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1998 SESSION
987612705Be it enacted by the General Assembly of Virginia:
1. That §§ 2.1-1.6 and 9-6.25:2 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding in Subtitle II of Title 54.1 a chapter numbered 23.1, consisting of sections numbered 54.1-2310 through 54.1-2342, as follows:
§ 2.1-1.6. State boards.
A. There shall be, in addition to such others as may be established by law, the following permanent collegial bodies affiliated with a state agency within the executive branch:
Accountancy, Board for
Aging, Advisory Board on the
Agriculture and Consumer Services, Board of
Air Pollution, State Advisory Board on
Alcoholic Beverage Control Board, Virginia
Apple Board, Virginia State
Appomattox State Scenic River Advisory Board
Aquaculture Advisory Board
Architects, Professional Engineers, Land Surveyors and Landscape Architects, State Board for
Art and Architectural Review Board
Athletic Board, Virginia
Auctioneers Board
Audiology and Speech-Language Pathology, Board of
Aviation Board, Virginia
Barbers, Board for
Branch Pilots, Board for
Bright Flue-Cured Tobacco Board, Virginia
Building Code Technical Review Board, State
Catoctin Creek State Scenic River Advisory Board
Cattle Industry Board, Virginia
Cave Board
Cemetery Board
Certified Seed Board, State
Chesapeake Bay Local Assistance Board
Chickahominy State Scenic River Advisory Board
Child Abuse and Neglect, Advisory Board on
Chippokes Plantation Farm Foundation, Board of Trustees
Clinch Scenic River Advisory Board
Coal Mining Examiners, Board of
Coal Research and Development Advisory Board, Virginia
Coal Surface Mining Reclamation Fund Advisory Board
Conservation and Development of Public Beaches, Board on
Conservation and Recreation, Board of
Contractors, Board for
Corn Board, Virginia
Correctional Education, Board of
Corrections, State Board of
Cosmetology, Board for
Criminal Justice Services Board
Dark-Fired Tobacco Board, Virginia
Deaf and Hard-of-Hearing, Advisory Board for the Department for the
Dentistry, Board of
Design-Build/Construction Management Review Board
Education, State Board of
Egg Board, Virginia
Emergency Medical Services Advisory Board, State
Farmers Market Board, Virginia
Fire Services Board, Virginia
Forestry, Board of
Funeral Directors and Embalmers, Board of
Game and Inland Fisheries, Board of
Geology, Board for
Goose Creek Scenic River Advisory Board
Health Planning Board, Virginia
Health Professions, Board of
Health, State Board of
Hearing Aid Specialists, Board for
Hemophilia Advisory Board
Historic Resources, Board of
Housing and Community Development, Board of
Irish Potato Board, Virginia
Juvenile Justice, State Board of
Litter Control and Recycling Fund Advisory Board
Marine Products Board, Virginia
Medical Advisory Board, Department of Motor Vehicles
Medicare and Medicaid, Advisory Board on
Medicine, Board of
Mental Health, Mental Retardation and Substance Abuse Services Board, State
Migrant and Seasonal Farmworkers Board
Military Affairs, Board of
Mineral Mining Examiners, Board of
Minority Business Enterprise, Interdepartmental Board of the Department of
Networking Users Advisory Board, State
Neurotrauma Initiative Advisory Board, Commonwealth
North Meherrin State Scenic River Advisory Board
Nottoway State Scenic River Advisory Board
Nursing, Board of
Nursing Home Administrators, Board of
Occupational Therapy, Advisory Board on
Oil and Gas Conservation Board, Virginia
Opticians, Board for
Optometry, Board of
Peanut Board, Virginia
Personnel Advisory Board
Pesticide Control Board
Pharmacy, Board of
Physical Therapy to the Board of Medicine, Advisory Board on
Plant Pollination Advisory Board
Polygraph Examiners Advisory Board
Pork Industry Board, Virginia
Poultry Products Board, Virginia
Private College Advisory Board
Private Security Services Advisory Board
Professional and Occupational Regulation, Board for
Professional Counselors, Board of
Professional Soil Scientists, Board for
Psychiatric Advisory Board
Psychology, Board of
Public Buildings Board, Virginia
Public Broadcasting Board, Virginia
Radiation Advisory Board
Real Estate Appraiser Board
Real Estate Board
Reciprocity Board, Department of Motor Vehicles
Recreational Fishing Advisory Board, Virginia
Recreation Specialists, Board of
Reforestation Board
Rehabilitation Providers, Advisory Board on
Rehabilitative Services, Board of
Respiratory Therapy, Advisory Board on
Rockfish State Scenic River Advisory Board
Safety and Health Codes Board
Seed Potato Board
Sewage Handling and Disposal Appeal Review Board, State Health Department
Shenandoah State Scenic River Advisory Board
Small Business Advisory Board
Small Business Environmental Compliance Advisory Board
Small Grains Board, Virginia
Social Services, Board of
Social Work, Board of
Soil and Water Conservation Board, Virginia
Soybean Board, Virginia
State Air Pollution Control Board
Substance Abuse Certification Board
Surface Mining Review, Board of
Sweet Potato Board, Virginia
T & M Vehicle Dealers' Advisory Board
Teacher Education and Licensure, Advisory Board on
Transportation Board, Commonwealth
Transportation Safety, Board of
Treasury Board, The, Department of the Treasury
Veterans' Affairs, Board on
Veterinary Medicine, Board of
Virginia Board for Asbestos and Lead
Virginia Coal Mine Safety Board
Virginia Correctional Enterprises Advisory Board
Virginia Cotton Board
Virginia Employment Commission, State Advisory Board for the
Virginia Geographic Information Network Advisory Board
Virginia Horse Industry Board
Virginia Manufactured Housing Board
Virginia Retirement System, Board of Trustees
Virginia Schools for the Deaf and the Blind, Advisory Commission on the
Virginia Sheep Industry Board
Virginia Veterans Cemetery Board
Virginia Waste Management Board
Visually Handicapped, Virginia Board for the
Voluntary Formulary Board, Virginia
War Memorial Foundation, Virginia, Board of Trustees
Waste Management Facility Operators, Board for
Water Resources Research Center Statewide Advisory Board, Virginia
Waterworks and Wastewater Works Operators, Board for
Well Review Board, Virginia.
