Florida Senate - 2016                                     SB 854
       By Senator Hukill
       8-00997-16                                             2016854__
    1                        A bill to be entitled                      
    2         An act relating to funeral, cemetery, and consumer
    3         services; amending s. 497.005, F.S.; defining terms;
    4         amending s. 497.141, F.S.; revising required
    5         information for licensure to include e-mail addresses;
    6         requiring the Department of Financial Services to
    7         include e-mail notification as a means to administer
    8         the licensing process; amending s. 497.152, F.S.;
    9         conforming provisions to changes made by the act;
   10         requiring, rather than authorizing, the Board of
   11         Funeral, Cemetery, and Consumer Services to provide
   12         certain criteria; prohibiting the board from requiring
   13         a fine when certain deficiencies are fully corrected
   14         within a specified period; amending s. 497.266, F.S.;
   15         revising the prohibition against withdrawal or
   16         transfer of assets within the care and maintenance
   17         trust fund to include an exception; amending s.
   18         497.267, F.S.; revising provisions relating to the
   19         disposition of withdrawals from the care and
   20         maintenance trust fund; creating s. 497.2675, F.S.;
   21         requiring the board to adopt certain rules; requiring
   22         a licensed cemetery company to request a method for
   23         withdrawal from the cemetery company’s care and
   24         maintenance trust fund; providing requirements for
   25         such methods; requiring that taxes on capital gains be
   26         paid from the trust principal; amending s. 497.268,
   27         F.S.; conforming provisions to changes made by the
   28         act; deleting a required deposit in a cemetery
   29         company’s care and maintenance trust fund for
   30         mausoleums or columbaria; deleting the requirement
   31         that taxes on capital gain be paid from the trust
   32         corpus; amending s. 497.269, F.S.; requiring a trustee
   33         to annually furnish financial reports that record the
   34         fair market value of the care and maintenance trust
   35         fund; amending ss. 497.273 and 497.274, F.S.;
   36         conforming provisions to changes made by the act;
   37         amending s. 497.277, F.S.; deleting a limitation on
   38         the fee for transfer of burial rights from one
   39         purchaser to another; authorizing the board to
   40         determine the transfer fee; amending ss. 497.283 and
   41         497.286, F.S.; conforming provisions to changes made
   42         by the act; amending s. 497.371, F.S.; providing that
   43         an applicant for the embalmer apprentice program may
   44         not be licensed without a determination of character
   45         by the licensing authority; amending ss. 497.372 and
   46         497.381, F.S.; conforming provisions to changes made
   47         by the act; amending s. 497.452, F.S.; deleting an
   48         exception that prohibits a person from receiving
   49         specified funds without holding a valid preneed
   50         license; amending ss. 497.454 and 497.456, F.S.;
   51         conforming provisions to changes made by the act;
   52         amending s. 497.458, F.S.; revising requirements
   53         relating to the disposition of proceeds on a preneed
   54         contract; requiring the trustee to furnish the
   55         department with an annual report regarding preneed
   56         licensee trust accounts beginning on a specified date;
   57         providing requirements for the annual report; revising
   58         which investments a trustee of a trust has the power
   59         to invest in; deleting provisions relating to the
   60         preneed licensee; amending s. 497.459, F.S.;
   61         prohibiting certain preneed contracts from being
   62         canceled during the life or after the death of the
   63         contract purchaser; amending s. 497.460, F.S.;
   64         conforming provisions to changes made by the act;
   65         repealing s. 497.461, F.S., relating to the
   66         authorization for a preneed licensee to elect surety
   67         bonding as an alternative to depositing funds into a
   68         trust; amending s. 497.462, F.S.; deleting obsolete
   69         references to surety bonds; amending s. 497.464, F.S.;
   70         conforming provisions to changes made by the act;
   71         amending s. 497.465, F.S.; requiring an inactive
   72         preneed licensee to deposit a specified amount of
   73         funds received on certain preneed contracts into the
   74         trust upon a specified time; amending ss. 497.601 and
   75         497.607, F.S.; specifying that cremated remains are
   76         not property; requiring a division of cremated remains
   77         to be consented to by certain persons; providing that
   78         a dispute shall be resolved by a court of competent
   79         jurisdiction; conforming provisions to changes made by
   80         the act; providing an effective date.
   82  Be It Enacted by the Legislature of the State of Florida:
   84         Section 1. Present subsections (5) through (8), (9) through
   85  (31), (32) through (38), (39) through (46), (47) through (61),
   86  (62) through (70), and (71) of section 497.005, Florida
   87  Statutes, are redesignated as subsections (6) through (9), (11)
   88  through (33), (35) through (41), (43) through (50), (52) through
   89  (66), (68) through (76), and (78), respectively, and new
   90  subsections (5), (10), (34), (42), (51), (67), and (77) are
   91  added to that section, to read:
   92         497.005 Definitions.—As used in this chapter, the term:
   93         (5) “Beneficiary” means a natural person expressly
   94  identified in a preneed contract as the person for whom funeral
   95  merchandise or services are intended.
   96         (10) “Capital gain” or “capital loss” means a change in the
   97  value of a capital asset, such as investment or real estate,
   98  which gives the asset a different worth than the purchase price.
   99  The gain or loss is not realized until the asset is sold.
  100         (34) “Fair market value” means the fair market value of
  101  assets held by a trust as of a specific date, assuming all
  102  assets of the trust are sold on that specific date.
  103         (42) “Income” means earnings on trust assets, including
  104  interest, dividends, and other income earned on the principal.
