Florida Senate - 2016                              CS for SB 854
       By the Committee on Banking and Insurance; and Senator Hukill
       597-02021-16                                           2016854c1
    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. 497.146, F.S.;
    9         revising required information for current licensees to
   10         include an address for e-mail notification; providing
   11         for rulemaking relating to electronic reporting;
   12         amending s. 497.152, F.S.; conforming provisions to
   13         changes made by the act; requiring, rather than
   14         authorizing, the Board of Funeral, Cemetery, and
   15         Consumer Services to provide certain criteria;
   16         prohibiting the board from requiring a fine when
   17         certain deficiencies are fully corrected within a
   18         specified period; amending s. 497.161, F.S.; revising
   19         requirements for rules of the licensing authority;
   20         amending s. 497.266, F.S.; revising the prohibition
   21         against withdrawal or transfer of assets within the
   22         care and maintenance trust fund to include an
   23         exception; amending s. 497.267, F.S.; revising
   24         provisions relating to the disposition of withdrawals
   25         from the care and maintenance trust fund; creating s.
   26         497.2675, F.S.; requiring the board to adopt certain
   27         rules; requiring a licensed cemetery company to
   28         request a method for withdrawal from the cemetery
   29         company’s care and maintenance trust fund; providing
   30         requirements for such methods; requiring that taxes on
   31         capital gains be paid from the trust principal;
   32         amending s. 497.268, F.S.; conforming provisions to
   33         changes made by the act; deleting a required deposit
   34         in a cemetery company’s care and maintenance trust
   35         fund for mausoleums or columbaria; deleting the
   36         requirement that taxes on capital gain be paid from
   37         the trust corpus; amending s. 497.269, F.S.; requiring
   38         a trustee to annually furnish financial reports that
   39         record the fair market value of the care and
   40         maintenance trust fund; amending ss. 497.273 and
   41         497.274, F.S.; conforming provisions to changes made
   42         by the act; amending s. 497.277, F.S.; deleting a
   43         limitation on the fee for transfer of burial rights
   44         from one purchaser to another; authorizing the board
   45         to determine the transfer fee; amending ss. 497.283
   46         and 497.286, F.S.; conforming provisions to changes
   47         made by the act; amending s. 497.371, F.S.; providing
   48         that an applicant for the embalmer apprentice program
   49         may not be licensed without a determination of
   50         character by the licensing authority; amending ss.
   51         497.372 and 497.381, F.S.; conforming provisions to
   52         changes made by the act; amending s. 497.452, F.S.;
   53         deleting an exception that prohibits a person from
   54         receiving specified funds without holding a valid
   55         preneed license; amending ss. 497.454 and 497.456,
   56         F.S.; conforming provisions to changes made by the
   57         act; amending s. 497.458, F.S.; revising requirements
   58         relating to the disposition of proceeds on a preneed
   59         contract; authorizing the board to specify criteria
   60         for the classification of items sold in a preneed
   61         contract; requiring the trustee to furnish the
   62         department with an annual report regarding preneed
   63         licensee trust accounts beginning on a specified date;
   64         providing requirements for the annual report; revising
   65         which investments a trustee of a trust has the power
   66         to invest in; deleting provisions relating to the
   67         preneed licensee; amending s. 497.459, F.S.;
   68         prohibiting certain preneed contracts from being
   69         canceled during the life or after the death of the
   70         contract purchaser or beneficiary; requiring
   71         unexpended moneys on an irrevocable contract to be
   72         deposited into the Medical Care Trust Fund under
   73         certain circumstances; amending s. 497.460, F.S.;
   74         conforming provisions to changes made by the act;
   75         repealing s. 497.461, F.S., relating to the
   76         authorization for a preneed licensee to elect surety
   77         bonding as an alternative to depositing funds into a
   78         trust; amending s. 497.462, F.S.; deleting obsolete
   79         references to surety bonds; amending s. 497.464, F.S.;
   80         conforming provisions to changes made by the act;
   81         amending s. 497.465, F.S.; requiring an inactive
   82         preneed licensee to deposit a specified amount of
   83         funds received on certain preneed contracts into the
   84         trust upon a specified time; amending ss. 497.601 and
   85         497.607, F.S.; specifying that cremated remains are
   86         not property; requiring a division of cremated remains
   87         to be consented to by certain persons; providing that
   88         a dispute shall be resolved by a court of competent
   89         jurisdiction; conforming provisions to changes made by
   90         the act; providing an effective date.
   92  Be It Enacted by the Legislature of the State of Florida:
   94         Section 1. Present subsections (5) through (8), (9) through
   95  (31), (32) through (38), (39) through (46), (47) through (61),
   96  (62) through (70), and (71) of section 497.005, Florida
   97  Statutes, are redesignated as subsections (6) through (9), (11)
   98  through (33), (35) through (41), (43) through (50), (52) through
   99  (66), (68) through (76), and (78), respectively, and new
  100  subsections (5), (10), (34), (42), (51), (67), and (77) are
  101  added to that section, to read:
  102         497.005 Definitions.—As used in this chapter, the term:
  103         (5) “Beneficiary” means a natural person expressly
  104  identified in a preneed contract as the person for whom funeral
  105  merchandise or services are intended.
  106         (10) “Capital gain” or “capital loss” means a change in the
  107  value of a capital asset, such as investment or real estate,
  108  which gives the asset a different worth than the purchase price.
  109  The gain or loss is not realized until the asset is sold.
  110         (34) “Fair market value” means the fair market value of
  111  assets held by a trust as of a specific date, assuming all
  112  assets of the trust are sold on that specific date.
  113         (42) “Income” means earnings on trust assets, including
  114  interest, dividends, and other income earned on the principal.
  115         (51) “Net income” means, in relation to a trust, ordinary
  116  income minus any income distributions for items such as trust
  117  expenses. For purposes of this subsection, “ordinary income”
  118  means, in relation to a trust, any earnings on trust assets,
  119  including interest and dividends received on property derived
  120  from the use of the trust principal, but does not include
  121  capital gains or capital losses.
