130th Ohio General Assembly
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(123rd General Assembly)
(Substitute House Bill Number 531)



AN ACT
To amend sections 1721.21, 1721.211, 3705.17, 4767.01, 4767.03, 4767.04, and 4767.08 of the Revised Code to exempt certain political subdivisions from the requirement of paying a cemetery registration fee, to make changes to the law governing fees for the issuance of burial permits, to revise the permissible uses of dividend and interest income from cemetery endowment care trusts, to exempt family cemeteries from the requirement of maintaining an endowment care trust, to revise the depository requirements for sellers of preneed cemetery merchandise and services contracts, and to generally exempt cemeteries owned and operated by fraternal organizations, municipal corporations, or other political subdivisions of the state, and national and family cemeteries, from the requirements pertaining to preneed cemetery merchandise and services contracts.

Be it enacted by the General Assembly of the State of Ohio:

SECTION 1 .  That sections 1721.21, 1721.211, 3705.17, 4767.01, 4767.03, 4767.04, and 4767.08 of the Revised Code be amended to read as follows:

Sec. 1721.21.  (A) As used in this section:

(1) "Person" means any corporation, company, partnership, individual, or other entity owning or operating a cemetery for the disposition of human remains.

(2) "Cemetery" means any one or a combination of more than one of the following:

(a) A burial ground for earth interments;

(b) A mausoleum for crypt entombments;

(c) A columbarium for the deposit of cremated remains;

(d) A scattering ground for the spreading of cremated remains.

(3) "Interment" means the disposition of human remains by earth burial, entombment, or inurnment.

(4) "Burial right" means the right of earth interment.

(5) "Entombment right" means the right of entombment in a mausoleum.

(6) "Columbarium right" means the right of inurnment in a columbarium for cremated remains.

(B) No person shall operate or continue to operate any cemetery in Ohio this state unless an endowment care trust is established and maintained as required by this section.

(C) Any person desiring to operate any cemetery that is organized or developed after July 1, 1970, before offering to sell or selling any burial lot, burial right, entombment right, or columbarium right in that cemetery, shall first establish an endowment care trust, segregated from other assets, and place in that fund a minimum of fifty thousand dollars in cash or in bonds of the United States, this state, or any county or municipal corporation of this state.

Whenever any person described in this division has placed another fifty thousand dollars in the endowment care trust out of gross sales proceeds, in addition to the deposit required by this division, that person, after submitting proof of this fact to the trustees of the endowment care trust, may be paid a distribution in the sum of fifty thousand dollars from the endowment care trust.

(D) Any person desiring to operate or to continue to operate any cemetery after July 1, 1970, shall place into the endowment care trust as required by this section not less than ten per cent of the gross sales proceeds received from the sale of any burial lot, burial right, entombment right, or columbarium right. This percentage shall be placed in the endowment care trust no later than thirty days following the month in which the entire gross sales are received.

(E) The trustees of the endowment care trust shall consist of at least three individuals who have been residents of the county in which the cemetery is located for at least one year, or a trust company licensed under Chapter 1111. of the Revised Code or a national bank or federal savings association that has securities pledged in accordance with section 1111.04 of the Revised Code. If a person or entity other than the trustees are not a financial institution is designated as trustee, the person or entity or trust company, the trustees shall be bonded by a corporate surety or fidelity bond in an aggregate amount of not less than one hundred per cent of the funds held by the trustee trustees. The trustee trustees or its their agent shall, on a continuous basis, keep exact records as to the amount of funds under any joint account or trust instrument being held for the individual beneficiaries showing the amount paid, the amount deposited and invested, and accruals and income.

The funds of the endowment care trust shall be held and invested in the manner in which trust funds are permitted to be held and invested pursuant to sections 2109.37 and 2109.371 of the Revised Code.

(F) Any person offering to sell or selling any burial lot, burial right, entombment right, or columbarium right shall give to the purchaser of the lot or right, at the time of sale, a written agreement that identifies and unconditionally guarantees to the purchaser the specific location of the lot or the specific location to which the right applies.

(G) No person shall open or close any grave, crypt, or niche for the interment of human remains in a cemetery without the permission of the cemetery association or other entity having control and management of the cemetery.

