H. B. 3212
(By Delegate Manchin (By Request))
[Introduced February 22, 2007; referred to the
Committee on the Judiciary.]
A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new article, designated §35-5C-1, §35-5C-2,
§35-5C-3, §35-5C-4 §35-5C-5, §35-5C-6, §35-5C-7, §35-5C-8,
§35-5C-9, §35-5C-10, §35-5C-11, §35-5C-12, §35-5C-13,
§35-5C-14, §35-5C-15, §35-5C-16, §35-5C-17, §35-5C-18,
§35-5C-19, §35-5C-20, §35-5C-21, §35-5C-22, §35-5C-23,
§35-5C-24, §35-5C-25, §35-5C-26, §35-5C-27, §35-5C-28 and
§35-5C-29,
all relating generally to establishing the West
Virginia Cemetery Act; scope; providing for definitions;
creating the West Virginia Cemetery Commission; providing for
commission logistics; providing for commission powers and
budget; providing for licensure requirements for various
brokers, companies, and organizations; cemetery changes of
control; care and maintenance trust funds; perpetual care
funds; trust fund financial reports; license applications, assignability and transferability; cemetery land acreage;
construction of mausoleums and crypts; providing for
penalties; burial public policy and validation of cemetery lot
deeds.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new article, designated §35-5C-1, §35-5C-2,
§35-5C-3, §35-5C-4 §35-5C-5, §35-5C-6, §35-5C-7, §35-5C-8,
§35-5C-9, §35-5C-10, §35-5C-11, §35-5C-12, §35-5C-13, §35-5C-14,
§35-5C-15, §35-5C-16, §35-5C-17, §35-5C-18, §35-5C-19, §35-5C-20,
§35-5C-21, §35-5C-22, §35-5C-23, §35-5C-24, §35-5C-25, §35-5C-26,
§35-5C-27, §35-5C-28 and §35-5C-29, all to read as follows:
ARTICLE 5C. WEST VIRGINIA CEMETERY ACT.
§35-5C-1. Short title.
This article may be cited as "West Virginia Cemetery Act."
§35-5C-2. Scope.
(a) The provisions of this article shall apply to all persons
engaged in the business of operating a cemetery as defined herein,
except cemeteries owned and operated by governmental agencies or
churches.
(b) Any cemetery beneficially owned and operated by a
fraternal organization or its corporate agent for at least fifty
years prior to September 1, 1975, shall be exempt from the provisions of this article.
§35-5C-3. Definitions.
As used in this article, unless otherwise stated or unless the
context or subject matter clearly indicates otherwise:
(1) "Bank of belowground crypts" means any construction unit
of belowground crypts acceptable to the commission which a cemetery
uses to initiate its belowground crypt program or to add to
existing belowground crypt structures.
(2) "Belowground crypts" consists of an interment space in
preplaced chambers, either side by side or multiple depth, covered
by earth and sod and are also known as lawn crypts, westminsters or
turf top crypts.
(3) "Cemetery" means any one or a combination of more than one
of the following in a place used or to be used and dedicated or
designated for cemetery purposes: a. A burial park, for earth
interment. b. A mausoleum. c. A columbarium.
(4) "Cemetery broker" means a legal entity engaged in the
business of arranging sales of cemetery products between legal
entities and which sale does not involve a cemetery company, but
does not mean funeral establishments or funeral directors, when
dealing between legal entities operating wherein one such entity
shall be members of the family of a deceased person or other
persons authorized by law to arrange for the burial and funeral of
such deceased human being. The West Virginia Cemetery Act shall not apply to any cemetery broker selling less than five grave
spaces per year.
(5) "Cemetery company" means any legal entity that owns or
controls cemetery lands or property and conducts the business of a
cemetery, including all cemeteries owned and operated by
governmental agencies, churches and fraternal organizations or
their corporate agents for the duration of any sales and management
contracts entered into with cemetery sales organizations or
cemetery management organizations for cemetery purposes, or with
any other legal entity other than direct employees of said
governmental agency, church or fraternal organization.
(6) "Cemetery management organization" means any legal entity
contracting as an independent contractor with a cemetery company to
manage a cemetery but does not mean individual managers employed by
and contracting directly with cemetery companies operating under
this article.
(7) "Cemetery sales organization" means any legal entity
contracting with a cemetery which is exempt or not exempt under
this article to conduct sales of cemetery products, but does not
mean individual salesmen or sales managers employed by and
contracting directly with cemetery companies operating under this
article, nor does it mean funeral establishments or funeral
directors operating under licenses when dealing directly with a
cemetery company and with members of the family of a deceased person or other persons authorized by law to arrange for the burial
and funeral of such deceased human being.
(8) "Columbarium" means a structure or building substantially
exposed aboveground intended to be used for the interment of the
cremated remains of a deceased person.
(9) "Commission" means the West Virginia Cemetery Commission.
(10) "Grave space" means a space of ground in a cemetery
intended to be used for the interment in the ground of the remains
of a deceased person.
(11) "Human remains" or "remains" means the bodies of deceased
persons, and includes the bodies in any stage of decomposition, and
cremated remains.
(12) "Mausoleum" means a structure or building substantially
exposed aboveground intended to be used for the entombment of
remains of a deceased person.
(13) "Mausoleum section" means any construction unit of a
mausoleum acceptable to the commission which a cemetery uses to
initiate its mausoleum program or to add to its existing mausoleum
structures.
