71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
HA to HB 2809
LC 2575/HB 2809-2
HOUSE AMENDMENTS TO
HOUSE BILL 2809
By COMMITTEE ON JUDICIARY
May 7
On page 1 of the printed bill, line 2, after 'ORS' delete the
rest of the line and line 3 and insert '65.860, 97.810, 97.825,
97.865, 128.400, 128.405, 128.407, 128.412, 128.414, 128.415,
128.421, 128.423, 128.425, 128.430, 128.435, 128.440, 128.991,
297.535 and'.
Delete lines 6 through 29 and delete pages 2 through 16 and
insert:
' { + SECTION 1. + } { + (1) A provider, as defined in ORS
128.400, may not engage in prearrangement sales or
preconstruction sales unless the provider is certified by the
Director of the Department of Consumer and Business Services. The
director shall:
' (a) Establish procedures for issuing certificates required by
this section.
' (b) Establish standards for determining whether a certificate
should be issued.
' (c) Set certification and renewal fees.
' (d) Require annual renewal of certification.
' (e) Establish standards for rules of conduct of providers.
' (2) The fees described in this section shall be reasonable
and shall defray the costs associated with the administration of
ORS 128.400 to 128.440.
' (3)(a) Every certified provider shall file an annual report
with the director on forms provided by the director. The annual
report shall contain any information reasonably considered
necessary by the director, including but not limited to:
' (A) A disclosure of changes in trust deposits;
' (B) The number of consecutively numbered prearrangement or
preconstruction sales contracts sold during the reporting period;
and
' (C) The number of withdrawals from or terminations of any
trusts.
' (b) If the annual report is not filed or is filed and shows
any material discrepancy, the director may take appropriate
action and send notification of the matter to the State Mortuary
and Cemetery Board.
' (c) The director may relieve a certified provider of the duty
to file the annual report upon a determination that the certified
provider has performed all obligations under the prearrangement
sales contract or preconstruction sales contract, or that such
obligations lawfully have been assumed by another or have been
discharged or canceled.
' (4) The director may audit the records of a certified
provider that relate to prearrangement sales or preconstruction
sales, as the director may consider appropriate. The director may
refer any matter outside of normal auditing procedures to the
office of the Attorney General for investigation and send
notification of the referral to the State Mortuary and Cemetery
Board.
' (5) The conduct of individuals, including salespersons as
defined in ORS 128.400, employed by a certified provider is the
direct responsibility of the certified provider. + }
' { + SECTION 2. + } { + (1) A person may not operate as a
master trustee, as defined in ORS 128.400, unless that person is
registered with the Director of the Department of Consumer and
Business Services. The director shall:
' (a) Establish procedures for registering persons under this
section.
' (b) Establish standards for master trustees.
' (c) Set registration and renewal fees.
' (d) Establish standards for rules of conduct of master
trustees.
' (2) The director may conduct an annual audit of a master
trustee. The director shall prescribe the form of audits under
this section.
' (3) A master trustee who is audited under this section shall
pay all expenses and costs incurred by the director in conducting
the audit.
' (4) The director shall adopt rules necessary to administer
this section. The rules shall identify the specific trust
provisions that are the subject of an audit conducted under this
section. + }
' { + SECTION 3. + } { + (1) Each certified provider or
master trustee is subject to the examination of the Director of
the Department of Consumer and Business Services. The director
may conduct examinations of the conditions and resources of each
certified provider, including a review of sales contracts used by
the certified provider, to determine whether the certified
provider is complying with the requirements of ORS 128.400 to
128.440, the laws of this state and the rules of the director.
The director may require certified providers to pay the actual
and reasonable costs of the examination.
' (2) For the purpose of an examination under this section, the
director may administer oaths and affirmations, subpoena
witnesses and compel their attendance, take evidence and require
the production of books, papers, correspondence, memoranda,
agreements or other documents or records that the director
considers relevant or material to the examination.
' (3) If a certified provider fails to comply with a subpoena
issued under this section or a party or witness refuses to
testify on any matter, the judge of the circuit court for any
county, on the application of the director, shall compel
obedience by proceedings for contempt as in the case of
disobedience of the requirements of a subpoena issued from the
court or a refusal to testify on a matter before the court.
' (4) Each witness who appears before the director under a
subpoena issued under this section shall receive the fees and
mileage provided for witnesses in ORS 44.415 (2), except that a
witness subpoenaed at the instance of parties other than the
director or an examiner may not be compensated for attendance or
travel unless the director certifies that the testimony of the
witness was material to the matter investigated.
' (5) During the course of any examination, the director may
cause the depositions of witnesses to be taken in the manner
prescribed by law for like depositions in civil suits in the
circuit court. + }
' { + SECTION 4. + } { + (1) The Director of the Department
of Consumer and Business Services may discipline as provided in
this section any certified provider, master trustee or person
acting as a certified provider or master trustee without a
certification or registration who has been found by an audit or
examination conducted by the director to be in violation of one
or more of the provisions of ORS 128.400 to 128.440.
' (2) In disciplining a certified provider, master trustee or
person acting as a certified provider or master trustee without a
certification or registration as authorized by subsection (1) of
this section, the director may take any or all of the following
actions:
' (a) Impose probation.
' (b) Suspend the certificate or registration.
' (c) Revoke the certificate or registration.
' (d) Place limitations on the certificate or registration.
' (e) Refuse to issue or renew a certificate or registration.
' (f) Take such other disciplinary action as the director in
the director's discretion finds proper, including assessment of
the costs of the investigation and disciplinary proceedings and
assessment of a civil penalty not to exceed $10,000 per
violation.
' (3) If the certificate or registration of a certified
provider or master trustee is suspended under this section, the
holder of the certificate or registration may not engage in the
activities allowed by the certificate or registration during the
term of suspension. Upon the expiration of the term of
suspension, the director shall reinstate the certificate or
registration if the conditions for which the certificate or
registration was suspended no longer exist.
' (4) The director shall enter each case of disciplinary action
on the records of the Department of Consumer and Business
Services.
' (5) Civil penalties under this section may be imposed as
provided in ORS 183.090.
' (6) If the director takes disciplinary action under this
section, the director shall send a notice of the action to the
State Mortuary and Cemetery Board. + }
' { + SECTION 5. + } { + (1) If the Director of the
Department of Consumer and Business Services has reason to
believe that a person has violated any provision of ORS 128.400
to 128.440, the director shall give the information relative to
the violation to the appropriate federal, state or local law
enforcement officer having jurisdiction over the violation.
' (2) If the director, in the course of taking an action
against a certified provider, master trustee or person acting as
a certified provider or master trustee without a registration or
certification, finds that a salesperson or person acting as a
salesperson has violated any provision of ORS 128.400 to 128.440,
the director shall provide the State Mortuary and Cemetery Board
with a copy of the findings and the order of the director. The
board shall, upon receipt of such information, discipline the
salesperson or person acting as a salesperson according to
established procedures. + }
' { + SECTION 6. + } { + Sections 1 to 5 of this 2001 Act
are added to and made a part of ORS 128.400 to 128.440. + }
' { + SECTION 7. + } ORS 128.400 is amended to read:
' 128.400. As used in ORS 128.400 to 128.440 and 128.991 unless
the context requires otherwise:
' (1) 'Beneficiary' means the person, if known, who is to
receive the funeral and cemetery merchandise, funeral and
cemetery services or completed interment, entombment or cremation
spaces.
' (2) 'Certified { - person - } { + provider + } ' means
any person { - holding a certificate of registration or who is
registered under ORS 692.285 - } { + certified under section 1
of this 2001 Act + } to sell or offer for sale prearrangement
sales contracts or preconstruction sales contracts.
