RULE PROPOSALS

VOLUME 41, ISSUE 16

ISSUE DATE: AUGUST 17, 2009

LAW AND PUBLIC SAFETY

DIVISION OF CONSUMER AFFAIRS

NEW JERSEY CEMETERY BOARD

Proposed Amendments: N.J.A.C. 13:44J-2.1, 8.4 and 14.3

Proposed New Rule: N.J.A.C. 13:44J-13.7

Definitions; Application for For-Profit Management Certificate of Authority

Authorized By: The 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 2009-259.

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. 45:27-7 requires that a cemetery company organized after December 1, 1971 be incorporated as a non-profit corporation. A "cemetery company" is defined as any person who directly or indirectly owns, manages, operates or controls a cemetery. Prior to the enactment of this definition on January 14, 2004, for-profit entities could manage or operate a cemetery. The new definition requires that these for-profit entities comply with N.J.S.A. 45:27-7 and become non-profit corporations in order to continue to operate. P.L. 2006, c. 26 was enacted on June 22, 2006. This law permits for-profit entities that managed or operated a cemetery prior to January 14, 2004 to continue to do so as for-profit entities, thus obviating the need to become non-profit. However, under the 2006 law, the Cemetery Board (Board) is required to issue a certificate of authority to these for-profit entities. The law also permits for-profit entities that were not managing or operating a cemetery prior to January 14, 2004 to apply to the Board for a certificate of authority to provide management services for a cemetery. Via this rulemaking, the Board seeks to amend N.J.A.C. 13:44J-2.1 and establish new rule N.J.A.C. 13:44J-13.7 to implement P.L. 2006, c. 26.

The Board is proposing to amend N.J.A.C. 13:44J-2.1 to create two definitions: "for-profit management services certificate of authority," to mean the holder of such is authorized to provide only management services for a cemetery and "for-profit management and operation certificate of authority," to mean the holder of this certificate must have been operating prior to January 14, 2004, and may continue to do so as a for-profit entity in the future.

Proposed new rule N.J.A.C. 13:44J-13.7 sets forth the information a for-profit entity must submit to the Board if it wishes to obtain a certificate to continue to manage or operate a cemetery that it managed or operated prior to January 14, 2004. The proposed new rule also sets forth an application process for obtaining a for-profit management services certificate of authority. The proposed new rule clarifies that entities that only provide sales services for cemetery companies are not required to obtain a for-profit management certificate of authority. A for-profit entity is only required to hold one for-profit management certificate of authority, which covers all of the cemeteries for which the entity provides services.

The holder of a for-profit management and operation certificate of authority that wishes to provide management and operation services to a new cemetery is required to submit the contract it entered into with the cemetery company to provide these services to the Board. Such an entity will be permitted to provide these services once the Board has received the contract. The holder of a for-profit management certificate of authority is required to apply to the Board for approval if it seeks to provide management services for a new cemetery. If the holder of either a for-profit management and operation certificate of authority or a for-profit management services certificate of authority ends its management relationship with a cemetery, it shall notify the Board. If the holder of either of these certificates ends its relationship with every cemetery it contracted to provide services for, the certificate will expire and the entity must surrender the certificate to the Board.

The Board has recently adopted new rule N.J.A.C. 13:44J-14.3, which sets forth requirements for the sale of spaces in mausoleums, which have yet to be built. At the same time, the Board adopted amendments to N.J.A.C. 13:44J-8.4 to permit cemetery companies to temporarily store human remains for more than four years, if the cemetery company obtains written consent for an extension from the person who has the right to control the disposition of remains pursuant to N.J.S.A. 45:27-22. The Board received a comment on this notice of proposal, which suggested that the Board amend N.J.A.C. 13:44J-8.4 to require that written consent for an extension be obtained at least 120 days prior to the end of the original four-year period. The Board agreed that this amendment would be appropriate, but could not make this change upon adoption. The Board is now proposing to amend N.J.A.C. 13:44J-8.4 to require that consent for an extension be obtained 120 days prior to the end of the four-year period.

N.J.A.C. 13:44J-14.3(h) requires a cemetery company to make refunds to a consumer who purchased a mausoleum space in a preconstruction sale. The Board received a comment on this rule that suggested that a request for a refund be in writing. The Board agreed that such a requirement would help to ensure that cemetery companies can clearly identify who makes a request for a refund and when such a request is made. As this change was overly substantive, the Board now proposes to amend N.J.A.C. 13:44J-14.3(h) to require that requests for refunds be made in writing.

