To amend sections 1151.345, 1161.59, 1733.51, 2108.81, 2117.251, 3103.03, 3905.451, 4717.01, 4717.03, 4717.04, 4717.13, 4717.99, and 5747.02, to enact sections 4717.31 and 4717.32, and to repeal sections 1111.19 and 1111.99 of the Revised Code to revise the Preneed Funeral Contract Law.

Section 1.  That sections 1151.345, 1161.59, 1733.51, 2108.81, 2117.251, 3103.03, 3905.451, 4717.01, 4717.03, 4717.04, 4717.13, 4717.99, and 5747.02 be amended and sections 4717.31 and 4717.32 of the Revised Code be enacted to read as follows:

Sec. 1151.345.  A savings and loan association, in accordance with sections 1111.19 and 1721.211 and 4717.31 of the Revised Code, may receive and hold on deposit moneys under a preneed funeral contract or a preneed cemetery merchandise and services contract.

Sec. 1161.59.  In accordance with sections 1111.19 and 1721.211 and 4717.31 of the Revised Code, a savings bank may receive and hold on deposit moneys under a preneed funeral contract or a preneed cemetery merchandise and services contract.

Sec. 1733.51.  A credit union may, subject to sections 1111.19 and 1721.211 and 4717.31 of the Revised Code, receive and hold on deposit moneys under a preneed funeral contract or preneed cemetery merchandise and services contract.

Sec. 2108.81.  (A) If either of the following is true, division (B) of this section shall apply:

(1) An adult has not executed a written declaration pursuant to sections 2108.70 to 2108.73 of the Revised Code that remains in force at the time of the adult's death.

(2) Each person to whom the right of disposition has been assigned or reassigned pursuant to a written declaration is disqualified from exercising the right as described in section 2108.75 of the Revised Code.

(B) Subject to division (A) of this section and sections 2108.75 and 2108.79 of the Revised Code, the right of disposition is assigned to the following persons, if mentally competent adults who can be located with reasonable effort, in the order of priority stated:

(1) The deceased person's surviving spouse;

(2) The sole surviving child of the deceased person or, if there is more than one surviving child, all of the surviving children, collectively.;

(3) The deceased person's surviving parent or parents;

(4) The deceased person's surviving sibling, whether of the whole or of the half blood or, if there is more than one sibling of the whole or of the half blood, all of the surviving siblings, collectively;

(5) The deceased person's surviving grandparent or grandparents;

(6) The deceased person's surviving grandchild, or if there is more than one surviving grandchild, all of the surviving grandchildren collectively;

(7) The lineal descendants of the deceased person's grandparents, as described in division (I) of section 2105.06 of the Revised Code;

(7)(8) The person who was the deceased person's guardian at the time of the deceased person's death, if a guardian had been appointed;

(8)(9) Any other person willing to assume the right of disposition, including the personal representative of the deceased person's estate or the licensed funeral director with custody of the deceased person's body, after attesting in writing that a good faith effort has been made to locate the persons in divisions (B)(1) to (7) of this section.

(10) If the deceased person was an indigent person or other person the final disposition of whose body is the responsibility of the state or a political subdivision of this state, the public officer or employee responsible for arranging the final disposition of the remains or the deceased person.

Sec. 2117.251. A claim under the bill of a funeral director pursuant to section 2117.25 of the Revised Code arises subsequent to the death of the decedent and is not in satisfaction of a personal obligation of the individual during the individual's lifetime. If a decedent during the decedent's lifetime has purchased an irrevocable preneed funeral contract pursuant to section 1111.19 4717.31 of the Revised Code, then those provisions of section 2117.25 of the Revised Code that relate to the bill of a funeral director, including divisions (A) and (B) of that section, do not apply to the estate of the decedent and the estate is not liable for the funeral expenses of the decedent.

Sec. 3103.03.  (A) Each married person must support the person's self and spouse out of the person's property or by the person's labor. If a married person is unable to do so, the spouse of the married person must assist in the support so far as the spouse is able. The biological or adoptive parent of a minor child must support the parent's minor children out of the parent's property or by the parent's labor.

(B) Notwithstanding section 3109.01 of the Revised Code and to the extent provided in section 3319.86 3119.86 of the Revised Code, the parental duty of support to children shall continue beyond the age of majority as long as the child continuously attends on a full-time basis any recognized and accredited high school. That duty of support shall continue during seasonal vacation periods.

(C) If a married person neglects to support the person's spouse in accordance with this section, any other person, in good faith, may supply the spouse with necessaries for the support of the spouse and recover the reasonable value of the necessaries supplied from the married person who neglected to support the spouse unless the spouse abandons that person without cause.

(D) If a parent neglects to support the parent's minor child in accordance with this section and if the minor child in question is unemancipated, any other person, in good faith, may supply the minor child with necessaries for the support of the minor child and recover the reasonable value of the necessaries supplied from the parent who neglected to support the minor child.

(E) If a decedent during the decedent's lifetime has purchased an irrevocable preneed funeral contract pursuant to section 1109.75 4717.31 of the Revised Code, then the duty of support owed to a spouse pursuant to this section does not include an obligation to pay for the funeral expenses of the deceased spouse. This division does not preclude a surviving spouse from assuming by contract the obligation to pay for the funeral expenses of the deceased spouse.

Sec. 3905.451.  A life insurance policy that is issued, sold, or assigned for the purpose of purchasing funeral or burial goods or services, and the contractual obligation to provide the goods or services, are not subject to divisions (C), (F), (G), (I), and (J) of section 1111.19 4717.31 of the Revised Code.

Sec. 4717.01.  As used in this chapter:

(A) "Embalming" means the preservation and disinfection, or attempted preservation and disinfection, of the dead human body by application of chemicals externally, internally, or both.

(B) "Funeral business" means a sole proprietorship, partnership, corporation, limited liability company, or other business entity that is engaged in funeral directing for profit or for free from one or more funeral homes licensed under this chapter.

