Untitled Texas Attorney General Opinion ( 2002 )

’ OFFICE OF THE ATTORNEY GENERAL . STATE OF TEXAS
JOHN CORNYN
September 4,2002
The Honorable Warren Chisum Opinion No. JC-0550
Chair, Environmental Regulation Committee
Texas House of Representatives Re: Whether the Texas Funeral Service
P.O. Box 2910 Commission is authorized to register nonprofit
Austin, Texas 78768-2910 cemeteries, and related questions (RQ-0523-JC)
Dear Representative Chisum:
In 2001, the Texas Legislature amended chapter 65 1 of the Occupations Code to extend the
regulatory authority of the Texas Funeral Service Commission (the “Commission”) to the operation
of cemeteries and crematories. See Act of May 21,2001,77th Leg., RX, ch. 682,200l Tex. Gen.
Laws 1288. You ask about the Commission’s authority under amended chapter 65 1 to register and
investigate cemeteries and crematories and to require that cemeteries or crematories submit to the
Commission copies of purchase agreements or retail price lists.’ We conclude that the Commission
is required to register cemeteries “operated not-for-profit” if the cemeteries sell goods or services
related to the burial or disposition of a body. Additionally, we conclude that owners or operators
of crematories located on the site of perpetual care cemeteries are required to register with the
Commission and pay the required registration fee. We also conclude that the Commission is
authorized to investigate cemeteries or crematories only upon the receipt of consumer complaints.
Finally, we conclude that the Commission is authorized to request from cemeteries or crematories
copies of their purchase agreements and retail price lists.
Before addressing your specific questions, we briefly review the relevant provisions of
chapter 65 1 of the Occupations Code as amended in 2001. Chapter 65 1 now requires cemeteries and
crematories that sell funeral-related goods and services to register with the Commission. Section
65 1.653 provides that a person may not conduct a cemetery or crematory business unless the owner
or operator registers with the cornmission and pays a registration fee. See TEX. Oct. CODEANN.
fj 65 1.653(a), (c) (V emon 2002). A “cemetery,” for the purposes of chapter 65 1, is “a place that is
used or intended to be used for interment, and includes a graveyard, burial park, or mausoleum.”
Id. 9 65 1.OOl(1). A “crematory” is “a structure containing a furnace used or intended to be used for
the cremation of human remains.” Id. 8 65 1.001(3). While “cemetery” and “crematory” are broadly
‘See Letter from Honorable Warren Chisum, Chair, Environmental Regulation Committee, Texas House of
Representatives, to Honorable John Comyn, Texas Attorney General (Mar. 12,2002) (on file with Opinion Committee)
[hereinafter Request Letter].
The Honorable Warren Chisum - Page 2 (JC-0550)
defined, the registration requirements apply “only to a cemetery or crematory that sells goods or
services related to the burial or final disposition of a body.” Id. fj 65 1.652(a).2
Additionally, chapter 65 1 authorizes the Commission to investigate and inspect cemeteries
and crematories. Section 651.202(c) requires the Commission to “investigate each complaint
received by the commission relating to a funeral director . . . or otherperson licensed or registered
under this chapter.” Id. 0 65 1.202(c) (emphasis added). Section 65 1.1575 authorizes the
Commission to inspect a cemetery or crematory if the Commission receives a complaint about that
facility. See id. 0 65 1.1575. Finally, the statute requires cemeteries and crematories to disclose to
consumers information regarding the goods and services they provide. Section 65 1.4055, pertaining
to cemeteries and crematories, requires that a “retail price list” include, among other information,
the price of items and services provided by the cemetery or crematory, see id. 8 651.4055; and
section 65 1.4065 requires that a “purchase agreement” signed by the “registrant” for the cemetery
or crematory include, among other information, the costs and fees charged by the cemetery or
crematory, see id. 8 65 1.4065.
With this background, we turn to your questions. You first ask whether the Commission is
required to register cemeteries “operated not-for-profit.” See Request Letter, supra note 1, at 1. The
registration requirements of subchapter N of chapter 65 1 apply “only to a cemetery or crematory
that sells goods or services related to the burial or disposition of a body.” TEX. Oct. CODEANN.