(14) "Person" means an individual, corporation, partnership,
joint venture, or association.
(15) "Vault" means a crypt or underground receptacle which is
used for interment in the ground and which is designed to encase
and protect caskets or similar burial devices. For the purposes of this article, a vault is a preneed item until delivery to the
purchaser.
§35-5C-4. The West Virginia cemetery commission.
There is hereby established in the Department of Commerce a
West Virginia cemetery commission with the power and duty to adopt
rules and regulations to be followed in the enforcement of this
article.
§35-5C-5. Cemetery commission; members, selection, quorum.
The cemetery commission shall consist of seven members
appointed by the Governor. Two members shall be owners or managers
of cemeteries in West Virginia. Three members shall be selected
from six nominees submitted by the West Virginia Cemetery and
Funeral Association. Two members shall be public members who have
no financial interest in, and are not involved in management of,
any cemetery or funeral related business. Four members of the
initial commission shall be appointed for a term to expire June
thirtieth, two thousand-eight, and three members shall be appointed
for a term to expire June thirtieth, two thousand-nine. At the end
of the respective terms of office of the initial members of the
commission, their successors shall be nominated in the same manner,
selected from the same categories and appointed for terms of four
years and until their successors are appointed and qualified. Any
appointment to fill a vacancy on the commission created by the
resignation, dismissal, death or disability of a member shall be for the balance of the unexpired term. The Governor shall have the
power to remove any member of the commission from office for
misfeasance, malfeasance and nonfeasance. A majority of the
commission shall constitute a quorum for the transaction of
business. At the first meeting of the commission held after the
first of September, two thousand seven, the commission shall elect
one of its members as its chairman and another as its
vice-chairman, both to serve through the thirtieth of June of the
next following year. Thereafter, at its first meeting held on or
after the first of July of each year, the commission shall elect
from its members a chairman and vice-chairman to serve through the
thirtieth of June of the next following year.
§35-5C-6. Principal office.
The principal office of the commission shall be in the City of
Charleston, West Virginia. Notice of all regular and special
meetings of the commission shall be advertised five or more days in
advance in at least three newspapers in West Virginia having
inter-county circulation in the state. Each member of the
commission shall receive per diem and allowances. The
administrator of the commission, other employees required to attend
and legal counsel to the commission shall be entitled to actual
expenses while attending regular or special meetings of the
commission held other than in Charleston, West Virginia. All
expenses of the commission shall be paid from funds coming to the commission pursuant to this article.
§35-5C-7. Regular and special meetings.
The cemetery commission shall meet at least once in each
quarter and may hold special meetings at any time and place within
the state at the call of the chairman or upon the written request
of at least four members.
§35-5C-8. Powers.
In addition to other powers conferred by this article, the
cemetery commission shall have the following powers and duties:
(1) The administrator shall be appointed by the Governor upon
recommendation of the cemetery commission. The compensation of the
administrator and such other personnel as is necessary to operate
the commission is subject to the relevant provisions of the West
Virginia Code. The commission is authorized and empowered to
employ such staff, including legal counsel, as may be necessary.
(2) To examine a cemetery company's records when a person
applies for a change of control of the company.
(3) Investigate, upon its own initiative or upon a verified
complaint in writing, the actions of any person engaged in the
business or acting in the capacity of a licensee under this
article. The license of a licensee may be revoked or suspended for
a period not exceeding two years, or until compliance with a lawful
order imposed in the final order of suspension, or both, where the
licensee in performing or attempting to perform any of the acts specified in this article has been guilty of:
(A) Failing to pay the fees required herein;
(B) Failing to make any reports required by this article;
(C) Failing to remit to the care and maintenance trust fund,
merchandise trust fund, or preconstruction trust fund the required
amounts;
(D) Making any substantial misrepresentation;
(E) Making any false statement of a character likely to
influence or persuade;
(F) A continued and flagrant course of misrepresentation or
making of false promises through cemetery agents or salesmen;
(G) Violating any provision of this article or rule
promulgated by the commission; or
(H) Any other conduct, whether of the same or a different
character than specified in this section, which constitutes fraud
or dishonest dealing.
(4) In all proceedings under this article for the revocation
or suspension of licenses, a license may not be revoked or
suspended except after notice and opportunity for hearing on that
action. The commissioner may issue to a person licensed under this
article an order to show cause why the license should not be
revoked, or should not be suspended for a period not in excess of
six months. The order shall state the place for a hearing and set
a time for the hearing that is no less than ten days from the date of the order. The hearing shall be conducted in accordance with
the provisions of article five, chapter twenty-nine-a of this code.
The commissioner may appoint a hearing examiner to preside at the
hearing and make a recommended decision. After the hearing the
commissioner shall revoke or suspend the license if he or she finds
good cause to do so.
(5) At such time as the commission finds it necessary it may
bring an action in the name of the state in the court of the county
in which the place of business is located against such person to
enjoin such person from engaging in or continuing such violation or
doing any act or acts in furtherance thereof. In any such action,
an order or judgment may be entered awarding such temporary or
permanent injunction as may be deemed proper: Provided, That
before any such action is brought the commission shall give the
cemetery at least twenty days' notice in writing, stating the
alleged violation and giving the cemetery an opportunity within the
twenty day period to cure the violation. In addition to all other
means provided by law for the enforcement of a temporary
restraining order, temporary injunction, or permanent injunction,
the court shall have the power and jurisdiction to impound and to
appoint a receiver for the property and business of the defendant,
including books, papers, documents, and records appertaining
thereto or so much thereof as the court may deem reasonably
necessary to prevent further violation of this article through or by means of the use of said property and business. The commission
may institute proceedings against the cemetery or its officers,
whereafter an examination, pursuant to this article, a shortage in
the care and maintenance trust fund, merchandise trust fund or
mausoleum and belowground crypts preconstruction trust fund is
discovered, to recover said shortage.
