SRC-LBB, EPT S.B. 1421 78(R)   BILL ANALYSIS


Senate Research Center   S.B. 1421
78R1576 KLA-DBy: Janek
Health & Human Services
4/2/2003
As Filed


DIGEST AND PURPOSE 

Over the last several decades, the federal government has created several
programs that require states to establish a "single state agency" to
administer each health and human services (HHS) program where other
similar programs are already in place.  The resulting array of state
agencies delivering similar services may be confusing and cumbersome, and
the comptroller of public accounts has issued an e-Texas recommendation to
consolidate these agencies.   As proposed, S.B. 1421 amends current law to
consolidate all HHS programs into five agencies, combining similar
services and activities and consolidating support structures to eliminate
duplication and improve cost-effectiveness. 

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the commissioner of health
and human services in SECTIONS 1.03, 1.06, 2.01, 2.02, and 4.05 (Sections
531.0055, 531.0224, 1001.029, 1001.051, 1001.052, 1001.076, 161.029,
161.052,161.073,181.029,181.052, 181.073, 201.029, 201.052, 201.073,
Government Code) of this bill. 

SECTION BY SECTION ANALYSIS

ARTICLE 1.  HEALTH AND HUMAN SERVICES COMMISSION

SECTION 1.01.  Reenacts and amends Section 531.001(4), Government Code, as
amended by Chapters 53, 957, and 1420, Acts of the 77th Legislature,
Regular Session, 2001, as follows: 

( 4 )   P r o v i d e s  t h a t  " h e a l t h  a n d  h u m a n  s e r v
i c e s  a g e n c i e s "  i n c l u d e s  t h e :   D e p a r t m e n t
f o r  C h i l d r e n  a n d  F a m i l i e s ,  D e p a r t m e n t  o n
A g i n g  r a t h e r  t h a n  t h e  T e x a s  D e p a r t m e n t  o
n  A g i n g ;  D e p a r t m e n t  f o r  P e r s o n s  w i t h  D i s
a b i l i t i e s ;  a n d  t h e  D e p a r t m e n t  f o r  H e a l t h
a n d  M e n t a l  H e a l t h .   D e l e t e s  f r o m  t h e  l i s t
o f  a g e n c i e s  t h a t  a r e  i n c l u d e d  a s  h e a l t h  a
n d  h u m a n  s e r v i c e  a g e n c i e s  t h e :  I n t e r a g e n
c y  C o u n c i l  o n  E a r l y  C h i l d h o o d  I n t e r v e n t i
o n ;  T e x a s  C o m m i s s i o n  o n  A l c o h o l  a n d  D r u g
A b u s e ;  T e x a s  C o m m i s s i o n  f o r  t h e  B l i n d ;  T
e x a s  C o m m i s s i o n  f o r  t h e  D e a f  a n d  H a r d  o f
H e a r i n g ;  T e x a s  D e p a r t m e n t  o f  H e a l t h ;  T e x
a s  D e p a r t m e n t  o f  H u m a n  S e r v i c e s ;  T e x a s  D
e p a r t m e n t  o f  M e n t a l  H e a l t h  a n d  M e n t a l  R e
t a r d a t i o n ;  T e x a s  R e h a b i l i t a t i o n  C o m m i s s
i o n ;  D e p a r t m e n t  o f  P r o t e c t i v e  a n d  R e g u l a
t o r y  S e r v i c e s ;  a n d  T e x a s  H e a l t h  C a r e  I n f
o r m a t i o n  C o u n c i l . 
 
SECTION 1.02.  Amends Section 531.004, Government Code, as follows:
 
Sec. 531.004.  SUNSET PROVISION.  Continues the Health and Human Services
Commission (HHSC) until September 1, 2009. 
 
SECTION 1.03.  Amends Section 531.0055, Government Code, as follows:
 
Sec. 531.0055.  New heading:  COMMISSIONER:  GENERAL RESPONSIBILITY FOR
HEALTH AND HUMAN SERVICES AGENCIES.  (a)   Redefines "agency director" to
mean the executive director of a health and human services agency.
Deletes the definition of "policymaking body." 
  
  (b)  Requires HHSC to perform certain functions.
   
(c)  Requires HHSC to implement the powers and duties given to HHSC under
Sections 531.0246, 531.0247, 2155.144, and 2167.004. 
 
(d)  Provides that the performance of administrative support services for
health and human services agencies is the responsibility of HHSC.
Provides that the term "administrative support services" includes, but is
not limited to, strategic planning and evaluation, audit, legal, human
resources, purchasing, contract management, financial management, and
accounting services. 

(e)  Requires the commissioner of health and human services (commissioner)
notwithstanding any other law, to adopt rules and policies for the
operation of and provision of health and human services by the health and
human services agencies.  Requires the commissioner, in addition, as
necessary to perform the functions described by Subsections (b), (c), and
(d) in implementation of applicable policies established for an agency by
the commissioner, to:  

(1)  manage and direct the operations of each health and human services
agency; and 
(2)  supervise and direct the activities of each agency director.
 
(f)  Provides that the operational authority and responsibility of the
commissioner for purposes of Subsection (e) at each health and human
services agency includes authority over and responsibility for certain
other functions. 
  
(g)  Make a conforming change.
 
(h)  No change to this subsection.

(i)  Provides that an agency director acts on behalf of and reports to the
commissioner in performing a delegated function. 
 
(j)  Requires, rather than authorizes, the commissioner to adopt rules to
implement the commissioner's authority under this section. 
 
(k)  Requires the commissioner and each agency director to enter into a
memorandum of understanding in the manner prescribed by Section 531.0164
that meets certain objectives. 
  
SECTION 1.04.  Amends Section 531.0056, Government Code, as follows:
 
Sec. 531.0056.  EMPLOYMENT OF AGENCY DIRECTOR.  (a)  Requires the
commissioner to hire an agency director for each health and human services
agency. 
 
  (b)  Requires the agency director to serve at the pleasure of the
commissioner 
 
(c)  Provides that in addition to the requirements of Section
531.0055(k)(1), the memorandum of understanding between the commissioner
and agency director required by that section must clearly define the terms
of the agency director's employment. 
 
(d)  Requires the terms of the memorandum of understanding to outline
specific performance objectives, as defined by the commissioner, to be
fulfilled by the agency director, including the performance objectives
outlined in Section 531.0055(h). 
 
(e)  No change made to this subsection.  Deletes existing subsections (f)
- (h). 

SECTION 1.05.  Amends Chapter 531A, Government Code, by adding Sections
531.0161  through 531.0165, as follows: 
 
Sec. 531.0161.  NEGOTIATED RULEMAKING AND ALTERNATIVE DISPUTE PROCEDURES.
(a)  Adds standard Sunset language regarding the use of negotiated
rulemaking.   

(b)  Requires the procedures relating to alternative dispute resolution to
conform, to the extent possible, to any model guidelines issued by the
State Office of Administrative Hearings for the use of alternative dispute
resolution by state agencies. 

Sec. 531.0162.  USE OF TECHNOLOGY.  (a)  Adds statndard Sunset language
regarding the use of technological solutions to improve an agency's
ability to perform its functions. 

(b)  Requires HHSC to develop and implement a policy described by
Subsection (a) in relation to HHSC's functions. 

Sec. 531.0163.  PURCHASING.  Requires HHSC, notwithstanding any other law,
to make all purchases for health and human services agencies.  Authorizes
HHSC to delegate purchasing authority to a health and human services
agency under circumstances in which HHSC determines that it is not
cost-effective for HHSC to make the purchases. Requires the agency, if
HHSC delegates purchasing authority to a health and human services agency,
to comply with Section 2155.144. 

Sec. 531.0164.  MEMORANDUM OF UNDERSTANDING.  (a)  Requires the memorandum
of understanding under Section 531.0055(k) to be adopted by the
commissioner by rule in accordance with the procedures prescribed by
Subchapter B, Chapter 2001, for adopting rules, except that the
requirements of Section 2001.033(a)(1)(A) or (C) do not apply with respect
to any part of the memorandum of understanding that concerns and relates
to certain issues. 
  
(b)  Authorizes the memorandum of understanding to be amended only by
following the procedures prescribed under Subsection (a). 
 
Sec. 531.0165.  TRANSFER OF PROGRAMS AND FUNCTIONS; COORDINATION. (a)
Authorizes HHSC to perform certain functions. 
  
(b)  Requires a decision of the commissioner to resolve any conflict
between the health and human services agencies. 

(c)  Requires the commissioner and the executive director of each affected
agency, if the commissioner transfers all or part of a program or function
to HHSC or one or more health and human services agencies,  to amend the
memorandum of understanding required by Section 531.0055(k) to reflect any
change in responsibilities that results from the transfer. 

SECTION 1.06.  Amends  Chapter 531B, Government Code, by adding Section
531.0224, as follows: 

Sec. 531.0224.  PLANNING AND POLICY DIRECTION OF TEMPORARY ASSISTANCE FOR
NEEDY FAMILIES PROGRAM.  Requires HHSC to perform certain functions. 
  
