82R8320 NAJ-D
By: Flynn H.B. No. 2029
A BILL TO BE ENTITLED
AN ACT
relating to the sale of a cemetery plot; providing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 711.001, Health and Safety Code, is
amended by adding Subdivision (2-b) to read as follows:
(2-b) "Cemetery broker" means a person who sells the
exclusive right of sepulture for another person. The term does not
include a person who:
(A) is an officer, agent, or employee of the
cemetery organization in which the plot is located; or
(B) originally purchased the exclusive right of
sepulture for personal use.
SECTION 2. Section 711.012(a), Health and Safety Code, is
amended to read as follows:
(a) The Finance Commission of Texas may adopt rules to
enforce and administer Subchapter C-1 and Sections 711.003,
711.004, 711.007, 711.008, 711.0105, 711.021-711.024,
711.032-711.036, 711.038, 711.0381, 711.040-711.042, 711.052,
711.061, and 711.062 relating to perpetual care cemeteries.
SECTION 3. The heading to Section 711.038, Health and
Safety Code, is amended to read as follows:
Sec. 711.038. SALE OF PLOTS BY CEMETERY ORGANIZATIONS.
SECTION 4. Section 711.038(e), Health and Safety Code, is
amended to read as follows:
(e) A person who is an officer, agent, or employee of the
cemetery organization or its affiliate is not required to be
licensed to sell a plot in a dedicated cemetery.
SECTION 5. Subchapter C, Chapter 711, Health and Safety
Code, is amended by adding Section 711.0381 to read as follows:
Sec. 711.0381. RESALE OF PLOTS BY CERTAIN PERSONS. (a) A
person may not act as a cemetery broker in the resale of the
exclusive right of sepulture in a plot unless the person is a
registered cemetery broker or is exempt from registration under
Subchapter C-1.
(b) Resale of the exclusive right of sepulture in a plot is
subject to the rules of the cemetery organization and any
restrictions in the certificate of ownership, quitclaim agreement,
or other instrument of conveyance. A quitclaim agreement or other
instrument evidencing the conveyance of the exclusive right of
sepulture must be:
(1) in a form authorized by or otherwise acceptable to
the cemetery organization, subject to Subsection (c);
(2) signed by:
(A) the grantee named in the certificate of
ownership or other instrument of conveyance as filed and recorded
in the cemetery organization's office in accordance with Section
711.038, as the seller or transferor;
(B) the designated purchaser or transferee; and
(C) each cemetery broker or other agent assisting
in the transfer of the interment rights; and
(3) filed and recorded with the cemetery organization
not later than the third business day after the date of the sale.
(c) On request of a person acting as a cemetery broker, a
cemetery organization shall provide its rules, conveyance forms,
and written guidelines and procedures for brokered sales, if any.
(d) The sale of the exclusive right of sepulture in a group
of interment rights that were conveyed collectively may not be
divided without the consent of the cemetery organization.
(e) A person acting as a cemetery broker that sells the
right of sepulture in a plot shall collect and remit to the cemetery
organization:
(1) all fees required by law; and
(2) any other fee required by the rules of the cemetery
organization subject to Subsection (f).
(f) A fee required by a rule of the cemetery organization
for the sale of the right of sepulture in a plot under this section
may not exceed the fee charged on the sale of the right of sepulture
in a plot under Section 711.038 by the cemetery organization.
(g) A person acting as a cemetery broker must keep a record
of each sale under this section. The record must include:
(1) the name and address of the purchaser;
(2) the date of the purchase;
(3) a copy of the purchase agreement, with the name and
address of the cemetery;
(4) a specific description of the interment rights;
(5) the purchase price;
(6) the amount of fees collected and remitted in
accordance with Subsection (e); and
(7) information on the disposal of the purchase
agreement, including whether the agreement was conveyed, canceled,
or voided.
