The Texas Department of Human Services (DHS) adopts the repeal of §97.13, amendments to §97.1, §97.2, §97.3, §97.11, §97.12, §97.14, §97.15, §97.16, §97.21, §97.51, and §97.52, and new §97.13. DHS adopts the repeal of §97.13, amendments to §97.3, §97.11, §97.12, §97.14, §97.15, and §97.16; and new §97.13 without changes to the proposed text published in the February 18, 2000, issue of the Texas Register (25 TexReg 1272). Amendments to §97.1, §97.2, §97.21, and §97.52 are adopted with minor editorial changes, and the amendment to §97.51(a)(1) is adopted with an administrative change to replace the phrase "commissioner of health" with "commissioner of human services".

Most of these adopted rules implement legislation from the 76th Legislative Session, which amended Health and Safety Code, Chapter 142, relating to licensing and regulation of home and community support services agencies (HCSSA). The rules that implement legislation are the rules which require agencies to provide a written statement describing the agency's policy for drug testing of employees who have direct contact with clients to certain individuals; require agencies to dispose of special or medical waste generated in the home in the same manner as they do at the agency; require agencies to report abuse, exploitation, and neglect; prohibit retaliation against a person for filing a complaint or presenting a grievance; and require agencies to inform residents of policies regarding advance directives and establish a $500 administrative penalty for failure to do so. In addition, the application procedures and the criteria and procedures relating to change of ownership were amended to address problem areas identified by DHS and to provide consistency with other DHS rules in other programs licensed by the department. The problem areas identified by DHS included unrealistic time lines for submitting applications and accompanying documents; and failure by agencies to submit timely applications when a change of ownership occurs.

DHS received one comment regarding the proposal from the Texas Association for Home Care. A summary of the comment and the department's response follows.

Comment: Concerning §97.13(a)(2) relating to change of ownership, a commenter expressed concerns with the rule language which changes the definition of a "change of ownership" to include the sale of 50% or more of stock. Formerly the rule stated that the sale of stock does not cause a change of ownership. The commenter stated that a corporation is the owner of the license and that the purchase of stock does not change that fact and that the only thing that changes is the controlling interest for which an agency is already required by statute to report. The change will cause a purchaser of 50% or more stock to pay an additional $875 for the parent and for any branches effected. The commenter further stated, "If the department is proposing to deny approval of a stock purchase through the change of ownership process, it should have clear criteria to be used in this decision so that parties are not caught by surprise after making significant financial investments."

Response: DHS disagrees and believes that a change of ownership does occur when there is a 50% or more stock purchase. DHS believes that at this percentage change there is a high probability in change of management and direction of a company or agency. A license is approved based on the information supplied in an application and compliance with the statute and rules adopted thereunder. When there is a change of ownership based on 50% or more stock purchase, this information changes. The department believes that the agency must be re-evaluated using the information contained in an application for a new license to ensure that an agency under new ownership meets the requirements for a license.

The amendments are adopted under the Health and Safety Code, Chapter 142, which provides the department with the authority to adopt rules for the licensing and regulation of home and community support services agencies.

The amendments implement the Health and Safety Code, Chapter 142.001-142.030.