Texas 2011 - 82nd Regular

Texas House Bill HB2029 Compare Versions

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1	1	82R8320 NAJ-D
2	2	By: Flynn H.B. No. 2029
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the sale of a cemetery plot; providing penalties.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Section 711.001, Health and Safety Code, is
10	10	amended by adding Subdivision (2-b) to read as follows:
11	11	(2-b) "Cemetery broker" means a person who sells the
12	12	exclusive right of sepulture for another person. The term does not
13	13	include a person who:
14	14	(A) is an officer, agent, or employee of the
15	15	cemetery organization in which the plot is located; or
16	16	(B) originally purchased the exclusive right of
17	17	sepulture for personal use.
18	18	SECTION 2. Section 711.012(a), Health and Safety Code, is
19	19	amended to read as follows:
20	20	(a) The Finance Commission of Texas may adopt rules to
21	21	enforce and administer Subchapter C-1 and Sections 711.003,
22	22	711.004, 711.007, 711.008, 711.0105, 711.021-711.024,
23	23	711.032-711.036, 711.038, 711.0381, 711.040-711.042, 711.052,
24	24	711.061, and 711.062 relating to perpetual care cemeteries.
25	25	SECTION 3. The heading to Section 711.038, Health and
26	26	Safety Code, is amended to read as follows:
27	27	Sec. 711.038. SALE OF PLOTS BY CEMETERY ORGANIZATIONS.
28	28	SECTION 4. Section 711.038(e), Health and Safety Code, is
29	29	amended to read as follows:
30	30	(e) A person who is an officer, agent, or employee of the
31	31	cemetery organization or its affiliate is not required to be
32	32	licensed to sell a plot in a dedicated cemetery.
33	33	SECTION 5. Subchapter C, Chapter 711, Health and Safety
34	34	Code, is amended by adding Section 711.0381 to read as follows:
35	35	Sec. 711.0381. RESALE OF PLOTS BY CERTAIN PERSONS. (a) A
36	36	person may not act as a cemetery broker in the resale of the
37	37	exclusive right of sepulture in a plot unless the person is a
38	38	registered cemetery broker or is exempt from registration under
39	39	Subchapter C-1.
40	40	(b) Resale of the exclusive right of sepulture in a plot is
41	41	subject to the rules of the cemetery organization and any
42	42	restrictions in the certificate of ownership, quitclaim agreement,
43	43	or other instrument of conveyance. A quitclaim agreement or other
44	44	instrument evidencing the conveyance of the exclusive right of
45	45	sepulture must be:
46	46	(1) in a form authorized by or otherwise acceptable to
47	47	the cemetery organization, subject to Subsection (c);
48	48	(2) signed by:
49	49	(A) the grantee named in the certificate of
50	50	ownership or other instrument of conveyance as filed and recorded
51	51	in the cemetery organization's office in accordance with Section
52	52	711.038, as the seller or transferor;
53	53	(B) the designated purchaser or transferee; and
54	54	(C) each cemetery broker or other agent assisting
55	55	in the transfer of the interment rights; and
56	56	(3) filed and recorded with the cemetery organization
57	57	not later than the third business day after the date of the sale.
58	58	(c) On request of a person acting as a cemetery broker, a
59	59	cemetery organization shall provide its rules, conveyance forms,
60	60	and written guidelines and procedures for brokered sales, if any.
61	61	(d) The sale of the exclusive right of sepulture in a group
62	62	of interment rights that were conveyed collectively may not be
63	63	divided without the consent of the cemetery organization.
64	64	(e) A person acting as a cemetery broker that sells the
65	65	right of sepulture in a plot shall collect and remit to the cemetery
66	66	organization:
67	67	(1) all fees required by law; and
68	68	(2) any other fee required by the rules of the cemetery
69	69	organization subject to Subsection (f).
