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SENATE BILL NO. 1066
A bill to amend 1986 PA 255, entitled
"Prepaid funeral and cemetery sales act,"
by amending sections 4, 6, 11, 12, 15, and 21 (MCL 328.214,
328.216, 328.221, 328.222, 328.225, and 328.231), sections 4, 6,
11, 15, and 21 as amended by 2004 PA 21 and section 12 as amended
by 2010 PA 327.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 4. (1) As used in this act: 1
(a) "Depository" means a state or nationally chartered bank or 2
June 23, 2026, Introduced by Senators SANTANA, WEBBER and HERTEL and referred to
Committee on Regulatory Affairs.
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state or federally chartered savings and loan association, savings 1
bank, or credit union whose deposits are insured by an agency of 2
the United States government under the laws of this state or the 3
United States. Depository includes the trust department, if any, of 4
an entity referred to in this subsection. 5
(b) "Detroit consumer price index" Consumer Price Index" means 6
the index for all urban wage earners for the Detroit statistical 7
Detroit-Warren-Dearborn area from the Bureau of Labor Statistics of 8
the United States department of labor, bureau of labor 9
statistics.Department of Labor. 10
(c) "Escrow agent" means a person who that holds, invests, and 11
disburses principal and income from the funds received under a 12
prepaid contract. 13
(d) "Funds" means all money or other consideration actually 14
received from a contract buyer by a contract seller or provider or 15
an assignee from the contract buyer in connection with any aspect 16
of the sale of a prepaid contract, including finance charges, but 17
does not include late payment penalties, payments required to be 18
made to a governmental agency at the time the contract is entered 19
into, or a commission authorized by under section 12(1). 20
(e) "Funeral services" means services customarily performed by 21
a mortuary science licensee who is licensed pursuant to under 22
article 18 of the occupational code, 1980 PA 299, MCL 339.1801 to 23
339.1812. 339.1811. Funeral services include, but are not limited 24
to, care of dead human remains, embalming, preparation of dead 25
human remains for final disposition, professional services relating 26
to a funeral or an alternative to a funeral or final disposition of 27
dead human remains, transportation of dead human remains, limousine 28
services, use of facilities or equipment for viewing dead human 29
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remains, visitation, memorial services, or services which that are 1
used in connection with a funeral or alternative to a funeral, 2
coordinating or conducting funeral rites or ceremonies, cremations, 3
and other services provided in connection with a funeral, 4
alternative to a funeral, or final disposition of dead human 5
remains. 6
(f) "Grave memorial" means a stone or other structure or item 7
used for the purpose of memorializing a decedent and placed on or 8
in proximity to a place of burial, interment, or entombment of a 9
casket, catafalque, or vault or on or in proximity to a place of 10
inurnment. 11
(g) "Guaranteed price contract" means a prepaid contract under 12
which funds received are held pursuant to in accordance with an 13
escrow agreement. A guaranteed price contract has a guaranteed 14
fixed price for which specified merchandise or funeral or cemetery 15
services are required to be sold to or made available for a 16
contract buyer or for a contract beneficiary, regardless of the 17
cost or value of the merchandise or funeral or cemetery services at 18
the time of death of the contract beneficiary. Under the guaranteed 19
price contract, additional consideration is not charged for the 20
originally contracted for merchandise or funeral or cemetery 21
services at the time of delivery of the merchandise or funeral and 22
cemetery services. 23
(h) "Income" means the money earned by the investment of the 24
principal, including, but not limited to, interest, dividends, and 25
gains or losses on the sale of, deposit of, or exchange of, 26
property using invested principal amounts. 27
(i) "Interment" means the disposition of human remains by 28
earth interment, entombment, or inurnment. 29
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(j) "Mausoleum" means a building or other aboveground 1
structure that is affixed to land and is a permanent repository for 2
human remains. 3
(k) Subject to subsection (2), "merchandise" means both of the 4
following: 5
(i) Cemetery burial vaults or other outside containers, grave 6
memorials, and urns. 7
(ii) Items of merchandise sold or offered for sale or lease to 8
consumers that will be used in connection with a funeral, or an 9
alternative to a funeral, or the final disposition of human 10
remains, including, but not limited to, caskets, combination units, 11
and catafalques. 12
(2) Merchandise does not include land, interests in land, or 13
interests in mausoleums or columbariums that are sold by a cemetery 14
that complies with the endowment care trust fund requirements of 15
the cemetery regulation act, 1968 PA 251, MCL 456.521 to 456.543. 16
Sec. 6. (1) A person shall not sell, provide, or agree to 17
provide merchandise or funeral or cemetery services pursuant to in 18
accordance with a prepaid contract unless that person is registered 19
with the department as provided in this section and has received a 20