' (3) 'Delivery' occurs when:
' (a) Physical possession of the funeral and cemetery
merchandise is transferred to the purchaser;
' (b) Title to the funeral and cemetery merchandise has been
transferred to the purchaser, has been paid for, and is in the
possession of the seller, who has placed it, until needed, for
storage on the seller's premises; or
' (c) The merchandise has been identified for the purchaser or
the beneficiary and held by the manufacturer for future delivery.
' (4) 'Depository' means a financial institution or trust
company, as those terms are defined ORS 706.008, that is
authorized to accept deposits in this state or to transact trust
business in this state.
' { + (5) 'Director' means the Director of the Department of
Consumer and Business Services. + }
' { - (5) - } { + (6) + } 'Funeral and cemetery merchandise'
includes nonperishable items of personal property customarily
sold by funeral service establishments, cemeteries, crematoriums
and monument companies, including, but not limited to, caskets,
burial vaults, memorials, markers and foundations, but shall not
include rights of interment or entombment in a cemetery section,
lawn crypt section, mausoleum or columbarium that is in existence
at the time of initial payment on the contract.
' { - (6) - } { + (7) + } 'Funeral and cemetery services'
includes all services customarily performed:
' (a) By a funeral service practitioner, embalmer, funeral
service establishment, cemetery or crematorium licensed under ORS
chapter 692;
' (b) In conjunction with an interment, entombment or
cremation; and
' (c) In conjunction with the sale, installation or erection of
a memorial, marker, monument or foundation.
' { - (7) - } { + (8) + } 'Guaranteed contract' means a
written preconstruction sales contract or prearrangement sales
contract that guarantees the beneficiary the specific undeveloped
space or spaces or funeral and cemetery merchandise or funeral
and cemetery services contained in the contract and under which
no charges other than the sales price contained in the contract
shall be required upon delivery or performance of the funeral and
cemetery services.
' { + (9) 'Master trustee' means an entity appointed by a
certified provider to administer moneys received from the
certified provider under ORS 128.423 who acts independently from
any certified provider and who is not also a certified provider
under ORS 128.400 to 128.440. + }
' { - (8) - } { + (10) + } 'Nonguaranteed contract' means a
written preconstruction sales contract or prearrangement sales
contract that guarantees the beneficiary the specific undeveloped
space or spaces or funeral and cemetery merchandise or funeral
and cemetery services contained in the contract and under which
additional charges other than the sales price contained in the
contract may be required at the time of delivery or performance
of the funeral and cemetery services.
' { - (9) 'Person' means any funeral service establishment,
embalmer, funeral service practitioner, cemetery, crematorium,
monument company, corporation, partnership, joint venture,
business trust, voluntary organization or any other form of
entity. - }
' { - (10) - } { + (11) + } 'Preconstruction sales' or
'preconstruction sales contract' means any sale made to a
purchaser, which has as its purpose the furnishing of undeveloped
interment, entombment or cremation spaces and where the sale
terms require payment or payments to be made at a currently
determinable time.
' { - (11) - } { + (12) + } 'Prearrangement sales' or
'prearrangement sales contract' means any sale, excluding the
sale and contemporaneous or subsequent assignment of a life
insurance policy or an annuity contract, made to a purchaser,
that has as its purpose the furnishing of funeral and cemetery
merchandise or funeral and cemetery services in connection with
the final disposition or commemoration of the memory of a dead
human body, for use at a time determinable by the death of the
person or persons whose body or bodies are to be disposed and
where the sale terms require payment or payments to be made at a
currently determinable time.
' { + (13) 'Provider' means any entity that sells or offers
for sale funeral and cemetery services. + }
' { - (12) - } { + (14) + } 'Purchaser' means a beneficiary
or a person acting on behalf of a beneficiary who enters into a
prearrangement sales contract or a preconstruction sales contract
with a certified { - person - } { + provider + } under which
any payment or payments made under the contract are required to
be deposited in trust under ORS 128.423.
' { + (15) 'Salesperson' means an individual registered under
ORS 128.414 and employed by a certified provider to engage in the
sale of prearrangement or preconstruction sales contracts on
behalf of the certified provider. + }
' { - (13) - } { + (16) + } 'Sales price' means the gross
amount paid by a purchaser for a prearrangement sales contract or
preconstruction sales contract, excluding sales taxes, credit
life insurance premiums and finance charges.
' { - (14) - } { + (17) + } 'Trust' means an express trust
created under ORS 128.423 whereby a trustee has the duty to
administer the amounts specified under ORS 128.423 received under
a prearrangement sales contract or a preconstruction sales
contract for the benefit of the purchaser of a prearrangement
sales contract or preconstruction sales contract.
' { - (15) 'Trustee' means the certified person who sold the
prearrangement sales contract or preconstruction sales contract
or any depository or successor trustee appointed by the original
trustee as successor trustee under ORS 128.423. - }
' { - (16) - } { + (18) + } 'Undeveloped interment,
entombment or cremation spaces' or 'undeveloped spaces' means any
space to be used for the reception of human remains that is not
completely constructed or developed at the time of initial
payment.
' { + SECTION 8. + } ORS 128.412 is amended to read:
' 128.412. The provisions of ORS 128.400 to 128.440, 128.990,
128.991 { - , - } { + and + } 692.180 { - and 692.285 shall
not include - } { + do not apply to + }:
' (1) Agreements to sell or sales of graves, crypts or niches
where such graves, crypts or niches are in existence at the time
of the sale or agreement to sell and are located in an endowment
care cemetery as defined in ORS 97.810.
' (2) Agreements to sell or sales of crypts or niches where
such crypts or niches are not in existence at the time of the
sale or agreement to sell and are to be located in an endowment
care cemetery, provided that:
' (a) Thirty-five percent of the sales price of each crypt or
niche described in this subsection is deposited in accordance
with the provisions of ORS 128.415; or
' (b) Such endowment care cemetery deposits a bond with a
corporate surety authorized to do business in this state, or an
irrevocable letter of credit issued by an insured institution, as
defined in ORS 706.008. The bond or letter of credit shall be in
an amount equal to 35 percent of the total sales price of all
crypts or niches described in this subsection that have been sold
by the endowment care cemetery and that have not yet been
completed.
' (3) Agreements to sell or sales of burial vaults or markers
for installation in an endowment care cemetery, provided that:
' (a) Sixty-six and two-thirds percent of the sale price of
such vaults or markers is deposited in accordance with the
provisions of ORS 128.415;
' (b) Such endowment care cemetery is at the time of the sale
or agreement to sell and for not less than 24 months before such
sale or agreement has been in continuous operation as an
endowment care cemetery and has assumed the obligation to supply
and install the vault or marker and maintain it as part of its
endowment care program; and
' (c) Such endowment care cemetery deposits { + with the
Director of the Department of Consumer and Business Services + }:
' (A) A bond { + in a form approved by the director + }
{ - with the Secretary of State - } in the amount of $10,000
{ - with - } { + issued by + } a corporate { - or
personal - } surety { + authorized to do business in this
state + } { - . Such personal surety shall submit a sworn
financial statement as of the date of the bond and annually
thereafter as long as the bond is in effect to insure the
availability of the total amount of the sale price when
required - } ; or
' (B) An irrevocable letter of credit { + in a form approved
by the director + } { - with the Secretary of State - } in the
amount of $10,000 { - , - } issued by an insured institution,
as defined in ORS 706.008.
