HBA-DMD H.B. 3625 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3625
By: Naishtat
Human Services
3/22/1999
Introduced



BACKGROUND AND PURPOSE 

Currently, if a nursing home owner commits fraud or mismanages the
institution's finances, the health and safety of the residents may be put
at risk. When the state takes over an institution because of fraud or
mismanagement, the financial burden for closing the institution or for
transferring its residents falls on the state. 

H.B. 3625 provides that an owner or controlling person who owns or controls
three or more institutions that are licensed must execute a surety bond for
each institution payable to the Texas Department of Human Services
(department) at an amount determined by the department in order to cover
the expenses of closing the institution, transferring its residents, or
taking regulatory action.  

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Texas Board of Human Services in
SECTION 1 (Section 242.0325, Health and Safety Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter B, Chapter 242, Health and Safety Code, by
adding Section 242.0325, as follows: 

Sec. 242.0325. (a) Provides that an owner or a controlling person who owns
or controls three or more institutions that are licensed or required to be
licensed under this chapter (Convalescent and Nursing Homes and Related
Institutions) must execute a surety bond, for each institution, by a surety
company authorized to do business in this state as a condition of obtaining
or renewing a license. 

(b) Provides that the bond must be payable to the Texas Department of Human
Services (department) and is conditional on the institution's compliance
with this chapter and rules adopted under this chapter. 

(c) Requires the Texas Board of Human Services (board) to set the amount of
the bond, by rule, and to determine the amount of the bond based on the
costs incurred by the department when it is necessary to close an
institution, arrange for the placement of a trustee, transfer residents, or
take other regulatory actions in connection with a violation of this
chapter or rules adopted under this chapter. 

SECTION 2.Effective date: September 1, 1999.

SECTION 3.Emergency clause.