1-1     By:  Moncrief, et al.                                  S.B. No. 200
 1-2           (In the Senate - Filed January 20, 1999; January 28, 1999,
 1-3     read first time and referred to Committee on Health Services;
 1-4     April 8, 1999, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 4, Nays 0; April 8, 1999,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 200                 By:  Moncrief
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to imposition of administrative penalties against personal
1-11     care facilities.
1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13           SECTION 1.  Section 247.002, Health and Safety Code, is
1-14     amended by adding Subdivision (6) to read as follows:
1-15                 (6)  "Commissioner" means the commissioner of human
1-16     services.
1-17           SECTION 2.  Subchapter C, Chapter 247, Health and Safety
1-18     Code, is amended by adding Sections 247.0451 through 247.0457 to
1-19     read as follows:
1-20           Sec. 247.0451.  ADMINISTRATIVE PENALTY.  (a)  The department
1-21     may assess an administrative penalty against a person who:
1-22                 (1)  violates this chapter or a rule, standard, or
1-23     order adopted or license issued under this chapter;
1-24                 (2)  makes a false statement, that the person knows or
1-25     should know is false, of a material fact:
1-26                       (A)  on an application for issuance or renewal of
1-27     a license or in an attachment to the application; or
1-28                       (B)  with respect to a matter under investigation
1-29     by the department;
1-30                 (3)  refuses to allow a representative of the
1-31     department to inspect:
1-32                       (A)  a book, record, or file required to be
1-33     maintained by a personal care facility; or
1-34                       (B)  any portion of the premises of a personal
1-35     care facility;
1-36                 (4)  wilfully interferes with the work of a
1-37     representative of the department or the enforcement of this
1-38     chapter;
1-39                 (5)  wilfully interferes with a representative of the
1-40     department preserving evidence of a violation of this chapter or a
1-41     rule, standard, or order adopted or license issued under this
1-42     chapter; or
1-43                 (6)  fails to pay a penalty assessed under this chapter
1-44     not later than the 10th day after the date the assessment of the
1-45     penalty becomes final.
1-46           (b)  Except as provided by Subsection (d) and Section
1-47     247.0452(c), the penalty may not exceed $10,000 for each violation.
1-48           (c)  Any violation that results in the assessment of an
1-49     administrative penalty shall be provided in writing to the personal
1-50     care facility.  The written violation must identify the specific
1-51     law or regulation that has been violated and include the name of
1-52     the surveyor that cited the violation.
1-53           (d)  The penalty for a violation of a right of a resident
1-54     under Section 247.065 may not exceed $1,000 for each violation.
1-55     This subsection does not apply to conduct that also violates
1-56     another provision in this chapter or a rule, standard, or order
1-57     adopted or license issued under this chapter.
1-58           (e)  The board shall establish gradations of penalties in
1-59     accordance with the relative seriousness of the violation.
1-60           (f)  In determining the amount of a penalty, the department
1-61     shall consider any matter that justice may require, including:
1-62                 (1)  the gradations of penalties established under
1-63     Subsection (e);
1-64                 (2)  the seriousness of the violation, including the
 2-1     nature, circumstances, extent, and gravity of the prohibited act
 2-2     and the hazard or potential hazard created by the act to the health
 2-3     or safety of the public;
 2-4                 (3)  the history of previous violations;
 2-5                 (4)  deterrence of future violations; and
 2-6                 (5)  efforts to correct the violation.
 2-7           (g)  A penalty assessed under Subsection (a)(6) is in
 2-8     addition to the penalty previously assessed and not timely paid.
 2-9           Sec. 247.0452.  RIGHT TO CORRECT.  (a)  The department may
2-10     not collect an administrative penalty from a personal care facility
2-11     under Section 247.0451 if, not later than the 45th day after the
2-12     date the facility receives notice under Section 247.0453(c), the
2-13     facility corrects the violation.
2-14           (b)  Subsection (a)  does not apply:
2-15                 (1)  to a violation that the department determines:
2-16                       (A)  results in serious harm to or death of a
2-17     resident;
2-18                       (B)  constitutes a serious threat to the health
2-19     or safety of a resident; or
2-20                       (C)  substantially limits the personal care
2-21     facility's capacity to provide care;
2-22                 (2)  to a violation described by Sections
2-23     247.0451(a)(2)-(6); or
2-24                 (3)  to a violation of a right of a resident under
2-25     Section 247.065.
