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.