HB2140 - 562R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 32-1301, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1301. Definitions

In this chapter, unless the context otherwise requires:

1. "Accredited" means being recognized or authorized by the American board of funeral service education.

2. "Administrative costs and expenses" means the cost of copies, transcripts, court reporter and witness fees, reimbursement for mileage and office of administrative hearings costs.

3. 2. "Alkaline hydrolysis" means a form of final disposition that includes all of the following:

(a) Reducing a dead human body to essential elements through a water-based dissolution process using alkaline chemicals, heat, agitation and pressure to accelerate natural decomposition.

(b) Processing the hydrolyzed remains after they are removed from the alkaline hydrolysis vessel.

(d) Releasing the hydrolyzed remains to an appropriate party.

4. 3. "Alkaline hydrolysis container":

(a) Means a hydrolyzable or biodegradable closed container or pouch that is resistant to leakage of bodily fluids, that encases a dead human body and into which the body is placed before the container's insertion into an alkaline hydrolysis vessel.

(b) Includes a hydrolyzable or biodegradable alternative container or casket.

5. 4. "Alkaline hydrolysis facility" means a building or structure containing one or more alkaline hydrolysis vessels for alkaline hydrolysis.

6. 5. "Alkaline hydrolysis operator" means a person who is trained to carry out the process of alkaline hydrolysis.

7. 6. "Alkaline hydrolysis vessel" means the container in which alkaline hydrolysis is performed.

8. 7. "Alternative container" means any unfinished wood box or other nonmetal receptacle or enclosure, without ornamentation or a fixed interior lining, that is designed for encasing human remains.

9. 8. "Authorizing agent" means a person who is legally entitled to order the cremation, disinterment, alkaline hydrolysis or embalming of human remains pursuant to section 32-1365.02.

10. 9. "Beneficiary" means a person whose future funeral arrangements will be handled by a funeral establishment pursuant to a prearranged funeral agreement.

11. 10. "Business entity" includes any corporation, association, limited liability company, professional corporation, partnership, limited partnership, sole proprietorship, business trust, trust, joint venture and other business entity.

12. 11. "Casket" means a rigid container that is designed to permanently encase human remains and that is usually constructed of wood, metal or synthetic substances and ornamented and lined with fabric.

13. 12. "Change of ownership" means a transfer of a controlling legal or equitable interest in a licensed funeral establishment or crematory resulting from a sale or merger. If the establishment or crematory is operated by a business entity, any transfer of the ownership of ten percent or more of the entity constitutes a change of ownership.

14. 13. "Conviction" means a criminal adjudication or conviction by any state or federal court of competent jurisdiction, including a judgment based on a no contest plea, without regard to whether civil rights have been restored.

15. 14. "Cremated remains" means the remaining bone fragments after cremation.

16. 15. "Cremation" means the heating process that reduces human remains to bone fragments by combustion and evaporation.

17. 16. "Cremation container" means a leak and spill resistant, rigid, combustible, closed receptacle into which human remains are placed before cremation.

18. 17. "Cremationist" means a person who operates a crematory retort, who performs the actual cremation of human remains and who may be licensed pursuant to article 6 of this chapter.

19. 18. "Crematory" means a building or portion of a building that is licensed pursuant to article 6 of this chapter and that houses a retort in which only human remains are cremated.

20. 19. "Department" means the department of health services.

21. 20. "Director" means the director of the department.

22. 21. "Disciplinary action" means an action taken to revoke or suspend a license, to impose probationary requirements or civil penalties or to issue a letter of censure or reprimand to any person who is subject to this chapter and who violates any provision of this chapter or rules.

23. 22. "Embalmer" means a person who is licensed pursuant to this chapter and who is engaged in embalming.

24. 23. "Embalming" means the implementation of reconstructive procedures and the process of disinfecting and preserving a dead human body to retard organic decomposition by treating the body to reduce the presence and growth of organisms.

25. 24. "Financial institution" means a bank, savings and loan association, trust company or credit union that is lawfully doing business in this state and that is not affiliated with a funeral establishment.

26. 25. "Fixed price prearranged funeral agreement funded by trust" means any agreement or combination of agreements that establishes a fixed price for funeral goods and services, that requires a funeral establishment to provide those funeral goods and services at the price levels in effect at the time of the execution of the agreement and that requires the purchaser to convey all or a portion of the accrued interest to the funeral establishment at the time that the funeral goods and services are actually provided.

27. 26. "Funded by insurance" means that monies for a prearranged funeral agreement are paid directly to an insurance company licensed pursuant to title 20 on behalf of the beneficiary of the agreement.

28. 27. "Funeral directing" means arranging, directing or providing a service in the disposition of dead human bodies for compensation.

29. 28. "Funeral director" means a person who is licensed pursuant to this chapter and who is engaged in funeral directing.

30. 29. "Funeral establishment" means a business at a specific location that is licensed pursuant to this chapter and that is devoted to the care, storage or preparation for final disposition or transportation of dead human bodies.

31. 30. "Funeral goods and services":

(a) Means any personal property or services that are typically sold or provided in connection with the final disposition of human remains, including caskets, alternative containers, outer burial containers, cremation containers, transportation containers, funeral clothing or accessories, monuments, grave markers, urns, embalming services, funeral directing services and similar funeral or burial items.

(b) Does not include:

(i) Goods and services sold by cemeteries.

(ii) Services provided pursuant to a transportation protection agreement.

32. 31. "Holding facility" means a designated area for retaining human remains.

33. 32. "Human remains" means a lifeless human body or parts of a human body that allow a reasonable inference that death occurred.

34. 33. "License" means a written authorization that is issued by the department and that entitles a person to act as a funeral director, cremationist, alkaline hydrolysis operator or embalmer or to operate a funeral establishment, crematory or alkaline hydrolysis facility in this state.

35. 34. "Licensee" means a person to whom the department has issued a license under this chapter.

36. 35. "Manage" means:

(a) That a responsible funeral director exercises control and oversight over all employees of a funeral establishment and over funeral transactions, including caring for dead human bodies, funeral services and activities and documenting and retaining records.

(b) That a responsible cremationist exercises control and oversight over all employees of a crematory and crematory operations.

37. 36. "National board examination" means the test or tests given by the international conference of funeral service examining boards to determine the entry level knowledge and skills of a person regarding funeral directing and embalming.

38. 37. "Net interest" means interest earned on a prearranged funeral trust account minus applicable taxes, reasonable and necessary charges made by the financial institution and the annual service fee allowed to be deducted by the funeral establishment according to section 32-1391.06, subsection B.

39. 38. "Outer burial container" means a container that is designed for placement in a grave around a casket, including burial vaults, grave boxes and grave liners.

40. 39. "Owner":

(a) Means a person who owns ten percent or more of a business entity.