B. Notwithstanding the definition for "board" as provided in § 2.1-1.2, the following entities shall be referred to as boards:
Compensation Board
State Board of Elections
State Water Control Board
Virginia Parole Board
Virginia Veterans Care Center Board of Trustees.
§ 9-6.25:2. Policy boards, commissions and councils.
There shall be, in addition to such others as may be designated in accordance with § 9-6.25, the following policy boards, commissions and councils:
Apprenticeship Council
Athletic Board
Auctioneers Board
Blue Ridge Regional Education and Training Council
Board for Accountancy
Board for Architects, Professional Engineers, Land Surveyors and Landscape Architects
Board for Barbers
Board for Contractors
Board for Cosmetology
Board for Geology
Board for Hearing Aid Specialists
Board for Opticians
Board for Professional and Occupational Regulation
Board for Professional Soil Scientists
Board for Waterworks and Wastewater Works Operators
Board of Agriculture and Consumer Services
Board of Audiology and Speech-Language Pathology
Board of Coal Mining Examiners
Board of Conservation and Recreation
Board of Correctional Education
Board of Dentistry
Board of Directors, Virginia Student Assistance Authorities
Board of Funeral Directors and Embalmers
Board of Health Professions
Board of Historic Resources
Board of Housing and Community Development
Board of Medical Assistance Services
Board of Medicine
Board of Mineral Mining Examiners
Board of Nursing
Board of Nursing Home Administrators
Board of Optometry
Board of Pharmacy
Board of Professional Counselors
Board of Psychology
Board of Recreation Specialists
Board of Social Services
Board of Social Work
Board of Surface Mining Review
Board of Veterinary Medicine
Board on Conservation and Development of Public Beaches
Cemetery Board
Chesapeake Bay Local Assistance Board
Child Day-Care Council
Commission on Local Government
Commonwealth Transportation Board
Council on Human Rights
Council on Information Management
Criminal Justice Services Board
Design-Build/Construction Management Review Board
Disability Services Council
Farmers Market Board, Virginia
Interdepartmental Council on Rate-setting for Children's Facilities
Library Board, The Library of Virginia
Marine Resources Commission
Milk Commission
Pesticide Control Board
Real Estate Appraiser Board
Real Estate Board
Reciprocity Board, Department of Motor Vehicles
Safety and Health Codes Board
Seed Potato Board
Southside Virginia Marketing Council
Specialized Transportation Council
State Air Pollution Control Board
State Board of Corrections
State Board of Elections
State Board of Health
State Board of Juvenile Justice
State Health Department, Sewage Handling and Disposal Appeal Review Board
State Library Board
State Mental Health, Mental Retardation and Substance Abuse Services Board
State Water Control Board
Substance Abuse Certification Board
Treasury Board, The, Department of the Treasury
Virginia Aviation Board
Virginia Board for Asbestos and Lead
Virginia Fire Services Board
Virginia Gas and Oil Board
Virginia Health Planning Board
Virginia Manufactured Housing Board
Virginia Parole Board
Virginia Public Broadcasting Board
Virginia Soil and Water Conservation Board
Virginia Voluntary Formulary Board
Virginia Waste Management Board
Waste Management Facility Operators, Board for.
§ 54.1-2310. Definitions.
As used in this chapter, unless the context requires a different meaning:
"Advertisement" means any information disseminated or placed before the public.
"At-need" means at the time of death or while death is imminent.
"Board" means the Cemetery Board.
"Cemetery" means any land or structure used or intended to be used for the interment of human remains. The sprinkling of ashes or their burial in a biodegradable container on church grounds or their placement in a columbarium on church property shall not constitute the creation of a cemetery.