(C) "Funeral directing" means the business or profession of directing or supervising funerals for profit, the business or profession of preparing dead human bodies for burial by means other than embalming, the disposition of dead human bodies, the provision or maintenance of a place for the preparation, the care, or disposition of dead human bodies, the use in connection with a business of the term "funeral director," "undertaker," "mortician," or any other term from which can be implied the business of funeral directing, or the holding out to the public that one is a funeral director or a disposer of dead human bodies.

(D) "Funeral home" means a fixed place for the care, preparation for burial, or disposition of dead human bodies or the conducting of funerals. Each business location is a funeral home, regardless of common ownership or management.

(E) "Embalmer" means a person who engages, in whole or in part, in embalming and who is licensed under this chapter.

(F) "Funeral director" means a person who engages, in whole or in part, in funeral directing and who is licensed under this chapter.

(G) "Final disposition" has the same meaning as in division (J) of section 3705.01 of the Revised Code.

(H) "Supervision" means the operation of all phases of the business of funeral directing or embalming under the specific direction of a licensed funeral director or licensed embalmer.

(I) "Direct supervision" means the physical presence of a licensed funeral director or licensed embalmer while the specific functions of the funeral or embalming are being carried out.

(J) "Embalming facility" means a fixed location, separate from the funeral home, that is licensed under this chapter whose only function is the embalming and preparation of dead human bodies.

(K) "Crematory facility" means the physical location at which a cremation chamber is located and the cremation process takes place. "Crematory facility" does not include an infectious waste incineration facility for which a license is held under division (B) of section 3734.05 of the Revised Code, or a solid waste incineration facility for which a license is held under division (A) of that section that includes a notation pursuant to division (B)(3) of that section authorizing the facility to also treat infectious wastes, in connection with the incineration of body parts other than dead human bodies that were donated to science for purposes of medical education or research.

(L) "Crematory" means the building or portion of a building that houses the holding facility and the cremation chamber.

(M) "Cremation" means the technical process of using heat and flame to reduce human or animal remains to bone fragments or ashes or any combination thereof. "Cremation" includes processing and may include the pulverization of bone fragments.

(N) "Cremation chamber" means the enclosed space within which cremation takes place.

(O) "Cremated remains" means all human or animal remains recovered after the completion of the cremation process, which may include the residue of any foreign matter such as casket material, dental work, or eyeglasses that were cremated with the human or animal remains.

(P) "Lapsed license" means a license issued under this chapter that has become invalid because of the failure of the licensee to renew the license within the time limits prescribed under this chapter.

(Q) "Operator of a crematory facility" means the sole proprietorship, partnership, corporation, limited liability company, or other business entity responsible for the overall operation of a crematory facility.

(R) "Processing" means the reduction of identifiable bone fragments to unidentifiable bone fragments through manual or mechanical means after the completion of the cremation process.

(S) "Pulverization" means the reduction of identifiable bone fragments to granulated particles by manual or mechanical means after the completion of the cremation process.

(T) "Financial institution" means a bank, savings bank, or savings association located in this state and insured by the federal deposit insurance corporation or a credit union authorized to do business in this state.

(U) "Preneed funeral contract" means a written agreement, contract, or series of contracts to sell or otherwise provide any funeral services, funeral goods, including caskets, or any combination of funeral services and funeral goods to be used in connection with the funeral or final disposition of a dead human body, where payment for the goods or services is made either outright or on an installment basis, prior to the death of the person purchasing the goods or services or for whom the goods or services are purchased. Preneed funeral contract does not include any preneed cemetery merchandise and services 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 is established or is exempt from establishment pursuant to section 1721.21 of the Revised Code.

Sec. 4717.03.  (A) Members of the board of embalmers and funeral directors shall annually in July, or within thirty days after the senate's confirmation of the new members appointed in that year, meet and organize by selecting from among its members a president, vice-president, and secretary-treasurer. The board may hold other meetings as it determines necessary. A quorum of the board consists of four members, of whom at least three shall be members who are embalmers and funeral directors. The concurrence of at least four members is necessary for the board to take any action. The president and secretary-treasurer shall sign all licenses issued under this chapter and affix the board's seal to each license.

(B) The board may appoint an individual who is not a member of the board to serve as executive director of the board. The executive director serves at the pleasure of the board and shall do all of the following:

(1) Serve as the board's chief administrative officer;

(2) Act as custodian of the board's records;

(3) Execute all of the board's orders.

In executing the board's orders, the executive director may enter the premises, establishment, office, or place of business of any embalmer, funeral director, or operator of a crematory facility in this state. The executive director may serve and execute any process issued by any court under this chapter.

(C) The board may employ clerical or technical staff who are not members of the board and who serve at the pleasure of the board to provide any clerical or technical assistance the board considers necessary. The board may employ necessary inspectors, who shall be licensed embalmers and funeral directors. Any inspector employed by the board may enter the premises, establishment, office, or place of business of any embalmer, funeral director, or operator of a crematory facility in this state, for the purposes of inspecting the facility and premises; the license and registration of embalmers and funeral directors operating in the facility; and the license of the funeral home, embalming facility, or crematory. The inspector shall serve and execute any process issued by any court under this chapter, serve and execute any papers or process issued by the board or any officer or member of the board, and perform any other duties delegated by the board.

(D) The president of the board shall designate three of its members to serve on the crematory review board, which is hereby created, for such time as the president finds appropriate to carry out the provisions of this chapter. Those members of the crematory review board designated by the president to serve and three members designated by the cemetery dispute resolution commission shall designate, by a majority vote, one person who is experienced in the operation of a crematory facility and who is not affiliated with a cemetery or a funeral home to serve on the crematory review board for such time as the crematory review board finds appropriate. Members serving on the crematory review board shall not receive any additional compensation for serving on the board, but may be reimbursed for their actual and necessary expenses incurred in the performance of official duties as members of the board. Members of the crematory review board shall designate one from among its members to serve as a chairperson for such time as the board finds appropriate. Costs associated with conducting an adjudicatory hearing in accordance with division (E) of this section shall be paid from funds available to the board of embalmers and funeral directors.

