HBA-DMD H.B. 3628 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3628 By: Naishtat Human Services 3/22/1999 Introduced BACKGROUND AND PURPOSE If a nursing home owner commits fraud or mismanages the institution's finances, the health and safety of the residents may be put at risk. When the state takes over an institution because of fraud or mismanagement, the financial burden for closing the institution or for transferring its residents falls on the state. The owner may be prosecuted, but there are no provisions barring an owner from providing nursing home care to Texans. H.B. 3628 makes a person who owns, controls, or operates an institution for which a trustee has been appointed or emergency funds granted ineligible for issuance or renewal of a license until five years after the trustee's appointment expires or the last day which emergency funds were used, whichever is later. This bill also increases the penalty for a person who has been convicted of fraud or theft from the institution and because of which a trustee has been appointed or emergency funds granted to the institution. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter D, Chapter 242, Health and Safety Code, by adding Section 242.102, as follows: Sec. 242.102. INELIGIBILITY FOR LICENSE. (a) Provides that a person who owns, controls, or operates an institution for which a trustee is appointed or emergency assistance funds are granted, is ineligible for issuance or renewal of a license before the fifth anniversary of the date the appointment of the trustee terminates, or the last date on which emergency assistance funds are used with respect to the institution, whichever is later. (b) Provides that for the purpose of this section, a person "controls" an institution if the person is a partner, officer, director, or managing employee of the applicant or license holder; a person who owns or controls the owner of the physical plant of a facility in which the institution operates or is to operate; or is a controlling person with respect to the institution for which a license or license renewal is requested. SECTION 2. Amends Subchapter D, Chapter 12, Penal Code, by adding Section 12.48, as follows: Sec. 12.48. CERTAIN OFFENSES RESULTING IN LOSS TO NURSING AND CONVALESCENT HOMES. Provides that if it is shown on the trial of an offense under Chapters 31 (Theft) or 32 (Fraud), Penal Code, that, as a result of a loss incurred because of theft or fraud, a trustee was appointed or emergency assistance funds were used for a nursing or convalescent home under Subchapter D (Trustees for Nursing or Convalescent Homes), Chapter 242 (Convalescent and Nursing Homes and Related Institutions), Health and Safety Code, the punishment for the offense is increased to the punishment prescribed for the next higher category of offense except that a felony of the first degree is punished as a felony of the first degree. SECTION 3.Effective date: September 1, 1999. SECTION 4.Makes application of this Act prospective, as it applies to the punishment of an offense under this Act. SECTION 5.Emergency clause.