  122         (67) “Purchaser” means a person who executes a preneed or
  123  an at-need contract with a licensee for merchandise or services.
  124         (77) “Total return withdrawal percentage” means a
  125  percentage, not to exceed 5 percent, of the fair market value of
  126  a trust.
  127         Section 2. Subsections (2) and (11) of section 497.141,
  128  Florida Statutes, are amended to read:
  129         497.141 Licensing; general application procedures.—
  130         (2) Any person desiring to be licensed shall apply to the
  131  licensing authority in writing using such forms and procedures
  132  as may be prescribed by rule. The application for licensure
  133  shall include the applicant’s social security number if the
  134  applicant is a natural person; otherwise, the applicant’s
  135  federal tax identification number shall be included.
  136  Notwithstanding any other provision of law, the department is
  137  the sole authority for determining the forms and form contents
  138  to be submitted for initial licensure and licensure renewal
  139  application. Such forms and the information and materials
  140  required by such forms may include, as appropriate,
  141  demographics, education, work history, personal background,
  142  criminal history, finances, business information, signature
  143  notarization, performance periods, reciprocity, local government
  144  approvals, supporting documentation, periodic reporting
  145  requirements, fingerprint requirements, continuing education
  146  requirements, business plans, character references, e-mail
  147  addresses, and ongoing education monitoring. Such forms and the
  148  information and materials required by such forms may also
  149  include, to the extent such information or materials are not
  150  already in the possession of the department or the board,
  151  records or information as to complaints, inspections,
  152  investigations, discipline, and bonding. The application shall
  153  be supplemented as needed to reflect any material change in any
  154  circumstance or condition stated in the application that takes
  155  place between the initial filing of the application and the
  156  final grant or denial of the license and that might affect the
  157  decision of the department or the board. After an application by
  158  a natural person for licensure under this chapter is approved,
  159  the licensing authority may require the successful applicant to
  160  provide a photograph of himself or herself for permanent
  161  lamination onto the license card to be issued to the applicant,
  162  pursuant to rules and fees adopted by the licensing authority.
  163         (11) The department shall implement a system for
  164  administration of the overall licensing process, including e
  165  mail notification for the processing and tracking of
  166  applications for licensure, the issuance of licenses approved by
  167  the board, the tracking of licenses issued, the administration
  168  of the license renewal process, and the collection and
  169  processing of fees related to those activities. The system may
  170  use staff and facilities of the department or the department may
  171  enter into a contract for all or any part of such system, upon
  172  such terms and conditions as the department deems advisable, and
  173  such contract may be with another government agency or a private
  174  business.
  175         Section 3. Section 497.146, Florida Statutes, is amended to
  176  read:
  177         497.146 Licensing; address of record; changes; licensee
  178  responsibility.—Each licensee under this chapter is responsible
  179  for notifying the department in writing of the licensee’s
  180  current e-mail address, business and residence mailing address,
  181  and the street address of the licensee’s primary place of
  182  practice and shall notify the department in writing within 30
  183  days after any change in such information, in accordance with
  184  procedures and forms prescribed by rule. Notwithstanding any
  185  other provision of law, electronic notification service by
  186  regular mail to a licensee’s last known e-mail address of record
  187  or preferred street address of record with the department
  188  constitutes adequate and sufficient notice to the licensee for
  189  any official communication to the licensee by the board or the
  190  department, except when other service is expressly required by
  191  this chapter. The department may adopt rules, forms, and
  192  procedures, including a procedure for electronic reporting of
  193  the data provided pursuant to this section. Rules may be adopted
  194  establishing forms and procedures for licensees to provide the
  195  notice required by this section.
  196         Section 4. Paragraphs (b) and (e) of subsection (8),
  197  paragraph (d) of subsection (12), paragraphs (b) and (c) of
  198  subsection (14), and paragraph (b) of subsection (15) of section
  199  497.152, Florida Statutes, are amended to read:
  200         497.152 Disciplinary grounds.—This section sets forth
  201  conduct that is prohibited and that shall constitute grounds for
  202  denial of any application, imposition of discipline, or other
  203  enforcement action against the licensee or other person
  204  committing such conduct. For purposes of this section, the
  205  requirements of this chapter include the requirements of rules
  206  adopted under authority of this chapter. No subsection heading
  207  in this section shall be interpreted as limiting the
  208  applicability of any paragraph within the subsection.
  210  REMAINS.—
  211         (b) Refusing to surrender promptly the custody of a dead
  212  human body upon the express order of the person legally
  213  authorized person to such person’s its custody; however, this
  214  provision shall be subject to any state or local laws or rules
  215  governing custody or transportation of dead human bodies.
  216         (e) Failing to obtain written authorization from a legally
  217  authorized person before the family or next of kin of the
  218  deceased prior to entombment, interment, disinterment,
  219  disentombment, or disinurnment of the remains of any human
  220  being.
  221         (12) DISCLOSURE REQUIREMENTS.—
  222         (d) Failure by a funeral director to make full disclosure
  223  in the case of a funeral or direct disposition with regard to
  224  the use of funeral merchandise that is not to be disposed of
  225  with the body or failure to obtain written permission from a
  226  legally authorized person the purchaser regarding disposition of
  227  such merchandise.
  229  CUSTOMERS.—
  230         (b) Committing or performing with such frequency as to
  231  indicate a general business practice any of the following:
  232         1. Failing to acknowledge and act promptly upon
  233  communications from a licensee’s customers and their
  234  representatives with respect to claims or complaints relating to
  235  the licensee’s activities regulated by this chapter.
  236         2. Denying claims or rejecting complaints received by a
  237  licensee from a customer or customer’s representative, relating
  238  to the licensee’s activities regulated by this chapter, without
  239  first conducting reasonable investigation based upon available
  240  information.
