89R9872 AMF-F     By: A. Davis of Dallas H.B. No. 4131       A BILL TO BE ENTITLED   AN ACT   relating to the receivership of a single-source continuum   contractor providing child welfare services.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 64.001(a), Civil Practice and Remedies   Code, is amended to read as follows:          (a)  A court of competent jurisdiction may appoint a   receiver:                (1)  in an action by a vendor to vacate a fraudulent   purchase of property;                (2)  in an action by a creditor to subject any property   or fund to his claim;                (3)  in an action between partners or others jointly   owning or interested in any property or fund;                (4)  in an action by a mortgagee for the foreclosure of   the mortgage and sale of the mortgaged property;                (5)  for a corporation that is insolvent, is in   imminent danger of insolvency, has been dissolved, or has forfeited   its corporate rights;                (6)  for a single-source continuum contractor as   provided by Subchapter B-2, Chapter 264, Family Code; or                (7) [(6)]  in any other case in which a receiver may be   appointed under the rules of equity.          SECTION 2.  Chapter 264, Family Code, is amended by adding   Subchapter B-2 to read as follows:   SUBCHAPTER B-2. RECEIVER FOR SINGLE-SOURCE CONTINUUM CONTRACTOR          Sec. 264.191.  DEFINITIONS. In this subchapter:                (1)  "Catchment area" has the meaning assigned by   Section 264.152.                (2)  "Community-based care contract" means a contract   between a single-source continuum contractor and the department or   the Health and Human Services Commission under Subchapter B-1.                (3)  "Single-source continuum contractor" means an   entity that has entered into a contract with the department or the   Health and Human Services Commission under Subchapter B-1.          Sec. 264.1915.  RECEIVER OF SINGLE-SOURCE CONTINUUM   CONTRACTOR. A court of competent jurisdiction may appoint a   receiver for a single-source continuum contractor or any of its   parts, divisions, components, or companies on the petition of the   department if:                (1)  after being subject to a quality improvement plan,   corrective action plan, or other remedial statutory or contract   measures, the contractor continues to fail to satisfactorily   perform under the community-based care contract;                (2)  the contractor:                      (A)  provides the department notice of the   contractor's intent to cease operations not later than the 60th day   before the date the contractor intends to cease operations; and                      (B)  has not made arrangements for another   single-source continuum contractor or the department to continue   the uninterrupted provision of services under the community-based   care contract;                (3)  conditions exist, as determined by the department,   within the contractor that present an imminent danger to the   health, safety, or welfare of the children under the   conservatorship of the department in the contractor's care;                (4)  the contractor has failed to provide adequate   information to the department regarding a child under the   conservatorship of the department in the contractor's care;                (5)  the contractor has failed to comply with a court   order or incurred a sanction against the department due to failure   to comply with a court order; or                (6)  the contractor cannot meet or is unlikely to be   able to meet financial obligations related to services provided   under the community-based care contract, including financial   obligations to employees, contractors, or foster parents.          Sec. 264.192.  PROCEEDING TO APPOINT RECEIVER. (a)  Except   as otherwise provided by law, a court shall give precedence to a   petition for the appointment of a receiver under this subchapter   over other matters.          (b)  A court shall conduct an evidentiary hearing on a   petition for the appointment of a receiver under this subchapter   not later than the fifth day after the date the petition is filed.     The department shall make reasonable efforts to notify the   single-source continuum contractor of the hearing under this   subsection.          (c)  A court shall grant a petition for the appointment of a   receiver under this subchapter on finding that:                (1)  one of the conditions described by Section   264.1915 exists; and                (2)  the continued existence of the condition   jeopardizes the health, safety, or welfare of a child under the   conservatorship of the department.          (d)  A court may grant a petition for the appointment of a   receiver under this subchapter ex parte.          (e)  The issuance of a check without sufficient money by the   single-source continuum contractor or the existence of delinquent   obligations for salaries, utilities, or essential services or   commodities for the contractor is prima facie evidence that the   contractor cannot meet or is unlikely to be able to meet financial   obligations related to services provided under the community-based   care contract as provided by Section 264.1915(6).          Sec. 264.1925.  QUALIFICATIONS. (a)  To be appointed as a   receiver under this subchapter, a person must be qualified by   education, training, or experience to carry out the duties of the   receiver under this subchapter.  Notwithstanding Section 64.021,   Civil Practice and Remedies Code, a receiver appointed under this   subchapter may be an employee of the department.          (b)  A court must appoint a receiver selected from a list of   qualified persons developed by the department and filed with the   court.          Sec. 264.193.  LIMITED DURATION; ASSESSMENT.  (a)  A   receivership under this subchapter expires on the 90th day after   the date a receiver is appointed, unless the department files a   petition for a 60-day extension of the receivership with the   appointing court on or before the date the receivership expires.     The department may request multiple extensions under this   subsection.          (b)  On or before the 60th day after the date a receiver is   appointed under this subchapter and every 60 days thereafter until   the expiration or termination of the receivership, the department   shall file with the appointing court an assessment of ability of the   single-source continuum contractor under receivership to ensure   the health, safety, and welfare of the children under the   conservatorship of the department in the contractor's care.          