Bill Text: OR HB4117 | 2012 | Regular Session | Enrolled
Bill Title: Relating to funeral products; and declaring an emergency.
Spectrum: Unknown
Status: (Passed) 2012-02-27 - Chapter 7, (2012 Laws): Effective date February 27, 2012. [HB4117 Detail]
Download: Oregon-2012-HB4117-Enrolled.html
76th OREGON LEGISLATIVE ASSEMBLY--2012 Regular Session
Enrolled
House Bill 4117
Introduced and printed pursuant to House Rule 12.00. Presession
filed (at the request of House Interim Committee on General
Government and Consumer Protection)
CHAPTER ................
AN ACT
Relating to funeral products; creating new provisions; amending
ORS 97.923, 97.925, 97.927, 97.933, 97.935, 97.936, 97.939,
97.941, 97.942, 97.943, 97.945, 97.947, 97.948 and 97.949; and
declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 97.923 is amended to read:
97.923. As used in ORS 97.923 to 97.949 and 97.994 unless the
context requires otherwise:
(1) 'Beneficiary' means the person { - , if known, - } who is
to receive the funeral and cemetery merchandise, funeral and
cemetery services or completed interment spaces.
(2) 'Certified provider' means { - any person - } { + an
entity + } certified under ORS 97.933 to { + :
(a) + } Sell or offer for sale prearrangement sales contracts
or preconstruction sales contracts { + ;
(b) Administer prearrangement sales contracts or
preconstruction sales contracts; or
(c) Provide merchandise or services to fulfill prearrangement
sales contracts or preconstruction sales contracts + }.
(3) 'Delivery' occurs when:
(a) Physical possession of the funeral or cemetery merchandise
is transferred to the purchaser; or
(b) If authorized by a purchaser under a purchase agreement:
(A) The title to the funeral or cemetery merchandise has been
transferred to the purchaser, has been paid for, and is in the
possession of the seller, who has documented the sale in the
purchaser's records through use of a serial or other identifying
number and placed the merchandise, until needed, for storage on
the seller's premises; or
(B) The merchandise has been identified for the purchaser or
the beneficiary as documented by the manufacturer's receipt
placed by the seller in the purchaser's records and held by the
manufacturer for future delivery.
(4) 'Depository' means a financial institution or trust
company, as those terms are defined ORS 706.008, that is
authorized to accept deposits in this state or to transact trust
business in this state { + and is not registered as a master
trustee + }.
{ - (5) 'Director' means the Director of the Department of
Consumer and Business Services. - }
Enrolled House Bill 4117 (HB 4117-INTRO) Page 1
{ - (6) - } { + (5) + } 'Guaranteed contract' means a
written preconstruction sales contract or prearrangement sales
contract that guarantees the beneficiary the specific undeveloped
space or spaces or funeral and cemetery merchandise or funeral
and cemetery services contained in the contract and under which
no charges other than the sales price contained in the contract
{ - shall be - } { + are + } required upon delivery or
performance of the funeral or cemetery merchandise or services
{ - . - } { + , if:
(a) Required payments have been made as specified in the
contract; and
(b) The balance of payment required by the contract is paid
before the death of the beneficiary.
(6) 'Joint trust fund account' means trust funds received by a
certified provider from two or more beneficiaries. + }
(7) { + (a) + } 'Master trustee' means an entity that is not a
certified provider under ORS 97.923 to 97.949 and that has
fiduciary responsibility for the uniform administration of funds
including, but not limited to, acceptance, custodianship,
investment and accounting, delivered to it by a certified
provider for the benefit of purchasers of preconstruction sales
contracts or prearrangement sales contracts.
{ + (b) + } 'Master trustee' does not include a financial
institution, as defined in ORS 706.008, that acts solely as a
depository under ORS 97.923 to 97.949.
(8) 'Nonguaranteed contract' means a written preconstruction
sales contract or prearrangement sales contract that guarantees
the beneficiary the specific undeveloped space or spaces or
funeral or cemetery merchandise or services contained in the
contract, when the price of the merchandise and services selected
has not been fixed and will be determined by existing prices at
the time the merchandise and services are delivered or provided.
(9) 'Prearrangement sales' or 'prearrangement sales contract'
means any sale, excluding the sale and contemporaneous or
subsequent assignment of a life insurance policy or an annuity
contract, made to a purchaser, that has as its purpose the
furnishing of funeral or cemetery merchandise or services in
connection with the final disposition or commemoration of the
memory of a dead human body, for use at a time determinable by
the death of the person or persons whose body or bodies are to be
disposed and where the sale terms require payment or payments to
be made at a currently determinable time.
(10) 'Preconstruction sale' or 'preconstruction sales contract'
means a sale made to a purchaser, for the purpose of furnishing
undeveloped interment spaces and when the sale terms require
payment or payments to be made at a currently determinable time.