  241         3. Attempting to settle a claim or complaint on the basis
  242  of a material document that was altered without notice to, or
  243  without the knowledge or consent of, the contract purchaser or a
  244  legally authorized person her or his representative or legal
  245  guardian.
  246         4. Failing within a reasonable time to affirm or deny
  247  coverage of specified services or merchandise under a contract
  248  entered into by a licensee upon written request of the contract
  249  purchaser or a legally authorized person her or his
  250  representative or legal guardian.
  251         5. Failing to promptly provide, in relation to a contract
  252  for funeral or burial merchandise or services entered into by
  253  the licensee or under the licensee’s license, a reasonable
  254  explanation to the contract purchaser or a legally authorized
  255  person her or his representative or legal guardian of the
  256  licensee’s basis for denying or rejecting all or any part of a
  257  claim or complaint submitted.
  258         (c) Making a material misrepresentation to a contract
  259  purchaser or a legally authorized person her or his
  260  representative or legal guardian for the purpose and with the
  261  intent of effecting settlement of a claim or complaint or loss
  262  under a prepaid contract on less favorable terms than those
  263  provided in, and contemplated by, the prepaid contract.
  265         For purposes of this subsection, the response of a customer
  266  recorded by the customer on a customer satisfaction
  267  questionnaire or survey form sent to the customer by the
  268  licensee, and returned by the customer to the licensee, shall
  269  not be deemed to be a complaint.
  271         (b) Failing to timely remit as required by this chapter the
  272  required amounts to any trust fund required by this chapter. The
  273  board shall may by rule provide criteria for identifying minor,
  274  nonwillful trust remittance deficiencies; and remittance
  275  deficiencies falling within such criteria, if fully corrected
  276  within 30 days after notice to the licensee by the department,
  277  do shall not constitute grounds for disciplinary action or a
  278  fine.
  279         Section 5. Paragraph (g) is added to subsection (1) of
  280  section 497.161, Florida Statutes, to read:
  281         497.161 Other rulemaking provisions.—
  282         (1) In addition to such other rules as are authorized or
  283  required under this chapter, the following additional rules, not
  284  inconsistent with this chapter, shall be authorized by the
  285  licensing authority.
  286         (g) Rules, not inconsistent with part IV of this chapter
  287  and the Florida Insurance Code, establishing conditions of use
  288  for insurance as a funding mechanism for preneed contracts.
  289         Section 6. Subsections (3) and (4) of section 497.266,
  290  Florida Statutes, are amended to read:
  291         497.266 Care and maintenance trust fund; remedy of
  292  department for noncompliance.—
  293         (3) A No person may not withdraw or transfer any portion of
  294  assets within the corpus of the care and maintenance trust fund,
  295  except as authorized by s. 497.2675, without first obtaining
  296  written consent from the licensing authority.
  297         (4) The trustee of the trust established pursuant to this
  298  section may only invest in investments and loan trust funds, as
  299  prescribed in s. 497.458. The trustee shall take title to the
  300  property conveyed to the trust for the purposes of investing,
  301  protecting, and conserving it for the cemetery company;
  302  collecting income; and distributing withdrawals from the trust
  303  the principal and income as prescribed in this chapter. The
  304  cemetery company is prohibited from sharing in the discharge of
  305  the trustee’s responsibilities under this subsection, except
  306  that the cemetery company may request the trustee to invest in
  307  tax-free investments.
  308         Section 7. Section 497.267, Florida Statutes, is amended to
  309  read:
  310         497.267 Disposition of withdrawals from the income of care
  311  and maintenance trust fund; notice to purchasers and
  312  depositors.—Withdrawals from the net income of the care and
  313  maintenance trust fund shall be used solely for the care and
  314  maintenance of the cemetery, including maintenance of monuments,
  315  which maintenance may shall not be deemed to include the
  316  cleaning, refinishing, repairing, or replacement of monuments;
  317  for reasonable costs of administering the care and maintenance;
  318  and for reasonable costs of administering the trust fund. At the
  319  time of making a sale or receiving an initial deposit, the
  320  cemetery company shall deliver to the person to whom the sale is
  321  made, or who makes a deposit, a written instrument which shall
  322  specifically state the purposes for which withdrawals from the
  323  income of the trust fund shall be used.
  324         Section 8. Section 497.2675, Florida Statutes, is created
  325  to read:
  326         497.2675 Withdrawal methods from the care and maintenance
  327  trust fund.—
  328         (1) The board shall adopt rules, with the approval of the
  329  department, to administer ss. 497.267 and 497.268, including,
  330  but not limited to:
  331         (a) Reporting requirements for a cemetery licensed under
  332  this chapter, including the requirement that specific reports be
  333  made on forms designed and approved by the board by rule.
  334         (b) Rules to address a cemetery licensed under this chapter
  335  whose pro rata share of the fair market value of the trust has
  336  not grown over a 3-year average, including limiting withdrawals
  337  from the care and maintenance trust fund, and any exceptions
  338  approved by the board.
  339         (2) Each cemetery company licensed under this chapter shall
  340  elect one of two withdrawal methods, as specified in paragraphs
  341  (a) and (b), for withdrawals from the cemetery company’s care
  342  and maintenance trust fund. The board shall adopt rules, with
  343  the approval of the department, to administer this subsection.
  344         (a) Net income withdrawal method.—Net income may be
  345  withdrawn from the trust, as earned, on a monthly basis.
  346         (b) Total return withdrawal method.—The licensee shall
  347  multiply the average fair market value of its pro rata share of
  348  the trust by the total return withdrawal percentage and may
  349  withdraw one-fourth of that amount at least quarterly beginning
  350  the first quarter of the new trust year. The initial total
  351  return withdrawal percentage elected by the licensee may not
  352  increase the total return withdrawal percentage for that
  353  quarter. For purposes of this paragraph, “average fair market
  354  value” means, in relation to a trust, the average of the fair
  355  market value of each asset held by the trust at the beginning of
  356  the current year and in each of the 2 previous years, or for the
  357  entire term of the trust if there are less than 2 previous
  358  years, and adjusted as follows:
  359         1. If assets are added to the trust during the years used
  360  to determine the average, the amount of each addition is added
  361  to all years in which such addition is not included.