$ 651.652(a) (Vernon 2002). Thus, the statute exempts from the registration requirements
cemeteries that do not sell funeral-related goods and services. See id. The statutory distinction for
registration purposes is not premised on the “nonprofit” character of the entity. We note that a
cemetery may be operated by, among other persons, a nonprofit corporation or a corporation
operated for profit. See TEX. HEALTH & SAFETYCODEANN. 5 711.021(b) (Vernon Supp. 2002). A
cemetery that sells goods and services may or may not be operated for profit. Additionally, the fact
that an organization is not operated for profit does not mean that it does not or cannot sell goods and
services or make a profit. The terms “nonprofit” and “not-for-profit” misleadingly suggest that an
organization makes no profit, but such an entity “actually does earn profits and then applies them
to charitable purposes.” BRYAN A. GARNER,A DICTIONARY OFMODERNLEGALUSAGE596 (2d ed.
1995) (explaining usage of “nonprofit; not-for-profit”). These terms more accurately reflect that an
organization’s “purpose is not for private gain, though indeed the organization may profit.” Id.
Accordingly, we conclude that the Commission is required to register cemeteries “operated not-for-
profit” if they sell goods or services related to the burial or disposition of a body.
You next ask whether the Cornmission “is required to register crematories that are on the site
of a perpetual care cemetery already registered with the Texas Banking Commission.” Request
Letter, supra note 1, at 1. We understand you to ask whether owners or operators of such
2Subchapter N of chapter 651 does not apply to the maintenance of a cemetery or crematory, including
“maintenance of any goods or services provided under chapter 7 11 [general provisions relating to cemeteries] or 7 12
[provisions relating to perpetual care cemeteries], of the Health and Safety Code.” Id. 0 65 1.652(b).
The Honorable Warren Chisum - Page 3 (JC-0550)
crematories are required to register with the Commission and to pay the required registration fee.3
Because chapter 65 1 does not expressly except from its general registration requirements the owners
or operators of crematories located on the site of perpetual care cemeteries, we conclude that such
crematory owners or operators must register with the Commission and pay the required registration
fee.
By way of background, we note that the owner or operator of a crematory may be different
than the owner or operator of a cemetery. A crematory must be located in a cemetery. See TEX.
HEALTH& SAFETY CODE ANN. $0 711.006(a) (Vernon Supp. 2002) (crematory must be established
or maintained only in burial park); 7 11 .OOl(2) (cemetery includes burial park); see also TEX. OCC.
CODEANN. 8 65 1 .001(l) (Vernon 2002) (“cemetery” is “a place that is used or intended to be used
for interment, and includes a graveyard, burial park, or mausoleum”). But no provision that we have
found requires the crematory to be owned or operated by the person who owns or operates the
cemetery. See also SUNSET ADVISORY COMMISSION,FUNERAL SERVICES COMMISSION, STAFF REPORT
(2000) at 48 [hereinafter Staff Report] (“Crematories are required by Texas law to be located in a
cemetery. [But] [t]he owner of a crematory may or may not be the same person as the owner of the
cemetery. For example, a crematory operating in Bumet leases land from the local city cemetery.“).
In general, an owner or operator of a cemetery or crematory is required to register with the
commission and pay a registration fee in order to conduct a cemetery or crematory business in the
state. Section 65 1.653 provides as follows:
(a) A person may not conduct a cemetery or crematory business
in this state unless an individual who is the owner or operator of the
cemetery or crematory registers with the commission.
(b) A cemetery or crematory may be owned by a person who is
not registered under this chapter.
(c) To register, the individual must apply for registration and pay
the registration fee. The commission shall register the individual on
determining that the individual satisfies the requirements of this
section.
TEX. Oct. CODE ANN. 5 65 1.653(a)-(c) (V emon 2002). See also Staff Report at 52 (“For purposes
of this [registration] recommendation, registration would consist of an application outlining the
purpose of the business, location of the business, and indicate the individual, either the owner or the
operator, to be held liable for business practices. If the crematory and the cemetery have separate
owners, the cemetery and crematory owners would register independently.“)
3See Letter from Honorable Warren Chisum, Chair, Environmental Regulation Committee, Texas House of
Representatives, to Chet Robbins, Executive Director, Texas Funeral Service Commission, at 2-3 (Mar. 12,2002) (on
file with Opinion Committee) [hereinafter Chisum Letter].
The Honorable Warren Chisum - Page 4 (JC-0550)
A narrow exception to the general registration requirement is created for perpetual care
cemeteries. While the Commission is required to register perpetual care cemeteries, the owners or
operators of perpetual care cemeteries do not have to apply and register with the Commission or pay
a registration fee. The Commission itself is required to register perpetual care cemeteries from a list
requested from and provided by the Texas Department of Banking (the “Banking Department”).
