By:  Parker                                           S.B. No. 1076
       73R3560 KLL-D
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the laws governing cemeteries and perpetual care
    1-3  cemeteries; providing civil and criminal penalties.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  Section 711.001, Health and Safety Code, is
    1-6  amended to read as follows:
    1-7        Sec. 711.001.  Definitions.  In this chapter:
    1-8              (1)  "Burial park" means a tract of land that is
    1-9  <dedicated to and is> used or intended to be used for interment in
   1-10  graves.
   1-11              (2)  "Cemetery" means a place that is <dedicated to and
   1-12  that is> used or intended to be used for interment, and includes a
   1-13  graveyard, burial park, or mausoleum.
   1-14              (3)  "Cemetery organization <association>" means <an
   1-15  organization that is>:
   1-16                    (A)  an unincorporated association of plot owners
   1-17  not operated for profit that is authorized by its articles of
   1-18  association to conduct a business for cemetery purposes; or
   1-19                    (B)  <or> a corporation, either for profit or not
   1-20  for profit, that is<; and>
   1-21                    <(B)>  authorized by its articles of
   1-22  incorporation to conduct a business for cemetery purposes.
   1-23              (4)  "Cemetery purpose" means a purpose necessary or
   1-24  incidental to establishing, maintaining, managing, operating,
    2-1  improving, or conducting a cemetery, interring remains, or caring
    2-2  for, preserving, and embellishing cemetery property.
    2-3              (5)  "Columbarium" means a durable, fireproof
    2-4  structure, or a room or other space in a durable, fireproof
    2-5  structure, containing niches and used or intended to be used to
    2-6  contain cremated remains.
    2-7              (6)  "Cremated remains" means the bone fragments
    2-8  remaining after the cremation process, which may include the
    2-9  residue of any foreign materials that were cremated with the human
   2-10  remains <remains after incineration in a crematory>.
   2-11              (7)  "Cremation" means the irreversible process of
   2-12  reducing human remains to bone fragments through extreme heat and
   2-13  evaporation, which may include the processing or the pulverization
   2-14  of bone fragments <reduction of remains to cremated remains>.
   2-15              (8)  "Crematory" means a structure containing a furnace
   2-16  used or intended to be used for the cremation <incineration> of
   2-17  human remains.
   2-18              (9)  "Crematory and columbarium" means a durable,
   2-19  fireproof structure containing both a crematory and columbarium.
   2-20              (10)  "Crypt" means a chamber in a mausoleum of
   2-21  sufficient size to inter human <uncremated> remains.
   2-22              (11)  "Directors" means the governing body of a
   2-23  cemetery organization <association>.
   2-24              (12)  "Entombment" means interment in a crypt.
   2-25              (13)  "Funeral establishment" means a place of business
   2-26  used in the care and preparation for interment or transportation of
   2-27  human remains, or any place where one or more persons, either as
    3-1  sole owner, in copartnership, or through corporate status, are
    3-2  engaged or represent themselves to be engaged in the business of
    3-3  embalming or funeral directing.
    3-4              (14)  "Grave" means a space of ground that is in a
    3-5  burial park and that is used or intended to be used for interment
    3-6  in the ground.
    3-7              (15)  "Human remains" means the body of a decedent.
    3-8              (16) <(14)>  "Interment" means the permanent
    3-9  disposition of remains by entombment, <or> burial, or placement in
   3-10  a niche.
   3-11              (17)  "Interment right" means the right to inter the
   3-12  remains of one decedent in a plot.
   3-13              (18) <(15)>  "Inurnment" means the placement of
   3-14  cremated remains in an urn.
   3-15              (19) <(16)>  "Lawn crypt" means a subsurface concrete
   3-16  and reinforced steel receptacle installed in multiple units for
   3-17  burial of human remains <in a coffin>.
   3-18              (20) <(17)>  "Mausoleum" means a durable, fireproof
   3-19  structure used or intended to be used for entombment.
   3-20              (21) <(18)>  "Niche" means a space in a columbarium
   3-21  used or intended to be used for the placement of cremated remains
   3-22  in an urn or other container.
   3-23              (22) <(19)>  "Nonperpetual care cemetery" means a
   3-24  cemetery that is not a perpetual care cemetery.
   3-25              (23) <(20)>  "Perpetual care" or "endowment care" means
   3-26  the maintenance, repair, and care of all <in proper order of the
   3-27  sod, foliage, and> places where <in which> interments have been
    4-1  made.
    4-2              (24) <(21)>  "Perpetual care cemetery" or "endowment
    4-3  care cemetery" means a cemetery for the benefit of which a
    4-4  perpetual care trust fund is established as provided by Chapter
    4-5  712.
    4-6              (25) <(22)>  "Plot" means space in a cemetery owned by
    4-7  an individual or organization that is used or intended to be used
    4-8  for interment, including a grave or adjoining graves, a crypt or
    4-9  adjoining crypts, a lawn crypt or adjoining lawn crypts, or a niche
   4-10  or adjoining niches.
   4-11              (26) <(23)>  "Plot owner" means a person:
   4-12                    (A)  in whose name a plot is listed in a cemetery
   4-13  organization's <association> office as the owner of the exclusive
   4-14  right of sepulture; or
   4-15                    (B)  who holds, from a cemetery organization
   4-16  <association>, a <conveyance or a> certificate of ownership or
   4-17  other instrument of conveyance of the exclusive right of sepulture
   4-18  in a particular plot in the organization's <association's>
   4-19  cemetery.
   4-20              (27)  "Prepaid funeral contract" means a written
   4-21  contract providing for prearranged or prepaid funeral services or
   4-22  funeral merchandise.
   4-23              (28) <(24)>  "Remains" means either human remains or
   4-24  cremated remains <the body of a decedent>.
   4-25        SECTION 2.  Section 711.002, Health and Safety Code, is
   4-26  amended to read as follows:
   4-27        Sec. 711.002.  Disposition of Remains; Duty to Inter.
    5-1  (a)  Unless a decedent has left other directions in writing for the
    5-2  disposition of the decedent's remains, the following persons, in
    5-3  the priority listed, have the right to control the disposition,
    5-4  including cremation, of the decedent's <person's> remains, shall
    5-5  inter the remains, and are liable for the reasonable cost of
    5-6  interment:
    5-7              (1)  the decedent's surviving spouse;
    5-8              (2)  any one of the decedent's surviving adult
    5-9  children;
   5-10              (3)  either one of the decedent's surviving parents;
   5-11              (4)  any one of the decedent's surviving adult
   5-12  siblings; or
   5-13              (5)  any <the> adult person in the next degree of
   5-14  kinship in the order named by law to inherit the estate of the
   5-15  decedent <deceased>.
   5-16        (b)  A person listed in Subsection (a) has the right, duty,
   5-17  and liability provided by that subsection only if there is no
   5-18  person in a priority listed before that <the> person.
   5-19        (c)  If there is no person with the duty to inter under
   5-20  Subsection (a) and:
   5-21              (1)  an inquest is held, the person conducting the
   5-22  inquest shall inter the remains; and
   5-23              (2)  an inquest is not held, the county in which the
   5-24  death occurred shall inter the remains.
   5-25        (d)  A person <An individual> who represents that the person
   5-26  <individual> knows the identity of a <the> decedent and, in order
   5-27  to procure the disposition, including cremation, of the decedent's
    6-1  remains <interment>, signs an order or statement, other than a
    6-2  death certificate, warrants the identity of the decedent and is
    6-3  liable for all damages <damage> that result <results>, directly or
    6-4  indirectly, from that warrant.
    6-5        (e)  A person may provide written directions for the
    6-6  disposition <instructions to direct the preparation for and type or
    6-7  place of interment> of the person's remains in a will, a prepaid
    6-8  funeral contract, or an instrument filed and recorded with a
    6-9  cemetery organization or funeral establishment.  The directions
   6-10  <instructions> may be modified only in writing.  The person or
   6-11  persons otherwise entitled to control the disposition of a
   6-12  decedent's <the> remains under this section shall faithfully carry
   6-13  out the directions <instructions> of the decedent to the extent
   6-14  that the decedent's estate or the person controlling the
   6-15  disposition is financially able to do so.
   6-16        (f)  If the directions <instructions> are in a will, they
   6-17  shall be carried out immediately without the necessity of probate.
   6-18  If the will is not probated or is declared invalid for testamentary
   6-19  purposes, the directions <instructions> are valid to the extent to
   6-20  which they have been acted on in good faith.
   6-21        (g)  A cemetery organization or funeral establishment
   6-22  <association> is not liable for carrying out the written directions
   6-23  <instructions> of the decedent, or the directions of any person who
   6-24  represents that the person is entitled to control the disposition
   6-25  of the decedent's remains, in accordance with this section.
   6-26        (h)  Any dispute among the next of kin of a decedent
   6-27  concerning their right to control the disposition, including
    7-1  cremation, of the decedent's remains under this section shall be
    7-2  resolved by a court of competent jurisdiction.  A cemetery
    7-3  organization or funeral establishment is not liable for refusing to
    7-4  accept the decedent's remains or to inter or otherwise dispose of
    7-5  the decedent's remains until it receives a court order or other
    7-6  suitable confirmation that the dispute has been resolved or settled
    7-7  <unless it has actual notice that the representation is untrue>.
    7-8        SECTION 3.  Section 711.003, Health and Safety Code, is
    7-9  amended to read as follows:
   7-10        Sec. 711.003.  Records of Interment.  A record shall be kept
   7-11  of each interment in a cemetery.  The record must include:
   7-12              (1)  the date the remains are received;
   7-13              (2)  the date the remains are interred;
   7-14              (3)  the name and age of the person interred if those
   7-15  facts can be conveniently obtained; and
   7-16              (4)  the identity of the plot<, and grave, niche, or
   7-17  crypt> in which the remains are interred.
   7-18        SECTION 4.  Section 711.004, Health and Safety Code, is
   7-19  amended to read as follows:
   7-20        Sec. 711.004.  Removal of Remains.  (a)  Remains<, including
   7-21  cremated remains,> interred in a cemetery may be removed from the
   7-22  cemetery with the written consent of the cemetery organization
   7-23  <association> operating the cemetery and the written consent of the
   7-24  current plot owner or owners and the following persons, in the
   7-25  priority listed:
   7-26              (1)  the decedent's surviving spouse;
   7-27              (2)  the decedent's surviving adult children;
    8-1              (3)  the decedent's surviving parents;
    8-2              (4)  the decedent's adult siblings; or
    8-3              (5)  the adult person in the next degree of kinship in
    8-4  the order named by law to inherit the estate of the decedent.
