8725. Every cemetery authority which now or hereafter maintains a
cemetery may place its cemetery under endowment care and establish,
maintain, and operate an endowment care fund. Endowment care and
special care funds consisting of trust funds created by irrevocable
trust agreements may be commingled for investment and the income
therefrom shall be divided between the endowment care and special
care funds in the proportion that each fund contributed to the
principal sum invested. Special care funds derived from trusts
created by a revocable agreement shall not be commingled for
investment and shall be accounted for separately from all other
funds. The funds may be held in the name of the cemetery authority or
its directors or in the name of the trustees appointed by the
cemetery authority.
8726. The principal of all funds for endowment care shall be
invested and the income only may be used for the care, maintenance,
and embellishment of the cemetery in accordance with the provisions
of law and the resolutions, bylaws, rules and regulations or other
actions or instruments of the cemetery authority and for no other
purpose. Endowment and special care funds shall be maintained
separate and distinct from all other funds and the trustees shall
keep separate records thereof.
8726.1. The trustee of the endowment care fund shall create a
reserve from which principal losses may be replaced by setting aside
a reasonable percentage of the income from the fund. The trustee may
also set aside out of income or net capital gains from investments,
reserves for future maintenance, repair or restoration of property or
embellishments in the cemetery which may be necessary or desirable
as a result of wear, deterioration, accident, damage or destruction.
The total amount of such reserves for maintenance, repair and
replacement shall not at any time exceed 10 percent of the endowment
care fund. "Net capital gains," as used in this section, means the
amount by which cumulative capital gains since the establishment of
the endowment care fund exceed the sum of cumulative capital losses
since the establishment of the endowment care fund and capital gains
previously set aside in reserve. Additions to the reserve in any year
from capital gains shall not exceed one-half the difference between
the capital gains and the capital losses during the year. Any capital
gains not set aside in reserve shall be a part of the principal of
the endowment care fund.
8728. The cemetery authority may from time to time adopt plans for
the general care, maintenance, and embellishment of its cemetery, and
charge and collect from all subsequent purchasers of plots such
reasonable sum as, in the judgment of the cemetery authority, will
aggregate a fund, the reasonable income from which will provide care,
maintenance and embellishment.
8729. Upon payment of the purchase price and the amount fixed as a
proportionate contribution for endowment care, there may be included
in the deed of conveyance or by separate instrument an agreement to
use the income from such endowment care fund for the care,
maintenance, and embellishment in accordance with the plan adopted,
for the cemetery and its appurtenances to the proportionate extent
the income received by the cemetery authority from the contribution
will permit.
8730. Upon the application of an owner of any plot, and upon the
payment by him of the amount fixed as a reasonable and proportionate
contribution for endowment care a cemetery authority may enter into
an agreement with him to use the income from such fund for the care
of his plot and its appurtenances.
8731. (a) The cemetery authority may appoint a board of trustees of
not less than three in number as trustees of its endowment care
fund. The members of the board of trustees shall hold office subject
to the direction of the cemetery authority.
(b) If within 30 days after notice of nonreceipt by the Cemetery
and Funeral Bureau or other agency with regulatory authority over
cemetery authorities, the cemetery authority fails to file the report
required by Section 9650 of the Business and Professions Code, or if
the report is materially not in compliance with law or the endowment
care fund is materially not in compliance with law, the cemetery
authority may be required to appoint as sole trustee of its endowment
care fund under Section 8733.5, any bank or trust company qualified
under the provisions of the Banking Law (Division 1 (commencing with
Section 99) of the Financial Code) to engage in the trust business.
That requirement may be imposed by the Cemetery and Funeral Bureau or
other agency with regulatory authority over cemetery authorities,
provided that the cemetery authority has received written notice of
the alleged violation and has been given the opportunity to correct
the alleged violation, and there has been a finding of a material
violation in an administrative hearing.
(c) (1) Each member of the board of trustees shall provide
signatory acknowledgment of understanding of the role of a trustee in
managing trust funds in the following areas:
(A) Trustee duties, powers, and liabilities as contained in Part 4
(commencing with Section 16000) of Division 9 of the Probate Code.
(B) Reporting and regulatory requirements contained in Article 3
(commencing with Section 9650) of Chapter 19 of Division 3 of the
Business and Professions Code.
(C) Provisions related to the care of active cemeteries contained
in Chapter 5 (commencing with Section 8700) of Part 3 of Division 8.
(2) The signatory acknowledgment shall be retained by the cemetery
authority during the duration of the trustee's term of office.
8732. Not more than one member of the board of trustees of an
endowment care fund may have a proprietary interest in the cemetery
authority.
8732.1. Each individual trustee of an endowment care fund shall be
a resident of this State, and a corporate trustee shall be qualified
to do business in this State.
8733. No sum in excess of 5 percent of the net income derived from
an endowment care fund, or special care fund, or both, in any year
shall be paid as compensation to the board of trustees for its
services as trustee. This amount shall be the total compensation from
the fund to be paid to a trustee for services. For purposes of this
section, "net income" means the amount of income remaining after
reasonable administrative expenses, including bookkeeping, postage,
taxes, and other costs directly related to generating income to the
trust fund, have been deducted from the gross income derived from the
fund.
8733.5. In lieu of the appointment of a board of trustees of its
endowment care fund, any cemetery authority may appoint as sole
trustee of its endowment care fund any bank or trust company
qualified under the provisions of the Banking Law (Division 1
(commencing with Section 99) of the Financial Code) to engage in the
trust business. If a cemetery authority appoints a bank or trust
company, the sum paid to the bank or trust company may exceed 5
percent of the net income derived from the endowment care fund, or
special care fund, or both, notwithstanding Section 8733.