  362         2. If assets are distributed from the trust during the
  363  years used to determine the average, other than in satisfaction
  364  of the unitrust amount, as defined in s. 738.1041, the amount of
  365  each distribution is subtracted from all other years in which
  366  such distribution is not included.
  367         (3) Without regard to the withdrawal method selected, taxes
  368  on capital gains, if any, must be paid from the trust principal.
  369         Section 9. Paragraphs (a) and (b) of subsection (1) and
  370  subsection (2) of section 497.268, Florida Statutes, are amended
  371  to read:
  372         497.268 Care and maintenance trust fund, percentage of
  373  payments for burial rights to be deposited.—
  374         (1) Each cemetery company shall set aside and deposit in
  375  its care and maintenance trust fund the following percentages or
  376  amounts for all sums received from sales of burial rights:
  377         (a) For burial rights, 10 percent of all payments received;
  378  however, for sales made after September 30, 1993, no deposit
  379  shall be less than $25 per burial right grave. For each burial
  380  right which is provided without charge, the deposit to the fund
  381  shall be $25.
  382         (b) For mausoleums or columbaria, 10 percent of payments
  383  received.
  384         (2) Deposits to the care and maintenance trust fund shall
  385  be made by the cemetery company not later than 30 days following
  386  the close of the calendar month in which any payment was
  387  received; however, when such payments are received in
  388  installments, the percentage of the installment payment placed
  389  in trust must be identical to the percentage which the payment
  390  received bears to the total cost for the burial rights. Trust
  391  income may be used to pay for all usual and customary services
  392  for the operation of a trust account, including, but not limited
  393  to: reasonable trustee and custodian fees, investment adviser
  394  fees, allocation fees, and taxes. If the net income is not
  395  sufficient to pay the fees and other expenses, the fees and
  396  other expenses shall be paid by the cemetery company. Capital
  397  gains taxes shall be paid from the corpus.
  398         Section 10. Section 497.269, Florida Statutes, is amended
  399  to read:
  400         497.269 Care and maintenance trust fund; financial
  401  reports.—On or before April 1 of each year, the trustee shall
  402  furnish adequate financial reports that record the fair market
  403  value with respect to the care and maintenance trust fund
  404  utilizing forms and procedures specified by rule. However, the
  405  department may require the trustee to make such additional
  406  financial reports as it deems necessary. In order to ensure that
  407  the proper deposits to the trust fund have been made, the
  408  department shall examine the status of the trust fund of the
  409  company on a semiannual basis for the first 2 years of the trust
  410  fund’s existence.
  411         Section 11. Subsection (4) of section 497.273, Florida
  412  Statutes, is amended to read:
  413         497.273 Cemetery companies; authorized functions.—
  414         (4) This chapter does not prohibit the interment or
  415  entombment of the inurned cremated animal remains of the
  416  decedent’s pet or pets with the decedent’s human remains or
  417  cremated human remains if:
  418         (a) The human remains or cremated human remains are not
  419  commingled with the inurned cremated animal remains; and
  420         (b) The interment or entombment with the inurned cremated
  421  animal remains is with the authorization of a the decedent or
  422  other legally authorized person.
  423         Section 12. Subsection (1) of section 497.274, Florida
  424  Statutes, is amended to read:
  425         497.274 Standards for grave spaces.—
  426         (1) A standard adult grave space shall measure at least 42
  427  inches in width and 96 inches in length, except for preinstalled
  428  vaults in designated areas. For interments, except cremated
  429  remains, the covering soil shall measure no less than 12 inches
  430  from the top of the outer burial container at time of interment,
  431  unless such level of soil is not physically possible. In any
  432  interment, a legally authorized person the family or next of kin
  433  may waive the 12-inch coverage minimum.
  434         Section 13. Subsection (2) of section 497.277, Florida
  435  Statutes, is amended to read:
  436         497.277 Other charges.—Other than the fees for the sale of
  437  burial rights, burial merchandise, and burial services, no other
  438  fee may be directly or indirectly charged, contracted for, or
  439  received by a cemetery company as a condition for a customer to
  440  use any burial right, burial merchandise, or burial service,
  441  except for:
  442         (2) Charges paid for transferring burial rights from one
  443  purchaser to another, as determined by rule of the board;
  444  however, no such fee may exceed $50.
  445         Section 14. Paragraph (c) of subsection (2) of section
  446  497.283, Florida Statutes, is amended to read:
  447         497.283 Prohibition on sale of personal property or
  448  services.—
  449         (2)
  450         (c) In lieu of delivery as required by paragraph (b), for
  451  sales to cemetery companies and funeral establishments, and only
  452  for such sales, the manufacturer of a permanent outer burial
  453  receptacle which meets standards adopted by rule may elect, at
  454  its discretion, to comply with the delivery requirements of this
  455  section by annually submitting for approval pursuant to
  456  procedures and forms as specified by rule, in writing, evidence
  457  of the manufacturer’s financial responsibility with the
  458  licensing authority for its review and approval. The standards
  459  and procedures to establish evidence of financial responsibility
  460  shall be those in s. 497.461, with the manufacturer of permanent
  461  outer burial receptacles which meet national industry standards
  462  assuming the same rights and responsibilities as those of a
  463  preneed licensee under s. 497.461.
