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Report to Congressional Requesters:

United States General Accounting Office:

GAO:

August 2003:

Death Care Industry: 

Regulation Varies across States and by Industry Segment:

GAO-03-757:

GAO Highlights:

Highlights of GAO-03-757, a report to congressional requesters 

Why GAO Did This Study:

Media reports of desecration of graves and human remains and other 
types of mismanagement at cemeteries and crematories have inspired a 
debate regarding whether the federal government should take on a 
greater role in regulating the death care industry, primarily funeral 
homes, crematories, cemeteries, pre-need sales of funeral plans, and 
third party sales of funeral goods. The federal government has a 
limited role in regulating the death care industry, as most regulatory 
responsibilities are handled at the state level. Because of this, 
federal policymakers have expressed an interest in understanding the 
range of practices that are used by the states to regulate the various 
segments of the death care industry.

Based on surveys of state regulators covering the various segments of 
the death care industry; and visits to the states of California, 
Florida, Georgia, Hawaii, New York, and Texas; this report provides 
information on (1) the structures used by states for regulating the 
death care industry, and (2) the mechanisms used by states for 
enforcing their regulations covering the industry. The report also 
provides information on the resources available to help consumers make 
informed choices regarding death care transactions. Details on the 
results of GAO’s surveys of the states can be found at: 
http://www.gao.gov/cgi-bin/getrpt?GAO-03-831SP.

What GAO Found:

GAO’s research shows that states vary in their approach to regulating 
the various segments of the death care industry. A majority of states 
have more than one state organization that is responsible for 
regulating all or most of the industry segments, whereas fewer states 
rely on one state organization for regulating the entire death care 
industry.

States also vary in the mechanisms they have and use to enforce 
regulations covering the death care industry and protect consumers. 
These enforcement mechanisms include licensing or registering 
businesses and practitioners, inspecting facilities, and taking 
enforcement actions against those businesses or practitioners that 
violate state rules or regulations.

The majority of states regulate funeral homes, crematories, 
cemeteries, and pre-need sales of funeral plans, although the specific 
licensing requirements vary across the states. Fewer states regulate 
third party sales of funeral goods. Further, even in those states that 
regulate each industry segment, not all businesses or practitioners 
may be subject to licensing or regulation.

Most states also require inspections of funeral homes and crematories, 
but fewer states require inspections of cemeteries. In most of these 
states, the inspections are conducted annually. Information obtained 
from the six case study states show that these inspections tend to 
focus on such things as the proper posting of licenses, the 
availability of price lists, and the cleanliness and adequacy of 
equipment and the facilities.

Since January 1, 2000, a majority of states have taken enforcement 
actions against funeral homes, funeral directors, or embalmers for 
violations of a variety of state rules or regulations. Fewer states, 
however, have taken such actions against the other industry segments.

www.gao.gov/cgi-bin/getrpt?GAO-03-757.

To view the full product, including the scope and methodology, click 
on the link above. For more information, contact Laurie Ekstrand at 
(202) 512-8777 or ekstrandl@gao.gov.

[End of section]

Contents:

Letter:

Background:

Results in Brief:

Appendix I: Objectives, Scope, and Methodology:

Objectives:

Scope and Methodology:

Appendix II: Resources Available to Assist Consumers in Death Care 
Transactions:

Resources Available from FTC:

Resources Available from Death Care Industry Sources:

Resources Available from Consumer Associations:

Consumer Protection Information Offered by States:

Appendix III: California's Regulation of the Death Care Industry:

Regulatory Structure:

Enforcement Mechanisms:

Appendix IV: Florida's Regulation of the Death Care Industry:

Regulatory Structure:

Enforcement Mechanisms:

Appendix V: Georgia's Regulation of the Death Care Industry:

Regulatory Structure:

Enforcement Mechanisms:

Appendix VI: Hawaii's Regulation of the Death Care Industry:

Regulatory Structure:

Enforcement Mechanisms:

Appendix VII: New York's Regulation of the Death Care Industry:

Regulatory Structure:

Enforcement Mechanisms:

Appendix VIII: Texas's Regulation of the Death Care Industry:

Regulatory Structure:

Enforcement Mechanisms:

Appendix IX: Comparison of Regulation of the Death Care Industry across 
the 6 Case Study States:

Appendix X: Consolidation of the Death Care Industry and the Interstate 
Transit of Human Remains:

Consolidation of the Death Care Industry:

Interstate Transit of Human Remains:

Appendix XI: GAO Contacts and Staff Acknowledgments:

GAO Contacts:

Staff Acknowledgments:

Glossary:

Tables:

Table 1: Summary of Surveyed States' Licensing Requirements for Funeral 
Homes, Funeral Directors, and Embalmers:

Table 2: Summary of Surveyed States' Licensing Requirements for 
Crematories and Crematory Operators:

Table 3: Summary of Surveyed States' Licensing Requirements for 
Cemeteries and Cemetery Operators:

Table 4: Summary of Surveyed States' Regulation and Registration or 
Licensing Requirements Regarding Sales of Pre-need Funeral Plans:

Table 5: Summary of Surveyed States' Regulation and Licensing 
Requirements for Third Party Sales of Funeral Goods:

Table 6: Listing of State Regulatory Agencies, Death Care Industry 
Associations, and Consumer Associations We Met with in the 6 States 
Visited:

Table 7: Summary of Consumer Information and Protections Offered by the 
States:

Table 8: Comparison of Requirements for Funeral Homes across the 6 Case 
Study States:

Table 9: Comparison of Requirements for Crematories across the 6 Case 
Study States:

Table 10: Comparison of Requirements for Cemeteries across the 6 Case 
Study States:

Table 11: Comparison of Requirements for Pre-Need Funeral Plan Sales 
Funded by Trusts in the 6 Case Study States:

Table 12: Comparison of Requirements for Third Party Sales of Funeral 
Goods across the 6 Case Study States:

Figures:

Figure 1: State and Federal Governments' Roles in Regulating the Death 
Care Industry:

Figure 2: Mechanisms States Use to Enforce Regulations Pertaining to 
Death Care Industry Segments:

Abbreviations:

FTC: Federal Trade Commission:

NFDA: National Funeral Directors Association:

United States General Accounting Office:

Washington, DC 20548:

August 25, 2003:

The Honorable Christopher J. Dodd 
United States Senate:

The Honorable Mark A. Foley 
House of Representatives:

Media reports of desecration of graves and human remains and other 
types of mismanagement at cemeteries and crematories have inspired a 
debate regarding whether the federal government should take on a 
greater role in regulating the death care industry, that is, the array 
of providers of funeral and cemetery goods and services, such as 
funeral directors, embalmers, crematory operators, cemetery operators, 
sellers of pre-need funeral plans, and third party sellers of funeral 
goods.[Footnote 1] In November 2002, bills were introduced in the 107th 
Congress that, if enacted, would have, among other things (1) provided 
federal funding to states that agree to comply with newly established 
federal standards and requirements for regulating various segments of 
the death care industry and (2) expanded the Federal Trade Commission's 
(FTC) role in protecting consumers in arranging death care 
transactions.[Footnote 2]

Though these bills did not pass, policymakers continue to express an 
interest in the range of practices states use to regulate the various 
segments of the death care industry. This report responds to your 
requests that we provide information on the regulation of the industry. 
Specifically, we are reporting on (1) the structures states use for 
regulating the death care industry and (2) the mechanisms states use 
for enforcing their regulations pertaining to the death care industry. 
We are also providing information on resources available to help 
consumers make informed choices regarding death care transactions (see 
app. II), as well as consolidation of the death care industry and the 
interstate nature of death care transactions (see app. X).

We gathered information to address the two primary objectives using a 
two-pronged approach. First, we developed five Web based surveys to 
gather information from state regulatory officials covering each of the 
five death care industry segments.[Footnote 3] Second, we visited and 
collected more specific information from state regulatory officials, 
death care industry officials, and consumer association representatives 
in six states--California, Florida, Georgia, Hawaii, New York, and 
Texas. California, Florida, Georgia, and Hawaii were selected because 
of media reports of desecration of graves and human remains and other 
types of mismanagement at cemeteries and crematories in these states. 
New York and Texas were selected because they represent states that 
have comparatively large populations. We will refer to these six states 
throughout the report as the "case study states.":

We conducted our review between July 2002 and July 2003 in accordance 
with generally accepted government auditing standards. Appendix I 
describes our objectives, scope, and methodology in greater detail.

Background:

While accurate data are not readily available on how much consumers 
spend each year on death care transactions, we do know that it is 
substantial. According to the National Center for Health Statistics, 
there were about 2.4 million deaths registered in the United States in 
2000--the most recent year for which complete data are available. To 
put that in perspective, the North American Funeral Directors 
Association reports that of the 2.4 million deaths in 2000, 
approximately 75 percent resulted in earth burial or entombment and 25 
percent resulted in cremation. The Association also reports that based 
on a 2001 survey, the average adult funeral costs $5,180. Multiplying 
this figure by 1,800,000 (75 percent of the 2.4 million deaths) 
provides an estimate of over $9.3 billion spent each year on funeral 
costs alone in the United States. Costs for the estimated 25 percent of 
deaths that resulted in cremations would be added to that cost figure, 
but data on cremation costs were not available.

The death care industry has been undergoing a transformation. According 
to AARP (formerly known as the American Association of Retired 
Persons), the death care industry has historically been fragmented, 
with limited overlap between the funeral and cemetery segments of the 
industry.[Footnote 4] Today, such distinctions are diminishing as the 
death care industry is consolidating. Increasingly, funeral directors 
provide goods and services once exclusive to cemetery operators and 
similarly, cemetery operators sell items that were once exclusive to 
the funeral industry. In addition, according to officials within the 
death care industry, there was increased corporate ownership of local 
funeral homes and cemeteries in the 1990s, but that trend has reversed 
in recent years.

AARP attributes much of the change in the death care industry in recent 
years to the growth of pre-need sales of funeral and cemetery goods. In 
the past, when nearly all funerals and burials were arranged upon death 
and survivors went to their local funeral homes and cemeteries at the 
time of need, comparatively little competition existed within the 
industry. Today, a growing number of consumers who purchase funeral and 
cemetery goods and services have shopped around in advance.

Figure 1 shows that the federal government has a limited role in 
regulating the death care industry and that most regulatory 
responsibilities regarding the death care industry are handled at the 
state level. According to FTC's Funeral Rule, any business that sells 
or offers to sell both funeral goods and funeral services to the public 
must comply with the Funeral Rule. The Funeral Rule specifies, among 
other things, that consumers are entitled to price information about 
funeral goods and services before they purchase them. Thus, the Funeral 
Rule requires funeral homes and sellers of both pre-need and at-need 
funeral plans to provide the consumer, at the beginning of the 
discussion about arrangements for funeral goods and services, a general 
price list that can be used for comparative shopping, if the consumer 
so wishes. Since the Funeral Rule only applies to businesses providing 
both funeral goods and services, it generally does not apply to 
crematories, cemeteries, or third party sales of funeral goods since 
these businesses usually provide only merchandise or only services. 
Aside from FTC's Funeral Rule, there is no regulation that specifically 
addresses the marketing practices of the death care industry at the 
federal level.

Figure 1: State and Federal Governments' Roles in Regulating the Death 
Care Industry:

[See PDF for image]

[A] Since the Funeral Rule only applies to businesses providing both 
funeral goods and services, it generally does not apply to crematories, 
cemeteries, or third party sales of funeral goods.

[End of figure]

Consumer associations, death care industry associations, and state 
regulators have divergent views on whether the federal government 
should take on a greater role in regulating the death care industry. 
While consumer associations generally favor an enhanced federal role, 
representatives of the death care industry generally do not. Support 
among state regulators for an enhanced federal role is mixed. Complaint 
data shed little light on this debate. In an earlier report,[Footnote 
5] we found that comprehensive information on consumer complaints that 
would indicate the overall nature and extent of problems that consumers 
experience involving the death care industry was not available. While 
we were able to obtain some complaint data involving the death care 
industry from two organizations, the data were not comprehensive 
because (1) complaint data are not systematically gathered within 
states or across the states, (2) there is no central repository for 
death care industry complaint data, (3) not all consumers who 
experience problems in their death care transactions file complaints, 
and (4) some consumers may file the same complaint with more than one 
organization. Nonetheless, the seriousness of the issues involved have 
prompted some policymakers to consider whether the federal government 
should take on a greater role in regulating the death care industry.

Results in Brief:

Structure for Regulating the Death Care Industry Varies across States:

States vary in their approach to regulating the various segments of the 
death care industry. Twenty-nine states have more than 1 state 
organization--such as a state agency, bureau, or board--that are 
responsible for regulating all or most of the five death care industry 
segments, whereas 21 states rely on 1 state organization for regulating 
the death care industry. For example, in Florida, a board within the 
Department of Business and Professional Regulation and a board within 
the Department of Financial Services are responsible for regulating 
segments of the death care industry. In contrast, California has a 
bureau within the Department of Consumer Affairs that regulates the 
death care industry. Further, in some states, the state regulatory 
organization focuses solely on the death care industry, whereas in 
other states, organizations also have regulatory responsibilities for 
other industries. For example, the Texas Funeral Service Commission 
focuses exclusively on regulating death care-related businesses, 
whereas Hawaii's Department of Health's Sanitation Branch regulates 
some funeral homes but also regulates food preparation industries and 
other businesses.

Mechanisms for Enforcing Regulations Covering the Death Care Industry 
Also Vary across States:

States also vary in the mechanisms they have and use to enforce 
regulations covering the various segments of the death care industry. 
As can be seen in figure 2, the enforcement mechanisms used by states 
to regulate the death care industry and protect consumers include 
licensing or registering businesses and practitioners, inspecting 
facilities, and taking enforcement actions against those individuals or 
businesses that violate state rules or regulations. The sections that 
follow present a summary of states' enforcement mechanisms, segregated 
by each of the 5 death care industry segments. (More detailed 
information on the 6 case study states' regulation of the separate 
death care industry segments can be found in appendixes III through 
IX.):

Figure 2: Mechanisms States Use to Enforce Regulations Pertaining to 
Death Care Industry Segments:

[See PDF for image]

[End of figure]

Funeral Homes, Funeral Directors, and Embalmers:

Results of our surveys of state regulators covering the various 
segments of the death care industry show that funeral homes are 
regulated and licensed more than any other segment of the death care 
industry. Table 1 shows that of the 48 states that responded to our 
survey regarding funeral homes, 45 reported that they regulate funeral 
homes. Of the 43 states that responded to this issue, all but 1 state 
regulate all funeral homes.[Footnote 6] The majority of states that 
regulate funeral homes also require funeral homes, funeral directors, 
and embalmers to be licensed, although specific licensing requirements 
vary. Our work in the 6 case study states reflect the same variation in 
licensing requirements for funeral homes, funeral directors, and 
embalmers found in our survey. For example, California, Florida, 
Georgia, and Texas require all funeral homes, funeral directors, and 
embalmers to hold a license to operate in the state. By contrast, 
Hawaii requires a license only for embalmers and for those funeral 
homes that perform embalmings, but not for funeral directors or for 
funeral homes that do not embalm; and in New York, funeral directors 
are required to be licensed, but there is no separate licensing 
requirement for embalmers or funeral homes.[Footnote 7]

Table 1: Summary of Surveyed States' Licensing Requirements for Funeral 
Homes, Funeral Directors, and Embalmers:

Total; Regulates funeral homes: 45 of 48 responders; Requires all 
funeral homes to be licensed: 42 of 43 responders; Requires all funeral 
directors to be licensed: 42 of 43 responders; Requires all embalmers 
to be licensed: 41 of 42 responders.

Source: Information obtained from answers to GAO's Web based survey of 
all 50 states.