SECTION 1.07.  Repealers: Sections 531.0057 (Authority Over Rulemaking at
Health and Human Services), 531.034 (Review of Agency Rulemaking), and
531.0345 (Coordination on Inpatient Mental Health Services), Government
Code.  


 ARTICLE 2.  HEALTH AND HUMAN SERVICES AGENCIES
    
SECTION 2.01.  Amends the Health and Safety Code by adding Title 12, as
follows: 

TITLE 12.  HEALTH AND MENTAL HEALTH
SUBTITLE A.  HEALTH AND MENTAL HEALTH SERVICES
CHAPTER 1001.  DEPARTMENT FOR HEALTH AND MENTAL HEALTH
SUBCHAPTER A.  GENERAL PROVISIONS

Sec. 1001.001.  DEFINITIONS.  Defines "advisory board," "agency,"
"commission," "commissioner," and "executive director." 

 Sec. 1001.002.  AGENCY.  Provides that the Department for Health and
Mental Health (agency) is an agency of the state. 

 Sec. 1001.003.  SUNSET PROVISION.  Continues the agency until September
1, 2009. 

[Reserves Sections 1001.004-1001.020 for expansion.]

SUBCHAPTER B.  ADMINISTRATIVE PROVISIONS

Sec. 1001.021.  ADVISORY BOARD FOR HEALTH AND MENTAL HEALTH.  (a) Provides
that the advisory board for health and mental health is created to assist
the commissioner in developing rules and policies for the agency. 
 
(b)  Sets forth the composition of the advisory board

(c)  Prohibits a person from being a public member of the advisory board
if the person or the person's spouse meets certain criteria.  

(d)  Requires the advisory board to study and make recommendations to the
executive director regarding the management and operation of the agency,
including policies and rules governing the delivery of services to persons
who are served by the agency and the rights and duties of persons who are
served or regulated by the agency. 

  (e)  Provides that Chapter 551 (Open Meetings), Government Code, applies
to the                         advisory board. 

(f)  Provides that Chapter 2110 (State Agency Advisory Committees),
Government Code, does not apply to the advisory board. 

Sec. 1001.022.  APPOINTMENTS.  Adds standard Sunset language regarding
appointments to the advisory board. 

Sec. 1001.023.  CONFLICTS OF INTEREST.  Adds standard Sunset language
regarding conflicts of interest.   

Sec. 1001.024.  TRAINING PROGRAM FOR ADVISORY BOARD MEMBERS.  Adds
standard Sunset language regarding training for persons appointed as
members of the advisory board. 

 Sec. 1001.025.  TERMS.  Sets forth the terms for advisory board members. 

Sec. 1001.026.  VACANCY.  Requires the governor by appointment to fill the
unexpired term of a vacancy on the advisory board. 

Sec. 1001.027.  PRESIDING OFFICER; OTHER OFFICERS; MEETINGS.  (a) Requires
the governor to designate a member of the advisory board as the presiding
officer to serve in that capacity at the pleasure of the governor. 

(b)  Requires the members of the advisory board to elect any other
necessary officers.  

(c)  Requires the advisory board to meet quarterly and at other times at
the call of the presiding officer.  Authorizes the board to hold meetings
in different areas of the state. 

Sec. 1001.028.  REIMBURSEMENT FOR EXPENSES.  Adds standard Sunset language
regarding an advisory board member's  reimbursement. 

Sec. 1001.029.  PUBLIC INTEREST INFORMATION AND COMPLAINTS.  (a)  Adds
standard Sunset language regarding information of public interest and
complaints. 

(b)  Requires the commissioner by rule to establish methods by which
consumers and service recipients are notified of the name, mailing
address, and telephone number of the agency for directing complaints to
the agency. 

Sec. 1001.030.  PUBLIC ACCESS AND TESTIMONY.  Requires the commissioner to
develop and implement policies that provide the public with a reasonable
opportunity to appear before the advisory board or commissioner and to
speak on any issue under the jurisdiction of the agency. 
 
Sec. 1001.031.  POLICYMAKING AND MANAGEMENT RESPONSIBILITIES. Requires the
commissioner, with the advice of the advisory board, to develop and the
agency to implement policies that clearly delineate the policymaking
responsibilities of the commissioner from the management responsibilities
of HHSC, the executive director, and the staff of the agency. 

Sec. 1001.032.  ANNUAL REPORT.  (a)  Requires the executive director to
file annually with the commissioner a complete and detailed written report
accounting for all funds received and disbursed by the agency during the
preceding fiscal year. 

(b)  Requires the annual report to be in the form and be reported in the
time provided by the commissioner. 

Sec. 1001.033.  OFFICES.  Requires the agency to maintain its central
office in Austin. Authorizes the agency to maintain offices in other areas
of the state as necessary. 

[Reserves Sections 1001.034-1001.050 for expansion.]

SUBCHAPTER C.  PERSONNEL

Sec. 1001.051.  EXECUTIVE DIRECTOR.  (a)  Requires the commissioner to
appoint an executive director, who is to be selected according to
education, training, experience, and demonstrated ability. 

(b)  Provides that the executive director serves at the pleasure of the
commissioner. 

(c)  Requires the executive director to act as the agency's chief
administrative officer and as a liaison between the agency and HHSC. 

(d)  Requires the executive director to administer this chapter under
operational policies established by the commissioner and in accordance
with the memorandum of understanding under Section 531.0055(k), Government
Code, between the executive director and the commissioner, as adopted by
rule. 

 Sec. 1001.052.  PERSONNEL.  (a)  Authorizes the agency to employ,
compensate, and prescribe the duties of personnel necessary and suitable
to administer this chapter. 

 (b)  Requires the commissioner to prepare and by rule adopt personnel
standards. 

(c)  Authorizes a personnel position to be filled only by an individual
selected and appointed on a nonpartisan merit basis. 

(d)  Requires the commissioner, with the advice of the advisory board, to
develop and requires the agency to implement policies that clearly define
the responsibilities of the staff of the agency. 
 
Sec. 1001.053.  INFORMATION ABOUT QUALIFICATIONS AND STANDARDS OF CONDUCT.
Adds standard Sunset language regarding qualifications and standards of
conduct. 
 
Sec. 1001.054.  MERIT PAY.  Requires the executive director or the
executive director's designee, subject to rules adopted by the
commissioner, to develop a system of annual performance evaluations.
Requires all merit pay for agency employees to be given under the system
established under this section or under rules adopted by the commissioner. 
 
Sec. 1001.055.  CAREER LADDER.  Requires the executive director or the
executive director's designee to develop an intra-agency career ladder
program.  Requires the program to require intra-agency postings of all
nonentry-level positions concurrently with any public posting. 
 
Sec. 1001.056.  EQUAL EMPLOYMENT OPPORTUNITY POLICY.  Adds standard Sunset
language regarding a policy of equal employment opportunity. 

Sec. 1001.057.  STATE EMPLOYEE INCENTIVE PROGRAM.  Requires the executive
director or the executive director's designee to provide to agency
employees information and training on the benefits and methods of
participation in the state employee incentive program. 

[Reserves Sections 1001.058-1001.070 for expansion.]

SUBCHAPTER D.  POWERS AND DUTIES OF AGENCY

Sec. 1001.071.  GENERAL POWERS AND DUTIES OF AGENCY RELATED TO HEALTH
CARE.  Provides that the agency is responsible for administering human
services programs regarding the public health, including certain
enumerated duties. 
  
Sec. 1001.072.  GENERAL POWERS AND DUTIES OF AGENCY RELATED TO MENTAL
HEALTH.  Provides that the agency is responsible for administering human
services programs regarding mental health, including certain specific
duties. 
  
Sec. 1001.073.  GENERAL POWERS AND DUTIES OF AGENCY RELATED TO SUBSTANCE
ABUSE.  Provides that the agency is responsible for administering human
services programs regarding substance abuse, including certain specified
duties. 
  
Sec. 1001.074.  ADMINISTRATION OF OTHER HEALTH, MENTAL HEALTH, OR
SUBSTANCE ABUSE PROGRAMS AND SERVICES.  Requires the agency to administer
other programs and services related to health, mental health, or substance
abuse that the commissioner delegates to the agency as the commissioner
determines necessary to efficiently provide those services in this state. 

Sec. 1001.075.  INFORMATION REGARDING COMPLAINTS.  (a)  Requires the
agency to maintain a file on each written complaint filed with the agency.
Requires the file to include certain information. 
  
(b)  Requires the agency to provide to the person filing the complaint and
to each person who is a subject of the complaint a copy of the
commissioner's and the agency's policies and procedures relating to
complaint investigation and resolution. 
 
(c)  Requires the agency, at least quarterly until final disposition of
the complaint, to notify the person filing the complaint and each person
who is a subject of the complaint of the status of the investigation
unless the notice would jeopardize an undercover investigation. 
 