(H) Except as provided in division (G) of this section, this section does not apply to a family cemetery as defined in section 4767.02 of the Revised Code, to any cemetery that is owned and operated entirely and exclusively by churches, religious societies, established fraternal organizations, municipal corporations, or other political subdivisions of the state, or to a national cemetery.

(I) The dividend and interest income from the endowment care trust shall be used only for the cost and expenses incurred to establish, manage, and administer the trust and for the maintenance, supervision, improvement, and preservation of the grounds, lots, buildings, equipment, statuary, and other real and personal property of the cemetery.

(J)(1) Annual reports of all the assets and investments of the endowment care trust shall be prepared and maintained, and shall be available for inspection at reasonable times by any owner of interment rights in the cemetery.

(2) Every cemetery required to establish and maintain an endowment care trust shall file an affidavit annually with the division of real estate of the department of commerce, in a form prescribed by the division, certifying under oath each of the following:

(a) That the cemetery has deposited, at the time specified in division (D) of this section, the amounts required by that division in the cemetery's endowment care trust;

(b) That only dividend and interest income have been paid from the endowment care trust, and the cemetery used the amounts withdrawn only for the purposes specified in division (I) of this section;

(c) That all principal and capital gains have remained in the endowment care trust;

(d) That the endowment care trust has not been used to collateralize or guarantee loans and has not otherwise been subjected to any consensual lien;

(e) That the endowment care trust is invested in compliance with the investing standards set forth in sections 2109.37 and 2109.371 of the Revised Code.

Sec. 1721.211.  (A) As used in this section, "preneed cemetery merchandise and services contract" means a written agreement, contract, or series of contracts to sell or otherwise provide an outer burial container, monument, marker, urn, other type of merchandise customarily sold by cemeteries, or opening and closing services to be used or provided in connection with the final disposition of a dead human body, where payment for the container, monument, marker, urn, other type of merchandise customarily sold by cemeteries, or opening and closing services is made either outright or on an installment basis, prior to the death of the person so purchasing or for whom so purchased. "Preneed cemetery merchandise and services contract" does not include any preneed funeral contract or any agreement, contract, or series of contracts pertaining to the sale of any burial lot, burial or interment right, entombment right, or columbarium right with respect to which an endowment care fund trust is established or is exempt from establishment pursuant to section 1721.21 of the Revised Code.

(B) Subject to the limitations and restrictions contained in Chapters 1101. to 1127. of the Revised Code, a trust company licensed under Chapter 1111. of the Revised Code or a national bank or federal savings association that pledges securities in accordance with section 1111.04 of the Revised Code or the individuals described in division (C)(2) of this section have the power as trustee to receive and to hold and invest in accordance with sections 2109.37 and 2109.371 of the Revised Code moneys under a preneed cemetery merchandise and services contract.

(C)(1) The greater of one hundred ten per cent of the seller's actual cost or thirty per cent of the seller's retail price of the merchandise and seventy per cent of the seller's retail price of the services to be provided under a preneed cemetery merchandise and services contract shall remain intact as a fund until the death of the person for whose benefit the contract is made or the merchandise is delivered as set forth in division (K) of this section. However, any moneys held pursuant to this section shall be released upon demand of the person for whose benefit the contract was made or upon the demand of the seller for its share of the moneys held and earned interest if the contract has been canceled as set forth in division (G) of this section.

(2) The trustee of the fund described in division (C)(1) of this section shall be a trust company licensed under Chapter 1111. of the Revised Code or a national bank or federal savings association that pledges securities in accordance with section 1111.04 of the Revised Code or at least three individuals who have been residents of the county in which the seller is located for at least one year, each of whom shall be bonded by a corporate surety in an amount that is at least equal to the amount deposited in the fund of which those persons serve as trustee. Amounts in the fund shall be held and invested in the manner in which trust funds are permitted to be held and invested pursuant to sections 2109.37 and 2109.371 of the Revised Code.

(D) Within thirty days after the last business day of the month in which the seller of cemetery merchandise or services receives final contractual payment under a preneed cemetery merchandise and services contract, the seller shall deliver the greater of one hundred ten per cent of the seller's actual cost or thirty per cent of the seller's retail price of the merchandise and seventy per cent of the seller's current retail price of the services as of the time the final contractual payment is received date of the contract to a trustee or to trustees as described in division (C)(2) of this section, and the moneys and accruals or income on the moneys shall be held in a fund and designated for the person for whose benefit the fund was established as a preneed cemetery merchandise and services contract fund.

