1. (a) Definitions. The words and terms used in this section that are defined in Finance Code, §154.002, and §25.23(a) of this title (relating to Application Fees), have the same meanings defined therein. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

   1. (1) Examination--The process of evaluating the legal compliance and financial condition of a seller or permit holder's prepaid funeral benefit operation.
   2. (2) Fiscal biennium--The 24-month period from September 1st of each odd-numbered calendar year to August 31st of the next succeeding odd-numbered calendar year.
2. (b) Examination costs. Each seller shall be subject to annual examination by the department, shall be subject to such additional examinations as the department deems necessary, and shall pay for the cost of each examination, including the salary and travel expenses for department employees and all other expenses necessarily incurred in the examination. Examination costs shall be calculated at the rate of $500 per examiner per day plus travel costs, and shall be due at the time of billing; provided, however, that the seller may offset the examination fee due for the first annual examination in each year of a fiscal biennium against and to the extent of prior assessment fees actually paid to the department in the current fiscal biennium pursuant to subsection (c) of this section. If additional examinations are required in the same fiscal year as a result of the seller's failure to comply with the Finance Code, Chapter 154, or this chapter or as a result of its failure to comply with departmental requests in furtherance of the department's regulatory responsibilities under the Finance Code, Chapter 154, or this chapter, an additional fee of $500 per day, plus examiner travel costs, will be assessed for each examiner assigned to such examination. Fees and travel costs for an additional examination may not be offset against prior assessment fees.

3. (c) Assessment fees.

   1. (1) In connection with the examination, during each fiscal biennium, each seller shall pay nonrefundable assessment fees in such periodically adjusted amounts as reasonably appear necessary to defray the total unrecovered costs of administering this Finance Code, Chapter 154, and to avoid the accumulation of unnecessary fund balances, as provided in this subsection.
   2. (2) No more often than once each quarter of each fiscal biennium, the department shall calculate, based on the number of each seller's total outstanding contracts, a proportionate charge covering the cost of examination, the seller's equitable or proportionate cost of maintenance and operation of the department and the enforcement of the provisions of the Finance Code, Chapter 154, taking into account current fund balances and anticipated revenues from fees collected under §25.23(a) of this title (relating to Application Fees). The aggregate sum of assessments during a fiscal biennium shall not exceed $6.00 per outstanding contract, or $14,700 per seller, whichever is less.
   3. (3) A seller shall remit payment for any assessment fee due within 15 days from the date of billing by the department; provided, however, that the seller may offset any assessment fee due against and to the extent of the one annual examination fee actually paid to the department in the current fiscal biennium pursuant to subsection (b) of this section. If examination costs actually paid and not previously offset against assessments in the current fiscal biennium exceed the current assessment fee due, the seller shall be permitted to carry forward such excess amounts as a credit against future assessments within the current fiscal biennium, but not into the next succeeding fiscal biennium. The offset provisions of this paragraph and subsection (b) of this section shall be construed together to require that a seller pay the greater of the sum of all assessments during the fiscal biennium or the sum of all examination costs incurred during the fiscal biennium. No offset for additional examinations within a fiscal biennium will be permitted.
   4. (4) If the assessment for any seller as computed under paragraph (2) of this subsection is less than $100 for the fiscal biennium, a minimum assessment fee of $100 shall be levied and collected for the fiscal biennium, subject to offset as provided in paragraph (3) of this subsection.
4. (d) Severability. If any fee in this section or the manner of its calculation is determined to be unlawful or in excess of the authority of the department to adopt and impose, the remainder of this section shall be unaffected, and other fees specified herein shall continue to be due and collected.

Source Note:The provisions of this §25.24 adopted to be effective February 24, 1994, 19 TexReg 1037; amended to be effective May 6, 1996, 21 TexReg 3605.