Texas Register, Volume 32, Number 44, Pages 7777-8060, November 2, 2007 Page: 7,905
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ficient to cover the cost of administering and enforcing Chapter
154.
The department received one comment regarding the proposed
amendments during the 30 day comment period from the Texas
Pre-Need Coalition. The commenter opposed the fees suggest-
ing the proposed fee structure be revised to provide for a con-
tract fee to be paid by a consumer upon entering into a prepaid
contract transaction. A portion of the fee would be paid to the
department to offset examination costs and support the costs
associated with servicing prepaid contracts abandoned by per-
mit holders through bankruptcy. The department disagrees with
the commenter's suggested change. The department does not
have a mechanism in place at this time to administer such a fee
program and feels the burden of the cost of regulation should
be borne by the permit holders. The department does not have
the staff to administer a contract fee charged to each purchaser.
However, a permit holder is not precluded from assessing a con-
tract processing fee to consumers to help offset the increase in
assessments.
The amendments are adopted under the authority of the Finance
Code, 154.051, which authorizes the commission to adopt rules
establishing fees to defray the costs of administering Chapter
154, and 154.054, which directs the commission to establish an
annually assessed examination fee sufficient to cover the costs
of examination, the equitable or proportionate cost of maintain-
ing and operating the department, and the cost of enforcing the
chapter.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's
legal authority.
Filed with the Office of the Secretary of State on October 19,
2007.
TRD-200705019
A. Kaylene Ray
General Counsel
Texas Department of Banking
Effective date: November 8, 2007
Proposal publication date: August 31, 2007
For further information, please call: (512) 475-1300
CHAPTER 26. PERPETUAL CARE
CEMETERIES
7 TAC 26.1
The Texas Finance Commission (commission), on behalf of the
Department of Banking (department), adopts amendments to
26.1, concerning fees. The amended sections are adopted
without changes to the proposed text as published in the August
31, 2007, issue of the Texas Register (32 TexReg 5551). The
text will not be republished.
Section 26.1(b) establishes the fees a person must pay the
department to operate a perpetual care cemetery (PCC) under
Health and Safety Code, Chapter 712 (Chapter 712), and
requires a PCC certificate holder to pay an annual fee and
an annually assessed examination fee (annual assessment).
The amendments to 26.1(b) change the basis for determin-
ing annual fees and annual assessments. Additionally, the
amendments create a tiered assessment structure for annualassessments and provide generally for increased assessments.
The revisions are intended to provide greater consistency with
respect to the calculation of assessments and allow the depart-
ment to more accurately assess the perpetual care cemetery
industry. The amendments will also enable the department to
recover its costs in administering and enforcing Chapter 712.
Despite inflation and rising program costs, the amount of the
annual assessments charged to perpetual care cemeteries has
not increased since 2004. The need to now increase assess-
ments is attributable to several factors. The department has
had to employ additional examiners in order to complete exam-
inations within the time parameters established by the depart-
ment's statutorily mandated performance measures. Addition-
ally, the time required to complete on-site PCC examinations has
increased because the department must verify compliance with
state laws and regulations that have been passed and adopted
within the past several years. For example, the department must
confirm compliance with the requirement that a PCC timely or-
der and set markers and monuments and respond to consumer
complaints.
The amendments create a tiered assessment structure, instead
of the existing structure that only allows for a minimum and
a maximum assessment range. The assessment will now be
based upon the required perpetual care fund balance taken
from the most recent filed annual statement of funds with the
department instead of the required fund balance reported as
of the date of the last examination. This change will provide
for better consistency on how assessments are calculated and
allow the department to more accurately assess the perpetual
care cemetery industry.
Based upon the number of PCC certificate holders and the de-
partment's experience in examining them and regulating PCC's,
the department believes that the annual assessments estab-
lished by the amendments to 26.1 (b) will provide the funding
required to administer and enforce Chapter 712 and to do so in
a manner that is fair and equitable to all certificate holders. In de-
termining the amount of the assessments, the department has
adhered to the limitation that only such funds as are necessary to
defray the cost of enforcing and administering Chapter 712, the
cost of examination, and the equitable and proportionate cost of
maintenance and operation of the department may be imposed
and collected, and that the department is statutorily prohibited
from retaining excess revenue.
Section 26.1(b)(2) specifies the basis on which the annual fee
is calculated. Previously, the fee was based upon the perpetual
care fund balance as of the date of the PCC certificate holder's
last examination. The amendment to paragraph (2) provides that
the amount of the fee is based on the fund balance as reflected
on the most recent annual statement of funds report filed by the
PCC certificate holder with the department.
Section 26.1(b)(3) specifies the basis and formula for calculating
the annual assessment. As does the revision to paragraph (2),
the amendments to paragraph (3) provide that the amount of a
certificate holder's annual assessment is based on the fund bal-
ance as reflected on the most recent annual statement of funds
report filed with the department. Additionally, the amendments
revise the formula for determining the amount of the annual as-
sessment and add an assessment schedule. Previously, annual
assessments were based upon a flat rate of $0.0030 per dollar of
the fund balance. The adopted amendments create a tiered as-
sessment structure by establishing ranges of fund based dollar
amounts and a corresponding assessment for each range as setADOPTED RULES November 2, 2007 32 TexReg 7905
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Texas. Secretary of State. Texas Register, Volume 32, Number 44, Pages 7777-8060, November 2, 2007, periodical, November 2, 2007; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth97421/m1/125/: accessed July 18, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.