(E) The moneys received from more than one preneed cemetery merchandise and services contract may, at the option of the persons for whose benefit the contracts are made, be placed in a common or pooled trust fund in this state under a single trust instrument. If three individuals are designated as the trustees as provided in division (C)(2) of this section, they shall be bonded by a corporate surety or fidelity bond in an aggregate amount of not less than one hundred per cent of the funds held by them as trustees. The trustee trustees or its their agent shall, on a continuous basis, keep exact records as to the amount of funds under a single trust instrument being held for the individual beneficiaries showing the amount paid, the amount deposited and invested, and accruals and income.

(F) The seller of merchandise or services under a preneed cemetery merchandise and services contract shall annually submit to the division of real estate of the department of commerce an affidavit in a form prescribed by the division, sworn under oath, specifying each of the following:

(1) That, within the time specified in division (D) of this section, the amounts required by that division were deposited in an appropriate fund;

(2) That the fund has not been used to collateralize or guarantee loans and has not otherwise been subjected to any consensual lien;

(3) That the fund is invested in compliance with the investing standards set forth in sections 2109.37 and 2109.371 of the Revised Code;

(4) That no moneys have been removed from the fund, except as provided for in this section.

(G) This division is subject to division (I) of this section.

Any person upon initially entering into a preneed cemetery merchandise and services contract may, within seven days, cancel the contract and request and receive from the seller one hundred per cent of all payments made under the contract. After the expiration of the above period, any person who has entered into a preneed cemetery merchandise and services contract may, on not less than fifteen days' notice, cancel the contract and request and receive from the seller sixty per cent of the payments made under the contract which have been paid up to the time of cancellation; except that, if a preneed cemetery merchandise and services contract stipulates a firm or fixed or guaranteed price for the merchandise or services for future use at a time determined by the death of the person on behalf of whom payments are made, the person who has entered into the contract may, if the merchandise has not been delivered or the services have not been performed as set forth in division (K) or (L) of this section, on not less than fifteen days' notice, cancel the contract and receive from the seller sixty per cent of the principal paid pursuant to the contract and not less than eighty per cent of any interest paid, up to the time of cancellation, and not less than eighty per cent of any accrual or income earned while the moneys have been held pursuant to divisions (C) and (D) of this section, up to the time of cancellation. Upon cancellation, after the moneys have been distributed to the beneficiary pursuant to this division, all remaining moneys being held pursuant to divisions (C) and (D) of this section shall be paid to the seller. If more than one person enters into the contract, all of those persons must request cancellation for it to be effective under this division. In such a case, the seller shall refund to each person only those moneys that each person has paid under the contract.

(H) Upon receipt of a certified copy of the certificate of death or evidence of delivery of the merchandise or performance of the services pursuant to division (K) or (L) of this section, the trustee described in division (C)(2) of this section or its agent, shall forthwith pay the fund and accumulated interest, if any, to the person entitled to them under the preneed cemetery merchandise and services contract. The payment of the fund and accumulated interest pursuant to this section, either to a seller or person making the payments, shall relieve the trustee of any further liability on the fund or accumulated interest.

(I) Notwithstanding any other provision of this section, any preneed cemetery merchandise and services contract may specify that it is irrevocable. All irrevocable preneed cemetery merchandise and services contracts shall include a clear and conspicuous disclosure of irrevocability in the contract and any person entering into an irrevocable preneed cemetery merchandise and services contract shall sign a separate acknowledgment of the person's waiver of the right to revoke. If a contract satisfies the requirements of this division, division (G) of this section does not apply to that contract.

(J) Any preneed cemetery merchandise and services contract that involves the payment of money shall be in writing and in compliance with the laws and rules of this state.

(K) For purposes of this section, the seller is considered to have delivered merchandise pursuant to a preneed cemetery merchandise and services contract when either of the following occur:

(1) The seller makes actual delivery of the merchandise to the beneficiary, or the seller pays for the merchandise and identifies it as being stored for the benefit of the beneficiary at a manufacturer's warehouse;.