    8-5        (b)  A person listed in Subsection (a) may consent to the
    8-6  removal only if there is no person in a priority listed before that
    8-7  <the> person.
    8-8        (c)  If the consent required by Subsection (a) cannot be
    8-9  obtained, the remains may be removed by permission of the county
   8-10  court of the county in which the cemetery is located.  Before the
   8-11  date of application to the court for permission to remove remains
   8-12  under this subsection, notice must be given to:
   8-13              (1)  the cemetery organization <association> operating
   8-14  the cemetery in which the remains are interred;
   8-15              (2)  <the plot owner or owners;>
   8-16              <(3)>  each person whose consent is required for
   8-17  removal of the remains under Subsection (a) <who does not consent
   8-18  to the removal>; and
   8-19              (3) <(4)>  any other person that the court requires to
   8-20  be served.
   8-21        (d)  For the purposes of Subsection (c), personal notice must
   8-22  be given not later than the 11th day before the date of application
   8-23  to the court for permission to remove the remains, or notice by
   8-24  certified or registered mail must be given not later than the 16th
   8-25  day before the date of application.
   8-26        (e)  Subsections (a)-(d) do not apply to the removal of
   8-27  remains:
    9-1              (1)  from one plot to another plot in the same
    9-2  cemetery;
    9-3              (2)  by the cemetery organization <association> from a
    9-4  plot for which the purchase price is past due and unpaid, to
    9-5  another suitable place; or
    9-6              (3)  on the order of a court or person who conducts
    9-7  inquests.
    9-8        (f)  Except as is authorized for a justice of the peace
    9-9  acting as coroner or medical examiner under Chapter 49, Code of
   9-10  Criminal Procedure, remains may not be removed from a cemetery
   9-11  except on the written order of the state registrar or the state
   9-12  registrar's designee. The cemetery organization shall keep a
   9-13  duplicate copy of the order as part of its records.  The Texas
   9-14  Board of Health may adopt rules to implement this subsection.
   9-15        (g)  A person who removes remains from a cemetery shall keep
   9-16  a record of the removal that includes:
   9-17              (1)  the date the remains are removed;
   9-18              (2)  the name and age at death of the decedent if those
   9-19  facts can be conveniently obtained;
   9-20              (3)  the place to which the remains are removed; and
   9-21              (4)  the cemetery and plot from which the remains are
   9-22  removed.
   9-23        (h)  If the remains are not reinterred, the person who
   9-24  removes the remains shall make and keep a record of the disposition
   9-25  of the remains.
   9-26        (i)  A person who removes remains from a cemetery shall give
   9-27  the cemetery organization <association> operating the cemetery a
   10-1  copy of the record made as required by Subsections (g) and (h).
   10-2        SECTION 5.  Section 711.006, Health and Safety Code, is
   10-3  amended to read as follows:
   10-4        Sec. 711.006.  Limitations on Crematory Construction and
   10-5  Operation.  (a)  A crematory may be constructed, established, or
   10-6  maintained only in a burial park having a columbarium, plot, or
   10-7  mausoleum <amply> equipped for the interment of cremated remains
   10-8  <cremated at that crematory>.
   10-9        (b)  The crematory may be in the same fireproof structure as
  10-10  the columbarium, plot, or mausoleum, or in a separate fireproof
  10-11  building in the same <cemetery or> burial park as the columbarium,
  10-12  plot, or mausoleum.
  10-13        (c)  A crematory that cremates a decedent's human remains
  10-14  shall dispose of the cremated remains by:
  10-15              (1)  delivering the cremated remains to or as directed
  10-16  by the funeral establishment that contracted to provide for the
  10-17  cremation;
  10-18              (2)  delivering the cremated remains as directed by the
  10-19  person who contracted for the cremation; or
  10-20              (3)  if not delivered as provided by Subdivision (1) or
  10-21  (2), by permanent interment of the cremated remains in a plot.
  10-22        (d)  Not later than the 90th day after the cremation, the
  10-23  crematory shall send a written notice by registered or certified
  10-24  mail to the funeral establishment or person who contracted for the
  10-25  cremation stating that the cremated remains will be interred under
  10-26  Subsection (c)(3) unless the notified funeral establishment or
  10-27  person, or other person authorized by the notified funeral
   11-1  establishment or person, claims and removes the cremated remains
   11-2  not later than the 60th day after the date of the notice.
   11-3        (e)  A crematory is not liable for any actions taken by the
   11-4  crematory in accordance with Subsection (c) or (d) <Cremated
   11-5  remains not removed from the crematory for permanent deposit
   11-6  elsewhere shall be permanently interred in a grave, crypt, or niche
   11-7  not later than the 30th day after the date of cremation>.
   11-8        SECTION 6.  Section 711.007, Health and Safety Code, is
   11-9  amended to read as follows:
  11-10        Sec. 711.007.  <Nonconforming or Abandoned Cemetery as a>
  11-11  Nuisance; Abatement and Injunction.  (a)  A court of the county in
  11-12  which a cemetery is located may, by order, abate the cemetery as a
  11-13  nuisance and enjoin its continuance if the cemetery is:
  11-14              (1)  maintained, located, or used in violation of this
  11-15  chapter or Chapter 712; or
  11-16              (2)  neglected so that it is offensive to the
  11-17  inhabitants of the surrounding section <and has no perpetual care
  11-18  fund regularly and legally established>.
  11-19        (b)  The proceeding may be brought by:
  11-20              (1)  the attorney general;
  11-21              (2)  the governing body of a municipality with a
  11-22  population of more than 25,000, if the cemetery is located in the
  11-23  municipality or not farther than five miles from the municipality;
  11-24              (3) <(2)>  the district attorney of the county, if the
  11-25  cemetery is located in an area of the county not described by
  11-26  Subdivision (2) <(1)>; <or>
  11-27              (4) <(3)>  the owner of a residence:
   12-1                    (A)  in or near the municipality in which the
   12-2  cemetery is located; or
   12-3                    (B)  in the area proscribed for the location of a
   12-4  cemetery by Section 711.008; or
   12-5              (5)  the owner of a plot in the cemetery.
   12-6        (c)  The court shall grant a permanent injunction against
   12-7  each person responsible for the nuisance if a cemetery nuisance
   12-8  exists or is threatened.
   12-9        (d)  If a cemetery nuisance under Subsection (a)(2) is
  12-10  located in a municipality, the governing body of the municipality
  12-11  may authorize the removal of all bodies, monuments, tombs, or other
  12-12  similar items from the cemetery to a perpetual care cemetery.
  12-13        SECTION 7.  Section 711.008, Health and Safety Code, is
  12-14  amended to read as follows:
  12-15        Sec. 711.008.  Location of Cemetery.  (a)  Except as provided
  12-16  by Subsections (b) and<,> (c), <and (e),> an individual,
  12-17  corporation, partnership, firm, trust, or association may not
  12-18  establish or operate a cemetery, or use any land for the interment
  12-19  of remains, <inter remains in a cemetery> located:
  12-20              (1)  in or within one mile of the boundaries of a
  12-21  municipality with a population of 5,000 to 25,000;
  12-22              (2)  in or within two miles of the boundaries of a
  12-23  municipality with a population of 25,000 to 50,000;
  12-24              (3)  in or within three miles of the boundaries of a
  12-25  municipality with a population of 50,000 to 100,000;
  12-26              (4)  in or within four miles of the boundaries of a
  12-27  municipality with a population of 100,000 to 200,000; or
   13-1              (5)  in or within five miles of the boundaries of a
   13-2  municipality with a population of at least 200,000.
   13-3        (b)  Subsection (a) does not apply to:
   13-4              (1)  a cemetery heretofore established and operating;
   13-5  or
   13-6              (2)  the establishment and use of a columbarium by an
   13-7  organized religious society or sect as part of or attached to the
   13-8  principal church building owned by the society or sect.
   13-9        (c)  A cemetery organization <association> operating a
  13-10  cemetery that heretofore was used and maintained inside the limits
  13-11  prescribed by Subsection (a) may acquire land that is adjacent but
  13-12  not necessarily contiguous to the cemetery for cemetery purposes if
  13-13  additional land is required.  That land may be used as an addition
  13-14  to the cemetery.
  13-15        (d)  <Subsections (e)-(i) apply to the establishment or use
  13-16  of a cemetery in a county with a population of less than 235,000
  13-17  that borders the Gulf of Mexico.>
  13-18        <(e)  Not later than August 31, 1990, a person who desires to
  13-19  establish or use a cemetery may file a written application to
  13-20  establish or use the cemetery if the cemetery is located inside a
  13-21  municipality and 80 percent or more of the municipality's
  13-22  boundaries are contiguous with the boundaries or extraterritorial
  13-23  jurisdiction of another municipality or if the cemetery is located
  13-24  outside a municipality but within the distance prohibited by
  13-25  Subsection (a) for the municipality.  The application must be filed
  13-26  with the governing body of the municipality.>
  13-27        <(f)  If the location of the proposed cemetery is inside the
   14-1  prohibited distance from more than one municipality, the person
   14-2  must file a written application with the governing body of each
   14-3  municipality.>
   14-4        <(g)  The governing body of a municipality by ordinance shall
   14-5  prescribe the information required in an application submitted
   14-6  under this subsection or Subsection (e).>
   14-7        <(h)  The governing body may grant the application if it
   14-8  determines that the establishment or use of the cemetery does not
   14-9  adversely affect public health, safety, and welfare.>
  14-10        <(i)  Before the person may establish or use the cemetery,
  14-11  the application must be granted by each municipality required to
  14-12  receive an application under this section.>
  14-13        <(j)>  For the purpose of determining where a cemetery may be
  14-14  located under Subsection (a), the boundary of an area annexed by a
  14-15  municipality is not considered to be a boundary of the municipality
  14-16  if no more than 10 percent of the boundary of the annexed area is
  14-17  composed of a part of the boundary of the annexing municipality as
  14-18  it existed immediately before the annexation.
  14-19        SECTION 8.  Section 711.009, Health and Safety Code, is
  14-20  amended to read as follows:
  14-21        Sec. 711.009.  Authority of Cemetery Keeper.  (a)  The
  14-22  superintendent, sexton, or other person in charge of a cemetery has
  14-23  the same powers, <and> duties, and immunities granted by law to:
  14-24              (1)  a police officer in the municipality in which the
  14-25  cemetery is located; or
  14-26              (2)  a constable or sheriff of the county in which the
  14-27  cemetery is located if the cemetery is outside a municipality.