8734. (a) Except as provided in subdivisions (b), (c), and (d), the
board of trustees or corporate trustee of an endowment care fund or
one or more special care funds shall file a fidelity bond executed by
an admitted surety insurer with the Cemetery and Funeral Bureau in
the amount of fifty thousand dollars ($50,000), guaranteeing payment
to each such fund of any monetary loss incurred by the fund
occasioned by acts of fraud or dishonesty by the trustees or trustee.
The board of trustees or corporate trustee of both an endowment care
fund and one or more special care funds need file only one such
bond.
(b) Any cemetery authority which has a fidelity bond on all
officers and employees issued by an admitted surety insurer and which
by its terms would cover any acts of fraud or dishonesty by the
trustees or corporate trustee of its endowment and special care funds
need not file a separate bond with the Cemetery and Funeral Bureau
as provided in subdivision (a), but shall submit to the Cemetery and
Funeral Bureau satisfactory evidence of such a fidelity bond. Such
fidelity bond, except as provided in subdivision (c), shall provide
at least fifty thousand dollars ($50,000) specifically designated to
guarantee payment of any monetary loss incurred by the endowment care
or special care funds of the cemetery authority occasioned by any
acts of fraud or dishonesty by the board of trustees or corporate
trustee thereof.
(c) Upon application, the Cemetery and Funeral Bureau may reduce
the amount of the bond required pursuant to this section if moneys in
the endowment care fund and special care funds administered by the
applicant board of trustees or corporate trustee are substantially
less than fifty thousand dollars ($50,000). In such cases, the
Cemetery and Funeral Bureau may permit filing of a bond pursuant to
subdivision (a) or (b) which, while the bond is on file, is not less
than the aggregate amount of all moneys in the endowment care fund
and special care funds administered by the applicant. If the Cemetery
and Funeral Bureau permits exceptions pursuant to this subdivision,
it shall adopt procedures to assure that affected bonds do not fall
below such amount.
(d) The trustees or corporate trustee of an endowment care fund or
special care fund shall take no action respecting trust funds unless
there is on file with the bureau a bond as required by this section.
The Cemetery and Funeral Bureau may suspend the certificate of
authority of any cemetery authority having endowment or special care
funds with respect to which there is no bond on file with the bureau
as required by this section, or whenever such a bond falls below the
amount required by this section.
(e) Any state or national bank authorized to engage in the trust
business pursuant to Division 1 (commencing with Section 99) of the
Financial Code shall be exempt from the requirements of this section.
8735. A cemetery authority which has established an endowment care
fund may take, receive, and hold as a part of or incident to the fund
any property, real, personal or mixed, bequeathed, devised, granted,
given or otherwise contributed to it for its endowment care fund.
8736. The endowment care fund and all payments or contributions to
it are hereby expressly permitted as and for charitable and
eleemosynary purposes. Endowment care is a provision for the
discharge of a duty due from the persons contributing to the persons
interred and to be interred in the cemetery and a provision for the
benefit and protection of the public by preserving and keeping
cemeteries from becoming unkept and places of reproach and desolation
in the communities in which they are situated.
8737. No payment, gift, grant, bequest, or other contribution for
general endowment care is invalid by reason of any indefiniteness or
uncertainty of the persons designated as beneficiaries, nor is the
fund or any contribution to it invalid as violating any law against
perpetuities or the suspension of the power of alienation of title to
property.
8738. An endowment care cemetery is one which has deposited in its
endowment care fund the minimum amounts heretofore required by law
and shall hereafter have deposited in its endowment care fund at the
time of or not later than completion of the initial sale not less
than the following amounts for plots sold or disposed of:
(a) Four dollars and fifty cents ($4.50) a square foot for each
grave.
(b) Seventy dollars ($70) for each niche.
(c) Two hundred twenty dollars ($220) for each crypt; provided,
however, that for companion crypts, there shall be deposited two
hundred twenty dollars ($220) for the first crypt and one hundred ten
dollars ($110) for each additional crypt.
(d) Seventy dollars ($70) for the cremated remains of each
deceased person scattered in the cemetery at a garden or designated
open area that is not an interment site subject to subdivision (a).
8738.1. In addition to the requirements of Section 8738 any
endowment care cemetery hereafter established shall also have
deposited in its endowment care fund the additional sum of
twenty-five thousand dollars ($25,000), or thirty-five thousand
dollars ($35,000) if established on or after January 1, 1977, before
disposing of any plot or making any sale thereof.
8738.2. The endowment care fund under the provisions of this code
shall be kept separate and apart from all other cemetery funds.
Separate records and books shall be kept of the endowment care fund.
The amount to be deposited in the endowment care fund shall be
separately shown on the original purchase agreement and a copy
delivered to the purchaser. In the sale of cemetery property, no
commission shall be paid a broker or salesman on the amount deposited
by the purchaser in the fund.
8739. A nonendowment care cemetery is one that does not have
deposited in an endowment care fund the minimum amounts required by
law.
8739.1. Any cemetery established, on or after September 7, 1955, or
excluded from the exemption provided in subdivision (c) of Section
8250 by virtue of paragraph (2) of such subdivision, shall be an
endowment care cemetery.
8740. A cemetery which otherwise complies with Section 8738 may be
designated an endowment care cemetery even though it contains a small
section which may be sold without endowment care, if the section is
separately set off from the remainder of the cemetery and if signs
are kept prominently placed around the section designating the same
as a "nonendowment care section" in legible black lettering at least
four inches high. There shall be printed at the head of all
contracts, agreements, statements, receipts and certificates of
ownership or deeds referring to plots in the section the phrase
"nonendowment care" in lettering of a size and style to be approved
by the Cemetery and Funeral Bureau.
No new "nonendowment care" sections shall be established, nor an
existing one enlarged in an endowment care cemetery.
