[House Hearing, 111 Congress] [From the U.S. Government Publishing Office] H.R. 3655, THE BEREAVED CONSUMER'S BILL OF RIGHTS ======================================================================= HEARING BEFORE THE SUBCOMMITTEE ON COMMERCE, TRADE, AND CONSUMER PROTECTION OF THE COMMITTEE ON ENERGY AND COMMERCE HOUSE OF REPRESENTATIVES ONE HUNDRED ELEVENTH CONGRESS SECOND SESSION __________ JANUARY 27, 2010 __________ Serial No. 111-93 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Printed for the use of the Committee on Energy and Commerce energycommerce.house.gov _____ U.S. GOVERNMENT PRINTING OFFICE 76-005 WASHINGTON : 2012 ----------------------------------------------------------------------- For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC 20402-0001 COMMITTEE ON ENERGY AND COMMERCE HENRY A. WAXMAN, California, Chairman JOHN D. DINGELL, Michigan JOE BARTON, Texas Chairman Emeritus Ranking Member EDWARD J. MARKEY, Massachusetts RALPH M. HALL, Texas RICK BOUCHER, Virginia FRED UPTON, Michigan FRANK PALLONE, Jr., New Jersey CLIFF STEARNS, Florida BART GORDON, Tennessee NATHAN DEAL, Georgia BOBBY L. RUSH, Illinois ED WHITFIELD, Kentucky ANNA G. ESHOO, California JOHN SHIMKUS, Illinois BART STUPAK, Michigan JOHN B. SHADEGG, Arizona ELIOT L. ENGEL, New York ROY BLUNT, Missouri GENE GREEN, Texas STEVE BUYER, Indiana DIANA DeGETTE, Colorado GEORGE RADANOVICH, California Vice Chairman JOSEPH R. PITTS, Pennsylvania LOIS CAPPS, California MARY BONO MACK, California MICHAEL F. DOYLE, Pennsylvania GREG WALDEN, Oregon JANE HARMAN, California LEE TERRY, Nebraska TOM ALLEN, Maine MIKE ROGERS, Michigan JANICE D. SCHAKOWSKY, Illinois SUE WILKINS MYRICK, North Carolina CHARLES A. GONZALEZ, Texas JOHN SULLIVAN, Oklahoma JAY INSLEE, Washington TIM MURPHY, Pennsylvania TAMMY BALDWIN, Wisconsin MICHAEL C. BURGESS, Texas MIKE ROSS, Arkansas MARSHA BLACKBURN, Tennessee ANTHONY D. WEINER, New York PHIL GINGREY, Georgia JIM MATHESON, Utah STEVE SCALISE, Louisiana G.K. BUTTERFIELD, North Carolina CHARLIE MELANCON, Louisiana JOHN BARROW, Georgia BARON P. HILL, Indiana DORIS O. MATSUI, California DONNA M. CHRISTENSEN, Virgin Islands KATHY CASTOR, Florida JOHN P. SARBANES, Maryland CHRISTOPHER S. MURPHY, Connecticut ZACHARY T. SPACE, Ohio JERRY McNERNEY, California BETTY SUTTON, Ohio BRUCE BRALEY, Iowa PETER WELCH, Vermont Subcommittee on Commerce, Trade, and Consumer Protection BOBBY L. RUSH, Illinois Chairman JANICE D. SCHAKOWSKY, Illinois CLIFF STEARNS, Florida Vice Chair Ranking Member JOHN SARBANES, Maryland RALPH M. HALL, Texas BETTY SUTTON, Ohio ED WHITFIELD, Kentucky FRANK PALLONE, New Jersey GEORGE RADANOVICH, California BART GORDON, Tennessee JOSEPH R. PITTS, Pennsylvania BART STUPAK, Michigan MARY BONO MACK, California GENE GREEN, Texas LEE TERRY, Nebraska CHARLES A. GONZALEZ, Texas MIKE ROGERS, Michigan ANTHONY D. WEINER, New York SUE WILKINS MYRICK, North Carolina JIM MATHESON, Utah MICHAEL C. BURGESS, Texas G.K. BUTTERFIELD, North Carolina JOHN BARROW, Georgia DORIS O. MATSUI, California KATHY CASTOR, Florida ZACHARY T. SPACE, Ohio BRUCE L. BRALEY, Iowa DIANA DeGETTE, Colorado JOHN D. DINGELL, Michigan (ex officio) C O N T E N T S ---------- Page Hon. Bobby L. Rush, a Representative in Congress from the State of Illinois, opening statement................................. 1 Hon. Ed Whitfield, a Representative in Congress from the Commonwealth of Kentucky, opening statement.................... 2 Prepared statement........................................... 5 Hon. Janice D. Schakowsky, a Representative in Congress from the State of Illinois, opening statement........................... 10 Hon. Phil Gingrey, a Representative in Congress from the State of Georgia, opening statement..................................... 10 Hon. Gene Green, a Representative in Congress from the State of Texas, opening statement....................................... 11 Hon. Steve Scalise, a Representative in Congress from the State of Louisiana, opening statement................................ 12 Hon. Joe Barton, a Representative in Congress from the State of Texas, prepared statement...................................... 76 Witnesses Chuck Harwood, Deputy Director, Bureau of Consumer Protection, Federal Trade Commission;...................................... 14 Prepared statement........................................... 16 Patricia Brown Holmes (Ret.), Chair, Illinois Cemetery Oversight Task Force, Partner, Schiff Hardin LLP......................... 26 Prepared statement........................................... 28 Paul M. Elvig, Former President, International Cemetery, Cremation and Funeral Association.............................. 31 Prepared statement........................................... 33 Randall L. Earl, Treasurer, National Funeral Directors Association, Owner, Brintlinger and Earl Funeral Homes......... 53 Prepared statement........................................... 55 Submitted Material Statement of Funeral Consumers Alliance.......................... 80 H.R. 3655, THE BEREAVED CONSUMER'S BILL OF RIGHTS ---------- WEDNESDAY, JANUARY 27, 2010 House of Representatives, Subcommittee on Commerce, Trade, and Consumer Protection, Committee on Energy and Commerce, Washington, DC. The Subcommittee met, pursuant to call, at 10:10 a.m., in Room 2123 of the Rayburn House Office Building, Hon. Bobby L. Rush [Chairman of the Subcommittee] presiding. Members present: Representatives Rush, Schakowsky, Stupak, Green, Barrow, Whitfield, Gingrey and Scalise. Staff present: Michelle Ash, Chief Counsel; Anna Laitin, Professional Staff; Timothy Robinson, Staff; Will Cusey, Special Assistant; Daniel Hekier, Intern; Elizabeth Letter, Special Assistant; Sarah Kelly, Intern; Shannon Weinberg, Counsel; Brian McCullough, Senior Professional Staff; and Sam Costello, Legislative Analyst. OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS Mr. Rush. The Subcommittee on Commerce, Trade, and Consumer Protection is called to order. We are convening for the hearing on the Bereaved Consumer's Bill of Rights Act of 2010 and I want to, before we begin giving opening statements, I want to welcome all who are gathered and welcome our witnesses for the day, and I want to thank the members of the subcommittee for their presence. The chair recognizes himself for 5 minutes for the purposes of an opening statement. In early July, 2009, horrific allegations of unlawful grave desecration shocked the Nation as news about the unauthorized removal of hundreds of human bodies and the reselling of grave plots at Burr Oak Cemetery in Alsip, Illinois, which is in my district, came to light, and as chair of this subcommittee and the representative of the first city of Illinois I wasted no time in conducting a field hearing in Chicago on July 27, 2009. My primary purpose in holding the field hearing was to hear bereaved survivors share their feelings of intense loss and bewilderment upon the learning of what happened at Burr Oak. I also wanted to learn more about their past dealings with Burr Oak, the staff and the red flags of gross neglect they had witnessed at the cemetery. Upon returning to Washington, any suspicions that Burr Oak was an aberration or a mere figment of society's imagination quickly diminished. A little more than a month following our Chicago field hearings fresh allegations of unlawful grave desecration and the resell of grave plots at Eden Memorial Park and a Jewish cemetery in Mission Hills, California and the Melwood Cemetery in DeKalb County, Georgia also came to light. Thus ushers in a period of deep sorrow, grief and loss for some survivors and the loved ones responsible for finalizing funeral arrangements and services. These very consumers in their state of bereavement become easy selling targets for an abundance of unnecessary goods and services that get slipped into funeral and burial packages. Consumers also fall prey to a host of misrepresentation by managers and sales staff that range from bogus claims about what State laws actually require to patently false interpretations of their own written regulations. The same bereaved consumers equal free cash for unprincipled owners and managers of cemeteries and crematoriums. The question is why. The easy answer is very easy. Sometimes it is just too easy for those who are out to earn a quick buck to prey on misinformed consumers. Lacking the experience with the funeral and burial section, these consumers cannot be reasonably expected to effectively negotiate fair practice, choices and contractual terms that apply to burial goods contracts and leases on land on graveyard property. Planning for one's own or even a loved one's death is typically a once-in-a-lifetime experience. It is also compounded by all kinds of unpredictability. But just as death often comes like a thief in the night, bereaved consumers should not be left wondering who in fact was and is the real thief, death or the cemetery sales sources. I introduced in September the Bereaved Consumer Bill of Rights. Today this subcommittee is reviewing this draft bill in its first hearing under new legislative session. This bill is all-encompassing and there are many parts to this bill. I have been earnest in respecting existing State laws as I drafted this bill. The bill will authorize both the FTC and the States' Attorneys Generals and other designated State entities to enforce its requirements. In closing, I want to thank each one of our witnesses again for appearing today and I look forward to this hearing and I yield back the balance of my time. Now, I recognize the ranking member of the subcommittee, Mr. Whitfield, for 