[End of table]

While most of the states that require inspections of funeral homes 
conduct those inspections at least annually, the number of inspectors 
who conduct the inspections varies across the states. Results from our 
survey of funeral-related issues show that 37 of the 43 responding 
states require funeral homes to be inspected, with most of these states 
requiring funeral homes to be inspected at least once a year. Based on 
the information obtained from our case study states, these inspections 
tend to focus on such things as whether (1) equipment and supplies are 
adequate, (2) embalming rooms are clean and properly ventilated, (3) 
licenses are current and conspicuously displayed, and (4) price lists 
are readily available. Among the responding states, the number of 
inspectors that conduct inspections of funeral homes ranges from a low 
of 1 to a high of 17, with most reporting they have 1 or 2 inspectors. 
Further, the percent of time inspectors devote to inspecting funeral 
homes varies, with inspectors in half of the responding states devoting 
70 percent or less of their time to such inspections, while inspectors 
in the remaining half of the states spend 80 percent or more of their 
time inspecting funeral homes. The variation in requirements for 
funeral home inspections among the 6 case study states was similar to 
the variation reflected in our survey. For example, Florida and Georgia 
require all funeral homes to be inspected at least once a year, whereas 
New York has no specific requirement for funeral homes to be inspected, 
but inspections are conducted on a "recurrent basis.":

Since January 1, 2000, a majority of the states have taken enforcement 
actions against funeral homes, funeral directors, or embalmers for 
violations of state rules or regulations. Of the 42 states that 
responded to this survey issue, 40 had taken enforcement actions, 
ranging from issuing notices of noncompliance, to revoking licenses, 
and prosecuting violators. It must be noted that a low number of 
enforcement actions taken by a state may not be indicative of lax 
enforcement efforts, but rather could be reflective of a general lack 
of problems involving the death care industry in that state.

Consistent with results obtained through our funeral home survey, 5 of 
the 6 case study states have taken a range of enforcement actions 
against funeral homes, funeral directors, or embalmers for violations 
of state rules or regulations since January 1, 2000. For example, 
Florida has taken a number of actions, including (1) issuing a notice 
of noncompliance to a funeral director for failing to properly display 
casket prices and (2) placing a funeral director on probation, levying 
a fine against him, and making him pass a state examination on state 
laws and rules after he did not properly maintain a body so that it 
would be suitable for viewing.

See appendixes III through IX for more detailed information on the 6 
case study states' regulation of funeral homes, funeral directors, and 
embalmers. To view the survey covering funeral homes, funeral 
directors, and embalmers and the responding states' answers to the 
survey questions, go to http://www.gao.gov/cgi-bin/getrpt?GAO-03-
831SP.

Crematories and Crematory Operators:

A majority of states regulate crematories and require crematories to be 
licensed to operate in their state, but fewer require crematory 
operators to be licensed. Specifically, as shown in table 2, of the 45 
states responding to our survey covering crematories and crematory 
operators, 36 regulate crematories, and 29 regulate all crematories in 
the state.[Footnote 8] Further, of the 35 states that responded to this 
issue, 27 require all crematories to be licensed to operate within 
their state, whereas only 16 of these states require all crematory 
operators to be licensed. Our work in the 6 case study states exhibits 
the same variation in licensing requirements and practices for 
crematories and crematory operators. For example, California requires 
all crematories and crematory operators to be licensed to operate in 
the state. In contrast, Hawaii and New York do not license either 
crematories or crematory operators.

Table 2: Summary of Surveyed States' Licensing Requirements for 
Crematories and Crematory Operators:

Total; Regulates crematories: 36 of 45 responders; Requires all 
crematories to be licensed: 27 of 35 responders; Requires all crematory 
operators to be licensed: 16 of 35 responders.

Source: Information obtained from answers to GAO's Web based survey of 
all 50 states.

[End of table]

Similar to funeral homes, most states require inspections of 
crematories at least annually. Of the 36 states that responded to this 
issue in our survey, 33 require crematories to be inspected, and most 
of these states require crematories to be inspected at least once a 
year. The number of inspectors who conduct those inspections and the 
percent of their time devoted to inspections of crematories, however, 
vary from state to state. Among the responding states, a majority 
reported they have 1 or 2 inspectors who inspect crematories and, in 
most of the responding states, these inspectors devote 10 percent or 
less of their time to inspections of crematories. The requirements for 
crematory inspections across the 6 case study states also vary. For 
example, California, Florida, Georgia,[Footnote 9] and New York require 
inspections of crematories at least once a year. In contrast, neither 
Hawaii nor Texas[Footnote 10] requires inspections of crematories.

Since January 1, 2000, only a minority of the states that regulate 
crematories have taken enforcement actions against crematories or 
crematory operators for violations of state rules or regulations. Of 
the 32 states that responded to this survey question, 13 have taken a 
variety of enforcement actions for violations, ranging from issuing 
notices of noncompliance, to revoking licenses and prosecution. Among 
the 6 case study states, California, Florida, and New York have taken a 
range of enforcement actions for violations of state rules or 
regulations, whereas Georgia, Hawaii, and Texas have not. For example, 
California placed a facility on probation for failing to properly inter 
or dispose of cremated remains.

See appendixes III through IX for more detailed information on the 6 
case study states' regulation of crematories and crematory operators. 
To view the survey covering crematories and crematory operators and the 
responding states' answers to the survey questions, go to http://
www.gao.gov/cgi-bin/getrpt?GAO-03-831SP.

Cemeteries and Cemetery Operators:

Most states regulate cemeteries, although not all cemeteries in those 
states are subject to regulation.[Footnote 11] Specifically, as shown 
in table 3, of the 44 states that responded to our survey covering 
cemeteries and cemetery operators, 34 regulate cemeteries, and 27 of 
these states noted that not all cemeteries are subject to regulation. 
About half of the states that regulate cemeteries require at least some 
cemetery operators to be licensed, although the licensing requirements 
vary across the states. Of the 33 states responding to this issue, 23 
said that at least some cemeteries must be licensed, whereas only 16 of 
these states require at least some cemetery operators to be licensed. 
Our work in the 6 case study states shows similar results.

Table 3: Summary of Surveyed States' Licensing Requirements for 
Cemeteries and Cemetery Operators:

Total; Regulates at least some cemeteries: 34 of 44 responders; 
Requires at least some cemeteries to be licensed: 23 of 33 responders; 
Requires at least some cemetery operators to be licensed: 16 of 33 
responders.

Source: Information obtained from answers to GAO's Web based survey of 
all 50 states.

[End of table]

Cemetery inspection requirements also vary across the states. Of the 33 
states that responded to this issue in our survey, 14 require 
cemeteries to be inspected and, among these states, 6 require 
inspections of cemeteries at least every 2 years. The number of 
inspectors who inspect cemeteries and the percent of their time devoted 
to these inspections also vary across the states. Among the responding 
states, a majority reported they have 3 or less inspectors who inspect 
cemeteries and, in most of the responding states, these inspectors 
devote 50 percent or less of their time to inspections of cemeteries. 
The requirements for cemetery inspections across the 6 case study 
states also vary, with 3 states requiring inspections of cemeteries, 
while the 3 remaining states do not.

A majority of the responding states have taken actions against 
cemeteries or cemetery operators for violations of state rules or 
regulations since January 1, 2000. Specifically, of the 33 states 
responding to this issue, 23 noted they have taken enforcement actions 
ranging from issuing notices of noncompliance, to revoking licenses, 
and prosecuting violators. However, among the 6 case study states, each 
has taken enforcement actions against cemeteries or cemetery operators 
since January 1, 2000, for violations of state rules or regulations. 
For example, Hawaii suspended a cemetery authority license because the 
licensee did not file required audited financial statements, and New 
York issued a notice of noncompliance to a cemetery because its record 
keeping was not sufficient to identify who is buried in each grave.

More detailed information on the 6 case study states' regulation of 
cemeteries and cemetery operators can be found in appendixes III 
through IX. To view the survey covering cemeteries and cemetery 
operators and the responding states' answers to the survey questions, 
go to http://www.gao.gov/cgi-bin/getrpt?GAO-03-831SP.

Pre-need Sales of Funeral Plans:

Most states regulate pre-need sales of funeral plans.[Footnote 12] 
Specifically, table 4 shows that all 42 of the states that responded to 
this issue in our survey stated that they regulate sales of pre-need 
funeral plans, with 34 of these states regulating all sales of pre-need 
funeral plans.[Footnote 13] A majority of the states that responded to 
this survey also require at least some sellers of pre-need funeral 
plans--to include the companies or the actual sales agents--to be 
licensed by the state. Of the 38 states that responded to this issue, 
35 require at least some sellers of pre-need funeral plans to be 
licensed to operate within their state, and 31 of the 38 states 
responding require at least some sellers to register with the state. 
Similarly, regulation of pre-need funeral plan sales in the 6 case 
study states also varies. For example, Florida requires companies to 
obtain a "certificate of authority" in order to sell pre-need funeral 
plans in the state. In contrast, New York only permits licensed funeral 
directors to sell pre-need funeral plans, which must be funded through 
trusts.

Table 4: Summary of Surveyed States' Regulation and Registration or 
Licensing Requirements Regarding Sales of Pre-need Funeral Plans:

Total; Regulates pre-need funeral plan sales: 42 of 42 responders; 
Regulates all pre-need funeral plan sales: 34 of 41 responders; 
Requires at least some sellers of pre-need funeral plans to be licensed 
by the state: 35 of 38 responders; Requires at least some sellers of 
pre-need funeral plans to register with the state: 31 of 38 responders.

Source: Information obtained from answers to GAO's Web based survey of 
all 50 states.

[End of table]

A majority of states require a portion of the proceeds from sales of 
pre-need funeral plans to be placed in trust, but trusting requirements 
vary across the states. Specifically, results from our survey show that 
of the 40 states that responded to this issue, 35 require a percentage 
of pre-need sales revenues to be placed in trust. The trusting 
requirements vary, though, depending on the category of funeral or 
cemetery goods or services purchased. Further, the refunds that 
purchasers of pre-need funeral plans are entitled to if they cancel 
their pre-need contracts also vary across the states. Some states allow 
consumers who cancel their pre-need sales contracts to recoup the 
amount of principal they paid plus any interest that has accrued, while 
in other states, consumers are entitled only to receive a majority of 
the principal they have paid. Regulation of pre-need funeral plan sales 
in the 6 case study states was consistent with the results obtained 
through our survey. Further, while each of the 6 states allow consumers 
to recoup the majority of the principal they paid when they cancel pre-
need funeral plans prior to need, requirements vary on the amount, if 
any, of accrued interest to which they are due.

A majority of the states that regulate pre-need funeral plan sales have 
taken enforcement actions against sellers of such plans for violations 
of state rules or regulations since January 1, 2000. Specifically, of 
the 36 states responding to this issue in our survey, 25 stated that 
they have taken such actions. Among the 6 case study states, all have 
taken at least one enforcement action against sellers of pre-need 
funeral plans for violations of state rules or regulations since 
January 1, 2000. For example, California revoked a license of a seller 
of pre-need funeral plans after the state determined the seller, among 
other things (1) lied about his criminal history, (2) fraudulently 
altered test results to obtain his license, and (3) failed to place 
pre-need sales funds in trust. Texas issued a notice of noncompliance 
to a cemetery for failure to properly make timely deposits to the trust 
fund as required.

More detailed information on the 6 case study states' regulation of 
pre-need funeral plan sales can be found in appendixes III through IX. 
To view the survey covering pre-need sales of funeral plans and the 
responding states' answers to the survey questions, go to http://
www.gao.gov/cgi-bin/getrpt?GAO-03-831SP.

Third Party Sales of Funeral Goods:

Third party sales of funeral goods are regulated less than any other 
segment of the death care industry. As can be seen in table 5, of the 
45 states that responded to our survey covering third party sales of 
funeral goods, only 16 regulate third party sales of funeral goods, and 
only 10 of those states responded that they regulate all third party 
sales of funeral goods.[Footnote 14] Even fewer states require third 
party sellers of funeral goods to be licensed by or registered with the 
state. Only 9 of the 13 responding states require at least some third 
party sellers to be licensed, and 9 of the 14 responding states require 
third party sellers of funeral goods to register with the state. 
Regulation of third party sales in the 6 case study states also varies. 
For example, California, Hawaii, New York, and Texas do not regulate or 
license third party sales of funeral goods. In contrast, Florida only 
regulates monument dealers.

Table 5: Summary of Surveyed States' Regulation and Licensing 
Requirements for Third Party Sales of Funeral Goods:

Total; Regulates third party sales of funeral goods: 16 of 45 
responders; Regulates all third party sales of funeral goods: 10 of 15 
responders; Requires at least some third party sellers of funeral goods 
to be licensed by the state: 9 of 13 responders; Requires third party 
sellers of funeral goods to register with the state: 9 of 14 
responders.

Source: Information obtained from answers to GAO's Web based survey of 
all 50 states.

[End of table]

Few states responded that they have taken enforcement actions against 
third party sellers of funeral goods for violations of state rules or 
regulations since January 1, 2000. Of the 16 responding states that 
regulate third party sales of funeral goods, 14 addressed this issue 
and, of these, 6 stated they have taken actions against third party 
sellers. Among the 6 case study states, only Georgia has taken any 
enforcement actions against third party sellers of funeral goods since 
January 1, 2000, and this action was to deny the registration of a 
third party seller.

More detailed information on the 6 case study states' regulation of 
third party sellers of funeral goods can be found in appendixes III 
through IX. To view our survey covering third party sales of funeral 
goods and the responding states' answers to the survey questions, go to 
http://www.gao.gov/cgi-bin/getrpt?GAO-03-831SP.

As agreed with your office, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies of this report 
to the Chairman of the Federal Trade Commission. We will also make 
copies available to others on request. In addition, the report will be 
available at no charge on GAO's Web site at http://www.gao.gov.

If you or your staffs have any questions regarding this report, please 
contact John Mortin or me at (202) 512-8777. Key contributors to this 
report are listed in appendix XI.

Laurie E. Ekstrand 
Director, Homeland Security & Justice:

Signed by Laurie E. Ekstrand: 

[End of section]

Appendix I: Objectives, Scope, and Methodology:

Objectives:

Our overall objectives were to report on (1) states' roles in and the 
structures used by states for regulating the death care industry and 
(2) the mechanisms used by states for enforcing their regulations 
pertaining to the death care industry.

Scope and Methodology:

To obtain information on the various ways states regulate the death 
care industry, we used a two-pronged approach. First, we determined the 
proper points of contacts within each state for regulating the various 
segments of the death care industry and designed and implemented five 
Web based surveys to gather information on the regulatory structure and 
enforcement mechanisms that are in place in the states to regulate each 
of the five segments of the death care industry we reviewed--funeral 
homes, crematories, cemeteries, pre-need sales of funeral 
plans,[Footnote 15] and third party sales of funeral goods. In some 
states, one person was designated as their state's point of contact for 
responding to all five surveys. In other states, there were multiple 
points of contact for responding to the five separate surveys.

To ensure we obtained the highest response rate possible, we made the 
Web based surveys available to the designated state contacts from 
December 2, 2002, through March 7, 2003, and sent reminders via E-mails 
and telephone calls to the state contacts. Over this 3-month period, we 
obtained responses from 48 states covering regulation of funeral homes, 
45 states covering regulation of crematories, 44 states covering 
regulation of cemeteries, 42 states covering regulation of sales of 
pre-need funeral plans, and 45 states covering regulation of third 
party sales of funeral goods. While the overall response rate was 
relatively high, not all states that completed the surveys provided 
responses to all the appropriate questions. Further, we did not 
independently verify the accuracy or completeness of the responses 
provided from the Web based surveys.

The second part of our approach to gathering data on state regulation 
of the death care industry was to visit the 6 states of California, 
Florida, Georgia, Hawaii, New York, and Texas. We conducted work in 
California, Florida, Georgia, and Hawaii because of media reports of 
desecration of graves and human remains and other types of 
mismanagement at cemeteries and crematories in those states. New York 
and Texas were selected because they represent states that have 
comparatively large populations.[Footnote 16] Within these 6 states, we 
conducted interviews with the relevant regulatory officials to collect 
more in-depth information and documentation on (1) relevant state rules 
and regulations; (2) the structure in place to regulate the death care 
industry; (3) enforcement mechanisms and capabilities that are in place 
to enforce the relevant state rules and regulations; and (4) the 
results of enforcement efforts--such as inspections of facilities, and 
enforcement actions taken. We also researched and reviewed relevant 
portions of these states' laws and regulations concerning the death 
care industry. Table 6 provides a listing of the state regulatory, 
death care industry, and consumer associations we met in the 6 states 
visited. The results from our work in these states are not 
generalizeable across all states.

