AN ACT

 1-1     relating to the regulation of nursing homes and similar facilities;

 1-2     providing penalties.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4       ARTICLE 1.  REGULATION OF NURSING HOMES AND SIMILAR FACILITIES

 1-5           SECTION 1.01.  Section 242.001, Health and Safety Code, is

 1-6     amended to read as follows:

 1-7           Sec. 242.001.  SCOPE, PURPOSE, AND IMPLEMENTATION.  (a)  It

 1-8     is the goal of this chapter to ensure that institutions in this

 1-9     state deliver the highest possible quality of care.  This chapter,

1-10     and the rules and standards adopted under this chapter, establish

1-11     minimum acceptable levels of care.  A violation of a minimum

1-12     acceptable level of care established under this chapter or a rule

1-13     or standard adopted under this chapter is forbidden by law.  Each

1-14     institution licensed under this chapter shall, at a minimum,

1-15     provide quality care in accordance with this chapter and the rules

1-16     and standards.  Components of quality of care addressed by these

1-17     rules and standards include:

1-18                 (1)  quality of life;

1-19                 (2)  access to care;

1-20                 (3)  continuity of care;

1-21                 (4)  comprehensiveness of care;

1-22                 (5)  coordination of services;

1-23                 (6)  humaneness of treatment;

 2-1                 (7)  conservatism in intervention;

 2-2                 (8)  safety of the environment;

 2-3                 (9)  professionalism of caregivers; and

 2-4                 (10)  participation in useful studies.

 2-5           (b)  The rules and standards adopted under this chapter may

 2-6     be more stringent than the standards imposed by federal law for

 2-7     certification for participation in the state Medicaid program.  The

 2-8     rules and standards may not be less stringent than the Medicaid

 2-9     certification standards imposed under the Omnibus Budget

2-10     Reconciliation Act of 1987 (OBRA), Pub.L. No. 100-203.

2-11           (c)  The rules and standards adopted under this chapter apply

2-12     to each licensed institution.  The rules and standards are intended

2-13     for use in state surveys of the facilities and any investigation

2-14     and enforcement action and are designed to be useful to consumers

2-15     and providers in assessing the quality of care provided in an

2-16     institution.

2-17           (d)  The legislature finds that the construction,

2-18     maintenance, and operation of institutions shall be regulated in a

2-19     manner that protects the residents of the institutions by:

2-20                 (1)  providing the highest possible quality of care;

2-21                 (2)  strictly monitoring all factors relating to the

2-22     health, safety, welfare, and dignity of each resident;

2-23                 (3)  imposing prompt and effective remedies for

2-24     noncompliance with licensing standards; and

2-25                 (4)  providing the public with information concerning

 3-1     the operation of institutions in this state.

 3-2           (e)  It is the legislature's intent that this chapter

 3-3     accomplish the goals listed in Subsection (d).

 3-4           (f)  This chapter shall be construed broadly to accomplish

 3-5     the purposes set forth in this section. [The purpose of this

 3-6     chapter is to promote the public health, safety, and welfare by

 3-7     providing for the development, establishment, and enforcement of

 3-8     standards for the treatment of residents of institutions and the

 3-9     establishment, construction, maintenance, and operation of

3-10     institutions that, in the light of advancing knowledge, will

3-11     promote safe and adequate treatment of residents.]

3-12           SECTION 1.02.  Section 242.002, Health and Safety Code, is

3-13     amended to read as follows:

3-14           Sec. 242.002.  DEFINITIONS.  In this chapter:

3-15                 (1)  "Board" means the Texas Board of Human Services.

3-16                 (2)  "Commissioner" means the commissioner of human

3-17     services.

3-18                 (3)  "Controlling person" means a person who controls

3-19     an institution or other person as described by Section 242.0021.

3-20                 (4)  "Department" means the Texas Department of Human

3-21     Services.

3-22                 (5) [(3)]  "Elderly person" means an individual who is

3-23     65 years of age or older.

3-24                 (6)  "Facility" means an institution.

3-25                 (7) [(4)]  "Governmental unit" means the state or a

 4-1     political subdivision of the state, including a county or

 4-2     municipality.

 4-3                 (8)  "Home" means an institution.

 4-4                 (9) [(5)]  "Hospital" has the meaning assigned by

 4-5     Chapter 241 (Texas Hospital Licensing Law).

 4-6                 (10) [(6)]  "Institution" means:

 4-7                       (A)  an establishment that:

 4-8                             (i)  furnishes, in one or more facilities,

 4-9     food and shelter to four or more persons who are unrelated to the

4-10     proprietor of the establishment; and

4-11                             (ii)  provides minor treatment under the

4-12     direction and supervision of a physician licensed by the Texas

4-13     State Board of Medical Examiners, or other services that meet some

4-14     need beyond the basic provision of food, shelter, and laundry; or

4-15                       (B)  a foster care type residential facility that

4-16     provides room and board to fewer than five persons who:

4-17                             (i)  are not related within the second

4-18     degree of consanguinity or affinity, as determined under Chapter

4-19     573, Government Code, to the proprietor; and

4-20                             (ii)  because of their physical or mental

4-21     limitation, or both, require a level of care and services suitable

4-22     to their needs that contributes to their health, comfort, and

4-23     welfare.

4-24                 (11) [(7)]  "Person" means an individual, firm,

4-25     partnership, corporation, association, [or] joint stock company,

 5-1     limited partnership, limited liability company, or any other legal

 5-2     entity  and includes a legal successor of those entities.

 5-3                 (12) [(8)]  "Resident" means an individual, including a

 5-4     patient, who resides in an institution.

 5-5                 [(9)  "Commissioner" means the commissioner of human

 5-6     services.]

 5-7           SECTION 1.03.  Subchapter A, Chapter 242, Health and Safety

 5-8     Code, is amended by adding Section 242.0021 to read as follows:

 5-9           Sec. 242.0021.  CONTROLLING PERSON.  (a)  A person is a

5-10     controlling person if the person has the ability, acting alone or

5-11     in concert with others, to directly or indirectly influence,

5-12     direct, or cause the direction of the management, expenditure of

5-13     money, or policies of an institution or other person.

5-14           (b)  For purposes of this chapter, "controlling person"

5-15     includes:

5-16                 (1)  a management company, landlord, or other business

5-17     entity that operates or contracts with others for the operation of

5-18     an institution;

5-19                 (2)  any person who is a controlling person of a

5-20     management company or other business entity that operates an

5-21     institution or that contracts with another person for the operation

5-22     of an institution; and

5-23                 (3)  any other individual who, because of a personal,

5-24     familial, or other relationship with the owner, manager, landlord,

5-25     tenant, or provider of an institution, is in a position of actual

 6-1     control or authority with respect to the institution, without

 6-2     regard to whether the individual is formally named as an owner,

 6-3     manager, director, officer, provider, consultant, contractor, or

 6-4     employee of the facility.

 6-5           (c)  A controlling person described by Subsection (b)(3) does

 6-6     not include a person, such as an employee, lender, secured

 6-7     creditor, or landlord, who does not exercise any influence or

 6-8     control, whether formal or actual, over the operation of an

 6-9     institution.

6-10           (d)  The department may adopt rules that define the ownership

6-11     interests and other relationships that qualify a person as a

6-12     controlling person.

6-13           SECTION 1.04.  Section 242.005, Health and Safety Code, is

6-14     amended to read as follows:

6-15           Sec. 242.005.  PERFORMANCE REPORTS [ANNUAL REPORT].  (a)  The

6-16     department and the attorney general each shall prepare annually a

6-17     full report of the operation and administration of their respective

6-18     responsibilities under this chapter, including recommendations and

6-19     suggestions considered [it considers] advisable.

6-20           (b)  The Legislative Budget Board and the state auditor shall

6-21     jointly prescribe the form and content of reports required under

6-22     this section.

6-23           (c)  The department and the attorney general shall submit the

6-24     required reports [report] to the governor and the legislature not

6-25     later than October 1 of each year.

 7-1           SECTION 1.05.  Subchapter A, Chapter 242, Health and Safety

 7-2     Code, is amended by adding Sections 242.015 and 242.016 to read as

 7-3     follows:

 7-4           Sec. 242.015.  LICENSED ADMINISTRATOR.  (a)  Each institution

 7-5     must have a licensed nursing facility administrator.

 7-6           (b)  The administrator shall:

 7-7                 (1)  manage the institution;

 7-8                 (2)  be responsible for:

 7-9                       (A)  delivery of quality care to all residents;

7-10     and

7-11                       (B)  implementation of the policies and

7-12     procedures of the institution; and

7-13                 (3)  work at least 40 hours per week on administrative

7-14     duties.

7-15           Sec. 242.016.  FEES AND PENALTIES.  Except as expressly

7-16     provided by this chapter, a fee or penalty collected by or on

7-17     behalf of the department under this chapter must be deposited to

7-18     the credit of the general revenue fund and may be appropriated only

7-19     to the department to administer and enforce this chapter.

7-20     Investigation and attorney's fees may not be assessed or collected

7-21     by or on behalf of the department or other state agency unless the

7-22     department or other state agency assesses and collects a penalty

7-23     described under this chapter.

7-24           SECTION 1.06.  Section 242.032, Health and Safety Code, is

7-25     amended to read as follows:

 8-1           Sec. 242.032.  LICENSE OR RENEWAL APPLICATION.  (a)  An

 8-2     application for a license or renewal of a license is made to the

 8-3     department on a form provided by the department and must be

 8-4     accompanied by the license fee.

 8-5           (b)  The application must contain information that the

 8-6     department requires.

 8-7           (c)  The applicant or license holder must furnish evidence to

 8-8     affirmatively establish the applicant's or license holder's ability

 8-9     to comply with:

8-10                 (1)  minimum standards of medical care, nursing care,

8-11     and financial condition; and

8-12                 (2)  any other applicable state or federal standard.

8-13           (d)  The department shall consider the background and

8-14     qualifications of:

8-15                 (1)  the applicant or license holder;

8-16                 (2)  a partner, officer, director, or managing employee

8-17     of the applicant or license holder;

8-18                 (3)  a person who owns or who controls the owner of the

8-19     physical plant of a facility in which the institution operates or

8-20     is to operate; and

8-21                 (4)  a controlling person with respect to the

8-22     institution for which a license or license renewal is requested.

8-23           (e)  In making the evaluation required by Subsection (d), the

8-24     department shall require the applicant or license holder to file a

8-25     sworn affidavit of a satisfactory compliance history and any

 9-1     other information required by the department to substantiate a

 9-2     satisfactory compliance history relating to each state or other

 9-3     jurisdiction in which the applicant or license holder and any other

 9-4     person described by Subsection (d) operated an institution at any

 9-5     time during the five-year period preceding the date on which the

 9-6     application is made.  The department by rule shall determine what

 9-7     constitutes a satisfactory compliance history.  The department may

 9-8     also require the applicant or license holder to file information

 9-9     relating to the history of the financial condition of the applicant

9-10     or license holder and any other person described by Subsection (d)

9-11     with respect to an institution operated in another state or

9-12     jurisdiction at any time during the five-year period preceding the

9-13     date on which the application is made[, which may include

9-14     affirmative evidence of ability to comply with the standards and

9-15     rules adopted under this chapter].

9-16           SECTION 1.07.  Subsection (a), Section 242.033, Health and

9-17     Safety Code, is amended to read as follows:

9-18           (a)  After receiving an application for a license, the

9-19     department shall issue the license if, after inspection and

9-20     investigation, it finds that the applicant or license holder, and

9-21     any other person described by Section 242.032(d), [and facilities]

9-22     meet the requirements established under each provision of this

9-23     chapter and any rule or standard adopted under this chapter.

9-24           SECTION 1.08.  Section 242.034, Health and Safety Code, is

9-25     amended to read as follows:

 10-1          Sec. 242.034.  LICENSE FEES.  (a)  The board may establish by

 10-2    rule license fees for institutions licensed by the department under

 10-3    this chapter.  The license fee may not exceed $250 [$150] plus:

 10-4                (1)  $10 [$5] for each unit of capacity or bed space

 10-5    for which a license is sought; and

 10-6                (2)  a background examination fee imposed under

 10-7    Subsection (c).