' { + (4) Any person having a claim against a certified
provider, a master trustee or a salesperson under the provisions
of ORS 128.400 to 128.440 or ORS chapter 692 shall have a right
against the bond or letter of credit provided for in subsections
(2) and (3) of this section. + }
' { + SECTION 9. + } ORS 128.414 is amended to read:
' 128.414. (1) { - It is unlawful for any - } { + A + }
salesperson { - to - } { + may not + } engage in
prearrangement sales made by endowment care cemeteries under ORS
128.412 { + or in preconstruction sales or prearrangement
sales + } unless the salesperson is registered with the State
Mortuary and Cemetery Board { + or holds a current funeral
service practitioner license, embalmer license, funeral service
practitioner apprentice registration or embalmer apprentice
registration + }. The board by rule shall { + :
' (a) + } Establish procedures for issuing { + salesperson + }
registrations { - required by - } { + under + } this
subsection { - , - } { + ;
' (b) + } Establish standards for determining whether a { +
salesperson + } registration should be issued { - and - }
{ + ;
' (c) + }Set { - a - } { + renewal and salesperson + }
registration { - fee - } { + fees; and
' (d) Require biennial renewal of salesperson
registrations + }.
' (2) The State Mortuary and Cemetery Board may conduct a
background check of any salesperson applying for registration
under subsection (1) of this section. The background check may
include information solicited from the Department of State
Police. After consideration of information obtained from any
background check and any other information in its possession, the
State Mortuary and Cemetery Board shall determine whether to
register the salesperson.
' { - (3) Notwithstanding the provisions of this section, a
salesperson employed to engage in prearrangement sales made by
endowment care cemeteries may engage in prearrangement sales upon
filing a completed application for registration with the State
Mortuary and Cemetery Board. In the event that the State Mortuary
and Cemetery Board refuses to issue a registration to the
salesperson, the authority of the salesperson to engage in
prearrangement sales ceases on the date that the State Mortuary
and Cemetery Board issues its order refusing to issue the
registration. - }
' { - (4) - } { + (3)(a) + }The State Mortuary and Cemetery
Board may { + impose a civil penalty of up to $1,000 per
violation or suspend, + } revoke or refuse to issue { + or
renew + } the registration of a salesperson described in
subsection (1) of this section upon a determination that the
applicant or holder has not complied with the provisions of
{ - this section or ORS 128.412 - } { + ORS 128.400 to 128.440
or ORS chapter 692, + }or any rules adopted thereunder. When the
board proposes to take such action, the person affected by the
action shall be accorded notice and an opportunity for hearing as
provided by ORS 183.310 to 183.550. { + The board shall notify
the Director of the Department of Consumer and Business Services
of its intent to take action against a salesperson or person
acting as a salesperson.
' (b) The board shall suspend, revoke or refuse to issue or
renew the registration of a salesperson if the director requests
the board to take such action. + }
' { + SECTION 10. + } ORS 128.415 is amended to read:
' 128.415. (1) This section applies to trust deposits required
to be made by endowment care cemeteries under ORS 128.412.
' (2) As used in this section, 'common trust account' means
trust funds received by a { - trustee - } { + provider + }
from two or more
{ - trustors - } { + purchasers + }.
' (3) All such trust funds shall be deposited by the
{ - trustee - } { + provider + } with a financial institution
in the State of Oregon carrying deposit insurance, within 15 days
after receipt thereof. A trust fund shall be held in a separate
account in the name of the { - depositor - } { + provider + }
followed by the words ' { - trustee of - } funeral plan
trust { + account + },' in trust for the person for whom such
prearranged funeral plan is made, or in a common trust account in
the name of the { - depositor followed by the words ' trustee
of funeral plan trusts,' - } { + provider + } in trust for each
person for whom such prearranged funeral plan is made, until a
trust fund is released under any of the following conditions:
' (a) Upon presentation of proof of the death of { - such - }
{ + the + } person { + for whom a prearranged funeral plan is
made + }, the financial institution shall release such trust fund
to the { - trustee - } { + provider + }.
' (b) Upon presentation of the written request of the
{ - trustor - } { + purchaser + } of a revocable trust, the
financial institution shall release such trust fund as directed
in such request.
' (c) Upon presentation of proof of the death, dissolution,
insolvency or merger with another of the { - trustee - }
{ + provider + } of a revocable trust, the financial institution
shall release such trust fund to the { - trustor - } { +
purchaser + }.
' (d) Upon presentation of proof of the death, dissolution,
insolvency or merger with another of the { - trustee - }
{ + provider + } of an irrevocable trust, the financial
institution shall continue to hold such trust fund subject to the
funeral plan trust, and upon appointment of a successor
{ - trustee - } { + provider + } by the { - trustor - }
{ + purchaser + }, the { - trustor's - }
{ + purchaser's + } legal representative, the
{ - Secretary of State - } { + Director of the Department of
Consumer and Business Services + } or a court of competent
jurisdiction, the financial institution shall release such trust
fund to the successor { - trustee - } { + provider + } only
as provided in paragraph (a) of this subsection.
' (4) If trust funds are held in a common trust account under
subsection (3) of this section, the { - trustee - }
{ + provider + } shall maintain records showing the
{ - trustor - } { + purchaser + } and beneficiary of each
individual trust fund in the account and the allocation to each
individual trust fund of interest earned by the account.
' (5) The { - trustee - } { + provider + } may appoint a
successor depository. The original depository shall only release
the trust funds to the successor depository except as described
in subsections (1) to (4) of this section.
' (6) The financial institution shall in no way be responsible
for the fulfillment of any prearranged funeral plan, excepting
only such financial institution shall release a trust fund as
provided in this section.
' (7) The { - Secretary of State - } { + director + } may
appoint a successor { - trustee - } { + provider + } upon a
determination that the
{ - trustee - } { + original provider + } has ceased to
provide the kinds of services and things which the { - seller
of the prearranged funeral plan - } { + original provider + }
agreed to provide, that the { - trustor - } { + purchaser + }
or the { - trustor's - } { + purchaser's + } legal
representative cannot be readily identified or contacted and that
the appointment of a successor { - trustee - } { +
provider + } is appropriate in order to protect the interests of
the trust beneficiaries. Financial institutions holding deposits
of such trust funds shall change their records to reflect such
appointment of a successor { - trustee - } { + provider + }
upon receipt of written notice of the appointment from the
{ - Secretary of State - } { + director + }. Where the
{ - Secretary of State - } { + director + } proposes to take
such action under this subsection, the
{ - trustee - } { + provider + } being replaced shall be
accorded notice and an opportunity for hearing as provided in ORS
183.310 to 183.550.
' { + SECTION 11. + } ORS 128.421 is amended to read:
' 128.421. (1) { - Four - } { + Three + } copies of a
written sales contract shall be executed for each prearrangement
sales contract or preconstruction sales contract sold by a
certified { - person - } { + provider + }. { + The certified
provider shall retain one copy of the contract and + } a copy of
the completed contract shall be given to:
' (a) The purchaser; { + and + }
' { - (b) The certified person who sold the contract; - }
' { - (c) The Secretary of State; and - }
' { - (d) The trust depository - }
' { + (b) The depository or the master trustee, if
applicable + }.
' (2) Upon receiving a trust deposit under ORS 128.423, the
{ - depository - } { + master trustee + } shall sign a copy
of the contract received under subsection (1) of this section and
return the contract to the purchaser.
