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90_HB2701 225 ILCS 45/1 from Ch. 111 1/2, par. 73.101 225 ILCS 45/1a from Ch. 111 1/2, par. 73.101a 225 ILCS 45/4 from Ch. 111 1/2, par. 73.104 225 ILCS 45/5.5 new 815 ILCS 390/4 from Ch. 21, par. 204 815 ILCS 390/15 from Ch. 21, par. 215 Amends the Illinois Funeral or Burial Funds Act to specify that outer burial containers may be included in sales contracts executed under the Illinois Pre-Need Cemetery Sales Act. Establishes when delivery of outer burial containers is deemed to have occurred. Sets forth requirements imposed on warehouse facilities to which sellers deliver outer burial containers. Requires sellers of pre-need contracts to pay $5 for each pre-need contract entered into, to be deposited into the Funeral Consumer Protection Fund for use in providing restitution to consumers who suffer a pecuniary loss arising out of a pre-need contract. Provides for service of process on the Comptroller for actions against a foreign warehouse facility. Amends the Illinois Pre-Need Cemetery Sales Act to include outer burial containers among the cemetery merchandise that may be offered in a pre-need sales contract under the Act. Provides that 85% of proceeds received for the purchase of outer burial containers shall be deposited into one or more trust funds. Effective January 1, 1999. LRB9007913NTsbA LRB9007913NTsbA 1 AN ACT concerning funeral and cemetery services, amending 2 named Acts. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 5. The Illinois Funeral or Burial Funds Act is 6 amended by changing Sections 1, 1a, and 4 and adding Section 7 5.5 as follows: 8 (225 ILCS 45/1) (from Ch. 111 1/2, par. 73.101) 9 Sec. 1. Payment under pre-need contract. Except as 10 otherwise provided in this Section, all sales proceeds paid 11 to any person, partnership, association or corporation with 12 respect to merchandise or services covered by this Act, upon 13 any agreement or contract, or any series or combination of 14 agreements or contracts, which has for a purpose the 15 furnishing or performance of funeral services, or the 16 furnishing or delivery of any personal property, merchandise, 17 or services of any nature in connection with the final 18 disposition of a dead human body, including, but not limited 19 to, outer burial containers, urns, combination casket-vault 20 units, caskets and clothing, for future use at a time 21 determinable by the death of the person or persons whose body 22 or bodies are to be so disposed of, shall be held to be trust 23 funds, and shall be placed in trust in accordance with 24 Sections 1b and 2, or shall be used to purchase life 25 insurance or annuities in accordance with Section 2a. The 26 person, partnership, association or corporation receiving 27 said payments under a pre-need contract is hereby declared to 28 be a trustee thereof until deposits of funds are made in 29 accordance with Section 1b or 2a of this Act. Persons 30 holding less than $500,000 in trust funds may continue to act 31 as the trustee after the funds are deposited in accordance -2- LRB9007913NTsbA 1 with subsection (d) of Section 1b. 2 Nothing in this Act shall be construed to prohibit the 3 inclusion of outer burial containers in sales contracts under 4 the Illinois Pre-Need Cemetery Sales Act. 5 (Source: P.A. 88-477.) 6 (225 ILCS 45/1a) (from Ch. 111 1/2, par. 73.101a) 7 Sec. 1a. Definitions. For the purposes of this Act, the 8 following terms shall have the meanings specified, unless the 9 context clearly requires another meaning: 10 "Beneficiary" means the person specified in the pre-need 11 contract upon whose death funeral services or merchandise 12 shall be provided or delivered. 13 "Foreign warehouse facility" means a warehouse facility 14 now or hereafter located in any state or territory of the 15 United States, including the District of Columbia, other than 16 the State of Illinois. 17 A foreign warehouse facility shall be deemed to have 18 appointed the Comptroller to be its true and lawful attorney 19 upon whom may be served all legal process in any action or 20 proceeding against it relating to or growing out of this Act, 21 and the acceptance of the delivery of stored merchandise 22 under this Act shall be signification of its agreement that 23 any such process against it which is so served, shall be of 24 the same legal force and validity as though served upon it 25 personally. 26 Service of such process shall be made by delivering to 27 and leaving with the Comptroller, or any agent having charge 28 of the Comptroller's Department of Cemetery and Burial 29 Trusts, a copy of such process and such service shall be 30 sufficient service upon such foreign warehouse facility if 31 notice of such service and a copy of the process are, within 32 10 days thereafter, sent by registered mail by the plaintiff 33 to the foreign warehouse facility at its principal office and -3- LRB9007913NTsbA 1 the plaintiff's affidavit of compliance herewith is appended 2 to the summons. The Comptroller shall keep a record of all 3 process served upon him or her under this Section and shall 4 record therein the time of such service. 