HBA-MPM S.B. 196 76(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 196 By: Madla Public Health 4/11/1999 Engrossed BACKGROUND AND PURPOSE Currently, there is an established system for regulating intermediate care facilities for the mentally retarded (ICF-MR) which addresses ICF-MR regulation, governance, and use of administrative penalties. However, the specific provisions for penalties do not address many due process provisions offered in parallel licensing statutes for similar programs. S.B. 196 clarifies and creates provisions regarding violations and penalties affecting ICF-MR facilities. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Department of Human Services in SECTIONS 1 and 3 (Sections 252.033 and 252.065, Health and Safety Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 252.033, Health and Safety Code, by adding Subsection (h), as follows: (h) Requires the Texas Department of Human Services (department), by rule, to define specific, appropriate, and objective criteria on which it may deny an initial license or license renewal or revoke a license. SECTION 2. Amends Subchapter B, Chapter 252, Health and Safety Code, by adding Section 252.044, as follows: Sec. 252.044. REPORTING VIOLATIONS. (a) Requires the department or the department's representative conducting an inspection, survey, or investigation under this chapter to list each violation of a law or rule on a form designed by the department for that purpose and identify the specific law or rule the facility violates. (b) Requires the department or department's representative to discuss the violations with the facility's management in an exit conference at the end of an inspection, survey, or investigation of the facility and to leave the facility a written list of the violations with the facility and the person designated to receive notice under Section 252.066, Health and Safety Code. Requires the department or department's representative to give the facility an additional exit conference regarding additional violations if they are discovered during the review of field notes or preparation of the official final list. (c) Requires the facility to submit a plan to correct the violations to the regional director no later than the10th day after receiving the final statement of violations. SECTION 3. Amends Section 252.065, Health and Safety Code, as follows: Sec. 252.065. ADMINISTRATIVE PENALTY. (a) Makes a nonsubstantive change. (b) Requires the penalty to be no less than $100 or more than $1,000 per violation. Provides that each day of a violation occurring before the day on which the person receives written notice of the violation from the department does not constitute a separate violation and shall be considered as one violation. Provides that each day a continuing violation occurs after receipt of the notice constitutes a separate violation. Makes a conforming change. (c) Requires the department, by rule, to specify each violation for which an administrative penalty may be assessed, and in determining which violations warrant penalties, to take into consideration certain factors regarding the seriousness of the violation and the facility's identification of the violation. Deletes the requirement that in determining the amount of the penalty, the department consider other factors with respect to the violation. (d) Requires the department, by rule, to establish a specific and detailed schedule of appropriate and graduated penalties for each violation based on certain factors. Makes conforming changes. (e) Requires the department, by rule, to provide the facility with a reasonable time period, no less than 45 days following the first day of the violation, in which to remedy the violation before assessing an administrative penalty, if a plan of correction has been implemented. Deletes text prohibiting the department from assessing a penalty under this subchapter and Section 32.021 (Administration of the Program), Human Resources Code, for a violation arising out of the same act or failure to act. (f) Prohibits the department from assessing an administrative penalty for a minor violation, if the person corrects the violation no later than the 45th day after receiving notice of the violation. (g) Requires the department to establish a system to ensure standard and consistent application of penalties regardless of the facility location. (h) Provides that all proceedings for the assessment of an administrative penalty under this chapter are subject to Chapter 2001 (Administrative Procedure), Government Code. (i) Prohibits the department from assessing an administrative penalty against a state agency. (j) Provides that notwithstanding any other provision of this section, an administrative penalty ceases to be incurred on the date a violation is corrected, and the penalty ceases to be incurred only if the facility notifies the department in writing of the correction and the date of the correction and shows later that the violation was corrected. SECTION 4. Amends Section 252.066, Health and Safety Code, as follows: Sec. 252.066. New title: NOTICE; REQUEST FOR HEARING. (a) Requires the department to give written notice of a violation to a person designated to receive notice if, after an investigation of a possible violation and the facts surrounding the possible violation, the department determines that a violation has occurred. Requires the notice to include certain information. Deletes the requirement that the Texas Board of Human Services adopt rules governing the assessment of administrative penalties under this chapter, including rules providing certain procedures regarding violation notice, payment and refund of a penalty, and hearings and appeals. (b) Authorizes a person notified to accept the department's determination under this section, including the proposed penalty, or to make a written request for a hearing on that determination no later than the 20th day after the notice was received. Deletes the requirement that rules under this section include specific and objective criteria describing the scope and severity of a violation that results in a recommendation for each specific penalty and the stipulation that the penalty be appropriate to the violation. (c) Requires the commissioner of human services (commissioner) o the commissioner's designee to issue an order approving the determination and