 10-8          (b)  An additional license fee may be charged as provided by

 10-9    Section 242.097.

10-10          (c)  The board may establish a background examination fee in

10-11    an amount necessary to defray the department's expenses in

10-12    administering its duties under Sections 242.032(d) and (e).

10-13          (d) [(b)]  The license fee must be paid with each application

10-14    for an initial license, a renewal license, or a change of ownership

10-15    license.

10-16          (e) [(c)]  The state is not required to pay the license fee.

10-17          (f) [(d)]  An approved increase in bed space is subject to an

10-18    additional fee.

10-19          (g) [(e)  Except as provided by Section 242.097, all license

10-20    fees collected shall be deposited in the state treasury to the

10-21    credit of the department and may be appropriated to the department

10-22    to administer and enforce this chapter.]

10-23          [(f)]  The license fees established under this chapter are an

10-24    allowable cost for reimbursement under the medical assistance

10-25    program administered by the Texas Department of Human Services

 11-1    under Chapter 32, Human Resources Code.  Any fee increases shall be

 11-2    reflected in reimbursement rates prospectively.

 11-3          SECTION 1.09.  Section 242.037, Health and Safety Code, as

 11-4    amended by Chapters 583 and 1049, Acts of the 74th Legislature,

 11-5    1995, is amended to read as follows:

 11-6          Sec. 242.037.  RULES; MINIMUM STANDARDS.  (a)  The department

 11-7    shall make and enforce rules and minimum standards to implement

 11-8    this chapter, including rules and minimum standards relating to

 11-9    quality of life, quality of care, and residents' rights.

11-10          (b)  The rules and standards adopted under this chapter may

11-11    be more stringent than the standards imposed by federal law for

11-12    certification for participation in the state Medicaid program.

11-13          (c)  The rules and standards adopted by the department may

11-14    not be less stringent than the Medicaid certification standards and

11-15    regulations imposed under the Omnibus Budget Reconciliation Act of

11-16    1987 (OBRA), Pub.L. No. 100-203.

11-17          (d)  To implement Sections 242.032(d) and (e), the department

11-18    by rule shall adopt minimum standards for the background and

11-19    qualifications of any person described by Section 242.032(d).  The

11-20    department may not issue or renew a license if a person described

11-21    by Section 242.032 does not meet the minimum standards adopted

11-22    under this section.

11-23          (e)  In addition to standards or rules required by other

11-24    provisions of this chapter, the [The] board shall [may] adopt,

11-25    publish, and enforce minimum standards relating to:

 12-1                (1)  the construction of an institution, including

 12-2    plumbing, heating, lighting, ventilation, and other housing

 12-3    conditions, to ensure the residents' health, safety, comfort, and

 12-4    protection from fire hazard;

 12-5                (2)  the regulation of the number and qualification of

 12-6    all personnel, including management and nursing personnel,

 12-7    responsible for any part of the care given to the residents;

 12-8                (3)  requirements for in-service education of all

 12-9    employees who have any contact with the residents;

12-10                (4)  training on the care of persons with Alzheimer's

12-11    disease and related disorders for employees who work with those

12-12    persons;

12-13                (5)  sanitary and related conditions in an institution

12-14    and its surroundings, including water supply, sewage disposal, food

12-15    handling, and general hygiene in order to ensure the residents'

12-16    health, safety, and comfort;

12-17                (6)  the nutritional [dietary] needs of each resident

12-18    according to good nutritional practice or the recommendations of

12-19    the physician attending the resident;

12-20                (7)  equipment essential to the residents' health and

12-21    welfare; [and]

12-22                (8)  the use and administration of medication in

12-23    conformity with applicable law and rules;

12-24                (9)  care and treatment of residents and any other

12-25    matter related to resident health, safety, and welfare;

 13-1                (10)  licensure of institutions; and

 13-2                (11)  implementation of this chapter.

 13-3          (f) [(b)]  The board shall adopt, publish, and enforce

 13-4    minimum standards requiring appropriate training in geriatric care

 13-5    for each individual who provides services to geriatric residents in

 13-6    [as an employee of] an institution and who holds a license or

 13-7    certificate issued by an agency of this state that authorizes the

 13-8    person to provide the services.  The minimum standards may require

 13-9    that each licensed or certified individual complete an appropriate

13-10    program of continuing education or in-service training, as

13-11    determined by board rule, on a schedule determined by board rule.

13-12          (g)  To administer the surveys for provider certification

13-13    provided for by federal law and regulation, the department must

13-14    identify each area of care that is subject to both state licensing

13-15    requirements and federal certification requirements.  For each area

13-16    of care that is subject to the same standard under both federal

13-17    certification and state licensing requirements, an institution that

13-18    is in compliance with the federal certification standard is

13-19    considered to be in compliance with the same state licensing

13-20    requirement.

13-21          [(b)  Notwithstanding Section 222.0255(b), an institution

13-22    that is certified as being in compliance with each standard of

13-23    participation in the state Medicaid program that relates to the

13-24    same subject matter as a minimum standard established under

13-25    Subsection (a) is not required to satisfy the minimum standard

 14-1    established under that subsection.]

 14-2          SECTION 1.10.  Section 242.042, Health and Safety Code, is

 14-3    amended to read as follows:

 14-4          Sec. 242.042.  POSTING.  (a)  Each institution shall

 14-5    prominently and conspicuously post for display in a public area of

 14-6    the institution that is readily available to residents, employees,

 14-7    and visitors:

 14-8                (1)  the license issued under this chapter;

 14-9                (2)  a sign prescribed by the department that specifies

14-10    complaint procedures established under this chapter or rules

14-11    adopted under this chapter and that specifies how complaints may be

14-12    registered with the department;

14-13                (3)  a notice in a form prescribed by the department

14-14    stating that licensing inspection reports and other related reports

14-15    which show deficiencies cited by the department are available at

14-16    the institution for public inspection and providing the

14-17    department's toll-free telephone number that may be used to obtain

14-18    information concerning the institution; [and]

14-19                (4)  a concise summary of the most recent inspection

14-20    report relating to the institution;

14-21                (5)  notice that the department can provide summary

14-22    reports relating to the quality of care, recent investigations,

14-23    litigation, and other aspects of the operation of the institution;

14-24                (6)  notice that the Texas Board of Nursing Facility

14-25    Administrators can provide information about the nursing facility

 15-1    administrator;

 15-2                (7)  any notice or written statement required to be

 15-3    posted under Section 242.072(c); and

 15-4                (8)  notice that informational materials relating to

 15-5    the compliance history of the institution are available for

 15-6    inspection at a location in the institution specified by the sign.

 15-7          (b)  The notice required by Subsection (a)(8) must also be

 15-8    posted at each door providing ingress to and egress from the

 15-9    institution.

15-10          (c)  The informational materials required to be maintained

15-11    for public inspection by an institution under Subsection (a)(8)

15-12    must be maintained in a well-lighted accessible location and must

15-13    include:

15-14                (1)  any information required to be included under

15-15    Section 242.504; and

15-16                (2)  a statement of the institution's record of

15-17    compliance with this chapter and the rules and standards adopted

15-18    under this chapter that is updated not less frequently than

15-19    bi-monthly and that reflects the record of compliance during the

15-20    period beginning one year before the date the statement is last

15-21    updated, in the form required by the department.

15-22          SECTION 1.11.  Subsection (c), Section 242.045, Health and

15-23    Safety Code, is amended to read as follows:

15-24          (c)  An offense under this section is a third degree felony

15-25    [Class B misdemeanor].

 16-1          SECTION 1.12.  Section 242.061, Health and Safety Code, is

 16-2    amended by amending Subsection (a) and adding Subsection (c) to

 16-3    read as follows:

 16-4          (a)  The department, after providing notice and opportunity

 16-5    for a hearing to the applicant or license holder, may deny,

 16-6    suspend, or revoke a license if the department finds that the

 16-7    applicant, the [or] license holder, or any other person described

 16-8    by Section 242.032(d) has:

 16-9                (1)  violated this chapter or a rule, standard, or

16-10    order adopted or license issued under this chapter in either a

16-11    repeated or substantial manner; or

16-12                (2)  committed any act described by Sections

16-13    242.066(a)(2)-(6) [substantially failed to comply with the

16-14    requirements established under this chapter].

16-15          (c)  The department may deny, suspend, or revoke the license

16-16    of an institution if any person described by Section 242.032(d) has

16-17    been excluded from holding a license under Section 242.0615.

16-18          SECTION 1.13.  Subchapter C, Chapter 242, Health and Safety

16-19    Code, is amended by adding Section 242.0615 to read as follows:

16-20          Sec. 242.0615.  EXCLUSION.  (a)  The department, after

16-21    providing notice and opportunity for a hearing, may exclude a

16-22    person from eligibility for a license under this chapter if the

16-23    person or any person described by Section 242.032(d) has

16-24    substantially failed to comply with this chapter and the rules

16-25    adopted under this chapter.  The authority granted by this

 17-1    subsection is in addition to the authority to deny issuance of a

 17-2    license under Section 242.061(a).

 17-3          (b)  Exclusion of a person under this section must extend for

 17-4    a period of at least two years, but may not exceed a period of 10

 17-5    years.

 17-6          SECTION 1.14.  Section 242.063, Health and Safety Code, is

 17-7    amended by amending Subsections (a), (b), and (d) and adding

 17-8    Subsection (e) to read as follows:

 17-9          (a)  The department may petition a district court for:

17-10                (1)  a temporary restraining order to restrain a person

17-11    from [continuing] a violation or threatened violation of the

17-12    standards imposed under [prescribed by] this chapter or any other

17-13    law affecting residents if the department reasonably believes

17-14    [finds] that the violation or threatened violation creates an

17-15    immediate threat to the health and safety of a resident; and

17-16                (2)  an injunction to restrain a person from a

17-17    violation or threatened violation of the standards imposed under

17-18    this chapter or by any other law affecting residents if the

17-19    department reasonably believes that the violation or threatened

17-20    violation creates a threat to the health and safety of a resident

17-21    [the institution's residents].

17-22          (b)  A district court, on petition of the department, may by

17-23    injunction:

17-24                (1)  prohibit a person from violating [continuing a

17-25    violation of] the standards or licensing requirements prescribed by

 18-1    this chapter;

 18-2                (2)  restrain or prevent the establishment, conduct,

 18-3    management, or operation of an institution without a license issued

 18-4    under this chapter; or

 18-5                (3)  grant the injunctive relief warranted by the facts

 18-6    on a finding by the court that a person is violating or threatening

 18-7    to violate the standards or licensing requirements prescribed by

 18-8    this chapter.

 18-9          (d)  Notwithstanding Chapter 15, Civil Practice and Remedies

18-10    Code, or Section 65.023, Civil Practice and Remedies Code, a [A]

18-11    suit for a temporary restraining order or other injunctive relief

18-12    may [must] be brought in Travis County or in the county in which

18-13    the alleged violation occurs.

18-14          (e)  The department by rule shall define "threatened

18-15    violation" for the purpose of this section.

18-16          SECTION 1.15.  Section 242.065, Health and Safety Code, is

18-17    amended to read as follows:

18-18          Sec. 242.065.  CIVIL PENALTY.  (a)  A person who violates or

18-19    causes a violation of this chapter or a rule adopted under this

18-20    chapter is liable for a civil penalty of not less than $1,000

18-21    [$100] or  more than $20,000 [$10,000] for each act of violation if

18-22    the  department determines the violation threatens the health and

18-23    safety of a resident.

