House committee substitute to the 1st edition makes the following changes.

Part I.

Amends GS 90-210.121 by changing the definition of alkaline hydrolysis so it is now defined the same as it is under GS 90-210.20, which defines the term as the technical process that reduces dead human bodies to bone fragments using heat, water, and chemical agents (was, the technical process using water, heat, and other chemicals to destroy, dissolve, or reduce human remains to simpler or essential elements).

Amends GS 90-210.123 by adding the requirement that applicants for licensure as a crematory undergo a criminal history record check, as described. Provides that refusal to consent to a criminal history record check may constitute grounds for denying the license. Requires a record check for new applicants and for those seeking instatement of licensure if the license has been expired for three or more years. Allows the use of a vendor other than the Department of Public Safety (DPS) for conducting the background check. Requires all information obtained as part of the background check to be kept privileged and confidential and specifies that it is not public record. Gives immunity to the NC Board of Funeral Service (Board) and its officers and employees, who are acting in good faith and in compliance with this statute, from civil liability for denying licensure based on information in the background check. Allows DPS to charge applicants a fee for conducting the criminal history checks. Removes the provision allowing the Board to obtain preliminary and final injunctions whenever a violation of the Article has occurred or threatens to occur. Makes clarifying changes to the new provisions concerning the Board’s ability to apply for injunctive relief.

Amends GS 90-210.125 making a change that conforms to the repeal of GS 90-210.124.

Amends GS 90-210.136 adding that only funeral establishments that hold a valid establishment permit are eligible to be a hydrolysis licensee. Also prohibits performing alkaline hydrolysis except on the physical premises of a funeral establishment with a valid establishment permit.

Adds the following new content.

Part III.

Amends GS 90-210.18A by reducing the number of members on the Board of Funeral Service (Board) appointed by the Governor upon recommendation by the NC Funeral Directors Association from four to three. Reallocates that member recommendation to the Funeral Directors and Morticians Association of NC, so it can provide three recommendations to the Governor for appointment to the Board (currently, two).  

Recodifies fifteen definitions in GS 90-210.20 (pertaining to the practice of funeral service) so that each definition is indicated by a subsection number in GS 90-210.20, rather than a subsection number letter. Applies GS 90-210.20, as amended above, to Articles 13A (Practice of Funeral Service), 13D (Preneed Funeral Funds), and 13F (Cremations) of GS Chapter 90 unless a different meaning applies. Makes technical changes. Adds new terms alkaline hydrolysis, branch establishment, embalming facility, funeral merchandise or funeral supplies, and principal funeral establishment. Modifies the definitions of chapel, dead human bodies, entry-level examination in funeral directing, and practice of funeral service.

Expands the Board’s authority so that it is also empowered to regulate and inspect chapels, crematories, and alkaline hydrolysis licensees under GS 90-210.23 (powers and duties of the Board). Allows the Board to recover costs, in addition to attorneys’ fees if the Board imposes discipline after holding a show cause hearing. Increases the cap on the amount that the Board may recover from $2,500 to $5,000. Directs the Board to set a reinspection fee by rule. Makes conforming changes.

Expands the places where a Board Inspector may conduct inspections under GS 90-210.24 (inspectors) to include visitations and memorial services.  Makes conforming changes to reflect expanded scope of Board’s authority. Makes technical changes.

Makes the following changes to GS 90-210.25, pertaining to the Board’s licensing power. Removes outdated language. Makes technical, organizational, clarifying, and conforming changes.  Increases the timespan that an applicant would have had to have obtained a passing score on the described funeral director, embalmer, or funeral service, examinations from three years to five years prior to the application. Allows an applicant to qualify for a provisional funeral director license if, in addition to meeting the other described requirements, they have five years of professional experience under the supervision of a licensed funeral service licensee. Allows persons desiring to become an embalmer, funeral director, or funeral service licensee to train under the described licensees who have been licensed to practice for a minimum of one year (was, five years).

