The major regulations of cemeteries in Texas (including Perpetual Care Cemeteries) occurs in Chapter 711 of the Texas Health and Safety Code. The majority of regulations specific to perpetual care cemeteries are at Chapter 712 of the Texas Health and Safety Code. Any "cemetery corporation" formed on or after September 1, 1993, must be operated as a perpetual care cemetery. Section 711.021(f).
A perpetual care cemetery may not be operated in Texas unless the articles of incorporation are filed with the secretary of state showing:
Further, a cemetery corporation chartered on or after September 1, 1993, must have a minimum capital of $75,000. Section 712.003(c).
A non profit association or corporation operated solely for the benefit of plot owners seeking to convert a cemetery to a perpetual care cemetery under Chapter 712 is not required to have the $75,000 if the cemetery has existed for at least 75 years and the non profit association or corporation has operated the cemetery for the proceeding ten years. Section 712.003(d).
Not later than the 30th day after the date a cemetery corporation files its articles of incorporation with the secretary of state, the corporation shall notify the Banking Department of Texas in writing of its intent to operate a perpetual care cemetery. The notice shall be sworn to and verified under oath by all persons subscribing to the capital stock of the corporation. A $500 filing fee must also be paid.
The Notice shall contain:
Please note that a cemetery operations manager must have at least two years of experience in cemetery management. Section 712.0031(b).
Failure to provide this information may cause the Banking Commissioner of Texas to instruct the secretary of state to cancel the cemetery corporation's charter, and serve notice of the cancellation to the cemetery corporation by registered or certified mail, addressed to the cemetery corporation's address. Section 712.0031(c).
A cemetery corporation shall notify the Banking Commissioner of Texas in writing of any change in the controlling ownership interest of the capital stock of the corporation not later than the 30th day following the change of controlling ownership interest. Section 712.0031(d).
Before obtaining a corporate charter, the incorporators of a cemetery corporation chartered on or after September 1, 1993, must establish a fund by permanently depositing in cash with the trustee of the fund an amount of not less that $50,000 for each perpetual care cemetery operated in this state. Section 712.004(b).
The trust fund shall be permanently set aside and deposited in trust with the trustee in accordance with Section 712.021 of the Texas Health and Safety Code.
If a 712.003 cemetery corporation does not begin actual operation of its perpetual care cemetery for six months after the charter is granted and delivered, the Banking Commissioner can instruct the secretary of state to cancel the charter. 712.005 (a). Under certain circumstances the order of cancellation may be rescinded and the cemetery corporation given an additional month to begin actual operation.
If the secretary of state cancels the charter under 712.005, but no sale of the dedicated cemetery property of the corporation has been made, a certified copy of the order of cancellation of the charter authorizes the trustee of the perpetual care trust fund to refund the fund to the incorporators who signed the corporation's articles of incorporation. 712.005 (d).
There are specific notices a perpetual care cemetery must provide. First, a sign must be posted at or near a cemetery entrance or administration building. The sign must state that the cemetery is a "Perpetual Care Cemetery," or an "Endowment Care Cemetery." and it must contain the names and telephone numbers of two of the corporation's officers or directors and the name of each bank or trust company entrusted with the perpetual care fund. 712.007 (a).
Second, a corporation must include the following statement in each sale contract, certificate of ownership, or other instrument of conveyance of the exclusive right of sepulture:
The term "endowment care" may be substituted for the term "perpetual care" in the statement required by 712.007 (c).
The Finance Commission of Texas had additional rules to enforce and administer Chapter 712, including rules establishing fees to defray the costs of enforcing and administering Chapter 712. 712.008.
There are additional statutory requirements concerning perpetual care trust funds beyond the scope of this article.
There are also other regulations that apply to cemetery organizations (including Perpetual Care Cemeteries) such as requirements for plating the land, where to file the plat, rules about the sale of plots, rights of interment, enforcement provisions, etc.
Anyone considering establishment of a perpetual care cemetery corporation should consult with an attorney of their choice.
Written by Donald Ray Burger, Attorney at Law
(1) subscriptions and payments in cash for the corporation's full capital stock;
(2) the location of the cemetery corporation's perpetual care cemetery; and
(3) a certificate showing the deposit in its trust fund of the minimum amount of cash required under Section 712.004 (not less than $50,000 cash deposited with the trustee of the trust fund for a cemetery corporation formed on or after September 1, 1993). Section 711.003(a)
(1) the information required to be provided to the secretary of state under Section 712.003;
(2) the names and addresses of all persons or entities who are or will be beneficial owners of the capital stock or otherwise share an interest in the ownership of the corporation's capital stock, or who have paid or will pay any portion of the consideration therefor;
(3) the name and address of any person or entity to whom the capital stock or assets of the cemetery corporation are or will be pledged as security for any loan; and
(4) the name and address of the person who will actively manage the cemetery operations of the corporation, along with a brief statement of that person's working experience in the cemetery industry. Section 712.0031(a).
"This cemetery is operated as a perpetual care cemetery, which means that a perpetual care fund for its maintenance has been established in conformity with the laws of the State of Texas. Perpetual care means to maintain, repair, and care for the cemetery." 712.007 c).
Last revised: November 10, 2003