"Cemetery company" means any person engaged in the business of (i) selling or offering for sale any grave or entombment right in a cemetery and representing to the public that the entire cemetery, a single grave, or entombment right therein will be perpetually cared for or (ii) selling property or services, vaults, grave liners, urns, memorials, markers, and monuments used in connection with interring or disposing of the remains or commemorating the memory of a deceased human being, where delivery of the property or performance of the service may be delayed later than 120 days after receipt of the initial payment on account of such sale. Such property or services include but are not limited to burial vaults, mausoleum crypts, garden crypts, lawn crypts, memorials, and marker bases, but shall not include graves or incidental additions such as dates, scrolls, or other supplementary matter representing not more than ten percent of the total contract price.
"Compliance agent" means a natural person who owns or is employed by a cemetery company to assure the compliance of the cemetery company with the provisions of this chapter.
"Cost requirement" means the total cost to the seller of the property or services subject to the deposit requirements of § 54.1-2325 required by that seller's total contracts.
"Department" means the Department of Professional and Occupational Regulation.
"Garden crypt" means a burial receptacle, usually constructed of reinforced concrete, installed in quantity on gravel or tile underlay. Each crypt becomes an integral part of a given garden area and is considered real property.
"General funds" means the sum total of specific funds put together in a single fund.
"Grave" means a below-ground right of interment.
"In-person communication" means face-to-face communication and telephonic communication.
"Interment" means all forms of final disposal of human remains including, but not limited to, earth burial, mausoleum entombment and niche or columbarium inurnment. The sprinkling of ashes on church grounds shall not constitute interment.
"Lawn crypt" means a burial vault with some minor modifications for the improvement of drainage in and around the receptacle and is considered personal property.
"Marker base" means the visible part of the marker or monument upon which the marker or monument rests and is considered personal property.
"Mausoleum crypt" means a burial receptacle usually constructed of reinforced concrete and usually constructed or assembled above the ground and is considered real property.
"Memorials, markers or monuments" means the object used to identify the deceased and is considered personal property.
"Perpetual care trust fund" means a fund created to provide income to a cemetery to provide care, maintenance, administration and embellishment of the cemetery.
"Preneed" means at any time other than either at the time of death or while death is imminent.
"Preneed burial contract" means a contract for the sale of property or services used in connection with interring or disposing of the remains or commemorating the memory of a deceased human being, where delivery of the property or performance of the service may be delayed for more than 120 days after the receipt of initial payment on account of such sale. Such property or services include but are not limited to burial vaults, mausoleum crypts, garden crypts, lawn crypts, memorials, and marker bases, but shall not include graves or incidental additions such as dates, scrolls, or other supplementary matter representing not more than ten percent of the total contract price.
"Seller" means the cemetery company.
"Seller's trust account" means the total specific trust funds deposited from all of a specific seller's contracts, plus income on such funds allotted to that seller.
"Solicitation" means initiating contact with consumers with the intent of influencing their selection of a cemetery.
"Specific trust funds" means funds identified to a certain contract for personal property or services.
§ 54.1-2311. Cemetery operators required to be licensed by the Board.
No person shall engage in the business of a cemetery company in the Commonwealth without first being licensed by the Board. The cemetery company shall renew its license as required by the Board. Such license and such renewal of license shall (i) be on forms prescribed by the Board and shall include the name and address of each cemetery in Virginia in which the cemetery company has a business interest, the name and address of all officers and directors of the cemetery company, the registered agent for the cemetery company, the compliance agent, and any such other information as the Board may require consistent with the purposes of this chapter and (ii) include a fee as prescribed by the Board for each cemetery in Virginia in which the cemetery company has a business interest. The cemetery company shall notify the Board of any change in the information required to be filed within thirty days after the change. A new license shall be required if there is a change in the ownership of the cemetery company or if there is a change in the compliance agent designated by the cemetery company. All fees shall be remitted to the State Treasurer and shall be placed to the credit and special fund of the Department to be used in the administration of this chapter.
§ 54.1-2312. Exemptions.
A. The provisions of this chapter shall not apply to cemeteries wholly owned and operated by a county, city or town; a church; or a nonstock corporation not operated for profit if the corporation (i) does not compensate any officer or director except for reimbursement of reasonable expenses incurred in the performance of his official duties, (ii) does not sell or construct or directly or indirectly contract for the sale or construction of vaults or lawn, garden or mausoleum crypts and (iii) uses proceeds from the sale of all graves and entombment rights for the sole purpose of defraying the direct expenses of maintaining the cemetery.
B. The provisions of this chapter shall not apply to any community cemetery not operated for profit if the cemetery (i) does not compensate any officer or director except for reimbursement of reasonable expenses incurred in the performance of his official duties, (ii) uses the proceeds from the sale of the graves and mausoleum spaces for the sole purpose of defraying the direct expenses of maintaining its facilities, and (iii) was chartered by the Commonwealth prior to 1850 A.D.