' (3) Each completed contract shall:
' (a) Comply with the plain language standards described in ORS
180.545 (1);
' (b) Be { + consecutively + } numbered { + ;
' (c) Have a corresponding consecutively numbered receipt;
' (d) Be preprinted or, if the certified provider uses a master
trustee, be obtained from the master trustee; + } { - and - }
{ +
' (e) + } Identify the purchaser and certified { - person - }
{ + provider + } who sold the contract;
' { - (c) - } { + (f) + } Specify whether the contract is a
guaranteed contract or a nonguaranteed contract;
' { - (d) - } { + (g) + } Specify the specific funeral and
cemetery merchandise, funeral and cemetery services or
undeveloped interment, entombment or cremation spaces included
and not included in the contract; and
' { - (e) - } { + (h) + } If a guaranteed contract, disclose
that the certified { - person - } { + provider + } may retain
10 percent of the sales price.
' (4) Notwithstanding ORS 128.425 (8), in the case of a
prearrangement sales contract, if at the time of completion of
the contract, the beneficiary of the contract is a recipient of
public assistance or reasonably anticipates becoming a recipient
of public assistance, the contract may provide that the contract
is irrevocable. The contract may provide for an election by the
beneficiary, or by the purchaser on behalf of the beneficiary, to
make the contract thereafter irrevocable if after the contract is
entered into, the beneficiary becomes eligible or seeks to become
eligible for public assistance.
' { + SECTION 12. + } ORS 128.423 is amended to read:
' 128.423. (1) Upon receiving anything of value under a
prearrangement sales contract or preconstruction sales contract,
the certified { - person - } { + provider + } who sold the
contract shall { - be the trustee and shall - } deposit the
following amounts into one or more trust funds maintained
pursuant to ORS 128.400 to 128.440, 128.990, 128.991 { - , - }
{ + and + } 692.180 { - and 692.285 - } :
' (a) Ninety percent of the amount received in payment of a
guaranteed prearrangement sales contract or guaranteed
preconstruction sales contract. The remaining 10 percent shall be
paid to the { - certified person - } { + provider + } who
sold the contract; or
' (b) One hundred percent of the amount received in payment of
a nonguaranteed prearrangement sales contract or nonguaranteed
preconstruction sales contract.
' (2) All trust deposits required by ORS 128.400 to 128.440,
128.990, 128.991 { - , - } { + and + } 692.180 { - and
692.285 - } shall be made within five business days of their
receipt.
' (3) Trust deposits required under ORS 128.400 to 128.440,
128.990, 128.991 { - , - } { + and + } 692.180 { - and
692.285 - } shall be placed in a depository as defined in ORS
128.400. The trust deposits shall be maintained in a depository,
except that the { - trustee - } { + provider + } of a
prearrangement sales contract { + or preconstruction sales
contract + } may invest the trust funds in a manner that is, in
the opinion of the { - trustee - } { + provider + },
reasonable and prudent under the circumstances, provided that all
investments are certificates of deposit, U.S. Treasuries, issues
of U.S. government agencies, guaranteed investment contracts,
banker's acceptances or corporate bonds rated A or better by
Standard & Poor's Corporation or Moody's Investors Service, and
provided that all investments shall be placed in the custody of
the depository in which the trust funds were originally deposited
or any other depository that may qualify under ORS 128.400 to
128.440. Prearrangement sales contract trust fund and
preconstruction sales contract trust fund accounts shall be in
the name of the { - certified person - } { + provider + } who
sold the contract under ORS 128.400 to 128.440, 128.990, 128.991
{ - , - } { + and + } 692.180 { - and 692.285 - } .
' (4) Funds deposited in the trust fund account shall be
identified in the records of the { - trustee - }
{ + provider + } by the name of the purchaser and beneficiary
and adequate records shall be maintained to allocate all earnings
to each prearrangement sales contract or preconstruction sales
contract. Nothing shall prevent the { - trustee - }
{ + provider + } from commingling the deposits in any such trust
fund account for purposes of managing and investing the funds. A
common trust fund account shall be identified by the name of the
{ - trustee - } { + provider + }.
' (5) When a prearrangement sales contract or preconstruction
sales contract includes rights of interment, entombment or
cremation, funeral or cemetery merchandise or funeral or cemetery
services, the application of payments received under the contract
shall be clearly provided in the contract.
' (6) Any person engaging in prearrangement sales or
preconstruction sales who enters into a combination sale which
involves the sale of items subject to trust and any item not
subject to trust shall be prohibited from increasing the sales
price of those items not subject to trust with the purpose of
allocating a lesser sales price to items which require a trust
deposit.
' { - (7) - } { + (7)(a) + } A { - trustee - }
{ + provider + } may appoint a successor
{ - depository - } { + provider + }. The { - original - }
depository shall { - only - } release the trust funds deposited
under ORS 128.400 to 128.440, 128.990, 128.991 { - , - }
{ + and + } 692.180 { - and 692.285 - } { + only + } to the
successor { - depository - } { + provider + } as described in
ORS 128.425 and 128.430 or upon presentation of the written
request of the purchaser.
' { + (b) If appointing a successor provider under this
subsection, the original provider shall notify the Director of
the Department of Consumer and Business Services of the proposed
change at least 30 days prior to the appointment. + }
' { - (8) - } { + (8)(a) + } { - An original trustee - }
{ + A provider + } may appoint a successor { - trustee - }
{ + depository or a master trustee + } that is a depository as
defined in ORS 128.400.
' { + (b) If appointing a successor depository or master
trustee under this subsection, the provider, the successor
depository and the master trustee must notify the director of the
proposed change at least 30 days prior to the appointment. + }
' (9) The trust fund accounts shall be a single purpose fund.
In the event of the { - certified person's - }
{ + provider's + } bankruptcy, the funds shall not be available
to any creditor as assets of the
{ - certified person - } { + provider + }, but shall be
distributed to the purchasers or managed for their benefit by the
trustee in bankruptcy, receiver or assignee.
' (10)(a) If the original { - trustee - } { + provider + }
is licensed under ORS chapter 692 and voluntarily surrenders the
license to the State Mortuary and Cemetery Board, the original
{ - trustee - } { + provider + } shall transfer responsibility
as { - trustee - } { + provider + } under this section to a
successor { - trustee - } { + provider + } who holds a
certificate { - of registration or is registered under ORS
692.285 - } { + issued by the director under section 1 of this
2001 Act + }.
' (b) If the original { - trustee - } { + provider + } is
not licensed under ORS chapter 692, upon presentation of proof of
the death, dissolution, insolvency or merger with another
{ - trustee - } { + provider + } of the original
{ - trustee - } { + provider + }, the depository shall release
the prearrangement trust fund deposits or preconstruction trust
fund deposits to the purchaser.
' (c) If the original { - trustee - } { + provider + } is
licensed under ORS chapter 692, upon proof of the death,
insolvency or involuntary surrender of the license of the
original { - trustee - } { + provider + }, the depository
shall release the prearrangement trust fund deposits or
preconstruction trust fund deposits to the purchaser.
' (11) The purchaser or beneficiary of a prearrangement sales
contract or preconstruction sales contract may be named cotrustee
with the { - certified person - } { + provider + } with the
written consent of the purchaser or beneficiary.
' { + (12) A provider who has not appointed a master trustee
shall have an annual audit of all trust account funds performed
by an independent certified public accountant in accordance with
generally accepted audit procedures. The provider shall make the
audit results available to the director if requested. + }
' { - (12) - } { + (13) + } As used in this section, 'common
trust fund account' means trust funds received by a
{ - trustee - } { + provider + } from two or more purchasers.
' { + SECTION 13. + } ORS 128.425 is amended to read:
' 128.425. (1) A depository shall make no distributions from
prearrangement sales contract trust deposits except as provided
in this section.