18-24          (b)  In determining the amount of a penalty to be awarded

18-25    under this section, the trier of fact shall consider:

 19-1                (1)  the seriousness of the violation, including the

 19-2    nature, circumstances, extent, and gravity of the violation and the

 19-3    hazard or potential hazard created by the violation to the health

 19-4    or safety of a resident;

 19-5                (2)  the history of violations committed by the person

 19-6    or the person's affiliate, employee, or controlling person;

 19-7                (3)  the amount necessary to deter future violations;

 19-8                (4)  the efforts made to correct the violation;

 19-9                (5)  any misrepresentation made to the department or to

19-10    another person regarding:

19-11                      (A)  the quality of services rendered or to be

19-12    rendered to residents;

19-13                      (B)  the compliance history of the institution or

19-14    any institutions owned or controlled by an owner or controlling

19-15    person of the institution; or

19-16                      (C)  the identity of an owner or controlling

19-17    person of the institution;

19-18                (6)  the culpability of the individual who committed

19-19    the violation; and

19-20                (7)  any other matter that should, as a matter of

19-21    justice or equity, be considered.

19-22          (c)  Each day of a continuing violation constitutes a

19-23    separate ground for recovery.

19-24          (d)  Any party to a suit under this section may request a

19-25    jury.

 20-1          (e)  If a person who is liable under this section fails to

 20-2    pay any amount the person is obligated to pay under this section,

 20-3    the state may seek satisfaction from any owner, other controlling

 20-4    person, or affiliate of the person found liable.  The owner, other

 20-5    controlling person, or affiliate may be found liable in the same

 20-6    suit or in another suit on a showing by the state that the amount

 20-7    to be paid has not been paid or otherwise legally discharged.  The

 20-8    department by rule may establish a method for satisfying an

 20-9    obligation imposed under this section from an insurance policy,

20-10    letter of credit, or other contingency fund.

20-11          (f)  A payment made to satisfy an obligation under this

20-12    section is not an allowable cost for reimbursement under the state

20-13    Medicaid program.

20-14          (g)  A civil penalty awarded under this section constitutes a

20-15    fine, penalty, or forfeiture payable to and for the benefit of a

20-16    government unit and is not compensation for actual pecuniary loss.

20-17          (h)  In this section, "affiliate" means:

20-18                (1)  with respect to a partnership other than a limited

20-19    partnership, each partner of the partnership;

20-20                (2)  with respect to a corporation:

20-21                      (A)  an officer;

20-22                      (B)  a director;

20-23                      (C)  a stockholder who owns, holds, or has the

20-24    power to vote at least 10 percent of any class of securities issued

20-25    by the corporation, regardless of whether the power is of record or

 21-1    beneficial; and

 21-2                      (D)  a controlling individual;

 21-3                (3)  with respect to an individual:

 21-4                      (A)  each partnership and each partner in the

 21-5    partnership in which the individual or any other affiliate of the

 21-6    individual is a partner; and

 21-7                      (B)  each corporation or other business entity in

 21-8    which the individual or another affiliate of the individual is:

 21-9                            (i)  an officer;

21-10                            (ii)  a director;

21-11                            (iii)  a stockholder who owns, holds, or

21-12    has the power to vote at least 10 percent of any class of

21-13    securities issued by the corporation, regardless of whether the

21-14    power is of record or beneficial; and

21-15                            (iv)  a controlling individual;

21-16                (4)  with respect to a limited partnership:

21-17                      (A)  a general partner; and

21-18                      (B)  a limited partner who is a controlling

21-19    individual;

21-20                (5)  with respect to a limited liability company:

21-21                      (A)  an owner who is a manager as described by

21-22    the Texas Limited Liability Company Act (Article 1528n, Vernon's

21-23    Texas Civil Statutes); and

21-24                      (B)  each owner who is a controlling individual;

21-25    and

 22-1                (6)  with respect to any other business entity, a

 22-2    controlling individual.

 22-3          SECTION 1.16.  Section 242.066, Health and Safety Code, is

 22-4    amended by amending Subsections (a) and (b) and adding Subsections

 22-5    (f), (g), and (h) to read as follows:

 22-6          (a)  The department may assess an administrative [a civil]

 22-7    penalty against a person who:

 22-8                (1)  violates this chapter or a rule, standard, or

 22-9    order adopted or license issued under this chapter;

22-10                (2)  makes a false statement, that the person knows or

22-11    should know is false, of a material fact:

22-12                      (A)  on an application for issuance or renewal of

22-13    a license or in an attachment to the application; or

22-14                      (B)  with respect to a matter under investigation

22-15    by the department;

22-16                (3)  refuses to allow a representative of the

22-17    department to inspect:

22-18                      (A)  a book, record, or file required to be

22-19    maintained  by an institution; or

22-20                      (B)  any portion of the premises of an

22-21    institution;

22-22                (4)  wilfully interferes with the work of a

22-23    representative of the department or the enforcement of this

22-24    chapter;

22-25                (5)  wilfully interferes with a representative of the

 23-1    department preserving evidence of a violation of this chapter or a

 23-2    rule, standard, or order adopted or license issued under this

 23-3    chapter; or

 23-4                (6)  fails to pay a penalty assessed by the department

 23-5    under this chapter not later than the 10th day after the date the

 23-6    assessment of the penalty becomes final.

 23-7          (b)  Except as provided by Subsection (f) and Section

 23-8    242.0665(c), the [The] penalty may not exceed $10,000 a day for

 23-9    each violation.

23-10          (f)  The penalty for a violation of Section 242.072(c), a

23-11    rule adopted under Section 242.1225, or a right of a resident

23-12    adopted under Subchapter L may not exceed $1,000 a day for each

23-13    violation.  This subsection does not apply to conduct that violates

23-14    both Subchapter K or a standard adopted under Subchapter K and a

23-15    right of a resident adopted under Subchapter L.

23-16          (g)  The persons against whom an administrative penalty may

23-17    be assessed under Subsection (a) include:

23-18                (1)  an applicant for a license under this chapter;

23-19                (2)  a license holder;

23-20                (3)  a partner, officer,  director, or managing

23-21    employee of a license holder or applicant; and

23-22                (4)  a person who controls an institution.

23-23          (h)  A penalty assessed under Subsection (a)(6) is in

23-24    addition to the penalty previously assessed and not timely paid.

23-25          SECTION 1.17.  Subchapter C, Chapter 242, Health and Safety

 24-1    Code, is amended by adding Section 242.0665 to read as follows:

 24-2          Sec. 242.0665.  RIGHT TO CORRECT.  (a)  The department may

 24-3    not collect an administrative penalty against an institution under

 24-4    this subchapter if, not later than the 45th day after the date the

 24-5    institution receives notice under Section 242.067(c), the

 24-6    institution corrects the violation.

 24-7          (b)  Subsection (a) does not apply:

 24-8                (1)  to a violation that the department determines:

 24-9                      (A)  results in serious harm to or death of a

24-10    resident;

24-11                      (B)  constitutes a serious threat to the health

24-12    or safety of a resident; or

24-13                      (C)  substantially limits the institution's

24-14    capacity to provide care;

24-15                (2)  to a violation described by Sections

24-16    242.066(a)(2)-(6);

24-17                (3)  to a violation of a rule adopted under Section

24-18    242.1225 or of Section 242.133 or 242.1335; or

24-19                (4)  to a violation of a right of a resident adopted

24-20    under Subchapter L.

24-21          (c)  An institution that corrects a violation under

24-22    Subsection (a) must maintain the correction.  If the institution

24-23    fails to maintain the correction until at least the first

24-24    anniversary of the date the correction was made, the department may

24-25    assess an administrative penalty under this subchapter for the

 25-1    subsequent violation.  A penalty assessed under this subsection

 25-2    shall be equal to three times the amount of the penalty assessed

 25-3    but not collected under Subsection (a).  The department is not

 25-4    required to provide the institution an opportunity to correct the

 25-5    subsequent violation under this section.

 25-6          SECTION 1.18.  Sections 242.067, 242.068, 242.069, and

 25-7    242.070, Health and Safety Code, are amended to read as follows:

 25-8          Sec. 242.067.  REPORT RECOMMENDING ADMINISTRATIVE PENALTY.

 25-9    (a)  The department may issue a preliminary report stating the

25-10    facts on which it concludes that a violation of this chapter or a

25-11    rule, standard, or order adopted or license issued under this

25-12    chapter has occurred if it has:

25-13                (1)  [it has] examined the possible violation and facts

25-14    surrounding the possible violation; and

25-15                (2)  concluded that a violation has occurred.

25-16          (b)  The report may recommend a penalty under Section 242.069

25-17    and the amount of the penalty.

25-18          (c)  The department shall give written notice of the report

25-19    to the person charged with the violation not later than the 10th

25-20    day after the date on which the report is issued.  The notice must

25-21    include:

25-22                (1)  a brief summary of the charges;

25-23                (2)  a statement of the amount of penalty recommended;

25-24    [and]

25-25                (3)  a statement of whether the violation is subject to

 26-1    correction under Section 242.0665 and, if the violation is subject

 26-2    to correction under that section, a statement of:

 26-3                      (A)  the date on which the institution must file

 26-4    with the department a plan of correction to be approved by the

 26-5    department; and

 26-6                      (B)  the date on which the plan of correction

 26-7    must be completed to avoid assessment of the penalty; and

 26-8                (4)  a statement that the person charged has a right to

 26-9    a hearing on the occurrence of the violation, the amount of the

26-10    penalty, or both.

26-11          (d)  Not later than the 20th day after the date on which the

26-12    notice under Subsection (c) is sent, the person charged may:

26-13                (1)  give to the department written consent to the

26-14    department's report, including the recommended penalty; [or]

26-15                (2)  make a written request for a hearing; or

26-16                (3)  if the violation is subject to correction under

26-17    Section 242.0665, submit a plan of correction to the department for

26-18    approval.

26-19          (e)  If the violation is subject to correction under Section

26-20    242.0665, and the person reports to the department that the

26-21    violation has been corrected, the department shall inspect the

26-22    correction or take any other step necessary to confirm that the

26-23    violation has been corrected and shall notify the person that:

26-24                (1)  the correction is satisfactory and that a penalty

26-25    is not assessed; or

 27-1                (2)  the correction is not satisfactory and that a

 27-2    penalty is recommended.

 27-3          (f)  Not later than the 20th day after the date on which a

 27-4    notice under Subsection (e)(2) is sent, the person charged may:

 27-5                (1)  give to the department written consent to the

 27-6    department's report, including the recommended penalty; or

 27-7                (2)  make a written request for a hearing.

 27-8          (g)  If the person charged with the violation consents to the

 27-9    administrative penalty recommended by the department, [or] does not

27-10    timely respond to a [the] notice sent under Subsection (c) or (e),

27-11    or fails to correct the violation to the department's satisfaction,

27-12    the commissioner or the commissioner's designee shall[:]

27-13                [(1)]  assess the administrative penalty recommended by

27-14    the department[; or]

27-15                [(2)  order a hearing to be held on the findings and

27-16    recommendations in the department's report].

27-17          (h) [(f)]  If the commissioner or the commissioner's designee

27-18    assesses the recommended penalty, the department shall give written

27-19    notice to the person charged of the decision and the person shall

27-20    pay the penalty.

27-21          Sec. 242.068.  HEARINGS ON ADMINISTRATIVE PENALTIES

27-22    [HEARING].  (a)  An administrative law judge [The commissioner]

27-23    shall order a hearing and give notice of the hearing if[:]

27-24                [(1)]  a person charged under Section 242.067(c)

27-25    requests a hearing[; or]

 28-1                [(2)  the commissioner or the commissioner's designee

 28-2    orders a hearing].

 28-3          (b)  The hearing shall be held before an administrative law

 28-4    judge [by a hearing examiner designated by the commissioner].

 28-5          (c)  The administrative law judge [hearing examiner] shall

 28-6    make findings of fact and conclusions of law [promptly issue to the

 28-7    commissioner a written decision] regarding the occurrence of a

 28-8    violation of this chapter or a rule or order adopted or license

 28-9    issued under this chapter [and a recommendation regarding the

28-10    amount of the proposed penalty if a penalty is warranted].

28-11          (d)  Based on the findings of fact and conclusions of law

28-12    [recommendations of the hearing examiner], the administrative law

28-13    judge [commissioner] by order shall [may] find:

28-14                (1)  a violation has occurred and assess an

28-15    administrative [a civil] penalty; or

28-16                (2)  a violation has not occurred.