  105         (51) “Net income” means, in relation to a trust, ordinary
  106  income minus any income distributions for items such as trust
  107  expenses. For purposes of this subsection, “ordinary income”
  108  means, in relation to a trust, any earnings on trust assets,
  109  including interest and dividends received on property derived
  110  from the use of the trust principal, but does not include
  111  capital gains or capital losses.
  112         (67) “Purchaser” means a natural person who has executed a
  113  preneed contract with or seeks at-need funeral merchandise or
  114  services from a licensee.
  115         (77) “Total return withdrawal percentage” means a
  116  percentage, not to exceed 5 percent, of the fair market value of
  117  a trust.
  118         Section 2. Subsections (2) and (11) of section 497.141,
  119  Florida Statutes, are amended to read:
  120         497.141 Licensing; general application procedures.—
  121         (2) Any person desiring to be licensed shall apply to the
  122  licensing authority in writing using such forms and procedures
  123  as may be prescribed by rule. The application for licensure
  124  shall include the applicant’s social security number if the
  125  applicant is a natural person; otherwise, the applicant’s
  126  federal tax identification number shall be included.
  127  Notwithstanding any other provision of law, the department is
  128  the sole authority for determining the forms and form contents
  129  to be submitted for initial licensure and licensure renewal
  130  application. Such forms and the information and materials
  131  required by such forms may include, as appropriate,
  132  demographics, education, work history, personal background,
  133  criminal history, finances, business information, signature
  134  notarization, performance periods, reciprocity, local government
  135  approvals, supporting documentation, periodic reporting
  136  requirements, fingerprint requirements, continuing education
  137  requirements, business plans, character references, e-mail
  138  addresses, and ongoing education monitoring. Such forms and the
  139  information and materials required by such forms may also
  140  include, to the extent such information or materials are not
  141  already in the possession of the department or the board,
  142  records or information as to complaints, inspections,
  143  investigations, discipline, and bonding. The application shall
  144  be supplemented as needed to reflect any material change in any
  145  circumstance or condition stated in the application that takes
  146  place between the initial filing of the application and the
  147  final grant or denial of the license and that might affect the
  148  decision of the department or the board. After an application by
  149  a natural person for licensure under this chapter is approved,
  150  the licensing authority may require the successful applicant to
  151  provide a photograph of himself or herself for permanent
  152  lamination onto the license card to be issued to the applicant,
  153  pursuant to rules and fees adopted by the licensing authority.
  154         (11) The department shall implement a system for
  155  administration of the overall licensing process, including e
  156  mail notification for the processing and tracking of
  157  applications for licensure, the issuance of licenses approved by
  158  the board, the tracking of licenses issued, the administration
  159  of the license renewal process, and the collection and
  160  processing of fees related to those activities. The system may
  161  use staff and facilities of the department or the department may
  162  enter into a contract for all or any part of such system, upon
  163  such terms and conditions as the department deems advisable, and
  164  such contract may be with another government agency or a private
  165  business.
  166         Section 3. Paragraphs (b) and (e) of subsection (8),
  167  paragraph (d) of subsection (12), paragraphs (b) and (c) of
  168  subsection (14), and paragraph (b) of subsection (15) of section
  169  497.152, Florida Statutes, are amended to read:
  170         497.152 Disciplinary grounds.—This section sets forth
  171  conduct that is prohibited and that shall constitute grounds for
  172  denial of any application, imposition of discipline, or other
  173  enforcement action against the licensee or other person
  174  committing such conduct. For purposes of this section, the
  175  requirements of this chapter include the requirements of rules
  176  adopted under authority of this chapter. No subsection heading
  177  in this section shall be interpreted as limiting the
  178  applicability of any paragraph within the subsection.
  180  REMAINS.—
  181         (b) Refusing to surrender promptly the custody of a dead
  182  human body upon the express order of the person legally
  183  authorized person to such person’s its custody; however, this
  184  provision shall be subject to any state or local laws or rules
  185  governing custody or transportation of dead human bodies.
  186         (e) Failing to obtain written authorization from a legally
  187  authorized person before the family or next of kin of the
  188  deceased prior to entombment, interment, disinterment,
  189  disentombment, or disinurnment of the remains of any human
  190  being.
  191         (12) DISCLOSURE REQUIREMENTS.—
  192         (d) Failure by a funeral director to make full disclosure
  193  in the case of a funeral or direct disposition with regard to
  194  the use of funeral merchandise that is not to be disposed of
  195  with the body or failure to obtain written permission from a
  196  legally authorized person the purchaser regarding disposition of
  197  such merchandise.
  199  CUSTOMERS.—
  200         (b) Committing or performing with such frequency as to
  201  indicate a general business practice any of the following:
  202         1. Failing to acknowledge and act promptly upon
  203  communications from a licensee’s customers and their
  204  representatives with respect to claims or complaints relating to
  205  the licensee’s activities regulated by this chapter.
  206         2. Denying claims or rejecting complaints received by a
  207  licensee from a customer or customer’s representative, relating
  208  to the licensee’s activities regulated by this chapter, without
  209  first conducting reasonable investigation based upon available
  210  information.
  211         3. Attempting to settle a claim or complaint on the basis
  212  of a material document that was altered without notice to, or
  213  without the knowledge or consent of, the contract purchaser or a
  214  legally authorized person her or his representative or legal
  215  guardian.
  216         4. Failing within a reasonable time to affirm or deny
  217  coverage of specified services or merchandise under a contract
  218  entered into by a licensee upon written request of the contract
  219  purchaser or a legally authorized person her or his
  220  representative or legal guardian.
  221         5. Failing to promptly provide, in relation to a contract
  222  for funeral or burial merchandise or services entered into by
  223  the licensee or under the licensee’s license, a reasonable
  224  explanation to the contract purchaser or a legally authorized
  225  person her or his representative or legal guardian of the
  226  licensee’s basis for denying or rejecting all or any part of a
  227  claim or complaint submitted.