(2) The seller receives delivery of the merchandise on behalf of the beneficiary, and all of the following occur:

(a) The merchandise is permanently affixed to or stored upon the real property of a cemetery located in this state.

(b) The seller notifies the beneficiary of receipt of the merchandise and identifies the specific location of the merchandise.

(c) The seller at the time of the beneficiary's final payment provides the beneficiary with evidence of ownership in the beneficiary's name showing the merchandise to be free and clear of any liens or other encumbrances.

(L) For purposes of this section, a seller is considered to have performed services pursuant to a preneed cemetery merchandise and services contract when the beneficiary's next of kin signs a written statement that the services have been performed or, if no next of kin of the beneficiary can be located through reasonable diligence, when the owner or other person responsible for the operation of the cemetery signs a statement of that nature.

(M) Notwithstanding any other provision of this chapter, any trust may be charged a trustee's fee, which is to be deducted from the earned income or accruals on that trust. The fee shall not exceed the amount that is regularly or usually charged for similar services rendered by the trustee described in division (C)(2) of this section when serving as a trustee.

(N) The general assembly intends that this section be construed as a limitation upon the manner in which a person is permitted to accept moneys in prepayment for merchandise and services to be delivered or provided in the future, or merchandise and services to be used or provided in connection with the final disposition of human remains, to the end that at all times members of the public may have an opportunity to arrange and pay for merchandise and services for themselves and their families in advance of need while at the same time providing all possible safeguards whereunder the prepaid moneys cannot be dissipated, whether intentionally or not, so as to be available for the payment for merchandise and services and the providing of merchandise and services used or provided in connection with the final disposition of dead human bodies.

(O) This section does not apply when to the seller or provider of merchandise or services under a preneed cemetery merchandise and services contract is if the contract pertains to a cemetery that is owned and operated entirely and exclusively by an established and legally cognizable church or denomination that is exempt from federal income taxation under section 501(c)(3) of the "Internal Revenue Code of 1954," 26 U.S.C.A. 501, and the preneed cemetery merchandise and services contract pertains to a cemetery that is owned and operated entirely and exclusively by the church or denomination AN ESTABLISHED FRATERNAL ORGANIZATION, OR A MUNICIPAL CORPORATION OR OTHER POLITICAL SUBDIVISION OF THE STATE, TO A CEMETERY THAT IS A NATIONAL CEMETERY, OR TO A CEMETERY THAT IS A FAMILY CEMETERY AS DEFINED IN SECTION 4767.02 OF THE REVISED CODE; provided that the church or denomination adopts, on a voluntary basis, rules and other measures are adopted to safeguard and secure all moneys received under a preneed cemetery merchandise and services contract.

(P) This section does not prohibit persons other than cemetery corporations or associations from selling outer burial containers, monuments, markers, urns, or other types of merchandise customarily sold by cemeteries pursuant to a preneed cemetery merchandise and services contract; however all sellers of merchandise pursuant to a preneed cemetery merchandise and services contract shall comply with this section unless the seller is specifically exempt from this section.

(Q) Any contract for preneed services or merchandise entered into with a cemetery not registered under section 4767.03 of the Revised Code is voidable.

Sec. 3705.17.  The body of a person whose death occurs in Ohio this state shall not be interred, deposited in a vault or tomb, cremated, or otherwise disposed of by a funeral director until a burial permit is issued by a local registrar or sub-registrar of vital statistics. No such permit shall be issued by a local registrar or sub-registrar until a satisfactory death, fetal death, or provisional death certificate is filed with the local registrar or sub-registrar. When the medical certification as to the cause of death cannot be provided by the attending physician or coroner prior to burial, for sufficient cause, as determined by rule of the director of health, the funeral director may file a provisional death certificate with the local registrar or sub-registrar for the purpose of securing a burial or burial-transit permit. When the funeral director files a provisional death certificate to secure a burial or burial-transit permit, such the funeral director shall file a satisfactory and complete death certificate within five days after the date of death. The director of health, by rule, may provide additional time for filing a satisfactory death certificate. A burial permit authorizing cremation shall not be issued upon the filing of a provisional certificate of death.

