82R23192 EAH-D
	By: Harper-Brown, Callegari, Lucio III	H.B. No. 2448
	Substitute the following for H.B. No. 2448:
	By:  Callegari	C.S.H.B. No. 2448

	A BILL TO BE ENTITLED
	AN ACT
	relating to the creation of offices of inspectors general at the
	Health and Human Services Commission, Texas Youth Commission, Texas
	Department of Criminal Justice, Texas Department of
	Transportation, and Texas Education Agency; providing penalties.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Subtitle B, Title 4, Government Code, is amended
	by adding Chapter 422 to read as follows:
	CHAPTER 422. OFFICES OF INSPECTORS GENERAL
	SUBCHAPTER A. GENERAL PROVISIONS
	Sec. 422.001.  SHORT TITLE.  This chapter may be cited as the
	Texas Inspector General Act.
	Sec. 422.002.  PURPOSE.  The purpose of this chapter is to
	establish guidelines for the offices of inspectors general at
	certain state agencies.
	Sec. 422.003.  DEFINITIONS.  In this chapter:
	(1)  "Agency" means a state agency subject to this
	chapter under Section 422.004.
	(2)  "Fraud" has the meaning assigned by Section
	531.1011.
	(3)  "Inspector general" means the person appointed
	under this chapter to serve as inspector general for an agency.
	(4)  "Office" means the office of inspector general for
	an agency.
	(5)  "Provider" has the meaning assigned by Section
	531.1011.
	(6)  "Review":
	(A)  includes an inspection, investigation,
	audit, or similar activity; and
	(B)  does not include a criminal or administrative
	investigation conducted by the office established for the Texas
	Department of Criminal Justice.
	(7)  "State funds" or "state money" includes federal
	funds or money received and appropriated by the state or for which
	the state has oversight responsibility.
	Sec. 422.004.  APPLICABILITY.  (a)  This chapter applies
	only to the:
	(1)  Health and Human Services Commission;
	(2)  Texas Youth Commission;
	(3)  Texas Department of Transportation;
	(4)  Texas Department of Criminal Justice; and
	(5)  Texas Education Agency.
	(b)  A state agency may not establish an office of inspector
	general without specific legislative authorization.
	Sec. 422.005.  REFERENCE IN OTHER LAW.  Notwithstanding any
	other provision of law, a reference in law or rule to an agency's
	office of inspector general means the office of inspector general
	established under this chapter for that agency.
	[Sections 422.006-422.050 reserved for expansion]
	SUBCHAPTER B.  OFFICE OF INSPECTOR GENERAL
	Sec. 422.051.  ESTABLISHMENT OF OFFICE.  (a)  Each agency
	subject to this chapter shall establish an office of inspector
	general in the agency.
	(b)  The office is governed by the inspector general for the
	agency.
	(c)  The inspector general shall:
	(1)  manage daily operations of the office;
	(2)  supervise office staff;
	(3)  create office operating procedures, personnel
	policies, and employment policies;
	(4)  allocate resources in the office;
	(5)  oversee office information resources systems;
	(6)  determine the location of office facilities; and
	(7)  coordinate office activities with the activities
	of other state agencies, including other health and human services
	agencies.
	(d)  The inspector general is responsible for office
	procurement and contracts.
	Sec. 422.052.  INDEPENDENCE OF OFFICE.  Except as otherwise
	provided by this chapter, the office and inspector general operate
	independently of the agency.
	Sec. 422.053.  ADMINISTRATIVE ATTACHMENT.  The office is
	administratively attached to the agency.  The agency shall provide
	to the office administrative support services.
	Sec. 422.054.  SERVICE LEVEL AGREEMENT.  (a)  The agency and
	the office shall enter into a service level agreement that
	establishes the performance standards and deliverables with regard
	to administrative support by the agency.
	(b)  The service level agreement must be reviewed at least
	annually to ensure that services and deliverables are provided in
	accordance with the agreement.
	Sec. 422.055.  APPROPRIATIONS AND BUDGET.  (a)  The
	inspector general shall submit a budget for the office in
	accordance with the reporting requirements of the General
	Appropriations Act.
	(b)  The inspector general shall submit to the Legislative
	Budget Board and the agency a legislative appropriations request
	and an operating budget in accordance with the service level
	agreement entered into under Section 422.054 and applicable law.
	(c)  If required by or under law, the agency shall submit the
	operating budget to the legislature. The budget is not subject to
	review, alteration, or modification by the agency or the governing
	body or governing officer of the agency before submission to the
	legislature.
	Sec. 422.056.  DUTIES OF AGENCY. (a)  The agency shall:
	(1)  provide administrative assistance to the office;
	and
	(2)  coordinate administrative responsibilities with
	the office to avoid unnecessary duplication of duties.
	(b)  The agency may not take an action that affects or
	relates to the validity, status, or terms of an interagency
	agreement or a contract to which the office is a party without the
	office's approval.
	[Sections 422.057-422.100 reserved for expansion]
	SUBCHAPTER C.  INSPECTOR GENERAL AND PERSONNEL
	Sec. 422.101.  APPOINTMENT; STATE OFFICER.  (a)  The
	governing body or, at an agency that is not governed by a
	multimember governing body, the governor with the advice and
	consent of the senate shall appoint an inspector general to serve as
	director of the office.
	(b)  The appointment shall be made without regard to
	political affiliation, race, color, disability, sex, religion,
	age, or national origin.
	(c)  In making the appointment, the governing body or the
	governor shall consider the person's integrity, education,
	training, knowledge of law, experience in the enforcement of law,
	executive ability, capability for strong leadership, and
	demonstrated ability in accounting, auditing, financial analysis,
	management analysis, public administration, investigation,
	criminal justice administration, or other closely related fields.
	(d)  The inspector general is a state officer.
	Sec. 422.102.  TERM. The inspector general serves a
	two-year term that expires on February 1 of each odd-numbered year.
	Sec. 422.103.  ELIGIBILITY. (a)  To be eligible for
	appointment as inspector general, a person must:
	(1)  have unquestioned integrity and moral character;
	(2)  hold a bachelor's degree;
	(3)  have either:
	(A)  at least five years of experience as a
	certified public accountant, certified internal auditor, or
	certified inspector general; or
	(B)  a peace officer certification issued by the
	Commission on Law Enforcement Officer Standards and Education that
	the person has held for at least five years; and
	(4)  have either:
	(A)  at least five years of experience in a
	professional or administrative position that included as a major
	duty fiscal management, the review of fiscal management, or the
	auditing or review of operational efficiency or program
	performance; or
	(B)  experience carrying out law enforcement
	duties to prevent fraud, waste, and abuse.
	(b)  The person appointed as inspector general must obtain
	certification as a certified inspector general within the time
	required by rules adopted by the governing body or governing
	officer of the agency, as applicable.
	(c)  A person formerly employed by an agency as an executive
	or manager may not serve as inspector general for that agency before
	the fifth anniversary of the date of the termination of that
	person's employment by the agency.
	(d)  A person is not eligible for appointment as inspector
	general if the person or the person's spouse:
	(1)  is an officer or paid consultant of a business
	entity or other organization that holds a license, certificate of
	authority, or other authorization from the agency or that receives
	funds from the agency;
	(2)  owns or controls, directly or indirectly, more
	than a 10 percent interest in a business entity or other
	organization receiving funds from the agency; or
	(3)  uses or receives a substantial amount of tangible
	goods or funds from the agency, other than compensation or
	reimbursement authorized by law.
	(e)  A person is not eligible to serve as inspector general
	if the person or the person's spouse is required to register as a
	lobbyist under Chapter 305 because of the person's or spouse's
	activities for compensation related to the operation of the agency.
	Sec. 422.104.  CONFLICT OF INTEREST. (a) The inspector
	general may not serve as an ex officio member on the governing body
	of a governmental entity.
	(b)  The inspector general may not have a financial interest
	in the transactions of the office, the agency, or a contractor or
	provider of the agency or office.
	(c)  The inspector general and office staff may not
	participate in partisan political activities related to the work of
	the inspector general's office. The inspector general may select
	the most efficient personnel available for each position in the
	inspector general's office. It is against the public policy of this
	state for an officer or employee of this state to recommend a person
	to serve on the staff of the inspector general.
	Sec. 422.105.  PEACE OFFICERS.  (a)  The office may employ
	and commission peace officers to assist the inspector general in
	carrying out the duties of the office relating to detection,
	investigation, and prevention of fraud, waste, and abuse in agency
	programs or in programs receiving state or federal funds that are
	implemented, administered, or overseen by or for a state agency.
	(b)  A commissioned peace officer or otherwise designated
	law enforcement officer employed by the office, except for an
	officer employed by the office established for the Texas Department
	of Criminal Justice, is not entitled to supplemental benefits from
	the law enforcement and custodial officer supplemental retirement
	fund unless the officer transfers from a position, without a break
	in service, that qualifies for supplemental retirement benefits
	from the fund.
	Sec. 422.106.  EXPERTS. Subject to the availability of
	funds, the inspector general may contract with certified public
	accountants, qualified management consultants, or other
	professional experts as necessary to independently perform the
	functions of the office.
	Sec. 422.107.  EMPLOYEES; TRAINING.  (a) The inspector
	general may employ personnel as necessary to implement the duties
	of the office.
	(b)  The inspector general shall train office personnel to
	pursue, efficiently and as necessary, fraud, waste, and abuse cases
	in state agency programs or other state or federally funded
	programs implemented, administered, or overseen by or for the
	agency.
	(c)  The inspector general for the Texas Department of
	Criminal Justice shall train personnel to efficiently and
	effectively perform law enforcement duties.
	Sec. 422.108.  ASSISTANCE BY AGENCY EMPLOYEES.  (a)  The
	inspector general may require employees of a state agency to
	provide assistance to the office in connection with the office's
	duties relating to conducting reviews of fraud, waste, and abuse in
	the provision of services for agency programs or state or federally
	funded programs implemented, administered, or overseen by or for
	the agency.
	(b)  The inspector general for the Health and Human Services
	Commission may also require employees of any health and human
	services agency to provide assistance under Subsection (a).
	[Sections 422.109-422.150 reserved for expansion]
	SUBCHAPTER D.  GENERAL POWERS AND DUTIES
	Sec. 422.151.  GENERAL RESPONSIBILITIES.  (a)  The office is
	responsible for:
	(1)  conducting reviews of fraud, waste, and abuse in
	the provision or funding of services by or for the agency or under a
	program implemented, administered, or overseen by or for the
	agency;
	(2)  the enforcement of state law and the protection of
	the public relating to the provision of those services; and
	(3)  the prevention and detection of crime relating to
	the provision of those services.
	(b)  In addition to the responsibilities under Subsection
	(a), the office established for the Texas Department of Criminal
	Justice is responsible for the investigation of criminal cases and
	administrative violations.
	Sec. 422.152.  RULEMAKING BY INSPECTOR GENERAL.  (a)
	Notwithstanding Section 531.0055(e) and any other law, the
	inspector general shall adopt the rules necessary to administer the
	functions of the office, including rules to address the imposition
	of sanctions and penalties for violations and due process
	requirements for imposing sanctions and penalties.
	(b)  A rule, standard, or form of the agency that is
	necessary to accomplish the duties of the office is considered to
	also be a rule, standard, or form of the office and remains in
	effect as a rule, standard, or form of the office until changed by
	the inspector general.
	(c)  The office shall submit proposed rules and adopted rules
	to the agency for publication. The agency shall promptly provide
	for the publication of the proposed or adopted rules in accordance
	with law.  The agency, including the governing body or governing
	officer of the agency, may not amend or modify a rule submitted by
	the office.
	(d)  The rules must include standards for the office that
	emphasize:
	(1)  coordinating reviews and investigative efforts to
	aggressively recover money;
	(2)  allocating resources to cases that have the
	strongest supportive evidence and the greatest potential for
	recovery of money; and
	(3)  maximizing opportunities for referral of cases to
	the office of attorney general.
