# The Attorney General of Texas

December 22, 1982
MARK WHITE Attorney General

Supreme Court Building P. 0. BOX 12546 Austin. TX. 787ll- 2546 5121475-2501 Telex 9101674-1367 Telecopier 5121475-0266

1607 Main St., Suite 1400 Dallas, TX. 75201-4709 2141742-6944

4624 Alberta Ave., Suite 160 El Paso, TX. 79905-2793 9151533-3464

1220 Dallas Ave., Suite 202 Houston, TX. 77002-6966 7131650-0666

606 Broadway. Suite 312 Lubbock, TX. 79401.3479 606l747.5236

4309 N. Tenth. Suite S McA,,en, TX. 76501-1665 5121662.4547

200 Main Plaza, suite 400 San Antonio. TX. 76205.2797 512,225.4191

An Equal Opportunity/ Affirmative Action Employer Mr. JohnW. Shocklee Executive Secretary StateBoard of Morticians 1513 S. Interstate35 Austin, Texas 78741

Dear Mr.,Shocklee: OpinionNo.MJ-539

lte: Cost itemization of funeral servicesandmerchandisepursuant section 38(23) of article :;82b,V.T.C.S.

You have raised two questiohs concerning section 3H(23) of article 4582b.V.T.C.S. Section 3H of this statuteprovides:

The State Board ofMorticiansmay seek appropriate injunctiverelief againsta funeralestablishment, licensed embalmer, or funeral director who fails to comply with any provision of this Act. This Act does not affect any remedy or enforcement power under other laws. The State Board of Morticians may revoke, suspend, or place on probation any licensed funeral director and/or embalmer, or apprentice and may refuse to license
or admit persons to examination for any of the following reasons all of which are offenses as provided in Section 6A of thisAct:

. . ..
23. Failure of any person arranging for funeral services or merchandise to provide each customer a written memorandum itemizing the costs of funeral services and funeral merchandise selected by the customer as enumerated in the price list, the requirements of which are set forth in Section 3, SubsectionH(22) of thisAct; each amount paid or owed to another on behalf of the customer; each fee for the costs of advancing funds or becoming indebtedto another on behalf of the customer; and includingthename, address,and telephonenumber of the funeral establishment and the followingnotice: 'Chargesare only for those items that are used. If the type of funeral

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

Your questionsconcern the subsection3H(23)proviso. They are:

1. Does component or "nit piicing exempt a person from the itemizationrequirementof 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 requirementof 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. Satterfieldv. Satterfield,448 S.W.2d 456 (Tex. 1969). Webster'sNew InternationalDictionary 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 aggregateorwhole."

Subsection 38(23) requires every personwho arranges for funeral services or merchandise to furnish each customer a written memorandum that itemizes the cost of each service and item thathe purchases, as said cost is "enumerated in the price list, the requirementsof 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. Itmust 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 customerknows the exact cost of everythingthathe buys.

Subsection3H(23) then states,however, that a personmay satisfy the itemizationrequirementby providing "prices to the purchaseron a

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component or unit pricing basis that provides a discount to the purchaser if any componentor unit is declinedor if all componentsor units are selected." Since,aswe noted above, "component"and "unit" essentially mean "individual," we believe it is clear that if a customerbuys 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) requirementare "as enumerated in the price list." As we have noted, each customermust, as a general rule,be informedof the retailprice 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 individualprices 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 discountspermitted in that subsection.

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

[T]hereare 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

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must disclose every itemwhich 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]heFTC has recommended that because certain discountsare very often granted on a unit pricing basis that you can use unit pricing if it will provide a discount either for the declinationof a componentpart or if theywant 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 experiencewith itemization,that the unit pricingwill very often reflect a cheaper price than what the full--the unit pricewill very often reflecta cheaperprice than the full itemization. (Emphasisadded).

These statements indicate that in enacting the subsection 38(23) proviso, the legislaturedid not intend to abolish the costbreakdown requirement,but merely sought to protect sellerswho offer discounts which result in a price of an item or service that is less expensive than itsnormal retailprice.

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 thatdiffers from the price stated in the retail price list if the deviation results from the application of either of the discounts permittedby that subsection.

MARK WHITE Attorney General of Texas

JOHNW. FAINTER,JR. FirstAssistantAttorneyGeneral

RICHARD E. GRAY III ExecutiveAssistantAttorneyGeneral
Preparedby Jon Bible AssistantAttorneyGeneral

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APPROVED: OPINION COMMITTEE

SusanL. Garrison,Chairman Jon Bible Rick Gilpin PatriciaHinojosa Shawn Jamail Jim Moellinges Bruce Youngblood

p. 1958