8741. Each endowment care cemetery shall post in a conspicuous
place at or near the entrance of the cemetery and at its
administration building and readily accessible to the public, a
legible sign that shall contain the following information in the
order and manner set forth below:
(a) A heading containing the words "endowment care"--which shall
appear in a minimum of one-inch letters.
(b) The statement, "This is an endowment care interment property."
8743. Each nonendowment care cemetery or the Cemetery and Funeral
Bureau shall post in a conspicuous place in the office or offices
where sales are conducted and in a conspicuous place at or near the
entrance of the cemetery or its administration building and readily
accessible to the public, a legible sign with lettering of a size and
style to be approved by the Cemetery and Funeral Bureau that shall
contain the following information in the order and manner set forth
below:
(a) A heading containing the words "nonendowment care."
(b) This is a nonendowment care interment property.
8744. There shall be printed at the head of all contracts,
agreements, statements, receipts, literature and other publications
of nonendowment care cemeteries the following form:
"This institution is operated as a "nonendowment care' interment
property."
The phrase "nonendowment care" shall be of a size and style to be
approved by the Cemetery and Funeral Bureau.
8745. All the information appearing on the signs and report filed
in the cemetery office shall be revised annually and verified by the
president and secretary, or two officers authorized by the cemetery
authority.
8746. Any person, partnership, corporation, association, or his,
her, or its agents or representatives, who shall violate any of the
provisions of this article, except as provided in Section 8785, or
make any willful or false statement appearing on a sign, contract,
agreement, receipt, statement, literature or other publication shall
be guilty of a misdemeanor.
8747.5. Each cemetery shall at all times maintain and keep within
the State of California all books, accounts, records, cash and
evidences of investments of its general and special care funds. They
shall be readily available for inspection and examination by the
Cemetery and Funeral Bureau in accordance with the provisions of the
Business and Professions Code.
8748. Where an endowment care mausoleum or mausoleum-columbarium is
operated within an endowment care cemetery and the cemetery
corporations or cemetery authorities owning or operating each merge
and consolidate into one cemetery authority or corporation, the
endowment care funds established by each may be consolidated and
merged into one endowment care fund. Such merger shall be
accomplished by the execution of a declaration of trust by the
successor cemetery authority or corporation, which declaration shall
provide:
(a) That the assets of each endowment care fund shall be merged
and consolidated into one endowment care fund which shall be held and
administered by the directors of the successor cemetery authority or
the trustees appointed by them for the care, maintenance, and
embellishment of both cemeteries in accordance with the provisions of
this code.
(b) That the income from such endowment care funds shall be used
for the general care, maintenance, and embellishment for the cemetery
as a whole, or, if the income from such consolidated fund is to be
divided between such mausoleum or mausoleum-columbarium and cemetery,
the proportion or manner in which it is to be divided.
(c) That it accepts and will administer all special care funds for
the purpose for which they were established and in accordance with
the provisions of this code.
The declaration of trust shall be approved by all of the trustees
of each endowment care fund and by the directors of the cemetery
authority or corporation appointing such trustees, which approval
shall be endorsed upon such declaration of trust. The declaration of
trust shall not be effective unless and until approved by the
Cemetery and Funeral Bureau.
An executed copy of such declaration of trust so approved shall be
filed with the Cemetery and Funeral Bureau and in the office of the
cemetery authority or corporation owning or operating such cemetery,
where it shall be available for inspection by any owner of property
therein.
Upon approval of the declaration of trust by the Cemetery and
Funeral Bureau, the assets and liabilities of such endowment care
funds shall be deemed merged and consolidated into one endowment care
fund, and the trustees of, or appointed by, the cemetery authority
or corporation handling such funds shall be immediately vested with
the title to all of the assets and subject to all of the liabilities
thereof. The trustees of the endowment care funds which have been
thus merged or consolidated shall be relieved of any obligations or
duties arising subsequent to such merger or consolidation.
8725. Every cemetery authority which now or hereafter maintains a
cemetery may place its cemetery under endowment care and establish,
maintain, and operate an endowment care fund. Endowment care and
special care funds consisting of trust funds created by irrevocable
trust agreements may be commingled for investment and the income
therefrom shall be divided between the endowment care and special
care funds in the proportion that each fund contributed to the
principal sum invested. Special care funds derived from trusts
created by a revocable agreement shall not be commingled for
investment and shall be accounted for separately from all other
funds. The funds may be held in the name of the cemetery authority or
its directors or in the name of the trustees appointed by the
cemetery authority.
8726. The principal of all funds for endowment care shall be
invested and the income only may be used for the care, maintenance,
and embellishment of the cemetery in accordance with the provisions
of law and the resolutions, bylaws, rules and regulations or other
actions or instruments of the cemetery authority and for no other
purpose. Endowment and special care funds shall be maintained
separate and distinct from all other funds and the trustees shall
keep separate records thereof.
8726.1. The trustee of the endowment care fund shall create a
reserve from which principal losses may be replaced by setting aside
a reasonable percentage of the income from the fund. The trustee may
also set aside out of income or net capital gains from investments,
reserves for future maintenance, repair or restoration of property or
embellishments in the cemetery which may be necessary or desirable
as a result of wear, deterioration, accident, damage or destruction.
The total amount of such reserves for maintenance, repair and
replacement shall not at any time exceed 10 percent of the endowment
care fund. "Net capital gains," as used in this section, means the
amount by which cumulative capital gains since the establishment of
the endowment care fund exceed the sum of cumulative capital losses
since the establishment of the endowment care fund and capital gains
previously set aside in reserve. Additions to the reserve in any year
from capital gains shall not exceed one-half the difference between
the capital gains and the capital losses during the year. Any capital
gains not set aside in reserve shall be a part of the principal of
the endowment care fund.