(6) Whenever any special additional audit or examination of a
licensee's premises, facilities, books or records is necessary
because of the failure of the licensee to comply with the
requirements imposed in this article or by the rules and
regulations of the commission, to charge a fee based on the cost of
the special examination or audit, taking into consideration the
salary of any employees involved in the special audit or
examination and any expenses incurred.
(7) Promulgate rules and regulations requiring licensees to
file with the commission plans and specifications for the minimum
quality of any product sold. The sale of any product for which
plans and specifications required by the rules and regulations have
not been filed or sale of any product of a lesser quality than the
plans and specifications filed with the commission is a violation
of this article.
(8) When the commission finds that failure by a licensee to
maintain a cemetery properly has caused that cemetery to be a
public nuisance or a health or safety hazard, the commission may bring an action for injunctive relief, against the responsible
licensee, in the superior court of the county in which the cemetery
or any part thereof is located.
§35-5C-9. Annual budget of commission; collection of funds.
The commission shall prepare an annual budget and shall
collect the sums of money required for this budget from yearly fees
and from any other sources provided in this article. On or before
the first of July of each year, each licensed cemetery shall pay a
license fee to be set by the commission in an amount not to exceed
three hundred dollars. In addition, each licensed cemetery shall
pay to the commission an inspection fee for each grave space,
niche, or mausoleum crypt sold and shall pay a fee for each vault,
niche, belowground crypt, mausoleum crypt, memorial, or opening and
closing of a grave space that is included in a preneed cemetery
contract. The inspection fee for each grave space, niche, or
mausoleum crypt is payable when the item is sold and may not exceed
two dollars. The fee for each of the listed items that are
included in a preneed cemetery contract is payable when the
contract is made and may not exceed five dollars.
§35-5C-10. License; cemetery company.
(a) No legal entity shall engage in the business of operating
a cemetery company except as authorized by this article and without
first obtaining a license from the commission.
(b) Any legal entity wishing to establish a cemetery shall file a written application for authority with the commission on
forms provided by the commission.
(c) Upon receipt of the application and filing fee of eight
hundred dollars, the commission shall cause an investigation to be
made to establish the following criteria for approval of the
application:
(1) The creation of a legal entity to conduct cemetery
business, and its proposed financial structure;
(2) A perpetual care trust fund agreement, with an initial
deposit of not less than fifty thousand dollars and with a bank
cashier's check or certified check attached for the amount made
payable to the trustee. The trust fund agreement must be executed
by the applicant, accepted by the trustee, and conditioned only
upon approval of the application;
(3) A plat of the land to be used for the cemetery, showing
the location of the cemetery and the access roads to the cemetery;
(4) Designation by the legal entity wishing to establish a
cemetery of a general manager. The general manager must be a
person of good moral character and have at least one year's
experience in cemeteries;
(5) Development plans sufficient to ensure the community that
the cemetery will provide adequate cemetery services and that the
property is suitable for use as a cemetery.
(d) The commission, after receipt of the investigating report, shall grant or refuse to grant the authority to organize a cemetery
based upon the criteria set forth in this chapter.
(e) If the commission intends to deny an application, it shall
give written notice to the applicant of its intention to deny. The
notice shall state a time and a place for a hearing before the
commission and a summary statement of the reasons for the proposed
denial. The notice of intent shall be mailed by certified mail to
the applicant at the address stated in the application at least
fifteen days prior to the scheduled hearing date. The applicant
shall pay the costs of this hearing as assessed by the commission
unless the applicant notifies the commission by certified mail at
least five days prior to the scheduled hearing date that a hearing
is waived. Any appeals from the commission's decision shall be to
the court having jurisdiction of the applicant or the commission.
(f) If the commission intends to grant the authority, it shall
give written notice that the authority to organize a cemetery has
been granted and that a license to operate will be issued upon the
completion of the following:
(1) Establishment of the care and maintenance trust fund and
receipt by the commission of a certificate from the trust company,
certifying receipt of the initial deposit required under this
article.
(2) Full development, ready for burial, of not less than two
acres including a completed paved road from a public roadway to said developed section, certified by inspection of the commission
or its representative.
(3) A description, by metes and bounds, of the acreage tract
of such proposed cemetery, together with evidence, by title
insurance policy or by certificate of an attorney-at-law,
certifying that the applicant is the owner in fee simple of such
tract of land, which must contain not less than thirty acres, and
that the title to not less than thirty acres is free and clear of
all encumbrances. In counties with a population of less than
thirty-five thousand population according to the latest federal
decennial census the tract need be only fifteen acres.
(4) A plat of the cemetery showing the number and location of
all lots surveyed and permanently staked for sale.
§35-5C-11. Existing companies; effect of article.
Existing cemetery companies at the time of the adoption of
this chapter shall continue in full force and effect and be granted
a license but shall hereafter be operated in accordance with the
provisions of this article.