	(e)  In addition to the standards under Subsection (d), the
	rules of the office established for the Texas Department of
	Criminal Justice must include standards for the office that
	emphasize the investigation of criminal cases and administrative
	violations.
	Sec. 422.153.  PUBLIC INTEREST INFORMATION AND COMPLAINTS.
	(a)  The office shall develop and implement policies that provide
	the public a reasonable opportunity to appear before the office and
	to speak on any issue under the office's jurisdiction.
	(b)  The office shall prepare information of public interest
	describing the functions of the office and the office's procedures
	by which complaints are filed with and resolved by the office.  The
	office shall make the information available to the public and
	appropriate state agencies.
	(c)  The office shall keep an information file about each
	complaint filed with the office relating to a state agency or entity
	receiving state or federal money and falling under the
	investigatory jurisdiction of the office.
	[Sections 422.154-422.200 reserved for expansion]
	SUBCHAPTER E.  REVIEWS, INVESTIGATIONS, AND AUDITS
	Sec. 422.201.  REVIEW, INVESTIGATION, AND AUDIT AUTHORITY.
	(a) The inspector general may review any activity or operation of
	the agency, a provider, if applicable, or a person in this state
	that is related to the investigation, detection, or prevention of
	fraud, waste, abuse, or employee misconduct in an agency program or
	state or federally funded program implemented, administered, or
	overseen by or for the agency. A review may include an
	investigation or other inquiry into a specific act or allegation
	of, or a specific financial transaction or practice that may
	involve, impropriety, malfeasance, or nonfeasance in the
	obligation, spending, receipt, or other use of state or federal
	money.
	(b)  The office shall conduct reviews to protect the public
	and detect and prevent fraud, waste, and abuse in the provision or
	funding of services or programs.
	(c)  The office shall conduct internal affairs
	investigations in instances of suspected fraud, waste, and abuse
	and in instances of suspected misconduct by employees, contractors,
	subcontractors, and vendors.
	(d)  The office established for the Texas Department of
	Criminal Justice shall conduct criminal and administrative
	investigations involving suspected misconduct by employees,
	contractors, subcontractors, vendors, and offenders.
	(e)  A state agency or the governing body or governing
	officer of a state agency may not impair or prohibit the inspector
	general from initiating or completing a review, or attempt to
	influence the inspector general in conducting a review.
	(f)  The inspector general may review the use and
	effectiveness of state or federal funds, including contract and
	grant funds, administered by a person or state agency receiving the
	funds in connection with an agency or state or federally funded
	program implemented, administered, or overseen by or for the
	agency.
	Sec. 422.202.  INITIATION OF REVIEW. The inspector general
	may initiate a review:
	(1)  on the inspector general's own initiative;
	(2)  at the request of the agency or the governing body
	or governing officer of the agency; or
	(3)  based on a complaint from any source concerning a
	matter described by Section 422.201.
	Sec. 422.203.  ACCESS TO INFORMATION.  To further a review
	conducted by the office, the inspector general is entitled to
	access all books, records, accounts, documents, reports, vouchers,
	databases, systems, or other information, including confidential
	information, electronic data, and internal records relevant to the
	functions of the office that are maintained by or for a person,
	state agency, or provider, if applicable, in connection with an
	agency or a state or federally funded program implemented,
	administered, or overseen by or for the agency.
	Sec. 422.204.  COOPERATION REQUIRED. To further a review
	conducted by the inspector general's office, the inspector general
	is entitled to full and unrestricted access to all offices, limited
	access or restricted areas, employees, equipment, and computers,
	including areas, equipment, and computers that contain
	confidential information and internal records, relevant to the
	functions of the office that are maintained by or for a person,
	agency, or provider, if applicable, in connection with an agency or
	a state or federally funded program implemented, administered, or
	overseen by or for the agency.
	Sec. 422.205.  SUBPOENAS. (a) The inspector general may
	issue a subpoena to compel the attendance of a relevant witness or
	the production, for inspection or copying, of relevant evidence in
	connection with a review conducted under this subchapter.
	(b)  A subpoena may be served personally or by certified
	mail.
	(c)  If a person fails to comply with a subpoena, the
	inspector general, acting through the attorney general, may file
	suit to enforce the subpoena in a district court in this state.
	(d)  On finding that good cause exists for issuing the
	subpoena, the court shall order the person to comply with the
	subpoena. The court may hold in contempt a person who fails to obey
	the court order.
	(e)  The reimbursement of the expenses of a witness whose
	attendance is compelled under this section is governed by Section
	2001.103.
	Sec. 422.206.  INTERNAL AUDITOR. (a) In this section,
	"internal auditor" means a person appointed under Section 2102.006.
	(b)  The internal auditor for the agency shall provide the
	inspector general with a copy of the agency's internal audit plan
	to:
	(1)  assist in the coordination of efforts between the
	inspector general and the internal auditor; and
	(2)  limit duplication of effort regarding reviews by
	the inspector general and internal auditor.
	(c)  The internal auditor shall provide to the inspector
	general all final audit reports concerning audits of any:
	(1)  part or division of the agency;
	(2)  contract, procurement, or grant; and
	(3)  program conducted by the agency.
	Sec. 422.207.  COOPERATION WITH LAW ENFORCEMENT OFFICIALS
	AND OTHER ENTITIES. (a) The inspector general may provide
	information and evidence relating to criminal acts to the state
	auditor's office and appropriate law enforcement officials.
	(b)  The inspector general may refer matters for further
	civil, criminal, and administrative action to appropriate
	administrative and prosecutorial agencies, including the attorney
	general.
	(c)  The inspectors general for the Texas Department of
	Criminal Justice and the Texas Youth Commission shall refer a
	criminal or delinquent conduct case to the appropriate prosecuting
	attorney or the special prosecution unit under Subchapter E,
	Chapter 41.
	(d)  The inspector general may enter into a memorandum of
	understanding with a law enforcement or prosecutorial agency,
	including the office of the attorney general, to assist in
	conducting a review under this subchapter.
	Sec. 422.208.  COOPERATION AND COORDINATION WITH STATE
	AUDITOR. (a) The state auditor may, on request of the inspector
	general, provide appropriate information or other assistance to the
	inspector general or office, as determined by the state auditor.
	(b)  The inspector general may meet with the state auditor's
	office to coordinate a review conducted under this subchapter,
	share information, or schedule work plans.
	(c)  The state auditor is entitled to access all information
	maintained by the inspector general, including vouchers,
	electronic data, internal records, and information obtained under
	Section 422.203 or subject to Section 422.254.
	(d)  Any information obtained or provided by the state
	auditor under this section is confidential and not subject to
	disclosure under Chapter 552.
	Sec. 422.209.  AUTHORITY OF STATE AUDITOR AND SUNSET
	ADVISORY COMMISSION NOT IMPAIRED.  (a)  This chapter or other law
	related to the operation of an inspector general does not take
	precedence over the authority of the state auditor to conduct an
	audit under Chapter 321 or other law.
	(b)  This chapter or other law related to the operation of an
	inspector general does not take precedence over the authority of
	the Sunset Advisory Commission or other legislative bodies to
	review an agency under other law.
	Sec. 422.210.  PREVENTION.  (a) The inspector general may
	recommend to the agency policies on:
	(1)  promoting economical and efficient administration
	of state or federal funds administered by an individual or entity
	that received the funds from a state agency; and
	(2)  preventing and detecting fraud, waste, and abuse
	in the administration of those funds.
	(b)  The inspector general may provide training or other
	education regarding the prevention of fraud, waste, or abuse to
	employees of a state agency.  The training or education provided
	must be approved by the agency director.
	[Sections 422.211-422.250 reserved for expansion]
	SUBCHAPTER F.  REPORTS
	Sec. 422.251.  PERIODIC REPORTING TO STATE AUDITOR AND
	AGENCY REQUIRED. The inspector general shall timely inform the
	state auditor and the agency director of the initiation of a review
	of an agency program and the ongoing status of each review.
	Sec. 422.252.  REPORTING OFFICE FINDINGS. The inspector
	general shall report the findings of the office for any review
	conducted under Subchapter E to:
	(1)  the governing body or governing officer of the
	agency, as applicable;
	(2)  the governor;
	(3)  the lieutenant governor;
	(4)  the speaker of the house of representatives;
	(5)  the state auditor's office; and
	(6)  appropriate law enforcement and prosecutorial
	agencies, including the office of the attorney general, if the
	findings suggest the probability of criminal conduct.
	Sec. 422.253.  FLAGRANT VIOLATIONS; IMMEDIATE REPORT. The
	inspector general shall immediately report to the governing body or
	governing officer of the agency, as applicable, the governor's
	general counsel, and the state auditor a problem that the inspector
	general determines is particularly serious or flagrant and that
	relates to the administration of a program, operation of a state
	agency, or interference with an inspector general review.
	Sec. 422.254.  INFORMATION CONFIDENTIAL. (a) Except as
	provided by this section and Sections 422.251, 422.252, 422.255,
	422.256, 531.103, and 531.1031, all information and material
	compiled or maintained by the inspector general during a review
	under this chapter is:
	(1)  confidential and not subject to disclosure under
	Chapter 552; and
	(2)  not subject to disclosure, discovery, subpoena, or
	other means of legal compulsion for release to anyone other than the
	state auditor's office, the agency, or the office or its agents
	involved in the review related to that information or material.
	(b)  As the inspector general determines appropriate based
	on evidence sufficient to support an allegation, information
	relating to a review may be disclosed to:
	(1)  a law enforcement agency;
	(2)  a district or county attorney with jurisdiction;
	(3)  the attorney general's office;
	(4)  the state auditor's office; or
	(5)  the agency.
	(c)  A person that receives information under Subsection (b)
	may not disclose the information except to the extent that
	disclosure is consistent with the authorized purpose for which the
	person first obtained the information.
	Sec. 422.255.  DRAFT OF FINAL REVIEW REPORT; AGENCY
	RESPONSE.  (a)  Except in cases in which the office has determined
	that fraud, waste, or abuse exists, the office shall provide a draft
	of the final review report of any review of the operations of a
	state agency to the state agency director before publishing the
	office's final review report.
	(b)  The state agency director may provide a response to the
	office's draft report in the manner prescribed by the office not
	later than the 10th day after the date the draft report is received
	by the state agency director.  The inspector general by rule shall
	specify the format and requirements of the agency response.
	(c)  Notwithstanding Subsection (a), the office may not
	provide a draft report to the state agency director if in the
	inspector general's opinion providing the draft report could
	negatively affect any anticipated civil or criminal proceedings.
	(d)  The office may include any portion of the state agency's
	response in the office's final report.
	Sec. 422.256.  FINAL REVIEW REPORTS; AGENCY RESPONSE. (a)
	The inspector general shall prepare a final report for each review
	conducted under this chapter. The final report must include:
	(1)  a summary of the activities performed by the
	inspector general in conducting the review;
	(2)  a determination of whether wrongdoing or
	substantial waste was found; and
	(3)  a description of any findings of wrongdoing or
	substantial waste or, if no wrongdoing or substantial waste was
	found, a statement indicating that finding.
	(b)  The inspector general's final review reports are
	subject to disclosure under Chapter 552.
	(c)  All working papers and other documents related to
	compiling the final review reports remain confidential and are not
	subject to disclosure under Chapter 552.
	(d)  Not later than the 60th day after the date the office
	issues a final report that identifies deficiencies or
	inefficiencies in, or recommends corrective measures in the
	operations of, a state agency, the state agency shall file a
	response that includes:
	(1)  an implementation plan and timeline for
	implementing corrective measures; or
	(2)  the state agency's rationale for declining to
	implement corrective measures for the identified deficiencies or
	inefficiencies or the office's recommended corrective measures, as
	applicable.