{ - (11) 'Provider' means any entity that sells and offers
for sale funeral or cemetery merchandise or services. - }
{ - (12) - } { + (11) + } 'Purchaser' means a beneficiary
or a person acting on behalf of a beneficiary who enters into a
prearrangement sales contract or a preconstruction sales contract
with a certified provider under which any payment or payments
made under the contract are required to be deposited in trust
under ORS 97.941.
{ - (13) - } { + (12) + } 'Salesperson' means an individual
registered under ORS 97.931 and employed by a certified provider
to engage in the sale of prearrangement or preconstruction sales
contracts on behalf of the certified provider.
{ - (14) - } { + (13) + } 'Sales price' means the gross
amount paid by a purchaser for a prearrangement sales contract or
Enrolled House Bill 4117 (HB 4117-INTRO) Page 2
preconstruction sales contract, excluding sales taxes, credit
life insurance premiums and finance charges.
{ - (15) - } { + (14) + } 'Trust' means an express trust
created under ORS 97.941 whereby a trustee has the duty to
administer the amounts specified under ORS 97.941 received under
a prearrangement sales contract or a preconstruction sales
contract for the benefit of the purchaser of a prearrangement
sales contract or preconstruction sales contract.
{ - (16) - } { + (15) + } 'Undeveloped interment spaces' or
'undeveloped spaces' means any space to be used for the reception
of human remains that is not completely constructed or developed
at the time of initial payment.
SECTION 2. ORS 97.925 is amended to read:
97.925. It is the purpose of ORS 97.923 to 97.949, 97.992,
97.994 and 692.180 to { - assure - } { + ensure + } funds for
performance to
{ - those - } purchasers who contract through prearrangement
sales contracts for the purchase of funeral or cemetery
merchandise or services, and through preconstruction sales
contracts for undeveloped interment spaces. It is also the
purpose of ORS 97.923 to 97.949, 97.992, 97.994 and 692.180 to
provide for the certification or registration of
{ - persons - } { + entities + } selling { - or - }
{ + , + } offering for sale { + , administering or providing
merchandise or services to fulfill + }prearrangement sales
contracts and preconstruction sales contracts, the creation and
administration of prearrangement sales contract and
preconstruction sales contract trust funds, the disbursement and
allocation of trust funds upon the certified provider's
performance of its contractual obligations and { - to
provide - } { + the + } protection for the purchaser upon the
certified provider's default.
SECTION 3. ORS 97.927 is amended to read:
97.927. { - (1) Except as provided in this section, ORS
97.923 to 97.949, 97.992, 97.994 and 692.180 apply to all
certified providers, master trustees and salespersons who sell or
offer for sale prearrangement sales contracts or preconstruction
sales contracts. - }
{ - (2) - } { + (1) + } ORS 97.923 to 97.949, 97.992,
97.994 and 692.180 do not apply to { - : - }
{ - (a) Agreements to sell or sales made by endowment care
cemeteries under ORS 97.929; or - }
{ - (b) Any - } { + a + } nonprofit memorial society
charging less than a $100 membership fee.
{ - (3) - } { + (2) + } Notwithstanding subsection
{ - (2) - } { + (1) + } of this section, ORS 97.937 applies to
{ - : - }
{ - (a) Agreements to sell or sales made by endowment care
cemeteries under ORS 97.929; or - }
{ - (b) Any - } { + a + } nonprofit memorial society
charging less than a $100 membership fee.
SECTION 4. ORS 97.933 is amended to read:
97.933. (1) { - A provider - } { + An entity + } may not
engage in prearrangement sales or preconstruction sales { + ,
administer prearrangement sales or preconstruction sales or
provide merchandise or services to fulfill prearrangement sales
or preconstruction sales + }unless the { - provider - }
{ + entity + } is certified by the Director of the Department of
Consumer and Business Services. { + Each location at which an
entity engages in prearrangement sales or preconstruction sales,
Enrolled House Bill 4117 (HB 4117-INTRO) Page 3
administers prearrangement sales or preconstruction sales or
provides merchandise or services to fulfill prearrangement sales
or preconstruction sales must be separately certified. + } The
director shall:
(a) Establish procedures for issuing certificates required by
this section.
(b) Establish standards for determining whether a certificate
should be issued.
(c) Set certification and renewal fees.
(d) Require annual renewal of certification.
(e) Establish standards for rules of conduct of certified
providers.
(2) The fees described in this section { - shall be
reasonable and shall defray - } { + must be sufficient to
meet + } the costs associated with the administration of ORS
97.923 to 97.949 { + and to maintain a reasonable emergency
fund + }.
(3)(a) { - Every - } { + A + } certified provider shall
file an annual report with the director on forms
{ - provided - } { + prescribed + } by the director { + by
rule + }. The annual report { - shall - } { + must + }
contain any information reasonably considered necessary by the
director, including but not limited to:
(A) A disclosure of { - changes in - } { + deposits and
withdrawals of + } trust { - deposits - } { + funds + };
(B) The number of consecutively numbered prearrangement or
preconstruction sales contracts sold during the reporting period;
(C) A complete inventory of the funeral merchandise { - , - }
{ + and + } cemetery merchandise { - or a combination
thereof - } delivered in lieu of trust fund requirements under
ORS 97.941, including:
(i) The location of the merchandise;
(ii) Merchandise serial numbers or warehouse receipt numbers
identified by the name of the purchaser or the beneficiary; and
(iii) The statement of the certified provider that each item of
merchandise is in the seller's possession at the specified
location; and
(D) The number of withdrawals from or terminations of any
trusts.
