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NEW JERSEY REGISTER
VOLUME 35, NUMBER 12
MONDAY, JUNE 16, 2003
RULE PROPOSAL

LAW AND PUBLIC SAFETY
DIVISION OF CONSUMER AFFAIRS
NEW JERSEY CEMETERY BOARD
CEMETERY PRICE LIST; ANNUAL REPORTS; FUTURE SERVICES; REMOVAL OF UNAUTHORIZED
MONUMENTATION

Proposed Amendments: N.J.A.C. 13:44J-5.2, 5.6 and 15.1

Proposed New Rule: N.J.A.C. 13:44J-5.9

Authorized By: New Jersey Cemetery Board, Susan Gartland, Executive Director.

Authority: N.J.S.A. 8A:2-2 and 8A:4-1 et seq.
Calendar Reference: See Summary below for explanation of exception to calendar requirement.
Proposal Number: PRN 2003-224.

Submit comments by August 15, 2003 to:

Susan Gartland, 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. 8A:2-2, the New Jersey Cemetery Board (the Board) proposes amendments to N.J.A.C. 13:44J-5.2, 5.6 and 15.1, and proposes new rule N.J.A.C. 13:44J-5.9.

In its proposed readoption of N.J.A.C. 13:44J, proposed September 5, 2000 at 32 N.J.R. 3261(a), the Board proposed to amend N.J.A.C. 13:44J-5.2(g) so that cemetery companies would no longer be required to put monies paid for personal services to be provided in the future in a trust fund subject to the requirements of N.J.S.A. 2A:102-13 through 17. The Board proposed that such monies be placed in a ledgered account and dispersed only when the services are provided. One of the comments the Board received regarding the readoption maintained that the proposed change to N.J.A.C. 13:44J-5.2(g) violated N.J.S.A. 2A:102-13. The Board did not adopt the proposed amendment to N.J.A.C. 13:44J-5.2(g) when it readopted its rules, November 6, 2000 at 32 N.J.R. 4265(a), and referred this matter to the Board's regulatory committee in order to determine if the proposed change would violate N.J.S.A. 2A:102- 13. After reviewing N.J.S.A. 2A:102-13, the Board determined that N.J.S.A. 2A:102-13 requires that any monies paid to a funeral director, undertaker or cemetery for the sale of personal property which is to be provided in the future must be placed in a trust fund. The statute also requires that any monies paid to a funeral director or an undertaker for the provision of personal services to be provided in the future be placed in a trust, but does not include cemetery companies in this list. The regulatory committee determined that, since the statute includes cemetery companies in the trusting requirement for goods but does not include them in the trusting requirement for services, the Legislature did not wish to require that cemetery companies place monies received for personal services to be provided in the future in a trust. It was determined that past requirements for trusting of these monies should be changed through regulation. The regulatory committee recommended that the Board amend N.J.A.C. 13:44J-5.2(g) to reflect that monies paid for future services need not be entrusted. The regulatory committee suggested that the Board propose the original amendment to N.J.A.C. 13:44J- 5.2(g) so as to ensure sufficient protection of monies which are paid to cemetery companies for future services. The Board agreed with the regulatory committee's suggestions and thus proposes that N.J.A.C. 13:44J-5.2(g) be deleted and the section heading be changed to delete "future services," and proposes new rule N.J.A.C. 13:44J-5.9 for the protection of monies paid to cemetery companies for the provision of future services.

The Board also proposes to amend N.J.A.C. 13:44J-5.6 to reflect new provisions to address monies paid to cemetery companies for future services. The amendments require that annual reports to the Board include certified statements from financial institutions listing the accounts a cemetery company maintains for future services, a list of any contracts entered into by the cemetery company to provide future services and any services provided during the year pursuant to a contract to provide future services. The rule is further amended to require that cemetery companies send to the Board certified statements from financial institutions listing the securities, bonds, certificates of deposit or other instruments in which the corpus of the fund is invested, as opposed to sending in a list of these items.

N.J.A.C. 13:44J-5.9 is the proposed new rule concerning the provision of future services. Subsection (a) of the rule defines "administrative fees" for purposes of the rule.

Subsection (b) allows a cemetery company to collect money for future services and requires the cemetery company to set forth any agreement to provide future services in a contract that meets the requirements of subsection (d).

Subsection (c) prohibits a cemetery company from charging or collecting any monies for future services that are not set forth in a contract.

Subsection (d) requires that contracts for future services be in writing, a copy of which must be kept in the cemetery company offices and one copy provided to the party that contracts for the future services. All future services contracts must include the name and address of the party paying for the future services, the person for whom and/or the space for which services are provided, the services that will be provided, the cost of the services, administrative fees and a statement indicating refund rights.

Subsection (e) states that the price charged for future services, excluding administrative fees, cannot be less than the current price charged by the cemetery company for the same services.

Subsection (f) requires that monies paid for future services be kept in a ledgered account in a bank with a place of business in New Jersey. The ledger must indicate the name of the person who contracted for the service, the amount paid, the date of contract, the amount of interest and the date services are provided or a refund given.

