Sec. 242.065. CIVIL PENALTY. (a) A person who violates or causes a violation of this chapter or a rule adopted under this chapter is liable for a civil penalty of not less than $1,000 or more than $20,000 for each act of violation if the department determines the violation threatens the health and safety of a resident.
(b) In determining the amount of a penalty to be awarded under this section, the trier of fact shall consider:
(1) the seriousness of the violation;
(2) the history of violations committed by the person or the person's affiliate, employee, or controlling person;
(3) the amount necessary to deter future violations;
(4) the efforts made to correct the violation;
(5) any misrepresentation made to the department or to another person regarding:
(A) the quality of services rendered or to be rendered to residents;
(B) the compliance history of the institution or any institutions owned or controlled by an owner or controlling person of the institution; or
(C) the identity of an owner or controlling person of the institution;
(6) the culpability of the individual who committed the violation; and
(7) any other matter that should, as a matter of justice or equity, be considered.
(c) Each day of a continuing violation constitutes a separate ground for recovery.
(d) Any party to a suit under this section may request a jury.
(e) If a person who is liable under this section fails to pay any amount the person is obligated to pay under this section, the state may seek satisfaction from any owner, other controlling person, or affiliate of the person found liable. The owner, other controlling person, or affiliate may be found liable in the same suit or in another suit on a showing by the state that the amount to be paid has not been paid or otherwise legally discharged. The executive commissioner by rule may establish a method for satisfying an obligation imposed under this section from an insurance policy, letter of credit, or other contingency fund.
(f) On request by the department, the attorney general may institute an action in a district court to collect a civil penalty under this section.
(g) A payment made to satisfy an obligation under this section is not an allowable cost for reimbursement under the state Medicaid program.
(h) A civil penalty awarded under this section constitutes a fine, penalty, or forfeiture payable to and for the benefit of a government unit and is not compensation for actual pecuniary loss.
(i) In this section, "affiliate" means:
(1) with respect to a partnership other than a limited partnership, each partner of the partnership;
(2) with respect to a corporation:
(A) an officer;
(B) a director;
(C) a stockholder who owns, holds, or has the power to vote at least 10 percent of any class of securities issued by the corporation, regardless of whether the power is of record or beneficial; and
(D) a controlling individual;
(3) with respect to an individual:
(A) each partnership and each partner in the partnership in which the individual or any other affiliate of the individual is a partner; and
(B) each corporation or other business entity in which the individual or another affiliate of the individual is:
(i) an officer;
(ii) a director;
(iii) a stockholder who owns, holds, or has the power to vote at least 10 percent of any class of securities issued by the corporation, regardless of whether the power is of record or beneficial; and
(iv) a controlling individual;
(4) with respect to a limited partnership:
(A) a general partner; and
(B) a limited partner who is a controlling individual;
(5) with respect to a limited liability company:
(A) an owner who is a manager as described by the Texas Limited Liability Company Law, as described by Section 1.008(e), Business Organizations Code; and
(B) each owner who is a controlling individual; and
(6) with respect to any other business entity, a controlling individual.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1997, 75th Leg., ch. 1159, Sec. 1.15, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 13, Sec. 1, eff. May 3, 1999; Acts 2003, 78th Leg., ch. 198, Sec. 2.59, eff. Sept. 1, 2003.
Amended by:
Acts 2015, 84th Leg., R.S., Ch. 1 (S.B. 219), Sec. 3.0616, eff. April 2, 2015.
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