HBA-NLM H.B. 3134 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3134 By: Chisum County Affairs 3/31/1999 Introduced BACKGROUND AND PURPOSE The 59th Legislature created the Childress County Hospital District in 1965. Since that time, the Act creating the district has not been amended and there is concern that the original Act no longer addresses the needs of the district. The purpose of this bill is to implement changes approved by the district's board of directors to the district's enabling legislation. H.B. 3134 authorizes the district to enter into arrangements with third parties for the administration or delivery of health care and to spend funds to recruit physicians as necessary. In addition, this bill requires the board to have the power to sell revenue bonds for certain purposes and to acquire sites to be used for hospitals. The bonds are required to be payable from and secured by a pledge of all or part of the revenues derived from the operation of the district's hospital system. This bill also sets forth procedures for the dissolution of the district. 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 3, Chapter 647, Acts of the 59th Legislature, Regular Session, 1965, to create Subsections (a)-(c) from existing text. SECTION 2. Amends Section 4, Chapter 647, Acts of the 59th Legislature, Regular Session, 1965, as follows: Sec. 4. (a) Deletes existing provisions relating to the requirement that the commissioners court appoint seven persons as directors and the established terms of the directors. Deletes the provision relating to the signing of a petition. (b) Requires that a regular election be held on the first Saturday in May, rather than April. Requires that the election be ordered at least 45 days, rather than 15 days, prior to the date on which it is to be held. Requires a candidate for director to file an application, rather than a petition, at least 31 days, rather than 25 days, prior to the date of the election. Requires notice of such an election to be published in the manner provided by this subsection not earlier than the 30th day or later than the 10th day, rather than at least five days, before the date of the election. Deletes existing language relating to vacancies in office, other than for the failure of an original director. (c) Provides that a director is entitled to actual expenses provided such expenses are reported in the district's minutes book or other district records and approved by the remainder of the board of directors (board). Provides that any person who is a resident of the district and a qualified voter, rather than property owning taxpaying voter, shall be eligible to hold office as director of the district. Prohibits an employee of the district from serving as a director. Requires the board to appoint a secretary who is not required to be a director. Requires each officer to serve for a term of one year. Provides that the president has the same right to vote as any other director. Deletes the requirement that the president be the chief executive officer of the district. (d) Created from existing text. SECTION 3. Amends Section 5, Chapter 647, Acts of the 59th Legislature, Regular Session, 1965, as follows: (a) Requires the board, with the assistance of the chief executive officer, to perform the procedures required by this section, including the management, control, and administration of the business, funds and resources of the district. Updates references to the administrator or manager to chief executive officer. Provides that the bond amount set by the board to be conditioned on the faithful performance of the chief executive officer's duties. Authorizes the board to pay the bond with district funds. Makes conforming and nonsubstantive changes. (b) Makes a conforming and nonsubstantive change. (c) Created from existing text. Authorizes the board to purchase or lease property for the district to use in the hospital system and to mortgage or pledge the property as security for the payment of the purchase price. Deletes existing text relating to the board's authority to enter into such contracts or agreements with the State of Texas or the Federal Government to establish or continue a retirement program. (d) Authorizes the board to contract to provide administrative or other personnel for the operation of the hospital facilities. Provides that a contract entered into under this subsection may not have a term longer than 25 years. (e) Authorizes the board to lease district hospital facilities to individuals, corporations, or other legal entities and to sell or otherwise dispose of the district's property. (f) Authorizes the board to provide retirement benefits for district employees by establishing or administering a retirement program or electing to participate in the Texas County and District Retirement System or any other statewide retirement system for which the district is eligible. (g) Authorizes the board to spend district funds to recruit physicians, nurses, and other trained medical personnel. Authorizes the board to contract with one or more full-time medical students or other students in a health occupation, each of whom is enrolled in and in good standing at an accredited medical school, college, or university, to pay the student's tuition or other expenses in consideration of the student's agreement to serve as an employee or independent contractor for the district. (h) Authorizes the board to institute a suit to enforce