(E) Upon receiving written notice from the board of embalmers and funeral directors of any of the following, the crematory review board shall conduct an adjudicatory hearing on the matter in accordance with Chapter 119. of the Revised Code, except as otherwise provided in this section or division (C) of section 4717.14 of the Revised Code:

(1) Notice provided under division (H) of this section of an alleged violation of any provision of this chapter or any rules adopted under this chapter, or section 1111.19 of the Revised Code, governing or in connection with crematory facilities or cremation;

(2) Notice provided under division (B) of section 4717.14 of the Revised Code that the board of embalmers and funeral directors proposes to refuse to grant or renew, or to suspend or revoke, a license to operate a crematory facility;

(3) Notice provided under division (C) of section 4717.14 of the Revised Code that the board of embalmers and funeral directors has issued an order summarily suspending a license to operate a crematory facility;

(4) Notice provided under division (B) of section 4717.15 of the Revised Code that the board of embalmers and funeral directors proposes to issue a notice of violation and order requiring payment of a forfeiture for any violation described in divisions (A)(9)(a) to (g) of section 4717.04 of the Revised Code alleged in connection with a crematory facility or cremation.

Nothing in division (E) of this section precludes the crematory review board from appointing an independent examiner in accordance with section 119.09 of the Revised Code to conduct any adjudication hearing required under division (E) of this section.

The crematory review board shall submit a written report of findings and advisory recommendations, and a written transcript of its proceedings, to the board of embalmers and funeral directors. The board of embalmers and funeral directors shall serve a copy of the written report of the crematory review board's findings and advisory recommendations on the party to the adjudication or the party's attorney, by certified mail, within five days after receiving the report and advisory recommendations. A party may file objections to the written report with the board of embalmers and funeral directors within ten days after receiving the report. No written report is final or appealable until it is issued as a final order by the board of embalmers and funeral directors and entered on the record of the proceedings. The board of embalmers and funeral directors shall consider objections filed by the party prior to issuing a final order. After reviewing the findings and advisory recommendations of the crematory review board, the written transcript of the crematory review board's proceedings, and any objections filed by a party, the board of embalmers and funeral directors shall issue a final order in the matter. Any party may appeal the final order issued by the board of embalmers and funeral directors in a matter described in divisions (E)(1) to (4) of this section in accordance with section 119.12 of the Revised Code, except that the appeal may be made to the court of common pleas in the county in which is located the crematory facility to which the final order pertains, or in the county in which the party resides.

(F) On its own initiative or on receiving a written complaint from any person whose identity is made known to the board of embalmers and funeral directors, the board shall investigate the acts or practices of any person holding or claiming to hold a license or registration under this chapter that, if proven to have occurred, would violate this chapter or any rules adopted under it, or section 1111.19 of the Revised Code. The board may compel witnesses by subpoena to appear and testify in relation to investigations conducted under this chapter and may require by subpoena duces tecum the production of any book, paper, or document pertaining to an investigation. If a person does not comply with a subpoena or subpoena duces tecum, the board may apply to the court of common pleas of any county in this state for an order compelling the person to comply with the subpoena or subpoena duces tecum, or for failure to do so, to be held in contempt of court.

(G) If, as a result of its investigation conducted under division (F) of this section, the board of embalmers and funeral directors has reasonable cause to believe that the person investigated is violating any provision of this chapter or any rules adopted under this chapter, or section 1111.19 of the Revised Code, governing or in connection with embalming, funeral directing, funeral homes, embalming facilities, or the operation of funeral homes or embalming facilities, it may, after providing the opportunity for an adjudicatory hearing, issue an order directing the person to cease the acts or practices that constitute the violation. The board shall conduct the adjudicatory hearing in accordance with Chapter 119. of the Revised Code except that, notwithstanding the provisions of that chapter, the following shall apply:

(1) The board shall send the notice informing the person of the person's right to a hearing by certified mail.

(2) The person is entitled to a hearing only if the person requests a hearing and if the board receives the request within thirty days after the mailing of the notice described in division (G)(1) of this section.

(3) A stenographic record shall be taken, in the manner prescribed in section 119.09 of the Revised Code, at every adjudicatory hearing held under this section, regardless of whether the record may be the basis of an appeal to a court.

(H) If, as a result of its investigation conducted under division (F) of this section, the board of embalmers and funeral directors has reasonable cause to believe that the person investigated is violating any provision of this chapter or any rules adopted under this chapter, or section 1111.19 of the Revised Code, governing or in connection with crematory facilities or cremation, the board shall send written notice of the alleged violation to the crematory review board. If, after the conclusion of the adjudicatory hearing in the matter conducted under division (E) of this section, the board of embalmers and funeral directors finds that a person is in violation of any provision of this chapter or any rules adopted under this chapter, or section 1111.19 of the Revised Code, governing or in connection with crematory facilities or cremation, the board may issue a final order under that division directing the person to cease the acts or practices that constitute the violation.

(I) The board of embalmers and funeral directors may bring a civil action to enjoin any violation or threatened violation of section 1111.19; sections 4717.01 to 4717.15 of the Revised Code or a rule adopted under any of those sections; division (A) or (B) of section 4717.23; division (B)(1) or (2), (C)(1) or (2), (D), (E), or (F)(1) or (2), or divisions (H) to (K) of section 4717.26; division (D)(1) of section 4717.27; or divisions (A) to (C) of section 4717.28, or section 4717.31 of the Revised Code. The action shall be brought in the county where the violation occurred or the threatened violation is expected to occur. At the request of the board, the attorney general shall represent the board in any matter arising under this chapter.