	(e)  Unless otherwise prohibited by this chapter or other
	law, the inspector general shall deliver a copy of each final report
	to:
	(1)  the agency director of the subject state agency;
	(2)  the governing body or governing officer of the
	state agency;
	(3)  any appropriate advisory council;
	(4)  the governor;
	(5)  the lieutenant governor;
	(6)  the speaker of the house of representatives;
	(7)  any appropriate law enforcement and prosecutorial
	agencies;
	(8)  the state auditor; and
	(9)  any appropriate licensing or certification
	agencies.
	Sec. 422.257.  COSTS. (a) The inspector general shall
	maintain information regarding the cost of reviews.
	(b)  The inspector general may cooperate with appropriate
	administrative and prosecutorial agencies, including the office of
	the attorney general, in recovering costs incurred under this
	chapter from nongovernmental entities, including contractors or
	individuals involved in:
	(1)  violations of applicable state or federal rules or
	statutes;
	(2)  abusive or wilful misconduct; or
	(3)  violations of a provider contract or program
	policy.
	(c)  In a criminal prosecution to which this chapter applies,
	the attorney representing the state shall request that the court
	require restitution as a condition of a convicted person's
	community supervision or parole.
	[Sections 422.258-422.300 reserved for expansion]
	SUBCHAPTER G.  PENALTIES
	Sec. 422.301.  ADMINISTRATIVE OR CIVIL PENALTY; INJUNCTION.
	(a)  The office may:
	(1)  act for a state agency in the assessment by the
	office of administrative or civil penalties the agency is
	authorized to assess under applicable law; and
	(2)  request that the attorney general obtain an
	injunction to prevent a person from disposing of an asset
	identified by the office as potentially subject to recovery by the
	office due to the person's fraud, waste, or abuse.
	(b)  If the office imposes an administrative or civil penalty
	under Subsection (a) for an agency:
	(1)  the agency may not impose an administrative or
	civil penalty against the same person for the same violation; and
	(2)  the office shall impose the penalty under
	applicable rules of the office, this chapter, applicable laws
	governing the imposition of a penalty by the agency, and any other
	applicable law.
	SECTION 2.  Section 493.019, Government Code, is amended to
	read as follows:
	Sec. 493.019.  ENFORCEMENT OFFICERS.  In accordance with
	Section 422.105, the [The] inspector general appointed under
	Chapter 422 may appoint employees who are certified by the
	Commission on Law Enforcement Officer Standards and Education as
	qualified to be peace officers to serve under the direction of the
	inspector general and assist the inspector general in performing
	the enforcement duties of the department.
	SECTION 3.  Section 493.028(b), Government Code, is amended
	to read as follows:
	(b)  The inspector general of the department appointed under
	Chapter 422 shall on a quarterly basis prepare and deliver to the
	board of directors of the special prosecution unit a report
	concerning any alleged criminal offense concerning the department
	and described by Article 104.003(a), Code of Criminal Procedure,
	that occurred during the preceding calendar quarter.
	SECTION 4.  Section 501.174, Government Code, is amended to
	read as follows:
	Sec. 501.174.  DEPARTMENT TO ADOPT POLICY.  The department
	shall adopt a policy providing for:
	(1)  a designated administrator at each correctional
	facility to post information throughout the facility describing how
	an inmate may confidentially contact the ombudsperson regarding a
	sexual assault;
	(2)  an inmate to write a confidential letter to the
	ombudsperson regarding a sexual assault;
	(3)  employees at correctional facilities, on
	notification of the occurrence of a sexual assault, to immediately:
	(A)  contact the ombudsperson and the office of
	the inspector general; and
	(B)  ensure that the alleged victim is safe;
	(4)  the office of the inspector general established
	under Chapter 422, at the time the office is notified of the sexual
	assault, to arrange for a medical examination of the alleged victim
	to be conducted in accordance with Article 56.06, Code of Criminal
	Procedure, or, if an appropriate employee of the office of the
	inspector general is not available at the time the office is
	notified of the sexual assault, a qualified employee at the
	correctional facility to conduct a medical examination of the
	alleged victim in accordance with Article 56.06, Code of Criminal
	Procedure;
	(5)  a grievance proceeding under Section 501.008 based
	on an alleged sexual assault to be exempt from any deadline
	applicable to grievances initiated under that section; and
	(6)  each correctional facility to collect statistics
	on all alleged sexual assaults against inmates confined in the
	facility and to report the statistics to the ombudsperson.
	SECTION 5.  Section 501.176(b), Government Code, is amended
	to read as follows:
	(b)  The report must include public information regarding:
	(1)  each investigation and monitoring activity
	relating to sexual assault completed during the fiscal year by the
	ombudsperson and the inspector general appointed under Chapter 422;
	and
	(2)  statistics collected by the ombudsperson
	regarding allegations of sexual assault.
	SECTION 6.  Section 501.177, Government Code, is amended to
	read as follows:
	Sec. 501.177.  STATE AUDITOR AUDITS, INVESTIGATIONS, AND
	ACCESS TO INFORMATION NOT IMPAIRED.  This subchapter or other law
	related to the operation of the ombudsperson or related to the
	office of the inspector general established under Chapter 422 does
	not prohibit the state auditor from conducting an audit,
	investigation, or other review or from having full and complete
	access to all records and other information, including witnesses
	and electronic data, that the state auditor considers necessary for
	the audit, investigation, or other review.
	SECTION 7.  Section 501.178, Government Code, is amended to
	read as follows:
	Sec. 501.178.  AUTHORITY OF STATE AUDITOR TO CONDUCT TIMELY
	AUDITS NOT IMPAIRED.  This subchapter or other law related to the
	operation of the ombudsperson or of the office of the inspector
	general established under Chapter 422 does not take precedence over
	the authority of the state auditor to conduct an audit under Chapter
	321 or other law.
	SECTION 8.  Section 531.001, Government Code, is amended by
	adding Subdivision (4-a) to read as follows:
	(4-a)  "Office of inspector general" means the office
	of inspector general established under Chapter 422 for the
	commission.
	SECTION 9.  Section 531.008(c), Government Code, is amended
	to read as follows:
	(c)  The executive commissioner shall establish the
	following divisions and offices within the commission:
	(1)  the eligibility services division to make
	eligibility determinations for services provided through the
	commission or a health and human services agency related to:
	(A)  the child health plan program;
	(B)  the financial assistance program under
	Chapter 31, Human Resources Code;
	(C)  the medical assistance program under Chapter
	32, Human Resources Code;
	(D)  the nutritional assistance programs under
	Chapter 33, Human Resources Code;
	(E)  long-term care services, as defined by
	Section 22.0011, Human Resources Code;
	(F)  community-based support services identified
	or provided in accordance with Section 531.02481; and
	(G)  other health and human services programs, as
	appropriate;
	(2)  [the office of inspector general to perform fraud
	and abuse investigation and enforcement functions as provided by
	Subchapter C and other law;
	[(3)]  the office of the ombudsman to:
	(A)  provide dispute resolution services for the
	commission and the health and human services agencies; and
	(B)  perform consumer protection functions
	related to health and human services;
	(3) [(4)]  a purchasing division as provided by Section
	531.017; and
	(4) [(5)]  an internal audit division to conduct a
	program of internal auditing in accordance with [Government Code,]
	Chapter 2102.
	SECTION 10.  Sections 531.101(a) and (b), Government Code,
	are amended to read as follows:
	(a)  The office of inspector general [commission] may grant
	an award to an individual who reports activity that constitutes
	fraud or abuse of funds in the state Medicaid program or reports
	overcharges in the program if the office [commission] determines
	that the disclosure results in the recovery of an administrative
	penalty imposed under Section 32.039, Human Resources Code. The
	office [commission] may not grant an award to an individual in
	connection with a report if the office [commission] or attorney
	general had independent knowledge of the activity reported by the
	individual.
	(b)  The office of inspector general [commission] shall
	determine the amount of an award. The award may not exceed five
	percent of the amount of the administrative penalty imposed under
	Section 32.039, Human Resources Code, that resulted from the
	individual's disclosure. In determining the amount of the award,
	the office [commission] shall consider how important the disclosure
	is in ensuring the fiscal integrity of the program. The office
	[commission] may also consider whether the individual participated
	in the fraud, abuse, or overcharge.
	SECTION 11.  Section 531.102, Government Code, is amended to
	read as follows:
	Sec. 531.102.  OFFICE OF INSPECTOR GENERAL:  CLAIMS CRITERIA
	FOR INVESTIGATION; REFERRAL TO FRAUD CONTROL UNIT; HOLD ON PAYMENT.
	(a)  [The commission, through the commission's office of inspector
	general, is responsible for the investigation of fraud and abuse in
	the provision of health and human services and the enforcement of
	state law relating to the provision of those services. The
	commission may obtain any information or technology necessary to
	enable the office to meet its responsibilities under this
	subchapter or other law.
	[(a-1)     The governor shall appoint an inspector general to
	serve as director of the office. The inspector general serves a
	one-year term that expires on February 1.
	[(b)     The commission, in consultation with the inspector
	general, shall set clear objectives, priorities, and performance
	standards for the office that emphasize:
	[(1)     coordinating investigative efforts to
	aggressively recover money;
	[(2)     allocating resources to cases that have the
	strongest supportive evidence and the greatest potential for
	recovery of money; and
	[(3)     maximizing opportunities for referral of cases to
	the office of the attorney general in accordance with Section
	531.103.
	[(c)     The commission shall train office staff to enable the
	staff to pursue priority Medicaid and other health and human
	services fraud and abuse cases as necessary.
	[(d)     The commission may require employees of health and
	human services agencies to provide assistance to the office in
	connection with the office's duties relating to the investigation
	of fraud and abuse in the provision of health and human services.
	The office is entitled to access to any information maintained by a
	health and human services agency, including internal records,
	relevant to the functions of the office.
	[(e)]  The commission, in consultation with the inspector
	general, by rule shall set specific claims criteria that, when met,
	require the office of inspector general to begin an investigation.
	(b) [(f)(1)]  If the office of inspector general
	[commission] receives a complaint of Medicaid fraud or abuse from
	any source, the office must conduct an integrity review to
	determine whether there is sufficient basis to warrant a full
	investigation. An integrity review must begin not later than the
	30th day after the date the office [commission] receives a
	complaint or has reason to believe that fraud or abuse has occurred.
	An integrity review shall be completed not later than the 90th day
	after it began.
	(c) [(2)]  If the findings of an integrity review give the
	office of inspector general reason to believe that an incident of
	fraud or abuse involving possible criminal conduct has occurred in
	the Medicaid program, the office must take the following action, as
	appropriate, not later than the 30th day after the completion of the
	integrity review:
	(1) [(A)]  if a provider is suspected of fraud or abuse
	involving criminal conduct, the office must refer the case to the
	state's Medicaid fraud control unit, provided that the criminal
	referral does not preclude the office from continuing its
	investigation of the provider, which investigation may lead to the
	imposition of appropriate administrative or civil sanctions; or
	(2) [(B)]  if there is reason to believe that a
	recipient has defrauded the Medicaid program, the office may
	conduct a full investigation of the suspected fraud.
	(d) [(g)(1)]  Whenever the office of inspector general
	learns or has reason to suspect that a provider's records are being
	withheld, concealed, destroyed, fabricated, or in any way
	falsified, the office shall immediately refer the case to the
	state's Medicaid fraud control unit. However, such criminal
	referral does not preclude the office from continuing its
	investigation of the provider, which investigation may lead to the
	imposition of appropriate administrative or civil sanctions.
	(e) [(2)]  In addition to other instances authorized under
	state or federal law, the office of inspector general shall impose
	without prior notice a hold on payment of claims for reimbursement
	submitted by a provider to compel production of records or when
	requested by the state's Medicaid fraud control unit, as
	applicable. The office must notify the provider of the hold on
	payment not later than the fifth working day after the date the
	payment hold is imposed.
