Sec. 509.012.  REFUSAL OR SUSPENSION OF STATE AID.  (a)  The division shall take one or more of the following actions against a department that the division determines is not in substantial compliance with division standards or requirements adopted under Sections 509.003 through 509.006:
(1)  a reduction, refusal, or suspension of payment of state aid to the department;  or
(2)  an imposition of budget control over the department.
(b)  The board shall provide for notice and a hearing in cases in which the division proposes to take an action authorized by this section, other than a refusal by the division to provide discretionary grant funding or a reduction by the division of discretionary grant funding during a funding cycle.  The division shall define with specificity the conduct that constitutes substantial noncompliance with division standards and shall establish the procedures to be used in imposing or waiving a sanction authorized by this section, subject to approval of the definition and the procedures by adoption by the board.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 7.01, eff. Sept. 1, 1995.  Amended by Acts 1997, 75th Leg., ch. 165, Sec. 12.29(a), eff. Sept. 1, 1997.