HBA-NLM H.B. 2416 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2416 By: Keffer County Affairs 3/22/1999 Introduced BACKGROUND AND PURPOSE The Act creating the North Runnels County Hospital District was passed by the 61st Legislature and has not been amended since it was originally passed. There is concern that the original Act may no longer accurately reflects the needs of the District. The district's board of directors has approved changes in the district's enabling legislation which will allow the district and its hospital provide new services to the residents of the district and the surrounding areas. H.B. 2416 provides for the continued operation and growth of the district and hospital. This bill sets forth the duties of the district and the procedures it must follow. It also authorizes the district to perform certain activities, including the issuance of general obligation bonds. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 2, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, as follows: Sec. 2. Requires the North Runnels County Hospital District (district), created in the existing provisions of this section, to provide for the administration, maintenance, operation, and financing of a hospital system within its boundaries, including specified health care entities, and authorizes the district to provide any services necessary for hospital agencies, extended care facilities, and assisted living or personal care facilities. SECTION 2. Amends Section 4, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, to specify that the district's board of directors (board) consists of seven directors and requires a regular election for directors to be held on the first Sunday in May of each year. Requires notice of the election to be published not earlier than the 30th day or later than the10th day, rather than at least 30 days, prior to the date of the election. Requires the directors to order the regular election for directors not later than the 45th day before the election day. Provides that the election order must state the time, place, and purpose of the election. Requires a person to file an application , rather than a petition, with the secretary of the board of directors if the person desires to have his name printed on the ballot as a candidate for director. Authorizes, rather than requires, the directors to require all officers and employees charged with handling funds to furnish good bonds as described. Authorizes the board to pay for the bond with district funds. Requires a secretary, who need not be a director, to be appointed, rather than elected. Deletes the requirement for the commissioners court of the county to convene and appoint members. Deletes the provision that any four members of the board of directors constitutes a quorum and that a concurrence of the four members is sufficient in all matters pertaining to the business of the district. SECTION 3. Amends Section 5, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, as follows: Sec. 5. (a) Requires the board of directors to manage, control, and administer the hospital and the business, funds, and resources of the district be invested in any funds or securities as described. (b) Authorizes the board to require the administrator to execute a performance bond before assuming the duties of the office and removes the reference to a manager. Authorizes the board to pay for the bond with district funds. (c) Creates this subdivision form existing text and makes a nonsubstantive change. (d) Creates this subdivision form existing text. (e) Authorizes the board to purchase or lease property, facilities, or equipment for the district to use in the hospital system, and to mortgage or pledge the property, facilities, or equipment as security for the payment of the purchase price. (f) Authorizes the board to enter into one or more contracts to provide administrative and other personnel for the operation of the hospital facilities. Specifies the contents for the term of the contract. Authorizes the board to transfer district hospital facilities, and to sell or otherwise dispose of district property. (g) Authorizes the board to provide retirement benefits for employees of the district by establishing and administering a retirement program or electing to participate in the Texas County and District Retirement System or other statewide retirement system in which the district is eligible to participate. (h) Authorizes the board to spend district funds to recruit certain personnel and to contract with certain students to pay the students' tuition or other expenses. (i) Authorizes the board to institute a suit to enforce the payment of taxes and to foreclose liens to secure the payment of taxes due to the district. (j) Authorizes the hospital district to provide services outside the boundaries of the district. SECTION 4. Amends Section 6, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, to require that the district be operated on the basis of a fiscal year established by the board. Provides that the fiscal year may not be changed more than one time in a 24-month period or when revenue bonds are outstanding. Requires the board to cause an annual, rather than independent, audit to be made as specified. Requires a public hearing on the annual budget to be held by the board after notice of such hearing has been published in accordance with the open meetings law, Chapter 551 (Open Meetings), Government Code, rather than published one time at least 10 days before the date set therefor and in a newspaper or newspapers which individually or collectively provide general circulation in the hospital district. Provides that any resident, rather than any property taxpayer, of the district shall have the right to be present and participate in said hearings. Makes conforming and nonsubstantive changes. SECTION 5. Amends Section 9, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, as follows: Sec. 9. (a) Authorizes the board of directors to issue general obligation bonds, rather than requires the board of directors to have the power and authority to issue and sell its bonds, in the name and upon the faith and credit of such hospital district to: _purchase, construct, acquire, repair, or renovate buildings or improvements; _equip buildings or improvements for hospital purposes; or _acquire and operate a mobile emergency medical or air ambulance service. (b) Prohibits a tax levied by the board from exceeding the rate of tax approved by the voters at the election authorizing the levy of taxes. Authorizes the district to issue general obligation bonds only if the bonds are