83R15678 ATP-F
	By: Flynn	H.B. No. 1489
	Substitute the following for H.B. No. 1489:
	By:  Villarreal	C.S.H.B. No. 1489

	A BILL TO BE ENTITLED
	AN ACT
	relating to prepaid funeral benefits contracts; authorizing a fee.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 154.106, Finance Code, is amended to
	read as follows:
	Sec. 154.106.  TRANSFER OF BUSINESS OWNERSHIP. (a) A permit
	holder shall notify the department and either the depository of the
	money held under Subchapter F or the issuer of insurance policy
	funding contracts under Subchapter E of a [contract to] transfer of
	ownership of the permit holder's business or a transfer of 25
	percent or more of the stock or other ownership or membership
	interest of the business in a single transaction. The notice must be
	given:
	(1)  in the case of a voluntary transfer, not later than
	the seventh day after the date the contract for transfer is
	executed; or
	(2)  in the case of an involuntary transfer, not later
	than the first business day after the date the permit holder
	receives notice of the impending foreclosure or other involuntary
	transfer.
	(b)  If the proposed transferee will own 51 percent or more
	of the business and is not a permit holder, the proposed transferee
	shall file an application for a permit with the department in
	accordance with this subchapter.  If the application is complete,
	the commissioner shall approve or deny the application before the
	16th day after the date the application was received.  The transfer
	of prepaid funeral benefits contracts of the permit holder that is
	the transferor may not occur until after the date a permit is issued
	to the applicant that is the transferee.
	(c)  If the commissioner denies the application, the
	applicant may request a hearing not later than the 15th day after
	the date on which notice of the determination is hand-delivered or
	the notice is mailed, whichever date is earlier.
	SECTION 2.  Section 154.107, Finance Code, is amended to
	read as follows:
	Sec. 154.107.  REQUIRED RENEWAL FOR [CERTAIN] SELLERS. (a)
	A seller that [discontinues the sale of prepaid funeral benefits
	but] has outstanding contracts shall renew the seller's permit
	until the contracts are fully discharged.
	(b)  A seller may renew the seller's permit as an
	unrestricted permit if the seller:
	(1)  wishes to continue to sell prepaid funeral
	benefits; and
	(2)  demonstrates to the commissioner that the seller
	continues to meet the qualifications and satisfy the requirements
	that apply to an applicant for a permit.
	(c)  A seller must renew the seller's permit as a restricted
	permit if the seller:
	(1)  cannot demonstrate to the commissioner that the
	seller continues to meet the qualifications and satisfy the
	requirements that apply to an applicant for a permit; or
	(2)  no longer wishes to sell prepaid funeral benefits.
	(d)  A seller that holds a restricted permit may not sell
	prepaid funeral benefits during the period a restricted permit is
	in effect. A contract entered into by a seller that at the time the
	contract is entered into holds a restricted permit is void and
	unenforceable and is not eligible for payment from a guaranty fund
	established under this chapter.
	SECTION 3.  Section 154.161(a), Finance Code, is amended to
	read as follows:
	(a)  The funeral provider under a prepaid funeral benefits
	contract subject to this chapter shall:
	(1)  in compliance with applicable law, protect any
	nonpublic personal financial and health information of the
	purchaser and contract beneficiary in the possession of the funeral
	provider;
	(2)  after the death of the contract beneficiary:
	(A)  deliver the contracted funeral merchandise
	and services and cash advance items required under the contract,
	subject to Section 154.1551;
	(B)  prepare a written pre-need to at-need
	reconciliation to verify that the specified goods and services are
	delivered or performed for the agreed price and promptly refund any
	contract overcharges that may be revealed by the reconciliation;
	(C)  if advance payment of cash advance items was
	included in the contract, prepare a reconciliation of proceeds
	applied to cash advance items; and
	(D)  retain a copy of each reconciliation until
	the third anniversary of the date of service; and
	(3)  with respect to each prepaid funeral benefits
	contract for which the funeral provider is not also the seller:
	(A)  sign the reconciliations required by
	Subdivision (2);
	(B)  promptly deliver the records that verify
	contract performance to the seller, including the final at-need
	contract, the certificate of performance, and the reconciliations
	required under Subdivision (2);
	(C)  if requested by the seller, correct or
	explain any discrepancy in a reconciliation required under
	Subdivision (2); [and]
	(D)  subject to Subsection (d), provide copies of
	any other records or documentation related to the offer, sale, and
	performance of the contract that are reasonably requested by the
	seller or the department, including records related to any refund
	required by Section 154.1511 or 154.1551; and
	(E)  inform each seller with which the funeral
	provider has an outstanding contract of any closure of the
	provider's funeral establishments not later than the 15th day after
	the date of closure.