Sec. 1001.076.  RULES.  Authorizes the commissioner to adopt rules
reasonably necessary for the agency to administer this chapter, consistent
with the memorandum of understanding under Section 531.0055(k), Government
Code, between the executive director and the commissioner, as adopted by
rule. 

SECTION 2.02.  Amends the Human Resources Code by adding Title 11 as
follows: 

TITLE 11.  SERVICES FOR CHILDREN, FAMILIES, AND THE AGING AND DISABLED
SUBTITLE A.  SERVICES FOR CHILDREN AND FAMILIES
CHAPTER 161.  DEPARTMENT FOR CHILDREN AND FAMILIES
SUBCHAPTER A.  GENERAL PROVISIONS

Sec. 161.001.  DEFINITIONS.  Defines "advisory board," "agency"
"commission" "commissioner," and "executive director." 
 
 Sec. 161.002.  AGENCY.  Provides that the Department of Children and
Families (agency) is an agency of the state. 
 
Sec. 161.003.  SUNSET PROVISION.  Continues the agency until September 1,
2009. 

[Reserves Sections 161.004-161.020 for expansion.]

SUBCHAPTER B.  ADMINISTRATIVE PROVISIONS

Sec. 161.021.  ADVISORY BOARD FOR CHILD AND FAMILY SERVICES.  (a) Provides
that the advisory board for child and family services is created to assist
the commissioner in developing rules and policies for the agency. 

(b)  Sets forth the composition of the advisory board.
  
(c)  Prohibits a person from being a public member of the advisory board
if the person or the person's spouse meets certain criteria. 
  
(d)  Requires the advisory board to study and make recommendations to the
executive director regarding the management and operation of the agency,
including policies and rules governing the delivery of services to persons
who are served by the agency and the rights and duties of persons who are
served or regulated by the agency. 

(e)  Provides that Chapter 551, Government Code (Open Meetings), applies
to the advisory board. 
 
(f)  Provides that Chapter 2110, Government Code (State Agency Advisory
Committees), does not apply to the advisory board. 
 
Sec. 161.022.  APPOINTMENTS.  Adds standard Sunset language regarding
appointments to the advisory board 
 
 Sec. 161.023.  CONFLICTS OF INTEREST.  Adds standard Sunset language
regarding conflicts of interest. 
 
Sec. 161.024.  TRAINING PROGRAM FOR ADVISORY BOARD MEMBERS.  Adds standard
Sunset language regarding training for advisory board members.  
 
Sec. 161.025.  TERMS.  Sets forth the terms for advisory board members.
 
Sec. 161.026.  VACANCY.  Requires the governor by appointment to fill the
unexpired term of a vacancy on the advisory board. 

Sec. 161.027.  PRESIDING OFFICER; OTHER OFFICERS; MEETINGS.  (a)  Requires
the governor to designate a member of the advisory board as the presiding
officer to serve in that capacity at the pleasure of the governor. 

 (b)  Requires the members of the advisory board to elect any other
necessary officers. 
 
(c)  Requires the advisory board to meet quarterly and at other times at
the call of the presiding officer.  Authorizes the board to hold meetings
in different areas of the state. 
 
Sec. 161.028.  REIMBURSEMENT FOR EXPENSES.  Adds standard Sunset language
regarding reimbursement for advisory board members. 

Sec. 161.029.  PUBLIC INTEREST INFORMATION AND COMPLAINTS.  (a)  Adds
standard Sunset language regarding information of public interest and
complaints. 

(b)  Requires the commissioner by rule to establish methods by which
consumers and service recipients are notified of the name, mailing
address, and telephone number of the agency for directing complaints to
the agency. 

Sec. 161.030.  PUBLIC ACCESS AND TESTIMONY.  Adds standard Sunset language
regarding policies that provide the public with a reasonable opportunity
to appear before the advisory board or commissioner and to speak on any
issue under the jurisdiction of the agency. 
 
Sec. 161.031.  POLICYMAKING AND MANAGEMENT RESPONSIBILITIES.  Adds
standard Sunset language regarding policies that clearly delineate the
policymaking responsibilities of the commissioner from the management
responsibilities of HHSC, the executive director, and the staff of the
agency. 

Sec. 161.032.  ANNUAL REPORT.  (a)  Requires the executive director to
file annually with the commissioner a complete and detailed written report
accounting for all funds received and disbursed by the agency during the
preceding fiscal year. 

(b)  Requires the annual report to be in the form and be reported in the
time provided by the commissioner. 

Sec. 161.033.  OFFICES.  Requires the agency to maintain its central
office in Austin. The agency may maintain offices in other areas of the
state as necessary. 

[Reserves Sections 161.034-161.050 for expansion.]

SUBCHAPTER C.  PERSONNEL

Sec. 161.051.  EXECUTIVE DIRECTOR.  (a)  Requires the commissioner to
appoint an executive director, who is to be selected according to
education, training, experience, and demonstrated ability. 

   (b)  Provides that the executive director serves at the pleasure of the
commissioner. 

(c)  Requires the executive director to act as the agency's chief
administrative officer and as a liaison between the agency and HHSC. 

(d)  Requires the executive director to administer this chapter under
operational policies established by the commissioner and in accordance
with the memorandum of understanding under Section 531.0055(k), Government
Code, between the executive director and the commissioner, as adopted by
rule. 

Sec. 161.052.  PERSONNEL.  (a)  Authorizes the agency to employ,
compensate, and prescribe the duties of personnel necessary and suitable
to administer this chapter. 
 
  (b)  Requires the commissioner to prepare and by rule adopt personnel
standards. 
 
(c)  Authorizes a personnel position to be filled only by an individual
selected and appointed on a nonpartisan merit basis. 
 
(d)  Requires the commissioner, with the advice of the advisory board, to
develop and the agency to implement policies that clearly define the
responsibilities of the staff of the agency. 

Sec. 161.053.  INFORMATION ABOUT QUALIFICATIONS AND STANDARDS OF CONDUCT.
Adds standard Sunset language regarding the requirements for employment
under this chapter or rules adopted by the commissioner, including
information regarding a person's responsibilities under applicable laws
relating to standards of conduct for state employees. 
 
Sec. 161.054.  MERIT PAY.  Requires the executive director or the
executive director's designee, subject to rules adopted by the
commissioner, to develop a system of annual performance evaluations.
Requires all merit pay for agency employees to be given under the system
established under this section or under rules adopted by the commissioner. 
 
Sec. 161.055.  CAREER LADDER.  Requires the executive director or the
executive director's designee to develop an intra-agency career ladder
program.  Requires the program to require intra-agency postings of all
nonentry-level positions concurrently with any public posting. 
 
Sec. 161.056.  EQUAL EMPLOYMENT OPPORTUNITY POLICY.  Adds standard Sunset
language regarding a policy of equal employment opportunity.  
 
Sec. 161.057.  STATE EMPLOYEE INCENTIVE PROGRAM.  Adds Sunset language
regarding a state employee incentive program. 

[Reserves Sections 161.058-161.070 for expansion.]

SUBCHAPTER D.  POWERS AND DUTIES OF AGENCY

Sec. 161.071.  GENERAL POWERS AND DUTIES OF AGENCY.  (a)  Provides that
the agency is responsible for administering human services programs for
children and families, including certain duties. 

(b)  Requires the agency to administer other programs and services for
children and families that the commissioner delegates to the agency as the
commissioner determines necessary to efficiently provide those services in
this state. 

Sec. 161.072.  INFORMATION REGARDING COMPLAINTS.  (a)  Requires the agency
to maintain a file on each written complaint filed with the agency.
Requires the file to  include certain information. 
  
(b)  Requires the agency to provide to the person filing the complaint and
to each person who is a subject of the complaint a copy of the
commissioner's and the agency's policies and procedures relating to
complaint investigation and resolution. 
 
(c)  Requires the agency, at least quarterly until final disposition of
the complaint, to notify the person filing the complaint and each person
who is a subject of the complaint of the status of the investigation
unless the notice would jeopardize an undercover investigation. 
 
Sec. 161.073.  RULES.  Authorizes the commissioner to adopt rules
reasonably necessary for the agency to administer this chapter, consistent
with the memorandum of understanding under Section 531.0055(k), Government
Code, between the executive director and the commissioner, as adopted by
rule. 

[Reserves Chapters 162-180 for expansion]

SUBTITLE B.  SERVICES FOR THE AGING
CHAPTER 181.  DEPARTMENT ON AGING
SUBCHAPTER A.  GENERAL PROVISIONS

Sec. 181.001.  DEFINITIONS.  Defines "advisory board," "agency,"
"commission," commissioner," and  "executive director."  

Sec. 181.002.  AGENCY.  Provides that the Department on Aging (agency) is
an agency of the state. 

Sec. 181.003.  SUNSET PROVISION.  Continues the agency until September 1,
2009. 

[Reserves Sections 181.004-181.020 for expansion.]