(b) If the annual report is not filed or is filed and shows any
material discrepancy, the director may take appropriate action
and send notification of the matter to the State Mortuary and
Cemetery Board.
(c) The director may relieve a certified provider of the duty
to file the annual report upon a determination that the certified
provider has performed all obligations under the prearrangement
sales contract or preconstruction sales contract, or that such
obligations lawfully have been assumed by another { + certified
provider + } or have been discharged or canceled.
(4) The director may audit the records of a certified provider
that relate to prearrangement sales or preconstruction sales, as
the director may consider appropriate. The director may refer any
matter outside of normal auditing procedures to the office of the
Attorney General for investigation and send notification of the
referral to the State Mortuary and Cemetery Board.
(5) The conduct of individuals, including salespersons as
defined in ORS 97.923, employed by a certified provider is the
direct responsibility of the certified provider.
(6) { - A certificate issued to a - } { + Authority to
operate as a certified + } provider is not transferable. { - A
Enrolled House Bill 4117 (HB 4117-INTRO) Page 4
person - } { + An entity + } that seeks to purchase or
otherwise acquire control of a cemetery or funeral establishment
{ - that is a certified provider - } shall first apply to the
director { - and obtain approval of the purchase or change in
control - } { + to become a certified provider + }.
{ - (7) A certificate issued to a provider becomes inactive
when the certificate is surrendered to the director. The director
retains jurisdiction over the provider as long as trust funds
remain on deposit for prearrangement sales contracts or
preconstruction sales contracts. While the certificate is
inactive, the provider shall: - }
{ - (a) Cease all prearrangement sales to the public; - }
{ - (b) Collect and deposit into trust all installment funds
paid toward contracts sold prior to becoming inactive; - }
{ - (c) Seek disbursal of trust funds only in accordance with
the requirements of the written contracts and ORS 97.923 to
97.949 until the funds have been exhausted; and - }
{ - (d) Continue to submit required annual reports and
renewal fees until no trust funds remain on deposit. - }
SECTION 5. ORS 97.935 is amended to read:
97.935. (1) { - A person - } { + An entity + } may not
operate as a master trustee unless the { - person - }
{ + entity + } is registered with the Director of the Department
of Consumer and Business Services. The director shall:
(a) Establish procedures for registering { - persons - }
{ + master trustees + } under this section.
(b) Establish standards for master trustees.
(c) Set registration and renewal fees.
(d) Establish standards for rules of conduct of master
trustees.
(2)(a) { - Every - } { + A + } master trustee shall file an
annual report with the director on forms { - provided - }
{ + prescribed + } by the director { + by rule + }. The annual
report { - shall - } { + must + } contain any information
reasonably considered necessary by the director, including but
not limited to:
(A) A disclosure of changes in trust deposits; and
(B) A list of all certified providers for which the master
trustee holds funds and the total amount of funds held for each
certified provider.
(b) The director may take appropriate action under ORS 97.948
and 97.949 if a master trustee fails to file the annual report or
the report contains any material discrepancy.
(c) The director may relieve a master trustee of the duty to
file the annual report upon a determination that the master
trustee has performed all obligations under the trust agreement
with each certified provider, or that the master trustee's
obligations have been lawfully assumed by another
{ - person - } { + master trustee + } or have been discharged
or canceled.
(3) The director may conduct an annual audit of a master
trustee. The director shall prescribe the form of audits under
this section { + by rule + }.
(4) A master trustee who is audited under this section shall
pay all expenses and costs incurred by the director in conducting
the audit.
SECTION 6. ORS 97.936 is amended to read:
97.936. (1) In addition to other actions authorized under ORS
97.948 (2), the Director of the Department of Consumer and
Business Services may:
Enrolled House Bill 4117 (HB 4117-INTRO) Page 5
(a) Issue an emergency order suspending or restricting a
certificate or registration or ordering a certified provider or
master trustee or { - a person - } { + an entity + } acting
as a certified provider or master trustee to cease and desist
from specified conduct; or
(b) Take other action deemed necessary by the director in the
circumstances.
(2) The director shall promptly provide opportunity for hearing
pursuant to ORS chapter 183.
(3) Emergency orders are:
(a) Effective when issued;
(b) Reviewable as provided in ORS 183.480; and
(c) Enforceable in the courts of this state.
SECTION 7. ORS 97.939 is amended to read:
97.939. (1) Three copies of a written sales contract shall be
executed for each prearrangement sales contract or
preconstruction sales contract sold by a certified provider. The
certified provider shall retain one copy of the contract and a
copy of the completed contract shall be given to:
(a) The purchaser; and
(b) The depository or the master trustee, if applicable.