  228         (c) Making a material misrepresentation to a contract
  229  purchaser or a legally authorized person her or his
  230  representative or legal guardian for the purpose and with the
  231  intent of effecting settlement of a claim or complaint or loss
  232  under a prepaid contract on less favorable terms than those
  233  provided in, and contemplated by, the prepaid contract.
  235  For purposes of this subsection, the response of a customer
  236  recorded by the customer on a customer satisfaction
  237  questionnaire or survey form sent to the customer by the
  238  licensee, and returned by the customer to the licensee, shall
  239  not be deemed to be a complaint.
  241         (b) Failing to timely remit as required by this chapter the
  242  required amounts to any trust fund required by this chapter. The
  243  board shall may by rule provide criteria for identifying minor,
  244  nonwillful trust remittance deficiencies; and remittance
  245  deficiencies falling within such criteria, if fully corrected
  246  within 30 days after notice to the licensee by the department,
  247  do shall not constitute grounds for disciplinary action or a
  248  fine.
  249         Section 4. Subsections (3) and (4) of section 497.266,
  250  Florida Statutes, are amended to read:
  251         497.266 Care and maintenance trust fund; remedy of
  252  department for noncompliance.—
  253         (3) A No person may not withdraw or transfer any portion of
  254  assets within the corpus of the care and maintenance trust fund,
  255  except as authorized by s. 497.268, without first obtaining
  256  written consent from the licensing authority.
  257         (4) The trustee of the trust established pursuant to this
  258  section may only invest in investments and loan trust funds, as
  259  prescribed in s. 497.458. The trustee shall take title to the
  260  property conveyed to the trust for the purposes of investing,
  261  protecting, and conserving it for the cemetery company;
  262  collecting income; and distributing withdrawals from the trust
  263  the principal and income as prescribed in this chapter. The
  264  cemetery company is prohibited from sharing in the discharge of
  265  the trustee’s responsibilities under this subsection, except
  266  that the cemetery company may request the trustee to invest in
  267  tax-free investments.
  268         Section 5. Section 497.267, Florida Statutes, is amended to
  269  read:
  270         497.267 Disposition of withdrawals from the income of care
  271  and maintenance trust fund; notice to purchasers and
  272  depositors.—Withdrawals from the net income of the care and
  273  maintenance trust fund shall be used solely for the care and
  274  maintenance of the cemetery, including maintenance of monuments,
  275  which maintenance may shall not be deemed to include the
  276  cleaning, refinishing, repairing, or replacement of monuments;
  277  for reasonable costs of administering the care and maintenance;
  278  and for reasonable costs of administering the trust fund. At the
  279  time of making a sale or receiving an initial deposit, the
  280  cemetery company shall deliver to the person to whom the sale is
  281  made, or who makes a deposit, a written instrument which shall
  282  specifically state the purposes for which withdrawals from the
  283  income of the trust fund shall be used.
  284         Section 6. Section 497.2675, Florida Statutes, is created
  285  to read:
  286         497.2675 Withdrawal methods from the care and maintenance
  287  trust fund.—
  288         (1) The board shall adopt rules, with the approval of the
  289  department, to administer ss. 497.267 and 497.268, including,
  290  but not limited to:
  291         (a) Reporting requirements for a cemetery licensed under
  292  this chapter, including the requirement that specific reports be
  293  made on forms designed and approved by the board by rule.
  294         (b) Rules to address a cemetery licensed under this chapter
  295  whose pro rata share of the fair market value of the trust has
  296  not grown over a 3-year average, including limiting withdrawals
  297  from the care and maintenance trust fund, and any exceptions
  298  approved by the board.
  299         (2) Each cemetery company licensed under this chapter shall
  300  elect one of two withdrawal methods, as specified in paragraphs
  301  (a) and (b), for withdrawals from the cemetery company’s care
  302  and maintenance trust fund. The board shall adopt rules, with
  303  the approval of the department, to administer this subsection.
  304         (a) Net income withdrawal method.—Net income may be
  305  withdrawn from the trust, as earned, on a monthly basis.
  306         (b) Total return withdrawal method.—The licensee shall
  307  multiply the average fair market value of its pro rata share of
  308  the trust by the total return withdrawal percentage and may
  309  withdraw one-fourth of that amount at least quarterly beginning
  310  the first quarter of the new trust year. The initial total
  311  return withdrawal percentage elected by the licensee may not
  312  increase the total return withdrawal percentage for that
  313  quarter. For purposes of this paragraph, “average fair market
  314  value” means, in relation to a trust, the average of the fair
  315  market value of each asset held by the trust at the beginning of
  316  the current year and in each of the 2 previous years, or for the
  317  entire term of the trust if there are less than 2 previous
  318  years, and adjusted as follows:
  319         1. If assets are added to the trust during the years used
  320  to determine the average, the amount of each addition is added
  321  to all years in which such addition is not included.
  322         2. If assets are distributed from the trust during the
  323  years used to determine the average, other than in satisfaction
  324  of the unitrust amount, as defined in s. 738.1041, the amount of
  325  each distribution is subtracted from all other years in which
  326  such distribution is not included.
  327         (3) Without regard to the withdrawal method selected, taxes
  328  on capital gains, if any, must be paid from the trust principal.