5 "Licensee" means a seller of a pre-need contract who has 6 been licensed by the Comptroller under this Act. 7 "Outer burial container" means any container made of 8 concrete, steel, wood, fiberglass or similar material, used 9 solely at the interment site, and designed and used 10 exclusively to surround or enclose a separate casket and to 11 support the earth above such casket, commonly known as a 12 burial vault, grave box or grave liner, but not including a 13 lawn crypt as defined in the Illinois Pre-need Cemetery Sales 14 Act. 15 "Person" means any person, partnership, association, 16 corporation, or other entity. 17 "Pre-need contract" means any agreement or contract, or 18 any series or combination of agreements or contracts, whether 19 funded by trust deposits or life insurance policies or 20 annuities, which has for a purpose the furnishing or 21 performance of funeral services or the furnishing or delivery 22 of any personal property, merchandise, or services of any 23 nature in connection with the final disposition of a dead 24 human body. Nothing in this Act is intended to regulate the 25 content of a life insurance policy or a tax-deferred annuity. 26 "Provider" means a person who is obligated for furnishing 27 or performing funeral services or the furnishing or delivery 28 of any personal property, merchandise, or services of any 29 nature in connection with the final disposition of a dead 30 human body. 31 "Purchaser" means the person who originally paid the 32 money under or in connection with a pre-need contract. 33 "Sales proceeds" means the entire amount paid to a 34 seller, exclusive of sales taxes paid by the seller, finance -4- LRB9007913NTsbA 1 charges paid by the purchaser, and credit life, accident or 2 disability insurance premiums, upon any agreement or 3 contract, or series or combination of agreements or 4 contracts, for the purpose of performing funeral services or 5 furnishing personal property, merchandise, or services of any 6 nature in connection with the final disposition of a dead 7 human body, including, but not limited to, the retail price 8 paid for such services and personal property and merchandise. 9 "Purchase price" means the sales proceeds less finance 10 charges on retail installment contracts. 11 "Seller" means the person who sells or offers to sell the 12 pre-need contract to a purchaser, whether funded by a trust 13 agreement, life insurance policy, or tax-deferred annuity. 14 "Trustee" means a person authorized to hold funds under 15 this Act. 16 (Source: P.A. 88-477.) 17 (225 ILCS 45/4) (from Ch. 111 1/2, par. 73.104) 18 Sec. 4. Withdrawal of funds; revocability of contract. 19 (a) The amount or amounts so deposited into trust, with 20 interest thereon, if any, shall not be withdrawn until the 21 death of the person or persons for whose funeral or burial 22 such funds were paid, unless sooner withdrawn and repaid to 23 the person who originally paid the money under or in 24 connection with the pre-need contract or to his or her legal 25 representative. The life insurance policies or tax-deferred 26 annuities shall not be surrendered until the death of the 27 person or persons for whose funeral or burial the policies or 28 annuities were purchased, unless sooner surrendered and 29 repaid to the owner of the policy purchased under or in 30 connection with the pre-need contract or to his or her legal 31 representative. If, however, the agreement or series of 32 agreements provides for forfeiture and retention of any or 33 all payments as and for liquidated damages as provided in -5- LRB9007913NTsbA 1 Section 6, then the trustee may withdraw the deposits. In 2 addition, nothing in this Section (i) prohibits the change of 3 depositary by the trustee and the transfer of trust funds 4 from one depositary to another or (ii) prohibits a contract 5 purchaser who is or may become eligible for public assistance 6 under any applicable federal or State law or local ordinance 7 including, but not limited to, eligibility under 24 C.F.R., 8 Part 913 relating to family insurance under federal Housing 9 and Urban Development Policy from irrevocably waiving, in 10 writing, and renouncing the right to cancel a pre-need 11 contract for funeral services in an amount prescribed by rule 12 of the Illinois Department of Public Aid. No guaranteed price 13 pre-need funeral contract may prohibit a purchaser from 14 making a contract irrevocable to the extent that federal law 15 or regulations require