Washington Report 012006
2006: The past is prologue
by ICFA General Counsel Robert M. Fells, Esq.
In government relations activities, each year develops a theme of its own. For example, during last year the long-awaited FTC Funeral Rule review proceedings did not materialize, but instead, out of left field, an interpretation of the Funeral Rule's "Cash Advance" requirements was made by a Texas state circuit court that could prove financially ruinous to funeral homes.
Also in 2005, the legality of a cemetery's grave opening and closing policy was again before the courts in Indiana after years of being dormant. The court upheld a state statute that allows cemetery staff to exclusively open and close all graves. So if 2005 can be described as something of a watershed year, the new year may see new developments on longstanding issues and new issues developing on their own.
The national scene
This is a national election year. That is, one-third of the 100-member Senate and all 435 members of the House of Representatives must run for re-election.
Under the direction of ICFA President Ray Frew, the association will launch its first Capitol Hill advocacy mission by visiting selected members of Congress during February. The visits will be led by ICFA Vice President Paul Elvig and Past President Irwin Shipper, who chairs the ICFA Government and Legal Affairs Committee and its Fundraising Committee, as well. As we go to press, the ICFA is also scheduling a meeting with the White House.
If you thought that 2005 was a politically charged year in Washington, wait until this year. The ICFA is taking proactive steps to ensure that the cemeteryand funeral profession are not caught in the crosshairs. It was for this reason that the ICFA PAC was established three years ago.
Also on Capitol Hill, increasing veterans benefits will be pursued this year, and the ICFA is reinforcing its efforts to promote increased burial benefits that take into account the vast cemetery resources in the private and religious sectors. Since 1990, veterans burial benefits have narrowed to include mainly national and state cemeteries, effectively disqualifying approximately 70 percent of veterans who were previously eligible for plot and marker allowances. When the ICFA testified last year before a House Veterans Affairs Subcommittee, we were assured of bipartisan support to enact legislation restoring the plot and marker allowances to their pre-1990 levels. Since this is an election year, the timing for continued support is favorable.
Proposed federal legislation to regulate the funeral and cemetery profession, sponsored by Sen. Christopher Dodd (D-CT) and Rep. Mark Foley (R-FL), has not to date been introduced into the 109th Congress. As previously reported, both members of Congress are said to be waiting for a new major "event" to serve as a catalyst for action on their proposals. The legislation would also codify the FTC Funeral Rule, that is, turn this trade regulation into a federal statute. Of course, the ICFA opposes the codification of the Funeral Rule.
Several federal regulatory agencies continue to review and enforce rules that directly affect cemetery and funeral home operations as well as related businesses. The Federal Trade Commission enforces the Funeral Rule, the Telemarketing Sales Rule, and the CAN SPAM Act, which restricts commercial e-mail.
The Internal Revenue Service continues to issue technical advice and private letter rulings on cemetery and mortuary operations. In addition, the IRS is issuing new construction rules that the ICFA will be reviewing in a forthcoming issue.
The recent overtime regulations from the Department of Labor and the many workplace standards enforced by OSHA will continue to raise issues for members of the profession. ICFA members should remember that the association retains a labor law attorney (Michael Pepperman, 215.665.3032) and a tax attorney (Leslie J. Schneider, 202.393.7600) for free telephone consultations on these issues.
The state scene
Notwithstanding the increasing federal intervention in the funeral and cemetery profession, the ICFA believes the profession is most efficiently and effectively regulated, and consumers are most protected, through the states.
For this reason, the association has published 28 Model Guidelines for State Laws and Regulation, available online at the ICFA Web page. And for the foreseeable future, state regulation will continue to predominate over federal.
Litigation in state courts will continue to command the ICFA's attention because an adverse ruling in one state may set a precedent for similar actions in neighboring states. The Texas litigation involving the cash advance provisions of the Funeral Rule, as previously mentioned, is a case in point, whereby any items sold by a funeral home that it has acquired from a third party, such as caskets and vaults, would be considered "cash advance" items and, according to the Texas court, the mark-up would also have to be disclosed.
The ICFA and other interested parties asked the FTC itself to clarify the cash advance provisions of the Funeral Rule. The commission issued an advisory letter on July 7, 2005, stating that the Texas court was incorrect in its interpretation, but the litigation continues. Meanwhile, the Funeral Consumer Alliance has petitioned the federal appeals court in Washington to require the FTC to withdraw its July 7 advisory letter.
This particular litigation, the Hijar case, suggests that even state litigation can have a widespread effect on members of our profession across the country. The ICFA continuously monitors dozens of issues that can affect our members, and 2006 may indeed shape up as the year where the past is but a prologue.