ordering that a person pay the proposed penalty if the person notified of a violation under this section accepts the department's determination or if the person fails to respond in a timely manner to the notice. Deletes the requirement that the rules establish a system to ensure standard and consistent application of penalties by local surveyors and across different areas of the state. Deletes existing text authorizing the department to prescribe a per diem penalty which ceases on the date a violation is corrected, and the provision that the per diem penalty ceases only if the facility notifies the department in writing that the violation has been corrected and of the date of the correction and shows later that the violation was corrected. Deletes the definition of "immediate and serious threat" for purposes of this section. SECTION 5. Amends Subchapter C, Chapter 252, Health and Safety Code, by adding Sections 252.067 through 252.071, as follows: Sec. 252.067. HEARING; ORDER. (a) Requires the department, if a person notified requests a hearing, to set a hearing, give a written notice of the hearing to the person, and designate a hearings examiner to conduct the hearing. (b) Requires the hearings examiner to make findings of fact and conclusions of law and to promptly issue to the commissioner or commissioner's designee a proposal for decision as to the occurrence of the violation and a recommendation as to the amount of the proposed penalty if a penalty is determined to be warranted. (c) Authorizes the commissioner or commissioner's designee to, by order, find that a violation has occurred and to assess a penalty or to find that no violation has occurred based on findings of fact and conclusions of law and recommendations of the hearings examiner. Sec. 252.068. NOTICE AND PAYMENT OF ADMINISTRATIVE PENALTY; JUDICIAL REVIEW; REFUND. (a) Requires the department to give notice of the order under Section 252.067(c), Health and Safety Code, to the person alleged to have committed the violation and the person designated by the facility to receive notice under Section 252.066, Health and Safety Code. Provides that the notice must include certain information. (b) Requires the person, no later than the 30th day after the decision becomes final as provided by Chapter 2001, Government Code, to pay the penalty or file a petition for judicial review contesting the occurrence of the violation, the penalty amount, or both. (c) Authorizes a person acting under Subsection (b), within a 30-day period, to stay enforcement of the penalty by paying it to the court for placement in escrow or giving the court a supersedeas bond that is approved by the court for the amount of the penalty and that is effective until all judicial review of the order is final. Alternatively, the person is authorized to request the court to stay enforcement of the penalty by filing a sworn affidavit stating that the person is financially unable to pay the penalty amount or supersedeas bond and giving a copy of the affidavit to the department by certified mail. (d) Authorizes the department, if it receives a copy of the affidavit under Subsection (c), to file with the court within 10 days after receipt, a contest to the affidavit. Requires the court to hold a hearing on the facts alleged in the affidavit as soon as practicable and to stay the enforcement of the penalty on finding that the alleged facts are true. Provides that the person filing the affidavit has the burden of proving that the person is financially unable to pay the penalty and to give a supersedeas bond. (e) Authorizes the department to refer a matter to the attorney general for collection of the penalty if a person does not pay a penalty and the enforcement of the penalty is not stayed. (f) Sets forth the judicial review of the order. (g) Authorizes the court to uphold or reduce the penalty amount and order the person to pay that amount if it sustains the occurrence of the violation. Requires the court to order no penalty be paid in the event it does not sustain the occurrence of the violation. (h) Requires the court to proceed under this subsection upon final judgment. Requires the court, if the person paid the penalty amount under Subsection (c) and if that amount is reduced or not upheld, to order the appropriate amount plus accrued interest be remitted to the person. Provides that the interest rate is that charged on loans to depository institutions by the New York Federal Reserve Bank. Requires the interest to be paid for the period beginning on the date the penalty was paid and ending the date the penalty is remitted. Requires the court, if a person gave a supersedeas bond an if the penalty is not upheld, to order the release of the escrow account or bond. Requires the court to order the release of the bond after the person pays the appropriate amount, if the person gave a supersedeas bond and the penalty amount is reduced. Sec. 252.069. PENALTY DEPOSITED TO STATE TREASURY. Requires an administrative penalty collected under this subchapter to be deposited in the state treasury to the credit of the general revenue fund. Sec. 252.070. EXPENSES AND COSTS FOR COLLECTION OF CIVIL OR ADMINISTRATIVE PENALTY. (a) Authorizes the attorney general to recover, on behalf of the attorney general and the department, reasonable expenses and costs if the attorney general brings an action against a person under Section 252.062 or 252.064 or to enforce an administrative penalty assessed under Section 252.065 and an injunction is granted against the person, or the person is found liable for a civil or administrative penalty. (b) Provides that for the purposes of this section, reasonable expenses and costs include expenses incurred by the department and the attorney general in the investigation, initiation, and prosecution of an action, including certain reasonable costs, fees and expenses. Sec. 252.071. AMELIORATION OF VIOLATION. Authorizes the department, in lieu of ordering payment of an administrative penalty authorized by this subchapter, to require a person subject to the penalty to use, under department supervision, all or part of the penalty to ameliorate the violation or improve services, other than administrative services, in the affected facility. SECTION 6. Effective date: September 1, 1999. Makes application of this Act prospective. SECTION 7. Emergency clause.