PRINTER'S NO. 2425
No. 1729 Session of 1990
INTRODUCED BY REIBMAN AND AFFLERBACH, JULY 10, 1990
REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE,
JULY 10, 1990
AN ACT
1 Amending the act of August 14, 1963 (P.L.1059, No.459), entitled
2 "An act prohibiting future need sales of cemetery merchandise
3 and services, funeral merchandise and services, except under
4 certain conditions; requiring the establishment of and
5 deposit into a merchandise trust fund of certain amount of
6 the proceeds of any such sale; providing for the
7 administration of such trust funds and the payment of money
8 therefrom; conferring powers and imposing duties on orphans'
9 courts, and prescribing penalties," further providing for
10 application of the provisions thereof to funeral directors,
11 for establishment of an escrow account, for the irrevocable
12 deposit into trust or escrow funds, for establishment and
13 administration of trust or escrow funds with a banking
14 institution in this Commonwealth authorized to perform trust
15 functions, as trustee of such funds, for reduced liquidated
16 damages, for an orphans' court accounting of the trust or
17 escrow funds; making editorial changes; and making a repeal.
18 The General Assembly of the Commonwealth of Pennsylvania
19 hereby enacts as follows:
20 Section 1. Sections 1, 2, 3, 4, 5, 6, 7, 8, 10 and 11 of the
21 act of August 14, 1963 (P.L.1059, No.459), entitled "An act
22 prohibiting future need sales of cemetery merchandise and
23 services, funeral merchandise and services, except under certain
24 conditions; requiring the establishment of and deposit into a
25 merchandise trust fund of certain amount of the proceeds of any
1 such sale; providing for the administration of such trust funds
2 and the payment of money therefrom; conferring powers and
3 imposing duties on orphans' courts, and prescribing penalties,"
4 are amended to read:
5 Section 1. Except as hereinafter provided, no person shall,
6 directly or indirectly or through an agent, offer to enter into
7 or enter into a contract for the sale of personal property or
8 for the furnishing of personal services to be used in connection
9 with the [interment] funeral or burial of a deceased human being
10 wherein the personal property is not to be delivered or the
11 personal services are not to be performed until the death at
12 some future time of the person for whose [interment] funeral or
13 burial such property or services are to be furnished.
14 Section 2. (a) Any person entering into any such contract as
15 the seller shall deposit irrevocably into a [merchandise] trust
16 fund or escrow account, established for that purpose with and
17 administered by a banking institution in the Commonwealth
18 authorized to perform trust functions, as trustee of such fund,
19 seventy per cent of the retail sale price of the personal
20 property or personal services so sold for future need.
21 (b) The deposit herein required to be made into such
22 [merchandise] trust fund shall be made within thirty days after
23 the end of the month in which the final payment of the purchase
24 price provided for under such contract is received by the seller
25 from the purchaser or otherwise. Prior to receipt by the seller
26 of final payment of the purchase price provided for under any
27 such contract, the seller, at the end of each month, shall
28 deposit, in [a special] an escrow account [in] established for
29 that purpose with and administered by a banking institution
30 [properly identified as being for such purpose] authorized to
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1 perform trust functions, as trustee of such escrow account, all
2 payments on account received under any such contract during the
3 month and ensuing months commencing thereafter, after first
4 deducting the percentage permitted to be retained by seller.
5 Withdrawals from such [special] escrow account shall be made by
6 seller only for the purpose of transfer to the [merchandise]
7 trust fund upon final payment of the purchase price by the
8 purchaser under the contract.
9 (c) If, prior to final payment of the purchase price under
10 the contract, the purchaser shall default in making payments on
11 account thereof, the seller shall be entitled to retain as
12 liquidated damages and withdraw from the [special] escrow
13 account [thirty] ten percent of the contract price, and shall
14 refund to the purchaser the balance in the [special] escrow
15 account, if any.
16 (d) Upon making a deposit into the escrow account, the
17 seller making such deposit shall provide the trustee of that
18 account with the names of the purchasers on whose behalf the
19 deposit is made and the portion of the total deposit to be
20 credited to the account of each of the named purchasers. For
21 each purchaser on whose behalf a deposit to the escrow account
22 is being made for the first time the seller also shall provide
23 the trustee with the name of the purchaser, the amount of the
24 retail sales price, the percentage of the retail sales price
25 that the seller is required to deposit into the trust fund or
26 escrow account, and a statement or copy of the contract with
27 that purchaser describing the personal property or services to
28 be furnished by the seller thereunder. Each deposit into the
29 [merchandise] trust fund shall be identified by the seller by
30 furnishing the trustee with the name of the purchaser, the
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1 amount of the retail sales price and the percentage thereof
2 herein required to be deposited, together with a statement of or
3 a copy of the contract and the personal property and services to
4 be furnished by the seller thereunder. Nothing herein contained
5 shall prohibit the trustee from commingling the deposits in any
6 such trust fund or escrow account for purposes of the management
7 thereof and the investment of funds therein.
