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2009 Texas Code
HEALTH AND SAFETY CODE
TITLE 7. MENTAL HEALTH AND MENTAL RETARDATION
CHAPTER 534. COMMUNITY SERVICES

HEALTH AND SAFETY CODE

TITLE 7. MENTAL HEALTH AND MENTAL RETARDATION

SUBTITLE A. TEXAS DEPARTMENT OF MENTAL HEALTH AND MENTAL

RETARDATION

CHAPTER 534. COMMUNITY SERVICES

SUBCHAPTER A. COMMUNITY CENTERS

Sec. 534.001. ESTABLISHMENT. (a) A county, municipality,

hospital district, school district, or an organizational

combination of two or more of those local agencies may establish

and operate a community center.

(b) In accordance with this subtitle, a community center may be:

(1) a community mental health center that provides mental health

services;

(2) a community mental retardation center that provides mental

retardation services; or

(3) a community mental health and mental retardation center that

provides mental health and mental retardation services.

(1) an agency of the state, a governmental unit, and a unit of

local government, as defined and specified by Chapters 101 and

102, Civil Practice and Remedies Code;

(2) a local government, as defined by Section 791.003,

Government Code;

(3) a local government for the purposes of Chapter 2259,

Government Code; and

(4) a political subdivision for the purposes of Chapter 172,

Local Government Code.

(d) A community center may be established only if:

(1) the proposed center submits to the department a copy of the

contract between the participating local agencies, if applicable;

(2) the department approves the proposed center's plan to

develop and make available to the region's residents an effective

mental health or mental retardation program, or both, through a

community center that is appropriately structured to include the

financial, physical, and personnel resources necessary to meet

the region's needs; and

(3) the department determines that the center can appropriately,

effectively, and efficiently provide those services in the

region.

(e) Except as provided by this section, a community center

operating under this subchapter may operate only for the purposes

and perform only the functions defined in the center's plan. The

executive commissioner by rule shall specify the elements that

must be included in a plan and shall prescribe the procedure for

submitting, approving, and modifying a center's plan. In

addition to the services described in a center's plan, the center

may provide other health and human services and supports as

provided by a contract with or a grant received from a local,

state, or federal agency.

(f) Each function performed by a community center under this

title is a governmental function if the function is required or

affirmatively approved by any statute of this state or of the

United States or by a regulatory agency of this state or of the

United States duly acting under any constitutional or statutory

authority vesting the agency with such power. Notwithstanding any

other law, a community center is subject to Chapter 554,

Government Code.

(g) An entity is, for the purpose of operating a psychiatric

center, a governmental unit and a unit of local government under

Chapter 101, Civil Practice and Remedies Code, and a local

government under Chapter 102, Civil Practice and Remedies Code,

if the entity:

(1) is not operated to make a profit;

(2) is created through an intergovernmental agreement between a

community mental health center and any other governmental unit;

and

(3) contracts with the community mental health center and any

other governmental unit that created it to operate a psychiatric

center.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.07, eff.

Aug. 30, 1993; Acts 1995, 74th Leg., ch. 601, Sec. 1, eff. Sept.

1, 1995; Acts 1997, 75th Leg., ch. 835, Sec. 1, eff. Sept. 1,

1997; Acts 2001, 77th Leg., ch. 1420, Sec. 8.276, eff. Sept. 1,

2001; Acts 2003, 78th Leg., ch. 198, Sec. 2.82, eff. Sept. 1,

2006.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

1292, Sec. 2, eff. June 19, 2009.

Sec. 534.0015. PURPOSE AND POLICY. (a) A community center

created under this subchapter is intended to be a vital component

in a continuum of services for persons in this state who are

mentally ill or mentally retarded.

(b) It is the policy of this state that community centers strive

to develop services for persons who are mentally ill or mentally

retarded, and may provide requested services to persons with

developmental disabilities or with chemical dependencies, that

are effective alternatives to treatment in a large residential

facility.

Added by Acts 1993, 73rd Leg., ch. 107, Sec. 6.08, eff. Aug. 30,

1993.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

1292, Sec. 3, eff. June 19, 2009.

Sec. 534.002. BOARD OF TRUSTEES FOR CENTER ESTABLISHED BY ONE

LOCAL AGENCY. The board of trustees of a community center

established by one local agency is composed of:

(1) the members of the local agency's governing body; or

(2) not fewer than five or more than nine qualified voters who

reside in the region to be served by the center and who are

appointed by the local agency's governing body.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.09, eff.

Aug. 30, 1993.

Sec. 534.003. BOARD OF TRUSTEES FOR CENTER ESTABLISHED BY AT

LEAST TWO LOCAL AGENCIES. (a) The board of trustees of a

community center established by an organizational combination of

local agencies is composed of not fewer than five or more than 13

members.

(b) The governing bodies of the local agencies shall appoint the

board members either from among the membership of the governing

bodies or from among the qualified voters who reside in the

region to be served by the center.

enter into a contract that stipulates the number of board members

and the group from which the members are chosen. They may

renegotiate or amend the contract as necessary to change the:

(1) method of choosing the members; or

(2) membership of the board of trustees to more accurately

reflect the ethnic and geographic diversity of the local service

area.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.10, eff.

Aug. 30, 1993; Acts 2003, 78th Leg., ch. 198, Sec. 2.200, eff.

Sept. 1, 2003.

Sec. 534.004. PROCEDURES RELATING TO BOARD OF TRUSTEES

MEMBERSHIP. (a) The local agency or organizational combination

of local agencies that establishes a community center shall

prescribe:

(1) the application procedure for a position on the board of

trustees;

(2) the procedure and criteria for making appointments to the

board of trustees;

(3) the procedure for posting notice of and filling a vacancy on

the board of trustees; and

(4) the grounds and procedure for removing a member of the board

of trustees.

(b) The local agency or organizational combination of local

agencies that appoints the board of trustees shall, in appointing

the members, attempt to reflect the ethnic and geographic

diversity of the local service area the community center serves.

The local agency or organizational combination shall include on

the board of trustees one or more persons otherwise qualified

under this chapter who are consumers of the types of services the

center provides or who are family members of consumers of the

types of services the center provides.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.11, eff.

Aug. 30, 1993; Acts 1999, 76th Leg., ch. 1187, Sec. 12, eff.

Sept. 1, 1999.

Sec. 534.005. TERMS; VACANCIES. (a) Appointed members of the

board of trustees who are not members of a local agency's

governing body serve staggered two-year terms. In appointing the

initial members, the appointing authority shall designate not

less than one-third or more than one-half of the members to serve

one-year terms and shall designate the remaining members to serve

two-year terms.

(b) A vacancy on a board of trustees composed of qualified

voters is filled by appointment for the remainder of the

unexpired term.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.12, eff.

Aug. 30, 1993; Acts 1999, 76th Leg., ch. 1187, Sec. 13, eff.

Sept. 1, 1999.

Sec. 534.006. TRAINING. (a) The board by rule shall establish:

(1) an annual training program for members of a board of

trustees administered by the professional staff of that community

center, including the center's legal counsel; and

(2) an advisory committee to develop training guidelines that

includes representatives of advocates for persons with mental

illness or mental retardation and representatives of boards of

trustees.

(b) Before a member of a board of trustees may assume office,

the member shall attend at least one training session

administered by that center's professional staff to receive

information relating to:

(1) the enabling legislation that created the community center;

(2) the programs the community center operates;

(3) the community center's budget for that program year;

(4) the results of the most recent formal audit of the community

center;

(5) the requirements of Chapter 551, Government Code, and

Chapter 552, Government Code;

(6) the requirements of conflict of interest laws and other laws

relating to public officials; and

(7) any ethics policies adopted by the community center.

