HBA-NLM H.B. 3627 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3627
By: Naishtat
Human Services
3/21/1999
Introduced



BACKGROUND AND PURPOSE 

Currently, there is no mechanism for the state to monitor the financial
solvency of nursing homes. There is concern that financial instability,
mismanagement, and fraudulent activity may lead to the deterioration of
care and to possible takeover of a nursing home by the state.  H.B. 3627
requires all licensed nursing homes to submit an audited financial
statement to the Texas Department of Human Services (department) for the
preceding calendar year. This bill provides that an independent certified
public accountant must certify the financial statement.  

H.B. 3627 authorizes the department to investigate the financial soundness
of an institution licensed under this chapter and to issue a subpoena to
obtain the financial record of the institution.  In addition, this bill
provides that a person who files a false financial statement may be
prosecuted under the Penal Code. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter C, Chapter 242, Health and Safety Code, by
adding Section 242.074, as follows: 

Sec. 242.074.  FINANCIAL STATEMENTS.  Requires an institution licensed
under this chapter (Convalescent and Nursing Homes and Related
Institutions) to submit to the Texas Department of Human Services
(department) an audited financial statement for the preceding calendar year
prepared in accordance with generally accepted accounting principles.
Provides that an independent certified public accountant must certify the
financial statement. Requires the institution to notify the department of
any change in the institution's financial condition that could adversely
affect the institution's ability to provide services to its customers.
Authorizes the department to investigate the financial soundness of an
institution licensed under this chapter and to issue a subpoena to obtain
the financial record of the institution.  Provides that a person that files
a false financial statement may be prosecuted under the Penal Code. 

SECTION 2.  Effective date: September 1, 1999.

SECTION 3.  Emergency clause.