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.