Directs the Board to register qualified applicants as registered trainees instead of directing the secretary to issue a certificate of resident traineeship. Directs the supervising licensee to file an affidavit of competence with the Board after the resident trainee has left the proctorship, with a copy of the affidavit provided to the trainee. Provides for an affidavit form. Removes requirement that traineeship be a primary vocation of the trainee. Increases the amount of trainees that may serve under a licensee from one to two at a time.

Removes the 60-day waiting period for an applicant who has not obtained a passing score on the Board’s entrance exam to retake the exam. Caps the fee for Board-sponsored continuing education courses at $50. Requires all applicants for licensure or reinstatement of licensure if the license has been expired for three years or more, including any owner, partner, manager, member, operator, or officer of a business entity, to consent to a State and national criminal history check. Specifies that refusal to consent to the check is grounds for denial of an application. Allows the Board and applicant to consent to use of a vendor other than the Department of Public Safety (DPS) to perform the check, with the applicant to pay costs. Provides for good faith immunity to Board and its officers and employees if it denies licensure based on the applicant's criminal history check. Allows registered trainees to apply for an inactive license in the same category as their resident trainee license. Removes option for an applicant of a forfeited license to pass the NC examination for a forfeited license in order to have their license reinstated. Removes exception allowing for (1) licensees employed by a college of mortuary science to engage in the practice of funeral directing or funeral services or (2) those who are practicing funeral directing or funeral services but do not own, are not employed by or are not an agent of a licensee funeral establishment to practice if specified conditions were met.

Removes the parity requirements in education, training, and examination for an applicant licensed in another jurisdiction seeking a State license based on reciprocity. Clarifies that the applicant must have practiced in the profession for at least three consecutive years (was, three years). Requires the applicant to have paid all applicable fees before granting licensure. Removes licensure option for an out-of-state applicant who has practiced as a funeral director for at least ten years. Authorizes the Board to adopt rules to include courtesy card application procedures and the limited practice of funeral service that may be conducted with a courtesy card. Removes requirement that licensees within the funeral service profession register with the local board of health in the jurisdiction where they practice.

Removes provisions pertaining to receipt and transportation of a dead body by railway agents and related entities. Modifies transportation or removal of a dead body so that includes an embalming facility but no longer includes related facilities to those listed in the term. Prohibits any person or entity from operating or otherwise conducting a business engaged in the transportation or removal of a decedent unless a removal and transportation permit for that business has been issued by the Board and is conspicuously displayed in the removal vehicles of that business. Exempts persons licensed under the crematoria provisions of GS Chapter 90, embalmers, and funeral service licensees from the permitting requirements described under this statute. Removes the exemption for individuals who have exhibited special care and concern for the decedent. No longer requires three character references for a transportation and removal permit. Increases the fee cap for the permit application from $125 to $200 for an individual and establishes a $300 fee cap for a business permit. Removes conviction of a crime of moral turpitude and gross immorality as grounds for action on a permittee’s transportation and removal permit. Instead, allows for action upon conviction or nolo contendre plea to a felony or misdemeanor crime that indicates the permittee is unfit or incompetent to engage in removal or transportation or that the permittee has deceived or defrauded the public. Expands the reasons for Board action on a permittee’s permit to now include (1) acts or omissions indicating that the permittee is unable to engage in removal or transportation of dead human bodies with reasonable skill and safety by reason of illness, excessive use of alcohol, drugs, chemicals, or any other type, or by reason of any physical or mental abnormality; (2) acts or omissions that endanger public health; (3) acts or omissions that deceive, defraud, or harm the public while engaging in the removal or transportation of dead human bodies; and (4) failure to respond to the Board’s inquiries within a reasonable time or manner.

