Bill Text: TX HB52 | 2013-2014 | 83rd Legislature | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to the sale of a cemetery plot; providing penalties; authorizing a fee.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Passed) 2013-06-14 - See remarks for effective date [HB52 Detail]

Download: Texas-2013-HB52-Introduced.html
  83R1174 AED-F
 
  By: Flynn H.B. No. 52
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the sale of a cemetery plot; providing penalties.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 711.001, Health and Safety Code, is
  amended by adding Subdivision (2-b) to read as follows:
               (2-b)  "Cemetery broker" means a person who sells the
  exclusive right of sepulture for another person.  The term does not
  include a person who:
                     (A)  is an officer, agent, or employee of the
  cemetery organization in which the plot is located and who is exempt
  from registration under Subchapter C-1; or
                     (B)  originally purchased the exclusive right of
  sepulture for personal use.
         SECTION 2.  Section 711.012(a), Health and Safety Code, is
  amended to read as follows:
         (a)  The Finance Commission of Texas may adopt rules to
  enforce and administer Subchapter C-1 and Sections 711.003,
  711.004, 711.007, 711.008, 711.0105, 711.021-711.024,
  711.032-711.036, 711.038, 711.0381, 711.040-711.042, 711.052, and 
  711.061[, and 711.062] relating to perpetual care cemeteries.
         SECTION 3.  The heading to Section 711.038, Health and
  Safety Code, is amended to read as follows:
         Sec. 711.038.  SALE OF PLOTS BY CEMETERY ORGANIZATIONS.
         SECTION 4.  Section 711.038(e), Health and Safety Code, is
  amended to read as follows:
         (e)  A person who is an officer, agent, or employee of the
  cemetery organization or its affiliate and who is exempt from
  registration under Subchapter C-1 is not required to be licensed or
  registered to sell a plot in a dedicated cemetery.
         SECTION 5.  Subchapter C, Chapter 711, Health and Safety
  Code, is amended by adding Section 711.0381 to read as follows:
         Sec. 711.0381.  SALE OR RESALE OF PLOTS BY CERTAIN PERSONS.  
  (a)  A person may not act as a cemetery broker in the sale or resale
  of the exclusive right of sepulture in a plot unless the person is
  registered as a cemetery broker under Subchapter C-1 or is exempt
  from registration under Subchapter C-1.
         (b)  Resale of the exclusive right of sepulture in a plot is
  subject to the rules of the cemetery organization and any
  restrictions in the certificate of ownership, quitclaim agreement,
  or other instrument of conveyance. A quitclaim agreement or other
  instrument evidencing the conveyance of the exclusive right of
  sepulture must be:
               (1)  in a form authorized by or otherwise acceptable to
  the cemetery organization, subject to Subsection (c);
               (2)  signed by:
                     (A)  the grantee named in the certificate of
  ownership or other instrument of conveyance as filed and recorded
  in the cemetery organization's office in accordance with Section
  711.038, as the seller or transferor;
                     (B)  the designated purchaser or transferee; and
                     (C)  each cemetery broker or other agent assisting
  in the transfer of the interment rights; and
               (3)  filed and recorded with the cemetery organization
  not later than the third business day after the date of the sale.
         (c)  On request of a person acting as a cemetery broker, a
  cemetery organization shall provide its rules, conveyance forms,
  and written guidelines and procedures for brokered sales, if any.
         (d)  The resale of the exclusive right of sepulture in a
  group of interment rights that were conveyed collectively may not
  be divided without the consent of the cemetery organization.
         (e)  A person acting as a cemetery broker that sells or
  resells the right of sepulture in a plot shall collect and remit to
  the cemetery organization:
               (1)  all fees required by law; and
               (2)  any other fee required by the rules of the cemetery
  organization, subject to Subsection (f).
         (f)  A fee required by a rule of the cemetery organization
  for the sale or resale of the right of sepulture in a plot under this
  section may not exceed the fee charged by the cemetery organization
  on the sale of the right of sepulture in a plot under Section
  711.038.