Subsection (g) requires that all monies paid for future services, excluding administrative fees, be used to provide future services unless the money is refunded.

Subsection (h) requires that any interest earned on an account be kept as part of the account and used to provide the future services.

Subsection (i) requires a cemetery company to refund money paid for future services, excluding administrative fees and interest, to a person who paid for future services or his or her heirs, if those funds are not used for the purpose for which they were paid. A refund is required within 30 days of receipt of a request.

Subsection (j) permits the Board to audit the records of a cemetery company that has entered into a contract to perform future services.

Subsection (k) prohibits cemetery companies from entering into a future services contract to provide cremations if the cemetery company does not have a crematory.

The Board proposes to amend N.J.A.C. 13:44J-15.1 to clarify that a cemetery company may remove any monumentation that has been installed without its approval. The proposed amendment also indicates that the lot owner is responsible for any costs incurred due to the removal pursuant to N.J.S.A. 8A:5-2(g).

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 new rule and amendments will have a positive impact on cemetery companies as well as those who contract with cemetery companies for future services. The Board believes that the current requirement that all monies paid for future services be held in a trust is not required by statute and is unduly burdensome. Also, the requirement to pay trust fees renders future services contracts financially unattractive. The Board believes that the proposed system will ensure the protection of any monies paid for future services, while making the maintenance of such monies less financially burdensome. The Board believes that this will make entering into future service contracts more attractive for cemetery companies and provide consumers greater access to such contractual services. The Board also believes that the proposed amendments to N.J.A.C. 13:44J-15.1 clarify what a cemetery company may do when monumentation has been installed without approval, and who must pay the cost for the removal of such monumentation. This will authorize and make it easier for cemetery companies to remove such monumentation.

Economic Impact

The Board believes that the proposed new rule and amendments will have an economic impact on cemetery companies and lot owners. The proposed amendments to N.J.A.C. 13:44J-5.6 require cemetery companies to include new information in annual reports to the Board. The costs of collecting this information and providing it to the Board will be borne by cemetery companies. The proposed amendment to N.J.A.C. 13:44J-5.2 and proposed new rule N.J.A.C. 13:44J- 5.9 will have a positive economic impact on cemetery companies. The existing requirement that monies paid for future services be placed in a trust fund necessitates that cemetery companies pay trust fees for these funds. The proposal deletes this requirement and provides new requirements for placing these monies in a ledgered account. The cost of maintaining the ledgered account will be nominal compared to the cost of trust fees. Cemetery companies will benefit because the costs of providing future services will be lowered. The proposed amendment to N.J.A.C. 13:44J-15.1 may have an economic impact on lot owners in that they will be responsible for the costs a cemetery company incurs in removing any monumentation that has not been authorized by the cemetery company.

Federal Standards Statement

A Federal standards analysis is not required because the proposed new rule and amendments do not have any applicable Federal standards or requirements.

Jobs Impact

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

Agriculture Industry Impact

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

Regulatory Flexibility Analysis

If, for purposes of the Regulatory Flexibility 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 amendments and new rule including the kinds of professional services likely to be needed to comply with the requirements. The Act further requires the Board to estimate the initial and annual compliance costs of the amendments 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 the rules have been designed to minimize any adverse economic impact upon small businesses.

The costs imposed on small businesses by the amendments and new rule are the same costs that are imposed on all businesses as outlined in the Economic Impact statement.

The Board does not believe that licensees will need to employ any professional services to comply with the requirements of the proposed amendments and new rule.

The amendments and new rule impose compliance requirements. N.J.A.C. 13:44J-5.9 requires a cemetery company to set forth any agreement to provide future services in a contract, maintain a copy in the cemetery company offices and provide a copy to parties who contract for future services. Future service contracts must include the name and address of the party paying for services, the services to be provided, the cost of the service, any administrative fees and a statement that indicates that the person who pays for future services has the right to a refund. A cemetery company cannot collect any monies that are not set forth in the contract and cannot charge a fee for future services that is less than the fee charged for the same services at need. Monies paid for future services must be maintained in a ledgered account and be held in a bank with a place of business in New Jersey. Monies paid for future services must be used to provide the contracted services and interest earned on the account must be maintained as part of the account. The cemetery company is required to refund monies to the person who paid for services, or his or her heirs, if the monies are not used to provide services. A cemetery company must make this refund within 30 days of receiving a request. Cemetery companies are also prohibited from contracting for the provision of a cremation in the future if the cemetery company does not have a crematory.

The amendments and new rule also impose reporting and recordkeeping requirements. A cemetery company is required to send to the Board, as part of its annual report, statements from financial institutions listing the accounts the cemetery company maintains for future services, a list of any contracts to provide future services and a list of any services provided during the year pursuant to a contract for future services. The cemetery company must maintain a ledger for each account which indicates the name of the person who contracted for the service, the amount paid for the service, the date the contract is signed, the amount of interest applied to the account and the date services are provided or a refund given.

