75R8238 DLF-F                           

         By Berlanga, Cuellar, Delisi, Glaze,                     H.B. No. 3

            Coleman, et al. 

         Substitute the following for H.B. No. 3:

         By Berlanga                                          C.S.H.B. No. 3

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to establishing the Texas Healthy Kids Corporation to

 1-3     increase access to health care for children.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Subtitle E, Title 2, Health and Safety Code, is

 1-6     amended by adding Chapter 109 to read as follows:

 1-7                CHAPTER 109.  TEXAS HEALTHY KIDS CORPORATION

 1-8                      SUBCHAPTER A.  GENERAL PROVISIONS

 1-9           Sec. 109.001.  DEFINITIONS.  In this chapter:

1-10                 (1)  "Board" means the board of directors of the

1-11     corporation.

1-12                 (2)  "Child" means an individual younger than 18 years

1-13     of age.

1-14                 (3)  "Corporation" means the Texas Healthy Kids

1-15     Corporation established under this chapter.

1-16                 (4)  "Eligible coverage provider" means an entity that

1-17     meets the requirements for providing coverage under the program

1-18     established by the corporation under Section 109.061.

1-19                 (5)  "Executive director" means the executive director

1-20     of the corporation.

1-21                 (6)  "Program" means the health benefit program

1-22     provided by the corporation under this chapter.

1-23                 (7)  "Title IV-D agency" means the agency designated to

1-24     serve as the state's Title IV-D agency in accordance with Part D,

 2-1     Subchapter IV, Social Security Act (42 U.S.C. Section 651 et seq.).

 2-2           Sec. 109.002.  TEXAS HEALTHY KIDS FUND.  (a)  The Texas

 2-3     healthy  kids fund is a fund outside the state treasury held by the

 2-4     Texas Treasury Safekeeping Trust Company.  The fund is composed of

 2-5     money appropriated to the fund and of money appropriated to or

 2-6     deposited in the premium stabilization revolving account

 2-7     established under Subchapter E. The comptroller shall transfer to

 2-8     the fund money appropriated  to the fund from the state treasury.

 2-9           (b)  The comptroller may invest money in the fund in the same

2-10     manner as the comptroller may invest money in the state treasury.

2-11           (c)  The board shall file with the comptroller a verified

2-12     copy of a board resolution that designates the authorized

2-13     representatives of the corporation who have authority to spend

2-14     money in the fund.

2-15           Sec. 109.003.  BIENNIAL REPORT.  Not later than January 1 of

2-16     each odd-numbered year, the corporation shall submit a written

2-17     report to the governor, the lieutenant governor, the speaker of the

2-18     house of representatives, and the commissioner of insurance.  The

2-19     report must state the program's status and must include a statement

2-20     of the corporation's financial condition and an accounting for the

2-21     corporation's administrative expenses for the two years preceding

2-22     the date of the report.

2-23           Sec. 109.004.  IMMUNITY FROM LIABILITY.  Chapter 84, Civil

2-24     Practice and Remedies Code, applies to the corporation  and an

2-25     employee or volunteer of the corporation.

2-26              (Sections 109.005-109.030 reserved for expansion)

 3-1                     SUBCHAPTER B.  CORPORATE STRUCTURE

 3-2           Sec. 109.031.  TEXAS HEALTHY KIDS CORPORATION.  (a)  The

 3-3     Texas Healthy Kids Corporation is created and has the powers that

 3-4     are necessary and proper to carry out its duties.  The corporation

 3-5     is a nonprofit corporation and shall comply with the Texas

 3-6     Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's

 3-7     Texas Civil Statutes).

 3-8           (b)  The corporation is not subject to the franchise tax

 3-9     imposed by Chapter 171, Tax Code.

3-10           (c)  Subject to this chapter, the board shall take any step

3-11     necessary to maintain an exemption from federal income tax under

3-12     Section 501(a) of the Internal Revenue Code of 1986 (26 U.S.C.

3-13     Section 501(a)) by being listed as an exempt organization under

3-14     Section 501(c)(3) or 501(c)(4) of that code (26 U.S.C. Section

3-15     501(c)(3) or (c)(4)) or another similar law.

3-16           Sec. 109.032.  BOARD OF DIRECTORS; PRESIDING OFFICER.  (a)

3-17     The corporation shall operate subject to the general supervision of

3-18     a board of directors.  Notwithstanding the Texas Non-Profit

3-19     Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil

3-20     Statutes), the board is composed of:

3-21                 (1)  six members appointed by the governor with the

3-22     advice  and consent of the senate;

3-23                 (2)  the commissioner of health and human services or

3-24     the commissioner's designee, who serves as a nonvoting ex officio

3-25     member;

3-26                 (3)  the commissioner of insurance or the

3-27     commissioner's designee, who serves as a nonvoting ex officio

 4-1     member; and

 4-2                 (4)  the director of the Title IV-D agency, or the

 4-3     director's designee, who serves as a nonvoting ex officio member.

