BILL ANALYSIS H.B. 2525 By: McCoulskey (Armbrister) Intergovernmental Relations 05-17-95 Senate Committee Report (Unamended) BACKGROUND In order for municipal and county hospital authorities to survive and compete in the present health care marketplace they must be able to decrease their costs of operations and capital. One method of reducing capital costs is to issue revenue bonds which bear interest at short-term variable interest rates. Payment of such debt is guaranteed or backed by a bank which then enters into a credit agreement with the issuer as to repayment if the bank has to advance funds to the bondholder on the issuer's behalf. The issuer benefits by being able to access the capital markets with the higher credit rating attributable to the bank as well as by paying low-short term interest rates. Hospital authorities cannot issue variable rate debt and enter into credit agreements with banks or other credit or liquidity providers. This authority is given to a broad range of governmental "issuers" to do so in Article 717q, V.T.C.S. The definition of "issuer" in Section 1(1)(H) of Article 717q has been previously amended to include any municipal or county hospital authority in a county with a population of more than two million according to the most recent federal census. PURPOSE As proposed, H.B. 2525 broadens the definition of "issuer" to include any hospital authority in a county which is included in a federal standard metropolitan statistical area that includes a county with a population of more than 1.8 million people. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 1(1), Article 717q, V.T.C.S., to redefine "issuer" to include, in addition to other meanings, any hospital authority in a county that is included, in whole or in part, in a standard metropolitan statistical area of this state that includes a county with a population of more than 1,800,000, that was created or is operating under Chapter 262 or 264, Health and Safety Code. SECTION 2. Emergency clause. Effective date: upon passage.