HBA-EVB S.B. 1840 76(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 1840 By: Ratliff County Affairs 5/3/1999 Engrossed BACKGROUND AND PURPOSE The legislation creating the Hopkins County Hospital District in 1961 did not contain specific language regarding indigent care qualifications for the directors, dissolution of the district, or the ability to issue revenue bonds. S.B. 1840 establishes provisions regarding the powers of the Hopkins County 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 3, Chapter 43, Acts of the 57th Legislature, 1st Called Session, 1961, as follows: Sec. 3. Prohibits a person from being appointed or elected as a member of the board of directors of a hospital district (board) unless he is a resident and a qualified voter thereof and unless at the time of such election or appointment he shall be more than twenty-one (21) years of age. Removes text requiring such a person to own land subject to taxation in the district. Prohibits an employee of the Hopkins County Hospital District from serving as a director of that district. SECTION 2. Amends Section 5, Chapter 43, Acts of the 57th Legislature, 1st Called Session, 1961, by adding Subsection (b), as follows: (b) 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 contract for the assessment and collection of taxes as provided by the Tax Code. Makes a conforming change. SECTION 3. Amends Chapter 43, Acts of the 57th Legislature, 1st Called Session, 1961, by adding Section 6C, as follows: Sec. 6C. Provides that the board has complete discretion to determine the type, number, and location, either inside or outside the district, of certain facilities required to establish and maintain an adequate hospital system and ancillary health care system, and the type of equipment necessary for hospital care and ancillary health care. Authorizes the board to acquire by lease, purchase, or lease to purchase property, facilities, supplies, and equipment for the district for use in the hospital system and ancillary health care system and authorizes the board to mortgage or pledge the property, facilities, supplies, or equipment acquired as security for the payment of the purchase price. Authorizes the board, on behalf of the district, to lease, sell, or otherwise dispose of the district's property, all or part of the hospital facilities, ancillary facilities, other facilities, supplies, or equipment to a public or private entity, but only to the extent necessary to maintain an adequate hospital system for the residents of Hopkins County. SECTION 4. Amends Chapter 43, Acts of the 57th Legislature, 1st Called Session, 1961, by adding Section 6D, as follows: Sec. 6D. (a) Authorizes the district to issue revenue bonds to purchase, construct, acquire, repair, or renovate buildings or improvements for hospital purposes, including necessary equipment and furnishings, and the hospital system; acquire sites to be used for hospital purposes; or acquire and operate a mobile emergency medical or air ambulance service to assist the district in carrying out its hospital purpose. (b) Authorizes the bonds to be secured by a mortgage or deed of trust lien on all or part of district property. Prohibits the district from imposing taxes to pay the principal of or interest on revenue bonds. (c) Provides 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, for issuance of revenue bonds by county hospital authorities. (d) Provides that because the district is a public entity performing an essential public function, bonds issued by the district, transactions relating to the bonds, and profits made in the sale of the bonds are free from taxation by the state or any city, county, special district, or other political subdivision of the state. SECTION 5. Amends Chapter 43, Acts of the 57th Legislature, 1st Called Session, 1961, by adding Section 7A, as follows: Sec. 7A. (a) Authorizes the board, on behalf of the district, to enter into a joint ownership arrangement with one or more public or private entities for the provision of management or operating services; and ownership of all or part of real property, facilities, equipment, or supplies. (b) Provides that the board must determine the arrangement is in the district's best interest and is for a public purpose of the district before the board enters into an arrangement under this section. SECTION 6. Amends Chapter 43, Acts of the 57th Legislature, 1st Called Session, 1961, by adding Section 8B, as follows: Sec. 8B. (a) Authorizes the board, by majority vote, if the hospital board of directors declares that funds are not currently available to meet lawfully authorized obligations of the district, to borrow money to satisfy those obligations in an amount not to exceed, at any one time in the aggregate, 10 percent of the annual operational expenses of the district for the prior fiscal year and, in addition, authorizes the board, by unanimous vote, to borrow money to satisfy obligations that exceed 10 percent of annual operating expenses of the district for the prior fiscal year. (b) Authorizes the board to pledge, to secure a loan, revenues of