  464         Section 15. Subsection (3) of section 497.286, Florida
  465  Statutes, is amended to read:
  466         497.286 Owners to provide addresses; presumption of
  467  abandonment; abandonment procedures; sale of abandoned unused
  468  burial rights.—
  469         (3) Upon the occurrence of a presumption of abandonment as
  470  set forth in subsection (2), a cemetery may file with the
  471  department a certified notice attesting to the abandonment of
  472  the burial rights. The notice shall do the following:
  473         (a) Describe the burial rights certified to have been
  474  abandoned;
  475         (b) Set forth the name of the owner or owners of the burial
  476  rights, or if the owner is known to the cemetery to be deceased,
  477  then the names, if known to the cemetery, of such claimants as
  478  are heirs at law, next of kin, or specific devisees under the
  479  will of the owner or the legally authorized person;
  480         (c) Detail the facts with respect to the failure of the
  481  owner or survivors as outlined in this section to keep the
  482  cemetery informed of the owner’s address for a period of 50
  483  consecutive years or more; and
  484         (d) Certify that no burial right has been exercised which
  485  is held in common ownership with any abandoned burial rights as
  486  set forth in subsection (2).
  487         Section 16. Section 497.371, Florida Statutes, is amended
  488  to read:
  489         497.371 Embalmers; establishment of embalmer apprentice
  490  program.—The licensing authority adopts rules establishing an
  491  embalmer apprentice program. An embalmer apprentice may perform
  492  only those tasks, functions, and duties relating to embalming
  493  which are performed under the direct supervision of an embalmer
  494  who has an active, valid license under s. 497.368 or s. 497.369.
  495  An embalmer apprentice is shall be eligible to serve in an
  496  apprentice capacity for a period not to exceed 3 years as may be
  497  determined by licensing authority rule or for a period not to
  498  exceed 5 years if the apprentice is enrolled in and attending a
  499  course in mortuary science or funeral service education at any
  500  mortuary college or funeral service education college or school.
  501  An embalmer apprentice shall be issued a license licensed upon
  502  payment of a licensure fee as determined by licensing authority
  503  rule but not to exceed $200. An applicant for the embalmer
  504  apprentice program may not be issued a license unless the
  505  licensing authority determines that the applicant is of good
  506  character and has not demonstrated a history of lack of
  507  trustworthiness or integrity in business or professional
  508  matters.
  509         Section 17. Paragraph (b) of subsection (1) of section
  510  497.372, Florida Statutes, is amended to read:
  511         497.372 Funeral directing; conduct constituting practice of
  512  funeral directing.—
  513         (1) The practice of funeral directing shall be construed to
  514  consist of the following functions, which may be performed only
  515  by a licensed funeral director:
  516         (b) Planning or arranging, on an at-need basis, the details
  517  of funeral services, embalming, cremation, or other services
  518  relating to the final disposition of human remains, including
  519  the removal of such remains from the state, with the family or
  520  friends of the decedent or any other person responsible for such
  521  services; setting the time of the services; establishing the
  522  type of services to be rendered; acquiring the services of the
  523  clergy; and obtaining vital information for the filing of death
  524  certificates and obtaining of burial transit permits.
  525         Section 18. Subsection (4) of section 497.381, Florida
  526  Statutes, is amended to read:
  527         497.381 Solicitation of goods or services.—
  528         (4) At-need solicitation of funeral merchandise or services
  529  is prohibited. A No funeral director or direct disposer or her
  530  or his agent or representative may not contact the legally
  531  authorized person or family or next of kin of a deceased person
  532  to sell services or merchandise unless the funeral director or
  533  direct disposer or her or his agent or representative has been
  534  initially called or contacted by the legally authorized person
  535  or family or next of kin of such person and requested to provide
  536  her or his services or merchandise.
  537         Section 19. Paragraph (c) of subsection (2) of section
  538  497.452, Florida Statutes, is amended to read:
  539         497.452 Preneed license required.—
  540         (2)
  541         (c) The provisions of paragraph (a) do not apply to any
  542  Florida corporation existing under chapter 607 acting as a
  543  servicing agent hereunder in which the stock of such corporation
  544  is held by 100 or more persons licensed pursuant to part III of
  545  this chapter, provided no one stockholder holds, owns, votes, or
  546  has proxies for more than 5 percent of the issued stock of such
  547  corporation; provided the corporation has a blanket fidelity
  548  bond, covering all employees handling the funds, in the amount
  549  of $50,000 or more issued by a licensed insurance carrier in
  550  this state; and provided the corporation processes the funds
  551  directly to and from the trustee within the applicable time
  552  limits set forth in this chapter. The department may require any
  553  person claiming that the provisions of this paragraph exempt it
  554  from the provisions of paragraph (a) to demonstrate to the
  555  satisfaction of the department that it meets the requirements of
  556  this paragraph.
  557         Section 20. Subsections (1) and (3) of section 497.454,
  558  Florida Statutes, are amended to read:
  559         497.454 Approval of preneed contract and related forms.—
  560         (1) Preneed contract forms and related forms shall be filed
  561  with and approved by the licensing authority before prior to
  562  use, pursuant to procedures specified by rule. The licensing
  563  authority may not approve any electronic or paper preneed
  564  contract form that does not provide for sequential prenumbering
  565  thereon.
  566         (3) Specific disclosure regarding the preneed licensee’s
  567  ability to select either trust funding or the financial
  568  responsibility alternative as set forth in s. 497.461 in
  569  connection with the receipt of preneed contract proceeds is
  570  required in the preneed contract.
  571         Section 21. Subsections (2), (7), and (8) of section
  572  497.456, Florida Statutes, are amended to read:
  573         497.456 Preneed Funeral Contract Consumer Protection Trust
  574  Fund.—
  575         (2) Within 60 days after the end of each calendar quarter,
  576  for each preneed contract written during the quarter and not
  577  canceled within 30 days after the date of the execution of the
  578  contract, each preneed licensee, whether funding preneed
  579  contracts by the sale of insurance or by establishing a trust
  580  pursuant to s. 497.458 or s. 497.464, shall remit the sum of
  581  $2.50 for each preneed contract having a purchase price of
  582  $1,500 or less, and the sum of $5 for each preneed contract
  583  having a purchase price in excess of $1,500; and each preneed
  584  licensee utilizing s. 497.461 or s. 497.462 shall remit the sum
  585  of $5 for each preneed contract having a purchase price of
  586  $1,500 or less, and the sum of $10 for each preneed contract
  587  having a purchase price in excess of $1,500.
