December 31, 1962 

Honorable J. M. Falkner 

Commissioner of Banking 

Department of Banking 

Austin, Texas 

Dear Mr. Falkner: 

Opinion No. WW-1515 

Re: Whether au existing, nonprofit, incorporated 

association of cemetery 

lot owners, chartered 

in the year 1894, can 

establish a perpetual care 

fund under the provisions 

of Article 912a, V.C.S., 

and related questions. 

Your letter states that a nonprofit, incorporated association of 

cemetery lot owners desiresto establish a perpetual care fund under Article 

912a, V. C. S. The charter of this corporation was granted by the Secretary 

of State in the year 1894, prior to the enactment of Article 912a, and said 

charter does not provide for a perpetual care fund. 

The questions in your letter which we feel we have authority to answer 

are paraphrased as follows: Can such association establish a perpetual care 

fund under the provisions of Article 912a from donations of a portion only of 

the lot owners for perpetual care of their lots? If the answer to the first 

question is “yes”, would the fund be subject to the supervision of the Banking 

Department? If the answer to the first question is “yes”, can a majority of 

the members cause the donations to be mandatory on all members, thus 

creating a perpetual care fund for the entire cemetery? 

Section 5 of Article 912a is entitled “Authority to Corporations”, 

and sets out the powers and rules by which cemetery corporations may be 

formed. This section also contains a clause which reads in part as follows: 

‘1. . . and provided further that the provisions of this 

Act shall not apply to . . . any association of cemetery 

lot owners not operated for profit. . . now existing or 

hereafter organized. . . I’ 
Hon. J. M. Falkner, Page 2 (WW-1515) 

It is our opinion that this clause was enacted to exempt only those organizations named in it from regulation under the Act. It was not intended 

to prohibit a nonprofit incorporated association of cemetery lot owners 

from voluntarily adopting the provisions of the Act. Therefore, in answer 

to your first question, the incorporated association can elect to amend 

its charter, bring itself within the provisions of Article 912a, and 

establish a perpetual care fund according to those, provisions. 

In answer to the second question, if the association did elect to 

amend as above described, the provisions of Article 912a would then require examination and supervision of the association by the Banking 

Department. In particular, see Sections 2, 3, 4, 30, 31, 32 and 33 of 

Article 912a. 

In answer to the third question, we quote in part from Section 15 

of Article 912a, entitled “Establishment of perpetual care”: 

‘1. . . If the cemetery originally sold cemetery lots 

without provision for perpetual care, it shall have the 

right to accept deposits from such lot owners for the purpose of establishing perpetual care endowment on those 

lots, provided said deposits meet the requirements hereof, 

such deposits to be placed in trust in conformity with the 

requirements of this Article. I’ 

It is our opinion that this part of Section 15 provides for the establishment 

of individual voluntary perpetual care funds in the type of association in 

question, and by implication prohibits a majority of the members who may 

want such a fund from making it mandatory on a minority who do not. The 

power given in Section 6 of Article 912a to nonprofit cemetery corporations 

organized by cemetery lot owners allowing such corporations to tax the 

property for the purpose of its general improvement and upkeep does not, 

in our opinion, give such corporation the power to tax for the establishment 

of a perpetual care fund. 
Hon. J. M. Falkner, Page 3 (WW-1515) 

SUMMARY 

A nonprofit, incorporated association of 

cemetery lot owners, in existence prior to 

the passage of Article 912a, V. C. S., can 

elect to amend its charter and adopt the provisions of Article 912a, and establish a perpetual care fund according to the provisions 

thereof. This fund would be subject to examination and supervision by the Banking Department . Donations to such a fund could not, 

however, be made mandatory from those 

members who do not desire to establish such 

a fund for their individual lots. 

Very truly yours, 

WILL WILSON 

Attorney General of Texas 

JGZ:lmc 

APPROVED: 

OPINION COMMITTEE: 

W. V. Geppert, Chairman 

Pat Bailey 

Dudley McCalla 

Norman Suarez 

Tom Peterson 

REVIEWED FOR THE ATTORNEY GENERAL 

BY: Leonard Pasamore