5 minutes for the purposes of opening statement. OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF KENTUCKY Mr. Whitfield. Chairman Rush, thank you very much and we are delighted that you are having a hearing on this important subject. Certainly when families face death and have to find themselves making decisions about the disposal of bodies and so forth, they are particularly vulnerable. And although we hope that people will act in good conscience, unfortunately we find ourselves having to write Federal and State laws and regulations to prevent the unscrupulous few from preying on the bereaved as profit centers in their state of emotional disarray. Thankfully, almost all funeral and cemetery businesses are honest actors who seek to assist the families and never violate the law but as you said, bad actors do persist. Incidents in Georgia, Florida and more recently Illinois indicate a few rogue operators do not respect the law or the same values that we hold. Allegations of illegal disinterment are being investigated at Burr Oak Cemetery in Illinois. Evidence suggests several of the workers may have engaged in reprehensible conduct to desecrate burial plots and resell those plots for profit. It is my understanding they face criminal charges and could be sentenced to prison time if they are convicted. In the wake of Burr Oak, the Governor of Illinois convened a task force to look into this situation and make recommendations for that State. I understand he signed a new law earlier this month which makes changes to the regulation of cemeteries in Illinois. Similarly, Georgia and Florida responded quickly to their unique problems with new State laws. So the question really becomes what role, if any, the Federal Government should have beyond its current authority. The Commission has the authority to bring action for either violations of the Funeral Rule which is about transparency or for violations of unfair or deceptive practices under its General Section 5 authority provided the violator was under its jurisdiction. Chairman Rush has introduced H.R. 3655 to address problems some people have identified in the funeral and cemetery industry and we all commend him for taking that action introducing this legislation intended to help consumers. While all of us support the practice of accurate and meaningful disclosure to consumers, the question does arise is the Federal Government the best entity to do this or do the States do a better job of it. We do know that all States have laws on their books and regulate the industry but as the Illinois task force concluded in its report, regulatory oversight by State regulators happens to be one of the major problems in that incident and so even if we require more disclosure, it may or may not stop criminal activity that occurred. Another potential problem of expanding the FTC's role is the perception by States that the Federal Government will be the primary entity with jurisdiction, and if that happens will the States have less incentive and maybe since all of them have financial difficulty anyway, just step back and let the Federal Government do it and maybe the Federal Government may not be as effective. In addition to required disclosures, the proposed legislation seeks to fill the regulatory gap of the FTC's enforcement authority by providing the Commission new authority over non-profit entities operating in the funeral and cemetery business. This would be a major expansion of the FTC's enforcement authority and certainly should be considered carefully, particularly in light of many other industries under the FTC's jurisdiction that have substantial participation of non-profits. If we want to consider sweeping non-profits under the FTC's jurisdiction, I believe it would be better to examine it in the context of the FTC's overall authority as it may have additional implications for State and municipality entities that operate as non-profits. Chairman Rush, I do commend you for holding this hearing and certainly this is an issue that is very important. It has a great impact on our society and we look forward to working with you to try to determine a proper course of action. Thank you very much. [The prepared statement of Mr. Whitfield follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Mr. Rush. The chair now recognizes the gentlelady from Illinois, Ms. Schakowsky, for 2 minutes for the purposes of opening statement. OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS Ms. Schakowsky. Thank you, Mr. Rush, for holding this hearing and for introducing this important bill and I am glad to be a co-sponsor of your bill, the Bereaved Consumer's Bill of Rights Act. I want to welcome our witnesses including two Illinois witnesses, the Honorable Patricia Brown Holmes, Chairman of the Illinois Cemetery Oversight Task Force and Randall Earl of the National Funeral Directors Association who is a funeral director in Decatur, Illinois. Last year a cemetery in my State, as Mr. Rush has gone into in some detail, made national headlines after some of its employees horribly violated the dignity of individuals interred at the cemetery in the name of nothing more than greed. Last July this committee held a field hearing in Chicago where we heard the heartbreaking testimonies from families, including some of my constituents who no longer knew where to go to mourn their loved ones. One of my constituents, Mrs. Rose Herd, went to the cemetery to order headstones for her son, daughter and mother and while at the cemetery a worker looked at the map and said ``someone is buried on top of the others in that grave.'' Imagine having to hear that. But one of the big takeaways that I had from that hearing was something that is mentioned in our briefing paper which is the asymmetrical regulatory framework between funeral homes which are stringently regulated by the FTC on one side and the cemeteries, crematory and mausoleums on the other which are not, and I think that is exactly what our bill would do. It would require the FTC to issue rules that would protect the rights of consumers when they are facing one of the most difficult times in life, burying a loved one or preparing for their own funerals. Again, Mr. Chairman, I thank you for holding this hearing and I hope it is the first step toward passing this important bill. I yield back the balance of my time. Mr. Rush. The chair thanks the gentlelady and the chair will also note that the gentlelady and four other members of this subcommittee participated in the field hearing held in Chicago, and I really want to place on the record my deep seated appreciation for your participation at the field hearing, each and every one of you. The chair now recognizes Dr. Gingrey for 2 minutes for the purposes of opening statements. OPENING STATEMENT OF HON. PHIL GINGREY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF GEORGIA Mr. Gingrey. Mr. Chairman, I want to thank you for calling today's hearing on H.R. 3655, the Bereaved Consumer's Bill of Rights Act of 2009 in order to review the existing structure of Federal regulations that oversee consumer protection of the funeral industry, particularly at a time when purchasing decisions are made in the midst of grief. Unfortunately, we are here today largely in response to incidents that occurred at Burr Oak Cemetery in Alsip, Illinois that resulted in charges of the unauthorized removal of human remains from graves and the subsequent reselling of those plots. As the story continued to unravel, shocking details were revealed and my deepest condolences go out to the families of those whose remains were desecrated. Mr. Chairman, my home State of Georgia, just outside of my congressional district has also been the subject of a national scandal on this very issue. Back in 2002, the Tri-State Crematory in Walker County was at the center of a criminal investigation where this company failed to cremate the remains of over 300 people and even worse than that, they improperly stored the remains, and for the families of northwest Georgia that this scandal affected I feel nothing but sorrow for the trauma that they experienced. Clearly both of these incidents provide this subcommittee with a good reason to review the ways in which funeral services are regulated. Due to rampant abuses within the funeral industry, the Federal Trade Commission issued the Funeral Rule in 1984 to ensure more transparency on information that was provided to consumers regarding pricing structure in funeral services. According to the FTC at a field hearing that Chairman Rush held in Chicago last July on this matter, compliance with the Funeral Rule appears to be at a good level. Mr. Chairman, H.R. 3655 seeks to address some of the problems that continue to exist within the funeral industry; however, despite its overall goal I do fear that H.R. 3655 may be duplicative in nature because the Funeral Rule already addresses a number of these regulations and unfortunately this legislation would not have prevented what occurred at either Burr Oak or Tri-State Crematory. At the same time, in the aftermath of these scandals both the State of Illinois and my home State of Georgia acted swiftly to address criminal activity and I commend them for that quick action. As we move forward on this legislation I believe we need to focus on the existing tools of enforcement. I look forward, Mr. Chairman, to hearing from today's panel and I yield back the balance of my time. Mr. Rush. The chair now recognizes the gentleman from Texas, Mr. Green, for 2 minutes for the purposes of an opening statement. OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS Mr. Green. Thank you, Mr. Chairman, for holding this hearing on your legislation to protect the rights of those who are arranging funeral services who are grieving from the loss of a loved one. I don't think anybody on our committee hasn't gone through that with one of our parents or our in-laws and how traumatic it is, and our children will have to go through that for us someday. Bad actors exist in every industry but the thought that someone would mislead and take advantage of a family that has just lost a loved one is especially dishonest and troubling. The last thing someone wants to do following the death in a family is be pressured into purchasing unnecessary, overpriced services, nor do they want to have to shop around to make sure they are not being scammed into drastically overpaying for a service. A number of States have laws regulating practices related to funeral services, others have not or do not have updated laws on the books. Because of that, we need to set a floor for the rights of individuals planning a funeral and burial. Mr. Chairman, I strongly support your legislation, the Bereaved Consumer's Bill of Rights, to develop and issue rules prohibiting unfair and deceptive acts and practices for sellers of funeral and burial goods and services. This legislation required the Federal Trade Commission which currently regulates funeral homes under the Funeral Industry Practices Trade Regulation Rule to expand that rule to cover other entities involving and providing funeral and burial services such as crematories, cemeteries, caskets retailers and headstone and market retailers. Mr. Chairman, the incident at Burr Oak Cemetery in Illinois and the several others that made news in recent years demonstrate the further action needed to be taken to provide peace of mind to those who recently suffered a loss. This legislation will provide basic requirements while not interfering with States' efforts so grieving families know they will not be misled or taken advantage of. Again, Mr. Chairman, I want to thank you for both the bill and also holding the hearing, and welcome our witnesses, and I yield back. Mr. Rush. The chair now recognizes the gentleman from Louisiana, Mr. Scalise, for 2 minutes. OPENING STATEMENT OF HON. STEVE SCALISE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF LOUISIANA Mr. Scalise. Thank you, Mr. Chairman. All of us here today at some point in our lives have experienced the death of a loved one and have gone through the grieving process. During this painful time, we should be able to take comfort in knowing that our loved one's remains are being treated with dignity and respect. This comfort should be based on trust of the funeral home, the cemetery, the crematory handling the remains as well as on the integrity of the funeral service profession as a whole. Unfortunately, we have seen instances where this trust has been violated in appalling ways. The most recent example being Burr Oak Cemetery which has prompted this legislation we are examining today and the previous field hearing this subcommittee held in July. The desecration of graves and the mishandling of remains that took place at Burr Oak Cemetery were despicable and hopefully we never see this happen again. I believe we can all agree that no one should be taken advantage of during this time of heightened emotional distress. In the case of Burr Oak Cemetery and in similar cases in Florida and Georgia the States acted quickly to determine what led to these horrible acts and what laws and regulations were broken or needed to be improved or put in place to prevent this from happening again. This leads me to question whether Federal legislation is the most appropriate. Again, let me stress that the cases in Illinois, Georgia and elsewhere are terrible and I am pleased that we are examining ways to protect consumers while they are grieving the loss of a loved one. But I also have to question whether this is an issue best decided by the States who are closer to these violations and in a better position to respond swiftly. While it certainly is important that families not fall victim to unfair or deceptive acts related to funeral services, it is also important that we examine any detrimental consequences of Federal legislation that may impede on the ability of State and local governments' ability to decide what is best to protect their local citizens. I look forward to hearing from our witnesses today as they share their thoughts on what actions should take place or be taken by Federal, State and local authorities to address this problem. Thank you, Mr. Chairman, and I yield back. Mr. Rush. The chair now recognizes the gentleman from Georgia, Mr. Barrow, for 2 minutes. Mr. Barrow. Thank you, Mr. Chairman. I waive. Mr. Rush. The chair thanks the gentleman. And now it is my privilege and honor to introduce the panelists who have taken time off from their busy schedules to appear before this subcommittee and the chair wants the panelists to know how much we appreciate the fact that you have taken time out to be a part of this process. I want to begin to introduce you. From my left there is Mr. Chuck Harwood. He is a deputy director of the Bureau of Consumer Protection for the Federal Trade Commission. Mr. Harwood, welcome. Seated next to Mr. Harwood is Judge Patricia Brown Holmes, who has been previously mentioned. She is from Illinois. She is the chairman or the chairperson of the Illinois Cemetery Oversight Task Force. She is also a partner with the Schiff Hardin Law Firm and as was indicated, her work resulted in the Illinois governor signing a piece of legislation earlier this month, and I really want to congratulate you and your committee and the outstanding work that you have done for the citizens of the State of Illinois. Seated next to Judge Holmes is Mr. Paul M. Elvig. He is the former president of the International Cemetery, Cremation and Funeral Association, and seated next to Mr. Elvig is Mr. Randall L. Earl who was also mentioned previously. He comes from the State of Illinois and he is the treasurer of the National Funeral Directors Association and he is the owner of the funeral home, Brintlinger and Earl Funeral Homes, in Decatur, Illinois. Again, I want to welcome you and it is the customary practice of this committee that you be sworn in. Would you please stand and raise your right hand. [Witnesses sworn.] Mr. Rush. Let the record indicate that the witnesses have all answered in the affirmative. And now we will ask that you present this committee with your opening statements and you are recognized for 5 minutes for that purpose, and I will start with Mr. Harwood. You are recognized for 5 minutes for the purposes of opening statements. TESTIMONY OF CHUCK HARWOOD, DEPUTY DIRECTOR, BUREAU OF CONSUMER PROTECTION, FEDERAL TRADE COMMISSION; THE HONORABLE PATRICIA BROWN HOLMES (RET.), CHAIR, ILLINOIS CEMETERY OVERSIGHT TASK FORCE, PARTNER, SCHIFF HARDIN LLP; PAUL M. ELVIG, FORMER PRESIDENT, INTERNATIONAL CEMETERY, CREMATION AND FUNERAL ASSOCIATION; AND RANDALL L. EARL, TREASURER, NATIONAL FUNERAL DIRECTORS ASSOCIATION, OWNER, BRINTLINGER AND EARL FUNERAL HOMES TESTIMONY OF CHUCK HARWOOD Mr. Harwood. Thank you, Mr. Chairman, and members of the subcommittee. My name is Charles Harwood. I am the deputy director of the Federal Trade Commission's Bureau of Consumer Protection. The Federal Trade Commission extends our condolences as we did last summer, to the families affected by the awful events at Burr Oak Cemetery. And, Mr. Chairman and members of the subcommittee, we hope your efforts and the efforts of the agencies and organizations in Illinois that have responded to this tragedy have provided some comfort for the many families who are affected by this tragedy. Given the horrific events that took place at Burr Oak Cemetery which were examined at the subcommittee's hearing last summer which I had the pleasure to attend, we appreciate the opportunity to discuss H.R. 3655. The Commission's formal views were presented in its written submission. My oral statement and responses to any questions are my views and not necessarily the views of the Commission or individual commissioners. H.R. 3655 seeks to provide more effective consumer protection against fraud and abusive practices in connection with the provision of funeral goods and funeral services. The Federal Trade Commission fully supports these goals and we appreciate the subcommittee's leadership in this area. The Commission's testimony highlights some important, specific aspects of H.R. 3655. First, the Commission's Funeral Rule currently applies primarily to funeral homes. H.R. 3655 would expand the Commission's jurisdiction in this area to cover not-for-profit entities and specifically cemeteries. Second, H.R. 3655 would apply new disclosure rules to all such cemeteries and also to third-party retailers of funeral goods. Third, in connection with prepaid funeral and burial contracts, H.R. 3655 would require new disclosures of fees and costs among other things. Finally, the bill would give the Commission APA rulemaking authority to promulgate rules to implement the bill's requirements. To that end, H.R. 3655 would direct the Commission to conduct a rulemaking within 1 year of enactment to extend the key consumer protections in the Commission's Funeral Rule to cemeteries, crematories and retailers of caskets, urns, monuments and markers. Because the authority contained in the bill includes non-profit members of the funeral industry, the rule promulgated under the bill would reach the vast majority of cemeteries whether they are for- profit or not-for-profit, including