2-26           (c)  A personal care facility that corrects a violation must
2-27     maintain the correction.  If the facility  fails to maintain the
2-28     correction until at least the first anniversary of the date the
2-29     correction was made, the department may assess and collect an
2-30     administrative penalty for the subsequent violation.  An
2-31     administrative penalty assessed under this subsection is equal to
2-32     three times the amount of the original penalty assessed but not
2-33     collected.  The department is not required to provide the facility
2-34     with an opportunity under this section to correct the subsequent
2-35     violation.
2-36           Sec. 247.0453.  REPORT RECOMMENDING ADMINISTRATIVE PENALTY.
2-37     (a)  The department may issue a preliminary report stating the
2-38     facts on which the department concludes that a violation of this
2-39     chapter or a rule, standard, or order adopted or license issued
2-40     under this chapter has occurred if the department has:
2-41                 (1)  examined the possible violation and facts
2-42     surrounding the possible violation; and
2-43                 (2)  concluded that a violation has occurred.
2-44           (b)  The report may recommend a penalty under Section
2-45     247.0451 and the amount of the penalty.
2-46           (c)  The department shall give written notice of the report
2-47     to the person charged with the violation not later than the 10th
2-48     day after the date on which the report is issued.  The notice must
2-49     include:
2-50                 (1)  a brief summary of the charges;
2-51                 (2)  a statement of the amount of penalty recommended;
2-52                 (3)  a statement of whether the violation is subject to
2-53     correction under Section 247.0452 and, if the violation is subject
2-54     to correction under that section, a statement of:
2-55                       (A)  the date on which the personal care facility
2-56     must file with the department a plan of correction to be approved
2-57     by the department; and
2-58                       (B)  the date on which the plan of correction
2-59     must be completed to avoid assessment of the penalty; and
2-60                 (4)  a statement that the person charged has a right to
2-61     a hearing on the occurrence of the violation, the amount of the
2-62     penalty, or both.
2-63           (d)  Not later than the 20th day after the date on which the
2-64     notice under Subsection (c) is sent, the person charged may:
2-65                 (1)  give to the department written consent to the
2-66     department's report, including the recommended penalty;
2-67                 (2)  make a written request for a hearing; or
2-68                 (3)  if the violation is subject to correction under
2-69     Section 247.0452, submit a plan of correction to the department for
 3-1     approval.
 3-2           (e)  If the violation is subject to correction under Section
 3-3     247.0452, and the person reports to the department that the
 3-4     violation has been corrected, the department shall inspect the
 3-5     correction or take any other step necessary to confirm the
 3-6     correction and shall notify the person that:
 3-7                 (1)  the correction is satisfactory and a penalty will
 3-8     not be assessed; or
 3-9                 (2)  the correction is not satisfactory and a penalty
3-10     is recommended.
3-11           (f)  Not later than the 20th day after the date on which a
3-12     notice under Subsection (e)(2) is sent, the person charged may:
3-13                 (1)  give to the department written consent to the
3-14     department's report, including the recommended penalty; or
3-15                 (2)  make a written request for a hearing.
3-16           (g)  If the person charged with the violation consents to the
3-17     penalty recommended by the department or does not timely respond to
3-18     a notice sent under Subsection (c) or (e)(2), the commissioner or
3-19     the commissioner's designee shall assess the penalty recommended by
3-20     the department.
3-21           (h)  If the commissioner or the commissioner's designee
3-22     assesses the recommended penalty, the department shall give written
3-23     notice to the person charged of the decision and the person shall
3-24     pay the penalty.
3-25           Sec. 247.0454.  HEARING ON ADMINISTRATIVE PENALTY.  (a)  An
3-26     administrative law judge shall order a hearing and give notice of
3-27     the hearing if a person charged with a violation under Section
3-28     247.0451 timely requests a hearing.
3-29           (b)  The hearing shall be held before an administrative law
3-30     judge.
3-31           (c)  The administrative law judge shall make findings of fact
3-32     and conclusions of law and promptly issue to the commissioner a
3-33     written decision regarding the occurrence of a violation of this
3-34     chapter or a rule, standard, or order adopted or license issued
3-35     under this chapter and a recommendation regarding the amount of the
3-36     proposed penalty if a penalty is warranted.