8728. The cemetery authority may from time to time adopt plans for
the general care, maintenance, and embellishment of its cemetery, and
charge and collect from all subsequent purchasers of plots such
reasonable sum as, in the judgment of the cemetery authority, will
aggregate a fund, the reasonable income from which will provide care,
maintenance and embellishment.
8729. Upon payment of the purchase price and the amount fixed as a
proportionate contribution for endowment care, there may be included
in the deed of conveyance or by separate instrument an agreement to
use the income from such endowment care fund for the care,
maintenance, and embellishment in accordance with the plan adopted,
for the cemetery and its appurtenances to the proportionate extent
the income received by the cemetery authority from the contribution
will permit.
8730. Upon the application of an owner of any plot, and upon the
payment by him of the amount fixed as a reasonable and proportionate
contribution for endowment care a cemetery authority may enter into
an agreement with him to use the income from such fund for the care
of his plot and its appurtenances.
8731. (a) The cemetery authority may appoint a board of trustees of
not less than three in number as trustees of its endowment care
fund. The members of the board of trustees shall hold office subject
to the direction of the cemetery authority.
(b) If within 30 days after notice of nonreceipt by the Cemetery
and Funeral Bureau or other agency with regulatory authority over
cemetery authorities, the cemetery authority fails to file the report
required by Section 9650 of the Business and Professions Code, or if
the report is materially not in compliance with law or the endowment
care fund is materially not in compliance with law, the cemetery
authority may be required to appoint as sole trustee of its endowment
care fund under Section 8733.5, any bank or trust company qualified
under the provisions of the Banking Law (Division 1 (commencing with
Section 99) of the Financial Code) to engage in the trust business.
That requirement may be imposed by the Cemetery and Funeral Bureau or
other agency with regulatory authority over cemetery authorities,
provided that the cemetery authority has received written notice of
the alleged violation and has been given the opportunity to correct
the alleged violation, and there has been a finding of a material
violation in an administrative hearing.
(c) (1) Each member of the board of trustees shall provide
signatory acknowledgment of understanding of the role of a trustee in
managing trust funds in the following areas:
(A) Trustee duties, powers, and liabilities as contained in Part 4
(commencing with Section 16000) of Division 9 of the Probate Code.
(B) Reporting and regulatory requirements contained in Article 3
(commencing with Section 9650) of Chapter 19 of Division 3 of the
Business and Professions Code.
(C) Provisions related to the care of active cemeteries contained
in Chapter 5 (commencing with Section 8700) of Part 3 of Division 8.
(2) The signatory acknowledgment shall be retained by the cemetery
authority during the duration of the trustee's term of office.
8732. Not more than one member of the board of trustees of an
endowment care fund may have a proprietary interest in the cemetery
authority.
8732.1. Each individual trustee of an endowment care fund shall be
a resident of this State, and a corporate trustee shall be qualified
to do business in this State.
8733. No sum in excess of 5 percent of the net income derived from
an endowment care fund, or special care fund, or both, in any year
shall be paid as compensation to the board of trustees for its
services as trustee. This amount shall be the total compensation from
the fund to be paid to a trustee for services. For purposes of this
section, "net income" means the amount of income remaining after
reasonable administrative expenses, including bookkeeping, postage,
taxes, and other costs directly related to generating income to the
trust fund, have been deducted from the gross income derived from the
fund.
8733.5. In lieu of the appointment of a board of trustees of its
endowment care fund, any cemetery authority may appoint as sole
trustee of its endowment care fund any bank or trust company
qualified under the provisions of the Banking Law (Division 1
(commencing with Section 99) of the Financial Code) to engage in the
trust business. If a cemetery authority appoints a bank or trust
company, the sum paid to the bank or trust company may exceed 5
percent of the net income derived from the endowment care fund, or
special care fund, or both, notwithstanding Section 8733.
8734. (a) Except as provided in subdivisions (b), (c), and (d), the
board of trustees or corporate trustee of an endowment care fund or
one or more special care funds shall file a fidelity bond executed by
an admitted surety insurer with the Cemetery and Funeral Bureau in
the amount of fifty thousand dollars ($50,000), guaranteeing payment
to each such fund of any monetary loss incurred by the fund
occasioned by acts of fraud or dishonesty by the trustees or trustee.
The board of trustees or corporate trustee of both an endowment care
fund and one or more special care funds need file only one such
bond.
(b) Any cemetery authority which has a fidelity bond on all
officers and employees issued by an admitted surety insurer and which
by its terms would cover any acts of fraud or dishonesty by the
trustees or corporate trustee of its endowment and special care funds
need not file a separate bond with the Cemetery and Funeral Bureau
as provided in subdivision (a), but shall submit to the Cemetery and
Funeral Bureau satisfactory evidence of such a fidelity bond. Such
fidelity bond, except as provided in subdivision (c), shall provide
at least fifty thousand dollars ($50,000) specifically designated to
guarantee payment of any monetary loss incurred by the endowment care
or special care funds of the cemetery authority occasioned by any
acts of fraud or dishonesty by the board of trustees or corporate
trustee thereof.
(c) Upon application, the Cemetery and Funeral Bureau may reduce
the amount of the bond required pursuant to this section if moneys in
the endowment care fund and special care funds administered by the
applicant board of trustees or corporate trustee are substantially
less than fifty thousand dollars ($50,000). In such cases, the
Cemetery and Funeral Bureau may permit filing of a bond pursuant to
subdivision (a) or (b) which, while the bond is on file, is not less
than the aggregate amount of all moneys in the endowment care fund
and special care funds administered by the applicant. If the Cemetery
and Funeral Bureau permits exceptions pursuant to this subdivision,
it shall adopt procedures to assure that affected bonds do not fall
below such amount.