(b) Does not include shareholders of companies who have a class of common equity stock listed or authorized to be listed on the New York stock exchange or the American stock exchange or listed on the NASDAQ stock market.

41. 40. "Person legally responsible" means the person responsible for burying a dead body as determined in section 36-831.

42. 41. "Prearranged funeral agreement" means any agreement or combination of agreements under which a payment is made before the death of the intended beneficiary for funeral goods and services to be delivered or performed after the death of the beneficiary.

43. 42. "Prearranged funeral trust account" means a trust account that is established at a financial institution and into which all monies paid on behalf of a beneficiary pursuant to a prearranged funeral agreement are deposited.

44. 43. "Preparation" means washing, shaving, dressing or arranging hair on, applying cosmetics to or positioning bodily features on a dead human body and placing the dead human body in a casket.

45. 44. "Processed cremated remains" means cremated remains after they are pulverized and cleaned, leaving primarily small bone fragments.

46. 45. "Provisionally accredited" means being granted candidacy status by the American board of funeral service education.

47. 46. "Responsible cremationist" means a licensed cremationist who manages a crematory.

48. 47. "Responsible funeral director" means a person who is licensed pursuant to this chapter, who is engaged in funeral directing and who manages and is accountable for a funeral establishment.

49. 48. "Retort" means an enclosed space within which cremation takes place.

50. 49. "Supervise" or "supervision" means that a licensed embalmer has responsibility for and is within sight and sound of a person who is embalming a dead human body or assisting in embalming a dead human body.

51. 50. "Temporary container" means a receptacle that is usually made of cardboard, rigid plastic or another similar material and that is designed to hold processed cremated remains until they are placed in an urn or another permanent container.

52. 51. "Transportation protection agreement" means an agreement that primarily provides or arranges for services that are related to preparing human remains or cremated remains for the purpose of transportation and such subsequent transportation.

53. 52. "Trust funds" means all monies that are deposited on behalf of a beneficiary of a prearranged funeral agreement funded by trust and all accrued net interest. Trust funds shall be considered an account kept in suspense until distributed to the beneficiary, the funeral establishment or the estate of the beneficiary in accordance with this article.

54. 53. "Universal precautions" means the universal blood and fluid precautions recommended by the centers for disease control of the United States public health service to prevent the transmission of bloodborne and bodily fluid-borne infectious diseases.

55. 54. "Unprofessional conduct" includes the following acts, whether occurring in this state or elsewhere:

(a) Committing a class 1 or 2 felony.

(b) Committing a felony or misdemeanor if the offense has a reasonable relationship to funeral directing or embalming. Conviction by any court of competent jurisdiction or a plea of no contest is conclusive evidence of the commission.

(c) Providing false, misleading or deceptive information on an application for licensure pursuant to this chapter or on an examination required for licensure.

(d) Bribing or offering to bribe, directly or indirectly, an employee of the department to influence the employee's actions in performing the employee's duties.

(e) Wilfully interfering with an embalmer, funeral director, alkaline hydrolysis operator or cremationist who has lawful custody of a dead human body in performing the embalmer's, funeral director's, alkaline hydrolysis operator's or cremationist's duty to embalm or prepare the body for burial, transportation, alkaline hydrolysis or cremation.

(f) Paying or causing monies or other valuable consideration to be paid to a person, other than an employee of a funeral establishment, to secure business regulated pursuant to this chapter from or through the person.

(g) Violating any law of this state or any rule adopted by the department that relates to embalming or preparing dead human bodies.

(h) Certifying falsely to having embalmed or prepared a dead human body that was embalmed by another person.

(i) Falsely advertising or labeling any service or merchandise with the intention of deceiving the public.

(j) Shipping or delivering any merchandise or supplies that are not the substantial equivalent of or superior in quality to merchandise or supplies previously presented to the purchaser as samples.

(k) Committing any act involving dishonesty, fraud, misrepresentation, breach of fiduciary duty, gross negligence or incompetence if the act has a reasonable relationship to funeral directing or embalming.

(l) Engaging in any conduct or practice that is reasonably related to funeral directing or embalming and that is or may be harmful or dangerous to the health, safety or welfare of the public.

(m) Within a period of five years, having a license, registration or endorsement suspended or revoked by the department or by the funeral services regulating authority of this state or any other jurisdiction or surrendering a license, registration or endorsement in lieu of disciplinary action.

56. 55. "Urn" means a receptacle into which processed cremated remains are placed for disposition. END_STATUTE

Sec. 2. Section 32-1302, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1302. Advisory committee; members; appointment; terms; compensation; meetings; duties

A. An advisory committee is established to collaborate with and assist advise the director in performing the duties prescribed in this chapter about matters relating to the regulation of the funeral services industry. The advisory committee consists of seven members who are appointed by the governor pursuant to section 38-211. Advisory committee members serve at the pleasure of the governor for staggered terms of four years beginning and ending on January 1 unless removed by the governor. The governor shall appoint a member for the unexpired portion of a term to fill a vacancy occurring during a term of office director. The advisory committee shall include:

1. Two members who are funeral directors licensed under this chapter.

2. One member who is an embalmer licensed under this chapter.

3. One member who is a cremationist licensed under this chapter.

4. Three public members who are residents of this state, one of whom is an owner or manager of a business that has no pecuniary or proprietary interest in a funeral establishment or crematory or in the sale of funeral goods and services. The public members shall not be licensed under this chapter currently or have been licensed under this chapter in the five years preceding appointment.

B. Members of the advisory committee shall not receive compensation but shall be reimbursed for subsistence expenses pursuant to section 38-624 and travel expenses pursuant to section 38-623.

C. The advisory committee shall annually select from its membership a chairperson for the advisory committee.

D. The advisory committee shall hold meetings:

1. Twice per year at a time and place designated by the chairperson.

2. At the director's request.

E. The advisory committee shall:

1. Provide the director with such recommendations as it deems necessary and beneficial to the best interests of the public.

2. Provide recommendations on specific questions or proposals as the advisory committee deems necessary or as requested by the director.

F. The advisory committee shall annually present to the governor an evaluation of the performance of the director and the department relating to enforcing and administering this chapter. END_STATUTE

Sec. 3. Section 32-1307, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1307. Powers and duties of department

A. The department shall:

1. Administer and enforce this chapter and the rules adopted pursuant to this chapter.

2. Maintain a record of the name and the mailing or employer's business address of each licensee.

3. Investigate alleged violations of this chapter and the rules adopted pursuant to this chapter.

4. In accordance with title 41, chapter 6, adopt rules that include provisions relating to the following:

(a) The keeping and disposition of records by licensees.

(b) Standards of practice, professional conduct, competence and consumer disclosure relating to owning or operating a funeral establishment, alkaline hydrolysis facility or crematory, funeral directing, embalming, alkaline hydrolysis and cremation.