28-17          (e)  Proceedings under this section are subject to Chapter

28-18    2001, Government Code.

28-19          Sec. 242.069.  NOTICE AND PAYMENT OF ADMINISTRATIVE PENALTY;

28-20    INTEREST; REFUND.  (a)  The commissioner shall give notice of the

28-21    decision taken under Section 242.068(d) to the person charged.  If

28-22    the commissioner finds that a violation has occurred and has

28-23    assessed an administrative [a civil] penalty, the commissioner

28-24    shall give written notice to the person charged of:

28-25                (1)  the findings;

 29-1                (2)  [,] the amount of the penalty;

 29-2                (3)  the rate of interest payable with respect to the

 29-3    penalty and the date on which interest begins to accrue;

 29-4                (4)  whether payment of the penalty or other action

 29-5    under Section 242.071 is required;[,] and

 29-6                (5)  the person's right to judicial review of the

 29-7    order.

 29-8          (b)  Not later than the 30th day after the date on which the

 29-9    commissioner's order is final, the person charged with the penalty

29-10    shall:

29-11                (1)  pay the full amount of the penalty; or

29-12                (2)  file a petition for judicial review contesting the

29-13    occurrence of the violation, the amount of the penalty, the failure

29-14    to correct the violation to the department's satisfaction, or all

29-15    of the above.

29-16          (c)  Notwithstanding Subsection (b), the department may

29-17    permit the person to pay the penalty in installments or may require

29-18    the person to use the amount of the penalty under the department's

29-19    supervision in accordance with Section 242.071.

29-20          (d)  If the person does not pay the penalty within the 30-day

29-21    period:

29-22                (1)  the penalty is subject to interest; and

29-23                (2)  the department may refer the matter to the

29-24    attorney general for collection of the penalty and interest. [If

29-25    the person seeks judicial review of the violation, the amount of

 30-1    the penalty, or both, the person, within the time provided by

 30-2    Subsection (b), shall:]

 30-3                [(1)  send the amount of the penalty to the

 30-4    commissioner for placement in an escrow account; or]

 30-5                [(2)  post with the commissioner a supersedeas bond in

 30-6    a form approved by the commissioner for the amount of the penalty,

 30-7    the bond to be effective until the judicial review of the order or

 30-8    decision is final.]

 30-9          [(d)  A person who fails to comply with Subsection (c) waives

30-10    the right to judicial review, and the commissioner may request

30-11    enforcement by the attorney general.]

30-12          (e)  If a penalty is reduced or not assessed, the

30-13    commissioner shall:

30-14                (1)  remit to the person charged the appropriate amount

30-15    of any penalty payment plus accrued interest; or

30-16                (2)  execute a release of the supersedeas bond if one

30-17    has been posted.

30-18          (f)  Accrued interest on amounts remitted by the commissioner

30-19    under Subsection (e)(1) shall be paid:

30-20                (1)  at a rate equal to the rate charged on loans to

30-21    depository institutions by the New York Federal Reserve Bank; and

30-22                (2)  for the period beginning on the date the penalty

30-23    is paid [to the commissioner] under Subsection (b) [(c)] and ending

30-24    on the date the penalty is remitted.

30-25          (g)  Interest under Subsection (d) shall be paid:

 31-1                (1)  at a rate equal to the rate charged on loans to

 31-2    depository institutions by the New York Federal Reserve Bank; and

 31-3                (2)  for the period beginning on the date the notice of

 31-4    the commissioner's order is received by the person and ending on

 31-5    the date the penalty is paid [A penalty collected under this

 31-6    section shall be deposited to the credit of the nursing and

 31-7    convalescent home trust fund established under Section 242.096].

 31-8          Sec. 242.070.  APPLICATION OF OTHER LAW.  The department may

 31-9    not assess more than one monetary [a] penalty under [both] this

31-10    chapter [subchapter and Section 32.021, Human Resources Code,] for

31-11    a violation arising out of the same act or failure to act, except

31-12    as provided by Section 242.0665(c).  This section does not prohibit

31-13    the department from assessing a monetary penalty under this chapter

31-14    and a monetary penalty under Chapter 32, Human Resources Code, for

31-15    the same act or failure to act.

31-16          SECTION 1.19.  Subchapter C, Chapter 242, Health and Safety

31-17    Code, is amended by adding Sections 242.071, 242.072, and 242.073

31-18    to read as follows:

31-19          Sec. 242.071.  AMELIORATION OF VIOLATION.  In lieu of

31-20    ordering payment of the administrative penalty under Section

31-21    242.069, the commissioner may require the person to use, under the

31-22    supervision of the department, any portion of the penalty to

31-23    ameliorate the violation or to improve services, other than

31-24    administrative services, in the institution affected by the

31-25    violation.

 32-1          Sec. 242.072.  OTHER REMEDIES.  (a)  If the commissioner

 32-2    finds that an institution has committed an act for which a civil

 32-3    penalty may be imposed under Section 242.065, the commissioner may,

 32-4    as appropriate under the circumstances, order the institution to

 32-5    immediately suspend admissions.

 32-6          (b)  A suspension of admissions ordered under Subsection (a)

 32-7    is effective on the date a representative of the institution

 32-8    receives notice of the order and of the manner in which the order

 32-9    may be appealed.  The department must provide an opportunity for a

32-10    hearing with respect to an appeal of the order not later than the

32-11    14th day after the date the suspension becomes effective.

32-12          (c)  During the period that an institution is ordered to

32-13    suspend admissions, the institution shall post a notice of the

32-14    suspension on all doors providing ingress to and egress from the

32-15    institution.  The notice shall be posted in the form required by

32-16    the department.

32-17          (d)  A person commits an offense if the person knowingly:

32-18                (1)  violates Subsection (c); or

32-19                (2)  removes a notice posted under Subsection (c)

32-20    before the facility is allowed to admit residents.

32-21          (e)  An offense under Subsection (d) is a Class C

32-22    misdemeanor.

32-23          Sec. 242.073.  LEGAL ACTION BY THE ATTORNEY GENERAL.

32-24    (a)  The department and the attorney general shall work in close

32-25    cooperation throughout any legal proceedings requested by the

 33-1    department.

 33-2          (b)  The commissioner must approve any settlement agreement

 33-3    to a suit brought under this chapter or any other law relating to

 33-4    the health and safety of residents in institutions.

 33-5          SECTION 1.20.   Subsection (e), Section 242.096, Health and

 33-6    Safety Code, is amended to read as follows:

 33-7          (e)  Any unencumbered amount in the nursing and convalescent

 33-8    home trust fund in excess of $500,000 [$100,000] at the end of each

 33-9    fiscal year shall be transferred to the credit of the general

33-10    revenue fund and may be appropriated only to the department for its

33-11    use in administering and enforcing this chapter.

33-12          SECTION 1.21.  Section 242.097, Health and Safety Code, is

33-13    amended to read as follows:

33-14          Sec. 242.097.  ADDITIONAL LICENSE FEE.  (a)  In addition to

33-15    the license fee provided by Section 242.034, the department shall

33-16    adopt an annual fee to be charged and collected if the amount of

33-17    the nursing and convalescent home trust fund is less than $500,000

33-18    [$100,000].  The fee shall be deposited to the credit of the

33-19    nursing and convalescent home trust fund created by this

33-20    subchapter.

33-21          (b)  The department shall set the fee for each nursing and

33-22    convalescent home at $1 for each licensed unit of capacity or bed

33-23    space in that home or in an amount necessary to provide $500,000

33-24    [$100,000] in the fund.

33-25          SECTION 1.22.  Subchapter E, Chapter 242, Health and Safety

 34-1    Code, is amended by adding Section 242.1225 to read as follows:

 34-2          Sec. 242.1225.  ADDITIONAL REPORTING REQUIREMENT.  (a)  The

 34-3    board shall adopt rules requiring any person required to report

 34-4    abuse or neglect under Section 242.122 to report other conduct or

 34-5    conditions specified by the rules.  The rules must require

 34-6    reporting of conduct or conditions resulting in exploitation of

 34-7    residents and accidental injury to or hospitalization of residents.

 34-8          (b)  A report made under this section must be made in the

 34-9    manner specified by board rule.

34-10          SECTION 1.23.  Section 242.126, Health and Safety Code, is

34-11    amended to read as follows:

34-12          Sec. 242.126.  INVESTIGATION AND REPORT OF DEPARTMENT OR

34-13    DESIGNATED [RECEIVING] AGENCY.  (a)  The department or the

34-14    designated agency shall make a thorough investigation [promptly]

34-15    after receiving an [either the] oral or written report of abuse or

34-16    neglect under Section 242.122 or another complaint alleging abuse

34-17    or neglect.

34-18          (b)  The primary purpose of the investigation is the

34-19    protection of the resident.

34-20          (c)  The agency shall begin the investigation:

34-21                (1)  within 24 hours of receipt of the report or other

34-22    allegation, if the report of abuse or neglect or other complaint

34-23    alleges that:

34-24                      (A)  a resident's health or safety is in imminent

34-25    danger;

 35-1                      (B)  a resident has recently died because of

 35-2    conduct alleged in the report of abuse or neglect or other

 35-3    complaint; or

 35-4                      (C)  a resident has been hospitalized or been

 35-5    treated in an emergency room because of conduct alleged in the

 35-6    report of abuse or neglect or other complaint; or

 35-7                (2)  before the end of the next working day after the

 35-8    date of receipt of the report of abuse or neglect or other

 35-9    complaint, if the report or complaint alleges the existence of

35-10    circumstances that could result in abuse or neglect and that could

35-11    place a resident's health or safety in imminent danger.

35-12          (d)  The department shall adopt rules governing the conduct

35-13    of investigations, including procedures to ensure that the

35-14    complainant and the resident, the resident's next of kin, and any

35-15    person designated to receive information concerning the resident

35-16    receive periodic information regarding the investigation.

35-17          (e)  In investigating the report of abuse or neglect or other

35-18    complaint, the investigator for the investigating agency shall:

35-19                (1)  make an unannounced visit to the institution to

35-20    determine the nature and cause of the alleged abuse or neglect of

35-21    the resident;

35-22                (2)  interview each available witness identified by any

35-23    source as having personal knowledge relevant to the report of abuse

35-24    or neglect or other complaint;

35-25                (3)  personally inspect any physical circumstance that

 36-1    is relevant and material to the report of abuse or neglect or other

 36-2    complaint and that may be objectively observed; and

 36-3                (4)  write an investigation report that includes:

 36-4                      (A)  the investigator's personal observations;

 36-5                      (B)  a review of relevant documents and records;

 36-6                      (C)  a summary of each witness statement; and

 36-7                      (D)  a statement of the factual basis for the

 36-8    findings for each incident or problem alleged in the report or

 36-9    other allegation.

36-10          (f)  An investigator for an investigating agency shall

36-11    conduct an interview under Subsection (e)(2) in private unless the

36-12    witness expressly requests that the interview not be private.

36-13          (g)  Not later than the 30th day after the date the

36-14    investigation is complete, the investigator shall prepare the

36-15    written report required by Subsection (e).  The department shall

36-16    make the investigation report available to the public on request

36-17    after the date the department's letter of determination is

36-18    complete.  The department shall delete from any copy made available

36-19    to the public the name of:

36-20                (1)  any resident, unless the department receives

36-21    written authorization from a resident or the resident's legal

36-22    representative requesting the resident's name be left in the

36-23    report;

36-24                (2)  the person making the report of abuse or neglect

36-25    or other complaint; and

 37-1                (3)  an individual interviewed in the investigation.

 37-2          (h)  In the investigation, the department or the designated

 37-3    agency shall determine:

 37-4                (1)  the nature, extent, and cause of the abuse or

 37-5    neglect;

 37-6                (2)  the identity of the person responsible for the

 37-7    abuse or neglect;

 37-8                (3)  the names and conditions of the other residents;

 37-9                (4)  an evaluation of the persons responsible for the

37-10    care of the residents;

37-11                (5)  the adequacy of the institution environment; and

37-12                (6)  any other information required by the department.