Table 6: Listing of State Regulatory Agencies, Death Care Industry 
Associations, and Consumer Associations We Met with in the 6 States 
Visited:

State: California; State regulatory agencies: Department of Consumer 
Affairs, Cemetery and Funeral Bureau; Death care industry associations: 
California Funeral Directors Association Interment Association of 
California; Consumer associations: Funeral Consumers Alliance of 
California.

State: Florida; State regulatory agencies: Department of Business and 
Professional Regulation, Board of Funeral Directors and Embalmers; 
Department of Banking and Finance (Now called the Department of 
Financial Services), Bureau of Funeral and Cemetery Services; Death 
care industry associations: Florida Funeral Directors Association; 
Association of Independent Funeral Directors of Florida; Consumer 
associations: Florida Funeral and Cemetery Consumer Advocacy.

State: Georgia; State regulatory agencies: Office of the Secretary of 
State, Securities and Business Regulation Division; Professional 
Licensing Boards Division; Death care industry associations: Georgia 
Funeral Directors Association; Consumer associations: AARP, Georgia 
State Office.

State: Hawaii[A]; State regulatory agencies: Department of Health, 
Sanitation Branch; Department of Health, Clean Air Branch; Department 
of Commerce and Consumer Affairs, Cemetery and Funeral Trust Program; 
Death care industry associations: Hawaii Funeral Directors Association; 
Hawaii Allied Memorial Council; Consumer associations: Memorial Society 
of Hawaii.

State: New York; State regulatory agencies: Department of State, 
Division of Cemeteries; Department of Health, Bureau of Funeral 
Directing; Death care industry associations: New York State Funeral 
Directors Association; New York State Association of Cemeteries; 
Consumer associations: Memorial Society of the Hudson-Mohawk Region.

State: Texas; State regulatory agencies: Texas Funeral Service 
Commission; Department of Banking, Special Audits Division; Death care 
industry associations: Texas Funeral Directors Association; Texas 
Cemeteries Association; Consumer associations: Consumers Union, 
Southwest Region; Funeral Consumers Alliance of Texas.

Source: GAO.

[A] In Hawaii, we also attended a meeting of the "Hawaii Task Force to 
Examine State Regulators of Death Care Providers.":

[End of table]

Our work focused primarily on the states since most regulatory 
responsibilities regarding the death care industry are handled at the 
state level. We did, however, communicate with officials from the (1) 
Federal Trade Commission, (2) Department of Veterans Affairs' National 
Cemetery Administration, (3) Environmental Protection Agency, and (4) 
Occupational Safety & Health Administration to obtain information and 
documentation on these agencies' specific roles and responsibilities in 
regulating the death care industry and their interaction with state 
agencies that are the primary regulators of the death care industry.

In order to obtain broader perspectives regarding the death care 
industry--including changing trends and information available to assist 
consumers in making informed choices regarding death care transactions-
-we spoke with officials from the North American Cemetery Regulators 
Association and with representatives from consumer associations and the 
death care industry. Specifically, we met with and collected relevant 
documentation from consumer association officials representing AARP, 
the Funeral Consumers Alliance, and consumer associations having an 
interest in death care industry issues within the 6 states we visited 
(see table 6). For the death care industry, we met with and collected 
relevant documentation from officials representing the Cremation 
Association of North American, the International Cemetery and Funeral 
Association, the National Funeral Directors Association, as well as 
local industry associations within the 6 states we visited (see table 
6).

[End of section]

Appendix II: Resources Available to Assist Consumers in Death Care 
Transactions:

There are a variety of resources available to consumers for gathering 
information regarding death care transactions. Through the Federal 
Trade Commission (FTC), various death care industry associations, and 
consumer associations, consumers are able to find brochures and 
planning guides. While the information contained in this appendix is 
not comprehensive, it highlights some sources of information available 
to consumers for making informed choices regarding death care 
transactions.

Resources Available from FTC:

FTC provides a printed publication entitled Funerals: A Consumers 
Guide, which is also available on-line at (http://www.ftc.gov/bcp/
conline/pubs/services/funeral.html) that informs consumers on how the 
Funeral Rule protects them and provides a glossary of terms, advice for 
planning funerals, and a worksheet for consumers to compare costs. 
FTC's Web site provides links to consumer advocacy and industry trade 
associations, provides a link to electronically file a complaint, and 
posts a toll-free telephone number to its Consumer Response Center, 1-
877-FTC-HELP (382-4357).

Resources Available from Death Care Industry Sources:

Representatives from the death care industry associations with whom we 
spoke (both national and local) all provide information on their 
Internet sites and printed documents for consumers.

* National Funeral Directors Association: The professional association 
for funeral directors and embalmers, has a link entitled "consumer 
resources" on its Web site (www.nfda.org) that consumers can use to 
find information about their state funeral directors associations, 
associations focusing on grief, and funeral planning. Some state 
funeral directors organizations also provide printed and on-line 
information related to such topics as alternatives to traditional 
funerals, pre-need funeral plans, and the role of the funeral director.

* Cremation Association of North America: A professional association 
promoting the practice of cremation that also provides educational 
brochures on cremation and cremation-related articles for consumers on 
its Web site (http://www.cremationassociation.org). For example, the 
Cremation Association of North America's Web site offers a brochure 
answering frequently asked questions, such as how cremations are 
performed and whether embalming is necessary. Articles available on the 
Web site cover, for example, the history of cremation and trends 
contributing to the increase in cremation rates.

* International Cemetery and Funeral Association: Like other industry 
associations we interviewed, this association, a trade association for 
cemeteries, crematories, monument sellers, and funeral homes, provides 
information for consumers via its Web site (http://www.icfa.org). The 
International Cemetery and Funeral Association provides a Consumer 
Resource Guide that answers questions related to dealing with grief, 
burial, cremation, pre-need funeral plans, and the Cemetery Consumer 
Service Council--a voluntary service that mediates complaints between 
consumers and participating cemeteries at no cost to consumers.

Resources Available from Consumer Associations:

* AARP: An organization for people over 50. Its publications and Web 
site (www.aarp.org) cover a variety of topics of interest to seniors 
and its Web site presents information regarding death care services.

* Funeral Consumers Alliance: A consumer advocacy association that 
provides death care industry-related information through its Web site 
(http://www.funerals.org). The Web site features such information as a 
list of state and local member organizations, how to file a funeral or 
cemetery complaint, and consumer alerts regarding various aspects of 
the death care industry. State affiliate organizations, also known as 
memorial societies, also provide brochures and Web information, though 
these resources are generally state or county focused.

Consumer Protection Information Offered by States:

Results from our surveys show that most states provide some information 
or protections to consumers regarding their transactions involving the 
death care industry. Table 7 summarizes the range of responses we 
received from the states.

Table 7: Summary of Consumer Information and Protections Offered by the 
States:

State: Alabama; Requires death care businesses to provide general price 
lists: No; Provides one or more state-sponsored complaint hot 
lines: No; Provides information through state-sponsored Web page: 
Yes; Conducts educational outreach programs: No; Provides 
information on licensed facilities in good standing: Yes; Holds public 
hearings: Yes; Conducts investigations of legitimate consumer 
complaints: Yes.

State: Alaska; Requires death care businesses to provide general price 
lists: No; Provides one or more state-sponsored complaint hot 
lines: No; Provides information through state-sponsored Web page: 
No; Conducts educational outreach programs: No; Provides 
information on licensed facilities in good standing: Yes; Holds public 
hearings: No; Conducts investigations of legitimate consumer 
complaints: Yes.

State: Arizona; Requires death care businesses to provide general price 
lists: Yes; Provides one or more state-sponsored complaint hot lines: 
No; Provides information through state-sponsored Web page: Yes; 
Conducts educational outreach programs: No; Provides information 
on licensed facilities in good standing: Yes; Holds public hearings: 
No; Conducts investigations of legitimate consumer complaints: Yes.

State: Arkansas; Requires death care businesses to provide general 
price lists: Yes; Provides one or more state-sponsored complaint hot 
lines: Yes; Provides information through state-sponsored Web page: Yes; 
Conducts educational outreach programs: No; Provides information 
on licensed facilities in good standing: Yes; Holds public hearings: 
Yes; Conducts investigations of legitimate consumer complaints: Yes.

State: California; Requires death care businesses to provide general 
price lists: Yes; Provides one or more state-sponsored complaint hot 
lines: Yes; Provides information through state-sponsored Web page: Yes; 
Conducts educational outreach programs: Yes; Provides information on 
licensed facilities in good standing: Yes; Holds public hearings: Yes; 
Conducts investigations of legitimate consumer complaints: Yes.

State: Colorado; Requires death care businesses to provide general 
price lists: Yes; Provides one or more state-sponsored complaint hot 
lines: No; Provides information through state-sponsored Web page: 
Yes; Conducts educational outreach programs: No; Provides 
information on licensed facilities in good standing: Yes; Holds public 
hearings: No; Conducts investigations of legitimate consumer 
complaints: Yes.

State: Connecticut; Requires death care businesses to provide general 
price lists: Yes; Provides one or more state-sponsored complaint hot 
lines: Yes; Provides information through state-sponsored Web page: Yes; 
Conducts educational outreach programs: No; Provides information 
on licensed facilities in good standing: Yes; Holds public hearings: 
No; Conducts investigations of legitimate consumer complaints: Yes.

State: Delaware; Requires death care businesses to provide general 
price lists: No; Provides one or more state-sponsored complaint 
hot lines: Yes; Provides information through state-sponsored Web page: 
Yes; Conducts educational outreach programs: No; Provides information 
on licensed facilities in good standing: Yes; Holds public hearings: 
No; Conducts investigations of legitimate consumer complaints: Yes.

State: Florida; Requires death care businesses to provide general price 
lists: Yes; Provides one or more state-sponsored complaint hot lines: 
Yes; Provides information through state-sponsored Web page: Yes; 
Conducts educational outreach programs: Yes; Provides information on 
licensed facilities in good standing: Yes; Holds public hearings: No; 
Conducts investigations of legitimate consumer complaints: Yes.

State: Georgia; Requires death care businesses to provide general price 
lists: Yes; Provides one or more state-sponsored complaint hot lines: 
No; Provides information through state-sponsored Web page: Yes; 
Conducts educational outreach programs: No; Provides information 
on licensed facilities in good standing: Yes; Holds public hearings: 
Yes; Conducts investigations of legitimate consumer complaints: Yes.

State: Hawaii; Requires death care businesses to provide general price 
lists: Yes; Provides one or more state-sponsored complaint hot lines: 
Yes; Provides information through state-sponsored Web page: Yes; 
Conducts educational outreach programs: No; Provides information on 
licensed facilities in good standing: Yes; Holds public hearings: 
No; Conducts investigations of legitimate consumer complaints: Yes.

State: Idaho; Requires death care businesses to provide general price 
lists: Yes; Provides one or more state-sponsored complaint hot lines: 
Yes; Provides information through state-sponsored Web page: Yes; 
Conducts educational outreach programs: No; Provides information on 
licensed facilities in good standing: No; Holds public hearings: 
No; Conducts investigations of legitimate consumer complaints: Yes.

State: Illinois; Requires death care businesses to provide general 
price lists: Yes; Provides one or more state-sponsored complaint hot 
lines: Yes; Provides information through state-sponsored Web page: Yes; 
Conducts educational outreach programs: Yes; Provides information on 
licensed facilities in good standing: Yes; Holds public hearings: Yes; 
Conducts investigations of legitimate consumer complaints: Yes.

State: Indiana; Requires death care businesses to provide general price 
lists: a; Provides one or more state-sponsored complaint hot lines: a; 
Provides information through state-sponsored Web page: a; Conducts 
educational outreach programs: a; Provides information on licensed 
facilities in good standing: a; Holds public hearings: a; Conducts 
investigations of legitimate consumer complaints: a.

State: Iowa; Requires death care businesses to provide general price 
lists: Yes; Provides one or more state-sponsored complaint hot lines: 
Yes; Provides information through state-sponsored Web page: No; 
Conducts educational outreach programs: Yes; Provides information on 
licensed facilities in good standing: Yes; Holds public hearings: 
No; Conducts investigations of legitimate consumer complaints: Yes.

State: Kansas; Requires death care businesses to provide general price 
lists: Yes; Provides one or more state-sponsored complaint hot lines: 
Yes; Provides information through state-sponsored Web page: Yes; 
Conducts educational outreach programs: Yes; Provides information on 
licensed facilities in good standing: Yes; Holds public hearings: No; 
Conducts investigations of legitimate consumer complaints: Yes.

State: Kentucky; Requires death care businesses to provide general 
price lists: No; Provides one or more state-sponsored complaint 
hot lines: Yes; Provides information through state-sponsored Web page: 
Yes; Conducts educational outreach programs: Yes; Provides information 
on licensed facilities in good standing: Yes; Holds public hearings: 
No; Conducts investigations of legitimate consumer complaints: Yes.

State: Louisiana; Requires death care businesses to provide general 
price lists: Yes; Provides one or more state-sponsored complaint hot 
lines: Yes; Provides information through state-sponsored Web page: Yes; 
Conducts educational outreach programs: No; Provides information 
on licensed facilities in good standing: Yes; Holds public hearings: 
Yes; Conducts investigations of legitimate consumer complaints: Yes.

State: Maine; Requires death care businesses to provide general price 
lists: Yes; Provides one or more state-sponsored complaint hot lines: 
No; Provides information through state-sponsored Web page: Yes; 
Conducts educational outreach programs: No; Provides information 
on licensed facilities in good standing: Yes; Holds public hearings: 
Yes; Conducts investigations of legitimate consumer complaints: Yes.

State: Maryland; Requires death care businesses to provide general 
price lists: Yes; Provides one or more state-sponsored complaint hot 
lines: Yes; Provides information through state-sponsored Web page: Yes; 
Conducts educational outreach programs: Yes; Provides information on 
licensed facilities in good standing: Yes; Holds public hearings: Yes; 
Conducts investigations of legitimate consumer complaints: Yes.

State: Massachusetts; Requires death care businesses to provide general 
price lists: Yes; Provides one or more state-sponsored complaint hot 
lines: No; Provides information through state-sponsored Web page: 
Yes; Conducts educational outreach programs: No; Provides 
information on licensed facilities in good standing: Yes; Holds public 
hearings: No; Conducts investigations of legitimate consumer 
complaints: Yes.

State: Michigan; Requires death care businesses to provide general 
price lists: No; Provides one or more state-sponsored complaint 
hot lines: No; Provides information through state-sponsored Web 
page: Yes; Conducts educational outreach programs: Yes; Provides 
information on licensed facilities in good standing: Yes; Holds public 
hearings: No; Conducts investigations of legitimate consumer 
complaints: Yes.

State: Minnesota; Requires death care businesses to provide general 
price lists: Yes; Provides one or more state-sponsored complaint hot 
lines: No; Provides information through state-sponsored Web page: 
Yes; Conducts educational outreach programs: No; Provides 
information on licensed facilities in good standing: Yes; Holds public 
hearings: No; Conducts investigations of legitimate consumer 
complaints: Yes.

State: Mississippi; Requires death care businesses to provide general 
price lists: No; Provides one or more state-sponsored complaint 
hot lines: Yes; Provides information through state-sponsored Web page: 
Yes; Conducts educational outreach programs: Yes; Provides information 
on licensed facilities in good standing: Yes; Holds public hearings: 
No; Conducts investigations of legitimate consumer complaints: Yes.

State: Missouri; Requires death care businesses to provide general 
price lists: No; Provides one or more state-sponsored complaint 
hot lines: Yes; Provides information through state-sponsored Web page: 
Yes; Conducts educational outreach programs: Yes; Provides information 
on licensed facilities in good standing: Yes; Holds public hearings: 
Yes; Conducts investigations of legitimate consumer complaints: Yes.