	(f) [(3)]  On timely written request by a provider subject to
	a hold on payment under Subsection (e) [Subdivision (2)], other
	than a hold requested by the state's Medicaid fraud control unit,
	the office of inspector general shall file a request with the State
	Office of Administrative Hearings or the hearings division of the
	Health and Human Services Commission for an expedited
	administrative hearing regarding the hold. The provider must
	request an expedited hearing under this subsection [subdivision]
	not later than the 10th day after the date the provider receives
	notice from the office under Subsection (e) [Subdivision (2)].
	(g) [(4)]  The inspector general [commission] shall adopt
	rules that allow a provider subject to a hold on payment under
	Subsection (e) [Subdivision (2)], other than a hold requested by
	the state's Medicaid fraud control unit, to seek an informal
	resolution of the issues identified by the office of inspector
	general in the notice provided under that subsection [subdivision].
	A provider must seek an informal resolution under this subsection
	[subdivision] not later than the deadline prescribed by Subsection
	(f) [Subdivision (3)]. A provider's decision to seek an informal
	resolution under this subsection [subdivision] does not extend the
	time by which the provider must request an expedited administrative
	hearing under Subsection (f) [Subdivision (3)]. However, a hearing
	initiated under Subsection (f) [Subdivision (3)] shall be stayed at
	the office's request until the informal resolution process is
	completed.
	(h) [(5)]  The office of inspector general shall, in
	consultation with the state's Medicaid fraud control unit,
	establish guidelines under which holds on payment, [or] program
	exclusions, administrative actions, or other sanctions:
	(1) [(A)]  may permissively be imposed on or taken
	against a provider; or
	(2) [(B)]  shall automatically be imposed on or taken
	against a provider.
	(i) [(h)]  In addition to performing functions and duties
	otherwise provided by law, the office of inspector general may:
	(1)  take administrative action, impose administrative
	sanctions, and assess administrative penalties otherwise
	authorized by law on behalf of the commission or a health and human
	services agency;
	(2)  request that the attorney general obtain an
	injunction to prevent a person from disposing of an asset
	identified by the office as potentially subject to recovery by the
	office due to the person's fraud or abuse;
	(3)  provide for coordination between the office and
	special investigative units formed by managed care organizations
	under Section 531.113 or entities with which managed care
	organizations contract under that section;
	(4)  audit the use and effectiveness of state or
	federal funds, including contract and grant funds, administered by
	a person or state agency receiving the funds from a health and human
	services agency;
	(5)  conduct investigations relating to the funds
	described by Subdivision (4); [and]
	(6)  recommend policies promoting economical and
	efficient administration of the funds described by Subdivision (4)
	and the prevention and detection of fraud and abuse in
	administration of those funds;
	(7)  request the attorney general to represent the
	office of inspector general in a legal proceeding that arises from a
	review conducted by the office and coordinate the activities of the
	office with the office of the attorney general during the legal
	proceeding;
	(8)  settle for the commission a case filed in response
	to a review conducted by the office; and
	(9)  recover overpayments, assessments, and
	liabilities in a settlement regardless of the origin of the
	overpayment, assessment, or liability.
	(j) [(i)]  Notwithstanding any other provision of law, a
	reference in law or rule to the commission's office of
	investigations and enforcement means the office of inspector
	general established under Chapter 422 [this section].
	[(j)     The office   shall prepare a final report on each audit
	or investigation conducted under this section.   The final report
	must include:
	[(1)     a summary of the activities performed by the
	office in conducting the audit or investigation;
	[(2)     a statement regarding whether the audit or
	investigation resulted in a finding of any wrongdoing; and
	[(3)  a description of any findings of wrongdoing.]
	(k)  A final report on an audit or investigation is subject
	to required disclosure under Chapter 552.  All information and
	materials compiled during the audit or investigation remain
	confidential and not subject to required disclosure [in accordance
	with Section 531.1021(g)].
	SECTION 12.  Sections 531.103(a), (c), and (d), Government
	Code, are amended to read as follows:
	(a)  The [commission, acting through the commission's]
	office of inspector general[,] and the office of the attorney
	general shall enter into a memorandum of understanding to develop
	and implement joint written procedures for processing cases of
	suspected fraud, waste, or abuse, as those terms are defined by
	state or federal law, or other violations of state or federal law
	under the state Medicaid program or other program administered by
	the commission or a health and human services agency, including the
	financial assistance program under Chapter 31, Human Resources
	Code, a nutritional assistance program under Chapter 33, Human
	Resources Code, and the child health plan program. The memorandum
	of understanding shall require:
	(1)  the office of inspector general and the office of
	the attorney general to set priorities and guidelines for referring
	cases to appropriate state agencies for investigation,
	prosecution, or other disposition to enhance deterrence of fraud,
	waste, abuse, or other violations of state or federal law,
	including a violation of Chapter 102, Occupations Code, in the
	programs and maximize the imposition of penalties, the recovery of
	money, and the successful prosecution of cases;
	(1-a)  the office of inspector general to refer each
	case of suspected provider fraud, waste, or abuse to the office of
	the attorney general not later than the 20th business day after the
	date the office of inspector general determines that the existence
	of fraud, waste, or abuse is reasonably indicated;
	(1-b)  the office of the attorney general to take
	appropriate action in response to each case referred to the
	attorney general, which action may include direct initiation of
	prosecution, with the consent of the appropriate local district or
	county attorney, direct initiation of civil litigation, referral to
	an appropriate United States attorney, a district attorney, or a
	county attorney, or referral to a collections agency for initiation
	of civil litigation or other appropriate action;
	(2)  the office of inspector general to keep detailed
	records for cases processed by that office or the office of the
	attorney general, including information on the total number of
	cases processed and, for each case:
	(A)  the agency and division to which the case is
	referred for investigation;
	(B)  the date on which the case is referred; and
	(C)  the nature of the suspected fraud, waste, or
	abuse;
	(3)  the office of inspector general to notify each
	appropriate division of the office of the attorney general of each
	case referred by the office of inspector general;
	(4)  the office of the attorney general to ensure that
	information relating to each case investigated by that office is
	available to each division of the office with responsibility for
	investigating suspected fraud, waste, or abuse;
	(5)  the office of the attorney general to notify the
	office of inspector general of each case the attorney general
	declines to prosecute or prosecutes unsuccessfully;
	(6)  representatives of the office of inspector general
	and of the office of the attorney general to meet not less than
	quarterly to share case information and determine the appropriate
	agency and division to investigate each case; and
	(7)  the office of inspector general and the office of
	the attorney general to submit information requested by the
	comptroller about each resolved case for the comptroller's use in
	improving fraud detection.
	(c)  The office of inspector general [commission] and the
	office of the attorney general shall jointly prepare and submit a
	semiannual report to the governor, lieutenant governor, speaker of
	the house of representatives, and comptroller concerning the
	activities of the office of the attorney general and the office of
	inspector general [those agencies] in detecting and preventing
	fraud, waste, and abuse under the state Medicaid program or other
	program administered by the commission or a health and human
	services agency. The report may be consolidated with any other
	report relating to the same subject matter the office of inspector
	general [commission] or office of the attorney general is required
	to submit under other law.
	(d)  The office of inspector general [commission] and the
	office of the attorney general may not assess or collect
	investigation and attorney's fees on behalf of any state agency
	unless the office of inspector general, the office of the attorney
	general, or another [other] state agency collects a penalty,
	restitution, or other reimbursement payment to the state.
	SECTION 13.  Section 531.1031(a)(2), Government Code, is
	amended to read as follows:
	(2)  "Participating agency" means:
	(A)  the Medicaid fraud enforcement divisions of
	the office of the attorney general; [and]
	(B)  each board or agency with authority to
	license, register, regulate, or certify a health care professional
	or managed care organization that may participate in the state
	Medicaid program; and
	(C)  the office of inspector general.
	SECTION 14.  Section 531.104(a), Government Code, is amended
	to read as follows:
	(a)  The office of inspector general [commission] and the
	attorney general shall execute a memorandum of understanding under
	which the office [commission] shall provide investigative support
	as required to the attorney general in connection with cases under
	Subchapter B, Chapter 36, Human Resources Code. Under the
	memorandum of understanding, the office [commission] shall assist
	in performing preliminary investigations and ongoing
	investigations for actions prosecuted by the attorney general under
	Subchapter C, Chapter 36, Human Resources Code.
	SECTION 15.  Section 531.105, Government Code, is amended to
	read as follows:
	Sec. 531.105.  FRAUD DETECTION TRAINING.  [(a)] The office
	of inspector general [commission] shall develop and implement a
	program to provide annual training to contractors who process
	Medicaid claims and appropriate staff of the health and human
	services agencies [Texas Department of Health and the Texas
	Department of Human Services] in identifying potential cases of
	fraud, waste, or abuse under the state Medicaid program. The
	training provided to the contractors and staff must include clear
	criteria that specify:
	(1)  the circumstances under which a person should
	refer a potential case to the office [commission]; and
	(2)  the time by which a referral should be made.
	[(b)     The Texas Department of Health and the Texas Department
	of Human Services, in cooperation with the commission, shall
	periodically set a goal of the number of potential cases of fraud,
	waste, or abuse under the state Medicaid program that each agency
	will attempt to identify and refer to the commission. The
	commission shall include information on the agencies' goals and the
	success of each agency in meeting the agency's goal in the report
	required by Section 531.103(c).]
	SECTION 16.  Sections 531.106(a), (b), (d), (e), (f), and
	(g), Government Code, are amended to read as follows:
	(a)  The office of inspector general [commission] shall use
	learning or neural network technology to identify and deter fraud,
	waste, and abuse in the Medicaid program throughout this state.
	(b)  The office of inspector general [commission] shall
	contract with a private or public entity to develop and implement
	the technology. The office [commission] may require the entity it
	contracts with to install and operate the technology at locations
	specified by the office [commission, including commission
	offices].
	(d)  The office of inspector general [commission] shall
	require each health and human services agency that performs any
	aspect of the state Medicaid program to participate in the
	implementation and use of the technology.
	(e)  The office of inspector general [commission] shall
	maintain all information necessary to apply the technology to
	claims data covering a period of at least two years.
	(f)  Cases [The commission shall refer cases] identified by
	the technology shall be referred to the [commission's] office of
	inspector general [investigations and enforcement] or the office of
	the attorney general, as appropriate.
	(g)  Each month, the learning or neural network technology
	implemented under this section must match bureau of vital
	statistics death records with Medicaid claims filed by a provider.
	If the commission or the office of inspector general determines
	that a provider has filed a claim for services provided to a person
	after the person's date of death, as determined by the bureau of
	vital statistics death records, [the commission shall refer] the
	case shall be referred for investigation to the office of inspector
	general or the office of the attorney general, as appropriate [to
	the commission's office of investigations and enforcement].
	SECTION 17.  Section 531.1061, Government Code, is amended
	to read as follows:
	Sec. 531.1061.  FRAUD INVESTIGATION TRACKING SYSTEM.  (a)
	The office of inspector general [commission] shall use an automated
	fraud investigation tracking system [through the commission's
	office of investigations and enforcement] to monitor the progress
	of an investigation of suspected fraud, waste, abuse, or
	insufficient quality of care under the state Medicaid program.
	(b)  For each case of suspected fraud, waste, abuse, or
	insufficient quality of care identified by the learning or neural
	network technology required under Section 531.106, the automated
	fraud investigation tracking system must:
	(1)  receive electronically transferred records
	relating to the identified case from the learning or neural network
	technology;
	(2)  record the details and monitor the status of an
	investigation of the identified case, including maintaining a
	record of the beginning and completion dates for each phase of the
	case investigation;
	(3)  generate documents and reports related to the
	status of the case investigation; and
	(4)  generate standard letters to a provider regarding
	the status or outcome of an investigation.
	(c)  The office of inspector general may [commission shall]
	require each health and human services agency that performs any
	aspect of the state Medicaid program to participate in the
	implementation and use of the automated fraud investigation
	tracking system.
	SECTION 18.  Section 531.1062(a), Government Code, is
	amended to read as follows:
	(a)  The office of inspector general [commission] shall use
	an automated recovery monitoring system to monitor the collections
	process for a settled case of fraud, waste, abuse, or insufficient
	quality of care under the state Medicaid program.