  588         (7) In any situation in which a delinquency proceeding has
  589  not commenced, the licensing authority may, in its discretion,
  590  use the trust fund for the purpose of providing restitution to
  591  any consumer, owner, or beneficiary of a preneed contract or
  592  similar regulated arrangement under this chapter entered into
  593  after June 30, 1977. If, after investigation, the licensing
  594  authority determines that a preneed licensee has breached a
  595  preneed contract by failing to provide benefits or an
  596  appropriate refund, or that a provider, who is a former preneed
  597  licensee or an establishment which has been regulated under this
  598  chapter, has sold a preneed contract and has failed to fulfill
  599  the arrangement or provide the appropriate refund, and such
  600  preneed licensee or provider does not provide or does not
  601  possess adequate funds to provide appropriate refunds, payments
  602  from the trust fund may be authorized by the licensing
  603  authority. In considering whether payments shall be made or when
  604  considering who will be responsible for such payments, the
  605  licensing authority shall consider whether the preneed licensee
  606  or previous provider has been acquired by a successor who is or
  607  should be responsible for the liabilities of the defaulting
  608  entity. With respect to preneed contracts funded by life
  609  insurance, payments from the fund shall be made: if the insurer
  610  is insolvent, but only to the extent that funds are not
  611  available through the liquidation proceeding of the insurer; or
  612  if the preneed licensee is unable to perform under the contract
  613  and the insurance proceeds are not sufficient to cover the cost
  614  of the merchandise and services contracted for. In no event
  615  shall the licensing authority approve payments in excess of the
  616  insurance policy limits unless it determines that at the time of
  617  sale of the preneed contract, the insurance policy would have
  618  paid for the services and merchandise contracted for. Such
  619  monetary relief shall be in an amount as the licensing authority
  620  may determine and shall be payable in such manner and upon such
  621  conditions and terms as the licensing authority may prescribe.
  622  However, with respect to preneed contracts to be funded pursuant
  623  to s. 497.458, s. 497.459, s. 497.461, or s. 497.462, any
  624  restitution made pursuant to this subsection may shall not
  625  exceed, as to any single contract or arrangement, the lesser of
  626  the gross amount paid under the contract or 4 percent of the
  627  uncommitted assets of the trust fund. With respect to preneed
  628  contracts funded by life insurance policies, any restitution may
  629  shall not exceed, as to any single contract or arrangement, the
  630  lesser of the face amount of the policy, the actual cost of the
  631  arrangement contracted for, or 4 percent of the uncommitted
  632  assets of the trust fund. The total of all restitutions made to
  633  all applicants under this subsection in a single fiscal year may
  634  shall not exceed the greater of 30 percent of the uncommitted
  635  assets of the trust fund as of the end of the most recent fiscal
  636  year or $120,000. The department may use moneys in the trust
  637  fund to contract with independent vendors pursuant to chapter
  638  287 to administer the requirements of this subsection.
  639         (8) All moneys deposited in the Preneed Funeral Contract
  640  Consumer Protection Trust Fund together with all accumulated
  641  appreciation income shall be used only for the purposes
  642  expressly authorized by this chapter and may shall not be
  643  subject to any liens, charges, judgments, garnishments, or other
  644  creditor’s claims against the preneed licensee, any trustee
  645  utilized by the preneed licensee, any company providing a surety
  646  bond as specified in this chapter, or any purchaser of a preneed
  647  contract. No preneed contract purchaser shall have any vested
  648  rights in the trust fund.
  649         Section 22. Paragraphs (a), (b), (d), and (f) of subsection
  650  (1) of section 497.458, Florida Statutes, are amended, a new
  651  paragraph (j) is added to that subsection, and paragraph (a) of
  652  subsection (3), subsection (4), paragraphs (a) and (c) of
  653  subsection (5), and subsections (6) through (9) of that section
  654  are amended, to read:
  655         497.458 Disposition of proceeds received on contracts.—
  656         (1)(a) Any person who is paid, collects, or receives funds
  657  under a preneed contract for funeral services or merchandise or
  658  burial services or merchandise shall deposit an amount at least
  659  equal to the sum of 70 percent of the purchase price collected
  660  for all services sold and facilities rented; 100 percent of the
  661  purchase price collected for all cash advance items sold; and 30
  662  percent of the purchase price collected or 110 percent of the
  663  wholesale cost, whichever is greater, for each item of
  664  merchandise sold. The board may, by rule, specify criteria for
  665  the classification of items sold in a preneed contract as
  666  services, cash advances, or merchandise.
  667         (b) The method of determining wholesale cost shall be
  668  established by rule of the licensing authority and shall be
  669  based upon the preneed licensee’s stated wholesale cost for the
  670  12-month period beginning July 1 during which the initial
  671  deposit to the preneed trust fund for the preneed contract is
  672  made.
  673         (c)(d) The trustee shall take title to the property
  674  conveyed to the trust for the purpose of investing, protecting,
  675  and conserving it for the preneed licensee; collecting income;
  676  and distributing the fair market value principal and income as
  677  prescribed in this chapter. The preneed licensee is prohibited
  678  from sharing in the discharge of these responsibilities, except
  679  that the preneed licensee may request the trustee to invest in
  680  tax-free investments and may appoint an adviser to the trustee.
  681  The licensing authority may adopt rules limiting or otherwise
  682  specifying the degree to which the trustee may rely on the
  683  investment advice of an investment adviser appointed by the
  684  preneed licensee. The licensing authority may adopt rules
  685  limiting or prohibiting payment of fees by the trust to
  686  investment advisors that are employees or principals of the
  687  licensee to whom the trust fund relates.
  688         (e)(f) The deposited funds shall be held in trust, both as
  689  to principal and any change in fair market value income earned
  690  thereon, and shall remain intact, except that the cost of the
  691  operation of the trust or trust account authorized by this
  692  section may be deducted from the income earned thereon.