37-13          (i) [(d)  The investigation may include a visit to the

37-14    resident's institution and an interview with the resident if these

37-15    actions are determined by the department to be appropriate.]

37-16          [(e)]  If the department attempts to carry out an on-site

37-17    investigation and it is shown that admission to the institution, or

37-18    any place where the resident is located, cannot be obtained, a

37-19    probate or county court shall order the person responsible for the

37-20    care of the resident or the person in charge of a place where the

37-21    resident is located to allow entrance for the interview and

37-22    investigation.

37-23          (j) [(f)]  Before the completion of the investigation the

37-24    department shall file a petition for temporary care and protection

37-25    of the resident if the department determines that immediate removal

 38-1    is necessary to protect the resident from further abuse or neglect.

 38-2          (k) [(g)]  The department or the designated agency shall make

 38-3    a complete final written report of the investigation and submit the

 38-4    report and its recommendations to the district attorney and, if a

 38-5    law enforcement agency has not investigated the report of abuse or

 38-6    neglect or other complaint, to the appropriate law enforcement

 38-7    agency.

 38-8          SECTION 1.24.  Section 242.127, Health and Safety Code, is

 38-9    amended to read as follows:

38-10          Sec. 242.127.  CONFIDENTIALITY.  A report, record, or working

38-11    paper used or developed in an investigation made under this

38-12    subchapter and the name of any person making a report under this

38-13    subchapter are [is] confidential and may be disclosed only for

38-14    purposes consistent with the rules adopted by the board or the

38-15    designated agency.

38-16          SECTION 1.25.  Subsection (a), Section 242.133, Health and

38-17    Safety Code, is amended to read as follows:

38-18          (a)  A person has a cause of action against an institution,

38-19    or the owner or employee of the institution, that suspends or

38-20    terminates the employment of the person or otherwise disciplines or

38-21    discriminates or retaliates against the person for making a report

38-22    or complaint under this chapter to [reporting the abuse or neglect

38-23    of a resident to the person's supervisors,] the department[,] or a

38-24    law enforcement agency, for reporting the abuse or neglect or other

38-25    complaint to the person's supervisors, or for initiating or

 39-1    cooperating in any investigation or proceeding of a governmental

 39-2    entity relating to care, services, or conditions at the

 39-3    institution.

 39-4          SECTION 1.26.  Subsection (a), Section 242.1335, Health and

 39-5    Safety Code, is amended to read as follows:

 39-6          (a)  An institution may not retaliate or discriminate against

 39-7    a resident if the resident, the resident's guardian, or any other

 39-8    person makes a complaint or files a grievance concerning the

 39-9    facility or reports [abuse or neglect] in accordance with this

39-10    chapter [subchapter].

39-11          SECTION 1.27.  Subchapter H, Chapter 242, Health and Safety

39-12    Code, as added by Section 5, Chapter 1049, Acts of the 74th

39-13    Legislature, 1995, is redesignated as Subchapter J and the

39-14    subchapter heading is amended to read as follows:

39-15            SUBCHAPTER J [H].  ARBITRATION OF CERTAIN DISPUTES

39-16          SECTION 1.28.  Subsection (c), Section 242.253, Health and

39-17    Safety Code, is amended to read as follows:

39-18          (c)  The party that elects arbitration [department] shall pay

39-19    the cost of the arbitration [if the department elects the

39-20    arbitration.  The cost of the arbitration shall be shared equally

39-21    by the department and the institution if the institution elects the

39-22    arbitration].  The total fees and expenses paid for an arbitrator

39-23    for a day may not exceed $500.

39-24          SECTION 1.29.  Sections 242.267 and 242.268, Health and

39-25    Safety Code, are amended to read as follows:

 40-1          Sec. 242.267.  COURT VACATING ORDER.  (a)  On a finding

 40-2    described by Subsection (b) [application of the institution], a

 40-3    court shall:

 40-4                (1)  on application of an institution, vacate an

 40-5    arbitrator's order with respect to an arbitration conducted at the

 40-6    election of the department; or

 40-7                (2)  on application of the department, vacate an

 40-8    arbitrator's order with respect to an arbitration conducted at the

 40-9    election of an institution.

40-10          (b)  A court shall vacate an arbitrator's order under

40-11    Subsection (a) only on a finding that:

40-12                (1)  the order was procured by corruption, fraud, or

40-13    misrepresentation;

40-14                (2)  the decision of the arbitrator was arbitrary or

40-15    capricious and against the weight of the evidence; or

40-16                (3)  the order exceeded the jurisdiction of the

40-17    arbitrator under Section 242.264(a).

40-18          (c) [(b)]  If the order is vacated, the dispute shall be

40-19    remanded to the department for another arbitration proceeding.

40-20          (d) [(c)]  A suit to vacate an arbitrator's order must be

40-21    filed not later than the 30th day after:

40-22                (1)  the date of the award; or

40-23                (2)  the date the institution or department knew or

40-24    should have known of a basis for suit under this section, but in no

40-25    event later than the first anniversary of the date of the order.

 41-1          (e) [(d)]  Venue for a suit to vacate an arbitrator's order

 41-2    is in the county in which the arbitration was conducted.

 41-3          Sec. 242.268.  NO ARBITRATION IN CASE OF EMERGENCY ORDER OR

 41-4    CLOSING ORDER.  This subchapter does not apply to an order issued

 41-5    under Section 242.062 or 242.072, and neither the department nor

 41-6    the institution may elect to arbitrate a dispute if the subject

 41-7    matter of the dispute is part of the basis for:

 41-8                (1)  revocation, denial, or suspension of an

 41-9    institution's license;

41-10                (2)  issuance of a closing order under Section 242.062;

41-11    or

41-12                (3)  suspension of admissions under Section 242.072.

41-13          SECTION 1.30.  Chapter 242, Health and Safety Code, is

41-14    amended by redesignating Subchapter F as Subchapter N and adding a

41-15    new Subchapter F and Subchapters K, L, and M to read as follows:

41-16           SUBCHAPTER F.  MEDICAL, NURSING, AND DENTAL SERVICES

41-17                  OTHER THAN ADMINISTRATION OF MEDICATION

41-18          Sec. 242.151.  PHYSICIAN SERVICES.  (a)  An institution shall

41-19    have at least one medical director who is licensed as a physician

41-20    in this state.

41-21          (b)  The attending physician is responsible for a resident's

41-22    assessment and comprehensive plan of care and shall review, revise,

41-23    and sign orders relating to any medication or treatment in the plan

41-24    of care.  The responsibilities imposed on the attending physician

41-25    by this subsection may be performed by an advanced practice nurse

 42-1    or a physician assistant pursuant to protocols jointly developed

 42-2    with the attending physician.

 42-3          (c)  Each resident has the right to choose a personal

 42-4    attending physician.

 42-5          Sec. 242.152.  PHYSICIAN SERVICES FOR RESIDENTS YOUNGER THAN

 42-6    18 YEARS OF AGE.  (a)  An institution shall use appropriate

 42-7    pediatric consultative services for a resident younger than 18

 42-8    years of age, in accordance with the resident's assessment and

 42-9    comprehensive plan of care.

42-10          (b)  A pediatrician or other physician with training or

42-11    expertise in the clinical care of children with complex medical

42-12    needs shall participate in all aspects of the resident's medical

42-13    care.

42-14          Sec. 242.153.  DIRECTOR OF NURSING SERVICES.  An institution

42-15    shall have a director of nursing services who shall be a registered

42-16    nurse.  The director of nursing services is responsible for:

42-17                (1)  coordinating each resident's comprehensive plan of

42-18    care; and

42-19                (2)  ensuring that only personnel with an appropriate

42-20    license or permit administer medication.

42-21          Sec. 242.154.  NURSING SERVICES.  (a)  An institution shall

42-22    provide the nursing care required to allow each resident to achieve

42-23    and maintain the highest possible degree of function and

42-24    independence medically possible.

42-25          (b)  The institution shall maintain sufficient staff to

 43-1    provide nursing and related services:

 43-2                (1)  in accordance with each resident's plan of care;

 43-3    and

 43-4                (2)  to obtain and maintain the physical, mental, and

 43-5    psychosocial functions of each resident at the highest practicable

 43-6    level, as determined by the resident's assessment and plan of care.

 43-7          Sec. 242.155.  PEDIATRIC NURSING SERVICES.  An institution

 43-8    shall ensure that:

 43-9                (1)  nursing services for a resident younger than 18

43-10    years of age are provided by a staff member who has been instructed

43-11    and has demonstrated competence in the care of children; and

43-12                (2)  consultative pediatric nursing services are

43-13    available to the staff if the institution has a resident younger

43-14    than 18 years of age.

43-15          Sec. 242.156.  REQUIRED MEDICAL EXAMINATION.  (a)  Except as

43-16    required by federal law, the department shall require that each

43-17    resident be given at least one medical examination each year.

43-18          (b)  The department shall specify the details of the

43-19    examination.

43-20          Sec. 242.157.  DENTAL EXAMINATION.  (a)  The department shall

43-21    require that each resident of an institution or the resident's

43-22    custodian be asked at least once each year if the resident desires

43-23    a dental examination and possible treatment at the resident's own

43-24    expense.

43-25          (b)  Each institution shall be encouraged to use all

 44-1    reasonable efforts to arrange for a dental examination for each

 44-2    resident who desires one.

 44-3          (c)  The institution is not liable for any costs relating to

 44-4    a dental examination under this section.

 44-5                      SUBCHAPTER K.  QUALITY OF CARE

 44-6          Sec. 242.401.  QUALITY OF LIFE.  (a)  An institution shall

 44-7    care for its residents in a manner and in an environment that

 44-8    promotes maintenance or enhancement of each resident's quality of

 44-9    life and dignity.  An institution that admits a resident who is

44-10    younger than 18 years of age must provide care to meet the

44-11    resident's unique medical and developmental needs.

44-12          (b)  A resident of an institution has the right to reside and

44-13    receive services in the institution with reasonable accommodation

44-14    of individual needs, except to the extent the health or safety of

44-15    the resident or other residents would be endangered.

44-16          Sec. 242.402.  QUALITY OF CARE.  An institution shall provide

44-17    to each resident the necessary care or service needed to enable the

44-18    resident to attain and maintain the highest practicable level of

44-19    physical, emotional, and social well-being, in accordance with:

44-20                (1)  each resident's individual assessment and

44-21    comprehensive plan of care; and

44-22                (2)  the rules and standards relating to quality of

44-23    care adopted under this chapter.

44-24          Sec. 242.403.  STANDARDS FOR QUALITY OF LIFE AND QUALITY OF

44-25    CARE.  (a)  The department shall adopt standards to implement

 45-1    Sections 242.401 and 242.402.  Those standards must, at a minimum,

 45-2    address:

 45-3                (1)  admission of residents;

 45-4                (2)  care of residents younger than 18 years of age;

 45-5                (3)  an initial assessment and comprehensive plan of

 45-6    care for residents;

 45-7                (4)  transfer or discharge of residents;

 45-8                (5)  clinical records;

 45-9                (6)  infection control at the institution;

45-10                (7)  rehabilitative services;

45-11                (8)  food services;

45-12                (9)  nutrition services provided by a director of food

45-13    services who is licensed by the Texas State Board of Examiners of

45-14    Dietitians or, if not so licensed, who is in scheduled consultation

45-15    with a person who is so licensed as frequently and for such time as

45-16    the department shall determine necessary to assure each resident a

45-17    diet that meets the daily nutritional and special dietary needs of

45-18    each resident;

45-19                (10)  social services and activities;

45-20                (11)  prevention of pressure sores;

45-21                (12)  bladder and bowel retraining programs for

45-22    residents;

45-23                (13)  prevention of complications from nasogastric or

45-24    gastrotomy tube feedings;

45-25                (14)  relocation of residents within an institution;

 46-1                (15)  postmortem procedures; and

 46-2                (16)  appropriate use of chemical and physical

 46-3    restraints.