   15-1        (b)  A person who is granted authority under Subsection (a)
   15-2  shall maintain order and enforce the cemetery organization's
   15-3  <association> rules, state law, and municipal ordinances in the
   15-4  cemetery over which that person has charge and as near the cemetery
   15-5  as necessary to protect cemetery property.
   15-6        SECTION 9.  Section 711.021, Health and Safety Code, is
   15-7  amended to read as follows:
   15-8        Sec. 711.021.  Formation of Corporation to Maintain and
   15-9  Operate Cemetery.  (a)  An individual, corporation, partnership,
  15-10  firm, trust, or association may not engage in a business for
  15-11  cemetery purposes in this state unless the person is a corporation
  15-12  organized for those purposes.
  15-13        (b)  A corporation conducting a business for cemetery
  15-14  purposes, including the sale of plots, may be formed only as
  15-15  provided by this section.  The corporation must be either:
  15-16              (1)  a nonprofit corporation organized in accordance
  15-17  with Section A or B, Article 3.01, Texas Non-Profit Corporation Act
  15-18  (Article 1396-3.01, Vernon's Texas Civil Statutes), or with Section
  15-19  711.022; or
  15-20              (2)  a private corporation operated for profit.
  15-21        (c)  The charter of a cemetery corporation formed after May
  15-22  15, 1947, but before September 1, 1993, must state whether the
  15-23  corporation:
  15-24              (1)  is operated for profit or not for profit; and
  15-25              (2)  is operating a perpetual care cemetery or a
  15-26  nonperpetual care cemetery.
  15-27        (d)  A corporation formed before September 3, 1945, under
   16-1  statutory authority other than Section 5, Chapter 340, Acts of the
   16-2  49th Legislature, Regular Session, 1945 (Article 912a-5, Vernon's
   16-3  Texas Civil Statutes), to maintain and operate a cemetery is
   16-4  governed by this chapter only to the extent that this chapter does
   16-5  not conflict with the charter or articles of incorporation of the
   16-6  corporation.
   16-7        (e)  This section does not apply to a corporation chartered
   16-8  by the state before September 3, 1945, that, under its charter,
   16-9  bylaws, or dedication, created a perpetual care trust fund and
  16-10  maintains that fund in accordance with the corporation's trust
  16-11  agreement, Chapter 712, and this chapter. The corporation may
  16-12  operate a perpetual care cemetery without amending the
  16-13  corporation's charter as if it had been incorporated under this
  16-14  section.
  16-15        (f)  Any cemetery that begins its initial operations on or
  16-16  after September 1, 1993, shall be operated as a perpetual care
  16-17  cemetery in accordance with Chapter 712.
  16-18        (g)  This section does not apply to:
  16-19              (1)  a family, fraternal, or community cemetery that is
  16-20  not larger than 10 acres;
  16-21              (2)  an unincorporated association of plot owners not
  16-22  operated for profit;
  16-23              (3)  a church, a religious society or denomination, or
  16-24  an entity <a corporation> solely administering the temporalities of
  16-25  a church or religious society or denomination; or
  16-26              (4)  a public cemetery belonging to this state or a
  16-27  county or municipality.
   17-1        SECTION 10.  The heading to Subchapter C, Chapter 711, Health
   17-2  and Safety Code, is amended to read as follows:
   17-3         SUBCHAPTER C.  CEMETERY ORGANIZATIONS <ASSOCIATIONS>
   17-4        SECTION 11.  Section 711.031, Health and Safety Code, is
   17-5  amended to read as follows:
   17-6        Sec. 711.031.  Rules; Civil Penalty.  (a)  A cemetery
   17-7  organization <association> may adopt and enforce rules:
   17-8              (1)  concerning the use, care, control, management,
   17-9  restriction, and protection of the cemetery operated by the
  17-10  cemetery organization <association>;
  17-11              (2)  to restrict the use of cemetery property;
  17-12              (3)  to regulate the placement, uniformity, class, and
  17-13  kind of markers, monuments, effigies, and other structures in any
  17-14  part of the cemetery;
  17-15              (4)  to regulate the planting and care of plants in the
  17-16  cemetery;
  17-17              (5)  to prevent the interment of remains not entitled
  17-18  to be interred in the cemetery;
  17-19              (6)  to prevent the use of a plot for a purpose that
  17-20  violates the cemetery organization's <association> restrictions;
  17-21              (7)  to regulate the conduct of persons on cemetery
  17-22  property and to prevent improper meetings at the cemetery; and
  17-23              (8)  for other purposes the directors consider
  17-24  necessary for the proper conduct of the cemetery organization's
  17-25  <association> business, and for the protection of the premises and
  17-26  the principles, plans, and ideals on which the cemetery was
  17-27  organized.
   18-1        (b)  Rules adopted under this section must be plainly printed
   18-2  or typed and maintained for inspection in the cemetery
   18-3  organization's <association's> office or another place in the
   18-4  cemetery prescribed by the directors.
   18-5        (c)  The directors may prescribe a penalty for the violation
   18-6  of a rule adopted under this section.  The cemetery organization
   18-7  <association> may recover the amount of the penalty in a civil
   18-8  action.
   18-9        SECTION 12.  Subchapter C, Chapter 711, Health and Safety
  18-10  Code, is amended by adding Section 711.0311 to read as follows:
  18-11        Sec. 711.0311.  DESECRATION OF CEMETERY.  (a)  A person
  18-12  commits an offense if the person acts without proper legal
  18-13  authority and knowingly:
  18-14              (1)  destroys or damages the remains of a decedent;
  18-15              (2)  removes any portion of the remains of a decedent
  18-16  from a plot or other repository of remains;
  18-17              (3)  desecrates remains; or
  18-18              (4)  obliterates, vandalizes, or desecrates a plot or
  18-19  other repository of remains.
  18-20        (b)  An offense under Subsection (a) is a felony of the third
  18-21  degree.  The person found guilty of committing the offense shall
  18-22  provide restitution to the cemetery organization for any damage
  18-23  caused by the person.
  18-24        (c)  A person commits an offense if the person acts without
  18-25  proper legal authority and knowingly:
  18-26              (1)  defaces, vandalizes, injures, or removes a
  18-27  gravestone, monument, or other structure commemorating a deceased
   19-1  person or group of persons, whether located within or outside of a
   19-2  cemetery;
   19-3              (2)  obliterates, vandalizes, or desecrates a park or
   19-4  other area clearly designated to preserve and perpetuate the memory
   19-5  of a deceased person or group of persons;
   19-6              (3)  obliterates, vandalizes, or desecrates plants,
   19-7  trees, shrubs, or flowers located on or around a cemetery; or
   19-8              (4)  obliterates, vandalizes, or desecrates a fence,
   19-9  rail, curb, or other structure of a similar nature intended for the
  19-10  protection or for the ornamentation of any plot, gravestone,
  19-11  monument, or other structure of similar character.
  19-12        (d)  An offense under Subsection (c) is a Class C
  19-13  misdemeanor.  The person found guilty of committing the offense
  19-14  shall provide restitution to the cemetery organization for the
  19-15  amount of any damage caused by the person.
  19-16        (e)  Subsections (a)-(d) do not apply to the removal or
  19-17  unavoidable breakage or injury by a cemetery organization of
  19-18  anything placed in or on any portion of its cemetery in violation
  19-19  of any of the rules of the cemetery organization, to the removal of
  19-20  anything placed in the cemetery in violation of any of the rules of
  19-21  the cemetery organization, or to the removal of anything placed in
  19-22  the cemetery by or with the consent of the cemetery organization
  19-23  that in its judgment has become wrecked, unsightly, or dilapidated.
  19-24        (f)  If an unemancipated minor is found guilty of violating
  19-25  Subsection (a) or (c) and is unable to provide restitution to the
  19-26  cemetery organization, the parents or legal guardians of that minor
  19-27  shall provide restitution to the cemetery organization for the
   20-1  amount of any damage caused by the offense, up to the total amount
   20-2  allowed under law.
   20-3        (g)  A person commits an offense if the person knowingly
   20-4  enters or knowingly remains on the premises of a cemetery without
   20-5  authorization during hours that the cemetery is posted as closed to
   20-6  the public.  An offense under this subsection is a Class C
   20-7  misdemeanor.
   20-8        (h)  A fine when recovered shall be paid by the court or
   20-9  officer receiving the fine to the cemetery organization and be
  20-10  applied, as far as possible, in repairing any damage caused by the
  20-11  person found guilty of committing the offense.
  20-12        (i)  This section does not prevent a cemetery organization or
  20-13  the owner of a plot, gravestone, monument, or other structure of
  20-14  similar character from maintaining a civil action for the recovery
  20-15  of damages caused by any injury resulting from a violation of this
  20-16  section.
  20-17        SECTION 13.  Section 711.032, Health and Safety Code, is
  20-18  amended to read as follows:
  20-19        Sec. 711.032.  Discrimination by Race, Color, or National
  20-20  Origin Prohibited.  (a)  A cemetery organization <association> may
  20-21  not adopt or enforce a rule that prohibits interment because of the
  20-22  race, color, or national origin of a decedent.
  20-23        (b)  A provision of a contract entered into by a cemetery
  20-24  organization <association> or of a <deed or> certificate of
  20-25  ownership or other instrument of conveyance <granted or> issued by
  20-26  a cemetery organization <association> that prohibits interment in a
  20-27  cemetery because of the race, color, or national origin of a
   21-1  decedent is void.
   21-2        SECTION 14.  Section 711.033, Health and Safety Code, is
   21-3  amended to read as follows:
   21-4        Sec. 711.033.  Property Acquisition by Cemetery ORGANIZATION
   21-5  <Association>; Recording Title.  (a)  A cemetery organization
   21-6  <association> may acquire by purchase, donation, or devise property
   21-7  consisting of land, a mausoleum, a crematory and columbarium, or
   21-8  other property in which remains may be interred under law.
   21-9        (b)  A cemetery organization <association> that acquires
  21-10  property may record <the association's> title to its <the> property
  21-11  with the county clerk of the county in which the property is
  21-12  located if its <the association> president and secretary or other
  21-13  authorized officer acknowledge a declaration executed by the
  21-14  cemetery organization <association> that describes the property and
  21-15  declares the cemetery organization's <association's> intention to
  21-16  use the property or a part of the property for interment purposes.