(c) The prohibition of deceptive, misleading or professionally negligent practices in advertising, offering or selling funeral goods and services by funeral establishments, crematories and licensees and agents of funeral establishments, crematories and licensees. The rules shall specifically prohibit misrepresentation of the legal requirements concerning preparing and interring dead human bodies.

(d) Standard price disclosure formats and price list requirements and definitions to facilitate price comparisons by members of the public.

(e) Guidelines to enable members of the public to determine the substantial equivalency of funeral goods available for sale to the public.

(f) Administrative and investigative procedures.

(g) The efficient administration of the department's affairs and the enforcement of this chapter.

(h) The inspection of all funeral establishments, crematories and alkaline hydrolysis facilities at least once every five years.

(i) Any other matters the department deems necessary to carry out this chapter.

B. The department may:

1. Subject to title 41, chapter 4, article 4, employ investigative, professional and clerical employees as it deems necessary to carry out this chapter. Compensation of these employees shall be determined pursuant to section 38-611.

2. In connection with investigations or administrative hearings, issue subpoenas to compel the attendance of witnesses and the production of books, papers, contracts, agreements and other documents or records in any form, administer oaths and take testimony and evidence concerning all matters within its jurisdiction. The department may pay the fees and expenses of witnesses who appear in any proceeding before the department. If a person refuses to obey a subpoena issued by the department, the department may invoke the aid of any court in this state to require the attendance and testimony of witnesses and the production of documentary evidence.

3. Contract with other state and federal agencies as it deems necessary to carry out this chapter.

4. Charge reasonable fees to distribute materials that the department prints or has printed at its expense and for the costs of mailing these materials.

5. Charge the reasonable costs of a fingerprint background check to an applicant for licensure. END_STATUTE

Sec. 4. Section 32-1309, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1309. Fees

A. The department shall establish and collect application fees in an amount to be determined by the department for each of the following:

1. A funeral director license.

2. An embalmer license.

3. A funeral director or embalmer license for a person who does not reside in this state.

4. A funeral establishment license:

(a) For a new establishment, new owner or new location.

(b) For a change of name.

5. A crematory license:

(a) For a new crematory, new owner or new location.

(b) For a change of name.

6. A cremationist license.

7. An alkaline hydrolysis facility license:

(a) For a new alkaline hydrolysis facility.

(b) For a change of name or location.

8. An alkaline hydrolysis operator license.

9. An interim alkaline hydrolysis facility permit.

10. An extension of an interim alkaline hydrolysis facility permit.

11. A prearranged funeral sales establishment endorsement.

12. A multiple funeral director license.

B. The department shall establish and collect license issuance fees in an amount to be determined by the department for each of the following:

1. A funeral director license.

2. An embalmer license.

3. A cremationist license.

4. An alkaline hydrolysis facility license.

5. An alkaline hydrolysis operator license.

6. A multiple funeral director license.

C. The department shall establish and collect renewal fees in an amount to be determined by the department for each of the following:

1. A funeral director license.

2. An embalmer license.

3. An establishment license for each disposition performed by the establishment during the immediately preceding calendar year. For the purposes of this paragraph, a funeral establishment performs a disposition each time the establishment files a death certificate pursuant to section 36-325.

4. A crematory license, per retort.

5. A cremationist license.

6. An alkaline hydrolysis facility license.

7. An alkaline hydrolysis operator license.

C. A license, registration or endorsement issued pursuant to this chapter does not expire and remains valid unless:

1. The department subsequently revokes or suspends the license, registration or endorsement.

2. Except as provided in section 32-4301, the license, registration or endorsement is considered void because the licensee did not pay the licensing, registration or endorsement fee, outstanding civil penalties or provider agreement fees or did not enter into an agreement with the department to pay all outstanding fees or penalties before the due date of the licensing, registration or enforcement fees or civil penalties.

D. The department shall establish and collect fees in an amount to be determined by the department for each of the following:

1. A duplicate license.

2. A reexamination for a state laws and rules examination.

3. Late renewal of a licensee.

4. Late renewal of an establishment license.

5. 3. Inactive licensure.

6. 4. Reinstatement of an inactive license.

7. 5. An interim permit for a funeral establishment, permit crematory and alkaline hydrolysis facility.

8. 6. Filing an annual trust report.

9. 7. Filing a late or incomplete annual trust report.

E. A person who was a licensed embalmer's assistant on March 31, 2023 may continue to be licensed if the licensed embalmer's assistant pays any lapsed licensing fees and continues to pay the licensing or endorsement fee BEFORE the licensing or endorsement fee due date. END_STATUTE

Sec. 5. Section 32-1310, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1310. Availability of information and records; complaints; release to public

A. All examination materials, records of examination grading and performance, and transcripts of educational institutions concerning applicants and licensees are confidential and are not public records.

B. Complaints, investigative reports, documents, exhibits and other materials relating to an investigation are not public records and shall remain confidential except as provided in subsections C and E of this section.

C. On written request, the department shall release confidential information to the subject of an informal interview and to the public after the department sends a case to an informal interview.

b. Information received and records kept by the DEPARTMENT for the purposes of administering this chapter are available to the public, except for sources of information that cause the DEPARTMENT to believe that an inspection of a licensee or facility is needed to determine the extent of compliance with this chapter and rules adopted pursuant to this chapter.

D. c. After receiving a complaint, the department shall inform the licensee of the name of the complainant and the general nature of the complaint.

E. d. During an investigation, after The department issues a formal hearing or informal interview notice and notifies the licensee, the department may release the name of the complainant and the general nature of the a complaint to the public. END_STATUTE

Sec. 6. Section 32-1321, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1321. License requirement; persons not required to be licensed; nontransferability; display

A. A person shall not advertise or engage in funeral directing, cremation, alkaline hydrolysis or embalming without having a valid license issued by the department.

B. This article does not prohibit:

1. A person from performing removals or arrangements or from directing funeral services if the person is under the direction of and accountable to a licensed funeral director.

2. A licensed cemetery employee from selling burial or final disposition items or from arranging or directing cemetery services.

C. A license issued by the department is not transferrable or subject to sale or assignment, whether by a voluntary or involuntary process.

D. A licensee shall conspicuously display the person's license at the person's place of employment. END_STATUTE

Sec. 7. Section 32-1324, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1324. Multiple funeral director license; display; nontransferrability

A. An applicant for a license as a funeral director who is proposing to manage and supervise the operations of more than one funeral establishment shall apply on a form prescribed by the department. The application shall be accompanied by the prescribed fee for the additional funeral establishment.

B. The department shall review the application for a multiple funeral director license, and, if it is reasonable to believe that the funeral establishments can be adequately supervised and managed by the applicant, the department shall issue the license.

C. A funeral director who holds a multiple funeral director license shall display the license at the funeral establishment to which the license is issued. Unless otherwise stated in this article, a multiple funeral director license is renewable at the same time as the funeral establishment license. A multiple funeral director license is not transferable without prior approval of the department. END_STATUTE

Sec. 8. Repeal

Section 32-1331, Arizona Revised Statutes, is repealed.