(2) Upon receiving { - a trust deposit - } { + trust
funds + } under ORS 97.941, the master trustee shall sign a copy
of the contract received under subsection (1) of this section,
retain a copy for its files and return the contract to the
purchaser.
(3) Each completed contract shall:
(a) Comply with the plain language standards described in ORS
180.545 (1);
(b) Be consecutively numbered;
(c) Have a corresponding consecutively numbered receipt;
(d) Be preprinted or, if the certified provider uses a master
trustee, be obtained from the master trustee;
(e) Identify the purchaser and certified provider who sold the
contract;
(f) Specify whether the contract is a guaranteed contract or a
nonguaranteed contract;
(g) Specify the specific funeral or cemetery merchandise or
services or undeveloped interment spaces included and not
included in the contract; and
(h) If a guaranteed contract, disclose that the certified
provider { - may retain - } { + is entitled to receive + } 10
percent of the sales price.
(4)(a) Notwithstanding ORS 97.943 (8), in the case of a
prearrangement sales contract, if at the time of entering into
the contract, the beneficiary of the contract is a recipient of
public assistance or reasonably anticipates becoming a recipient
of public assistance, the contract may provide that the contract
is irrevocable.
(b) The contract may provide for an election by the
beneficiary, or by the purchaser on behalf of the beneficiary, to
make the contract thereafter irrevocable if after the contract is
entered into, the beneficiary becomes eligible or seeks to become
eligible for public assistance.
SECTION 8. ORS 97.941 is amended to read:
97.941. (1) Upon receiving anything of value under a
prearrangement sales contract or preconstruction sales contract,
the certified provider who sold the contract shall deposit the
following amounts into one or more trust funds maintained
pursuant to ORS 97.923 to 97.949, 97.992, 97.994 and 692.180:
Enrolled House Bill 4117 (HB 4117-INTRO) Page 6
(a) { - Ninety percent of - } { + If + } the amount
received { + is + } in payment of a guaranteed prearrangement
sales contract or guaranteed preconstruction sales contract { + ,
90 percent of the amount received + }.
{ - The remaining 10 percent shall be paid to - } The
{ + certified + } provider who sold the contract { + is
entitled to receive the remaining 10 percent. + } { - ; or - }
(b) { - One hundred percent of - } { + If + } the amount
received { + is + } in payment of a nonguaranteed prearrangement
sales contract or nonguaranteed preconstruction sales
contract { + , 100 percent of the amount received + }.
(2) { + A certified provider shall pay + } all trust
{ - deposits - } { + funds + } required by ORS 97.923 to
97.949, 97.992, 97.994 and 692.180
{ - shall be placed in a depository or delivered - }
{ + directly + } to a master trustee { + or depository + }
within five business days { - of their receipt - } { + after
the certified provider receives the funds from the purchaser + }.
{ - (3)(a) The trust deposits of a provider that does not use
the services of a master trustee shall be maintained in a
depository, except that the provider may invest the trust funds
in a manner that is, in the opinion of the provider, reasonable
and prudent under the circumstances. - }
{ - (b) A provider that invests trust funds may invest the
funds only in: - }
{ + (3)(a) If a certified provider places trust funds in a
depository, the funds may be invested only in: + }
(A) Certificates of deposit;
(B) { - U.S. Treasuries; - } { + United States Treasury
bills; + }
(C) Issues of { - U.S. - } { + United States + } government
agencies;
(D) Guaranteed investment contracts; or
(E) Banker's acceptances or corporate bonds rated A or better
by Standard & Poor's Corporation or Moody's Investors Service.
{ - (c) All investments made under paragraph (b) of this
subsection shall be placed in the custody of the depository in
which the trust funds were originally deposited or any other
depository that may qualify under ORS 97.923 to 97.949. - }
{ - (d) - } { + (b) + } Prearrangement sales contract trust
fund and preconstruction sales contract trust fund accounts
{ - shall - } { + must + } be in the name of the
{ + certified + } provider who sold the contract under ORS
97.923 to 97.949, 97.992, 97.994 and 692.180.
(4) { + A certified provider shall identify + } funds
deposited in the trust fund account { - shall be identified - }
in the records of the { + certified + } provider by the name of
the purchaser and beneficiary
{ - and adequate records shall be maintained to allocate - }
{ + . The certified provider shall maintain records that specify
the allocation of + } all earnings to each prearrangement sales
contract or preconstruction sales contract. Nothing { - shall
prevent the - } { + prohibits the certified + }provider from
{ - commingling - } { + directing a master trustee or a
depository to commingle + } the deposits in { - any such - }
{ + a + } trust fund account for purposes of managing and
investing the funds. A { - common - } { + joint + } trust
fund account { - shall - } { + must + } be identified by the
name of the { + certified + } provider.
Enrolled House Bill 4117 (HB 4117-INTRO) Page 7
(5) When a prearrangement sales contract or preconstruction
sales contract includes rights of interment and funeral or
cemetery merchandise or services, { + the terms of the contract
must clearly provide for + } the application of payments received
under the contract { - shall be clearly provided in the
contract - } .