(J) The board of embalmers and funeral directors and the crematory review board may issue subpoenas for funeral directors and embalmers or persons holding themselves out as such, for operators of crematory facilities or persons holding themselves out as such, or for any other person whose testimony, in the opinion of either board, is necessary. The subpoena shall require the person to appear before the appropriate board or any designated member of either board, upon any hearing conducted under this chapter. The penalty for disobedience to the command of such a subpoena is the same as for refusal to answer such a process issued under authority of the court of common pleas.

(K) All moneys received by the board of embalmers and funeral directors from any source shall be deposited in the state treasury to the credit of the occupational licensing and regulatory fund created in section 4743.05 of the Revised Code.

(L) The board of embalmers and funeral directors shall submit a written report to the governor on or before the first Monday of July of each year. This report shall contain a detailed statement of the nature and amount of the board's receipts and the amount and manner of its expenditures.

Sec. 4717.04.  (A) The board of embalmers and funeral directors shall adopt rules in accordance with Chapter 119. of the Revised Code for the government, transaction of the business, and the management of the affairs of the board of embalmers and funeral directors and the crematory review board, and for the administration and enforcement of this chapter. These rules shall include all of the following:

(1) The nature, scope, content, and form of the application that must be completed and license examination that must be passed in order to receive an embalmer's license or a funeral director's license under section 4717.05 of the Revised Code. The rules shall ensure both of the following:

(a) That the embalmer's license examination tests the applicant's knowledge through at least a comprehensive section and an Ohio laws section;

(b) That the funeral director's license examination tests the applicant's knowledge through at least a comprehensive section, an Ohio laws section, and a sanitation section.

(2) The minimum license examination score necessary to be licensed under section 4717.05 of the Revised Code as an embalmer or as a funeral director;

(3) Procedures for determining the dates of the embalmer's and funeral director's license examinations, which shall be administered at least once each year, the time and place of each examination, and the supervision required for each examination;

(4) Procedures for determining whether the board shall accept an applicant's compliance with the licensure, registration, or certification requirements of another state as grounds for granting the applicant a license under this chapter;

(5) A determination of whether completion of a nationally recognized embalmer's or funeral director's examination sufficiently meets the license requirements for the comprehensive section of either the embalmer's or the funeral director's license examination administered under this chapter;

(6) Continuing education requirements for licensed embalmers and funeral directors;

(7) Requirements for the licensing and operation of funeral homes;

(8) Requirements for the licensing and operation of embalming facilities;

(9) A schedule that lists, and specifies a forfeiture commensurate with, each of the following types of conduct which, for the purposes of division (A)(9) of this section and section 4717.15 of the Revised Code, are violations of this chapter:

(a) Obtaining a license under this chapter by fraud or misrepresentation either in the application or in passing the required examination for the license;

(b) Purposely violating any provision of sections 4717.01 to 4717.15 of the Revised Code or a rule adopted under any of those sections; division (A) or (B) of section 4717.23; division (B)(1) or (2), (C)(1) or (2), (D), (E), or (F)(1) or (2), or divisions (H) to (K) of section 4717.26; division (D)(1) of section 4717.27; or divisions (A) to (C) of section 4717.28 of the Revised Code;

(c) Committing unprofessional conduct;

(d) Knowingly permitting an unlicensed person, other than a person serving an apprenticeship, to engage in the profession or business of embalming or funeral directing under the licensee's supervision;

(e) Refusing to promptly submit the custody of a dead human body upon the express order of the person legally entitled to the body;

(f) Transferring a license to operate a funeral home, embalming facility, or crematory facility from one owner or operator to another, or from one location to another, without notifying the board;

(g) Misleading the public using false or deceptive advertising.

Each instance of the commission of any of the types of conduct described in divisions (A)(9)(a), (b), (c), (d), (e), (f), and (g) of this section is a separate violation. The rules adopted under division (A)(9) of this section shall establish the amount of the forfeiture for a violation of each of those divisions. The forfeiture for a first violation shall not exceed five thousand dollars, and the forfeiture for a second or subsequent violation shall not exceed ten thousand dollars. The amount of the forfeiture may differ among the types of violations according to what the board considers the seriousness of each violation.

(10) Requirements for the licensing and operation of crematory facilities;

(11) Procedures for the issuance of duplicate licenses;

(12) Requirements and procedures for annual reporting of preneed sales by all preneed sellers;

(13) Procedures for the administration of the preneed recovery fund.

(B) The board may adopt rules governing the educational standards for licensure as an embalmer or funeral director and the standards of service and practice to be followed in embalming and funeral directing and in the operation of funeral homes, embalming facilities, and crematory facilities in this state.

(C) Nothing in this chapter authorizes the board of embalmers and funeral directors to regulate cemeteries, except that the board shall license and regulate crematories located at cemeteries in accordance with this chapter.

Sec. 4717.13.  (A) No person shall do any of the following:

(1) Engage in the business or profession of funeral directing unless the person is licensed as a funeral director under this chapter, is certified as an apprentice funeral director in accordance with rules adopted under section 4717.04 of the Revised Code and is assisting a funeral director licensed under this chapter, or is a student in a college of mortuary sciences approved by the board and is under the direct supervision of a funeral director licensed by the board;

(2) Engage in embalming unless the person is licensed as an embalmer under this chapter, is certified as an apprentice embalmer in accordance with rules adopted under section 4717.04 of the Revised Code and is assisting an embalmer licensed under this chapter, or is a student in a college of mortuary science approved by the board and is under the direct supervision of an embalmer licensed by the board;

(3) Advertise or otherwise offer to provide or convey the impression that the person provides funeral directing services unless the person is licensed as a funeral director under this chapter and is employed by or under contract to a licensed funeral home and performs funeral directing services for that funeral home in a manner consistent with the advertisement, offering, or conveyance;

(4) Advertise or otherwise offer to provide or convey the impression that the person provides embalming services unless the person is licensed as an embalmer under this chapter and is employed by or under contract to a licensed funeral home or a licensed embalming facility and performs embalming services for the funeral home or embalming facility in a manner consistent with the advertisement, offering, or conveyance;

(5) Operate a funeral home without a license to operate the funeral home issued by the board under this chapter;

(6) Practice the business or profession of funeral directing from any place except from a funeral home that a person is licensed to operate under this chapter;

(7) Practice embalming from any place except from a funeral home or embalming facility that a person is licensed to operate under this chapter;

(8) Operate a crematory or perform cremation without a license to operate the crematory issued under this chapter;

(9) Cremate animals in a cremation chamber in which dead human bodies or body parts are cremated or cremate dead human bodies or human body parts in a cremation chamber in which animals are cremated.