 4-4           (b)  Notwithstanding the Texas Non-Profit Corporation Act

 4-5     (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes), the

 4-6     appointed members of the board serve staggered six-year terms.  The

 4-7     terms of two appointed members expire on February 1 of each

 4-8     odd-numbered year.

 4-9           (c)  The members of the board appointed by the governor shall

4-10     annually elect a member appointed by the governor to serve as the

4-11     presiding officer of the board.

4-12           (d)  A member of the board may not serve more than two terms,

4-13     without regard to whether the terms are consecutive.

4-14           (e)  Members of the board serve without compensation, but are

4-15     entitled to reimbursement of their travel expenses as provided for

4-16     in the General Appropriations Act for state board or commission

4-17     members.  Money appropriated to the Texas Department of Insurance,

4-18     the Health and Human Services Commission, or the Title IV-D agency

4-19     may be spent, consistent with the General Appropriations Act, in

4-20     connection with the work or expenses of the ex officio members of

4-21     the board.

4-22           (f)  A person is not eligible for appointment to the board if

4-23     the person or the person's spouse is employed by, represents in any

4-24     capacity, owns, or controls any ownership interest in a business or

4-25     organization:

4-26                 (1)  that may obtain a pecuniary or other favorable

4-27     interest in the course of a business activity with the corporation;

 5-1     or

 5-2                 (2)  from whom the corporation receives funds.

 5-3           (g)  A person is not eligible for appointment to the board if

 5-4     the person is or has been an adverse party in litigation against

 5-5     the board or corporation.

 5-6           Sec. 109.033.  POWERS AND DUTIES OF BOARD; OVERSIGHT OF

 5-7     COMMISSIONER OF INSURANCE.  (a)  Subject to Subsection (d), the

 5-8     board is the oversight and governing entity of the corporation and

 5-9     has any power necessary and proper to carry out its duties under

5-10     this chapter, including the power to adopt bylaws governing the

5-11     operations of the board and the corporation. The board has complete

5-12     fiscal control over the corporation and is responsible for all

5-13     corporate operations.

5-14           (b)  The board may request and accept grants and gifts of

5-15     money, property, or services.  Subject to Subsection (c), the

5-16     corporation may use a grant or gift for any purpose of the

5-17     corporation, including paying the corporation's business expenses

5-18     and the salaries or wages of the corporation's employees.

5-19           (c)  The corporation may use a donation made as community

5-20     benefits by a hospital or hospital system under Section 171.063(a),

5-21     Tax Code, only to purchase health benefits for children who:

5-22                 (1)  have a family income of less than 200 percent of

5-23     poverty level according to the poverty index prepared by the

5-24     federal Office of Management and Budget; and

5-25                 (2)  reside:

5-26                       (A)  in the case of a hospital, in the county in

5-27     which the hospital is located or a county contiguous to the county;

 6-1     or

 6-2                       (B)  in the case of a hospital system, in a

 6-3     county in which the hospital system operates or any county

 6-4     contiguous to a county in which the hospital system operates.

 6-5           (d)  The board shall submit to the commissioner of insurance

 6-6     for approval and may not implement before receiving that approval:

 6-7                 (1)  the corporation's bylaws, plan of operation, and

 6-8     any other standards adopted by the board; and

 6-9                 (2)  the health benefit program and health benefit

6-10     plans established by the corporation under Subchapter C.

6-11           Sec. 109.034.  EXECUTIVE DIRECTOR.  (a)  The board shall

6-12     employ an executive director to help the board perform its duties.

6-13     The executive director shall act on behalf of and subject to

6-14     authorization and supervision of the board to carry out the

6-15     purposes of the corporation.

6-16           (b)  The corporation shall pay the executive director a

6-17     salary in an amount established by the board.

6-18           (c)  The executive director must make and file a surety bond

6-19     in an amount determined by the board for the faithful performance

6-20     of the executive director's duties and the proper safekeeping and

6-21     disbursement of corporate money.

6-22           Sec. 109.035.  EMPLOYEES; CONSULTANTS.  The executive

6-23     director may employ employees and retain consultants as necessary

6-24     to administer the programs of the corporation.

6-25           Sec. 109.036.  PUBLIC INPUT.  The board shall develop and

6-26     implement policies that provide the public with a reasonable

6-27     opportunity to appear before the board and to speak on any issue

 7-1     related to the corporation or the program.