State: Montana; Requires death care businesses to provide general price 
lists: No; Provides one or more state-sponsored complaint hot 
lines: No; Provides information through state-sponsored Web page: 
Yes; Conducts educational outreach programs: No; Provides 
information on licensed facilities in good standing: Yes; Holds public 
hearings: No; Conducts investigations of legitimate consumer 
complaints: Yes.

State: Nebraska; Requires death care businesses to provide general 
price lists: Yes; Provides one or more state-sponsored complaint hot 
lines: Yes; Provides information through state-sponsored Web page: Yes; 
Conducts educational outreach programs: No; Provides information 
on licensed facilities in good standing: Yes; Holds public hearings: 
No; Conducts investigations of legitimate consumer complaints: Yes.

State: Nevada; Requires death care businesses to provide general price 
lists: Yes; Provides one or more state-sponsored complaint hot lines: 
Yes; Provides information through state-sponsored Web page: Yes; 
Conducts educational outreach programs: No; Provides information on 
licensed facilities in good standing: Yes; Holds public hearings: 
No; Conducts investigations of legitimate consumer complaints: Yes.

State: New Hampshire; Requires death care businesses to provide general 
price lists: b; Provides one or more state-sponsored complaint hot 
lines: b; Provides information through state-sponsored Web page: b; 
Conducts educational outreach programs: b; Provides information on 
licensed facilities in good standing: b; Holds public hearings: b; 
Conducts investigations of legitimate consumer complaints: b.

State: New Jersey; Requires death care businesses to provide general 
price lists: Yes; Provides one or more state-sponsored complaint hot 
lines: Yes; Provides information through state-sponsored Web page: Yes; 
Conducts educational outreach programs: Yes; Provides information on 
licensed facilities in good standing: Yes; Holds public hearings: 
No; Conducts investigations of legitimate consumer complaints: Yes.

State: New Mexico; Requires death care businesses to provide general 
price lists: Yes; Provides one or more state-sponsored complaint hot 
lines: Yes; Provides information through state-sponsored Web page: Yes; 
Conducts educational outreach programs: No; Provides information 
on licensed facilities in good standing: Yes; Holds public hearings: 
Yes; Conducts investigations of legitimate consumer complaints: Yes.

State: New York; Requires death care businesses to provide general 
price lists: Yes; Provides one or more state-sponsored complaint hot 
lines: No; Provides information through state-sponsored Web page: 
Yes; Conducts educational outreach programs: Yes; Provides information 
on licensed facilities in good standing: Yes; Holds public hearings: 
No; Conducts investigations of legitimate consumer complaints: Yes.

State: North Carolina; Requires death care businesses to provide 
general price lists: No; Provides one or more state-sponsored 
complaint hot lines: Yes; Provides information through state-sponsored 
Web page: Yes; Conducts educational outreach programs: No; Provides 
information on licensed facilities in good standing: Yes; Holds public 
hearings: Yes; Conducts investigations of legitimate consumer 
complaints: Yes.

State: North Dakota; Requires death care businesses to provide general 
price lists: Yes; Provides one or more state-sponsored complaint hot 
lines: No; Provides information through state-sponsored Web page: 
No; Conducts educational outreach programs: No; Provides 
information on licensed facilities in good standing: Yes; Holds public 
hearings: Yes; Conducts investigations of legitimate consumer 
complaints: Yes.

State: Ohio; Requires death care businesses to provide general price 
lists: No; Provides one or more state-sponsored complaint hot 
lines: No; Provides information through state-sponsored Web page: 
Yes; Conducts educational outreach programs: No; Provides 
information on licensed facilities in good standing: Yes; Holds public 
hearings: Yes; Conducts investigations of legitimate consumer 
complaints: Yes.

State: Oklahoma; Requires death care businesses to provide general 
price lists: No; Provides one or more state-sponsored complaint 
hot lines: No; Provides information through state-sponsored Web 
page: Yes; Conducts educational outreach programs: Yes; Provides 
information on licensed facilities in good standing: Yes; Holds public 
hearings: Yes; Conducts investigations of legitimate consumer 
complaints: Yes.

State: Oregon; Requires death care businesses to provide general price 
lists: No; Provides one or more state-sponsored complaint hot 
lines: No; Provides information through state-sponsored Web page: 
Yes; Conducts educational outreach programs: No; Provides 
information on licensed facilities in good standing: Yes; Holds public 
hearings: No; Conducts investigations of legitimate consumer 
complaints: Yes.

State: Pennsylvania; Requires death care businesses to provide general 
price lists: No; Provides one or more state-sponsored complaint 
hot lines: Yes; Provides information through state-sponsored Web page: 
Yes; Conducts educational outreach programs: No; Provides information 
on licensed facilities in good standing: Yes; Holds public hearings: Yes; 
Conducts investigations of legitimate consumer complaints: Yes.

State: Rhode Island; Requires death care businesses to provide general 
price lists: No; Provides one or more state-sponsored complaint 
hot lines: No; Provides information through state-sponsored Web 
page: Yes; Conducts educational outreach programs: No; Provides 
information on licensed facilities in good standing: Yes; Holds public 
hearings: No; Conducts investigations of legitimate consumer 
complaints: Yes.

State: South Carolina; Requires death care businesses to provide 
general price lists: Yes; Provides one or more state-sponsored 
complaint hot lines: No; Provides information through state-sponsored 
Web page: Yes; Conducts educational outreach programs: No; Provides 
information on licensed facilities in good standing: Yes; Holds public 
hearings: No; Conducts investigations of legitimate consumer 
complaints: Yes.

State: South Dakota; Requires death care businesses to provide general 
price lists: Yes; Provides one or more state-sponsored complaint hot 
lines: Yes; Provides information through state-sponsored Web page: Yes; 
Conducts educational outreach programs: No; Provides information 
on licensed facilities in good standing: Yes; Holds public hearings: 
Yes; Conducts investigations of legitimate consumer complaints: Yes.

State: Tennessee; Requires death care businesses to provide general 
price lists: No; Provides one or more state-sponsored complaint 
hot lines: No; Provides information through state-sponsored Web 
page: No; Conducts educational outreach programs: No; 
Provides information on licensed facilities in good standing: No; 
Holds public hearings: No; Conducts investigations of legitimate 
consumer complaints: Yes.

State: Texas; Requires death care businesses to provide general price 
lists: Yes; Provides one or more state-sponsored complaint hot lines: 
Yes; Provides information through state-sponsored Web page: Yes; 
Conducts educational outreach programs: Yes; Provides information on 
licensed facilities in good standing: Yes; Holds public hearings: Yes; 
Conducts investigations of legitimate consumer complaints: Yes.

State: Utah; Requires death care businesses to provide general price 
lists: Yes; Provides one or more state-sponsored complaint hot lines: 
No; Provides information through state-sponsored Web page: 
No; Conducts educational outreach programs: No; Provides 
information on licensed facilities in good standing: No; Holds 
public hearings: No; Conducts investigations of legitimate 
consumer complaints: Yes.

State: Vermont; Requires death care businesses to provide general price 
lists: Yes; Provides one or more state-sponsored complaint hot lines: 
Yes; Provides information through state-sponsored Web page: Yes; 
Conducts educational outreach programs: No; Provides information on 
licensed facilities in good standing: Yes; Holds public hearings: 
No; Conducts investigations of legitimate consumer complaints: Yes.

State: Virginia; Requires death care businesses to provide general 
price lists: Yes; Provides one or more state-sponsored complaint hot 
lines: Yes; Provides information through state-sponsored Web page: Yes; 
Conducts educational outreach programs: Yes; Provides information on 
licensed facilities in good standing: Yes; Holds public hearings: Yes; 
Conducts investigations of legitimate consumer complaints: Yes.

State: Washington; Requires death care businesses to provide general 
price lists: No; Provides one or more state-sponsored complaint 
hot lines: No; Provides information through state-sponsored Web 
page: Yes; Conducts educational outreach programs: Yes; Provides 
information on licensed facilities in good standing: Yes; Holds public 
hearings: No; Conducts investigations of legitimate consumer 
complaints: Yes.

State: West Virginia; Requires death care businesses to provide general 
price lists: Yes; Provides one or more state-sponsored complaint hot 
lines: Yes; Provides information through state-sponsored Web page: Yes; 
Conducts educational outreach programs: Yes; Provides information on 
licensed facilities in good standing: Yes; Holds public hearings: Yes; 
Conducts investigations of legitimate consumer complaints: Yes.

State: Wisconsin; Requires death care businesses to provide general 
price lists: Yes; Provides one or more state-sponsored complaint hot 
lines: No; Provides information through state-sponsored Web page: 
Yes; Conducts educational outreach programs: No; Provides 
information on licensed facilities in good standing: Yes; Holds public 
hearings: No; Conducts investigations of legitimate consumer 
complaints: Yes.

State: Wyoming; Requires death care businesses to provide general price 
lists: Yes; Provides one or more state-sponsored complaint hot lines: 
Yes; 
Provides information through state-sponsored Web page: No; 
Conducts educational outreach programs: No; Provides information 
on licensed facilities in good standing: Yes; Holds public hearings: 
No; Conducts investigations of legitimate consumer complaints: Yes.

State: Totals; Requires death care businesses to provide general price 
lists: 32; Provides one or more state-sponsored complaint hot lines: 
27; Provides information through state-sponsored Web page: 42; Conducts 
educational outreach programs: 17; Provides information on licensed 
facilities in good standing: 45; Holds public hearings: 19; Conducts 
investigations of legitimate consumer complaints: 48.

Source: Information obtained from states' answers to GAO's Web based 
surveys of all 50 states.

[A] State did not provide responses to any of the five Web based 
surveys.

[B] State did not provide responses to questions regarding consumer 
protections.

[End of table]

Summary of Results from 6 States Visited:

The 6 states we visited all provide consumers with certain information 
and protections so that they can make informed choices about death care 
transactions. A description of the information and protections 
available to consumers in the 6 states we visited is summarized below.

* California: Requires that all licensed death care facilities, with 
the exception of cemeteries, place the Cemetery and Funeral Bureau's 
name, address, and telephone number on all contracts and provide 
consumers with a general price list. Additionally, the Cemetery and 
Funeral Bureau provides a consumer informational guide entitled 
Consumer Guide to Funeral and Cemetery Purchases both in print and on 
its Web site (http://www.cfb.ca.gov) and requires all funeral homes and 
licensed cemeteries to display the guide for consumers who inquire 
about funeral or cemetery services and give the guide to consumers 
before drafting a contract. California also has a state sponsored Web 
page that (1) lists some actions taken against licensees through posted 
press releases, (2) provides a complaint hot line number to the 
Consumer Information Center, (3) provides an on-line complaint form, 
and (4) has a search program that allows consumers to research whether 
firms are in good standing.

* Florida: Provides a state sponsored Web page (http://
www.myfloridalicense.com) where consumers can obtain information on 
firms in good standing. The Web page also provides a hot line number 
for consumers to contact a customer service agent, as well as an on-
line complaint form. The Department of Financial Services requires its 
toll-free hot line number to be placed on the signature page of all 
contracts and maintains a Pre-need Funeral Contract Consumer Protection 
Trust Fund for consumers who are defrauded by companies that sell pre-
need funeral plans.

* Georgia: Provides on-line information to consumers through a state 
sponsored Web page regarding funeral homes and funeral directors that 
are in good standing with the state. Information regarding cemeteries, 
pre-need dealers and salespersons, and third party sellers of funeral 
goods (merchandise dealers) can be obtained by contacting the 
Securities and Business Regulation Division. The Division also provides 
general consumer information on the Web page. In addition, Georgia 
holds public hearings to address consumer concerns or complaints and 
conducts investigations of legitimate consumer complaints. Further, 
Georgia requires that all cemeteries and businesses that sell pre-need 
funeral merchandise and services provide general price lists to 
consumers.

* Hawaii: Provides a state sponsored Web page through the Department of 
Commerce and Consumer Affairs (http://www.ehawaiigov.org) where 
consumers can obtain information about whether a cemetery or pre-need 
licensee is in good standing, verify licensure, and obtain information 
on complaints filed against licensees. The Department of Commerce and 
Consumer Affairs also has a telephone number where consumers can call 
to verify that a business is licensed and to request audited financial 
statements and actuarial reports on trust funds. The Department of 
Health does not have consumer protections that relate to death care 
transactions.

* New York: Provides on-line information to consumers through a state 
sponsored Web page that provides information on licensed facilities in 
good standing with the state. New York also conducts educational 
outreach programs to seniors and others. For cemeteries, New York 
requires that a notice be conspicuously posted on or adjacent to the 
cemetery that is in English and includes information such as that the 
cemetery is regulated by the New York State Cemetery Board and lists 
the telephone number of the nearest office of the Division of 
Cemeteries. In addition, cemeteries are required by law to 
conspicuously post their rules, regulations, charges, and prices of 
their lots in each of their offices.

* Texas: Requires that all funeral-related businesses provide customers 
with a general price list. Additionally, funeral homes are required to 
provide a brochure, Facts About Funerals, to all customers. Texas 
requires all cemeteries and pre-need companies to provide general price 
lists. Texas maintains complaint hot lines and Web pages and requires 
its regulated entities to include this information on sales agreements 
and price lists. Texas provides information on firms and salespersons 
in good standing and holds public hearings to resolve controversial 
issues when warranted.

[End of section]

Appendix III: California's Regulation of the Death Care Industry:

Regulatory Structure:

* In California, the Cemetery and Funeral Bureau within the California 
Department of Consumer Affairs regulates funeral homes, funeral 
directors, embalmers, cemeteries, cemetery managers (operators), 
crematories, and crematory managers (operators). The Bureau also 
regulates sales of pre-need funeral plans, but only those that are sold 
by funeral homes that place the sales revenue in trust. California does 
not regulate third party sales of funeral goods.

* Staff within the Cemetery and Funeral Bureau within the California 
Department of Consumer Affairs focus solely on regulation of the death 
care industry.

Enforcement Mechanisms:

Funeral Homes, Funeral Directors, and Embalmers:

* Requires all funeral homes (also known as "funeral establishments" in 
California), funeral directors, and embalmers to hold a license and 
apprentice embalmers to hold a registration certificate to operate in 
the state.

* Requires prospective funeral home owners, funeral directors, 
embalmers, and apprentice embalmers to pass a criminal background 
check. In addition to the criminal background checks, prospective 
funeral directors, embalmers, and apprentice embalmers must also be 18 
years of age or older and pay the appropriate fees. Funeral directors 
and embalmers must pass a state examination. Funeral directors are also 
required to have an Associate of Arts or Science degree. To receive an 
embalmers license, California also requires a 1-year course in an 
embalming school and a 2-year apprenticeship with an experienced 
embalmer in a California licensed funeral establishment, during which 
time the apprentice embalmer must embalm or assist in embalming at 
least 100 cases.

* Licenses for funeral homes, funeral directors, and embalmers are to 
be renewed annually.

* Each of California's 936 funeral homes is to be inspected every 24 to 
30 months. California has four inspectors that spend 100 percent of 
their time conducting such inspections and investigating consumer 
complaints. During inspections of funeral homes, inspectors use a 
prepared checklist and look to ensure, among other things, that (1) 
arrangement counselors have the required training; (2) the facility, 
the funeral directors, and embalmers are properly licensed and that the 
licenses are conspicuously displayed; (3) there is proper maintenance 
of the preparation room and embalming equipment; (4) storage facilities 
for human remains are properly maintained; (5) price lists, contracts, 
and disclosures meet legal requirements; and (6) case files are 
properly completed.

* Since January 1, 2000, California has taken a range of enforcement 
actions against funeral homes and funeral directors or embalmers for 
violations of state rules or regulations. The actions taken include 
issuing notices of noncompliance, assessing investigative costs, 
levying monetary fines, placing violators on probation, asking for the 
voluntary relinquishment of a license, suspending a license, revoking 
licenses, and criminally prosecuting a violator.

Crematories and Crematory Operators:

* Requires crematories to hold a license to operate in the state. 
Effective July 1, 2003, crematory managers (operators) are required to 
be licensed to operate in California.

* Requires prospective crematory managers (operators) to be at least 18 
years of age, pass a criminal background check, be a high school 
graduate or have a general equivalency diploma, and pass the state 
crematory manager examination.

