HBA-NLM H.B. 3595 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3595 By: Chisum County Affairs 3/28/1999 Introduced BACKGROUND AND PURPOSE The board of the Castro Hospital District has requested changes in the district's enabling legislation in a effort to serve the health care needs of the county in a more effective manner. The proposed changes allow the district to conform its enabling legislation to the Texas Election Code and the Texas Tax Code. Other changes include indemnity provisions for the district's officers and employers, to allow third party contracting for health care services, and to expand recruiting options. H.B. 3595 effectuates the requested changes by the board of directors of Castro County Hospital District. This bill authorizes the district, subject to the approval of the board of directors, to provide primary care, emergency services, preventative medical services, and other health-related services outside the district, provided that the services serve the purpose of the district. This bill sets forth certain procedures related to the election of board members, use of general obligation bonds, and taxes. In addition, this bill sets forth certain 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 2, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, to change to the term "qualified property taxpaying electors" to "electors." SECTION 2. Amends Section 3, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, as follows: (a) Makes a conforming change. (b) Prohibits an employee or a medical staff member of the Castro County Hospital District from serving as a director of the respective district. Make nonsubstantive changes. (c) Makes a conforming change. (d) Requires the board of directors of the Hansford County and Ochiltree County Hospital District to organize by electing one of their number as president and one of their number as secretary. Requires the board of directors (board) of the Castro County Hospital district to organize by electing from the membership of the board one member to serve as president, one member to serve as vice president, and on member to serve as secretary. (e) Requires notice of an election to be published not earlier than the 30th day or later than the 10th day before, rather than a least 10 days prior to, the date of the election. Requires a petition to be filed with the secretary of the board not later than the 25th day before, rather than at least twenty five day prior to, the date of the election. Makes nonsubstantive changes. SECTION 3. Amends Section 3A(a), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, to provide that this section applies only to the Ochiltree County and Castro County hospital districts and to make a nonsubstantive change. SECTION 4. Amends Section 4, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, to authorize the board of Castro County Hospital District to defend or indemnify certain persons specified in this section. SECTION 5. Amends Section 5, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, as follows: (a) Requires the board of the Ochiltree County or Hansford County Hospital District to have the power and authority provided by this section. Makes a nonsubstantive change. (b) Makes a conforming change. (c) Makes a conforming change. SECTION 6. Amends Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, by adding Section 5A, as follows: Sec. 5A. (a) Provides that this section applies only to the Castro County Hospital District. (b) Authorizes the board to impose property taxes in an amount not to exceed the limit approved by the voters at the election authorizing the levy of taxes. (c) Prohibits the tax rate from exceeding 75 cents on each $100 valuation of all taxable property in the district. (d) Sets forth certain authorized use of the taxes. (e) Prohibits the district from imposing taxes to pay the principal of or interest on revenue bonds issued by the district. (f) Provides that the Tax Code governs the appraisal, assessment, and collection of the district taxes. (g) Authorizes the board to provided 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. SECTION 7. Amends Section 6, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, as follows: Sec. 6. (a) Requires the board to have the power and authority to issue and sell as the obligations of such hospital district, and in the name and upon the faith and credit of such hospital district, general obligation bonds for the purchase, construction, acquisition, repair or renovation of buildings and improvements and equipping the same for hospital purposes and for any or all of such purposes. (b) Requires a sufficient tax to be levied at the time of issuance of any general obligation bond for specified use. Prohibits taxes levied by the Castro County Hospital District from exceeding the limit approved by the voters at the election authorizing the levy of taxes. Makes a nonsubstantive change. (c) Makes a conforming and nonsubstantive change. (d) Makes a conforming and nonsubstantive change. (e) Provides that refunding bonds issued by the Castro County Hospital District must be issued in the manner provided by Chapter 784, Acts of the 61st Legislature, Regular Session, 1969 (relating to the issuance of bonds by political subdivisions of the state). Makes a nonsubstantive change. (f) Makes a nonsubstantive change. SECTION 8. Amends Section 6A, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, by amending Subsection (a) and by adding Subsection (d), as follows: (a) Includes the Castro County hospital district in the provisions set forth in this section. (d) Authorizes the board of the Castro County Hospital District to issue revenue bonds in the name and on the faith and credit of the district to purchase, construct, repair, renovate, or acquire buildings or improvements, equip buildings and improvements for hospital purposes, and acquire real property for hospital purposes. Provides that the revenue bonds issued under this subsection must be payable from and secured by a pledge of all or part of the Castro County Hospital District's revenues from operations of the hospital system. Provides that the bonds may also be secured by a mortgage or deed of trust on all or part of the district's property. Provides that the revenue 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, for the issuance of revenue bonds by county hospital authorities. SECTION 9. Section 6B, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, is amended to read as follows: Sec. 6B. Includes the board of the Castro County Hospital District to the existing provisions of this section. SECTION 10. Amends Section 7, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, to