 46-4          (b)  The department may adopt standards in addition to those

 46-5    required by Subsection (a) to implement Sections 242.401 and

 46-6    242.402.

 46-7          Sec. 242.404.  POLICIES, PROCEDURES, AND PRACTICES FOR

 46-8    QUALITY OF CARE AND QUALITY OF LIFE.  (a)  Each institution shall

 46-9    comply with the standards adopted under this subchapter and shall

46-10    develop written operating policies to implement those standards.

46-11          (b)  The policies and procedures must be available to each

46-12    physician, staff member, resident, and resident's next of kin or

46-13    guardian and to the public.

46-14             (Sections 242.405-242.500 reserved for expansion

46-15                    SUBCHAPTER L.  RIGHTS OF RESIDENTS

46-16          Sec. 242.501.  RESIDENT'S RIGHTS.  (a)  The department by

46-17    rule shall adopt a statement of the rights of a resident.  The

46-18    statement must be consistent with Chapter 102, Human Resources

46-19    Code, but shall reflect the unique circumstances of a resident at

46-20    an institution.  At a minimum, the statement of the rights of a

46-21    resident must address the resident's constitutional, civil, and

46-22    legal rights and the resident's right:

46-23                (1)  to be free from abuse and exploitation;

46-24                (2)  to safe, decent, and clean conditions;

46-25                (3)  to be treated with courtesy, consideration, and

 47-1    respect;

 47-2                (4)  to not be subjected to discrimination based on

 47-3    age, race, religion, sex, nationality, or disability and to

 47-4    practice the resident's own religious beliefs;

 47-5                (5)  to privacy, including privacy during visits and

 47-6    telephone calls;

 47-7                (6)  to complain about the institution and to organize

 47-8    or participate in any program that presents residents' concerns to

 47-9    the administrator of the institution;

47-10                (7)  to have information about the resident in the

47-11    possession of the institution maintained as confidential;

47-12                (8)  to retain the services of a physician the resident

47-13    chooses, at the resident's own expense or through a health care

47-14    plan, and to have a physician explain to the resident, in language

47-15    that the resident understands, the resident's complete medical

47-16    condition, the recommended treatment, and the expected results of

47-17    the treatment;

47-18                (9)  to participate in developing a plan of care, to

47-19    refuse treatment, and to refuse to participate in experimental

47-20    research;

47-21                (10)  to a written statement or admission agreement

47-22    describing the services provided by the institution and the related

47-23    charges;

47-24                (11)  to manage the resident's own finances or to

47-25    delegate that responsibility to another person;

 48-1                (12)  to access money and property that the resident

 48-2    has deposited with the institution and to an accounting of the

 48-3    resident's money and property that are deposited with the

 48-4    institution and of all financial transactions made with or on

 48-5    behalf of the resident;

 48-6                (13)  to keep and use personal property, secure from

 48-7    theft or loss;

 48-8                (14)  to not be relocated within the institution,

 48-9    except in accordance with standards adopted by the department under

48-10    Section 242.403;

48-11                (15)  to receive visitors;

48-12                (16)  to receive unopened mail and to receive

48-13    assistance in reading or writing correspondence;

48-14                (17)  to participate in activities inside and outside

48-15    the institution;

48-16                (18)  to wear the resident's own clothes;

48-17                (19)  to discharge himself or herself from the

48-18    institution unless the resident is an adjudicated mental

48-19    incompetent;

48-20                (20)  to not be discharged from the institution except

48-21    as provided in the standards adopted by the department under

48-22    Section 242.403; and

48-23                (21)  to be free from any physical or chemical

48-24    restraints imposed for the purposes of discipline or convenience,

48-25    and not required to treat the resident's medical symptoms.

 49-1          (b)  A right of a resident may be restricted only to the

 49-2    extent necessary to protect:

 49-3                (1)  a right of another resident, particularly a right

 49-4    of the other resident relating to privacy and confidentiality; or

 49-5                (2)  the resident or another person from danger or

 49-6    harm.

 49-7          (c)  The department may adopt rights of residents in addition

 49-8    to those required by Subsection (a) and may consider additional

 49-9    rights applicable to residents in other jurisdictions.

49-10          Sec. 242.502.  RIGHTS CUMULATIVE.  The rights established

49-11    under this subchapter are cumulative of the rights established

49-12    under any other law.

49-13          Sec. 242.503.  DUTIES OF INSTITUTION.  (a)  An institution

49-14    shall develop and implement policies to protect resident rights.

49-15          (b)  An institution and the staff of an institution may not

49-16    violate a right adopted under this subchapter.

49-17          Sec. 242.504.  INFORMATION ABOUT RESIDENT'S RIGHTS AND

49-18    VIOLATIONS.  (a)  An institution shall inform each resident and the

49-19    resident's next of kin or guardian of the rights adopted under this

49-20    subchapter and shall explain the rights to the resident and the

49-21    resident's next of kin or guardian.  The institution shall provide

49-22    a written statement of:

49-23                (1)  all of the resident's rights; and

49-24                (2)  any additional rules adopted by the institution

49-25    involving resident rights and responsibilities.

 50-1          (b)  The institution shall provide a copy of the written

 50-2    statement to:

 50-3                (1)  each resident;

 50-4                (2)  the next of kin or guardian of each resident; and

 50-5                (3)  each member of the staff of the institution.

 50-6          (c)  The institution shall maintain a copy of the statement,

 50-7    signed by the resident or the resident's next of kin or guardian,

 50-8    in the institution's records.

 50-9          (d)  The institution shall post the written statement in the

50-10    manner required by Section 242.042.

50-11          (e)  An institution that has been cited by the department for

50-12    a violation of any right adopted under this subchapter shall

50-13    include a notice of the citation in the informational materials

50-14    required by Section 242.042(a)(8).  The notice of citation must

50-15    continue to be included in the informational materials until any

50-16    regulatory action or proceeding with respect to the violation is

50-17    complete and the department has determined that the institution is

50-18    in full compliance with the applicable requirement.

50-19             (Sections 242.505-242.550 reserved for expansion

50-20                   SUBCHAPTER M.   COMPLAINT INSPECTIONS

50-21          Sec. 242.551.  COMPLAINT REQUESTING INSPECTION.  (a)  A

50-22    person may request an inspection of an institution in accordance

50-23    with this chapter by making a complaint notifying the department of

50-24    an alleged violation of law and requesting an inspection.

50-25          (b)  The department shall encourage a person who makes an

 51-1    oral complaint under Subsection (a) to submit a written, signed

 51-2    complaint.

 51-3          Sec. 242.552.  DISCLOSURE OF SUBSTANCE OF COMPLAINT.  The

 51-4    department may not provide information to the institution relating

 51-5    to the substance of a complaint made under this subchapter before

 51-6    an on-site inspection is begun in accordance with this subchapter.

 51-7          Sec. 242.553.  CONFIDENTIALITY.  The name of the person

 51-8    making the complaint is confidential and may not be released to the

 51-9    institution or any other person, unless the person making the

51-10    complaint specifically requests that the person's name be released.

51-11          Sec. 242.554.  PRELIMINARY REVIEW OF COMPLAINT; INSPECTION.

51-12    (a)  On receipt of a complaint under this subchapter, the

51-13    department shall make a preliminary review of the complaint.

51-14          (b)  Within a reasonable time after receipt of the complaint,

51-15    the department shall make an on-site inspection or otherwise

51-16    respond to the complaint unless the department determines that:

51-17                (1)  the person making the complaint made the complaint

51-18    to harass the institution;

51-19                (2)  the complaint is without any reasonable basis; or

51-20                (3)  sufficient information in the possession of the

51-21    department indicates that corrective action has been taken.

51-22          (c)  The department shall promptly notify  the person making

51-23    the complaint of the department's proposed course of action under

51-24    Subsection (b) and the reasons for that action.

51-25             (Sections 242.555-242.600 reserved for expansion

 52-1              SUBCHAPTER N [F].  ADMINISTRATION OF MEDICATION

 52-2                         [MEDICAL AND DENTAL CARE]

 52-3          Sec. 242.601.  MEDICATION ADMINISTRATION.  (a)  An

 52-4    institution must establish medication administration procedures to

 52-5    ensure that:

 52-6                (1)  medications to be administered are checked against

 52-7    the order of a physician, advanced practice nurse, or physician

 52-8    assistant pursuant to protocols jointly developed with a physician;

 52-9                (2)  the resident is identified before the

52-10    administration of a medication;

52-11                (3)  each resident's clinical record includes an

52-12    individual medication record in which the dose of medication

52-13    administered is properly recorded by the person who administered

52-14    the medication;

52-15                (4)  medications and biologicals are prepared and

52-16    administered to a resident by the same individual, except under

52-17    unit-of-use package distribution systems; and

52-18                (5)  a medication prescribed for one resident is not

52-19    administered to any other person.

52-20          (b)  The medication administration procedures must comply

52-21    with this subchapter and the rules adopted by the board under

52-22    Section 242.608.

52-23          Sec. 242.602.  PHARMACIST SERVICES.  (a)  An institution

52-24    shall:

52-25                (1)  employ a licensed pharmacist responsible for

 53-1    operating the institution's pharmacy; or

 53-2                (2)  contract, in writing, with a licensed pharmacist

 53-3    to advise the institution on ordering, storage, administration, and

 53-4    disposal of medications and biologicals and related recordkeeping.

 53-5          (b)  The institution shall allow residents to choose their

 53-6    pharmacy provider from any pharmacy that is qualified to perform

 53-7    the services.

 53-8          Sec. 242.603.  STORAGE AND DISPOSAL OF MEDICATIONS.  (a)  An

 53-9    institution shall store medications under appropriate conditions of

53-10    sanitation, temperature, light, moisture, ventilation, segregation,

53-11    and security.  Poisons, medications used externally, and

53-12    medications taken internally shall be stored on separate shelves or

53-13    in separate cabinets.  Medication stored in a refrigerator

53-14    containing other items shall be kept in a separate compartment with

53-15    appropriate security.  The institution shall store a medication  in

53-16    a locked area that must remain locked unless an individual

53-17    authorized to distribute the medication is present.

53-18          (b)  The institution shall properly dispose of:

53-19                (1)  any medication that is discontinued or outdated,

53-20    except as provided by Subsection (c); and

53-21                (2)  any medication in a container with a worn or

53-22    illegible label or missing a label.

53-23          (c)  A discontinued medication that has not been destroyed

53-24    must be reinstated if reordered.

53-25          (d)  An institution shall release the medications of a

 54-1    resident who is transferred directly to another institution or who

 54-2    is discharged to home to the new institution or to the resident or

 54-3    resident's next of kin or guardian, as appropriate.  The

 54-4    institution may release a medication to a resident only on the

 54-5    written or verbal authorization of the attending physician.

 54-6          Sec. 242.604.  REPORTS OF MEDICATION ERRORS AND ADVERSE

 54-7    REACTIONS.  An institution's nursing staff must report medication

 54-8    errors and adverse reactions to the resident's physician in a

 54-9    timely manner, as warranted by an assessment of the resident's

54-10    condition, and record the errors and reactions in the resident's

54-11    clinical record.

54-12          Sec. 242.605.  MEDICATION REFERENCE SOURCES.  An institution

54-13    shall maintain updated medication reference texts or sources.  If

54-14    the institution has a resident younger than 18 years of age, these

54-15    texts or sources must include information on pediatric medications,

54-16    dosages, sites, routes, techniques of administration of

54-17    medications, desired effects, and possible side effects.

54-18          Sec. 242.606 [242.151].  PERMITS TO ADMINISTER MEDICATION.  A

54-19    person may not administer medication to a resident unless the

54-20    person:

54-21                (1)  holds a license under state law that authorizes

54-22    the person to administer medication; or

54-23                (2)  holds a permit issued under Section 242.610

54-24    [242.154] and acts under the authority of a person who holds a

54-25    license under state law that authorizes the person to administer

 55-1    medication.