§35-5C-12. Licenses for sales organizations, management
organizations and brokers.
(a) No legal entity shall engage in the business of a cemetery
sales organization, a cemetery management organization or a
cemetery broker except as authorized by this article, and without
first obtaining a license from the commission.
(b) Any legal entity wishing to establish and operate the
business of a cemetery sales organization, a cemetery management
organization or a cemetery broker shall file a written application
for authority with the commission on forms provided by the
commission which must contain such of the following documents and
information as may be required by the commission:
(1) The appointment of a West Virginia resident to receive
service of any lawful process in any noncriminal proceedings
arising under this chapter against the applicant, its principal
owners, principal stockholders, directors and general manager or
their personal representatives.
(2) The states or other jurisdictions in which the applicant
presently is conducting the business activity applied for or other
similar businesses and any adverse order, judgment or decree
entered against the applicant in each jurisdiction or by any court.
(3) The applicant's name, address and the form, date and
jurisdiction of the organization and the address of each of its
offices within or without this state.
(4) The name, address, principal occupation for the past five
years of every director and officer of the applicant or person
occupying a similar status or performing similar functions.
(5) Copies of the articles of incorporation or articles of
partnership or joint venture agreement or other instrument
establishing the legal entity of the applicant.
(c) The application shall be accompanied by an initial filing
fee of four hundred dollars for cemetery sales organization and
cemetery management organization and an initial filing fee of two
hundred dollars for a cemetery broker. If ninety percent or more
of the applicant is owned by an existing cemetery company operating
under the West Virginia Cemetery Act, then the initial filing fee
shall be one half of the sums set out herein. On or before the
first of July of each year, each licensed cemetery sales
organization, cemetery management organization, or cemetery broker
shall pay a license renewal fee of one hundred dollars per year.
(d) Upon receipt of the application and filing fee, the
commission shall cause an investigation to be made of the legal
entity to conduct the business applied for and the qualification of
said legal entity to do business in West Virginia.
(e) The commission, after receipt of the investigation report,
shall grant or refuse to grant the authority to organize the
organization applied for after it determines that the applicant
possesses good character and general fitness or, in the case of a
business association, employs and is directed by personnel of good
character and general fitness.
(f) If the commission intends to deny an application, it shall
give written notice to the applicant of its intention to deny. The
notice shall state a time and a place for hearing before the
commission and a summary statement of the reasons for the proposed denial. The notice of intent shall be mailed by certified mail to
the applicant at the address stated in the application at least 15
days prior to the scheduled hearing date. Any appeals from the
commission's decision shall be to the court having jurisdiction of
the applicant, or in the event of an out-of-state applicant, then
to the court having jurisdiction of the commission.
(g) If the commission intends to grant the authority, it shall
give written notice that the authority to organize the business
applied for has been granted and that a license to operate will be
issued upon presentment to the commission of a statement of
employment between the applicant and the cemetery or cemeteries to
be serviced thereby.
(h) Any person or any cemetery sales organization or any
cemetery management organization or any cemetery broker violating
the provisions of this section is guilty of a misdemeanor, and
shall be subject to revocation of the license to operate.
§35-5C-13. Licenses for persons selling preneed grave space.
(a) No person shall offer to sell preneed grave spaces,
mausoleum crypts, niches, memorials, vaults or any other preneed
cemetery merchandise or services under any plan authorized for any
cemetery, cemetery sales group, or cemetery management group,
before obtaining a license from the commission.
(b) Persons wishing to obtain a license shall file a written
application with the commission on forms provided by the commission. The commission may require such information and
documents as it deems necessary to protect the public interest.
(c) The application shall be accompanied by a filing fee of
fifteen dollars to cover the expenses of processing and
investigation. After processing and investigation the commission
shall grant, or refuse to grant, the license applied for. The
annual license fee shall be set by the commission but shall not
exceed ten dollars.
(d) If the commission refuses to grant the license applied
for, it shall give written notice to the applicant. The notice
shall state a time and a place for hearing before the commission,
and a summary statement of the reasons for the refusal to grant the
license. The notice shall be mailed by registered mail or
certified mail to the applicant at the address stated in the
application at least thirty days prior to the scheduled hearing
date.
(e) If the commission intends to grant the license, it shall
give written notice that the license will be issued upon
presentment to the commission of a duly executed statement of
employment between the applicant and the cemetery or cemeteries to
be serviced thereby.
(f) All of the pertinent provisions of section four, article
five, chapter twenty-nine-a of this code, shall apply to and govern
to appeals or petitions for judicial review by any person or persons aggrieved by an order or decision of the commission. The
judgment of the Circuit Court shall be final unless reversed,
vacated or modified on appeal to the Supreme Court of Appeals in
accordance with the provisions of section one, article six, chapter
twenty-nine-a of this code. Legal counsel and services for the
commission in all appeal proceedings in any Circuit Court and the
Supreme Court of Appeals shall be provided by the Attorney General
or the Attorney General's assistants and in any Circuit Court by
the prosecuting attorney of the county as well, all without
additional compensation. The commission, with the written approval
of the Attorney General, may employ special counsel to represent
the commission at any such appeal proceedings.
§35-5C-14. Application for a change of control; filing fee.
A person who proposes to acquire control of an existing
cemetery company, whether by purchasing the capital stock of the
company, purchasing an owner's interest in the company, or
otherwise acting to effectively change the control of the company,
shall first make application on a form supplied by the commission
for a certificate of approval of the proposed change of control.