certificate of registration. 21
(2) A person desiring to receive a certificate of registration 22
under this section shall apply upon on forms provided by the 23
department and pay an application fee of $120.00. The original 24
registration may be renewed. A certification of registration is 25
valid for 3 years from after the date of its issuance. An 26
application form for original registration or renewal shall must 27
contain all of the following: 28
(a) The name and business address of the person registering. 29
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(b) The names and addresses of persons owning each person that 1
owns 10% or more interest in the entity applying for registration. 2
(c) The business address where books and records pertaining to 3
prepaid contracts shall be are maintained for inspection by the 4
department. 5
(d) A list of the names and addresses of any escrow agents in 6
which funds have been or will be deposited by the registrant as 7
well as copies of all escrow or trust agreements between a 8
registrant and an escrow agent. The list and copies required by 9
this subdivision shall must be constantly updated. The registrant 10
shall inform the department of any change in this list within not 11
more than 30 days of after the change by adding to the list the 12
name and address of any new escrow agent or by deleting from the 13
list an escrow agent whose services are no longer being used by the 14
registrant. 15
(e) A statement made under oath that the registrant has an 16
agreement with each escrow agent with which it the registrant has 17
deposited funds which complies with the requirements of section 7, 18
or if the registrant is or intends to be an escrow agent for funds 19
received in connection with a nonguaranteed price contract, a 20
statement that the registrant will comply with the requirements of 21
section 7. 22
(3) The department shall renew the registration of a person 23
who that applies for renewal upon on a form provided by the 24
department and pays an application fee of $30.00 provided that the 25
person has submitted the sworn statement as required by this 26
section and the special report or sworn statement as required by 27
section 8 at least not less than 60 days before the expiration date 28
printed on the certificate of registration. The certificate of 29
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registration of a person who that fails to file the sworn statement 1
or special report required by this section shall expire expires on 2
the date printed on the certificate of registration. A registrant 3
may reinstate the registration within not more than 60 days of its 4
from the expiration date by submitting the sworn statement or 5
special report and paying a fee of $120.00. 6
(4) The department may deny the registration of a person if it 7
the department determines any of the following: 8
(a) That the person was previously registered with the 9
department and that registration was revoked or suspended within 2 10
years before the date of the current application for registration. 11
(b) That the person was or is presently an owner with a 12
substantial interest in the entity, partner, or employee of a 13
person whose registration was revoked or suspended within 2 years 14
before the date of the current application for registration and the 15
person engaged or participated in or authorized the misconduct that 16
was the basis for the revocation or suspension. 17
(c) That the person lacks good moral character as that term is 18
defined and determined under 1974 PA 381, MCL 338.41 to 338.47. 19
(d) That the person has violated this act, article 18 of the 20
occupational code, 1980 PA 299, MCL 339.1801 to 339.1812, 339.1811, 21
or the cemetery regulation act, 1968 PA 251, MCL 456.521 to 22
456.543. 23
(5) An applicant who that registers with the department shall 24
not receive a certificate of registration unless the applicant 25
complies with the conditions in this section. 26
(6) A person who that is denied registration by the department 27
pursuant to under this section may petition the department for 28
reconsideration. A person seeking reconsideration is entitled to a 29
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hearing conducted in compliance with the administrative procedures 1
act of 1969, 1969 PA 306, MCL 24.201 to 24.328. 2
Sec. 11. (1) A guaranteed price contract shall must designate 3
a provider who that has agreed to furnish the merchandise or 4
funeral or cemetery services specified in the contract upon the 5
death of the contract beneficiary. If the provider designated is 6
not the prepaid contract seller of the contract, the provider shall 7
be made a party to the prepaid contract before any consideration is 8
paid and the prepaid contract is not binding on the contract buyer 9
until the provider has been made a party to the prepaid contract. 10
(2) In addition to the registration otherwise required by the 11
terms of this act, the provider which that has agreed to provide 12
merchandise or funeral or cemetery services pursuant to under a 13
guaranteed price contract shall, at the time the prepaid contract 14
is entered into, possess any license or registration required in 15
order to provide the funeral or cemetery services, pursuant to 16
under article 18 of the occupational code, 1980 PA 299, MCL 17
339.1801 to 339.1812, 339.1811, or the cemetery regulation act, 18