the payment of taxes or to foreclose liens to secure the payment of taxes due to the district. (i) Authorizes the board to provide or contract to provide educational programs or courses for employees and medical staff of the district. SECTION 4. Amends Section 6, Chapter 647, Acts of the 59th Legislature, Regular Session, 1965, as follows: Sec. 6. (a) Prohibits the fiscal year established by the board from being changed when revenue bonds are outstanding or more than one time in a 24-month period. Requires an annual audit. Requires a public hearing to be held by the board after notice has been given in the manner provided by Subchapter C (Notice of Meetings), Chapter 551, Government Code, rather than after notice of such hearing has been published one time at least ten days before the date set therefor. Deletes existing text requiring the fiscal year to commence on October 1 of each year and end on September 30 of the following year. Makes conforming and nonsubstantive changes. (b) Created from existing text. (c) Makes a conforming change. SECTION 5. Amends Section 7, Chapter 647, Acts of the 59th Legislature, Regular Session, 1965, as follows: Sec. 7. (a) Requires the board to have the power to sell revenue bonds for the purposes set forth by this section, and to acquire sites to be used for hospitals. Requires the bonds to be payable from and secured by a pledge of all or part of the revenues derived from the operation of the district's hospital system. Authorizes the bonds to be additionally secured by a mortgage or deed of trust on all or part of district property. Requires the revenue bonds to be issued as provided by Sections 264.042 (Form and Procedure), 264.043 (Terms), 264.046 (Junior Lien Bonds; Parity Bonds), 264.047 (Bond Proceeds; Investment of Funds), and 264.049 (Approval and Registration of Bonds), Health and Safety Code, for the issuance of revenue bonds by county hospital authorities. Makes nonsubstantive changes. (b) Authorizes the board to issue and sell general obligation bonds authorized by an election in the name and on the faith and credit of the district for certain purchases, improvements and acquisitions. (c) Prohibits the district from exceeding the limit approved by the voters at the election authorizing the levy of taxes, rather than seventy five cents on each one hundred dollar valuation of taxable property in any one year. Authorizes the district to issue general obligation bonds only if the bonds are authorized by a majority of the qualified voters of the district voting at an election called and held for that purpose. Authorizes the board to order a bond election. Requires the order calling the election to state the nature and date of the election, the hours during which the polls will be open, the location of the polling places, the amounts of the bonds to be authorized, and the maximum maturity of the bonds. Requires notice of a bond election to be given as provided for by Article 704, V.T.C.S. Requires the board to canvass the returns and declare the results of the election. Makes a nonsubstantive change. (d) Deletes existing text relating to the requirement of the district to make provisions for defraying the cost of all elections called and held under certain provisions. Makes nonsubstantive changes. (e) Provides that district bonds must mature not later than the 40th anniversary of the date of issuance and must bear a rate of interest that does not exceed the amount provided by Chapter 3, Acts of the 61st Legislature, Regular Session, 1969, Article 717k-2 (Public Securities; Issuance by Public Agencies; Interest Rate), V.T.C.S. (f) Provides that refunding bonds must be issued in the manner provided by Chapter 784, Acts of the 61st Legislature, Regular Session, 1969, Article 717k-3 (Refunding Bonds; Issuance by Public Agencies; Approval; Registration; etc.), V.T.C.S. Requires such refunding bonds to be issued and payments made in the manner specified by Chapter 503, Acts of the 54th Legislature, Regular Session, 1955, Article 717k (State, County, Municipality or Political Subdivision; Issuer of Bonds, Notes, etc.), V.T.C.S. SECTION 6. Amends Section 11, Chapter 647, Acts of the 59th Legislature, Regular Session, 1965, as follows: Sec. 11. Requires the district to comply with the competitive bidding requirements contained in Chapter 252 (Purchasing and Contracting Authority of Municipalities), Local Government Code, before the district enters into a contract that requires an expenditure of more than $15,000. Deletes existing text relating to authorized purchases involving the expenditure of more that $2,000. SECTION 7. Amends Section 12, Chapter 647, Acts of the 59th Legislature, Regular Session, 1965, to delete the term "within its boundaries" in regard to the naming of one or more banks by the district. SECTION 8. Amends Section 16, Chapter 647, Acts of the 59th Legislature, Regular Session, 1965, as follows: Sec. 16. (a) 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. Prohibits the tax rate for all purposes from exceeding 75 cents on each $100 valuation of all taxable property in the district. (b) Authorizes the taxes to be used to pay for indebtedness issued or assumed by the district 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. (c) Establishes 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 may contract for the assessment and collection of taxes as provided by the Tax Code. Deletes existing text relating to the