The application shall contain the name and address of each proposed
new owner. The commission shall issue a certificate of approval
only after it determines that the proposed new owners are qualified
by character, experience, and financial responsibility to control
and operate the cemetery company in a legal and proper manner, and that the interest of the public generally will not be jeopardized
by the proposed change in control. An application for approval of
a change of control must be completed and accompanied by a filing
fee of two hundred dollars.
§35-5C-15. Records.
A record shall be kept of every burial in the cemetery of a
cemetery company, showing the date of burial, name of the person
buried, together with lot, plot, and space in which such burial was
made therein. All sales, trust funds, accounting records, and all
other records of the licensee shall be available at the licensee's
principal place of business in this state and shall be readily
available at all reasonable times for examination by an authorized
representative of the commission.
§35-5C-16. Trustees; qualifications; examination of records;
enforcement.
(a) The term "corporate trustee" as used in this article shall
mean either a bank or trust company authorized to do business in
West Virginia under the supervision of the commissioner of banks or
any other corporate entity: Provided, That any corporate entity
other than a bank or trust company which acts as trustee under this
article shall first be approved by the cemetery commission and
shall be subject to supervision by the cemetery commission as
provided herein.
(b) Any corporate entity, other than a bank or trust company, which desires to act as trustee for cemetery funds under this
article shall make application to the commission for approval. The
commission shall approve the trustee when it has become satisfied
that:
(1) The applicant employs and is directed by persons who are
qualified by character, experience, and financial responsibility to
care for and invest the funds of others.
(2) The applicant will perform its duties in a proper and
legal manner and the trust funds and interest of the public
generally will not be jeopardized.
(3) The applicant will act as trustee for cemetery funds which
will exceed five hundred thousand dollars in the aggregate.
(4) The applicant is authorized to do business in West
Virginia and has adequate facilities to perform its duties as
trustee.
(c) Any trustee under this article, other than a bank or trust
company under the supervision of the commissioner of banks, shall
maintain records relative to cemetery trust funds as the commission
may by regulation prescribe. The records shall be available at the
trustee's place of business in West Virginia and shall be available
at all reasonable times for examination by a representative of the
commission. The records shall be audited annually, within ninety
days from the end of the trust fund's fiscal year, by an
independent certified public accountant, and a copy of the audit report shall be promptly forwarded to the commission.
(d) Whenever it appears that an officer, director, or employee
of a trustee, other than a bank or trust company, is dishonest,
incompetent, or reckless in the management of a cemetery trust
fund, the commission may bring an action in the courts to remove
the trustee and to impound the property and business of the trustee
as may be reasonably necessary to protect the trust funds.
(e) Any trustee shall invest and reinvest cemetery trust funds
in the same manner as provided by law for the investment of trust
funds by the Clerk of the Supreme Court of Appeals.
§35-5C-17. Required trust fund for care and maintenance; remedy of
commission for noncompliance.
No cemetery company shall be permitted to establish, or
operate if already established, a cemetery unless provision is made
for the future care and maintenance of such cemetery by
establishing a trust fund and designating a corporate trustee to
administer said fund in accordance with a written trust agreement.
If any cemetery company refuses or otherwise fails to provide or
maintain an adequate care and maintenance trust fund in accordance
with the provisions of this article, the commission, after
reasonable notice, shall proceed to enforce compliance under the
powers vested in it under this article; provided any nonprofit
cemetery corporation, incorporated and engaged in the cemetery
business continuously since and prior to the year nineteen hundred fifteen and whose current trust assets exceed seven hundred fifty
thousand dollars shall not be required to designate a corporate
trustee. The trust fund agreement shall contain and include the
following: name, location, and address of both the licensee and the
trustee showing the date of agreement together with the amounts
required deposited as stated in this article. No person shall
withdraw or transfer any portion of the corpus of the care and
maintenance trust fund without first obtaining written consent from
the commission.
§35-5C-18. Individual contracts for care and maintenance.
At the time of making a sale or receiving the initial deposit
hereunder, the cemetery company shall deliver to the person to whom
such sale is made, or who makes such deposit, an instrument in
writing which shall specifically state that the net income of the
care and maintenance trust fund shall be used solely for the care
and maintenance of the cemetery, for reasonable costs of
administering such care and maintenance and for reasonable costs of
administering the trust fund.
§35-5C-19. Requirements for perpetual care fund.
A cemetery company may not cause or permit advertising of a
perpetual care fund in connection with the sale or offer for sale
of its property unless the amount deposited in the fund is at least
forty dollars per grave space, niche, or mausoleum crypt sold.
Nothing may prohibit an individual cemetery from requiring a perpetual care deposit for grave memorial markers to be deposited
in the perpetual care fund so long as the same assessment is
uniformly applied to all grave memorial markers installed in the
cemetery.
§35-5C-20. Deposits to perpetual care fund.
(a) Deposits to the care and maintenance trust fund must be
made by the cemetery company holding title to the subject cemetery
lands on or before the last day of the calendar month following the
calendar month in which final payment is received as provided
herein; however the entire amount required to be deposited into the
fund shall be paid within four years from the date of any contract
requiring such payment regardless of whether all amounts have been
received by the cemetery company. If the cemetery company fails to
make timely deposit, the commission may levy and collect a penalty
of one dollar per day for each day the deposit is delinquent on
each grave space, niche or mausoleum crypt sold. The care and
maintenance trust fund shall be invested and reinvested by the
trustee in the same manner as provided by law for the investment of
other trust funds by the Clerk of the Supreme Court of Appeals.
