 per grave space, niche, or mausoleum crypt sold. Nothing may
prohibit an individual cemetery from requiring a perpetual care
deposit for grave memorial markers to be deposited in the perpetual
care fund so long as the same assessment is uniformly applied to
all grave memorial markers installed in the cemetery.
§35-5C-20. Deposits to perpetual care fund.
(a) Deposits to the care and maintenance trust fund must be
made by the cemetery company holding title to the subject cemetery
lands on or before the last day of the calendar month following the calendar month in which final payment is received as provided
herein. However, the entire amount required to be deposited into
the fund shall be paid within four years from the date of any
contract requiring such payment regardless of whether all amounts
have been received by the cemetery company. If the cemetery
company fails to make timely deposit, the commission may levy and
collect a penalty of $1 per day for each day the deposit is
delinquent on each grave space, niche or mausoleum crypt sold. The
care and maintenance trust fund shall be invested and reinvested by
the trustee in the same manner as provided by law for the
investment of other trust funds by the Clerk of the Supreme Court
of Appeals. The fees and other expenses of the trust fund shall be
paid by the trustee from the net income thereof and may not be paid
from the corpus. To the extent that the said net income is not
sufficient to pay such fees and other expenses, the same shall be
paid by the cemetery company.
(b) When a municipal, church-owned or fraternal cemetery
converts to a private cemetery then that cemetery shall establish
and maintain a care and maintenance trust fund pursuant to this
section. However, the initial deposit for establishment of this
trust fund shall be an amount equal to $10 per space for all spaces
either previously sold or contracted for sale in said cemetery at
the time of conversion or $25,000, whichever sum is greater.
(c) In each sales contract, reservation or agreement wherein burial rights are priced separately, the purchase price of said
burial rights shall be the only item subject to care and
maintenance trust fund deposits; but if the burial rights are not
priced separately therein, the full amount of the contract,
reservations or agreement shall be subject to care and maintenance
trust fund deposits as provided herein, unless the purchase price
of said burial rights can be determined from the accounting records
of the cemetery company.
(d) When the amount deposited in the perpetual care fund
required by this article of any cemetery company shall amount to
$150,000, anything in this article to the contrary notwithstanding,
the cemetery company may make all deposits thereafter either into
the original perpetual care trust fund or into a separate fund
established as an irrevocable trust, designated as Perpetual Care
Trust Fund "A," and invested by the trustee, as directed by the
cemetery company. Funds in a trust fund designated as Trust Fund
"A" may not be invested in another cemetery company.
(e) For special endowments for a specific lot, grave, or a
family mausoleum, memorial, marker, or monument, the cemetery may
set aside the full amounts received for this individual special
care in a separate trust 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 or savings account for the special endowment the full amount thereof shall be deposited in perpetual care trust
fund.
§35-5C-21. Trust fund; financial reports.
Within sixty days after the end of the calendar or fiscal year
of the cemetery company, the trustee shall furnish adequate
financial reports with respect to the care fund on forms provided
by the commission. However, the commission may require the trustee
to make such additional financial reports as it may deem advisable.
§35-5C-22. Receipts from sale of personal property or services;
trust account; penalties.
(a) It shall be deemed contrary to public policy if any person
or legal entity receives, holds, controls or manages funds or
proceeds received from the sale of, or from a contract to sell,
personal property or services which may be used in a cemetery in
connection with the burial of or the commemoration of the memory of
a deceased human being, where payments for the same are made either
outright or on an installment basis prior to the demise of the
person or persons so purchasing them or for whom they are so
purchased, unless such person or legal entity holds, controls or
manages said funds, subject to the limitations and regulations
prescribed in this section. This section shall apply to all
cemetery companies or other legal entities that offer for sale or
sell personal property or services which may be used in a cemetery
in connection with the burial of, or the commemoration of the memory of, a deceased human being.