  21-17        (c)  Filing under Subsection (b) is constructive notice as of
  21-18  the date of the filing of the use of the property for interment.
  21-19        (d)  A cemetery organization <association> may by
  21-20  condemnation acquire property in which remains may be interred, and
  21-21  the acquisition of that property is for a public purpose.
  21-22        SECTION 15.  Section 711.034, Health and Safety Code, is
  21-23  amended to read as follows:
  21-24        Sec. 711.034.  Dedication.  (a)  A cemetery organization
  21-25  <association> that acquires property for interment purposes shall:
  21-26              (1)  in the case of land, survey and subdivide the
  21-27  property into gardens or sections, with descriptive names or
   22-1  numbers <blocks, lots, avenues, walks, or other subdivisions>, and
   22-2  make a map or plat of the property showing the plots contained
   22-3  within the perimeter boundary <subdivisions, with descriptive names
   22-4  or numbers>; or
   22-5              (2)  in the case of a mausoleum or a crematory and
   22-6  columbarium, make a map or plat of the property<,> delineating
   22-7  sections<, halls, rooms, corridors, elevators, or other divisions
   22-8  of the property,> with descriptive names and numbers.
   22-9        (b)  The cemetery organization <association> shall file the
  22-10  map or plat with the county clerk of each county in which the
  22-11  property or any part of the property is located.
  22-12        (c)  The cemetery organization <association> shall file with
  22-13  the map or plat a written certificate or declaration of dedication
  22-14  of the property delineated by the map or plat, dedicating the
  22-15  property exclusively to cemetery purposes.  The certificate or
  22-16  declaration must be:
  22-17              (1)  in a form prescribed by the directors or
  22-18  <association> officers of the cemetery organization;
  22-19              (2)  signed by the <association> president or
  22-20  vice-president and <by> the secretary of the cemetery organization
  22-21  <association>, or by another person authorized by the directors;
  22-22  and
  22-23              (3)  acknowledged.
  22-24        (d)  Filing a map or plat and a certificate or declaration
  22-25  under this section dedicates the property for cemetery purposes and
  22-26  is constructive notice of that dedication.
  22-27        (e)  The certificate or declaration may contain a provision
   23-1  permitting the directors by order to resurvey and change the shape
   23-2  and size of the property for which the associated map or plat is
   23-3  filed if that change does not disturb any interred remains.  If a
   23-4  change is made, the cemetery organization <association> shall file
   23-5  an amended map or plat.
   23-6        (f)  The county clerk shall number and file the map or plat
   23-7  and record the certificate or declaration in the county deed
   23-8  records.
   23-9        SECTION 16.  Section 711.035, Health and Safety Code, is
  23-10  amended to read as follows:
  23-11        Sec. 711.035.  Effect of Dedication.  (a)  Property may be
  23-12  dedicated for cemetery purposes, and the dedication is permitted in
  23-13  respect for the dead, for the disposition of remains, and in
  23-14  fulfillment of a duty to and for the benefit of the public.
  23-15        (b)  Dedication of cemetery property and title to the
  23-16  exclusive right of sepulture of a plot owner are not affected by
  23-17  the dissolution of the cemetery organization <association>, nonuse
  23-18  by the cemetery organization <association>, alienation,
  23-19  encumbrance, or forced sale of the property.
  23-20        (c)  Dedication of cemetery property may not be invalidated
  23-21  because of a violation of the law against perpetuities or the law
  23-22  against the suspension of the power of alienation of title to or
  23-23  use of property.
  23-24        (d)  A railroad, street, road, alley, pipeline, telephone,
  23-25  telegraph, electric line, or other public utility or thoroughfare
  23-26  may not be placed through, over, or across a part of a dedicated
  23-27  cemetery without the consent of:
   24-1              (1)  the directors of the cemetery organization
   24-2  <association> that owns or operates the cemetery; or
   24-3              (2)  at least two-thirds of the owners of plots in the
   24-4  cemetery.
   24-5        (e)  All property of a dedicated cemetery, including a road,
   24-6  alley, or walk in the cemetery:
   24-7              (1)  is exempt from public improvements assessments,
   24-8  fees, and public taxation; and
   24-9              (2)  may not be sold on execution or applied in payment
  24-10  of debts due from individual owners and plots.
  24-11        (f)  Dedicated cemetery property shall be used exclusively
  24-12  for cemetery purposes until the dedication is removed by court
  24-13  order or until the maintenance of the cemetery is enjoined or
  24-14  abated as a nuisance under Section 711.007.
  24-15        SECTION 17.  Section 711.036, Health and Safety Code, is
  24-16  amended to read as follows:
  24-17        Sec. 711.036.  Removal of Dedication.  (a)  A cemetery
  24-18  organization may petition a district court of the county in which
  24-19  its <a> dedicated cemetery is located to <may, by order,> remove
  24-20  the dedication with respect to all or any portion of the cemetery
  24-21  if:
  24-22              (1)  all the remains have been removed from that
  24-23  portion of the cemetery where the dedication is to be removed; or
  24-24              (2)  no interments were made in that portion of the
  24-25  cemetery where the dedication is to be removed and that portion of
  24-26  the cemetery is not used or necessary for interment purposes.
  24-27        (b)  <A proceeding may be brought by:>
   25-1              <(1)  the governing body of a municipality with a
   25-2  population of more than 25,000, if the cemetery is located in the
   25-3  municipality or not farther than five miles from the municipality;>
   25-4              <(2)  the district attorney of the county, if the
   25-5  cemetery is located in an area of the county not described by
   25-6  Subdivision (1); or>
   25-7              <(3)  the owner of property situated so that its value
   25-8  is affected by the cemetery.>
   25-9        <(c)>  The court shall <may> order the removal of the
  25-10  dedication <of a cemetery> on notice and proof satisfactory to the
  25-11  court.
  25-12        <(d)  The district court in a county in which a dedicated
  25-13  cemetery is located may, in a proceeding brought by the affected
  25-14  political subdivision, remove the dedication from property lying in
  25-15  the path of proposed construction of or on a highway, thoroughfare,
  25-16  road, or street if:>
  25-17              <(1)  the United States, this state, a county, a
  25-18  municipality, or another governmental subdivision of this state
  25-19  determines that a new highway, thoroughfare, road, or street will
  25-20  be constructed along a proposed route or that an existing highway,
  25-21  thoroughfare, road, or street will be widened;>
  25-22              <(2)  the determination is a matter of public record;
  25-23  and>
  25-24              <(3)  after the determination, property lying in the
  25-25  path of the proposed route is dedicated for cemetery purposes.>
  25-26        <(e)  Dedication of property for cemetery purposes under the
  25-27  circumstances described by Subsection (d) is presumed to be made in
   26-1  fraud of the rights of the public and for the sole purpose of
   26-2  enhancing the value of property to be condemned.>
   26-3        SECTION 18.  Section 711.037, Health and Safety Code, is
   26-4  amended to read as follows:
   26-5        Sec. 711.037.  Lien Against Cemetery Property.  (a)  A
   26-6  cemetery organization <association> by contract may incur
   26-7  indebtedness as required to conduct its <the association's>
   26-8  business and may secure the indebtedness by mortgage, deed of
   26-9  trust, or other lien against its <association> property.
  26-10        (b)  A mortgage, deed of trust, or other lien placed on
  26-11  dedicated cemetery property, or on cemetery property that is later
  26-12  dedicated with the consent of the holder of the lien, does not
  26-13  affect the dedication and is subject to the dedication.  A sale on
  26-14  foreclosure of the lien is subject to the dedication of the
  26-15  property for cemetery purposes.
  26-16        SECTION 19.  Section 711.038, Health and Safety Code, is
  26-17  amended to read as follows:
  26-18        Sec. 711.038.  Sale of Plots.  (a)  A cemetery organization
  26-19  <association> may sell and convey the exclusive right of sepulture
  26-20  in a plot:
  26-21              (1)  after a map or plat and a certificate or
  26-22  declaration of dedication are filed as provided by Section 711.034;
  26-23  <and>
  26-24              (2)  subject to the rules of the cemetery organization
  26-25  <association> and the restrictions in the certificate of ownership
  26-26  or other instrument of conveyance; and
  26-27              (3)  after payment in full of the purchase price of the
   27-1  plot.
   27-2        (b)  A certificate of ownership or other instrument
   27-3  evidencing the conveyance of the exclusive right of sepulture by a
   27-4  cemetery organization <association> must be signed by the
   27-5  <association> president or vice-president and the <association>
   27-6  secretary or other officers authorized by the cemetery organization
   27-7  <association>.
   27-8        (c)  A conveyance of the exclusive right of sepulture must be
   27-9  filed and recorded in the cemetery organization's <association's>
  27-10  office.
  27-11        (d)  A plot or a part of a plot that is conveyed as a
  27-12  separate plot by a certificate of ownership or other instrument may
  27-13  not be divided without the consent of the cemetery organization
  27-14  <association>.
  27-15        (e)  A person is not required to be licensed to sell a plot
  27-16  in a dedicated cemetery.
  27-17        SECTION 20.  Section 711.039, Health and Safety Code, is
  27-18  amended to read as follows:
  27-19        Sec. 711.039.  Rights of Interment in Plot.  (a)  A plot in
  27-20  which the exclusive right of sepulture is conveyed is presumed to
  27-21  be the separate property of the person named as grantee in the
  27-22  certificate of ownership or other instrument of conveyance.
  27-23        (b)  The spouse of a person to whom the exclusive right of
  27-24  sepulture in a plot is conveyed has a vested right of interment of
  27-25  the spouse's remains in the plot while the spouse is married to the
  27-26  plot owner or if the spouse is married to the plot owner at the
  27-27  time of the owner's death.
   28-1        (c)  An attempted conveyance or other action without the
   28-2  joinder or written, attached consent of the spouse of the plot
   28-3  owner does not divest the spouse of the vested right of interment.
   28-4        (d)  The vested right of interment is terminated:
   28-5              (1)  on the final decree of divorce between the plot
   28-6  owner and the owner's former spouse unless the decree provides
   28-7  otherwise; or
   28-8              (2)  when the remains of the person having the vested
   28-9  right are interred elsewhere.