SECTION 6. Chapter 711, Health and Safety Code, is amended
by adding Subchapter C-1 to read as follows:
SUBCHAPTER C-1. CEMETERY BROKER REGISTRATION
Sec. 711.045. DEFINITIONS. In this subchapter:
(1) "Commission" means the Finance Commission of
Texas.
(2) "Commissioner" means the banking commissioner of
Texas.
(3) "Department" means the Texas Department of
Banking.
Sec. 711.046. CEMETERY BROKER REGISTRATION. (a) A person
may not act as a cemetery broker in the sale of the exclusive right
of sepulture in a plot unless the person is registered under this
subchapter as a cemetery broker or is exempt from registration
under Section 711.047. To register under this subchapter, a
cemetery broker shall file with the department a sworn, notarized
statement that contains:
(1) the name and street address of the cemetery
broker;
(2) the name, street address, and telephone number of
the representative of the cemetery broker to be contacted regarding
a written complaint; and
(3) any Internet or other electronic mail address of
the cemetery broker.
(b) The registration of a cemetery broker is valid until
withdrawn or revoked. Periodic renewal of the registration is not
required.
(c) A registered cemetery broker shall update the
information contained in the registration statement not later than
the 60th day after the date the information changes.
(d) The department may charge a cemetery broker a reasonable
fee to cover the costs of filing and maintaining the registration
statement and administering this chapter. The administration fee
may not exceed $100 per year.
Sec. 711.047. EXEMPTIONS. This subchapter does not apply
to a person offering to sell or selling the exclusive right of
sepulture in a plot if the person is:
(1) an officer, agent, employee, or affiliate of the
cemetery organization in which the plot is located, acting at the
direction or under the control of the cemetery organization;
(2) an employee of a registered cemetery broker;
(3) with respect to the specific plot for sale:
(A) a grantee named in the certificate of
ownership or other instrument of conveyance for the plot as filed
and recorded in the cemetery organization's office under Section
711.038;
(B) a spouse or other heir of the named grantee as
described by Section 711.039;
(C) an executor, administrator, or guardian of
the named grantee appointed by court order; or
(D) an attorney-in-fact for the named grantee
under a durable power of attorney if the person is not otherwise
engaged in the business of a cemetery broker and does not solicit
appointment as attorney-in-fact for the purpose of offering to sell
or selling the exclusive right of sepulture of the named grantee; or
(4) otherwise exempt in accordance with rules adopted
by the commission as necessary to protect the public health and
safety.
Sec. 711.048. COMPLAINTS. (a) A cemetery broker is subject
to rules adopted under Section 11.307, Finance Code, regarding the
manner in which the cemetery broker provides consumers with
information on how to file complaints with the department. The
rules must be consistent with the obligations imposed by this
section.
(b) If the department receives a signed written complaint
from a person concerning a cemetery broker, the department shall
notify the cemetery broker's designated representative in writing
of the complaint not later than the 31st day after the date the
complaint was received and provide a copy of the complaint to the
representative. The department may:
(1) require the cemetery broker to resolve the
complaint or to provide the department with a response to the
complaint; or
(2) direct the cemetery broker in writing to take
specific action to resolve the complaint.
Sec. 711.049. TERMINATION OF REGISTRATION. (a) A cemetery
broker may withdraw the cemetery broker's registration at any time.
(b) After notice and opportunity for a hearing, the
commissioner may revoke the registration of a registered cemetery
broker that:
(1) fails to pay the annual administration fee and
fails to cure the default not later than the 30th day after the date
written notice of the default is mailed by the department to the
cemetery broker;
(2) fails or refuses to comply with the department's
written request for a response to a complaint; or
(3) the commissioner concludes, after considering a
complaint filed under this chapter, has engaged in an intentional
course of conduct that:
(A) violates federal or state law; or
(B) constitutes improper, fraudulent, or
dishonest dealings.
(c) The commissioner shall state the basis of the decision
in an order revoking the registration of a cemetery broker. The
cemetery broker may appeal an order revoking registration in the
manner provided by Chapter 2001, Government Code.