  329         Section 7. Paragraphs (a) and (b) of subsection (1) and
  330  subsection (2) of section 497.268, Florida Statutes, are amended
  331  to read:
  332         497.268 Care and maintenance trust fund, percentage of
  333  payments for burial rights to be deposited.—
  334         (1) Each cemetery company shall set aside and deposit in
  335  its care and maintenance trust fund the following percentages or
  336  amounts for all sums received from sales of burial rights:
  337         (a) For burial rights, 10 percent of all payments received;
  338  however, for sales made after September 30, 1993, no deposit
  339  shall be less than $25 per burial right grave. For each burial
  340  right which is provided without charge, the deposit to the fund
  341  shall be $25.
  342         (b)For mausoleums or columbaria, 10 percent of payments
  343  received.
  344         (2) Deposits to the care and maintenance trust fund shall
  345  be made by the cemetery company not later than 30 days following
  346  the close of the calendar month in which any payment was
  347  received; however, when such payments are received in
  348  installments, the percentage of the installment payment placed
  349  in trust must be identical to the percentage which the payment
  350  received bears to the total cost for the burial rights. Trust
  351  income may be used to pay for all usual and customary services
  352  for the operation of a trust account, including, but not limited
  353  to: reasonable trustee and custodian fees, investment adviser
  354  fees, allocation fees, and taxes. If the net income is not
  355  sufficient to pay the fees and other expenses, the fees and
  356  other expenses shall be paid by the cemetery company. Capital
  357  gains taxes shall be paid from the corpus.
  358         Section 8. Section 497.269, Florida Statutes, is amended to
  359  read:
  360         497.269 Care and maintenance trust fund; financial
  361  reports.—On or before April 1 of each year, the trustee shall
  362  furnish adequate financial reports that record the fair market
  363  value with respect to the care and maintenance trust fund
  364  utilizing forms and procedures specified by rule. However, the
  365  department may require the trustee to make such additional
  366  financial reports as it deems necessary. In order to ensure that
  367  the proper deposits to the trust fund have been made, the
  368  department shall examine the status of the trust fund of the
  369  company on a semiannual basis for the first 2 years of the trust
  370  fund’s existence.
  371         Section 9. Subsection (4) of section 497.273, Florida
  372  Statutes, is amended to read:
  373         497.273 Cemetery companies; authorized functions.—
  374         (4) This chapter does not prohibit the interment or
  375  entombment of the inurned cremated animal remains of the
  376  decedent’s pet or pets with the decedent’s human remains or
  377  cremated human remains if:
  378         (a) The human remains or cremated human remains are not
  379  commingled with the inurned cremated animal remains; and
  380         (b) The interment or entombment with the inurned cremated
  381  animal remains is with the authorization of a the decedent or
  382  other legally authorized person.
  383         Section 10. Subsection (1) of section 497.274, Florida
  384  Statutes, is amended to read:
  385         497.274 Standards for grave spaces.—
  386         (1) A standard adult grave space shall measure at least 42
  387  inches in width and 96 inches in length, except for preinstalled
  388  vaults in designated areas. For interments, except cremated
  389  remains, the covering soil shall measure no less than 12 inches
  390  from the top of the outer burial container at time of interment,
  391  unless such level of soil is not physically possible. In any
  392  interment, a legally authorized person the family or next of kin
  393  may waive the 12-inch coverage minimum.
  394         Section 11. Subsection (2) of section 497.277, Florida
  395  Statutes, is amended to read:
  396         497.277 Other charges.—Other than the fees for the sale of
  397  burial rights, burial merchandise, and burial services, no other
  398  fee may be directly or indirectly charged, contracted for, or
  399  received by a cemetery company as a condition for a customer to
  400  use any burial right, burial merchandise, or burial service,
  401  except for:
  402         (2) Charges paid for transferring burial rights from one
  403  purchaser to another, as determined by rule of the board;
  404  however, no such fee may exceed $50.
  405         Section 12. Paragraph (c) of subsection (2) of section
  406  497.283, Florida Statutes, is amended to read:
  407         497.283 Prohibition on sale of personal property or
  408  services.—
  409         (2)
  410         (c) In lieu of delivery as required by paragraph (b), for
  411  sales to cemetery companies and funeral establishments, and only
  412  for such sales, the manufacturer of a permanent outer burial
  413  receptacle which meets standards adopted by rule may elect, at
  414  its discretion, to comply with the delivery requirements of this
  415  section by annually submitting for approval pursuant to
  416  procedures and forms as specified by rule, in writing, evidence
  417  of the manufacturer’s financial responsibility with the
  418  licensing authority for its review and approval. The standards
  419  and procedures to establish evidence of financial responsibility
  420  shall be those in s. 497.461, with the manufacturer of permanent
  421  outer burial receptacles which meet national industry standards
  422  assuming the same rights and responsibilities as those of a
  423  preneed licensee under s. 497.461.
  424         Section 13. Subsection (3) of section 497.286, Florida
  425  Statutes, is amended to read:
  426         497.286 Owners to provide addresses; presumption of
  427  abandonment; abandonment procedures; sale of abandoned unused
  428  burial rights.—
  429         (3) Upon the occurrence of a presumption of abandonment as
  430  set forth in subsection (2), a cemetery may file with the
  431  department a certified notice attesting to the abandonment of
  432  the burial rights. The notice shall do the following:
  433         (a) Describe the burial rights certified to have been
  434  abandoned;
  435         (b) Set forth the name of the owner or owners of the burial
  436  rights, or if the owner is known to the cemetery to be deceased,
  437  then the names, if known to the cemetery, of such claimants as
  438  are heirs at law, next of kin, or specific devisees under the
  439  will of the owner or the legally authorized person;
  440         (c) Detail the facts with respect to the failure of the
  441  owner or survivors as outlined in this section to keep the
  442  cemetery informed of the owner’s address for a period of 50
  443  consecutive years or more; and
  444         (d) Certify that no burial right has been exercised which
  445  is held in common ownership with any abandoned burial rights as
  446  set forth in subsection (2).