C. The provisions of this chapter regarding preneed burial contracts shall not apply to prearranged funeral plans entered into by licensees of the Board of Funeral Directors and Embalmers.
§ 54.1-2313. Board; appointment; terms; vacancies; meetings; quorum; other powers.
A. The Cemetery Board shall consist of seven members to be appointed by the Governor as follows: four cemetery operators who have operated a cemetery in the Commonwealth for at least five consecutive years immediately prior to appointment, three of whom shall be affiliated with a cemetery company incorporated in the Commonwealth which is not owned, operated or affiliated, directly or indirectly, with a foreign corporation; one representative of local government, and two citizen members. Appointments to the Board shall generally represent the geographical areas of the Commonwealth.
B. Of the members initially appointed to the Board, three shall be appointed for a term of four years, two shall be appointed for a term of three years, and two shall be appointed for a term of two years. Thereafter, all appointments shall be for terms of four years, except that appointment to fill vacancies shall be for the unexpired terms. No person shall be eligible to serve for more than two successive four-year terms.
C. The Board shall annually elect a chairman and a vice chairman from among its members. The Board shall hold at least two meetings each year and may meet as often as its duties require. Four members shall constitute a quorum.
D. In addition to the general powers and duties conferred in this subtitle, the Board shall have the power and duty to regulate (i) preneed burial contracts and perpetual care trust fund accounts as prescribed by this chapter, including, but not limited to, the authority to prescribe preneed contract forms, disclosure requirements and disclosure forms and to require reasonable bonds to insure performance of preneed contracts; and (ii) sales personnel employed by a cemetery company.
§ 54.1-2314. Refusal, suspension or revocation of license.
The Board may refuse to license any applicant, suspend a license for a stated period or indefinitely, revoke any license, censure or reprimand any licensee, or place him on probation for such time as it may designate for any of the following causes related to the sale or offering to the public of cemetery vaults, grave liners, urns, memorials, markers or monuments:
1. Conviction of any felony or any crime involving moral turpitude;
2. Unprofessional conduct which is likely to defraud or to deceive the public or clients;
3. Misrepresentation or fraud in the conduct of the cemetery company, or in obtaining or renewing a license;
4. False or misleading advertising;
5. Solicitation in violation of § 54.1-2327 B;
6. Direct or indirect payment or offer of payment of a commission to others by the licensee, his sales representatives, agents, or employees for the purpose of securing business;
7. Use of alcohol or drugs to the extent that such use renders him unsafe to practice his licensed activity;
8. Aiding or abetting an unlicensed person to engage in the business of cemetery companies;
9. Using profane, indecent or obscene language within the immediate hearing of the family or relatives of a deceased, whose body has been interred or otherwise disposed of;
10. Violation of any statute, ordinance or regulation affecting the handling, custody, care or transportation of dead human bodies;
11. Failure to comply with § 54.1-2327 A, and to keep on file an itemized statement of cemetery expenses in accordance with Board regulations and this chapter;
12. Violation of or noncompliance with Federal Trade Commission rules regulating funeral industry practices which are hereby applicable to cemetery companies;
13. Charging third-party handling fees; and
14. Refusing to honor transfer of preneed contract arrangements to another party but not being responsible for paying additional costs associated with any actual transfer.
§ 54.1-2315. Other prohibited activities.
The following acts shall be prohibited:
1. Employment by the licensee of persons known as "cappers," "steerers," or "solicitors," or other such persons to obtain the services of a funeral establishment or cemetery company.
2. Employment directly or indirectly of any sales representative, agent, employee or other person, on a part- or full-time basis, or on a commission, for the purpose of calling upon individuals or institutions by whose influence dead human bodies may be turned over to a particular funeral establishment or cemetery company;
3. Solicitation or acceptance by a licensee of any commission or bonus or rebate in consideration of recommending or causing a dead human body to be disposed of in any crematory, mausoleum or cemetery.
4. Violating or cooperating with others to violate any provision of this chapter or the regulations of the Board.
5. Interfering with the freedom of choice of the general public in the choice of persons or establishments providing funeral services, preneed funeral planning or preneed funeral contracts.
Nothing in this section shall preclude a cemetery company from employing or retaining a sales representative, agent, employee or other person, on a part- or full-time basis, from offering cemetery company goods and services on a commission basis.
§ 54.1-2316. Certain representations unlawful; perpetual care trust fund required.
It shall be unlawful to sell or offer for sale in the Commonwealth any grave or entombment right in a cemetery and, in connection therewith, to represent to the public in any manner, express or implied, that the entire cemetery or any grave or entombment right therein will be perpetually cared for, unless adequate provision has been made for the perpetual care of the cemetery and all graves and entombment rights therein as to which such representation has been made.