When a funeral director or other person obtains a burial permit from a local registrar or sub-registrar, the registrar or sub-registrar shall charge a fee of two three dollars and fifty cents for the issuance of a the burial permit. Two dollars and fifty cents of each fee collected for a burial permit shall be paid into the state treasury to the credit of the division of real estate in the department of commerce to be used by the division of real estate in discharging its duties prescribed in Chapter 4767. of the Revised Code and the Ohio cemetery dispute resolution commission created by section 4767.05 of the Revised Code. A local registrar or sub-registrar shall transmit payments of that portion of the amount of each fee collected under this section to the treasurer of state on a quarterly basis or more frequently, if possible. The director of health shall, by rule, shall provide for the issuance of a burial permit without the payment of the fee required by this section if the total cost of the burial will be paid by an agency or instrumentality of the United States, the state or a state agency, or a political subdivision of the state.

The director of commerce may by rule adopted in accordance with Chapter 119. of the Revised Code reduce the total amount of the fee required by this section and that portion of the amount of the fee required to be paid to the credit of the division of real estate for the use of the division and the Ohio cemetery dispute resolution commission, if the director determines that the total amount of funds the fee is generating at the amount required by this section exceeds the amount of funds the division of real estate and the commission need to carry out their powers and duties prescribed in Chapter 4767. of the Revised Code.

No person in charge of any premises in which interments or cremations are made shall inter or cremate or otherwise dispose of a body, unless it is accompanied by a burial permit. Each person in charge of a cemetery, crematory, or other place of disposal, shall indorse upon the a burial permit the date of interment, cremation, or other disposal and shall retain such permits for a period of at least five years. The person in charge shall keep an accurate record of all interments, cremations, or other disposal of dead bodies, made in the premises under the person's charge, stating the name of the deceased person, place of death, date of burial, cremation, or other disposal, and name and address of the funeral director. Such record shall at all times be open to public inspection.

Sec. 4767.01.  As used in sections 4767.01 to 4767.08 of the Revised Code:

(A) "Cemetery," "interment," "burial right," "entombment right," and "columbarium right" have the same meanings as in section 1721.21 of the Revised Code.

(B) "Political subdivision" has the same meaning as in section 3501.01 of the Revised Code means one or more municipal corporations, townships, or other bodies corporate and politic authorized to operate and maintain a cemetery under the law of this state.

(C) "Division of real estate" may be used interchangeably with, and for all purposes has the same meaning as, "division of real estate and professional licensing."

(D) "Superintendent" or "superintendent of the division of real estate" means the superintendent of the division of real estate and professional licensing of this state. Whenever the division or superintendent of real estate is referred to or designated in any statute, rule, contract, or other document, the reference or designation shall be deemed to refer to the division or superintendent of real estate and professional licensing, as the case may be.

Sec. 4767.03.  (A)(1) The owner or the person responsible for the operation and maintenance of a cemetery shall apply to the division of real estate in the department of commerce to register the cemetery on forms prescribed by the division. With the application, the applicant shall submit such the documentation as required in division (A) of section 4767.04 of the Revised Code and a registration fee of twenty-five dollars for one cemetery, forty dollars for two cemeteries, and fifty dollars for three or more cemeteries, except that no fee shall be required of any political subdivision.

(2) The director of commerce, by rule adopted in accordance with Chapter 119. of the Revised Code, may reduce the amount of the registration fee required by this section in any year if the director determines that the total amount of funds the fee is generating at the amount specified by this section exceeds the amount of funds the division of real estate and the Ohio cemetery dispute resolution commission created by section 4767.05 of the Revised Code need to carry out their powers and duties under this chapter. If the director so reduces the amount of the registration fee, the director shall reduce it for all owners or other persons required to pay the fee under division (A)(1) of this section and shall require that the reduced fee be paid according to the number of cemeteries owned, operated, or maintained as required under that division. If the director has reduced the fee under division (A)(2) of this section, the director may later raise it up to the amounts specified in division (A)(1) of this section if, in any year, the director determines that the total amount of funds the fee is generating at the reduced amount is insufficient for the division of real estate and the Ohio cemetery dispute resolution commission to carry out their powers and duties under this chapter.

