The Finance Commission of Texas (the commission), on behalf of the Texas Department of Banking (the department), proposes to amend §26.2, concerning required records to maintain; and §26.4, concerning when you must order and set a burial marker or monument in a perpetual care cemetery. The amended rules are proposed to clarify recordkeeping requirements, require maintenance of records regarding the sale of undeveloped mausoleum spaces and regarding the certificate holder's regulatory or litigation involvement, and require records of all marker transactions. The amended rules also add a requirement that if a certificate holder specifies in writing that it will set a marker or monument at a date earlier than that set forth in §26.4, it must set the marker or monument by that date.

Chapter 712 of the Texas Health and Safety Code (Health Code) authorizes the department to grant and renew certificates of authority for perpetual care cemeteries. Pursuant to Health Code §712.044, the Texas Banking Commissioner (commissioner) is authorized to examine the books and records of a certificate holder relating to its perpetual care fund, undeveloped mausoleum spaces, and other matters. In order to renew a certificate of authority under §712.0037(a), the commissioner must determine that the certificate holder continues to meet the qualifications that apply to an applicant for a certificate of authority. Pursuant to §712.008(b)(1), the commission shall adopt rules establishing reasonable standards for timely placement of burial markers or monuments in a perpetual care cemetery.

The proposed amendment to §26.2(b)(1)(D) clarifies that the certificate holder must maintain the original trust agreement and any amendments made since the last examination. The proposed amendment to §26.2(b)(1)(E) does two things. First, it clarifies that if the certificate holder is rated marginal or worse or if its last examination was a limited scope examination, it must retain a copy of its examination response. Second, it reflects that department Supervisory Memorandum 1014 was revised in 2011.

The proposed amendment to add §26.2(b)(1)(N) clarifies that the certificate holder must retain records to verify compliance with all the statutes in Health Code, Chapter 712, Subchapter D, which governs the sale of undeveloped mausoleum space, including those records specifically referred to in Health Code §712.044(a)(2) - (3).

The proposed amendment to add §26.2(b)(1)(O) requires the certificate holder to maintain all records relating to regulatory action or litigation to which the certificate holder is subject. This requirement gives the commissioner information necessary to determine whether the certificate holder meets the qualifications and requirements for holding a certificate of authority.

The department proposes a non-substantive amendment to §26.4(a)(4) to clarify a reference to §26.4(b)(1) by adding the words "of this section".

The proposed amendments to §26.4(c) and (d) state that if a certificate holder stipulates in writing that it will set a marker or monument at a date that is earlier than the date otherwise required by those subsections, it must honor the earlier date. This clarification is necessary because some certificate holders specify earlier dates.

The proposed amendment to §26.4(f) contains a non-substantive revision to simplify the wording and a substantive requirement that certificate holders keep a record of all marker transactions, including ones where the marker was purchased from someone other than the certificate holder. This record is necessary for the Department to monitor compliance with §26.4(c), (d) and (e).

Stephanie Newberg, Deputy Commissioner, 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 also has determined that, for each year of the first five years the rules as proposed are in effect, the public benefit anticipated as a result of enforcing the rules is that the department will have necessary records available to verify that the certificate holder is complying with applicable statutes and rules. In regard to the proposed amendment to §26.4(c) and (d), the certificate holder, the marker or monument purchaser, and the department will all have clarity on when a marker or monument must be set.

For each year of the first five years that the rules will be in effect, there will be very minimal economic costs to persons required to comply with the rules as proposed. The certificate holders will be required to maintain a few records they may not currently maintain.

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 sections must be submitted no later than 5:00 p.m. on December 1, 2014. 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 are proposed under Health Code §712.008, which authorizes the commission to adopt rules to enforce and administer Chapter 712 and which states that the commission shall adopt rules establishing reasonable standards for timely placement of burial markers or monuments in a perpetual care cemetery.

Health Code §§712.0037, 712.044, 712.048(c), and 712.061 - 712.068 are affected by the proposed amended sections.