(d) The trustees or corporate trustee of an endowment care fund or
special care fund shall take no action respecting trust funds unless
there is on file with the bureau a bond as required by this section.
The Cemetery and Funeral Bureau may suspend the certificate of
authority of any cemetery authority having endowment or special care
funds with respect to which there is no bond on file with the bureau
as required by this section, or whenever such a bond falls below the
amount required by this section.
(e) Any state or national bank authorized to engage in the trust
business pursuant to Division 1 (commencing with Section 99) of the
Financial Code shall be exempt from the requirements of this section.
8735. A cemetery authority which has established an endowment care
fund may take, receive, and hold as a part of or incident to the fund
any property, real, personal or mixed, bequeathed, devised, granted,
given or otherwise contributed to it for its endowment care fund.
8736. The endowment care fund and all payments or contributions to
it are hereby expressly permitted as and for charitable and
eleemosynary purposes. Endowment care is a provision for the
discharge of a duty due from the persons contributing to the persons
interred and to be interred in the cemetery and a provision for the
benefit and protection of the public by preserving and keeping
cemeteries from becoming unkept and places of reproach and desolation
in the communities in which they are situated.
8737. No payment, gift, grant, bequest, or other contribution for
general endowment care is invalid by reason of any indefiniteness or
uncertainty of the persons designated as beneficiaries, nor is the
fund or any contribution to it invalid as violating any law against
perpetuities or the suspension of the power of alienation of title to
property.
8738. An endowment care cemetery is one which has deposited in its
endowment care fund the minimum amounts heretofore required by law
and shall hereafter have deposited in its endowment care fund at the
time of or not later than completion of the initial sale not less
than the following amounts for plots sold or disposed of:
(a) Four dollars and fifty cents ($4.50) a square foot for each
grave.
(b) Seventy dollars ($70) for each niche.
(c) Two hundred twenty dollars ($220) for each crypt; provided,
however, that for companion crypts, there shall be deposited two
hundred twenty dollars ($220) for the first crypt and one hundred ten
dollars ($110) for each additional crypt.
(d) Seventy dollars ($70) for the cremated remains of each
deceased person scattered in the cemetery at a garden or designated
open area that is not an interment site subject to subdivision (a).
8738.1. In addition to the requirements of Section 8738 any
endowment care cemetery hereafter established shall also have
deposited in its endowment care fund the additional sum of
twenty-five thousand dollars ($25,000), or thirty-five thousand
dollars ($35,000) if established on or after January 1, 1977, before
disposing of any plot or making any sale thereof.
8738.2. The endowment care fund under the provisions of this code
shall be kept separate and apart from all other cemetery funds.
Separate records and books shall be kept of the endowment care fund.
The amount to be deposited in the endowment care fund shall be
separately shown on the original purchase agreement and a copy
delivered to the purchaser. In the sale of cemetery property, no
commission shall be paid a broker or salesman on the amount deposited
by the purchaser in the fund.
8739. A nonendowment care cemetery is one that does not have
deposited in an endowment care fund the minimum amounts required by
law.
8739.1. Any cemetery established, on or after September 7, 1955, or
excluded from the exemption provided in subdivision (c) of Section
8250 by virtue of paragraph (2) of such subdivision, shall be an
endowment care cemetery.
8740. A cemetery which otherwise complies with Section 8738 may be
designated an endowment care cemetery even though it contains a small
section which may be sold without endowment care, if the section is
separately set off from the remainder of the cemetery and if signs
are kept prominently placed around the section designating the same
as a "nonendowment care section" in legible black lettering at least
four inches high. There shall be printed at the head of all
contracts, agreements, statements, receipts and certificates of
ownership or deeds referring to plots in the section the phrase
"nonendowment care" in lettering of a size and style to be approved
by the Cemetery and Funeral Bureau.
No new "nonendowment care" sections shall be established, nor an
existing one enlarged in an endowment care cemetery.
8741. Each endowment care cemetery shall post in a conspicuous
place at or near the entrance of the cemetery and at its
administration building and readily accessible to the public, a
legible sign that shall contain the following information in the
order and manner set forth below:
(a) A heading containing the words "endowment care"--which shall
appear in a minimum of one-inch letters.
(b) The statement, "This is an endowment care interment property."
8743. Each nonendowment care cemetery or the Cemetery and Funeral
Bureau shall post in a conspicuous place in the office or offices
where sales are conducted and in a conspicuous place at or near the
entrance of the cemetery or its administration building and readily
accessible to the public, a legible sign with lettering of a size and
style to be approved by the Cemetery and Funeral Bureau that shall
contain the following information in the order and manner set forth
below:
(a) A heading containing the words "nonendowment care."
(b) This is a nonendowment care interment property.
8744. There shall be printed at the head of all contracts,
agreements, statements, receipts, literature and other publications
of nonendowment care cemeteries the following form:
"This institution is operated as a "nonendowment care' interment
property."
The phrase "nonendowment care" shall be of a size and style to be
approved by the Cemetery and Funeral Bureau.
8745. All the information appearing on the signs and report filed
in the cemetery office shall be revised annually and verified by the
president and secretary, or two officers authorized by the cemetery
authority.
8746. Any person, partnership, corporation, association, or his,
her, or its agents or representatives, who shall violate any of the
provisions of this article, except as provided in Section 8785, or
make any willful or false statement appearing on a sign, contract,
agreement, receipt, statement, literature or other publication shall
be guilty of a misdemeanor.
8747.5. Each cemetery shall at all times maintain and keep within
the State of California all books, accounts, records, cash and
evidences of investments of its general and special care funds. They
shall be readily available for inspection and examination by the
Cemetery and Funeral Bureau in accordance with the provisions of the
Business and Professions Code.
