A pilot program requiring licensing of boarding homes in cities that seek enhanced regulation of the facilities is headed to the governor after legislative passage Monday of a bill aimed at strengthening state oversight of board-and-care facilities.

Local governments would have to pass an ordinance requiring all homes housing three or more unrelated people to be licensed. Only one Texas city – El Paso – has such an ordinance.

But officials in Dallas have been discussing ways to tighten oversight of the homes for months, and officials in San Antonio say they expect to begin preparing an ordinance this week so they can begin enforcing the new state law.

The state Department of Aging and Disability Services, or DADS, has been criticized for not aggressively trying to identify or pursue regulation violations against board-and-care homes. Supporters of the new legislation say they hope it will push the agency to do more to address a growing statewide problem.

The original bill, sponsored by Rep. Jose Menendez, D-San Antonio, had called for DADS to license every board-and-care home in Texas that housed three or more unrelated people and provided any food, assistance with daily living activities or transportation.

But Senate leaders wouldn't allow the bill to come to a vote without being sharply cut back because DADS officials estimated that statewide licensure would cost nearly $50 million in the first two years of implementation.

"We can come back two years from now and say these cities passed these ordinances, and now we need X number of dollars. The hard part was getting the enacting legislation," Mr. Menendez said. "We've given cities and counties the ability to put these folks out of business if they don't have a license."

The law finally approved Monday evening will require DADS officials to set up pilot licensure and enforcement programs in any cities or counties that enact ordinances. But for any cities that don't have city laws requiring licensure, funding for expansion of licensing pilot programs would have to come from DADS' existing operating budget.

DADS will have to report to the Legislature by January 2009 on the results of the programs, detailing the number of homes licensed or shut down and whether the program should be expanded. If no pilot programs are set up by then, the agency will have to submit recommendations on how best to regulate the facilities statewide.

The law gives counties and cities more flexibility and speed to pursue homes that violate the law. If the attorney general's office doesn't act on a case referred for litigation within 30 days, DADS regulators would be required to send it to county or district attorney's offices for legal action.

Licensed homes would also be barred from housing registered sex offenders.

Violators of any provision of the law could be fined $100 to $1,000 per violation.

Officials in Dallas have been meeting for months to study ways to better regulate the more than 300 unlicensed homes believed to be operating citywide. A City Hall task force was scheduled to report recommendations earlier this month to the Dallas City Council.

The presentation is now expected to be made next month, outlining plans for a team of code officers, fire inspectors and city prosecutors.