Each cemetery company shall establish in a Virginia trust company or trust subsidiary or a federally insured bank or savings institution doing business in the Commonwealth, an irrevocable trust fund in the amount of at least $25,000 before the first lot, parcel of land, burial or entombment right is sold. This fund shall be designated the perpetual care trust fund.
§ 54.1-2317. Who may serve as trustee of perpetual care trust fund.
A. The trustee of the perpetual care trust fund shall be appointed by the person owning, operating, or developing a cemetery company. If the trustee is other than a Virginia trust company or trust subsidiary or a federally insured bank or savings institution doing business in the Commonwealth, the trustee shall be approved by the Board.
A trustee that is not a Virginia trust company or trust subsidiary or a federally insured bank or savings institution doing business in the Commonwealth shall apply to the Board for approval, and the Board shall approve the trustee when he has become satisfied that the applicant:
1. Employs and is directed by persons who are qualified by character, experience, and financial responsibility to care for and invest the funds of others;
2, Will perform its duties in a proper and legal manner and the trust funds and interest of the public generally will not be jeopardized; and
3. Is authorized to do business in the Commonwealth and has adequate facilities to perform its duties as trustee.
B. If the trustee is other than a Virginia trust company or trust subsidiary or a federally insured bank or savings institution doing business in the Commonwealth, the trustee shall furnish a fidelity bond with corporate surety thereon, payable to the trust established, which shall be designated "Perpetual Care Trust Fund for (name of cemetery company)," in a sum equal to not less than 100 percent of the value of the principal of the trust estate at the beginning of each calendar year, which bond shall be deposited with the Board.
C. If the trustee is other than a Virginia trust company or trust subsidiary or a federally insured bank or savings institution doing business in the Commonwealth and if it appears that an officer, director or employee of the trustee is dishonest, incompetent, or reckless in the management of a perpetual care trust fund, the Board may bring an action in the appropriate court to remove the trustee and to impound the property and business of the trustee as may be reasonably necessary to protect the trust funds.
§ 54.1-2318. Application of Title 26.
Trustees appointed pursuant to this chapter shall be governed in their investment of trust funds by §§ 26-40 through 26-45.1 of Chapter 3 of Title 26, except as provided otherwise herein.
§ 54.1-2319. Deposit in perpetual care trust fund required upon sale of graves, etc.
Each cemetery company shall deposit a minimum of ten percent of the receipts from the sale of graves and above-ground crypts and niches, excluding below-ground burial vaults, in cash in the perpetual care trust fund within thirty days after the close of the month in which such receipts are paid to it. If the purchaser's payment is made on an installment or deferred payment basis, the cemetery company shall have the option of paying ten percent of the amount of principal in each payment received into the perpetual care trust fund.
§ 54.1-2320. Additional deposit not required upon subsequent sale of same grave, crypt or niche.
If ten percent of the sales price of a grave or above-ground crypt or niche has been deposited in a perpetual care trust fund, no deposit shall be required on subsequent sales of the same grave, crypt or niche.
§ 54.1-2321. Recovery of original perpetual care trust fund deposit.
Once the cemetery company has deposited in the perpetual care trust fund a sum equal to twice the amount of the original deposit, exclusive of the original deposit, the trustee shall allow the cemetery company to recover its original deposit by withholding the money that would otherwise be required to be deposited in the perpetual care trust fund until the amount of the original deposit is recovered. Once the cemetery company has recovered an amount equal to its original deposit, deposits to the perpetual care trust fund shall be resumed.
§ 54.1-2322. Use of income from perpetual care trust fund.
The income from the perpetual care trust fund shall be used solely and exclusively for the general care, maintenance, administration and embellishment of the cemetery.
§ 54.1-2323. Financial records required.
The cemetery company shall file with the Board detailed accounts of all transactions, receipts and accounts receivable subject to the ten percent trust requirement and of all expenditures of income from the perpetual care trust fund at such times as required by the Board.
§ 54.1-2324. Financial report and written assurance required for perpetual care trust funds.
A. Within four months after the close of its fiscal year, the cemetery company shall report the following information to the Board:
1. The total amount of principal in the perpetual care trust fund.
2. The securities in which the perpetual care trust fund is invested and the amount of cash on hand as of the close of the fiscal year.
3. The income received from the perpetual care trust fund, and the sources of such income, during the preceding fiscal year.
4. An affidavit executed by the compliance agent that all applicable provisions of this chapter relating to perpetual care trust funds have been complied with.
5. The total receipts subject to the ten percent trust requirement.
6. All expenditures from the perpetual care trust fund.
7. If the trustee is other than a Virginia trust company or trust subsidiary or a federally insured bank or savings institution doing business in the Commonwealth, proof that the required fidelity bond has been secured and that it is in effect.
8. A separate total of expenses incurred for general care and maintenance, embellishment and administration of its cemeteries.
