BILL ANALYSIS Ó AB 180 Page 1 Date of Hearing: May 13, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 180 (Bonilla) - As Amended April 22, 2015 ----------------------------------------------------------------- |Policy |Business and Professions |Vote:|14 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- 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 AB 180 Page 2 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. AB 180 Page 3 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 AB 180 Page 4 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 AB 180 Page 5