* Licenses for crematories and crematory managers (operators) are to be 
renewed annually.

* Each of California's 176 crematories is to be inspected annually. The 
state has two inspectors that spend 100 percent of their time 
inspecting crematories and cemeteries and as of July 1, 2003, added 
three more inspectors. During inspections of crematories, inspectors 
use a prepared checklist and look to ensure, among other things, that 
the facility is properly licensed and has a licensed crematory manager; 
meets refrigeration standards; provides written General Price Lists; 
there is a system for properly identifying remains; the crematory 
maintains employee training records, and price lists; contracts and 
disclosures meet legal requirements; case files, disposition permits, 
and cremation logs are properly completed; and cremated remains are not 
commingled.

* Since January 1, 2000, California has taken a range of enforcement 
actions against crematories or crematory operators for violations of 
state rules or regulations. The actions taken include issuing notices 
of noncompliance, assessing investigative costs, levying monetary 
fines, placing a violator on probation, asking for the voluntary 
relinquishment of licenses, revoking licenses, and criminally 
prosecuting a violator.

Cemeteries and Cemetery Operators:

* Requires some cemeteries to be licensed to operate in the state, but 
private or fraternal cemeteries of less than 10 acres that were formed 
before 1939; and religious and public cemeteries are not subject to 
regulation. Cemetery brokers (supervisors of cemetery sales) and 
cemetery salespersons (persons selling cemetery goods and services, 
cemetery property, and interment space) are to be licensed to operate 
in the state. As of July 1, 2003, California began requiring cemetery 
managers (operators) to be licensed to operate in the state.

* Requires prospective cemetery managers (operators) to be at least 18 
years of age, pass a criminal background check, be a high school 
graduate or have a general equivalency diploma, pass a state 
examination, and have 2 years of cemetery experience.

* Licenses for cemeteries are to be renewed annually. Licenses for 
cemetery managers (operators) also have an annual renewal requirement.

* Effective July 1, 2003, the state began requiring each of its 190 
licensed cemeteries to be subject to annual, unannounced inspections. 
The state has five inspectors responsible for inspecting cemeteries and 
crematories. These inspectors spend 100 percent of their time 
inspecting cemeteries and investigating consumer complaints involving 
cemeteries and crematories. During inspections of cemeteries, 
inspectors use a prepared checklist and look to ensure that, among 
other things, the cemetery is properly licensed and has a licensed 
cemetery manager; maintains an appropriate record system, price lists, 
contracts, and that disclosures meet legal requirements; case files, 
disposition permits and interment records are properly completed; 
accurate maps of clearly marked sections and plots are maintained; an 
appropriate amount of dirt covers vaults and caskets; and sales of 
cemetery goods, services, and property meet legal requirements.

* Since January 1, 2000, California has taken a range of enforcement 
actions against cemeteries or cemetery operators for violations of 
state rules or regulations. The actions taken include issuing notices 
of noncompliance, assessing investigative costs, levying monetary 
fines, placing a violator on probation, asking for the voluntary 
relinquishment of licenses, revoking licenses, and criminally 
prosecuting a violator.[Footnote 17]

Pre-need Sales of Funeral Plans:

* Regulates only those pre-need funeral plans sold through funeral 
homes in which the proceeds are placed in trust. The state does not 
license companies who sell pre-need funeral plans or their sales staff. 
The state has four auditors whose responsibilities include reviewing 
pre-need contracts for proper language and ensuring the soundness of 
funds placed in trust.

* Sellers of pre-need funeral plans are required to place into trust 
100 percent of the principal paid for pre-need funeral and cemetery 
goods and services. However, sellers of pre-need funeral plans are 
permitted to take up to 4 percent of the sales revenue out of interest 
earned as an administrative fee.

* If a purchaser cancels the pre-need contract, the seller is required 
to refund 100 percent of the principal invested and cannot take more 
than 10 percent of the interest that has accrued as a revocation fee.

* Since January 1, 2000, California has taken a range of enforcement 
actions against sellers of pre-need funeral plans for violations of 
state rules or regulations. The actions taken include suspending a 
license and prosecuting a violator.

Third Party Sales of Funeral Goods:

* California does not license or register third party sellers of 
funeral goods, but California's general business law requires price 
disclosures, in the form of a General Price List, individual price 
tags, and itemized contracts of casket retailers.

* Since January 1, 2000, California has taken no enforcement actions 
against third party sellers of funeral goods.

[End of section]

Appendix IV Florida's Regulation of the Death Care Industry:

Regulatory Structure:

* In Florida, two entities regulate the death care industry. The Board 
of Funeral Directors and Embalmers within the Department of Business 
and Professional Regulation regulates funeral homes, funeral directors, 
embalmers, crematories, direct disposers, direct disposer 
establishments, centralized embalming facilities, refrigeration 
facilities, and removal services. In addition, the Board of Funeral and 
Cemetery Services within the Department of Financial Services regulates 
cemeteries and sellers of pre-need funeral plans. Florida does not 
license third party sellers of funeral goods, but registers third party 
sellers of monuments.

* Staff who work directly for the Board of Funeral Directors and 
Embalmers within the Department of Business and Professional 
Regulation, also work with other professions. Staff who work for the 
Board of Funeral and Cemetery Services within the Department of 
Financial Services, focus solely on the death care industry. Inspectors 
in the Department of Business and Professional Regulation, however, are 
responsible for inspecting businesses other than just death care-
related businesses. Field examiners within the Department of Financial 
Services are only responsible for inspections of cemeteries and 
financial examinations of cemeteries and pre-need sales of funeral 
goods.

Enforcement Mechanisms:

Funeral Homes, Funeral Directors, and Embalmers:

* Requires all funeral homes (also known as "funeral establishments" in 
Florida), funeral directors, and embalmers to hold a license to operate 
in the state.

* Prospective funeral directors and embalmers are required to, among 
other things, (1) pay an application and examination fee to the state, 
(2) be at least 18 years of age, (3) complete a 1-year internship with 
a licensed funeral director or embalmer, and (4) pass a state and 
national examination. In addition, prospective funeral directors are 
required to have an associates degree in mortuary science, and 
prospective embalmers are to have completed a course in mortuary 
science.

* Licenses for funeral homes, funeral directors, and embalmers are to 
be renewed every 2 years.

* Each of Florida's 895 funeral homes is to be inspected annually. If 
violations are found, however, the funeral home has 30 days to correct 
the deficiencies and they can be re-inspected. Further, there are 
additional inspections if the funeral home is part of an on-going 
investigation. The state has 17 inspectors, divided among several 
geographic regions, that spend approximately 8 percent of their time 
inspecting funeral homes and crematories. They are also responsible for 
inspecting other types of funeral-related facilities, such as removal 
services, refrigeration facilities, centralized embalming facilities, 
and direct disposal establishments, in addition to barber shops, 
cosmetologists, and veterinary clinics. During inspections of funeral 
homes, inspectors use a prepared checklist to look for such things as 
whether the facility, the funeral directors, and embalmers have current 
licenses and that the licenses are properly displayed; there is 
adequate ventilation, equipment, and cleanliness in the embalming 
room(s); itemized price lists have the funeral home's name, address, 
and telephone number; and written agreements for services have proper 
disclosure statements.

* Since January 1, 2000, Florida has taken a range of enforcement 
actions against funeral homes, funeral directors, or embalmers for 
violations of state rules or regulations. The actions taken include 
issuing notices of noncompliance, sending letters of reprimand, 
assessing investigative costs, levying monetary fines, placing 
violators on probation, asking for the voluntary relinquishment of 
licenses, suspending licenses, and revoking licenses.

Crematories and Crematory Operators:

* Requires crematories to hold a license to operate in the state. While 
Florida does not license crematory operators, they do require a 
designated licensed funeral director or direct disposer to be in charge 
of each crematory.

* Crematory licenses are to be renewed every 2 years.

* Each of Florida's 123 crematories is to be inspected annually, but 
may be done more frequently if deficiencies are found or if there is an 
on-going investigation. The same 17 inspectors who inspect funeral 
homes in Florida also conduct inspections of crematories. In 
conjunction with their inspections of funeral homes, other funeral-
related facilities, barbershops, cosmetologists, and veterinary 
clinics, these inspectors spend an estimated 8 percent of their time 
inspecting crematories. During inspections of crematories, among the 
items inspectors look at include ensuring that the name of the facility 
and the funeral director in charge is posted at the public entrance, a 
system exists for properly identifying human remains, and that bodies 
are properly placed in the incinerator.

* Since January 1, 2000, Florida has issued six notices of 
noncompliance to crematories or crematory operators for violations of 
state rules or regulations, though these are not considered by Florida 
to be disciplinary actions.

Cemeteries and Cemetery Operators:

* Requires some cemeteries to be licensed to operate in the state, but 
cemeteries such as those operated by families, or by county, municipal, 
religious, or fraternal organizations are exempt from regulation. 
Florida does not require cemetery operators to be licensed.

* Cemetery licenses are to be renewed annually.

* Each of Florida's 173 licensed cemeteries is to be inspected annually 
with a financial examination every 3 years. If a problem is discovered 
during an inspection, such inspections might occur more frequently. The 
state has 11 field examiners that spend 100 percent of their time 
inspecting cemeteries and conducting financial examinations. The 
inspectors use a prepared checklist for these inspections to ensure, 
among other things, that proper licenses are conspicuously displayed, 
price lists are available, and cemetery grounds and roads are 
maintained. Financial examiners look for such things as verification of 
burial records, reasonable maintenance of burial grounds, and that 
disclosures are given to consumers.

* Since January 1, 2000, Florida has taken a range of enforcement 
actions against cemeteries or cemetery operators for violations of 
state rules or regulations. The actions taken include issuing notices 
of noncompliance, sending letters of reprimand, levying monetary fines, 
asking for the voluntary relinquishment of a license, revoking 
licenses, and prosecuting violators.

Pre-need Sales of Funeral Plans:

* Companies who wish to sell pre-need funeral plans are required to 
obtain a "certificate of authority" that authorizes the company to sell 
pre-need funeral plans in Florida. These certificates of authority are 
renewed annually and, with each renewal, licensees must submit a 
financial statement. Separate from its licensing requirements, Florida 
requires companies that sell pre-need funeral plans to contribute 
$1.00[Footnote 18] to the Pre-Need Funeral Contract Consumer Protection 
Trust Fund to ensure that pre-need funds are available to pay for 
consumers' funerals in the event that sellers of pre-need funeral plans 
go out of business or otherwise cannot meet their contractual 
obligations to consumers. The state does not require the sales agents 
for these companies to be licensed. Rather, sales agents who are not 
licensed funeral directors are required to register with the state. 
Sales agents are required to renew their registration every 2 years. 
The state has 11 field examiners whose responsibilities include, in 
addition to inspecting and examining cemeteries, examining pre-need 
licensees at least once every 3 years to ensure, among other things, 
that (1) the pre-need contracts meet state requirements, (2) sales 
agents are properly registered, and (3) the licensee supported 
withdrawals from its trust fund.

* The state has different trusting requirements for purchases of pre-
need funeral and cemetery goods than it does for purchases of pre-need 
funeral and cemetery services. Sellers of pre-need funeral and cemetery 
goods are required to place into trust 110 percent of the wholesale 
cost or 30 percent of the retail price, whichever amount is greater for 
each good sold. Pre-need sellers of funeral or cemetery services are 
required to place into trust a minimum of 70 percent of the total 
principal.

* Purchasers are allowed to cancel pre-need contracts at any time. If a 
purchaser cancels the pre-need contract within 30 days, the seller is 
required to refund 100 percent of the principal invested for unused 
goods and services, but is permitted to retain all of the interest 
accrued. If the purchaser cancels the pre-need contract more than 30 
days after purchase, the seller is required to refund 100 percent of 
the principal invested for unused services, but can retain any interest 
that may have accrued. Sellers, however, are required to deliver goods 
as stated in the pre-need contract or make arrangements with another 
seller to deliver the purchased goods.

* Since January 1, 2000, Florida has taken a range of enforcement 
actions against sellers of pre-need funeral plans for violations of 
state rules or regulations. The actions taken include issuing notices 
of noncompliance, sending letters of reprimand, assessing investigative 
costs, levying monetary fines, revoking licenses, and prosecuting 
violators.

Third Party Sales of Funeral Goods:

* Florida does not license third party sellers of funeral goods, but 
does require monument dealers to register with the state. Monument 
dealers are required to (1) be located in a physical location with a 
street address, (2) pay a registration fee, and (3) renew their 
registration biennially.

* Since January 1, 2000, Florida has taken no enforcement actions 
against third party sellers of funeral goods for violations of state 
rules or regulations.

[End of section]

Appendix V: Georgia's Regulation of the Death Care Industry:

Regulatory Structure:

* In Georgia, regulation of the death care industry is centralized in 
the Office of the Secretary of State. Within this office, the 
Securities and Business Regulation Division regulates perpetual care 
cemeteries, pre-need sales of funeral plans, and third party sales of 
funeral goods. In addition, the Georgia State Board of Funeral Service, 
within the Secretary of State's Office, regulates funeral homes, 
funeral directors, and crematories, and is supported by staff of the 
State's Professional Licensing Boards Division.

* Staff within the Division responsible for administering and 
regulating cemeteries, pre-need sales of funeral plans, and third party 
sales of funeral goods spend half of their time on the administration 
and regulation of cemeteries, pre-need sales of funeral plans, and 
third party sales of funeral goods and the other half of their time on 
regulation of charities. Staff that work for the State Board of Funeral 
Service spend about 30 percent of their time on death care related 
issues.

Enforcement Mechanisms:

Funeral Homes, Funeral Directors, and Embalmers:

* Requires all funeral homes, funeral directors, and embalmers to hold 
a license to operate in the state.

* Prospective funeral directors and embalmers must pass both a national 
and state examination, have a degree in mortuary science, and serve an 
apprenticeship of 3,120 hours over an 18-month period.

* Licenses for funeral homes, funeral directors, and embalmers are to 
be renewed every 2 years.

* Each of Georgia's 736 licensed funeral homes is to be "regularly" 
inspected and all are inspected at least once per year. The state has 
two inspectors that spend 100 percent of their time conducting 
inspections of funeral homes. During these inspections, the inspectors 
use a prepared checklist to look for such things as ensuring whether 
the embalming room has proper equipment, the facility has a range of 
caskets available with prices visibly posted, and licenses for the 
funeral home and funeral director(s) are current and conspicuously 
displayed.

* Since January 1, 2000, Georgia has taken a range of enforcement 
actions against funeral homes, funeral directors, or embalmers for 
violations of state rules or regulations. The actions taken include 
issuing letters of reprimand, levying monetary fines, placing violators 
on probation, asking for the voluntary relinquishment of licenses, 
suspending licenses, and revoking licenses.

Crematories and Crematory Operators:

* Requires crematories to hold a license to operate in the state. While 
Georgia does not license crematory operators per se, they do require a 
designated licensed funeral director to be in charge of each crematory.

* Crematory licenses are to be renewed every 2 years.

* As of May 2002, each of Georgia's 46 crematories is to be inspected 
at least once a year.[Footnote 19] The same two inspectors who conduct 
inspections of funeral homes in Georgia also conduct inspections of 
crematories. During inspections of crematories, inspectors use a 
prepared checklist and look to ensure that, among other things, the 
equipment is operable, there is sufficient room for memorial services, 
and that licenses are current and conspicuously displayed.

* Since January 1, 2000, Georgia has not taken any enforcement actions 
against crematories or crematory operators for violations of state 
rules or regulations.

Cemeteries and Cemetery Operators:

* Requires perpetual care cemeteries to be registered to operate in the 
state, but exempts governmentally owned cemeteries, fraternal 
cemeteries, and cemeteries owned and operated by churches, synagogues, 
or communities, and family burial plots. Cemetery operators are not 
required to be licensed, but they are required to register with the 
state each year.

* Cemetery registrations are to be renewed annually.