SUBCHAPTER B.  ADMINISTRATIVE PROVISIONS

Sec. 181.021.  ADVISORY BOARD FOR AGING SERVICES.  (a)  Provides that the
advisory board for aging services is created to assist the commissioner in
developing rules and policies for the agency. 

(b)  Sets forth the composition of the advisory board.  

(c)  Prohibits a person from being a public member of the advisory board
if the person or the person's spouse meets certain criteria.  
  
(d)  Requires the advisory board to study and make recommendations to the
executive director regarding the management and operation of the agency,
including policies and rules governing the delivery of services to persons
who are served by the agency and the rights and duties of persons who are
served or regulated by the agency. 

 (e)  Provides that Chapter 551 (Open Meetings), Government Code, applies
to the advisory board. 

(f)  Provides that Chapter 2110, Government Code (State Agency Advisory
Committee), does not apply to the advisory board. 

Sec. 181.022.  APPOINTMENTS.  Adds standard Sunset language regarding
appointments to the advisory board. 
 
 Sec. 181.023.  CONFLICTS OF INTEREST.  Adds standard Sunset language
regarding conflicts of interest. 

Sec. 181.024.  TRAINING PROGRAM FOR ADVISORY BOARD MEMBERS.  Adds standard
Sunset language regarding training for a person who is appointed as a
member of the advisory board. 

Sec. 181.025.  TERMS.  Sets forth the terms for advisory board members.

Sec. 181.026.  VACANCY.  Requires the governor by appointment to fill the
unexpired term of a vacancy on the advisory board. 

Sec. 181.027.  PRESIDING OFFICER; OTHER OFFICERS; MEETINGS.  (a)  Requires
the governor to designate a member of the advisory board as the presiding
officer to serve in that capacity at the pleasure of the governor. 

(b)  Requires the members of the advisory board to elect any other
necessary officers. 
 
(c)  Requires the advisory board to meet quarterly and at other times at
the call of the presiding officer.  Authorizes the board to hold meetings
in different areas of the state. 
 
Sec. 181.028.  REIMBURSEMENT FOR EXPENSES.  Adds standard Sunset language
regarding reimbursement for advisory board members.  
 
Sec. 181.029.  PUBLIC INTEREST INFORMATION AND COMPLAINTS.  Adds standard
Sunset language regarding information of public interest and complaints. 

Sec. 181.030.  PUBLIC ACCESS AND TESTIMONY.  Adds standard Sunset language
regarding public access and testimony. 
 
Sec. 181.031.  POLICYMAKING AND MANAGEMENT RESPONSIBILITIES.  Adds
standard Sunset language regarding policies that clearly delineate the
policymaking responsibilities of the commissioner from the management
responsibilities of HHSC, the executive director, and the staff of the
agency. 

Sec. 181.032.  ANNUAL REPORT.  Adds standard Sunset language regarding a
report accounting for all funds received and disbursed by the agency
during the preceding fiscal year. 
 
Sec. 181.033.  OFFICES.  Requires the agency to maintain its central
office in Austin. Authorizes the agency to maintain offices in other areas
of the state as necessary. 

[Reserves Sections 181.034-181.050 for expansion.]

SUBCHAPTER C.  PERSONNEL

Sec. 181.051.  EXECUTIVE DIRECTOR.  (a)  Requires the commissioner to
appoint an executive director, who is to be selected according to
education, training, experience, and demonstrated ability. 

(b)  Provides that the executive director serves at the pleasure of the
commissioner. 

(c)  Requires the executive director to act as the agency's chief
administrative officer and as a liaison between the agency and HHSC. 

(d)  Requires the executive director to administer this chapter under
operational  policies established by the commissioner and in accordance
with the memorandum of understanding under Section 531.0055(k), Government
Code, between the executive director and the commissioner, as adopted by
rule. 

Sec. 181.052.  PERSONNEL.  (a)  Authorizes the agency to employ,
compensate, and prescribe the duties of personnel necessary and suitable
to administer this chapter. 

  (b)  Requires the commissioner to prepare and by rule adopt personnel
standards. 

(c)  Authorizes a personnel position to be filled only by an individual
selected and appointed on a nonpartisan merit basis. 

(d)  Requires the commissioner, with the advice of the advisory board, to
develop and the agency to implement policies that clearly define the
responsibilities of the staff of the agency. 

Sec. 181.053.  INFORMATION ABOUT QUALIFICATIONS AND STANDARDS OF CONDUCT.
Adds standard Sunset language regarding information about qualifications
and standards of conduct.  
 
Sec. 181.054.  MERIT PAY.  Requires the executive director or the
executive director's designee, subject to rules adopted by the
commissioner, to develop a system of annual performance evaluations.
Requires all merit pay for agency employees to be given under the system
established under this section or under rules adopted by the commissioner. 

Sec. 181.055.  CAREER LADDER.  Requires the executive director or the
executive director's designee to develop an intra-agency career ladder
program.  Requires the program to require intra-agency postings of all
nonentry-level positions concurrently with any public posting. 
 
Sec. 181.056.  EQUAL EMPLOYMENT OPPORTUNITY POLICY.  Adds standard Sunset
language regarding an equal employment opportunity policy.   

Sec. 181.057.  STATE EMPLOYEE INCENTIVE PROGRAM.  Adds standard Sunset
language regarding a state employee incentive program. 

[Reserves Sections 181.058-181.070 for expansion.]

SUBCHAPTER D.  POWERS AND DUTIES OF AGENCY

Sec. 181.071.  GENERAL POWERS AND DUTIES OF AGENCY.  (a)  Requires the
agency to perform certain duties and functions.  
  
(b)  Requires the agency to administer other programs and services for the
aging that the commissioner delegates to the agency as the commissioner
determines necessary to efficiently provide those services in this state. 

Sec. 181.072.  INFORMATION REGARDING COMPLAINTS.  Adds standard Sunset
language regarding complaints. 
   
Sec. 181.073.  RULES.  Authorizes the commissioner to adopt rules
reasonably necessary for the agency to administer this chapter, consistent
with the memorandum of understanding under Section 531.0055(k), Government
Code, between the executive director and the commissioner, as adopted by
rule. 

[Reserves Chapters 182-200 for expansion.]

SUBTITLE C.  SERVICES FOR PERSONS WITH DISABILITIES
CHAPTER 201.  DEPARTMENT FOR PERSONS WITH DISABILITIES
 SUBCHAPTER A.  GENERAL PROVISIONS

Sec. 201.001.  DEFINITIONS.  Defines "advisory board," "agency,"
"commission," "commissioner," and "executive director." 

 Sec. 201.002.  AGENCY.  Provides that the Department for Persons with
Disabilities             (agency) is an agency of the state. 

Sec. 201.003.  SUNSET PROVISION.  Continues the Department for Persons
with Disabilities until September 1, 2009. 

[Reserves Sections 201.004-201.020 for expansion.]

SUBCHAPTER B.  ADMINISTRATIVE PROVISIONS

Sec. 201.021.  ADVISORY BOARD FOR PERSONS WITH DISABILITIES.  (a) Provides
that the advisory board for persons with disabilities is created to assist
the commissioner in developing rules and policies for the agency. 

(b)  Sets forth the composition for the advisory board for persons with
disabilities. 

(c)  Prohibits a  person from being a public member of the advisory board
if the person or the person's spouse meets certain criteria. 
  
(d)  Requires the advisory board to study and make recommendations to the
executive director regarding the management and operation of the agency,
including policies and rules governing the delivery of services to persons
who are served by the agency and the rights and duties of persons who are
served or regulated by the agency. 

 (e)  Provides that Chapter 551 (Open Meetings), Government Code, applies
to the             advisory board. 
 
(f)  Provides that Chapter 2110 (State Agency Advisory Committees),
Government Code, does not apply to the advisory board. 
 
Sec. 201.022.  APPOINTMENTS.  Adds standard Sunset language regarding
appointments to the advisory board. 

Sec. 201.023.  CONFLICTS OF INTEREST.  Adds standard Sunset language
regarding conflicts of interest. 

Sec. 201.024.  TRAINING PROGRAM FOR ADVISORY BOARD MEMBERS.  Adds standard
Sunset language regarding a training program for advisory board members. 

 Sec. 201.025.  TERMS.  Sets forth the terms for advisory board members. 

Sec. 201.026.  VACANCY.  Requires the governor by appointment to fill the
unexpired term of a vacancy on the advisory board. 
 
Sec. 201.027.  PRESIDING OFFICER; OTHER OFFICERS; MEETINGS.  (a)  Requires
the governor to designate a member of the advisory board as the presiding
officer to serve in that capacity at the pleasure of the governor. 

(b)  Requires the members of the advisory board to elect any other
necessary officers. 
 
(c)  Requires the advisory board to meet quarterly and at other times at
the call of the presiding officer.  Authorizes the board to hold meetings
in different areas of  the state. 
 
Sec. 201.028.  REIMBURSEMENT FOR EXPENSES.  Adds standard Sunset language
regarding reimbursement for advisory board members. 
 
