76R15911 JRD-F                          
         By Moncrief                                           S.B. No. 1198
         Substitute the following for S.B. No. 1198:
         By Naishtat                                       C.S.S.B. No. 1198
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to requiring certain convalescent and nursing homes to
 1-3     execute a surety bond.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subchapter B, Chapter 242, Health and Safety
 1-6     Code, is amended by adding Section 242.0325 to read as follows:
 1-7           Sec. 242.0325.  SURETY BOND REQUIREMENT.  (a)  If three or
 1-8     more institutions that are licensed or required to be licensed
 1-9     under this chapter are owned by the same owner or controlled by the
1-10     same controlling person, the license holder of each of the
1-11     institutions must execute a surety bond issued by a surety company
1-12     authorized to do business in this state as a condition of obtaining
1-13     or renewing a license, provided that there are three or more
1-14     companies willing to provide this service to the institutions and
1-15     that the dedication of collateral by the institutions or license
1-16     holders is not a condition for the issuance of the bonds.
1-17           (b)  The bond must be payable to the department in the event
1-18     a trustee is appointed for the institution under Subchapter D and
1-19     the trustee uses emergency assistance funds in accordance with
1-20     Section 242.096 to alleviate an immediate threat to the health and
1-21     safety of the residents of the institution. The term of the bond
1-22     must be coextensive with the term of the institution's license
1-23     under this chapter.  The surety is liable to the department under a
 2-1     bond only for the amounts of emergency assistance funds that the
 2-2     department disburses on account of the institution covered by the
 2-3     bond during the term covered by the bond and only in a cumulative
 2-4     amount not to exceed the face amount of the bond.
 2-5           (c)  The board shall set the amounts of bonds under this
 2-6     section according to a schedule adopted by rule.  The board may not
 2-7     require a bond under this section in an amount that exceeds
 2-8     $50,000. The board shall schedule the amounts based on the number
 2-9     of residents in an institution and on the department's experience
2-10     regarding the amounts disbursed from the emergency assistance fund
2-11     when a trustee has been appointed under Subchapter D.
2-12           (d)  Before the board adopts any rule under Subsection (c),
2-13     the department on behalf of the board shall attempt to engage in
2-14     negotiated rulemaking to assist the board in drafting the proposed
2-15     rule by following the procedures prescribed by Chapter 2008,
2-16     Government Code.
2-17           SECTION 2.  This Act takes effect September 1, 1999.
2-18           SECTION 3.  The importance of this legislation and the
2-19     crowded condition of the calendars in both houses create an
2-20     emergency and an imperative public necessity that the
2-21     constitutional rule requiring bills to be read on three several
2-22     days in each house be suspended, and this rule is hereby suspended.