BWH H.B. 1567 75(R)BILL ANALYSIS COUNTY AFFAIRS H.B. 1567 By: Van de Putte 4-2-97 Committee Report (Amended) BACKGROUND Hospital Districts were created in the 1950's to provide medical and hospital care to need residents of the district. Many hospital districts carry out this responsibility through affiliation agreements with academic medical centers like the University of Texas System, which operates a graduate residency training program. Changes in the delivery of health care caused by the move to managed care, including the State Medicaid program, has required hospitals districts to adapt their approach to health services. This is necessary because over fifty percent of a hospital district's budget is supported by patient care revenue. Loss of this source of support will adversely affect the ability of hospital districts and the graduate medical training programs to survive. Establishment of charitable organizations by hospital districts allows flexibility in how hospital districts render care. PURPOSE H.B. 1567 explicitly authorizes hospital districts to establish charitable organizations to carry out hospital district purposes in a manner congruent with current hospital district methods, rules and immunities. In addition, it provides that a charitable organization created and controlled by the hospital district is a unit of local government for the purpose of Chapter 101 of the Civil Practice and Remedies Code. 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. Subchapter C, Chapter 281 of the Health and Safety Code are amended by adding Section 281.0565. Sec. 281.0565. CHARITABLE ORGANIZATIONS (a) Defines for the purposes of this Chapter a charitable organization as one that is exempt under Section 501(a) of the Internal Revenue code by being exempt from Section 501(c)(3) or 501(c)(4) of that code. (b) The district may create a charitable organization to manage health care services and resources for the district. (c) That charitable organization is subject to the same immunity for liability as the district and the board of the district. (d) This charitable organization is a local government unit for the purposes of Chapter 101 of the Civil Practice and Remedies Code. SECTION 2. EFFECTIVE DATE. September 1, 1997. SECTION 3. EMERGENCY CLAUSE. EXPLANATION OF AMENDMENTS Committee Amendment No. 1 deletes Section 281.0565(c) for the bill.