Sec. 201.029.  PUBLIC INTEREST INFORMATION AND COMPLAINTS.  Adds standard
Sunset language regarding information of public interest and complaints.  

Sec. 201.030.  PUBLIC ACCESS AND TESTIMONY.  Requires the commissioner to
develop and implement policies that provide the public with a reasonable
opportunity to appear before the advisory board or commissioner and to
speak on any issue under the jurisdiction of the agency. 
 
Sec. 201.031.  POLICYMAKING AND MANAGEMENT RESPONSIBILITIES.  Adds
standard Sunset language regarding policies that clearly delineate the
policymaking responsibilities of the commissioner from the management
responsibilities of HHSC, the executive director, and the staff of the
agency. 

Sec. 201.032.  ANNUAL REPORT.  (a)  Requires the executive director to
file annually with the commissioner a complete and detailed written report
accounting for all funds received and disbursed by the agency during the
preceding fiscal year. 
 
(b)  Requires the annual report to be in the form and be reported in the
time provided by the commissioner. 
 
Sec. 201.033.  OFFICES.  Requires the agency to maintain its central
office in Austin. Authorizes the agency to maintain offices in other areas
of the state as necessary. 

[Reserves sections 201.034-201.050 for expansion.]

SUBCHAPTER C.  PERSONNEL

Sec. 201.051.  EXECUTIVE DIRECTOR.  (a)  Requires the commissioner to
appoint an executive director, who is to be selected according to
education, training, experience, and demonstrated ability. 
 
(b)  Provides that the executive director serves at the pleasure of the
commissioner. 
 
(c)  Requires the executive director to act as the agency's chief
administrative officer and as a liaison between the agency and HHSC. 
 
(d)  Requires the executive director to administer this chapter under
operational policies established by the commissioner and in accordance
with the memorandum of understanding under Section 531.0055(k), Government
Code, between the executive director and the commissioner, as adopted by
rule. 
 
Sec. 201.052.  PERSONNEL.  (a)  Authorizes the agency to employ,
compensate, and prescribe the duties of personnel necessary and suitable
to administer this chapter. 
 
(b)  Requires the commissioner to prepare and by rule adopt personnel
standards. 
 
(c)  Authorizes a personnel position to be filled only by an individual
selected and appointed on a nonpartisan merit basis. 
 
(d)  Requires the commissioner, with the advice of the advisory board, to
develop and the agency to implement policies that clearly define the
responsibilities of the staff of the agency. 

 Sec. 201.053.  INFORMATION ABOUT QUALIFICATIONS AND STANDARDS OF CONDUCT.
Adds standard Sunset language regarding standards of conduct for state
employees. 
 
Sec. 201.054.  MERIT PAY.  Adds standard Sunset language regarding merit
pay for agency employees. 
 
Sec. 201.055.  CAREER LADDER.  Adds standard Sunset language regarding an
intraagency career ladder program.  

Sec. 201.056.  EQUAL EMPLOYMENT OPPORTUNITY POLICY.  Adds standard Sunset
language regarding an equal employment opportunity policy 

Sec. 201.057.  STATE EMPLOYEE INCENTIVE PROGRAM.  Adds standard Sunset
language regarding a state employee incentive program. 

[Reserves Sections 201.058-201.070 for expansion.]

SUBCHAPTER D.  POWERS AND DUTIES OF AGENCY

Sec. 201.071.  GENERAL POWERS AND DUTIES OF AGENCY.  (a)  Provides that
the agency is responsible for performing certain functions. 
  
(b)  Requires the agency to administer other programs and services for
persons with disabilities that the commissioner delegates to the agency as
the commissioner determines necessary to efficiently provide those
services in this state. 
 
Sec. 201.072.  INFORMATION REGARDING COMPLAINTS.  Adds standard Sunset
language regarding complaints 

Sec. 201.073.  RULES.  Authorizes the commissioner to adopt rules
reasonably necessary for the agency to administer this chapter, consistent
with the memorandum of understanding under Section 531.0055(k), Government
Code, between the executive director and the commissioner, as adopted by
rule. 
 
SECTION 2.03.  APPOINTMENTS OF EXECUTIVE DIRECTORS.  Requires the
commissioner of health and human services, as soon as possible after the
effective date of this article, to appoint the executive directors of: 

(1)  the Department for Health and Mental Health in accordance with
Chapter 1001, Health and Safety Code, as added by this article; 
(2)  the Department for Children and Families in accordance with Chapter
161, Human Resources Code, as added by this article; 
(3)  the Department on Aging in accordance with Chapter 181, Human
Resources Code, as added by this article; and 
(4)  the Department for Persons with Disabilities in accordance with
Chapter 201, Human Resources Code, as added by this article. 
 
SECTION 2.04.  APPOINTMENTS OF BOARD MEMBERS.  (a)  Requires the governor,
as soon as possible after the effective date of this article, to appoint
the members of the advisory board for health and mental health in
accordance with Chapter 1001, Health and Safety Code, as added by this
article.  Requires the governor in making the initial appointments, to
designate three members for terms expiring February 1, 2005, two members
for terms expiring February 1, 2007, and two members for terms expiring
February 1, 2009. 

(b)  Requires the governor, as soon as possible after the effective date
of this article, to appoint the members of the advisory board for child
and family services in accordance with Chapter 161, Human Resources Code,
as added by this article.  Requires the governor in making the initial
appointments, to designate three members for terms expiring February 1,
2005, two members for terms expiring February 1, 2007, and two members for
terms expiring February 1, 2009. 
 
(c)  Requires the governor, as soon as possible after the effective date
of this article, to appoint the members of the advisory board for aging
services in accordance with Chapter 181, Human Resources Code, as added by
this article. Requires the governor in making the initial appointments, to
designate three members for terms expiring February 1, 2005, two members
for terms expiring February 1, 2007, and two members for terms expiring
February 1, 2009. 
 
(d)  Requires the governor, as soon as possible after the effective date
of this article, to appoint the members of the advisory board for persons
with disabilities in accordance with Chapter 201, Human Resources Code, as
added by this article. Requires the governor in making the initial
appointments, to designate three members for terms expiring February 1,
2005, two members for terms expiring February 1, 2007, and two members for
terms expiring February 1, 2009. 
 
SECTION 2.05.  LIMITATION ON ACTIVITIES.  Authorizes a state agency
created under this article to, before September 1, 2004, perform only
those powers, duties, functions, and activities that relate to preparing
for the transfer of powers, duties, functions, programs, and activities to
that agency in accordance with Article 3 of this Act.  Prohibits a state
agency created under this article from operating all or any part of a
health and human services program before September 1, 2004. 
 
SECTION 2.06.  INITIAL ADVISORY BOARD MEETINGS.  Requires the presiding
officer of the advisory board for each state agency created under this
article to call the initial meeting of the advisory board as soon as
possible after the advisory board members are appointed. 
 
SECTION 2.07.  EFFECTIVE DATE.  Provides that this article takes effect
June 1, 2004, and the Department for Health and Mental Health, the
Department for Children and Families, the Department on Aging, and the
Department for Persons with Disabilities are created on that date. 

ARTICLE 3.  INTERAGENCY TRANSFERS OF PROPERTY,
RECORDS, OBLIGATIONS, FUNDS, FUNCTIONS, PROGRAMS,
AND ACTIVITIES

SECTION 3.01.  TRANSFERS TO THE HEALTH AND HUMAN SERVICES COMMISSION. (a)
Provides that on September 1, 2004, certain powers, duties, functions,
programs, and activities are transferred to the Health and Human Services
Commission. 
  
(b)  Provides that on the date specified by Subsection (a) of this section:

(1)  all obligations and contracts of a state agency or entity abolished
by Section 5.01 of this Act that are related to a power, duty, function,
program, or activity transferred under Subsection (a) of this section are
transferred to the Health and Human Services Commission; 

(2)  all property and records in the custody of a state agency or entity
abolished by Section 5.01 of this Act that are related to a power, duty,
function, program, or activity transferred under Subsection (a) of this
section and all funds appropriated by the legislature for the power, duty,
function, program, or activity shall be transferred to the Health and
Human Services Commission; and 

(3)  all complaints, investigations, or contested cases that are pending
before a state agency or entity abolished by Section 5.01 of this Act or
the governing body of the agency or entity and that are related to a
power, duty, function, program, or activity transferred under Subsection
(a) of this section are transferred without change in status to the Health
and Human Services Commission. 
      
(c)  Provides that a rule or form adopted by a state agency or entity
abolished by Section 5.01 of this Act that relates to a power, duty,
function, program, or activity transferred under Subsection (a) of this
section is a rule or form of the Health and Human Services Commission and
remains in effect until altered by HHSC. 

(d)  Provides that a reference in law to a state agency or entity
abolished by Section 5.01 of this Act, or to the governing body of the
agency or entity, that relates to a power, duty, function, program, or
activity transferred under Subsection (a) of this section means the Health
and Human Services Commission. 
 
