By:  Nelson                                            S.B. No. 940

                                A BILL TO BE ENTITLED

                                       AN ACT

 1-1     relating to local mental health and mental retardation authorities

 1-2     and community centers.

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

 1-4           SECTION 1.  Subsections (g), (h), and (i), Section 534.035,

 1-5     Health and Safety Code, are amended to read as follows:

 1-6           (g)  If, by the date prescribed by the commissioner, the

 1-7     community center fails to respond to a deficiency identified in a

 1-8     review or audit to the satisfaction of the commissioner, the

 1-9     department may withhold [discontinue the transfer of] related

1-10     department funds to the community center until the dispute is

1-11     resolved in accordance with Section 534.059.  [The community center

1-12     is entitled to notice and an opportunity for a hearing before the

1-13     transfer of department funds is discontinued.  The board by rule

1-14     shall prescribe the hearings procedure.]

1-15           [(h)  The department may withhold funds during the pendency

1-16     of an appeal to a court if the department hearing upholds the

1-17     discontinuation of the funds.  The department shall transfer the

1-18     withheld funds to the community center if the final determination

1-19     is favorable to the community center.]

1-20           [(i)]  The department shall incorporate the community

1-21     center's responses into the official management audit report in

1-22     accordance with the Government Auditing Standards published by the

1-23     United States General Accounting Office.  The department shall

 2-1     publish the final report within the period prescribed by department

 2-2     rules, but not later than the 60th day after the date on which the

 2-3     audit staff conducts the official exit conference with the

 2-4     community center.  If the department disagrees with the community

 2-5     center's responses as provided by Subsection (f), the department

 2-6     shall publish the official report within the period prescribed by

 2-7     department rules.

 2-8           SECTION 2.  Subchapter A, Chapter 534, Health and Safety

 2-9     Code, is amended by adding Section 534.036 to read as follows:

2-10           Sec. 534.036.  MANAGEMENT IN CERTAIN CIRCUMSTANCES.  (a)  The

2-11     commissioner may appoint a management team or an individual to

2-12     manage and operate a community center if the commissioner finds:

2-13                 (1)  the community center has wilfully or negligently

2-14     failed to discharge its duties under a contract with the

2-15     department;

2-16                 (2)  an officer or employee of the center has misused

2-17     state or federal money;

2-18                 (3)  an officer or employee of the center has engaged

2-19     in a fraudulent act, transaction, practice, or course of business;

2-20                 (4)  the life, health, welfare, or safety of a person

2-21     served by the community center is or may be endangered by an act or

2-22     omission of the community center;

2-23                 (5)  the community center has failed to keep fiscal

2-24     records in accordance with Chapter 783, Government Code;

2-25                 (6)  the community center has failed to maintain proper

 3-1     control over its assets in accordance with Chapter 783, Government

 3-2     Code;

 3-3                 (7)  the community center has failed to respond as

 3-4     prescribed by the commissioner to a deficiency in a review or

 3-5     audit; or

 3-6                 (8)  the community center has failed to comply with

 3-7     applicable sections of this subchapter and department rules.

 3-8           (b)  The department, in writing, shall notify the community

 3-9     center and local agency or organizational combination of local

3-10     agencies responsible for making appointments to the local board of

3-11     trustees of the appointment of the management team or individual

3-12     and the circumstances on which the appointment is based.

3-13           (c)  The management team or individual may perform any or all

3-14     of the following functions as defined by the commissioner:

3-15                 (1)  evaluate, redesign, modify, administer, supervise,

3-16     or monitor the management, procedures, or operations of the

3-17     community center;

3-18                 (2)  hire, supervise, discipline, or reassign employees

3-19     of the community center or terminate the employment of the

3-20     employees;

3-21                 (3)  reallocate resources and manage assets of the

3-22     community center;

3-23                 (4)  provide technical assistance to officers and

3-24     employees of the community center and require or provide staff

3-25     development;

 4-1                 (5)  approve or disapprove each financial transaction

 4-2     or expenditure or contract for goods and services that the

 4-3     community center makes;

 4-4                 (6)  redesign, modify, or terminate the community

 4-5     center's programs or services;

 4-6                 (7)  direct the local board of trustees, executive

 4-7     director, chief financial officer, or other fiscal or programmatic

 4-8     officer of the community center to take an action;

 4-9                 (8)  exercise all powers and duties of the officers and

4-10     employees of the community center; and

4-11                 (9)  make recommendations to the local agency or

4-12     organizational combination of local agencies responsible for

4-13     appointments to the board of trustees regarding the removal of some

4-14     or all of the community center's trustees.

4-15           (d)  The management team or individual shall report the

4-16     activities of the team or individual to the commissioner and the

4-17     local board of trustees monthly.

4-18           (e)  The commissioner shall review and evaluate the

4-19     performance of the community center each month to determine the

4-20     feasibility of restoring the management and operation of the

4-21     community center to local control.

4-22           (f)  The powers and duties of the board of trustees shall be

4-23     exercised under the supervision of the management team or

4-24     individual.

4-25           (g)  The commissioner may direct that all costs of the

 5-1     management team or individual shall be paid by the community

 5-2     center.

