SB 1342

relating to the regulation of psychiatric residential treatment
facilities and Medicaid reimbursement for the provision of
treatment by those facilities; requiring an occupational license.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 577.002(b), Health and Safety Code, is
(b)  This chapter does not apply to a psychiatric residential
[youth] treatment facility licensed [certified] under Chapter
SECTION 2.  The heading to Chapter 577A, Health and Safety
Code, is amended to read as follows:
CHAPTER 577A.  PSYCHIATRIC RESIDENTIAL [YOUTH] TREATMENT
SECTION 3.  Section 577A.001(3), Health and Safety Code, is
(3)  "Psychiatric residential [youth] treatment
facility" means a private facility that provides psychiatric health
treatments and services in a residential, nonhospital setting
exclusively to individuals who are 21 years of age or younger [and
is licensed as a general residential operation under Chapter 42,
Human Resources Code].  The term includes a facility that provides
SECTION 4.  The heading to Subchapter B, Chapter 577A,
Health and Safety Code, is amended to read as follows:
SUBCHAPTER B.  LICENSURE [CERTIFICATION], FEES, AND INSPECTIONS
SECTION 5.  Section 577A.051, Health and Safety Code, is
Sec. 577A.051.  LICENSE REQUIRED [VOLUNTARY QUALITY
STANDARDS CERTIFICATION].  A person may not operate a psychiatric
residential treatment facility without a license issued by the
commission [The commission shall, using existing resources to the
extent feasible, develop and implement a voluntary quality
standards certification process to certify a psychiatric
residential youth treatment facility that meets standards for
certification] under this chapter.
SECTION 6.  The heading to Section 577A.052, Health and
Safety Code, is amended to read as follows:
Sec. 577A.052.  LICENSE [CERTIFICATE] APPLICATION.
SECTION 7.  Section 577A.052(a), Health and Safety Code, is
(a)  To obtain a license [certificate] under this chapter, an
applicant must submit to the commission an application in the form
and manner prescribed by the commission.
SECTION 8.  Section 577A.053, Health and Safety Code, is
Sec. 577A.053.  FEES.  The executive commissioner by rule
shall establish a nonrefundable license [certificate] application
fee and a nonrefundable license [certificate] renewal fee in
amounts necessary to cover the costs of administering this chapter.
SECTION 9.  Section 577A.054, Health and Safety Code, is
Sec. 577A.054.  ISSUANCE AND RENEWAL OF LICENSE
[CERTIFICATE].  (a)  The commission shall issue a license
[certificate] to an applicant if on inspection and investigation
the commission determines the applicant meets the requirements of
this chapter and commission rules.  [The commission may not issue to
an applicant a certificate under this chapter unless the applicant
is licensed as a general residential operation under Chapter 42,
(b)  A license [certificate] issued under this chapter
expires on the second anniversary of the date the license
[certificate] is issued or renewed.
(c)  The commission shall renew a license [certificate] if:
(1)  the license [certificate] holder submits to the
commission a fee established by the executive commissioner under
(2)  on inspection and investigation the commission
determines the license [certificate] holder meets the requirements
of this chapter and commission rules.
SECTION 10.  Section 577A.055, Health and Safety Code, is
Sec. 577A.055.  INSPECTIONS.  In addition to the inspections
required under Section 577A.054, the commission shall conduct an
inspection not later than the first anniversary of the date a
license [certificate] is issued or renewed to ensure the license
[certificate] holder remains in compliance with the requirements of
this chapter and commission rules.
SECTION 11.  The heading to Subchapter C, Chapter 577A,
Health and Safety Code, is amended to read as follows:
SUBCHAPTER C.  REGULATION OF LICENSED [CERTIFIED] PSYCHIATRIC
RESIDENTIAL [YOUTH] TREATMENT FACILITIES
SECTION 12.  Section 577A.101, Health and Safety Code, is
Sec. 577A.101.  MINIMUM STANDARDS.  The executive
commissioner by rule shall establish minimum standards for the
licensing [certification] of psychiatric residential [youth]
treatment facilities under this chapter.  The minimum standards
(1)  obtain accreditation by The Joint Commission, the
Commission on Accreditation of Rehabilitation Facilities, the
Council on Accreditation, or another accrediting organization
approved by the commission; [and]
(2)  provide and prescribe guidelines for the provision
of the following activities, treatments, and services:
(A)  development and implementation of individual
plans of care, including the provision of services provided by a
licensed psychiatrist or physician to develop individual plans of
(C)  family engagement activities;
(D)  consultation services with qualified
professionals, including case managers, primary care
professionals, community-based mental health providers, school
staff, and other support planners;
(E)  24-hour nursing services; and
(F)  direct care and supervision services,
supportive services for daily living and safety, and positive
(3)  satisfy federal requirements for a psychiatric
residential treatment facility under 42 C.F.R. Section 441.151 et
seq. and 42 C.F.R. Section 483.350 et seq.; and
(4)  satisfy all requirements to be licensed as a
general residential operation under Chapter 42, Human Resources
Code, and comply with rules adopted under that chapter.