(B) No funeral director or other person in charge of the final disposition of a dead human body shall fail to do one of the following prior to the interment of the body:

(1) Affix to the ankle or wrist of the deceased a tag encased in a durable and long-lasting material that contains the name, date of birth, date of death, and social security number of the deceased;

(2) Place in the casket a capsule containing a tag bearing the information described in division (B)(1) of this section;

(3) If the body was cremated, place in the vessel containing the cremated remains a tag bearing the information described in division (B)(1) of this section.

(C) No person who holds a funeral home license for a funeral home that is closed, or that is owned by a funeral business in which changes in the ownership of the funeral business result in a majority of the ownership of the funeral business being held by one or more persons who solely or in combination with others did not own a majority of the funeral business immediately prior to the change in ownership, shall fail to submit to the board within thirty days after the closing or such a change in ownership of the funeral business owning the funeral home, a clearly enumerated account of all of the following from which the licensee, at the time of the closing or change in ownership of the funeral business and in connection with the funeral home, was to receive payment for providing funeral services, funeral goods, or any combination of those in connection with the funeral or final disposition of a dead human body:

(1) Preneed funeral contracts governed by section 1111.19 4717.31 of the Revised Code;

(2) Life insurance policies the benefits of which are payable to the provider of funeral or burial goods or services;

(3) Accounts at banks or savings banks insured by the federal deposit insurance corporation, savings and loan associations insured by the federal savings and loan insurance corporation or the Ohio deposit guarantee fund, or credit unions insured by the national credit union administration or a credit union share guaranty corporation organized under Chapter 1761. of the Revised Code that are payable upon the death of the person for whose benefit deposits into the accounts were made.

Sec. 4717.31.  (A) Only a funeral director licensed pursuant to Chapter 4717. of the Revised Code may sell a preneed funeral contract that includes funeral services.

(B) A preneed funeral contract may be funded by the purchase or assignment of an insurance policy in accordance with section 3905.45 of the Revised Code. Preneed funeral contracts that are funded by the purchase or assignment of an insurance policy in accordance with section 3905.45 of the Revised Code are not subject to divisions (C), (F), (G), (I), and (J) of this section. Any preneed funeral contract that involves the payment of money or the purchase or assignment of an insurance policy shall be in writing and include the following information:

(1) The name, address, and phone number of the seller and the name, address, and social security number of the purchaser, and, if the beneficiary of the preneed funeral contract is for someone other than the purchaser, the name, address, and social security number of the beneficiary;

(2) A statement of the funeral goods and funeral services purchased, which disclosure may be made by attaching a copy of the completed statement of funeral goods and services selected to the preneed funeral contract;

(3) If the preneed funeral contract is funded by any means other than an insurance policy or policies, disclosures identifying the name and address of the trustee, indicating whether fees, expenses, or taxes will be deducted from the trust, and a statement of who will be responsible for the taxes owed on the trust earnings;

(4) If the preneed funeral contract is funded by the purchase or assignment of one or more insurance policies, disclosures identifying the name and address of the insurance company and any right the purchaser has regarding canceling or transferring the insurance policies;

(5) A disclosure explaining the form in which the purchase price must be paid and, if the price is to be paid in installments, a disclosure to the purchaser regarding what constitutes a default under the preneed funeral contract and the consequences of the default;

(6) A disclosure informing the purchaser whether the contract is either a guaranteed price preneed funeral contract or a non-guaranteed price preneed funeral contract, and, if guaranteed only in part, the funeral goods or funeral services included in the guarantee shall be specified. If the preneed funeral contract is a guaranteed price contract, the contract shall disclose that the seller, in exchange for all of the proceeds of the trust or insurance policy, shall provide the funeral goods and services set forth in the preneed funeral contract without regard to the actual cost of such funeral goods and services prevailing at the time of performance. If the preneed funeral contract is a non-guaranteed price contract, the contract shall disclose that the proceeds of the trust or insurance policy shall be applied to the current retail prices of the funeral goods and services set forth in the contract. It shall further disclose that any surplus funds shall be paid to the estate of the purchaser and, in the event of an insufficiency in funds, the seller shall not be required to perform until payment arrangements satisfactory to the seller have been made.

(7) A disclosure that the purchaser has the right to make the contract irrevocable and that if the preneed funeral contract is irrevocable, the purchaser does not have a right to revoke the contract;

(8) A disclosure informing the purchaser of the initial right to cancel the preneed funeral contract within seven days as provided in division (D) of this section and the right to revoke a revocable preneed funeral contract in accordance with divisions (E)(3) and (I)(1) of this section;

(9) A disclosure that the seller may substitute funeral goods or services of equal quality, value, and workmanship if those specified in the preneed funeral contract are unavailable at the time of need;

(10) A disclosure that any purchaser of funeral goods and services is entitled to receive price information prior to making that purchase in accordance with the Federal Trade Commission's funeral industry practices revised rule, 16 C.F.R. Part 453;

(11) The following notice in boldface print and in substantially the following form:

"NOTICE: Under Ohio law, the person holding the right of disposition of the remains of the beneficiary of this contract pursuant to section 2108.70 or 2108.81 of the Revised Code will have the right to make funeral arrangements inconsistent with the arrangements set forth in this contract. However, the beneficiary is encouraged to state his or her preferences as to funeral arrangements in a declaration of the right of disposition pursuant to section 2108.72 of the Revised Code, including that the arrangements set forth in this contract shall be followed."