not-for-profit cemeteries owned or operated by religious organizations, States or municipalities. In contrast, the current FTC Funeral Rule concerns primarily funeral homes which are mostly for-profit entities. It does not reach non-profits. The Federal Trade Commission Act under which the original Funeral Rule and subsequent Funeral Rule was promulgated, generally excludes not-for-profit companies from the Commission's consumer protection jurisdiction. The proposed expansion of jurisdiction provided by H.R. 3655 would enable the Commission to reach many more members of the funeral industry. This expanded authority coupled with H.R. 3655's new disclosure and record-keeping requirements makes new consumer protection tools available to the FTC and to State enforcers. Finally, as highlighted in the Commission's written testimony, a number of years ago the FTC committed itself to improving compliance with the funerals cost disclosure provisions and during questioning, I would be glad to talk more about that. But ensuring similar compliance with H.R. 3655 by several thousand newly covered entities will require a commitment of FTC resources. Making available new resources will permit the FTC to continue other consumer protection initiatives while also ensuring that we can effectively implement and enforce the requirements of H.R. 3655. Thank you, Mr. Chairman. [The prepared statement of Mr. Harwood follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Mr. Rush. The chair now recognizes Judge Brown Holmes and Judge, you are recognized for 5 minutes for the purposes of opening statements. TESTIMONY OF PATRICIA BROWN HOLMES Ms. Holmes. Thank you, Mr. Chairman and members of the subcommittee, for the opportunity to be here today to testify about the findings and recommendations of the Illinois Cemetery Oversight Task Force. I am Retired Judge Patricia Brown Holmes, the chairperson of that task force, and I appear here today in my capacity as a private citizen because the task force is no longer in effect because the legislation was passed. Mr. Chairman, all of us expect that our loved ones will be treated with the same dignity and respect in death as in life and many of us believe that the protection of those rights is a duty and a responsibility that is properly entrusted to our Government. That is why the citizens of the State of Illinois were shocked in July, 2009, when we learned of the horrific events taking place in historic Burr Oak Cemetery in Alsip, Illinois, a place where Emmett Till, Dinah Washington, and Ezra Charles were buried along with my father. According to reports that appeared in print and broadcast media, it was alleged that workers at the Burr Oak Cemetery had over a period of several years, unearthed hundreds of corpses and then dumped them in the weeds in the cemetery or double- stacked them in existing graves. The empty burial plots were then allegedly resold to members of the public who had no knowledge that the graves were being reused. On July 16, in the wake of these appalling reports, Governor Quinn signed an executive order forming the Cemetery Oversight Task Force and appointed me chair along with 11 other blue ribbon panel members. Our task was to examine the circumstances surrounding the Burr Oak Cemetery fiasco and to attempt to conduct a comprehensive review of pertinent Illinois laws and the laws of other States to recommend policies, laws, rules and regulations that should be implemented to ensure the respectful and humane treatment of the deceased, and to essentially recommend legislation to better protect and serve the people of the State of Illinois. The testimony and evidence presented to our task force during the 2 months of hearings was shocking. It revealed a systemic failure of oversight and regulation of the cemetery industry in our State. The task force concluded that although there were a number of laws in Illinois that did address various aspects of the death care industry, a regulatory disjunction existed with respect to the operation and management of cemeteries. The task force concluded that there was a direct connection between the hodgepodge of regulations governing the death care industry and a lack of regulatory oversight that contributed to the deteriorated condition of Burr Oak Cemetery and other cemeteries, circumstances that allowed the alleged activity to flourish. With an eye towards assuring that this historic event did not repeat itself, the report issued by our task force on September 15 set forth three primary recommendations. First, we recommended that regulatory authority over the funeral and burial practices be consolidated into one department, in our case, the Department of Financial and Professional Regulation which, in Illinois, currently licenses more than one million professionals in nearly 100 industries. Second, our task force recommended that legislation be adopted requiring cemetery management operations to be treated as a profession and that only qualified persons be authorized to own, operate, or work in the cemetery in our State based on our finding that the practice of cemetery management and operation affects the public health safety and wellbeing of our citizens. Third, we recommended that our General Assembly amend and consolidate various statutes for the purpose of first, creating a uniform system of oversight and regulation, second, strengthening the licensing and regulatory requirements in those statutes and third, creating new consumer protections. With the passage and signing of the Cemetery Oversight Act on January 17, Illinois now has a comprehensive regulatory framework making it a national model for cemetery oversight, establishing new and stricter standards for the care and operation of cemeteries. For example, the Act requires licensure for private, non-religious cemeteries, the creation of a consumer bill of rights protecting consumers purchasing burial merchandise and services, and the establishment of a statewide data base that will help future generations locate the remains of a loved one. The new Act also prohibits cemeteries from requiring cash payment for services and merchandise. It establishes protections for whistleblowers and it creates a cemetery relief fund to assist abandoned and neglected cemeteries. I am very privileged to have participated in the passage of that landmark legislation which is an example of our democratic process at its best. We look forward to your bill, Mr. Chairman, and hope that it will complement the State's bill and I will answer further questions at the conclusion. Thank you. [The prepared statement of Ms. Holmes follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Ms. Schakowsky [presiding]. Thank you. Mr. Elvig. TESTIMONY OF PAUL M. ELVIG Mr. Elvig. My name is Paul Elvig and I am with the International Cemetery Cremation and Funeral Association. I am also past president of the National Cemetery Regulators Association many years ago. I would like to thank the chairman, the vice chair and all members of this committee for the interest you have taken, keen interest you have taken in what is no doubt one of the most outrageous acts most of us have heard in our lifetime. I have been around this business, if you will call it that, for the last 40 years and as a regulator I have looked into consumer complaints from misspelled markers on tombstones to the sexual molestation of the dead by a very sick person. I share that to show you that there are many, many aspects of potential crime, if you will, against the dead. Our association, the ICCFA is proud to call ourselves the guardian of Americans' heritage. We think your interest is showing your interest in being a guardian of our heritage in this country. We are concerned and we don't oppose this bill. We support the concepts but we certainly are concerned about unintended consequences and that is obviously something we always have to look at when we talk about new legislation. There are thousands upon thousands of cemeteries in this country that are run by volunteer organizations, church organizations, community clubs, grange halls, you name it, that are running on frankly just nickels and dimes and donations. And as we would look at possibly imposing upon those cemeteries the guidelines, for example, that the FTC presently has for funeral homes, we are talking about increased cost of operation that could very well bankrupt already a very shoestring industry if you want to call it that. Our state regulator in Washington State just shared with several of us on our legislative committee that he has had a cemetery come into his office, one of these ones I mentioned, and put the keys on his table and say we are through. We can't run this cemetery. Who does? And so we would urge that as we would look at legislation, as we would look at regulation, we be certain that we not break the backs of many organizations who have already been hurt by the cremation increase in this country and who are seeing their revenue sources literally dry up. That is a major concern to us. We have enjoyed in the past working with the FTC and have participated in hearings and have offered our evidence but one thing I want to mention under the FOIA request we made with the FTC, we found that there were 1.2 million complaints filed with them on every subject from computer network fraud to you name it. But out of that there were only 241 complaints, that is out of 1.2 million, there were 241 complaints about funeral homes and cemeteries and the cemeteries represented even a small fraction of that. That was less than two tenths of one percent and so