(6) { - Any person - } { + An entity + } engaging in
prearrangement sales or preconstruction sales { - who enters
into a combination sale which involves - } { + that involve + }
the sale of items subject to trust and any item not subject to
trust { - shall be prohibited from increasing - } { + may not
increase + } the sales price of those items not subject to trust
with the purpose of allocating a lesser sales price to items
{ - which - } { + that + } require a { - trust - }
deposit { + of trust funds + }.
(7)(a) { + Except when the Director of the Department of
Consumer and Business Services has made the determination
described in subsection (9)(a) of this section, + } a
{ + certified + } provider may appoint a successor
{ + certified + } provider. The { + master trustee or + }
depository shall release the trust funds deposited under ORS
97.923 to 97.949, 97.992, 97.994 and 692.180 and accrued income
only to the successor { + certified + } provider as described in
ORS 97.943 and 97.944 { - or upon presentation of the written
request of the purchaser - } .
(b) If appointing a successor { + certified + } provider under
this subsection, the original { + certified + } provider shall
notify the director { - of the Department of Consumer and
Business Services - } of the proposed change at least 30 days
{ - prior to - } { + before + } the appointment.
(8) { - (a) - } A { + certified + } provider may appoint a
successor depository or a master trustee { - as defined in ORS
97.923. - }
{ - (b) If appointing a successor depository or master
trustee under this subsection, the provider, the successor
depository and the master trustee must - } { + and shall + }
notify the director of the proposed change at least 30 days
{ - prior to - } { + before + } the appointment.
(9)(a) The director may appoint a successor certified provider
upon a determination that:
(A) The original certified provider has { - ceased to provide
the services and merchandise that the original - } { + failed
to perform the duties of a + } certified provider { - agreed to
provide - } ;
(B) The certificate issued to the original certified provider
has been revoked or surrendered; and
(C) The appointment of a successor certified provider is
{ - appropriate in order - } { + necessary + } to protect the
interests of the purchasers and beneficiaries of prearrangement
sales contracts or preconstruction sales contracts.
(b) Depositories or master trustees holding deposits of trust
funds by the original certified provider shall change their
records to reflect the appointment of a successor certified
provider upon receipt of written notice of the appointment from
the director.
(10) { - The - } { + A + } trust fund { - accounts
shall - } { + account must + } be a single purpose fund. In the
event of the { + certified + } provider's bankruptcy, the funds
and accrued income { - shall not be - } { + are not + }
Enrolled House Bill 4117 (HB 4117-INTRO) Page 8
available to any creditor as assets of the { + certified + }
provider, but
{ - shall - } { + must + } be distributed to the purchasers
or managed for
{ - their - } { + the purchasers' + } benefit by the trustee
in bankruptcy, receiver or assignee.
(11)(a) If the original { + certified + } provider is licensed
under ORS chapter 692 and voluntarily surrenders the license to
the State Mortuary and Cemetery Board, { - the original
provider shall transfer responsibility as provider under this
section to a successor provider who holds a certificate issued by
the director under ORS 97.933 - } { + prearrangement sales
contracts and preconstruction sales contracts must be transferred
to the successor certified provider appointed by the
director + }.
(b) If the original { + certified + } provider is not licensed
under ORS chapter 692, upon presentation of proof of the
{ - death, - } dissolution { - , - } { + or + }
insolvency { + , + } or merger with another { + certified + }
provider { + , + } of the original { + certified + } provider,
the depository shall release the prearrangement trust fund
deposits or preconstruction trust fund deposits to the purchaser.
(c) If the original { + certified + } provider is licensed
under ORS chapter 692, upon proof of the { - death, - }
insolvency or involuntary surrender of the license of the
original { + certified + } provider, the depository shall
release the prearrangement trust fund deposits or preconstruction
trust fund deposits to the purchaser.
(12) The purchaser or beneficiary of a prearrangement sales
contract or preconstruction sales contract may be named cotrustee
with the { + certified + } provider with the written consent of
the purchaser or beneficiary.
(13) A { + certified + } provider who has not appointed a
master trustee { + and is placing funds with a depository + }
shall have an annual audit of all trust account funds performed
by an independent certified public accountant in accordance with
generally accepted accounting procedures. The { + certified + }
provider shall { - make - } { + provide + } the audit results
{ - available - } to the director
{ - if requested - } { + as part of the annual report
required under ORS 97.933 + }.
{ - (14) As used in this section, 'common trust fund account
' means trust funds received by a provider from two or more
purchasers. - }
SECTION 9. ORS 97.942 is amended to read:
97.942. (1) The Attorney General, on behalf of the Director of
the Department of Consumer and Business Services, may petition
the circuit courts of this state for appointment of a receiver
for a certified provider or { - person - } { + entity + }
acting as a certified provider without certification.
