HBA-DMD H.B. 3232 76(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 3232 By: Keffer County Affairs 9/15/1999 Enrolled BACKGROUND AND PURPOSE In 1989, the 71st Legislature created the Eastland Memorial Hospital District (district) and that Act has not been amended since its adoption. Prior to the 76th Legislature, some aspects of the enabling legislation did not comply with the tax code and Texas Election Code. H.B. 3232 authorizes the district to enter into a contract to provide administrative and other personnel for a term of 25 years or less and to institute a suit to enforce the payment of taxes and to foreclose liens to secure the payment of taxes due to the district. This bill authorizes the board of directors to obtain a loan to meet the lawful obligations of the district in times of an emergency or nonemergency. This bill also provides for the transfer of district assets if the voters in the district vote to dissolve the hospital 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 4.04, Chapter 221, Acts of the 71st Legislature, Regular Session, 1989, to prohibit the required notice of an election of directors of the board (directors) from being published earlier than 30 days or later than 10 days before the election, rather than requiring notice to be published at least 35 days before the election. Makes conforming changes. SECTION 2. Amends Section 4.05, Chapter 221, Acts of the 71st Legislature, Regular Session, 1989, to provide that a person who wishes to have his name printed on the ballot as a candidate must file an application with the secretary of the board of directors no later than 31 days before the election. Deletes language relating to a petition that must be signed by 200 registered voters of the district asking that the person's name be placed on the ballot and the provision that the determination of whether the person's name will be placed on the ballot is required to be based on the most recent official lists of registered voters. Makes conforming changes. SECTION 3. Amends Section 4.12(d), Chapter 221, Acts of the 71st Legislature, Regular Session, 1989, to authorize the board of directors (board) to require the hospital administrator, rather than requiring the administrator, to execute a bond payable to the hospital district in the amount of not less than $5,000, before the administrator may assume the administrator's duties. Makes conforming and nonsubstantive changes. SECTION 4. Amends Section 5.02, Chapter 221, Acts of the 71st Legislature, Regular Session, 1989, to include in a list of the Eastland Memorial Hospital District's (district) duties upon being created, the authorization of the district to enter into a contract for a term of 25 years or less in order to provide administrative and other personnel for the operation of hospital facilities, and to institute a suit to enforce the payment of taxes and to foreclose liens to secure the payment of taxes due to the district. SECTION 5. Amends Section 5.06(c), Chapter 221, Acts of the 71st Legislature, Regular Session, 1989, to specify that the board is authorized to lease hospital facilities on behalf of the district to individuals, corporations, or other legal entities. SECTION 6. Amends Section 5.07(a), Chapter 221, Acts of the 71st Legislature, Regular Session, 1989, to authorize the board to enter into construction contracts only after competitive bidding as provided by Subchapter B (Competitive Bidding on Certain Public Works Contracts), Chapter 271 (Purchasing and Contracting Authority of Municipalities), Local Government Code, for spending more than $15,000, rather than $10,000. SECTION 7. Amends Section 5.11(b), Chapter 221, Acts of the 71st Legislature, Regular Session, 1989, to require the district, no later than the beginning of each operating year, to adopt an application procedure in order to determine eligibility for assistance, as provided by Section 61.053 (Application Procedure), Health and Safety Code, rather than Section 10.03, Article 4438f, V.T.C.S. (Indigent Health Care and Treatment Act), which has been repealed. SECTION 8. Amends Section 5.12(a), Chapter 221, Acts of the 71st Legislature, Regular Session, 1989, to make a conforming change. SECTION 9. Amends Chapter 221, Acts of the 71st Legislature, Regular Session, 1989, by adding Section 5.16, as follows: Sec. 5.16. EMERGENCY LOANS. (a) Authorizes the board, if the board determines that funds are not available to meet the lawful obligations of the district and that an emergency exists, to borrow money at a rate of interest not to exceed the maximum annual percentage rate allowed by law for district obligations at the time of the loan. (b) Sets forth revenues and bonds which the board is authorized to pledge in order to secure a loan. (c) Requires a loan for which tax revenue or bonds are pledged to mature no later than the first anniversary of the date on which the loan was made. Requires a loan for which other district revenues are pledged to mature no later than the fifth anniversary of the date on which the loan was made. (d) Prohibits the board from using loan proceeds obtained under this section for any purpose other than the purpose for which the board determined an emergency existed. Prohibits the board, if tax revenue or bonds are pledged to pay the loan, from using the loan proceeds for a purpose other than the purpose for which the taxes were levied or the bonds were authorized. SECTION 10. Amends Chapter 221, Acts of the 71st Legislature, Regular Session, 1989, by adding Section 5.17, as follows: Sec. 5.17. NONEMERGENCY LOANS. (a) Authorizes the board to borrow money at a rate of interest not to exceed the maximum annual percentage rate allowed by law for district obligations at the time of the loan. (b) Specifies revenues and bonds which the board is authorized to pledge in order to secure a loan. (c) Requires a loan for which tax revenue or bonds are pledged to mature no later than the first anniversary of the date on which the loan was made. Requires a loan for which other district revenues are pledged to mature no later than the fifth anniversary of the date on which the loan was made. SECTION 11. Amends Section 6.09(a), Chapter 221, Acts of the 71st Legislature, Regular Session, 1989, to include Sections 5.16 and 5.17 of this Act as exceptions to the district's prohibition from incurring a debt payable from revenues of the district other than the revenues on hand or to be on hand in the current and immediately following fiscal year of the district. SECTION 12. Amends Section 7.02(a), Chapter 221, Acts of the 71st Legislature, Regular Session, 1989, to require the board to levy a tax at the time general obligation bonds are issued by the district. Makes a conforming change. SECTION 13. Amends Section 7.04(c), Chapter 221, Acts of the 71st Legislature, Regular Session, 1989, to provide that the bonds must be issued in the manner 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), 264.048 (Refunding Bonds), and 264.049 (Approval and Registration of Bonds), Health and Safety Code, rather than Sections 8, 10, 11, 12, and 13, Article 4494r, V.T.C.S. (County Hospital Authority Act), which have been repealed, for issuance of revenue bonds by county hospital authorities. SECTION 14. Amends Section 9.02(b), Chapter 221, Acts of the 71st Legislature, Regular Session, 1989, to require the directors, upon being presented a petition for a dissolution election signed by at least 15 percent of the registered voters, rather than 300 registered voters, of the territory of the district according to the most recent official list of registered voters, to order an election to be held on the question of dissolution of the district and the transfer of its assets. SECTION 15. Amends Section 9.08, Chapter 221, Acts of the 71st Legislature, Regular Session, 1989, as follows: Sec. 9.08. TRANSFER OF ASSETS. Sets forth required actions for the board, if a majority of votes in the election favor the dissolution of the district. Redesignates existing Subsections (a) and (b) to Subsections (h) and (i), respectively. SECTION 16.Emergency clause. Effective date: upon passage.