The Finance Commission of Texas (the commission), on behalf of the Texas Department of Banking (the department), adopts amendments to §26.1, concerning fees required to operate a perpetual care cemetery, §26.2, concerning what records are required to be maintained, and §26.4, concerning when a burial marker or monument must be ordered and set, without changes to the proposed text as published in the September 2, 2011, issue of the Texas Register (36 TexReg 5538).

House Bill 2495, 82nd Texas Legislature, 2011 (HB 2495), amended Chapters 711 and 712 of the Health and Safety Code. The adopted amendments to §§26.1, 26.2 and 26.4 conform the rules to these statutory changes. Additional amendments to §26.1 change the method of calculating examination fees.

Section 26.1 sets out the fees that must be paid to operate a perpetual care cemetery. Amendments to §26.1(b)(1) and (2) are made to reflect changed terminology and changed citations to Chapter 712 of the Health and Safety Code. Section 26.1(b)(3) is a new provision that establishes a late fee, which was authorized by Health and Safety Code §712.0039(b)(2). The remaining paragraphs of §26.1(b) were accordingly renumbered as was the related figure.

Section 26.1(b)(5) and (d)(1) change the formula for calculating the fee for examinations of new perpetual care cemetery certificate holders and the fee for extra examinations of perpetual care cemeteries. Until May 5, 2011, these examination fees had been set by §26.1 at $600 per day per examiner. The rule was amended to tie these perpetual care cemetery examination fees to the fee charged for specialty examinations of other entities under §3.36(h) of this title (currently also set at $600 per day per examiner). This change was based on the premise that the resources necessary for all examinations performed by department examiners are similar and when one changed the other should change also. However, as the department continued to evaluate the examination fee for other entities under §3.36(h), it determined that although similar, the cost to examine these other entities is not the same as the cost to examine perpetual care cemeteries. Therefore, the department has determined that the rates should be set separately.

Previously, the fee for new and additional perpetual care cemetery examinations was $600 per day for each examiner. It has been the department's practice to prorate the fee when less than a full day is spent on a perpetual care cemetery examination. These types of examinations typically take 8 hours or less to complete. The amendments change the fee for these perpetual care cemetery examinations from $600 per day for each examiner to $75 per hour for each examiner. Related travel expenses will continue to be charged in addition to this hourly rate. This reimbursement method more closely describes the current practice. The adopted examination fee of $75 per hour for each examiner is equivalent to the previous fee of $600 per day for each examiner.

The amendment to §26.1(c)(1) clarifies the department's current practice of decreasing the annual assessment if the commissioner determines a lesser amount is needed to administer Health and Safety Code Chapter 712.

Similar changes were adopted to the rules that set examination fees for money services businesses and prepaid funeral contract sellers. This will allow for consistent examination fees for all industries examined by the department's Special Audits Division.

The amendment to §26.2(b)(1)(A) clarifies what financial information a certificate holder must maintain. HB 2495 included new Health and Safety Code §712.0037, which requires a certificate holder to renew its certificate of authority annually. Previously there was no renewal requirement. Section 712.0037(a)(2) requires the certificate holder to demonstrate that it meets the qualifications for holding a certificate. Those qualifications are set out in §712.0034(b). One of those qualifications is that the certificate holder has a financial condition that warrants the public's confidence. The department has determined that it must review a current balance sheet and income statement to ensure that the certificate holder's financial condition is sound.

The amendment to §26.2(b)(1)(K) reflects the addition of new requirements regarding lawn crypts to Chapter 711 of the Health and Safety Code. The amendment to §26.2(c)(2) adds citations to new statutory sections of Chapter 712 of the Health and Safety Code that broaden the department's enforcement powers.

The amendment to §26.4 changes the statutory citations in subsection (a)(2) to reflect changes made to Health and Safety Code §711.002.

The department received no comments regarding the proposed amendments.

The amendments are adopted pursuant to Health and Safety Code §711.012(a), which authorizes the Finance Commission to adopt rules to enforce and administer §711.061 of the Health and Safety Code; Health and Safety Code §712.0037(a)(1), which authorizes the Finance Commission to adopt a rule establishing an annual renewal fee; Health and Safety Code §712.0037(b)(2), which authorizes the Finance Commission to adopt a late fee for renewing certificate holders; Health and Safety Code §712.008(a), which authorizes the Finance Commission to adopt rules to enforce and administer Chapter 712, including rules establishing fees to defray the costs; Health and Safety Code §712.042, which authorizes the Finance Commission to adopt a rule setting an annual assessment fee to defray the cost of administering Chapter 712; and Health and Safety Code §712.044(b), which authorizes the Finance Commission to adopt a rule setting a fee for examinations under Chapter 712.