Added by Acts 1993, 73rd Leg., ch. 107, Sec. 6.13, eff. Aug. 30,

1993. Amended by Acts 1995, 74th Leg., ch. 76, Sec. 5.95(82),

(88), eff. Sept. 1, 1995.

Sec. 534.0065. QUALIFICATIONS; CONFLICT OF INTEREST; REMOVAL.

(a) As a local public official, a member of the board of

trustees of a community center shall uphold the member's position

of public trust by meeting and maintaining the applicable

qualifications for membership and by complying with the

applicable requirements relating to conflicts of interest.

(b) A person is not eligible for appointment as a member of a

board of trustees if the person or the person's spouse:

(1) owns or controls, directly or indirectly, more than a 10

percent interest in a business entity or other organization

receiving funds from the community center by contract or other

method; or

(2) uses or receives a substantial amount of tangible goods or

funds from the community center, other than:

(A) compensation or reimbursement authorized by law for board of

trustees membership, attendance, or expenses; or

(B) as a consumer or as a family member of a client or patient

receiving services from the community center.

must be in the local service area the member represents.

(d) A member of the board of trustees is subject to Chapter 171,

Local Government Code.

(e) A member of the board of trustees may not:

(1) refer for services a client or patient to a business entity

owned or controlled by a member of the board of trustees, unless

the business entity is the only business entity that provides the

needed services within the jurisdiction of the community center;

(2) use a community center facility in the conduct of a business

entity owned or controlled by that member;

(3) solicit, accept, or agree to accept from another person or

business entity a benefit in return for the member's decision,

opinion, recommendation, vote, or other exercise of discretion as

a local public official or for a violation of a duty imposed by

law;

(4) receive any benefit for the referral of a client or a

patient to the community center or to another business entity;

(5) appoint, vote for, or confirm the appointment of a person to

a paid office or position with the community center if the person

is related to a member of the board of trustees by affinity

within the second degree or by consanguinity within the third

degree; or

(6) solicit or receive a political contribution from a supplier

to or contractor with the community center.

(f) Not later than the date on which a member of the board of

trustees takes office by appointment or reappointment and not

later than the anniversary of that date, each member shall

annually execute and file with the community center an affidavit

acknowledging that the member has read the requirements for

qualification, conflict of interest, and removal prescribed by

this chapter.

(g) In addition to any grounds for removal adopted under Section

534.004(a), it is a ground for removal of a member of a board of

trustees if the member:

(1) violates Chapter 171, Local Government Code;

(2) is not eligible for appointment to the board of trustees at

the time of appointment as provided by Subsections (b) and (c);

(3) does not maintain during service on the board of trustees

the qualifications required by Subsections (b) and (c);

(4) violates a provision of Subsection (e);

(5) violates a provision of Section 534.0115; or

(6) does not execute the affidavit required by Subsection (f).

(h) If a board of trustees is composed of members of the

governing body of a local agency or organizational combination of

local agencies, this section applies only to the qualifications

for and removal from membership on the board of trustees.

Added by Acts 1993, 73rd Leg., ch. 107, Sec. 6.13, eff. Aug. 30,

1993.

Sec. 534.007. PROHIBITED ACTIVITIES BY FORMER OFFICERS OR

EMPLOYEES; OFFENSE. (a) A former officer or employee of a

community center who ceases service or employment with the center

may not represent any person or receive compensation for services

rendered on behalf of any person regarding a particular matter in

which the former officer or employee participated during the

period of employment, either through personal involvement or

because the case or proceeding was a matter within the officer's

or employee's official responsibility.

(b) This section does not apply to:

(1) a former employee who is compensated on the last date of

service or employment below the amount prescribed by the General

Appropriations Act for salary group 17, Schedule A, or salary

group 9, Schedule B, of the position classification salary

schedule; or

(2) a former officer or employee who is employed by a state

agency or another community center.

policy development that was concluded before the officer's or

employee's service or employment ceased.

(d) A former officer or employee of a community center commits

an offense if the former officer or employee violates this

section. An offense under this section is a Class A misdemeanor.

(e) In this section:

(1) "Participated" means to have taken action as an officer or

employee through decision, approval, disapproval, recommendation,

giving advice, investigation, or similar action.

(2) "Particular matter" means a specific investigation,

application, request for a ruling or determination, proceeding

related to the development of policy, contract, claim, charge,

accusation, arrest, or judicial or other proceeding.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1999, 76th Leg., ch. 1187, Sec. 14, eff.

Sept. 1, 1999.

Sec. 534.008. ADMINISTRATION BY BOARD. (a) The board of

trustees is responsible for the effective administration of the

community center.

(b) The board of trustees shall make policies that are

consistent with the department's rules and standards.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.14, eff.

Aug. 30, 1993.

Sec. 534.009. MEETINGS. (a) The board of trustees shall adopt

rules for the holding of regular and special meetings.

(b) Board meetings are open to the public to the extent required

by and in accordance with Chapter 551, Government Code.

in accordance with Chapter 551, Government Code. The record is

open for public inspection in accordance with that law.

(d) The board of trustees shall send to the department and each

local agency that appoints the members a copy of the approved

minutes of board of trustees meetings by:

(1) mailing a copy appropriately addressed and with the

necessary postage paid using the United States postal service; or

(2) another method agreed to by the board of trustees and the

local agency.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.15, eff.

Aug. 30, 1993; Acts 1995, 74th Leg., ch. 76, Sec. 5.95(84), eff.

Sept. 1, 1995.

Sec. 534.010. EXECUTIVE DIRECTOR. (a) The board of trustees

shall appoint an executive director for the community center.

(b) The board of trustees shall:

(1) adopt a written policy governing the powers that may be

delegated to the executive director; and

(2) annually report to each local agency that appoints the

members the executive director's total compensation and benefits.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.16, eff.

Aug. 30, 1993.

Sec. 534.011. PERSONNEL. (a) The executive director, in

accordance with the policies of the board of trustees, shall

employ and train personnel to administer the community center's

programs and services. The community center may recruit those

personnel and contract for recruiting and training purposes.

(b) The board of trustees shall provide employees of the

community center with appropriate rights, privileges, and

benefits.

(d) The board of trustees shall prescribe the number of

employees and their salaries. The board of trustees may choose to

set salaries and benefits in compliance with a market analysis or

internal salary study. If an internal salary study is used, the

board of trustees shall conduct the study in accordance with the

guidelines established by the commissioner.

(e) Instead of using a market analysis or internal salary study

to establish salaries and benefits, the board of trustees may use

the state position classification plan and the General

Appropriations Act to determine the appropriate classification

and relative compensation of officers and employees. The board of

trustees may pay salaries in amounts less than those provided by

the General Appropriations Act. For a position not on the

classification plan, the board of trustees shall set the

compensation according to guidelines adopted by the commissioner.

The board of trustees may petition the department for approval to

exclude a position from the position classification plan and to

provide a stated salary for that position that exceeds the amount

prescribed by the General Appropriations Act for the classified

position.

(f) During a management audit of a community center, the

department is entitled to confirm the method the center used to

determine salaries and benefits.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.17, eff.

Aug. 30, 1993.

Sec. 534.0115. NEPOTISM. (a) The board of trustees or

executive director may not hire as a paid officer or employee of

the community center a person who is related to a member of the

board of trustees by affinity within the second degree or by

consanguinity within the third degree.