70	70	(f) A fee required by a rule of the cemetery organization
71	71	for the sale of the right of sepulture in a plot under this section
72	72	may not exceed the fee charged on the sale of the right of sepulture
73	73	in a plot under Section 711.038 by the cemetery organization.
74	74	(g) A person acting as a cemetery broker must keep a record
75	75	of each sale under this section. The record must include:
76	76	(1) the name and address of the purchaser;
77	77	(2) the date of the purchase;
78	78	(3) a copy of the purchase agreement, with the name and
79	79	address of the cemetery;
80	80	(4) a specific description of the interment rights;
81	81	(5) the purchase price;
82	82	(6) the amount of fees collected and remitted in
83	83	accordance with Subsection (e); and
84	84	(7) information on the disposal of the purchase
85	85	agreement, including whether the agreement was conveyed, canceled,
86	86	or voided.
87	87	SECTION 6. Chapter 711, Health and Safety Code, is amended
88	88	by adding Subchapter C-1 to read as follows:
89	89	SUBCHAPTER C-1. CEMETERY BROKER REGISTRATION
90	90	Sec. 711.045. DEFINITIONS. In this subchapter:
91	91	(1) "Commission" means the Finance Commission of
92	92	Texas.
93	93	(2) "Commissioner" means the banking commissioner of
94	94	Texas.
95	95	(3) "Department" means the Texas Department of
96	96	Banking.
97	97	Sec. 711.046. CEMETERY BROKER REGISTRATION. (a) A person
98	98	may not act as a cemetery broker in the sale of the exclusive right
99	99	of sepulture in a plot unless the person is registered under this
100	100	subchapter as a cemetery broker or is exempt from registration
101	101	under Section 711.047. To register under this subchapter, a
102	102	cemetery broker shall file with the department a sworn, notarized
103	103	statement that contains:
104	104	(1) the name and street address of the cemetery
105	105	broker;
106	106	(2) the name, street address, and telephone number of
107	107	the representative of the cemetery broker to be contacted regarding
108	108	a written complaint; and
109	109	(3) any Internet or other electronic mail address of
110	110	the cemetery broker.
111	111	(b) The registration of a cemetery broker is valid until
112	112	withdrawn or revoked. Periodic renewal of the registration is not
113	113	required.
114	114	(c) A registered cemetery broker shall update the
115	115	information contained in the registration statement not later than
116	116	the 60th day after the date the information changes.
117	117	(d) The department may charge a cemetery broker a reasonable
118	118	fee to cover the costs of filing and maintaining the registration
119	119	statement and administering this chapter. The administration fee
120	120	may not exceed $100 per year.
121	121	Sec. 711.047. EXEMPTIONS. This subchapter does not apply
122	122	to a person offering to sell or selling the exclusive right of
123	123	sepulture in a plot if the person is:
124	124	(1) an officer, agent, employee, or affiliate of the
125	125	cemetery organization in which the plot is located, acting at the
126	126	direction or under the control of the cemetery organization;
127	127	(2) an employee of a registered cemetery broker;
128	128	(3) with respect to the specific plot for sale:
129	129	(A) a grantee named in the certificate of
130	130	ownership or other instrument of conveyance for the plot as filed
131	131	and recorded in the cemetery organization's office under Section
132	132	711.038;
133	133	(B) a spouse or other heir of the named grantee as
134	134	described by Section 711.039;
135	135	(C) an executor, administrator, or guardian of
136	136	the named grantee appointed by court order; or
137	137	(D) an attorney-in-fact for the named grantee
138	138	under a durable power of attorney if the person is not otherwise
139	139	engaged in the business of a cemetery broker and does not solicit
140	140	appointment as attorney-in-fact for the purpose of offering to sell
141	141	or selling the exclusive right of sepulture of the named grantee; or
142	142	(4) otherwise exempt in accordance with rules adopted
143	143	by the commission as necessary to protect the public health and
144	144	safety.