	SECTION 4.  Section 154.253, Finance Code, is amended to
	read as follows:
	Sec. 154.253.  DEPOSIT OF MONEY PAID OR COLLECTED. (a) Not
	later than the 30th day after the date of collection, the money,
	other than money retained as provided by Section 154.252, shall be
	deposited:
	(1)  in a financial institution that has its main
	office or a branch in this state in an interest-bearing restricted
	account insured by the federal government; or
	(2)  in trust with a financial institution that has its
	main office or a branch located in this state and is authorized to
	act as a fiduciary in this state, to be invested by the financial
	institution as trustee in accordance with this subchapter.
	(b)  An account described by Subsection (a), including a
	trust account, shall be carried in the name of the funeral provider
	or other entity to whom the purchaser makes payment and must include
	the words "prepaid funeral benefits" or "pre-need funeral
	benefits."[.]
	SECTION 5.  Section 154.3595, Finance Code, is amended by
	adding Subsection (a-1) to read as follows:
	(a-1)  A permit holder to which this section applies shall
	notify each purchaser of an outstanding prepaid funeral benefits
	contract of any closure of the funeral provider named in the
	contract not later than the 90th day after the date of its receipt
	of notice of the closure.
	SECTION 6.  Subchapter I, Chapter 154, Finance Code, is
	amended by adding Section 154.400 to read as follows:
	Sec. 154.400.  INVESTIGATION AND SUBPOENA AUTHORITY. (a) If
	the commissioner has a reasonable suspicion of a misallocation or
	defalcation of prepaid funeral funds or an unauthorized sale of
	prepaid funeral benefits, the commissioner may conduct
	investigations as the commissioner considers necessary or
	appropriate to determine whether:
	(1)  a misallocation or defalcation of prepaid funeral
	funds has occurred; or
	(2)  an unauthorized sale of prepaid funeral benefits
	has occurred.
	(b)  The commissioner may issue a subpoena to compel the
	attendance and testimony of a person under oath or the production of
	documents related to an investigation conducted under Subsection
	(a). The subpoena may require attendance and production at the
	department's offices in Austin, Texas, or at another place the
	commissioner designates.
	(c)  A subpoena issued under this section to a financial
	institution is not subject to Section 59.006.
	(d)  If a person refuses to obey a subpoena, a district court
	in Travis County or the county in which the subpoena was served, on
	application by the commissioner, may issue an order requiring the
	person to appear before the commissioner and produce documents or
	give evidence regarding the matter under investigation.
	SECTION 7.  Section 154.4061(a), Finance Code, is amended to
	read as follows:
	(a)  If, after a hearing conducted as provided by Chapter
	2001, Government Code, the trier of fact finds that a violation of
	this chapter or a rule of the Finance Commission of Texas
	establishes a pattern of wilful disregard for the requirements of
	this chapter or rules of the finance commission, the trier of fact
	may [shall] recommend to the commissioner that the maximum
	administrative penalty permitted under Section 154.406 be imposed
	on the person committing the violation or that the commissioner
	cancel or not renew the person's permit under this chapter.
	SECTION 8.  Section 154.407, Finance Code, is amended to
	read as follows:
	Sec. 154.407.  INJUNCTIVE RELIEF. The commissioner may sue
	in a district court in Travis County or the county in which the
	violation occurred to enjoin a violation or threatened violation
	of:
	(1)  this chapter; or
	(2)  a final order of the commissioner or rule of the
	commission.
	SECTION 9.  Section 154.4081(c), Finance Code, is amended to
	read as follows:
	(c)  The person named in the order may request in writing an
	opportunity for a hearing to show that the emergency order should be
	stayed.  The written request for a hearing must be filed with the
	commissioner not later than the 30th day after the date on which the
	order is hand-delivered or the order is mailed, whichever date is
	earlier. On receipt of the request, the commissioner shall set a
	time for the hearing before the 22nd day after the date the
	commissioner received the request, unless extended at the request
	of the person named in the order.
	SECTION 10.  Section 154.409(b), Finance Code, is amended to
	read as follows:
	(b)  The attorney general shall institute suit in the name of
	this state against a person who violates this chapter in a district
	court in Travis County or the county in which the violation
	occurred.
	SECTION 11.  Section 154.412, Finance Code, is amended by
	amending Subsection (c-1) and adding Subsection (h) to read as
	follows:
	(c-1)  An emergency order remains in effect unless stayed by
	the commissioner.  The person named in the order may request in
	writing an opportunity for a hearing to show that the emergency
	order should be stayed.  The written request for a hearing must be
	filed with the commissioner not later than the 30th day after the
	date on which the order is hand-delivered or the order is mailed,
	whichever date is earlier. On receipt of the request, the
	commissioner shall set a time before the 22nd day after the date the
	commissioner received the request, unless extended at the request
	of the person named in the order.  The hearing is an administrative
	hearing relating to the findings that support immediate effect of
	the order.