Allows for the manager of a funeral establishment to manage a principal funeral establishment and any branch funeral establishments and chapels registered to it within a fifty-mile radius in a straight line (currently, can only manage one funeral establishment). Tasks the manager with overseeing the daily operations of the funeral establishments and any other of the described facilities registered to the establishment. Expands the information required for a funeral establishment permit to include a list of all full-time and part-time licensees contracted by the establishment (currently, just employed). Now requires the manager to file for a funeral establishment permit, unless the establishment is operating in the 30-day window without a manager. In that case, authorizes the owner or managing officer or director of an entity owning the establishment to file for the permit. Prohibits funeral establishment permits that have been expired for six months or more from being renewed. Specifies that the 30-day deadline for a new application for a funeral establishment permit applies when there is a change in ownership due to an acquisition or sale. Describes when the death of an owner or other managing entity of the funeral establishment constitutes a change of ownership.

Removes conviction of a crime of moral turpitude and gross immorality as grounds for adverse action on a licensee’s license. Instead, allows for action upon conviction or nolo contendre plea to a felony or misdemeanor crime that indicates the permittee is unfit or incompetent to engage in removal or transportation or that the permittee has deceived or defrauded the public. Expands the reasons for adverse action on a license to now include (1) failure to adequately supervise or oversee auxiliary licensed or unlicensed staff or contractors as required by the specified laws; (2) knowingly failing to follow the lawful direction of the person or persons with right to authorize disposition of a dead human body; and (3) failure to respond to the Board’s inquiries within a reasonable time or manner. Specifies that nothing in Article 13A should be construed to alter the duties and authority of the Office of Chief Medical Examiner (was, coroner).  Expands the prohibition on taking or recovery of human tissue to crematoria. Expands the venues where the Board may seek injunctive relief to include Wake County. Provides for the Board’s reimbursement of costs and attorney's fees expended from any defendant found to have engaged in the unlicensed practice of funeral service by a court of this State.

Allows the Board to find that a criminal conviction for a sexual offense against a minor is indicative of the applicant’s lack of fitness to practice funeral service under GS 90-210.25B (persons with criminal history) (was, Board had to reject such persons). Repeals GS 90-210.26 (concerning affidavits of good moral character). Requires under GS 90-210.27A for each preparation room in a funeral establishment to also contain surgical gloves and clean smocks or gowns, identification tags, and a waste receptacle for storage of soiled linens.

Amends the triggering event for funeral establishments to be exempt from certain requirements under GS 90-210.27A(a1) so that it only applies when a funeral establishment is destroyed by certain events (currently, applies when the preparation room of a funeral establishment is destroyed). In that event, allows for the Board to grant a waiver not to exceed two years  from the requirements of GS 90-210.27A(a) (governing preparation rooms) and GS 90-210.27A(c) (requiring reposing rooms) (was, 180-day limit). Allows for further extension for up to two years from the date of loss. Authorizes a court to enter an order upon petition of the establishment and required findings granting an additional extension of up to three years after the date of loss or one year after the court order, whichever is greater. Narrows the regulations that the establishment must comply with during that time so that it is those rules and regulations imposed on funeral establishments and the funeral profession designed to protect consumers. Requires the establishment to maintain its business records at a location made known to the Board and to make those records available for inspection by the Board as specified. Allows for a provisional funeral director license to qualify as a license under the above-described waiver provisions. Requires that branch funeral establishments be registered with the Board as described. Prevents a person from owning or maintaining a branch funeral establishment or chapel outside of a radius within 50 miles in a straight line from the funeral establishment (currently, no straight line requirement). Prevents a licensee from using a chapel for the described secondary uses including selling funeral merchandise to the public. Removes prohibition on a funeral establishment using an unregistered name. Expands the types of misleading names to include “crematory center.” Modifies the conditions when using "crematory," "crematorium," or "crematory center" would be misleading to now include when the funeral establishment does not share a facility or other contiguous real property with a crematory licensee (was, doesn’t own a crematory). Includes owners of more than one chapel as those persons who may use the terms "crematory," "crematorium," or "crematory center" in its name if the there is a crematory license on the premises. Provides for temperature levels as part of the cooling requirements for deceased bodies (currently, covers embalmed human remains and no specificity on temperatures).