145	145	Sec. 711.048. COMPLAINTS. (a) A cemetery broker is subject
146	146	to rules adopted under Section 11.307, Finance Code, regarding the
147	147	manner in which the cemetery broker provides consumers with
148	148	information on how to file complaints with the department. The
149	149	rules must be consistent with the obligations imposed by this
150	150	section.
151	151	(b) If the department receives a signed written complaint
152	152	from a person concerning a cemetery broker, the department shall
153	153	notify the cemetery broker's designated representative in writing
154	154	of the complaint not later than the 31st day after the date the
155	155	complaint was received and provide a copy of the complaint to the
156	156	representative. The department may:
157	157	(1) require the cemetery broker to resolve the
158	158	complaint or to provide the department with a response to the
159	159	complaint; or
160	160	(2) direct the cemetery broker in writing to take
161	161	specific action to resolve the complaint.
162	162	Sec. 711.049. TERMINATION OF REGISTRATION. (a) A cemetery
163	163	broker may withdraw the cemetery broker's registration at any time.
164	164	(b) After notice and opportunity for a hearing, the
165	165	commissioner may revoke the registration of a registered cemetery
166	166	broker that:
167	167	(1) fails to pay the annual administration fee and
168	168	fails to cure the default not later than the 30th day after the date
169	169	written notice of the default is mailed by the department to the
170	170	cemetery broker;
171	171	(2) fails or refuses to comply with the department's
172	172	written request for a response to a complaint; or
173	173	(3) the commissioner concludes, after considering a
174	174	complaint filed under this chapter, has engaged in an intentional
175	175	course of conduct that:
176	176	(A) violates federal or state law; or
177	177	(B) constitutes improper, fraudulent, or
178	178	dishonest dealings.
179	179	(c) The commissioner shall state the basis of the decision
180	180	in an order revoking the registration of a cemetery broker. The
181	181	cemetery broker may appeal an order revoking registration in the
182	182	manner provided by Chapter 2001, Government Code.
183	183	SECTION 7. Section 711.052(a), Health and Safety Code, is
184	184	amended to read as follows:
185	185	(a) A person who is an individual, firm, association,
186	186	corporation, or municipality, or an officer, agent, or employee of
187	187	an individual, firm, association, corporation, or municipality,
188	188	commits an offense if the person:
189	189	(1) engages in a business for cemetery purposes in
190	190	this state other than through a corporation organized for that
191	191	purpose, if a corporation is required by law;
192	192	(2) fails or refuses to keep records of interment as
193	193	required by Sections 711.003 and 711.004;
194	194	(3) sells, offers to sell, or advertises for sale a
195	195	plot or the exclusive right of sepulture in a plot for purposes of
196	196	speculation or investment; [or]
197	197	(4) represents through advertising or printed
198	198	material that a retail department will be established for the
199	199	resale of the plots of plot purchasers, that specific improvements
200	200	will be made in the cemetery, or that specific merchandise or
201	201	services will be furnished to a plot owner, unless adequate funds or
202	202	reserves are created by the cemetery organization for the
203	203	represented purpose;
204	204	(5) offers or receives monetary inducement to solicit
205	205	business for a cemetery broker;
206	206	(6) fails or refuses to keep records of resales or to
207	207	collect and remit fees as required by Section 711.0381; or
208	208	(7) fails or refuses to register as a cemetery broker
209	209	as required by Subchapter C-1.
210	210	SECTION 8. Section 711.056(a), Health and Safety Code, is
211	211	amended to read as follows:
212	212	(a) If after a hearing conducted as provided by Chapter
213	213	2001, Government Code, the trier of fact finds that a violation of
214	214	this chapter or a rule of the Finance Commission of Texas
215	215	establishes a pattern of wilful disregard for the requirements of
216	216	this chapter or rules of the finance commission, the trier of fact
217	217	shall recommend to the commissioner that the maximum administrative
218	218	penalty permitted under Section 711.055 be imposed on the person
219	219	committing the violation or that the commissioner cancel or not
220	220	renew:
221	221	(1) the person's registration under Subchapter C-1, if
222	222	the person is registered under that subchapter; or
223	223	(2) the person's permit under Chapter 154, Finance
224	224	Code, if the person holds such a permit.
