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NEW JERSEY REGISTER
VOLUME 38, ISSUE 19
ISSUE DATE: OCTOBER 2, 2006
RULE PROPOSALS
LAW AND PUBLIC SAFETY
DIVISION OF CONSUMER AFFAIRS
NEW JERSEY CEMETERY BOARD
Pre-construction Sales of Mausoleum Space

Proposed Amendment: N.J.A.C. 13:44J-8.4
Proposed New Rule: N.J.A.C. 13:44J-14.3

Authorized By: New Jersey Cemetery Board, Dianne Tamaroglio, Executive Director.
Authority: N.J.S.A. 45:27-4.
Calendar Reference: See Summary below for explanation of exception to calendar requirement.
Proposal Number: PRN 2006-326.

Submit comments by December 1, 2006 to:
Dianne Tamaroglio, Executive Director
New Jersey Cemetery Board
PO Box 45031
Newark, NJ 07101

The agency proposal follows:

Summary

Pursuant to its rulemaking authority in N.J.S.A. 45:27-4, the New Jersey Cemetery Board (the Board) proposes an amendment to N.J.A.C. 13:44J-8.4 and new rule N.J.A.C. 13:44J-14.3.

Existing N.J.A.C. 13:44J-8.4(b) allows a cemetery company to temporarily store human remains, but imposes a four-year limitation on such storage. The Board proposes to amend this rule to allow a cemetery company to temporarily store human remains for more than four years if it receives written permission from the person who has the right to control the disposition of the remains.

Proposed new N.J.A.C. 13:44J-14.3 provides for the sale of spaces in mausoleums which have yet to be built. The Board believes that such sales are appropriate, as they permit cemetery companies to raise the funds necessary to build mausoleums, but wishes to ensure that purchasers of such spaces are protected. A cemetery company that offers mausoleum space in a pre-construction sale is required to complete construction within four years from the date of the first sale. A cemetery company must inform the Board of the first pre-construction sale. The cemetery company also must post notification of the date of the first sale in its office.

A cemetery company may apply to the Board for a one-year extension if construction has not been completed within four years. The cemetery company is permitted to apply for additional one-year extensions if construction is not completed after the first one-year extension. A cemetery company that has been granted more than one extension is required to make a full refund of the purchase price upon request of the purchaser or his or her authorized representative. If a cemetery company is not granted an extension, it shall cease selling pre-construction spaces and make a full refund of the purchase price to every individual who purchased such a space.

A cemetery company that contracts with another entity to sell spaces in a mausoleum not yet completed must ensure that the other entity will indemnify it for any refunds it has to make pursuant this rule. This is because sales commissions are customarily paid to the selling entity at the time of the sale. A contract for a pre-construction sale must include specific disclosures which must be initialed by the purchaser. A cemetery company that engages in pre-construction sales must place at least 45 percent of the purchase price for a pre-construction sale in a ledgered account that is used for deposits to the Maintenance and Preservation Fund, deposits to the building fund, construction costs, or refunds. This rule applies to any pre-construction sale made after the effective date of this rule.

As the Board has provided a 60-day comment period on this notice of proposal, this notice is excepted from the rulemaking calendar requirement pursuant to N.J.A.C. 1:30-3.3(a)5.

Social Impact

The Board believes that the proposed amendment and new rule will have a positive social impact. The proposed amendment and new rule allows cemetery companies to engage in pre-construction sales of mausoleum spaces, thereby providing the funding for mausoleum construction projects that create more space for the interment of human remains. The proposed amendment and new rule also provides protections for consumers who purchase pre-construction spaces. These purchasers will be assured that either the mausoleum will be completed in a reasonable time or they will be able to receive a refund from the cemetery company.

Economic Impact

The Board believes that the proposed amendment and new rule will have a beneficial economic impact on cemetery companies. By allowing regulated pre-construction sales, the proposed amendment and new rule provides an opportunity for cemetery companies to raise funds needed in order to complete construction of a mausoleum. The proposed amendment and new rule imposes a cost on cemetery companies that do not complete construction within five years in that these companies are required to make refunds to any purchasers or authorized representatives who request them. Costs are imposed on any cemetery company that is denied an extension, as the cemetery must make refunds to all pre-construction purchasers. Cemetery companies also bear the cost of notifying the Board of the first pre-construction sale and of posting notification in their offices. The proposed amendment and new rule may impose costs on entities that contract with cemetery companies to sell pre-construction mausoleum space to consumers, due to the requirement that such entities indemnify cemetery companies for any refunds made to purchasers.