(b) An officer or employee who is related to a member of the

board of trustees in a prohibited manner may continue to be

employed if the person began the employment not later than the

31st day before the date on which the member was appointed.

trustees shall resign if the officer or employee began the

employment later than the 31st day before the date on which the

member was appointed.

(d) If an officer or employee is permitted to remain in

employment under Subsection (b), the related member of the board

of trustees may not participate in the deliberation of or voting

on an issue that is specifically applicable to the officer or

employee unless the issue affects an entire class or category of

employees.

Added by Acts 1993, 73rd Leg., ch. 107, Sec. 6.18, eff. Aug. 30,

1993.

Sec. 534.012. ADVISORY COMMITTEES. (a) The board of trustees

may appoint committees, including medical committees, to advise

the board of trustees on matters relating to mental health and

mental retardation services.

(b) Each committee must be composed of at least three members.

trustees of the final responsibility and accountability as

provided by this subtitle.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.19, eff.

Aug. 30, 1993.

Sec. 534.013. COOPERATION OF DEPARTMENT. The department shall

provide assistance, advice, and consultation to local agencies,

boards of trustees, and executive directors in the planning,

development, and operation of a community center.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991.

Sec. 534.014. BUDGET; REQUEST FOR FUNDS. (a) Each community

center shall annually provide to each local agency that appoints

members to the board of trustees a copy of the center's:

(1) approved fiscal year operating budget;

(2) most recent annual financial audit; and

(3) staff salaries by position.

(b) The board of trustees shall annually submit to each local

agency that appoints the members a request for funds or in-kind

assistance to support the center.

Added by Acts 1993, 73rd Leg., ch. 107, Sec. 6.20, eff. Aug. 30,

1993.

Sec. 534.015. PROVISION OF SERVICES. (a) The board of trustees

may adopt rules to regulate the administration of mental health

or mental retardation services by a community center. The rules

must be consistent with the purposes, policies, principles, and

standards prescribed by this subtitle.

(b) The board of trustees may contract with a local agency or a

qualified person or organization to provide a portion of the

mental health or mental retardation services.

contract with the governing body of another county or

municipality to provide mental health and mental retardation

services to residents of that county or municipality.

(d) A community center may provide services to a person who

voluntarily seeks assistance or who has been committed to that

center.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991.

Sec. 534.0155. FOR WHOM SERVICES MAY BE PROVIDED. (a) This

subtitle does not prevent a community center from providing

services to a person with a chemical dependency, to a person with

a developmental disability, or to a person with a mental

disability, as defined by Section 535.001.

(b) A community center may provide those services by contracting

with a public or private agency in addition to the department.

Added by Acts 1993, 73rd Leg., ch. 107, Sec. 6.21, eff. Aug. 30,

1993. Amended by Acts 1993, 73rd Leg., ch. 646, Sec. 7(a), eff.

Aug. 30, 1993.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

1292, Sec. 4, eff. June 19, 2009.

Sec. 534.016. SCREENING AND CONTINUING CARE SERVICES. (a) A

community center shall provide screening services for a person

who requests voluntary admission to a department facility for

persons with mental illness and for a person for whom proceedings

for involuntary commitment to a department facility have been

initiated.

(b) A community center shall provide continuing mental health

and physical care services for a person referred to the center by

a department facility and for whom the facility superintendent

has recommended a continuing care plan.

the department's rules and standards.

(d) The commissioner may designate a facility other than the

community center to provide the screening or continuing care

services if:

(1) local conditions indicate that the other facility can

provide the services more economically and effectively; or

(2) the commissioner determines that local conditions may impose

an undue burden on the community center.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991.

Sec. 534.017. FEES FOR SERVICES. (a) A community center shall

charge reasonable fees for services the center provides, unless

prohibited by other service contracts or law.

(b) The community center may not deny services to a person

because of inability to pay for the services.

powers for collecting fees for treating patients and clients that

the department has by law.

(d) The county or district attorney of the county in which the

community center is located shall represent the center in

collecting fees when the center's executive director requests the

assistance.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.22, eff.

Aug. 30, 1993.

Sec. 534.0175. TRUST EXEMPTION. (a) If a client is the

beneficiary of a trust that has an aggregate principal of

$250,000 or less, the corpus or income of the trust is not

considered to be the property of the client or the client's

estate and is not liable for the client's support. If the

aggregate principal of the trust exceeds $250,000, only the

portion of the corpus of the trust that exceeds that amount and

the income attributable to that portion are considered to be the

property of the client or the client's estate and are liable for

the client's support.

(b) To qualify for the exemption provided by Subsection (a), the

trust and the trustee must comply with the requirements

prescribed by Sections 552.018 and 593.081.

Added by Acts 1993, 73rd Leg., ch. 166, Sec. 1, eff. Sept. 1,

1993. Amended by Acts 2001, 77th Leg., ch. 1020, Sec. 1, eff.

June 15, 2001.

Sec. 534.018. GIFTS AND GRANTS. A community center may accept

gifts and grants of money, personal property, and real property

to use in providing the center's programs and services.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.23, eff.

Aug. 30, 1993.

Sec. 534.019. CONTRIBUTION BY LOCAL AGENCY. A participating

local agency may contribute land, buildings, facilities, other

real and personal property, personnel, and funds to administer

the community center's programs and services.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.23, eff.

Aug. 30, 1993.

Sec. 534.020. ACQUISITION AND CONSTRUCTION OF PROPERTY AND

FACILITIES BY COMMUNITY CENTER. (a) A community center may

purchase or lease-purchase real and personal property and may

construct buildings and facilities.

(b) The board of trustees shall require that an appraiser

certified by the Texas Appraiser Licensing and Certification

Board conduct an independent appraisal of real estate the

community center intends to purchase. The board of trustees may

waive this requirement if the purchase price is less than the

value listed for the property by the local appraisal district and

the property has been appraised by the local appraisal district

within the preceding two years. A community center may not

purchase or lease-purchase property for an amount that is greater

than the property's appraised value unless:

(1) the purchase or lease-purchase of that property at that

price is necessary;

(2) the board of trustees documents in the official minutes the

reasons why the purchase or lease-purchase is necessary at that

price; and

(3) a majority of the board approves the transaction.

relevant department rules competitive bidding procedures and

practices for capital purchases and for purchases involving

department funds or required local matching funds.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.23, eff.

Aug. 30, 1993; Acts 1993, 73rd Leg., ch. 646, Sec. 8, eff. Aug.

30, 1993.

Sec. 534.021. APPROVAL AND NOTIFICATION REQUIREMENTS. (a) A

community center must receive from the department prior written

approval to acquire real property, including a building, if the

acquisition involves the use of department funds or local funds

required to match department funds. In addition, for acquisition

of nonresidential property, the community center must notify each

local agency that appoints members to the board of trustees not

later than the 31st day before it enters into a binding

obligation to acquire the property.

(b) A community center must notify the department and each local

agency that appoints members to the board of trustees not later

than the 31st day before it enters into a binding obligation to

acquire real property, including a building, if the acquisition

does not involve the use of department funds or local funds

required to match department funds. The commissioner, on request,

may waive the 30-day requirement on a case-by-case basis.

notification process.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 646, Sec. 9(a), eff.

Sept. 1, 1993.

Sec. 534.022. FINANCING OF PROPERTY AND IMPROVEMENTS. (a) To

acquire or to refinance the acquisition of real and personal

property, to construct improvements to property, or to finance

all or part of a payment owed or to be owed on a credit

agreement, a community center may contract in accordance with

Subchapter A, Chapter 271, Local Government Code, or issue,

execute, refinance, or refund bonds, notes, obligations, or

contracts. The community center may secure the payment of the

bonds, notes, obligations, or contracts with a security interest

in or pledge of its revenues or by granting a mortgage on any of

its properties.