	SECTION 19.  Sections 531.107(a), (b), and (f), Government
	Code, are amended to read as follows:
	(a)  The Medicaid and Public Assistance Fraud Oversight Task
	Force advises and assists the [commission and the commission's]
	office of inspector general [investigations and enforcement] in
	improving the efficiency of fraud investigations and collections.
	(b)  The task force is composed of a representative of the:
	(1)  attorney general's office, appointed by the
	attorney general;
	(2)  comptroller's office, appointed by the
	comptroller;
	(3)  Department of Public Safety, appointed by the
	public safety director;
	(4)  state auditor's office, appointed by the state
	auditor;
	(5)  office of inspector general [commission],
	appointed by the inspector general [commissioner of health and
	human services];
	(6)  [Texas] Department of Aging and Disability [Human]
	Services, appointed by the commissioner of aging and disability
	[human] services;
	(7)  Texas Department of Insurance, appointed by the
	commissioner of insurance; and
	(8)  [Texas] Department of State Health Services,
	appointed by the commissioner of state [public] health services.
	(f)  At least once each fiscal quarter, the [commission's]
	office of inspector general [investigations and enforcement] shall
	provide to the task force:
	(1)  information detailing:
	(A)  the number of fraud referrals made to the
	office and the origin of each referral;
	(B)  the time spent investigating each case;
	(C)  the number of cases investigated each month,
	by program and region;
	(D)  the dollar value of each fraud case that
	results in a criminal conviction; and
	(E)  the number of cases the office rejects and
	the reason for rejection, by region; and
	(2)  any additional information the task force
	requires.
	SECTION 20.  Sections 531.108 and 531.109, Government Code,
	are amended to read as follows:
	Sec. 531.108.  FRAUD PREVENTION.  (a)  The [commission's]
	office of inspector general [investigations and enforcement] shall
	compile and disseminate accurate information and statistics
	relating to:
	(1)  fraud prevention; and
	(2)  post-fraud referrals received and accepted or
	rejected from the office's [commission's] case management system or
	the case management system of a health and human services agency.
	(b)  The office of inspector general [commission] shall:
	(1)  aggressively publicize successful fraud
	prosecutions and fraud-prevention programs through all available
	means, including the use of statewide press releases [issued in
	coordination with the Texas Department of Human Services]; and
	(2)  ensure that a toll-free hotline for reporting
	suspected fraud in programs administered by the office, the
	commission, or a health and human services agency is maintained and
	promoted[, either] by the office, the commission, or [by] a health
	and human services agency.
	(c)  The office of inspector general [commission] shall
	develop a cost-effective method of identifying applicants for
	public assistance in counties bordering other states and in
	metropolitan areas selected by the office [commission] who are
	already receiving benefits in other states. If economically
	feasible, the office [commission] may develop a computerized
	matching system.
	(d)  The office of inspector general [commission] shall:
	(1)  verify automobile information that is used as
	criteria for eligibility; and
	(2)  establish a computerized matching system with the
	Texas Department of Criminal Justice to prevent an incarcerated
	individual from illegally receiving public assistance benefits
	administered by the commission.
	(e)  The office of inspector general [commission] shall
	submit to the governor and Legislative Budget Board a semiannual
	report on the results of computerized matching of office and
	commission information with information from neighboring states,
	if any, and information from the Texas Department of Criminal
	Justice. The report may be consolidated with any other report
	relating to the same subject matter the office [commission] is
	required to submit under other law.
	Sec. 531.109.  SELECTION AND REVIEW OF CLAIMS.  (a)  The
	office of inspector general [commission] shall annually select and
	review a random, statistically valid sample of all claims for
	reimbursement under the state Medicaid program, including the
	vendor drug program, for potential cases of fraud, waste, or abuse.
	(b)  In conducting the annual review of claims under
	Subsection (a), the office of inspector general [commission] may
	directly contact a recipient by telephone or in person, or both, to
	verify that the services for which a claim for reimbursement was
	submitted by a provider were actually provided to the recipient.
	(c)  Based on the results of the annual review of claims, the
	office of inspector general and the commission shall determine the
	types of claims at which office and commission resources for fraud,
	waste, and abuse detection should be primarily directed.
	SECTION 21.  Sections 531.110(a), (c), (d), (e), and (f),
	Government Code, are amended to read as follows:
	(a)  The office of inspector general [commission] shall
	conduct electronic data matches for a recipient of assistance under
	the state Medicaid program at least quarterly to verify the
	identity, income, employment status, and other factors that affect
	the eligibility of the recipient.
	(c)  The commission and other health and human services
	agencies [Texas Department of Human Services] shall cooperate with
	the office of inspector general [commission] by providing data or
	any other assistance necessary to conduct the electronic data
	matches required by this section.
	(d)  The office of inspector general [commission] may
	contract with a public or private entity to conduct the electronic
	data matches required by this section.
	(e)  The office of inspector general [commission], or a
	health and human services agency designated by the office
	[commission], by rule shall establish procedures to verify the
	electronic data matches conducted by the office [commission] under
	this section. Not later than the 20th day after the date the
	electronic data match is verified, the commission and other health
	and human services agencies [Texas Department of Human Services]
	shall remove from eligibility a recipient who is determined to be
	ineligible for assistance under the state Medicaid program.
	(f)  The office of inspector general [commission] shall
	report biennially to the legislature the results of the electronic
	data matching program. The report must include a summary of the
	number of applicants who were removed from eligibility for
	assistance under the state Medicaid program as a result of an
	electronic data match conducted under this section.
	SECTION 22.  Section 531.111, Government Code, is amended to
	read as follows:
	Sec. 531.111.  FRAUD DETECTION TECHNOLOGY.  The office of
	inspector general [commission] may contract with a contractor who
	specializes in developing technology capable of identifying
	patterns of fraud exhibited by providers and Medicaid recipients
	to:
	(1)  develop and implement the fraud detection
	technology; [and]
	(2)  determine if a pattern of fraud by Medicaid
	recipients is present in the provider's files or recipients'
	eligibility files maintained by the commission or other health and
	human services agencies; and
	(3)  identify a person who obtains or receives services
	fraudulently, the date on which the person obtained or received the
	services, and the location where the services were provided [Texas
	Department of Human Services].
	SECTION 23.  Section 531.1112, Government Code, is amended
	to read as follows:
	Sec. 531.1112.  STUDY CONCERNING INCREASED USE OF TECHNOLOGY
	TO STRENGTHEN FRAUD DETECTION AND DETERRENCE; IMPLEMENTATION. (a)
	The commission and the [commission's] office of inspector general
	shall jointly study the feasibility of increasing the use of
	technology to strengthen the detection and deterrence of fraud in
	the state Medicaid program. The study must include the
	determination of the feasibility of using technology to verify a
	person's citizenship and eligibility for coverage.
	(b)  The commission shall implement any methods the
	commission and the [commission's] office of inspector general
	determine are effective at strengthening fraud detection and
	deterrence.
	SECTION 24.  Section 531.113, Government Code, is amended to
	read as follows:
	Sec. 531.113.  MANAGED CARE ORGANIZATIONS: SPECIAL
	INVESTIGATIVE UNITS OR CONTRACTS.  (a)  Each managed care
	organization that provides or arranges for the provision of health
	care services to an individual under a government-funded program,
	including the Medicaid program and the child health plan program,
	shall:
	(1)  establish and maintain a special investigative
	unit within the managed care organization to investigate fraudulent
	claims and other types of program waste or abuse by recipients and
	service providers; or
	(2)  contract with another entity for the investigation
	of fraudulent claims and other types of program waste or abuse by
	recipients and service providers.
	(b)  Each managed care organization subject to this section
	shall adopt a plan to prevent and reduce fraud, waste, and abuse and
	annually file that plan with the [commission's] office of inspector
	general for approval. The plan must include:
	(1)  a description of the managed care organization's
	procedures for detecting and investigating possible acts of fraud,
	waste, or abuse;
	(2)  a description of the managed care organization's
	procedures for the mandatory reporting of possible acts of fraud,
	waste, or abuse to the [commission's] office of inspector general;
	(3)  a description of the managed care organization's
	procedures for educating and training personnel to prevent fraud,
	waste, and abuse;
	(4)  the name, address, telephone number, and fax
	number of the individual responsible for carrying out the plan;
	(5)  a description or chart outlining the
	organizational arrangement of the managed care organization's
	personnel responsible for investigating and reporting possible
	acts of fraud, waste, or abuse;
	(6)  a detailed description of the results of
	investigations of fraud, waste, and abuse conducted by the managed
	care organization's special investigative unit or the entity with
	which the managed care organization contracts under Subsection
	(a)(2); and
	(7)  provisions for maintaining the confidentiality of
	any patient information relevant to an investigation of fraud,
	waste, or abuse.
	(c)  If a managed care organization contracts for the
	investigation of fraudulent claims and other types of program waste
	or abuse by recipients and service providers under Subsection
	(a)(2), the managed care organization shall file with the
	[commission's] office of inspector general:
	(1)  a copy of the written contract;
	(2)  the names, addresses, telephone numbers, and fax
	numbers of the principals of the entity with which the managed care
	organization has contracted; and
	(3)  a description of the qualifications of the
	principals of the entity with which the managed care organization
	has contracted.
	(d)  The [commission's] office of inspector general may
	review the records of a managed care organization to determine
	compliance with this section.
	(e)  The inspector general [commissioner] shall adopt rules
	as necessary to accomplish the purposes of this section.
	SECTION 25.  Sections 531.114(b) and (g), Government Code,
	are amended to read as follows:
	(b)  If after an investigation the office of inspector
	general [commission] determines that a person violated Subsection
	(a), the office [commission] shall:
	(1)  notify the person of the alleged violation not
	later than the 30th day after the date the office [commission]
	completes the investigation and provide the person with an
	opportunity for a hearing on the matter; or
	(2)  refer the matter to the appropriate prosecuting
	attorney for prosecution.
	(g)  The inspector general [commission] shall adopt rules as
	necessary to implement this section.
	SECTION 26.  Section 531.115, Government Code, is amended to
	read as follows:
	Sec. 531.115.  FEDERAL FELONY MATCH.  The office of
	inspector general [commission] shall develop and implement a system
	to cross-reference data collected for the programs listed under
	Section 531.008(c) with the list of fugitive felons maintained by
	the federal government.
