Amend CSSB 1863 (House committee printing) in Section 7.02 of 
the bill as follows:
	(1)  In the recital to the section (page 28, line 19), strike 
"Subsections (f) and (g)" and substitute "Subsections (f)-(i)".
	(2)  At the end of the section (page 29, between lines 5 and 
6), insert:     
	(h)  The commission shall establish a pilot project to 
streamline and expedite the cost reporting and auditing processes 
for intermediate care facilities for the mentally retarded that are 
not operated by the state and for the home and community-based 
services waiver program.  The commission shall commence the pilot 
project in time to capture financial information for the 2005 
fiscal year. The commission shall ensure that the 2005 fiscal year 
information is available for use in the 2006 legislative 
appropriations process for the 80th state legislative session.  The 
commission may consider providing in the pilot program incentives 
for providers to submit independently audited financial 
information instead of reviewed financials. The pilot project must 
include the following features:
		(1)  a significantly simplified cost reporting process 
that is similar to standard financial reporting expectations in 
banking and that includes both allowable and non-allowable costs;
		(2)  reimbursement regulations that eliminate all 
minimum spending requirements, to ensure simplicity;
		(3)  rules that require providers to include with all 
reports submitted a financial review performed by an independent 
accounting firm licensed under Chapter 901, Occupations Code, in 
accordance with generally-accepted accounting principles and with 
commission guidelines; and
		(4)  provisions for filing financial information 
electronically that are:
			(A)  for the first year of the pilot program, 
optional; and         
			(B)  after the first anniversary of the pilot 
program, mandatory.   
	(i)  In developing the pilot project described by Subsection 
(h), the commission shall:
		(1)  revise reimbursement rules as necessary to 
implement the pilot program; and
		(2)  develop the simplified reporting process and 
system by a collaborative process involving:
			(A)  providers of services in intermediate care 
facilities for the mentally retarded and home and community-based 
services waiver program services; and
			(B)  accounting firms familiar with intermediate 
care facilities for the mentally retarded and the home and 
community-based services waiver program.