' (2) The principal of a trust created pursuant to a
prearrangement sales contract shall be paid to the certified
{ - person - } { + provider + } who sold the contract if the
certified { - person - } { + provider + } who sold the
contract { - certifies by sworn affidavit to the depository
that the purchaser or the beneficiary named in the prearrangement
sales contract has deceased and that - } { + swears, by
affidavit, that the + } certified { - person - }
{ + provider + } has delivered all merchandise and performed all
services required under the prearrangement sales contract { +
and delivers to the depository one of the following:
' (a) A certified death certificate of the beneficiary; or
' (b) A sworn affidavit signed by the certified provider and
by:
' (A) One member of the beneficiary's family; or
' (B) The executor of the beneficiary's estate + }.
' (3) The principal of a trust created pursuant to a
prearrangement sales contract shall be paid to the purchaser if
the original { - trustee - } { + provider + } is no longer
qualified to serve as
{ - trustee - } { + provider + } under ORS 128.423 (10).
' (4) Upon { - receiving a sworn affidavit from the certified
person who sold the contract that funeral and cemetery
merchandise under the contract has been delivered - } { +
completion by the certified provider of the actions described in
subsection (2) of this section + }, the depository shall pay to
the certified { - person - } { + provider + } from the
prearrangement sales contract trust fund an amount equal to the
sales price of the merchandise delivered.
' (5) Upon the final payment to the certified { - person - }
{ + provider + } of the principal in trust under subsection (2)
of this section, the undistributed earnings of the trust shall be
paid to:
' (a) The certified { - person - } { + provider + } who
sold the contract if the contract is a guaranteed contract; or
' (b) The contract purchaser, or the purchaser's estate, if the
contract is a nonguaranteed contract.
' (6) The depository may rely upon the certifications and
affidavits made to it under the provisions of ORS 128.400 to
128.440, 128.990, 128.991 { - , - } { + and + } 692.180
{ - and 692.285 - } , and shall not be liable to any person for
such reliance.
' (7) If for any reason a certified { - person - }
{ + provider + } who sold the prearrangement sales contract has
refused to comply, or cannot or does not comply with the terms of
the prearrangement sales contract within a reasonable time after
the certified
{ - person - } { + provider + } is required to do so, the
purchaser or heirs or assigns or duly authorized representative
of the purchaser or the beneficiary shall have the right to a
refund in the amount equal to the sales price paid for
undelivered merchandise and unperformed services plus
undistributed earnings amounts held in trust attributable to such
contract, within 30 days of the filing of a sworn affidavit with
the certified { - person - } { + provider + } who sold the
contract and the depository setting forth the existence of the
contract and the fact of breach. A copy of this affidavit shall
be filed with the { - Secretary of State - } { + Director of
the Department of Consumer and Business Services + }. In the
event a certified { - person - } { + provider + } who has
sold a prearrangement sales contract is prevented from performing
by strike, shortage of materials, civil disorder, natural
disaster or any like occurrence beyond the control of the
certified { - person - } { + provider + }, the certified
{ - person's - } { + provider's + } time for performance shall
be extended by the length of such delay.
' (8) At any time prior to the death of the beneficiary of a
prearrangement sales contract, the purchaser of the
prearrangement sales contract may cancel the contract and shall
be entitled to a 100 percent refund of the entire amount paid on
the contract including undistributed earnings attributable to
such amount, but excluding any amount paid for merchandise
already delivered, which amount shall be retained by the
certified { - person - } { + provider + } who sold the
contract as liquidated damages.
' (9) Notwithstanding ORS 128.423 (4) and subsection (5) of
this section, upon receiving a sworn affidavit from the
{ - trustee - } { + provider + } stating that qualifying
expenses, taxes or fees have been incurred, a depository shall
allow a { - trustee - } { + provider + } to pay from earnings
of trust fund deposits any expenses, accounting fees, taxes,
depository fees, investment manager fees and other fees as may be
necessary to enable the { - trustee - } { + provider + } to
comply with the reporting required by ORS 128.400 to 128.440, and
to perform other services for the trust as may be authorized by
ORS 128.400 to 128.440. Any payment of expenses or fees from
earnings of a trust fund deposit under this subsection shall not:
' (a) Exceed an amount equal to 25 percent per calendar year of
the earnings of the trust fund deposit in the calendar year;
' (b) Include the payment of any fee to the { - trustee - }
{ + provider + } in consideration for services rendered as
{ - trustee - } { + provider + }; or
' (c) Reduce, diminish or in any other way lessen the value of
the trust fund deposit so that the services or merchandise
provided for under the contract are reduced, diminished or in any
other way lessened.
' { + SECTION 14. + } ORS 128.430 is amended to read:
' 128.430. (1) A depository shall make no distributions from
preconstruction sales contract trust deposits except as provided
in this section.
' (2) The construction or development of undeveloped interment,
entombment or cremation spaces shall be commenced on the phase of
construction or development, or the section or sections of spaces
in which sales are made within five years of the date of the
first sale. The certified { - person - } { + provider + } who
sold the preconstruction sales contract shall give written notice
including a description of the project to the { - Secretary of
State - } { + Director of the Department of Consumer and
Business Services + } no later than 30 days after the first sale.
Once commenced, construction or development shall be pursued
diligently to completion. The first phase of construction must be
completed within seven years of the first sale. If construction
or development is not commenced or completed within the times
specified, any contract purchaser may surrender and cancel the
contract and upon cancellation shall be entitled to a refund of
the actual amounts paid toward the purchase price. However, any
delay caused by strike, shortage of materials, civil disorder,
natural disaster or any like occurrence beyond the control of the
certified { - person - } { + provider + } shall extend the
time of such completion by the length of such delay.
' (3) Except as otherwise authorized by this section, every
certified { - person - } { + provider + } selling undeveloped
spaces shall provide facilities for temporary interment or
entombment or for cremation for purchasers or beneficiaries of
contracts who die prior to completion of the space. Such
temporary facilities shall be constructed of permanent materials,
and, insofar as practical, be landscaped and groomed to the
extent customary in that community. The heirs, assigns or
personal representative of a purchaser or beneficiary shall not
be required to accept temporary underground interment space where
undeveloped space contracted for was an aboveground entombment or
cremation space. In the event that temporary facilities as
described in this subsection are not made available upon the
death of a purchaser or beneficiary, the heirs, assigns or
personal representative is entitled to a refund of the entire
sales price paid plus undistributed interest attributable to such
amount while in trust.
' (4) If the certified { - person - } { + provider + } who
sold the preconstruction sales contract delivers a completed
space acceptable to the heirs, assigns or personal representative
of a purchaser or beneficiary, other than a temporary facility,
in lieu of the undeveloped space purchased, the certified
{ - person - } { + provider + } shall provide the depository
with a delivery certificate and all sums deposited under the
preconstruction sales contract shall be paid to the certified
{ - person - } { + provider + }.
' (5) During the construction or development of interment,
entombment or cremation spaces, upon receiving the sworn
certification by the certified { - person - }
{ + provider + } who sold the preconstruction sales contract and
the contractor, the depository shall disburse from the trust fund
the amount equivalent to the cost of performed labor or delivered
materials as certified. A person who executes and delivers a
completion certificate with actual knowledge of a falsity
contained therein shall be considered in violation of ORS 128.400
to 128.440 { - , 128.990, 128.991, - } { + and + } 692.180
{ - and 692.285 - } .
' (6) Upon completion of the phase of construction or
development, section or sections of the project as certified to
the depository by the certified { - person - }
{ + provider + } and the contractor, the trust requirements
shall terminate and all funds held in the preconstruction sales
contract trust fund attributable to the completed phase, section
or sections shall be paid to the certified { - person - }
{ + provider + } who sold the preconstruction sales contract.