that such a contract be irrevocable 16 for purposes of the purchaser's eligibility for Supplemental 17 Security Income benefits, Medicaid, or another public 18 assistance program, as permitted under federal law. 19 (b) If for any reason a seller or provider who has 20 engaged in pre-need sales has refused, cannot, or does not 21 comply with the terms of the pre-need contract within a 22 reasonable time after he or she is required to do so, the 23 purchaser or his or her heirs or assigns or duly authorized 24 representative shall have the right to a refund of an amount 25 equal to the sales price paid for undelivered merchandise or 26 services plus otherwise earned undistributed interest amounts 27 held in trust attributable to the contract, within 30 days of 28 the filing of a sworn affidavit with the trustee setting 29 forth the existence of the contract and the fact of breach. 30 A copy of this affidavit shall be filed with the Comptroller 31 and the seller. In the event a seller is prevented from 32 performing by strike, shortage of materials, civil disorder, 33 natural disaster, or any like occurrence beyond the control 34 of the seller or provider, the seller or provider's time for -6- LRB9007913NTsbA 1 performance shall be extended by the length of the delay. 2 Nothing in this Section shall relieve the seller or provider 3 from any liability for non-performance of his or her 4 obligations under the pre-need contract. 5 (c) After final payment on a pre-need contract, any 6 purchaser may, upon written demand to a seller, demand that 7 the pre-need contract with the seller be terminated. The 8 seller shall, within 30 days, initiate a refund to the 9 purchaser of the entire amount held in trust attributable to 10 undelivered merchandise and unperformed services, including 11 otherwise earned undistributed interest earned thereon or the 12 cash surrender value of a life insurance policy or 13 tax-deferred annuity. 14 If no funeral merchandise or services are provided or if 15 the funeral is conducted by another person, the seller may 16 keep no more than 10% of the payments made under the pre-need 17 contract or $300, whichever sum is less. The remainder of 18 the trust funds or insurance or annuity proceeds shall be 19 forwarded to the legal heirs of the deceased or as determined 20 by probate action. 21 (d) The placement and retention of all or a portion of a 22 casket, combination casket-vault, urn, or outer burial 23 container comprised of materials which are designed to 24 withstand prolonged storage in the manner set forth in this 25 paragraph without adversely affecting the structural 26 integrity or aesthetic characteristics of such merchandise in 27 a specific burial space in which the person or persons for 28 whose funeral or burial the merchandise was intended has a 29 right of interment, or the placement of the merchandise in a 30 specific mausoleum crypt or lawn crypt in which such person 31 has a right of entombment, or the placement of the 32 merchandise in a specific niche in which such person has a 33 right of inurnment, or delivery to such person and retention 34 by such person until the time of need shall constitute actual -7- LRB9007913NTsbA 1 delivery to the person who originally paid the money under or 2 in connection with said agreement or series of agreements. 3 Actual delivery shall eliminate, from and after the date of 4 actual delivery, any requirement under this Act to place or 5 retain in trust any funds received for the sale of such 6 merchandise. The delivery, prior to the time of need, of any 7 funeral or burial merchandise in any manner other than 8 authorized by this Section shall not constitute actual 9 delivery and shall not eliminate any requirement under this 10 Act to place or retain in trust any funds received for the 11 sale of such merchandise. 12 In addition, and solely with respect to outer burial 13 containers, "delivery" occurs when: 14 (1) Physical possession of the outer burial 15 container is transferred or the easement for burial 16 rights in a completed space is executed, delivered, and 17 transferred to the buyer; or 18 (2) Title to the outer burial container has been 19 transferred to the buyer and the outer burial container 20 has been paid for and is in the possession of the seller 21 who has placed it, until needed, at the site of its 22 ultimate use; or 23 (3)(A) The outer burial container has been 24 permanently identified with the name of the buyer or the 25 beneficiary and delivered to a licensed and bonded 26 warehouse and both title to the outer burial container 27 and a warehouse receipt have been delivered to the 28 purchaser or beneficiary. Nothing herein shall prevent a 29 seller from perfecting a security interest in accordance 30 with the Uniform Commercial Code on any outer burial 31 