	SECTION 27.  Section 533.005(a), Government Code, is amended
	to read as follows:
	(a)  A contract between a managed care organization and the
	commission for the organization to provide health care services to
	recipients must contain:
	(1)  procedures to ensure accountability to the state
	for the provision of health care services, including procedures for
	financial reporting, quality assurance, utilization review, and
	assurance of contract and subcontract compliance;
	(2)  capitation rates that ensure the cost-effective
	provision of quality health care;
	(3)  a requirement that the managed care organization
	provide ready access to a person who assists recipients in
	resolving issues relating to enrollment, plan administration,
	education and training, access to services, and grievance
	procedures;
	(4)  a requirement that the managed care organization
	provide ready access to a person who assists providers in resolving
	issues relating to payment, plan administration, education and
	training, and grievance procedures;
	(5)  a requirement that the managed care organization
	provide information and referral about the availability of
	educational, social, and other community services that could
	benefit a recipient;
	(6)  procedures for recipient outreach and education;
	(7)  a requirement that the managed care organization
	make payment to a physician or provider for health care services
	rendered to a recipient under a managed care plan not later than the
	45th day after the date a claim for payment is received with
	documentation reasonably necessary for the managed care
	organization to process the claim, or within a period, not to exceed
	60 days, specified by a written agreement between the physician or
	provider and the managed care organization;
	(8)  a requirement that the commission, on the date of a
	recipient's enrollment in a managed care plan issued by the managed
	care organization, inform the organization of the recipient's
	Medicaid certification date;
	(9)  a requirement that the managed care organization
	comply with Section 533.006 as a condition of contract retention
	and renewal;
	(10)  a requirement that the managed care organization
	provide the information required by Section 533.012 and otherwise
	comply and cooperate with the [commission's] office of inspector
	general;
	(11)  a requirement that the managed care
	organization's usages of out-of-network providers or groups of
	out-of-network providers may not exceed limits for those usages
	relating to total inpatient admissions, total outpatient services,
	and emergency room admissions determined by the commission;
	(12)  if the commission finds that a managed care
	organization has violated Subdivision (11), a requirement that the
	managed care organization reimburse an out-of-network provider for
	health care services at a rate that is equal to the allowable rate
	for those services, as determined under Sections 32.028 and
	32.0281, Human Resources Code;
	(13)  a requirement that the organization use advanced
	practice nurses in addition to physicians as primary care providers
	to increase the availability of primary care providers in the
	organization's provider network;
	(14)  a requirement that the managed care organization
	reimburse a federally qualified health center or rural health
	clinic for health care services provided to a recipient outside of
	regular business hours, including on a weekend day or holiday, at a
	rate that is equal to the allowable rate for those services as
	determined under Section 32.028, Human Resources Code, if the
	recipient does not have a referral from the recipient's primary
	care physician; [and]
	(15)  a requirement that the managed care organization
	develop, implement, and maintain a system for tracking and
	resolving all provider appeals related to claims payment, including
	a process that will require:
	(A)  a tracking mechanism to document the status
	and final disposition of each provider's claims payment appeal;
	(B)  the contracting with physicians who are not
	network providers and who are of the same or related specialty as
	the appealing physician to resolve claims disputes related to
	denial on the basis of medical necessity that remain unresolved
	subsequent to a provider appeal; and
	(C)  the determination of the physician resolving
	the dispute to be binding on the managed care organization and
	provider; and
	(16)  a requirement that the managed care organization
	refund to the commission, through the office of inspector general,
	an overpayment made by the managed care organization to a provider
	that is identified as a result of a review conducted under Chapter
	422 or Subchapter C, Chapter 531, according to rules adopted by the
	inspector general.
	SECTION 28.  Section 533.012(c), Government Code, is amended
	to read as follows:
	(c)  The [commission's] office of inspector general
	[investigations and enforcement] shall review the information
	submitted under this section as appropriate in the investigation of
	fraud in the Medicaid managed care program.
	SECTION 29.  Section 811.001(9), Government Code, is amended
	to read as follows:
	(9)  "Law enforcement officer" means a member of the
	retirement system who:
	(A)  has been commissioned as a law enforcement
	officer by the Department of Public Safety, the Texas Alcoholic
	Beverage Commission, the Parks and Wildlife Department, or the
	office of inspector general established under Chapter 422 at the
	Texas Youth Commission; and
	(B)  is recognized as a commissioned law
	enforcement officer by the Commission on Law Enforcement Officer
	Standards and Education.
	SECTION 30.  Section 814.104(b), Government Code, is amended
	to read as follows:
	(b)  A member who is at least 55 years old and who has at
	least 10 years of service credit as a commissioned peace officer
	engaged in criminal law enforcement activities of the Department of
	Public Safety, the Texas Alcoholic Beverage Commission, the Parks
	and Wildlife Department, or the office of inspector general
	established under Chapter 422 at the Texas Youth Commission, or as a
	custodial officer, is eligible to retire and receive a service
	retirement annuity.
	SECTION 31.  Section 815.505, Government Code, is amended to
	read as follows:
	Sec. 815.505.  CERTIFICATION OF NAMES OF LAW ENFORCEMENT AND
	CUSTODIAL OFFICERS. Not later than the 12th day of the month
	following the month in which a person begins or ceases employment as
	a law enforcement officer or custodial officer, the Public Safety
	Commission, the Texas Alcoholic Beverage Commission, the Parks and
	Wildlife Commission, the office of inspector general established
	under Chapter 422 at the Texas Youth Commission, the Board of
	Pardons and Paroles, or the Texas Board of Criminal Justice, as
	applicable, shall certify to the retirement system, in the manner
	prescribed by the system, the name of the employee and such other
	information as the system determines is necessary for the crediting
	of service and financing of benefits under this subtitle.
	SECTION 32.  Section 2054.376(b), Government Code, is
	amended to read as follows:
	(b)  This subchapter does not apply to:
	(1)  the Department of Public Safety's use for criminal
	justice or homeland security purposes of a federal database or
	network;
	(2)  a Texas equivalent of a database or network
	described by Subdivision (1) that is managed by the Department of
	Public Safety;
	(3)  the uniform statewide accounting system, as that
	term is used in Subchapter C, Chapter 2101;
	(4)  the state treasury cash and treasury management
	system; [or]
	(5)  a database or network managed by the comptroller
	to:
	(A)  collect and process multiple types of taxes
	imposed by the state; or
	(B)  manage or administer fiscal, financial,
	revenue, and expenditure activities of the state under Chapter 403
	and Chapter 404; or
	(6)  the use of a federal or state database or network
	by an office of inspector general established under Chapter 422.
	SECTION 33.  Section 21.014(b), Human Resources Code, is
	amended to read as follows:
	(b)  The [person employed by the department as] inspector
	general appointed under Chapter 422, Government Code, for the
	Health and Human Services Commission shall make reports to and
	consult with the agency director [chairman of the board] regarding:
	(1)  the selection of internal audit topics;
	(2)  the establishment of internal audit priorities;
	and
	(3)  the findings of each regular or special internal
	audit initiative.
	SECTION 34.  Section 32.003, Human Resources Code, is
	amended by adding Subdivision (5) to read as follows:
	(5)  "Office of inspector general" means the office of
	inspector general established under Chapter 422, Government Code,
	for the Health and Human Services Commission.
	SECTION 35.  Section 32.0291, Human Resources Code, is
	amended to read as follows:
	Sec. 32.0291.  PREPAYMENT REVIEWS AND POSTPAYMENT HOLDS.
	(a) Notwithstanding any other law, the office of inspector general
	or department may:
	(1)  perform a prepayment review of a claim for
	reimbursement under the medical assistance program to determine
	whether the claim involves fraud, waste, or abuse; and
	(2)  as necessary to perform that review, withhold
	payment of the claim for not more than five working days without
	notice to the person submitting the claim.
	(b)  Notwithstanding any other law, the office of inspector
	general [department] may impose a postpayment hold on payment of
	future claims submitted by a provider if the office [department]
	has reliable evidence that the provider has committed fraud, waste,
	abuse, or wilful misrepresentation regarding a claim for
	reimbursement under the medical assistance program. The office
	[department] must notify the provider of the postpayment hold not
	later than the fifth working day after the date the hold is imposed.
	(c)  On timely written request by a provider subject to a
	postpayment hold under Subsection (b), the office of inspector
	general [department] shall file a request with the State Office of
	Administrative Hearings or the hearings division of the Health and
	Human Services Commission for an expedited administrative hearing
	regarding the hold. The provider must request an expedited hearing
	under this subsection not later than the 10th day after the date the
	provider receives notice from the office of inspector general
	[department] under Subsection (b). The office of inspector general
	[department] shall discontinue the hold unless the office
	[department] makes a prima facie showing at the hearing that the
	evidence relied on by the office of inspector general [department]
	in imposing the hold is relevant, credible, and material to the
	issue of fraud, waste, abuse, or wilful misrepresentation.
	(d)  The inspector general [department] shall adopt rules
	that allow a provider subject to a postpayment hold under
	Subsection (b) to seek an informal resolution of the issues
	identified by the office of inspector general [department] in the
	notice provided under that subsection. A provider must seek an
	informal resolution under this subsection not later than the
	deadline prescribed by Subsection (c). A provider's decision to
	seek an informal resolution under this subsection does not extend
	the time by which the provider must request an expedited
	administrative hearing under Subsection (c). However, a hearing
	initiated under Subsection (c) shall be stayed at the office's
	[department's] request until the informal resolution process is
	completed.
	SECTION 36.  Section 32.032, Human Resources Code, is
	amended to read as follows:
	Sec. 32.032.  PREVENTION AND DETECTION OF FRAUD, WASTE, AND
	ABUSE. The inspector general [department] shall adopt reasonable
	rules for minimizing the opportunity for fraud, waste, and abuse,
	for establishing and maintaining methods for detecting and
	identifying situations in which a question of fraud, waste, or
	abuse in the program may exist, and for referring cases where fraud,
	waste, or abuse appears to exist to the appropriate law enforcement
	agencies for prosecution.
	SECTION 37.  Sections 32.0321(a) through (d), Human
	Resources Code, are amended to read as follows:
	(a)  The office of inspector general [department] by rule may
	recommend to the department and the department by rule may require
	that each provider of medical assistance in a provider type that has
	demonstrated significant potential for fraud, waste, or abuse to
	file with the department a surety bond in a reasonable amount. The
	office and the department by rule shall each require a provider of
	medical assistance to file with the department a surety bond in a
	reasonable amount if the office [department] identifies a pattern
	of suspected fraud, waste, or abuse involving criminal conduct
	relating to the provider's services under the medical assistance
	program that indicates the need for protection against potential
	future acts of fraud, waste, or abuse.
	(b)  The bond under Subsection (a) must be payable to the
	department to compensate the department for damages resulting from
	or penalties or fines imposed in connection with an act of fraud,
	waste, or abuse committed by the provider under the medical
	assistance program.
	(c)  Subject to Subsection (d) or (e), the office of
	inspector general and the department by rule may require each
	provider of medical assistance that establishes a resident's trust
	fund account to post a surety bond to secure the account. The bond
	must be payable to the department to compensate residents of the
	bonded provider for trust funds that are lost, stolen, or otherwise
	unaccounted for if the provider does not repay any deficiency in a
	resident's trust fund account to the person legally entitled to
	receive the funds.
	(d)  The office of inspector general and the department may
	not require the amount of a surety bond posted for a single facility
	provider under Subsection (c) to exceed the average of the total
	average monthly balance of all the provider's resident trust fund
	accounts for the 12-month period preceding the bond issuance or
	renewal date.
	SECTION 38.  Section 32.0322, Human Resources Code, is
	amended to read as follows:
	Sec. 32.0322.  CRIMINAL HISTORY RECORD INFORMATION.  (a)
	The office of inspector general and the department may obtain from
	any law enforcement or criminal justice agency the criminal history
	record information that relates to a provider under the medical
	assistance program or a person applying to enroll as a provider
	under the medical assistance program.
	(b)  The office of inspector general [department] by rule
	shall establish criteria for revoking a provider's enrollment or
	denying a person's application to enroll as a provider under the
	medical assistance program based on the results of a criminal
	history check.
	SECTION 39.  Sections 32.033(d) through (h), Human Resources
	Code, are amended to read as follows:
	(d)  A separate and distinct cause of action in favor of the
	state is hereby created, and the office of inspector general
	[department] may, without written consent, take direct civil action
	in any court of competent jurisdiction. A suit brought under this
	section need not be ancillary to or dependent upon any other action.
	(e)  The [department's] right of recovery of the office of
	inspector general is limited to the amount of the cost of medical
	care services paid by the department. Other subrogation rights
	granted under this section are limited to the cost of the services
	provided.
	(f)  The inspector general [commissioner] may waive the
	[department's] right of recovery of the office of inspector general
	in whole or in part when the inspector general [commissioner] finds
	that enforcement would tend to defeat the purpose of public
	assistance.
	(g)  The office of inspector general [department] may
	designate an agent to collect funds the office [department] has a
	right to recover from third parties under this section. The
	department shall use any funds collected under this section to pay
	costs of administering the medical assistance program.
	(h)  The inspector general [department] may adopt rules for
	the enforcement of the office's [its] right of recovery.