8748. Where an endowment care mausoleum or mausoleum-columbarium is
operated within an endowment care cemetery and the cemetery
corporations or cemetery authorities owning or operating each merge
and consolidate into one cemetery authority or corporation, the
endowment care funds established by each may be consolidated and
merged into one endowment care fund. Such merger shall be
accomplished by the execution of a declaration of trust by the
successor cemetery authority or corporation, which declaration shall
provide:
(a) That the assets of each endowment care fund shall be merged
and consolidated into one endowment care fund which shall be held and
administered by the directors of the successor cemetery authority or
the trustees appointed by them for the care, maintenance, and
embellishment of both cemeteries in accordance with the provisions of
this code.
(b) That the income from such endowment care funds shall be used
for the general care, maintenance, and embellishment for the cemetery
as a whole, or, if the income from such consolidated fund is to be
divided between such mausoleum or mausoleum-columbarium and cemetery,
the proportion or manner in which it is to be divided.
(c) That it accepts and will administer all special care funds for
the purpose for which they were established and in accordance with
the provisions of this code.
The declaration of trust shall be approved by all of the trustees
of each endowment care fund and by the directors of the cemetery
authority or corporation appointing such trustees, which approval
shall be endorsed upon such declaration of trust. The declaration of
trust shall not be effective unless and until approved by the
Cemetery and Funeral Bureau.
An executed copy of such declaration of trust so approved shall be
filed with the Cemetery and Funeral Bureau and in the office of the
cemetery authority or corporation owning or operating such cemetery,
where it shall be available for inspection by any owner of property
therein.
Upon approval of the declaration of trust by the Cemetery and
Funeral Bureau, the assets and liabilities of such endowment care
funds shall be deemed merged and consolidated into one endowment care
fund, and the trustees of, or appointed by, the cemetery authority
or corporation handling such funds shall be immediately vested with
the title to all of the assets and subject to all of the liabilities
thereof. The trustees of the endowment care funds which have been
thus merged or consolidated shall be relieved of any obligations or
duties arising subsequent to such merger or consolidation.
8725. Every cemetery authority which now or hereafter maintains a
cemetery may place its cemetery under endowment care and establish,
maintain, and operate an endowment care fund. Endowment care and
special care funds consisting of trust funds created by irrevocable
trust agreements may be commingled for investment and the income
therefrom shall be divided between the endowment care and special
care funds in the proportion that each fund contributed to the
principal sum invested. Special care funds derived from trusts
created by a revocable agreement shall not be commingled for
investment and shall be accounted for separately from all other
funds. The funds may be held in the name of the cemetery authority or
its directors or in the name of the trustees appointed by the
cemetery authority.
8726. The principal of all funds for endowment care shall be
invested and the income only may be used for the care, maintenance,
and embellishment of the cemetery in accordance with the provisions
of law and the resolutions, bylaws, rules and regulations or other
actions or instruments of the cemetery authority and for no other
purpose. Endowment and special care funds shall be maintained
separate and distinct from all other funds and the trustees shall
keep separate records thereof.
8726.1. The trustee of the endowment care fund shall create a
reserve from which principal losses may be replaced by setting aside
a reasonable percentage of the income from the fund. The trustee may
also set aside out of income or net capital gains from investments,
reserves for future maintenance, repair or restoration of property or
embellishments in the cemetery which may be necessary or desirable
as a result of wear, deterioration, accident, damage or destruction.
The total amount of such reserves for maintenance, repair and
replacement shall not at any time exceed 10 percent of the endowment
care fund. "Net capital gains," as used in this section, means the
amount by which cumulative capital gains since the establishment of
the endowment care fund exceed the sum of cumulative capital losses
since the establishment of the endowment care fund and capital gains
previously set aside in reserve. Additions to the reserve in any year
from capital gains shall not exceed one-half the difference between
the capital gains and the capital losses during the year. Any capital
gains not set aside in reserve shall be a part of the principal of
the endowment care fund.
8728. The cemetery authority may from time to time adopt plans for
the general care, maintenance, and embellishment of its cemetery, and
charge and collect from all subsequent purchasers of plots such
reasonable sum as, in the judgment of the cemetery authority, will
aggregate a fund, the reasonable income from which will provide care,
maintenance and embellishment.
8729. Upon payment of the purchase price and the amount fixed as a
proportionate contribution for endowment care, there may be included
in the deed of conveyance or by separate instrument an agreement to
use the income from such endowment care fund for the care,
maintenance, and embellishment in accordance with the plan adopted,
for the cemetery and its appurtenances to the proportionate extent
the income received by the cemetery authority from the contribution
will permit.
8730. Upon the application of an owner of any plot, and upon the
payment by him of the amount fixed as a reasonable and proportionate
contribution for endowment care a cemetery authority may enter into
an agreement with him to use the income from such fund for the care
of his plot and its appurtenances.
8731. (a) The cemetery authority may appoint a board of trustees of
not less than three in number as trustees of its endowment care
fund. The members of the board of trustees shall hold office subject
to the direction of the cemetery authority.
(b) If within 30 days after notice of nonreceipt by the Cemetery
and Funeral Bureau or other agency with regulatory authority over
cemetery authorities, the cemetery authority fails to file the report
required by Section 9650 of the Business and Professions Code, or if
the report is materially not in compliance with law or the endowment
care fund is materially not in compliance with law, the cemetery
authority may be required to appoint as sole trustee of its endowment
care fund under Section 8733.5, any bank or trust company qualified
under the provisions of the Banking Law (Division 1 (commencing with
Section 99) of the Financial Code) to engage in the trust business.
That requirement may be imposed by the Cemetery and Funeral Bureau or
other agency with regulatory authority over cemetery authorities,
provided that the cemetery authority has received written notice of
the alleged violation and has been given the opportunity to correct
the alleged violation, and there has been a finding of a material
violation in an administrative hearing.