' (7) Upon the payment to a certified { - person - }
{ + provider + } of preconstruction sales contract trust funds
under subsection (4) or (6) of this section, the undistributed
income of the trust shall be paid to:
' (a) The certified { - person - } { + provider + } who
sold the contract if the contract is a guaranteed contract; or
' (b) The contract purchaser, or the purchaser's estate, if the
contract is a nonguaranteed contract.
' (8) If the preconstruction sales contract purchaser defaults
in making payments under an installment preconstruction sales
contract, and default continues for at least 30 days after the
purchaser has received written notice of default, the certified
{ - person - } { + provider + } who sold the contract may
cancel the contract and withdraw from the trust fund the entire
balance of the defaulting purchaser's account as liquidating
damages. Upon certification of the default, the depository shall
deliver the balance to the certified { - person - } { +
provider + }. The depository may rely on the certification and
affidavits made to it under the provisions of ORS 128.400 to
128.440, 128.990, 128.991 { - , - } { + and + } 692.180
{ - and 692.285 - } and shall not be liable to any person for
such reliance.
' (9) This section and the trust fund requirements in ORS
128.423 shall not apply to the sale of undeveloped spaces if
there has been any such sale in the same phase of construction or
development or the section or sections of the project prior to
September 27, 1987.
' { + SECTION 15. + } ORS 128.435 is amended to read:
' 128.435. (1) Every prearrangement sales contract or
preconstruction sales contract seller shall pay to the
{ - Secretary of State - } { + Director of the Department of
Consumer and Business Services + } a $5 fee for each
prearrangement sales contract or preconstruction sales contract
entered into, to be paid into a special income earning fund in
the State Treasury, separate from the General Fund, known as the
Funeral and Cemetery Consumer Protection Trust Fund. The fees
shall be remitted to the
{ - Secretary of State - } { + director + } semiannually
within 30 days after the end of June and December for all
contracts that have been entered into during the six-month
period.
' (2) Except as provided in this section, the fund shall be
used solely for the purpose of providing restitution to
purchasers who have suffered pecuniary loss arising out of
prearrangement sales contracts or preconstruction sales
contracts. The fund may be used for payment of actual
administrative expenses incurred in administering the fund. All
moneys in the Funeral and Cemetery Consumer Protection Trust Fund
are appropriated continuously to the { - Secretary of State - }
{ + director + } for the payment of restitution under this
section and the payment of expenses incurred in performing the
duties and functions of the { - Secretary of State - } { +
director + } required under ORS 128.400 to 128.440, 128.990,
128.991 { - , - } { + and + } 692.180 { - and 692.285 - } .
' (3) The { - Secretary of State - } { + director + } shall
administer the fund and shall adopt rules governing the payment
of restitution from the fund.
' (4) Payments for restitution shall be made only upon order of
the { - Secretary of State - } { + director + } where the
{ - secretary - } { + director + } determines that the
obligation is noncollectible from the certified { - person - }
{ + provider + }. Restitution shall not exceed the amount of
the sales price paid plus interest at the statutory rate.
' (5) The fund shall not be applied toward any restitution for
losses on a prearrangement sales contract or preconstruction
sales contract entered into prior to the effective date of ORS
128.400 to 128.440, 128.990, 128.991 { - , - } { + and + }
692.180 { - and 692.285 - } .
' (6) The fund shall not be allocated for any purpose other
than that specified in ORS 128.400 to 128.440, 128.990, 128.991
{ - , - } { + and + } 692.180 { - and 692.285 - } .
' (7) If the { - Secretary of State - } { + director + }
proposes to deny an application for restitution from the fund,
the { - secretary - } { + director + } shall accord an
opportunity for a hearing as provided in ORS 183.310 to 183.550.
' (8) Notwithstanding any other provision of this section, the
payment of restitution from the fund shall be a matter of grace
and not of right and no purchaser shall have vested rights in the
fund as a beneficiary or otherwise.
' (9) The status of the fund shall be reviewed annually by the
{ - Secretary of State - } { + director + }. If the review
determines that the fund together with all accumulated income
earned on the fund is sufficient to cover costs of potential
claims against the fund and that the total number of outstanding
claims filed against the fund is less than 10 percent of the
fund's current balance, then payments to the fund shall be
adjusted accordingly at the discretion of the { - Secretary of
State - } { + director + }.
' { + SECTION 16. + } ORS 128.405 is amended to read:
' 128.405. It is the purpose of ORS 128.400 to 128.440,
128.990, 128.991 { - , - } { + and + } 692.180 { - and
692.285 - } to assure funds for performance to those purchasers
who contract through prearrangement sales contracts for the
purchase of funeral and cemetery merchandise and funeral and
cemetery services, and through preconstruction sales contracts
for undeveloped interment, entombment or cremation spaces. It is
also the purpose of ORS 128.400 to 128.440, 128.990, 128.991
{ - , - } { + and + } 692.180 { - and 692.285 - } to provide
for the certification { + or registration + } of persons selling
or offering for sale prearrangement sales contracts and
preconstruction sales contracts, the creation and administration
of prearrangement sales contract and preconstruction sales
contract trust funds, the disbursement and allocation of trust
funds upon the certified { - person's - } { + provider's + }
performance of its contractual obligations and to provide
protection for the purchaser upon the certified
{ - person's - } { + provider's + }default.
' { + SECTION 17. + } ORS 128.407 is amended to read:
' 128.407. Except as provided in this section, ORS 128.400 to
128.440, 128.990, 128.991 { - , - } { + and + } 692.180
{ - and 692.285 - } apply to all { - persons - }
{ + certified providers and salespersons + } who sell or offer
for sale prearrangement sales contracts or preconstruction sales
contracts. ORS 128.400 to 128.440, 128.990, 128.991 { - , - }
{ + and + } 692.180 { - and 692.285 - } do not apply to:
' (1) Agreements to sell or sales made by endowment care
cemeteries under ORS 128.412; or
' (2) Any nonprofit memorial society charging less than a $100
membership fee.
' { + SECTION 18. + } ORS 128.440 is amended to read:
' 128.440. (1) { - No person or individual shall - } { + A
person may not + } engage in unsolicited door to door or
telephone advertising and marketing of prearrangement sales
contracts or preconstruction sales contracts. The costs of
advertising and marketing { - shall - } { + may + } not be
paid from trust funds.
' (2) Advertising and marketing a prearrangement sales contract
or a preconstruction sales contract by a funeral service
practitioner, embalmer or funeral service establishment licensed
under ORS chapter 692 does not constitute a violation of ORS
692.180 (1)(c).
' { + SECTION 19. + } ORS 128.991 is amended to read:
' 128.991. Any certified { - person - } { + provider or
salesperson + } violating ORS 128.414 { - , - } { + or + }
128.423 { - or 692.285 (1) or (2) - } { + or section 1 of
this 2001 Act + } is guilty of a Class C misdemeanor.
' { + SECTION 20. + } ORS 297.535 is amended to read:
' 297.535. (1) All moneys received by the Secretary of State
under ORS 297.210, 297.230, 297.425 and 297.445 shall be
immediately turned over to the State Treasurer who shall deposit
the moneys in the General Fund to the credit of an account to be
known as the Division of Audits Account.
' (2) The moneys received under subsection (1) of this section
and deposited in the Division of Audits Account hereby are
appropriated for use in payment of salaries and other expenses or
costs of the Division of Audits.
' (3) The moneys received under ORS 297.545 and deposited in
the Division of Audits Account hereby are appropriated for use in
payment of salaries and other expenses or costs incurred by the
Division of Audits of the Office of the Secretary of State in
connection with the carrying out of the provisions of ORS
297.020, 297.230, 297.405 to 297.740 and 297.990.
