BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 180


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          Date of Hearing:  May 13, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          AB  
          180 (Bonilla) - As Amended April 22, 2015


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill requires the powers and duties of the Cemetery and  
          Funeral Bureau (Bureau) be reviewed by the appropriate policy  
          committees of the Legislature, before January 1, 2020, and  
          requires the Bureau to conduct a study of endowment care funds  








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          as specified, by November 1, 2018.


          FISCAL EFFECT:


          The Bureau operates as a single entity from two separate special  
          funds, the Cemetery Fund (Cemetery) and the Funeral Directors  
          and Embalmers Fund (Funeral). The funds are both supported by  
          fees from licensees, are solvent, and have reserves.


          On-going annual Special Fund costs of approximately of  
          approximately $2.5 million (Cemetery) and $1.8 million (Funeral)  
          for operating and personnel expenses including enforcement,  
          licensing, auditing and administrative functions. This fund is  
          self-supporting with fee revenue.


          COMMENTS:


          1)Purpose.  This bill is one of five author-sponsored sunset  
            bills.  According to the author, "Although the Bureau is  
            subject to sunset review, and was subject to a sunset review  
            oversight hearing on March 18, 2015, its statutory provisions  
            do not contain a sunset review provision.  This bill seeks to  
            make clear that the Bureau is subject to sunset review, and to  
            reinforce the recommendations contained in the Bureau's sunset  
            review report, including a review of endowment care funds, in  
            order to increase accountability."  
          This bill will authorize the continued operation of the Bureau  
            as it is currently functioning under the Department of  
            Consumer Affairs (DCA) and request the Bureau to be reviewed  
            by the Legislature again in four years.  By continuing the  
            functions of the Bureau, this bill will allow the Bureau to  
            continue in its regulatory capacity for the protection of  
            consumers and the regulation of all aspects of the funeral and  
            cemetery industries.  








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          2)Background.   The Bureau licenses and regulates more than  
            11,000 licensees in 13 different licensing categories.  The  
            Bureau does not license or regulate cemeteries operated by  
            religious organizations, cities, counties, cemetery districts,  
            the military, Native American tribal organizations, or other  
            groups. The Bureau has the oversight responsibility for both  
            fiduciary and operational activities of its licensing  
            population and has the statutory authority to enforce the  
            licensing and practice acts dealing specifically with human  
            remains, cemetery, and crematory provisions. The Bureau  
            currently employees 21.5 full and part time positions.


          3)Endowment Care Funds.  Current law requires cemeteries to file  
            an annual report regarding the amount collected for endowment  
            care funds and special care funds (preneed cemetery  
            merchandise and services), the manner of investment of the  
            funds, as well as other financial information and related  
            documents. The annual report must be submitted with an audit  
            report signed by a certified public accountant. The Bureau's  
            audit unit reviews the annual reports and assesses any  
            potential risk to the funds.  In 2008, the Bureau reported to  
            the Legislature the results from its Endowment Care Fund  
            Survey, which addressed the need to increase endowment care  
            fund requirements. While an increase in funding for endowment  
            care was enacted in 2008, it was recommended in the background  
            paper that the Bureau conduct an updated study on endowment  
            care fund requirements and needs.  This bill will require the  
            Bureau to conduct a study of endowment care funds and report  
            back to the Legislature by November 1, 2018.  


          4)Previous Legislation.  


             a)   SB 658 (Negrete McLeod), Chapter 386, Statutes of 2011,  
               required funeral establishments to make their general price  








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               list available by mail, facsimile, or electronic mail, or  
               to post that information on its Internet Web site, as  
               specified, by January 1, 2013.
             b)   AB 2946 (Hayashi), Chapter 504, Statutes of 2008,  
               deleted the December 31, 2007, sunset date of, thereby  
               extending indefinitely, the $8.50 quarterly fee the Bureau  
               charges cemeteries for each burial, entombment, inurnment,  
               or cremation made during the preceding quarter.


             c)   SB 363 (Figueroa), Chapter 874, Statutes of 2003,  
               implemented changes to several boards and commissions,  
               including the Bureau, within the DCA.

             d)   SB 1952 (Figueroa) Chapter 825, Statutes of 2002,  
               required the Bureau to report to the Legislature on certain  
               specified topics; extended the sunset date requiring  
               cemetery authorities and crematories to pay a fee of $8.50  
               per cremation, burial, entombment or inurnment; authorized  
               the Bureau to assess a fee for developing, purchasing,  
               grading, and administering the cemetery manager and  
               crematory manager examinations; and made other changes  
               regulating the Bureau pursuant to recommendations of the  
               JLSRC and DCA.
          


          Analysis Prepared by:Jennifer Swenson / APPR. / (916)  
          319-2081


















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