container covered under this Act. 32 (B) All warehouse facilities to which sellers 33 deliver outer burial containers pursuant to this Act 34 shall: -8- LRB9007913NTsbA 1 (i) be either located in the State of 2 Illinois or qualify as a foreign warehouse 3 facility as defined herein; 4 (ii) submit to the Comptroller not less 5 than annually, by March 1 of each year, a 6 report of all outer burial containers stored by 7 each licensee under this Act which is in 8 storage on the date of the report; 9 (iii) permit the Comptroller or his or 10 her designee at any time to examine stored 11 outer burial containers and to examine any 12 documents pertaining thereto; 13 (iv) submit evidence satisfactory to the 14 Comptroller that all outer burial containers 15 stored by said warehouse for licensees under 16 this Act are insured for casualty or other loss 17 normally assumed by a bailee for hire; 18 (v) demonstrate to the Comptroller that 19 the warehouse has procured and is maintaining a 20 performance bond in the form, content, and 21 amount sufficient to unconditionally guarantee 22 to the purchaser or beneficiary the prompt 23 shipment of the outer burial container. 24 (Source: P.A. 87-1091; 88-477.) 25 (225 ILCS 45/5.5 new) 26 Sec. 5.5. (a) Every seller of a pre-need contract shall 27 pay to the Comptroller $5 for each pre-need contract entered 28 into, to be paid into a special income earning fund hereby 29 created in the State Treasury, known as the Funeral Consumer 30 Protection Fund. The fees required under this subsection 31 shall be remitted to the Comptroller semi-annually within 30 32 days after the end of June and December for all contracts 33 that have been entered in such 6-month period. -9- LRB9007913NTsbA 1 (b) All moneys paid into the Fund together with all 2 accumulated undistributed income thereon shall be held as a 3 special fund in the State Treasury. The Fund shall be used 4 solely for the purpose of providing restitution to consumers 5 who have suffered pecuniary loss arising out of a pre-need 6 contract. 7 (c) The Fund shall be applied only to restitution or 8 delivery of the merchandise or services, where such 9 restitution or delivery has been ordered by the Circuit Court 10 in a lawsuit brought under this Act by the Attorney General 11 of the State of Illinois on behalf of the Comptroller and in 12 which it has been determined by the Court that the obligation 13 is non-collectible from the judgment debtor. Restitution 14 shall not exceed the amount of the sales price paid plus 15 interest at the statutory rate. The Fund shall not be used 16 for the payment of any attorney fees or other fees. 17 (d) Whenever restitution is paid by the Fund, the Fund 18 shall be subrogated to the amount of the restitution, and the 19 Comptroller shall request the Attorney General to engage in 20 all reasonable post-judgment collection steps to collect the 21 restitution from the judgment debtor and reimburse the Fund. 22 (e) The Fund shall not be applied toward any restitution 23 for losses in any lawsuit initiated by the Attorney General 24 or Comptroller or with respect to any claim made on a 25 pre-need contract entered into prior to the effective date of 26 this amendatory Act of 1998. 27 (f) The Fund may not be allocated for any purpose other 28 than that specified in this Act. 29 (g) Notwithstanding any other provision of this Section, 30 the payment of restitution from the Fund shall be a matter of 31 grace and not of right and no purchaser shall have any vested 32 rights in the Fund as a beneficiary or otherwise. 33 (h) Annually, the status of the Fund shall be reviewed 34 by the Comptroller, and if he or she determines that the Fund -10- LRB9007913NTsbA 1 together with all accumulated income earned thereon, equals 2 or exceeds $10,000,000 and that the total number of 3 outstanding claims filed against the Fund is less than 10% of 4 the Fund's current balance, then payments to the fund shall 5 be suspended until such time as the Fund's balance drops 6 below $10,000,000 or the total number of outstanding claims 7 filed against the Fund is more than 10% of the Fund's current 8 balance, but on such suspension, the Fund shall not be 9 considered inactive. 10 Section 10. The Illinois Pre-Need Cemetery Sales Act is 11 amended by changing Sections 4 and 15 as follows: 12 (815 ILCS 390/4) (from Ch. 21, par. 204) 13 Sec. 4. Definitions. As used in this Act, the following 14 terms shall have the meaning specified: 15 (a) "Pre-need sales contract" or "pre-need sales" means 16 any agreement or contract or series or combination of 17 agreements or contracts which have for a purpose the sale of 18 cemetery merchandise, cemetery services or undeveloped 19 interment, entombment or inurnment spaces where the terms of 20 such sale require payment or payments to be made at a 21 currently determinable time and where the merchandise, 22 services or completed spaces are to be provided more than 120 23 days following the initial payment on the account. 24 (b) "Delivery" occurs when: 25 (1) Physical possession of the merchandise is 26 transferred or the easement for burial rights in a 27 completed space is executed, delivered and transferred to 28 the buyer; or 29 (2) Title to the merchandise has been transferred 30 to the buyer and the merchandise has been paid for and is 31 in the possession of the seller who has placed it, until 32 needed, at the site of its ultimate use; or -11- LRB9007913NTsbA 1 (3) (A)