' { - (4) The moneys received under ORS 692.285 and deposited
in the Division of Audits Account hereby are appropriated for use
in payment of salaries and other expenses or costs incurred by
the Secretary of State in connection with the carrying out of the
provisions of ORS 692.285. - }
' { - (5) The moneys received under ORS 97.810 and deposited
in the Division of Audits Account hereby are appropriated for use
in payment of salaries and other expenses or costs incurred by
the Division of Audits of the Office of the Secretary of State in
connection with the carrying out of the provisions of ORS
97.810. - }
' { - (6) - } { + (4) + } The Secretary of State may use the
moneys to the credit of the Division of Audits Account, or any
part thereof, for cash advances for travel expenses necessary in
carrying out the provisions of ORS 297.020 to 297.555 and
297.990. Any moneys received in reimbursement of these cash
advances shall be deposited in the Division of Audits Account.
' { - (7) - } { + (5) + } The Secretary of State shall keep
a record of all moneys deposited in the Division of Audits
Account. The record shall indicate by separate cumulative
accounts the source from which the moneys are derived and the
individual activity or program against which each withdrawal is
charged.
' { + SECTION 21. + } ORS 692.180 is amended to read:
' 692.180. (1) Upon complaint or upon its own motion, the State
Mortuary and Cemetery Board may investigate any complaint
concerning any person, licensee or holder of a certificate of
authority made by any person or by the board. If the board finds
any of the causes described in this section in regard to any
person, licensee or applicant or the holder of a certificate of
authority, the board may impose a civil penalty of not more than
$1,000 for each violation, suspend or revoke a license to
practice or to operate under this chapter or refuse to grant or
renew a license. The causes are as follows:
' (a) Misrepresentation in the conduct of business or in
obtaining a license.
' (b) Fraudulent or dishonest conduct, when the conduct bears a
demonstrable relationship to funeral service practice, embalming
practice or the operation of cemeteries or crematoriums.
' (c) Except as provided in this paragraph, solicitation of
human dead bodies by the licensee or any agent, assistant or
employee of the licensee, either before or after death. This
paragraph does not apply to:
' (A) Activities permissible under ORS 128.400 to 128.440
{ - and 692.285 - } ; or
' (B) The sale, in accordance with provisions of the Insurance
Code, of prearranged funeral or cemetery merchandise or services,
or any combination thereof, to be funded by the contemporaneous
or subsequent assignment of a life insurance policy or an annuity
contract.
' (d) Offensive treatment of dead human bodies or a body in the
person's custody has been disposed of in violation of ORS chapter
432 or rules adopted pursuant thereto.
' (e) Aiding or abetting a person who is not a licensee or an
apprentice in any act involving the disposition of dead human
bodies before the bodies undergo cremation, entombment or burial
or before the bodies are transported out of the State of Oregon.
' (f) Sale or reuse of any casket or body container that has
been previously utilized for the placement of a deceased human
body. This does not include use of a rental cover as defined in
ORS 692.010.
' (g) Violation of any of the provisions of this chapter or any
rules adopted under this chapter.
' (h) Violation of any provision of ORS 128.412 or 128.415 or
regulations adopted by the Federal Trade Commission regulating
funeral industry practices.
' (i) Conviction of a crime, when the crime bears a
demonstrable relationship to funeral service practice, embalming
practice or the operation of cemeteries or crematoriums. A copy
of the record of the conviction certified to by the clerk of the
court entering the conviction shall be conclusive evidence of the
conviction.
' (j) Violation of ORS chapter 97 as it relates to disposition
of human bodies and to cemeteries.
' (k) Refusing to surrender promptly the custody of a dead
human body, upon the express order of the person lawfully
entitled to the custody of the body.
' (L) Acting as the legal representative of any deceased person
for whom the licensee has rendered services governed by this
chapter. This subsection does not prohibit a licensee from acting
as the legal representative of a deceased relative or a deceased
licensee if the deceased licensee was a partner, employee or
employer in the licensee's practice.
' (m) Failure to pay any civil penalty imposed by the board
within 10 days after the order is entered or, if appealed, within
10 days after the order is sustained on appeal.
' (2) All amounts recovered under this section shall be
deposited in accordance with ORS 692.375.
' (3) Civil penalties under this section shall be imposed as
provided in ORS 183.090.
' (4) Upon receipt of a complaint, the board shall conduct an
investigation as described under ORS 676.165.
' (5) Information that the board obtains as part of an
investigation into licensee or applicant conduct or as part of a
contested case proceeding, consent order or stipulated agreement
involving licensee or applicant conduct is confidential as
provided under ORS 676.175.
' { + SECTION 22. + } ORS 65.860 is amended to read:
' 65.860. (1) A nonprofit corporation organized or existing
solely for the purposes of either owning and operating a cemetery
or cremating dead bodies and burying and caring for incinerate
remains may, by its bylaws, provide that a stated percentage of
the money received from the sale of lots and burial space,
cremation of bodies, donations, gifts or other sources of revenue
shall constitute an irreducible fund. Any bylaw enacted for the
creation of the irreducible fund cannot be amended to reduce the
fund.
' (2) The board of directors may direct the investment of the
money in the irreducible fund, but all investments of money
deposited in the fund on or after January 1, 1972, shall be in
securities in classes and amounts approved by the State Treasurer
and published in a list pursuant to ORS 97.820. If a bank or
trust company qualified to engage in the trust business is
directed by the board of directors to invest the money in the
irreducible fund, the bank or trust company shall be governed by
the provisions of ORS 128.194 to 128.218 and shall not be
required to invest the money according to the list approved by
the State Treasurer. An officer of the corporation shall file
with the
{ - Secretary of State - } { + Director of the Department of
Consumer and Business Services + } on or before April 15 of each
year a verified statement in duplicate containing the same
information pertaining to the irreducible fund as provided in ORS
97.810 (3) regarding endowment care funds. The { - Secretary of
State - } { + director + } may require the corporation to file,
as often as the { - Secretary of State - } { + director + }
considers it to be necessary, a detailed report of the conditions
and assets of the irreducible fund.
' (3) The interest or income arising from the irreducible fund
provided for in this section or by any bylaws, or so much thereof
as is necessary, shall be devoted exclusively to the preservation
and embellishment of the grounds, buildings and property of the
corporation and the lots and space in buildings or grounds sold
to the members of the corporation, or to the payment of the
interest or principal of the debts authorized by subsection (5)
of this section for the purchase of land, erecting buildings, and
improvements. Any surplus thereof not needed or used for such
purposes shall be invested as provided in this section and shall
become part of the irreducible fund.
' (4) After paying for the land and the erection of the
original buildings and improvements thereon, all the future
receipts and income of the corporation subject to the provisions
in this section relating to the creation of an irreducible fund,
whether from the sale of lots and burial space, cremation of
bodies, donations, gifts and other sources, shall be applied
exclusively to laying out, preserving, protecting, embellishing
and beautifying the cemetery or the crematory and grounds
thereof, and the avenues leading thereto, and to the erection of
such buildings and improvements as may be necessary or convenient
for cemetery or crematory purposes, and to pay the necessary
expenses of the corporation.
' (5) No debts shall be contracted by such corporation in
anticipation of any future receipts, except for originally
purchasing the lands authorized to be purchased by it, laying out
and embellishing the grounds and avenues, erecting buildings and
vaults on such land, and improving them for the purposes of the
corporation. The corporation may issue bonds or notes for debts
so contracted and may secure them by way of mortgage upon any of
its lands, buildings, property and improvements excepting lots or
space conveyed to the members.
