This is the third and final post in our continuing discussion of the draft guidance issued by the Division of Cemeteries. It will provide a brief summary of some of the more minor but notable provisions included in the guidance. These include:

• An emphasis that only net appreciation of the Fund and not Fund principal can be spent;

• A cemetery must be in “good standing” (this term is explained in the draft regulations) to apply;

• Net appreciation can only be used for maintenance and preservation of cemetery grounds and not directly or indirectly for any other purpose;

• Net appreciation is a last resort and general funds and income from the Fund must be maximized before making an application to use net appreciation;

• A cemetery must show a calculation of “net appreciation” that indicates a positive balance. If the calculation indicates a zero or negative calculation, no net appreciation exists; and

• Only a portion of that appreciation that is “prudent” under PMIFA can be appropriated. An appropriation of 20% or less of net appreciation is presumptively prudent. An appropriation of 20% or more will be objected to and disapproved absent unusual and exigent circumstances.

By requiring cemeteries to apply the PMIFA instead of the little understood prior formula, it is hoped that cemeteries will have increased tools to aid their maintenance and preservation. Numerous concerns have already been raised about how net appreciation is calculated under the proposed guidance particularly the choice of 12/31/99 as the starting date for the market value of the Fund. As such, cemeteries are being encouraged to offer their input on how the draft guidance can be improved.