(12) If the preneed funeral contract is funded by the purchase of one or more insurance policies, the following notice in boldface print and in substantially the following form:

"NOTICE: You, as the purchaser of this contract, will be notified in writing by any insurance company when the insurance policy or policies that will fund this contract have been issued. If you do not receive the notice within sixty days of the date you paid the funds to the seller, you should contact the insurance company identified in the contract."

(13) If the preneed contract is funded by means other than an insurance policy, the following notice in boldface print and in substantially the following form:

"NOTICE: You, as the purchaser of this contract, will be notified in writing when the trustee of this contract has received a deposit of the funds you paid the seller under this contract. If you do not receive the notice within sixty days of the date you paid the funds to the seller, you should contact the trustee identified in the contract."

(C) One hundred per cent of all payments for funeral goods and services made under a preneed funeral contract shall remain intact and held in trust in accordance with divisions (F), (G), (I), and (J) of this section for the benefit of the person for whose benefit the contract is made. No money in a preneed funeral contract trust shall be distributed from the trust except as provided in this section. Within thirty days after the seller of funeral goods or services receives any payment under a preneed funeral contract, the seller shall deliver the moneys received and not returned to the purchaser as provided in division (D) of this section to the trustee designated in the preneed funeral contract.

(D) Any purchaser on initially entering into a preneed funeral contract may, within seven days, rescind the contract and request and receive from the seller one hundred per cent of all payments made under the contract. Each preneed funeral contract shall contain the following notice in boldface print and in substantially the following form:

"NOTICE: Under Ohio law, you, as the purchaser of this contract, may rescind it and receive a refund of all payments you made under the contract. To rescind the contract, you must notify the seller within seven days of signing the contract."

(E)(1) If the preneed funeral contract provides that it will be funded by the purchase of an insurance policy, the seller, within thirty days after receiving any payment under the preneed funeral contract, shall deliver the money received and not returned to the purchaser as provided in division (D) of this section, to the insurance company designated in the preneed funeral contract.

(2) The insurance company receiving payment from a preneed funeral contract seller for an insurance policy to fund the preneed funeral contract shall notify the purchaser of the contract in writing of the amount of any payment received within fifteen days of the receipt of the payment.

(3) The purchaser of a preneed funeral contract that is not irrevocable and that is funded by an insurance policy may, on not less than fifteen days' notice, cancel the preneed funeral contract and change the beneficiary of the insurance policy or reassign the benefits under the policy.

(4) The purchaser of a preneed funeral contract that is irrevocable and that is funded by an insurance policy may transfer the preneed funeral contract to a successor seller. Within fifteen days of receiving the written notice of the designation of the successor seller from the purchaser, the original seller shall notify the insurance company to transfer all rights under the insurance policy to the successor seller. The insurance company shall confirm the transfer to the original seller, the successor seller, and the purchaser by written notice to each.

(F) The trustee of each preneed funeral contract 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.

(G)(1) A trustee shall establish a separate preneed funeral contract trust for the moneys paid under each preneed funeral contract, unless the purchaser under a preneed funeral contract authorizes the trustee to place the moneys paid in a combined preneed funeral contract trust. The trustee of a combined preneed funeral contract trust shall keep exact records of the corpus, income, expenses, and disbursements with regard to each beneficiary of a preneed funeral contract for whom moneys are held in the trust. The terms of a preneed funeral contract trust are governed by this section.

(2) The trustee of a preneed funeral contract shall notify the purchaser of the contract in writing of the amount of any deposit with the trustee of a payment under the contract within fifteen days of receiving the deposit from the seller of the contract.

(3) A trustee may charge a fee for managing a preneed funeral contract trust. The fee shall not exceed the amount regularly or usually charged for similar services rendered by the financial institution when serving as a trustee, and shall be paid only from the income on that trust.

(H) No preneed funeral contract shall restrict the purchaser from making the contract irrevocable. On the purchase by an individual of an irrevocable preneed funeral contract, the selling funeral director assumes the legal obligation to provide for the funeral of the individual pursuant to the terms of the contract. No money deposited in a trust fund for an irrevocable preneed contract shall be withdrawn to purchase an insurance policy.

(I)(1) The purchaser of a preneed funeral contract that is not irrevocable may, on not less than fifteen days' notice, cancel the contract and request and receive from the trustee payments made under the contract and any income earned up to the time of cancellation, less fees, distributions, and expenses made pursuant to this section; except, if a preneed funeral contract stipulates a firm or fixed or guaranteed price for funeral services and goods for future use at a time determined by the death of the beneficiary of the preneed funeral contract, the purchaser, on not less than fifteen days' notice, may cancel the contract and receive from the trustee ninety per cent of the principal paid pursuant to the preneed funeral contract, not less than eighty per cent of any interest earned up to the time of cancellation, and not less than eighty per cent of any income earned on the funds since the funds were paid to the seller and up to the time of cancellation less any fees, distributions, and expenses. On cancellation, after the funds are distributed to the purchaser pursuant to this division, the trustee shall distribute all remaining funds attributable to the cancelled preneed funeral contract to the seller. If more than one purchaser enters into the contract, all of those purchasers must request cancellation for it to be effective under this division, and the trustee shall refund to each purchaser only those funds that purchaser has paid under the contract and a proportionate amount of any income earned on those funds, less any fees, distributions, and expenses.