B. The cemetery company shall employ an independent certified public accountant to audit and provide assurance that, with regard to the total of all receipts subject to § 54.1-2317, the report of the owner, operator or developer is true and correct and that the required deposits to the perpetual care trust fund have been made on a timely basis. Such audit shall provide full disclosure of any transactions between the perpetual care trust fund and any directors, officers, stockholders, employees, or relatives thereof, and shall include a description of the transactions, the parties involved, the dates and amounts of the transactions, and the reasons for the transactions.
C. The information required to be filed hereunder with the Board shall be exempt from the Privacy Protection Act (§ 2.1-377 et seq.).
§ 54.1-2325. Deposit in preneed trust required upon sale of property or services not to be delivered within 120 days.
A. Each cemetery company shall deposit into a trust fund forty percent of the receipts from the sale of property or services purchased pursuant to a preneed burial contract, when the delivery thereof will be delayed more than 120 days from the initial payment on said contract. The cemetery company shall establish a special trust fund in a Virginia trust company or trust subsidiary or a federally insured bank or savings institution doing business in the Commonwealth. The trust shall bear the legend "Preneed Trust Account." Deposits are required to be made by the cemetery company within thirty days after the close of the month in which said receipts are paid to it.
B. If the purchaser's payment is made on an installment or deferred payment basis, the seller shall have the option of paying each payment received into the preneed trust account.
§ 54.1-2326. Who may serve as trustee of preneed trust fund.
A. The trustee of the preneed trust fund shall be appointed by the person owning, operating, or developing a cemetery company. If the trustee is other than a Virginia trust company or trust subsidiary or a federally insured bank or savings institution doing business in the Commonwealth, the trustee shall be approved by the Board.
A trustee that is not a Virginia trust company or trust subsidiary or a federally insured bank or savings institution doing business in the Commonwealth shall apply to the Board for approval, and the Board shall approve the trustee when the Board has become satisfied that the applicant:
1. Employs and is directed by persons who are qualified by character, experience, and financial responsibility to care for and invest the funds of others;
2. Will perform its duties in a proper and legal manner and that the trust funds and interest of the public generally will not be jeopardized; and
3. Is authorized to do business in the Commonwealth and has adequate facilities to perform its duties as trustee.
B. If the trustee is other than a Virginia trust company or trust subsidiary or a federally insured bank or savings institution doing business in the Commonwealth, the trustee shall furnish a fidelity bond with corporate surety thereon, payable to the trust established, which shall be designated "Preneed Trust Fund for (name of cemetery company)," in a sum equal to but not less than 100 percent of the value of the principal of the trust estate at the beginning of each calendar year, which bond shall be deposited with the Board.
C. If the trustee is other than a Virginia trust company or trust subsidiary or a federally insured bank or savings institution doing business in the Commonwealth, and if it appears that an officer, director or employee of the trustee is dishonest, incompetent, or reckless in the management of a preneed trust fund, the Board may bring an action in the appropriate court to remove the trustee and to impound the property and business of the trustee as may be reasonably necessary to protect the trust funds.
§ 54.1-2327. Itemized statement and general price list of burial expenses to be furnished; solicitations prohibited.
A. Every cemetery company licensed pursuant to the provisions of this chapter shall furnish a written general price list and a written itemized statement of charges in connection with burial services provided by the cemetery company.
Individuals inquiring in person about burial arrangements or the prices of property or services shall be given the general price list. Upon beginning discussion of burial arrangements or the selection of any property or services, the general price list shall be offered by the cemetery company.
The itemized statement shall include, but not be limited to, the following charges: burial vaults or other burial receptacles, facilities used, and other professional services used, which shall be set forth in a clear and conspicuous manner.
The general price list and itemized statement of burial expenses shall comply with forms prescribed by regulation of the Board. All regulations promulgated herewith shall promote the purposes of this section.
B. No cemetery company licensed pursuant to the provisions of this chapter shall make any solicitation at-need or any preneed solicitation using in-person communication by the cemetery company, his agents, assistants or employees, which is false, misleading, or contrary to the stated purpose. In addition, general advertising and preneed solicitation, other than in-person communication, shall be allowed.
§ 54.1-2328. Requirements of preneed burial contracts.
A. It shall be unlawful for any person residing or doing business within the Commonwealth, to make, either directly or indirectly by any means, a preneed burial contract unless the contract:
1. Is made on forms prescribed by the Board and is written in clear, understandable language and printed in easy-to-read type, size and style;
2. Identifies the seller, seller's license number, contract buyer and person for whom the contract is purchased if other than the contract buyer;
3. Contains a complete description of the property or services purchased;
4. Clearly discloses whether the price of the property and services purchased is guaranteed;
5. States for funds required to be trusted pursuant to § 54.1-2325, the amount to be trusted, and the name of the trustee;
6. Contains the name, address and telephone number of the Board and lists the Board as the regulatory agency which handles consumer complaints;
7. Provides that any person who makes payment under the contract may terminate the agreement at any time prior to the furnishing of the property or supplies contracted for; if the purchaser terminates the contract within thirty days of execution, the purchaser shall be refunded all consideration paid or delivered, together with any interest or income accrued thereon; if the purchaser terminates the contract after thirty days, the purchaser shall be refunded any amounts required to be deposited under § 54.l-2325, together with any interest or income accrued thereon;
8. Provides that if the particular property and services specified in the contract are unavailable at the time of delivery, the seller shall be required to furnish supplies and services similar in size and style and at least equal in quality of material and workmanship and that the representative of the deceased shall have the right to choose the property or services to be substituted;
