BILL ANALYSIS



H.B. 2358
By: Williamson
04-21-95
Committee Report (Unamended)


BACKGROUND

The Decatur Hospital Authority operates one of a few remaining
municipally owned hospitals in rural Texas.  Recently, the
Authority started forward with an expansion program.  During the
process of establishing a line of credit to finance the
construction costs, Authority Board members learned the Authority
was not authorized to create debt other than revenue bonds.  The
Authority has never borrowed money in the past so this restriction
came as a surprise to the Board members.  The proposed expansion
will be paid for from internally generated cash flow but a line of
credit is necessary to "bridge" the expansion project during
critical construction timelines.


PURPOSE

The purpose of this legislation is to allow a municipal hospital
authority with a population of less than five thousand, to
establish a local line of credit for improvements to the structures
governed therein, rather than executing the tedious and time
consuming procedure of issuing revenue bonds.


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 C, Chapter 262 of the Health and
Safety Code to read as follows:

           Sec. 262.0225. Authority to Borrow Money
                (a) Authorities with populations less than five
thousand.
                (b) The board may borrow money from a federally
insured bank.
                (c) Authority to borrow money under agreeable
terms.
                (d) Loans pledged against bond money shall mature
not later than one year                 from the original date of
the loan.

     SECTION 2. Emergency clause.

SUMMARY OF COMMITTEE ACTION

HB 2358 was considered in a public hearing on April 20, 1995.  The
following people testified in favor of the bill: Rep. Williamson. 
The bill was reported favorably without amendment, with the
recommendation that it do pass and be printed and be sent to the
Committee on Local and Consent Calendars by a record vote of 8
ayes, 0 nays, 0 pnv, and 1 absent.