The fees and other expenses of the trust fund shall be paid by the
trustee from the net income thereof and may not be paid from the
corpus. To the extent that the said net income is not sufficient
to pay such fees and other expenses, the same shall be paid by the
cemetery company.
(b) When a municipal, church-owned or fraternal cemetery
converts to a private cemetery then that cemetery shall establish
and maintain a care and maintenance trust fund pursuant to this
section; provided, however, the initial deposit for establishment
of this trust fund shall be an amount equal to ten dollars per
space for all spaces either previously sold or contracted for sale
in said cemetery at the time of conversion or twenty-five thousand
dollars, whichever sum is greater.
(c) In each sales contract, reservation or agreement wherein
burial rights are priced separately, the purchase price of said
burial rights shall be the only item subject to care and
maintenance trust fund deposits; but if the burial rights are not
priced separately therein, the full amount of the contract,
reservations or agreement shall be subject to care and maintenance
trust fund deposits as provided herein, unless the purchase price
of said burial rights can be determined from the accounting records
of the cemetery company.
(d) When the amount deposited in the perpetual care fund
required by this article of any cemetery company shall amount to
one hundred fifty thousand dollars, anything in this article to the
contrary notwithstanding, the cemetery company may make all
deposits thereafter either into the original perpetual care trust
fund or into a separate fund established as an irrevocable trust,
designated as Perpetual Care Trust Fund "A," and invested by the trustee, as directed by the cemetery company. Funds in a trust
fund designated as Trust Fund "A" may not be invested in another
cemetery company.
(e) For special endowments for a specific lot, grave, or a
family mausoleum, memorial, marker, or monument, the cemetery may
set aside the full amounts received for this individual special
care in a separate trust or by a deposit to a savings account in a
bank or savings and loan association located within and authorized
to do business in the state; provided, however, if the licensee
does not set up a separate trust or savings account for the special
endowment the full amount thereof shall be deposited in perpetual
care trust fund.
§35-5C-21. Trust fund; financial reports.
Within sixty days after the end of the calendar or fiscal year
of the cemetery company, the trustee shall furnish adequate
financial reports with respect to the care fund on forms provided
by the commission. However, the commission may require the trustee
to make such additional financial reports as it may deem advisable.
§35-5C-22. Receipts from sale of personal property or services;
trust account; penalties.
(a) It shall be deemed contrary to public policy if any person
or legal entity receives, holds, controls or manages funds or
proceeds received from the sale of, or from a contract to sell,
personal property or services which may be used in a cemetery in connection with the burial of or the commemoration of the memory of
a deceased human being, where payments for the same are made either
outright or on an installment basis prior to the demise of the
person or persons so purchasing them or for whom they are so
purchased, unless such person or legal entity holds, controls or
manages said funds, subject to the limitations and regulations
prescribed in this section. This section shall apply to all
cemetery companies or other legal entities that offer for sale or
sell personal property or services which may be used in a cemetery
in connection with the burial of, or the commemoration of the
memory of, a deceased human being.
(b) Any cemetery company or other entity entering into a
contract for the sale of personal property or services, to be used
in a cemetery in connection with disposing of, or commemorating the
memory of a deceased human being wherein the use of the personal
property or the furnishing of services is not immediately requested
or required, shall comply with the following requirements and
conditions:
(1) The cemetery company or other entity shall deposit an
amount equal to sixty percent of all proceeds received on such
contracts into a trust account, either in the form of an account
governed by a trust agreement and handled by a corporate trustee or
in the form of a passbook savings account, certificates of deposit
for time certificates, and/or money-market certificates with a licensed and insured bank or savings institution located in the
State of West Virginia until the amount deposited equals sixty
percent of the actual sale price of the property or services sold.
Such accounts and/or deposits shall be in the name of the cemetery
company or other entity in a form which will permit withdrawals
only with the participation and consent of the cemetery commission
as required by subdivision four of this subsection.
(2) All funds received on account of a contract for the sale
of such personal property or services, whether the funds be
received directly from the purchaser or from the sale or assignment
of notes entered into by the purchase or otherwise, shall be
deposited into the trust account as required by subdivision (1) of
this section.
(3) All deposits required herein shall be made into the trust
account so established on or before the last day of the month
following receipt of the funds by the cemetery company or other
entity.
(4) Withdrawals from a trust account may be made by the
depositor, but only with the written approval of the commission or
officer or employee of the commission authorized to act for the
commission. Withdrawals may be made only upon delivery of the
merchandise or services for which the funds were deposited,
cancellation of a contract, the presence of excess funds in the
trust account, or under other circumstances deemed appropriate by the commission. The commission shall promulgate rules and
regulations governing withdrawals from trust accounts, including
time and frequency of withdrawals, notice to the commission prior
to withdrawals, the number and identity of persons other than the
owner who are authorized by the owner to make withdrawals, the
officers and employees of the commission authorized to approve
withdrawals, and any other matters necessary to implement the
provisions of this subdivision. Withdrawals will not be allowed if
the amount remaining in the trust account would fall below sixty
percent of all proceeds received on account of contracts for the
sale of such personal property or services.