SECTION 13.  Section 577A.102, Health and Safety Code, is
Sec. 577A.102.  ADMISSION CRITERIA.  A facility licensed
[certified] under this chapter may not admit or provide treatments
or services to an individual unless the individual:
(1)  is 21 years of age or younger;
(2)  has been diagnosed with a severe emotional
disturbance by a licensed mental health professional;
(3)  requires residential psychiatric treatment under
the direction of a licensed physician to improve the individual's
(4)  was referred for treatments or services in a
psychiatric residential [youth] treatment facility by a licensed
SECTION 14.  Section 577A.151, Health and Safety Code, is
Sec. 577A.151.  PENALTIES.  A facility licensed [certified]
under this chapter is subject to a civil penalty under Section
571.023 or an administrative penalty under Section 571.025, as
applicable, for a violation of this chapter or a rule adopted under
SECTION 15.  Section 32.024, Human Resources Code, is
amended by adding Subsection (ss) to read as follows:
(ss)  The commission in the commission's rules and standards
governing the scope of services provided under the medical
assistance program shall include psychiatric treatment and related
services provided by a psychiatric residential treatment facility
licensed under Chapter 577A, Health and Safety Code, to the extent
SECTION 16.  Section 42.041(b), Human Resources Code, is
(b)  This section does not apply to:
(1)  a state-operated facility;
(3)  a facility that is operated in connection with a
shopping center, business, religious organization, or
establishment where children are cared for during short periods
while parents or persons responsible for the children are attending
religious services, shopping, or engaging in other activities,
including retreats or classes for religious instruction, on or near
the premises, that does not advertise as a child-care facility or
day-care center, and that informs parents that it is not licensed by
(4)  a school or class for religious instruction that
does not last longer than two weeks and is conducted by a religious
organization during the summer months;
(5)  a youth camp licensed by the Department of State
(6)  a facility licensed, operated, certified, or
registered by another state agency;
(7)  an educational facility that is accredited by the
Texas Education Agency, the Southern Association of Colleges and
Schools, or an accreditation body that is a member of the Texas
Private School Accreditation Commission and that operates
primarily for educational purposes for prekindergarten and above, a
before-school or after-school program operated directly by an
accredited educational facility, or a before-school or
after-school program operated by another entity under contract with
the educational facility, if the Texas Education Agency, the
Southern Association of Colleges and Schools, or the other
accreditation body, as applicable, has approved the curriculum
content of the before-school or after-school program operated under
(8)  an educational facility that operates solely for
educational purposes for prekindergarten through at least grade
two, that does not provide custodial care for more than one hour
during the hours before or after the customary school day, and that
is a member of an organization that promulgates, publishes, and
requires compliance with health, safety, fire, and sanitation
standards equal to standards required by state, municipal, and
(9)  a kindergarten or preschool educational program
that is operated as part of a public school or a private school
accredited by the Texas Education Agency, that offers educational
programs through grade six, and that does not provide custodial
care during the hours before or after the customary school day;
(10)  a family home, whether registered or listed;
(11)  an educational facility that is integral to and
inseparable from its sponsoring religious organization or an
educational facility both of which do not provide custodial care
for more than two hours maximum per day, and that offers an
educational program in one or more of the
following:  prekindergarten through at least grade three,
elementary grades, or secondary grades;
(12)  an emergency shelter facility, other than a
facility that would otherwise require a license as a child-care
facility under this section, that provides shelter or care to a
minor and the minor's child or children, if any, under Section
32.201, Family Code, if the facility:
(A)  is currently under a contract with a state or
(B)  meets the requirements listed under Section
(13)  a juvenile detention facility certified under
Section 51.12, Family Code, a juvenile correctional facility
certified under Section 51.125, Family Code, a juvenile facility
providing services solely for the Texas Juvenile Justice
Department, or any other correctional facility for children
operated or regulated by another state agency or by a political
(14)  an elementary-age (ages 5-13) recreation program
operated by a municipality provided the governing body of the
municipality annually adopts standards of care by ordinance after a
public hearing for such programs, that such standards are provided
to the parents of each program participant, and that the ordinances
shall include, at a minimum, staffing ratios, minimum staff
qualifications, minimum facility, health, and safety standards,
and mechanisms for monitoring and enforcing the adopted local
standards; and further provided that parents be informed that the
program is not licensed by the state and the program may not be
advertised as a child-care facility;
(15)  an annual youth camp held in a municipality with a
population of more than 1.5 million that operates for not more than