A.The merchandise has been permanently 2 identified with the name of the buyer or the beneficiary 3 and delivered to a licensed and bonded warehouse and both 4 title to the merchandise and a warehouse receipt have 5 been delivered to the purchaser or beneficiary. Nothing 6 herein shall prevent a seller from perfecting a security 7 interest in accordance with the Uniform Commercial Code 8 on any merchandise covered under this Act. 9 (B) B.All warehouse facilities to which 10 sellers deliver merchandise pursuant to this Act 11 shall: 12 (i) be either located in the State of 13 Illinois or qualify as a foreign warehouse 14 facility as defined herein; 15 (ii) submit to the Comptroller not less 16 than annually, by March 1 of each year, a 17 report of all cemetery merchandise stored by 18 each licensee under this Act which is in 19 storage on the date of the report; 20 (iii) permit the Comptroller or his 21 designee at any time to examine stored 22 merchandise and to examine any documents 23 pertaining thereto; 24 (iv) submit evidence satisfactory to the 25 Comptroller that all merchandise stored by said 26 warehouse for licensees under this Act is 27 insured for casualty or other loss normally 28 assumed by a bailee for hire; 29 (v) demonstrate to the Comptroller that 30 the warehouse has procured and is maintaining a 31 performance bond in the form, content and 32 amount sufficient to unconditionally guarantee 33 to the purchaser or beneficiary the prompt 34 shipment of the cemetery merchandise. -12- LRB9007913NTsbA 1 (C) C."Cemetery merchandise" means items of 2 personal property normally sold by a cemetery 3 authority not covered under "An Act concerning 4 agreements for furnishing or delivery of personal 5 property, merchandise or services in connection with 6 the final disposition of dead human bodies and 7 regulating use or disposition of Funds paid on said 8 agreements and providing penalties for violation 9 thereof", approved July 14, 1955, as amended, 10 including but not limited to: 11 (1) memorials, 12 (2) markers, 13 (3) monuments, and14 (4) foundations, and .15 (5) outer burial containers. 16 (D) D."Undeveloped interment, entombment or 17 interment spaces" or "undeveloped spaces" means any 18 space to be used for the reception of human remains 19 that is not completely and totally constructed at 20 the time of initial payment therefore in a: 21 (1) lawn crypt, 22 (2) mausoleum, 23 (3) garden crypt, 24 (4) columbarium or 25 (5) cemetery section. 26 (E) E."Cemetery services" means those 27 services customarily performed by a cemetery or 28 crematory personnel in connection with the 29 interment, entombment, inurnment or cremation of a 30 dead human body. 31 (F) F."Cemetery section" means a grouping of 32 spaces intended to be developed simultaneously for 33 the purpose of interring human remains. 34 (G) G."Columbarium" means an arrangement of -13- LRB9007913NTsbA 1 niches that may be an entire building, a complete 2 room, a series of special indoor alcoves, a bank 3 along a corridor or part of an outdoor garden 4 setting that is constructed of permanent material 5 such as bronze, marble, brick, stone or concrete for 6 the inurnment of human remains. 7 (H) H."Lawn crypt" means a permanent 8 underground crypt usually constructed of reinforced 9 concrete or similar material installed in multiple 10 units for the interment of human remains. 11 (I) I."Mausoleum" or "garden crypt" means a 12 grouping of spaces constructed of reinforced 13 concrete or similar material constructed or 14 assembled above the ground for entombing human 15 remains. 16 (J) J."Memorials, markers and monuments" 17 means the object usually comprised of a permanent 18 material such as granite or bronze used to identify 19 and memorialize the deceased. 20 (K) K."Foundations" means those items used to 21 affix or support a memorial or monument to the 22 ground in connection with the installation of a 23 memorial, marker or monument. 24 (L) L."Person" means an individual, 25 corporation, partnership, joint venture, business 26 trust, voluntary organization or any other form of 27 entity. 