Sec. 264.1935.  BOND. Notwithstanding Section 64.023, Civil   Practice and Remedies Code, a receiver appointed under this   subchapter who is an employee of the department is not required to   execute a bond.          Sec. 264.194.  POWERS AND DUTIES OF RECEIVER. (a)  A   receiver appointed under this subchapter shall take all actions:                (1)  ordered by the appointing court; and                (2)  necessary to ensure the continued health, safety,   and welfare of children under the conservatorship of the department   in the care of the single-source continuum contractor under   receivership, which may include:                      (A)  taking actions reasonably necessary to   protect or conserve the assets or property of the contractor;                      (B)  using of the property of the contractor for   the provision of care and services to children under the   conservatorship of the department and their families in the   applicable catchment area;                      (C)  entering into contracts with or hiring agents   or employees to carry out the powers and duties of the receiver;                      (D)  directing, managing, hiring, or discharging   employees or agents of the contractor; and                      (E)  honoring leases, mortgages, and contractual   obligations of the contractor as those payments become due during   the period of the receivership.          (b)  Notwithstanding any other law and to ensure continuous   provision of necessary services to children under the   conservatorship of the department and their families, a contract   entered into by a receiver acting in accordance with the receiver's   duties under this section is not subject to advertising,   competitive bidding, or proposal evaluation requirements.          (c)  A receiver shall compensate an employee hired in   accordance with this section at a rate of compensation, including   benefits, approved by the appointing court.          (d)  A receiver may petition the appointing court for   temporary relief from obligations under a contract entered into by   the single-source continuum contractor under receivership if:                (1)  the rent, price, or rate of interest substantially   exceeds a reasonable rent, price, or rate of interest at the time   the contractor entered into the contract; or                (2)  any material provision of the contract is   unreasonable when compared to contracts negotiated under similar   conditions.          (e)  Any relief granted by a court under Subsection (d) is   limited to the life of the receivership, unless otherwise   determined by the court.          (f)  A receiver appointed under this subchapter shall   deposit all money related to the receivership in a separate account   and shall use that account for all disbursements related to the   receivership.  A payment to a receiver of a sum owed to the   single-source continuum contractor under receivership shall be   considered a payment to the contractor with respect to the   discharge of the obligation.          (g)  A receiver who is not a department employee shall   coordinate with the department to ensure:                (1)  the continued health, safety, and welfare of the   children in the department's conservatorship; and                (2)  compliance with all state and federal laws   relating to child welfare.          (h)  A receiver shall make a reasonable effort to facilitate   the continued operation of the community-based care program under   Subchapter B-1 in the applicable catchment area.          Sec. 264.1945.  COMPENSATION OF RECEIVER. The appointing   court shall order compensation for a receiver appointed under this   subchapter to be paid by the single-source continuum contractor   under receivership.  If the receiver is a department employee, the   department shall pay the receiver the compensation ordered under   this section and the single-source continuum contractor shall   reimburse the department.          Sec. 264.195.  LIABILITY OF RECEIVER. (a)  A person does not   have a cause of action against a receiver appointed under this   subchapter for an action taken within the scope of the receivership   unless the cause of action arises from a breach of fiduciary duty or   the gross negligence or intentional acts of the receiver.          (b)  Notwithstanding Subsection (a), this section does not   waive the sovereign immunity to suit and from liability of the   department or a department employee acting in an official capacity.          Sec. 264.1955.  OBLIGATIONS AND LIABILITY OF SINGLE-SOURCE   CONTINUUM CONTRACTOR; SALE OR LEASE OF PROPERTY BY SINGLE-SOURCE   CONTINUUM CONTRACTOR.  (a)  The appointment of a receiver under this   subchapter does not relieve the single-source continuum contractor   under receivership or any employee or agent of the contractor of:                (1)  civil or criminal liability arising out of an act   or omission that occurred before the appointment of the receiver;                (2)  an obligation for the payment of taxes,   operational or maintenance expenses, mortgages, leases,   contractual obligations, or liens; or                (3)  a duty imposed by law.          (b)  A single-source continuum contractor under receivership   may sell or lease a facility under receivership, subject to the   approval of the appointing court.          Sec. 264.196.  TERMINATION OF RECEIVERSHIP. (a) The   appointing court may terminate a receivership if:                (1)  the court determines that the receivership is no   longer necessary because the conditions that gave rise to the   receivership no longer exist;                (2)  the department has entered into a new contract   with a single-source continuum contractor and that contractor is   ready and able to assume the duties of the single-source continuum   contractor under receivership; or                (3)  the department is ready and able to assume the   duties of the single-source continuum contractor under   receivership.          (b)  Not later than the 60th day after the date a   receivership is terminated or expires under this subchapter, unless   such time is extended by order of the appointing court, the receiver   shall file with the clerk of the appointing court a full and final   and sworn account of:                (1)  all property received by the receiver;                (2)  all money collected and disbursed; and                (3)  the expenses of the receivership.          SECTION 3.  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, 2025.