  28-10        (e)  Unless a plot owner who has the exclusive right of
  28-11  sepulture in a plot and who is interred in that plot has made a
  28-12  specific disposition of the plot by express reference to the plot
  28-13  in the owner's will or by written declaration filed and recorded in
  28-14  the office of the cemetery organization <association>:
  28-15              (1)  a grave, niche, or crypt in the plot shall be
  28-16  reserved for the surviving spouse of the plot owner; and
  28-17              (2)  the owner's children, in order of need, may be
  28-18  interred in any remaining graves, niches, or crypts of the plot
  28-19  without the consent of a person claiming an interest in the plot.
  28-20        (f)  The surviving spouse or a child of an interred plot
  28-21  owner may each waive his right of interment in the plot in favor of
  28-22  a relative of the owner or relative of the owner's spouse.  The
  28-23  person in whose favor the waiver is made may be interred in the
  28-24  plot.
  28-25        (g)  The exclusive right of sepulture in an unused grave,
  28-26  niche, or crypt of a plot in which the plot owner has been interred
  28-27  may be conveyed only by:
   29-1              (1)  specific disposition of the unused grave, niche,
   29-2  or crypt by express reference to it in a will or by written
   29-3  declaration of the plot owner filed and recorded in the office of
   29-4  the cemetery organization;
   29-5              (2)  the surviving spouse, if any, and children of the
   29-6  owner; or
   29-7              (3) <(2)>  the surviving spouse, if any, and the
   29-8  heirs-at-law of the owner, if there is no surviving child of the
   29-9  owner.
  29-10        (h)  Unless a deceased plot owner who has the exclusive right
  29-11  of sepulture in a plot and who is not interred in the plot has
  29-12  otherwise made specific disposition of the plot <by express
  29-13  reference to the plot in a will or by written declaration filed and
  29-14  recorded in the office of the cemetery association>, the exclusive
  29-15  right of sepulture in the plot, except the one grave, niche, or
  29-16  crypt reserved for the surviving spouse, if any, vests on the death
  29-17  of the owner in the owner's heirs-at-law and may be conveyed by
  29-18  them.
  29-19        SECTION 21.  Section 711.040, Health and Safety Code, is
  29-20  amended to read as follows:
  29-21        Sec. 711.040.  Multiple Owners of Plot.  Two or more owners
  29-22  of a plot may designate a person to represent the plot and file
  29-23  with the cemetery organization <association> written notice of the
  29-24  designation.  If notice is not filed, the cemetery organization
  29-25  <association> may inter or permit an interment in the plot at the
  29-26  request or direction of a registered co-owner of the plot.
  29-27        SECTION 22.  Subchapter C, Chapter 711, Health and Safety
   30-1  Code, is amended by adding Section 711.041 to read as follows:
   30-2        Sec. 711.041.  ACCESS TO CEMETERY.  (a)  Any person who
   30-3  wishes to visit a cemetery or private burial grounds for which no
   30-4  public ingress or egress is available shall have the right to
   30-5  reasonable ingress and egress for the purpose of visiting the
   30-6  cemetery or private burial grounds.  This right of access extends
   30-7  only to visitation during reasonable hours and only for purposes
   30-8  usually associated with cemetery visits.
   30-9        (b)  The owner or owners of the lands surrounding the
  30-10  cemetery or private burial grounds may designate the routes of
  30-11  reasonable ingress and egress.
  30-12        SECTION 23.  Section 711.052, Health and Safety Code, is
  30-13  amended to read as follows:
  30-14        Sec. 711.052.  Criminal Penalties.  (a)  A person who is an
  30-15  individual, firm, association, corporation, or municipality, or an
  30-16  officer, agent, or employee of an individual, firm, association,
  30-17  corporation, or municipality, commits an offense if the person:
  30-18              (1)  engages in a business for cemetery purposes in
  30-19  this state other than through a corporation organized for that
  30-20  purpose, if a corporation is required by law;
  30-21              (2)  fails or refuses to keep records of interment as
  30-22  required by Sections 711.003 and 711.004;
  30-23              (3)  sells, offers to sell, or advertises for sale a
  30-24  plot or the exclusive right of sepulture in a plot for purposes of
  30-25  speculation or investment; or
  30-26              (4)  represents through advertising or printed material
  30-27  that a retail department will be established for the resale of the
   31-1  plots of plot purchasers, that specific improvements will be made
   31-2  in the cemetery, or that specific merchandise or services will be
   31-3  furnished to a plot owner, unless adequate funds or reserves are
   31-4  created by the cemetery organization <operator> for the represented
   31-5  purpose.
   31-6        (b)  A cemetery organization commits an offense if it offers
   31-7  any inducement, pecuniary or otherwise, to any person or entity
   31-8  other than its officers, employees, agents, subcontractors, or
   31-9  representatives for the purpose of securing or attempting to secure
  31-10  business for that cemetery organization <An officer, agent, or
  31-11  employee of a cemetery or cemetery association commits an offense
  31-12  if the officer, agent, or employee pays or offers to pay a
  31-13  commission, rebate, or gratuity to a funeral director or the
  31-14  funeral director's employee>.
  31-15        (c)  A cemetery organization <association or an officer or
  31-16  employee of the association> commits an offense if the cemetery
  31-17  organization <association, officer, or employee> offers a free plot
  31-18  in a drawing, in a lottery, or in another manner, unless the offer
  31-19  is for the immediate burial of an indigent person.
  31-20        (d)  An offense under this section is a Class A misdemeanor
  31-21  <punishable by:>
  31-22              <(1)  a fine not to exceed $500; or>
  31-23              <(2)  if the defendant is an individual, by a fine not
  31-24  to exceed $500, confinement in the county jail for a term not to
  31-25  exceed six months, or both>.
  31-26        SECTION 24.  Section 712.001, Health and Safety Code, is
  31-27  amended to read as follows:
   32-1        Sec. 712.001.  Definitions.  (a)  The definitions provided by
   32-2  Section 711.001 apply to this chapter.
   32-3        (b)  In this chapter:
   32-4              (1)  "Banking department" means the Banking Department
   32-5  of Texas.
   32-6              (2)  "Commissioner" means the Banking Commissioner of
   32-7  Texas.
   32-8              (3)  "Corporation" means a corporation that is
   32-9  organized under this chapter, or any corresponding statute in
  32-10  effect before September 1, 1993, to operate one or more perpetual
  32-11  care cemeteries in this state.
  32-12              (4)  "Fund" means a <cemetery> perpetual care trust
  32-13  fund established by one or more corporations under this chapter or
  32-14  any corresponding statute in effect before September 1, 1993.
  32-15              (5) <(4)>  "Trustee" means the trustee of a cemetery
  32-16  perpetual care trust fund.
  32-17        SECTION 25.  Section 712.002, Health and Safety Code, is
  32-18  amended to read as follows:
  32-19        Sec. 712.002.  Exemptions From Chapter.  This chapter does
  32-20  not apply to:
  32-21              (1)  a family, fraternal, or community cemetery;
  32-22              (2)  an unincorporated association of plot owners not
  32-23  operated for profit;
  32-24              (3)  a nonprofit corporation organized by plot owners;
  32-25  or
  32-26              (4)  a church, a religious society or denomination, or
  32-27  an entity <a corporation> solely administering the temporalities of
   33-1  a church or religious society or denomination.
   33-2        SECTION 26.  Section 712.003, Health and Safety Code, is
   33-3  amended to read as follows:
   33-4        Sec. 712.003.  Incorporation Required; Minimum Capital.
   33-5  (a)  A perpetual care cemetery may not be operated in this state
   33-6  unless articles of incorporation are filed <organized unless the
   33-7  cemetery files> with the secretary of state <articles of
   33-8  incorporation> showing:
   33-9              (1)  subscriptions and payments <payment> in cash for
  33-10  the corporation's <of the cemetery's> full capital stock;
  33-11              (2)  the location of its perpetual care <the> cemetery
  33-12  <property>; and
  33-13              (3)  a certificate showing the deposit in its fund of
  33-14  the minimum amount required under <of the cemetery's perpetual care
  33-15  and maintenance guarantee fund in accordance with> Section 712.004.
  33-16        (b)  A corporation chartered on or after September 5, 1955,
  33-17  and before September 1, 1993, <perpetual care cemetery> must have a
  33-18  minimum capital of:
  33-19              (1)  $15,000, if the cemetery serves a municipality
  33-20  with a population of less than 15,000;
  33-21              (2)  $30,000, if the cemetery serves a municipality
  33-22  with a population of 15,000 to 25,000; or
  33-23              (3)  $50,000, if the cemetery serves a municipality
  33-24  with a population of at least 25,000.
  33-25        (c)  A corporation chartered on or after September 1, 1993,
  33-26  must have a minimum capital of $25,000 <This section does not apply
  33-27  to a cemetery corporation chartered before September 5, 1955,
   34-1  except that a corporation that amends its charter must comply with
   34-2  the minimum requirements of this section>.
   34-3        (d)  A nonprofit <cemetery> association or corporation
   34-4  operated solely for the benefit of plot owners <its members>
   34-5  seeking to convert a <permanent care> cemetery to a perpetual care
   34-6  cemetery under this chapter <Section 712.004 and Subchapter B> is
   34-7  not required to <issue capital stock to> meet the <minimum capital>
   34-8  requirements prescribed by this section and Section 712.004 if the
   34-9  cemetery has existed for at least 75 years and the association or
  34-10  corporation has operated the cemetery for the preceding 10 years.
  34-11        SECTION 27.  Subchapter A, Chapter 712, Health and Safety
  34-12  Code, is amended by adding Section 712.0031 to read as follows:
  34-13        Sec. 712.0031.  NOTICES TO BANKING DEPARTMENT.  (a)  Not
  34-14  later than the 30th day after the date a corporation files its
  34-15  articles of incorporation with the secretary of state, the
  34-16  corporation shall notify the banking department in writing of its
  34-17  intent to operate a perpetual care cemetery in this state.  The
  34-18  notice shall be accompanied by a filing fee of $500, shall be sworn
  34-19  to and verified under oath by all persons subscribing to the
  34-20  capital stock of the corporation, and shall contain:
  34-21              (1)  the information required to be provided to the
  34-22  secretary of state under Section 712.003;
  34-23              (2)  the names and addresses of any other persons or
  34-24  entities who are or will be beneficial owners of the capital stock
  34-25  of the corporation or otherwise share an interest in the ownership
  34-26  of the corporation's capital stock, or who have paid or will pay
  34-27  any portion of the consideration therefor;
   35-1              (3)  the name and address of any person or entity to
   35-2  whom the capital stock or assets of the corporation are or will be
   35-3  pledged as security for any loan; and
   35-4              (4)  the name and address of the person who will
   35-5  actively manage the cemetery operations of the corporation along
   35-6  with a brief statement of that person's working experience in the
   35-7  cemetery industry.