Expands the fee schedule set forth in GS 90-210.28 to cover branch funeral establishments. Instead of requiring the Board to provide copies of its rules and governing statutes to the applicants for licensure, directs the Board to publish the current statutes and rules related to the practice of funeral service on its website. Expands the identification requirements in GS 90-210.29A to licensees under Article 13F of GS Chapter 90 and authorized representatives of the described licensees. Requires the licensee or representative thereof to place an identification tag upon the body upon taking physical custody of the body. Makes technical and clarifying changes.

Specifies that the listed Board records in GS 90-210.29B relating to investigation of its licensees are also not subject to discovery, subpoena, or other means of legal compulsion for release to any person other than the Board, its employees, or consultants involved in the application for license, assessment, or discipline of a license holder (currently, just nonpublic records). Makes clarifying changes to the description of those records. Expands the type of Board actions tied to those records to include inquiries or assessments conducted in connection with a licensing, complain, or disciplinary matter. 

Part IV.

Amends Article 13D, Preneed Funeral Funds, as follows.

Amend GS 90-210.60, which sets out definitions that apply to the Article as follows. Adds and defines the term cash advance item as any item obtained from a third party and paid for by the funeral provider on the purchaser's behalf; sets out items that may be included. Amends the definitions of preneed funeral contract and preneed funeral funds by excluding from the terms the furnishing of outer burial containers, or pre-installed interment receptacle sold by a cemetery that is regulated by the Cemetery Commission. Makes technical changes.

Amends GS 90-210.61 to allow funds deposited in trust under a revocable or irrevocable preneed funeral contract (was, under a revocable standard preneed funeral contract) to be withdrawn and used to purchase a pre-arrangement insurance policy. Specifies that this should not be construed to permit the revocation of an irrevocable preneed funeral contract and all funds withdrawn from the trust must be applied to the purchase of a pre-arrangement insurance policy (was, no funds deposited in trust in a financial institution can be withdrawn by the trustee to purchase a pre-arrangement insurance policy, except as provided in this provision).

Amends GS 90-210.62 adding that a person purchasing a preneed funeral contract may specify in writing religious practices that conflict with this Article and Articles 13A (Practice of Funeral Service) or 13F (Cremations) of GS Chapter 90. Requires the preneed licensee to observe those religious practices except where they interfere with cremation or the required documentation and record keeping.

Amends GS 90-210.63 concerning substitution of a different funeral establishment when a preneed funeral contract is irrevocable, as follows. Requires when a preneed funeral contract is funded by a trust deposit that the financial institution pay the funds to the successor preneed licensee (was, pay funds to the original contracting preneed licensee who was to then immediately pay the funds to the successor). Makes conforming changes. Provides that the successor preneed licensee is to deposit all of the funds in a trust or insurance product (was, in a financial institution if the preneed funeral contract beneficiary is still alive); no longer states that the specified provisions of the statute must not be construed to allow the use of the transferred funds to purchase a prearrangement insurance policy.

Amends GS 90-210.64 making conforming changes and specifying that the impacted licensee is the performing preneed licensee (including changing references to a contracting preneed licensee to performing preneed licensee). Adds the requirement that the performing preneed licensee give the contracting preneed licensee a copy of the certificate of performance at the same time it is submitted to the Board on or before 10 days of payment.

Amends GS 90-210.67 prohibiting the renewal of preneed funeral establishment permits that are expired six months or more and requires reapplying for licensure. Specifies that the Board may extend the bond requirement for a new preneed establishment license or for a license that has lapsed or been terminated, beyond five years if there is a claim paid from the bond. Clarifies that the late fees apply after February 1 (was, on or after).