SECTION 7. Section 711.052(a), Health and Safety Code, is
amended to read as follows:
(a) A person who is an individual, firm, association,
corporation, or municipality, or an officer, agent, or employee of
an individual, firm, association, corporation, or municipality,
commits an offense if the person:
(1) engages in a business for cemetery purposes in
this state other than through a corporation organized for that
purpose, if a corporation is required by law;
(2) fails or refuses to keep records of interment as
required by Sections 711.003 and 711.004;
(3) sells, offers to sell, or advertises for sale a
plot or the exclusive right of sepulture in a plot for purposes of
speculation or investment; [or]
(4) represents through advertising or printed
material that a retail department will be established for the
resale of the plots of plot purchasers, that specific improvements
will be made in the cemetery, or that specific merchandise or
services will be furnished to a plot owner, unless adequate funds or
reserves are created by the cemetery organization for the
represented purpose;
(5) offers or receives monetary inducement to solicit
business for a cemetery broker;
(6) fails or refuses to keep records of resales or to
collect and remit fees as required by Section 711.0381; or
(7) fails or refuses to register as a cemetery broker
as required by Subchapter C-1.
SECTION 8. Section 711.056(a), Health and Safety Code, is
amended to read as follows:
(a) If after a hearing conducted as provided by Chapter
2001, Government Code, the trier of fact finds that a violation of
this chapter or a rule of the Finance Commission of Texas
establishes a pattern of wilful disregard for the requirements of
this chapter or rules of the finance commission, the trier of fact
shall recommend to the commissioner that the maximum administrative
penalty permitted under Section 711.055 be imposed on the person
committing the violation or that the commissioner cancel or not
renew:
(1) the person's registration under Subchapter C-1, if
the person is registered under that subchapter; or
(2) the person's permit under Chapter 154, Finance
Code, if the person holds such a permit.
SECTION 9. Subchapter D, Chapter 711, Health and Safety
Code, is amended by adding Sections 711.057, 711.058, and 711.059
to read as follows:
Sec. 711.057. EMERGENCY ORDER. (a) The commissioner may
issue an emergency order that takes effect immediately if the
commissioner finds that immediate and irreparable harm is
threatened to the public or a beneficiary under a sale of the
exclusive right of sepulture in a plot.
(b) An emergency order remains in effect unless stayed by
the commissioner.
(c) The person named in the order may request in writing an
opportunity for a hearing to show that the emergency order should be
stayed. On receipt of the request, the commissioner shall set a
time for the hearing before the 22nd day after the date the
commissioner received the request, unless extended at the request
of the person named in the order.
(d) The hearing is an administrative hearing relating to the
validity of findings that support immediate effect of the order.
Sec. 711.058. RESTITUTION. The commissioner may issue an
order to a person requiring restitution if, after notice and
opportunity for hearing, the commissioner finds that the person:
(1) failed to remit a fee in accordance with Section
711.0381; or
(2) misappropriated, converted, or illegally withheld
or failed or refused to pay on demand money entrusted to the person
that belongs to a cemetery organization under an instrument of
conveyance.
Sec. 711.059. SEIZURE OF ACCOUNTS AND RECORDS. (a) The
commissioner may issue an order to seize accounts in which funds
from the sale of the exclusive right of sepulture in a plot,
including earnings, may be held and may issue an order to seize the
records that relate to the sale of the exclusive right of sepulture
in a plot if the commissioner finds, by examination or other
credible evidence, that the person:
(1) failed to remit a fee in accordance with Section
711.0381;
(2) misappropriated, converted, or illegally withheld
or failed or refused to pay on demand money entrusted to the person
that belongs to a cemetery organization under an instrument of
conveyance;
(3) refused to submit to examination by the
department;
(4) was the subject of an order to cancel, suspend, or
refuse a registration under Subchapter C-1; or
(5) is required to be registered under Subchapter C-1
and is not registered or transferred the ownership of the business
that required registration to another person who is not registered.