Sec. 9. Section 32-1334, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1334. Inactive status

A. A licensed embalmer, funeral director, cremationist or alkaline hydrolysis operator who retires from practicing embalming, funeral directing, cremation or alkaline hydrolysis and who is not currently practicing embalming, funeral directing, cremation or alkaline hydrolysis in this state may request that the department place the person's license on inactive status. The person shall submit the request on a form prescribed by the department and shall pay the applicable fee pursuant to section 32-1309.

B. A person who holds an inactive license shall not practice:

1. Embalming, funeral directing or cremation in this state.

2. Alkaline hydrolysis in this state unless there is another individual at the alkaline hydrolysis facility who operates or supervises the alkaline hydrolysis facility and who is licensed pursuant to this chapter.

C. A person who holds an inactive license may request that the department reactivate the person's license. If an inactive licensee desires to reactivate a license, the inactive licensee shall submit a completed application on a form prescribed by the department, the applicable fee pursuant to section 32-1309, an attestation that the person has completed the required continuing education units, a completed fingerprint card and the prescribed fingerprint background check fee. The person shall pass the applicable state laws and rules examination. END_STATUTE

Sec. 10. Section 32-1338, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1338. Continuing education requirements; waiver

A. A person who is licensed pursuant to this article shall complete continuing education designed to educate the person regarding current skills and procedures and developments in the funeral industry. The department may prescribe in its rules the number of hours of continuing education required each year, not to exceed six hours, and the subject matter to be covered.

B. The department shall waive the continuing education requirements for persons whose licenses have been placed on inactive status and for persons who are serving in the United States armed forces in time of war. The department may waive the continuing education requirement for good cause shown as prescribed in its rules. END_STATUTE

Sec. 11. Section 32-1342, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1342. Alkaline hydrolysis facilities; requirements

A. An alkaline hydrolysis facility licensed under this article must meet all of the following:

1. Have a building or structure that complies with applicable local and state building codes, zoning laws and ordinances and wastewater management and environmental standards and that contains one or more alkaline hydrolysis vessels.

2. Use a method that is approved by the department to dry the hydrolyzed remains and that occurs within the licensed facility.

3. Have a means approved by the department for refrigerating dead human bodies awaiting alkaline hydrolysis.

4. 3. Have an appropriate refrigerated holding facility or another means for refrigerating dead human bodies awaiting alkaline hydrolysis that maintains dead human bodies at or below thirty-eight degrees fahrenheit.

B. An alkaline hydrolysis facility:

1. Shall employ a licensed alkaline hydrolysis operator to carry out the process of alkaline hydrolysis. This paragraph does not apply if the alkaline hydrolysis facility is operated or supervised by a responsible cremationist.

2. Shall provide proper procedures for all personnel.

3. Shall comply with this chapter and other applicable state and federal laws relating to occupational and workplace health and safety. END_STATUTE

Sec. 12. Section 32-1343, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1343. Alkaline hydrolysis operators; licensure; application; qualifications; fingerprinting

A. An applicant for an alkaline hydrolysis operator license shall submit a completed application on a form prescribed by the department. The application shall be subscribed under oath and shall be accompanied by the applicable fee pursuant to section 32-1309 and any additional information that the department deems necessary.

B. An applicant for an alkaline hydrolysis operator license shall meet both of the following:

1. Submit a completed fingerprint card and the prescribed fingerprint records check fee to the department of health services to enable the department of health services or the department of public safety to conduct a criminal records check.

2. Meet the educational requirements as prescribed by the department in rule.

C. An applicant for licensure under this section may not have a disqualifying criminal history as determined by the department pursuant to section 41-1093.04.

D. If the department finds that the applicant meets the criteria for an alkaline hydrolysis operator license under this section and under rules adopted by the department, the department shall issue an alkaline hydrolysis operator license. A person does not need to be licensed as an alkaline hydrolysis operator in order to practice as an alkaline hydrolysis operator if the alkaline hydrolysis facility is operated or supervised by a responsible cremationist or another person who is a licensed alkaline hydrolysis operator.

E. Except as provided in section 32-4301, an alkaline hydrolysis operator license issued pursuant to this article expires on August 1 of each year. A licensed alkaline hydrolysis operator shall submit a renewal application and the applicable nonrefundable renewal fee pursuant to section 32-1309 on or before July 1 of each year. A licensed alkaline hydrolysis operator that submits a renewal application and the applicable renewal fee after July 1 but before August 1 shall pay a late fee pursuant to section 32-1309 in addition to the renewal fee. A licensed alkaline hydrolysis operator that fails to submit a renewal application and the applicable fee on or before August 1 must apply for a new license pursuant to this article. END_STATUTE

Sec. 13. Section 32-1344, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1344. Alkaline hydrolysis facilities; licensure requirements; application

A. An application for an alkaline hydrolysis facility shall be in a form prescribed by the department. If the applicant is a business entity, the entity shall direct a natural person who is an owner of the entity to submit its application. The application shall be subscribed under oath and shall be accompanied by the applicable fee pursuant to section 32-1309 and any additional information that the department deems necessary. A business entity that applies for a license pursuant to this article shall submit to the department with its application for licensure a copy of its partnership agreement, its articles of incorporation or organization or any other organizational documents required to be filed with the corporation commission.

B. An individual who applies for an alkaline hydrolysis facility license pursuant to this article, or if the applicant is a business entity, the owners, partners, officers, directors and trust beneficiaries of the entity, shall submit a completed fingerprint card, criminal history background information and a fingerprint background check fee to the department.

C. The department shall inspect the premises of an alkaline hydrolysis facility and investigate the character and other qualifications of all applicants for licensure pursuant to this article to determine whether the alkaline hydrolysis facility and the applicants are in compliance with the requirements of this article and rules adopted by the department.

D. If the department finds that the applicant meets the criteria for licensure under this article and rules adopted by the department, the department shall issue an alkaline hydrolysis facility license.

E. Except as provided in section 32-4301, an alkaline hydrolysis facility license issued pursuant to this article expires on August 1 of each year. A licensed alkaline hydrolysis facility shall submit a renewal application and the applicable nonrefundable renewal fee pursuant to section 32-1309 on or before July 1 of each year. A licensed alkaline hydrolysis facility that submits a renewal application and the applicable renewal fee after July 1 but before August 1 shall pay a late fee pursuant to section 32-1309 in addition to the renewal fee. A licensed alkaline hydrolysis facility that fails to submit a renewal application and the applicable fee on or before August 1 must apply for a new license pursuant to this article. END_STATUTE

Sec. 14. Section 32-1361, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1361. Licensed embalmers; supervision; certification of embalming; exception for embalmer's assistants

A. Only a licensed embalmer may embalm a dead human body, except that another person who is employed by a funeral establishment and on a pathway to licensure may embalm a dead human body under the direct supervision of a licensed embalmer.