as we look to correct problems, we ask that we keep that perspective in mind as to how broad are these problems. Now, having served as the president of the National Cemetery Regulators, I have had the privilege of reviewing State law and it varies considerably. It varies by the State. It varies by the issues a State's faced whether it be a cemetery that is situated in a desert scene where there is not normal dirt to make burial, to cemeteries in Hawaii, to cemeteries in Vermont that have hundreds of years of history. And so having reviewed State law nationwide, I want to say that what we are seeing in State statute is custom statute to fit a custom situation. So when we do hear about scandals that happened right in your State, right in Illinois, the outrage there, these folks went to work and they did their job. They introduced State legislation to address that issue in that particular community under those particular circumstances and so we strongly favor the concept that States ought to continue in their role of regulating and we certainly don't want to see States read into any action from this committee as saying it has all been handled. That is a concern. It really is a concern. Having been a bureaucrat and in State government, I know how easy it is to say somebody else is handling the problem. I want to conclude by saying this--that there is something not mentioned in this bill that I would beg you to consider and that would be to federally criminalize the illegal disruption of a human dead body that has been buried or brought to a crematory. That is such an outrage there ought to be a Federal law against it. There is when we look at veterans cemeteries. We have veterans buried in non-veteran cemeteries who aren't protected that way and so I would urge that as you refine this bill that you look at criminalizing and putting away these, I won't use words I want to call them, those who would disturb the dead that are lying in peace. We can't let that outrage exist and I ask your help in that. Thank you so much. [The prepared statement of Mr. Elvig follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Mr. Rush. Thank you. The chair now recognizes Mr. Earl for 5 minutes. TESTIMONY OF RANDALL L. EARL Mr. Earl. Mr. Chairman and members of the subcommittee, thank you very much for the opportunity to present the view of the National Funeral Directors Association on H.R. 3655. I am Randall L. Earl, a licensed funeral director from Decatur, Illinois and have been practicing my profession for 40 years. I own and operate the 125 year old Brintlinger and Earl Funeral Home in Decatur and serve Burr Oak as well as B and E Crematory in also Decatur. We have nine full-time employees and seven part-time employees. We perform approximately 400 funerals a year. I am appearing here today in my capacity as an elected official of the National Funeral Directors Association. NFDA is the leading funeral service organization in the United States and provides the national voice for the funeral service profession. One of NFDA's missions is to safeguard the trust and integrity of the funeral profession. In that regard, we strongly support H.R. 3655 and the intent in which it was proposed. However, before I discuss the specifics of H.R. 3655, I think it would be helpful to your deliberations to provide some background on our experience with the FTC rule. NFDA and its members today strongly support retention of the FTC rule as the uniform standard for funeral homes as well as a rule that protects consumers served by funeral homes. Since the rule was enacted, the marketplace for funeral and burial goods and services has changed dramatically. With the introduction of many non-traditional sellers, most recently for example, Wal-Mart and Amazon.com began selling caskets directly to consumers. When consumers do business with these non- traditional providers they see none of the protections afforded by the FTC rule when they purchase the same goods from funeral homes. It is therefore necessary in our judgment to establish a separate rule as outlined in H.R. 3655. We believe the rule which is enforced by FTC has benefited consumers by providing basic protections and safeguards to consumers who do business with funeral homes. We also believe that the Funeral Rule has benefited funeral providers. Many NFDA members have reported that the rule has made them better businessmen and women by helping them explain to consumers the cost of all different components of a funeral thereby giving families a greater understanding of the cost involved. In addition, to maintain compliance levels funeral homes now offer continuous staff training and education that reinforces the professionalism of the funeral home staff. As evidenced by the scandals at Burr Oak Cemetery, Menorah Gardens Cemetery, Tri- State Crematory and many other incidents, there is no question that consumers are being injured because cemeteries and other sellers of funeral or burial goods or services are not subject to uniform Federal standards or a haphazard and inconsistent set of State laws. As a result, NFDA strongly supports H.R. 3655 which requires the FTC to establish a Federal rule that applies the same or similar disclosures and standards of practice provided under the Funeral Rule to all sellers of funeral or burial goods or services not now covered by the rule. We are particularly supportive of the inclusion of all non-profit and religious organizations as well as State and local political subdivisions. We strongly believe that consumers should enjoy the same protections regardless of where or whom they purchase funeral or burial services. In conclusion, Mr. Chairman and members of the subcommittee, NFDA believes this bill outlines for the FTC a rule that NFDA has long argued was necessary given the dramatically changed marketplace and the rise of new and non- traditional sellers who now offer consumers many of the same funeral or burial goods or services provided by funeral homes but without protections afforded by the Funeral Rule. While H.R. 3655 does impose some modest requirements on funeral homes, we believe them to be appropriate and consistent with our policy. Finally, while we understand this rule might not have prevented the widely reported scandals that occurred at Burr Oak, Menorah Garden Cemetery or the Tri-State Crematory, NFDA believes H.R. 3655 will raise the bar for everyone and correct many of the existing problems that led to those situations. As we know, after 26 years under the FTC rule we are better funeral directors for the experience and have a much greater awareness that good consumer practices are good business practices as well. Thank you for the opportunity to present the views of the National Funeral Directors Association on this very important legislation. I will be happy to answer any questions you might have. [The prepared statement of Mr. Earl follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Mr. Rush. The chair thanks all of the witnesses for their opening statement and the chair now recognizes himself for 5 minutes for the purposes of asking questions of the witnesses. The chair wants to thank at this point the Funeral Consumers Alliance, AARP and the National Funeral Directors Association, NFDA, for their support of this legislation. I want to start by questioning Mr. Harwood. Mr. Harwood, in your testimony you expressed some sound supports of provisions of this legislation that expands the FTC's authority to include non-profit, municipal and religious cemeteries. Why do you think this provision is seen as so essential to this bill? Mr. Harwood. Mr. Chairman, currently the cemetery industry consists of both for-profit entities and not-for-profit entities. In our experience, a majority of cemeteries are not- for-profit and the numbers vary but, you know, there are many thousands of not-for-profit cemeteries. Some are owned by cities and counties. Some are owned by religious organizations. Some are associated with other entities. The FTC's legislation, the FTC law wouldn't currently reach those entities because we have no jurisdiction under our consumer protection authority over not-for-profit entities. When we looked at this issue last in 2008 and discussed whether we should consider extending some of the Funeral Rule provisions to the cemetery industry, we concluded that doing so would create an odd regulatory situation because the regulation only reached some cemeteries and left out a majority of the cemeteries that would otherwise be affected. Secondly, we were concerned that consumers would be confused if some cemeteries were covered and other cemeteries were not. Your legislation addresses that concern by making all cemeteries subject or potentially subject to the same regulation. Mr. Rush. Judge Holmes, this provision of and inclusion of the for-profits, and not-for-profits, and municipal and religious cemeteries, and do you have, did you discuss this provision in the topic and this provision addresses? Did you have the opportunity to discuss that in your deliberations? Ms. Holmes. Yes, Mr. Chairman, we did and the solution that the bill came up with which I think is a great solution, religious cemeteries, public cemeteries and cemeteries that have fewer than 25 burials in the past 2 years are what is called partially exempt. So while they may not have to acquire licenses for their individual workers, they do still have to comply with various portions of the Cemetery Oversight Act, those portions that would be consumer-related. They have to reasonably maintain the cemetery property. They must comply with the mapping of their