HBA-MPM S.B. 356 76(R)    BILL ANALYSIS


Office of House Bill AnalysisS.B. 356
By: Brown
Public Health
3/23/1999
Engrossed



BACKGROUND AND PURPOSE 

The Texas Hospital Equipment Financing Council (HEFC) was created to
provide low-cost loans to hospitals, especially in rural areas, for the
purchase of equipment, by issuing, selling and delivering bonds.  The small
hospitals could then borrow from the HEFC and receive the benefit of the
lower financing cost, while the expense of the bond issuance would be
shared by a pool of small hospitals. Because the small rural hospitals'
lacked the credit qualifications the bond insurers required of loan
applicants, the HEFC was unable to perform this role.  Subsequently, the
legislature eliminated HEFC's ability to issue bonds and limited its
purpose to providing for the validity and enforceability of its bonds
outstanding on September 1, 1989.  On October 7, 1998, HEFC redeemed all of
its bonds that were outstanding, and therefore it no longer serves a needed
purpose.  HEFC is subject to review under the Texas Sunset Act and will be
abolished September 1, 1999, unless continued by the legislature.  The
Sunset Advisory Commission, having reviewed HEFC, recommended its
abolishment. S.B. 356 abolishes the Texas Hospital Equipment Financing
Council.  

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.  Repealer:  Chapter 224 (Hospital Equipment Financing), Health
and Safety Code. Repealer:  Section 151.3131 (Texas Hospital Equipment
Financing Council), Tax Code. 

SECTION 2.  Effective date: September 1, 1999.

SECTION 3.  Emergency clause.