 55-2          Sec. 242.607 [242.1511].  EXEMPTIONS FOR NURSING STUDENTS AND

 55-3    MEDICATION AIDE TRAINEES.  (a)  Sections 242.606 and 242.614

 55-4    [242.151 and 242.158] do not apply to:

 55-5                (1)  a graduate nurse holding a temporary permit issued

 55-6    by the Board of Nurse Examiners;

 55-7                (2)  a student enrolled in an accredited school of

 55-8    nursing or program for the education of registered nurses who is

 55-9    administering medications as part of the student's clinical

55-10    experience;

55-11                (3)  a graduate vocational nurse holding a temporary

55-12    permit issued by the Board of Vocational Nurse Examiners;

55-13                (4)  a student enrolled in an accredited school of

55-14    vocational nursing or program for the education of vocational

55-15    nurses who is administering medications as part of the student's

55-16    clinical experience; or

55-17                (5)  a trainee in a medication aide training program

55-18    approved by the department under this subchapter who is

55-19    administering medications as part of the trainee's clinical

55-20    experience.

55-21          (b)  The administration of medications by persons exempted

55-22    under Subdivisions (1) through (4) of Subsection (a) is governed by

55-23    the terms of the memorandum of understanding executed by the

55-24    department and the Board of Nurse Examiners or the department and

55-25    the Board of Vocational Nurse Examiners, as appropriate.

 56-1          Sec. 242.608 [242.152].  RULES FOR ADMINISTRATION OF

 56-2    MEDICATION.  The board by rule shall establish:

 56-3                (1)  minimum requirements for the issuance, denial,

 56-4    renewal, suspension, emergency suspension, and revocation of a

 56-5    permit to administer medication to a resident;

 56-6                (2)  curricula to train persons to administer

 56-7    medication to a resident;

 56-8                (3)  minimum standards for the approval of programs to

 56-9    train persons to administer medication to a resident and for

56-10    rescinding approval; and

56-11                (4)  the acts and practices that are allowed or

56-12    prohibited to a permit holder.

56-13          Sec. 242.609 [242.153].  TRAINING PROGRAMS TO ADMINISTER

56-14    MEDICATION.  (a)  An application for the approval of a training

56-15    program must be made to the department on a form and under rules

56-16    prescribed by the board.

56-17          (b)  The department shall approve a training program that

56-18    meets the minimum standards adopted under Section 242.608

56-19    [242.152].  The department may review the approval annually.

56-20          Sec. 242.610 [242.154].  ISSUANCE AND RENEWAL OF PERMIT TO

56-21    ADMINISTER MEDICATION.  (a)  To be issued or to have renewed a

56-22    permit to administer medication, a person shall apply to the

56-23    department on a form prescribed and under rules adopted by the

56-24    board.

56-25          (b)  The department shall prepare and conduct, at the site of

 57-1    the training program, an examination for the issuance of a permit.

 57-2          (c)  The department shall require a permit holder to

 57-3    satisfactorily complete a continuing education course approved by

 57-4    the department for renewal of the permit.

 57-5          (d)  The department shall issue a permit or renew a permit to

 57-6    an applicant who:

 57-7                (1)  meets the minimum requirements adopted under

 57-8    Section 242.608 [242.152];

 57-9                (2)  successfully completes the examination or the

57-10    continuing education requirements; and

57-11                (3)  pays a nonrefundable application fee determined by

57-12    the board.

57-13          (e)  A permit is valid for one year and is not transferable.

57-14          (f)  The department may issue a permit to an employee of a

57-15    state or federal agency listed in Section 242.003(a)(6)(B).

57-16          Sec. 242.611 [242.155].  FEES FOR ISSUANCE AND RENEWAL OF

57-17    PERMIT TO ADMINISTER MEDICATION. [(a)]  The board shall set the

57-18    fees in amounts reasonable and necessary to recover the amount

57-19    projected by the department as required to administer its

57-20    functions.  The fees may not exceed:

57-21                (1)  $25 for a combined permit application and

57-22    examination fee; and

57-23                (2)  $15 for a renewal permit application fee.

57-24          [(b)  Fees received under this section may only be

57-25    appropriated to the department to defray costs incurred under this

 58-1    section.]

 58-2          Sec. 242.612 [242.156].  VIOLATION OF PERMITS TO ADMINISTER

 58-3    MEDICATION.  (a)  For the violation of this subchapter or a rule

 58-4    adopted under this subchapter, the department may:

 58-5                (1)  suspend, revoke, or refuse to renew a permit;

 58-6                (2)  suspend a permit in an emergency; or

 58-7                (3)  rescind training program approval.

 58-8          (b)  Except as provided by Section 242.613 [242.157], the

 58-9    procedure by which the department takes a disciplinary action and

58-10    the procedure by which a disciplinary action is appealed are

58-11    governed by the department's rules for a formal hearing and by

58-12    Chapter 2001, Government Code.

58-13          Sec. 242.613 [242.157].  EMERGENCY SUSPENSION OF PERMITS TO

58-14    ADMINISTER MEDICATION.  (a)  The department shall issue an order to

58-15    suspend a permit issued under this subchapter if the department has

58-16    reasonable cause to believe that the conduct of the permit holder

58-17    creates an imminent danger to the public health or safety.

58-18          (b)  An emergency suspension is effective immediately without

58-19    a hearing on notice to the permit holder.

58-20          (c)  If requested in writing by a permit holder whose permit

58-21    is suspended, the department shall conduct a hearing to continue,

58-22    modify, or rescind the emergency suspension.

58-23          (d)  The hearing must be held not earlier than the 10th day

58-24    or later than the 30th day after the date on which the hearing

58-25    request is received.

 59-1          (e)  The hearing and an appeal from a disciplinary action

 59-2    related to the hearing are governed by the department's rules for a

 59-3    formal hearing and Chapter 2001, Government Code.

 59-4          Sec. 242.614 [242.158].  ADMINISTRATION OF MEDICATION;

 59-5    CRIMINAL PENALTY.  (a)  A person commits an offense if the person

 59-6    knowingly administers medication to a resident and the person:

 59-7                (1)  does not hold a license under state law that

 59-8    authorizes the person to administer medication; or

 59-9                (2)  does not hold a permit issued by the department

59-10    under this subchapter.

59-11          (b)  An offense under this section is a Class B misdemeanor.

59-12          [Sec. 242.159.  REQUIRED MEDICAL EXAMINATION.  (a)  The

59-13    department shall require each resident to be given at least one

59-14    medical examination each year.]

59-15          [(b)  The department shall specify the details of the

59-16    examination.]

59-17          [Sec. 242.160.  DENTAL EXAMINATION.  (a)  The department

59-18    shall require that each resident of a nursing home or custodial

59-19    care home or the resident's custodian be asked at least once each

59-20    year if the resident desires a dental examination and possible

59-21    treatment at the resident's own expense.]

59-22          [(b)  Each nursing home or custodial care home shall be

59-23    encouraged to use all reasonable efforts to arrange for a dental

59-24    examination for each resident who desires one.]

59-25          [(c)  The nursing home or custodial care home is not liable

 60-1    for any costs relating to a dental examination under this section.]

 60-2          Sec. 242.615 [242.161].  EMERGENCY MEDICATION KIT.  (a)  An

 60-3    institution licensed under this chapter is entitled to maintain a

 60-4    supply of controlled substances in an emergency medication kit for

 60-5    a resident's emergency medication needs.

 60-6          (b)  The controlled substances shall be labeled in accordance

 60-7    with all applicable state and federal food and drug laws, including

 60-8    Chapter 481 (Texas Controlled Substances Act).

 60-9          (c)  The board shall adopt rules governing the amount, type,

60-10    and procedure for use of the controlled substances in the emergency

60-11    medication kit.  The storage of the controlled substances in the

60-12    kit is under the supervision of the consultant pharmacist.

60-13          (d)  The administration of the controlled substances in the

60-14    emergency medication kit shall comply with all applicable laws.

60-15          SECTION 1.31.  Chapter 242, Health and Safety Code, is

60-16    amended by adding Subchapter O to read as follows:

60-17                   SUBCHAPTER O.  LEGISLATIVE OVERSIGHT

60-18          Sec. 242.651.  DEFINITION.  In this subchapter, "committee"

60-19    means the long-term care legislative oversight committee.

60-20          Sec. 242.652.  COMPOSITION OF COMMITTEE; PRESIDING OFFICER.

60-21    (a)  The committee is composed of:

60-22                (1)  two members of the senate and one public member

60-23    appointed by the lieutenant governor; and

60-24                (2)  two members of the house of representatives and

60-25    one public member appointed by the speaker of the house of

 61-1    representatives.

 61-2          (b)  A member of the committee serves at the pleasure of the

 61-3    appointing official.

 61-4          (c)  The lieutenant governor and the speaker of the house of

 61-5    representatives shall appoint the presiding officer of the

 61-6    committee on an alternating basis.  The presiding officer shall

 61-7    serve a two-year term expiring February 1 of each odd-numbered

 61-8    year.

 61-9          Sec. 242.653.  COMMITTEE POWERS AND DUTIES.  (a)  The

61-10    committee shall:

61-11                (1)  meet at the call of the presiding officer;

61-12                (2)  receive information about rules proposed or

61-13    adopted by the department; and

61-14                (3)  review specific recommendations for legislation

61-15    proposed by the department or the attorney general relating to

61-16    nursing facility rules and regulations and other long-term care

61-17    issues.

61-18          (b)  The committee may issue process, in accordance with

61-19    Section 301.024, Government Code, to compel the attendance of

61-20    witnesses and the production of books, records, documents, and

61-21    instruments required by the committee.

61-22          (c)  The committee shall monitor the effectiveness and

61-23    efficiency of the nursing facility regulatory system of this state.

61-24          (d)  The committee may request reports and other information

61-25    from the department and the attorney general relating to the

 62-1    nursing facility regulatory system of this state and other

 62-2    long-term care issues.

 62-3          (e)  The committee shall use the existing staff resources of

 62-4    the senate and the house of representatives to assist the committee

 62-5    in performing its duties under this section.

 62-6          Sec. 242.654.  REPORT.  (a)  The committee shall report to

 62-7    the governor, lieutenant governor, and speaker of the house of

 62-8    representatives not later than November 15 of each even-numbered

 62-9    year.

62-10          (b)  The report must include:

62-11                (1)  identification of significant problems in the

62-12    nursing facility regulatory system, with recommendations for

62-13    action;

62-14                (2)  the effectiveness and efficiency of the nursing

62-15    facility regulatory system of this state, with recommendations for

62-16    any necessary research;

62-17                (3)  an analysis of the continuum of care of long-term

62-18    services available to citizens of this state; and

62-19                (4)  recommendations for legislative action.

62-20          Sec. 242.655.  RIGHTS OF EMPLOYEES; RETALIATION PROHIBITED.

62-21    (a)  An employee of the department may cooperate with the committee

62-22    in the performance of its functions.

62-23          (b)  The department may not suspend or terminate the

62-24    employment of, or take another adverse personnel action against, an

62-25    employee of the department solely because the employee cooperates

 63-1    with the committee in good faith.

 63-2          (c)  In this section, "personnel action" has the meaning

 63-3    assigned by Section 554.001, Government Code.

 63-4          SECTION 1.32.  Section 222.0255, Health and Safety Code, is

 63-5    amended by adding Subsection (e) to read as follows:

 63-6          (e)  Chapter 242 establishes the minimum licensing standards

 63-7    for an institution.  The licensing standards adopted by the

 63-8    department under this chapter shall be adopted subject to Section

 63-9    242.037(b) and must comply with Section 242.037(c) and the other

63-10    provisions of Chapter 242.

