SRC-CDH H.B. 3234 75(R)BILL ANALYSIS


Senate Research CenterH.B. 3234
By: Hinojosa (Lucio)
Intergovernmental Relations
5-13-97
Committee Report (Amended)


DIGEST 

Currently, hospital authorities are created by municipalities to ensure
that the health care needs of area residents are met.  Hospital
authorities have bonding authority, but not taxing authority, and their
primary function is to acquire and operate hospitals. Concern has been
raised that statutory clarification is needed to allow hospital
authorities to use funds for purposes other than for the operation of its
hospitals.  A problem arises, for example, when a hospital authority board
wants to use assets and funds for health-related programs which are not
part of its hospital system.  Another source of conflict is when a
hospital authority sells its hospital unit.  Critics of the present system
argue that since the authority no longer has a hospital to operate,
proceeds from the sale should be transferred to either the creating
municipality or another entity which could use the funds to serve the
health care needs of the area.  However, under a recent attorney general's
opinion, the Edinburg Hospital Authority was prevented from transferring
the proceeds from the sale of the hospital back to the city because as the
attorney general's opinion stated, even upon dissolution of the authority,
only transfers "specifically for the purpose of providing for and
operating hospitals" would be valid. H.B. 3234 allows municipal hospital
authorities to transfer assets to another governmental agency to fund or
support items which are related to providing for the health care needs of
those served by the authority.   

PURPOSE

As proposed, H.B. 3234 provides for the transfer of municipal hospital
authority assets for healthrelated projects.   

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 262.002, Health and Safety Code, by adding
Subdivision (9), to define "health-related projects." 

SECTION 2. Amends Section 262.005(a), Health and Safety Code, to delete
the provision making dissolution of a hospital authority (authority)
created by the governing body contingent upon the authority providing for
the sale or transfer of the authority's assets and liabilities to the
municipality or to another person.  Prohibits the governing body of a
municipality (governing body) from transferring the assets of the
authority without due compensation except to a governmental entity that
embraces the territory of the authority, including the municipality that
created the authority or a county in which that municipality is located,
to fund or support health-related projects. 

SECTION 3. Amends Section 262.033, Health and Safety Code, by adding
Subsection (e), to authorize the authority to transfer proceeds from the
sale of a hospital or part of a hospital to a governmental entity that
embraces the territory of the authority, including the municipality that
created the authority or a county in which the municipality is located, to
fund or support healthrelated projects.   

SECTION 4. Amends Chapter 262C, Health and Safety Code, by adding Section
262.037, as follows: 
 
Sec. 262.037.  HEALTH-RELATED PROJECTS.  Authorizes an authority to
transfer assets to a governmental entity that embraces the territory of
the authority, including the municipality that created the authority or a
county in which that municipality is located, to fund or support
health-related projects. 

SECTION 5. Emergency clause.
  Effective date:  upon passage.

SUMMARY OF COMMITTEE CHANGES

Amendment 1.

Page 1, line 14, after "body," strike "and the authority provide," and add
"provides". 

Page 1, line 17, after "The," strike "authority and the".