(2) The purchaser of a preneed funeral contract that is irrevocable may transfer the preneed funeral contract to a successor seller. Within fifteen days of receiving the written notice of the new designation from the purchaser, the trustee shall list the successor seller as the seller of the preneed funeral contract and the original seller shall relinquish and transfer all rights under the preneed funeral contract to the successor seller. The trustee shall confirm the transfer to the original seller, the successor seller, and the purchaser by written notice to each. If the preneed funeral contract stipulates a firm or fixed or guaranteed price for the funeral services and goods to be provided under the preneed funeral contract, the original seller may collect from the trustee a cancellation fee not exceeding ten per cent of the principal paid pursuant to the preneed funeral contract and twenty per cent of any interest or income earned on the funds since the time the funds were paid to the seller up to the time of transfer. If the preneed funeral contract does not stipulate a firm or fixed or guaranteed price for funeral services and goods to be provided under the preneed funeral contract, no cancellation fee may be collected by the original seller.

(3) Within thirty days after a seller receives notice that the beneficiary of a preneed funeral contract has died and that funeral services and goods have been provided by a different provider, the seller shall notify the trustee to pay to the estate of the beneficiary of the preneed funeral contract all funds held by the trustee, less fees, distributions, and expenses made pursuant to this section; provided, however, that in the event the preneed funeral contract stipulates a firm or fixed or guaranteed price for funeral services and goods that were to be provided under the preneed funeral contract, the seller may collect from the trustee a cancellation fee not exceeding ten per cent of the principal paid pursuant to the preneed funeral contract and twenty per cent of any interest or income earned on the funds since the time the funds were paid to the seller up to the date that the trust funds were paid to the estate of the beneficiary. If the preneed funeral trust does not stipulate a firm or fixed or guaranteed price for funeral services and goods to be provided under the preneed funeral contract, no cancellation fees may be collected by the original seller.

(J) A certified copy of the certificate of death or other evidence of death satisfactory to the trustee shall be furnished to the trustee as evidence of death, and the trustee shall promptly pay the accumulated payments and income, if any, according to the preneed funeral contract. The payment of the accumulated payments and income pursuant to this section and, when applicable, the preneed funeral contract, shall relieve the trustee of any further liability on the accumulated payments and income.

(K) For purposes of this section, the seller is deemed to have delivered funeral goods pursuant to a preneed funeral contract when the seller makes actual delivery of the goods to the beneficiary.

(L) All sellers of funeral goods or services under a preneed funeral contract, whether funded by insurance or otherwise, annually shall submit to the board of embalmers and funeral directors the reports the board requires.

(M) This section shall be construed as a limitation on the manner in which a person is permitted to accept funds in prepayment for funeral services to be performed in the future, or funeral goods to be used in connection with the funeral or 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 a funeral for themselves and their families in advance of need while at the same time providing all possible safeguards to ensure that prepaid funds cannot be dissipated, whether intentionally or not, but remain available for payment for funeral goods and services in connection with the funeral or final disposition of dead human bodies.

(N) This section does not apply when the seller of funeral goods or services under a preneed funeral contract is 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 1986," 100 Stat. 2085, 26 U.S.C. 501, as amended, and the preneed funeral contract pertains to a cemetery owned and operated entirely and exclusively by the church or denomination; provided the church or denomination adopts, on a voluntary basis, rules and other measures to safeguard and secure all funds received under any preneed funeral contract.

(O) This section does not prohibit persons who are not licensed funeral directors from selling funeral goods pursuant to a preneed funeral contract; however, all sellers of funeral goods pursuant to a preneed funeral contract shall comply with this section unless the seller is specifically exempt from compliance by this section.

(P) Any money, insurance policies, or other items delivered in payment of a preneed funeral contract, and any funds held in trust pursuant to this section, are exempt from levy, attachment, or sale to satisfy a judgment or order.

Sec. 4717.32.  (A) There is hereby created in the state treasury the preneed recovery fund, which shall be used to reimburse any purchaser of a preneed funeral contract who has incurred financial losses as a result of the malfeasance, misfeasance, default, failure, or insolvency of any seller of a preneed funeral contract. All investment earnings of the fund shall be credited to the fund.

(B) A seller of a preneed funeral contract that is funded by the payment of money or by an insurance policy shall collect from each purchaser of a preneed funeral contract a fee of ten dollars. The sellers of preneed funeral contracts annually shall remit the fees collected to the board of embalmers and funeral directors quarterly within thirty days after the end of March, June, September, and December for all preneed funeral contracts that have been entered into during the three-month period. The board shall deposit one-half of the fees collected into the preneed recovery fund, to be expended only for the purposes specified in division (E) of this section.

(C) The remaining one-half of the fees remitted to the board in accordance with division (B) of this section shall be used by the board to administer the preneed recovery fund and to monitor the preneed annual reports filed by sellers of preneed funeral contracts.

(D) The board shall adopt rules governing management of the preneed recovery fund, the presentation and processing of applications for reimbursement, and subrogation or assignment of the rights of any reimbursed applicant.

(E) The board may expend moneys in the fund for the following purposes:

(1) To make reimbursements on approved applications;

(2) To purchase insurance to cover losses as deemed appropriate by the board and not inconsistent with the purposes of the fund;

(3) To invest such portions of the fund as are not currently needed to reimburse losses and maintain adequate reserves as are permitted to be made by fiduciaries under state law.

(F) Reimbursements from the fund shall be made only to the extent to which such losses are not bonded or otherwise covered, protected, or reimbursed, and only after the applicant has complied with all applicable rules of the board.

(G) The board shall investigate all applications made and may reject or allow such claims in whole or in part to the extent that the moneys are available in the fund. The board has complete discretion to determine the order and manner of payment of approved applications. All payments are a matter of privilege and not a right, and no person has any right in the fund as a third-party beneficiary or otherwise. No attorney may be compensated by the board for prosecuting an application for reimbursement.