(a-1) For purposes of Subsection (a), "revenues" includes the

following, as those terms are defined by Section 9.102, Business

& Commerce Code:

(1) an account;

(2) a chattel paper;

(3) a commercial tort claim;

(4) a deposit account;

(5) a document;

(6) a general intangible;

(7) a health care insurance receivable;

(8) an instrument;

(9) investment property;

(10) a letter-of-credit right; and

(11) proceeds.

(b) Except as provided by Subsection (f), the community center

shall issue the bonds, notes, or obligations in accordance with

Chapters 1201 and 1371, Government Code. The attorney general

must approve before issuance:

(1) notes issued in the form of public securities, as that term

is defined by Section 1201.002, Government Code;

(2) obligations, as that term is defined by Section 1371.001,

Government Code; and

(3) bonds.

Government Code, relating to real property and the construction

of improvements to real property, does not apply to a community

center.

(d) The board shall review the issuance of bonds or notes under

this section and for each issuance shall make a finding of

whether the proceeds are to be expended on projects or purchases

that are related to the provision of services. Not later than

November 1 of each year, the board shall submit to the

Legislative Budget Board, the Governor's Office of Budget and

Planning, and the state auditor a report that describes the use

and amount of proceeds derived from bonds and notes issued by

community centers in the preceding fiscal year.

(e) A county or municipality acting alone or two or more

counties or municipalities acting jointly pursuant to interlocal

contract may create a public facility corporation to act on

behalf of one or more community centers pursuant to Chapter 303,

Local Government Code. Such counties or municipalities may

exercise the powers of a sponsor under that chapter, and any such

corporation may exercise the powers of a corporation under that

chapter (including but not limited to the power to issue bonds).

The corporation may exercise its powers on behalf of community

centers in such manner as may be prescribed by the articles and

bylaws of the corporation, provided that in no event shall one

community center ever be liable to pay the debts or obligation or

be liable for the acts, actions, or undertakings of another

community center.

(f) The board of trustees of a community center may authorize

the issuance of an anticipation note in the same manner, using

the same procedure, and with the same rights under which an

eligible school district may authorize issuance under Chapter

1431, Government Code, except that anticipation notes issued for

the purposes described by Section 1431.004(a)(2), Government

Code, may not, in the fiscal year in which the attorney general

approves the notes for a community center, exceed 50 percent of

the revenue anticipated to be collected in that year.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.24, eff.

Aug. 30, 1993; Acts 1993, 73rd Leg., ch. 161, Sec. 1, eff. May

16, 1993; Acts 1995, 74th Leg., ch. 821, Sec. 11, eff. Sept. 1,

1995; Acts 2001, 77th Leg., ch. 1420, Sec. 8.277, eff. Sept. 1,

2001.

Amended by:

Acts 2005, 79th Leg., Ch.

826, Sec. 1, eff. September 1, 2005.

Sec. 534.031. SURPLUS PERSONAL PROPERTY. The department may

transfer, with or without reimbursement, ownership and possession

of surplus personal property under the department's control or

jurisdiction to a community center for use in providing mental

health or mental retardation services.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991.

Sec. 534.032. RESEARCH. A community center may engage in

research and may contract for that purpose.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991.

Sec. 534.033. LIMITATION ON DEPARTMENT CONTROL AND REVIEW. (a)

It is the intent of the legislature that the department limit its

control over, and routine reviews of, community center programs

to those programs that:

(1) use department funds or use required local funds that are

matched with department funds;

(2) provide core or required services;

(3) provide services to former clients or patients of a

department facility; or

(4) are affected by litigation in which the department is a

defendant.

(b) The department may review any community center program if

the department has reason to suspect that a violation of a

department rule has occurred or if the department receives an

allegation of patient or client abuse.

uses department funds or uses required local matching funds.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.27, eff.

Aug. 30, 1993.

Sec. 534.035. REVIEW, AUDIT, AND APPEAL PROCEDURES. (a) The

department by rule shall establish review, audit, and appeal

procedures for community centers. The procedures must ensure that

reviews and audits are conducted in sufficient quantity and type

to provide reasonable assurance that a community center has

adequate and appropriate fiscal controls.

(b) In a community center plan approved under Section 534.001,

the center must agree to comply with the review and audit

procedures established under this section.

center fails to respond to a deficiency identified in a review or

audit to the satisfaction of the commissioner, the department may

sanction the center in accordance with board rules.

Added by Acts 1993, 73rd Leg., ch. 107, Sec. 6.28, eff. Aug. 30,

1993. Amended by Acts 1999, 76th Leg., ch. 1209, Sec. 8, eff.

Sept. 1, 1999.

Sec. 534.036. FINANCIAL AUDIT. (a) The department shall

prescribe procedures for financial audits of community centers.

The department shall develop the procedures with the assistance

of the state agencies and departments that contract with

community centers. The department shall coordinate with each of

those state agencies and departments to incorporate each agency's

financial and compliance requirements for a community center into

a single audit that meets the requirements of Section 534.068.

Before prescribing or amending the procedures, the department

shall set a deadline for those state agencies and departments to

submit to the department proposals relating to the financial

audit procedures. The procedures must be consistent with any

requirements connected with federal funding received by the

community center. The department may not implement the procedures

without the approval of the Health and Human Services Commission.

(b) Each state agency or department that contracts with a

community center shall comply with the procedures developed under

this section.

department to conduct additional financial audit activities of a

community center. A state agency or department may not conduct

additional financial audit activities of a community center

without the approval of the Health and Human Services Commission.

(d) Expired.

Added by Acts 1997, 75th Leg., ch. 869, Sec. 2, eff. Sept. 1,

1997.

Sec. 534.037. PROGRAM AUDIT. (a) The department shall

coordinate with each state agency or department that contracts

with a community center to prescribe procedures based on risk

assessment for coordinated program audits of the activities of a

community center. The department may not implement the procedures

without the approval of the Health and Human Services Commission.

The procedures must be consistent with any requirements connected

with federal funding received by the community center.

(b) A program audit of a community center must be performed in

accordance with procedures developed under this section.

or an entity providing funding to a community center from

investigating a complaint against or performing additional

contract monitoring of a community center.

(d) A program audit under this section must evaluate:

(1) the extent to which the community center is achieving the

desired results or benefits established by the legislature or by

a state agency or department;

(2) the effectiveness of the community center's organizations,

programs, activities, or functions; and

(3) whether the community center is in compliance with

applicable laws.

(e) Expired.

Added by Acts 1997, 75th Leg., ch. 869, Sec. 3, eff. Sept. 1,

1997.

Sec. 534.038. APPOINTMENT OF MANAGER OR MANAGEMENT TEAM. (a)

The commissioner may appoint a manager or management team to

manage and operate a community center if the commissioner finds

that the center or an officer or employee of the center:

(1) intentionally, recklessly, or negligently failed to

discharge the center's duties under a contract with the

department;

(2) misused state or federal money;

(3) engaged in a fraudulent act, transaction, practice, or

course of business;

(4) endangers or may endanger the life, health, or safety of a

person served by the center;

(5) failed to keep fiscal records or maintain proper control

over center assets as prescribed by Chapter 783, Government Code;

(6) failed to respond to a deficiency in a review or audit;

(7) substantially failed to operate within the functions and

purposes defined in the center's plan; or

(8) otherwise substantially failed to comply with this

subchapter or department rules.