225	225	SECTION 9. Subchapter D, Chapter 711, Health and Safety
226	226	Code, is amended by adding Sections 711.057, 711.058, and 711.059
227	227	to read as follows:
228	228	Sec. 711.057. EMERGENCY ORDER. (a) The commissioner may
229	229	issue an emergency order that takes effect immediately if the
230	230	commissioner finds that immediate and irreparable harm is
231	231	threatened to the public or a beneficiary under a sale of the
232	232	exclusive right of sepulture in a plot.
233	233	(b) An emergency order remains in effect unless stayed by
234	234	the commissioner.
235	235	(c) The person named in the order may request in writing an
236	236	opportunity for a hearing to show that the emergency order should be
237	237	stayed. On receipt of the request, the commissioner shall set a
238	238	time for the hearing before the 22nd day after the date the
239	239	commissioner received the request, unless extended at the request
240	240	of the person named in the order.
241	241	(d) The hearing is an administrative hearing relating to the
242	242	validity of findings that support immediate effect of the order.
243	243	Sec. 711.058. RESTITUTION. The commissioner may issue an
244	244	order to a person requiring restitution if, after notice and
245	245	opportunity for hearing, the commissioner finds that the person:
246	246	(1) failed to remit a fee in accordance with Section
247	247	711.0381; or
248	248	(2) misappropriated, converted, or illegally withheld
249	249	or failed or refused to pay on demand money entrusted to the person
250	250	that belongs to a cemetery organization under an instrument of
251	251	conveyance.
252	252	Sec. 711.059. SEIZURE OF ACCOUNTS AND RECORDS. (a) The
253	253	commissioner may issue an order to seize accounts in which funds
254	254	from the sale of the exclusive right of sepulture in a plot,
255	255	including earnings, may be held and may issue an order to seize the
256	256	records that relate to the sale of the exclusive right of sepulture
257	257	in a plot if the commissioner finds, by examination or other
258	258	credible evidence, that the person:
259	259	(1) failed to remit a fee in accordance with Section
260	260	711.0381;
261	261	(2) misappropriated, converted, or illegally withheld
262	262	or failed or refused to pay on demand money entrusted to the person
263	263	that belongs to a cemetery organization under an instrument of
264	264	conveyance;
265	265	(3) refused to submit to examination by the
266	266	department;
267	267	(4) was the subject of an order to cancel, suspend, or
268	268	refuse a registration under Subchapter C-1; or
269	269	(5) is required to be registered under Subchapter C-1
270	270	and is not registered or transferred the ownership of the business
271	271	that required registration to another person who is not registered.
272	272	(b) An order shall be served on the person named in the order
273	273	by certified mail, return receipt requested, to the last known
274	274	address of the person.
275	275	(c) An order takes effect immediately and remains in effect
276	276	unless stayed by the commissioner, if the commissioner finds that
277	277	immediate and irreparable harm is threatened to the public or a
278	278	beneficiary under a sale of the exclusive right of sepulture in a
279	279	plot. If such a threat does not exist, the order must state the
280	280	effective date, which may not be before the 16th day after the date
281	281	the order is mailed.
282	282	(d) An emergency order remains in effect unless stayed by
283	283	the commissioner. The person named in the order may request in
284	284	writing an opportunity for a hearing to show that the emergency
285	285	order should be stayed. On receipt of the request, the commissioner
286	286	shall set a time before the 22nd day after the date the commissioner
287	287	received the request, unless extended at the request of the person
288	288	named in the order. The hearing is an administrative hearing
289	289	relating to the findings that support immediate effect of the
290	290	order.
291	291	(e) A nonemergency order takes effect as proposed unless the
292	292	person named in the order requests a hearing not later than the 15th
293	293	day after the date the order is mailed.
