BILL ANALYSIS



C.S.H.B. 2032
By: Uher
April 29, 1995
Committee Report (Substituted)


BACKGROUND

During the 73rd interim, public medical schools formed various task
forces designed to address the issue of how medical and dental
schools could cope with the changing health care market.  Recent
years have seen the spread of managed care throughout this market. 
The various task forces recommended a number of measures aimed at
improving institutional to better participate in the health care
market place.  Two of these recommendations revolve around
legislative changes permitting the institutions to better
participate in the health care market place.  One would allow
institutions to offer retirement incentives to employees, allowing
medical and dental units to facilitate needed employment
reductions.  The second would increase institutional savings by
reducing state purchasing regulations applicable to the
institutions, allowing them to make acquisitions under private
business standards.

Similar provisions were included in S.B. 192, 74th Legislative
Session, relating to the M.D. Anderson Cancer Center.  This bill
has passed both houses and been signed by the governor.  

PURPOSE

CSHB 2032 gives medical and dental units more management
flexibility by reducing state regulations relating to purchasing
laws and allowing the institution to provide retirement incentives
to reduce employment levels.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency or institution.

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter Z, Chapter 51, Education Code, by
adding Sections 51.932 and 51.933.
     Sec. 51.932 allows medical and dental units to offer
retirement incentives to employees of the unit who are eligible to
retire under the Optional Retirement Program or the Teachers
Retirement System.  Requires the medical and dental units to
provide information to the Legislative Budget Board and file any
retirement plan with the Legislative Budget Board.  Also requires
that any incentive be paid by institutional funds or hospital and
clinic fees, clarifies that any incentive payments are not to be
considered as entitling employees to additional benefits, and
restricts hiring of employees receiving retirement incentives. 
Defines "institutional fund" and "medical and dental unit".

     Sec. 51.933 allows a medical and dental unit to acquire goods
and service by any method providing the best value.  Lists the
types of methods that can be used; states what factors the medical
and dental units shall consider in determining what is the best
value; state that all purchases are subject to audit by the state
auditor; and provides that a medical and dental unit shall comply
with all state laws concerning contracting with historically
underutilized businesses.  Also allows the legislative audit
committee to contract for a report on the purchasing operations of
the medical and dental unit, and provides that the unit shall bear
the cost of the study.  Defines "medical and dental unit."

SECTION 2.  Effective date: upon passage.  Emergency clause. 

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute adds language to Sec. 51.932, Education Code, of the
original providing that any retirement incentive plan shall be
filed with the LBB and that any retirement incentives paid to an
employee shall not entitle the employee to additional benefits
based on salary or compensation.

The substitute also adds "a school of veterinary medicine" to the
definition of  "medical and dental unit."

SUMMARY OF COMMITTEE ACTION

Pursuant to public notice posted on March 30, 1995, the Committee
on State Affairs convened in a public hearing on April 4, 1995 to
consider HB 2032.  The Chair laid out HB 2032 and recognized Rep.
Uher to explain the bill.  The Chair laid out a complete committee
substitute which was not adopted.  The following persons testified
neutrally on the bill: Ken Wildenthal, MD representing the UT
Southwestern Medical Center; and Dr. M. David Low representing
UTHSC-Houston.  The Chair recognized Rep. Uher to close.  The Chair
left HB 2032 pending.  In a formal meeting on April 27, 1995, the
Chair laid out HB 2032.  Rep. D. Jones laid out a complete
committee substitute.  Rep. D. Jones laid out Committee amendment
#1 which was adopted without objection.  The substitute as amended
was adopted without objection.  The Chair directed the staff to
incorporate the amendment into the substitute.  The bill was
reported favorably as substituted with the recommendation that it
do pass and be printed by a record vote of 15 ayes, 0 nays, 0 pnv,
and 0 absent.