The Finance Commission of Texas (the commission), on behalf of the Texas Department of Banking (the department), proposes to amend §26.1, concerning perpetual care cemetery fees; §26.2, concerning maintenance of perpetual care cemetery records; and §26.4, concerning time requirements for ordering and setting a burial marker or monument in a perpetual care cemetery; and to add new §26.5, concerning time requirements for issuance of a conveyance document for a cemetery plot.

The amendments are proposed to update the rules, the need for which was discovered as a result of the recent review of these rules conducted in accordance with Government Code, §2001.039. New §26.5 is proposed to set a deadline that is consistent with the deadline set out in the department's Legal Opinion 98-48.

Pre-proposal consultation with stakeholders.

The department provided a draft of the proposed revisions to §§26.1, 26.2, and 26.4, and the proposed new §26.5 to those persons currently holding a certificate to operate a perpetual care cemetery. The department invited those parties to submit written comments. No comments were submitted.

Description of proposed amendments and the new rule.

The proposed amendments to §26.1 accomplish two things. The proposal would delete §26.1(a)(3). This change removes the ability of an insolvent permit holder to request a one-year reduction in its annual fee. In the last five years, the department has not received a request under the current rule and is of the opinion that each perpetual care cemetery should pay its cost of regulation.

The second change adds language to §26.1(a)(4) which would tie the fee for examinations of new perpetual care cemetery certificate holders and the fee for extra examinations of perpetual care cemeteries to the fee charged for specialty examinations of other entities under §3.36(h) of this title. Examination rates are set by using the average salary for an average tenured employee. The Department resources necessary for these examinations is similar.

Additionally, the proposed amendment would allow these perpetual care cemetery examination fees to automatically change to mirror any change to the specialty examination fee for other entities under §3.36(h). Currently, the new and extra examination fee for perpetual care cemeteries, like the specialty examination fee for other entities under §3.36(h), is $600 per day plus actual travel expenses. Therefore, this amendment does not change the current examination fees for perpetual care cemeteries.

The proposed amendments to §26.2 simplify recordkeeping requirements for permit holders by allowing the maintenance of records in an electronic database as long as the records can be retrieved without impeding the examination process. The proposed amendments would eliminate the need to retain certain records and reduce the retention time for others. A certificate holder's general file would no longer be required to contain a copy of its certificate of authority, its most recent annual statement, previously examined amendments to the perpetual care fund trust agreement, all correspondence with the department for the previous three years, all examination reports for the previous three years, and cemetery price lists used before the prior examination. A certificate holder who had a limited scope examination or who was rated a 3 or lower would be required to retain the signed acknowledgement by its board of directors to the examination report. All certificate holders would be required to maintain a record of department approvals upon which the certificate holder relies, and a list of all its maps and plats.

The proposed amendment to §26.4 adds a requirement in subsection (f) to maintain a list of all markers sold for the examination period. This information is needed to test and verify that timelines for marker ordering and setting are consistently met. Additionally a typographical error in §26.4(c)(2) has been corrected.

Proposed new §26.5 sets a deadline for issuing a conveyance document for a cemetery plot. The deadline is 20 days after the month in which the purchase contract is paid in full. The deadline is consistent with that established by department Legal Opinion 98-48. Placing the deadline in a rule will clarify that a violation of the deadline will subject the violator to enforcement action.

Deputy Commissioner Stephanie Newberg, Texas Department of Banking, has determined that for the first five-year period the proposed rules are in effect, there will be no fiscal implications for state government or for local government as a result of enforcing or administering the rules.

Ms. Newberg has also determined that, for each year of the first five years the rules as proposed are in effect, the public benefit is as follows: ensuring that examination fees for examinations with similar resource demands are the same; reducing the recordkeeping requirements for perpetual care cemetery certificate holders; making compliance with marker ordering and setting rules more easily monitored and enforced by the department; and clarifying the deadline for issuance of a conveyance document for a cemetery plot.

For each year of the first five years that the rules will be in effect, there may be minimal economic costs to persons required to comply with §26.4 as proposed. That section's requirement that certificate holders keep a list of marker sales may result in a minimal cost to those certificate holders who sell markers. Any costs incurred as a result of marker sales recordkeeping will be offset by cost savings resulting from the reductions in general recordkeeping requirements in proposed amendments to §26.2. There is no economic cost as a result of the proposed change to §26.1 because the specialty examination fees under §3.36(h) to which these cemetery examination fees would be tied are the same amount, i.e., $600 per day plus actual travel expenses.

There will be no adverse economic effect on small businesses or micro-businesses. There will be no difference in the cost of compliance for small businesses as compared to large businesses.

To be considered, comments on the proposed amended and new sections must be submitted no later than 5:00 p.m. on April 4, 2011. Comments should be addressed to General Counsel, Texas Department of Banking, Legal Division, 2601 North Lamar Boulevard, Suite 300, Austin, Texas 78705-4294. Comments may also be submitted by email to legal@dob.texas.gov.

The amendments and the new rule are proposed under Health and Safety Code §712.008(a), which provides that the commission may adopt rules to enforce and administer Chapter 712, including rules establishing fees to defray the costs of enforcing and administering Chapter 712. The proposed amendment to §26.4 is also proposed under Health and Safety Code §712.008(b)(1), which states that the commission shall adopt rules establishing reasonable standards for timely placement of burial markers or monuments in a perpetual care cemetery. New rule §26.5 is also proposed under Health and Safety Code §711.012(a), which authorizes the Finance Commission to adopt rules to enforce and administer Health and Safety Code §711.038 relating to perpetual care cemeteries. Section 711.038 concerns the sale of plots and the issuance of certificates of ownership.

Health and Safety Code §§711.038, 711.054, 711.055, 711.056, 712.042, 712.044, 712.0441, and 712.0442 are affected by the proposed amended and new sections.