3-37           (d)  Based on the findings of fact and conclusions of law and
3-38     the recommendation of the administrative law judge, the
3-39     commissioner by order may:
3-40                 (1)  find that a violation has occurred and assess an
3-41     administrative penalty; or
3-42                 (2)  find that a violation has not occurred.
3-43           (e)  Proceedings under this section are subject to Chapter
3-44     2001, Government Code.
3-45           Sec. 247.0455.  NOTICE AND PAYMENT OF ADMINISTRATIVE PENALTY;
3-46     INTEREST; REFUND.  (a)  The commissioner shall give notice of the
3-47     findings made under Section 247.0454(d) to the person charged.  If
3-48     the commissioner finds that a violation has occurred, the
3-49     commissioner shall give to the person charged written notice of:
3-50                 (1)  the findings;
3-51                 (2)  the amount of the administrative penalty;
3-52                 (3)  the rate of interest payable with respect to the
3-53     penalty and the date on which interest begins to accrue;
3-54                 (4)  whether action under Section 247.0457 is required
3-55     in lieu of payment of all or part of the penalty; and
3-56                 (5)  the person's right to judicial review of the
3-57     commissioner's order.
3-58           (b)  Not later than the 30th day after the date on which the
3-59     commissioner's order is final, the person charged with the penalty
3-60     shall:
3-61                 (1)  pay the full amount of the penalty; or
3-62                 (2)  file a petition for judicial review contesting the
3-63     occurrence of the violation, the amount of the penalty, the failure
3-64     to correct the violation to the department's satisfaction, or any
3-65     combination of these issues.
3-66           (c)  Notwithstanding Subsection (b), the department may
3-67     permit the person to pay a penalty in installments or may require
3-68     the person to use all or part of the amount of the penalty in
3-69     accordance with Section 247.0457.
 4-1           (d)  If the person does not pay the penalty within the period
 4-2     provided by Subsection (b) or in accordance with Subsection (c), if
 4-3     applicable:
 4-4                 (1)  the penalty is subject to interest; and
 4-5                 (2)  the department may refer the matter to the
 4-6     attorney general for collection of the penalty and interest.
 4-7           (e)  Interest under Subsection (d)(1) accrues:
 4-8                 (1)  at a rate equal to the rate charged on loans to
 4-9     depository institutions by the New York Federal Reserve Bank; and
4-10                 (2)  for the period beginning on the date after the
4-11     date on which the penalty becomes due and ending on the date the
4-12     penalty is paid.
4-13           (f)  If a penalty is reduced or not assessed as a result of
4-14     judicial review, the commissioner shall:
4-15                 (1)  remit to the person charged the appropriate amount
4-16     of any penalty payment plus accrued interest; or
4-17                 (2)  execute a release of the supersedeas bond if one
4-18     has been posted.
4-19           (g)  Accrued interest on amounts remitted by the commissioner
4-20     under Subsection (f)(1) shall be paid:
4-21                 (1)  at a rate equal to the rate charged on loans to
4-22     depository institutions by the New York Federal Reserve Bank; and
4-23                 (2)  for the period beginning on the date the penalty
4-24     is paid and ending on the date the penalty is remitted to the
4-25     person charged.
4-26           Sec. 247.0456.  APPLICATION OF OTHER LAW.  Except as provided
4-27     by Section 247.0451(a)(6) or 247.0452(c), the department may not
4-28     assess more than one monetary penalty under this chapter for a
4-29     violation arising out of the same act or failure to act.  This
4-30     section does not prohibit the department from assessing a monetary
4-31     penalty under this chapter and a monetary penalty under Chapter 32,
4-32     Human Resources Code, if appropriate, for the same act or failure
4-33     to act.
4-34           Sec. 247.0457.  AMELIORATION OF VIOLATION.  In lieu of
4-35     ordering payment of an administrative penalty authorized by this
4-36     subchapter, the commissioner may require a person subject to the
4-37     penalty to use, under the supervision of the department, all or
4-38     part of the amount of the penalty to ameliorate the violation or to
4-39     improve services, other than administrative services, in the
4-40     personal care facility affected by the violation.
4-41           SECTION 3.  This Act takes effect September 1, 1999.
4-42           SECTION 4.   The importance of this legislation and the
4-43     crowded condition of the calendars in both houses create an
4-44     emergency and an imperative public necessity that the
4-45     constitutional rule requiring bills to be read on three several
4-46     days in each house be suspended, and this rule is hereby suspended.
4-47                                  * * * * *