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RULE PROPOSALS
VOLUME 41, ISSUE 16
ISSUE DATE: AUGUST 17, 2009
LAW AND PUBLIC SAFETY
DIVISION OF CONSUMER AFFAIRS
NEW JERSEY CEMETERY BOARD
Proposed Amendment: N.J.A.C. 13:44J-13.6
Proposed New Rule: N.J.A.C. 13:44J-5.4A
Co-Mingling of Trust Funds for Building Maintenance; Application
to Lease or License Cemetery Lands
Authorized By: New Jersey Cemetery Board, Dianne Tamaroglio, Executive
Director.
Authority: N.J.S.A. 45:27-4.
Calendar Reference: See Summary below for explanation of exception
to calendar requirement.
Proposal Number: PRN 2009-260.
Submit comments by October 16, 2009 to:
Dianne Tamaroglio, Executive Director
New Jersey Cemetery Board
PO Box 45031
Newark, NJ 07101
The agency proposal follows:
Summary
N.J.S.A. 45:27-14 requires cemetery companies to create a Building
Maintenance Fund for the maintenance of a public mausoleum and to create
a trust fund for every private mausoleum constructed on cemetery grounds.
The Cemetery Board (Board) proposes new rule N.J.A.C. 13:44J-5.4A to
allow cemetery companies to co-mingle private mausoleum trust funds and
to co-mingle public mausoleum trust funds. Cemetery companies that co-mingle
trust funds must ensure that the income from the co-mingled fund is allocated
to each mausoleum based upon the amount each mausoleum contributes to
the co-mingled fund. These requirements are imposed to ensure that the
income from each individual mausoleum fund is being used to maintain
that mausoleum and is not being used to support other mausoleums. The
proposed new rule requires cemetery companies that co-mingle trust funds
to include specific information in annual reports.
The Board proposes to amend N.J.A.C. 13:44J-13.6 to require that an
application to lease cemetery lands include a statement that 15 percent
of the proceeds of the lease will be deposited in the Maintenance and
Preservation Fund. This requirement is imposed pursuant to N.J.S.A. 45:27-34e.
As the Board has provided a 60-day comment period on this notice of
proposal, this notice is excepted from the rulemaking calendar requirement
pursuant to N.J.A.C. 1:30-3.3(a)5.
Social Impact
The Board anticipates that the proposed new rule and amendment will
benefit cemetery companies. Currently, a separate trust fund must be
created for each mausoleum in a cemetery. These trust funds are relatively
small and the administrative costs associated with maintaining the trust
results in a small amount of income to maintain the mausoleum. The Board
believes that co-mingling trust funds will result in lower administrative
[page=3030] costs, as those costs will be shared by all the mausoleum
trust funds in the co-mingled fund. These lower administrative costs
will leave more income to maintain mausoleums. The Board does not believe
that the proposed new rule and amendment will have any other impact on
society. The proposed amendment and new rule will also benefit consumers
who have purchased spaces in public mausoleums or have constructed private
mausoleums.
Economic Impact
The Board believes that the proposed new rule and amendment will have
an economic impact on cemetery companies in that the co-mingling of trust
funds will result in lower administrative costs to the individual trust
funds and more income for the maintenance of mausoleums. The Board does
not believe that the proposed new rule and amendment will have any other
economic impact.
Federal Standards Statement
A Federal standards analysis is not required because the proposed new
rule and amendment do not involve any Federal standards or requirements.
Jobs Impact
The Board does not believe that the proposed new rule and amendment
will result in an increase or decrease of jobs in the State.
Agriculture Industry Impact
The Board does not believe that the proposed new rule and amendment
will have any impact on the agriculture industry of this State.
Regulatory Flexibility Analysis
Since the cemetery companies that are issued certificates of authority
by the Board are individually licensed by the Board, under the Regulatory
Flexibility Act, N.J.S.A. 52:14B-16 et seq., (the Act) they may be considered "small
businesses" for the purposes of the Act.
The economic impact imposed by the proposed new rule and amendment
are the same for all cemetery companies as set forth above in the Economic
Impact statement. The Board does not believe that cemetery companies
will need to employ any professional services to comply with the requirements
of the proposed new rule and amendment. The proposed new rule and amendment
impose no recordkeeping requirements, but imposes compliance and reporting
requirements upon cemetery companies as detailed in the Summary.
The Board believes that because the proposed new rule and amendment
ensure the proper allocation of income from a co-mingled trust fund,
the new rule and amendment must be applied uniformly to all cemetery
companies regardless of the size of the business.
