| (a) What unique defined terms are used in this section?
(1) "You" or "I" means the owner or operator of a perpetual
care cemetery.
(2) "Perpetual care property" or "property" means all
niches, crypts, and ground space sold in connection with perpetual
care.
(3) "Consumer complaint" means a written complaint
you receive, either at your corporate office or your cemetery location,
from a consumer regarding the manner in which you operate your perpetual
care cemetery or perform your obligations under a perpetual care cemetery
contract or Health and Safety Code, Chapter 711, or Chapter 712. The
term includes a written complaint you receive either directly from
the consumer or through the department. The term does not include
an oral complaint.
(4) "Maintain" means to store and retain records either
in hard copy form or on microfiche or in an electronic database from
which the record can be retrieved and printed in hard copy in a manner
that does not impede the efficient completion of the examination.
(5) "Department" means the Texas Department of Banking.
(b) What records must I maintain?
(1) You must maintain the following records in a general
file that is readily accessible to the department:
(A) your most current financial statement or tax return,
either of which must:
(i) substantiate your use or expenditure of fund income;
and
(ii) include a balance sheet and income statement dated
not later than the last day of your preceding fiscal year;
(B) a sample form of each purchase agreement you currently
use;
(C) a sample form of each document of conveyance of
interment rights you currently use;
(D) the current trust agreement governing the fund
and any amendments since the last examination;
(E) if the certificate holder received a uniform risk
rating of 3, 4, or 5 at the last examination or if the last examination
was a limited scope examination, the certificate holder's examination
response and the examination report acknowledgments, signed by the
certificate holder's board of directors, for the last examination
report (See Texas Department of Banking Supervisory Memorandum 1014
(2011) for an explanation of the perpetual care cemetery rating system.);
(F) all trustee/depository statements covering the
perpetual care fund, provided at least quarterly, and all written
correspondence from the trustee that you received since the last examination;
(G) minutes of each meeting of the cemetery corporation's
board of directors held since the last department examination or,
if the cemetery corporation is a wholly-owned subsidiary and does
not hold board meetings, minutes of each meeting of the parent corporation's
board of directors held since the last examination;
(H) all recordkeeping exceptions and other department
or commissioner approvals or directions upon which the certificate
holder relies in connection with its current operations;
(I) all maps, plats, and property dedications, and
a list of these that reflects the dates of filing in the county records
under Health and Safety Code, §711.034;
(J) your current sales maps showing the sold and unsold
spaces in all gardens, mausoleums, crematories, and columbaria in
the cemetery;
(K) records and photographs relating to lawn crypt
construction and completion, to demonstrate you complied with Health
and Safety Code, §711.061, §711.063 and §711.064;
(L) each cemetery price list that you used at any time
since the last examination;
(M) your quarterly reconciliation of capital gains
and losses in the fund since the last examination, if your trust agreement
includes capital gains and losses in the definition of trust income;
(N) all documents relating to the offer and sale of
undeveloped mausoleum spaces as required under Health and Safety Code,
Chapter 712, §712.044(a)(2)-(3) and Subchapter D; and
(O) all records relating to regulatory action or litigation
to which the certificate holder is subject.
(2) You must maintain the following records in a segregated
consumer complaint file:
(A) each written complaint that you received from a
consumer regarding the manner in which you operate the perpetual care
cemetery or perform your contractual obligations to a consumer; and
(B) all written correspondence and other records relating
to a consumer complaint, including records showing how you resolved
or otherwise disposed of the complaint.
(3) You must maintain either:
(A) separate files for each property purchaser, filed
alphabetically or numerically, that contains all executed property
purchase agreements, conveyance documents, and all related information;
or
(B) files referenced by property location if:
(i) the cemetery maintains an alphabetical index on
which the names of the property owners or purchasers can be cross-referenced
to their property location; and
(ii) the files contain all executed property purchase
agreements, conveyance documents, and all related information.
(4) You must maintain, and update at least monthly,
a historical register of all interment rights sold, showing:
(A) the purchaser's name;
(B) the date of purchase;
(C) the purchase agreement number;
(D) a specific description of the property you sold;
and
(E) how and when you disposed of the purchase agreement,
including whether the agreement was conveyed, canceled, or voided.
(5) You must maintain a monthly recapitulation of all
conveyance of interment rights issued since the date of your last
examination that includes, for each paid-in-full property sale:
(A) the date the purchase agreement was executed;
(B) the property purchaser's name;
(C) the purchase agreement number;
(D) the date that the purchase agreement was paid-in-full;
(E) the conveyance document number;
(F) the amount of ground area, number of crypts, or
number of niches conveyed under the purchase agreement, and the corresponding
sales price of each;
(G) the deposits to the fund from sales, as required
by Health and Safety Code, §712.028;
(H) any additional deposits to the fund:
(i) that are required by contract in an amount in excess
of the deposits required by Health and Safety Code, §712.028;
(ii) that result from exchanged or traded-in property;
(iii) that result from the sale of additional or subsequent
rights of interment; or
(iv) that are voluntarily made in excess of the amount
of deposits required by Health and Safety Code, §712.028;
(I) total deposits for each conveyance, which is the
sum of subparagraphs (G) and (H) of this subsection for each conveyance;
and
(J) cumulative monthly totals of the amounts listed
in subparagraphs (F), (G), and (H) of this subsection.
(c) Where do I need to keep the records required under
this section?
(1) You must keep all required records at the perpetual
care cemetery's physical location, corporate office located in this
state, or another location approved in writing by the commissioner.
(2) If the physical location of the records is not
conducive to examination by department personnel, the department may
request that you provide your records at a mutually agreeable location
in your area that is more suitable for conducting an examination.
In this situation, if you refuse to agree, the commissioner may consider
your inaction to constitute refusal to submit to an examination and
initiate an appropriate enforcement action against you under Health
and Safety Code, §§712.0441 - 712.0444.
(d) With respect to purchase agreements executed prior
to the effective date of this section, a perpetual care cemetery will
not violate this section if it cannot produce records required under
this section that were not previously required by statute or rule.
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| Source Note: The provisions of this §26.2 adopted to be effective May 21, 2002, 27 TexReg 4325; amended to be effective March 11, 2004, 29 TexReg 2302; amended to be effective January 4, 2007, 31 TexReg 10758; amended to be effective May 5, 2011, 36 TexReg 2723; amended to be effective November 10, 2011, 36 TexReg 7506; amended to be effective January 1, 2015, 39 TexReg 10405; amended to be effective January 8, 2023, 47 TexReg 8981 |
