BILL ANALYSIS

Senate Research Center	H.B. 492
88R18939 JCG-D	By: Craddick; Morales, Eddie (Sparks)
	Health & Human Services
	4/28/2023
	Engrossed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Recognizing the need for additional mental health services in the Permian Basin, the 87th Texas Legislature provided funding for a new mental health hospital in the region. The legislature required the new facility to be run by both the Midland and Ector County Hospital Districts. H.B. 492 seeks to abide by this requirement by providing for the creation of a mental health services district by the two hospital districts to provide mental health services to the district's residents.

H.B. 492 amends current law relating to the creation and operation of a mental health services district by the Midland County Hospital District of Midland County, Texas, and the Ector County Hospital District.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Subtitle C, Title 7, Health and Safety Code, by adding Chapter 579, as follows:

CHAPTER 579. MENTAL HEALTH SERVICES DISTRICTS CREATED BY CERTAIN HOSPITAL DISTRICTS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 579.001. PURPOSE. Provides that the purpose of this chapter is to authorize certain hospital districts to create a special district to provide mental health services to the residents of the district.

Sec. 579.002. DEFINITIONS. Defines "board," "director," "district," and "hospital district."

Sec. 579.003. APPLICABILITY. Provides that this chapter applies only to the Midland County Hospital District of Midland County, Texas, and the Ector County Hospital District.

SUBCHAPTER B. CREATION AND DISSOLUTION OF DISTRICT

Sec. 579.051. CREATION BY CONCURRENT ORDERS. (a) Authorizes the hospital districts to which this chapter applies to create a district by adopting concurrent orders.

(b) Requires that a concurrent order to create a district:

(1) be approved by the governing body of each creating hospital district;

(2) contain identical provisions; and

(3) define the boundaries of the district to be coextensive with the combined boundaries of each creating hospital district.

Sec. 579.052. CONTRACT TERMS. (a) Requires each creating hospital district to contract with the district for the district to provide mental health services to the hospital district's residents. Requires that the contract:

(1) state the term of the contract;

(2) specify the purpose, terms, rights, and duties of the district, as authorized by this chapter;

(3) specify the financial contributions to be made by each party to the contract to fund the district; and

(4) specify the land, buildings, improvements, equipment, and other assets owned by a party to the contract that the district will be required to manage and operate, if any.

(b) Provides that Chapter 791 (Interlocal Cooperation Contracts), Government Code, does not apply to a contract made under this chapter.

Sec. 579.053. DISSOLUTION. Requires a district to be dissolved if the creating hospital districts adopt concurrent orders to dissolve the district and the concurrent orders contain identical provisions.

Sec. 579.054. ADMINISTRATION OF PROPERTY, DEBTS, AND ASSETS AFTER DISSOLUTION. (a) Requires the board of directors of a district (board), after dissolution of a district under Section 579.053, to continue to control and administer any property, debts, and assets of the district until all funds have been disposed of and all district debts have been paid or settled.

(b) Requires the district, if, after administering any property and assets, the board determines that the district's property and assets are insufficient to pay the debts of the district, to transfer the remaining debts to the creating hospital districts in proportion to the funds contributed to the district by each hospital district.

(c) Requires the board, if, after complying with Subsection (b) and administering the property and assets, the board determines that unused funds remain, to transfer the unused funds to the creating hospital districts in proportion to the funds contributed to the district by each hospital district.

Sec. 579.055. ACCOUNTING AFTER DISSOLUTION. Requires the board, after the district has paid all its debts and has disposed of all its assets and funds as prescribed by Section 579.054, to provide an accounting to each creating hospital district. Requires that the accounting show the manner in which the assets and debts of the district were distributed.

SUBCHAPTER C. BOARD OF DIRECTORS

Sec. 579.101. BOARD OF DIRECTORS; TERMS; VACANCY. (a) Provides that the board consists of six appointed directors. Requires each creating hospital district to appoint three directors to the board.

(b) Provides that directors serve staggered two-year terms, with one-half of the directors' terms expiring each year.

(c) Requires that a vacancy in the office of director be filled for the unexpired term in the same manner as the original appointment.

Sec. 579.102. OFFICERS. (a) Requires the board to elect from among its members a president.

(b) Requires the board to appoint a secretary, who need not be a director.

(d) Requires the board to fill a vacancy in a board office for the unexpired term.

Sec. 579.103. QUALIFICATIONS FOR OFFICE. (a) Requires a person, to be eligible to serve as a director, to be a resident or an officer of the hospital district that appoints the person under Section 579.101.

(b) Prohibits an employee of the district from serving as a director.

Sec. 579.104. COMPENSATION. (a) Provides that directors and officers serve without compensation but are authorized to be reimbursed for actual expenses incurred in the performance of official duties.

(b) Requires that expenses reimbursed under this section be:

(1) reported in the district's minute book or other district records;� and

(2) approved by the board.

SUBCHAPTER D. POWERS AND DUTIES

Sec. 579.151. TRANSFER OF CERTAIN RESPONSIBILITIES OF CREATING HOSPITAL DISTRICT. Authorizes each creating hospital district, on creation of a district, to transfer to the district:

(1) management and operation of any real property, improvements, and equipment located wholly in the district that are owned by the creating hospital district and are used to provide mental health services, as specified in the contract under Section 579.052; and

(2) operating funds and reserves for operating expenses and funds that have been budgeted by the creating hospital district to provide mental health services for residents of the district, as specified in the contract under Section 579.052.

