S.B. No. 1402
  relating to the regulation of cemeteries and the administration of
  perpetual care trust funds.
         SECTION 1.  Section 711.056(a), Health and Safety Code, is
  amended to read as follows:
         (a)  If after a hearing conducted as provided by Chapter
  2001, Government Code, the trier of fact finds that a violation of
  this chapter or a rule of the Finance Commission of Texas
  establishes a pattern of wilful disregard for the requirements of
  this chapter or rules of the finance commission, the trier of fact
  may [shall] recommend to the commissioner that the maximum
  administrative penalty permitted under Section 711.055 be imposed
  on the person committing the violation or that the commissioner
  cancel or not renew:
               (1)  the person's registration under Subchapter C-1, if
  the person is registered under that subchapter; or
               (2)  the person's permit under Chapter 154, Finance
  Code, if the person holds such a permit.
         SECTION 2.  Section 712.0034, Health and Safety Code, is
  amended by amending Subsection (b) and adding Subsection (c) to
  read as follows:
         (b)  To qualify for a certificate of authority under this
  chapter, an applicant must demonstrate to the satisfaction of the
  commissioner that:
               (1)  the applicant's business ability, experience,
  character, financial condition, and general fitness warrant the
  public's confidence;
               (2)  the cemetery operations manager has at least two
  years of experience in cemetery management;
               (3)  the issuance of the certificate of authority is in
  the public interest;
               (4)  the applicant, a principal of the applicant, or a
  person who controls the applicant does not owe the department a
  delinquent fee, assessment, administrative penalty, or other
  amount imposed under this chapter or a rule adopted or order issued
  under this chapter; and
               (5)  the applicant corporation:
                     (A)  is in good standing and statutory compliance
  with this state;
                     (B)  is authorized to engage in the perpetual care
  cemetery business in this state; [and]
                     (C)  does not owe any delinquent franchise or
  other taxes to this state; and
                     (D)  wholly owns all land on which the perpetual
  care cemetery will be located.
         (c)  For purposes of Subsection (b)(5)(D), an applicant
  corporation is considered to wholly own land regardless of whether
  the land is subject to a mortgage, deed of trust, or other lien.
         SECTION 3.  Section 712.0037, Health and Safety Code, is
  amended by adding Subsections (a-1) and (a-2) to read as follows:
         (a-1)  Notwithstanding Subsection (a), a certificate holder
  holding a certificate of authority issued before September 1, 2017,
  that does not on that date satisfy the ownership requirement under
  Section 712.0034(b)(5)(D) is not required to satisfy that ownership
  requirement as a condition of renewal until September 1, 2022. The
  commissioner may extend the period of compliance for the ownership
  requirement if the certificate holder:
               (1)  files a written application for the extension in
  the form and manner required by the department; and
               (2)  shows good cause for the extension.
         (a-2)  This subsection and Subsection (a-1) expire September
  1, 2028.
         SECTION 4.  Section 712.021, Health and Safety Code, is
  amended by amending Subsections (a) and (g) and adding Subsection
  (h) to read as follows:
         (a)  Except as provided by Subsection (h), a [A] corporation
  that operates a perpetual care cemetery in this state shall have a
  fund established with a trust company or a bank with trust powers
  that is located in this state. The trust company or bank may not
  have more than one director who is also a director of the
         (g)  In this subsection, "master trust account" means an
  account containing the perpetual care trust funds of two or more
  certificate holders for the purpose of collective investment and
  administration.  The trustors of two or more perpetual care trust
  funds may establish a master [common] trust account [fund] in which
  deposits required by this chapter are made, provided that separate
  records of principal and income are maintained for each perpetual
  care cemetery for the benefit of which the master [common] trust
  account [fund] is established, and further provided that the income
  attributable to each perpetual care cemetery is used only for the
  perpetual care of that cemetery.
         (h)  A corporation may apply to the commissioner for
  temporary relief and placement of a perpetual care trust fund in a
  segregated interest bearing account at a Texas financial
  institution, as defined by Section 201.101, Finance Code, if the
               (1)  has been operating a perpetual care cemetery in
  this state for at least two years; and
               (2)  has a perpetual care trust fund with a balance of
  less than $100,000, the income of which is insufficient to pay
  trustee fees.
         SECTION 5.  This Act takes effect September 1, 2017.
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
         I hereby certify that S.B. No. 1402 passed the Senate on
  April 19, 2017, by the following vote:  Yeas 31, Nays 0.
  Secretary of the Senate    
         I hereby certify that S.B. No. 1402 passed the House on
  May 9, 2017, by the following vote:  Yeas 145, Nays 0, two present
  not voting.
  Chief Clerk of the House