Private cemeteries: endowment funds.

Existing law authorizes a cemetery authority that maintains a private cemetery to place its cemetery under endowment care and to operate an endowment care fund. Existing law requires the principal of all funds for endowment care to be invested, and only the income to be used for the care of the cemetery. The term "income," for these purposes, means the distribution under either the net income distribution method or the unitrust distribution method. Existing law requires an endowment fund to be subject to a net income distribution method, and authorizes, on or after January 1, 2020, a cemetery authority to apply to the Cemetery and Funeral Bureau to convert its fund to a unitrust distribution method. The board is required to approve an application to convert a fund if certain conditions are met, including, the compensation to the trustee of the fund is limited to 0.1 % of the net fair market value of the assets as of the last trading day for each of the 3 preceding fiscal years. This bill would instead authorize a cemetery authority to convert to a unitrust distribution method on or after January 1, 2021. The bill would additionally modify the requirements to convert an endowment care fund from a net income distribution method to a unitrust distribution method by requiring the compensation of the trustee, as defined, to be reasonable and meet specified requirements based on the net fair market value, as defined, of the endowment care fund. The bill would additionally prohibit the principal and income of the trust fund of a cemetery from being seized in any proceeding by any private entity, and would limit the use of the principal and income of the trust fund if it is seized by a public entity. The bill would additionally limit the use of the principal and income of the trust fund if ownership of the cemetery authority is transferred, as specified.