(b) Any cemetery company or other entity entering into a
contract for the sale of personal property or services, to be used
in a cemetery in connection with disposing of, or commemorating the
memory of a deceased human being wherein the use of the personal
property or the furnishing of services is not immediately requested
or required, shall comply with the following requirements and
conditions:
(1) The cemetery company or other entity shall deposit an
amount equal to sixty percent of all proceeds received on such
contracts into a trust account, either in the form of an account
governed by a trust agreement and handled by a corporate trustee or
in the form of a passbook savings account, certificates of deposit
for time certificates, and/or money-market certificates with a
licensed and insured bank or savings institution located in the
State of West Virginia until the amount deposited equals sixty
percent of the actual sale price of the property or services sold.
Such accounts and/or deposits shall be in the name of the cemetery
company or other entity in a form which will permit withdrawals
only with the participation and consent of the cemetery commission
as required by subdivision four of this subsection.
(2) All funds received on account of a contract for the sale
of such personal property or services, whether the funds be
received directly from the purchaser or from the sale or assignment of notes entered into by the purchase or otherwise, shall be
deposited into the trust account as required by subdivision (1) of
this section.
(3) All deposits required herein shall be made into the trust
account so established on or before the last day of the month
following receipt of the funds by the cemetery company or other
entity.
(4) Withdrawals from a trust account may be made by the
depositor, but only with the written approval of the commission or
officer or employee of the commission authorized to act for the
commission. Withdrawals may be made only upon delivery of the
merchandise or services for which the funds were deposited,
cancellation of a contract, the presence of excess funds in the
trust account, or under other circumstances deemed appropriate by
the commission. The commission shall promulgate rules governing
withdrawals from trust accounts, including time and frequency of
withdrawals, notice to the commission prior to withdrawals, the
number and identity of persons other than the owner who are
authorized by the owner to make withdrawals, the officers and
employees of the commission authorized to approve withdrawals, and
any other matters necessary to implement the provisions of this
subdivision. Withdrawals will not be allowed if the amount
remaining in the trust account would fall below sixty percent of
all proceeds received on account of contracts for the sale of such personal property or services.
(5) If for any reason a cemetery company or other entity who
has entered into a contract for the sale of personal property or
services cannot or does not provide the personal property or
perform the services called for by the contract after request in
writing to do so, the purchaser or his or her heirs or assigns or
duly authorized representative shall be entitled to receive the
entire amount paid on the contract and any income if any, earned
thereon by the trust account.
(6) Every year after September 1, 2009, the cemetery company,
the trustee or other entity shall within seventy five days after
the end of the calendar year, file a financial report of the trust
funds with the commission, setting forth the principal thereof, the
investments and payments made, and the income earned and disbursed.
The commission may require the cemetery, trustee, or other entity
to make such additional financial reports as it may deem advisable.
(c) Whenever a contract for the sale of personal property
and/or services allocates payments to apply to one item at a time
under a specific schedule, the contract shall be considered
divisible. Title to each item of personal property or the right to
each item of services shall pass to the purchaser upon full payment
for that item regardless of the remaining balance on other items
under the same contract.
(d) Any contract for the sale of personal property and/or services shall state separate costs for each item of personal
property, for each act of installation required by the contract,
and for each other item of services included in the contract.
(e) All contracts for the sale of personal property and/or
services must be printed in type size as required by the Truth in
Lending Act, 15 U.S.C. §1601 et. seq., and regulations adopted
pursuant to that act.
(f) In the event of prepayment, interest charged shall be no
more than the interest earned on the unpaid balance computed on a
percent per month basis for each month or part of a month up to the
date of final payment. Any excess interest which has been paid by
the purchaser must be refunded to him or her, his or her assigns,
or his or her representative within thirty days after the final
payment. No penalty or additional charge for prepayment may be
required.
(g) In lieu of the deposits required under subsection (b) of
this section, the cemetery company or other entity may post with
the commission a good and sufficient performance bond by surety
company licensed to do business in West Virginia and in an amount
sufficient to cover all payments made directly or indirectly by or
on account of purchasers who have not received the purchased
property and services. Money received from the sale or assignment
of notes entered into by the purchasers, or otherwise, shall be
treated as payments made by the purchasers.
(h) The commission shall have the power and is required from
time to time as it may deem necessary to examine the business of
any cemetery company or other entity writing contracts for the sale
of the property or services as herein contemplated. The written
report of such examination shall be filed in the office of the
commission. Any person or entity being examined shall produce the
records of the company needed for such examination.