authorized by a majority of the voters at an election called and held for the purpose. Authorizes the board to order a bond election. Requires the order calling the election to state specified contents and procedures. Requires the board to canvass the returns and declare the results of the election. Requires the election to be conducted in accordance with the general laws of Texas pertaining to general elections, except as modified by the provisions of this Act. Deletes existing language relating to the issuance of and the election on bonds. (c) Authorizes the district to issue revenue bonds for a purpose described by Subsection (a) of this section. Requires the bonds to be payable from and secured by a pledge, certain revenues, or by a mortgage or deed of trust on all or part of the district's property. Requires the revenue bonds to be issued in the manner provided by specified provisions of the Health and Safety Code, relating to the issuance of revenue bonds by county hospital authorities. (d) Created from existing text previously contained in existing Subsection (c). Deletes existing text authorizing an election to be held on a proposition to empower the board to issue bonds. (e) Provide that bonds of the district shall bear interest not to exceed the amount provided by Chapter 3, Acts of the 61st Legislature, Regular Session, 1969, Article 717k-2 (Public Securities; issuance of public agencies; interest rate) , V.T.C.S., rather than six-and-one-half percent a year. SECTION 6. Amends Section 10, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, to require bonds described by this section to be issued in the manner and in accordance with the procedures and requirements specified for the issuance of revenue bonds by county hospital authorities in specified provisions of the Health and Safety Code. SECTION 7. Amends Section 11, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, to change the word "dispensaries" to "pharmacies." SECTION 8. Amends Section 12, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, to require the district to comply with the bidding requirements prescribed by Chapter 271 (Purchasing and Contracting Authority of Municipalities), Local Government Code. Requires the provisions of Chapter 2253 (Public Work Performance and Payment Bonds), Government Code, rather than Article 5160 (Contractors Performance and Payment Bonds), V.T.C.S., to apply to contruction contracts let by the district. SECTION 9. Amends Section 13, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, to delete the requirement that the bank or banks named by the board to serve as depository for the funds of the district lie within the district's boundaries. SECTION 10. Amends Section 14, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, to make a nonsubstantive change. SECTION 11. Amends Section 16, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, to provide that the provisions relating to the requirement of the district to make deposits in the registry of the trial court must comply with Section 21.021 (Possession Pending Litigation), Property Code, rather than paragraph 2 of Article 3268, V.T.C.S., and makes a nonsubstantive change. SECTION 12. Amends Section 17, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, as follows: Sec. 17. (a) Requires that all taxes of the district be assessed and collected as provided in Subsection (b), and deletes the provisions providing for the election to have taxes assessed and collected by the district's own tax assessor. (b) Authorizes the board to annually impose property taxes in an amount not to exceed the limit approved by the voters at the election authorizing the levy of taxes. Establishes the tax rate and the authority to use the tax to pay for indebtedness and for the maintenance and operating expenses of the district. Prohibits the district from imposing taxes to pay the principal of or interest on revenue bonds. Provides that the Tax Code governs the appraisal, assessment, and collection of district taxes. Authorizes the board to provide for the appointment of a tax assessor-collector for the district or to contract for the assessment and collection of taxes as provided by the Tax Code. Deletes existing text relating to the requirement for district taxes to be assessed and collected on county tax values, the duties of the tax assessor-collector, and other provisions relating to the use of district taxes. SECTION 13. Amends Section 19, Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, to make conforming and nonsubstantive changes. SECTION 14. Amends Chapter 206, Acts of the 61st Legislature, Regular Session, 1969, by adding Sections 20a and 20b, as follows: Sec. 20a. Authorizes the board to borrow money at a rate not to exceed the maximum annual percentage rate allowed by law for district obligations at the time of the loan. Provides certain actions the board may take to secure a loan. Specifies provisions relating to the maturity of a loan. Sec. 20b. Authorizes the district to be dissolved only if the dissolution is approved by the majority of the qualified voters of the district voting in an election called and held for that purpose. Sets forth procedures for the board to order an election and the content of the order calling the election. Requires the board to give notice of the election in the manner described in this section. Requires the board to find that the district is dissolved, if the majority of the votes in the election favor dissolution. Requires the board to continue to administer the district, and provides that another election on the question of dissolution may not be held before the first anniversary or the most recent election to dissolve the district, if the majority of the votes in the election do not favor dissolution. Sets forth certain procedures required of the board if the majority of the votes in the election favor dissolution. Requires the board to determine the debt owed by the district and to impose on the property included in the district's tax rolls a tax that is in proportion of the debt to the property value. Requires the board to order the secretary to return the pro rata share of all unused tax money to each district taxpayer when all outstanding debts and collections of the district are paid and requires the board to file a written report with the commissioners court of Runnels County after the district has paid all its debts and has disposed of all assets and funds. Sets forth procedures and the requirements for the sale or transfer of the district's assets and liabilities. SECTION 15. Emergency clause. Effective date: upon passage.