  447         Section 14. Section 497.371, Florida Statutes, is amended
  448  to read:
  449         497.371 Embalmers; establishment of embalmer apprentice
  450  program.—The licensing authority adopts rules establishing an
  451  embalmer apprentice program. An embalmer apprentice may perform
  452  only those tasks, functions, and duties relating to embalming
  453  which are performed under the direct supervision of an embalmer
  454  who has an active, valid license under s. 497.368 or s. 497.369.
  455  An embalmer apprentice is shall be eligible to serve in an
  456  apprentice capacity for a period not to exceed 3 years as may be
  457  determined by licensing authority rule or for a period not to
  458  exceed 5 years if the apprentice is enrolled in and attending a
  459  course in mortuary science or funeral service education at any
  460  mortuary college or funeral service education college or school.
  461  An embalmer apprentice shall be issued a license licensed upon
  462  payment of a licensure fee as determined by licensing authority
  463  rule but not to exceed $200. An applicant for the embalmer
  464  apprentice program may not be issued a license unless the
  465  licensing authority determines that the applicant is of good
  466  character and has not demonstrated a history of lack of
  467  trustworthiness or integrity in business or professional
  468  matters.
  469         Section 15. Paragraph (b) of subsection (1) of section
  470  497.372, Florida Statutes, is amended to read:
  471         497.372 Funeral directing; conduct constituting practice of
  472  funeral directing.—
  473         (1) The practice of funeral directing shall be construed to
  474  consist of the following functions, which may be performed only
  475  by a licensed funeral director:
  476         (b) Planning or arranging, on an at-need basis, the details
  477  of funeral services, embalming, cremation, or other services
  478  relating to the final disposition of human remains, including
  479  the removal of such remains from the state, with the family or
  480  friends of the decedent or any other person responsible for such
  481  services; setting the time of the services; establishing the
  482  type of services to be rendered; acquiring the services of the
  483  clergy; and obtaining vital information for the filing of death
  484  certificates and obtaining of burial transit permits.
  485         Section 16. Subsection (4) of section 497.381, Florida
  486  Statutes, is amended to read:
  487         497.381 Solicitation of goods or services.—
  488         (4) At-need solicitation of funeral merchandise or services
  489  is prohibited. A No funeral director or direct disposer or her
  490  or his agent or representative may not contact the legally
  491  authorized person or family or next of kin of a deceased person
  492  to sell services or merchandise unless the funeral director or
  493  direct disposer or her or his agent or representative has been
  494  initially called or contacted by the legally authorized person
  495  or family or next of kin of such person and requested to provide
  496  her or his services or merchandise.
  497         Section 17. Paragraph (c) of subsection (2) of section
  498  497.452, Florida Statutes, is amended to read:
  499         497.452 Preneed license required.—
  500         (2)
  501         (c) The provisions of paragraph (a) do not apply to any
  502  Florida corporation existing under chapter 607 acting as a
  503  servicing agent hereunder in which the stock of such corporation
  504  is held by 100 or more persons licensed pursuant to part III of
  505  this chapter, provided no one stockholder holds, owns, votes, or
  506  has proxies for more than 5 percent of the issued stock of such
  507  corporation; provided the corporation has a blanket fidelity
  508  bond, covering all employees handling the funds, in the amount
  509  of $50,000 or more issued by a licensed insurance carrier in
  510  this state; and provided the corporation processes the funds
  511  directly to and from the trustee within the applicable time
  512  limits set forth in this chapter. The department may require any
  513  person claiming that the provisions of this paragraph exempt it
  514  from the provisions of paragraph (a) to demonstrate to the
  515  satisfaction of the department that it meets the requirements of
  516  this paragraph.
  517         Section 18. Subsections (1) and (3) of section 497.454,
  518  Florida Statutes, are amended to read:
  519         497.454 Approval of preneed contract and related forms.—
  520         (1) Preneed contract forms and related forms shall be filed
  521  with and approved by the licensing authority before prior to
  522  use, pursuant to procedures specified by rule. The licensing
  523  authority may not approve any electronic or paper preneed
  524  contract form that does not provide for sequential prenumbering
  525  thereon.
  526         (3) Specific disclosure regarding the preneed licensee’s
  527  ability to select either trust funding or the financial
  528  responsibility alternative as set forth in s. 497.461 in
  529  connection with the receipt of preneed contract proceeds is
  530  required in the preneed contract.
  531         Section 19. Subsections (2), (7), and (8) of section
  532  497.456, Florida Statutes, are amended to read:
  533         497.456 Preneed Funeral Contract Consumer Protection Trust
  534  Fund.—
  535         (2) Within 60 days after the end of each calendar quarter,
  536  for each preneed contract written during the quarter and not
  537  canceled within 30 days after the date of the execution of the
  538  contract, each preneed licensee, whether funding preneed
  539  contracts by the sale of insurance or by establishing a trust
  540  pursuant to s. 497.458 or s. 497.464, shall remit the sum of
  541  $2.50 for each preneed contract having a purchase price of
  542  $1,500 or less, and the sum of $5 for each preneed contract
  543  having a purchase price in excess of $1,500; and each preneed
  544  licensee utilizing s. 497.461 or s. 497.462 shall remit the sum
  545  of $5 for each preneed contract having a purchase price of
  546  $1,500 or less, and the sum of $10 for each preneed contract
  547  having a purchase price in excess of $1,500.