(c) (1) Each member of the board of trustees shall provide
signatory acknowledgment of understanding of the role of a trustee in
managing trust funds in the following areas:
(A) Trustee duties, powers, and liabilities as contained in Part 4
(commencing with Section 16000) of Division 9 of the Probate Code.
(B) Reporting and regulatory requirements contained in Article 3
(commencing with Section 9650) of Chapter 19 of Division 3 of the
Business and Professions Code.
(C) Provisions related to the care of active cemeteries contained
in Chapter 5 (commencing with Section 8700) of Part 3 of Division 8.
(2) The signatory acknowledgment shall be retained by the cemetery
authority during the duration of the trustee's term of office.
8732. Not more than one member of the board of trustees of an
endowment care fund may have a proprietary interest in the cemetery
authority.
8732.1. Each individual trustee of an endowment care fund shall be
a resident of this State, and a corporate trustee shall be qualified
to do business in this State.
8733. No sum in excess of 5 percent of the net income derived from
an endowment care fund, or special care fund, or both, in any year
shall be paid as compensation to the board of trustees for its
services as trustee. This amount shall be the total compensation from
the fund to be paid to a trustee for services. For purposes of this
section, "net income" means the amount of income remaining after
reasonable administrative expenses, including bookkeeping, postage,
taxes, and other costs directly related to generating income to the
trust fund, have been deducted from the gross income derived from the
fund.
8733.5. In lieu of the appointment of a board of trustees of its
endowment care fund, any cemetery authority may appoint as sole
trustee of its endowment care fund any bank or trust company
qualified under the provisions of the Banking Law (Division 1
(commencing with Section 99) of the Financial Code) to engage in the
trust business. If a cemetery authority appoints a bank or trust
company, the sum paid to the bank or trust company may exceed 5
percent of the net income derived from the endowment care fund, or
special care fund, or both, notwithstanding Section 8733.
8734. (a) Except as provided in subdivisions (b), (c), and (d), the
board of trustees or corporate trustee of an endowment care fund or
one or more special care funds shall file a fidelity bond executed by
an admitted surety insurer with the Cemetery and Funeral Bureau in
the amount of fifty thousand dollars ($50,000), guaranteeing payment
to each such fund of any monetary loss incurred by the fund
occasioned by acts of fraud or dishonesty by the trustees or trustee.
The board of trustees or corporate trustee of both an endowment care
fund and one or more special care funds need file only one such
bond.
(b) Any cemetery authority which has a fidelity bond on all
officers and employees issued by an admitted surety insurer and which
by its terms would cover any acts of fraud or dishonesty by the
trustees or corporate trustee of its endowment and special care funds
need not file a separate bond with the Cemetery and Funeral Bureau
as provided in subdivision (a), but shall submit to the Cemetery and
Funeral Bureau satisfactory evidence of such a fidelity bond. Such
fidelity bond, except as provided in subdivision (c), shall provide
at least fifty thousand dollars ($50,000) specifically designated to
guarantee payment of any monetary loss incurred by the endowment care
or special care funds of the cemetery authority occasioned by any
acts of fraud or dishonesty by the board of trustees or corporate
trustee thereof.
(c) Upon application, the Cemetery and Funeral Bureau may reduce
the amount of the bond required pursuant to this section if moneys in
the endowment care fund and special care funds administered by the
applicant board of trustees or corporate trustee are substantially
less than fifty thousand dollars ($50,000). In such cases, the
Cemetery and Funeral Bureau may permit filing of a bond pursuant to
subdivision (a) or (b) which, while the bond is on file, is not less
than the aggregate amount of all moneys in the endowment care fund
and special care funds administered by the applicant. If the Cemetery
and Funeral Bureau permits exceptions pursuant to this subdivision,
it shall adopt procedures to assure that affected bonds do not fall
below such amount.
(d) The trustees or corporate trustee of an endowment care fund or
special care fund shall take no action respecting trust funds unless
there is on file with the bureau a bond as required by this section.
The Cemetery and Funeral Bureau may suspend the certificate of
authority of any cemetery authority having endowment or special care
funds with respect to which there is no bond on file with the bureau
as required by this section, or whenever such a bond falls below the
amount required by this section.
(e) Any state or national bank authorized to engage in the trust
business pursuant to Division 1 (commencing with Section 99) of the
Financial Code shall be exempt from the requirements of this section.
8735. A cemetery authority which has established an endowment care
fund may take, receive, and hold as a part of or incident to the fund
any property, real, personal or mixed, bequeathed, devised, granted,
given or otherwise contributed to it for its endowment care fund.
8736. The endowment care fund and all payments or contributions to
it are hereby expressly permitted as and for charitable and
eleemosynary purposes. Endowment care is a provision for the
discharge of a duty due from the persons contributing to the persons
interred and to be interred in the cemetery and a provision for the
benefit and protection of the public by preserving and keeping
cemeteries from becoming unkept and places of reproach and desolation
in the communities in which they are situated.
8737. No payment, gift, grant, bequest, or other contribution for
general endowment care is invalid by reason of any indefiniteness or
uncertainty of the persons designated as beneficiaries, nor is the
fund or any contribution to it invalid as violating any law against
perpetuities or the suspension of the power of alienation of title to
property.
8738. An endowment care cemetery is one which has deposited in its
endowment care fund the minimum amounts heretofore required by law
and shall hereafter have deposited in its endowment care fund at the
time of or not later than completion of the initial sale not less
than the following amounts for plots sold or disposed of:
(a) Four dollars and fifty cents ($4.50) a square foot for each
grave.
(b) Seventy dollars ($70) for each niche.
(c) Two hundred twenty dollars ($220) for each crypt; provided,
however, that for companion crypts, there shall be deposited two
hundred twenty dollars ($220) for the first crypt and one hundred ten
dollars ($110) for each additional crypt.