* While state law does not require annual inspections of Georgia's 206 
registered cemeteries, inspections are conducted in response to 
complaints. The state has three investigative analysts (inspectors) who 
spend 25 percent of their time inspecting cemeteries. The investigative 
analysts use a checklist and look at such things as whether price 
lists, certificates, and sales materials are properly posted, and the 
general condition of the cemetery. The investigative analysts also 
review financial statements and documents.

* Since January 1, 2000, Georgia has taken a range of enforcement 
actions against cemeteries and cemetery operators for violations of 
state rules or regulations. The actions taken include issuing notices 
of noncompliance, assessing investigative costs, levying monetary 
fines, and suspending licenses.

Pre-need Sales of Funeral Plans:

* The state does not license companies and their sales agents who sell 
pre-need funeral plans funded by trusts, but these companies and their 
sales agents are to annually register with the state.

* Sellers of pre-need funeral and cemetery services are required to 
place into trust 100 percent of the principal paid. The state has 
different trusting requirements for sellers of pre-need funeral and 
cemetery goods. For pre-need funeral goods, sellers are required to 
place into trust 100 percent of the principal paid, while sellers of 
cemetery monuments and outer burial containers are required to place 
into trust 35 percent of the principal paid or 110 percent of the 
wholesale price.

* If a purchaser cancels the pre-need contract for merchandise and 
services, the seller is required to refund 100 percent of the principal 
invested and 100 percent of any interest that has accrued, except that 
interest is not refunded on monuments and vaults.

* Since January 1, 2000, Georgia has taken enforcement actions against 
sellers of pre-need funeral plans. These actions include four orders 
denying registration of pre-need sales agents.

Third Party Sales of Funeral Goods:

* Georgia requires certain, but not all, third party sellers of funeral 
goods to register with the Office of the Secretary of State and these 
registrations are to be renewed at least once per year.[Footnote 20]

* Since January 1, 2000, Georgia has denied the registration of a third 
party seller of funeral goods.

[End of section]

Appendix VI: Hawaii's Regulation of the Death Care Industry:

Regulatory Structure:

* In Hawaii, regulation of the death care industry is divided between 
two state agencies. The Department of Health has responsibility for 
regulating funeral homes with embalming rooms and embalmers. The 
Department of Commerce and Consumer Affairs regulates cemeteries and 
pre-need sales of funeral plans. Hawaii does not license crematories or 
third party sellers of funeral goods.

* Staff in the Department of Health's Sanitation Branch are responsible 
for regulating embalmers and funeral homes with embalming rooms, but 
also regulate food preparation and other businesses. Staff in the 
Department of Commerce and Consumer Affairs' Division of Professional 
and Vocational Licensing regulate cemeteries and sales of pre-need 
funeral plans, but these represent only a portion of the businesses 
regulated.

Enforcement Mechanisms:

Funeral Homes, Funeral Directors, and Embalmers:

* Hawaii only requires a license for those funeral homes (also known as 
"mortuaries" in Hawaii) that perform embalmings. Funeral homes that do 
not perform embalmings are not licensed. Embalmers are required to be 
licensed, but funeral directors who do not embalm are not licensed.

* Embalmers are required to serve a 1-year apprenticeship with a 
licensed embalmer if they did not graduate from a nationally recognized 
embalming school, and pass a national and practical examination.

* Licenses for embalmers and for funeral homes that embalm are to be 
renewed annually.

* Each of the 17 funeral homes in Hawaii that perform embalmings is to 
be inspected annually. If a funeral home does not perform embalmings, 
it is not inspected. The state has 24 inspectors that spend less than 1 
percent of their time conducting inspections of embalming rooms within 
funeral homes. These inspectors spend the majority of their time 
inspecting food preparation and other types of businesses. Inspectors 
use a prepared checklist for inspections of funeral homes and they look 
for such things as proper ventilation, sterilized equipment, and proper 
disposal of wastewater.

* Since January 1, 2000, Hawaii has taken no actions against funeral 
homes, funeral directors, or embalmers for violations of state rules or 
regulations.

Crematories and Crematory Operators:

* Hawaii does not license crematories or crematory operators.

* Hawaii does not require inspections of crematories.

* Since January 1, 2000, Hawaii has taken no actions against 
crematories or crematory operators for violations of state rules or 
regulations.

Cemeteries and Cemetery Operators:

* Hawaii requires some cemeteries to be licensed to operate in the 
state, but cemeteries operated by families, plantations, communities, 
or churches are exempt from regulation. Hawaii does not require 
cemetery operators to be licensed.

* Cemetery licenses are to be renewed every 2 years.

* While state law does not require inspections of Hawaii's 14 licensed 
cemeteries, inspections can be conducted to investigate complaints 
against cemeteries.

* Since January 1, 2000, Hawaii has taken enforcement actions against 
cemeteries or cemetery operators for violations of state rules or 
regulations. These actions include issuing warning letters and levying 
a monetary fine:

Pre-need Sales of Funeral Plans:

* Companies offering pre-need funeral plans are to obtain a "pre-need 
funeral authority" license to operate, but their sales agents are not 
required to be licensed or registered by the state. Applicants for pre-
need licenses are required to provide such things as, business 
registration, current financial statements, proof of tax clearances, 
credit reports, copy of the sales contract to be used, a bond of 
$50,000, trust agreement between applicant and trustee, and an 
application fee. Companies are required to renew their licenses every 2 
years. A staff person reviews pre-need contracts and trust agreements 
with assistance from a deputy attorney general. Licensees are required 
to submit an audited financial statement and actuarial study on a 
fiscal or calendar year basis to the Department of Commerce and 
Consumer Affairs. The state's consultant reviews the financial 
statements and actuarial studies.

* Sellers of pre-need funeral plans are required to place into trust 70 
percent of the principal and can retain up to 30 percent of the 
principal for recovery of acquisition costs. Purchasers who cancel 
their pre-need contract are entitled to a refund of 100 percent of the 
principal they paid, but none of the interest that has accrued.

* Since January 1, 2000, Hawaii has issued one warning letter to a 
licensed seller of pre-need funeral plans and prosecuted one seller of 
pre-need funeral plans for violations of state rules or regulations.

Third Party Sales of Funeral Goods:

* Hawaii does not license or register third party sellers of funeral 
goods:

* Since January 1, 2000, Hawaii has taken no actions against third 
party sellers of funeral goods for violations of state rules or 
regulations.

[End of section]

Appendix VII: New York's Regulation of the Death Care Industry:

Regulatory Structure:

* Regulation of the death care industry is handled by two organizations 
in New York. The Bureau of Funeral Directing within the Department of 
Health regulates funeral homes, funeral directors, and embalmers. The 
Bureau also regulates sales of pre-need funeral plans since only 
licensed funeral directors can sell pre-need funeral plans. In 
addition, the Cemetery Board, which is composed of the Secretary of 
State, the Attorney General, and the Commissioner of Health, regulates 
cemeteries and crematories. Within the Department of State, the 
Division of Cemeteries administers both state laws and the Cemetery 
Board's rules and regulations. New York State does not regulate third 
party sales of funeral or cemetery goods.

* Staff responsible for regulating the death care industry in New York 
work exclusively on death care issues and are not responsible for 
regulating other types of businesses.

Enforcement Mechanisms:

Funeral Homes, Funeral Directors, and Embalmers:

* Requires all funeral homes (also called "funeral firms") to register 
with the state, whereas funeral directors are required to hold a 
license to operate in the state and this license also authorizes them 
to perform embalmings. As such, since the 1960s, New York has had no 
separate license for embalmers.

* Requires prospective funeral directors to graduate from mortuary 
school, pass both a national and a state examination, and serve a 1-
year residency with a licensed funeral director. In addition, funeral 
directors are required to have 12 hours of continuing education every 2 
years.

* Funeral homes are required to renew their registration every 2 years 
and funeral directors are also required to renew their registration 
every 2 years.

* While New York has no specific requirement to inspect its estimated 
1,985 funeral homes, the state has two inspectors that spend 20 percent 
of their time conducting inspections of funeral homes on a "recurrent 
basis." These inspectors use a prepared checklist to look for such 
things as that the embalming room is properly equipped and sanitary, 
actual retail prices are posted on funeral merchandise offered for 
sale, and licenses and registrations are current and conspicuously 
posted.

* Since January 1, 2000, New York has taken a variety of enforcement 
actions against funeral homes, funeral directors, or embalmers for 
violations of state rules or regulations. These actions include issuing 
notices of noncompliance, sending letters of reprimand, levying 
monetary fines, asking for voluntary relinquishment of licenses, 
revoking licenses, and prosecuting violators.

Crematories and Crematory Operators:

* Does not license crematories or crematory operators. However, the 
state Cemetery Board must approve every certificate of incorporation of 
a cemetery corporation, which includes crematories.

* Each of New York's 43 crematories is to be inspected twice a year. 
The state has the equivalent of 2.5 inspectors available that spend an 
estimated 10 percent of their time inspecting crematories. (These 
inspectors also inspect cemeteries.) During inspections of crematories, 
inspectors use a prepared checklist and look to ensure such things as 
whether the facility is maintained in a clean, orderly, and sanitary 
manner; there is a plan for proper identification of human remains; and 
current charges are properly displayed.

* Since January 1, 2000, New York has issued 5 notices of noncompliance 
to crematories or crematory operators for violations of state rules or 
regulations.

Cemeteries and Cemetery Operators:

* The state does not require cemeteries or cemetery operators to be 
licensed, but the Cemetery Board must approve every certificate of 
incorporation of a cemetery corporation. In addition, all cemeteries 
are required to be not-for-profit corporations.

* New York's 1,860 regulated cemeteries are inspected about every 6 or 
7 years. More frequent inspections occur if complaints are received. 
The state has the equivalent of 2.5 inspectors who spend 20 percent of 
their time inspecting cemeteries. The inspectors use a checklist and 
look at such things as whether rules and regulations are conspicuously 
displayed, the condition of memorials, evidence of vandalism, and the 
overall condition of the cemetery.

* Since January 1, 2000, New York has issued 23 notices of 
noncompliance to cemeteries or cemetery operators for violations of 
state rules or regulations.

Pre-need Sales of Funeral Plans:

* In New York, only licensed and registered funeral directors can sell 
pre-need funeral plans funded by trusts. As such, there is no separate 
license for sellers of pre-need funeral plans. Registrations are to be 
renewed every 2 years.

* Sellers of pre-need funeral goods and services and pre-need cemetery 
goods plans are required to place into trust 100 percent of the 
principal paid. There is no requirement to place into trust proceeds 
from the pre-need sale of cemetery services.

* If a purchaser cancels the pre-need contract prior to its use, the 
seller is required to refund 100 percent of the principal paid and 100 
percent of any interest that has accrued.

* Since January 1, 2000, New York has taken a number of enforcement 
actions against sellers of pre-need funeral plans for violations of 
state rules or regulations. The actions taken include issuing notices 
of noncompliance, sending letters of reprimand, levying monetary fines, 
requiring restitution to consumers, revoking licenses, and prosecuting 
violators.

Third Party Sales of Funeral Goods:

* New York does not regulate third party sales of funeral goods.

* Since January 1, 2000, New York has taken no enforcement actions 
against third party sellers of funeral goods for violations of state 
rules or regulations.

[End of section]

Appendix VIII: Texas's Regulation of the Death Care Industry:

Regulatory Structure:

* Regulation of the death care industry is handled by two organizations 
in Texas. The Texas Funeral Service Commission is responsible for 
regulating funeral homes, funeral directors and embalmers, and for 
registering crematories and certain cemeteries. The Department of 
Banking regulates pre-need sales of funeral plans. The Department of 
Banking also regulates third party sellers of funeral and cemetery 
goods if they sell the goods pre-need. If third party sellers sell the 
goods at-need, they are not regulated.

* Staff in the Texas Funeral Service Commission focus exclusively on 
regulation of death care industry businesses, whereas staff in the 
Department of Banking are responsible for regulating financial 
businesses in addition to pre-need sales of funeral plans. The 
Department of Banking has staff dedicated exclusively to the regulation 
of pre-need sales of funeral plans and perpetual care cemeteries.

Enforcement Mechanisms:

Funeral Homes, Funeral Directors, and Embalmers:

* Requires all funeral homes, funeral directors, and embalmers to hold 
a license to operate in the state.

* Prospective funeral directors or embalmers must be a graduate of a 
college of mortuary science, pass both a national and state 
examination, pass a criminal background check, serve a 1-to 2-year 
provisional licensing program (internship) period with a licensed 
funeral home, and pass an oral examination before the Texas Funeral 
Service Commission board. In addition, funeral directors and embalmers 
are required to obtain 20 hours of continuing professional education 
every 2 years.

* Licenses for funeral homes are to be renewed annually, whereas 
licenses for funeral directors and embalmers are to be renewed every 2 
years.

* Each of the estimated 1,300 funeral homes in Texas is to be inspected 
at least once every 2 years.[Footnote 21] The state has two inspectors 
that spend approximately 90 percent of their time inspecting funeral 
homes. During inspections of funeral homes, these inspectors use a 
prepared checklist to look for such things as whether the embalming 
room has proper supplies and equipment, licenses are current and 
properly displayed, price lists are available, and adequate numbers of 
caskets are displayed.

* Since January 1, 2000, Texas has taken a variety of enforcement 
actions against funeral homes, funeral directors, or embalmers for 
violations of state rules or regulations. The enforcement actions 
include issuing notices of noncompliance, sending letters of reprimand, 
assessing investigative costs, levying monetary fines, placing 
violators on probation, asking for the voluntary relinquishment of 
licenses, suspending licenses, revoking licenses, and prosecuting 
violators.

Crematories and Crematory Operators:

* Does not license crematories or crematory operators, but crematories 
must annually register with the Texas Funeral Service 
Commission.[Footnote 22]

* Does not require crematories to be inspected unless the Texas Funeral 
Service Commission receives a complaint.[Footnote 23]

* Since January 1, 2000, Texas has taken no enforcement actions against 
crematories or crematory operators for violations of state rules or 
regulations.

Cemeteries and Cemetery Operators:

* The state does not require cemeteries to be licensed, but some 
cemeteries must annually register with the Texas Funeral Service 
Commission.[Footnote 24] Cemeteries that are exempt from registration 
requirements include public cemeteries owned by the state, county, or 
municipality, family, fraternal, and religious cemeteries. Cemetery 
operators are not required to be licensed.

* Texas does not require inspections of its 232 registered cemeteries 
unless the Texas Funeral Service Commission receives a 
complaint.[Footnote 25]

* Since January 1, 2000, Texas has issued notices of noncompliance to 
and assessed investigative costs against cemeteries or cemetery 
operators for violations of state rules or regulations.

Pre-need Sales of Funeral Plans:

* Companies who wish to sell pre-need funeral plans are required to 
obtain a permit from the Department of Banking. These permits are to be 
renewed at least once each year. The state does not regulate or license 
the individual sales agents of these companies. Contracts used for pre-
need funeral plan sales must be approved in advance by the Department 
of Banking.

* Sellers of pre-need funeral plans are required to place into trust 90 
percent of the principal for funeral goods, funeral services, cemetery 
goods, and cemetery services. The sellers are permitted to retain 10 
percent of the principal.

* For pre-need funeral plan contracts purchased prior to September 1, 
2001, or held less than 1 year, if a purchaser cancels the pre-need 
contract, the seller is required to refund 90 percent of the principal 
invested, but is permitted to retain all of the interest accrued. For 
pre-need contracts purchased on or after September 1, 2001, if a 
purchaser cancels the pre-need contract after 1 year, the seller is 
required to refund 90 percent of the principal invested and 50 percent 
of the interest accrued.

* Since January 1, 2000, Texas has taken a variety of enforcement 
actions against sellers of pre-need funeral plans for violations of 
state rules or regulations. The actions include issuing notices of 
noncompliance; assessing investigative costs; conducting follow-up 
examinations; levying monetary fines; placing violators on probation; 
suspending permits; revoking permits; and issuing cease, desist, and 
seizure orders.

Third Party Sales of Funeral Goods:

* Texas does not regulate third party sales of funeral goods.

* Since January 1, 2000, Texas has taken no enforcement actions against 
third party sellers of funeral goods for violations of state rules or 
regulations.