(e)  Provides that a license, permit, or certification in effect that was
issued by a state agency or entity abolished by Section 5.01 of this Act
and that relates to a power, duty, function, program, or activity
transferred under Subsection (a) of this section is continued in effect as
a license, permit, or certification of the Health and Human Services
Commission. 
 
SECTION 3.02.  TRANSFERS TO THE DEPARTMENT FOR HEALTH AND MENTAL HEALTH.
(a)  Provides that on September 1, 2004, certain powers, duties,
functions, programs, and activities, other than those related to
rulemaking or policymaking, or administrative support services such as
strategic planning and evaluation, audit, legal, human resources,
accounting, purchasing, financial management, and contract management
services, are transferred to the Department for Health and Mental Health. 

(b)  Provides that on the date specified by Subsection (a) of this section:

(1)  all obligations and contracts of an entity listed in Subsection (a)
of this section that are related to a power, duty, function, program, or
activity transferred under that subsection are transferred to the
Department for Health and Mental Health; 

(2)  all property and records in the custody of an entity listed in
Subsection (a) of this section that are related to a power, duty,
function, program, or activity transferred under that subsection and all
funds appropriated by the legislature for the power, duty, function,
program, or activity shall be transferred to the Department for Health and
Mental Health; and 

(3)  all complaints, investigations, or contested cases that are pending
before an entity or the governing body of an entity listed in Subsection
(a) of this section and that are related to a power, duty, function,
program, or activity transferred under that subsection are transferred
without change in status to the Department for Health and Mental Health. 
 
(c)  Provides that a rule or form adopted by an entity listed in
Subsection (a) of this section that relates to a power, duty, function,
program, or activity transferred under that subsection is a rule or form
of the Department for Health and Mental Health and remains in effect until
altered by the commissioner of health and human services. 

(d)  Provides that reference in law to an entity listed in Subsection (a)
of this section that relates to a power, duty, function, program, or
activity transferred under that subsection means, as appropriate, the
Department for Health and Mental Health or any other health and human
services agency to which the commissioner of health and human services
transfers the power, duty, function, program, or activity under Section
531.0165, Government Code, as added by this Act.  Provides that a
reference in law to the governing body of an entity listed in Subsection
(a) of this section means the Health and Human Services Commission or the
commissioner of health and human services. 
 
(e)  Provides that a license, permit, or certification in effect that was
issued by an entity listed in Subsection (a) of this section and that
relates to a power, duty, function, program, or activity transferred under
that subsection is continued in effect as a license,  permit, or
certification of the Department for Health and Mental Health. 

SECTION 3.03.  TRANSFERS TO THE DEPARTMENT FOR CHILDREN AND FAMILIES.  (a)
Provides that on September 1, 2004, certain powers, duties, functions,
programs, and activities, other than those related to rulemaking or
policymaking, or administrative support services such as strategic
planning and evaluation, audit, legal, human resources, accounting,
purchasing, financial management, and contract management services, are
transferred to the Department for Children and Families. 
    
 (b)  Provides that on the date specified by Subsection (a) of this
section: 
  
(1)  all obligations and contracts of an entity listed in Subsection (a)
of this section that are related to a power, duty, function, program, or
activity transferred under that subsection are transferred to the
Department for Children and Families; 

(2)  all property and records in the custody of an entity listed in
Subsection (a) of this section that are related to a power, duty,
function, program, or activity transferred under that subsection and all
funds appropriated by the legislature for the power, duty, function,
program, or activity shall be transferred to the Department for Children
and Families; and 

(3)  all complaints, investigations, or contested cases that are pending
before an entity or the governing body of an entity listed in Subsection
(a) of this section and that are related to a power, duty, function,
program, or activity transferred under that subsection are transferred
without change in status to the Department for Children and Families. 
 
(c)  Provides that a rule or form adopted by an entity listed in
Subsection (a) of this section that relates to a power, duty, function,
program, or activity transferred under that subsection is a rule or form
of the Department for Children and Families and remains in effect until
altered by the commissioner of health and human services. 

(d)  Provides that a reference in law to an entity listed in Subsection
(a) of this section that relates to a power, duty, function, program, or
activity transferred under that subsection means, as appropriate, the
Department for Children and Families or any other health and human
services agency to which the commissioner of health and human services
transfers the power, duty, function, program, or activity under Section
531.0165, Government Code, as added by this Act.  Provides that a
reference in law to the governing body of an entity listed in Subsection
(a) of this section means the Health and Human Services Commission or the
commissioner of health and human services. 
 
(e)  Provides that a license, permit, or certification in effect that was
issued by an entity listed in Subsection (a) of this section and that
relates to a power, duty, function, program, or activity transferred under
that subsection is continued in effect as a license, permit, or
certification of the Department for Children and Families. 

SECTION 3.04.  TRANSFERS TO THE DEPARTMENT ON AGING.  (a)  Provides that
on September 1, 2004, certain powers, duties, functions, programs, and
activities, other than those related to rulemaking or policymaking, or
administrative support services such as strategic planning and evaluation,
audit, legal, human resources, accounting, purchasing, financial
management, and contract management services, are transferred to the
Department on Aging: 
  
(b)  Provides that on the date specified by Subsection (a) of this section:

(1)  all obligations and contracts of an entity listed in Subsection (a)
of this section that are related to a power, duty, function, program, or
activity transferred under that subsection are transferred to the
Department on Aging; 

(2)  all property and records in the custody of an entity listed in
Subsection (a) of this  section that are related to a power, duty,
function, program, or activity transferred under that subsection and all
funds appropriated by the legislature for the power, duty, function,
program, or activity shall be transferred to the Department on Aging; and 

(3)  all complaints, investigations, or contested cases that are pending
before an entity or the governing body of an entity listed in Subsection
(a) of this section and that are related to a power, duty, function,
program, or activity transferred under that subsection are transferred
without change in status to the Department on Aging. 
 
(c)  Provides that a rule or form adopted by an entity listed in
Subsection (a) of this section that relates to a power, duty, function,
program, or activity transferred under that subsection is a rule or form
of the Department on Aging and remains in effect until altered by the
commissioner of health and human services. 
 
(d)  Provides that a reference in law to an entity listed in Subsection
(a) of this section that relates to a power, duty, function, program, or
activity transferred under that subsection means, as appropriate, the
Department on Aging or any other health and human services agency to which
the commissioner of health and human services transfers the power, duty,
function, program, or activity under Section 531.0165, Government Code, as
added by this Act.  Provides that a reference in law to the governing body
of an entity listed in Subsection (a) of this section means the Health and
Human Services Commission or the commissioner of health and human
services. 
 
(e)  Provides that a license, permit, or certification in effect that was
issued by an entity listed in Subsection (a) of this section and that
relates to a power, duty, function, program, or activity transferred under
that subsection is continued in effect as a license, permit, or
certification of the Department on Aging. 
 
SECTION 3.05.  TRANSFERS TO THE DEPARTMENT FOR PERSONS WITH DISABILITIES.
(a)  Provides that on September 1, 2004, certain powers, duties,
functions, programs, and activities, other than those related to
rulemaking or policymaking, or administrative support services such as
strategic planning and evaluation, audit, legal, human resources,
accounting, purchasing, financial management, and contract management
services, are transferred to the Department for Persons with Disabilities: 
  
(b)  Provides that on the date specified by Subsection (a) of this section:

(1)  all obligations and contracts of an entity listed in Subsection (a)
of this section that are related to a power, duty, function, program, or
activity transferred under that subsection are transferred to the
Department for Persons with Disabilities; 

(2)  all property and records in the custody of an entity listed in
Subsection (a) of this section that are related to a power, duty,
function, program, or activity transferred under that subsection and all
funds appropriated by the legislature for the power, duty, function,
program, or activity shall be transferred to the Department for Persons
with Disabilities; and 

(3)  all complaints, investigations, or contested cases that are pending
before an entity or the governing body of an entity listed in Subsection
(a) of this section and that are related to a power, duty, function,
program, or activity transferred under that subsection are transferred
without change in status to the Department for Persons with Disabilities. 
 
(c)  Provides that a rule or form adopted by an entity listed in
Subsection (a) of this section that relates to a power, duty, function,
program, or activity transferred under that subsection is a rule or form
of the Department for Persons with Disabilities and remains in effect
until altered by the commissioner of health and human services. 
  
(d)  Provides that a reference in law to an entity listed in Subsection
(a) of this section that relates to a power, duty, function, program, or
activity transferred under that subsection means, as appropriate, the
Department for Persons with Disabilities or any other health and human
services agency to which the commissioner of health and human services
transfers the power, duty, function, program, or activity under Section
531.0165, Government Code, as added by this Act.  Provides that a
reference in law to the governing body of an entity listed in Subsection
(a) of this section means the Health and Human Services Commission or the
commissioner of health and human services. 