  548         (7) In any situation in which a delinquency proceeding has
  549  not commenced, the licensing authority may, in its discretion,
  550  use the trust fund for the purpose of providing restitution to
  551  any consumer, owner, or beneficiary of a preneed contract or
  552  similar regulated arrangement under this chapter entered into
  553  after June 30, 1977. If, after investigation, the licensing
  554  authority determines that a preneed licensee has breached a
  555  preneed contract by failing to provide benefits or an
  556  appropriate refund, or that a provider, who is a former preneed
  557  licensee or an establishment which has been regulated under this
  558  chapter, has sold a preneed contract and has failed to fulfill
  559  the arrangement or provide the appropriate refund, and such
  560  preneed licensee or provider does not provide or does not
  561  possess adequate funds to provide appropriate refunds, payments
  562  from the trust fund may be authorized by the licensing
  563  authority. In considering whether payments shall be made or when
  564  considering who will be responsible for such payments, the
  565  licensing authority shall consider whether the preneed licensee
  566  or previous provider has been acquired by a successor who is or
  567  should be responsible for the liabilities of the defaulting
  568  entity. With respect to preneed contracts funded by life
  569  insurance, payments from the fund shall be made: if the insurer
  570  is insolvent, but only to the extent that funds are not
  571  available through the liquidation proceeding of the insurer; or
  572  if the preneed licensee is unable to perform under the contract
  573  and the insurance proceeds are not sufficient to cover the cost
  574  of the merchandise and services contracted for. In no event
  575  shall the licensing authority approve payments in excess of the
  576  insurance policy limits unless it determines that at the time of
  577  sale of the preneed contract, the insurance policy would have
  578  paid for the services and merchandise contracted for. Such
  579  monetary relief shall be in an amount as the licensing authority
  580  may determine and shall be payable in such manner and upon such
  581  conditions and terms as the licensing authority may prescribe.
  582  However, with respect to preneed contracts to be funded pursuant
  583  to s. 497.458, s. 497.459, s. 497.461, or s. 497.462, any
  584  restitution made pursuant to this subsection may shall not
  585  exceed, as to any single contract or arrangement, the lesser of
  586  the gross amount paid under the contract or 4 percent of the
  587  uncommitted assets of the trust fund. With respect to preneed
  588  contracts funded by life insurance policies, any restitution may
  589  shall not exceed, as to any single contract or arrangement, the
  590  lesser of the face amount of the policy, the actual cost of the
  591  arrangement contracted for, or 4 percent of the uncommitted
  592  assets of the trust fund. The total of all restitutions made to
  593  all applicants under this subsection in a single fiscal year may
  594  shall not exceed the greater of 30 percent of the uncommitted
  595  assets of the trust fund as of the end of the most recent fiscal
  596  year or $120,000. The department may use moneys in the trust
  597  fund to contract with independent vendors pursuant to chapter
  598  287 to administer the requirements of this subsection.
  599         (8) All moneys deposited in the Preneed Funeral Contract
  600  Consumer Protection Trust Fund together with all accumulated
  601  appreciation income shall be used only for the purposes
  602  expressly authorized by this chapter and may shall not be
  603  subject to any liens, charges, judgments, garnishments, or other
  604  creditor’s claims against the preneed licensee, any trustee
  605  utilized by the preneed licensee, any company providing a surety
  606  bond as specified in this chapter, or any purchaser of a preneed
  607  contract. No preneed contract purchaser shall have any vested
  608  rights in the trust fund.
  609         Section 20. Paragraphs (a), (b), (d), and (f) of subsection
  610  (1) of section 497.458, Florida Statutes, are amended, a new
  611  paragraph (j) is added to that subsection, and paragraph (a) of
  612  subsection (3), subsection (4), paragraphs (a) and (c) of
  613  subsection (5), and subsections (6) through (9) of that section
  614  are amended, to read:
  615         497.458 Disposition of proceeds received on contracts.—
  616         (1)(a) Any person who is paid, collects, or receives funds
  617  under a preneed contract for funeral services or merchandise or
  618  burial services or merchandise shall deposit an amount at least
  619  equal to the sum of 70 percent of the purchase price collected
  620  for all services sold and facilities rented; 100 percent of the
  621  purchase price collected for all cash advance items sold; and 30
  622  percent of the purchase price collected or 110 percent of the
  623  wholesale cost, whichever is greater, for each item of
  624  merchandise sold.
  625         (b) The method of determining wholesale cost shall be
  626  established by rule of the licensing authority and shall be
  627  based upon the preneed licensee’s stated wholesale cost for the
  628  12-month period beginning July 1 during which the initial
  629  deposit to the preneed trust fund for the preneed contract is
  630  made.
  631         (c)(d) The trustee shall take title to the property
  632  conveyed to the trust for the purpose of investing, protecting,
  633  and conserving it for the preneed licensee; collecting income;
  634  and distributing the fair market value principal and income as
  635  prescribed in this chapter. The preneed licensee is prohibited
  636  from sharing in the discharge of these responsibilities, except
  637  that the preneed licensee may request the trustee to invest in
  638  tax-free investments and may appoint an adviser to the trustee.
  639  The licensing authority may adopt rules limiting or otherwise
  640  specifying the degree to which the trustee may rely on the
  641  investment advice of an investment adviser appointed by the
  642  preneed licensee. The licensing authority may adopt rules
  643  limiting or prohibiting payment of fees by the trust to
  644  investment advisors that are employees or principals of the
  645  licensee to whom the trust fund relates.
  646         (e)(f) The deposited funds shall be held in trust, both as
  647  to principal and any change in fair market value income earned
  648  thereon, and shall remain intact, except that the cost of the
  649  operation of the trust or trust account authorized by this
  650  section may be deducted from the income earned thereon.
