AB 79

Current law authorizes a person who owns or operates a cemetery (cemetery

authority) to receive any of the following:

1. Funds for the care of a cemetery lot (lot care funds).

2. Funds for the care of a mausoleum space (mausoleum care funds).

3. Funds paid under an agreement (preneed sales contract) for the sale of a

future mausoleum space or for the sale of goods or services, to be delivered in the

future, associated with the burial of human remains, including monuments,

markers, and urns, but excluding caskets (preneed trust funds).

Under current law, with limited exceptions, a cemetery authority may deposit

lot care funds, and must deposit mausoleum care funds and preneed trust funds,

with a state-chartered or federally chartered financial institution located in this

state, including a bank, savings bank, savings and loan association, trust company,

or credit union (financial institution). The financial institution is the trustee of the

care funds and preneed trust funds. As the trustee, the financial institution must

invest the care funds and preneed trust funds in compliance with certain prudent

investor standards.

This bill allows a cemetery authority to deposit lot care funds, mausoleum care

funds, and preneed trust funds with a broker-dealer registered, or exempt from

registration, with the Division of Securities in the Department of Financial

Institutions by expanding the definition of "financial institution" for these purposes

to include such a broker-dealer. A "broker-dealer" is defined, with limited

exceptions, as a person engaged in the business of effecting transactions in securities

for the account of others or for the person's own account.