Senate committee advances bill letting funeral homes charge small administrative fee to fund preneed oversight

Senate Bill 107, aimed at funding state oversight of preneed funeral services, received a favorable committee report after officials and lawmakers debated how to cover the board’s operating costs.

Sponsor Senator Figures asked the committee to hear from the Department of Insurance and the Alabama Board of Funeral Service and said she would not sponsor a bill unless it was “for the best all involved.” Commissioner Fowler, representing the Department of Insurance, described a multi-year transition that moved preneed regulation from the insurance department to the Board of Funeral Services and said the department had previously been subsidizing that regulation at a deficit. "We had been regulating preneed funeral service at a deficit," Fowler said, describing why statutory authority for fees is necessary.

Charles P. Ryan, executive director of the Alabama Board of Funeral Service, told the committee the board began regulating preneed on Oct. 1, 2023, and estimated it needs an additional $675,000 to add staff, cover travel and perform on-site examinations of firms that sell preneed services. The bill allows an administrative fee up to $30 per funeral service; Ryan said his preliminary estimate is the fee will be about $10 per service. "In 2024, there were exactly 59,000 deaths in the state of Alabama. $10, that would be 590,000 dollars," Ryan said, adding the remainder would come from license fees the board already collects.

Committee members pressed for clarifications. A senator asked about a separate $1,000 transfer fee in the bill; Ryan explained that transfer-of-authority reviews require audits and substantial staff time, and the bill sets the transfer fee at up to $1,000 because transfers are infrequent but labor-intensive. Senator Mayo and others contrasted the per-service fee approach with the alternative of raising license fees and noted the per-service option would be less economically burdensome for many funeral licensees.

Senator Bell initially moved to carry the bill over one week after receiving texts from funeral homes asking for more time to review the measure, saying opponents characterized the proposal as "adding a tax." Sponsor Senator Figures worked with Bell and ultimately asked that the bill be released from committee so the sponsor could continue working on concerns; Bell withdrew his carry-over motion. The committee then moved and seconded a favorable report and the clerk called the roll; the chair announced the bill was given a favorable report and sent out of committee.

The bill’s next steps are to appear on the Senate calendar for further action. The committee debate left open negotiations about fee levels and administrative details; sponsors pledged to continue working with stakeholders before floor consideration.