Full Text of HB5312 98th General Assembly
HB5312 98TH GENERAL ASSEMBLY |
| | 98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014 HB5312 Introduced , by Rep. Michael Unes SYNOPSIS AS INTRODUCED: |
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760 ILCS 100/3 | from Ch. 21, par. 64.3 |
760 ILCS 100/4 | from Ch. 21, par. 64.4 |
760 ILCS 100/5 | from Ch. 21, par. 64.5 |
760 ILCS 100/12 | from Ch. 21, par. 64.12 |
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Amends the Cemetery Care Act. Provides that a trustee of a nonprofit cemetery may convert a trust fund established under the Act to a total return trust in accordance with provisions of the Trusts and Trustees Act pertaining to total return trusts, provided that the distribution percentage of the total return trust does not exceed 5% of the trust. Makes corresponding changes throughout the Act. Effective immediately.
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| | A BILL FOR |
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| 1 | | AN ACT concerning civil law.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Cemetery Care Act is amended by changing | 5 | | Sections 3, 4, 5, and 12 as follows:
| 6 | | (760 ILCS 100/3) (from Ch. 21, par. 64.3)
| 7 | | Sec. 3. Gifts and contributions - Trust funds. Any cemetery | 8 | | authority is
hereby authorized and empowered to accept any | 9 | | gift, grant, contribution,
payment, legacy, or pursuant to | 10 | | contract, any sum of money, funds, securities
or property of | 11 | | any kind, or the income or avails thereof, and to establish a
| 12 | | trust fund to hold the same in perpetuity for the
care of its | 13 | | cemetery, or for the care of any lot, grave, crypt or niche in | 14 | | its
cemetery; or for the special care of any lot, grave, crypt | 15 | | or niche or of any
family mausoleum or memorial, marker, or | 16 | | monument in its cemetery.
| 17 | | The cemetery authority shall act as trustee of all amounts | 18 | | received for
care until they have been deposited into the trust | 19 | | fund established under this
Section. The cemetery authority may | 20 | | continue to be the trustee of up to
$500,000 of care funds that | 21 | | have been deposited into the trust fund, but the
cemetery | 22 | | authority must retain an independent trustee for any amount of | 23 | | care
funds held in trust in excess of that $500,000. A cemetery |
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| 1 | | authority holding
care funds in excess of $500,000 on the | 2 | | effective date of this amendatory Act
of 1996 shall have 36 | 3 | | months to retain an independent trustee for the excess
amounts | 4 | | held in trust; any other cemetery authority must retain an | 5 | | independent
trustee for its care funds in excess of $500,000 as | 6 | | soon as may be practical.
| 7 | | No gift, grant, legacy, payment or other contribution
shall | 8 | | be invalid by reason of any indefiniteness or uncertainty as to | 9 | | the
beneficiary designated in the instrument creating the gift, | 10 | | grant, legacy,
payment or other contribution. If any gift, | 11 | | grant, legacy, payment or
other contribution consists of | 12 | | non-income producing
property, the cemetery authority | 13 | | accepting it is authorized and empowered
to sell such property | 14 | | and to invest the funds obtained in accordance with
the | 15 | | provisions of the next succeeding paragraph.
| 16 | | The care funds authorized by this Section and provided for | 17 | | in Section 4 of
this Act shall be held intact and, unless | 18 | | otherwise restricted by the terms of
the gift, grant, legacy, | 19 | | contribution, payment, contract or other payment, as
to | 20 | | investments made after June 11, 1951 the trustee of the care | 21 | | funds of the cemetery authority, in
acquiring, investing, | 22 | | reinvesting, exchanging, retaining, selling and
managing | 23 | | property for any such trust, shall exercise the judgment and | 24 | | care
under the circumstances then prevailing, which persons of | 25 | | prudence, discretion
and intelligence exercise in the | 26 | | management of their own affairs, not in
regard to speculation |
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| 1 | | but in regard to the permanent disposition of their
funds, | 2 | | considering the probable income as well as the probable safety | 3 | | of
their capital. Within the limitations of the foregoing | 4 | | standard, the trustee of the care funds of the cemetery
| 5 | | authority is authorized to acquire and retain every kind of | 6 | | property, real,
personal or mixed, and every kind of | 7 | | investment, including specifically but
without limiting the | 8 | | generality of the foregoing, bonds, debentures and
other | 9 | | corporate obligations, preferred or common stocks and real | 10 | | estate
mortgages, which persons of prudence, discretion and | 11 | | intelligence acquire or
retain for their own account. Within | 12 | | the limitations of the foregoing
standard,
the trustee is | 13 | | authorized to retain property
properly acquired, without | 14 | | limitation as to time and without regard to its
suitability for | 15 | | original purchase. The care funds authorized by this
