    [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

                                    _____

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                        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:]

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        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:]

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        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:]

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        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:]

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        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:]

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