By: Campbell S.B. No. 1402
(In the Senate - Filed March 7, 2017; March 16, 2017, read
first time and referred to Committee on Business & Commerce;
April 10, 2017, reported favorably by the following vote: Yeas 8,
Nays 0; April 10, 2017, sent to printer.)
Click here to see the committee vote
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of cemeteries and the administration of
perpetual care trust funds.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. 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
may [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 2. Section 712.0034, Health and Safety Code, is
amended by amending Subsection (b) and adding Subsection (c) to
read as follows:
(b) To qualify for a certificate of authority under this
chapter, an applicant must demonstrate to the satisfaction of the
commissioner that:
(1) the applicant's business ability, experience,
character, financial condition, and general fitness warrant the
public's confidence;
(2) the cemetery operations manager has at least two
years of experience in cemetery management;
(3) the issuance of the certificate of authority is in
the public interest;
(4) the applicant, a principal of the applicant, or a
person who controls the applicant does not owe the department a
delinquent fee, assessment, administrative penalty, or other
amount imposed under this chapter or a rule adopted or order issued
under this chapter; and
(5) the applicant corporation:
(A) is in good standing and statutory compliance
with this state;
(B) is authorized to engage in the perpetual care
cemetery business in this state; [and]
(C) does not owe any delinquent franchise or
other taxes to this state; and
(D) wholly owns all land on which the perpetual
care cemetery will be located.
(c) For purposes of Subsection (b)(5)(D), an applicant
corporation is considered to wholly own land regardless of whether
the land is subject to a mortgage, deed of trust, or other lien.
SECTION 3. Section 712.0037, Health and Safety Code, is
amended by adding Subsections (a-1) and (a-2) to read as follows:
(a-1) Notwithstanding Subsection (a), a certificate holder
holding a certificate of authority issued before September 1, 2017,
that does not on that date satisfy the ownership requirement under
Section 712.0034(b)(5)(D) is not required to satisfy that ownership
requirement as a condition of renewal until September 1, 2022. The
commissioner may extend the period of compliance for the ownership
requirement if the certificate holder:
(1) files a written application for the extension in
the form and manner required by the department; and
(2) shows good cause for the extension.
(a-2) This subsection and Subsection (a-1) expire September
1, 2028.
SECTION 4. Section 712.021, Health and Safety Code, is
amended by amending Subsections (a) and (g) and adding Subsection
(h) to read as follows:
(a) Except as provided by Subsection (h), a [A] corporation
that operates a perpetual care cemetery in this state shall have a
fund established with a trust company or a bank with trust powers
that is located in this state. The trust company or bank may not
have more than one director who is also a director of the
corporation.
(g) In this subsection, "master trust account" means an
account containing the perpetual care trust funds of two or more
certificate holders for the purpose of collective investment and
administration. The trustors of two or more perpetual care trust
funds may establish a master [common] trust account [fund] in which
deposits required by this chapter are made, provided that separate
records of principal and income are maintained for each perpetual
care cemetery for the benefit of which the master [common] trust
account [fund] is established, and further provided that the income
attributable to each perpetual care cemetery is used only for the
perpetual care of that cemetery.
(h) A corporation may apply to the commissioner for
temporary relief and placement of a perpetual care trust fund in a
segregated interest bearing account at a Texas financial
institution, as defined by Section 201.101, Finance Code, if the
corporation:
(1) has been operating a perpetual care cemetery in
this state for at least two years; and
(2) has a perpetual care trust fund with a balance of
less than $100,000, the income of which is insufficient to pay
trustee fees.
SECTION 5. This Act takes effect September 1, 2017.
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