   35-8        (b)  A cemetery operations manager must have at least two
   35-9  years of experience in cemetery management.
  35-10        (c)  If the corporation fails to provide to the banking
  35-11  department the information prescribed by Subsection (a), the
  35-12  commissioner may instruct the secretary of state to cancel the
  35-13  corporation's charter and serve notice of the cancellation on the
  35-14  corporation by registered or certified letter, addressed to the
  35-15  corporation's address.
  35-16        (d)  A corporation shall notify the commissioner in writing
  35-17  of any change in the controlling ownership interest of the capital
  35-18  stock of the corporation not later than the 30th day following the
  35-19  change of controlling ownership interest.
  35-20        SECTION 28.  Section 712.004, Health and Safety Code, is
  35-21  amended to read as follows:
  35-22        Sec. 712.004.  PERPETUAL CARE TRUST <AND MAINTENANCE
  35-23  GUARANTEE> FUND REQUIRED.  (a)  Before obtaining a corporate
  35-24  charter, the incorporators of a corporation chartered on or after
  35-25  September 3, 1945, and before September 1, 1993, <a perpetual care
  35-26  cemetery> must establish a <minimum perpetual care and maintenance
  35-27  guarantee> fund by permanently depositing in cash with the trustee
   36-1  of the fund:
   36-2              (1)  $15,000, if the corporation <cemetery> has capital
   36-3  stock of $15,000;
   36-4              (2)  $30,000, if the corporation <cemetery> has capital
   36-5  stock of $30,000; or
   36-6              (3)  $50,000, if the corporation <cemetery> has capital
   36-7  stock of $50,000 or more.
   36-8        (b)  Before obtaining a corporate charter, the incorporators
   36-9  of a corporation chartered on or after September 1, 1993, must
  36-10  establish a fund by permanently depositing in cash with the trustee
  36-11  of the fund an amount of not less than $50,000.
  36-12        (c)  The <guarantee> fund shall be permanently set aside and
  36-13  deposited in trust with the trustee in accordance with Subchapter
  36-14  B.
  36-15        <(c)  The amount of deposit required by law to be placed in
  36-16  trust for the perpetual care and maintenance of the cemetery from
  36-17  the receipts for the sale of a plot may, on the sale, be credited
  36-18  against the original perpetual care and maintenance guarantee fund
  36-19  until the amount of the credits equals the amount of the original
  36-20  deposit.  After credits for that amount have been taken, the
  36-21  corporation shall deposit in the perpetual care trust fund the
  36-22  minimum amount required by law and any additional amount required
  36-23  by the rules, trust agreement, or contract of the cemetery
  36-24  association for the cemetery's perpetual care and maintenance.>
  36-25        <(d)  This section does not apply to a cemetery corporation
  36-26  chartered before September 3, 1945, except that a corporation that
  36-27  amends its charter must comply with the minimum requirements of
   37-1  this section.>
   37-2        SECTION 29.  Section 712.005, Health and Safety Code, is
   37-3  amended to read as follows:
   37-4        Sec. 712.005.  Cancellation of Charter for Failure to Begin
   37-5  Operation of Perpetual Care Cemetery <Corporation>.  (a)  If a
   37-6  corporation chartered under Section 712.003 does not begin actual
   37-7  operation of its perpetual care cemetery <under the charter> for
   37-8  six months after the charter is granted and delivered, the
   37-9  commissioner may instruct the secretary of state to <shall> cancel
  37-10  the charter and serve notice of the cancellation on the corporation
  37-11  <association> by registered or certified letter, addressed to the
  37-12  corporation's <association's> address.
  37-13        (b)  The commissioner may rescind the order of cancellation
  37-14  on:
  37-15              (1)  the application of the directors;
  37-16              (2)  the payment to the commissioner of a penalty set
  37-17  by the commissioner in an amount not to exceed $500;
  37-18              (3)  the execution and delivery to the commissioner of
  37-19  an agreement to begin actual operation of the perpetual care
  37-20  cemetery not later than one month after the date of the agreement;
  37-21  and
  37-22              (4)  a proper showing by the trustee that the <money of
  37-23  the> fund is on deposit.
  37-24        (c)  If the corporation does not begin actual <active>
  37-25  operation as agreed, the commissioner by order may <shall> set
  37-26  aside the order of rescission and the cancellation is final.  The
  37-27  commissioner shall make a full report of the cancellation to the
   38-1  attorney general for liquidation of the corporation, if liquidation
   38-2  is necessary.
   38-3        (d)  If no sale of the dedicated cemetery property of the
   38-4  corporation is made, a certified copy of the order of cancellation
   38-5  authorizes the trustee to refund the fund to the incorporators who
   38-6  signed the corporation's articles of incorporation.
   38-7        SECTION 30.  Section 712.007, Health and Safety Code, is
   38-8  amended to read as follows:
   38-9        Sec. 712.007.  Notice of Perpetual Care Required.  (a)  A
  38-10  corporation <perpetual care cemetery> shall post a sign in a
  38-11  conspicuous place in an office of the corporation <all offices> in
  38-12  which sales are conducted or, if there is no office, at or near the
  38-13  cemetery entrance or administration building and readily accessible
  38-14  to the public.
  38-15        (b)  The sign must contain substantially the following<, in
  38-16  the manner and order stated>:
  38-17              (1)  "Perpetual Care Cemetery," or "Endowment Care
  38-18  Cemetery;" <in a minimum of 48-point black type;>
  38-19              (2)  the names of the corporation's <cemetery> officers
  38-20  and directors; and
  38-21              (3)  the name of each <the> bank or trust company
  38-22  entrusted with the fund.
  38-23        (c)  A corporation <perpetual care cemetery> must include
  38-24  substantially the following statement in each sales contract,
  38-25  certificate of ownership, <sales contract,> or other instrument of
  38-26  conveyance of the exclusive right of sepulture:
  38-27        "This cemetery is operated as a perpetual care
   39-1        cemetery, which means that a perpetual care fund for
   39-2        its maintenance has been established in conformity with
   39-3        the laws of the State of Texas.  Perpetual care means
   39-4        to maintain, <keep the sod in> repair, and care for all
   39-5        places where interments have been made <in order and to
   39-6        care for trees and shrubs planted by the cemetery>."
   39-7        (d)  The term "endowment care" may be substituted for the
   39-8  term "perpetual care" in the statement required by Subsection (c).
   39-9        SECTION 31.  Section 712.021, Health and Safety Code, is
  39-10  amended to read as follows:
  39-11        Sec. 712.021.  Establishment and Purposes of Fund.  (a)  A
  39-12  corporation <cemetery association> that <maintains,> operates<, or
  39-13  conducts> a perpetual care cemetery in this state<, including a
  39-14  permanent maintenance or free care cemetery,> shall have a
  39-15  <perpetual care trust> fund established with a trust company or a
  39-16  bank with trust powers that is located in this state.  The trust
  39-17  company or bank may not have more than one director who is also a
  39-18  director of the corporation <cemetery association>.
  39-19        (b)  <If there is no trust company or bank with trust powers
  39-20  that is qualified and willing to accept the trust funds at the
  39-21  regular fees established by the Texas Trust Code (Section 111.001
  39-22  et seq., Property Code) and that is located in the county in which
  39-23  the cemetery association is located, the fund may be established
  39-24  with a board of trustees composed of three or more persons, no two
  39-25  trustees of which are also directors.>
  39-26        <(c)>  The principal of the fund may not be reduced
  39-27  voluntarily, and it must remain inviolable.  The trustee shall
   40-1  maintain the principal of the fund separate from all operating
   40-2  <other> funds of the corporation.
   40-3        (c) <(d)>  In establishing a fund, the corporation
   40-4  <association> may adopt plans for the general care, maintenance,
   40-5  and embellishment of its perpetual care <the> cemetery.
   40-6        (d) <(e)>  The fund and the trustee are governed by the Texas
   40-7  Trust Code (Section 111.001 et seq., Property Code).
   40-8        (e) <(f)>  A corporation <cemetery association> that
   40-9  establishes a fund may receive and hold for the fund and as a part
  40-10  of the fund or as an incident to the fund any property contributed
  40-11  to the fund.
  40-12        (f) <(g)>  The fund and contributions to the fund are for
  40-13  charitable purposes.  The perpetual care financed by the fund is:
  40-14              (1)  the discharge of a duty due from the corporation
  40-15  <person contributing to the fund> to persons interred and to be
  40-16  interred in its perpetual care <the> cemetery; and
  40-17              (2)  for the benefit and protection of the public by
  40-18  preserving and keeping the perpetual care cemetery from becoming a
  40-19  place of disorder, reproach, and desolation in the community in
  40-20  which the perpetual care cemetery is located.
  40-21        SECTION 32.  Section 712.022, Health and Safety Code, is
  40-22  amended to read as follows:
  40-23        Sec. 712.022.  OPERATION OF PERPETUAL <ESTABLISHMENT OF FUND
  40-24  BY NONPERPETUAL> CARE CEMETERY.  <(a)>  A corporation <cemetery
  40-25  association> authorized by law to operate a <cemetery as a>
  40-26  perpetual care cemetery but not doing so may do so if the
  40-27  corporation <association>:
   41-1              (1)  notifies the commissioner; and
   41-2              (2)  establishes a fund as provided by Section 712.021
   41-3  in an <the> amount equal to the larger of:
   41-4                    (A)  the amount that would have been paid into
   41-5  the fund if the cemetery operated as a perpetual care cemetery from
   41-6  the date of the cemetery's first sale of plots <burial space>; or
   41-7                    (B)  the minimum amount provided by Section
   41-8  712.004.
   41-9        <(b)  If the amount of the fund is the minimum amount
  41-10  provided by Section 712.004, the cemetery association is entitled
  41-11  to a credit against amounts required by this chapter to be paid by
  41-12  the association into the fund.  The amount of the total credits
  41-13  permitted is equal to the difference between the amount computed
  41-14  under Subsection (a)(2)(A) and the amount computed under Subsection
  41-15  (a)(2)(B).>
  41-16        SECTION 33.  Section 712.023, Health and Safety Code, is
  41-17  amended to read as follows:
  41-18        Sec. 712.023.  Validity of Contributions.  A contribution to
  41-19  a fund for <general> perpetual care is not invalid because of:
  41-20              (1)  indefiniteness or uncertainty of the person
  41-21  designated as beneficiary in the instrument establishing the fund
  41-22  <creating the trust>; or
  41-23              (2)  a violation of the law against perpetuities or the
  41-24  law against the suspension of the power of alienation of title to
  41-25  or use of property.