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 will benefit for-profit entities that provided management services for cemetery companies prior to January 14, 2004. These entities will be permitted to continue offering [page=3028] these services. The proposed new rule will also benefit for-profit entities that seek to provide services for cemeteries. These for-profit entities are in the business of providing services for cemeteries. The proposed new rule will permit these entities to fulfill their business purposes. The proposed new rule will also permit cemeteries to continue receiving services from for-profit entities. The proposed amendments and new rule will benefit consumers whose loved ones are interred in cemeteries that received management services from a for-profit entity prior to January 14, 2004, as the cemeteries will continue to function in the same manner without an interruption in services. The Board does not believe that the proposed amendments to N.J.A.C. 13:44J-8.4 and 14.3 will have any other impact on society.

Economic Impact

The proposed new rule will have an economic impact on for-profit entities that managed cemeteries prior to January 14, 2004. These entities will have to bear the costs of submitting documents to the Board and paying an application fee, so that the Board can issue a certificate of authority to these entities. These costs will be outweighed by the benefits the entities receive from not having to apply for and become not-for-profit entities. The proposed new rule will also impose costs on for-profit entities that did not manage a cemetery prior to January 14, 2004 and seek to provide these services now. These entities will bear the cost of applying for a certificate of authority, including paying the application fee. The proposed amendments to N.J.A.C. 13:44J-14.3 will impose small costs on consumers who request refunds in that such requests will now have to be in writing. The Board does not believe that the remaining proposed amendments will have any economic impact on any other entities or individuals.

Federal Standards Statement

A Federal standards analysis is not required because the proposed new rule and amendments do not involve any Federal standards or requirements.

Jobs Impact

The Board believes that the proposed new rule and amendments may result in an increase of jobs in the for-profit entities that provide management services. By permitting such companies to increase the number of cemeteries for which they provide services, the rules could result in these companies employing more individuals. The Board does not believe that the proposed new rule and amendments will increase or decrease jobs in New Jersey in any other way.

Agriculture Industry Impact

The Board does not believe that the proposed new rule and amendments will have any impact on the agriculture industry of this State.

Regulatory Flexibility Analysis

Since the for-profit entities 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 rules are the same for all for-profit entities as set forth above in the Economic Impact statement. The Board does not believe that for-profit entities will need to employ any professional services to comply with the requirements of the proposed new rule and amendments. The proposed new rule and amendments impose no recordkeeping requirements, but imposes compliance and reporting requirements upon for-profit entities as detailed in the Summary. The proposed amendments impose compliance requirements on cemetery companies seeking to extend the time frame for temporarily storing human remains as detailed in the Summary.

The Board believes that because the proposed new rule and amendments ensures that it is aware of the for-profit entities that managed or operated cemeteries prior to January 14, 2004 and that it has the ability to review applications from for-profit entities that did not provide services prior to January 14, 2004 but seek to do so now, the proposed amendments and new rule must be applied uniformly to all for-profit entities regardless of the size of the business. The Board also believes that, as the proposed amendments ensure that consent for an extension of the time period for temporarily storing human remains is obtained in a timely manner, the proposed amendments must be applied uniformly to cemetery companies.

Smart Growth Impact

The Board does not anticipate that the proposed new rule and 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.

Housing Affordability Impact

The proposed amendments and new rule 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 issuing certificates of authority to for-profit entities to manage, or provide management services to, cemeteries.

Smart Growth Development Impact

The proposed amendments and new rule 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 issuing certificates of authority to for-profit entities to manage, or provide management services to, cemeteries.

Full text of the proposal follows (additions indicated in boldface thus; deletions indicated in brackets [thus]):

SUBCHAPTER 2. DEFINITIONS

13:44J-2.1 Definitions

The following words and terms, when used in this chapter, shall have the following meanings:

. . .

"For-profit management services certificate of authority" means a certificate of authority issued pursuant to P.L. 2006, c. 26 to a for-profit corporation, partnership, association or other private entity that authorizes the holder to provide management services for a cemetery.

"For-profit operation and management certificate of authority" means a certificate of authority issued pursuant to P.L. 2006, c. 26 to a for-profit corporation, partnership, association or other private entity that managed or operated a cemetery prior to January 14, 2004, which authorizes the holder to manage or operate a cemetery.

. . .

SUBCHAPTER 8. DISINTERMENT

13:44J-8.4 Temporary storage prior to final entombment or interment within a single cemetery

(a) (No change.)

