Typically, the standard by which a cemetery is judged to be abandoned is whether the grass is getting cut. But for licensed cemeteries, some states’ laws may also include provisions to deem a cemetery abandoned when regulatory reports are not filed. Care fund reports are intended to inform the cemetery regulator whether the operator is making deposits to the fund, and how much the trustee is distributing to the operator. When the reporting required for a cemetery license is neglected by the operator, state law may provide the cemetery regulator authority to bring legal action to declare the cemetery abandoned even though the grass has been cut regularly. The purpose for such authority is to enable the regulator to determine if the care fund is being depleted by the operator, and to bring action to preserve the fund.
Kansas has had such authority for many years, but an annual reporting system meant the Secretary of State’s office was viewing information that was 15 months old (if operators filed their reports timely and accurately). When the Kansas cemetery law was amended in 2012, the operator’s annual report was replaced with monthly reporting required from both the operator and the trustee. The impact of the new reporting requirements were somewhat negated by a change to the abandonment provisions (requiring a proceeding to prove both that reports were not filed and that the grass had not been cut for a year).
In a compromise sought by the Kansas Cemetery Association, the reporting requirements were changed from monthly to quarterly, and the abandonment provisions were changed back to allow abandonment be sought under either condition. HB 2172 will take effect on July 1st.
While regulators want to determine that care fund contributions are being made when required, recent disciplinary proceedings have been the result of care fund trustees making improper distributions. Consequently, the Kansas law requires cemetery trustees to file reports directly with the Secretary of State. Those reports include the determination of distributable income for care funds. A trustee’s failure to file its quarterly reports could trigger an abandonment proceeding under Section 17-1366.
Kansas’ trustee filings are intended to avoid a situation similar to that reported on the discipline page of the Missouri Office of Endowed Care Cemetery, where a St. Louis cemetery agreed to return almost $190,000 of care fund distributions.