         (g)  A person acting as a cemetery broker must keep a record
  of each sale or resale under this section. The record must include:
               (1)  the name and address of the purchaser;
               (2)  the date of the purchase;
               (3)  a copy of the purchase agreement, with the name and
  address of the cemetery;
               (4)  a specific description of the interment rights;
               (5)  the purchase price;
               (6)  the amount of fees collected and remitted in
  accordance with Subsection (e); and
               (7)  information on the disposal of the purchase
  agreement, including whether the agreement was conveyed, canceled,
  or voided.
         SECTION 6.  Chapter 711, Health and Safety Code, is amended
  by adding Subchapter C-1 to read as follows:
  SUBCHAPTER C-1.  CEMETERY BROKER REGISTRATION
         Sec. 711.045.  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. 711.046.  CEMETERY BROKER REGISTRATION. (a) To register
  under this subchapter, a cemetery broker shall file with the
  department a sworn, notarized statement that contains:
               (1)  the name and street address of the cemetery
  broker;
               (2)  the name, street address, and telephone number of
  the representative of the cemetery broker to be contacted regarding
  a written complaint; and
               (3)  any Internet or other electronic mail address of
  the cemetery broker.
         (b)  The registration of a cemetery broker is valid until
  withdrawn or revoked. Periodic renewal of the registration is not
  required.
         (c)  A registered cemetery broker shall update the
  information contained in the registration statement not later than
  the 60th day after the date the information changes.
         (d)  The department may charge a cemetery broker a reasonable
  fee to cover the costs of filing and maintaining the registration
  statement and administering this chapter. The administration fee
  may not exceed $100 per year.
         Sec. 711.047.  EXEMPTIONS.  This subchapter does not apply
  to a person offering to sell or selling the exclusive right of
  sepulture in a plot if the person is:
               (1)  an officer, agent, employee, or affiliate of the
  cemetery organization in which the plot is located, acting at the
  direction or under the control of the cemetery organization;
               (2)  an employee of a registered cemetery broker;
               (3)  with respect to the specific plot for sale:
                     (A)  a grantee named in the certificate of
  ownership or other instrument of conveyance for the plot as filed
  and recorded in the cemetery organization's office under Section
  711.038;
                     (B)  a spouse or other heir of the named grantee as
  described by Section 711.039;
                     (C)  an executor, administrator, or guardian of
  the named grantee appointed by court order; or
                     (D)  an attorney-in-fact for the named grantee
  under a durable power of attorney if the person is not otherwise
  engaged in the business of a cemetery broker and does not solicit
  appointment as attorney-in-fact for the purpose of offering to sell
  or selling the exclusive right of sepulture of the named grantee; or
               (4)  otherwise exempt in accordance with rules adopted
  by the commission as necessary to protect the public health and
  safety.
         Sec. 711.048.  COMPLAINTS. (a)  A cemetery broker is subject
  to rules adopted under Section 11.307, Finance Code, regarding the
  manner in which the cemetery broker provides consumers with
  information on how to file complaints with the department.  The
  rules must be consistent with the obligations imposed by this
  section.
         (b)  If the department receives a signed written complaint
  from a person concerning a cemetery broker, the department shall
  provide written notification of the complaint to the cemetery
  broker's designated representative not later than the 31st day
  after the date the complaint was received and provide a copy of the
  complaint to the representative. The department may:
               (1)  require the cemetery broker to resolve the
  complaint or to provide the department with a response to the
  complaint; or
               (2)  provide written direction requiring the cemetery
  broker to take specific action to resolve the complaint.
         Sec. 711.049.  TERMINATION OF REGISTRATION. (a) A cemetery
  broker may withdraw the cemetery broker's registration at any time.