(i) Any provision of any contract for the sale of the personal
property or the performance of services herein contemplated under
which the purchaser or beneficiary waives any of the provisions of
this section shall be void.
(j) If any report is not received within the time stipulated
by the commission or herein, the commission may levy and collect a
penalty of $25 per day for each day of delinquency.
(k) Within thirty days following the execution of a contract
for the sale of personal property or performance of services, a
purchaser may cancel his
or her contract by giving written notice
to the seller. The seller may cancel the contract, upon default by
purchaser, by giving written notice to the purchaser. Within
thirty days of notice of cancellation, the cemetery company or
other entity shall refund to purchaser the principal amount on
deposit in the trust account for his or her benefit on any
undelivered merchandise or services. This amount (no other
obligations owed the purchaser by the seller) shall constitute the purchaser's entire entitlements under the contract. The seller may
not terminate the contract without complying with this subsection.
§35-5C-23. Applications for license.
Applications for renewal license must be submitted on or
before July 1 each and every year in the case of an existing
cemetery company. Before any sale of cemetery property in the case
of a new cemetery company or a change of ownership or control, an
application for license must be submitted and license issued.
§35-5C-24. License not assignable or transferable.
No license issued under this article shall be transferable or
assignable and no licensee shall develop or operate any cemetery
authorized by this article under any name or at any location other
than that contained in the application for such license.
§35-5C-25. Minimum acreage; sale or disposition of cemetery lands.
(a) Each licensee shall set aside a minimum of thirty acres of
land for use by said licensee as a cemetery, and shall not sell,
mortgage, lease or encumber the same.
(b) The fee simple title, or lesser estate, in any lands owned
by licensee and dedicated for use by it as a cemetery, which are
contiguous, adjoining, or adjacent to the minimum of thirty acres
described in subsection (a), may be sold, conveyed, or disposed of,
or any part thereof, by the licensee, for use by the new owner for
other purposes than as a cemetery if no bodies have been previously
interred therein. In addition, any and all titles, interests, or burial rights which may have been sold or contracted to be sold in
such lands which are the subject of such sale shall be conveyed to
and revested in the licensee prior to consummation of any such
sale, conveyance or disposition.
(c) Any licensee may convey and transfer to a municipality or
county its real and personal property together with moneys
deposited with the trustee; provided said municipality or county
will accept responsibility for maintenance thereof and prior
written approval of the commission is first obtained.
(d) Subsections (a) and (b) relating to a requirement for
minimum acreage shall not apply to those cemeteries licensed on or
before July 1, 1967, which own or control a total of less than
thirty acres of land; provided that such cemeteries shall not
dispose of any of such lands. A nongovernment lien or other
interest in land acquired in violation of this section is void.
§35-5C-26.
Construction of mausoleums and belowground crypts;
trust fund for receipts from sale of preconstruction
crypts; compliance requirements.
(a) A cemetery company shall be required to start construction
of that section of a mausoleum or bank of belowground crypts in
which sales, contracts for sale, reservations for sales or
agreements for sales are being made, within forty-eight months
after the date of the first such sale. The construction of such
mausoleum section or bank of belowground crypts shall be completed within five years after the date of the first sale made. However,
extensions for completion, not to exceed one year, may be granted
by the commission for good reasons shown.
(b) A cemetery company which plans to offer for sale space in
a section of a mausoleum or bank of underground crypts prior to its
construction shall establish a preconstruction trust account. The
trust account shall be administered and operated in the same manner
as the merchandise trust account and shall be exclusive of the
merchandise trust account or such other trust accounts or funds
that may be required by law. The personal representative of any
purchaser of such space who dies before completion of construction
shall be entitled to a refund of all moneys paid for such space
including any income earned thereon.