Section 65 1.654 provides that:
(a) On request by the commission, the Texas Department of
Banking shall provide the commission a list of perpetual care
cemeteries, including the address and other contact information for
each cemetery. The commission shall annually register, under this
subchapter, each perpetual care cemetery on that list.
(b) A perpetual care cemetery is not required to pay a registration
fee under this subchapter.
Id. 8 65 1.654. A “perpetual care cemetery” here is “a person who notifies the Texas Department of
Banking of its intent to operate a perpetual care cemetery in this state under Section 712.003 1” of
the Health and Safety Code. Id. 8 65 1.65 1.
Perpetual care cemeteries are regulated to a certain degree by the Banking Department under
chapter 712 of the Health and Safety Code. See generally TEX. HEALTH& SAFETYCODEANN.
$8 712.001-.048(a) (Vernon Supp. 2002). Under chapter 712 of the Health and Safety Code, a
perpetual care cemetery must file with the secretary of state articles of incorporation showing the
location of the cemetery and financial information regarding the corporation’s capital. See id.
8 712.003(a); see also id. 8 7 12.002 (persons exempted from chapter 7 12). Within thirty days of the
filing of the articles of incorporation with the secretary of state, the corporation must notify the
Banking Department of its intent to operate a perpetual care cemetery and provide financial and
organizational information about the corporation. See id. 0 7 12.003 1. The corporation must also
establish a trust fund that may only be used for the maintenance and care of the perpetual care
cemetery and that must be invested, funded, and accounted for in accordance with the requirements
set forth in the statute. See id. $5 712.021, .025, .028-.029. Chapter 712 does not include a
definition of “perpetual care cemetery” or speak to a crematory located on the site of a perpetual care
cemetery.
In sum, chapter 65 1 generally requires that owners or operators of cemeteries or crematories
register with the Commission and pay the required registration fee. The statute expressly excepts
only owners or operators of perpetual care cemeteries from registering with the Commission and
paying registration fees. When the legislature crafts specific exclusions or exceptions to a statute,
no other exceptions are generally intended. See Unigard Sec. Ins. Co. v. Schaffer, 572 S.W.2d 303,
307 (Tex. 1978); City of Dallas v. McKasson, 726 S.W.2d 173, 176 (Tex. App.-Dallas 1987, writ
ref d n.r.e.). Accordingly, we construe the perpetual care cemetery exception narrowly and read the
The Honorable Warren Chisum - Page 5 (JC-0550)
statute’s general registration requirements to apply to owners or operators of crematories located in
perpetual care cemeteries.
It could be argued that if the crematory and the perpetual care cemetery are owned or
operated by the same person, the owner or operator should not be required to register with the
Commission with respect to the crematory because, as a practical matter, the Commission would
have the necessary regulatory information from the Banking Department. See Chisum Letter, supra
note 3, at 3. We note, however, that the owner or operator would not be registered as the owner or
operator of a crematory. It is also unclear whether the Commission would have information about
the operation of the crematory based on the list provided by the Banking Department. But, in any
case, if the registration requirements are indeed unnecessary or unintended, it is the province of the
legislature to make exceptions fi-om the general registration requirements for common ownership
of a perpetual care cemetery and crematory located in such cemetery.
You ask next whether the Commission “has the authority to investigate a cemetery or
crematory whether or not a consumer complaint has been filed.” Request Letter, supra note 1, at 1.
We conclude that the Commission is authorized to investigate cemeteries or crematories only upon
the receipt of consumer complaints. Chapter 651 does not grant the Commission general
investigatory authority with respect to cemeteries and crematories. Section 65 1.202(c) directs the
Commission to investigate complaints:
The commission shall investigate each complaint received by the
commission relating to a funeral director, embalmer, provisional
license holder, funeral establishment, or other person licensed or
registered under this chapter.
TEX. Oct. CODEANN. 8 651.202(c) (V emon 2002) (emphasis added). This provision in isolation
could be read to mandate the Commission to investigate complaints and to give it discretion to
investigate cemeteries or crematories when no complaints have been filed. However, we are
required to construe it in the context of other provisions of the statute. See Fitzgerald v. Advanced
Spine Fixation Sys., Inc., 996 S.W.2d 864,865 (Tex. 1999) (in determining legislative intent, court
looks at entire act rather than single section in isolation). Section 65 1.1575 specifically ties the
Commission’s authority to inspect cemeteries and crematories to the receipt of a complaint: “The
commission may inspect a cemetery or crematory only if the commission receives a complaint about
the facility under Section 65 1.202.” TEX. Oct. CODEANN. 8 65 1.1575 (Vernon 2002). And section
65 1.1575 does not provide a context that would support a liberal reading of the Commission’s
investigatory authority.