(e)  Provides that a license, permit, or certification in effect that was
issued by an entity listed in Subsection (a) of this section and that
relates to a power, duty, function, program, or activity transferred under
that subsection is continued in effect as a license, permit, or
certification of the Department for Persons with Disabilities. 
 
SECTION 3.06.  FACILITATION OF TRANSFERS BY COMMISSIONER OF HEALTH AND
HUMAN SERVICES.  (a)  Requires the commissioner, to facilitate the
transfer of power, duties, functions, programs, and activities among the
state's health and human services agencies, the Health and Human Services
Commission, and other agencies as provided by this article with a minimal
negative effect on the delivery of health and human services in this
state, to: 

(1)  for each power, duty, function, program, or activity transferred
under this article, make certain determinations; and  

(2)  oversee and assist the entities listed in Sections 3.01, 3.02, 3.03,
3.04, and 3.05 of this article in transferring the powers, duties,
functions, programs, activities, records, property, funds, obligations,
and employees in accordance with this article. 
 
(b)  Requires a state agency or entity abolished by Section 5.01 of this
Act to assist the commissioner of health and human services in planning
for an orderly transfer of powers, duties, functions, programs, and
activities as provided by this article. 

SECTION 3.07.  APPLICABILITY OF FORMER LAW.  Provides that an action
brought or proceeding commenced before the effective date of a transfer
prescribed by this article, including a contested case or a remand of an
action or proceeding by a reviewing court, is governed by the laws and
rules applicable to the action or proceeding before the transfer. 

ARTICLE 4.  OPERATION OF THE MEDICAL
ASSISTANCE PROGRAM

SECTION 4.01.  Amends Section 32.024, Human Resources Code, by adding
Subsection (t-1) to prohibit the Health and Human Services Commission
(department), in its rules governing the medical transportation program,
from prohibiting a recipient of medical assistance from receiving
transportation services through the program on the basis that the
recipient resides in a nursing facility. 
 
SECTION 4.02.  Amends Section 32.026, Human Resources Code, by adding
Subsection (d-1) to require the department to establish not more than four
call centers for purposes of determining and certifying the eligibility
and need for public assistance benefits administered by the department,
including determining and certifying the eligibility and need for medical
assistance for children under 19 years of age. 

SECTION 4.03.  Amends Chapter 32B, Human Resources Code, by adding Section
32.0291, as follows: 
 
Sec. 32.0291.  PREPAYMENT REVIEWS AND POSTPAYMENT HOLDS.  (a) Authorizes
the department, notwithstanding any other law, to: 
  
 (1)  perform a prepayment review of a claim for reimbursement under the
medical assistance program to determine whether the claim involves fraud
or abuse; and 
  
(2)  as necessary to perform that review, withhold payment of the claim
for not more than five working days without notice to the person
submitting the claim. 
 
(b)  Authorizes the department notwithstanding any other law, to impose a
postpayment hold on payment of future claims submitted by a provider if
the department has reliable evidence that the provider has committed fraud
or wilful misrepresentation regarding a claim for reimbursement under the
medical assistance program.  Requires the department to notify the
provider of the postpayment hold not later than the fifth working day
after the date the hold is imposed. 

SECTION 4.04.  Amends Section 32.032, Human Resources Code, as follows:
 
Sec. 32.032.  New heading:  PREVENTION AND DETECTION OF FRAUD AND ABUSE.
Makes conforming changes. 

SECTION 4.05.  Amends Section 32.0321(a), Human Resources Code, to require
the department by rule to require a provider of medical assistance to file
with the department a surety bond in a reasonable amount if the department
identifies an irregularity relating to the provider's services under the
medical assistance program that indicates the need for protection against
potential future acts of fraud or abuse. 
 
SECTION 4.06.  Amends Section 32.039(a), Human Resources Code, by adding
Subdivision (1a) to provide that "inducement" includes a service, cash in
any amount, entertainment, or any item of value. 

SECTION 4.07.  Amends Section 32.039, Human Resources Code, by amending
Subsections (b), (u), and (v) and adding Subsections (w) and (x) as
follows: 

 (b)  Provides that a person commits a violation if the person:
  
(1)  presents or causes to be presented to the department a claim that
contains a statement or representation the person knows or should know to
be false; 
  
(1-a)  engages in conduct that violates Section 102.001, Occupations Code;
  
(1-b)  solicits or receives, directly or indirectly, overtly or covertly
any remuneration, including any kickback, bribe, or rebate, in cash or in
kind for referring an individual to a person for the furnishing of, or for
arranging the furnishing of, any item or service for which payment may be
made, in whole or in part, under the medical assistance program; 
  
(1-c)  solicits or receives, directly or indirectly, overtly or covertly
any remuneration, including any kickback, bribe, or rebate, in cash or in
kind for purchasing, leasing, or ordering, or arranging for or
recommending the purchasing, leasing, or ordering of any good, facility,
service, or item for which payment may be made, in whole or in part, under
the medical assistance program; 
  
(1-d)  offers or pays, directly or indirectly, overtly or covertly any
remuneration, including any kickback, bribe, or rebate, in cash or in kind
to induce a person to refer an individual to another person for the
furnishing of, or for arranging the furnishing of, any item or service for
which payment made be made, in whole or in part, under the medical
assistance program; 
  
(1-e)  offers or pays, directly or indirectly, overtly or covertly any
remuneration, including any kickback, bribe, or rebate, in cash or in kind
to induce a person to purchase, lease, or order or arrange for or
recommend the purchase, lease, or order of any good, facility, service, or
item for which payment may be made, in whole or in part, under the medical
assistance program; 
  
(1-f)  provides or offers an inducement in a manner or for a purpose not
otherwise prohibited by this section or Section 102.001, Occupations Code,
to an individual, including a recipient, provider, or employee of a
provider, for the purpose of influencing a decision regarding selection of
a provider or  receipt of a good or service under the medical assistance
program or for the purpose of otherwise influencing a decision regarding
the use of goods or services provided under the medical assistance
program; or 
  
(2)  No change to subsection.

(u)  Makes conforming changes.
 
(v)  Makes conforming changes.
 
(w)  Authorizes the department by rule to prescribe criteria under which a
person described by Subsection (u) or (v) is not prohibited from providing
or arranging to provide health care services under the medical assistance
program.  Authorizes the criteria to include consideration of certain
factors. 
   
(x)  Provides that Subsections (b)(1-b) through (1-f) do not prohibit a
person from engaging in: 
  
(1)  generally accepted business practices, as determined by department
rule, including: 

(A)  conducting a marketing campaign;
(B)  providing token items of minimal value that advertise the person's
trade name; and 
(C)  providing complimentary refreshments at an informational meeting
promoting the person's goods or services; or 

(2)  conduct specifically authorized by law.
 
SECTION 4.08.  Amends Subchapter B, Chapter 32, Human Resources Code, by
adding Section 32.0391 as follows: 

Sec. 32.0391.  CRIMINAL OFFENSE.  (a)  Provides that a person commits an
offense if the person commits a violation under Section 32.039(b)(1-b),
(1-c), (1-d), or (1-e). 

 (b)  Provides that an offense under this section is a state jail felony.

(c)  Provides that if conduct constituting an offense under this section
also constitutes an offense under another provision of law, including a
provision in the Penal Code, the person may be prosecuted under either
this section or the other provision. 

SECTION 4.09.  Amends Chapter 32B, Human Resources Code, by adding Section
32.0423, as follows: 
 
Sec. 32.0423.  RECOVERY OF REIMBURSEMENTS FROM HEALTH COVERAGE PROVIDERS.
Requires the medical assistance identification card of a recipient of
medical assistance to state whether the recipient is covered by any
third-party health coverage or insurance.  Requires a health care service
provider to the extent allowed by federal law, to seek reimbursement from
available third-party health coverage or insurance before billing the
medical assistance program. 

SECTION 4.10.  Amends Section 32.050, Human Resources Code, by adding
Subsections (d) and (e), as follows: 

(d)  Requires a nursing facility, home health services provider, or any
other similar longterm care services provider to: 

(1)  seek reimbursement from Medicare before billing the medical
assistance program for services provided to an individual identified under
Subsection (a); and 
(2)  as directed by the department, appeal Medicare claim denials for
payment of services provided to an individual identified under Subsection
(a). 
 
(e)  Prohibits the medical assistance program, if the Medicare
reimbursement rate for a service provided to an individual identified
under Subsection (a) exceeds the medical assistance reimbursement rate for
a comparable service, from paying a Medicare coinsurance or deductible
amount for that service. 

SECTION 4.11.  Amends Chapter 32B, Human Resources Code,by adding Section
32.060 as follows: 

Sec. 32.060.  THIRD-PARTY BILLING VENDORS.  (a)  Prohibits a third-party
billing vendor from submitting a claim with the department for
reimbursement on behalf of a provider of medical services under the
medical assistance program unless the vendor has entered into a contract
with the department authorizing that activity. 