(2) If the court determines that a receivership is necessary or
advisable, the court shall appoint a receiver:
(a) When a receiver would ensure the orderly and proper conduct
of a { + certified + } provider's professional business and
affairs during or in the aftermath of an administrative
proceeding to revoke or suspend the { + certified + } provider;
(b) When a receiver would protect the public's interest and
rights in the business, premises or activities of the
{ + certified + } provider { + or entity + } sought to be
placed in receivership;
Enrolled House Bill 4117 (HB 4117-INTRO) Page 9
(c) Upon a showing of serious and repeated violations of ORS
97.923 to 97.949 demonstrating an inability or unwillingness to
comply with the provisions of ORS 97.923 to 97.949;
(d) When a receiver would prevent loss, wasting, dissipation,
theft or conversion of assets that should be marshaled and held
available for the honoring of obligations under ORS 97.923 to
97.949; or
(e) When the court receives proof of other grounds that the
court deems good and sufficient for instituting receivership
action concerning the { - receiver - } { + certified provider
or entity + } sought to be placed in receivership.
(3)(a) A receivership under this section may be temporary or
for the winding up and dissolution of a business, as the director
may request and the court determines to be necessary or advisable
in the circumstances.
(b) Venue of receivership proceedings may be, at the director's
request, in Marion County or the county where the subject of the
receivership is located. The appointed receiver shall be the
director or a person that the director nominates and that the
court approves.
(c) The director may expend money from budgeted funds or the
Funeral and Cemetery Consumer Protection Trust Fund to implement
a receivership. Any expenditures are a claim against the estate
in the receivership proceedings.
SECTION 10. ORS 97.943 is amended to read:
97.943. (1) A { + master trustee or a + } depository may not
make any distributions from prearrangement sales contract trust
{ + fund + } deposits except as provided in this section.
(2) The principal of a trust created pursuant to a
prearrangement sales contract shall be paid to the certified
provider who sold the contract if the certified provider who sold
the contract swears, by affidavit, that the certified provider
has delivered all merchandise and performed all services required
under the prearrangement sales contract and delivers to the
{ + master trustee or the + } depository one of the following:
(a) A certified death certificate of the beneficiary; or
(b) A sworn affidavit signed by the certified provider and by:
(A) One member of the beneficiary's family; or
(B) The executor of the beneficiary's estate.
(3) The principal of a trust created pursuant to a
prearrangement sales contract { - shall - } { + must + } be
paid to the purchaser if the original { + certified + } provider
is no longer qualified to serve as { + the certified + }
provider under ORS 97.941 (11).
(4) Upon completion by the certified provider of the actions
described in subsection (2) of this section, the { + master
trustee or the + } depository shall pay to the certified provider
from the prearrangement sales contract trust fund an amount equal
to the sales price of the merchandise delivered.
(5) Upon the final payment to the certified provider of the
principal in trust under subsection (2) of this section, the
undistributed earnings of the trust { - shall - }
{ + must + } be paid to:
(a) The certified provider who sold the contract if the
contract is a guaranteed contract; or
(b) The contract purchaser, or the purchaser's estate, if the
contract is a nonguaranteed contract.
(6) The { + master trustee or the + } depository may rely upon
the certifications and affidavits made to it under the provisions
of ORS 97.923 to 97.949, 97.992, 97.994 and 692.180, and
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{ - shall not be - } { + is not + } liable to any person for
such reliance.
(7) If { - for any reason - } a certified provider who sold
{ - the - } { + a + } prearrangement sales contract { - has
refused to comply, or cannot or - } does not comply with the
terms of the prearrangement sales contract within a reasonable
time after the certified provider is required to do so, the
purchaser or heirs or assigns or duly authorized representative
of the purchaser or the beneficiary
{ - shall have - } { + has + } the right to a refund in the
amount equal to the sales price paid for undelivered merchandise
and unperformed services plus undistributed earnings amounts held
in trust attributable to such contract, within 30 days of the
filing of a sworn affidavit with the certified provider who sold
the contract and the { + master trustee or the + } depository
setting forth the existence of the contract and the fact of
breach. A copy of this affidavit shall be filed with the Director
of the Department of Consumer and Business Services. In the event
a certified provider who has sold a prearrangement sales contract
is prevented from performing by strike, shortage of materials,
civil disorder, natural disaster or any like occurrence beyond
the control of the certified provider, the certified provider's
time for performance
{ - shall be - } { + is + } extended by the length of such
delay.
(8) Except for an irrevocable contract described in ORS 97.939
(4), at any time prior to the death of the beneficiary of a
prearrangement sales contract, the purchaser of the
prearrangement sales contract may cancel the contract and
{ - shall be - } { + is + } entitled to a refund of all
amounts paid on the contract, all amounts in trust including
earnings allocated to the contract that are in excess of all
amounts paid on the contract and unallocated earnings on trust
contract amounts from the date of the last allocation to the date
of the refund request, less any amounts paid for merchandise
already delivered or services already performed, which amounts
may be retained by the certified provider as compensation.