	(h)  On certification by the commissioner, a record seized as
	provided by Subsection (a) or a record created by or filed with the
	department in connection with a seizure is admissible as evidence
	in any proceeding before the commissioner without prior proof of
	its correctness and without other proof. The certified record or a
	certified copy of the record is prima facie evidence of the facts
	contained in the record. This subsection does not limit another
	provision of this subtitle or a provision of another law that
	provides for the admission of evidence or its evidentiary value.
	SECTION 12.  Section 154.414, Finance Code, is amended to
	read as follows:
	Sec. 154.414.  LIQUIDATION OF BUSINESS AND AFFAIRS OF PERSON
	FOLLOWING SEIZURE OF MONEY AND RECORDS. After an order issued under
	Section 154.412(a) becomes final and unappealable, the
	commissioner may petition a [the] district court in Travis County
	or in the county in which a person required to hold a permit under
	this chapter resides to request the issuance of an order to show
	cause why the business and affairs of that person should not be
	liquidated and a receiver appointed by the court for that purpose
	if:
	(1)  the person:
	(A)  failed to deposit money in accordance with
	Subchapter F;
	(B)  misappropriated, converted, or illegally
	withheld or failed or refused to pay on demand money entrusted to
	that person that belongs to the beneficiary under a prepaid funeral
	benefits contract; or
	(C)  allowed the person's permit to lapse or had
	the permit revoked under this chapter and did not make adequate
	provision for the administration of the money deposited with the
	person for prepaid funeral benefits contracts in accordance with
	the contract and applicable law, including rules; and
	(2)  the person failed or refused to correct the
	violation before the 31st day after the date the person received
	written notice from the commissioner.
	SECTION 13.  Subchapter I, Chapter 154, Finance Code, is
	amended by adding Sections 154.415 and 154.416 to read as follows:
	Sec. 154.415.  PROHIBITION ORDER. (a) The commissioner may
	prohibit a person from participating in the business of prepaid
	funeral benefits sales if the commissioner determines from
	examination or other credible evidence that:
	(1)  the person:
	(A)  intentionally committed or participated in
	the commission of an act described by Section 154.401;
	(B)  violated a final cease and desist order
	issued by the department or another state agency related to the sale
	of prepaid funeral benefits; or
	(C)  made, or caused to be made, false entries in
	the records of a prepaid funeral benefits seller;
	(2)  because of the action by the person described by
	Subdivision (1):
	(A)  the purchaser or seller of prepaid funeral
	benefits has suffered or will probably suffer financial loss or
	expense, or other damage;
	(B)  the interests of the purchaser have been or
	could be prejudiced; or
	(C)  the person has received financial gain or
	other benefit by reason of the action, or likely would have if the
	action had not been discovered; and
	(3)  the action involves personal dishonesty on the
	part of the person.
	(b)  If the commissioner has grounds for action under
	Subsection (a) and finds that a prohibition order appears to be
	necessary and in the best interest of the public, the commissioner
	may serve a proposed prohibition order on a person alleged to have
	committed or participated in the action. The proposed order must:
	(1)  be personally delivered or mailed by registered or
	certified mail, return receipt requested;
	(2)  state with reasonable certainty the grounds for
	prohibition;
	(3)  state the effective date of the order, which may
	not be before the 21st day after the date the proposed order is
	personally delivered or mailed; and
	(4)  state the duration of the order, including whether
	the duration is perpetual.
	(c)  The commissioner may make a prohibition order perpetual
	or effective for a specific period of time, may probate the order,
	or may impose other conditions on the order.
	(d)  The order takes effect if the person against whom the
	proposed order is directed does not request a hearing in writing
	before the effective date. If the person does not request a hearing
	before the effective date, the order is final and not appealable as
	to that person.
	(e)  If the person requests a hearing as provided by
	Subsection (d), the hearing must be conducted as provided by
	Chapter 2001, Government Code, and commission rules. After the
	hearing, the commissioner shall issue or decline to issue the
	proposed order. The proposed order may be modified as necessary to
	conform to the findings at the hearing.
	(f)  An order issued under Subsection (e) is immediately
	final for purposes of enforcement and appeal. The order may be
	appealed as provided by Sections 31.202, 31.203, and 31.204.
	Sec. 154.416.  APPLICATION FOR RELEASE FROM PROHIBITION
	ORDER. (a) After the expiration of 10 years from the date of
	issuance, a person who is subject to a prohibition order issued
	under Section 154.415, regardless of the order's stated duration or
	date of issuance, may apply to the commissioner to be released from
	the order.
	(b)  The application must be made under oath and in the form
	required by the commissioner. The application must be accompanied
	by any required fees.
	(c)  The commissioner, in the exercise of discretion, may
	approve or deny an application filed under this section.
	(d)  The commissioner's decision under Subsection (c) is
	final and not appealable.
	SECTION 14.  This Act takes effect September 1, 2013.