(d) Seventy dollars ($70) for the cremated remains of each
deceased person scattered in the cemetery at a garden or designated
open area that is not an interment site subject to subdivision (a).
8738.1. In addition to the requirements of Section 8738 any
endowment care cemetery hereafter established shall also have
deposited in its endowment care fund the additional sum of
twenty-five thousand dollars ($25,000), or thirty-five thousand
dollars ($35,000) if established on or after January 1, 1977, before
disposing of any plot or making any sale thereof.
8738.2. The endowment care fund under the provisions of this code
shall be kept separate and apart from all other cemetery funds.
Separate records and books shall be kept of the endowment care fund.
The amount to be deposited in the endowment care fund shall be
separately shown on the original purchase agreement and a copy
delivered to the purchaser. In the sale of cemetery property, no
commission shall be paid a broker or salesman on the amount deposited
by the purchaser in the fund.
8739. A nonendowment care cemetery is one that does not have
deposited in an endowment care fund the minimum amounts required by
law.
8739.1. Any cemetery established, on or after September 7, 1955, or
excluded from the exemption provided in subdivision (c) of Section
8250 by virtue of paragraph (2) of such subdivision, shall be an
endowment care cemetery.
8740. A cemetery which otherwise complies with Section 8738 may be
designated an endowment care cemetery even though it contains a small
section which may be sold without endowment care, if the section is
separately set off from the remainder of the cemetery and if signs
are kept prominently placed around the section designating the same
as a "nonendowment care section" in legible black lettering at least
four inches high. There shall be printed at the head of all
contracts, agreements, statements, receipts and certificates of
ownership or deeds referring to plots in the section the phrase
"nonendowment care" in lettering of a size and style to be approved
by the Cemetery and Funeral Bureau.
No new "nonendowment care" sections shall be established, nor an
existing one enlarged in an endowment care cemetery.
8741. Each endowment care cemetery shall post in a conspicuous
place at or near the entrance of the cemetery and at its
administration building and readily accessible to the public, a
legible sign that shall contain the following information in the
order and manner set forth below:
(a) A heading containing the words "endowment care"--which shall
appear in a minimum of one-inch letters.
(b) The statement, "This is an endowment care interment property."
8743. Each nonendowment care cemetery or the Cemetery and Funeral
Bureau shall post in a conspicuous place in the office or offices
where sales are conducted and in a conspicuous place at or near the
entrance of the cemetery or its administration building and readily
accessible to the public, a legible sign with lettering of a size and
style to be approved by the Cemetery and Funeral Bureau that shall
contain the following information in the order and manner set forth
below:
(a) A heading containing the words "nonendowment care."
(b) This is a nonendowment care interment property.
8744. There shall be printed at the head of all contracts,
agreements, statements, receipts, literature and other publications
of nonendowment care cemeteries the following form:
"This institution is operated as a "nonendowment care' interment
property."
The phrase "nonendowment care" shall be of a size and style to be
approved by the Cemetery and Funeral Bureau.
8745. All the information appearing on the signs and report filed
in the cemetery office shall be revised annually and verified by the
president and secretary, or two officers authorized by the cemetery
authority.
8746. Any person, partnership, corporation, association, or his,
her, or its agents or representatives, who shall violate any of the
provisions of this article, except as provided in Section 8785, or
make any willful or false statement appearing on a sign, contract,
agreement, receipt, statement, literature or other publication shall
be guilty of a misdemeanor.
8747.5. Each cemetery shall at all times maintain and keep within
the State of California all books, accounts, records, cash and
evidences of investments of its general and special care funds. They
shall be readily available for inspection and examination by the
Cemetery and Funeral Bureau in accordance with the provisions of the
Business and Professions Code.
8748. Where an endowment care mausoleum or mausoleum-columbarium is
operated within an endowment care cemetery and the cemetery
corporations or cemetery authorities owning or operating each merge
and consolidate into one cemetery authority or corporation, the
endowment care funds established by each may be consolidated and
merged into one endowment care fund. Such merger shall be
accomplished by the execution of a declaration of trust by the
successor cemetery authority or corporation, which declaration shall
provide:
(a) That the assets of each endowment care fund shall be merged
and consolidated into one endowment care fund which shall be held and
administered by the directors of the successor cemetery authority or
the trustees appointed by them for the care, maintenance, and
embellishment of both cemeteries in accordance with the provisions of
this code.
(b) That the income from such endowment care funds shall be used
for the general care, maintenance, and embellishment for the cemetery
as a whole, or, if the income from such consolidated fund is to be
divided between such mausoleum or mausoleum-columbarium and cemetery,
the proportion or manner in which it is to be divided.
(c) That it accepts and will administer all special care funds for
the purpose for which they were established and in accordance with
the provisions of this code.
The declaration of trust shall be approved by all of the trustees
of each endowment care fund and by the directors of the cemetery
authority or corporation appointing such trustees, which approval
shall be endorsed upon such declaration of trust. The declaration of
trust shall not be effective unless and until approved by the
Cemetery and Funeral Bureau.
An executed copy of such declaration of trust so approved shall be
filed with the Cemetery and Funeral Bureau and in the office of the
cemetery authority or corporation owning or operating such cemetery,
where it shall be available for inspection by any owner of property
therein.
Upon approval of the declaration of trust by the Cemetery and
Funeral Bureau, the assets and liabilities of such endowment care
funds shall be deemed merged and consolidated into one endowment care
fund, and the trustees of, or appointed by, the cemetery authority
or corporation handling such funds shall be immediately vested with
the title to all of the assets and subject to all of the liabilities
thereof. The trustees of the endowment care funds which have been
thus merged or consolidated shall be relieved of any obligations or
duties arising subsequent to such merger or consolidation.