63-11          SECTION 1.33.  Section 250.006, Health and Safety Code, is

63-12    amended to read as follows:

63-13          Sec. 250.006.  CONVICTIONS BARRING EMPLOYMENT.  A person

63-14    convicted of an offense listed in this section may not be employed

63-15    in a position the duties of which involve direct contact with a

63-16    consumer in a facility:

63-17                (1)  an offense under Chapter 19, Penal Code (criminal

63-18    homicide);

63-19                (2)  an offense under Chapter 20, Penal Code

63-20    (kidnapping and false imprisonment);

63-21                (3)  an offense under Section 21.11, Penal Code

63-22    (indecency with a child);

63-23                (4)  an offense under Section 22.011, Penal Code

63-24    (sexual assault);

63-25                (5)  an offense under Section 22.02, Penal Code

 64-1    (aggravated assault);

 64-2                (6)  an offense under Section 22.04, Penal Code (injury

 64-3    to a child, elderly individual, or disabled individual);

 64-4                (7)  an offense under Section 22.041, Penal Code

 64-5    (abandoning or endangering child);

 64-6                (8)  an offense under Section 22.08, Penal Code (aiding

 64-7    suicide);

 64-8                (9)  an offense under Section 25.031, Penal Code

 64-9    (agreement to abduct from custody);

64-10                (10) [(5)]  an offense under Section 25.08, Penal Code

64-11    (sale or purchase of a child);

64-12                (11) [(6)]  an offense under Section 28.02, Penal Code

64-13    (arson);

64-14                (12) [(7)]  an offense under Section 29.02, Penal Code

64-15    (robbery); or

64-16                (13) [(8)]  an offense under Section 29.03, Penal Code

64-17    (aggravated robbery).

64-18          SECTION 1.34.  Section 242.012, Health and Safety Code, is

64-19    repealed.

64-20          SECTION 1.35.  The Texas Board of Human Services shall adopt

64-21    rules as necessary to implement the change in law made by this

64-22    article not later than January 1, 1998.

64-23          SECTION 1.36.  (a)  The change in law made by this article to

64-24    Section 242.097, Health and Safety Code, applies only to a license

64-25    fee originally due on or after the effective date of this Act.  A

 65-1    license fee that was originally due before the effective date of

 65-2    this Act is governed by the law as it existed immediately before

 65-3    the effective date of this Act, and that law is continued in effect

 65-4    for that purpose.

 65-5          (b)  The change in law made by this article to Section

 65-6    250.006, Health and Safety Code, applies only to a person hired on

 65-7    or after September 1, 1997, in a position the duties of which

 65-8    involve direct contact with a consumer in a facility.  That change

 65-9    does not apply to a person hired before September 1, 1997, in a

65-10    position the duties of which involve direct contact with a consumer

65-11    in a facility as long as the person remains continuously employed

65-12    in that position on and after September 1, 1997.

65-13          SECTION 1.37.  Except as provided by Section 1.36 of this

65-14    article, this article applies only to conduct occurring on or after

65-15    January 1, 1998.  Conduct occurring before January 1, 1998, is

65-16    governed by the law as it existed immediately before September 1,

65-17    1997, and that law is continued in effect for that purpose.

65-18            ARTICLE 2.  GOVERNMENT FUNDING OF NURSING SERVICES

65-19          SECTION 2.01.  Section 32.021, Human Resources Code, is

65-20    amended by amending Subsections (d), (h), (i), (j), and (k) and

65-21    adding Subsections (l), (m), (n), and (o) to read as follows:

65-22          (d)  The department shall [may] include in its contracts for

65-23    the delivery of medical assistance by nursing facilities provisions

65-24    for monetary penalties to be assessed for [contract] violations as

65-25    required by 42 U.S.C. Section 1396r, including without limitation

 66-1    the Omnibus Budget Reconciliation Act (OBRA), P.L. 100-203, Nursing

 66-2    Home Reform Amendments of 1987, provided that the department

 66-3    shall:

 66-4                (1)  provide for an informal dispute resolution process

 66-5    in the department's central office; the informal dispute resolution

 66-6    process shall:

 66-7                      (A)  require the institution to request informal

 66-8    dispute resolution no later than the 10th calendar day after

 66-9    notification by the department of a violation of a standard or

66-10    standards;

66-11                      (B)  require the department to complete the

66-12    process no later than the 30th calendar day after receipt of a

66-13    request from the institution for informal dispute resolution; and

66-14                      (C)  require any individual representing an

66-15    institution in an informal dispute resolution process to register

66-16    with the department and disclose the following:

66-17                            (i)  the individual's five-year employment

66-18    history during the preceding five years, including employment in

66-19    regulatory agencies of this state and other states;

66-20                            (ii)  ownership, including the identity of

66-21    the controlling person or persons, of the institution the person is

66-22    representing before the department; and

66-23                            (iii)  the identity of other entities the

66-24    person represents or has represented before the agency during the

66-25    previous 24 months [establish a penalties and sanctions advisory

 67-1    committee of consumer advocates and long-term care providers to

 67-2    help develop and monitor an appropriate system for assessing

 67-3    penalties]; and

 67-4                (2)  develop rules [in accordance with Subsection (i)]

 67-5    to adjudicate claims in contested cases.

 67-6          (h)  Medicaid nursing facilities shall also comply with state

 67-7    licensure rules, which may be more stringent than the requirements

 67-8    for certification [Except to the extent necessary to implement

 67-9    rights granted to an elderly individual under Chapter 102, the

67-10    rules adopted by the department for certification of nursing

67-11    facilities as being in compliance with the requirements for

67-12    participation in the state Medicaid program may not be different

67-13    from the standards imposed by federal law].  The [This subsection

67-14    does not prevent the] department shall use appropriate [from using

67-15    any] civil, administrative, or criminal remedies [remedy]

67-16    authorized by state or federal law with respect to a facility that

67-17    is in violation of a certification or licensing requirement.

67-18          (i)  Except as provided by Subsections (j) and (k), a

67-19    department survey, complaint investigation, incident investigation,

67-20    or survey report [The rules adopted under Subsection (d)(2) must

67-21    provide for:]

67-22                [(1)  an informal dispute resolution process that

67-23    provides for adjudication by an appropriate disinterested person in

67-24    a regional office of the department and an informal appeal to the

67-25    department's central office;]

 68-1                [(2)  an administrative appeals process under Chapter

 68-2    2001, Government Code; and]

 68-3                [(3)  the arbitration process described by Subsection

 68-4    (k).]

 68-5          [(j)  A finding by the department] that documents that an

 68-6    institution has violated a standard for participation in the state

 68-7    Medicaid program, or the assessment of a monetary penalty by the

 68-8    department or the payment of a monetary penalty by the institution

 68-9    [under this section], is not admissible as evidence in a civil

68-10    action to prove that the institution has committed a violation.

68-11          (j)  Subsection (i) [This subsection] does not:

68-12                (1)  apply in an enforcement action or related

68-13    proceeding in which the state or an agency or political subdivision

68-14    of the state is a party;

68-15                (2)  prohibit or limit the testimony of a department

68-16    surveyor or investigator in a civil action; or

68-17                (3)  bar the admission into evidence in a civil action

68-18    of a written finding, survey report, complaint investigation,

68-19    incident investigation, or inspection report of the department that

68-20    is offered:

68-21                      (A)  to establish warning or notice to an

68-22    institution of a relevant finding; or

68-23                      (B)  under any rule or evidentiary predicate of

68-24    the Texas Rules of Civil Evidence.

68-25          (k)  A department surveyor or investigator may testify in a

 69-1    civil action as to observations, factual findings, conclusions, or

 69-2    violations of requirements for licensure or for certification  for

 69-3    participation in the state Medicaid program that were made in the

 69-4    discharge of official duties for the department, in accordance with

 69-5    the Texas Rules of Civil Evidence.

 69-6          (l)  The department may not include as a reimbursable item to

 69-7    a nursing facility an administrative or civil penalty assessed

 69-8    against the facility under this chapter or under Chapter 242,

 69-9    Health and Safety Code.

69-10          (m)  Notwithstanding any provision of law to the contrary,

69-11    the department shall terminate a nursing facility's provider

69-12    agreement if the department has imposed required Category 2 or

69-13    Category 3 remedies on the facility three times within a 24-month

69-14    period unless the department makes an affirmative finding that good

69-15    cause exists to waive this requirement to facilitate a change in

69-16    ownership to protect residents of a facility.  In this subsection,

69-17    "Category 2 remedies" and  "Category 3 remedies" have the meanings

69-18    assigned by 42 C.F.R. Section 488.408.

69-19          (n)  An assessment of monetary penalties under this section

69-20    is subject to arbitration under Subchapter J [H], Chapter 242,

69-21    Health and Safety Code.

69-22          (o)  In any circumstance in which a nursing facility would

69-23    otherwise be required to admit a resident transferred from another

69-24    facility, because of an emergency or otherwise, the nursing

69-25    facility may not admit a resident whose needs cannot be met through

 70-1    service from the facility's staff or in cooperation with community

 70-2    resources or other providers under contract.  If a nursing facility

 70-3    refuses to admit a resident under this subsection, the nursing

 70-4    facility shall provide a written statement of the reasons for the

 70-5    refusal to the department within a period specified by department

 70-6    rule.  A nursing facility that fails to provide the written

 70-7    statement, or that includes false or misleading information in the

 70-8    statement, is subject to monetary penalties assessed in accordance

 70-9    with this chapter.

70-10          SECTION 2.02.  Subchapter B, Chapter 32, Human Resources

70-11    Code, is amended by adding Section 32.0213 to read as follows:

70-12          Sec. 32.0213.  NURSING FACILITY BED CERTIFICATION AND

70-13    DECERTIFICATION.  (a)  The department by rule shall establish

70-14    procedures for:

70-15                (1)  controlling the number of Medicaid beds in nursing

70-16    facilities;

70-17                (2)  decertification of unused Medicaid beds in nursing

70-18    facilities; and

70-19                (3)  reallocation of nursing home beds decertified

70-20    under Subdivision (2) to other nursing facilities.

70-21          (b)  The procedures established under this section must take

70-22    into account the occupancy rate of the nursing facility.

70-23          SECTION 2.03.  Subsection (c), Section 32.034, Human

70-24    Resources Code, is amended to read as follows:

70-25          (c)  The section does not apply if federal matching funds are

 71-1    not available to pay the facility whose [a] contract is being

 71-2    cancelled.  If [because] federal matching funds cannot be used, no

 71-3    state funds may be used to pay the facility [for contract payments

 71-4    are no longer available or if the contract expires according to its

 71-5    terms].

 71-6          SECTION 2.04.  If before the Texas Department of Human

 71-7    Services implements Subsection (o), Section 32.021, Human Resources

 71-8    Code, as added by this Act, the  Health and Human  Services

 71-9    Commission  determines that a waiver  or  authorization from  a

71-10    federal  agency is necessary for implementation, the commission

71-11    shall request the waiver or authorization and the Texas Department

71-12    of Human Services shall delay implementing this Act  until the

71-13    waiver or authorization is granted.

71-14                   ARTICLE 3.  EFFECTIVE DATE; EMERGENCY

71-15          SECTION 3.01.  This Act takes effect September 1, 1997.

71-16          SECTION 3.02.  The importance of this legislation and the

71-17    crowded condition of the calendars in both houses create an

71-18    emergency and an imperative public necessity that the

71-19    constitutional rule requiring bills to be read on three several

71-20    days in each house be suspended, and this rule is hereby suspended.

                                                                S.B. No. 190

         ________________________________   ________________________________

             President of the Senate              Speaker of the House

               I hereby certify that S.B. No. 190 passed the Senate on

         April 3, 1997, by a viva-voce vote; April 28, 1997, Senate refused

         to concur in House amendments and requested appointment of

         Conference Committee; April 30, 1997, House granted request of the

         Senate; May 28, 1997, Senate adopted Conference Committee Report by

         a viva-voce vote.

                                             _______________________________

                                                 Secretary of the Senate

               I hereby certify that S.B. No. 190 passed the House, with

         amendments, on April 22, 1997, by a non-record vote;

         April 30, 1997, House granted request of the Senate for appointment

         of Conference Committee; May 28, 1997, House adopted Conference

         Committee Report by a non-record vote.

                                             _______________________________

                                                 Chief Clerk of the House

         Approved:

         ________________________________

                      Date

         ________________________________

                    Governor