(b) The department shall give written notification to the center

and local agency or combination of agencies responsible for

making appointments to the local board of trustees regarding:

(1) the appointment of the manager or management team; and

(2) the circumstances on which the appointment is based.

incurred by the manager or management team.

(d) The center may appeal the commissioner's decision to appoint

a manager or management team as prescribed by board rule. The

filing of a notice of appeal stays the appointment unless the

commissioner based the appointment on a finding under Subsection

(a)(2) or (4).

Added by Acts 1999, 76th Leg., ch. 1520, Sec. 1, eff. Sept. 1,

1999. Amended by Acts 2003, 78th Leg., ch. 839, Sec. 1, eff.

Sept. 1, 2003.

Sec. 534.039. POWERS AND DUTIES OF MANAGEMENT TEAM. (a) As the

commissioner determines for each appointment, a manager or

management team appointed under Section 534.038 may:

(1) evaluate, redesign, modify, administer, supervise, or

monitor a procedure, operation, or the management of a community

center;

(2) hire, supervise, discipline, reassign, or terminate the

employment of a center employee;

(3) reallocate a resource and manage an asset of the center;

(4) provide technical assistance to an officer or employee of

the center;

(5) require or provide staff development;

(6) require that a financial transaction, expenditure, or

contract for goods and services must be approved by the manager

or management team;

(7) redesign, modify, or terminate a center program or service;

(8) direct the executive director, local board of trustees,

chief financial officer, or a fiscal or program officer of the

center to take an action;

(9) exercise a power or duty of an officer or employee of the

center; or

(10) make a recommendation to the local agency or combination of

agencies responsible for appointments to the local board of

trustees regarding the removal of a center trustee.

(b) The manager or management team shall supervise the exercise

of a power or duty by the local board of trustees.

commissioner and local board of trustees on actions taken.

(d) A manager or management team appointed under this section

may not use an asset or money contributed by a county,

municipality, or other local funding entity without the approval

of the county, municipality, or entity.

Added by Acts 1999, 76th Leg., ch. 1520, Sec. 1, eff. Sept. 1,

1999.

Sec. 534.040. RESTORING MANAGEMENT TO CENTER. (a) Each month,

the commissioner shall evaluate the performance of a community

center managed by a manager or team appointed under Section

534.038 to determine the feasibility of restoring the center's

management and operation to a local board of trustees.

(b) The authority of the manager or management team continues

until the commissioner determines that the relevant factors

listed under Section 534.038(a) no longer apply.

commissioner shall terminate the authority of the manager or

management team and restore authority to manage and operate the

center to the center's authorized officers and employees.

Added by Acts 1999, 76th Leg., ch. 1520, Sec. 1, eff. Sept. 1,

1999. Amended by Acts 2003, 78th Leg., ch. 839, Sec. 2, eff.

Sept. 1, 2003.

SUBCHAPTER B. COMMUNITY-BASED SERVICES

Sec. 534.052. RULES AND STANDARDS. (a) The board shall adopt

rules, including standards, the board considers necessary and

appropriate to ensure the adequate provision of community-based

mental health and mental retardation services through a local

mental health or mental retardation authority under this

subchapter.

(b) The department shall send a copy of the rules to each local

mental health or mental retardation authority or other provider

receiving contract funds as a local mental health or mental

retardation authority or designated provider.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.29, eff.

Aug. 30, 1993.

Sec. 534.053. REQUIRED COMMUNITY-BASED SERVICES. (a) The

department shall ensure that, at a minimum, the following

services are available in each service area:

(1) 24-hour emergency screening and rapid crisis stabilization

services;

(2) community-based crisis residential services or

hospitalization;

(3) community-based assessments, including the development of

interdisciplinary treatment plans and diagnosis and evaluation

services;

(4) family support services, including respite care;

(5) case management services;

(6) medication-related services, including medication clinics,

laboratory monitoring, medication education, mental health

maintenance education, and the provision of medication; and

(7) psychosocial rehabilitation programs, including social

support activities, independent living skills, and vocational

training.

(b) The department shall arrange for appropriate community-based

services, including the assignment of a case manager, to be

available in each service area for each person discharged from a

department facility who is in need of care.

shall:

(1) ensure that the services listed in this section are

available for children, including adolescents, as well as adults,

in each service area;

(2) emphasize early intervention services for children,

including adolescents, who meet the department's definition of

being at high risk of developing severe emotional disturbances or

severe mental illnesses; and

(3) ensure that services listed in this section are available

for defendants required to submit to mental health treatment

under Article 17.032 or Section 5(a) or 11(d), Article 42.12,

Code of Criminal Procedure.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 900, Sec. 4.021, eff.

Sept. 1, 1993.

Sec. 534.0535. JOINT DISCHARGE PLANNING. (a) The board shall

adopt, and the department shall enforce, rules that require

continuity of services and planning for patient or client care

between department facilities and local mental health or mental

retardation authorities.

(b) At a minimum, the rules must require joint discharge

planning between a department facility and a local mental health

or mental retardation authority before a facility discharges a

patient or client or places the patient or client on an extended

furlough with an intent to discharge.

shall plan with the department facility and determine the

appropriate community services for the patient or client.

(d) The local mental health or mental retardation authority

shall arrange for the provision of the services if department

funds are to be used and may subcontract with or make a referral

to a local agency or entity.

Added by Acts 1993, 73rd Leg., ch. 107, Sec. 6.30, eff. Aug. 30,

1993.

Sec. 534.054. DESIGNATION OF PROVIDER. (a) The department

shall identify and contract with a local mental health or mental

retardation authority for each service area to ensure that

services are provided to patient and client populations

determined by the department. A local mental health or mental

retardation authority shall ensure that services to address the

needs of priority populations are provided as required by the

department and shall comply with the rules and standards adopted

under Section 534.052.

(b) Repealed by Acts 1997, 75th Leg., ch. 869, Sec. 5, eff.

Sept. 1, 1997.

provider or organization to act as a designated provider of a

service if the department:

(1) cannot negotiate a contract with a local mental health or

mental retardation authority to ensure that a specific required

service for priority populations is available in that service

area; or

(2) determines that a local mental health or mental retardation

authority does not have the capacity to ensure the availability

of that service.

(d) Repealed by Acts 1997, 75th Leg., ch. 869, Sec. 5, eff.

Sept. 1, 1997.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.31, eff.

Aug. 30, 1993; Acts 1995, 74th Leg., ch. 821, Sec. 12, eff. Sept.

1, 1995; Acts 1997, 75th Leg., ch. 869, Sec. 5, eff. Sept. 1,

1997.

Sec. 534.055. CONTRACTS FOR CERTAIN COMMUNITY SERVICES. (a) A

mental health or mental retardation authority and a private

provider shall use a contract designed by the department as a

model contract for the provision of services at the community

level for persons with mental retardation or mental illness,

including residential services, if the contract involves the use

of state funds or funds for which the state has oversight

responsibility.

(b) The department shall design one or more model contracts and

shall retain copies of each model contract in the central office

of the department.

(1) require that the services provided by the private provider

be based on the patient's or client's individual treatment plan;

(2) provide that a community-based residential facility that is

a family home as defined in Chapter 123, Human Resources Code may

house only a person with a disability as defined in Section

123.002, Human Resources Code;

(3) prohibit the use of the facility for purposes such as

restitution centers, homes for substance abusers, or halfway

houses; and

(4) outline a dispute resolution procedure.