(b)  Requires the contract to the extent practical, to contain provisions
comparable to the provisions contained in contracts between the department
and providers of medical services, with an emphasis on provisions designed
to prevent fraud or abuse under the medical assistance program.  Requires
the contract, at a minimum, to require the third-party billing vendor to
take certain actions. 

(c)  Requires the department, on receipt of a claim submitted by a
third-party billing vendor, to send a remittance notice directly to the
provider referenced in the claim.  Requires the notice to: 

(1)  include detailed information regarding the claim submitted on behalf
of the provider; and 

(2)  require the provider to review the claim for accuracy and notify the
department promptly regarding any errors. 

(d)  Requires the department to take all action necessary, including any
modifications of the department's claims processing system, to enable the
department to identify and verify a third-party billing vendor submitting
a claim for reimbursement under the medical assistance program, including
identification and verification of any computer or telephone line used in
submitting the claim, any relevant user password used in submitting the
claim, and any provider number referenced in the claim. 

SECTION 4.12.  Amends Chapter 531B, Government Code, by adding Sections
531.0392 and 531.063, as follows: 

Sec. 531.0392.  RECOVERY OF THIRD-PARTY REIMBURSEMENTS UNDER  MEDICAID.
(a)  Defines "dually eligible individual." 

(b)  Requires HHSC to contract directly on a no-risk contingency fee basis
with a consulting firm experienced in third-party reimbursements to assist
the state in increasing third-party reimbursements under the Medicaid
program. 

(c)  Requires HHSC to require a consulting firm with whom HHSC contracts
under this section to perform certain actions. 
   
(d)  Requires HHSC to obtain Medicaid reimbursement from each fiscal
intermediary who makes a payment to a service provider on behalf of the
Medicare program, including a reimbursement for a payment made to a home
health services provider or nursing facility for services rendered to a
dually eligible individual. 

Sec. 531.063.  MEMORANDUM OF UNDERSTANDING RELATING TO CERTAIN
CLASS-ACTION LAWSUITS.  Requires HHSC to enter into a memorandum of
understanding with the office of the attorney general to establish
procedures for HHSC to identify and submit requests for the review of any
health-related class-action lawsuits filed in this state or another state
to make certain determinations. 
  
SECTION 4.13.  Amends Section 531.102, Government Code, by amending
Subsections (a) and (d) and adding Subsections (f) and (g), as follows: 

 (a)  Makes a conforming change.

(d)  Makes a conforming change.
 
(f)  Provides that notwithstanding any other law, for purposes of
obtaining information relevant to the Investigations and Enforcement
Office's (office) duties from a law enforcement agency, prosecutor, or
governmental entity, the office is considered to be a law enforcement
agency and may obtain the information in the same manner as another law
enforcement agency.  Provides that information obtained by the office
under this subsection that deals with the detection, investigation, or
prosecution of crime is excepted from the requirements of Section 552.021
in the manner provided by Section 552.108. 

(g)  Authorizes the office, in connection with the investigation of fraud
and abuse in the provision of health and human services, to issue a
subpoena throughout this state to compel the attendance and testimony of a
witness or production of records.  Provides that the subpoena may compel
attendance or production at the office or at another place designated in
the subpoena. 
 
SECTION 4.14.  Amends Chapter 531C, Government Code, by adding Section
531.1021, as follows: 
 
Sec. 531.1021.  SEIZURE OF ASSETS.  (a)  Authorizes HHSC, through HHSC's
office of investigations and enforcement, to seize assets owned by a
person if certain conditions are met. 
   
(b)  Requires HHSC to provide a person whose assets are seized with an
opportunity for a hearing at which the person may contest the seizure. 
 
(c)  Prohibits HHSC from disposing of seized assets until certain
conditions are met. 
 
SECTION 4.15.  Amends Section 531.103, Government Code, by adding
Subsections (c-1) and (e-1) and amending Subsection (e), as  follows: 
 
 (c-1)  Require the office of the attorney general, not later than
November 1 of each year, in addition to the report required by Subsection
(c), to prepare and submit to the governor, the legislature, and the
comptroller a report that specifically addresses the activities of the
attorney general's Medicaid fraud control unit and civil Medicaid fraud
section.  Requires the attorney general to consult with the comptroller
regarding the format of the report and make reasonable efforts to provide
the report in the format requested by the comptroller. The report must
specify, for the Medicaid fraud control unit and the civil Medicaid fraud
section, respectively, certain information. 
  
(e)  Requires HHSC to refer a case of suspected fraud, waste, or abuse
under the state Medicaid program to the appropriate United States
attorney, district attorney, county attorney, city attorney, or private
collection agency if the attorney general fails to act within 30 days of
referral of the case to the office of the attorney general.  Provides that
a failure by the attorney general to act within 30 days constitutes
approval by the attorney general under Section 2107.003. 
 
(e-1)  Provides that in addition to the provisions required by Subsection
(a), the memorandum of understanding required by this section must
identify circumstances under which HHSC may refer a case of suspected
fraud, waste, or abuse under the state Medicaid program directly to the
appropriate United States attorney, district attorney, county attorney,
city attorney, or private collection agency.  Provides that a case
referred in accordance with this subsection is considered approved by the
attorney general under Section 2107.003. 

SECTION 4.16.  Amends Section 531.107(b), Government Code, to provide that
the task force is composed of representatives of certain state agency
offices, commissions, and departments. 
  
SECTION 4.17.  STUDY.  (a)  Requires the Medicaid and Public Assistance
Fraud Oversight Task Force, with the participation of the Texas Department
of Health's Bureau of Vital Statistics and other agencies designated by
the comptroller, to study procedures and documentation requirements used
by the state in confirming a person's identity for purposes of
establishing entitlement to Medicaid and other benefits provided through
health and human services programs. 
 
(b)  Requires the Medicaid and Public Assistance Fraud Oversight Task
Force, with assistance from the agencies participating in the study
required by Subsection (a) of this section, to, not later than December 1,
2004, submit a report to the legislature containing recommendations for
improvements in the procedures and documentation requirements described by
Subsection (a) of this section that would strengthen the state's ability
to prevent fraud and abuse in the Medicaid program and other health and
human services programs. 

SECTION 4.18.  CONSOLIDATION OF CERTAIN DIVISIONS AND ACTIVITIES.  (a)
Requires HHSC not later than March 1, 2004, to consolidate the Medicaid
post-payment thirdparty recovery divisions or activities of the Texas
Department of Human Services, the Medicaid vendor drug program, and the
state's Medicaid claims administrator with the Medicaid postpayment
third-party recovery function. 
 
(b)  Requires HHSC to use HHSC's Medicaid post-payment third-party
recovery contractor  for the consolidated division. 
 
(c)  Requires HHSC to update its computer system to facilitate the
consolidation. 
 
SECTION 4.19.  MEMORANDUMS OF UNDERSTANDING.  (a)  Requires HHSC and the
office of the attorney general, not later than January 1, 2004, to enter
into the memorandum of understanding required by Section 531.063,
Government Code, as added by this Act. 

(b)  Requires the office of the attorney general and the Health and Human
Services Commission, not later than December 1, 2003, to amend the
memorandum of  understanding required by Section 531.103, Government Code,
as necessary to comply with Section 531.103(e-1), Government Code, as
added by this Act. 
 
SECTION 4.20.  APPLICABILITY.  Makes the changes in law made by this Act
through amending Section 32.039(b), Human Resources Code, and adding
Section 32.0391, Human Resources Code, prospective 
 
SECTION 4.21.  EFFECTIVE DATE.  (a)  Provides that this article takes
effect September 1, 2003, except as otherwise provided by Subsection (b)
of this section. 
 
(b)  Provides that Section 32.060, Human Resources Code, as added by this
article, takes effect January 1, 2004. 

ARTICLE 5.  MISCELLANEOUS PROVISIONS

SECTION 5.01.  ABOLITION OF STATE AGENCIES AND ENTITIES.  (a)  Provides
that 24 state agencies and entities are abolished. 
    
(b)  Provides that the abolition of a state agency or entity listed in
Subsection (a) of this section and the transfer of its powers, duties,
functions, programs, activities, obligations, rights, contracts, records,
property, funds, and employees as provided by this Act do not affect or
impair an act done, any obligation, right, order, permit, certificate,
rule, criterion, standard, or requirement existing, or any penalty accrued
under former law, and that law remains in effect for any action concerning
those matters. 
 
SECTION 5.02.  REPEAL.  Repealer:  Article 2, Chapter 1505, Acts of the
76th Legislature, Regular Session, 1999. 
 
SECTION 5.03.  REQUIRED WAIVER OR AUTHORIZATION.  Provides that if before
implementing any provision of this Act a state agency determines that a
waiver or authorization from a federal agency is necessary for
implementation of that provision, the agency affected by the provision
shall request the waiver or authorization and may delay implementing that
provision until the waiver or authorization is granted. 

SECTION 5.04.  EFFECTIVE DATE.  Provides that this Act takes effect
September 1, 2004, except as otherwise provided by this Act.