' { + SECTION 23. + } ORS 97.810 is amended to read:
' 97.810. (1) An endowment care cemetery is one which after
July 5, 1955, deposits with the trustee or custodian of its
endowment care fund not less than the following amounts for plots
sold after that date:
' (a) Fifteen percent of the gross sales price with a minimum
of $5 for each grave or, when the gross sales price is paid in
installments, 15 percent of each installment until at least 15
percent of the gross sales price has been deposited, with a
minimum of $5 for each grave.
' (b) Five percent of the gross sales price for each niche or,
when the gross sales price is paid in installments, five percent
of each installment until at least five percent of the gross
sales price has been deposited.
' (c) Five percent of the gross sales price for each crypt or,
when the gross sales price is paid in installments, five percent
of each installment until at least five percent of the gross
sales price has been deposited.
' (2) The cemetery authority shall deposit with the trustee or
custodian of its endowment care fund any payment received by it
and required by subsection (1) of this section to be paid into
such fund, within 30 days from the receipt of such payment.
' (3) Within 75 days of the end of its fiscal year, each
endowment care cemetery, except one owned by a city or a county,
shall file with the { - Secretary of State - } { + Director
of the Department of Consumer and Business Services + } a
statement containing the following information pertaining to the
endowment care fund: The total amount invested in bonds,
securities, mortgages and other investments, the total amount of
cash on hand not invested at the close of the previous calendar
or fiscal year, the income earned by investments in the preceding
calendar or fiscal year, the amounts of such income expended for
maintenance in the preceding calendar or fiscal year, the amount
paid into the fund in the preceding calendar or fiscal year and
such other items as the { - Secretary of State - } { +
director + } may from time to time require to show accurately the
complete financial condition of the trust on the date of the
statement.
' (4) All of the information appearing on the statement shall
be verified by an owner or officer of the cemetery authority, and
a copy of the statement shall be maintained in the business
office of the cemetery authority.
' (5) The { - Secretary of State - } { + director + } shall
have authority to require, as often as the { - Secretary of
State - } { + director + } deems necessary, the cemetery
authority to make under oath a detailed report of the condition
and assets of any cemetery endowment care fund.
' (6) At the time of the filing of the statements of its
endowment care fund each cemetery filing shall pay to the
{ - Secretary of State - } { + director + } an annual fee as
follows:
' (a) Up to 100 interments per year, $40.
' (b) Over 100 interments per year, $100.
' (7) All fees received by the { - Secretary of State - }
{ + director + } under this section shall be { - by the
Secretary of State - } immediately turned over to the State
Treasurer who shall deposit the moneys in the { - Division of
Audits Account - } { + Consumer and Business Services Fund + }
created under ORS { - 297.535 - } { + 705.145 + }.
' (8) No cemetery shall operate after July 5, 1955, as an
endowment care, permanent maintenance or free care cemetery until
the provisions of this section are complied with. There shall be
printed or stamped at the head of all contracts and certificates
of ownership or deeds referring to plots in an endowment care
cemetery, the following statement: 'This cemetery is an endowment
care cemetery,' in lettering equivalent to at least 10-point
No. 2 black type, and there shall be printed in the body of or
stamped upon the above-described instruments the following
statement: 'Endowment care means the general care and
maintenance of all developed portions of the cemetery and
memorials erected thereon. '
' (9) A cemetery which otherwise complies with this section may
be designated an endowment care cemetery even though it contains
a small area which may be sold without endowed care, if it is
separately set off from the remainder of the cemetery. There
shall be printed or stamped at the head of all contracts and
certificates of ownership or deeds referring to plots in this
area the phrase 'nonendowed care' in lettering equivalent to at
least 10-point No. 2 black type.
' (10) A nonendowed care cemetery is one that does not deposit
in an endowment care fund the minimum specified in subsection (1)
of this section.
' (11) No cemetery shall in any way advertise or represent that
it operates wholly or partially as an endowment care, permanent
maintenance or free care cemetery, or otherwise advertise or
represent that it provides general care or maintenance of all or
portions of the cemetery or memorials erected thereon, until the
provisions of this section are complied with.
' { + SECTION 24. + } ORS 97.825 is amended to read:
' 97.825. (1) Should the cemetery authority fail to remit to
the trustee or trustees in accordance with the law, the funds
herein provided for endowment and special care, or fail to expend
all such funds and generally care for and maintain any portion of
a cemetery entitled to endowment care, any three lot owners whose
lots are entitled to endowment care, or any one lot owner whose
lot is entitled to special care, or the next of kin, heirs at law
or personal representatives of such lot owners, shall have the
right, or the district attorney of any county wherein is situated
such lots, shall have the power, by suit for mandatory injunction
or for appointment of a receiver, to sue for, to take charge of,
and to expend such net income. Such suit may be filed in the
circuit court of the county in which said cemetery is located, to
compel the expenditure either by the cemetery authority or by any
receiver so appointed by the court, of the net income from such
endowment care fund for the purposes set out in ORS 97.010 to
97.040, 97.110 to 97.450, 97.510 to 97.730, 97.810 to 97.920 and
97.990.
' (2) When the { - Secretary of State - } { + Director of
the Department of Consumer and Business Services + } has reason
to believe that a cemetery endowment care fund does not conform
to the requirement of law, or when the { - Secretary of
State - } { + director + } has reason to believe that any
cemetery is operating in violation of ORS 97.810 or 97.820, or
when an endowment care cemetery fails after 30 days' notice of
delinquency to make any report to the
{ - Secretary of State - } { + director + } required by ORS
97.810, the
{ - Secretary of State - } { + director + } shall give notice
of the foregoing to the trustee or trustees of the cemetery
endowment care fund, the cemetery for the benefit of which the
fund is established, the Attorney General of Oregon and the State
Mortuary and Cemetery Board. Within 90 days after the receipt of
such notice, the Attorney General shall institute suit in the
circuit court of any county of this state in which such cemetery
is located, for a mandatory injunction against further sales of
graves, plots, crypts, niches, burial vaults, markers or other
cemetery merchandise by such cemetery or for the appointment of a
receiver to take charge of the cemetery, unless the Attorney
General shall prior to that time be notified by the
{ - Secretary of State - } { + director + } that such failure
to conform to the requirements of the law or to report has been
corrected.
' (3) If a trustee fails to perform the duties of the trustee
under ORS 97.810 to 97.920, the trustee shall be liable for any
damage resulting from that failure to any lot owners or the next
of kin, heirs at law or personal representatives of such lot
owners.
' (4) The court may award reasonable attorney fees, costs and
disbursements to the prevailing party in an action under this
section.
' { + SECTION 25. + } ORS 97.865 is amended to read:
' 97.865. (1) The cemetery authority that operates a cemetery
for any religious or eleemosynary corporation, church, religious
society or denomination, corporation sole administering
temporalities of any church or religious society or denomination
and any county or city may make an irrevocable election to have
ORS 97.810 to 97.865 apply to any cemetery controlled or operated
by the cemetery authority, county or city by filing a written
statement indicating such action with the { - Secretary of
State - } { + Director of the Department of Consumer and
Business Services + }. The statement shall be in the form
prescribed by the { - Secretary of State - } { + director + }
and shall contain the information specified by the
{ - Secretary of State - } { + director + }.
' (2) When a cemetery authority, county or city files a
statement described in this section with the { - Secretary of
State - } { + director + }, ORS 97.810 to 97.865 will apply to
a cemetery controlled or operated by the cemetery authority,
county or city beginning on the first day of the fiscal year next
following the filing of the statement.
' { + SECTION 26. + } { + ORS 692.285 is repealed. + } ' .
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