Amends GS 90-210.68 amending the content of the preneed licensee’s annual pretor so that it is on the preneed funeral contract sales during the previous calendar year, including the total number, status, and type of each preneed contract for which the preneed licensee serves as trustee, the total year-end balance of each contact, and the status of each preneed contract. Requires, when a preneed licensee transfers or assigns its assets or stock to a successor funeral establishment, that the successor funeral establishment be in good standing with the Board (in addition to being a preneed licensee) in order to avoid having to apply for a license. Amends disclosure requirements to now require financial institutions accepting preneed funeral trust funds and, for any insurance policy naming a funeral establishment as an assignee or beneficiary, that the issuing or underwriting insurance company, upon request of the Board or its inspectors, to disclose information on the preneed funeral trust accounts or any insurance policy that names a funeral establishment as an assignee or beneficiary. Requires financial institutions accepting preneed funeral trust funds and, for any insurance policy naming a funeral establishment an assignee or beneficiary, for the insurance company to also forward the account balance or policy status and current death benefit to the contracting preneed funeral establishment or the funeral establishment named as an assignee or beneficiary at the end of the year. Requires when a license lapses or is terminated that the preneed licensee transfer unperformed contracts and retained amounts to a successor preneed funeral establishment licensee that is in good standing with the Board. Requires notifying the Board 30 days before the transfer and requires notice to contract purchasers and financial institutions housing funds or issuing the issuing or underwriting insurance company within 30 days after the transfer.  

Amends GS 90-210.69 as follows. Allows the Board, when necessary to protect the interest of a preneed contract purchasers or beneficiary, to issue a written order directing the preneed funds of any preneed licensee on deposit in any institution or organization and operating under this Article be frozen and not paid out. Provides immunity to a legal entity freezing the preneed funds under the Board’s direction. Adds that the Board may place on probation, refuse to issue or renew, suspend, or revoke a preneed license when an owner, partner, manager, member, operator, officer, or preneed salesperson of the preneed funeral licensee violates this Article or any Board rules, or when any agent or employee of the preneed funeral establishment, with consent of any person, firm, or corporation operating the funeral establishment, violates any of these provisions, rules, or regulations. Amends the conditions under which the Board may refuse to issue or renew a license or suspend or revoke a license or place the license holder on probation, to now include: (1) conviction of, or plea of guilty or nolo contendere to, a felony or a misdemeanor that indicates that the individual is unfit or incompetent to engage in preneed funeral service or that the individual has deceived or defrauded the public (was, conviction for a crime involving fraud or moral turpitude); (2) violating or cooperating with others to violate Articles 13A (Practice of Funeral Service), 13E (Mutual Burial Associations), or 13F (Cremation); (3) failure to refund any insurance proceeds received as consideration in excess of the funeral contract purchase price within days of receipt (excludes interest or growth on funds paid toward funeral goods and services to be provided pursuant to an inflation-proof preneed contract); (4) failure to provide, within a reasonable time, either the goods and services contracted for or a refund for the price of goods and services paid but not fulfilled; (5) violation of GS 58-58-97. 5 (Provision of life insurance information upon notification of insured's death); and (6) failure to respond to the Board's inquiries in a reasonable manner or time regarding any matter affecting the individual's performance of preneed funeral services. Adds that revocation of a funeral establishment permit results in the automatic revocation of the firm's preneed funeral establishment permit; active suspension of a funeral establishment permit results in the automatic active suspension of the firm's preneed funeral establishment permit for the same length of time.

Amends GS 90-210.72 amending venue for actions brought by the Board for a restraining order and injunction so that it can be brought in Wake County, as an alternative to the superior court of any county where the acts are alleged to have been committed or the county where the defendant resides.

Amends GS 90-210.73 specifying that the following records or documents, in addition to not being subject to GS Chapter 132 (public records), are also not subject to discovery, subpoena, or other means of legal compulsion for release: (1) preneed funeral contracts filed with the Board (was, the name and address of the preneed funeral contract purchasers and beneficiaries); and (2) all financial information used to demonstrate solvency in connection with a required bond or application for a preneed funeral establishment permit (was, required bond only).

Makes conforming organizational changes to the act.