create Subsections (a)-(c) from existing text. SECTION 11. Amends Sections 8(b), (c), and (d), Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, as follows: (b) Includes the board of the Castro County Hospital District among those entities subject to the provisions of this section. (c) Makes a conforming change. (d) Makes a conforming change. SECTION 12. Amends Section 8A, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, by adding Subsections (f) - (l) , as follows: (f) Authorizes the district, subject to the approval of the board of directors, to provide primary care, emergency services, preventative medical services, and other health-related services outside the district, provided that the services serve the purpose of the district as established by this Act. (g) Authorizes the board of directors to contract with a political subdivision or governmental agency to provide investigatory or other services related to facilities for the medical care, hospital, or welfare needs of the inhabitants of the district and to contract with a hospital, hospital authority, hospital district, emergency services district, county, municipality, or other political subdivision of this state that is located outside its boundaries to be reimbursed for the care and treatment of the sick, diseased, or injured persons of that entity. Authorizes the board of directors to also contract with the state or agencies of the federal government to be reimbursed for the treatment of sick, diseased, or injured persons. (h) Authorizes the district to contract with, affiliate with, or enter into another arrangement with a managed care system, a preferred provider organization, a health maintenance organization, another provider of alternative health care or delivery system, or a private hospital to jointly administer or deliver health care services. Authorizes the district to spend district funds to establish and maintain partnerships, corporations, or other entities involved in the delivery of health care services. (i) Authorizes the district to sponsor and to create a non-profit corporation under the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq., V.T.C.S.) and to contribute funds to or solicit funds for the corporation. Authorizes the corporation to use funds, other than funds paid by the corporation to the district, only to provide health care or other services the district may provide under this Act. Requires the board of directors of the hospital district to establish adequate controls to ensure that the corporation uses its funds as required by this subsection. Authorizes the corporation to invest corporation funds in any manner in which the district may invest funds, including investing funds as authorized by Chapter 2256 (Public Funds Investment), Government Code. (j) Authorizes the board to spend district funds, enter into agreements, and take other necessary action described in this subsection, to recruit physicians and other persons to serve as medical staff members or employees of the district. (k) Authorizes the board to spend district funds, enter into agreements, and take other necessary action to conduct, participate in, or otherwise assist in providing health care educational programs for current or prospective medical staff members or employees of the district. (l) Authorizes the board to provide retirement benefits for employees of the district by establishing or administering a retirement program, or by participating in the Texas County and District Retirement System or in any other statewide retirement system in which the district is eligible to participate. SECTION 13. Amends Section 9, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, by creating Subsections (a) and (b) from existing text. SECTION 14. Amends Section 14, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, to make nonsubstantive changes. SECTION 15. Amends Section 14A, Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, as follows: Sec. 14A. (a) Applies this section only to the Ochiltree County and Castro County hospital districts. (b) Makes a conforming change. SECTION 16. Amends Chapter 103, Acts of the 57th Legislature, Regular Session, 1961, by adding Sections 16A and 21, as follows: Sec. 16A. (a) Applies this section only to the Castro County Hospital District. (b) 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. (c) Authorizes the board to pledge certain revenues, taxes, and bonds to secure a loan. (d) 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. Sec. 21. (a) Applies this section only to the Castro County Hospital District. (b) Authorizes the district to be dissolved only if the dissolution is approved by a majority of the voters of the district voting in an election called and held for that purpose. (c) 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. (d) Requires the election to be held not later than the 60th day after the date the election is ordered. Provides that Section 41.001(a), Election Code, does not apply to an election ordered under this section. Sets forth the required content of the order calling the election. (e) 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 Castro County Hospital District." (f) 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 another election on the question of dissolution may not be 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. (g) Requires the board to perform certain procedures if a majority of the votes in the election favor dissolution. (h) Provides that the county or agency assumes all debts and obligations of the district at the time of the transfer, and the district is dissolved, if the district transfers the land, buildings, improvements, equipment, and other assets to a county or other governmental agency. (i) 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. (j) 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. (k) 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. (l) Requires the board to file a written report with the commissioners court of Castro 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. (m) Requires the commissioners court of Castro County to enter an order dissolving the district and releasing the board of directors of the district 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. (n) 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. Provides that the dissolution of the district and the sale or transfer of the district's assets and liabilities may not contravene 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. (o) 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. Specifies 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 17. Emergency clause. Effective date: upon passage.