B. A licensed embalmer who embalms or supervises the embalming of a dead human body shall certify the embalming with the embalmer's signature and license number.

C. For the purposes of this section, a person is on a pathway to licensure if both of the following apply:

1. The person has been employed by a funeral establishment. for not more than three years.

2. The person intends to become a licensed embalmer after assisting in embalming at least twenty-five dead human bodies or intends to become a licensed funeral director by assisting in arranging and directing at least twenty-five funerals.

D. The pathway to licensure may not exceed three years and begins either:

1. While the person is enrolled in an accredited or provisionally accredited school of mortuary science and is assisting embalming dead human bodies under the direct supervision of a licensed embalmer or assisting in arranging and directing funerals.

2. After the person has graduated from an accredited or provisionally accredited school of mortuary science and passed the state laws and rules examination and the national board examination and is assisting in embalming dead human bodies under the direct supervision of a licensed embalmer or assisting in arranging and directing funerals.

E. A person on a pathway to licensure or the funeral establishment providing direct supervision of a person on a pathway to licensure shall submit to the department on a form approved by the department information necessary for the department to verify that the person is on a pathway to licensure.

F. This section does not apply to a person who was a licensed embalmer's assistant on March 31, 2023. END_STATUTE

Sec. 15. Section 32-1365.01, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1365.01. Lawful disposition of dead human body; authorization document; legally competent adults; immunity

A. A legally competent adult may prepare a written statement directing the cremation or other lawful disposition of the legally competent adult's own remains pursuant to section 36-831. The written statement may but need not be part of the legally competent adult's will.

B. The legally competent adult who is the subject of a document described in subsection A of this section shall sign and date the document. The document shall be notarized or witnessed in writing by at least one adult who affirms that the notary or witness was present when the legally competent adult signed and dated the document and that the legally competent adult appeared to be of sound mind and free from duress at the time of execution of the document.

C. A document that conforms to this section authorizes a crematory, cemetery, alkaline hydrolysis facility or funeral establishment to carry out the wishes of the legally competent adult who is the subject of the document. It is not necessary for a crematory, cemetery, alkaline hydrolysis facility or funeral establishment to obtain the consent or concurrence of any other person when it cremates or otherwise provides for the lawful disposition of a dead human body pursuant to instructions contained in a document that conforms to this section.

D. This section does not mandate that a crematory, cemetery, alkaline hydrolysis facility or funeral establishment cremate or otherwise provide for the lawful disposition of a dead human body pursuant to the document unless the legally competent adult who executed the document made any financial arrangements necessary to effectuate the legally competent adult's wishes as expressed in the document.

E. A crematory, cemetery, alkaline hydrolysis facility or funeral establishment that cremates or otherwise provides for the lawful disposition of a dead human body in good faith reliance on an apparently genuine document executed pursuant to this section is immune from criminal and civil liability and is not subject to professional discipline. The decision of a crematory, cemetery, alkaline hydrolysis facility or funeral establishment to cremate or otherwise provide for the lawful disposition of a dead human body in reliance on a document executed pursuant to this section is presumed to be made in good faith. END_STATUTE

Sec. 16. Section 32-1365.02, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1365.02. Authorizing agents; consent for cremation, alkaline hydrolysis, disinterment or embalming; definition

A. Except as provided in section 32-1365.01 and in subsection E of this section, it is unlawful to cremate, use alkaline hydrolysis or disinter a dead human body without prior written consent of the authorizing agent.

B. Except as provided in section 32-1365.01, it is unlawful to embalm a dead human body without prior oral or written consent of the authorizing agent.

C. A funeral establishment shall create a written record of an oral consent given pursuant to this section that includes all of the following:

1. The name of the authorizing agent.

2. The relation of the authorizing agent to the deceased.

3. The date and time that consent was given.

4. The name of the person who obtained the consent.

5. Any other information required by the department.

D. In determining who the proper authorizing agent is, the order of preference is the same as provided in section 36-831. If there is more than one member in a category listed in section 36-831 entitled to serve as the authorizing agent, final arrangements may be made by any member of that category unless that member knows of an objection by another member of the category. If an objection is known, final arrangements shall be made by a majority of the members of the category who are reasonably available.

E. On the order of a court or a county medical examiner, or a person performing the duties of a county medical examiner, a dead human body shall be disinterred.

F. If none of the persons listed in section 36-831 is willing or financially capable of providing for the cremation, alkaline hydrolysis or embalming of a dead human body, the public fiduciary or other person who is designated by the county in which a death occurs to handle funeral arrangements may order the cremation, alkaline hydrolysis or embalming.

G. A funeral establishment, an employee or agent of a funeral establishment or a licensee shall exercise due diligence to obtain the consent required pursuant to this section from the proper authorizing agent. It is an affirmative defense to any action or claim brought against a crematory, cemetery, alkaline hydrolysis facility or funeral establishment relating to the disposition of a dead human body that the crematory, cemetery, alkaline hydrolysis facility or funeral establishment relied in good faith on the direction of a person who claimed to be the authorizing agent in providing for the lawful disposition of a dead human body. The decision of a crematory, cemetery, alkaline hydrolysis facility or funeral establishment to cremate or otherwise provide for the lawful disposition of a dead human body in reliance on the direction of a person who claims to be the authorizing agent is presumed to be in good faith unless the crematory, cemetery, alkaline hydrolysis facility or funeral establishment has actual knowledge that the claim is false.

H. If the authorizing agent is not reasonably available or unable to act as the authorizing agent, the person's right to be the authorizing agent shall pass to the next person or category of persons in the order of preference prescribed in section 36-831.

I. It is presumed that the authorizing agent is not reasonably available to act as authorizing agent if the crematory, cemetery, alkaline hydrolysis facility or funeral establishment after exercising due diligence has been unable to contact the individual or if that person has been unwilling or unable to make final arrangements for the disposition of the decedent within fifteen days after the initial contact by the crematory, cemetery, alkaline hydrolysis facility or funeral establishment. If a person in a prior category makes an initial contact with the crematory, cemetery, alkaline hydrolysis facility or funeral establishment or becomes able before the final disposition of the decedent, that person resumes that person's right to serve as the authorizing agent.

J. Any dispute among any of the persons listed in section 36-831, subsection A concerning the right to control the disposition, including cremation or alkaline hydrolysis, of a decedent's remains shall be resolved by the parties to the dispute or by a court of competent jurisdiction in order to expedite the resolution of a dispute among the parties. A crematory, cemetery, alkaline hydrolysis facility or funeral establishment is not liable for refusing to accept the decedent's remains or to inter, cremate, use alkaline hydrolysis or otherwise dispose of a decedent's remains until it receives a court order or other suitable confirmation that the dispute has been resolved or settled. A crematory, cemetery, alkaline hydrolysis facility or funeral establishment may bring an action in a court of competent jurisdiction in order to expedite the resolution of a dispute among the parties listed in section 36-831, subsection A.