Section | 16 | | may be commingled with other trust funds received by such | 17 | | cemetery
authority for the care of its cemetery or for the care | 18 | | or special care of
any lot, grave, crypt, niche, private | 19 | | mausoleum, memorial, marker, or
monument in its cemetery, | 20 | | whether received by gift, grant, legacy,
contribution, | 21 | | payment, contract or other conveyance heretofore or hereafter
| 22 | | made to such cemetery authority. Such care funds may be | 23 | | invested with
common trust funds as provided in The Common | 24 | | Trust Fund Act. Unless the trust fund has been converted into a | 25 | | total return trust, the The net income
only from the investment | 26 | | of such care funds
shall be allocated and used for the purposes |
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| 1 | | specified in the transaction
by which the principal was | 2 | | established in the proportion that each
contribution bears to | 3 | | the entire sum invested. | 4 | | A trustee of a cemetery operating as a nonprofit | 5 | | organization exempt from taxation under Section 501(c)(3) of | 6 | | the Internal Revenue Code of 1986 may convert a trust | 7 | | established under this Act to a total return trust in | 8 | | accordance with Section 5.3 of the Trusts and Trustees Act, | 9 | | provided that the distribution percentage of the total return | 10 | | trust does not exceed 5% of the trust.
| 11 | | (Source: P.A. 89-615, eff. 8-9-96 .)
| 12 | | (760 ILCS 100/4) (from Ch. 21, par. 64.4)
| 13 | | Sec. 4. Care funds; deposits; investments.
Whenever a | 14 | | cemetery authority owning, operating, controlling or
managing | 15 | | a privately operated cemetery accepts care funds, either in
| 16 | | connection with the sale or giving away at an imputed value of | 17 | | an
interment right, entombment right or inurnment right, or in | 18 | | pursuance
of a contract, or whenever, as a condition precedent | 19 | | to the purchase or
acceptance of an interment right, entombment | 20 | | right or inurnment right,
such cemetery authority requires the | 21 | | establishment of a care fund or a
deposit in an already | 22 | | existing care fund, then such cemetery authority
shall execute | 23 | | and deliver to the person from whom received an instrument in
| 24 | | writing which shall specifically state: (a) the nature and | 25 | | extent of the
care to be furnished, and (b) that such care |
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| 1 | | shall be furnished only in so
far as the amount deposited in | 2 | | trust will allow, as governed by the terms of the trust net | 3 | | income derived from the amount deposited in trust will
permit | 4 | | (the income from the amount so deposited, less necessary
| 5 | | expenditures of administering the trust, shall be deemed the | 6 | | net income) ,
and (c) that not less than the following amounts | 7 | | will be set aside and
deposited in trust:
| 8 | | 1. For interment rights, $1 per square foot of the | 9 | | space sold or 15% of
the sales price or imputed value, | 10 | | whichever is the greater, with a minimum
of $25 for each | 11 | | individual interment right.
| 12 | | 2. For entombment rights, not less than 10% of the | 13 | | sales
price or imputed value with a minimum of $25 for each
| 14 | | individual entombment right.
| 15 | | 3. For inurnment rights, not less than 10% of the sales
| 16 | | price or imputed value with a minimum of $15 for each
| 17 | | individual inurnment right.
| 18 | | 4. For any transfer of interment rights, entombment | 19 | | rights, or
inurnment rights recorded in the records of the | 20 | | cemetery authority,
excepting only transfers between | 21 | | members of the immediate family of the
transferor, a | 22 | | minimum of $25 for each such right transferred. For the
| 23 | | purposes of this paragraph "immediate family of the | 24 | | transferor" means the
spouse, parents, grandparents, | 25 | | children, grandchildren, and siblings of the
transferor.
| 26 | | 5. Upon an interment, entombment, or inurnment in a |
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| 1 | | grave, crypt, or
niche in which rights of interment, | 2 | | entombment, or inurnment were
originally acquired from a | 3 | | cemetery authority prior to January 1, 1948, a
minimum of | 4 | | $25 for each such right exercised.
| 5 | | 6. For the special care of any lot, grave, crypt, or | 6 | | niche or of a
family mausoleum, memorial, marker, or | 7 | | monument, the full amount received.
| 8 | | Such setting aside and deposit shall be made by such | 9 | | cemetery authority
not later than 30 days after the close of | 10 | | the month in which
the cemetery authority gave away for an | 11 | | imputed value or
received the final payment on the purchase | 12 | | price of interment rights,
entombment rights, or inurnment | 13 | | rights, or received the final payment
for the general or | 14 | | special care of a lot,
grave, crypt or niche or of a family | 15 | | mausoleum, memorial, marker or
monument; and such amounts shall | 16 | | be held by
the trustee of the care funds of such cemetery | 17 | | authority in trust in
perpetuity for the specific purposes | 18 | | stated in said written instrument.