Finally, you ask whether the Commission “has the authority to require a cemetery or
crematory to send the agency a copy of the purchase agreement disclosure.” Request Letter, supra
note 1, at 1. We assume you ask about the Commission’s authority to request copies of both the
retail price list and the purchase agreement. We conclude that the Commission is authorized to
request from cemeteries and crematories copies of these documents.
The Honorable Warren Chisum - Page 6 (JC-0550)
A state administrative agency has only those powers expressly conferred upon it by statute.
See Pub. Util. Comm ‘n v. City Pub. Serv. Bd. ofSan Antonio, 53 S.W.3d 310,315 (Tex. 2001). But
an agency may also have implied powers that are reasonably necessary to carry out its express
statutory responsibilities because “when the Legislature expressly confers a power on an agency, it
also impliedly intends that the agency have whatever powers are reasonably necessary to fulfill its
express functions or duties.” Id. at 3 15-l 6. On the other hand, an agency may not exercise what is
effectively a new power, or a power that is contrary to the statute, on the theory that such power is
administratively expedient. See id. at 3 16.
We believe the Commission has implied authority to request from cemeteries or crematories
copies of purchase agreements and retail price lists. The Commission is not expressly authorized
to request a cemetery or crematory to submit a purchase agreement or retail list. But that authority
is reasonably necessary to carry out the Commission’s express authority to ensure compliance with
the consumer disclosure requirements of sections 65 1.4055 and 65 1.4065 of the Occupations Code.
Section 65 1.4055 and section 651.4065 require cemeteries and crematories to provide to
consumers retail price lists and purchase agreements containing information for the benefit and
protection of consumers. Section 65 1.4055 defines a “retail price list” as “a printed or typewritten
list of the retail price of items or services provided by a cemetery or crematory,” and requires it to
include the name, address, and telephone number of the cemetery or crematory; effective date of
stated prices; a printed notice advising the customer regarding his or her freedom to choose only the
goods and services desired; and “any other items that the commission may by rule require.” TEX.
Oct. CODEANN. 0 65 1.4055 (Vernon 2002). Similarly, section 65 1.4065 provides that a “purchase
agreement,” signed by the “registrant for the cemetery or crematory” must state the name, address,
and telephone number of the facility; the amounts due from the customer; the Commission’s address
and telephone number; that complaints may be directed to the Commission; and “any other
items that the commission may by rule require.” Id. 0 65 1.4065(a)-(c). In Attorney General Opinion
JC-05 12, this office determined that sections 65 1.4055 and 65 1.4065 require cemeteries and
crematories to provide these documents with the requisite information to consumers. See Tex. Att’y
Gen. Op. No. JC-05 12 (2002) at 5. In that opinion, the office also concluded that failure to comply
with these provisions was a violation of chapter 65 1 that the Commission may regulate. See id. The
Commission cannot reasonably determine whether the requisite information is provided to
consumers if it cannot obtain and review copies of the documents. See also TEX. Oct. CODEANN.
8 65 1.460(a)(2) (Vernon 2002) (providing that a person violates chapter 65 1 if the person “fails to
retain and make available to the commission, on request, copies of all price lists, written notices,
embalming documents, and memoranda of agreement required by this chapter”).
The Honorable Warren Chisum - Page 7 (JC-0550)
SUMMARY
Under chapter 651 of the Occupations Code, the Texas
Funeral Service Commission (the “Commission”) is required to
register cemeteries “operated not-for-profit” if they sell goods or
services related to the burial or disposition of a body. Additionally,
owners or operators of crematories located on the site of perpetual
care cemeteries are required to register with the Commission and pay
the required registration fee. The Commission is authorized to
investigate cemeteries or crematories only upon the receipt of
consumer complaints. Finally, the Commission is authorized to
request from cemeteries or crematories copies of their purchase
agreements and retail price lists.
Attorney General of Texas
HOWARD G. BALDWIN, JR.
First Assistant Attorney General
NANCY FULLER
Deputy Attorney General - General Counsel
SUSAN DENMON GUSKY
Chair, Opinion Committee
Sheela Rai
Assistant Attorney General, Opinion Committee