(d) The department shall design a competitive procurement or

similar system that a mental health or mental retardation

authority shall use in awarding an initial contract under this

section.

(e) The system must require that each mental health or mental

retardation authority:

(1) ensure public participation in the authority's decisions

regarding whether to provide or to contract for a service;

(2) make a reasonable effort to give notice of the intent to

contract for services to each potential private provider in the

local service area of the authority; and

(3) review each submitted proposal and award the contract to the

applicant that the authority determines has made the lowest and

best bid to provide the needed services.

(f) Each mental health or mental retardation authority, in

determining the lowest and best bid, shall consider any relevant

information included in the authority's request for bid

proposals, including:

(1) price;

(2) the ability of the bidder to perform the contract and to

provide the required services;

(3) whether the bidder can perform the contract or provide the

services within the period required, without delay or

interference;

(4) the bidder's history of compliance with the laws relating to

the bidder's business operations and the affected services and

whether the bidder is currently in compliance;

(5) whether the bidder's financial resources are sufficient to

perform the contract and to provide the services;

(6) whether necessary or desirable support and ancillary

services are available to the bidder;

(7) the character, responsibility, integrity, reputation, and

experience of the bidder;

(8) the quality of the facilities and equipment available to or

proposed by the bidder;

(9) the ability of the bidder to provide continuity of services;

and

(10) the ability of the bidder to meet all applicable written

departmental policies, principles, and regulations.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.32, eff.

Aug. 30, 1993; Acts 1995, 74th Leg., ch. 821, Sec. 13, eff. Sept.

1, 1995.

Sec. 534.056. COORDINATION OF ACTIVITIES. A local mental health

or mental retardation authority shall coordinate its activities

with the activities of other appropriate agencies that provide

care and treatment for persons with drug or alcohol problems.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.33, eff.

Aug. 30, 1993.

Sec. 534.057. RESPITE CARE. (a) The board shall adopt rules

relating to the provision of respite care and shall develop a

system to reimburse providers of in-home respite care.

(b) The rules must:

(1) encourage the use of existing local providers;

(2) encourage family participation in the choice of a qualified

provider;

(3) establish procedures necessary to administer this section,

including procedures for:

(A) determining the amount and type of in-home respite care to

be authorized;

(B) reimbursing providers;

(D) handling complaints from recipients of in-home respite care;

(E) providing emergency backup for in-home respite care

providers; and

(F) advertising for, selecting, and training in-home respite

care providers; and

(4) specify the conditions and provisions under which a

provider's participation in the program can be canceled.

for department facilities and designated providers to use in

operating the in-home respite care program. The board shall

establish the standards from information obtained from the

families of patients and clients receiving in-home respite care

and from providers of in-home respite care. The board may obtain

the information at a public hearing or from an advisory group.

(d) The service and performance standards established by the

board under Subsection (c) must:

(1) prescribe minimum personnel qualifications the board

determines are necessary to protect health and safety;

(2) establish levels of personnel qualifications that are

dependent on the needs of the patient or client; and

(3) permit a health professional with a valid Texas

practitioner's license to provide care that is consistent with

the professional's training and license without requiring

additional training unless the board determines that additional

training is necessary.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991.

Sec. 534.058. STANDARDS OF CARE. (a) The department shall

develop standards of care for the services provided by a local

mental health or mental retardation authority and its

subcontractors under this subchapter.

(b) The standards must be designed to ensure that the quality of

the community-based services is consistent with the quality of

care available in department facilities.

retardation authorities, the department shall review the

standards biennially to determine if each standard is necessary

to ensure the quality of care.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.34, eff.

Aug. 30, 1993.

Sec. 534.059. CONTRACT COMPLIANCE FOR LOCAL AUTHORITIES. (a)

The department shall evaluate a local mental health or mental

retardation authority's compliance with its contract to ensure

the provision of specific services to priority populations.

(b) If, by a date set by the commissioner, a local mental health

or mental retardation authority fails to comply with its contract

to ensure the provision of services to the satisfaction of the

commissioner, the department may impose a sanction as provided by

the applicable contract rule until the dispute is resolved. The

department shall notify the authority in writing of the

department's decision to impose a sanction.

appeal the department's decision to impose a sanction on the

authority. The board by rule shall prescribe the appeal

procedure.

(d) The filing of a notice of appeal stays the imposition of the

department's decision to impose a sanction except when an act or

omission by a local mental health or mental retardation authority

is endangering or may endanger the life, health, welfare, or

safety of a person.

(e) While an appeal under this section is pending, the

department may limit general revenue allocations to a local

mental health or mental retardation authority to monthly

distributions.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.35, eff.

Aug. 30, 1993; Acts 1999, 76th Leg., ch. 1209, Sec. 9, eff. Sept.

1, 1999.

Sec. 534.060. PROGRAM AND SERVICE MONITORING AND REVIEW OF LOCAL

AUTHORITIES. (a) The department shall develop mechanisms for

monitoring the services provided by a local mental health or

mental retardation authority.

(b) The department shall review the program quality and program

performance results of a local mental health or mental

retardation authority in accordance with a risk assessment and

evaluation system appropriate to the authority's contract

requirements. The department may determine the scope of the

review.

retardation authority and the department must authorize the

department to have unrestricted access to all facilities,

records, data, and other information under the control of the

authority as necessary to enable the department to audit,

monitor, and review the financial and program activities and

services associated with department funds.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.36, eff.

Aug. 30, 1993; Acts 1997, 75th Leg., ch. 869, Sec. 4, eff. Sept.

1, 1997; Acts 1999, 76th Leg., ch. 1209, Sec. 10, eff. Sept. 1,

1999.

Sec. 534.0601. COORDINATED PROGRAM AUDITS OF LOCAL AUTHORITIES.

(a) The department shall coordinate with each agency or

department of the state that contracts with a local mental health

or mental retardation authority to prescribe procedures for a

coordinated program audit of the authority. The procedures must

be:

(1) consistent with the requirements for the receipt of federal

funding by the authority; and

(2) based on risk assessment.

(b) A program audit must evaluate:

(1) the extent to which a local mental health or mental

retardation authority is achieving the results or benefits

established by an agency or department of the state or by the

legislature;

(2) the effectiveness of the authority's organization, program,

activities, or functions; and

(3) the authority's compliance with law.

retardation authority must be performed in accordance with the

procedures prescribed under this section.

(d) The department may not implement a procedure for a program

audit under this section without the approval of the Health and

Human Services Commission.

(e) This section does not prohibit an agency, department, or

other entity providing funding to a local mental health or mental

retardation authority from investigating a complaint against the

authority or performing additional contract monitoring of the

authority.

Added by Acts 1999, 76th Leg., ch. 1209, Sec. 11, eff. Sept. 1,

1999.

Sec. 534.0602. FINANCIAL AUDITS OF LOCAL AUTHORITIES. (a) The

department shall prescribe procedures for a financial audit of a

local mental health or mental retardation authority. The

procedures must be consistent with requirements for the receipt

of federal funding by the authority.

(b) The department shall develop the procedures with the

assistance of each agency or department of the state that

contracts with a local mental health or mental retardation

authority. The department shall incorporate each agency's or

department's financial or compliance requirements for an

authority into a single audit that meets the requirements of

Section 534.068.

section, the department must set a deadline for agencies and

departments of the state that contract with local mental health

and mental retardation authorities to submit proposals relating

to the procedure.

(d) An agency or department of the state that contracts with a

local mental health or mental retardation authority must comply

with a procedure developed under this section.

(e) The department may not implement a procedure under this

section without the approval of the Health and Human Services

Commission.