K. For the purposes of this section, "reasonably available" means a person who is able to be contacted by the crematory, cemetery, alkaline hydrolysis facility or funeral establishment without undue effort and who is willing and able to act within fifteen days after the initial contact by the crematory, cemetery, alkaline hydrolysis facility or funeral establishment. END_STATUTE

Sec. 17. Section 32-1366, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1366. Grounds for disciplinary action

A. After a formal hearing, the department may deny or refuse to renew revoke a license or may take disciplinary action against any embalmer, funeral director, alkaline hydrolysis operator or other person who is licensed pursuant to this chapter for any of the following reasons:

1. Commission of an act of unprofessional conduct.

2. Repeated or continuing negligence or any other professional incompetence in the practice of funeral directing, embalming or alkaline hydrolysis.

3. Violation of this chapter or any rule adopted pursuant to this chapter.

4. Violation of title 44, chapter 10, article 7.

B. After a formal hearing, the department may deny or refuse to renew revoke a license or take disciplinary action against a responsible funeral director for a violation of this chapter or any rule adopted pursuant to this chapter by an employee of the licensed funeral establishment that the responsible funeral director manages. END_STATUTE

Sec. 18. Section 32-1367, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1367. Investigations; disciplinary proceedings; civil penalty; probationary terms

A. The department shall conduct an investigation when it the department receives a written complaint that appears to show the existence of any grounds for disciplinary action under this chapter or rules adopted pursuant to this chapter.

B. The department on its own initiative may investigate any information that appears to show the existence of any grounds for disciplinary action under this chapter or rules adopted pursuant to this chapter.

C. If it appears after an initial investigation that grounds for disciplinary action may exist, the department may either request an informal interview with the licensee or may issue a notice of a formal hearing. If the initial investigation indicates that suspension other than a temporary suspension imposed pursuant to subsection D of this section or revocation of a license or endorsement may be warranted, the department shall schedule a formal hearing pursuant to title 41, chapter 6, article 10.

D. C. After completing an informal interview investigation, the department may take any or all of the following disciplinary actions:

1. Issue a letter of censure or reprimand.

2. Impose probationary terms as the department deems necessary to protect the public health, safety and welfare and to rehabilitate or educate the licensee. Probationary terms imposed pursuant to this paragraph may include temporary suspension of a license or endorsement for a period of not more than thirty days, restriction of the licensee's right to practice pursuant to this chapter and a requirement that restitution be made to any funeral service consumer or other person who was injured by a violation of this chapter or rules adopted pursuant to this chapter. A licensee's failure to comply with any probationary terms imposed pursuant to this paragraph is cause for the department to consider the entire case against the licensee and any other alleged violations of this chapter at a formal hearing.

3. Impose Assess a civil penalty of not more than against a person who violates this chapter or a rule adopted pursuant to this chapter in an amount of not more than $1,000 for each violation. Each day that a violation occurs constitutes a separate violation.

E. After completing a formal hearing, the department may take any or all of the following disciplinary actions:

1. Issue a letter of censure or reprimand.

2. Impose probationary terms as the department deems necessary to protect the public health, safety and welfare and to rehabilitate or educate the licensee. Probationary terms imposed pursuant to this paragraph may include a requirement that restitution be made to any funeral service customer or other person who was injured by a violation of this chapter or rules adopted pursuant to this chapter.

3. Impose a civil penalty not to exceed $3,000 per violation.

4. Suspend a license or endorsement for not more than ninety days for a first offense and not more than one hundred eighty days for a second offense.

5. Revoke a license or endorsement.

F. If, as a result of information ascertained during an investigation, informal interview or formal hearing, the department determines that an alleged violation of this chapter or rules adopted pursuant to this chapter is not sufficiently serious to warrant disciplinary action, the department may issue a letter of concern to the licensee. The letter of concern shall advise the licensee of the possible violation.

4. Suspend or revoke a license or endorsement pursuant to chapter 41, chapter 6, article 10.

D. In determining the amount of a civil penalty pursuant to subsection C of this section, the department shall consider the following:

1. Repeated violations of statutes or rules by the person.

2. Patterns of noncompliance by the person.

3. The types of violations.

4. The severity of violations.

5. The potential for and occurrences of actual harm.

6. Threats to health and safety.

7. the number of persons affected by the violations.

8. The number of violations.

9. The size of the facility.

10. The length of time that the violations have been occurring.

E. Actions to enforce the collection of civil penalties assessed pursuant to subsection C of this section shall be brought by the attorney general or the county attorney in the name of the state in the justice court or the superior court in the county in which the violation occurred.

G. F. If a licensee refuses to participate in an informal interview or a formal hearing investigation, the department may take any or all of the disciplinary actions listed in subsections D and E subsection C of this section.

H. Before the department may revoke or suspend a license or endorsement, other than a temporary suspension imposed pursuant to subsection D of this section, the department shall serve notice and conduct a hearing in the manner prescribed in title 41, chapter 6, article 10.

I. After service of notice of a decision of the department suspending or revoking a license or endorsement or imposing a disciplinary action on a licensee pursuant to subsection D or E of this section, a licensee may apply for a rehearing or review by filing a motion pursuant to title 41, chapter 6, article 10. The filing of a motion for a rehearing or review suspends the operation of the department's decision to impose a disciplinary action and allows the licensee to continue to practice pending a denial or granting of the petition and pending the decision of the department on rehearing if a rehearing is granted. The department also may grant a rehearing on its own motion if it finds newly discovered evidence or for any other reason that justifies a reconsideration of a matter.

J. Except as provided in section 41-1092.08, subsection H, any party who is aggrieved by a final order or decision of the department may appeal to the superior court pursuant to title 12, chapter 7, article 6.

K. All notices that the department is required to provide to any person under this chapter are fully effective by personal service or by mailing a copy of the notice by certified mail addressed to the person's last known address of record in the department's files. Notice by mail is complete at the time of its deposit in the mail.

L. In addition to the requirements of subsection K of this section, a funeral establishment or crematory shall file a notice with the department identifying the person on whom the department's notices relating to the funeral establishment or crematory shall be served.

M. G. In addition to the authority given to the department in this section, the department may impose probationary terms as described in subsection D C, paragraph 2 of this section after the department inspects a funeral establishment, crematory or alkaline hydrolysis facility if the department deems the probationary terms necessary to protect the public health, safety and welfare and to rehabilitate or educate the licensee. END_STATUTE

Sec. 19. Repeal

Section 32-1368, Arizona Revised Statutes, is repealed.