8 Section 3. Nothing contained in this act shall be construed
9 to require any funeral director [or any], cemetery or other
10 person to accept any personal property or perform any personal
11 services contrary to law or ordinances pertaining to the burial
12 of deceased human beings or contrary to rules and regulations of
13 a cemetery pertaining to the quality and kind of personal
14 property that may be used for the burial of deceased human
15 beings in any such cemetery.
16 Section 4. (a) The funds held in trust or escrow shall
17 remain intact until delivery of personal property is made,
18 services are performed or the death of the person for whose
19 benefit the said contract was made, and upon submission of
20 certified copy of death certificate or certification by the
21 seller to the trustees that delivery of the personal property or
22 performance of the services contracted for have been fully
23 completed. Upon such certification having been made, the amount
24 of money on deposit to the credit of that particular contract
25 shall be paid to the person creating the trust fund or escrow
26 account. Any trustee accepting the [merchandise] trust fund or
27 escrow account under the provisions of this act may rely upon
28 all such certifications herein required to be made and shall not
29 be liable to anyone for such reliance.
30 (b) If, for any reason, the seller, who has entered into a
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1 contract for the sale of personal property or services and has
2 made the deposit herein required to be made, cannot or does not
3 perform said contract promptly after the death of the person to
4 be benefited and after request to do so, the family or next of
5 kin of the deceased person, having provided for such personal
6 property or services on behalf of the deceased person, shall be
7 entitled to receive from the trustee the amount of money on
8 deposit to the credit of that particular contract. An affidavit
9 to that effect, delivered to the trustee, shall be sufficient
10 authority to the trustee to make such a payment without any
11 liability to the person making the deposit of such money into
12 the trust fund or escrow account or to any other person. Nothing
13 herein contained shall relieve the seller under any such
14 contract of his liability for nonperformance.
15 Section 5. After final payment, if the [purchaser] person
16 for whose benefit the said contract was made moves out of the
17 [State and upon] Commonwealth and only in such event, written
18 notice of which, including the purchaser's new address, shall be
19 delivered to the seller and to the trustee the purchaser may
20 cancel any such contract for the furnishing of personal property
21 or services prior to performance by seller and to the death of
22 the person for whose benefit such contract was made, in which
23 event, the purchaser shall be entitled to receive from the
24 trustee the principal amount of money on deposit to the credit
25 of that particular contract less the interest which shall be
26 returned to the seller.
27 Section 6. (a) Every two years after effective date of this
28 act, the trustee shall, prior to the first of December, file [a
29 financial report] an accounting of the [merchandise] trust fund
30 or escrow account with the orphans' court of the county in which
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1 the trustee is situate, setting forth the principal thereof, the
2 investments and payments made and income earned and disbursed.
3 (b) The orphans' court having jurisdiction over any such
4 [merchandise] trust fund or escrow account may, at any time,
5 require the person creating the same or the trustee to file a
6 report and submit its records in relation to any such fund. If
7 the court determines that the fund is not being maintained in
8 accordance with the provisions of this act, it shall make such
9 orders as may be necessary to compel compliance with the
10 provisions hereof.
11 Section 7. A trustee of a [merchandise] trust fund or escrow
12 account created under the provisions of this act, upon the
13 exercise of due care, shall not be liable to the person creating
14 such fund, to the purchaser or to any person for any
15 disbursements made [for] from the trust fund or escrow account
16 pursuant to the provisions of this act.
17 Section 8. This act shall not apply to the sale of cemetery
18 lots or graves by a funeral director, cemetery or any other
19 person[, association, partnership or corporation].
20 Section 10. Any person knowingly violating the provisions of
21 this act or failing to make the required deposits into a
22 [merchandise] trust fund or [into a temporary special] escrow
23 account shall be guilty of a misdemeanor, and, upon conviction
24 thereof, shall be sentenced to pay a fine of not less than five
25 hundred dollars ($500) nor more than one thousand dollars
26 ($1000), or undergo imprisonment for a term not exceeding one
27 year, or both. If the person violating the provisions of this
28 act is a corporation or association, the officer responsible for
29 the violation shall undergo any prison term imposed.
30 Section 11. The provisions of this act shall not be
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1 construed to repeal or affect the [provisions] requirement of
2 section 13 of the act of January 14, 1952 [(P.L.1898), known as
3 the "Funeral Director Law."] (1951 P.L.1898, No.522), known as
4 the "Funeral Director Law," that no person other than a funeral
5 director shall, directly or indirectly, or through an agent,
6 offer to or enter into a contract with a living person to render
7 funeral services to such person when needed or any other
8 requirements of the State Board of Funeral Directors pertaining
9 to the reporting of such contracts to the State Board of Funeral
10 Directors by a funeral director.
11 Section 2. The second sentence of section 13(c) of the act
12 of January 14, 1952 (1951 P.L.1898, No.522), known as the
13 Funeral Director Law, is repealed.
14 Section 3. This act shall take effect immediately.
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