NEW JERSEY REGISTER
VOLUME 35, NUMBER 9
MONDAY, MAY 5, 2003
LAW AND PUBLIC SAFETY
DIVISION OF CONSUMER AFFAIRS
NEW JERSEY CEMETERY BOARD
Proposed Amendments: N.J.A.C. 13:44J-5.3 and 5.4
Authorized By: New Jersey Cemetery Board, Susan Gartland, Executive Director.
Authority: N.J.S.A. 8A:2-2 and 8A:4 et seq.
Calendar Reference: See Summary below for explanation of exception to calendar requirement.
Proposal Number: PRN 2003-160.
Submit comments by July 4, 2003 to:
Susan Gartland, Executive Director
New Jersey Cemetery Board
PO Box 45031
Newark, NJ 07101
The agency proposal follows:
Pursuant to its rulemaking authority in N.J.S.A. 8A:2-2, and the authority over Maintenance and Preservation Funds found in N.J.S.A. 8A:4-1 et seq., the New Jersey Cemetery Board (the Board) proposes amendments to N.J.A.C. 13:44J-5.3 and 5.4. According to N.J.S.A. 8A:4-2, every cemetery operating in the State of New Jersey must establish an irrevocable trust fund for the continuous maintenance and preservation of the cemetery. The Board proposes these amendments in order to clarify the irrevocable nature of the Maintenance and Preservation Fund (Fund), protecting its corpus from invasion, and ensuring that capital gains earned through the sale of assets, and interest earned on investments, are properly applied.
The proposed amendment to N.J.A.C. 13:44J-5.3 is the addition of subsection (k) which will prohibit any withdrawals of money or assets from the Maintenance and Preservation Fund corpus. At N.J.A.C. 13:44J-5.4, new subsection (d) limits a trustee's compensation for services rendered on behalf of a Maintenance and Preservation Fund to six percent of the income generated by the Fund, consistent with N.J.S.A. 8A:4-8. New subsection (e) requires that any capital gains which are earned when an asset of a Fund is sold must be maintained as part of the corpus of the Fund. New subsection (f) requires that any stock dividend paid as additional shares of stock must be retained in the corpus of the Fund. Any dividend paid in cash, however, may be considered as earned interest and used by the trustee for Fund objectives, or may be retained as part of the corpus of the Fund.
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.
The Board believes that the proposed amendments will have a positive impact on cemetery companies as well as the families and friends of those who are interred in cemeteries. The amendments will ensure the protection of the Maintenance and Preservation Fund and, therefore, ensure that the cemetery company will have adequate funds to provide for the upkeep of the cemetery grounds.
The proposed amendments may have an economic impact on cemetery companies. By determining how stock dividends and capital gains will be treated, as either part of the Fund corpus or earned income, the amendments impact the value of the Fund and the income that will be generated by the Fund. By limiting trustee compensation to six percent of the Fund's income, the amendments may impact the amount a trustee may earn on income generated by the Fund.
Federal Standards Statement
A Federal standards analysis is not required because the proposed amendments do not have any applicable Federal standards or requirements.
The Board does not believe that the proposed amendments will result in an increase or decrease of jobs inthe State.
Agriculture Industry Impact
The Board does not believe that the proposed amendments will have any impact on the agriculture industry of this State.
Regulatory Flexibility Analysis
If, for purposes of the Regulatory Flexibility Act, N.J.S.A. 52:14B-16 et seq., the approximately 400 cemeteries in the State are deemed "small businesses," then the following analysis applies.
The proposed amendments impose no reporting or recordkeeping requirements. The proposed amendments do impose compliance requirements but the need for employment of outside professional services is not anticipated. Under the amendments, no one may withdraw money from the Maintenance and Preservation Fund. Trustees of Maintenance and Preservation Funds must retain capital gains as part of the corpus of the Fund, retain stock dividends paid in additional shares of stock as part of the corpus of the Fund and cannot receive more than six percent of Fund income as compensation for services they render to the Fund. The Board believes that since the proposed amendments are intended to protect the assets of the Maintenance and Preservation Fund in order to ensure that there will be sufficient income to provide for the Fund objectives, the amendments must be applied uniformly to all companies and no differing compliance requirements are provided based on size of the business.
Smart Growth Impact
The Board does not anticipate that the proposed amendments 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.
Full text of the proposal follows:
<< NJ ADC 13:44J-5.3 >>
13:44J-5.3 Trust funds
(a)-(j) (No change.)
<<+(k) No person shall make any withdrawals of money or assets from the corpus of the Maintenance and Preservation Fund.+>>
<< NJ ADC 13:44J-5.4 >>
13:44J-5.4 Trust fund management/recordkeeping
(a)-(c) (No change.)
<<+(d) The trustee shall not receive more than six percent of the income generated by the Maintenance and Preservation Fund for services rendered on behalf of the Fund.+>>
<<+(e) Any capital gain earned from the sale of an asset of the Maintenance and Preservation Fund shall be considered and retained as part of the corpus of the trust and shall not be treated as earned interest.+>>
<<+(f) Any stock dividend paid in shares of stock shall be considered and retained as part of the corpus of the Maintenance and Preservation Fund. Any stock dividend paid in cash may be either treated as earned interest, used for the maintenance and preservation of the cemetery, or retained as corpus of the Fund.+>>
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