cemetery. They must keep an index. They must submit to periodic inspection of the cemetery. They must submit to the Consumer Bill of Rights so they must follow all of the Consumer Bill of Rights although they don't have to comply with the licensure rules that the for-profit cemeteries would have to comply with. So we thought that was a really good compromise. Mr. Rush. Thank you. Mr. Elvig, in your testimony you raised some concerns about this provision along the lines of constitution and jurisdictional concerns. What is your position? Do you agree with Mr. Harwood or do you have another position? Mr. Elvig. Well, my position would be different. Our position would be different from an angle and that is that when you start talking about municipal cemeteries or religious cemeteries, and religious cemeteries can be the gamut from Muslim cemeteries, Jewish, Catholic to Protestant, a variety of religious cemeteries, we are talking about certain constitutional protections as to how much you can regulate and what success you may have in the courts in trying to prosecute in those cemeteries. And so our concern is that as one moves through the subject of municipal and religious cemeteries, what constitutionality you may have. Could a Federal Trade Commission rule honestly be imposed upon the City of Los Angeles if it operated a cemetery, for say. I am dealing with a cemetery in Florida that it is publicly operated right now that is in a court case. How much jurisdiction can really be held over that Florida cemetery? So our concerns are there and it would seem to me that there would a lot of homework necessary and for that reason we would think that if the FTC was to adopt a rule they should adopt it for cemeteries and not a combined one of funerals and cemeteries. Mr. Rush. Thank you. The chair's time has expired. The chair now recognizes Mr. Whitfield for 5 minutes. Mr. Whitfield. Well, I want to thank the panel for your testimony today. We genuinely appreciate your taking time to do so. Judge Brown Holmes, you may be the most objective person here today because you are not a regulator and you are not in the business, and you spent a lot of time looking into this subject matter. And it sounds like to me that you all have been quite successful in addressing the problem in Illinois, and I am sure you have not looked at other States or maybe you have to a degree but just from your perspective, do you feel like that a Federal law would be helpful to address some of these concerns nationwide? Ms. Holmes. You know, it is a good question and I have thought about that, and I actually do think that a Federal law could serve to preempt in States that don't have regulations right now. The kind of disaster that we had in Illinois had there been a Federal law that required consumer protection, this may not have happened but we had nothing. We had a very disjointed system in our State and so it was the tragedy that brought about the need to get in and do the regulation. Quite possibly if the Federal government said to States do something about this or here is the rule. The rule must be complied with and there is authority with the FTC utilizing these State attorneys general, the state attorneys general could then get in and make certain that this type of thing did not happen in those States where there is no regulation. We did look at some States and what we found is that it was the tragedy that then brought about the need for the rule and regulation. I think if we get in and have the rule and regulation in the beginning, possibly it stops the tragedy. Mr. Whitfield. Unfortunately, I have not had the opportunity to read 3655 but I note generally and understanding the chairman's reputation of always having good legislation except maybe on occasion, I am sure this is an effective bill but you seem to be saying that preemption would be important because a lot of these States do have different rules and regulations and I don't believe this bill has Federal preemption, does it? Ms. Holmes. No, no, no, what I mean is the Funeral Rule prior to the 1984 Act established particular rules. The funeral industry has changed as a result of it. There is an opportunity for States to opt out if their regulation is better than the Funeral Rule so it puts that in the forefront of the minds of the funeral industry. The cemetery industry, however I think for some reason what it appears to us has been parsed out. I am not certain why. We didn't investigate why that is but it appears to me and from all of the individuals who testified before us the average consumer joins the funeral director and the cemetery. They don't look at them as a separate entity, a separate business, a separate industry; but what we found and learned is that they are, and it appeared to us to be, sort of unusual. One portion of that industry is very heavily regulated and the portion of the industry that is basically almost in perpetuity is not regulated. And so it would seem to me that if there are some regulations particularly given that it is at that back end that there seems to be the most abuse that it would be extremely helpful in drawing attention to the issue and preventing this from occurring. Mr. Whitfield. OK. Mr. Harwood, someone in their testimony brought up this issue of non-profits and in some instances States or municipalities are operating cemeteries, for example. Can the FTC assess civil penalties on another governmental entity for violations? Mr. Harwood. My understanding and I may have to correct this, but my current understanding is that where a municipality functions in a role that would be a businesslike role that we have the authority to assess civil penalties in those situations. It is not exercised often. It is obviously not good for intergovernmental relations but the authority does exist where necessary to do so. Mr. Whitfield. OK, so you can do so then? Mr. Harwood. Yes, that is my understanding. Mr. Whitfield. Now, the Funeral Rule that was adopted by the FTC was that required by statute or did you all just do that under self initiation? Mr. Harwood. The Funeral Rule dates from 1974 and it was actually initiated, well '72 actually, it was actually initiated by the FTC under its rulemaking authority called the Magnus Moss Act rulemaking authority so it was actually initiated by the FTC. Mr. Whitfield. And would your current regulations give you any authority over the incident that happened in Illinois at that cemetery? Mr. Harwood. Well, my understanding is that cemetery was not a not-for-profit cemetery so to that extent our authority would reach the cemetery. The funeral itself doesn't contain provisions currently that would have addressed the conduct that we are concerned about there, the exhuming of bodies and those sorts of things. Mr. Whitfield. OK. Well, thank you. I see my time has expired, Mr. Chairman. Mr. Rush. The chair recognizes the gentlelady from Illinois, Ms. Schakowsky, for 2 minutes. Ms. Schakowsky. Thank you, Mr. Chairman. Mr. Earl, do you find what Ms. Brown Holmes has said that people see the whole funeral and burial process as one and I wonder if you could describe how that impacts you if there is some things that go on at the cemetery level? Mr. Earl. Well, I smiled when Judge Holmes said what she did because that is absolutely true. Any time there is a situation with a crematory, a cemetery, it doesn't matter what it is we were the first to be called. National Funeral Directors Association was the first to be called when all of these situations have happened and occurred because everyone turns to their funeral director when they have this problem. Consumers look to us as funeral directors to solve problems. That is what we do and when they call upon us they want us to take care of one of the biggest problems they have ever had in their life. And when I in my testimony as I am testifying the third-party sellers and all these things that we have today did not occur in 1984 when the rule was put into place, and so we have a different world out there today to deal with, and that is why we feel so strongly that the rules have to be changed. They have to be changed to protect the consumer. The funeral homes have complied. I mean you have heard the testimony here today. The funeral homes have complied with the rule and it has helped the profession as a whole but in order to protect the consumer of today we have to have new laws to prevent some of the things that are happening today. Ms. Schakowsky. I just have a few seconds. Mr. Chairman, can I ask one more question? Mr. Rush. Sure. Ms. Schakowsky. OK, it seems as if one of the most basic responsibilities of a cemetery is to keep clear and orderly records that reflect who is buried there. Families have to be able to find their loved ones. Mr. Elvig, you were saying that someone turned in the keys and said as a small cemetery they could not comply with any stricter rules. Is it really too much to ask that even for a small cemetery that they keep good, retain the records and that they respond to these consumer protections? Mr. Elvig. Congresswoman, not at all, that is not too much to ask. As a matter of fact, small, large and middle-size cemeteries they have to rely on quality records to know what they can even sell and what they can use, where they can put markers. Recordkeeping in cemeteries are not separable. Good records are very critical. I have urged cemeteries and we are seeing an interesting trend as they convert to electronic record systems, mapping systems, card file systems, we have asked cemeteries across this country to consider giving their old records that were