Federal Standards Statement

A Federal standards analysis is not required because there are no Federal standards or requirements applicable to the proposed amendment and new rule.

Jobs Impact

The Board does not believe that the proposed amendment and new rule will result in an increase or decrease of jobs in the State.

Agriculture Industry Impact

The Board does not believe that the proposed amendment and new rule will have any impact on the agriculture industry of this State.

Regulatory Flexibility Analysis

If, for purposes of the Regulatory Flexibility Act (Act), N.J.S.A. 52:14B-16 et seq., the approximately 400 cemeteries in the State are deemed "small businesses," then the following analysis applies.

The Act requires the Board to set forth the reporting, recordkeeping and other compliance requirements of the proposed amendment and new rule, including the kinds of professional services likely to be needed to comply. The Act further requires the Board to estimate the initial and annual compliance costs of the proposed amendment and new rule with an indication of the varying impact on small businesses of differing types and sizes and to outline the manner in which it has designed the rules to minimize any adverse economic impact upon small businesses.

The proposed amendment and new rule do not require cemetery companies to employ professional services in order to comply with the rules. The proposed amendment and new rule do not impose any recordkeeping requirements, but does impose compliance and reporting requirements. The proposed amendment to N.J.A.C. 13:44J-8.4 requires a cemetery company that needs to temporarily store human remains for more than four years to obtain written consent to an extension from the person who has the right to control the disposition of remains. The rule also requires the cemetery company to inform the Board if an extension has been granted.

New N.J.A.C. 13:44J-14.3 requires cemetery companies to complete construction of a mausoleum within four years from the date of the first pre-construction sale. The proposed new rule also requires a cemetery company to notify the Board of the first pre-construction sale. A cemetery company may apply for an extension of this four-year period and, if it does so, it is required to apply for the extension by submitting specific information to the Board 120 days prior to the expiration of the deadline. A cemetery company that contracts with another entity to sell spaces must ensure that the other entity will indemnify it for any refunds made pursuant to this rule. A cemetery company that has been granted an extension and has not completed construction during the extension must apply to the Board for another extension and, if this request for an additional extension is granted, make refunds to any purchasers or authorized representatives who request them. A cemetery company that is denied a request for an extension must make a refund to every purchaser of pre-construction space. A cemetery company must disclose, and have a purchaser initial, specific information in the sales contract. Forty-five percent of the purchase price a cemetery company receives for a pre-construction sale must be placed in an account that will be used for deposits to the Maintenance and Preservation Trust Fund, deposits to the building fund, construction costs or refunds.

The Board believes that since the proposed amendment and new rule are intended to protect consumers who purchase spaces in pre-construction sales, the amendment and new rule must be applied uniformly to all cemetery companies and no differing compliance requirements are provided based on size of the business.

Smart Growth Impact

The Board does not anticipate that the proposed amendment and new rule will have any impact on the achievement of smart growth and implementation of the State Development and Redevelopment Plan, otherwise known as the State Plan.

Full text of the proposal follows (additions indicated in boldface thus; deletions indicated in brackets [thus]):

13:44J-8.4 Temporary storage prior to final entombment or interment within a single cemetery v (a) (No change.)

(b) A cemetery company may temporarily store human remains in a properly constructed receiving vault prior to final entombment or interment for [not more than] up to four years. If a cemetery company needs to temporarily store human remains for more than four years, the cemetery company must obtain the written consent for an extension, which includes a set term for the extension, from the person who has the right to control the disposition of remains pursuant to N.J.S.A. 45:27-22. The cemetery company shall advise the Board that the person who has the right to control the disposition of remains has granted the extension. The cemetery company may transfer the remains from the place of temporary storage to the place of final entombment or interment without obtaining a disinterment permit and without the presence of a licensed funeral director if both the temporary storage and final resting place are within a single cemetery.