(H) In the event reimbursement is made to an applicant under this section, the board is subrogated in the reimbursed amount and may bring any action it deems advisable against any person, including a seller of a preneed funeral contract. The board may enforce any claims it may have for restitution or otherwise and may employ and compensate consultants, agents, legal counsel, accountants, and any other person it deems appropriate.

(I) The fund shall not be applied toward any reimbursement on losses on a preneed funeral contract that was entered into prior to the effective date of this section.

(J) If at the end of any fiscal year for the state, the balance in the fund exceeds two million dollars, the amount collected from purchasers of preneed funeral contracts during the next fiscal year shall be reduced from ten dollars to five dollars, with all such proceeds to be used by the board in accordance with division (C) of this section.

Sec. 4717.99.  Whoever violates any provision of sections 4717.01 to 4717.15; division (A) or (B) of section 4717.23; division (B)(1) or (2), (C)(1) or (2), (D), (E), or (F)(1) or (2), or divisions (H) to (K) of section 4717.26; division (D)(1) of section 4717.27; or divisions (A) to (C) of section 4717.28 of the Revised Code shall be fined not less than one hundred nor more than five thousand dollars, or imprisoned for not more than one year, or both, for the first offense. For each subsequent offense such a person shall be fined not less than one hundred nor more than ten thousand dollars, or imprisoned for not more than one year, or both.

Whoever purposely violates section 4717.31 of the Revised Code is guilty of a felony of the fourth degree.

Sec. 5747.02.  (A) For the purpose of providing revenue for the support of schools and local government functions, to provide relief to property taxpayers, to provide revenue for the general revenue fund, and to meet the expenses of administering the tax levied by this chapter, there is hereby levied on every individual, trust, and estate residing in or earning or receiving income in this state, on every individual, trust, and estate earning or receiving lottery winnings, prizes, or awards pursuant to Chapter 3770. of the Revised Code, and on every individual, trust, and estate otherwise having nexus with or in this state under the Constitution of the United States, an annual tax measured in the case of individuals by Ohio adjusted gross income less an exemption for the taxpayer, the taxpayer's spouse, and each dependent as provided in section 5747.025 of the Revised Code; measured in the case of trusts by modified Ohio taxable income under division (D) of this section; and measured in the case of estates by Ohio taxable income. The tax imposed by this section on the balance thus obtained is hereby levied as follows:

(1) For taxable years beginning in 2004:

(2) For taxable years beginning in 2005:

(3) For taxable years beginning in 2006:

(4) For taxable years beginning in 2007:

(5) For taxable years beginning in 2008:

(6) For taxable years beginning in 2009 or thereafter:

In July of each year, beginning in 2010, the tax commissioner shall adjust the income amounts prescribed in this division by multiplying the percentage increase in the gross domestic product deflator computed that year under section 5747.025 of the Revised Code by each of the income amounts resulting from the adjustment under this division in the preceding year, adding the resulting product to the corresponding income amount resulting from the adjustment in the preceding year, and rounding the resulting sum to the nearest multiple of fifty dollars. The tax commissioner also shall recompute each of the tax dollar amounts to the extent necessary to reflect the adjustment of the income amounts. The rates of taxation shall not be adjusted.

The adjusted amounts apply to taxable years beginning in the calendar year in which the adjustments are made. The tax commissioner shall not make such adjustments in any year in which the amount resulting from the adjustment would be less than the amount resulting from the adjustment in the preceding year.

(B) If the director of budget and management makes a certification to the tax commissioner under division (B) of section 131.44 of the Revised Code, the amount of tax as determined under division (A) of this section shall be reduced by the percentage prescribed in that certification for taxable years beginning in the calendar year in which that certification is made.

(C) The levy of this tax on income does not prevent a municipal corporation, a joint economic development zone created under section 715.691, or a joint economic development district created under section 715.70 or 715.71 or sections 715.72 to 715.81 of the Revised Code from levying a tax on income.

(D) This division applies only to taxable years of a trust beginning in 2002 or thereafter.

(1) The tax imposed by this section on a trust shall be computed by multiplying the Ohio modified taxable income of the trust by the rates prescribed by division (A) of this section.

(2) A credit is allowed against the tax computed under division (D) of this section equal to the lesser of (1) the tax paid to another state or the District of Columbia on the trust's modified nonbusiness income, other than the portion of the trust's nonbusiness income that is qualifying investment income as defined in section 5747.012 of the Revised Code, or (2) the effective tax rate, based on modified Ohio taxable income, multiplied by the trust's modified nonbusiness income other than the portion of trust's nonbusiness income that is qualifying investment income. The credit applies before any other applicable credits.

(3) The credits enumerated in divisions (A)(1) to (13) of section 5747.98 of the Revised Code do not apply to a trust subject to this division. Any credits enumerated in other divisions of section 5747.98 of the Revised Code apply to a trust subject to this division. To the extent that the trust distributes income for the taxable year for which a credit is available to the trust, the credit shall be shared by the trust and its beneficiaries. The tax commissioner and the trust shall be guided by applicable regulations of the United States treasury regarding the sharing of credits.

(E) For the purposes of this section, "trust" means any trust described in Subchapter J of Chapter 1 of the Internal Revenue Code, excluding trusts that are not irrevocable as defined in division (I)(3)(b) of section 5747.01 of the Revised Code and that have no modified Ohio taxable income for the taxable year, charitable remainder trusts, qualified funeral trusts and preneed funeral contract trusts established pursuant to section 1111.19 4717.31 of the Revised Code that are not qualified funeral trusts, endowment and perpetual care trusts, qualified settlement trusts and funds, designated settlement trusts and funds, and trusts exempted from taxation under section 501(a) of the Internal Revenue Code.

Section 2.  That existing sections 1151.345, 1161.59, 1733.51, 2108.81, 2117.251, 3103.03, 3905.451, 4717.01, 4717.03, 4717.04, 4717.13, 4717.99, and 5747.02 and sections 1111.19 and 1111.99 of the Revised Code are hereby repealed.