BILL ANALYSIS H.B. 338 By: Counts February 23, 1995 Committee Report (Unamended) BACKGROUND The original charter establishing the Stamford Hospital District gave general guidelines for the board to borrow money for maintenance support. In the past boards operated under this charter borrowing money for short term needs with little or no problem. After the banking crisis in the late 1980's, federal regulations came down hard on all lending activity at banks. The banks legal advisors say that the authority of the board need to be specific, not generalized. The language in the original charter in the 59th Legislature gave detailed information on issuing bonds and methods of repayment of bonds, for the purpose of the purchase, construction, acquisition, repair or renovation of buildings and improvements and equipping same for hospital purposes, and for any and all such purposes. This does not address the problem of short term financing needed by the hospital until such time as tax moneys are available. PURPOSE This bill provides the Board of Directors for the Stamford Hospital District the authority to borrow money from a federally insured lending institution for the purpose of short time financing for operation until tax funds become available. RULEMAKING AUTHORITY It is the opinion of this committee that this bill does not grant additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Chapter 108, Acts of the 59th Legislature, Regular Session, 1965, is amended by adding Section 17a to read as follows: Sec. 17a. Authorizes the Board of Directors to borrow money on behalf of the Hospital District from a federally insured lending institution to be used to meet lawfully authorized obligations of the District. Lines 12-14 set the amount to be borrowed as the amount the Board of Directors considers advisable subject to rate of interest and terms the Board considers advisable. Lines 15-17 address collateral to be pledged for borrowed money. Lines 17-19 place a time limit of five years on loans when revenue of the District are pledged to pay the loan. SECTION 2. Emergency Clause SUMMARY OF COMMITTEE ACTION Pursuant to public notice posted on February 16, 1995, the Committee on County Affairs met in a public hearing on February 22, 1995 to consider HB 338. The chair laid out HB 338 and recognized Representative Counts to explain the bill. Representative Counts explained the bill and closed. There was no testimony on the bill. The motion that HB 338 be favorably reported to the full house with the recommendation that it do pass and be placed on the Local and Consent Calendar prevailed by the following vote: 8 Ayes, 0 Nays, 0 Present-not-voting, 1 Absent.