9. Discloses any additional costs that the purchaser may be required to pay at-need;
10. Complies with all disclosure requirements imposed by the Board; and
11. Is executed in duplicate and a signed copy given to the buyer.
12. Provides that the contract buyer shall have the right to change the contract provider and the trustee at any time prior to the furnishing of the services or supplies contracted for under the preneed burial contract. If the contract seller will not be furnishing the property and services to the purchaser, the contract seller shall attach to the preneed burial contract a copy of the seller's agreement with the provider.
B. Any preneed burial contract sold or offered by any cemetery company or agent with a trust fund deposit of less than 100% shall be required to include the following printed statement in capitalized letters, in bold 10-point faced type:
THIS PRENEED BURIAL CONTRACT DOES NOT FULLY PROTECT OR PLACE IN TRUST 100% OF THE FUNDS INCLUDED IN THIS CONTRACT. THE BALANCE OF FUNDS NOT PLACED IN TRUST MAY BE USED FOR CARE AND MAINTENANCE OF THE CEMETERY AND ARE NOT FULLY PROTECTED. SIMILAR MERCHANDISE INCLUDED IN THIS CONTRACT (VAULTS, GRAVE LINERS, URNS, MEMORIALS, MARKERS OR MONUMENTS) MAY BE AVAILABLE FROM A LICENSED FUNERAL ESTABLISHMENT (FUNERAL HOME) OR LICENSED FUNERAL SERVICE LICENSEE (FUNERAL DIRECTOR) WHO ARE REQUIRED BY LAW TO PLACE IN TRUST 100% OF THE FUNDS.
§ 54.1-2329. Identification of specific funds.
Specific funds deposited in the trust account shall be identified in the records of the seller by the contract number and by the name of the buyer. The trustee may commingle the deposits in any preneed trust account for the purposes of the management thereof and the investment of funds therein.
§ 54.1-2330. Specific funds and income to remain in preneed trust account; exception.
Specific funds shall remain intact until the property is delivered or services performed as specified in the contract. The net income from the preneed trust account, after payment of any appropriate trustee fees, commissions, and costs, shall remain in the account and be reinvested and compounded. Any trustee fees, commissions, and costs in excess of income shall be paid by the cemetery company and not from the trust. However, the trustee shall, as of the close of the cemetery company's fiscal year, upon written assurance to the trustee of a certified public accountant employed by the seller, return to the seller any income in the seller's account which, when added to the specific funds, is in excess of the current cost requirements for all undelivered property or services included in the seller's preneed burial contracts. The seller's cost requirements shall be certified in its records by an affidavit sworn by the compliance agent and shall be determined by the seller as of the close of the cemetery company's fiscal year.
§ 54.1-2331. Disbursement of trust funds upon performance of contract.
A. Upon performance of the preneed burial contract, the seller shall certify to the trustee by affidavit the amount of specific funds in the trust, identified to the contract performed, which the trustee shall pay to the seller. The seller may in its records itemize the property or services and the consideration paid or to be paid therefor, to which the deposit requirements of this chapter apply. In such case, the seller may, upon certification to the trustee of performance or delivery of such property or services and of the amount of specific trust funds identified in its records to such items, request disbursement of that portion of the specific funds deposited pursuant to the contract, which the trustee shall pay to the seller.
B. If the preneed contract provides for two or more persons, the seller may, at its option, designate in its records the consideration paid for each individual in the preneed burial contract. In such case, upon performance of that portion of the contract identified to a particular individual, the seller may request, by certification in the manner described above, the disbursement of trust funds applicable to that portion of the contract, which the trustee shall pay to the seller.
§ 54.1-2332. Seller required to keep records.
Each seller of a preneed burial contract shall file with the Board at such time as the Board may prescribe, detailed accounts of all contracts and transactions regarding preneed burial contracts.
§ 54.1-2333. Financial report and written assurance required for preneed trust accounts.
A. The cemetery company shall report the following information to the Board within four months following the cemetery company's fiscal year:
1. The total amount of principal in the preneed trust account;
2. The securities in which the preneed trust account is invested;
3. The income received from the trust and the source of that income during the preceding fiscal year;
4. An affidavit executed by the compliance agent that all provisions of this chapter applicable to the seller relating to preneed trust accounts have been complied with;
5. Forty percent of the total receipts required to be deposited in the preneed trust account;
6. All expenditures from the preneed trust account; and
7. If the trustee is other than a Virginia trust company or trust subsidiary or a federally insured bank or savings institution doing business in the Commonwealth, proof that the required fidelity bond has been secured and that it is in effect.