(b) A cemetery company may temporarily store human remains in a properly constructed receiving vault prior to final entombment or interment for up to four years. If a cemetery company needs to temporarily store human remains for more than four years, the cemetery company must obtain the written consent for an extension at least 120 days prior to the end of the four-year period, which includes a set term for the extension, from the person who has the right to control the disposition of remains pursuant to N.J.S.A. 45:27-22. The cemetery company shall advise the Board that the person who has the right to control the disposition of remains has granted the extension. The cemetery company may transfer the remains from the place of temporary storage to the place of final entombment or interment without obtaining a disinterment permit and without the presence of a licensed funeral director if both the temporary storage and final resting place are within a single cemetery.

(c)-(e) (No change.)

[page=3029] SUBCHAPTER 13. APPLICATIONS

13:44J-13.7 Application for for-profit management certificate of authority

(a) A for-profit entity that managed or operated a cemetery company or companies prior to January 14, 2004, that seeks to continue to manage or operate the same cemetery company or companies shall file with the Board the following:

1. Proof that the for-profit entity managed or operated a cemetery prior to January 14, 2004 ;

2. The management contract the entity has entered into with the cemetery. Such contracts shall be considered proprietary commercial information pursuant to N.J.S.A. 47:1A-1 et seq.;

3. A completed certificate of authority application;

4. A completed information sheet;

5. An application fee, as set forth in N.J.A.C. 13:44J-3.1(a)1iv(1), made payable to the New Jersey Cemetery Board; and

6. A copy of articles of incorporation and/or charter, and bylaws, if the entity is incorporated.

(b) A for-profit management entity that did not manage or operate a cemetery company prior to January 14, 2004 and which seeks to provide management services for a cemetery company shall apply for a for-profit management services certificate of authority by submitting the following:

1. The management services contract the entity has entered into with the cemetery. Such contracts shall be considered proprietary commercial information pursuant to N.J.S.A. 47:1A-1 et seq.;

2. A completed certificate of authority application, which shall include the information the Board needs to determine:

i. The applicant's fitness and ability to perform proposed services;

ii. The applicant's fitness and ability to conform to N.J.S.A. 45:27-1 et seq. and this chapter; and

iii. The applicant's fitness and ability to comply with health protection rules of the New Jersey Department of Health and Senior Services, the New Jersey Department of Environmental Protection, or a local health authority;

3. A completed information sheet;

4. An application fee as set forth in N.J.A.C. 13:44J-3.1(a)1iv(1), made payable to the New Jersey Cemetery Board; and

5. If the entity is incorporated, a copy of articles of incorporation and/or charter, and bylaws.

(c) For purposes of this rule, an entity that only provides sales services for a cemetery company shall not be considered as providing management services for a cemetery company and shall not be required to obtain a certificate of authority.

(d) A for-profit entity shall hold one certificate of authority, regardless of the number of cemeteries for which the entity provides management services.

(e) If the holder of a for-profit management and operation certificate of authority enters into a contract to provide management and operation services for a new cemetery company, it shall submit the contract to provide such services to the Board. Such contracts shall be considered proprietary commercial information pursuant to N.J.S.A. 47:1A-1 et seq.

(f) A holder of a for-profit management services certificate of authority seeking to provide management services for a new cemetery company shall apply to the Board for approval to provide such services by submitting the management contract the entity has entered into with the cemetery. Such contracts shall be considered proprietary commercial information pursuant to N.J.S.A. 47:1A-1 et seq.

(g) A holder of a for-profit management services certificate of authority or a for-profit management and operation certificate of authority shall notify the Board if it ends a management relationship with any cemetery company with which it has contracted.

(h) If the holder of a for-profit management services certificate of authority or a for-profit management and operation certificate of authority ends its management relationship with every cemetery company it has contracted with, the certificate of authority shall expire and the company shall submit the expired certificate of authority to the Board. A company whose certificate of authority has expired shall not provide management services for a new cemetery company until it has obtained a new for-profit management certificate of authority pursuant to (b) above.

SUBCHAPTER 14. SALES OF INTERMENT SPACES

13:44J-14.3 Pre-construction sales of mausoleum space

(a)-(g) (No change.)

(h) A cemetery company that is granted an extension pursuant to (g) above shall make a full refund of the monies paid to any pre-construction purchaser within 30 days of receiving a written request for refund from the purchaser or his or her authorized representative.

(i)-(m) (No change.)