Texas House Bill HB1948

Texas 2017 - 85th Regular

Caption

Relating to the administration and operation of certain trusts created to provide for the general care and maintenance of perpetual care cemeteries.

Impact

The bill aims to enhance the financial sustainability of perpetual care cemeteries by offering a more flexible approach to fund management. By allowing the option to calculate distributions based on the total return method, which considers both income and capital appreciation, it is expected that cemeteries can better meet their maintenance obligations. This legislative change seeks to ensure that funds are adequately managed, preserving both the financial health of the trust and the quality of care provided at cemeteries.

Summary

House Bill 1948 focuses on the administration and operation of trusts created for the general care and maintenance of perpetual care cemeteries. The bill modifies existing legislation under Chapter 712 of the Health and Safety Code, introducing provisions that clarify the management of funds designated for perpetual care. Key changes include the establishment of rules for fund distributions based on either net income or total return methods, ensuring that the principal remains protected and intact for its intended purpose.

Sentiment

General sentiment around HB 1948 appears to be supportive, particularly among stakeholders involved in cemetery management and operations. Proponents argue that the bill's provisions will provide necessary clarity and flexibility in fund management, ultimately benefiting cemetery operations and enhancing maintenance standards. However, there may be concerns regarding the potential for mismanagement if the guidelines for fund distributions are not strictly enforced, highlighting a need for oversight.

Contention

Notable points of contention include the definitions and methods for calculating permissible distributions from trust funds. Critics may voice concerns about the risks associated with the total return method, which could incentivize more aggressive investment strategies. Additionally, there are considerations about how well the bill adds to the existing regulatory framework without complicating trust administration further. Therefore, the effectiveness of this bill in protecting the interests of cemetery plot owners and ensuring adequate maintenance remains an area of active discussion.