PRICE DANIEL ATTORNEY

GENERAL 

### AXJ.STIN 11.Y-EXAE

December 11, 1950

Hon. C. H. Cavness Opinion No. V-l 130. State Auditor Austin, Texas Re: Several questions relating to filing fees, reports, and perpetual care funds required of Dear Sir: perpetual care cemeteries.

We quote the following excerpt from your letter ofOctober 4, 1950.

“It will be noted that the present law governing perpetual care cemeteries (Articles 912a-I through 912a-27, R.C.S.) was passed by the Forty-Ninth Legislature (House Bill 

### 46) and amended by the Fiftieth Legislature (House Bill 98). Most past administrations of the Secretary ofState’s Office have interpreted Article 912a-5 toexempt from the provisions ofthe Act all non-profit, perpetual care cemeteries maintained by associations ofcemetery lot owners. ‘Associations’ had been construed to mean either, or both, incorporated or unincorporated associations, Therefore, such exempt corporations were not required to file annual reports on their perpetual care trust funds or pay filing fees provided by Article 912a-2 and 912a-3 respectively.

“More recently the Secretary ofState’s Office has construed Article 912a-5 not to exempt non-profit corporations, but toexempt from the Act any unincorporated associations ofcemetery lot oxrs not operated for profit, as well as the other specifically named cemetery operators. In other words, the latter part of Article 912a-5, which reads in part as follows, ’

... or any association ofcemetery lot owners not operated for profit

... , ’ is now being interpreted as ifit read,

...or any unincorporated association ofcemetery lot owners not operated for profit

...‘

. Under this present interpretation, all corporations operating a perpetual care cemetery, whether for profit or not, are required to file the statement as provided by Article 912a-2 and to pay the filing fee provided byArticle 912a3, unless such corporations fall under one ofthe other specific exemptions.Hon. C. H. Cavness, Page 2(V-1130)

“With reference tothe foregoing, our first question is raised by the following facts:

“The Morton Cemetery Association was incorporated on January 20th, 1944. Its charter specifies that the corporation is formed for the purpose ofoperating
acemetery, that it is organized by cemetery lot owners and that it shall not be operated for profit. fSaid charter also specificay provides that the corporation shall operate a perpetual care cemetery,f

“Question 1. Is this corporation, organized prior to the enactment ofthe present statutes, required tofiIe
a statement as provided byArticle 912a-2 and topay the filing fee as provided by Article 912a-3?

“Question 2. Should a corporation whose charter provisions are the same as in the case ofthe Morton Cemetery Association, cited above, but chartered subsequent to the enactment ofthe present statutes, be required tofile a statement as provided byArticle 912a-2 and to pay the filing fee as provided by Article 912a-3? ”

By letter opinion dated May 9, 1949, we advised Hon. J. M. Falkner, Commissioner, Department ofBanking, that an opinion rendered by Judge Ocie Speer, counsel ofthat department, was correct and that nonprofit perpetual care cemetery corporations are excepted by the proviso appended to Section 2 (Art, 912a-2, V. C.S.) ofthe present Act and are not required to make annual statements and fee remissions required by said section. We are enclosing herewith acopy ofJudge Speer’s opinion and acopy ofour letter opinion, We adhere to the ruling stated in our letter opinion, and your first two questions are therefore answered in the negative.

We pass toaconsideration oftwo further questions which you have presented for our consideration and quote the following excerpt from your letter:

“The following facts raise an additional question:

“A Dallas corporation is operating two cemeteries, both being perpetual care cemeteries. Only one perpetual care fund is maintained, and only one annual statement is filed with the Secretary ofState, and only
one filing fee is paid.

“Question 3. Is this combination ofthe funds permissible under the present statutes?Hon. C. H. Cavness, Page 3(V-1130)

“Question 4. Should the corporation maintain two funds separately? Would it need tofile separate statements and pay filing fees for each statement? ”

We think that various sections ofthe Act indicate that
a separate perpetual care fund must be maintained for each perpetual care cemetery, that annual statements must be filed for each perpetual care cemetery and that afiling fee must be paid at the time each such statement is filed. Article 912a-15, which relates to the establishment ofperpetual care funds, expressly provides that the net income arising from aperpetual care fund “shall be used solely for the general care and maintenance ofthe property entitled to perpetual care in the cemetery for which the fund is established.” This Article a%.o makes detailed provision for the amount that each cemetery must pay into its perpetual care fund, the amount being fixed by the number of square feet ofground area disposed ofas perpetual care property and the number ofcrypt interment rights, mausbleum interments, and niche interment rights sold as perpetual care property. This provision clearly contemplates that the amount ofthe perpetual care fund for each cemetery will be determined by the amount ofproperty entitlesperpetual
care. Likewise the information which must be given in the annual statement regarding the amount ofproperty entitled to perpetual
care is obviously required for the purpose ofdetermining the adequacy ofthe fund established for the perpetual care ofthe property. A copy ofthe annual statement must be published inat least one newspaper ofgeneral circulation in the county inwhich the cemetery is located. The information contained in such publication would be oflittle value to persons interested inaparticular cemetery unless it reflected the amount ofthe perpetual care fund provided for that cemetery. Moreover, Article 912a-3 requires that the amount ofthe filing fee be determined by the size ofthe city which is served by the cemetery. Thus ifa single corporation operated several perpetual care ceme~teries each serving cities ofadifferent size, this provision could be complied with only by paying a separate fee for filing the statement pertaining to each cemetery.