B. The cemetery company shall employ an independent certified public accountant to audit and provide assurance that forty percent of the cash receipts from the sale of preneed property or services not to be delivered or performed within 120 days after receipt of the initial payment on account has been deposited in the account within thirty days after the close of the month in which the payment was received. Such audit shall provide full disclosure of any transactions between the preneed trust account and any directors, officers, stockholders, employees, or relatives thereof, and shall include a description of the transactions, the parties involved, the dates and amounts of the transactions, and the reasons for the transactions.
C. The information required to be filed hereunder with the Board shall be exempt from the Privacy Protection Act (§ 2.1-377 et seq.).
§ 54.1-2334. Inclusion of property and services to be delivered within 120 days.
Nothing in this chapter shall be deemed to prohibit the sale within the preneed burial contract of property or services to be delivered within 120 days after the receipt of the initial payment on account of such sale. Contracts may specify separately the total consideration paid or to be paid for preneed property or services not to be delivered or provided within 120 days after receipt of initial payment. If a contract does not so specify, the seller shall deposit forty percent of the total consideration for the entire contract.
§ 54.1-2335. Breach of contract by seller; trust to be single purpose trust.
If, after a written request, the seller fails to perform its contractual duties, the purchaser, executor or administrator of the estate, or heirs, or assigns or duly authorized representative of the purchaser shall be entitled to maintain a proper legal or equitable action in any court of competent jurisdiction. No other purchaser need be made a party to or receive notice of any proceeding brought pursuant to this section relating to the performance of any other contract.
The trust shall be a single purpose trust, and the trust funds shall not be available to any creditors as assets of the seller.
§ 54.1-2336. Trustee may rely on certifications and affidavits.
The trustee may rely upon all certifications and affidavits made pursuant to or required by the provisions of this chapter and shall not be liable to any person for such reasonable reliance.
§ 54.1-2337. Transfer of trust funds to another trustee.
The seller may, upon notification in writing to the trustee, and upon such other terms and conditions as the agreement between them may specify, transfer its account funds to another trustee qualified under the provisions of this chapter. The trustee may, upon notification in writing to the seller, and upon such other terms and conditions as the agreement between them may specify, transfer the trust funds to another trustee qualified under the provisions of this chapter.
§ 54.1-2338. Use of trustee's name in advertisements.
No person subject to the provisions of this chapter shall use the name of the trustee in any advertisement or other public solicitation without written permission of the trustee.
§ 54.1-2339. Construction and development of mausoleums and garden crypts.
Within four years after the date of the first sale, a cemetery company or other seller of mausoleums and garden crypts shall be required to start construction or development of that undeveloped ground or section of a mausoleum or garden crypt in which sales, contracts for sales, or agreements for sales are being made. The construction or development of such undeveloped mausoleum section or garden crypt shall be completed within five years after the date of the first such sale. Completed construction shall be deemed performance for purposes of this chapter.
§ 54.1-2340. Waiver of chapter void.
Any provision of any contract which purports to waive any provision of this chapter shall be void.
§ 54.1-2341. Exemption from levy, garnishment and distress.
Any money, personal property or real property paid, delivered or conveyed subject to § 54.1-2325 shall be exempt from levy, garnishment or distress.
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54.1-2342. Penalties.
It shall be unlawful for any person to violate any of the provisions of this chapter. Any such violation shall be deemed a Class 1 misdemeanor, and any person convicted of such violation shall be punished in accordance with the provisions of § 18.2-11. However, any violation of or failure to comply with §§ 54.1-2319, 54.1-2321, 54.1-2322, 54.1-2325 or 54.1-2326 shall be deemed a Class 6 felony, and any person convicted of such violation shall be punished in accordance with the provisions of § 18.2-10.
2. That Article 3.2 (§§ 57-35.11 through 57-35.35) of Chapter 3 of Title 57 of the Code of Virginia is repealed, effective July 1, 2000.
3. That the provisions of this act shall become effective on July 1, 2000, except that § 54.1-2313 shall become effective on July 1, 1998.
4. That the Cemetery Board shall adopt final regulations in accordance with Chapter 23.1 (§ 54.1-2310 et seq.) of Title 54.1 on or before July 1, 2000.
5. That the provisions of Article 3.2 (§ 57-35.11 et seq.) of Chapter 3 of Title 57 shall remain in effect until July 1, 2000, when the Cemetery Board shall regulate cemetery companies and implement its regulations in accordance with Chapter 23.1 (§ 54.1-2310 et seq.) of Title 54.1.
6. That the Board for Professional and Occupational Regulation shall conduct a study to determine the appropriate level of regulation of cemetery companies and related trust funds. The Board shall also determine the approximate costs to regulants, the affected businesses and the impact on consumers. The Board shall report its findings and recommendations to the Governor and the 1999 session of the General Assembly by December 1, 1998.