Texas Register, Volume 37, Number 28, Pages 5177-5392, July 13, 2012 Page: 5,276

                                
The Executive Commissioner of the Health and Human Ser-
vices Commission (commission), on behalf of the Department
of State Health Services (department), adopts new 1.601, con-
cerning adverse licensing, listing, or registration decisions, with-
out changes to the proposed text as published in the February 3,
2012, issue of the Texas Register (37 TexReg 466) and, there-
fore, the section will not be republished.
BACKGROUND AND PURPOSE
Senate Bill 78, enacted during the 82nd Legislature, Regular
Session, 2011, added Government Code, 531.951 - 531.954
and requires certain Health and Human Services Commission
agencies to capture, retain, and share information regarding ad-
verse actions against regulated entities or persons seeking or
renewing a license. This new law applies to the department, as
well as the Department of Aging and Disability Services (DADS),
and the Department of Family and Protective Services (DFPS).
Each agency is required to create a monthly list of adverse ac-
tions that is shared with the other agencies. Under this law, an
agency may take an adverse action against a licensee or appli-
cant based on the information provided by the other agencies.
The new rule implements the law by adding Subchapter Y.
Five regulatory programs administered by the department are
affected by the new law that includes Youth Camps in 25 Texas
Administrative Code (TAC) Chapter 265; Hospital Licensing in
25 TAC Chapter 133; Special Care Facilities in 25 TAC Chap-
ter 125; Chemical Dependency Treatment Facilities in 25 TAC
Chapter 448; and Private Psychiatric Hospitals in 25 TAC Chap-
ter 134. Each program has a unique rule set; therefore, the most
efficient way to implement the law is to amend the broad-scope
25 TAC Chapter 1, rather than amending five individual rule text
chapters in 25 TAC. The requirements of the law are identical for
all programs affected.
The new requirements include creating a record of final decisions
for any adverse actions that result in denial, suspension, revo-
cation or termination of a license. The department must provide
the records on a monthly basis to DADS and DFPS; conversely,
DADS and DFPS are required to provide such information to the
department and to one another. The records of decisions and
the relevant applications must be retained by the agencies for a
period of 10 years from the anniversary date of the denial, sus-
pension, revocation or termination. The new rule promotes effi-
cient communication between the agencies and facilitates denial
or termination of a license in circumstances that pose significant
risk or harm to an individual in the care of the entity or person.
SECTION-BY-SECTION SUMMARY
Section 1.601(a) defines the scope of the subchapter with re-
spect to the department and the five programs it administers that
are subject to the rule. The programs are Youth Camps in Health
and Safety Code, Chapter 141; Hospital Licensing in Health and
Safety Code, Chapter 241; Special Care Facilities in Health and
Safety Code, Chapter 248; Chemical Dependency Treatment
Facilities in Health and Safety Code, Chapter 464; and Private
Psychiatric Hospitals in Health and Safety Code, Chapter 577.
Section 1.601(b) describes the requirement to create, share, and
retain records of decisions, which relate to denying, revoking,
suspending, or terminating a license or registration (adverse ac-
tion). The records that relate to adverse action must include: the
name and address of the applicant; the name and address of
each person named on the application; the name of each con-
trolling person; a summary of the terms for which the adverse
action was taken; and the period that the adverse action will be

in effect. This subsection also includes the provisions for provid-
ing the monthly report and the 10-year retention period.
Section 1.601(c) describes how the department may deny an
application for a license or renewal of a license, based on the
adverse actions taken by the other agencies subject to the en-
abling statute. The license may be denied if the applicant, a
person named on the application, or a controlling person of the
entity or person seeking a license is listed by DADS or DFPS
in a record as described in subsection (b) and the agency's ac-
tion was based on an act or omission that resulted in physical
or mental harm to an individual in the care of the applicant or
person; a threat to the health, safety or well-being of an individ-
ual in the care of the applicant or person; or a determination by
the agency that the applicant or person has committed an act or
omission that renders the applicant unqualified to fulfill the obli-
gations of the license or registration.
Section 1.601(d) requires an applicant to include with the appli-
cation a written statement of the name of any person who is or
will be a controlling person of the entity for which the license or
registration is sought.
COMMENTS
The department, on behalf of the commission, did not receive
any comments regarding the proposed rule during the comment
period.
LEGAL CERTIFICATION
The Department of State Health Services General Counsel,
Lisa Hernandez, certifies that the rule, as adopted, has been
reviewed by legal counsel and found to be a valid exercise of
the agencies' legal authority.
STATUTORY AUTHORITY
The new rule is authorized by Government Code, Chapter 531,
which requires the Executive Commissioner of the Health and
Human Services Commission to adopt a rule necessary to imple-
ment the adverse licensing, listing, or registration decisions; and
Government Code, 531.0055, and Health and Safety Code,
1001.075, which authorize the Executive Commissioner of the
Health and Human Services Commission to adopt rules and poli-
cies necessary for the operation and provision of health and hu-
man services by the department and for the administration of
Health and Safety Code, Chapter 1001.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's
legal authority.
Filed with the Office of the Secretary of State on July 2, 2012.
TRD-201203468
Lisa Hernandez
General Counsel
Department of State Health Services
Effective date: July 22, 2012
Proposal publication date: February 3, 2012
For further information, please call: (512) 776-6972
CHAPTER 229. FOOD AND DRUG
SUBCHAPTER EE. COTTAGE FOOD
PRODUCTION OPERATION

37 TexReg 5276  July 13, 2012  Texas Register