  693         (j) Beginning April 1, 2018, and on or before each April 1
  694  thereafter, the trustee shall furnish the department with an
  695  annual report regarding each preneed licensee trust account held
  696  by the trustee at any time during the previous calendar year.
  697  The report shall state the name and address of the trustee; the
  698  name, address, and license number of the licensee to whom the
  699  report relates; the trust account number; the beginning and
  700  ending trust balance; and, as may be specified by department
  701  rule, a list of receipts showing the date and amount of any
  702  disbursement. The report must be signed by the trustee’s account
  703  manager for the trust account. The trustee shall submit the
  704  report in a format and pursuant to procedures specified by
  705  department rule.
  706         (3)(a) The trustee shall make regular valuations of assets
  707  it holds in trust and provide a fair market value report of such
  708  valuations to the preneed licensee at least quarterly.
  709         (4) The licensing authority may adopt rules exempting from
  710  the prohibition of paragraph (1)(g) (1)(h), pursuant to criteria
  711  established in such rule, the investment of trust funds in
  712  investments, such as widely and publicly traded stocks and
  713  bonds, notwithstanding that the licensee, its principals, or
  714  persons related by blood or marriage to the licensee or its
  715  principals have an interest by investment in the same entity,
  716  where neither the licensee, its principals, or persons related
  717  by blood or marriage to the licensee or its principals have the
  718  ability to control the entity invested in, and it would be in
  719  the interest of the preneed contract holders whose contracts are
  720  secured by the trust funds to allow the investment.
  721         (5) The trustee of the trust established pursuant to this
  722  section shall only have the power to:
  723         (a) Invest in investments as prescribed in s. 518.11 215.47
  724  and exercise the powers set forth in part VIII of chapter 736.
  725  However, the trustee may not invest in, or count as assets, life
  726  insurance policies or annuity contracts; real estate may not
  727  compose more than 25 percent of the trust’s assets; and,
  728  provided that the licensing authority may by order require the
  729  trustee to liquidate or dispose of any investment within 30 days
  730  after such order, or within such other times as the order may
  731  direct. The licensing authority may issue such order if it
  732  determines that the investment violates any provision of this
  733  chapter or is not in the best interests of the preneed contract
  734  holders whose contracts are secured by the trust funds.
  735         (c) Commingle the property of the trust with the property
  736  of any other trust established pursuant to this chapter and make
  737  corresponding allocations and divisions of assets, liabilities,
  738  income, and expenses, and capital gains and losses.
  739         (6) The preneed licensee, at her or his election, shall
  740  have the right and power, at any time, to revest in it title to
  741  the trust assets, or its pro rata share thereof, provided it has
  742  complied with s. 497.461.
  743         (7) Notwithstanding anything contained in this chapter to
  744  the contrary, the preneed licensee, via its election to sell or
  745  offer for sale preneed contracts subject to this section, shall
  746  represent and warrant, and is hereby deemed to have done such,
  747  to all federal and Florida taxing authorities, as well as to all
  748  potential and actual preneed contract purchasers, that:
  749         (a) Section 497.461 is a viable option available to it at
  750  any and all relevant times;
  751         (b) Section 497.462 is a viable option available to it at
  752  any and all relevant times for contracts written prior to July
  753  1, 2001, for funds not held in trust as of July 1, 2001; or
  754         (c) For any preneed licensee authorized to do business in
  755  this state that has total bonded liability exceeding $100
  756  million as of July 1, 2001, s. 497.462 is a viable option to it
  757  at any and all relevant times for contracts written prior to
  758  December 31, 2004, for funds not held in trust as of July 1,
  759  2001.
  760         (8) If in the preneed licensee’s opinion it does not have
  761  the ability to select the financial responsibility alternative
  762  of s. 497.461 or s. 497.462, then the preneed licensee shall not
  763  have the right to sell or solicit preneed contracts.
  764         (6)(9) The amounts required to be placed in a trust by this
  765  section for contracts previously entered into shall be as
  766  follows:
  767         (a) For contracts entered into before October 1, 1993, the
  768  trust amounts as amended by s. 6, chapter 83-316, Laws of
  769  Florida, shall apply.
  770         (b) For contracts entered into on or after October 1, 1993,
  771  the trust amounts as amended by s. 98, chapter 93-399, Laws of
  772  Florida, shall apply.
  773         Section 23. Paragraph (a) of subsection (6) of section
  774  497.459, Florida Statutes, is amended to read:
  775         497.459 Cancellation of, or default on, preneed contracts.—
  776         (6) OTHER PROVISIONS.—
  777         (a) All preneed contracts are cancelable and revocable as
  778  provided in this section, provided that a preneed contract does
  779  not restrict any contract purchaser who is the beneficiary of
  780  the preneed contract and who is a qualified applicant for, or a
  781  recipient of, supplemental security income, temporary cash
  782  assistance, or Medicaid from making her or his contract
  783  irrevocable. A preneed contract that is made irrevocable
  784  pursuant to this section may not be canceled during the life or
  785  after the death of the contract purchaser or beneficiary as
  786  described in this section. Any unexpended moneys paid on an
  787  irrevocable contract shall be remitted to the Agency for Health
  788  Care Administration for deposit into the Medical Care Trust Fund
  789  after final disposition of the beneficiary.
  790         Section 24. Section 497.460, Florida Statutes, is amended
  791  to read:
  792         497.460 Payment of funds upon death of named beneficiary.
  793  Disbursements of funds discharging any preneed contract
  794  fulfilled after September 30, 1993, shall be made by the trustee
  795  to the preneed licensee upon receipt of a certified copy of the
  796  death certificate of the contract beneficiary or satisfactory
  797  evidence as established by rule of the licensing authority that
  798  the preneed contract has been performed in whole or in part.
