[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]





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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:]


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    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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