28 (M) M."Seller" means any person selling or 29 offering for sale cemetery merchandise, cemetery 30 services or undeveloped spaces on a pre-need basis. 31 (N) N."Religious cemetery" mean a cemetery 32 owned, operated, controlled or managed by any 33 recognized church, religious society, association or 34 denomination or by any cemetery authority or any -14- LRB9007913NTsbA 1 corporation administering, or through which is 2 administered, the temporalities of any recognized 3 church, religious society, association or 4 denomination. 5 (O) O."Municipal cemetery" means a cemetery 6 owned, operated, controlled or managed by any city, 7 village, incorporated town, township, county or 8 other municipal corporation, political subdivision, 9 or instrumentality thereof authorized by law to own, 10 operate or manage a cemetery. 11 (O-1) "Outer burial container" means a 12 container made of concrete, steel, wood, fiberglass, 13 or similar material, used solely at the interment 14 site, and designed and used exclusively to surround 15 or enclose a separate casket and to support the 16 earth above such casket, commonly known as a burial 17 vault, grave box, or grave liner, but not including 18 a lawn crypt. 19 (P) P."Sales price" means the gross amount 20 paid by a purchaser on a pre-need sales contract for 21 cemetery merchandise, cemetery services or 22 undeveloped interment, entombment or inurnment 23 spaces, excluding sales taxes, credit life insurance 24 premiums, finance charges and "Cemetery Care Act" 25 contributions. 26 (Q) Q."Foreign warehouse facility" means a 27 warehouse facility now or hereafter located in any 28 state or territory of the United States, including 29 the District of Columbia, other than the State of 30 Illinois. 31 A foreign warehouse facility shall be deemed to 32 have appointed the Comptroller to be its true and 33 lawful attorney upon whom may be served all legal 34 process in any action or proceeding against it -15- LRB9007913NTsbA 1 relating to or growing out of this Act, and the 2 acceptance of the delivery of stored merchandise 3 under this Act shall be signification of its 4 agreement that any such process against it which is 5 so served, shall be of the same legal force and 6 validity as though served upon it personally. 7 Service of such process shall be made by 8 delivering to and leaving with the Comptroller, or 9 any agent having charge of the Comptroller's 10 Department of Cemetery and Burial Trusts, a copy of 11 such process and such service shall be sufficient 12 service upon such foreign warehouse facility if 13 notice of such service and a copy of the process 14 are, within 10 days thereafter, sent by registered 15 mail by the plaintiff to the foreign warehouse 16 facility at its principal office and the plaintiff's 17 affidavit of compliance herewith is appended to the 18 summons. The Comptroller shall keep a record of all 19 process served upon him under this Section and shall 20 record therein the time of such service. 21 (Source: P.A. 85-1209.) 22 (815 ILCS 390/15) (from Ch. 21, par. 215) 23 Sec. 15. (a) Whenever a seller receives anything of 24 value under a pre-need sales contract, the person receiving 25 such value shall deposit 50% of all proceeds received into 26 one or more trust funds maintained pursuant to this Section, 27 except that, in the case of proceeds received for the 28 purchase of outer burial containers, 85% of the proceeds 29 shall be deposited into one or more trust funds. Such 30 deposits shall be made until the amount deposited in trust 31 equals 50% of the sales price of the cemetery merchandise, 32 cemetery services and undeveloped spaces included in such 33 contract, except that, in the case of deposits for outer -16- LRB9007913NTsbA 1 burial containers, deposits shall be made until the amount 2 deposited in trust equals 85% of the sales price. In the 3 event an installment contract is factored, discounted or sold 4 to a third party, the seller shall deposit an amount equal to 5 50% of the sales price of the installment contract, except 6 that, for the portion of the contract attributable to the 7 sale of outer burial containers, the seller shall deposit an 8 amount equal to 85% of the sales price. Proceeds required to 9 be deposited in trust which are attributable to cemetery 10 merchandise and cemetery services shall be held in a 11 "Cemetery Merchandise Trust Fund". Proceeds required to be 12 deposited in trust which are attributable to the sale of 13 undeveloped interment, entombment or inurnment spaces shall 14 be held in a "Pre-construction Trust Fund". If merchandise is 15 delivered for storage in a bonded warehouse, as authorized 16 herein, and payment of transportation or other charges 17 totaling more than $20 will be required in order to secure 18 delivery to the site of ultimate use, upon such delivery to 19 the warehouse the seller shall deposit to the trust fund the 20 full amount of the actual or estimated transportation charge. 