Senate Bill Report — SB 5016, Prearrangement Funeral Services (As of January 16, 2025)

Summary

This Senate Bill Report on SB 5016, as of January 16, 2025, covers an act relating to prearrangement funeral services, with Senator Lovick as sponsor and committee activity before Business, Financial Services & Trade on 1/16/25. The brief summary states that the bill excludes certain funeral merchandise and transportation protection agreements from prearrangement funeral service contract requirements. The background states that a funeral establishment must place at least 90 percent of the cash purchase price of a trust-funded contract in the trust. The summary of the bill states that the minimum percentage placed in trust is decreased to 80 percent and the maximum percentage retained by the funeral establishment is increased to 20 percent. It lists Appropriation: None and Fiscal Note: Available.

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Full text

                            SENATE BILL REPORT
                                  SB 5016

                                      As of January 16, 2025

Title: An act relating to prearrangement funeral services.

Brief Description: Concerning prearrangement funeral services.

Sponsors: Senator Lovick.

Brief History:
     Committee Activity: Business, Financial Services & Trade: 1/16/25.


                                     Brief Summary of Bill
           • Excludes certain funeral merchandise and transportation protection
             agreements from prearrangement funeral service contract requirements.
           • Revises the minimum percentage of the purchase price required to be
             placed in trust and the percentage limit that may be retained by the
             funeral establishment for prearrangement funeral service contracts
             funded with trusts.


SENATE COMMITTEE ON BUSINESS, FINANCIAL SERVICES & TRADE

     Staff: John Kim (786-7453)

     Background: A prearrangement funeral service contract is a contract under which a
     funeral establishment, for a specified consideration, promises to furnish funeral
     merchandise or services upon the death of the person named or implied in the contract.
     Funeral merchandise or services are those normally provided or performed by funeral
     establishments including burial supplies and equipment and the care, shelter, transportation,
     preparation, and embalming of human remains. Funeral merchandise or services do not
     include the sale of cemetery lands, cemetery interests, or incidental services, markers,
     memorials, monuments, equipment, crypts, niches, or vaults, which instead may be sold in




     This analysis was prepared by non-partisan legislative staff for the use of legislative
     members in their deliberations. This analysis is not part of the legislation nor does it
     constitute a statement of legislative intent.

Senate Bill Report                              -1-                                             SB 5016
     prearrangement contracts with cemetery authorities.

     Funeral establishments must be licensed by the Washington State Department of Licensing
     (DOL). A separate prearrangement funeral registration with DOL is required for a funeral
     establishment that sells prearrangement funeral service contracts.

     In applying for prearrangement funeral registration, a funeral establishment must indicate
     whether its prearrangement funeral service contracts are funded with trusts or are funded
     with insurance. A funeral establishment selling prearrangement funeral service contracts
     funded with trusts must establish and maintain one or more trusts under state law, with two
     or more designated trustees, for the benefit of the beneficiary of the contract. Among other
     requirements, the funeral establishment must place at least 90 percent of the cash purchase
     price of the contract, paid in advance but excluding sales tax, in the trust. The remainder of
     up to 10 percent of the cash purchase price of the contract may be retained by the funeral
     establishment, except that a purchaser is entitled to a full refund of the purchase price of the
     contract if it is canceled within 30 calendar days after signing.

     Summary of Bill: Exclusion of Certain Funeral Merchandise and Transportation
     Protection Agreements from Prearrangement Funeral Service Contract Requirements. The
     definition of a prearranged funeral service contract is revised to exclude funeral
     merchandise delivered either at the time of sale or within 30 days thereafter and to exclude
     transportation protection agreements. A transportation protection agreement is defined as
     an agreement that primarily provides for the coordination and arrangement of all
     professional services related to the preparation of transportation and subsequent
     transportation of human remains or cremated remains.

     A funeral establishment is exempted from placing into trust moneys received for such
     funeral merchandise or for transportation protection agreements.

     Trust Requirement. The minimum percentage of the cash purchase price of the
     prearrangement funeral service contract funded with trusts that must be placed in trust is
     decreased to 80 percent. The maximum percentage of the contract cash purchase price that
     may be retained by the funeral establishment is increased to 20 percent.

     Appropriation: None.

     Fiscal Note: Available.

     Creates Committee/Commission/Task Force that includes Legislative members: No.

     Effective Date: Ninety days after adjournment of session in which bill is passed.

     Staff Summary of Public Testimony: PRO: The bill helps funeral establishments to be
     more competitive, allowing them to hire quality staff, pay higher wages to an aging


Senate Bill Report                              -2-                                          SB 5016
     workforce, and provide employee benefits. The reduced minimum trust requirement aligns
     Washington with other states and allows funeral establishments to pay for necessary items
     when the services are purchased.

     Persons Testifying: PRO: Senator John Lovick, Prime Sponsor; Scott Sheehan,
     Washington Cemetery, Cremation & Funeral Association.

     Persons Signed In To Testify But Not Testifying: No one.




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