You also request our opinion on the following questions:

“Question 5. Is there any restraint provided by
our statutes which would prevent aperpetual care cemetery from dissolving and then obtaining anew charter
as a non-perpetual care cemetery corporation or ceasing todo business as acemetery company?

“Question 6. Ifthe answer toQuestion 5is in the negative, does the perpetual.care fund which remains after the dissolution ofthe original corporation remain under the supervision ofthe State, so that the annual statement must be filed and the filing fee paid? ”Hon. C. H. Cavness, Page 4 (V-1130)

No restraint is provided by our statutes which would prevent a perpetual care cemetery corporation from dissolving. In such cases the cemetery perpetual care fund would be protected by various other provisions ofthe Act. See particularly Sections 4, 15,and 17. The provisions ofSection 2clearly contemplate the exist~ence ofacorporation and therefore cannot be applied to require
an annual statement and filing fee after the dissolution ofacorporation. Passing toaconsideration ofyour final question, we again quote from your letter of October 4th:

“The Temple Cemetery Company was chartered in 1884, and its charter expired in 1934. The charter did not provide for aperpetual care fund, yet such a fund was set upbefore the charter expired. Later in 1934 anew charter was obtained, and its purpose clause called for a non-perpetual care cemetery.

“Question 7. Is the old perpetual care fund which is still inexistence subject to State supervision? Must it file the annual statement and pay the filing fee? ”

Prior to the enactment of House Bill 122, Acts 43rd Legislature, 2nd C.S. 1934, ch. 66, p. 146, the laws regulating cemeteries were carried in Title 26, Articles 912-931, R.C.S. ofTexas, 1925. Although these articles provided for the establishment ofa trust fund by persons desiring to provide afund for maintaining, etc., private blocks or lots inany cemetery inthe State, 1there
were no specific provisions for the organization and regulation of perpetual care cemetery corporations. Indeed, Article 929 declared that corporations formed “under this title shall be exempt from any provision oflaw requiring periodical reports tobe made toany department ofthe State government.” By House Bill 122 the 43rd Legislature undertook to regulate perpetual care cemetery corporations and provided for the establishment and protection ofperpetual care funds byamending Title 26 ofthe Revised Civil Statutes ofTexas, 1925. House Bill 122 made express provision for such cemeteries as were then operating as perpetual care cemeteries. We quote the following from Section 1,Article 925a, House Bill 122, Acts 43rd Leg., 2nd C.S. 1934, ch. 66, p. 156:

’ A similar provision is carried inArticle 912a-18 ofthe present law in the event that parties desire to provide such afund for caring for lots inanonperpetual care cemetery.I

Hon. C. H. Cavness, Page 5(V-1130)

“All other cemeteries heretofore operating as perpetual care cemeteries shall, within one year from the effective date ofthis Act, establish thkir trust funds in cash or legal securities inconformity with the provisions thereof, and in the event offailure so todo, shall not thereafter operate as aperpetual care orfree care cemetery until the provisions hereof are complied with.”

The Temple Cemetery Company complied with this provision by obtaining anew charter as anonperpetual care cemetery. If the old perpetual care fund is still in existence, it is not subject to State supervision in the sense that the requirements ofthe present Act regulating perpetual care funds must be complied with; and the Temple Cemetery Company need not file the annual statement or pay the filing fee presently required ofperpetual care cemeteries.

SUMMARY Nonprofit perpetual care cemetery corporations organized by cemetery lot owners are not required to file annual statements concerning perpetual care funds and pay the filing fees required byArticles 912a-2 and 912a-3, V.C.S. A separate perpetual care fund should be maintained for each perpetual care cemetery. The annual statement required byArticle 912a-2 must be filed for each perpetual care cemetery, and the filing fee required by Article 912a-3 must be paid at the time such statement is filed. No statute prohibits dissolution ofaperpetual care cemetery corporation. Articles 912a2and 912a-3 contemplate the existence ofacorporation and would not be applicable after the dissolution ofa corporation. The old perpetual care fund ofacemetery corporation whose charter expired in 1934, but which obtained anew charter as anonperpetual care cemetery, is not subject toState supervision, and the new corporation need not file the annual statements and pay the filing fees provided in Title 26, V.C.S.
Yours very truly,

APPROVED:
Everett Hutchinson Executive Assistant
Charles D. Mathews First Assistant
WVG/mwb Encls. PRICE DANIEL Attorney General
By &y5.&.~ / > - W. V. Geppert Assistant