[End of section]

Appendix IX: Comparison of Regulation of the Death Care Industry across 
the 6 Case Study States:

Table 8: Comparison of Requirements for Funeral Homes across the 6 Case 
Study States:

State: California; Licensing or registration requirements: Funeral 
homes, funeral directors, and embalmers are required to be licensed; 
Licensing or registration renewals: Licenses for funeral homes, funeral 
directors, and embalmers are to be renewed annually; Inspection 
requirements: Each of California's 936 funeral homes is to be inspected 
every 24 to 30 months; Inspection staff: There are 4 inspectors 
responsible for inspecting California's 936 funeral homes; Percent of 
time allocated to inspections: The inspectors spend 100% of their time 
inspecting funeral homes and investigating consumer complaints 
involving funeral homes.

State: Florida; Licensing or registration requirements: Funeral homes, 
funeral directors, and embalmers are required to be licensed; 
Licensing or registration renewals: Licenses for funeral homes, funeral 
directors, and embalmers are to be renewed every 2 years; Inspection 
requirements: Each of Florida's 895 funeral homes is to be inspected 
annually; Inspection staff: There are 17 inspectors who, among other 
things, are responsible for inspecting Florida's 895 funeral homes and 
its 123 crematories; Percent of time allocated to inspections: The 
inspectors spend an estimated 8% of their time on inspections of 
funeral homes and crematories. They are also responsible for inspecting 
other funeral-related facilities, such as removal services, direct 
refrigeration facilities, centralized embalming facilities, and direct 
disposers in addition to barber shops, veterinary clinics, and 
cosmetologists.

State: Georgia; Licensing or registration requirements: Funeral homes, 
funeral directors, and embalmers are required to be licensed; 
Licensing or registration renewals: Licenses for funeral homes, funeral 
directors, and embalmers are to be renewed every 2 years; Inspection 
requirements: Each of Georgia's 736 funeral homes is to be "regularly" 
inspected and all are inspected at least once a year; Inspection 
staff: There are 2 inspectors responsible for inspecting Georgia's 736 
funeral homes and its 46 crematories; Percent of time allocated to 
inspections: The inspectors spend 100% of their time on inspections of 
funeral homes and crematories.

State: Hawaii; Licensing or registration requirements: Embalmers and 
funeral homes that perform embalmings are required to be licensed. 
Funeral directors and funeral homes that do not perform embalmings are 
not licensed; Licensing or registration renewals: Licenses for 
embalmers and funeral homes that perform embalmings are to be renewed 
annually; Inspection requirements: Each of Hawaii's 17 funeral homes 
that perform embalmings is to be inspected annually; Inspection staff: 
There are 24 inspectors who, among other things, are responsible for 
inspecting Hawaii's 17 funeral homes that perform embalmings; Percent 
of time allocated to inspections: The inspectors spend less than 1% of 
their time inspecting funeral homes' embalming rooms. They spend most 
of their time inspecting food establishments.

State: New York; Licensing or registration requirements: Funeral homes 
are required to register, but are not licensed. Funeral directors are 
required to be licensed and registered. There is no separate license 
for embalmers; Licensing or registration renewals: Funeral firms and 
funeral directors are required to renew their registrations every 2 
years; Inspection requirements: There is no specific requirement for 
New York's estimated 1,985 funeral firms to be inspected, but they are 
inspected on a "recurrent basis."; Inspection staff: There are 2 
investigators who, among other things, are responsible for inspecting 
New York's estimated 1,985 funeral firms; Percent of time allocated to 
inspections: The investigators spend an estimated 20% of their time on 
inspections of funeral firms and the remainder of their time on other 
issues related to regulation of funeral firms, funeral directors, and 
sales of pre-need funeral plans.

State: Texas; Licensing or registration requirements: Funeral homes, 
funeral directors, and embalmers are required to be licensed; 
Licensing or registration renewals: Funeral home licenses are to be 
renewed annually and licenses for funeral directors and embalmers are 
to be renewed every 2 years; Inspection requirements: Each of Texas's 
estimated 1,300 funeral homes is to be inspected at least once every 2 
years; Inspection staff: There are 2 inspectors who, among other 
things, are responsible for inspecting Texas's estimated 1,300 funeral 
homes; Percent of time allocated to inspections: The inspectors spend 
an estimated 90% of their time on inspections of funeral homes and the 
remainder of their time on other issues related to regulation of 
funeral homes and funeral directors.

Source: GAO analysis of data provided by officials within the 6 case 
study states.

[End of table]

Table 9: Comparison of Requirements for Crematories across the 6 Case 
Study States:

State: California; Licensing or registration requirements: Crematories 
and crematory operators are required to be licensed; Licensing or 
registration renewals: Licenses for crematories and crematory operators 
are to be renewed annually; Inspection requirements: Each of 
California's 176 crematories is to be inspected annually; Inspection 
staff: There are 2 inspectors responsible for inspecting and 
investigating complaints about California's 176 licensed crematories 
and its 190 licensed cemeteries. Effective July 1, 2003, 3 more 
inspectors will be available to inspect and investigate crematories and 
cemeteries; Percent of time allocated to inspections: The inspectors 
spend 100% of their time on inspections and investigations of 
crematories and cemeteries.

State: Florida; Licensing or registration requirements: Crematories are 
required to be licensed, but not crematory operators. Each crematory, 
however, must designate a licensed funeral director to be in charge; 
Licensing or registration renewals: Crematory licenses are to be 
renewed every 2 years; Inspection requirements: Each of Florida's 123 
crematories is to be inspected annually; Inspection staff: There are 
17 inspectors responsible for inspecting Florida's 123 crematories and 
its 895 funeral homes; Percent of time allocated to inspections: The 
inspectors spend an estimated 8% of their time on inspections of 
funeral homes and crematories. They are also responsible for inspecting 
other funeral-related facilities, such as removal services, direct 
refrigeration facilities, centralized embalming facilities, and direct 
disposers in addition to barber shops, veterinary clinics, and 
cosmetologists.

State: Georgia; Licensing or registration requirements: Crematories are 
required to be licensed, but not crematory operators. Each crematory, 
however, must designate a funeral director to be in charge; Licensing 
or registration renewals: Crematory licenses are to be renewed every 2 
years; Inspection requirements: As of May 2002, each of Georgia's 46 
crematories is to be inspected at least once per year; Inspection 
staff: There are 2 inspectors responsible for inspecting Georgia's 46 
crematories and its 736 funeral homes; Percent of time allocated to 
inspections: The inspectors spend 100% of their time on inspections of 
crematories and funeral homes.

State: Hawaii; Licensing or registration requirements: Neither 
crematories nor crematory operators are required to be licensed; 
Licensing or registration renewals: Not applicable; Inspection 
requirements: Crematories are not required to be inspected; Inspection 
staff: Not applicable; Percent of time allocated to inspections: Not 
applicable.

State: New York; Licensing or registration requirements: Neither 
crematories nor crematory operators are required to be licensed. 
However, New York's Cemetery Board must approve every certificate of 
incorporation of a cemetery corporation, which includes crematories; 
Licensing or registration renewals: Not applicable; Inspection 
requirements: Each of New York's 43 crematories is to be inspected 
twice a year; Inspection staff: The state has the equivalent of 2.5 
inspectors available to conduct inspections of crematories. These 
inspectors also inspect cemeteries; Percent of time allocated to 
inspections: The inspectors spend an estimated 10% of their time 
inspecting crematories; The inspectors spend the rest of their time 
performing other duties related to regulation of crematories and 
cemeteries.

State: Texas; Licensing or registration requirements: Neither 
crematories nor crematory operators are required to be licensed, but 
crematories must register.[A]; Licensing or registration renewals: 
Crematories must annually renew their registration.[A]; Inspection 
requirements: Crematories are not required to be inspected, but 
inspections are performed if a complaint is received.[B]; Inspection 
staff: Not applicable; Percent of time allocated to inspections: Not 
applicable.

Source: GAO analysis of data provided by officials within the 6 case 
study states.

[A] Effective September 1, 2003, crematories in Texas will be required 
to be licensed and the licenses will be required to be renewed 
annually.

[B] Effective September 1, 2003, crematories in Texas will be required 
to be inspected at least once every 2 years. If the Texas Funeral 
Service Commission finds a violation, the crematory is required to be 
inspected annually until the Commission determines the crematory is 
free of violations.

[End of table]

Table 10: Comparison of Requirements for Cemeteries across the 6 Case 
Study States:

State: California; Licensing or registration requirements: Some 
cemeteries are required to be licensed and cemetery managers are 
required to be licensed; Licensing or registration renewals: Licenses 
for non-exempt cemeteries and for cemetery managers are to be renewed 
annually; Inspection requirements: Effective July 1, 2003, each of 
California's 190 licensed cemeteries is subject to annual inspections; 
Inspection or examination staff: There are 2 inspectors responsible for 
inspecting and investigating California's 190 licensed cemeteries and 
its 176 crematories. Effective July 1, 2003, 3 more inspectors will be 
available to inspect and investigate cemeteries and crematories; 
Percent of time allocated to inspections or examinations: The 
inspectors spend 100% of their time on inspections and investigations 
of cemeteries and crematories.

State: Florida; Licensing or registration requirements: The state 
estimates that it has 3,000 cemeteries, but most are exempt from 
regulation. While some cemeteries are required to be licensed, cemetery 
operators are not required to be licensed; Licensing or registration 
renewals: Licenses for non-exempt cemeteries are to be renewed 
annually; Inspection requirements: Each of Florida's 173 licensed 
cemeteries is to be inspected annually, with financial examinations to 
be performed very 3 years; Inspection or examination staff: There are 
11 field examiners responsible for inspecting/ examining Florida's 173 
licensed cemeteries and sellers of pre-need funeral plans; Percent of 
time allocated to inspections or examinations: The field examiners 
spend 100% of their time on inspections of licensed cemeteries and 
financial examinations of cemeteries and sellers of pre-need funeral 
plans.

State: Georgia; Licensing or registration requirements: Some cemeteries 
are required to register. Cemetery operators are not required to be 
licensed, but they must register; Licensing or registration renewals: 
Registrations for non-exempt cemeteries and for cemetery operators are 
to be renewed annually; Inspection requirements: There is no 
requirement for inspections of Georgia's 206 registered cemeteries, but 
they are inspected in response to complaints; Inspection or 
examination staff: There are 3 investigative analysts responsible for 
examining Georgia's 206 registered cemeteries; Percent of time 
allocated to inspections or examinations: The investigative analysts 
spend an estimated 25% of their time on inspections of registered 
cemeteries. In addition, they review cemetery trust fund and escrow 
records and accounts and annual financial statements for cemeteries. 
They are also are responsible for reviewing financial records for other 
types of businesses, like sellers of pre-need funeral plans and 
charities.

State: Hawaii; Licensing or registration requirements: Some cemeteries 
are required to be licensed, but cemetery operators are not required to 
be licensed; Licensing or registration renewals: Licenses for non-
exempt cemeteries are to be renewed every 2 years; Inspection 
requirements: There is no requirement for inspections of Hawaii's 14 
licensed cemeteries, but they can be inspected in response to 
complaints; Inspection or examination staff: Not applicable; Percent 
of time allocated to inspections or examinations: Not applicable.

State: New York; Licensing or registration requirements: There is no 
requirement for cemeteries or cemetery operators to be licensed, but 
the Cemetery Board must approve the certificate of incorporation for 
each cemetery and all regulated cemeteries are required to be not-for-
profit corporations; Licensing or registration renewals: Not 
applicable; Inspection requirements: Inspections of New York's 1,860 
regulated cemeteries are conducted every 6 or 7 years, but are done 
more frequently if complaints are received; Inspection or examination 
staff: There are the equivalent of 2.5 inspectors responsible for 
inspecting New York's 1,860 regulated cemeteries; Percent of time 
allocated to inspections or examinations: The inspectors spend an 
estimated 20% of their time inspecting cemeteries. The inspectors spend 
the rest of their time performing other duties related to regulation of 
cemeteries and crematories.

State: Texas; Licensing or registration requirements: There is no 
requirement for cemeteries or cemetery operators to be licensed, but 
cemeteries must register with the state.[A]; Texas did not provide 
information on the number of cemeteries that are exempt from 
regulation; Licensing or registration renewals: Cemeteries must 
annually renew their registration with the state.[A]; Inspection 
requirements: There is no requirement for Texas's 232 registered 
cemeteries to be inspected unless a complaint is received.[B]; 
Inspection or examination staff: There are 8 examiners responsible for 
on-site examinations at Texas's 232 registered cemeteries; Percent of 
time allocated to inspections or examinations: These 8 examiners spend 
an estimated 35% of their time examining registered cemeteries. The 
examiners spend the majority (65%) of their time examining trust funds 
and contracts for pre-need funeral plans.

Source: GAO analysis of data provided by officials within the 6 case 
study states.

Note: Of the 6 case study states, only Florida provided information on 
the total number of cemeteries that operate in their state. The types 
of cemeteries that are exempt from regulation include those cemeteries 
that are affiliated with a religious organization or that are owned and 
operated by a municipality.

[A] Effective September 1, 2003, cemeteries in Texas will be required 
to be licensed by the Texas Funeral Service Commission. These licenses 
will have to be renewed annually. This licensing requirement, however, 
does not apply to certain cemeteries--such as cemeteries owned by a 
municipality or family, or by a fraternal or religious organization.

[B] Effective September 1, 2003, cemeteries will be required to be 
inspected at least once every 2 years. If the Texas Funeral Service 
Commission finds a violation, the cemetery is required to be inspected 
annually until the Commission determines the cemetery is free of 
violations.

[End of table]

Table 11: Comparison of Requirements for Pre-Need Funeral Plan Sales 
Funded by Trusts in the 6 Case Study States:

State: California; Licensing or registration requirements: State 
regulates only pre-need funeral plan sales by funeral homes in which 
the proceeds are placed in trust; Licensing or registration renewals: 
Not applicable; Trusting requirements: Sellers of pre-need funeral 
plans are required to place into trust 100% of the principal paid for 
funeral and cemetery goods and services; Reimbursement requirements: 
If a purchaser cancels a pre-need contract, the seller is required to 
refund 100% of the principal paid and cannot take more than 10% of the 
interest that may have accrued; Inspection/audit resources: There are 
4 auditors who review pre-need contracts for proper language and for 
ensuring the soundness of funds placed in trust.

State: Florida; Licensing or registration requirements: Companies that 
wish to sell pre-need funeral plans are required to obtain a 
"certificate of authority" that authorizes them to sell pre-need 
funeral plans in Florida. Sales agents for these companies are not 
required to be licensed, but they must register; Licensing or 
registration renewals: Companies are required to renew their 
certificate of authority each year and to annually submit financial 
statements. Sales agents of these companies are required to renew their 
registration with the state every 2 years; Trusting requirements: 
Sellers of pre-need funeral and cemetery goods are required to place 
into trust 110% of the wholesale cost or 30% of the retail price, 
whichever amount is greater for each good sold. Pre-need sellers of 
funeral or cemetery services are required to place into trust a minimum 
of 70% of the total principal; Reimbursement requirements: If a 
purchaser cancels the pre-need contract within 30 days of purchase, the 
seller is required to refund 100% of all funds paid. If a purchaser 
cancels the pre-need contract more than 30 days after purchase, the 
seller is required to refund 100% of the principal invested for unused 
services, but can retain any interest that may have accrued. Sellers, 
however, are required to deliver goods as stated in the pre-need 
contract or make arrangements with another seller to deliver the 
purchased goods; Inspection/audit resources: There are 11 examiners 
who, besides inspecting and examining licensed cemeteries, also examine 
pre-need licensees (companies) to ensure, among other things, that pre-
need contracts meet state requirements, sales agents are properly 
registered, and whether the licensees supported withdrawals from its 
trust fund.