(9) Notwithstanding ORS 97.941 (4) and subsection (5) of this
section, { - upon receiving a sworn affidavit from the master
trustee or provider stating that qualifying expenses, taxes or
fees have been incurred, a depository shall allow - } a master
trustee or { + certified + } provider { - to pay from
earnings of trust fund deposits any expenses, - } { + may
pay + } accounting fees, taxes, depository fees, investment
manager fees and { - other fees as may be necessary to enable
the provider to comply with the reporting required by ORS 97.923
to 97.949, and to perform other services for the trust as may be
authorized by ORS 97.923 to 97.949 - } { + master trustee fees
from earnings of trust fund deposits + }. Any payment of expenses
or fees from earnings of a trust fund deposit under this
subsection
{ - shall - } { + must + } not:
(a) Exceed an amount equal to two percent per calendar year of
the value of the trust as determined { - on the first day of
January of each calendar year - } { + at least once every six
months as prescribed by the director by rule + };
(b) Include the payment of any fee to the { + certified + }
provider in consideration for services rendered as
{ + certified + } provider; or
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(c) Reduce, diminish or in any other way lessen the value of
the trust fund deposit so that the { + merchandise or + }
services { - or merchandise - } provided for under the
contract are reduced, diminished or in any other way lessened.
SECTION 11. ORS 97.945 is amended to read:
97.945. (1) { - Every prearrangement sales contract or
preconstruction sales contract seller - } { + A certified
provider + } shall pay to the Director of the Department of
Consumer and Business Services a $5 fee for each prearrangement
sales contract or preconstruction sales contract entered into, to
be paid into a special income earning fund in the State Treasury,
separate from the General Fund, known as the Funeral and Cemetery
Consumer Protection Trust Fund. The fees shall be remitted to the
director annually within 30 days after the end of December for
all contracts that have been entered into during the 12-month
period.
(2) Except as provided in this section, the fund shall be used
solely for the purpose of providing restitution to purchasers who
have suffered pecuniary loss arising out of prearrangement sales
contracts or preconstruction sales contracts. The fund may be
used for payment of actual administrative expenses incurred in
administering the fund. All moneys in the Funeral and Cemetery
Consumer Protection Trust Fund are appropriated continuously to
the director for the payment of restitution under this section
and the payment of expenses incurred in performing the duties and
functions of the director required under ORS 97.923 to 97.949,
97.992, 97.994 and 692.180.
(3) The director shall administer the fund and shall adopt
rules governing the payment of restitution from the fund.
(4) Payments for restitution shall be made only upon order of
the director where the director determines that the obligation is
noncollectible from the certified provider. Restitution
{ - shall - } { + must + } not exceed the amount of the sales
price paid plus interest at the statutory rate.
(5) The fund { - shall - } { + must + } not be applied
toward any restitution for losses on a prearrangement sales
contract or preconstruction sales contract entered into prior to
September 27, 1987.
(6) The fund { - shall - } { + must + } not be allocated
for any purpose other than that specified in ORS 97.923 to
97.949, 97.992, 97.994 and 692.180.
(7) If the director proposes to deny an application for
restitution from the fund, the director shall accord an
opportunity for a hearing as provided in ORS chapter 183.
(8) Notwithstanding any other provision of this section, the
payment of restitution from the fund { - shall be - }
{ + is + } a matter of grace and not of right and no purchaser
{ - shall have - } { + has + } vested rights in the fund as a
beneficiary or otherwise.
(9) { + (a) + } The { + director shall annually review the + }
status of the fund { - shall be reviewed annually by the
director - } . If the { - review - } { + director + }
determines that the fund together with all accumulated income
earned on the fund is sufficient to cover costs of potential
claims against the fund and that the total number of outstanding
claims filed against the fund is less than 10 percent of the
fund's current balance, then payments to the fund { - shall - }
{ + may + } be adjusted accordingly at the discretion of the
director.
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{ + (b) If the fund's balance falls below acceptable levels
to meet future obligations, the director by rule may increase the
fee or impose an assessment on certified providers.
(c) The balance of the fund may not exceed $2 million. The
director is authorized to adjust the fee or assessment as
necessary to comply with this paragraph. + }
SECTION 12. { + Section 13 of this 2012 Act is added to and
made a part of ORS 97.923 to 97.949. + }
SECTION 13. { + A person may not, in connection with
performing certified provider activities, operating an endowment
care cemetery, providing services as a master trustee or
providing related services:
(1) Employ any device, scheme or artifice to defraud;
(2) Knowingly make any untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements made, in the light of the circumstances under which
the statements are made, not misleading;
(3) Engage in any act, practice or course of business that
operates or would operate as a fraud or deceit upon any person;
or
(4) Make or file, or cause to be made or filed, to or with the
Director of the Department of Consumer and Business Services any
statement, report or document that is known to be false in any
material respect or matter. + }
SECTION 14. ORS 97.947 is amended to read:
97.947. (1)(a) The Director of the Department of Consumer and
Business Services may examine the conditions and resources,
including sales contracts, of a certified provider, master
trustee or { - person - } { + entity + } acting as a
certified provider or master trustee without certification or
registration to determine whether the certified provider, master
trustee or { - person - } { + entity + } acting as a
certified provider or master trustee without certification or
registration is complying with ORS 97.923 to 97.949, the rules of
the director and any other laws of this state applicable to a
certified provider or master trustee.