  41-26        SECTION 34.  Section 712.024, Health and Safety Code, is
  41-27  amended to read as follows:
   42-1        Sec. 712.024.  AMENDMENT OF TRUST INSTRUMENT <AGREEMENT>.  A
   42-2  corporation <cemetery association> and the trustee of a <the> fund
   42-3  <providing perpetual care for the association's cemetery> may, by
   42-4  agreement, amend the instrument that established the fund
   42-5  <perpetual care trust agreement> to include any provision that is
   42-6  consistent with this chapter.
   42-7        SECTION 35.  Section 712.025, Health and Safety Code, is
   42-8  amended to read as follows:
   42-9        Sec. 712.025.  Use of Fund Income.  <(a)>  Fund income may be
  42-10  applied in the manner the directors of a corporation determine to
  42-11  be for the best interest of the corporation's perpetual care
  42-12  cemetery and may be used only for the perpetual care described by
  42-13  resolution, bylaw, or other action or instrument that established
  42-14  the fund, including the general care and maintenance of the
  42-15  property entitled to perpetual care in the perpetual care cemetery.
  42-16        <(b)  Fund income may not be used for improvement or
  42-17  embellishment of unsold property to be offered for sale.>
  42-18        SECTION 36.  Section 712.026, Health and Safety Code, is
  42-19  amended to read as follows:
  42-20        Sec. 712.026.  Suit by Plot Owners to Maintain Perpetual
  42-21  Care.  (a)  If the directors of a corporation do not generally care
  42-22  for and maintain the corporation's perpetual care <part of the>
  42-23  cemetery <entitled to perpetual care>, the district court of the
  42-24  county in which the perpetual care cemetery is located may:
  42-25              (1)  by injunction compel the directors to expend the
  42-26  net <fund> income of the corporation's fund as required by this
  42-27  chapter; or
   43-1              (2)  appoint a receiver to take charge of the fund and
   43-2  expend the net <fund> income of the fund as required by this
   43-3  chapter.
   43-4        (b)  The suit for relief under this section must be brought
   43-5  by at least five <plot> owners of <whose> plots located in the
   43-6  perpetual care cemetery <are entitled to perpetual care>.
   43-7        SECTION 37.  Section 712.027, Health and Safety Code, is
   43-8  amended to read as follows:
   43-9        Sec. 712.027.  Investment of Fund.  (a)  A trustee shall
  43-10  invest and manage the investment of the <fund> principal of a fund
  43-11  in accordance with the Texas Trust Code (Section 111.001 et seq.,
  43-12  Property Code).
  43-13        (b)  <The fund may not be invested without the written
  43-14  approval of an active officer of the cemetery association or a
  43-15  majority of its directors.>   An investment must be made at not
  43-16  more than the prevailing market value of the securities at the time
  43-17  of acquisition.
  43-18        SECTION 38.  Section 712.028, Health and Safety Code, is
  43-19  amended to read as follows:
  43-20        Sec. 712.028.  Amount of Fund Deposits from Sales.  (a)  A
  43-21  corporation <perpetual care cemetery> shall deposit in its <the>
  43-22  fund an amount that is at least:
  43-23              (1)  the greater of:
  43-24                    (A)  $1.50 a square foot of ground area conveyed
  43-25  <disposed of or sold> as perpetual care property; or
  43-26                    (B)  10 percent of the total purchase price of
  43-27  that ground area;
   44-1              (2)  the greater of:
   44-2                    (A)  $90 for each crypt interment right for
   44-3  mausoleum interment or lawn crypt interment conveyed <disposed of
   44-4  or sold> as perpetual care property, or $50 for each crypt
   44-5  interment right if that crypt is accessible only through another
   44-6  crypt; or
   44-7                    (B)  five percent of the total purchase price of
   44-8  that crypt interment right; and
   44-9              (3)  the greater of:
  44-10                    (A)  $30 for each niche interment right for
  44-11  columbarium interment conveyed; or
  44-12                    (B)  10 percent of the total purchase price of
  44-13  that niche interment right <disposed of or sold>.
  44-14        (b)  Subsection (a) does not apply to deposits from sales
  44-15  required to be made by a corporation in its fund before September
  44-16  1, 1993, under a corresponding statute in effect before that date.
  44-17        (c)  If a plot owner exchanges a plot for another plot in a
  44-18  corporation's perpetual care cemetery, the amount to be deposited
  44-19  in the corporation's fund in respect of the plot received by the
  44-20  plot owner in the exchange may be reduced by the amount deposited
  44-21  in the fund in respect of the plot contributed by the plot owner in
  44-22  the exchange <A cemetery may not operate as a perpetual care
  44-23  cemetery, including a permanent maintenance or free care cemetery,
  44-24  unless the cemetery complies with this section and Section
  44-25  712.029>.
  44-26        SECTION 39.  Section 712.029, Health and Safety Code, is
  44-27  amended to read as follows:
   45-1        Sec. 712.029.  Accounting For and Depositing Amounts; Civil
   45-2  Penalty.  (a)  The part of the purchase price of a plot in a
   45-3  perpetual care cemetery that is to be deposited in a fund must be
   45-4  shown separately on the original purchase agreement from the total
   45-5  purchase price.  A copy of the agreement shall be delivered to the
   45-6  purchaser of the plot.
   45-7        (b)  On the sale of a plot <burial space>, a commission may
   45-8  not be paid to a broker or salesman on the amount to be deposited
   45-9  in the fund.
  45-10        (c)  <If the purchase price is payable in installments, each
  45-11  amount paid must be applied first to the balance not required to be
  45-12  deposited in the fund, and the remainder, on receipt by the seller,
  45-13  shall be deposited in the fund.>
  45-14        <(d)>  A corporation <seller of a plot> shall deposit in its
  45-15  <the> fund the <required> amount required under Section 712.028 not
  45-16  later than the 20th day after the end of the month in which the
  45-17  original purchase agreement has been paid in full.  A corporation
  45-18  may prepay funds into its fund at any time and, if a surplus exists
  45-19  in the fund from the prepayments, may credit against the surplus
  45-20  the amounts otherwise required to be deposited in the fund under
  45-21  Section 712.028 until the surplus has been depleted.  In
  45-22  determining whether a surplus exists from prepayments, no part of
  45-23  the fund resulting from gifts to the fund under Section 712.030 may
  45-24  be considered <amount is received>.
  45-25        (d) <(e)>  A corporation that <seller who> violates
  45-26  Subsection (c) <(d)> is liable for a penalty of $10 a day for each
  45-27  day the violation continues <of violation>.  The commissioner shall
   46-1  collect the penalty.
   46-2        (e) <(f)>  If the corporation <seller> refuses to pay the
   46-3  penalty, the commissioner may <shall> report the refusal to the
   46-4  attorney general, who shall bring suit to recover the penalty,
   46-5  costs, and other relief requested by the attorney general as proper
   46-6  and necessary.
   46-7        SECTION 40.  Section 712.030, Health and Safety Code, is
   46-8  amended to read as follows:
   46-9        Sec. 712.030.  USE OF GIFT FOR SPECIAL CARE OF PLOT <BURIAL
  46-10  SPACE> IN PERPETUAL CARE CEMETERY.  <(a)>  A trustee may take and
  46-11  hold property transferred to the trustee in trust in order to apply
  46-12  the principal, proceeds, or income of the property for any purpose
  46-13  consistent with the purpose of a corporation's perpetual care <the>
  46-14  cemetery, including:
  46-15              (1)  the improvement or embellishment of any part of
  46-16  the perpetual care cemetery;
  46-17              (2)  the erection, renewal, repair, or preservation of
  46-18  a monument, fence, building, or other structure in the perpetual
  46-19  care cemetery;
  46-20              (3)  planting or cultivating plants in or around the
  46-21  perpetual care cemetery; or
  46-22              (4)  taking special care of or embellishing a <burial>
  46-23  plot, section, or building in the perpetual care cemetery.
  46-24        <(b)  Not more than 75 percent of the property's proceeds or
  46-25  income may be devoted to maintaining and beautifying the private
  46-26  block, plot, or structure for which the transfer is made.>
  46-27        <(c)  At least 25 percent of the property's proceeds or
   47-1  income must be devoted generally to maintaining and beautifying the
   47-2  cemetery in which the block, plot, or structure is located.>
   47-3        SECTION 41.  Section 712.041, Health and Safety Code, is
   47-4  amended to read as follows:
   47-5        Sec. 712.041.  ANNUAL STATEMENT OF FUNDS.  (a)  A corporation
   47-6  <perpetual care cemetery> shall file in its <the cemetery's> office
   47-7  and with the commissioner a statement in duplicate that shows:
   47-8              (1)  the principal amount of its fund;
   47-9              (2)  the amount of the fund invested in bonds and other
  47-10  securities;
  47-11              (3)  the amount of <fund> cash on hand in the fund;
  47-12              (4)  any other item that shows the financial condition
  47-13  of the fund;
  47-14              (5)  the number of crypts, niches, and square feet of
  47-15  ground area conveyed <grave space sold or disposed of> under
  47-16  perpetual care before and after March 15, 1934, listed separately;
  47-17  and
  47-18              (6)  the number of crypts, niches, and square feet of
  47-19  ground area conveyed <grave space sold or disposed of> under
  47-20  perpetual care after March 15, 1934, for which the minimum deposits
  47-21  required for perpetual care have not been paid to the fund.
  47-22        (b)  The corporation's <association> president and secretary,
  47-23  or two principal officers, shall verify the information on the
  47-24  statement.
  47-25        (c)  The corporation <association> shall revise and post and
  47-26  file the statement on or before March 1 of each year.
  47-27        (d)  Not later than the 30th day after the date on which the
   48-1  statement is filed with the commissioner, a copy of the statement
   48-2  shall be published in at least one newspaper of general circulation
   48-3  in the county in which the corporation's perpetual care cemetery is
   48-4  located.
