Virginia HB 1505: Perpetual care trust funds; method of distribution.

Bill Text

Bill Tracking - 2017 session > Legislation 

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2017 SESSION

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17101195D

HOUSE BILL NO. 1505 

Offered January 11, 2017 

Prefiled December 19, 2016 

A BILL to amend and reenact �� 54.1-2322 and 54.1-2324 of the 
 Code of Virginia, relating to perpetual care trust funds; method of 
 distribution. 
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Patron-- Garrett 

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Referred to Committee on Health, Welfare and Institutions 

---------- 

Be it enacted by the General Assembly of Virginia:

1. That �� 54.1-2322 and 54.1-2324 of the Code of Virginia 
 are amended and reenacted as follows:

� 54.1-2322. Use of income from perpetual care trust fund; 
 distributions.

A. The income from the perpetual care trust fund shall be used 
 solely and exclusively for the general care, maintenance, administration, and 
 embellishment of the cemetery. Unless prior approval has been obtained from the 
 Board or a court of competent jurisdiction, the principal of the perpetual care 
 trust fund shall only be used for investment purposes.

B. A cemetery company may 
 request the trustee of a perpetual care trust fund to 
 elect the distribution of either of the following from the perpetual care trust 
 fund:

1. All net income, which 
 for purposes of this section means the collected dividends, interest, and 
 other income of the perpetual care trust fund less 
 any taxes on income, fees, commissions, and 
 costs. A distribution made under 
 this subdivision shall be referred to as 
 a "net income distribution 
 method"; or

2. An amount not to exceed 
 five percent of the fair market value of the perpetual care trust fund at the 
 close of its fiscal year preceding the 
 distribution year. A distribution made under 
 this subdivision shall be referred to as 
 a "total return distribution 
 method."

C. A 
 cemetery company may request the 
 trustee of a perpetual care trust fund to 
 convert from a net income distribution method to a total return distribution 
 method by delivering written or electronic notice to the 
 trustee. Notice of such conversions shall be 
 provided to the Board at least 90 days prior to implementation of the 
 total return distribution method. Such notices may be written 
 or electronic and shall include a copy of 
 the trust instrument, election 
 of distribution method, and 
 an investment and distribution policy pursuant to 
 subdivision D 1. In 
 the event that a distribution method is not 
 elected, distributions shall be limited to the net 
 income distribution method.

D. The 
 trustee of a perpetual care trust fund may 
 reject a cemetery company's request to elect 
 a total return distribution method. If a 
 trustee determines that election of a total 
 return distribution method is 
 proper, he shall:

1. Prior to 
 implementation of the total return distribution method, adopt a written 
 investment and distributi