Smart Growth Impact
The Board does not anticipate that the proposed new rule and amendment
will have any impact on the achievement of smart growth and implementation
of the State Development and Redevelopment Plan, otherwise known as the
State Plan.
Housing Affordability Impact
The proposed new rule and amendment will have an insignificant impact
on affordable housing in New Jersey and there is an extreme unlikelihood
that the rules would evoke a change in the average costs associated with
housing because the proposed rules concern comingling of cemetery trust
funds and leasing of cemetery lands.
Smart Growth Development Impact
The proposed new rule and amendment will have an insignificant impact
on smart growth and there is an extreme unlikelihood that the rules would
evoke a change in housing production in Planning Areas 1 or 2 or within
designated centers under the State Development and Redevelopment Plan
in New Jersey because the proposed rules concern co-mingling of cemetery
trust funds and leasing of cemetery lands.
Full text of the proposal follows (additions indicated in boldface thus;
deletions indicated in brackets [thus]):
SUBCHAPTER 5. CEMETERY COMPANIES
13:44J-5.4A Co-mingling of trust funds for building maintenance
(a) The following words and terms, when used in this section, shall
have the following meanings, unless the context clearly indicates otherwise:
"Private mausoleum fund" means a trust fund created for
the maintenance of the structure of a private mausoleum and the area
on which it is located as required by N.J.S.A. 45:27-14a.
"Public mausoleum fund" means a Building Maintenance Fund
created for the maintenance of a public mausoleum as required by N.J.S.A.
45:27-14b.
(b) A cemetery company may co-mingle private mausoleum funds established
pursuant to N.J.S.A. 45:27-14 in a co-mingled private mausoleum trust
fund.
(c) A cemetery company may co-mingle public mausoleum funds in a
co-mingled public mausoleum trust fund.
(d) If a cemetery company co-mingles private or public mausoleum
trust funds pursuant to (b) or (c) above, the cemetery company shall
ensure that the income of the co-mingled trust fund is allocated for
the maintenance of each individual mausoleum based upon the initial
contribution to the co-mingled fund. For example, if the public mausoleum
trust funds for mausoleum one and mausoleum two are co-mingled, such
that mausoleum one contributes 75 percent of the initial contribution
to the co-mingled fund, 75 percent of the income of the co-mingled
fund shall be allocated to mausoleum one.
(e) If additional money is deposited in a co-mingled trust fund
created pursuant to (b) or (c) above, either from mausoleum trust funds
that are already part of the co-mingled trust fund or new mausoleum
trust funds being added to the co-mingled trust fund, the cemetery
company shall recalculate the allocation of income from the co-mingled
trust fund in proportion to the contributions from the individual private
or public mausoleum trust funds.
(f) Income allocated from a co-mingled trust fund created pursuant
to (b) above to an individual mausoleum shall be redeposited in the
co-mingled trust fund or used for the maintenance of that mausoleum.
Such income shall not be used to maintain other mausoleums or for other
cemetery expenses.
(g) If the income allocated from a co-mingled trust fund created
pursuant to (c) above to an individual mausoleum exceeds the cost of
maintaining that mausoleum, the excess income shall be reserved for
future maintenance of that mausoleum and shall not be used to maintain
other mausoleums or for other cemetery expenses.
(h) A cemetery company that co-mingles trust funds pursuant to (b)
or (c) above shall include in its annual report:
1. A list of private mausoleum funds that have been co-mingled in
a co-mingled private mausoleum fund and the amount each private mausoleum
fund has in the co-mingled fund;
2. A list of public mausoleum funds that have been co-mingled in
a co-mingled public mausoleum fund and the amount each public mausoleum
fund has in the co-mingled fund;
3. Documentation indicating the allocation made from each co-mingled
trust fund to the individual mausoleums that are part of the co-mingled
fund;
4. Bank statements from the co-mingled private mausoleum fund and
the co-mingle public mausoleum fund.
SUBCHAPTER 13. APPLICATIONS
13:44J-13.6 Application to lease or license cemetery lands
(a) (No change.)
(b) An application to lease or license cemetery lands pursuant to N.J.S.A.
45:27-34 shall include:
1. (No change.)
2. A certified statement by the board of trustees or directors that
15 percent of the proceeds of the lease will be deposited into the
Maintenance and Preservation Fund;
Recodify existing 2.-6. as 3.-7. (No change in text.)
(c) (No change.)
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