three months and that has been operated for at least 10 years by a
nonprofit organization that provides care for the homeless;
(16)  a food distribution program that:
(A)  serves an evening meal to children two years
(B)  is operated by a nonprofit food bank in a
nonprofit, religious, or educational facility for not more than two
hours a day on regular business days;
(17)  a child-care facility that operates for less than
three consecutive weeks and less than 40 days in a period of 12
(A)  in which a child receives direct instruction
in a single skill, talent, ability, expertise, or proficiency;
(B)  that does not provide services or offerings
that are not directly related to the single talent, ability,
(C)  that does not advertise or otherwise
represent that the program is a child-care facility, day-care
center, or licensed before-school or after-school program or that
the program offers child-care services;
(D)  that informs the parent or guardian:
(i)  that the program is not licensed by the
(ii)  about the physical risks a child may
face while participating in the program; and
(E)  that conducts background checks for all
program employees and volunteers who work with children in the
program using information that is obtained from the Department of
(19)  an elementary-age (ages 5-13) recreation program
(A)  adopts standards of care, including
standards relating to staff ratios, staff training, health, and
(B)  provides a mechanism for monitoring and
enforcing the standards and receiving complaints from parents of
(C)  does not advertise as or otherwise represent
the program as a child-care facility, day-care center, or licensed
before-school or after-school program or that the program offers
(D)  informs parents that the program is not
(E)  is organized as a nonprofit organization or
is located on the premises of a participant's residence;
(F)  does not accept any remuneration other than a
(G)  does not solicit donations as compensation or
payment for any good or service provided as part of the program; and
(H)  conducts background checks for all program
employees and volunteers who work with children in the program
using information that is obtained from the Department of Public
(20)  a living arrangement in a caretaker's home
involving one or more children or a sibling group, excluding
children who are related to the caretaker, in which the caretaker:
(A)  had a prior relationship with the child or
sibling group or other family members of the child or sibling group;
(B)  does not care for more than one unrelated
(C)  does not receive compensation or solicit
donations for the care of the child or sibling group; and
(D)  has a written agreement with the parent to
care for the child or sibling group;
(21)  a living arrangement in a caretaker's home
involving one or more children or a sibling group, excluding
children who are related to the caretaker, in which:
(A)  the department is the managing conservator of
(B)  the department placed the child or sibling
group in the caretaker's home; and
(C)  the caretaker had a long-standing and
significant relationship with the child or sibling group, or the
family of the child or sibling group, before the child or sibling
group was placed with the caretaker;
(22)  a living arrangement in a caretaker's home
involving one or more children or a sibling group, excluding
children who are related to the caretaker, in which the child is in
the United States on a time-limited visa under the sponsorship of
the caretaker or of a sponsoring organization;
(23)  a facility operated by a nonprofit organization
(A)  does not otherwise operate as a child-care
facility that is required to be licensed under this section;
(B)  provides emergency shelter and care for not
more than 15 days to children 13 years of age or older but younger
than 18 years of age who are victims of human trafficking alleged
under Section 20A.02, Penal Code;
(C)  is located in a municipality with a
population of at least 600,000 that is in a county on an
(D)  meets one of the following criteria:
(i)  is licensed by, or operates under an
agreement with, a state or federal agency to provide shelter and
(ii)  meets the eligibility requirements for
a contract under Section 51.005(b)(3);
(24)  a facility that provides respite care exclusively
for a local mental health authority under a contract with the local
(25)  a living arrangement in a caretaker's home
involving one or more children or a sibling group in which the
(A)  has a written authorization agreement under
Chapter 34, Family Code, with the parent of each child or sibling
group to care for each child or sibling group;
(B)  does not care for more than six children,
excluding children who are related to the caretaker; and
(C)  does not receive compensation for caring for
(26)  a psychiatric residential treatment facility
licensed under Chapter 577A, Health and Safety Code.
SECTION 17.  Section 577A.003, Health and Safety Code, is
SECTION 18.  As soon as practicable after the effective date
of this Act, the executive commissioner of the Health and Human
Services Commission shall adopt rules as necessary to implement the
changes in law made by this Act.
SECTION 19.  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 20.  Notwithstanding the changes in law made by this
Act to Chapter 577A, Health and Safety Code, a psychiatric
residential treatment facility that is licensed under Chapter 42,
Human Resources Code, on the effective date of this Act is not
required to be licensed under Chapter 577A, Health and Safety Code,
until the expiration of the facility's license under Chapter 42,
SECTION 21.  This Act takes effect September 1, 2025.