The Board believes that since the proposed amendments and new rule provide for the protection of any monies paid for the provision of future services, the rules should be applied uniformly to all cemetery companies licensed by the Board.

Smart Growth Impact

The Board does not anticipate that the proposed amendments 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:

<< NJ ADC 13:44J-5.2 >>

13:44J-5.2 Cemetery price list; <<-future services;->> general maintenance charges

(a)-(f) (No change.)

<<-(g) Any monies paid to a cemetery company for future services shall be subject to the requirements of N.J.S.A. 2A:102-13 through 17.->>

<<-(h)->><<+(g)+>> (No change in text.)

<< NJ ADC 13:44J-5.6 >>

13:44J-5.6 Annual reports

(a) Each year, a cemetery company shall submit a check for all charges due the Board pursuant to N.J.A.C. 13:44J-3.1 and file <<+with the Board+>> a notarized annual report on a form provided by the Board <<-with the Board->>. The report shall include:

1. (No change.)

2. The designation of the income of the maintenance and preservation fund as operational expenses, retained income or both; <<-and->>

3. <<-A list of->> <<+Certified statements from financial institutions listing+>> the securities, bonds, certificates of deposit or other instruments in which the corpus of the fund is invested<<-.->><<+;+>>

<<+4. Certified statements from financial institutions listing the accounts the cemetery company maintains for future services pursuant to N.J.A.C. 13:44J-5.9;+>>

<<+5. A complete list of any contracts entered into by the cemetery company to provide future services; and+>>

<<+6. Any services provided during the year pursuant to a contract to provide future services.+>>

(b) (No change.)

<< NJ ADC 13:44J-5.9 >>

<<+13:44J-5.9 Future services+>>

<<+(a) For purposes of this section, "administrative fees" means all costs incurred by a cemetery company pursuant to a contract for future services excluding the price listed in the contract for providing the service in the future. "Administrative fees" may include costs for bookkeeping, recordkeeping and any sales commissions.+>>

<<+(b) A cemetery company may collect money for future services, such as openings and closings, foundation fees and installation fees. Any agreement to provide future services shall be set forth in a contract pursuant to (d) below.+>>

<<+(c) A cemetery company which contracts to provide future services shall not charge or collect any monies other than those set forth in the contract.+>>

<<+(d) All contracts for future services shall be in writing. A copy of all future service contracts shall be maintained in the cemetery company offices and a copy shall be provided to the party that contracts for the performance of the services. The future services contract shall include:+>>

<<+1. The name and address of the party paying for the future services and the person(s) for whom, and/or the space for which, services are to be provided;+>>

<<+2. The services that will be provided;+>>

<<+3. The cost of the services. If there is more than one service contracted for, the price for each service shall be listed;+>>

<<+4. Any administrative fees; and+>>

<<+5. A statement indicating that the person who pays for the future services, or his or her heirs or assignees, has the right to a refund of the contract price, excluding administrative fees and interest, if the services have not been provided.+>>

<<+(e) The price a cemetery company charges for future services, excluding administrative fees, shall not be less than the current listed price for the same service provided at need.+>>

<<+(f) All monies paid for future services, excluding administrative fees, shall be kept in a ledgered account maintained by a cemetery company and held in a banking institution which maintains a place of business in New Jersey. For each service contracted for performance in the future, the ledger shall reflect:+>>

<<+1. The name of the person who contracted for the service;+>>

<<+2. The amount paid for each service;+>>

<<+3. The date the contract is signed;+>>

<<+4. The amount of interest applied to the account from the date the contract is signed until all services are provided or money is refunded; and+>>

<<+5. The date services are provided or a refund is given.+>>

<<+(g) All monies, excluding administrative fees, paid for future services shall be used solely to fulfill the contractual obligations to provide future services, unless the monies are refunded pursuant to (i) below.+>>

<<+(h) Interest earned on an account kept pursuant to (f) above shall be maintained as part of that account and used to fulfill the contractual obligation to provide future services.+>>

<<+(i) Monies paid for future services, excluding administrative costs and interests, shall be refunded to the person who paid for such services or his or her heirs or assignees if those funds are not used for the purposes for which they were paid. A cemetery company shall make a refund within 30 days of receiving a request for a refund.+>>

<<+(j) The Board may perform an audit of the records of any cemetery company that has entered into a contract to perform future services.+>>

<<+(k) Only cemetery companies with a crematory may enter into a future services contract to provide a cremation.+>>

<< NJ ADC 13:44J-15.1 >>

13:44J-15.1 Removal of unauthorized monumentation

Monumentation that has <<-not been authorized by the cemetery company->> <<+been installed without the cemetery company's approval+>> may be removed by the cemetery company. <<+The lot owner shall be responsible for costs incurred by the cemetery company for removal pursuant to N.J.S.A. 8A:5-2(g).+>>


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Posted June 16, 2003