BWM C.S.H.B. 1843 75(R)BILL ANALYSIS FINANCIAL INSTITUTIONS C.S.H.B. 1843 By: Marchant 4-2-97 Committee Report (Substituted) BACKGROUND Today in Texas, some cemeteries sell lawn crypts for $800 to $1000 that supposedly contain complex drainage systems and reinforced structures. Unfortunately, sometimes what is delivered is a simple concrete box or other outer burial container, costing $250 to $450. When this type of transaction takes place on a preneed basis, the seller should be licensed by the Department of Banking to sell preneed merchandise and trust the funds. This would allow the consumer added protection and give the Banking Department clear authority to correct these practices when done on a preneed basis. Current law describes how trust funds from preneed funeral contracts can and should be invested. A written investment plan is required and limitations are outlined on the instruments that the funds may be invested in. Allowing the Banking Commissioner to waive these limitations would give the Department more flexibility. PURPOSE If enacted, H.B. 1843 would require that if an outer burial chamber, other than a lawn crypt, is sold preneed, it is covered under the prepaid funeral contract statute. The bill would amend current law to refer to a specific definition of lawn crypt in the Health & Safety Code. In addition, H.B. 1843 would give the Banking Commissioner the ability to waive the investment limitations on trust funds as long as there is not an unreasonable risk of loss to the funds. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 1(b), Article 548b, of the Vernon's Texas Civil Statutes as follows: Amends Subsection (9). "Prepaid funeral benefits" by amending what is included in funeral merchandise or services to include alternative container, casket, or outer burial container. Further amends this Subsection by adding plot and lawn crypt to terms that do apply to this term. Adds Subsection (12). "Crypt," "grave," "lawn crypt," "niche" and "plot" have the meanings assigned to those terms assigned by Section 711.001 of the Health and Safety Code. Adds Subsection (13). Adds definition for "funeral merchandise" or "merchandise." Adds Subsection (14). Adds definition for "funeral services" or "services." SECTION 2. Amends Section 5A,, Article 548b, of the Vernon's Texas Civil Statutes as follows: Adds Subsection (i). Provides for the Commissioner to waive a limitation provided for by Subsection (e), (f), or (g) of this section, on written request of a permit holder, if the Commissioner concludes that the waiver does not threaten an unreasonable risk of loss to the prepaid funeral benefits trust funds. Requires the Commissioner to approve or disapprove the request within 60 days after having received the request. If the Commissioner does not disapprove the request before the expiration of this period then the request is approved. Provides for a hearing for the permit holder. SECTION 3. Amends Sbsection 711.001 (19), Health and Safety Code, to strike the words "concrete and reinforced steel" from the definition of a lawn crypt, and specifies the burial to be a ground burial. SECTION 4. Amends Chapter 711, Health and Safety Code, by adding Subchapter E to delineate the constuctio requirements for lawn crypts in general and specifies that the installation of a lawn crypt in fewer than ten units requires a plot owner's written request to install a crypt which complies with certain construction standards. SECTION 5. Specifies Sections 3 and 4 of this Act apply only to the installation of a lawn crypt on or after the effective date of this Act. SECTION 6. Effective date: September 1, 1997. SECTION 7. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The Committee Subtitute to H.B. 1843 expands the definition of funeral services as defined in the original bill. Furthermore, the Committee Substitute allows the Commissioner an additional 30 days (changed from 30 days to 60 days) to approve or disapprove any written requests by a permit holder to waive a limitation provided by Subsection (e), (f), or (g) of Article 548b, V.T.C.S. The Committee Substitute also amends the definition of a lawn crypt, and delineates the construction requirements for lawn crypts in general and specifes that the installation of a lawn crypt in fewer than ten units requires a plot owner's written request to install a crypt which complies with certain construction standards. Lastly, the Substitute establishes an effective date of September 1, 1997, and specifies that Sections 3 and 4 of the Act apply only to the installation of a lawn crypt on or after this effective date.