(b) In addition to the authority conferred by ORS 97.948, the
director may require a certified provider, master trustee or
{ - person - } { + entity + } acting as a certified provider
or master trustee without certification or registration to pay
the actual and reasonable costs of the examination.
(2) For the purpose of an examination under this section, the
director may administer oaths and affirmations, compel the
attendance of witnesses, take evidence and require the production
of books, papers, correspondence, memoranda, agreements or other
documents or records that the director considers relevant or
material to the examination.
(3) If a certified provider, master trustee or { - person - }
{ + entity + } acting as a certified provider or master trustee
without certification or registration fails to comply with a
subpoena issued under this section or a party or witness refuses
to testify on any matter, the judge of the circuit court for any
county, on the application of the director, shall compel
obedience by proceedings for contempt as in the case of
disobedience of the requirements of a subpoena issued from the
court or a refusal to testify on a matter before the court.
(4) Each witness who appears before the director under a
subpoena issued under this section shall receive the fees and
mileage provided for witnesses in ORS 44.415 (2), except that a
witness subpoenaed at the instance of parties other than the
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director or an examiner may not be compensated for attendance or
travel unless the director certifies that the testimony of the
witness was material to the matter investigated.
(5) During the course of any examination, the director may
cause the depositions of witnesses to be taken in the manner
prescribed by law for like depositions in civil suits in the
circuit court.
SECTION 15. ORS 97.948 is amended to read:
97.948. (1) The Director of the Department of Consumer and
Business Services may discipline a certified provider, master
trustee or { - person - } { + entity + } acting as a
certified provider or master trustee without certification or
registration who has been found by an audit or examination
conducted by the director:
(a) To be in violation of ORS 97.923 to 97.949;
(b) To have liabilities that exceed assets;
(c) To be unable to meet obligations as they come due; or
(d) To be in a financial condition that fails to adequately
protect the interests of customers.
(2) In disciplining a certified provider, master trustee or
{ - person - } { + entity + } acting as a certified provider
or master trustee without certification or registration under
subsection (1) of this section, the director may take the
following actions:
(a) Impose probation.
(b) Suspend the certificate or registration.
(c) Revoke the certificate or registration.
(d) Place limitations on the certificate or registration.
(e) Refuse to issue or renew a certificate or registration.
(f) Issue an order to cease and desist from the activities that
support the discipline.
(g) Take any other disciplinary action that the director finds
proper, including assessment of the costs of the investigation
and disciplinary proceedings and assessment of a civil penalty
not to exceed $10,000 per violation.
(3) If the certificate or registration of a certified provider
or master trustee is suspended under this section, the holder of
the certificate or registration may not engage in the activities
allowed by the certificate or registration during the term of
suspension. Upon the expiration of the term of suspension, the
director shall reinstate the certificate or registration if the
conditions for which the certificate or registration was
suspended no longer exist.
(4) The director shall enter each case of disciplinary action
on the records of the Department of Consumer and Business
Services.
(5) Civil penalties under this section may be imposed as
provided in ORS 183.745.
(6) If the director takes disciplinary action under this
section, the director may send a notice of the action to the
State Mortuary and Cemetery Board and to the Attorney General.
SECTION 16. ORS 97.949 is amended to read:
97.949. (1) If the Director of the Department of Consumer and
Business Services has reason to believe that a person has
violated any provision of ORS 97.923 to 97.949, the director may
give the information relative to the violation to the appropriate
federal, state or local law enforcement officer having
jurisdiction over the violation.
(2) If the director, in the course of taking an action against
a certified provider, master trustee or { - person - }
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{ + entity + } acting as a certified provider or master trustee
without certification or registration, finds that a salesperson
or person acting as a salesperson has violated any provision of
ORS 97.923 to 97.949, the director shall provide the State
Mortuary and Cemetery Board with a copy of the findings and the
order of the director. The board shall, upon receipt of such
information, discipline the salesperson or person acting as a
salesperson as required by law.
SECTION 17. { + This 2012 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2012 Act takes effect on
its passage. + }
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Passed by House February 6, 2012
.............................................................
Ramona Kenady Line, Chief Clerk of House
.............................................................
Bruce Hanna, Speaker of House
.............................................................
Arnie Roblan, Speaker of House
Passed by Senate February 20, 2012
.............................................................
Peter Courtney, President of Senate
Enrolled House Bill 4117 (HB 4117-INTRO) Page 15
Received by Governor:
......M.,............., 2012
Approved:
......M.,............., 2012
.............................................................
John Kitzhaber, Governor
Filed in Office of Secretary of State:
......M.,............., 2012
.............................................................
Kate Brown, Secretary of State
Enrolled House Bill 4117 (HB 4117-INTRO) Page 16