(c)-(e) (No change.)

13:44J-14.3 [(Reserved)] Pre-construction sales of mausoleum space

(a) For the purposes of this section, the following words and terms shall have the following meanings, unless the context clearly indicates otherwise.

"Complete construction" means that all requirements for entombment in the mausoleum have been met.

"Construction costs" means the costs directly associated with the building project, such as:

1. Architect fees;

2. City and State permit fees;

3. Contractor fees;

4. Soil testing;

5. Landscaping;

6. Furniture and fixtures;

7. Engineering;

8. Site plan development; and

9. Installation of utility lines and other expenses of a similar nature that are necessary to complete construction of the mausoleum.

"Pre-construction sale" means the sale, assignment or reservation of mausoleum space to a consumer for monetary consideration, prior to the time that the mausoleum space is available for entombment.

(b) A cemetery company may offer for sale space in a mausoleum that has not been constructed.

(c) Any cemetery company that offers mausoleum space in a pre-construction sale must complete construction of the mausoleum within four years from the date of the first pre-construction sale, except as permitted pursuant to (e) below.

(d) Within 30 days of the first pre-construction sale, a cemetery company shall inform the Board in writing of the date of the first sale and shall post notification of the date of the first sale in its office or, if the cemetery company has no office, at the construction site.

(e) A cemetery company may apply to the Board for a one year extension of the four-year deadline for completion. The Board may grant the extension if it deems the cemetery company to be actively engaged in constructing the mausoleum and determines that delays in the completion of the mausoleum are not due to any misconduct of the cemetery company. An application for an extension shall be filed at least 120 days prior to the end of the four-year period and shall include:

1. The date of the first pre-construction sale;

2. The reasons the cemetery company was unable to complete construction within the four-year deadline;

3. Any documents that establish the reasons why the cemetery company was unable to complete construction;

4. The number of human remains temporarily entombed pending completion of construction; and

5. The number of anticipated spaces in each mausoleum under construction and the number of sold spaces in each mausoleum.

(f) If a cemetery company enters into a contract with another entity for the sale of spaces in a mausoleum that will be sold in a pre-construction sale, the cemetery company shall ensure that the contract contains a provision that requires the other entity to indemnify the cemetery company for any refunds made to consumers pursuant to (h) and (i) below.

(g) A cemetery company that has been granted a one-year extension pursuant to (e) above, and that has not completed the construction of the mausoleum within that one-year period, shall apply to the Board for another one year extension pursuant to (e) above. An application for an extension shall be filed at least 120 days prior to the end of the one-year extension granted pursuant to (e) above. The Board may approve such an extension with conditions or restrictions.

(h) A cemetery company that is granted an extension pursuant to (g) above shall make a full refund of the purchase price to any pre-construction purchaser within 30 days of receiving a request for refund from the purchaser or his or her authorized representative.

(i) If construction is not completed as required by (c) above and an extension has not been granted pursuant to (e) or (h) above, the cemetery company shall cease selling pre-construction spaces and shall make a full refund of the purchase price to every consumer who has purchased a space.

(j) A sales contract for a pre-construction mausoleum space must disclose:

1. That the sale is for mausoleum space that has not yet been constructed and is not available for interments at the time of the sale;

2. The projected date the cemetery company will complete construction; and

3. The fact that the cemetery company is allowed to apply to the Board for permission to extend the date of completion beyond four years from the date of the first preconstruction sale and that a purchaser has the right to a full refund if the cemetery company does not complete construction within five years from the date of the first pre-construction sale.

(k) The purchaser of a pre-construction mausoleum space shall initial the disclosures in the sales contract required by (j) above.

(l) A cemetery company that offers mausoleum space in a pre-construction sale must place no less than 45 percent of the purchase price in a ledgered account and use the funds in this account for deposits to the Maintenance and Preservation Fund, deposits to the building fund, construction costs or refunds. Funds remaining in this account upon the completion of construction shall revert to the cemetery company.

(m) The requirements of (a) through (l) above shall apply to all pre-construction sales made after (the effective date of this rule).



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