written in pen and ink on cards to archives, the State archives and the likes for research but cemeteries need accurate records. Ms. Schakowsky. All right, so what is it that a small, not- for-profit cemetery thinks they could not comply with if we were to change the rules and cover them? Mr. Elvig. For example, when you look at the Federal Trade Commission's present rules on funeral homes, on price lists, on disclosures, on the types of rule they have it would impose-- just asking a small volunteer cemetery to come up with a written price list for all of the varieties of graves and markers and vaults and liners and urns that are available you are talking about a cost, and yet if you are only burying 35 people a year you are talking about a burden on those cemeteries. I know I have been in them. I have audited them. I watch them close. Ms. Schakowsky. Thank you. Mr. Rush. The chair now recognizes the gentleman from Georgia, Dr. Gingrey, for 2 minutes for the purposes of opening statement. Mr. Gingrey. Mr. Chairman, I thank you. I have to admit I came here this morning out of respect for my chairman and my ranking member and to make an opening statement and then hopefully to catch up on my e-mails but quite honestly this panel is fantastic. Each and every one of you has done a wonderful job and I have been so interested I haven't even been able to look at my e-mails. So I am going to ask my question of Judge Holmes. Judge Holmes, I don't know if you ever heard of Lewis Grizzard. Of course, we are talking about the crematory up in Georgia close to my district but I mention Lewis Grizzard. He was a humorist from Georgia, a columnist for many years for the Atlanta Journal Constitution and he spent some of his career in Chicago and then came back to the great State of Georgia. He died a number of years ago far too young but Lewis Grizzard said that nothing good comes out of Illinois and particularly nothing good comes out of Chicago. He didn't have the opportunity to meet Judge Holmes, obviously and based on your testimony I think that he would have liked you very much. Let me direct my question to you. You mentioned that duplicative and overlapping regulations for funeral products cause confusion amongst consumers in Illinois. It was an issue your task force addressed. Do you have concerns that duplicative regulation by the State and the Federal Government could cause similar confusion? Ms. Holmes. No, I don't because the way I read the House bill, I actually thought it was excellent, very concise, to the point, very consumer-friendly, very consumer-oriented, and I read our bill and they mesh together very well. Ours is a little more stringent, I think, and so I would like the opportunity if I were the State I would say well, I would like the opportunity to implement our rules and regulations because they are stricter but if I were a State that had no rules or regulations or if I were one of the States that had a hodgepodge of rules that don't really get to the issue and the Federal Government said to me do something about this, then fine, let's do something about this. I have a friend, and it sort of goes to Congressman Schakowsky's question regarding the small funeral home, she--her family owns the South View Cemetery in Georgia, in Atlanta, Georgia, very small, owned by a small family. It is the funeral, cemetery, I am sorry, it is the cemetery where Martin Luther King was buried before his body was exhumed and taken to their foundation, and she runs that cemetery tremendously. She has rules. She has regulations. She gives price lists. She follows a set of rules that she has imposed, her family has imposed on themselves and it is a beautiful cemetery, and she does it with very little money. So it can be done and the way we view this House bill, the way I view this House bill, it is not asking you to do anything that you ought not do anyway if you have good conscience and good ethics. And I think that if it is imposed on the States to do this, if the Federal Government either says here is a baseline, you can go beyond the baseline, I think that gets us to a point where the States do something and we don't have to chase the tragedy. Mr. Gingrey. Thank you very much. Mr. Chairman, thank you for your indulgence and I really appreciate the testimony of all the witnesses. I yield back. Mr. Rush. The chair thanks the gentleman. The chair now recognizes Mr. Stupak for 2 minutes for the purposes of questioning the witnesses. Mr. Stupak. Thank you, Mr. Chairman. Thanks for holding this hearing. Let me ask Ms. Holmes and Mr. Earl this question if I may. Regulation of prepaid funeral and cemetery contracts in Michigan was enacted in 1986. Michigan law regulates the sale and provision of certain funeral and cemetery merchandise and services including prepaid funerals. All prepaid funeral money must be placed in a State-regulated escrow account by the funeral providers so that it is available when the funeral occurs. Even with these regulations in 2009, there were plenty of scams if you will, concerning prepaid funerals in Michigan. How would this bill address the growing problem of prepaid funeral arrangements that are invalidated, renegotiated after the death or altered in a way to mislead the customer? Mr. Earl and Ms. Holmes or anyone else, Mr. Elvig. Mr. Earl. I will address it to a certain extent. This House rule would not pertain to pre-need funerals at all. Mr. Stupak. So even if the money is in escrow there still is--we are still going to have problems even underneath this bill? And we have people that just embezzled the escrow money and people died and the money was gone and we were caught up in the one. We had 70 funerals. Mr. Earl. The bill would not address that. You are correct. Mr. Stupak. OK, so OK. Ms. Holmes. And our task force did not address pre-need because there was another task force that was investigating pre-need but I do think you have hit on another aspect that does need to be covered. Mr. Stupak. OK, Mr. Elvig. Mr. Elvig. If I could comment. Mr. Stupak. Sure. Mr. Elvig. I have been a regulator and an auditor. It is very difficult to address because of so many facets to pre- need. For example, divorce, people remarrying and not addressing their pre-needs in divorce, cemeteries being dragged in and saying OK, now you settle it 20 years later on who gets to use what. It really comes right back to what does a State agency do. How does a State regulate unique to its State and that is why we have taken the stand that the States probably are in the best position to regulate like Michigan. Mr. Stupak. Sure, but then now with the Internet, you know, you are seeing more and more of this on the Internet. The marketplace for funeral goods and services has really changed with the Internet and more businesses are selling their products on the Internet so even if we do have local rules like Michigan, I mean you still have those scams but I think the Internet has made it easier to bring more uncertainty to this area where when people prepay or see a director they think there is some certainty other than death that they are dealing with here. Mr. Elvig. That is correct, sir. Mr. Stupak. So how do we deal with that, I guess we still go back. Mr. Elvig. I think that first off you have made a very good point and the other good thing by the way about the Internet has opened up for the consumers still more opportunities to compare shop. Mr. Stupak. Sure. Mr. Elvig. To decide what they really want and that is a concern we have that as we look at structuring rules and we look at structuring FTC rule that we don't close the door on the future that this industry will evolve in by consumer demand. Mr. Stupak. Right. Mr. Elvig. We need to listen to those who want to use the services. Well, nobody wants to use the service but when they need to use it. Mr. Stupak. Correct. Mr. Elvig. You are right on there. Mr. Stupak. OK. Mr. Rush. The gentleman's time is up. The chair now recognizes the gentleman from Louisiana, Mr. Scalise for 2 minutes. Mr. Scalise. Thank you, Mr. Chairman. Judge Holmes, in your task force's work you proposed actual legislation that was adopted in Illinois? Was it specific recommendations that you all proposed? Ms. Holmes. We didn't write the bill, no. We proposed recommendations. We made findings. We handed those findings over to our state legislature. There was Representative Monique Davis, Representative Dan Brady and several senators who worked on it. Mr. Scalise. Some legislators were part of the task force and they drafted the actual law. Ms. Holmes. So they worked on the--they drafted the actual legislation but they took our recommendations into account. Mr. Scalise. Did they take all of them? Were there any left out? Ms. Holmes. There were a couple of provisions that were left off but I am not thinking of what they are right away but they were minor in our view. They took every one of our major recommendations. Mr. Scalise. OK and I will include Mr. Elvig and Mr. Earl in this, too. As you look at the law now as it stands in Illinois and of course you all touched on the fact that there are laws in each State but you probably have 50 different variations of the law and regulation process, first, would Illinois now be considered model legislation or is there a State that has kind of a model law? And, you know, and I know in South Louisiana where the district I represent we have cemeteries that are above ground because of the water table so, in fact, many of the cemeteries are considered tourist attractions, believe it or not, and so there are different situations there. Are the laws that you