1968 PA 251, MCL 456.521 to 456.543. If a provider is required to 19
possess a license or registration to provide the services included 20
in a prepaid contract, a contract seller who that does not possess 21
a license or registration to provide the services must disclose to 22
the contract buyer or prospective contract buyer that it the 23
contract seller cannot perform those activities required to be 24
registered or licensed. 25
Sec. 12. (1) Except as otherwise provided in subsection (2), 26
all funds received in connection with a prepaid contract shall must 27
be held in escrow by an escrow agent for the benefit of the 28
contract beneficiary. 29
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(2) Funds received by a cemetery registered under the cemetery 1
regulation act, 1968 PA 251, MCL 456.521 to 456.543, for cemetery 2
merchandise may, in lieu of subsection (1), be escrowed as follows: 3
(a) Before January 1, 2006, 60% of the funds received during 4
that period from the sale of cemetery merchandise pursuant to under 5
prepaid contracts. 6
(b) After December 31, 2005 and before January 1, 2007, 65% of 7
the funds received during that period from the sale of cemetery 8
merchandise pursuant to under prepaid contracts. 9
(c) After December 31, 2006 and before January 1, 2008, 70% of 10
the funds received during that period from the sale of cemetery 11
merchandise pursuant to under prepaid contracts. 12
(d) After December 31, 2007 and before January 1, 2009, 75% of 13
the funds received during that period from the sale of cemetery 14
merchandise pursuant to under prepaid contracts. 15
(e) After December 31, 2008, 80% of the funds received from 16
the sale of cemetery merchandise pursuant to under prepaid 17
contracts. 18
(3) A prepaid contract may authorize the contract seller or 19
provider to charge an additional commission of not more than 10% of 20
the contract price. which shall Any additional commission is not be 21
subject to the depository requirements of this section. If the 22
contract price is paid in installments, the commission retained by 23
the contract seller or the provider shall must not exceed the rate 24
of the commission charged in the prepaid contract for each 25
installment. On cancellation, a contract buyer is entitled to a 26
refund as provided in section 13(1) or (2). 27
(4) Only the following persons may serve as the escrow agent 28
of funds under this section: 29
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(a) If the prepaid contract is a nonguaranteed price contract, 1
the contract seller or provider of that nonguaranteed price 2
contract. 3
(b) If the prepaid contract is either a guaranteed or 4
nonguaranteed price contract, a depository, a trust company, or a 5
Michigan nonprofit corporation or association, in which the 6
majority interest is held by 250 or more funeral establishments 7
licensed under article 18 of the occupational code, 1980 PA 299, 8
MCL 339.1801 to 339.1812, 339.1811, or a Michigan nonprofit 9
corporation or association, in which the majority interest is held 10
by 30 or more cemeteries registered and operated pursuant to under 11
the cemetery regulation act, 1968 PA 251, MCL 456.521 to 456.543. 12
If the prepaid contract is a guaranteed price contract, the 13
contract seller or the provider shall not serve as the escrow 14
agent. 15
(5) If the escrow agent is not the contract seller or provider 16
of a nonguaranteed price contract, the escrow agent shall must be 17
selected as follows: 18
(a) If the prepaid contract is a nonguaranteed price contract, 19
the escrow agent may be selected by either the contract seller or 20
the provider. 21
(b) If the prepaid contract is a guaranteed price contract, 22
the escrow agent shall must be selected by the provider who that 23
has been designated to furnish the funeral services. If the prepaid 24
contract does not include funeral services, the escrow agent shall 25
must be selected by any provider. 26
(6) If the escrow agent is a person other than the person to 27
whom which the funds have been paid by the contract buyer, the 28
funds shall must be deposited with the escrow agent within not more 29
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than 30 days after the receipt by the person to whom which the 1
funds are paid. 2
(7) Funds held by an escrow agent shall must be held and 3
invested only as specified in the prepaid contract. A prepaid 4
contract may authorize investments only as follows: 5
(a) If the prepaid contract is a nonguaranteed price contract, 6
the funds shall must be invested in 1 or more interest-bearing 7
accounts in a depository. 8
(b) If the prepaid contract is a guaranteed price contract, 9
the principal and income may be invested only in accordance with 10
section 7803 of the estates and protected individuals code, 1998 PA 11
386, MCL 700.7803, except that funds shall must not be invested in 12
a company owned by, operated by, or affiliated in any way with a 13
contract seller or provider or an authorized agent of a contract 14
seller or provider or in loans to any person directly connected 15
with or employed by a contract seller or provider or an authorized 16
agent of a contract seller or provider. 17
(8) Income shall must be held and invested by the escrow agent 18
in the same manner as the principal except that the income may be 19
utilized to pay reasonable fees and expenses of the escrow agent in 20
addition to other costs specifically authorized by this act. The 21