  651         (j) Beginning April 1, 2018, and on or before each April 1
  652  thereafter, the trustee shall furnish the department with an
  653  annual report regarding each preneed licensee trust account held
  654  by the trustee at any time during the previous calendar year.
  655  The report shall state the name and address of the trustee; the
  656  name, address, and license number of the licensee to whom the
  657  report relates; the trust account number; the beginning and
  658  ending trust balance; and, as may be specified by department
  659  rule, a list of receipts showing the date and amount of any
  660  disbursement. The report must be signed by the trustee’s account
  661  manager for the trust account. The trustee shall submit the
  662  report in a format and pursuant to procedures specified by
  663  department rule.
  664         (3)(a) The trustee shall make regular valuations of assets
  665  it holds in trust and provide a fair market value report of such
  666  valuations to the preneed licensee at least quarterly.
  667         (4) The licensing authority may adopt rules exempting from
  668  the prohibition of paragraph (1)(g) (1)(h), pursuant to criteria
  669  established in such rule, the investment of trust funds in
  670  investments, such as widely and publicly traded stocks and
  671  bonds, notwithstanding that the licensee, its principals, or
  672  persons related by blood or marriage to the licensee or its
  673  principals have an interest by investment in the same entity,
  674  where neither the licensee, its principals, or persons related
  675  by blood or marriage to the licensee or its principals have the
  676  ability to control the entity invested in, and it would be in
  677  the interest of the preneed contract holders whose contracts are
  678  secured by the trust funds to allow the investment.
  679         (5) The trustee of the trust established pursuant to this
  680  section shall only have the power to:
  681         (a) Invest in investments as prescribed in s. 518.11 215.47
  682  and exercise the powers set forth in part VIII of chapter 736,
  683  provided that the licensing authority may by order require the
  684  trustee to liquidate or dispose of any investment within 30 days
  685  after such order, or within such other times as the order may
  686  direct. The licensing authority may issue such order if it
  687  determines that the investment violates any provision of this
  688  chapter or is not in the best interests of the preneed contract
  689  holders whose contracts are secured by the trust funds.
  690         (c) Commingle the property of the trust with the property
  691  of any other trust established pursuant to this chapter and make
  692  corresponding allocations and divisions of assets, liabilities,
  693  income, and expenses, and capital gains and losses.
  694         (6) The preneed licensee, at her or his election, shall
  695  have the right and power, at any time, to revest in it title to
  696  the trust assets, or its pro rata share thereof, provided it has
  697  complied with s. 497.461.
  698         (7) Notwithstanding anything contained in this chapter to
  699  the contrary, the preneed licensee, via its election to sell or
  700  offer for sale preneed contracts subject to this section, shall
  701  represent and warrant, and is hereby deemed to have done such,
  702  to all federal and Florida taxing authorities, as well as to all
  703  potential and actual preneed contract purchasers, that:
  704         (a) Section 497.461 is a viable option available to it at
  705  any and all relevant times;
  706         (b) Section 497.462 is a viable option available to it at
  707  any and all relevant times for contracts written prior to July
  708  1, 2001, for funds not held in trust as of July 1, 2001; or
  709         (c) For any preneed licensee authorized to do business in
  710  this state that has total bonded liability exceeding $100
  711  million as of July 1, 2001, s. 497.462 is a viable option to it
  712  at any and all relevant times for contracts written prior to
  713  December 31, 2004, for funds not held in trust as of July 1,
  714  2001.
  715         (8) If in the preneed licensee’s opinion it does not have
  716  the ability to select the financial responsibility alternative
  717  of s. 497.461 or s. 497.462, then the preneed licensee shall not
  718  have the right to sell or solicit preneed contracts.
  719         (6)(9) The amounts required to be placed in a trust by this
  720  section for contracts previously entered into shall be as
  721  follows:
  722         (a) For contracts entered into before October 1, 1993, the
  723  trust amounts as amended by s. 6, chapter 83-316, Laws of
  724  Florida, shall apply.
  725         (b) For contracts entered into on or after October 1, 1993,
  726  the trust amounts as amended by s. 98, chapter 93-399, Laws of
  727  Florida, shall apply.
  728         Section 21. Paragraph (a) of subsection (6) of section
  729  497.459, Florida Statutes, is amended to read:
  730         497.459 Cancellation of, or default on, preneed contracts.—
  731         (6) OTHER PROVISIONS.—
  732         (a) All preneed contracts are cancelable and revocable as
  733  provided in this section, provided that a preneed contract does
  734  not restrict any contract purchaser who is the beneficiary of
  735  the preneed contract and who is a qualified applicant for, or a
  736  recipient of, supplemental security income, temporary cash
  737  assistance, or Medicaid from making her or his contract
  738  irrevocable. A preneed contract that is made irrevocable
  739  pursuant to this section may not be canceled during the life or
  740  after the death of the contract purchaser as described in this
  741  section.
  742         Section 22. Section 497.460, Florida Statutes, is amended
  743  to read:
  744         497.460 Payment of funds upon death of named beneficiary.
  745  Disbursements of funds discharging any preneed contract
  746  fulfilled after September 30, 1993, shall be made by the trustee
  747  to the preneed licensee upon receipt of a certified copy of the
  748  death certificate of the contract beneficiary or satisfactory
  749  evidence as established by rule of the licensing authority that
  750  the preneed contract has been performed in whole or in part.
  751  However, if the contract is only partially performed, the
  752  disbursement shall only cover the fair market value of that
  753  portion of the contract performed. In the event of any contract
  754  default by the contract purchaser, or in the event that the
  755  funeral merchandise or service or burial merchandise or service
  756  contracted for is not provided or is not desired by the legally
  757  authorized person heirs or personal representative of the
  758  contract beneficiary, the trustee shall return, within 30 days
  759  after its receipt of a written request therefor, funds paid on
  760  the contract to the preneed licensee or to its assigns, subject
  761  to the provisions of s. 497.459.