	SECTION 40.  Sections 32.039(c) through (r) and (u) through
	(x), Human Resources Code, are amended to read as follows:
	(c)  A person who commits a violation under Subsection (b) is
	liable to the department for:
	(1)  the amount paid, if any, as a result of the
	violation and interest on that amount determined at the rate
	provided by law for legal judgments and accruing from the date on
	which the payment was made; and
	(2)  payment of an administrative penalty, assessed by
	the office of inspector general, in [of] an amount not to exceed
	twice the amount paid, if any, as a result of the violation, plus an
	amount:
	(A)  not less than $5,000 or more than $15,000 for
	each violation that results in injury to an elderly person, as
	defined by Section 48.002(a)(1) [48.002(1)], a disabled person, as
	defined by Section 48.002(a)(8)(A) [48.002(8)(A)], or a person
	younger than 18 years of age; or
	(B)  not more than $10,000 for each violation that
	does not result in injury to a person described by Paragraph (A).
	(d)  Unless the provider submitted information to the
	department for use in preparing a voucher that the provider knew or
	should have known was false or failed to correct information that
	the provider knew or should have known was false when provided an
	opportunity to do so, this section does not apply to a claim based
	on the voucher if the department calculated and printed the amount
	of the claim on the voucher and then submitted the voucher to the
	provider for the provider's signature. In addition, the provider's
	signature on the voucher does not constitute fraud. The inspector
	general [department] shall adopt rules that establish a grace
	period during which errors contained in a voucher prepared by the
	department may be corrected without penalty to the provider.
	(e)  In determining the amount of the penalty to be assessed
	under Subsection (c)(2), the office of inspector general
	[department] shall consider:
	(1)  the seriousness of the violation;
	(2)  whether the person had previously committed a
	violation; and
	(3)  the amount necessary to deter the person from
	committing future violations.
	(f)  If after an examination of the facts the office of
	inspector general [department] concludes that the person committed
	a violation, the office [department] may issue a preliminary report
	stating the facts on which it based its conclusion, recommending
	that an administrative penalty under this section be imposed and
	recommending the amount of the proposed penalty.
	(g)  The office of inspector general [department] shall give
	written notice of the report to the person charged with committing
	the violation.  The notice must include a brief summary of the
	facts, a statement of the amount of the recommended penalty, and a
	statement of the person's right to an informal review of the alleged
	violation, the amount of the penalty, or both the alleged violation
	and the amount of the penalty.
	(h)  Not later than the 10th day after the date on which the
	person charged with committing the violation receives the notice,
	the person may either give the office of inspector general
	[department] written consent to the report, including the
	recommended penalty, or make a written request for an informal
	review by the office [department].
	(i)  If the person charged with committing the violation
	consents to the penalty recommended by the office of inspector
	general [department] or fails to timely request an informal review,
	the office [department] shall assess the penalty. The office
	[department] shall give the person written notice of its action.
	The person shall pay the penalty not later than the 30th day after
	the date on which the person receives the notice.
	(j)  If the person charged with committing the violation
	requests an informal review as provided by Subsection (h), the
	office of inspector general [department] shall conduct the review.
	The office [department] shall give the person written notice of the
	results of the review.
	(k)  Not later than the 10th day after the date on which the
	person charged with committing the violation receives the notice
	prescribed by Subsection (j), the person may make to the office of
	inspector general [department] a written request for a hearing.
	The hearing must be conducted in accordance with Chapter 2001,
	Government Code.
	(l)  If, after informal review, a person who has been ordered
	to pay a penalty fails to request a formal hearing in a timely
	manner, the office of inspector general [department] shall assess
	the penalty. The office [department] shall give the person written
	notice of its action. The person shall pay the penalty not later
	than the 30th day after the date on which the person receives the
	notice.
	(m)  Within 30 days after the date on which the inspector
	general's [board's] order issued after a hearing under Subsection
	(k) becomes final as provided by Section 2001.144, Government Code,
	the person shall:
	(1)  pay the amount of the penalty;
	(2)  pay the amount of the penalty and file a petition
	for judicial review contesting the occurrence of the violation, the
	amount of the penalty, or both the occurrence of the violation and
	the amount of the penalty; or
	(3)  without paying the amount of the penalty, file a
	petition for judicial review contesting the occurrence of the
	violation, the amount of the penalty, or both the occurrence of the
	violation and the amount of the penalty.
	(n)  A person who acts under Subsection (m)(3) within the
	30-day period may:
	(1)  stay enforcement of the penalty by:
	(A)  paying the amount of the penalty to the court
	for placement in an escrow account; or
	(B)  giving to 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 [department's] order of
	the inspector general is final; or
	(2)  request the court to stay enforcement of the
	penalty by:
	(A)  filing with the court a sworn affidavit of
	the person stating that the person is financially unable to pay the
	amount of the penalty and is financially unable to give the
	supersedeas bond; and
	(B)  giving a copy of the affidavit to the office
	of inspector general [commissioner] by certified mail.
	(o)  If the office of inspector general [commissioner]
	receives a copy of an affidavit under Subsection (n)(2), the office
	[commissioner] may file with the court, within five days after the
	date the copy is received, a contest to the affidavit. The court
	shall hold a hearing on the facts alleged in the affidavit as soon
	as practicable and shall stay the enforcement of the penalty on
	finding that the alleged facts are true. The person who files an
	affidavit has the burden of proving that the person is financially
	unable to pay the amount of the penalty and to give a supersedeas
	bond.
	(p)  If the person charged does not pay the amount of the
	penalty and the enforcement of the penalty is not stayed, the office
	of inspector general [department] may forward the matter to the
	attorney general for enforcement of the penalty and interest as
	provided by law for legal judgments. An action to enforce a penalty
	order under this section must be initiated in a court of competent
	jurisdiction in Travis County or in the county in which the
	violation was committed.
	(q)  Judicial review of an [a department] order or review by
	the office of inspector general under this section assessing a
	penalty is under the substantial evidence rule. A suit may be
	initiated by filing a petition with a district court in Travis
	County, as provided by Subchapter G, Chapter 2001, Government Code.
	(r)  If a penalty is reduced or not assessed, the department
	shall remit to the person the appropriate amount plus accrued
	interest if the penalty has been paid or the office of inspector
	general shall execute a release of the bond if a supersedeas bond
	has been posted. The accrued interest on amounts remitted by the
	department under this subsection shall be paid at a rate equal to
	the rate provided by law for legal judgments and shall be paid for
	the period beginning on the date the penalty is paid to the
	department under this section and ending on the date the penalty is
	remitted.
	(u)  Except as provided by Subsection (w), a person found
	liable for a violation under Subsection (c) that resulted in injury
	to an elderly person, as defined by Section 48.002(a)(1), a
	disabled person, as defined by Section 48.002(a)(8)(A), or a person
	younger than 18 years of age may not provide or arrange to provide
	health care services under the medical assistance program for a
	period of 10 years. The inspector general [department] by rule may
	provide for a period of ineligibility longer than 10 years. The
	period of ineligibility begins on the date on which the
	determination that the person is liable becomes final.
	(v)  Except as provided by Subsection (w), a person found
	liable for a violation under Subsection (c) that did not result in
	injury to an elderly person, as defined by Section 48.002(a)(1), a
	disabled person, as defined by Section 48.002(a)(8)(A), or a person
	younger than 18 years of age may not provide or arrange to provide
	health care services under the medical assistance program for a
	period of three years. The inspector general [department] by rule
	may provide for a period of ineligibility longer than three years.
	The period of ineligibility begins on the date on which the
	determination that the person is liable becomes final.
	(w)  The inspector general [department] by rule may
	prescribe criteria under which a person described by Subsection (u)
	or (v) is not prohibited from providing or arranging to provide
	health care services under the medical assistance program. The
	criteria may include consideration of:
	(1)  the person's knowledge of the violation;
	(2)  the likelihood that education provided to the
	person would be sufficient to prevent future violations;
	(3)  the potential impact on availability of services
	in the community served by the person; and
	(4)  any other reasonable factor identified by the
	inspector general [department].
	(x)  Subsections (b)(1-b) through (1-f) do not prohibit a
	person from engaging in:
	(1)  generally accepted business practices, as
	determined by inspector general [department] rule, including:
	(A)  conducting a marketing campaign;
	(B)  providing token items of minimal value that
	advertise the person's trade name; and
	(C)  providing complimentary refreshments at an
	informational meeting promoting the person's goods or services;
	(2)  the provision of a value-added service if the
	person is a managed care organization; or
	(3)  other conduct specifically authorized by law,
	including conduct authorized by federal safe harbor regulations (42
	C.F.R. Section 1001.952).
	SECTION 41.  Section 32.070(d), Human Resources Code, is
	amended to read as follows:
	(d)  This section does not apply to a computerized audit
	conducted using the Medicaid Fraud Detection Audit System or an
	audit or investigation of fraud, waste, and abuse conducted by the
	Medicaid fraud control unit of the office of the attorney general,
	the office of the state auditor, the office of [the] inspector
	general, or the Office of Inspector General in the United States
	Department of Health and Human Services.
	SECTION 42.  Section 33.015(e), Human Resources Code, is
	amended to read as follows:
	(e)  The department shall require a person exempted under
	this section from making a personal appearance at department
	offices to provide verification of the person's entitlement to the
	exemption on initial eligibility certification and on each
	subsequent periodic eligibility recertification. If the person
	does not provide verification and the department considers the
	verification necessary to protect the integrity of the food stamp
	program, the department shall initiate a fraud referral to the
	[department's] office of inspector general established for the
	Health and Human Services Commission under Chapter 422, Government
	Code.
	SECTION 43.  Section 61.001(7), Human Resources Code, is
	amended to read as follows:
	(7)  "Office of inspector general" means the office of
	inspector general established under Chapter 422, Government Code,
	for the commission [Section 61.0451].
	SECTION 44.  Sections 61.0451(a), (d), (f), and (g), Human
	Resources Code, are amended to read as follows:
	(a)  The office of inspector general shall investigate [is
	established at the commission for the purpose of investigating]:
	(1)  crimes committed by commission employees,
	including parole officers employed by or under a contract with the
	commission; and
	(2)  crimes and delinquent conduct committed at a
	facility operated by the commission, a residential facility
	operated by another entity under a contract with the commission, or
	any facility in which a child committed to the custody of the
	commission is housed or receives medical or mental health
	treatment.
	(d)  The office of inspector general may employ and
	commission inspectors [general] as peace officers in accordance
	with Section 422.105, Government Code, for the purpose of carrying
	out the duties described by this section.  An inspector [general]
	shall have all of the powers and duties given to peace officers
	under Article 2.13, Code of Criminal Procedure.
	(f)  If the inspector general is not a commissioned peace
	officer, the inspector general [The executive commissioner] shall
	select a commissioned peace officer as chief inspector [general].
	The chief inspector [general] is subject to the requirements of
	this section and may only be discharged for cause.
	(g)  The [chief] inspector general shall on a quarterly basis
	prepare and deliver a report concerning the operations of the
	office of inspector general to:
	(1)  the executive commissioner;
	(2)  the advisory board;
	(3)  the governor;
	(4)  the lieutenant governor;
	(5)  the speaker of the house of representatives;
	(6)  the standing committees of the senate and house of
	representatives with primary jurisdiction over correctional
	facilities;
	(7)  the state auditor; and
	(8)  the comptroller.
	SECTION 45.  Sections 61.098(d) and (e), Human Resources
	Code, are amended to read as follows:
	(d)  Notwithstanding Subsection (c), the office of inspector
	general shall immediately provide the special prosecution unit with
	a report concerning an alleged criminal offense or delinquent
	conduct concerning the commission and described by Article
	104.003(a), Code of Criminal Procedure, if the [chief] inspector
	general reasonably believes the offense or conduct is particularly
	serious and egregious.
