                                         The Attorney              General of Texas
                                                              December 22, 1982
MARK WHITE
Attorney General


                                        Mr. John W. Shocklee                      Opinion No.MJ-539
Supreme      Court Building             Executive Secretary
P. 0. BOX 12546
                                        State Board of Morticians                 lte: Cost itemization of funeral
Austin.    TX. 787ll-    2546
5121475-2501                            1513 S. Interstate 35                     services and merchandise pursuant
Telex    9101674-1367                   Austin, Texas   78741                         section 38(23) of article
Telecopier     5121475-0266                                                       :;82b, V.T.C.S.

1607 Main St., Suite 1400
                                        Dear Mr.,Shocklee:
Dallas, TX. 75201-4709
2141742-6944                                 You have raised two questiohs concerning section 3H(23) of
                                        article 4582b. V.T.C.S. Section 3H of this statute provides:
4624 Alberta       Ave., Suite    160
El Paso, TX.       79905-2793
                                                 The State Board of Morticians may seek appropriate
9151533-3464                                     injunctive relief against a funeral establishment,
                                                 licensed embalmer, or funeral director who fails
                                                 to comply with any provision of this Act. This
1220 Dallas Ave., Suite 202
                                                 Act does not affect any remedy or enforcement
Houston,     TX. 77002-6966
7 131650-0666
                                                 power under other laws.      The State Board of
                                                 Morticians may revoke, suspend, or place on
                                                 probation any licensed funeral director and/or
606 Broadway.        Suite 312                   embalmer, or apprentice and may refuse to license
Lubbock,  TX.       79401.3479
                                                 or admit persons to examination for any of the
606l747.5236
                                                 following reasons all of which are offenses as
                                                 provided in Section 6A of this Act:
4309 N. Tenth. Suite S
McA,,en,     TX. 76501-1665                          . . ..
5121662.4547

                                                    23.     Failure of any person arranging for
200 Main Plaza, suite 400                        funeral services or merchandise to provide each
San Antonio.  TX. 76205.2797                     customer a written memorandum itemizing the costs
512,225.4191                                     of funeral services and funeral merchandise
                                                 selected by the customer as enumerated in the
An Equal       Opportunity/                      price list, the requirements of which are set
Affirmative      Action     Employer             forth in Section 3, Subsection H(22) of this Act;
                                                 each amount paid or owed to another on behalf of
                                                 the customer;   each fee for the costs of advancing
                                                 funds or becoming indebted to another on behalf of
                                                 the customer;   and including the name, address, and
                                                 telephone number of the funeral establishment and
                                                 the following notice: 'Charges are only for those
                                                 items that are used.       If the type of funeral




                                                                     p. 1954
Mr. John W. Shocklee - Page 2   (MW-539)




         selected requires extra items, we will explain the
         reasons in writing on this memorandum.' Provided,
         however, that any person arranging for funeral
         services        merchandise      Y   satisfy   the
         itemixation"~eq"irements of thi:Subsection 3H(23)
         by providing prices to the purchaser on a
         component or unit pricing basis that provides a
         discount to the purchaser if any component or unit
         is declined or if all components or units are
         selected.   The written memorandum shall also
         include the name, address, and telephone number of
         the State Board of Morticians and a statement
         indicating that complaints can be directed to the
         Board. (Emphasis added).

    Your questions concern the subsection 3H(23) proviso. They are:

            1. Does component or "nit piicing exempt a
         person from the itemization requirement of section
         38(23) of the Mortuary Laws, article 4582b,
         V.T.C.S.?

            2. If so, what constitutes component or unit
         pricing so as      to satisfy the     itemization
         requirement of section 3H(23)? More particularly,
         how does a 'discount' apply to such component or
         unit pricing?

     The words 'component' and 'unit' are not defined in article
4582b.   They must therefore be given their ordinary meaning.
Satterfield v. Satterfield, 448 S.W.2d 456 (Tex. 1969). Webster's New
International Dictionary 231 (2d Ed. 1977) states that "component" is
synonymous with "constituent," "ingredient," and "element."        It
defines "unit" as a "distinct part or member analyzable in an
aggregate or whole."

     Subsection 38(23) requires every person who arranges for funeral
services or merchandise to furnish each customer a written memorandum
that itemizes the cost of each service and item that he purchases, as
said cost is "enumerated in the price list, the requirements of which
are set forth in section 3, subsection 38(22) of this Act." This
"price list" is a list of the retail prices of available funeral
services and merchandise. It must be made available to customers "at
the time of discussion or selection of funeral services or
merchandise." The intent of subsection 38(23) is obviously to insure
that each customer knows the exact cost of everything that he buys.