Sec. 20. Section 32-1374, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1374. Price list requirement

When a licensee makes arrangements by interstate telecommunications to perform services in this state with any person residing outside this state, the licensee is not required to shall provide the written price list required pursuant to section 32-1371 electronically unless the person does not have access to the internet. END_STATUTE

Sec. 21. Section 32-1382, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1382. Funeral establishment requirements; responsible funeral director; universal precautions

A. A funeral establishment licensed pursuant to this article shall:

1. Provide separate rooms for each of the following:

(a) An area inside the funeral establishment that may be used as a chapel for conducting funeral services.

(b) If the funeral establishment embalms on-site, a preparation room that meets minimum requirements adopted by the department, that is maintained at all times in a sanitary and professional manner, that has sanitary flooring, drainage and ventilation and that is equipped with instruments and supplies necessary to protect the health and safety of the public and the employees of the funeral establishment in connection with preparing and embalming dead human bodies. This paragraph does not prohibit the embalming of a body at a central location that meets the minimum requirements adopted by the department. If a funeral establishment embalms at a central location and not on-site, the funeral establishment is not required to have an on-site preparation room.

2. If the funeral establishment embalms at a central location and not on-site, provide the department the central location's name, address and license number.

2. 3. Provide access to hearses or funeral coaches that are properly equipped for transporting dead human bodies and that are kept in a sanitary and professional manner.

3. 4. Employ and designate a responsible funeral director to manage and supervise the daily operation of the funeral establishment. The responsible funeral director is responsible for the funeral establishment complying with the laws of this state and the rules of the department. The funeral establishment or the responsible funeral director shall designate a licensed funeral director to act as an interim responsible funeral director.

B. All employees of a funeral establishment who handle dead human bodies shall use universal precautions and shall exercise reasonable care to minimize the risk of transmitting any communicable disease from a dead human body. END_STATUTE

Sec. 22. Repeal

Section 32-1386, Arizona Revised Statutes, is repealed.

Sec. 23. Section 32-1388, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1388. Nontransferability of funeral establishment licenses; change of ownership; interim permits; definition

A. A funeral establishment license issued by the department is not transferable or subject to sale or assignment, whether by a voluntary or involuntary process.

B. If there is a change of ownership of a funeral establishment, the licensee shall notify the department in writing and shall surrender the license to the department within twenty days after the change of ownership. The new owner shall also notify the department in writing within twenty days after the change of ownership and shall submit an initial application for a funeral establishment license to the department pursuant to section 32-1383.

C. The department shall issue an interim permit to a new owner of a licensed funeral establishment to allow the new owner to continue the operation of the funeral establishment during the period that the new owner's license application is pending if the following conditions are met:

1. The new owner notifies the department of the change of ownership and submits an application for an interim permit and the applicable fee pursuant to section 32-1309 within three days, excluding Saturdays, Sundays and holidays, after the change takes place. Notice shall be given during regular business hours.

2. The funeral establishment continues to meet the requirements of section 32-1382.

D. An interim permit issued by the department pursuant to this section shall be for not more than forty-five days and shall not be extended except as provided in subsection E of this section. An interim permit is a conditional permit and authorizes the holder to operate a funeral establishment as would be allowed under a funeral establishment license issued pursuant to this article. The holder of an interim permit is subject to the licensing rules and disciplinary proceedings prescribed in this chapter and in rules adopted pursuant to this chapter.

E. Notwithstanding subsection D of this section, for good cause shown, the department may extend an interim permit for not more than forty-five days.

F. Until an interim permit is issued, the department shall keep confidential all notices filed with the department by the prospective new owner of a licensed funeral establishment pursuant to this section.

G. For the purposes of this section, "regular business hours" means between the hours of 8:00 a.m. and 5:00 p.m. on any day of the week other than Saturday, Sunday or any other legal holiday or a day on which the department is authorized or obligated by law or executive order to close. END_STATUTE

Sec. 24. Section 32-1390.01, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1390.01. Prohibited acts; disciplinary actions; agents and employees; penalties

A. The department may deny or refuse to renew revoke the license of a funeral establishment or may take disciplinary action against a funeral establishment for any of the following reasons:

1. Committing fraud or misrepresentation in obtaining a license.

2. Failing to employ and designate a responsible funeral director.

3. Displaying or using a funeral establishment license at any place other than the funeral establishment to which it is issued.

4. Violating title 44, chapter 10, article 7.

5. Violating this chapter or a rule adopted pursuant to this chapter.

6. The commission of an act by an agent or an employee of the funeral establishment that violates this chapter or rules adopted pursuant to this chapter.

B. The acts or omissions of an agent or employee of a funeral establishment that violate this chapter or rules adopted pursuant to this chapter are considered to be the acts or omissions of the funeral establishment.

C. If the department finds that a funeral establishment has committed an offense listed in subsection A of this section, the department may take any of the following actions:

1. Issue a letter of censure or reprimand.

2. Impose probationary terms as the department considers necessary to protect the public health, safety and welfare and to rehabilitate or educate the licensee, including restitution to any customer or other person who was injured by a violation of this chapter or a rule adopted pursuant to this chapter.

3. Impose a civil penalty not to exceed $3,000 per violation.

4. Revoke the license of the funeral establishment pursuant to a disciplinary proceeding.

5. Suspend the license of the funeral establishment for not more than ninety days for a first offense or not more than one hundred eighty days for a second offense. END_STATUTE

Sec. 25. Section 32-1390.02, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1390.02. Disciplinary proceedings; notice

A. Article 3 of this chapter and rules adopted pursuant to article 3 of this chapter govern disciplinary proceedings brought against a funeral establishment.

B. Any notice required to be served by the department pursuant to section 32-1367, subsection K on a person who is licensed pursuant to article 2 of this chapter shall also be served by the department on each funeral establishment that employed or hired the person at the time of the conduct causing the department to serve the notice on the person. Each funeral establishment shall identify the person to whom the department shall send the notice to be served on the funeral establishment as required by this subsection. END_STATUTE

Sec. 26. Section 32-1391.12, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1391.12. Prearranged funeral sales endorsement; requirements

A. A funeral establishment that desires to offer or sell prearranged funeral agreements funded by trust shall apply to the department for an endorsement to its establishment license. The department shall issue the endorsement if the funeral establishment satisfies the following requirements:

1. Pays the prescribed application fee pursuant to section 32-1309.

2. Provides the name and address of each person owning ten percent or more of the common shares or other ownership or beneficial interest in the funeral establishment.

3. Provides the name and address, any prior names or aliases, all prior addresses for the immediately preceding seven-year period, and the date and location of birth of any responsible funeral director, manager, officer, owner, trustee or other person controlling the funeral establishment and who has been convicted of any of the crimes or has been the subject of any of the court actions described in section 10-202, subsection D, paragraph 1, subdivisions (a), (b) and (c).