see across the country, is there a model law that you would recommend or how does it work in terms of what you have seen from your research, both Judge Holmes as well as other panelists. Ms. Holmes. For our task force we reviewed several different States and we took the ones that we thought were--we took sort of the best of the best. Florida had a really good law. California had a really good law, both born from tragedy. And we consider our law now to be a model, a national model because we did take the best of the best, and we focused on consumer protection. Mr. Scalise. Gentlemen. Mr. Earl. I would just add that we look--the funeral profession looks at the FTC rule as being a standard for every State. It is a minimum standard for all funeral homes in every State. As has been mentioned, if a State has a higher standard they can opt out of the rule but we also believe that there should be the same standard for all cemeteries, all third-party sellers, some type of a standard and that is all we are asking for so that there is something. There are many States out there that have much better laws than what we are talking about but there are some that have none, zero, so that is what we are asking for in the bill that you are speaking of. Mr. Elvig. If I could just add that your comments are right spot-on again concerning the style of burials in Louisiana, above ground because of the water and your State statute addresses that, at least that is what Fran Mayo use to tell me. She was a regulator in your State. Washington State we have Mount Rainier and what do we do about scattering cremated remains in that park and on that mountain. What about the State of Montana where the grounds are frozen a good portion of the year? How do you handle burials and holding bodies for burial in frozen grounds? Issues vary State for State and that is one of the strong reasons for looking to State answers to its State issues so we would urge that that be kept in mind as you look at this bill is the uniqueness of State situation. Mr. Scalise. Thank you, Mr. Chairman. I yield back. Mr. Rush. The chair would entertain by unanimous consent extend this hearing for an additional round of questions. Each member will be allowed to ask one question of the witnesses and the chair would also like to announce that there is a vote expected in about 15 minutes so I think that one additional question should be able to give us ample time to get over to vote. The chair would recognize himself for 1 minute to ask a question of Mr. Harwood. Mr. Harwood, are you familiar with the recent sting in Massachusetts of funeral homes by State licensing investigators which has resulted in a 25 percent violation rule with respect to compliance with the FTC's Funeral Rule? My question is that is did the FTC assist Massachusetts at all in those enforcement activities and what is the state of enforcement activities at FTC now as it relates to the Funeral Rule? Mr. Harwood. Mr. Chairman, we learned of the Massachusetts sweep or sting when it was reported in the press and we did not assist the State in its enforcement sweep. That being said, we have historically worked with States that are engaged in funeral enforcement and in each of the last 3 years we worked with at least one State. For example, on the work we have done this year we worked with Tennessee. Last year we worked with Minnesota. The year before that we worked with Pennsylvania on enforcement rule. So we have a history of working with States. In the case of Massachusetts, they appear to have a law that lets them enforce the Funeral Rule without Federal involvement and that is precisely what they did here. Mr. Rush. The chair now recognizes the ranking member, Mr. Whitfield, for one additional question. Mr. Whitfield. Judge Holmes, I would like to ask you another question. Cemeteries frequently have financial difficulties on maintenance at cemeteries and I notice that you indicated that you all established a cemetery relief fund in Illinois and would you expand on that, and how did you fund that? Ms. Holmes. Well, it is my understanding right now it is not funded of course because the bill just passed but it is my understanding that it will be funded by fines that it will be started at least by fines that will be levied against individuals who may be in violation of some of the rules that will promulgated by the Illinois Department of Professional and Financial Regulations, as well as by the licensure fees. So now all cemetery owners will have to pay a small fee and what we were told is they are talking about grading the fee based on the number of burials or the size and acreage of the land, et cetera, and so having some money that I think will be the upstart for the fund. Mr. Whitfield. OK and that license, that is required of the funeral home as well as. Ms. Holmes. Yeah, the funeral directors are already required to be that. It is the cemeteries are not. Mr. Whitfield. Cemeteries. Ms. Holmes. And so the cemeteries will now be required based on whether it is private, religious, et cetera, their levels of licensure. I think religious are exempt. Mr. Whitfield. OK, thank you. Mr. Rush. Ms. Schakowsky, you are recognized for one additional question. Ms. Schakowsky. Thank you. Mr. Harwood, the legislation under consideration today would give the FTC the authority to promulgate these regulations under the standard process of the Administrative Procedures Act. How would this provision impact FTC's ability to take action in this area? Mr. Harwood. Under the FTC's current rulemaking authority which I referred to earlier as the Magnus Moss Act it takes the FTC between 3 and 10 years to promulgate a rule. In fact, the Funeral Rule took longer than that but we had--but we were in the learning curve with the Magnus Moss Act at that point. Recently, it has taken us between 3 and 10 years. Where we have been able to use the Administrative Procedures Act, the Act provided for in this rule, this legislation, we have been able to promulgate a rule in a year and so this legislation would allow us to do the same for I think here. Ms. Schakowsky. Thank you. Mr. Rush. The chair recognizes Dr. Gingrey for one additional question. Mr. Gingrey. Mr. Chairman, thank you. You know, I do have a question and it is going to be of Mr. Elvig but I just wanted to make this comment. We have all seen the horrific views of what is going on in Haiti and how they are dealing with the hundreds of thousands of the bodies of the deceased and of course they have no choice I don't think in this situation. We have all seen film clips, of course, from the Holocaust and they had a choice but, you know, it just shows you how important this subject really is. How very important this subject is that people shouldn't be re-gifted in death and that is basically what was happening in the cemetery in Illinois and even worse in the cemetery in Georgia. So I just appreciate the opportunity, Mr. Chairman, to discuss your bill and to have a hearing on it and to get the information from the experts. My question, Mr. Elvig, in your testimony you state that ICCFA believes that the funeral and cemetery industry is best regulated at the State level, not at the Federal level, yet people say and the testimony here today that some States really do not have very strict cemetery or funeral home laws. A law is made OK, but there is very little enforcement by the States, do you agree with that? Mr. Elvig. Well, unfortunately, Mr. Congressman, I don't agree with it. I have been through State laws. I have gotten to know most State regulators one-on-one. I have had them call me about issues they are facing. They do regulate. They go to where the problems are, and they respond to those problems, so I think to say that the States are not carrying their weight is not accurate nor is it adequate. This issue is Illinois, for example, was addressed at that State level and addressed quite well by the Judge and her committee. Again, they deserve to be complimented, but again, that is reacting to an event and not trying to impose nationwide. Yes, the States are regulating. Yes, the States are doing their job. ICCFA files presently are full of information that where the States are moving on various fronts. Many times they seem to be small fronts. The simple issue of what constitutes maintenance in a cemetery. You can argue about that until the cows come home. Maybe you could use some cows but eating the grass but whatever the case is you are talking about State per State issue that is unique State per State and the regulators are doing their job. Mr. Rush. That concludes the questioning portion of this hearing, and that being said the chair asks for unanimous consent for testimony of the Funeral Consumer's Alliance that their testimony be entered into the record and hearing no objection, so ordered. The chair wants to announce that the record will remain open for 2 weeks to allow subcommittee members to submit questions to the witnesses to round out the attending record, and the chair again wants to express his appreciation to the fine testimony of each and every one of you. You have contributed greatly to our deliberations and to this legislative process and we owe you our heartfelt gratitude for your experience, and your time, and your testimony. And now the chair will announce that this committee and this hearing is adjourned and thank all the members for their participation. The committee now stands adjourned. [Whereupon, at 11:30 a.m., the Subcommittee was adjourned.] [Material submitted for inclusion in the record follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]