Authorizes a cemetery authority to elect to use the total return distribution method to fund endowment care of the cemetery.

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83rd OREGON LEGISLATIVE ASSEMBLY--2025 Regular Session
House Bill 3344
Sponsored by Representative EVANS
SUMMARY
The following summary is not prepared by the sponsors of the measure and is not a part of the body thereof subject
to consideration by the Legislative Assembly. It is an editor’s brief statement of the essential features of the
measure as introduced. The statement includes a measure digest written in compliance with applicable readability
standards.
Digest: The Act would let a cemetery opt to use the total return distribution method to fund its
care. (Flesch Readability Score: 61.6).
Authorizes a cemetery authority to elect to use the total return distribution method to fund
endowment care of the cemetery.
A BILL FOR AN ACT
Relating to the total return distribution method for endowment care cemeteries; creating new pro-
visions; and amending ORS 97.825, 97.830 and 97.835.
Be It Enacted by the People of the State of Oregon:
SECTION 1.
Sections 2 to 6 of this 2025 Act are added to and made a part of ORS 97.810
to 97.865.
SECTION 2. As used in ORS 97.810 to 97.865:
(1) “Average fair market value” means:
(a) The average of the fair market value of endowment care fund assets on the last day
of the current business year and the last day of each of the two preceding business years;
or
(b) If there are fewer than two preceding business years, the average of the fair market
value as of the last day of all business years for the entire term of the trust fund.
(2) “Net income distribution” means the distribution of interest and dividend income
earned by an endowment care fund minus permissible fees and taxes.
(3) “Total return distribution” means the distribution of funds from an endowment care
fund based on the average fair market value of fund assets multiplied by the total return
percentage.
(4) “Total return percentage” means the annual percentage set by the cemetery author-
ity under section 5 of this 2025 Act.
SECTION 3.
(1) Distributions from endowment care funds may be made using the net
income distribution method or the total return distribution method.
(2)(a) A cemetery authority shall elect a distribution method by delivering written in-
structions to the trustee of the fund no later than 30 days prior to the beginning of the cal-
endar year in which the authority will begin using the distribution method.
(b) If the trustee does not receive written notice from the cemetery authority of the
distribution method elected, the trustee shall calculate and make distributions using the net
income distribution method.
(3) A cemetery authority must notify the Department of Consumer and Business Ser-
vices, in accordance with section 4 of this 2025 Act, of its intent to begin using the total re-
NOTE: Matter in boldfaced type in an amended section is new; matter [ italic and bracketed] is existing law to be omitted.
New sections are in boldfaced type.
LC 3804
HB 3344
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turn distribution method.
(4) The distribution method and, if applicable, the total return distribution rate shall re-
main in effect unless the cemetery authority notifies the trustee and the department of the
authority’s intent to change the method.
(5) A cemetery authority that has converted to using the total return distribution
method may elect to reconvert to the net income distribution method by submitting notifi-
cation of the election to the trustee and the department with documents and other infor-
mation supporting the reconversion, including a copy of the trust agreement and the
proposed effective date of the reconversion.
SECTION 4.
(1) A cemetery authority intending to use the total return distribution
method must notify the Department of Consumer and Business Services on or before No-
vember 1 of the year prior to the year in which the authority intends to begin using the
method.
(2) The cemetery authority or the trustee of the endowment care fund shall provide the
department with the following:
(a) A written investment policy whose investment goals are:
(A) First, to achieve principal growth through permissible investments under law for
endowment care funds; and
(B) Second, to achieve current income.
(b) An amended endowment care trust agreement that clearly shows the election of the
total return distribution method.
(c) A written distribution policy establishing the total return percentage and initial esti-
mated average fair market value, using the most recent month end balances as the estimate
for the current year, signed by the cemetery authority or trustee.
SECTION 5.
(1)(a) A cemetery authority that has elected to use the total return distrib-
ution method shall set a total return percentage that does not exceed four percent of the
average fair market value of the endowment care fund assets.
(b) The cemetery authority may reduce the total return percentage but may not increase
it unless the authority provides to the trustee of the endowment care fund documentation
demonstrating a rate of return of the endowment care fund assets over the prior three years
that supports the increase.
(2) Expenses that could be deducted from income under this chapter if the trust were
not a unitrust may not be deducted from a total return distribution.
(3) In accordance with ORS 129.225, the trustee may, in the trustee’s discretion, deter-
mine:
(a) The manner in which the total return distribution will be prorated for a year in which
a trust’s right to payments begins or ends;
(b) The effect on trust asset valuation of distributions or other payments from, or con-
tributions to, the trust;
(c) Whether or how to estimate the value of nonliquid assets; and
(d) Any other matters necessary for the proper administration of the trust.
SECTION 6.
(1) The Department of Consumer and Business Services may take corrective
measures, including, but not limited to, reducing a cemetery authority’s total return per-
centage, or requiring a distribution of only net income, under any of the following circum-
stances:
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(a) The average fair market value of the trust fund for the current three-year period has
declined by 10 or more percentage points compared to the previous three-year period.
(b) The fair market value of the trust fund assets at the end of a business year is less
than 80 percent of the sum of the fair market value of the trust fund, as of the first day of
the calendar year in which the endowment care fund began making distributions using the
total return distribution method, plus all deposits made to the trust fund since the first day.
(c) After review of the annual trust fund report or an on-site examination, the depart-
ment determines that there is an uncorrected financial or investment related endowment
care fund deficiency.
(d) The department determines that the trustee of the endowment care fund is not able
to demonstrate sufficient knowledge and expertise regarding the effective implementation
of distributing income for the maintenance of the cemetery using this method.