 7-2           Sec. 109.037.  OPEN MEETINGS; OPEN RECORDS.  The board and

 7-3     the corporation are subject to the open meetings law, Chapter 551,

 7-4     Government Code, and the open records law, Chapter 552, Government

 7-5     Code, subject to Section 109.064.

 7-6           Sec. 109.038.  COOPERATION OF AND ASSISTANCE TO STATE

 7-7     AGENCIES.  (a)  A health and human services agency, as that term is

 7-8     defined by Section 531.001, Government Code, the Texas Department

 7-9     of Insurance, the Title IV-D agency, and the comptroller shall

7-10     cooperate with the corporation to assist the corporation in

7-11     performing its duties.

7-12           (b)  The corporation shall work with the Title IV-D agency,

7-13     the Texas Department of Human Services, and the Texas Department of

7-14     Health to facilitate the electronic exchange of information among

7-15     the corporation and the agencies that relates to individuals who:

7-16                 (1)  are covered under the program; and

7-17                 (2)  are the subject of a medical child support order

7-18     or are or may be eligible for benefits under a federally or

7-19     state-funded program administered by the Texas Department of Human

7-20     Services or the Texas Department of Health.

7-21           Sec. 109.039.  AUDIT BY STATE AUDITOR.  The corporation is

7-22     subject to audit by the state auditor under Chapter 321, Government

7-23     Code.  The audit may include a financial audit and an economy and

7-24     efficiency audit.

7-25              (Sections 109.040-109.060 reserved for expansion

7-26                    SUBCHAPTER C.  HEALTH BENEFIT PROGRAM

7-27           Sec. 109.061.  HEALTH BENEFIT PROGRAM.  (a)  The corporation

 8-1     shall:

 8-2                 (1)  establish a program to provide, through eligible

 8-3     coverage providers, health benefits for eligible children in this

 8-4     state who:

 8-5                       (A)  are not covered by insurance or another type

 8-6     of health benefit plan;

 8-7                       (B)  are not covered by insurance or another type

 8-8     of health benefit plan for a specified medical condition; or

 8-9                       (C)  are not covered by insurance or another type

8-10     of health benefit plan that, in the opinion of the board, provides

8-11     adequate coverage;

8-12                 (2)  develop the design and benefits structure of the

8-13     health benefit program offered by the corporation through eligible

8-14     coverage providers;

8-15                 (3)  determine eligibility criteria that children and

8-16     their family members must meet before the children may participate

8-17     in the program;

8-18                 (4)  develop participation criteria, subject to Section

8-19     109.063, for authorized insurers, health service organizations,

8-20     health maintenance organizations, and other entities eligible to

8-21     provide coverage under the health benefit program;

8-22                 (5)  develop and implement a public awareness program

8-23     to educate the public about the program;

8-24                 (6)  establish participation objectives for the

8-25     program;

8-26                 (7)  negotiate premiums for coverage under the program

8-27     and applicable copayments, coinsurance, or deductibles to be paid

 9-1     on behalf of a covered child; and

 9-2                 (8)  contract for the provision of health benefit

 9-3     coverage under the program.

 9-4           (b)  The board may contract for or otherwise obtain

 9-5     third-party administration services for the corporation.

 9-6           (c)  In developing the program, the corporation may consult

 9-7     with the Texas Department of Health, appropriate professional

 9-8     organizations, coverage providers, other agency officials, and

 9-9     consultants.  The corporation shall consult with the Title IV-D

9-10     agency in matters relating to coverage for children who are the

9-11     subject of a medical child support order and for whom the agency is

9-12     providing enforcement services.

9-13           (d)  Notwithstanding Article 3.51-6, Insurance Code, the

9-14     corporation may establish group coverage plans for children under

9-15     the program in specified geographic regions of the state or based

9-16     on other criteria approved by the commissioner of insurance.

9-17           (e)  The parent, managing conservator, or guardian of a

9-18     child, or another person sponsoring coverage for the child, is

9-19     responsible for premiums for coverage under the program and for

9-20     applicable copayments, coinsurance, or deductibles, as determined

9-21     by the corporation.  The corporation may develop a premium

9-22     structure that varies according to ability to pay and may require,

9-23     in accordance with the premium structure, that the parent,

9-24     conservator, guardian, or sponsor pay the full cost of the child's

9-25     coverage.

9-26           (f)  The corporation may require that the parent, managing

9-27     conservator, or guardian of a child, or another person sponsoring

 10-1    coverage for the child, pay to the corporation a reasonable

 10-2    enrollment fee, in an amount set by the corporation, before the

 10-3    child is enrolled in coverage under the program.