 5-3           (h)  The appointment of a management team or individual under

 5-4     this section continues until:

 5-5                 (1)  the commissioner determines that circumstances

 5-6     that would support a finding under Subsection (a) no longer exist;

 5-7     or

 5-8                 (2)  the department cancels the contract with the

 5-9     community center.

5-10           (i)  When the commissioner finds that circumstances that

5-11     would support a finding under Subsection (a) no longer exist, the

5-12     commissioner shall terminate the powers and appointment of the team

5-13     or individual, and after the termination, the community center's

5-14     authorized officers and employees shall manage and operate the

5-15     community center.

5-16           (j)  The community center may appeal an appointment made

5-17     under Subsection (a) as prescribed by board rule.  The filing of a

5-18     notice of appeal does not stay the appointment of a management team

5-19     or individual if the appointment is made on a finding made under

5-20     Subsection (a)(4).

5-21           (k)  A member of the management team or individual appointed

5-22     under this section is immune from suit or liability arising from

5-23     the good faith performance of any functions described in this

5-24     section.

5-25           (l)  This section does not apply to local mental health and

 6-1     mental retardation authorities and community centers in a county

 6-2     with a population of 2.8 million or more.

 6-3           SECTION 3.  Section 534.059, Health and Safety Code, is

 6-4     amended to read as follows:

 6-5           Sec. 534.059.  PERFORMANCE STANDARDS.  (a)  The department

 6-6     shall specify performance standards, including measures of results,

 6-7     to use in evaluating the compliance of a local mental health or

 6-8     mental retardation authority with its obligation or contract to

 6-9     ensure the provision of [provide] specific services to priority

6-10     populations.

6-11           (b)  If, by the date prescribed by the commissioner, a mental

6-12     health or mental retardation authority fails to comply with its

6-13     obligation or contract to ensure provision of services to the

6-14     satisfaction of the commissioner, the department may withhold

6-15     related department money to the authority until the dispute is

6-16     resolved.  The department shall notify the local mental health and

6-17     mental retardation authority in writing of the department's

6-18     decision to withhold money under this section.

6-19           (c)  The local mental health or mental retardation authority

6-20     may appeal the department's decision to withhold money under this

6-21     section.  The board by rule shall prescribe the appeal procedure.

6-22     The filing of a notice of appeal under this subsection stays the

6-23     imposition of the department's decision to withhold money.

6-24           (d)  Notwithstanding Subsection (c), the department may limit

6-25     general revenue allocations to the local mental health and mental

 7-1     retardation authority to monthly distributions during the appeal.

 7-2           (e)  The department may withhold money during an appeal to a

 7-3     court if the decision to withhold money is finally affirmed in the

 7-4     appeal filed under Subsection (c).

 7-5           SECTION 4.  Subsection (b), Section 534.060, Health and

 7-6     Safety Code, is amended to read as follows:

 7-7           (b)  The department shall review the program quality and

 7-8     program performance results of each local mental health or mental

 7-9     retardation authority in accordance with a risk assessment and

7-10     evaluation system appropriate to contract requirements [at least

7-11     once each fiscal year].  The department may determine the scope of

7-12     each review.

7-13           SECTION 5.  Subsections (a), (b), and (c), Section 534.061,

7-14     Health and Safety Code, are amended to read as follows:

7-15           (a)  The department shall develop mechanisms for periodically

7-16     monitoring the services provided by a [private] provider who

7-17     contracts with a mental health or mental retardation authority to

7-18     provide services for persons with mental retardation or mental

7-19     illness at the community level, including residential services, if

7-20     state funds or funds for which the state has oversight

7-21     responsibility are used to pay for at least part of the services.

7-22           (b)  The local mental health or mental retardation authority

7-23     [department] shall monitor the services to ensure that the

7-24     [private] provider is delivering the services in a manner

7-25     consistent with the contract.  [The department shall also provide

 8-1     for periodic fiscal audits of those private providers.]

 8-2           (c)  Each [private] provider contract involving the use of

 8-3     state funds or funds for which the state has oversight

 8-4     responsibility must authorize the local mental health or mental

 8-5     retardation authority or the authority's designee, and the

 8-6     department or the department's designee to have unrestricted access

 8-7     to all facilities, records, data, and other information under the

 8-8     control of the provider as necessary to enable the department to

 8-9     audit, monitor, and review the financial and program activities and

8-10     services associated with the contract.

8-11           SECTION 6.  This Act takes effect September 1, 1997.

8-12           SECTION 7.  The importance of this legislation and the

8-13     crowded condition of the calendars in both houses create an

8-14     emergency and an imperative public necessity that the

8-15     constitutional rule requiring bills to be read on three several

8-16     days in each house be suspended, and this rule is hereby suspended.

8-17                          COMMITTEE AMENDMENT NO. 1

8-18           Amend Senate Bill No. 940 in Section 2 of the bill by

8-19     striking added Subsection (l), Section 534.036, Health and Safety

8-20     Code, (Senate engrossment, page 5, line 25 and page 6, lines 1 and

8-21     2) and substituting:

8-22           (l)  The management team or individual appointed under this

8-23     section may not use any asset or money that was contributed by a

8-24     county, municipality, or other local funding entity unless the team

8-25     or individual has the express approval of the funding entity.

 9-1     75R14874 JJT-D                                               Delisi