the district that are not pledged to pay bonded indebtedness of the district; or district taxes to be levied by the district in the next 12-month period that are not pledged to pay the principal of or interest on district bonds. (c) Provides that a loan for which taxes are pledged must mature and be paid not later than the first anniversary of the date on which the loan is made. (d) Prohibits the board from spending money obtained from a loan under this section for any purpose other than the purpose declared by the board and, if taxes are pledged to pay the loan, for any purpose other than the purposes for which the pledged taxes were levied. SECTION 7. Amends Section 14, Chapter 43, Acts of the 57th Legislature, 1st Called Session, 1961, as follows: Sec. 14. (a) Requires the district, without charge, to supply to a patient residing in the district the care and treatment that the patient or a relative of the patient who is legally responsible for the patient's support cannot pay. (b) Requires the district to adopt an application procedure, not later than the beginning of each operating year, to determine eligibility for assistance, as provided by Section 61.053 (Application Procedure), Health and Safety Code. (f) Deletes text that provides that if the agent designated by the district to handle such affairs finds that such patient or said relatives are not able to pay for his care and treatment in such hospital, the same is required to become a charge upon the hospital district. Creates Subsections (c)-(f) from existing text. SECTION 8. Amends Chapter 43, Acts of the 57th Legislature, 1st Called Session, 1961, by adding Section 21, as follows: Sec. 21. (a) Authorizes the district to be dissolved and its assets and liabilities sold or transferred to another entity or person only if the dissolution and transfer are approved by a majority of the qualified voters of the territory of the district voting at an election called and held for that purpose. (b) Authorizes a majority of the directors to order an election to be held on the question of dissolution of the district and the transfer of its assets and liabilities. (c) Requires the directors, on presentation of a petition for a dissolution election signed by at least 500 of the 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 transfer of its assets. Requires the election to be called not later than the 60th day after the date the petition is presented to the district. (d) Provides that the order calling the election must state the nature of the election, including the proposition that is to appear on the ballot, the date of the election, the hours during which the polls will be open, and the location of the polling places. (e) Requires the directors to give notice of the election by publishing a substantial copy of 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 at least 35 days before the date set for election. (f) Requires the election to be held not less than 45 days after the date on which the election is ordered. (g) Provides that Section 41.001(a) (Uniform Election Dates), Election Code, does not apply to an election ordered under this section. (h) Requires the ballot for an election at which the dissolution of the district is proposed to be printed to permit voting for or against the proposition: "The dissolution of the Hopkins County Hospital District and the transfer of its assets and liabilities in the following manner: ________________________ (insert provisions for transfer)." (i) Requires the directors to canvass the returns of the election. (j) Requires the directors, if they find that the election results are favorable to the proposition to dissolve the district and transfer its assets and liabilities, to issue an order declaring the district dissolved and requires them to proceed with the sale or transfer of its assets and liabilities according to the plan proposed on the ballot. (k) Prohibits another dissolution election from being held before the first anniversary of the date of the election at which voters disapproved the proposition, if the directors find that the election results are not favorable to the proposition to dissolve the district and transfer its assets and liabilities. (l) Prohibits the district from being dissolved, notwithstanding any other provision of this section, unless the board provides for the sale or transfer of the district's assets and liabilities to another entity or person. 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. Prohibits the dissolution and sale or transfer from diminishing or impairing the rights of the holders of any outstanding bonds, warrants, or other obligations of the district. (m) 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 their collective property rights in the district's assets. Provides that any grant from federal funds is considered 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 another governmental agency embracing the district and using the transferred assets for the benefit of residents formerly in the district. SECTION 9. Effective date: September 1, 1999. SECTION 10. Emergency clause.