expenses and fees paid to the escrow agent shall must not exceed 1% 22
of the aggregate balance of principal and prior earned income from 23
each account annually. If a fee is charged for reasonable expenses 24
for the administration costs under an escrow agreement, the amount 25
may be paid to the escrow agent periodically or may be accumulated 26
in the account and paid at the time of death or upon cancellation 27
of the contract. A cemetery that has elected the escrowing option 28
for cemetery merchandise provided in subsection (2) may provide by 29
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written agreement with the escrow agent to be paid accumulated 1
income generated solely by the investment of funds received for the 2
cemetery merchandise. Such payments Payments to a cemetery may must 3
not be made more frequently than once in a 12-month period and 4
shall must not exceed the net amount of income earned in the 5
previous 12 months less any amounts paid to the escrow agent for 6
expenses and fees described in this subsection and an amount equal 7
to any increase in the Detroit consumer price index.Consumer Price 8
Index. 9
(9) Amounts of principal and income held by an escrow agent 10
other than the contract seller or provider of a nonguaranteed price 11
contract may be commingled with principal and income derived from 12
other prepaid accounts. However, a separate accounting of principal 13
and income shall must be maintained for each prepaid contract under 14
the name of the contract beneficiary. 15
(10) The escrow agent shall send to the contract buyer a 16
notice stating the date, amount of the deposit, and the name of the 17
escrow agent with whom the funds are deposited. 18
(11) Upon the death of the contract beneficiary and upon 19
performance by the provider of its the provider's obligation to 20
furnish merchandise or funeral or cemetery services pursuant to 21
under the prepaid contract, funds held by the escrow agent shall 22
must be disbursed as follows: 23
(a) If the prepaid contract is a nonguaranteed price contract, 24
the principal and income shall must first be disbursed by the 25
escrow agent to the provider of the merchandise or funeral or 26
cemetery services in payment of all reasonable charges. Thereafter, 27
After the first disbursements, not less than 90% of the remaining 28
balance of principal and income, if any, shall must be disbursed to 29
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the person, other than the provider or the contract seller, 1
designated in the prepaid contract or authorized by law to receive 2
the surplus, and the remainder, if any, shall must be disbursed to 3
the provider as final compensation for its the provider's services. 4
The amount paid to the person entitled to receive the surplus shall 5
must be as follows: 6
(i) If no commission has been charged pursuant to under this 7
section, at least not less than 90% of the remaining balance of 8
principal and income in the escrow account. 9
(ii) If a commission of 5% or less of the contract price has 10
been charged, at least not less than 95% of the remaining principal 11
and income in the escrow account. 12
(iii) If a commission of greater than 5% of the contract price 13
has been charged, 100% of the remaining principal and income in the 14
escrow account. 15
(b) If the prepaid contract is a guaranteed price contract, 16
the principal and income held by the escrow agent shall must be 17
disbursed to the provider, its the provider's designee, or its the 18
provider's successor. 19
(c) If the escrow agent is notified that there is a dispute as 20
to whether the provider has performed all its the provider's 21
obligations under the prepaid contract, the escrow agent shall file 22
an action for interpleader or shall obtain an impartial arbitrator 23
to determine the rights of the parties. Expenses of arbitration 24
shall must be shared equally by the parties unless otherwise 25
ordered by the arbitrator. 26
(12) A Michigan nonprofit corporation or association, in which 27
the majority interest is held by 250 or more funeral establishments 28
or by 30 or more cemeteries registered and operated under the 29
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cemetery regulation act, 1968 PA 251, MCL 456.521 to 456.543, may 1
be designated as the escrow agent under this section only if the 2
contract buyer has expressly authorized that designation in 3
writing. If the contract buyer authorizes the appointment as escrow 4
agent of a Michigan nonprofit corporation or association in the 5
prepaid contract, the authorization shall must be set forth in a 6
separate paragraph which shall is not be effective unless 7
separately signed or initialed by a contract buyer and which shall 8
must state that the contract buyer may elect to require that a 9
depository or a trust company be designated as the escrow agent. 10
(13) If a prepaid contract is canceled, the escrow agent shall 11
disburse the principal and income in accordance with section 13. 12
(14) At least annually, unless waived in writing by a contract 13
buyer, a contract buyer shall must be furnished a statement 14
indicating the current balance, the fees or expenses charged since 15
the last statement, the amount of the refund to which a buyer is 16
entitled if the contract is canceled, and the name and address of 17
the escrow agent from whom which additional information may be 18
obtained about the account. The cost of the statement required by 19