  799  However, if the contract is only partially performed, the
  800  disbursement shall only cover the fair market value of that
  801  portion of the contract performed. In the event of any contract
  802  default by the contract purchaser, or in the event that the
  803  funeral merchandise or service or burial merchandise or service
  804  contracted for is not provided or is not desired by the legally
  805  authorized person heirs or personal representative of the
  806  contract beneficiary, the trustee shall return, within 30 days
  807  after its receipt of a written request therefor, funds paid on
  808  the contract to the preneed licensee or to its assigns, subject
  809  to the provisions of s. 497.459.
  810         Section 25. Section 497.461, Florida Statutes, is repealed.
  811         Section 26. The repeal of s. 497.461, Florida Statutes, by
  812  this act does not apply to a preneed licensee who has elected to
  813  maintain a surety bond in lieu of depositing funds into a trust
  814  as of July 1, 2016.
  815         Section 27. Subsection (2), paragraph (a) of subsection
  816  (3), and subsections (7) and (10) of section 497.462, Florida
  817  Statutes, are amended to read:
  818         497.462 Other alternatives to deposits under s. 497.458.—
  819         (2) Upon prior approval by the licensing authority, the
  820  preneed licensee may file a letter of credit with the licensing
  821  authority in lieu of a surety bond. Such letter of credit must
  822  be in a form, and is subject to terms and conditions, prescribed
  823  by the board. It may be revoked only with the express approval
  824  of the licensing authority.
  825         (2)(3)(a) A buyer of preneed merchandise or services who
  826  does not receive such services or merchandise due to the
  827  economic failure, closing, or bankruptcy of the preneed licensee
  828  must file a claim with the surety as a prerequisite to payment
  829  of the claim and, if the claim is not paid, may bring an action
  830  based on the bond and recover against the surety. In the case of
  831  a letter of credit or cash deposit that has been filed with the
  832  licensing authority, the buyer may file a claim with the
  833  licensing authority.
  834         (6)(7) Any preneed contract which promises future delivery
  835  of merchandise at no cost constitutes a paid-up contract.
  836  Merchandise which has been delivered is not covered by the
  837  required performance bond or letter of credit even though the
  838  contract is not completely paid. The preneed licensee may not
  839  cancel a contract unless the purchaser is in default according
  840  to the terms of the contract and subject to the requirements of
  841  s. 497.459. A contract sold, discounted, and transferred to a
  842  third party constitutes a paid-up contract for the purposes of
  843  the performance bond or letter of credit.
  844         (9)(10) The licensing authority may adopt forms and rules
  845  necessary to implement this section, including, but not limited
  846  to, rules which ensure that the surety bond provides and line of
  847  credit provide liability coverage for preneed merchandise and
  848  services.
  849         Section 28. Paragraphs (c) and (f) of subsection (1) of
  850  section 497.464, Florida Statutes, are amended to read:
  851         497.464 Alternative preneed contracts.—
  852         (1) Nothing in this chapter shall prevent the purchaser and
  853  the preneed licensee from executing a preneed contract upon the
  854  terms stated in this section. Such contracts shall be subject to
  855  all provisions of this chapter except:
  856         (c) Section 497.458(1), (3), and (6).
  857         (f) Section 497.461.
  858         Section 29. Subsection (2) and paragraph (c) of subsection
  859  (9) of section 497.465, Florida Statutes, are amended to read:
  860         497.465 Inactive, surrendered, and revoked preneed
  861  licensees.—
  862         (2) Upon becoming inactive, a preneed licensee shall cease
  863  all preneed sales to the public and upon becoming inactive. the
  864  preneed licensee shall collect and deposit into the trust all
  865  funds it receives on or after the date on which it becomes
  866  inactive from sales of into trust all of the funds paid toward
  867  preneed contracts sold before prior to becoming inactive.
  868         (9) The licensing authority may adopt rules for the
  869  implementation of this section, for the purpose of ensuring a
  870  thorough review and investigation of the status and condition of
  871  the preneed licensee’s business affairs for the protection of
  872  the licensee’s preneed customers. Such rules may include:
  873         (c) Requirements for submission of unaudited or audited
  874  financial statements, as the licensing authority deems
  875  advisable.
  876         Section 30. Paragraph (b) of subsection (1) of section
  877  497.601, Florida Statutes, is amended to read:
  878         497.601 Direct disposition; duties.—
  879         (1) Those individuals licensed as direct disposers may
  880  perform only those functions set forth below:
  881         (b) Secure pertinent information from a legally authorized
  882  person the decedent’s next of kin in order to complete the death
  883  certificate and to file for the necessary permits for direct
  884  disposition.
  885         Section 31. Subsection (1) of section 497.607, Florida
  886  Statutes, is amended, present subsections (2), (3), and (4) of
  887  that section are redesignated as subsections (3), (4), and (5),
  888  respectively, and a new subsection (2) is added to that section,
  889  to read:
  890         497.607 Cremation; procedure required.—
  891         (1) At the time of the arrangement for a cremation
  892  performed by any person licensed pursuant to this chapter, the
  893  legally authorized person contracting for cremation services
  894  shall be required to designate her or his intentions with
  895  respect to the disposition of the cremated remains of the
  896  deceased in a signed declaration of intent which shall be
  897  provided by and retained by the funeral or direct disposal
  898  establishment. A cremation may not be performed until a legally
  899  authorized person gives written authorization, which may include
  900  the declaration of intent to dispose of the cremated remains,
  901  for such cremation. The cremation must be performed within 48
  902  hours after a specified time which has been agreed to in writing
  903  by the person authorizing the cremation.
  904         (2) Cremated remains are not property, as defined in s.
  905  731.201(32), and are not subject to ownership or court-ordered
  906  partition. A division of cremated remains requires the consent
  907  of the legally authorized person who approved the cremation or,
  908  if the legally authorized person is the decedent, the next
  909  legally authorized person pursuant to s. 497.005(43). A dispute
  910  regarding the division of cremated remains shall be resolved by
  911  a court of competent jurisdiction.
  912         Section 32. This act shall take effect July 1, 2016.