AXJ.STIN 11. Y-EXAE
PRICE DANIEL
ATTORNEYGENERAL
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 per-
petual care funds required of
Dear Sir: perpetual care cemeteries.
We quote the following excerpt from your letter of Oc-
tober 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 Leg-
islature (House Bill 46) and amended by the Fiftieth
Legislature (House Bill 98). Most past administrations
of the Secretary of State’s Office have interpreted Ar-
ticle 912a-5 to exempt from the provisions of the Act
all non-profit, perpetual care cemeteries maintained
by associations of cemetery lot owners. ‘Associations’
had been construed to mean either, or both, incorpo-
rated or unincorporated associations, Therefore, such
exempt corporations were not required to file annual
reports on their perpetual care trust funds or pay fil-
ing fees provided by Article 912a-2 and 912a-3 respec-
tively.
“More recently the Secretary of State’s Office
has construed Article 912a-5 not to exempt non-profit
corporations, but to exempt from the Act any unincor-
porated associations of cemetery lot oxrs not oper-
ated 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 of cemetery lot owners not operated
for profit . . . ’, is now being interpreted as if it read,
. . . or any unincorporated association of cemetery
lot owners not operated for profit . . . ‘. Under this
present interpretation, all corporations operating a per-
petual 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 by Article 912a-
3, unless such corporations fall under one of the other
specific exemptions.
Hon. C. H. Cavness, Page 2 (V-1130)
“With reference to the foregoing, our first ques-
tion is raised by the following facts:
“The Morton Cemetery Association was incorpo-
rated on January 20th, 1944. Its charter specifies that
the corporation is formed for the purpose of operating
a cemetery, that it is organized by cemetery lot own-
ers 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 of the present statutes, required tofiIe
a statement as provided by Article 912a-2 and to pay
the filing fee as provided by Article 912a-3?
“Question 2. Should a corporation whose charter
provisions are the same as in the case of the Morton
Cemetery Association, cited above, but chartered sub-
sequent to the enactment of the present statutes, be re-
quired to file a statement as provided by Article 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 of Banking, that an opin-
ion rendered by Judge Ocie Speer, counsel of that 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.) of the present Act and are not required to make annual state-
ments and fee remissions required by said section. We are enclos-
ing herewith a copy of Judge Speer’s opinion and a copy of our let-
ter opinion, We adhere to the ruling stated in our letter opinion,
and your first two questions are therefore answered in the negative.
We pass to a consideration of two further questions
which you have presented for our consideration and quote the fol-
lowing excerpt from your letter:
“The following facts raise an additional question:
“A Dallas corporation is operating two cemeter-
ies, both being perpetual care cemeteries. Only one
perpetual care fund is maintained, and only one annual
statement is filed with the Secretary of State, and only
one filing fee is paid.
“Question 3. Is this combination of the funds per-
missible under the present statutes?
Hon. C. H. Cavness, Page 3 (V-1130)
“Question 4. Should the corporation maintain
two funds separately? Would it need to file separate
statements and pay filing fees for each statement? ”
We think that various sections of the Act indicate that
a separate perpetual care fund must be maintained for each per-
petual care cemetery, that annual statements must be filed for each
perpetual care cemetery and that a filing fee must be paid at the
time each such statement is filed. Article 912a-15, which relates
to the establishment of perpetual care funds, expressly provides
that the net income arising from a perpetual care fund “shall be
used solely for the general care and maintenance of the property
entitled to perpetual care in the cemetery for which the fund is es-
tablished.” This Article a%.o makes detailed provision for the a-
mount that each cemetery must pay into its perpetual care fund,
the amount being fixed by the number of square feet of ground area
disposed of as perpetual care property and the number of crypt in-
terment rights, mausbleum interments, and niche interment rights
sold as perpetual care property. This provision clearly contem-
plates that the amount of the perpetual care fund for each cemetery
will be determined by the amount of property entitlesperpetual
care. Likewise the information which must be given in the annual
statement regarding the amount of property entitled to perpetual
care is obviously required for the purpose of determining the ade-
quacy of the fund established for the perpetual care of the property.
A copy of the annual statement must be published in at least one
newspaper of general circulation in the county in which the ceme-
tery is located. The information contained in such publication would
be of little value to persons interested in a particular cemetery un-
less it reflected the amount of the perpetual care fund provided for
that cemetery. Moreover, Article 912a-3 requires that the amount
of the filing fee be determined by the size of the city which is served
by the cemetery. Thus if a single corporation operated several per-
petual care ceme~teries each serving cities of a different 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 a perpetual care cem-
etery from dissolving and then obtaining a new charter
as a non-perpetual care cemetery corporation or ceas-
ing to do business as a cemetery company?
“Question 6. If the answer to Question 5 is in
the negative, does the perpetual.care fund which re-
mains after the dissolution of the original corporation
remain under the supervision of the 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 of the Act. See particularly Sections 4,
15, and 17. The provisions of Section 2 clearly contemplate the ex-
ist~ence of a corporation and therefore cannot be applied to require
an annual statement and filing fee after the dissolution of a corpo-
ration.
Passing to a consideration of your 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 a perpetual care fund, yet such a
fund was set up before the charter expired. Later in
1934 a new 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 in existence 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 cem-
eteries were carried in Title 26, Articles 912-931, R.C.S. of Texas,
1925. Although these articles provided for the establishment of a
trust fund by persons desiring to provide a fund for maintaining,
etc., private blocks or lots in any cemetery in the State, 1 there
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 of law requiring periodical reports to be made to any de-
partment of the State government.” By House Bill 122 the 43rd Leg-
islature undertook to regulate perpetual care cemetery corporations
and provided for the establishment and protection of perpetual care
funds by amending Title 26 of the Revised Civil Statutes of Texas,
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 in Article 912a-18 of the present
law in the event that parties desire to provide such a fund for car-
ing for lots in a nonperpetual 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 of this Act, establish thkir trust funds
in cash or legal securities in conformity with the pro-
visions thereof, and in the event of failure so to do, shall
not thereafter operate as a perpetual care or free care
cemetery until the provisions hereof are complied with.”
The Temple Cemetery Company complied with this pro-
vision by obtaining a new charter as a nonperpetual 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 of the pres-
ent 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 of perpetual 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 by Articles 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 by Article 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
of a perpetual care cemetery corporation. Articles 912a-
2 and 912a-3 contemplate the existence of a corporation
and would not be applicable after the dissolution of a
corporation. The old perpetual care fund of a cemetery
corporation whose charter expired in 1934, but which
obtained a new charter as a nonperpetual care cemetery,
is not subject to State supervision, and the new corpora-
tion need not file the annual statements and pay the filing
fees provided in Title 26, V.C.S.
Yours very truly,
APPROVED: PRICE DANIEL
Attorney General
Everett Hutchinson
Executive Assistant
By &y5.&.~ / > -
Charles D. Mathews W. V. Geppert
First Assistant Assistant
WVG/mwb
Encls.