For all care funds received | 19 | | by a cemetery authority, except for care
funds received by a | 20 | | cemetery authority pursuant to a specific gift, grant,
| 21 | | contribution, payment, legacy, or contract that are subject to | 22 | | investment
restrictions more restrictive than the investment | 23 | | provisions set forth in
this Act, and except for care funds | 24 | | otherwise subject to a trust agreement
executed by a person or | 25 | | persons responsible for transferring the specific
gift, grant, | 26 | | contribution, payment, or legacy to the cemetery authority
that |
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| 1 | | contains investment restrictions more restrictive than the | 2 | | investment
provisions set forth in this Act, the cemetery | 3 | | authority may, without the
necessity of having to obtain prior | 4 | | approval from any court in this State,
designate a new trustee | 5 | | in accordance with this Act and invest the care
funds in | 6 | | accordance with this Section, notwithstanding any contrary
| 7 | | limitation contained in the trust agreement.
| 8 | | Any such cemetery authority engaged in selling or giving | 9 | | away at an
imputed value interment rights, entombment rights or | 10 | | inurnment rights, in
conjunction with the selling or giving | 11 | | away at an imputed value any other
merchandise or services not | 12 | | covered by this Act, shall be prohibited from
increasing the | 13 | | sales price or imputed value of those items not requiring a
| 14 | | care fund deposit under this Act with the purpose of allocating | 15 | | a lesser
sales price or imputed value to items that require a | 16 | | care fund deposit.
| 17 | | In the event any sale that would require a deposit to such | 18 | | cemetery
authority's care fund is made by a cemetery authority | 19 | | on an installment
basis, and the installment contract is | 20 | | factored, discounted, or sold to a
third party, the cemetery | 21 | | authority shall deposit the amount due to
the care fund within | 22 | | 30 days after the close of the month in which the
installment | 23 | | contract was factored, discounted, or sold. If, subsequent to
| 24 | | such deposit, the purchaser defaults on the contract such that | 25 | | no care fund
deposit on that contract would have been required, | 26 | | the cemetery authority may
apply the amount deposited as a |
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| 1 | | credit against future required deposits.
| 2 | | The trust authorized by this Section shall be a single | 3 | | purpose trust
fund. In the event of the seller's bankruptcy, | 4 | | insolvency, or assignment
for the benefit of creditors, or an | 5 | | adverse judgment, the trust funds shall
not be available to any | 6 | | creditor as assets of the cemetery authority or to pay
any | 7 | | expenses of any bankruptcy or similar proceeding, but shall be | 8 | | retained
intact to provide for the future maintenance of the | 9 | | cemetery. Except in an
action by the Comptroller to revoke a | 10 | | license issued pursuant
to this Act and for creation of a | 11 | | receivership as provided in this Act, the
trust shall not be | 12 | | subject to judgment, execution, garnishment, attachment,
or | 13 | | other seizure by process in bankruptcy or otherwise, nor to | 14 | | sale, pledge,
mortgage, or other alienation, and shall not be | 15 | | assignable except as
approved by the Comptroller. The changes | 16 | | made by this amendatory Act of
the 91st General Assembly are | 17 | | intended to clarify existing law regarding the
inability of | 18 | | licensees to pledge the trust.
| 19 | | (Source: P.A. 91-7, eff. 6-1-99 .)
| 20 | | (760 ILCS 100/5) (from Ch. 21, par. 64.5)
| 21 | | Sec. 5.
No cemetery authority, nor any agent, servant, or | 22 | | employee of it,
nor any other person, shall advertise, | 23 | | represent, guarantee, promise, or
contract that perpetual | 24 | | care, permanent care, perpetual or permanent
maintenance, care | 25 | | forever, continuous care, eternal care, everlasting care,
or |
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| 1 | | any similar or equivalent care, or care for any number of years | 2 | | of any
cemetery or of any lot, grave, crypt or niche, or of any | 3 | | family mausoleum,
memorial, marker, or monument, will be | 4 | | furnished: Provided, however, that
any cemetery authority may | 5 | | advertise, represent, guarantee, promise or
contract that care | 6 | | will be furnished from the net income only derived from
funds | 7 | | held in trust as provided in Section 3 of this Act; and may
| 8 | | advertise, represent, guarantee, promise or contract that care | 9 | | will be
given any lot, grave, crypt, or niche, or any family | 10 | | mausoleum, memorial,
marker, or monument for any definite | 11 | | number of years, such care to be
furnished under a contract | 12 | | providing that the principal of the amount paid
under the | 13 | | contract shall be used to furnish the care and further | 14 | | providing
specifically the care to be given and the number of | 15 | | years for which it is
to be given.