     Subsection 3H(23) then states, however, that a person may satisfy
the itemization requirement by providing "prices to the purchaser on a




                                 p. 19'55
Mr. John W. Shocklee - Page 3   0-w539)




component or unit pricing basis that provides a discount to the
purchaser if any component or unit is declined or if all components or
units are selected." Since, as we noted above, "component" and "unit"
essentially mean "individual," we believe it is clear that if a
customer buys several items and services, and the customer is given a
"package price" which does not contain a cost breakdown, the
requirements of the proviso have not been met. But if both the
proviso and the main body of subsection 38(23) require itemized
pricing, how do the two differ?

     In our opinion, the key words in the subsection 3H(23)
requirement are "as enumerated in the price list." As we have noted,
each customer must, as a general rule, be informed of the retail price
of every item and service that he purchases. The subsection 3H(23)
proviso does not eliminate the itemization requirement. On the
contrary, we believe that it simply authorizes sellers to list prices
of individual items and services that differ from their retail prices
because one of the two permissible discounts is offered to the
customer and a new price results from the application of that
discount.   Thus, if a customer purchases several items and/or
services, and no discount is offered, the seller would have to list
the retail price of each item and service as stated in the retail
price list. If, on the other hand, a discount is offered, the seller
could satisfy the itemization requirement by lxting the discounted
price of each item and service. The proviso, in other words, merely
insures that the seller cannot be accused of violating subsection
3H(23) if the individual prices that he lists deviate from the retail
prices stated in the retail price list, as long as the deviations
result from the application of one of the discounts permitted in that
subsection.

     The legislative history of subsection 3H(23) supports this
conclusion. The transcript of testimony on Senate Bill No. 277 which
was presented to the Government Organization Committee of the House of
Representatives on April 18, 1979, contains this excerpt from the
testimony of a witness:

          [T]here are two price l~iststhat you must provjde
          under the suggested bill, 277.      In the first
          place, at the time of selection, when you are
          first talking to the family, you must tell them
          that there is available in the funeral home, and
          at their request, you will present them with the
          entire price list before they ever start talking
          about any kind of a contract. And that gives them
          the right to decline any item on there that  they
          feel would not be necessary for the funeral
          service.... Then, at the time you are entering
          into the contractual arrangement with them, you




                            p. 1956
Mr. John W. Shocklee - Page 4     (Mw-539)




         must disclose every item which they have selected
         and the price for that individual item, itemized,
         now completely. Now, we have put in another
         nrovision in there in the committee substitute....
         '[T]he FTC has recommended that because certain
         discounts are very often granted on a unit pricing
         basis that you can use unit pricing if it will
         provide a discount either for the declination of a
         component part or if they want to make a purchase
         of the entire package, you can give them a
         discount on that basis.        And the FTC has
         recommended, and it has been their experience in
         other states where they have had experience with
         itemization, that the unit pricing will very often
         reflect a cheaper price than what the full--the
         unit price will very often reflect a cheaper price
         than the full itemization. (Emphasis added).

These statements indicate that in enacting the subsection 38(23)
proviso, the legislature did not intend to abolish the cost breakdown
requirement, but merely sought to protect sellers who offer discounts
which result in a price of an item or service that is less expensive
than its normal retail price.

                                SUMMARY

            Under subsection 38(23) of article 4582b,
         V.T.C.S., "component or unit pricing" requires
         itemized pricing of each funeral item or service
         purchased by a customer, but allows the seller to
         list a price that differs from the price stated in
         the retail price list if the deviation results
         from the application of either of the discounts
         permitted by that subsection.




                                          MARK      WHITE
                                          Attorney General of Texas

JOHN W. FAINTER, JR.
First Assistant Attorney General

RICHARD E. GRAY III
Executive Assistant Attorney General

Prepared by Jon Bible
Assistant Attorney General


                                p. 1957
Mr.   John W. Shocklee - Page 5   (MW-539)




APPROVED:
OPINION COMMITTEE

Susan L. Garrison, Chairman
Jon Bible
Rick Gilpin
Patricia Hinojosa
Shawn Jamail
Jim Moellinges
Bruce Youngblood




                                   p. 1958
