BILL ANALYSIS


                                                        S.B. 1715
                                                       By: Sibley
                                             Economic Development
                                                         05-11-95
                                     Committee Report (Unamended)
BACKGROUND

The Decatur Hospital Authority (authority) operates one of a few
remaining municipally owned hospitals in rural Texas. Recently, the
authority started an expansion program. During the process of
establishing a line of credit to finance the construction costs,
board members of the authority learned that the authority was not
authorized to create debt other than revenue bonds. The authority
has never borrowed money in the past. 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

As proposed, S.B. 1715 authorizes the board of directors of a
municipal hospital authority to borrow money in a certain amount
from a federally insured lending institution.

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 Chapter 262C, Health and Safety Code, by adding
Section 262.0225, as follows:

     Sec. 262.0225. AUTHORITY TO BORROW MONEY. (a) Provides that
     this section applies only to a municipal hospital authority
     (authority) created by a municipality with a population of
     less than 5,000.
     
     (b) Authorizes the board of directors of an authority
       (board), on behalf of the authority, to borrow money from a
       federally insured lending institution for any of the
       authority's purposes.
       
       (c) Authorizes the board to borrow money in the amount it
       considers advisable subject to a rate of interest and other
       terms and conditions it considers advisable.
       
       (d) Requires a loan for which bonds are pledged to mature no
       later than the first anniversary of the date on which the
       loan is made.
       
       SECTION 2.   Emergency clause.
           Effective date: upon passage.