| 16 | | (Source: Laws 1947, p. 338 .)
| 17 | | (760 ILCS 100/12) (from Ch. 21, par. 64.12)
| 18 | | Sec. 12. Annual reports. Every licensee shall prepare a | 19 | | written report as of the end of the
preceding calendar year or | 20 | | fiscal year, as the case may be, showing:
| 21 | | (a) The amount of the principal of the care funds held
in | 22 | | trust
by the trustee of the care funds at the beginning of
such | 23 | | year and in addition thereto all moneys or property received | 24 | | during
such year (1) under and by virtue of the sale of a lot, | 25 | | grave, crypt or
niche; (2) under or by virtue of the terms of |
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| 1 | | the contract authorized by
the provisions of Section 3 of this | 2 | | Act; (3) under or by virtue of any
gift, grant, legacy, payment | 3 | | or other contribution made either
prior to or subsequent to the | 4 | | effective date of this Act, and (4) under or
by virtue of any | 5 | | contract or conveyance made either prior to or subsequent
to | 6 | | the effective date of this Act;
| 7 | | (b) The securities in which such care funds are invested | 8 | | and the cash on
hand as of the date of the report;
| 9 | | (c) The income received from such care funds during the | 10 | | preceding
calendar year, or fiscal year, as the case may be;
| 11 | | (d) The expenditures made from said income , or, in the case | 12 | | of a total return trust, the total distributions made during | 13 | | the preceding calendar
year, or fiscal year, as the case may | 14 | | be; and
| 15 | | (e) The number of interments made during the preceding | 16 | | calendar year, or
fiscal year, as the case may be.
| 17 | | Where any of the care funds of a licensee are held by
an | 18 | | independent trustee, the
report filed by the licensee shall | 19 | | contain a certificate signed by the
trustee of the care funds | 20 | | of such licensee certifying to the truthfulness
of the | 21 | | statements in the report as to (1) the total amount of | 22 | | principal of
the care funds held by the trustee, (2) the | 23 | | securities in which such care
funds are invested and the cash | 24 | | on hand as of the date of the report and
(3) the income | 25 | | received from such care funds during the preceding calendar
| 26 | | year, or fiscal year, as the case may be.
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| 1 | | Such report shall be filed by such licensee on or before | 2 | | March 15 of
each calendar year, in the office of the | 3 | | Comptroller. If the fiscal year of
such licensee is other than | 4 | | on a calendar year basis, then such licensee
shall file the | 5 | | report required by this Section within 2 1/2
months of the end | 6 | | of its fiscal year. The Comptroller shall for good cause
shown | 7 | | grant an extension for the filing of the annual report upon the
| 8 | | written request of the licensee. Such extension shall not | 9 | | exceed 60 days.
If a licensee fails to submit an annual report | 10 | | to the Comptroller within
the time specified in this Section, | 11 | | the Comptroller shall impose upon the
licensee a penalty of $5 | 12 | | for each and every day the licensee remains
delinquent in | 13 | | submitting the annual report. The Comptroller may abate all or
| 14 | | part of the $5 daily penalty for good cause shown.
| 15 | | Such report shall be made under oath and shall be in the | 16 | | form furnished
by the Comptroller. Each report shall be | 17 | | accompanied by a check or money
order in the amount of $10, | 18 | | payable to: Comptroller, State of Illinois.
| 19 | | If any annual report shows that the amount of the care | 20 | | funds held
in trust at the
end of the preceding calendar year | 21 | | or fiscal year, as the case may be, has
increased in amount | 22 | | over that shown by the next preceding report, then the
fidelity | 23 | | bond theretofore filed shall be increased to the amount | 24 | | required by
Section 9 of this Act. Such increased fidelity bond | 25 | | shall accompany the report
and no report shall be accepted by | 26 | | the Comptroller unless accompanied by such
bond, except where |
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| 1 | | the filing of a bond is excused by Section 18 of this Act.
| 2 | | (Source: P.A. 92-419, eff. 1-1-02 .)
| 3 | | Section 99. Effective date. This Act takes effect upon | 4 | | becoming law.
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