(b) An order shall be served on the person named in the order
by certified mail, return receipt requested, to the last known
address of the person.
(c) An order takes effect immediately and remains in effect
unless stayed by the commissioner, if the commissioner finds that
immediate and irreparable harm is threatened to the public or a
beneficiary under a sale of the exclusive right of sepulture in a
plot. If such a threat does not exist, the order must state the
effective date, which may not be before the 16th day after the date
the order is mailed.
(d) An emergency order remains in effect unless stayed by
the commissioner. The person named in the order may request in
writing an opportunity for a hearing to show that the emergency
order should be stayed. On receipt of the request, the commissioner
shall set a time before the 22nd day after the date the commissioner
received the request, unless extended at the request of the person
named in the order. The hearing is an administrative hearing
relating to the findings that support immediate effect of the
order.
(e) A nonemergency order takes effect as proposed unless the
person named in the order requests a hearing not later than the 15th
day after the date the order is mailed.
(f) After the issuance of an order under this section, the
commissioner may initiate an administrative claim for ancillary
relief, including a claim for:
(1) costs incurred in the administration, transfer, or
other disposition of the seized assets and records; or
(2) costs reasonably expected to be incurred in
connection with the administration and performance of any
outstanding certificate of ownership or other instrument of
conveyance that is a part of a sale by the person subject to the
order.
(g) The remedy provided by Subsection (f) is not exclusive.
The commissioner may seek an additional remedy authorized under
this subchapter.
SECTION 10. Chapter 711, Health and Safety Code, is amended
by adding Subchapter F to read as follows:
SUBCHAPTER F. POWERS AND DUTIES OF DEPARTMENT
RELATING TO CEMETERY BROKERS
Sec. 711.081. DEFINITIONS. In this subchapter:
(1) "Commission" means the Finance Commission of
Texas.
(2) "Commissioner" means the banking commissioner of
Texas.
(3) "Department" means the Texas Department of
Banking.
Sec. 711.082. ADMINISTRATION; FEES. (a) The department
shall administer Subchapters C and C-1 relating to cemetery
brokers.
(b) The commission may adopt reasonable rules concerning:
(1) fees to defray the cost of administering
Subchapters C and C-1;
(2) the retention and inspection of records relating
to the resale of the exclusive right of sepulture in a plot;
(3) changes in the management or control of a cemetery
broker's business; and
(4) any other matter relating to the enforcement and
administration of Subchapters C and C-1.
(c) A fee set by the commission may not produce unnecessary
fund balances.
Sec. 711.083. RECORDS; EXAMINATION. (a) A person acting as
a cemetery broker shall maintain records in accordance with this
subchapter and Section 711.0381.
(b) The department shall examine the records of each person
acting as a cemetery broker if the commissioner determines the
examination is necessary to:
(1) safeguard the interests of purchasers and
beneficiaries of the exclusive right of sepulture in a plot; and
(2) efficiently enforce applicable law.
(c) A person may maintain and provide a record required to
be maintained under this section in an electronic format if the
record is reliable and can be retrieved in a timely manner.
Sec. 711.084. EXAMINATION FEE. (a) For each examination
conducted under Section 711.083, the commissioner or the
commissioner's agent shall impose on the cemetery broker a fee in an
amount set by the commission under Section 711.082.
(b) The amount of the fee must be sufficient to cover:
(1) the cost of the examination, including:
(A) salary and travel expenses for department
employees, including travel to and from the place where the records
are kept; and
(B) any other expense necessarily incurred in
conducting the examination;
(2) the equitable or proportionate cost of maintaining
and operating the department; and
(3) the cost of enforcing this subchapter.
SECTION 11. (a) Except as provided by Subsection (b) of
this section, this Act takes effect immediately if it receives a
vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. Except as
provided by Subsection (b) of this section, if this Act does not
receive the vote necessary for immediate effect, this Act takes
effect September 1, 2011.
(b) Subchapter C-1, Chapter 711, Health and Safety Code, as
added by this Act, takes effect January 1, 2012.