(2) The department may decide not to impose corrective measures under the circum-
stances described in subsection (1) of this section if it finds that:
(a) The circumstances are due to unusual or temporary factors that are not within the
control of the cemetery authority or the trustee and that could not have been reasonably
anticipated;
(b) The current investment policy for the trust fund is reasonably designed to protect the
trust fund from further declines in fair market value; or
(c) The exception appears to be both necessary and appropriate for the continued pro-
tection of the endowment care fund.
SECTION 7.
ORS 97.825 is amended to read:
97.825. (1)(a) If the cemetery authority fails to remit to the trustee or trustees, in accordance
with the law, the funds herein provided for endowment and special care, or fails to expend the net
income or total return distribution from the funds and generally care for and maintain any portion
of a cemetery entitled to endowment care, any of the following may bring an action for a mandatory
injunction or for an appointment of a receiver to sue for, take charge of and expend the net income
or total return distribution :
(A) Any three lot owners, or a lot owner’s next of kin, heir or personal representative whose
lots are entitled to endowment care;
(B) Any one lot owner, or the lot owner’s next of kin, heir or personal representative, whose lot
is entitled to special care;
(C) The district attorney of the county where a lot described in this subsection is located; or
(D) A local government with jurisdiction over the county or municipality where a lot described
in this subsection is located.
(b) The suit may be filed in the circuit court of the county where the cemetery is located in
order to compel the cemetery authority or the appointed receiver to make the expenditure of the
net income or total return distribution from the endowment care fund for the purposes set out in
ORS 97.010 to 97.040, 97.110 to 97.450, 97.510 to 97.730, 97.810 to 97.920 and 97.990.
(2) When the Director of the Department of Consumer and Business Services has reason to be-
lieve that a cemetery endowment care fund does not conform to the requirement of law, or when the
director has reason to believe that any cemetery is operating in violation of ORS 97.810 or 97.820,
or when the director has sent an endowment care cemetery a notice of delinquency to make any
report to the director required by ORS 97.810, the director shall, as soon thereafter as reasonable,
give notice of the foregoing to the trustee or trustees of the cemetery endowment care fund, the
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cemetery authority, the Attorney General of Oregon and the State Mortuary and Cemetery Board.
(3) Within 120 days after the receipt of such notice, the Attorney General shall institute suit in
the circuit court of any county of this state in which such cemetery is located, for a mandatory in-
junction against further sales of graves, plots, crypts, niches, burial vaults, markers or other ceme-
tery merchandise by such cemetery or for the appointment of a receiver to take charge of the
cemetery, unless the Attorney General shall prior to that time be notified by the director that such
failure to conform to the requirements of the law or to report has been corrected.
(4) The Attorney General may delay instituting any suit brought under subsection (3) of this
section for no more than an additional 30 days if, in the discretion of the Attorney General after
consulting with the director, it appears to the Attorney General:
(a) That the failure to conform to the requirements of the law or to report will be corrected;
and
(b) That no harm to the public will occur during the additional 30 days.
(5) If a trustee fails to perform the duties of the trustee under ORS 97.810 to 97.920, the trustee
shall be liable for any damage resulting from that failure to any lot owners or the next of kin, heirs
at law or personal representatives of such lot owners.
(6) The court may award reasonable attorney fees, costs and disbursements to the prevailing
party in an action under this section.
SECTION 8.
ORS 97.830 is amended to read:
97.830. (1) (a) The principal of all funds for endowed care shall be invested, from time to time
reinvested and kept invested.
(b) If a trust agreement imposes upon the trustee or custodian the duty to direct the investment
or reinvestment of endowed care funds, the trustee or custodian shall perform this duty governed
by ORS 130.750 to 130.775.
(c) [ Otherwise] If a trust agreement does not impose upon the trustee or custodian the
duty described in paragraph (b) of this subsection , the cemetery authority, governed by ORS
130.750 to 130.775, shall direct the investment and reinvestment of endowed care funds in the time
or savings deposits of the custodian bank or savings association.
(2)(a) Except where a cemetery authority has elected to use the total return distribution
method, the principal of invested endowed care funds shall never be voluntarily reduced, but shall
be maintained separate and distinct by the trustee or custodian from all other funds [ except that it
shall be proper to commingle ].
(b) Notwithstanding paragraph (a) of this subsection, endowment care funds may be
commingled with special care funds.
(c) The payment of charges chargeable against principal under ORS chapter 129 or of other
expenses necessarily incurred in the administration of the trust in accordance with subsection (1)
of this section shall not constitute a voluntary reduction of principal.
(3)(a) The net income earned or total return distribution shall be used solely for the general
care and maintenance of the cemetery property entitled to endowment care, as stipulated in the
resolution, bylaw and other action or instrument by which the fund was established, and in such
manner as the cemetery authority may from time to time determine to be in the best interests of
such endowed property.
(b) Such net income or total return distribution shall never be used for the improvement or
embellishment of undeveloped property offered for sale.
SECTION 9.
ORS 97.835 is amended to read:
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97.835. (1) The trustee shall have no duty whatsoever to :
(a) Operate, maintain or [ to] supervise the general maintenance of any endowment fund
cemetery[ , and the trustee shall have no duty whatsoever to ];
(b) Enforce collection of any of the trust funds either from the purchasers of lots, or from the
cemetery authority[ , and the trustee shall have no duty whatsoever to ]; or
(c) See to the application of the net income or total return distribution after payment of the
net income or total return distribution to the cemetery authority.
(2) The trustee shall be entitled to rely without liability upon the affidavit of the cemetery au-
thority showing the amount payable to the trustee as endowment care funds.
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