(5) If for any reason a cemetery company or other entity who
has entered into a contract for the sale of personal property or
services cannot or does not provide the personal property or
perform the services called for by the contract after request in
writing to do so, the purchaser or his or her heirs or assigns or
duly authorized representative shall be entitled to receive the
entire amount paid on the contract and any income if any, earned
thereon by the trust account.
(6) Every year after September first, two thousand eight, the
cemetery company, the trustee or other entity shall within seventy
five days after the end of the calendar year, file a financial
report of the trust funds with the commission, setting forth the
principal thereof, the investments and payments made, and the income earned and disbursed. The commission may require the
cemetery, trustee, or other entity to make such additional
financial reports as it may deem advisable.
(c) Whenever a contract for the sale of personal property
and/or services allocates payments to apply to one item at a time
under a specific schedule, the contract shall be considered
divisible. Title to each item of personal property or the right to
each item of services shall pass to the purchaser upon full payment
for that item regardless of the remaining balance on other items
under the same contract.
(d) Any contract for the sale of personal property and/or
services shall state separate costs for each item of personal
property, for each act of installation required by the contract,
and for each other item of services included in the contract.
(e) All contracts for the sale of personal property and/or
services must be printed in type size as required by the Truth in
Lending Act, 15 U.S.C. § 1601 et seq, and regulations adopted
pursuant to that act.
(f) In the event of prepayment, interest charged shall be no
more than the interest earned on the unpaid balance computed on a
percent per month basis for each month or part of a month up to the
date of final payment. Any excess interest which has been paid by
the purchaser must be refunded to him or her, his or her assigns,
or his or her representative within thirty days after the final payment. No penalty or additional charge for prepayment may be
required.
(g) In lieu of the deposits required under subsection (b) of
this section, the cemetery company or other entity may post with
the commission a good and sufficient performance bond by surety
company licensed to do business in West Virginia and in an amount
sufficient to cover all payments made directly or indirectly by or
on account of purchasers who have not received the purchased
property and services. Money received from the sale or assignment
of notes entered into by the purchasers, or otherwise, shall be
treated as payments made by the purchasers.
(h) The commission shall have the power and is required from
time to time as it may deem necessary to examine the business of
any cemetery company or other entity writing contracts for the sale
of the property or services as herein contemplated. The written
report of such examination shall be filed in the office of the
commission. Any person or entity being examined shall produce the
records of the company needed for such examination.
(i) Any provision of any contract for the sale of the personal
property or the performance of services herein contemplated under
which the purchaser or beneficiary waives any of the provisions of
this section shall be void.
(j) If any report is not received within the time stipulated
by the commission or herein, the commission may levy and collect a penalty of twenty-five dollars per day for each day of delinquency.
(k) Within thirty days following the execution of a contract
for the sale of personal property or performance of services, a
purchaser may cancel his contract by giving written notice to the
seller. The seller may cancel the contract, upon default by
purchaser, by giving written notice to the purchaser. Within
thirty days of notice of cancellation, the cemetery company or
other entity shall refund to purchaser the principal amount on
deposit in the trust account for his or her benefit on any
undelivered merchandise or services. This amount (no other
obligations owed the purchaser by the seller) shall constitute the
purchaser's entire entitlements under the contract. The seller may
not terminate the contract without complying with this subsection.
§35-5C-23. Applications for license.
Applications for renewal license must be submitted on or
before the first of July each and every year in the case of an
existing cemetery company. Before any sale of cemetery property in
the case of a new cemetery company or a change of ownership or
control, an application for license must be submitted and license
issued.
§35-5C-24. License not assignable or transferable.
No license issued under shall be transferable or assignable
and no licensee shall develop or operate any cemetery authorized by
this article under any name or at any location other than that contained in the application for such license.
§35-5C-25. Minimum acreage; sale or disposition of cemetery lands.
(a) Each licensee shall set aside a minimum of thirty acres of
land for use by said licensee as a cemetery, and shall not sell,
mortgage, lease or encumber the same.
(b) The fee simple title, or lesser estate, in any lands owned
by licensee and dedicated for use by it as a cemetery, which are
contiguous, adjoining, or adjacent to the minimum of thirty acres
described in subsection (a), may be sold, conveyed, or disposed of,
or any part thereof, by the licensee, for use by the new owner for
other purposes than as a cemetery; provided that no bodies have
been previously interred therein; and provided further, that any
and all titles, interests, or burial rights which may have been
sold or contracted to be sold in such lands which are the subject
of such sale shall be conveyed to and revested in the licensee
prior to consummation of any such sale, conveyance or disposition.
(c) Any licensee may convey and transfer to a municipality or
county its real and personal property together with moneys
deposited with the trustee; provided said municipality or county
will accept responsibility for maintenance thereof and prior
written approval of the commission is first obtained.
(d) The provisions of subsections (a) and (b) relating to a
requirement for minimum acreage shall not apply to those cemeteries
licensed on or before the first of July, 1967, which own or control a total of less than thirty acres of land; provided that such
cemeteries shall not dispose of any of such lands. A nongovernment
lien or other interest in land acquired in violation of this
section is void.
§35-5C-26.
Construction of mausoleums and belowground crypts;
trust fund for receipts from sale of preconstruction
crypts; compliance requirements.
