SB2034

The law adds a specific receivership process for an entity contracting with DFPS or the Health and Human Services Commission under the community-based-care law, including its parts or divisions. DFPS may petition on any of six grounds: continued unsatisfactory performance after corrective measures; notice at least 60 days before planned closure without arrangements for uninterrupted services; imminent danger to children in DFPS conservatorship; inadequate information about a child in its care; failure to comply with a court order or a resulting sanction against DFPS; or inability, or likely inability, to meet service-related financial obligations, including to employees, contractors or foster parents. The court must also find that the continuing condition jeopardizes a child’s health, safety or welfare. Final law, 264.191–.192; Community-based-care definitions.

The court generally must give the petition priority and hold an evidentiary hearing within five days after filing. DFPS must make reasonable efforts to notify the contractor. The court may grant the petition ex parte—without the other side participating—but the act still states the hearing and required-findings duties. An insufficient-funds check or delinquent salaries, utilities or essential-service bills counts as initial evidence of financial inability, not an automatic finding that every requirement is met. The court must select a qualified person from a DFPS list. A DFPS employee may serve despite the usual receiver-qualification rule, and only that employee category is expressly exempted from the receiver bond. Final law, 264.192–.1935; General receiver qualifications; General bond rule.

A receivership expires on day 90 unless DFPS timely files for a 60-day extension; it may request multiple extensions. DFPS must file its assessment of the contractor’s ability to protect children by day 60 and every 60 days afterward while the receivership continues. Thus 90 days is not an absolute maximum. Final law, 264.193.

The receiver must carry out court orders and actions needed to protect children. Powers can include conserving assets, using property to provide services, hiring or dismissing workers and agents, making contracts and honoring obligations as they fall due. Contracts made within these duties to maintain necessary services are exempt from advertising, competitive bidding and proposal evaluation. The court approves compensation rates for hired employees. The receiver can ask the court for relief from substantially excessive rent, prices or interest, or materially unreasonable contract terms; relief is limited to the receivership unless the court decides otherwise. The receiver cannot simply erase every debt. Final law, 264.194.

Receivership money must be held in a separate account, and payment to the receiver discharges the corresponding debt to the contractor. An outside receiver must coordinate with DFPS on child safety and compliance with state and federal child-welfare law; every receiver must reasonably try to continue the community-based-care program. The court orders the contractor to pay the receiver. For a DFPS employee, DFPS pays first and the contractor must reimburse it. Final law, 264.194–.1945.

The law limits lawsuits over actions within the receivership’s scope, but expressly leaves exceptions for breach of fiduciary duty, gross negligence and intentional acts. It does not waive the state’s or an officially acting DFPS employee’s sovereign immunity. Appointing a receiver does not excuse the contractor or its workers from earlier civil or criminal liability, existing debts or legal duties. A contractor may sell or lease a facility only with the appointing court’s approval. Final law, 264.195–.1955.

The court may end the receivership when the original problems no longer exist, when a newly contracted provider is ready and able to take over, or when DFPS is ready and able to take over. Within 60 days after expiration or termination, unless the court extends the time, the receiver must file a sworn final account of property, money received and spent, and expenses. Final law, 264.196.

All five operative versions are identical and the amendment index lists none. The act adds this specific process alongside existing receivership authority rather than creating receivership from scratch. Both chambers supplied the votes needed for immediate effect: Senate 31–0, House 148–0 with one present but not voting. The fallback September 1 date therefore did not control. Introduced; Senate committee; Senate-passed; House committee; Final law; Amendment index; Version index; Existing receivership grounds.

Compare the published text versions in the official text index. A change is not attributed to a specific amendment here without a verified record.

Children, foster parents and service providers may gain a way to maintain services while a contractor’s serious problems are addressed. The tradeoffs include rapid intervention, loss of contractor control, receiver compensation costs and limits on some lawsuits and competitive procurement. Court findings, recurring assessments and final accounting provide checks, but the act does not guarantee a successful rescue or repayment by an insolvent contractor. No actual receivership or child outcome is verified here. Final law.

The March 24 fiscal note anticipates no significant state fiscal impact, assuming the courts, HHSC and DFPS can absorb costs within existing appropriations; it anticipates no local-government fiscal impact. This does not mean receivers serve for free or that the affected contractor has no costs: the act expressly allocates compensation to the contractor, with reimbursement to DFPS when a department employee serves. It does not supply a new appropriation or quantify private losses. Fiscal note; Final law, 264.1945.