AN ACT
 1-1     relating to monitoring the financial condition of certain nursing
 1-2     facilities licensed by the Texas Department of Human Services;
 1-3     providing penalties.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subsection (a), Section 242.061, Health and
 1-6     Safety Code, is amended to read as follows:
 1-7           (a)  The department, after providing notice and opportunity
 1-8     for a hearing to the applicant or license holder, may deny,
 1-9     suspend, or revoke a license if the department finds that the
1-10     applicant, the license holder, or any other person described by
1-11     Section 242.032(d) has:
1-12                 (1)  violated this chapter or a rule, standard, or
1-13     order adopted or license issued under this chapter in either a
1-14     repeated or substantial manner; [or]
1-15                 (2)  committed any act described by Sections
1-16     242.066(a)(2)-(6); or
1-17                 (3)  failed to comply with Section 242.074.
1-18           SECTION 2.  Subchapter C, Chapter 242, Health and Safety
1-19     Code, is amended by adding Section 242.074 to read as follows:
1-20           Sec. 242.074.  NOTIFICATION OF CHANGE IN FINANCIAL CONDITION.
1-21     (a)  An institution shall notify the department of a significant
1-22     change in the institution's financial position, cash flow, or
1-23     results of operation that could adversely affect the institution's
1-24     delivery of essential services, including nursing services, dietary
 2-1     services, and utilities, to residents of the institution.
 2-2           (b)  The department may verify the financial condition of an
 2-3     institution in order to identify any risk to the institution's
 2-4     ability to deliver essential services.
 2-5           (c)  A person that knowingly files false information under
 2-6     this section may be prosecuted under the Penal Code.
 2-7           (d)  The department shall adopt rules to implement this
 2-8     section.  The rules shall include the conditions that constitute a
 2-9     significant change in an institution's financial condition that are
2-10     required to be reported under Subsection (a).
2-11           (e)  The information obtained by the department under this
2-12     section is confidential and is not subject to disclosure under
2-13     Chapter 552, Government Code.  The department may release the
2-14     information to:
2-15                 (1)  the institution; or
2-16                 (2)  a person other than the institution if the
2-17     institution consents in writing to the disclosure.
2-18           (f)  A person who knowingly discloses information in
2-19     violation of Subsection (e) commits an offense.  An offense under
2-20     this subsection is a Class A misdemeanor.
2-21           (g)  The provisions in Subsection (e) relating to the
2-22     confidentiality of records do not apply to:
2-23                 (1)  an institution whose license has been revoked or
2-24     suspended; or
2-25                 (2)  the use of information in an administrative
2-26     proceeding initiated by the department or in a judicial proceeding.
 3-1           SECTION 3.  (a)  Except as provided by Subsection (b) of this
 3-2     section, this Act takes effect September 1, 1999.
 3-3           (b)  Subsection (a), Section 242.074, Health and Safety Code,
 3-4     as added by this Act, takes effect January 1, 2000.
 3-5           (c)  The Texas Department of Human Services shall adopt the
 3-6     rules required under Subsection (d), Section 242.074, Health and
 3-7     Safety Code, as added by this Act, not later than December 31,
 3-8     1999.
 3-9           SECTION 4.  The importance of this legislation and the
3-10     crowded condition of the calendars in both houses create an
3-11     emergency and an imperative public necessity that the
3-12     constitutional rule requiring bills to be read on three several
3-13     days in each house be suspended, and this rule is hereby suspended.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I hereby certify that S.B. No. 1292 passed the Senate on
         April 13, 1999, by a viva-voce vote.
                                             _______________________________
                                                 Secretary of the Senate
               I hereby certify that S.B. No. 1292 passed the House on
         May 22, 1999, by a non-record vote.
                                             _______________________________
                                                 Chief Clerk of the House
         Approved:
         _______________________________
                     Date
         _______________________________
                   Governor