(c) Before a sale, contract for sale, reservation for sale or
agreement for sale in the first mausoleum section or bank of
underground crypts in each cemetery may be made the funds (one
hundred twenty percent of construction cost) to be deposited to the
preconstruction trust account shall be computed as to said section
or bank of crypts and such trust account payments must be made on
or before the last day of the calendar month following receipt by
the cemetery company or its agent of each payment. The trust
account portion of each such payment shall be computed by dividing
the cost of the project plus twenty percent of said cost, as
computed by a licensed contractor, engineer or architect by the number of crypts in the section or bank of crypts to ascertain the
cost per unit. The unit cost shall be divided by the contract
sales price of each unit to obtain a percentage which shall be
multiplied by the amount of each payment. The formula shall be
computed as follows: Cost plus twenty percent divided by number of
crypts = cost per unit; cost per unit divided by contract sales
price = Percentage x payment received = deposit required to
preconstruction trust account.
(d) The cemetery company shall be entitled to withdraw the
funds from said preconstruction trust account only after the
commission has become satisfied that construction has been
completed. However, that during construction of the mausoleum or
bank of belowground crypts the commission may, in its discretion,
authorize a specific percentage of the funds to be withdrawn when
it appears that at least an equivalent percentage of construction
has been completed.
(e) If a mausoleum section or bank of underground crypts is
not completed within the time limits set out in this section the
corporate trustee, if any, shall contract for and cause said
project to be completed and paid therefor from the trust account
funds deposited to the project's account paying any balance, less
cost and expenses, to the cemetery company. In the event there is
no corporate trustee, the commission shall appoint a committee to
serve as trustees to contract for and cause said project to be completed and paid therefor from the trust account funds deposited
to the project's account paying any balance, less cost and
expenses, to the cemetery company.
(f) In lieu of the payments outlined hereunder to the
preconstruction trust account the cemetery company may deliver to
the commission a good and sufficient completion or performance bond
in an amount and by surety companies acceptable to the commission.
§35-5C-27. Penalties.
(a) Except as provided in this subsection, a person violating
any provisions of this article, of any order or rule promulgated
under this article, or of any license issued by the commission is
guilty of a misdemeanor and, upon conviction thereof, shall be
fined not less than $100 nor more than $1,000 for each occurrence,
or incarcerated in jail for a term not to exceed one year, or both
fined and confined. Each failure to deposit funds in a trust fund
in accordance with this article is a separate offense. A person
who has failed to deposit funds in a trust fund in accordance with
this article and whose delinquent deposits equal or exceed $20,000
is guilty of a felony and, upon conviction thereof, shall be fined
not less than $500 nor more than $3,000, or imprisoned in a state
correctional facility not less than one nor more than three years,
or, in the discretion of the court, be confined in jail for a term
not to exceed one year.
(b) The officers and directors or persons occupying similar status or performing similar functions of any cemetery company,
cemetery sales organization, cemetery management organization or
cemetery broker, as defined in this article, failing to make
required contributions to the care and maintenance trust fund and
any other trust fund or escrow account shall be liable for any
offense based on the failure and upon conviction for the offense
shall be punished in the manner prescribed by law.
§35-5C-28.
Burial without regard to race or color, religion,
national origin, or ancestry.
(a) It shall be the public policy of the state that all
cemetery companies or other legal entities conducting or
maintaining public or private cemeteries shall sell to all
applicants and bury all deceased human beings on equal terms
without regard to race or color, religion, national origin, or
ancestry. Anything contrary hereto is void and of no legal effect.
Bylaws, rules, contracts, deeds, etc, may permit designation of
parts of cemeteries or burial grounds for the specific use of
persons whose religious code required isolation. Any program
offering free burial rights to veterans or any other person or
group of persons shall not be conditioned by any requirement to
purchase additional burial rights or merchandise.
(b) Any cemetery company or other legal entity violating the
provisions of this section shall be guilty of a misdemeanor and,
upon conviction thereof, shall be fined not less than $100 nor more than $1,000 for each occurrence, or incarcerated in jail for a term
not to exceed one year, or both fined and incarcerated.
§35-5C-29.
Validation of certain deeds for cemetery lots executed
by suspended corporations.
Any deed for a cemetery lot or lots which was executed prior
to January 1, 2009, and which would have been valid if the charter
of the grantor corporation had not been suspended at the time the
deed was executed, is hereby validated.
NOTE: The purpose of this bill is to create a cemetery
commission to regulate private cemeteries and to address the
various concerns with cemetery care
and maintenance.
This article is new; therefore, strike-throughs and
underscoring have been omitted.