  762         Section 23. Section 497.461, Florida Statutes, is repealed.
  763         Section 24. The repeal of s. 497.461, Florida Statutes, by
  764  this act does not apply to a preneed licensee who has elected to
  765  maintain a surety bond in lieu of depositing funds into a trust
  766  as of July 1, 2016.
  767         Section 25. Subsection (2), paragraph (a) of subsection
  768  (3), and subsections (7) and (10) of section 497.462, Florida
  769  Statutes, are amended to read:
  770         497.462 Other alternatives to deposits under s. 497.458.—
  771         (2) Upon prior approval by the licensing authority, the
  772  preneed licensee may file a letter of credit with the licensing
  773  authority in lieu of a surety bond. Such letter of credit must
  774  be in a form, and is subject to terms and conditions, prescribed
  775  by the board. It may be revoked only with the express approval
  776  of the licensing authority.
  777         (2)(3)(a) A buyer of preneed merchandise or services who
  778  does not receive such services or merchandise due to the
  779  economic failure, closing, or bankruptcy of the preneed licensee
  780  must file a claim with the surety as a prerequisite to payment
  781  of the claim and, if the claim is not paid, may bring an action
  782  based on the bond and recover against the surety. In the case of
  783  a letter of credit or cash deposit that has been filed with the
  784  licensing authority, the buyer may file a claim with the
  785  licensing authority.
  786         (6)(7) Any preneed contract which promises future delivery
  787  of merchandise at no cost constitutes a paid-up contract.
  788  Merchandise which has been delivered is not covered by the
  789  required performance bond or letter of credit even though the
  790  contract is not completely paid. The preneed licensee may not
  791  cancel a contract unless the purchaser is in default according
  792  to the terms of the contract and subject to the requirements of
  793  s. 497.459. A contract sold, discounted, and transferred to a
  794  third party constitutes a paid-up contract for the purposes of
  795  the performance bond or letter of credit.
  796         (9)(10) The licensing authority may adopt forms and rules
  797  necessary to implement this section, including, but not limited
  798  to, rules which ensure that the surety bond provides and line of
  799  credit provide liability coverage for preneed merchandise and
  800  services.
  801         Section 26. Paragraphs (c) and (f) of subsection (1) of
  802  section 497.464, Florida Statutes, are amended to read:
  803         497.464 Alternative preneed contracts.—
  804         (1) Nothing in this chapter shall prevent the purchaser and
  805  the preneed licensee from executing a preneed contract upon the
  806  terms stated in this section. Such contracts shall be subject to
  807  all provisions of this chapter except:
  808         (c) Section 497.458(1), (3), and (6).
  809         (f) Section 497.461.
  810         Section 27. Subsection (2) and paragraph (c) of subsection
  811  (9) of section 497.465, Florida Statutes, are amended to read:
  812         497.465 Inactive, surrendered, and revoked preneed
  813  licensees.—
  814         (2) A preneed licensee shall cease all preneed sales to the
  815  public upon becoming inactive. Upon becoming inactive, the
  816  preneed licensee shall collect and deposit into the trust all of
  817  the funds received from into trust all of the funds paid toward
  818  preneed contracts sold before prior to becoming inactive.
  819         (9) The licensing authority may adopt rules for the
  820  implementation of this section, for the purpose of ensuring a
  821  thorough review and investigation of the status and condition of
  822  the preneed licensee’s business affairs for the protection of
  823  the licensee’s preneed customers. Such rules may include:
  824         (c) Requirements for submission of unaudited or audited
  825  financial statements, as the licensing authority deems
  826  advisable.
  827         Section 28. Paragraph (b) of subsection (1) of section
  828  497.601, Florida Statutes, is amended to read:
  829         497.601 Direct disposition; duties.—
  830         (1) Those individuals licensed as direct disposers may
  831  perform only those functions set forth below:
  832         (b) Secure pertinent information from a legally authorized
  833  person the decedent’s next of kin in order to complete the death
  834  certificate and to file for the necessary permits for direct
  835  disposition.
  836         Section 29. Subsection (1) of section 497.607, Florida
  837  Statutes, is amended, present subsections (2), (3), and (4) of
  838  that section are redesignated as subsections (3), (4), and (5),
  839  respectively, and a new subsection (2) is added to that section,
  840  to read:
  841         497.607 Cremation; procedure required.—
  842         (1) At the time of the arrangement for a cremation
  843  performed by any person licensed pursuant to this chapter, the
  844  legally authorized person contracting for cremation services
  845  shall be required to designate her or his intentions with
  846  respect to the disposition of the cremated remains of the
  847  deceased in a signed declaration of intent which shall be
  848  provided by and retained by the funeral or direct disposal
  849  establishment. A cremation may not be performed until a legally
  850  authorized person gives written authorization, which may include
  851  the declaration of intent to dispose of the cremated remains,
  852  for such cremation. The cremation must be performed within 48
  853  hours after a specified time which has been agreed to in writing
  854  by the person authorizing the cremation.
  855         (2) Cremated remains are not property, as defined in s.
  856  731.201(32), and are not subject to ownership or court-ordered
  857  partition. A division of cremated remains requires the consent
  858  of the legally authorized person who approved the cremation or,
  859  if the legally authorized person is the decedent, the next
  860  legally authorized person pursuant to s. 497.005(43). A dispute
  861  between the legally authorized person, heirs, or other parties
  862  shall be resolved by a court of competent jurisdiction.
  863         Section 30. This act shall take effect July 1, 2016.