this subsection may be paid from the income and may be in addition 20
to any other fee or charge authorized by this act. 21
Sec. 15. (1) All prices or quotations of prices contained in a 22
prepaid contract, offer, or solicitation shall must be stated in 23
compliance with applicable federal and state laws and regulations. 24
In addition, a person who that offers either merchandise or funeral 25
or cemetery services on a preneed or at-need basis shall comply 26
with the price disclosure rules of the federal trade commission, 27
code of federal regulations, 16 C.F.R., Federal Trade Commission 28
under 16 CFR part 453, whether or not the rules by their own terms 29
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apply to the offering. This subsection does not apply to the sale 1
of any interest covered by the endowment care trust requirements of 2
the cemetery regulation act, 1968 PA 251, MCL 456.521 to 456.543. 3
(2) A person who that sells or offers to sell both funeral 4
goods or services and nonfuneral goods or services as part of the 5
same transaction or series of transactions shall not manipulate the 6
relative prices of the goods or services so as to allocate a 7
disproportionate share of the total price to nonfuneral property or 8
services. 9
(3) All prepaid contracts shall must provide that a contract 10
buyer may revoke the prepaid contract within not more than 10 11
business days after entering into the prepaid contract and that 12
upon revocation, all funds paid to the contract seller or provider 13
shall be are refunded. This provision shall must be conspicuously 14
set forth in the prepaid contract at a place immediately before the 15
place where the contract buyer is to sign his or her the contract 16
buyer's name. 17
(4) A prepaid contract shall must disclose the contract 18
buyer's right to cancel the prepaid contract and the amount of the 19
refund to which the contract buyer or that person's estate is 20
entitled upon cancellation. The disclosure shall must be stated 21
substantially as follows: 22
"This contract may be canceled either before death or after 23
death by the buyer or, if the buyer is deceased, by the person or 24
persons legally authorized to make funeral or cemetery 25
arrangements. If the contract is canceled, the buyer or the buyer's 26
estate is entitled to receive a refund of ____% of the contract 27
price and any income as required by law." 28
In addition, if a commission is charged pursuant to under 29
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section 12, the amount of the commission and the fact that it the 1
commission is a charge which is in addition to the contract price 2
shall must be stated in the prepaid funeral contract. If a printed 3
contract form is used, the disclosures required by this subsection 4
shall must be stated in boldfaced type. 5
(5) This act does not authorize a contract seller or provider 6
to perform or offer to perform services for which a mortuary 7
science license or funeral establishment licensed is required by 8
article 18 of the occupational code, 1980 PA 299, MCL 339.1801 to 9
339.1812, 339.1811, unless that person holds the required license 10
or licenses and does not require a contract seller or a provider to 11
possess this license or any other license to engage in an activity 12
covered under this act for which a license is not required by any 13
other act. 14
(6) A prepaid contract shall must provide that the contract 15
buyer may designate a new contract beneficiary any time before the 16
death of the contract beneficiary originally specified in the 17
prepaid contract by providing written notice to the contract seller 18
of a nonguaranteed price contract or the provider designated to 19
furnish merchandise or funeral or cemetery services pursuant to 20
under a guaranteed price contract. Notwithstanding any other 21
provisions of law, a contract buyer may designate the estate of a 22
deceased person as the contract beneficiary, or provide that the 23
contract beneficiary is the first of 2 or more designated persons 24
to die. 25
(7) A prepaid contract that is a nonguaranteed price contract 26
shall have it indicated clearly indicate on the prepaid contract 27
that it the prepaid contract is a nonguaranteed price contract and 28
that the actual costs of the merchandise or funeral or cemetery 29
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VMP S03260'25 b_SB1066_INTR_1 8hei6k
services delivered at the time of death may be greater or less than 1
the amount of principal and income in the escrow account, and that 2
the buyer, the buyer's estate, or the person or persons that are 3
legally entitled to make funeral or cemetery arrangements, or both, 4
are not obligated to purchase specific merchandise and services 5
which were selected before the death of the contract beneficiary or 6
to expend a specific amount on merchandise or funeral or cemetery 7
services. 8
Sec. 21. A violation of this act by a person who that is 9
licensed under article 18 of the occupational code, 1980 PA 299, 10
MCL 339.1801 to 339.1812, 339.1811, or the cemetery regulation act, 11
1968 PA 251, MCL 456.521 to 456.543, is considered a violation of 12
the respective licensing act, and the violator is subject to 13
penalties available under those acts. 14
Enacting section 1. This amendatory act does not take effect 15
unless Senate Bill No. 1060 of the 103rd Legislature is enacted 16
into law. 17