294	294	(f) After the issuance of an order under this section, the
295	295	commissioner may initiate an administrative claim for ancillary
296	296	relief, including a claim for:
297	297	(1) costs incurred in the administration, transfer, or
298	298	other disposition of the seized assets and records; or
299	299	(2) costs reasonably expected to be incurred in
300	300	connection with the administration and performance of any
301	301	outstanding certificate of ownership or other instrument of
302	302	conveyance that is a part of a sale by the person subject to the
303	303	order.
304	304	(g) The remedy provided by Subsection (f) is not exclusive.
305	305	The commissioner may seek an additional remedy authorized under
306	306	this subchapter.
307	307	SECTION 10. Chapter 711, Health and Safety Code, is amended
308	308	by adding Subchapter F to read as follows:
309	309	SUBCHAPTER F. POWERS AND DUTIES OF DEPARTMENT
310	310	RELATING TO CEMETERY BROKERS
311	311	Sec. 711.081. DEFINITIONS. In this subchapter:
312	312	(1) "Commission" means the Finance Commission of
313	313	Texas.
314	314	(2) "Commissioner" means the banking commissioner of
315	315	Texas.
316	316	(3) "Department" means the Texas Department of
317	317	Banking.
318	318	Sec. 711.082. ADMINISTRATION; FEES. (a) The department
319	319	shall administer Subchapters C and C-1 relating to cemetery
320	320	brokers.
321	321	(b) The commission may adopt reasonable rules concerning:
322	322	(1) fees to defray the cost of administering
323	323	Subchapters C and C-1;
324	324	(2) the retention and inspection of records relating
325	325	to the resale of the exclusive right of sepulture in a plot;
326	326	(3) changes in the management or control of a cemetery
327	327	broker's business; and
328	328	(4) any other matter relating to the enforcement and
329	329	administration of Subchapters C and C-1.
330	330	(c) A fee set by the commission may not produce unnecessary
331	331	fund balances.
332	332	Sec. 711.083. RECORDS; EXAMINATION. (a) A person acting as
333	333	a cemetery broker shall maintain records in accordance with this
334	334	subchapter and Section 711.0381.
335	335	(b) The department shall examine the records of each person
336	336	acting as a cemetery broker if the commissioner determines the
337	337	examination is necessary to:
338	338	(1) safeguard the interests of purchasers and
339	339	beneficiaries of the exclusive right of sepulture in a plot; and
340	340	(2) efficiently enforce applicable law.
341	341	(c) A person may maintain and provide a record required to
342	342	be maintained under this section in an electronic format if the
343	343	record is reliable and can be retrieved in a timely manner.
344	344	Sec. 711.084. EXAMINATION FEE. (a) For each examination
345	345	conducted under Section 711.083, the commissioner or the
346	346	commissioner's agent shall impose on the cemetery broker a fee in an
347	347	amount set by the commission under Section 711.082.
348	348	(b) The amount of the fee must be sufficient to cover:
349	349	(1) the cost of the examination, including:
350	350	(A) salary and travel expenses for department
351	351	employees, including travel to and from the place where the records
352	352	are kept; and
353	353	(B) any other expense necessarily incurred in
354	354	conducting the examination;
355	355	(2) the equitable or proportionate cost of maintaining
356	356	and operating the department; and
357	357	(3) the cost of enforcing this subchapter.
358	358	SECTION 11. (a) Except as provided by Subsection (b) of
359	359	this section, this Act takes effect immediately if it receives a
360	360	vote of two-thirds of all the members elected to each house, as
361	361	provided by Section 39, Article III, Texas Constitution. Except as
362	362	provided by Subsection (b) of this section, if this Act does not
363	363	receive the vote necessary for immediate effect, this Act takes
364	364	effect September 1, 2011.
365	365	(b) Subchapter C-1, Chapter 711, Health and Safety Code, as
366	366	added by this Act, takes effect January 1, 2012.