(B) Upon receipt of the completed application form, documentation, and, if required, registration fee, the division of real estate shall issue a certificate of registration to the applicant. The applicant shall display the certificate in a conspicuous place on the premises of the cemetery for which the registration was obtained, except that, if the applicant is the legislative authority governing body of a political subdivision or person acting on behalf of that authority governing body, the certificate shall be kept on file and be available for public inspection at the office of the legislative authority governing body.

(C) Each Except as otherwise provided in this division, each registration issued pursuant to this section shall expire annually on the thirtieth day of June and may be renewed. The renewal fee shall be the same as the initial registration fees prescribed in division (A) of this section.

The registration of a cemetery operated and maintained by a political subdivision shall not expire unless the political subdivision ceases to operate and maintain the cemetery. A political subdivision operating and maintaining a cemetery is not required to renew or update the registration of that cemetery unless there is a change in the information required under division (A) of section 4767.04 of the Revised Code or unless additional land is acquired to increase the size of the cemetery.

(D) All registration and renewal fees collected pursuant to this section shall be paid into the state treasury to the credit of the division of real estate in the department of commerce to be used by the division to carry out its powers and duties under this chapter and by the Ohio cemetery dispute resolution commission created by section 4767.05 of the Revised Code.

Sec. 4767.04.  (A) To qualify a cemetery for a certificate of registration, the applicant shall submit to the division of real estate the following information:

(1) The name of the cemetery;

(2) The street address, city, village, or township, and county where the cemetery is located, and the mailing address if different from the street address;

(3) The name and address of the person who owns the cemetery;

(4) The name and address of the person responsible for the operation and maintenance of the cemetery;

(5) A copy of the most recent annual report of the cemetery if required by the Ohio division of real estate commission pursuant to section 1721.211 of the Revised Code or if required by the Ohio cemetery dispute resolution commission. If the cemetery is owned by a cemetery company or association, a copy of the annual report for the previous year of all of the assets and investments of the endowment care funds trust of the company or association as prepared pursuant to section 1721.21 of the Revised Code shall be submitted to the division.

(B) If any of the information required in division (A) of this section changes at any time, the person responsible for the operation and maintenance of the cemetery shall submit written notification of the change to the division within thirty days of the change occurring.

(C) In addition to satisfying the requirements set forth in divisions (A) and (B) of this section, if a political subdivision intends to acquire additional land to increase the size of an existing cemetery that it is operating and maintaining or intends to open a new cemetery, its governing body shall notify the division at least thirty days before the acquisition or opening to renew the registration of the existing cemetery or to register the new cemetery.

Sec. 4767.08.  (A) The Ohio cemetery dispute resolution commission, on its own motion or as a result of a complaint received pursuant to section 4767.07 of the Revised Code and with good cause shown, shall investigate or cause to be investigated alleged violations of sections 1721.19, 1721.20, 1721.21, 1721.211, 4735.02, 4735.22, and 4765.03 4767.03 of the Revised Code. If the commission or the superintendent of the division of real estate in the department of commerce believes that a violation has occurred, the commission or superintendent shall do all of the following:

(1) Review the financial records of the cemetery to ensure compliance with sections 1721.21 and 1721.211 of the Revised Code;

(2) Request the prosecuting attorney of the county in which the alleged violation occurred to initiate such proceedings as are appropriate.

(B) If, as a result of an investigation, the commission or the superintendent believes that a person has violated Chapter 1345. of the Revised Code, the commission or superintendent shall report the findings to the attorney general.

(C) The commission, at any time, may dismiss a complaint if it determines there is not good cause shown for the complaint. If the commission dismisses a complaint, it shall notify the person who filed the complaint within twenty days of reaching its decision and identify the reason why the complaint was dismissed.

(D) When necessary for the division of real estate in the department of commerce to perform the duties required by sections 4767.07 and 4767.08 of the Revised Code, the superintendent of the division, after consultation with at least a majority of the members of the cemetery dispute resolution commission, may issue subpoenas and compel the production of books, papers, records, and other forms of evidence.

SECTION 2 .  That existing sections 1721.21, 1721.211, 3705.17, 4767.01, 4767.03, 4767.04, and 4767.08 of the Revised Code are hereby repealed.

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