Sec. 579.152. POWERS AND DUTIES. Authorizes a district, if necessary to provide mental health services to the residents of the creating hospital districts, to:

(1) acquire and hold title to, construct, operate, manage, and maintain real property, including improvements to real property;

(2) acquire, operate, manage, and maintain equipment and other personal property;

(3) enter into and perform contracts;

(4) appoint and employ officers, agents, and employees;

(5) sue and be sued;

(6) seek and accept gifts, grants, and donations; and

(7) perform other acts necessary to accomplish the purpose of the district.

Sec. 579.153. RULES. Authorizes the board to adopt rules governing the operation of the district and the duties, functions, and responsibilities of the district's staff and employees.

Sec. 579.154. DISTRICT ADMINISTRATOR; ASSISTANT ADMINISTRATOR. (a) Requires the board to appoint a qualified person as district administrator.

(b) Authorizes the board to appoint assistant administrators.

(c) Provides that the district administrator and any assistant administrator serve at the will of the board and are entitled to the compensation determined by the board.

SUBCHAPTER E. GENERAL FINANCIAL PROVISIONS

Sec. 579.201. DISTRICT FUNDING; LIMITATION. (a) Requires each creating hospital district to provide funding for the district's operation as specified in the contract under Section 579.052.

(b) Prohibits the district from imposing a tax or issuing bonds or other obligations.

Sec. 579.202. BUDGET. (a) Requires the district administrator to prepare an annual budget for approval by the board.

(b) Requires that the proposed budget contain a complete financial statement of:

(1) the outstanding obligations of the district;

(2) the cash on hand in each district fund;

(3) the money received by the district from all sources during the previous year;

(4) the money available to the district from all sources during the ensuing year;

(5) the balances expected at the end of the year in which the budget is being prepared;

(6) the estimated revenue and balances available to cover the proposed budget; and

(7) the proposed expenditures and disbursements and the estimated receipts and collections for the following fiscal year.

(c) Requires the board to provide in each annual budget for the payment of all operation and maintenance expenses of the district.

Sec. 579.203. NOTICE; HEARING; ADOPTION OF BUDGET. (a) Requires the board to hold a public hearing on the proposed annual budget.

(b) Requires the board, at least 10 days before the date of the hearing, to publish notice of the hearing in a newspaper of general circulation in the district.

(d) Requires the board, at the conclusion of the hearing, to adopt a budget by acting on the budget proposed by the district administrator. Authorizes the board to make any changes in the proposed budget that the board judges to be in the interest of the district's residents and that the law warrants.

(e) Provides that the budget is effective only after adoption by the board.

Sec. 579.204. AMENDMENTS TO BUDGET. Authorizes the budget to be amended as required by circumstances. Requires the board to approve all amendments.

Sec. 579.205. RESTRICTION ON EXPENDITURES. Authorizes money to be spent only for an expense included in the budget or an amendment to the budget.

Sec. 579.206. FISCAL YEAR.� Provides that the district operates according to a fiscal year that begins on October 1 and ends on September 30. Authorizes the board to change the fiscal year.

Sec. 579.207. AUDIT. Requires the board to have an independent audit made of the district's financial condition for each fiscal year.

Sec. 579.208. INSPECTION OF AUDIT AND DISTRICT RECORDS. Requires that the audit and other district records be open to inspection at the principal office of each creating hospital district.

Sec. 579.209. FINANCIAL REPORT. Requires the district administrator, as soon as practicable after the close of each fiscal year, to prepare for the board a complete sworn statement of all district money and a complete account of the disbursements of that money.

SECTION 2. Amends Subchapter C, Chapter 1024, Special District Local Laws Code, by adding Section 1024.118, as follows:

Sec. 1024.118. MENTAL HEALTH SERVICES. (a) Authorizes the Ector County Hospital District to provide mental health services, including by contract in the manner prescribed by Chapter 579, Health and Safety Code.

(b) Provides that the Ector County Hospital District's provision of mental health services does not prohibit another political subdivision of this state from providing, or taxing to provide for, mental health services inside the boundaries of the district, as provided by Section 13 (Participation of Municipalities and Other Political Subdivisions in Establishment and Operation of Mental Health, Mental Retardation, or Public Health Services), Article IX (Counties), Texas Constitution.

SECTION 3. Amends Subchapter C, Chapter 1061, Special District Local Laws Code, by adding Section 1061.122, as follows:

Sec. 1061.122.� MENTAL HEALTH SERVICES.� (a) Authorizes the Midland County Hospital District of Midland, Texas, to provide mental health services, including by contract in the manner prescribed by Chapter 579, Health and Safety Code.

(b) Provides that the Midland County Hospital District of Midland, Texas' provision of mental health services does not prohibit another political subdivision of this state from providing, or taxing to provide for, mental health services inside the boundaries of the Midland County Hospital District of Midland, Texas, as provided by Section 13, Article IX, Texas Constitution.

SECTION 4. Requires the creating hospital districts, in making the initial appointment of directors under Section 579.101, Health and Safety Code, as added by this Act, to jointly determine which three directors serve one-year terms and which three directors serve two-year terms. Provides that all directors appointed under Section 579.101, Health and Safety Code, as added by this Act, thereafter, are appointed to serve two-year terms.

SECTION 5. Effective date: September 1, 2023.