State: Georgia; Licensing or registration requirements: Neither 
companies that sell pre-need funeral plans nor their sales agents are 
required to be licensed, but the companies and their sales agents are 
to register; Licensing or registration renewals: Companies that sell 
pre-need funeral plans and their sales agents are to renew their 
registration with the state each year; Trusting requirements: Sellers 
of pre-need funeral plans are required to place in trust 100% of the 
principal paid. For pre-need funeral goods, sellers are required to 
place in trust 100% of the principal paid, while sellers of cemetery 
goods (monuments and outer burial containers) are required to place in 
trust 35% of the principal paid or 110% of the wholesale price; 
Reimbursement requirements: If a purchaser cancels the pre-need 
contract, the seller is required to refund 100% of the principal 
invested and 100% of any interest that may have accrued; Inspection/
audit resources: There are 3 investigative analysts responsible for 
examining financial statements of sellers of pre-need funeral plans. 
These field examiners are also responsible for examining financial 
records of other businesses, like cemeteries and charities.

State: Hawaii; Licensing or registration requirements: Companies that 
want to sell pre-need funeral plans in Hawaii are required to obtain a 
"pre-need funeral authority license." The companies' sales agents are 
not required to be licensed or registered; Licensing or registration 
renewals: Companies are required to renew their "pre-need funeral 
authority license" every 2 years; Trusting requirements: Companies 
that sell pre-need funeral plans are required to place in trust 70% of 
the principal and can retain up to 30% for recovery of acquisition 
costs; Reimbursement requirements: Purchasers of pre-need funeral 
plans that cancel their contract are entitled to a refund of 100% of 
the principal they paid, but none of the interest that may have 
accrued; Inspection/audit resources: A staff person reviews pre-need 
contracts and trust agreements with assistance from the Deputy Attorney 
General. Companies that sell pre-need funeral plans are required to 
submit an audited financial statement and an actuarial statement on a 
fiscal or calendar year basis. The state's consultant reviews the 
financial and actuarial statements.

State: New York; Licensing or registration requirements: In New York, 
only licensed and registered funeral directors can sell pre-need 
funeral plans funded by trusts. As such, there is no separate license 
for sellers of pre-need funeral plans; Licensing or registration 
renewals: Registrations for selling pre-need funeral plans are to be 
renewed every 2 years; Trusting requirements: Sellers of pre-need 
funeral goods and services and pre-need cemetery goods are required to 
place in trust 100% of the principal paid. There is no requirement to 
place in trust proceeds from the sale of cemetery services; 
Reimbursement requirements: If a purchaser cancels a pre-need contract, 
the seller is required to refund 100% of the principal paid and 100% of 
any interest that may have accrued; Inspection/audit resources: Two 
investigators perform reviews of pre-need funeral plan contracts. These 
2 investigators are also responsible for regulations involving funeral 
homes and funeral directors.

State: Texas; Licensing or registration requirements: Companies that 
wish to sell trust-funded pre-need funeral plans in Texas are required 
to obtain a permit from the Department of Banking. Texas does not 
regulate or license the sales agents for these companies; Licensing or 
registration renewals: Companies that sell trust-funded pre-need 
funeral plans in Texas are required to renew their permit at least once 
per year; Trusting requirements: Sellers of pre-need funeral plans are 
required to place in trust 90% of the principal for funeral and 
cemetery goods and services. Sellers are permitted to retain 10% of the 
principal; Reimbursement requirements: For contracts purchased prior 
to September 1, 2001, or held for less than 1 year, if a purchaser 
cancels a pre-need contract, the seller is required to refund 90% of 
the principal invested, but is permitted to retain all of the interest 
that may have accrued. For trust-funded pre-need contracts purchased on 
or after September 1, 2001, if the purchaser cancels the contract after 
1 year, the seller is required to refund 90% of the principal invested 
and 50% of any interest that may have accrued; Inspection/audit 
resources: Texas has 8 examiners who spend 65% of their time on 
reviewing pre-need funeral plan sales contracts and examining the trust 
funds from sales of pre-need funeral plans. These examinations are 
performed every 12 to 16 months. These same 8 examiners spend the 
remaining 35% of their time examining financial records of regulated 
cemeteries.

Source: GAO analysis of data provided by officials within the 6 case 
study states.

[End of table]

Table 12: Comparison of Requirements for Third Party Sales of Funeral 
Goods across the 6 Case Study States:

State: California; Licensing or registration requirements: There is no 
licensing or registration requirement for third party sellers of 
funeral goods, but California requires that casket retailers provide a 
General Price List, individual price tag, and an itemized contract.

State: Florida; Licensing or registration requirements: There is no 
licensing requirement for third party sellers of funeral goods, but 
monument dealers are required to (1) register with the state, (2) be 
located in a physical location with a street address, (3) and pay a 
registration fee. Monument dealers must renew their registration every 
2 years.

State: Georgia; Licensing or registration requirements: Some third 
party sellers are required to register with the Office of the Secretary 
of State. These registrations are to be renewed at least once per 
year[A].

State: Hawaii; Licensing or registration requirements: There is no 
licensing or registration requirement for third party sellers of 
funeral goods.

State: New York; Licensing or registration requirements: There is no 
licensing or registration requirement for third party sellers of 
funeral goods.

State: Texas; Licensing or registration requirements: There is no 
licensing or registration requirement for third party sellers of 
funeral goods.

Source: GAO analysis of data provided by officials within the 6 case 
study states.

[A] In Georgia, some third party sellers are exempt from registration 
requirements, such as those providing interment and disinterment 
services exclusively at cemeteries that are exempt from regulation.

[End of table]

[End of section]

Appendix X: Consolidation of the Death Care Industry and the Interstate 
Transit of Human Remains:

Consolidation of the Death Care Industry:

During our review, questions arose about the extent to which the death 
care industry has been undergoing a transformation from an industry 
comprised of small, family-owned businesses to one where many of the 
small businesses had been "consolidated" under corporate ownership by 
large, publicly traded companies. The variety of possible ownership 
arrangements for this industry, as for any other, can take a range of 
forms, including single ownership of one establishment, single 
ownership of multiple establishments (that could exclusively be of one 
type such as funeral homes, or multiple types, such as funeral homes 
and cemeteries), partnerships of various configurations, to 
corporations of all sizes. We contacted death care industry 
associations, state regulators in the 6 case study states, and national 
and state consumer associations to gather data on the configuration of 
the death care industry, and particularly on ownership of death care-
related businesses by large corporations, but found very limited data 
available.

According to officials within the death care industry and state 
regulators within the 6 case study states, the corporate purchases of 
funeral homes and cemeteries reached a peak in the late 1990s. Since 
that time, according to these officials, the large, publicly traded 
corporations have been divesting themselves of funeral homes and 
cemeteries. Data we obtained from the National Funeral Directors 
Association (NFDA) support these officials' statements. According to 
NFDA data, as of July 2003, there were an estimated 21,710 funeral 
homes in the United States--89 percent of which were owned by 
individuals, families, or closely held private corporations and the 
remaining 11 percent were owned by one of the publicly traded 
corporations. The data further show that while the number of funeral 
homes in the United States has remained fairly stable since 1998, the 
percent of funeral homes in the United States owned by one of the 
publicly traded corporations has decreased slightly since 1998--from 13 
percent in 1998, to 12 percent in 2002, and then to 11 percent in 
2003.[Footnote 26] We have not reviewed these data to verify their 
validity, and our information on corporate ownership relate only to the 
large, publicly traded corporations.

Interstate Transit of Human Remains:

While it is clear that a number of people die each year in locations 
other than where they or their families want their remains to be 
placed, no systematic data are available to document the extent to 
which death care transactions involve the shipment of human remains 
across state lines. Human remains can be transported from location to 
location, including across state lines, by aircraft, motor vehicles, 
trains, or other modes of transportation. For those living and working 
in areas proximate to state boundaries, the transport of human remains 
across jurisdictions is no doubt routine. For example, an individual 
could die in Maryland and be transported to Virginia or the District of 
Columbia for burial. Similarly, an individual could work and die in New 
York City and be transported to the location of his home in New Jersey 
or Connecticut for burial. The number of these interstate movements is 
generally not maintained.

We were unable to gather data from airlines or interstate shipping 
companies about the extent to which death care transactions involve 
interstate transport of human remains because either they did not 
compile such data or they would not share these data for proprietary 
reasons.[Footnote 27] We also contacted officials in our 6 case study 
states to find out if their states maintain records of the interstate 
transit of human remains either to or from their state. Only Florida 
was able to provide any data on this issue. Specifically, the data 
provided by a state official showed that, between 1999 and 2002, the 
remains of between 14 and 15 percent of the individuals who died in 
Florida were transported out-of-state. State officials did not have 
data on the number of bodies that were transported into Florida from 
other states for final disposition.

[End of section]

Appendix XI: GAO Contacts and Staff Acknowledgments:

GAO Contacts:

John Mortin (202) 512-8777 or mortinj@gao.gov:

Staff Acknowledgments:

Leo Barbour, Christopher Conrad, Tahra Edwards, Stu Kaufman, Daniel 
Mesler, Susan Michal-Smith, John Mingus, Amy Rosewarne, and Greg 
Wilmoth made key contributions to this report.

[End of section]

Glossary:

This glossary is provided for reader convenience, not to provide 
authoritative or complete definitions.

Cemetery:

An area of ground set aside for burial or entombment.

Cemetery Operator:

The person who operates or manages the cemetery.

Cremation:

The process of burning human remains and the container encasing them 
and processing the resulting bone fragments into ash.

Crematory:

A furnace for cremating remains or a building housing such a furnace.

Crematory Operator:

The person who is responsible for operating or managing the crematory.

Embalming:

The process of preserving a dead body by means of circulating a 
preservative fluid through the veins and arteries.

Embalmer:

A professional who disinfects or preserves dead human bodies by the 
injection or external application of antiseptics, disinfectants, or 
preservative fluids.

Funeral Director:

A professional who prepares for the burial or other disposition of dead 
human bodies, supervises such burial or disposition, maintains a 
funeral establishment for such purposes, counsels with survivors. 
Synonym: mortician, undertaker.

Funeral Home:

A building used for the purpose of embalming, arranging and conducting 
funerals. Also called "funeral establishment," "funeral firm," or 
"mortuary" in some states.

Monument or Memorial Marker:

A method of identifying the occupant of a particular grave. Monuments 
or markers are usually of metal or stone, which gives such data as the 
name of the individual, date and place of birth, date and place of 
death.

Mortuary Science:

That part of the funeral service profession dealing with the proper 
preparation of the body for final disposition.

Pre-need Funeral Plan:

A contractual agreement whereby funeral and/or burial arrangements are 
made and paid for by an individual prior to his/her death.

Third Party Sellers of Funeral Goods:

Companies or businesses that are not affiliated with a funeral home or 
cemetery that sell funeral goods.

FOOTNOTES

[1] Third party sellers of funeral goods refer primarily to retailers 
that are not affiliated with a funeral home or cemetery that sell 
caskets and other funeral-related products.

[2] Federal Death Care Inspection and Disclosure Act, S. 3168 and H.R. 
5743, 107th Cong. (2002).

[3] We did not independently verify the accuracy or completeness of the 
responses to the Web based surveys.

[4] A typical funeral includes a combination of goods (casket and outer 
burial container) and services (care of the body, transportation, and 
use of facilities). A burial typically includes both goods (burial plot 
and marker) and services (opening and closing of the grave and 
perpetual care). 

[5] U.S. General Accounting Office, Funeral-Related Industries: 
Complaints and State Laws Vary, and FTC Could Better Manage the Funeral 
Rule, GAO/GGD-99-156 (Washington, D.C.: September 1999).

[6] In Nebraska, all funeral homes are licensed and regulated except 
those on designated tribal reservations. 

[7] New York State used to license embalmers separately from funeral 
directors, but this practice ceased in the 1960s.

[8] Crematories at state medical schools, not-for-profit crematories, 
and crematories run by religious groups or municipalities are among the 
crematories that are exempt from some states' regulations. 

[9] In May 2002, subsequent to the discovery of decomposed bodies at 
the Tri-State Crematory in Noble, Georgia, the state amended the 
definition of the term "crematory" to cover more facilities, including 
the Tri-State Crematory. Prior to this amendment, crematory was defined 
as "any place that is owned by a funeral director or funeral 
establishment where cremation is performed, and which is open to the 
public other than a hospital, clinic, laboratory, or other facility 
authorized by the Department of Human Resources for such purposes." 
Because Tri-State Crematory was not owned by a funeral director or 
funeral establishment, it was not covered by the former definition of 
crematory, and thus not subject to regulation. 

[10] Under a new law, effective September 1, 2003, all licensed 
crematories will be required to be inspected at least once every 2 
years by staff of the Texas Funeral Service Commission. If the 
Commission finds a violation, the crematory is required to be inspected 
annually until the Commission determines the crematory is free of 
violations.

[11] For example, cemeteries that are operated by municipalities or by 
religious organizations are exempt from regulation in many states. 

[12] For purposes of our survey, we focused on regulation of pre-need 
funeral plans that are funded by trusts. 

[13] Among the pre-need funeral plan sales that are exempt from 
regulation across the other states include those that are funded by 
insurance. 

[14] Among the types of third party sales of funeral goods that are 
exempt from regulation across the states that do not regulate all third 
party sales are Internet sales, sales to consumers who need the goods 
immediately (referred to as "at-need"), and sales of funeral goods when 
the consumer takes possession of the merchandise within a fixed period 
of time.

[15] For purposes of our survey, we focused on regulation of pre-need 
funeral plans that are funded by trusts not those funded through 
insurance. 

[16] California, Florida, New York, and Texas, were also included in an 
earlier report on the death care industry, U.S. General Accounting 
Office, Funeral-Related Industries: Complaints and State Laws Vary, and 
FTC Could Better Manage the Funeral Rule, GAO/GGD-99-156 (Washington, 
D.C.: September 1999).

[17] In its responses to our surveys, California listed the same 
answers for the actions taken against cemeteries or cemetery operators 
as they did for actions taken against crematories and crematory 
operators. 

[18] Companies that secure pre-need contracts with surety bonds or 
letters of credit pay $5.00 per contract. 

[19] In May 2002, subsequent to the discovery of decomposed bodies at 
the Tri-State Crematory in Noble, Georgia, the state amended the 
definition of the term "crematory" to cover more facilities, including 
the Tri-State Crematory. Prior to this amendment, crematory was defined 
as "any place that is owned by a funeral director or funeral 
establishment where cremation is performed, and which is open to the 
public other than a hospital, clinic, laboratory, or other facility 
authorized by the Department of Human Resources for such purposes." 
Because Tri-State Crematory was not owned by a funeral director or 
funeral establishment, it was not covered by the former definition of 
crematory, and thus not subject to regulation.

[20] In Georgia, certain third party sellers are exempt, such as those 
providing interment and disinterment services exclusively at cemeteries 
exempt from registration.

[21] By law, if a violation is found, the funeral home is required to 
be inspected annually until the Texas Funeral Service Commission 
determines the funeral home is free of violations.

[22] HB 587, which was signed into law by the Texas Governor on May 29, 
2003, will require crematories to be licensed starting September 1, 
2003, and then renewed annually.

[23] HB 1538, which was signed into law by the Texas Governor on June 
20, 2003, will require all licensed crematories to be inspected at 
least once every 2 years effective September 1, 2003. If the Texas 
Funeral Service Commission finds a violation, the crematory is required 
to be inspected annually until the Commission determines the crematory 
is free of violations.

[24] Effective September 1, 2003, cemeteries in Texas will be required 
to be licensed by the Texas Funeral Service Commission. These licenses 
will have to be renewed annually. This licensing requirement, however, 
does not apply to certain cemeteries--such as cemeteries owned by a 
municipality or family, or by a fraternal or religious organization.

[25] Effective September 1, 2003, cemeteries will be required to be 
inspected at least once every 2 years. If the Texas Funeral Service 
Commission finds a violation, the cemetery is required to be inspected 
annually until the Commission determines the cemetery is free of 
violations.

[26] Data on corporate ownership of funeral homes in the Unites States 
were not available for prior years because until recently, NFDA has not 
gathered these data on a regular basis.

[27] One airline was willing to provide data for 3 recent years, but we 
are not reporting the data because we were unable to obtain comparable 
data from other airlines or interstate shipping companies to provide a 
more complete picture of trends involving the interstate transport of 
human remains.

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