required assessment and collection of district taxes. Deletes existing text relating to the board's authority to levy certain taxes. SECTION 9. Amends Section 18, Chapter 647, Acts of the 59th Legislature, Regular Session, 1965, to make conforming and nonsubstantive changes. SECTION 10. Amends Chapter 647, Acts of the 59th Legislature, Regular Session, 1965, by adding Section 20A, as follows: Sec. 20A. (a) Authorizes the board to borrow money for district obligations at the time of the loan. (b) Authorizes the board to pledge certain revenues, taxes, and bonds to secure a loan. (c) Provides that a loan for which taxes or bonds are pledged must mature not later than the first anniversary of the date on which the loan was made. Provides that a loan for which district revenues are pledged must mature not later than the fifth anniversary of the date on which the loan is made. SECTION 11. Amends Chapter 647, Acts of the 59th Legislature, Regular Session, 1965, by adding Section 25, as follows: Sec. 25. (a) Authorizes the district to be dissolved only if the dissolution is approved by a majority of the qualified voters of the district voting in an election called and held for that purpose. (b) Authorizes the board to order an election on the question of dissolving the district and disposing of the district's assets and obligations. Requires the board to order an election if the board receives a petition requesting an election that is signed by a number of residents of the district equal to at least 15 percent of the registered voters in the district. (c) Requires the election to be held not later than the 60th day after the date the election is ordered. Section 41.001(a), Election Code (relating to the required dates for elections to be held), does not apply to an election ordered under this section. Specifies the required content for the order calling the election. (d) Requires the board to give notice of the election by publishing the election order in a newspaper with general circulation in the district once a week for two consecutive weeks. Provides that the first publication must appear not less than 35 days before the date set for the election. Requires the ballot for the election to be printed to permit voting for or against the proposition: "The dissolution of the Childress County Hospital District." (e) Requires the board to find that the district is dissolved if a majority of the votes in the election favor dissolution. Requires the board to continue to administer the district, and prohibits another election on the question of dissolution from being held before the first anniversary of the most recent election to dissolve the district if a majority of the votes in the election do not favor dissolution. (f) Sets forth required procedures for the board if a majority of the votes in the election favor dissolution. (g) Provides that the county or agency assumes all debts and obligations of the district at the time of the transfer, if the district transfers the land, buildings, improvements, equipment, and other assets to a county or other governmental agency, and that the district is dissolved. (h) 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, after the board finds that the district is dissolved. (i) 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 obligations of the district are paid. (j) Authorizes a taxpayer to request that the taxpayer's share of surplus tax money be credited to the taxpayer's county taxes. Requires the board to direct the secretary to transmit the funds to the county tax assessor-collector if a taxpayer requests the credit. (k) Requires the board to file a written report with the commissioners court of Childress County setting forth a summary of the board's actions in dissolving the district, after the district has paid all its debts and has disposed of all its assets and funds as prescribed by this section. (l) Requires the Commissioners Court of Childress County to enter an order dissolving the district and releasing the board from any further duty or obligation, not later than the 10th day after the date it receives the report and determines that the requirements of this section have been fulfilled. (m) Prohibits the district from being dissolved unless the board provides for the sale or transfer of the district's assets and liabilities to another person or entity. Prohibits the dissolution of the district and the sale or transfer of the district's assets and liabilities from contravening a trust indenture or bond resolution relating to the outstanding bonds of the district. Provides that the dissolution and sale or transfer does not diminish or impair the rights of a holder of an outstanding bond, warrant, or other obligation of the district. (n) Provides that the sale or transfer of the district's assets and liabilities must satisfy the debt and bond obligations of the district in a manner that protects the interests of the residents of the district, including the residents' collective property rights in the district's assets. Provides that a grant from federal funds is an obligation to be repaid in satisfaction. Prohibits the district from transferring or disposing of the district's assets except for due compensation unless the transfer is made to a governmental agency that serves the district and the transferred assets are to be used for the benefit of the residents of the district. SECTION 12. Emergency clause. Effective date: upon passage.