4. Delivers a corporate surety bond in favor of this state, executed by a surety company authorized to do business in this state, in the amount that is prescribed by the department and that is recoverable by this state for the benefit of any person injured by a violation of this article. The department shall establish, in its rules, a separate bond requirement amount for each of the following:

(a) Funeral establishments that sold fewer than one hundred prearranged funeral agreements funded by trust during the immediately preceding calendar year.

(b) Funeral establishments that sold one hundred or more but fewer than two hundred fifty prearranged funeral agreements funded by trust during the immediately preceding calendar year.

(c) Funeral establishments that sold two hundred fifty or more prearranged funeral agreements funded by trust during the immediately preceding calendar year.

Bond amount requirements established by the department shall be at least $15,000 but not more than $50,000 for each funeral establishment.

5. Provides the full name and address of the funeral director designated by the funeral establishment to offer or sell prearranged funerals and all of the following:

(a) A recent photograph of the designated funeral director.

(b) Any prior names or aliases used by the designated funeral director.

(d) The date and location of the designated funeral director's birth.

(e) A declaration from the designated funeral director that the funeral director has not been convicted of any felony or convicted of any other crime involving dishonesty, fraud, deception, misrepresentation, embezzlement or breach of fiduciary duty in any state or federal court within the seven-year period immediately preceding the date of application.

(f) A declaration from the designated funeral director that the funeral director has not been the subject of a consumer fraud, securities fraud or civil racketeering judgment or consent order in any state or federal court within the seven-year period immediately preceding the date of application.

6. Provides information about existing prearranged funeral agreements funded by trust of the funeral establishment required by the department.

B. A prearranged funeral sales endorsement shall be renewed annually by the funeral establishment by payment of the prescribed renewal fee pursuant to section 32-1309 and by compliance with the requirements described in subsection A, paragraphs 2, 3 and 4 of this section on or before July 31 does not expire and remains valid unless either of the following occurs:

1. The department subsequently revokes the endorsement.

2. The endorsement is considered void because the licensee did not pay the application fee BEFORE the fee due date.

C. Failure to pay the renewal fee by July 31 voids the endorsement. An endorsement voided under this subsection may be reinstated on compliance with subsection B of this section and payment of the prescribed reinstatement fee. END_STATUTE

Sec. 27. Section 32-1391.13, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1391.13. Funeral establishment sales endorsement; grounds for denial or revocation; disciplinary action

The department may deny or refuse to renew revoke a prearranged funeral sales endorsement or may take disciplinary action against a funeral establishment if any of the following occurs:

1. The funeral establishment fails to satisfy the requirements of section 32-1391.12.

2. The funeral establishment fails to comply with the annual report requirement prescribed in section 32-1391.16.

3. The funeral establishment or its designated funeral director violates this article or any rule adopted pursuant to this article.

4. The funeral establishment makes false or misleading statements on its initial or renewal application or on the required annual report.

5. The designated funeral director is convicted of any crime or is the subject of any court decision described in section 32-1391.12, subsection A, paragraph 5, subdivision (e) or (f).

6. The funeral establishment or its designated funeral director violates any provision of title 44, chapter 10, article 7. END_STATUTE

Sec. 28. Section 32-1391.16, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1391.16. Prearranged funeral sales and trust account activities; funeral establishments; annual report

A. On or before May 1, each funeral establishment holding a prearranged funeral sales endorsement shall file an annual report with the department concerning its prearranged funeral sales and trust account activities during the preceding calendar year.

B. The funeral establishment shall pay the annual report fee prescribed in section 32-1309 when the annual report is filed.

C. The annual report shall contain the following information sworn to by the owner or owners of the funeral establishment:

1. The names and addresses of persons who were sold prearranged funerals funded by trust by the funeral establishment during the preceding calendar year and the names of the persons who are to be the beneficiaries of the prearranged funerals.

2. the name of the salesperson who sold each prearranged funeral pursuant to paragraph 1 of this subsection.

2. 3. The total contract amount for each purchaser listed in paragraph 1 of this subsection, the total amount of monies previously paid on each contract and the amount of monies paid by and refunded to the purchaser on each contract during the preceding calendar year.

3. 4. The total trust funds contained in the funeral establishment's prearranged funeral trust accounts as of the end of the preceding calendar year and the total funds received in the trust accounts during that year.

4. 5. The total amount of monies, if any, received from purchasers but not deposited in the trust accounts as of the end of the preceding calendar year, excluding initial service fees received by the funeral establishment.

5. 6. The names and addresses of all salespersons employed or otherwise engaged by the funeral establishment during the preceding calendar year and the names and registration numbers of all salespersons terminated during that year.

6. 7. The names and addresses of the financial institutions where the trust funds are on deposit and the account number of each account.

7. 8. A statement of the owner of the funeral establishment that the funeral establishment has complied with this article and rules adopted pursuant to this article.

8. 9. Other information required by the department.

D. Each funeral establishment that does not offer or sell prearranged funerals funded by trust or hold a prearranged funeral sales endorsement shall file with the department the annual report described in subsection C of this section concerning all prearranged funeral trust accounts established before January 1, 1985 and in existence during the preceding calendar year on or before May 1. For the purposes of this subsection, "prearranged funeral trust account" includes all prearranged funeral trust accounts or funds established pursuant to laws in existence before January 1, 1985.

E. The department of health services shall provide the department of insurance and financial institutions with a copy of each annual report filed pursuant to this section. END_STATUTE

Sec. 29. Repeal

Sections 32-1394.02 and 32-1396, Arizona Revised Statutes, are repealed.

Sec. 30. Section 32-1397, Arizona Revised Statutes, is amended to read:

START_STATUTE32-1397. Nontransferability of crematory licenses; change of ownership; interim permit; definition

A. A crematory license issued by the department is not transferable or subject to sale or assignment, whether by a voluntary or involuntary process.

B. If a change of ownership of a crematory occurs, the licensee shall notify the department in writing and shall surrender the license to the department within twenty days after the change of ownership. The new owner shall also notify the department in writing within twenty days after the change of ownership and shall submit an initial application for a crematory license to the department pursuant to section 32-1395.

C. The department shall issue an interim permit to a new owner of a licensed crematory to allow the new owner to continue the operation of the crematory during the period that the new owner's license application is pending if the following conditions are met:

2. The crematory continues to meet the requirements of section 32-1394.

D. An interim permit issued by the department pursuant to this section shall be for not more than forty-five days and shall not be extended except as provided in subsection E of this section. An interim permit is a conditional permit and authorizes the holder to operate a crematory as would be allowed under a crematory license issued pursuant to this article. The holder of an interim permit is subject to the licensing rules and disciplinary proceedings prescribed in this chapter and in rules adopted pursuant to this chapter.

E. Notwithstanding subsection D of this section, for good cause shown, the department may extend an interim permit for not more than forty-five days.

F. Until an interim permit is issued, the department shall keep confidential all notices filed with the department by the prospective new owner of a licensed crematory pursuant to this section.