21 Transportation charges which have been prepaid by the seller 22 shall not be deposited to trust funds maintained pursuant to 23 this Section. As used in this Section, "all proceeds" means 24 the entire amount paid by a purchaser in connection with a 25 pre-need sales contract, including finance charges and 26 Cemetery Care Act contributions, but excluding sales taxes 27 and credit life insurance premiums. 28 (b) All trust deposits required by this Act shall be 29 made within 30 days following the end of the month of 30 receipt. 31 (c) A trust established under this Act must be 32 maintained: 33 (1) in a trust account established in a bank, savings 34 and loan association or credit union authorized to do -17- LRB9007913NTsbA 1 business in Illinois where such accounts are insured by an 2 agency of the federal government; 3 (2) in a trust company authorized to do business in 4 Illinois; or 5 (3) in an investment company authorized to do business 6 in Illinois insured by the Securities Brokers Insurance 7 Corporation. 8 (d) Funds deposited in the trust account shall be 9 identified in the records of the seller by the name of the 10 purchaser. Nothing shall prevent the trustee from commingling 11 the deposits in any such trust fund for purposes of the 12 management thereof and the investment of funds therein as 13 provided in the "Common Trust Fund Act", approved June 24, 14 1949, as amended. In addition, multiple trust funds 15 maintained pursuant to this Act may be commingled or 16 commingled with other funeral or burial related trust funds, 17 provided that all record keeping requirements imposed by or 18 pursuant to law are met. 19 (e) In lieu of a pre-construction trust fund, a seller 20 of undeveloped interment, entombment or inurnment spaces may 21 obtain and file with the Comptroller a performance bond in an 22 amount at least equal to 50% of the sales price of the 23 undeveloped spaces or the estimated cost of completing 24 construction, whichever is greater. The bond shall be 25 conditioned on the satisfactory construction and completion 26 of the undeveloped spaces as required in Section 19 of this 27 Act. 28 Each bond obtained under this Section shall have as 29 surety thereon a corporate surety company incorporated under 30 the laws of the United States, or a State, the District of 31 Columbia or a territory or possession of the United States. 32 Each such corporate surety company must be authorized to 33 provide performance bonds as required by this Section, have 34 paid-up capital of at least $250,000 in cash or its -18- LRB9007913NTsbA 1 equivalent and be able to carry out its contracts. Each 2 pre-need seller must provide to the Comptroller, for each 3 corporate surety company such seller utilizes, a statement of 4 assets and liabilities of the corporate surety company sworn 5 to by the president and secretary of the corporation by 6 January 1 of each year. 7 The Comptroller shall prohibit pre-need sellers from 8 doing new business with a corporate surety company if the 9 company is insolvent or is in violation of this Section. In 10 addition the Comptroller may direct a pre-need seller to 11 reinstate a pre-construction trust fund upon the 12 Comptroller's determination that the corporate surety company 13 no longer is sufficient security. 14 All performance bonds issued pursuant to this Section 15 must be irrevocable during the statutory term for completing 16 construction specified in Section 19 of this Act, unless 17 terminated sooner by the completion of construction. 18 (f) Whenever any pre-need contract shall be entered into 19 and include 1) items of cemetery merchandise and cemetery 20 services, and 2) rights to interment, inurnment or entombment 21 in completed spaces without allocation of the gross sale 22 price among the items sold, the application of payments 23 received under the contract shall be allocated, first to the 24 right to interment, inurnment or entombment, second to items 25 of cemetery merchandise and cemetery services, unless some 26 other allocation is clearly provided in the contract. 27 (g) Any person engaging in pre-need sales who enters 28 into a combination sale which involves the sale of items 29 covered by a trust or performance bond requirement and any 30 item not covered by any entrustment or bond requirement, 31 shall be prohibited from increasing the gross sales price of 32 those items not requiring entrustment with the purpose of 33 allocating a lesser gross sales price to items which require 34 a trust deposit or a performance bond. -19- LRB9007913NTsbA 1 (Source: P.A. 85-1209.) 2 Section 99. Effective date. This Act takes effect 3 January 1, 1999.
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