Added by Acts 1999, 76th Leg., ch. 1209, Sec. 11, eff. Sept. 1,

1999.

Sec. 534.0603. ADDITIONAL FINANCIAL AUDIT ACTIVITY. (a) The

department shall develop protocols for an agency or department of

the state to conduct additional financial audit activities of a

local mental health or mental retardation authority.

(b) An agency or department of the state may not conduct

additional financial audit activities relating to a local mental

health or mental retardation authority without the approval of

the Health and Human Services Commission.

do not apply to an audit conducted under Chapter 321, Government

Code.

Added by Acts 1999, 76th Leg., ch. 1209, Sec. 11, eff. Sept. 1,

1999.

Sec. 534.061. PROGRAM AND SERVICE MONITORING AND REVIEW OF

CERTAIN COMMUNITY SERVICES. (a) The department shall develop

mechanisms for periodically monitoring the services of a provider

who contracts with a local mental health or mental retardation

authority to provide services for persons with mental retardation

or mental illness at the community level, including residential

services, if state funds or funds for which the state has

oversight responsibility are used to pay for at least part of the

services.

(b) The local mental health or mental retardation authority

shall monitor the services to ensure that the provider is

delivering the services in a manner consistent with the

provider's contract.

funds for which the state has oversight responsibility must

authorize the local mental health or mental retardation authority

or the authority's designee and the department or the

department's designee to have unrestricted access to all

facilities, records, data, and other information under the

control of the provider as necessary to enable the department to

audit, monitor, and review the financial and program activities

and services associated with the contract.

(d) The department may withdraw funding from a local mental

health or mental retardation authority that fails to cancel a

contract with a provider involving the use of state funds or

funds for which the state has oversight responsibility if:

(1) the provider is not fulfilling its contractual obligations;

and

(2) the authority has not taken appropriate action to remedy the

problem in accordance with board rules.

(e) The board by rule shall prescribe procedures a local mental

health or mental retardation authority must follow in remedying a

problem with a provider.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1999, 76th Leg., ch. 1209, Sec. 12, eff.

Sept. 1, 1999.

Sec. 534.063. PEER REVIEW ORGANIZATION. The department shall

assist a local mental health or mental retardation authority in

developing a peer review organization to provide self-assessment

of programs and to supplement department reviews under Section

534.060.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.37, eff.

Aug. 30, 1993.

Sec. 534.064. CONTRACT RENEWAL. The commissioner may refuse to

renew a contract with a local mental health or mental retardation

authority and may select other agencies, entities, or

organizations to be the local mental health or mental retardation

authority if the department's evaluation of the authority's

performance indicates that the authority cannot ensure the

availability of the specific services to priority populations

required by the department and this subtitle.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.38, eff.

Aug. 30, 1993; Acts 1995, 74th Leg., ch. 821, Sec. 14, eff. Sept.

1, 1995.

Sec. 534.065. RENEWAL OF CERTAIN CONTRACTS FOR COMMUNITY

SERVICES. (a) A mental health or mental retardation authority

shall review a contract scheduled for renewal that:

(1) is between the authority and a private provider;

(2) is for the provision of mental health or mental retardation

services at the community level, including residential services;

and

(3) involves the use of state funds or funds for which the state

has oversight responsibility.

(b) The mental health or mental retardation authority may renew

the contract only if the contract meets the criteria provided by

Section 533.016.

private provider shall negotiate a contract renewal at arms

length and in good faith.

(d) This section applies to a contract renewal regardless of the

date on which the original contract was initially executed.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1995, 74th Leg., ch. 821, Sec. 15, eff.

Sept. 1, 1995; Acts 1999, 76th Leg., ch. 1187, Sec. 15, eff.

Sept. 1, 1999.

Sec. 534.066. LOCAL MATCH REQUIREMENT. (a) The department

shall include in a contract with a local mental health or mental

retardation authority a requirement that some or all of the state

funds the authority receives be matched by local support in an

amount or proportion jointly agreed to by the department and the

authority's board of trustees and based on the authority's

financial capability and its overall commitment to other mental

health or mental retardation programs, as appropriate.

(b) The department shall establish, for community services

divisions of department facilities that provide community-based

services required under this subchapter, a local match

requirement that is consistent with the requirements applied to

other local mental health or mental retardation authorities.

and facilities contributed by the local mental health or mental

retardation authority, contributions by a county or municipality,

and other locally generated contributions, including local tax

funds, may be counted when calculating the local support for a

local mental health or mental retardation authority. The

department may disallow or reduce the value of services claimed

as support.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.38, eff.

Aug. 30, 1993; Acts 1995, 74th Leg., ch. 821, Sec. 16, eff. Sept.

1, 1995.

Sec. 534.067. FEE COLLECTION POLICY. The department shall

establish a uniform fee collection policy for all local mental

health or mental retardation authorities that is equitable,

provides for collections, and maximizes contributions to local

revenue.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.38, eff.

Aug. 30, 1993.

Sec. 534.0675. NOTICE OF DENIAL, REDUCTION, OR TERMINATION OF

SERVICES. The board by rule, in cooperation with local mental

health and mental retardation authorities, consumers, consumer

advocates, and service providers, shall establish a uniform

procedure that each local mental health or mental retardation

authority shall use to notify consumers in writing of the denial,

involuntary reduction, or termination of services and of the

right to appeal those decisions.

Added by Acts 1993, 73rd Leg., ch. 107, Sec. 6.38, eff. Aug. 30,

1993; Acts 1993, 73rd Leg., ch. 646, Sec. 11, eff. Aug. 30, 1993.

Sec. 534.068. AUDITS. (a) As a condition to receiving funds

under this subtitle, a local mental health and mental retardation

authority other than a state facility designated as an authority

must annually submit to the department a financial and compliance

audit prepared by a certified public accountant or public

accountant licensed by the Texas State Board of Public

Accountancy. To ensure the highest degree of independence and

quality, the local mental health or mental retardation authority

shall use an invitation-for-proposal process as prescribed by the

department to select the auditor.

(b) The audit must meet the minimum requirements as shall be,

and be in the form and in the number of copies as may be,

prescribed by the department, subject to review and comment by

the state auditor.

shall file the required number of copies of the audit report with

the department by the date prescribed by the department. From the

copies filed with the department, copies of the report shall be

submitted to the governor and Legislative Budget Board.

(d) The local mental health or mental retardation authority

shall either approve or refuse to approve the audit report. If

the authority refuses to approve the report, the authority shall

include with the department's copies a statement detailing the

reasons for refusal.

(e) The commissioner and state auditor have access to all

vouchers, receipts, journals, or other records the commissioner

or auditor considers necessary to review and analyze the audit

report.

(f) The department shall annually submit to the governor,

Legislative Budget Board, and Legislative Audit Committee a

summary of the significant findings identified during the

department's reviews of fiscal audit activities.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991. Amended by Acts 1993, 73rd Leg., ch. 107, Sec. 6.39, eff.

Aug. 30, 1993.

Sec. 534.069. CRITERIA FOR PROVIDING FUNDS FOR START-UP COSTS.

(a) The board by rule shall develop criteria to regulate the

provision of payment to a private provider for start-up costs

associated with the development of residential and other

community services for persons with mental illness or mental

retardation.

(b) The criteria shall provide that start-up funds be awarded

only as a last resort and shall include provisions relating to:

(1) the purposes for which start-up funds may be used;

(2) the ownership of capital property and equipment obtained by

the use of start-up funds; and

(3) the obligation of the private provider to repay the start-up

funds awarded by the department by direct repayment or by

providing services for a period agreed to by the parties.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991.