   48-5        SECTION 42.  Section 712.042, Health and Safety Code, is
   48-6  amended to read as follows:
   48-7        Sec. 712.042.  Fees.  (a)  On filing a <the> statement of
   48-8  funds under Section 712.041, a corporation <the cemetery> shall pay
   48-9  the commissioner:
  48-10              (1)  $200, if the corporation's perpetual care <$100,
  48-11  if the> cemetery serves a municipality with a population of 25,000
  48-12  or less; or
  48-13              (2)  $400, if the corporation's perpetual care <$200,
  48-14  if the> cemetery serves a municipality with a population of more
  48-15  than 25,000.
  48-16        (b)  The banking department shall receive and disburse
  48-17  revenues collected under this chapter in accordance with Article
  48-18  12, Chapter I, The Texas Banking Code of 1943 (Article 342-112,
  48-19  Vernon's Texas Civil Statutes)<, for:>
  48-20              <(1)  the administration and enforcement of the law
  48-21  relating to the operation of funds; and>
  48-22              <(2)  investigations on department initiative, or on
  48-23  complaints made by others, regarding the operation of a perpetual
  48-24  care cemetery and the creation, investment, and expenditure of
  48-25  funds.>
  48-26        <(c)  A reasonable part of the amount that the banking
  48-27  department transfers each year of the biennium to the general
   49-1  revenue fund to cover the cost of government services rendered by
   49-2  other departments may consist of revenues collected under this
   49-3  chapter>.
   49-4        SECTION 43.  Section 712.043, Health and Safety Code, is
   49-5  amended to read as follows:
   49-6        Sec. 712.043.  Additional Fund Report.  The commissioner may
   49-7  require, as often as the commissioner determines necessary, the
   49-8  trustee of a corporation's fund <a trustee> to make under oath a
   49-9  detailed report of the condition of the fund.  The report must
  49-10  include:
  49-11              (1)  a detailed description of the assets of the fund
  49-12  <assets>;
  49-13              (2)  a description of securities held by the fund;
  49-14              (3)  if a security held by the fund is a lien, a
  49-15  description of the property against which the lien is taken;
  49-16              (4)  each security's acquisition cost;
  49-17              (5)  each security's market value at the time of
  49-18  acquisition;
  49-19              (6)  each security's current market value;
  49-20              (7)  each security's status with reference to default;
  49-21              (8)  a statement that a security is not encumbered by
  49-22  debt; and
  49-23              (9)  <a statement that none of the fund assets are
  49-24  loans to the cemetery for which the fund is established or to an
  49-25  officer or director of the cemetery; and>
  49-26              <(10)>  any other information the commissioner
  49-27  determines is pertinent.
   50-1        SECTION 44.  Section 712.044, Health and Safety Code, is
   50-2  amended to read as follows:
   50-3        Sec. 712.044.  EXAMINATION <AUDIT> OF FUND RECORDS;
   50-4  EXAMINATION <AUDIT> FEES AND EXPENSES.  (a)  The books and records
   50-5  of a corporation relating to its fund shall be examined biennially
   50-6  by the commissioner.  The biennial examination shall cover the
   50-7  two-year or lesser period of time from the date of the last
   50-8  examination of the corporation's books and records relating to its
   50-9  fund <The commissioner shall examine the records of a perpetual
  50-10  care cemetery association annually or as often as necessary>.
  50-11        (b)  A corporation <An association> that is examined under
  50-12  this section shall make its books and records relating to its fund
  50-13  available for examination by the banking department upon reasonable
  50-14  notice to the corporation and shall pay to the commissioner for the
  50-15  regular biennial examination:
  50-16              (1)  not more than $100 a day or part of a day for each
  50-17  examiner or not more than a total of $400 for the entire
  50-18  examination, if the corporation's <association's> annual deposits
  50-19  to its <the association's> fund as required by law are less than
  50-20  $7,500; or
  50-21              (2)  not more than $200 a day or part of a day for each
  50-22  examiner or not more than a total of $800 for the entire
  50-23  examination, if the corporation's <association's> annual deposits
  50-24  to its <the association's> fund as required by law are $7,500 or
  50-25  more.
  50-26        <(c)  If the examiner determines that the conditions of the
  50-27  association necessitate additional examination or a prolonged audit
   51-1  to ascertain the association's status, the association shall pay
   51-2  the total expense of the additional examination or audit.>
   51-3        SECTION 45.  Section 712.045, Health and Safety Code, is
   51-4  amended to read as follows:
   51-5        Sec. 712.045.  Failure to File Statement; Civil Penalty.
   51-6  (a)  A corporation <cemetery association> that does not file a
   51-7  statement of funds and publish <a publication of> the statement
   51-8  <with the commissioner> as required by Section 712.041 is liable
   51-9  for a penalty of $5 a day for each day of failure.  The
  51-10  commissioner shall collect the penalty.
  51-11        (b)  If the corporation <association> does not pay the
  51-12  penalty, the commissioner shall notify the attorney general, who
  51-13  shall bring suit to recover the penalty and for other relief
  51-14  requested by the attorney general as proper and necessary.
  51-15        SECTION 46.  Section 712.046, Health and Safety Code, is
  51-16  amended to read as follows:
  51-17        Sec. 712.046.  Proceedings to Forfeit Charter for
  51-18  Noncompliance.  (a)  If a <cemetery> corporation does not file with
  51-19  the commissioner a statement of funds on or before March 1 or pay
  51-20  the filing fee required by Section 712.042 <this chapter>, the
  51-21  commissioner shall notify the attorney general.  <The failure to
  51-22  report is prima facie evidence that the fund does not comply with
  51-23  the law.>
  51-24        (b)  If the commissioner finds that a fund does not comply
  51-25  with the law or if a trustee does not file a report required by the
  51-26  commissioner under Section 712.043 within 30 days after the date of
  51-27  the request, the commissioner shall notify the <trustee and the
   52-1  cemetery for which the fund was established, in addition to the>
   52-2  attorney general.
   52-3        (c)  The commissioner shall provide a copy of any notice
   52-4  given to the attorney general under Subsection (a) or (b) to the
   52-5  corporation and the trustee of the fund.
   52-6        (d)  If within 90 days after the date of any <the>  notice
   52-7  given by the commissioner to the attorney general under Subsection
   52-8  (a) or (b), the <attorney general is not notified by the>
   52-9  commissioner notifies the attorney general that the violation has
  52-10  not been corrected, the attorney general shall bring suit or quo
  52-11  warranto proceedings for the forfeiture of the corporation's
  52-12  charter and dissolution of the corporation in the district court of
  52-13  any county in which its perpetual care <the> cemetery is operated.
  52-14        SECTION 47.  Section 712.047, Health and Safety Code, is
  52-15  amended to read as follows:
  52-16        Sec. 712.047.  Receivership; Appointment and Duties of
  52-17  Receiver.  (a)  If a trustee of a corporation's fund does not
  52-18  comply with this chapter, the attorney general may <shall> apply to
  52-19  the district court of the county in which the corporation's
  52-20  perpetual care cemetery is operated for proper legal writs to
  52-21  require a report of the fund.
  52-22        (b)  If a <the> fund is misappropriated by its <the> trustee
  52-23  and is not handled as required by law, the attorney general shall
  52-24  apply to the court for the appointment by the court of a receiver
  52-25  to take custody of the fund for the benefit of the cestui que
  52-26  trust.
  52-27        (c)  The receiver may bring suit against the defaulting
   53-1  trustee as necessary to require a full accounting and restoration
   53-2  of the fund.
   53-3        (d)  If a corporation <perpetual care cemetery> is placed in
   53-4  receivership, the receiver shall make deposits in its <the> fund
   53-5  from the proceeds of the liquidation of the corporation <cemetery>
   53-6  to meet the minimum deposit amounts required by law for the fund.
   53-7  A deficit in the  fund below the minimum requirements is a
   53-8  preferred claim against any of the corporation's <cemetery> assets
   53-9  in the receiver's possession and takes precedence over all claims
  53-10  except vendor's liens on the corporation's perpetual care cemetery
  53-11  property.
  53-12        (e)  The receiver may deliver any residue to a trustee
  53-13  selected by the <cemetery> corporation in accordance with this
  53-14  chapter.
  53-15        SECTION 48.  Section 712.048, Health and Safety Code, is
  53-16  amended to read as follows:
  53-17        Sec. 712.048.  Criminal Penalties.  (a)  A person who is an
  53-18  individual, firm, association, corporation, or municipality, or an
  53-19  officer, agent, or employee of an individual, firm, association,
  53-20  corporation, or municipality, commits an offense if the person<:>
  53-21              <(1)>  sells, offers to sell, or advertises for sale an
  53-22  interment right in a plot <or the exclusive right of sepulture in a
  53-23  plot> and, before a fund is established for the cemetery in which
  53-24  the plot is located as provided by this chapter <subtitle>,
  53-25  represents that the plot is under perpetual care.  An offense under
  53-26  this subsection is a Class A misdemeanor.  This subsection does not
  53-27  prevent an aggrieved party or the attorney general from maintaining
   54-1  a civil action for the recovery of damages caused by an injury
   54-2  resulting from an offense under this subsection.
   54-3        (b)  A person who is an individual, firm, association,
   54-4  corporation, or municipality, or an officer, agent, or employee of
   54-5  an individual, firm, association, corporation, or municipality,
   54-6  commits an offense if the person knowingly defalcates or
   54-7  misappropriates assets of a fund.  An offense under this subsection
   54-8  is punishable as if it were an offense under Section 32.45, Penal
   54-9  Code<;>
  54-10              <(2)  violates Section 712.041;>
  54-11              <(3)  invests funds in violation of Section 712.027; or>
  54-12              <(4)  does not post notice as required by Section
  54-13  712.007.>
  54-14        <(b)  An offense under this section is a misdemeanor
  54-15  punishable by:>
  54-16              <(1)  a fine not to exceed $500; or>
  54-17              <(2)  if the defendant is an individual, by a fine not
  54-18  to exceed $500, confinement in the county jail for a term not to
  54-19  exceed six months, or both>.
  54-20        SECTION 49.  Sections 711.005 and 712.006, Health and Safety
  54-21  Code, are repealed.
  54-22        SECTION 50.  This Act takes effect September 1, 1993.
  54-23        SECTION 51.  The importance of this legislation and the
  54-24  crowded condition of the calendars in both houses create an
  54-25  emergency and an imperative public necessity that the
  54-26  constitutional rule requiring bills to be read on three several
  54-27  days in each house be suspended, and this rule is hereby suspended.