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HB 1948 would require the trustee of a fund created to provide for care and maintenance of perpetual care cemeteries to use the net income method to determine permissible distributions from the fund to the corporation. The corporation and its trustee may agree to instead use the total return method in determining permissible distributions if the corporation follows certain guidelines. The corporation may also reconvert the fund back to a net income fund if it follows certain procedures. After this is determined, the trustee shall make distributions to the corporation in an agreed upon frequency.
The trustee of a total return fund shall determine the average fair market value of the fund at the beginning of each fiscal year, and will select the total return percentage to be used in determining permissible distributions from a total return trust. The Banking Commissioner of Texas may convert a total return fund to a net income fund, limit or prohibit distributions from the fund, or both, if certain benchmark criteria are not met.