	(e)  The [chief] inspector general of the office of inspector
	general, at the direction of the board of directors of the special
	prosecution unit, shall notify the foreman of the appropriate grand
	jury, in the manner provided by Article 20.09, Code of Criminal
	Procedure, if:
	(1)  the [chief] inspector general receives credible
	evidence of illegal or improper conduct by commission officers,
	employees, or contractors that the inspector general reasonably
	believes jeopardizes the health, safety, and welfare of children in
	the custody of the commission;
	(2)  the [chief] inspector general reasonably believes
	the conduct:
	(A)  could constitute an offense under Article
	104.003(a), Code of Criminal Procedure; and
	(B)  involves the alleged physical or sexual abuse
	of a child in the custody of a commission facility or an
	investigation related to the alleged abuse; and
	(3)  the [chief] inspector general has reason to
	believe that information concerning the conduct has not previously
	been presented to the appropriate grand jury.
	SECTION 46.  Section 64.055(b), Human Resources Code, is
	amended to read as follows:
	(b)  The independent ombudsman shall immediately report to
	the governor, the lieutenant governor, the speaker of the house of
	representatives, the state auditor, and the office of the inspector
	general established under Chapter 422, Government Code, for [of]
	the commission any particularly serious or flagrant:
	(1)  case of abuse or injury of a child committed to the
	commission;
	(2)  problem concerning the administration of a
	commission program or operation;
	(3)  problem concerning the delivery of services in a
	facility operated by or under contract with the commission; or
	(4)  interference by the commission with an
	investigation conducted by the office.
	SECTION 47.  Section 64.056(b), Human Resources Code, is
	amended to read as follows:
	(b)  The records of the independent ombudsman are
	confidential, except that the independent ombudsman shall:
	(1)  share with the office of inspector general
	established under Chapter 422, Government Code, for [of] the
	commission a communication with a child that may involve the abuse
	or neglect of the child; and
	(2)  disclose its nonprivileged records if required by
	a court order on a showing of good cause.
	SECTION 48.  Article 2.12, Code of Criminal Procedure, is
	amended to read as follows:
	Art. 2.12.  WHO ARE PEACE OFFICERS. The following are peace
	officers:
	(1)  sheriffs, their deputies, and those reserve
	deputies who hold a permanent peace officer license issued under
	Chapter 1701, Occupations Code;
	(2)  constables, deputy constables, and those reserve
	deputy constables who hold a permanent peace officer license issued
	under Chapter 1701, Occupations Code;
	(3)  marshals or police officers of an incorporated
	city, town, or village, and those reserve municipal police officers
	who hold a permanent peace officer license issued under Chapter
	1701, Occupations Code;
	(4)  rangers and officers commissioned by the Public
	Safety Commission and the Director of the Department of Public
	Safety;
	(5)  investigators of the district attorneys', criminal
	district attorneys', and county attorneys' offices;
	(6)  law enforcement agents of the Texas Alcoholic
	Beverage Commission;
	(7)  each member of an arson investigating unit
	commissioned by a city, a county, or the state;
	(8)  officers commissioned under Section 37.081,
	Education Code, or Subchapter E, Chapter 51, Education Code;
	(9)  officers commissioned by the General Services
	Commission;
	(10)  law enforcement officers commissioned by the
	Parks and Wildlife Commission;
	(11)  airport police officers commissioned by a city
	with a population of more than 1.18 million that operates an airport
	that serves commercial air carriers;
	(12)  airport security personnel commissioned as peace
	officers by the governing body of any political subdivision of this
	state, other than a city described by Subdivision (11), that
	operates an airport that serves commercial air carriers;
	(13)  municipal park and recreational patrolmen and
	security officers;
	(14)  security officers and investigators commissioned
	as peace officers by the comptroller;
	(15)  officers commissioned by a water control and
	improvement district under Section 49.216, Water Code;
	(16)  officers commissioned by a board of trustees
	under Chapter 54, Transportation Code;
	(17)  investigators commissioned by the Texas Medical
	Board;
	(18)  officers commissioned by the board of managers of
	the Dallas County Hospital District, the Tarrant County Hospital
	District, or the Bexar County Hospital District under Section
	281.057, Health and Safety Code;
	(19)  county park rangers commissioned under
	Subchapter E, Chapter 351, Local Government Code;
	(20)  investigators employed by the Texas Racing
	Commission;
	(21)  officers commissioned under Chapter 554,
	Occupations Code;
	(22)  officers commissioned by the governing body of a
	metropolitan rapid transit authority under Section 451.108,
	Transportation Code, or by a regional transportation authority
	under Section 452.110, Transportation Code;
	(23)  investigators commissioned by the attorney
	general under Section 402.009, Government Code;
	(24)  security officers and investigators commissioned
	as peace officers under Chapter 466, Government Code;
	(25)  an officer employed by the Department of State
	Health Services under Section 431.2471, Health and Safety Code;
	(26)  officers appointed by an appellate court under
	Subchapter F, Chapter 53, Government Code;
	(27)  officers commissioned by the state fire marshal
	under Chapter 417, Government Code;
	(28)  an investigator commissioned by the commissioner
	of insurance under Section 701.104, Insurance Code;
	(29)  apprehension specialists [and inspectors
	general] commissioned by the Texas Youth Commission as officers
	under Section [Sections 61.0451 and] 61.0931, Human Resources Code;
	(30)  [officers appointed by the inspector general of
	the Texas Department of Criminal Justice under Section 493.019,
	Government Code;
	[(31)]  investigators commissioned by the Commission
	on Law Enforcement Officer Standards and Education under Section
	1701.160, Occupations Code;
	(31) [(32)]  commission investigators commissioned by
	the Texas Private Security Board under Section 1702.061(f),
	Occupations Code;
	(32) [(33)]  the fire marshal and any officers,
	inspectors, or investigators commissioned by an emergency services
	district under Chapter 775, Health and Safety Code;
	(33) [(34)]  officers commissioned by the State Board
	of Dental Examiners under Section 254.013, Occupations Code,
	subject to the limitations imposed by that section;
	(34) [(35)]  investigators commissioned by the Texas
	Juvenile Probation Commission as officers under Section 141.055,
	Human Resources Code; [and]
	(35) [(36)]  the fire marshal and any related officers,
	inspectors, or investigators commissioned by a county under
	Subchapter B, Chapter 352, Local Government Code; and
	(36)  officers commissioned by an office of inspector
	general established under Chapter 422, Government Code.
	SECTION 49.  Section 1(2), Article 18.21, Code of Criminal
	Procedure, is amended to read as follows:
	(2)  "Authorized peace officer" means:
	(A)  a sheriff or a sheriff's deputy;
	(B)  a constable or deputy constable;
	(C)  a marshal or police officer of an
	incorporated city;
	(D)  a ranger or officer commissioned by the
	Public Safety Commission or the director of the Department of
	Public Safety;
	(E)  an investigator of a prosecutor's office;
	(F)  a law enforcement agent of the Alcoholic
	Beverage Commission;
	(G)  a law enforcement officer commissioned by the
	Parks and Wildlife Commission; or
	(H)  an enforcement officer appointed by the
	inspector general [executive director] of the Texas Department of
	Criminal Justice under Section 493.019, Government Code.
	SECTION 50.  Section 531.1021, Government Code, is repealed.
	SECTION 51.  (a)  The amendment by this Act of Section
	531.102, Government Code, does not affect the validity of a
	complaint, investigation, or other proceeding initiated under that
	section before the effective date of this Act. A complaint,
	investigation, or other proceeding initiated under that section is
	continued in accordance with the changes in law made by this Act.
	(b)  The repeal by this Act of Section 531.1021, Government
	Code, does not affect the validity of a subpoena issued under that
	section before the effective date of this Act. A subpoena issued
	under that section before the effective date of this Act is governed
	by the law that existed when the subpoena was issued, and the former
	law is continued in effect for that purpose.
	SECTION 52.  (a) A person serving on the effective date of
	this Act as inspector general for a state agency subject to Chapter
	422, Government Code, as added by this Act, shall serve as the
	inspector general considered appointed for the agency under Chapter
	422, Government Code, as added by this Act, until February 1, 2013,
	and may be reappointed under Chapter 422 if the person has the
	qualifications required under that chapter.
	(b)  Not later than February 1, 2013, the governor or the
	governing body of a state agency subject to Chapter 422, Government
	Code, as added by this Act, as applicable, shall appoint an
	inspector general for the office of inspector general of that
	agency to a term expiring February 1, 2015.
	SECTION 53.  A contract or proceeding primarily related to a
	function transferred to an office of inspector general established
	under this Act is transferred to the office.  The transfer does not
	affect the status of a proceeding or the validity of a contract.
	SECTION 54.  (a)  All personnel and assets currently
	assigned to the inspector general of a state agency subject to
	Chapter 422, Government Code, as added by this Act, shall be
	promptly transferred to the office of inspector general for that
	agency established under Chapter 422 along with any equipment,
	documents, and records currently assigned to or used by the
	inspector general of that agency.  Inventory of personnel,
	equipment, documents, records, and assets to be transferred under
	this section shall be accomplished jointly by the transferring
	agency and the inspector general considered appointed under Chapter
	422 for that agency.  All funds previously appropriated or used,
	from any source, by the transferring agency in support of the
	transferred functions, personnel, equipment, documents, records,
	or assets shall also be contemporaneously transferred to the
	office.
	(b)  For purposes of this section, "currently assigned"
	means:
	(1)  all personnel and vacant full-time equivalent
	positions assigned to or supporting a transferred function at any
	time during the state fiscal biennium beginning September 1, 2009;
	and
	(2)  all inventory and equipment assigned to a
	transferred function or transferring personnel or that was in the
	possession of transferring personnel on or at any time after
	October 31, 2010.
	(c)  All state and federal funding, including funding for
	overhead costs, support costs, and lease or colocation lease costs,
	for the functions to be transferred to an office of inspector
	general established under Chapter 422, Government Code, as added by
	this Act, shall be reallocated to that office.
	(d)  For purposes of federal single state agency funding
	requirements, any federal funds that may not be appropriated
	directly to the office of inspector general for an agency subject to
	Chapter 422, Government Code, as added by this  Act, shall be
	transferred from the single state agency receiving the funds to the
	office of inspector general if the funds are intended for a function
	performed by the office.
	SECTION 55.  On the effective date of this Act:
	(1)  all functions, activities, employees, rules,
	forms, money, property, contracts, memorandums of understanding,
	records, and obligations of a previously established office of
	inspector general of an agency subject to Chapter 422, Government
	Code, as added by this Act, become functions, activities,
	employees, rules, forms, money, property, contracts, memorandums
	of understanding, records, and obligations of the office of
	inspector general established under Chapter 422, without a change
	in status; and
	(2)  all money appropriated for the operations of a
	previously established office of inspector general at an agency
	subject to Chapter 422, Government Code, as added by this Act,
	including money for providing administrative support, is
	considered appropriated to the office of inspector general
	established under Chapter 422.
	SECTION 56.  (a)  Each agency subject to Chapter 422,
	Government Code, as added by this Act, shall take all action
	necessary to provide for the orderly transfer of the assets and
	responsibilities of any previously established office of inspector
	general for that agency to the office of inspector general
	established under Chapter 422.
	(b)  A rule or form adopted by a previously established
	office of inspector general of an agency subject to Chapter 422,
	Government Code, as added by this Act, is a rule or form of the
	office of inspector general established under Chapter 422 and
	remains in effect until changed by the office of inspector general.
	(c)  A reference in law or administrative rule to a
	previously established office of inspector general of an agency
	subject to Chapter 422, Government Code, as added by this Act, means
	the office of inspector general established under Chapter 422.
	SECTION 57.  If before implementing any provision of this
	Act a state agency determines that a waiver or authorization from a
	federal agency is necessary for implementation of that provision,
	the agency affected by the provision shall request the waiver or
	authorization and may delay implementing that provision until the
	waiver or authorization is granted.
	SECTION 58.  This Act takes effect immediately if it
	receives a vote of two-thirds of all the members elected to each
	house, as provided by Section 39, Article III, Texas Constitution.
	If this Act does not receive the vote necessary for immediate
	effect, this Act takes effect September 1, 2011.