December 31, 1962
Honorable J. M. Falkner Opinion No. WW-1515
Commissioner of Banking
Department of Banking Re: Whether au existing, non-
Austin, Texas profit, 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.,
Dear Mr. Falkner: 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 organ-
izations 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 re-
quire 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 pur-
pose 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 pro-
visions of Article 912a, and establish a per-
petual care fund according to the provisions
thereof. This fund would be subject to exam-
ination and supervision by the Banking Depart-
ment . 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