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