         (b)  After notice and opportunity for a hearing, the
  commissioner may revoke the registration of a registered cemetery
  broker that:
               (1)  fails to pay the annual administration fee and
  fails to cure the default not later than the 30th day after the date
  written notice of the default is mailed by the department to the
  cemetery broker;
               (2)  fails or refuses to comply with the department's
  written request for a response to a complaint; or
               (3)  the commissioner concludes, after considering a
  complaint filed under this subchapter, has engaged in an
  intentional course of conduct that:
                     (A)  violates federal or state law; or
                     (B)  constitutes improper, fraudulent, or
  dishonest dealings.
         (c)  The commissioner shall state the basis of the decision
  in an order revoking the registration of a cemetery broker. The
  cemetery broker may appeal an order revoking registration in the
  manner provided by Chapter 2001, Government Code.
         SECTION 7.  Section 711.052(a), Health and Safety Code, is
  amended to read as follows:
         (a)  A person who is an individual, firm, association,
  corporation, or municipality, or an officer, agent, or employee of
  an individual, firm, association, corporation, or municipality,
  commits an offense if the person:
               (1)  engages in a business for cemetery purposes in
  this state other than through a corporation organized for that
  purpose, if a corporation is required by law;
               (2)  fails or refuses to keep records of interment as
  required by Sections 711.003 and 711.004;
               (3)  sells, offers to sell, or advertises for sale a
  plot or the exclusive right of sepulture in a plot for purposes of
  speculation or investment; [or]
               (4)  represents through advertising or printed
  material that a retail department will be established for the
  resale of the plots of plot purchasers, that specific improvements
  will be made in the cemetery, or that specific merchandise or
  services will be furnished to a plot owner, unless adequate funds or
  reserves are created by the cemetery organization for the
  represented purpose;
               (5)  offers or receives monetary inducement to solicit
  business for a cemetery broker;
               (6)  fails or refuses to keep records of sales or
  resales or to collect and remit fees as required by Section
  711.0381; or
               (7)  fails or refuses to register as a cemetery broker
  as required by Subchapter C-1.
         SECTION 8.  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
  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 9.  Subchapter D, Chapter 711, Health and Safety
  Code, is amended by adding Sections 711.057, 711.058, and 711.059
  to read as follows:
         Sec. 711.057.  EMERGENCY ORDER. (a) The commissioner may
  issue an emergency order that takes effect immediately 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.
         (b)  An emergency order remains in effect unless stayed by
  the commissioner.
         (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
  commissioner received the request, unless extended at the request
  of the person named in the order.
         (d)  The hearing is an administrative hearing relating to the
  validity of findings that support immediate effect of the order.
         Sec. 711.058.  RESTITUTION. The commissioner may issue an
  order to a person requiring restitution if, after notice and
  opportunity for hearing, the commissioner finds that the person:
               (1)  failed to remit a fee in accordance with Section
  711.0381; or
               (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.
         Sec. 711.059.  SEIZURE OF ACCOUNTS AND RECORDS. (a) The
  commissioner may issue an order to seize accounts in which funds
  from the sale or resale 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 or resale of the exclusive
  right of sepulture 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
  department;
               (4)  was the subject of an order to cancel, suspend, or
  refuse a registration under Subchapter C-1; or
               (5)  is required to register under Subchapter C-1 and
  is not registered or has transferred the ownership of the business
  that required registration to another person who is not registered.
         (b)  An order shall be served on the person named in the order
  by certified mail, return receipt requested, to the last known
  address of the person.
         (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
  person named in the order requests a hearing not later than the 15th
  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:
               (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
  outstanding certificate of ownership or other instrument of
  conveyance that is a part of a sale by the person subject to the
  order.
         (g)  The remedy provided by Subsection (f) is not exclusive.
  The commissioner may seek an additional remedy authorized under
  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 sale or 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, 2013.
         (b)  Section 711.0381 and Subchapter C-1, Chapter 711,
  Health and Safety Code, as added by this Act, take effect January 1,
  2014.
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