(a) A cemetery company shall be required to start construction
of that section of a mausoleum or bank of belowground crypts in
which sales, contracts for sale, reservations for sales or
agreements for sales are being made, within forty-eight months
after the date of the first such sale. The construction of such
mausoleum section or bank of belowground crypts shall be completed
within five years after the date of the first sale made; provided,
however, extensions for completion, not to exceed one year, may be
granted by the commission for good reasons shown.
(b) A cemetery company which plans to offer for sale space in
a section of a mausoleum or bank of underground crypts prior to its
construction shall establish a preconstruction trust account. The
trust account shall be administered and operated in the same manner
as the merchandise trust account and shall be exclusive of the
merchandise trust account or such other trust accounts or funds
that may be required by law. The personal representative of any
purchaser of such space who dies before completion of construction shall be entitled to a refund of all moneys paid for such space
including any income earned thereon.
(c) Before a sale, contract for sale, reservation for sale or
agreement for sale in the first mausoleum section or bank of
underground crypts in each cemetery may be made the funds (one
hundred twenty percent of construction cost) to be deposited to the
preconstruction trust account shall be computed as to said section
or bank of crypts and such trust account payments must be made on
or before the last day of the calendar month following receipt by
the cemetery company or its agent of each payment. The trust
account portion of each such payment shall be computed by dividing
the cost of the project plus twenty percent of said cost, as
computed by a licensed contractor, engineer or architect by the
number of crypts in the section or bank of crypts to ascertain the
cost per unit. The unit cost shall be divided by the contract
sales price of each unit to obtain a percentage which shall be
multiplied by the amount of each payment. The formula shall be
computed as follows: Cost plus twenty percent divided by number of
crypts = cost per unit Cost per unit divided by contract sales
price = Percentage x payment received = deposit required to
preconstruction trust account.
(d) The cemetery company shall be entitled to withdraw the
funds from said preconstruction trust account only after the
commission has become satisfied that construction has been completed; provided, however, that during construction of the
mausoleum or bank of belowground crypts the commission may, in its
discretion, authorize a specific percentage of the funds to be
withdrawn when it appears that at least an equivalent percentage of
construction has been completed.
(e) If a mausoleum section or bank of underground crypts is
not completed within the time limits set out in this section the
corporate trustee, if any, shall contract for and cause said
project to be completed and paid therefor from the trust account
funds deposited to the project's account paying any balance, less
cost and expenses, to the cemetery company. In the event there is
no corporate trustee, the commission shall appoint a committee to
serve as trustees to contract for and cause said project to be
completed and paid therefor from the trust account funds deposited
to the project's account paying any balance, less cost and
expenses, to the cemetery company.
(f) In lieu of the payments outlined hereunder to the
preconstruction trust account the cemetery company may deliver to
the commission a good and sufficient completion or performance bond
in an amount and by surety companies acceptable to the commission.
§35-5C-27. Penalties.
(a) Except as provided in this subsection, a person violating
any provisions of this article, of any order or rule promulgated
under this article, or of any license issued by the commission is guilty of a misdemeanor and, upon conviction thereof, shall be
fined not less than one hundred nor more than one thousand dollars
for each occurrence, or incarcerated in jail for a term not to
exceed one year, or both fined and incarcerated. Each failure to
deposit funds in a trust fund in accordance with this article is a
separate offense. A person who has failed to deposit funds in a
trust fund in accordance with this article and whose delinquent
deposits equal or exceed twenty thousand dollars is guilty of a
felony and, upon conviction thereof, shall be fined not less than
five hundred nor more than three thousand dollars, or incarcerated
in a state correctional facility not less than one nor more than
three years, or, in the discretion of the court, be incarcerated in
jail for a term not to exceed one year.
(b) The officers and directors or persons occupying similar
status or performing similar functions of any cemetery company,
cemetery sales organization, cemetery management organization or
cemetery broker, as defined in this article, failing to make
required contributions to the care and maintenance trust fund and
any other trust fund or escrow account shall be liable for any
offense based on the failure and upon conviction for the offense
shall be punished in the manner prescribed by law.
§35-5C-28.
Burial without regard to race or color, religion,
color, national origin, or ancestry.
(a) It shall be the public policy of the state that all cemetery companies or other legal entities conducting or
maintaining public or private cemeteries shall sell to all
applicants and bury all deceased human beings on equal terms
without regard to race or color, religion, national origin, or
ancestry. Anything contrary hereto is void and of no legal effect.
Bylaws, rules and regulations, contracts, deeds, etc, may permit
designation of parts of cemeteries or burial grounds for the
specific use of persons whose religious code required isolation.
Any program offering free burial rights to veterans or any other
person or group of persons shall not be conditioned by any
requirement to purchase additional burial rights or merchandise.
(b) Any cemetery company or other legal entity violating the
provisions of this section shall be guilty of a misdemeanor and,
upon conviction thereof, shall be fined not less than one hundred
nor more than one thousand dollars for each occurrence, or
incarcerated in the county or regional jail for a term not to
exceed one year, or both fined and incarcerated.
§35-5C-29.
Validation of certain deeds for cemetery lots executed
by suspended corporations.
Any deed for a cemetery lot or lots which was executed prior
to January 1, two thousand seven, and which would have been valid
if the charter of the grantor corporation had not been suspended at
the time the deed was executed, is hereby validated.
NOTE: The purpose of this bill is create a cemetery
commission to regulate private cemeteries and to address the
various concerns with cemetery care
and maintenance.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.