HBA-DMD H.B. 3625 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3625 By: Naishtat Human Services 3/22/1999 Introduced BACKGROUND AND PURPOSE Currently, if a nursing home owner commits fraud or mismanages the institution's finances, the health and safety of the residents may be put at risk. When the state takes over an institution because of fraud or mismanagement, the financial burden for closing the institution or for transferring its residents falls on the state. H.B. 3625 provides that an owner or controlling person who owns or controls three or more institutions that are licensed must execute a surety bond for each institution payable to the Texas Department of Human Services (department) at an amount determined by the department in order to cover the expenses of closing the institution, transferring its residents, or taking regulatory action. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Board of Human Services in SECTION 1 (Section 242.0325, Health and Safety Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter B, Chapter 242, Health and Safety Code, by adding Section 242.0325, as follows: Sec. 242.0325. (a) Provides that an owner or a controlling person who owns or controls three or more institutions that are licensed or required to be licensed under this chapter (Convalescent and Nursing Homes and Related Institutions) must execute a surety bond, for each institution, by a surety company authorized to do business in this state as a condition of obtaining or renewing a license. (b) Provides that the bond must be payable to the Texas Department of Human Services (department) and is conditional on the institution's compliance with this chapter and rules adopted under this chapter. (c) Requires the Texas Board of Human Services (board) to set the amount of the bond, by rule, and to determine the amount of the bond based on the costs incurred by the department when it is necessary to close an institution, arrange for the placement of a trustee, transfer residents, or take other regulatory actions in connection with a violation of this chapter or rules adopted under this chapter. SECTION 2.Effective date: September 1, 1999. SECTION 3.Emergency clause.