Sec. 534.070. USE OF PROSPECTIVE PAYMENT FUNDS. (a) Each

mental health or mental retardation authority that receives

prospective payment funds shall submit to the department a

quarterly report that clearly identifies how the provider or

program used the funds during the preceding fiscal quarter.

(b) The board by rule shall prescribe the form of the report,

the specific information that must be included in the report, and

the deadlines for submitting the report.

a mental health or mental retardation authority that fails to

submit the quarterly reports required by this section.

(d) In this section "prospective payment funds" means money the

department prospectively provides to a mental health or mental

retardation authority to provide community services to certain

persons with mental retardation or mental illness.

Added by Acts 1991, 72nd Leg., ch. 76, Sec. 1, eff. Sept. 1,

1991.

Sec. 534.071. ADVISORY COMMITTEE. A local mental health or

mental retardation authority may appoint a committee to advise

its governing board on a matter relating to the oversight and

provision of mental health and mental retardation services. The

appointment of a committee does not relieve the authority's

governing board of a responsibility prescribed by this subtitle.

Added by Acts 1999, 76th Leg., ch. 1209, Sec. 13, eff. Sept. 1,

1999.

SUBCHAPTER C. HEALTH MAINTENANCE ORGANIZATIONS

Sec. 534.101. HEALTH MAINTENANCE ORGANIZATION CERTIFICATE OF

AUTHORITY. (a) One or more community centers may create or

operate a nonprofit corporation pursuant to the laws of this

state for the purpose of accepting capitated or other at-risk

payment arrangements for the provision of services designated in

a plan approved by the department under Subchapter A.

(b) Before a nonprofit corporation organized or operating under

Subsection (a) accepts or enters into any capitated or other

at-risk payment arrangement for services designated in a plan

approved by the department under Subchapter A, the nonprofit

corporation must obtain the appropriate certificate of authority

from the Texas Department of Insurance to operate as a health

maintenance organization pursuant to Chapter 843, Insurance Code.

operating under this subchapter shall disclose in an open meeting

the services to be provided by the community center through any

capitated or other at-risk payment arrangement by the nonprofit

corporation. Notice of the meeting must be posted in accordance

with Sections 551.041, 551.043, and 551.054, Government Code. The

department shall verify that the services provided under any

capitated or other at-risk payment arrangement are within the

scope of services approved by the department in each community

center's plan required under Subchapter A.

(d) The board of the nonprofit corporation shall:

(1) provide for public notice of the nonprofit corporation's

intent to submit a bid to provide or arrange services through a

capitated or other at-risk payment arrangement through placement

as a board agenda item on the next regularly scheduled board

meeting that allows at least 15 days' public review of the plan;

and

(2) provide an opportunity for public comment on the services to

be provided through such arrangements and on the consideration of

local input into the plan.

(e) The nonprofit corporation shall provide:

(1) public notice before verification and disclosure of services

to be provided by the community center through any capitated or

other at-risk payment arrangements by the nonprofit corporation;

(2) an opportunity for public comment on the community center

services within the capitated or other at-risk payment

arrangements offered by the nonprofit corporation;

(3) published summaries of all relevant documentation concerning

community center services arranged through the nonprofit

corporation, including summaries of any similar contracts the

nonprofit corporation has entered into; and

(4) public access and review of all relevant documentation.

(f) A nonprofit corporation operating under this subchapter:

(1) is subject to the requirements of Chapters 551 and 552,

Government Code;

(2) shall solicit public input on the operations of the

nonprofit corporation and allow public access to information on

the operations, including services, administration, governance,

revenues, and expenses, on request unless disclosure is expressly

prohibited by law or the information is confidential under law;

and

(3) shall publish an annual report detailing the services,

administration, governance, revenues, and expenses of the

nonprofit corporation, including the disposition of any excess

revenues.

Added by Acts 1997, 75th Leg., ch. 835, Sec. 2, eff. Sept. 1,

1997. Amended by Acts 1999, 76th Leg., ch. 1229, Sec. 2, eff.

Sept. 1, 1999; Acts 2003, 78th Leg., ch. 1276, Sec. 10A.530, eff.

Sept. 1, 2003.

Sec. 534.102. LAWS AND RULES. A nonprofit corporation created

or operated under this subchapter that obtains and holds a valid

certificate of authority as a health maintenance organization may

exercise the powers and authority and is subject to the

conditions and limitations provided by this subchapter, Chapter

843, Insurance Code, the Texas Non-Profit Corporation Act

(Article 1396-1.01 et seq., Vernon's Texas Civil Statutes), and

rules of the Texas Department of Insurance.

Added by Acts 1997, 75th Leg., ch. 835, Sec. 2, eff. Sept. 1,

1997. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.531,

eff. Sept. 1, 2003.

Sec. 534.103. APPLICATION OF LAWS AND RULES. A health

maintenance organization created and operating under this

subchapter is governed as, and is subject to the same laws and

rules of the Texas Department of Insurance as, any other health

maintenance organization of the same type. The commissioner of

insurance may adopt rules as necessary to accept funding sources

other than the sources specified by Section 843.405, Insurance

Code, from a nonprofit health maintenance organization created

and operating under this subchapter, to meet the minimum surplus

requirements of that section.

Added by Acts 1997, 75th Leg., ch. 835, Sec. 2, eff. Sept. 1,

1997. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.532,

eff. Sept. 1, 2003.

Sec. 534.104. APPLICATION OF SPECIFIC LAWS. (a) A nonprofit

health maintenance organization created under Section 534.101 is

a health care provider that is a nonprofit health maintenance

organization created and operated by a community center for

purposes of Section 84.007(e), Civil Practice and Remedies Code.

The nonprofit health maintenance organization is not a

governmental unit or a unit of local government, for purposes of

Chapters 101 and 102, Civil Practice and Remedies Code,

respectively, or a local government for purposes of Chapter 791,

Government Code.

(b) Nothing in this subchapter precludes one or more community

centers from forming a nonprofit corporation under Chapter 162,

Occupations Code, to provide services on a risk-sharing or

capitated basis as permitted under Chapter 844, Insurance Code.

Added by Acts 1997, 75th Leg., ch. 835, Sec. 2, eff. Sept. 1,

1997. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 14.802,

eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 1276, Sec. 10A.533,

eff. Sept. 1, 2003.

Sec. 534.105. CONSIDERATION OF BIDS. The department shall give

equal consideration to bids submitted by any entity, whether it

be public, for-profit, or nonprofit, if the department accepts

bids to provide services through a capitated or at-risk payment

arrangement and if the entities meet all other criteria as

required by the department.

Added by Acts 1997, 75th Leg., ch. 835, Sec. 2, eff. Sept. 1,

1997.

Sec. 534.106. CONDITIONS FOR CERTAIN CONTRACTS. A contract

between the department and a health maintenance organization

formed by one or more community centers must provide that the

health maintenance organization may not form a for-profit entity

unless the organization transfers all of the organization's

assets to the control of the boards of trustees of the community

centers that formed the organization.

Added by Acts 1999, 76th Leg., ch. 1187, Sec. 16, eff. Sept. 1,

1999.

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2009 Texas Code HEALTH AND SAFETY CODE TITLE 7. MENTAL HEALTH AND MENTAL RETARDATION CHAPTER 534. COMMUNITY SERVICES

2009 Texas Code
HEALTH AND SAFETY CODE
TITLE 7. MENTAL HEALTH AND MENTAL RETARDATION
CHAPTER 534. COMMUNITY SERVICES