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Amend CSHB 2292 by adding the following appropriately 
numbered sections to the bill and renumbering subsequent sections 
	SECTION ____.  Subchapter B, Chapter 533, Health and Safety 
Code, is amended by adding Section 533.049 to read as follows:
	Sec. 533.049.  PRIVATIZATION OF STATE SCHOOL.  (a)  After 
August 31, 2004, and before September 1, 2005, the department may 
contract with a private service provider to operate a state school 
only if:
		(1)  the Health and Human Services Commission 
determines that the private service provider will operate the state 
school at a cost that is at least 10 percent less than the cost to 
the department to operate the state school;
		(2)  the Health and Human Services Commission approves 
the contract; and
		(3)  the state school, when operated under the 
contract, treats a population with the same characteristics and 
need levels as the population treated by the state school when 
operated by the department.
	(b)  On or before April 1, 2004, the department shall report 
to the commissioner of health and human services whether the 
department has received a proposal by a private service provider to 
operate a state school.  The report must include an evaluation of 
the private service provider's qualifications, experience, and 
financial strength, a determination of whether the provider can 
operate the state school under the same standard of care as the 
department, and an analysis of the projected savings under a 
proposed contract with the provider.  The savings analysis must 
include all department costs to operate the state school, including 
costs, such as employee benefits, that are not appropriated to the 
	(c)  If the department contracts with a private service 
provider to operate a state school, the department, the governor's 
office of budget and planning, and the Legislative Budget Board 
shall identify sources of funding that must be transferred to the 
department to fund the contract.
	(d)  The department may renew a contract under this section.  
The conditions listed in Subsections (a)(1)-(3) apply to the 
renewal of the contract.
	SECTION ____.  Section 533.049, Health and Safety Code, as 
added by this Act, takes effect September 1, 2004.