 10-4          (g)  The health benefit coverage provided under the

 10-5    corporation's program is secondary to any other available private

 10-6    coverage covering a child.  The corporation shall ensure that

 10-7    benefits provided by the program are the payor of last resort with

 10-8    respect to private coverage covering a child.

 10-9          (h)  In developing eligibility criteria under Subsection

10-10    (a)(3), the corporation may consider the impact of the eligibility

10-11    criteria on the availability of other health benefit plan coverage

10-12    for children. The corporation may restrict eligibility for coverage

10-13    under the program or impose a waiting period or other appropriate

10-14    restriction to minimize any adverse impact on the availability of

10-15    other health benefit plan coverage.

10-16          (i)  The board may develop a marketing plan under which each

10-17    participating eligible coverage provider is required to market the

10-18    program.  The corporation or eligible coverage providers may

10-19    publicize the corporation and the general nature of the program.

10-20    Direct sale or solicitation of a health benefit plan offered

10-21    through the program must be done in accordance with the Insurance

10-22    Code and other insurance laws of this state.

10-23          Sec. 109.062.  CORPORATE OPERATIONS; LICENSING REQUIREMENTS.

10-24    (a)  The corporation is not an insurer and may not self-insure or

10-25    self-fund the coverage provided through the program.  The board and

10-26    employees of the corporation are not agents of an insurer.  The

10-27    corporation, the board, and the employees of the corporation are

 11-1    not subject to any licensing requirement imposed under the

 11-2    Insurance Code or another insurance law of this state.

 11-3          (b)  The corporation shall use prudent business practices in

 11-4    the procurement of goods and services. A law governing the

 11-5    procurement of goods or services by a state agency, including

 11-6    Chapter 2054 or 2254, Government Code, or Subtitle D, Title 10,

 11-7    Government Code, does not apply to the procurement of goods or

 11-8    services by the corporation.  This subsection applies without

 11-9    regard to whether the goods or services are procured with money

11-10    provided to the corporation under a state grant or under

11-11    appropriation.

11-12          Sec. 109.063.  OPERATIONS OF ELIGIBLE COVERAGE PROVIDER.  (a)

11-13    An eligible coverage provider must:

11-14                (1)  hold a certificate of authority or other

11-15    appropriate license issued by the Texas Department of Insurance

11-16    that authorizes the eligible coverage provider to provide the type

11-17    of coverage to be offered through the program; and

11-18                (2)  satisfy, except as provided by this section, any

11-19    other applicable requirement of the Insurance Code or another

11-20    insurance law of this state.

11-21          (b)  A health benefit plan provider under the program is not

11-22    subject to a law that requires coverage or the offer of coverage of

11-23    a health care service or benefit.

11-24          (c)  An eligible coverage provider is not subject to the

11-25    premium tax imposed by Article 4.11, Insurance Code, or the tax on

11-26    revenues imposed under Section 33, Texas Health Maintenance

11-27    Organization Act (Section 20A.33, Vernon's Texas Insurance Code),

 12-1    with respect to money received for coverage provided under this

 12-2    chapter.

 12-3          Sec. 109.064.  ACCESS TO RECORDS; CONFIDENTIALITY.  (a)

 12-4    Notwithstanding any other law, the corporation may obtain the

 12-5    medical records of and other information relating to a child

 12-6    covered by the program or applying to be covered by the program on

 12-7    receipt of the informed written consent of the child's parent,

 12-8    managing conservator, or guardian.

 12-9          (b)  Information in the possession of the corporation that

12-10    identifies an individual, including  medical records and family

12-11    financial information, is confidential and exempt from disclosure

12-12    and discovery in a civil action.  Subject to Section 109.038(b) and

12-13    any requirement of federal law, the corporation or an employee or

12-14    agent of the corporation may not release confidential information

12-15    to any person, including a state or federal agency, without the

12-16    written consent of a parent, managing conservator, or guardian of

12-17    the participating child.

12-18          Sec. 109.065.  GRIEVANCES AND APPEALS.  The corporation shall

12-19    develop a plan for the receipt and consideration of complaints

12-20    regarding participating eligible coverage providers to ensure

12-21    appropriate delivery of health care services to participating

12-22    children and to ensure that eligible coverage providers comply with

12-23    any applicable complaint procedure imposed by law or the

12-24    requirements of the corporation.

12-25          Sec. 109.066.  TEXAS DEPARTMENT OF HEALTH PROGRAMS.  (a)  The

12-26    department may use appropriated funds, in accordance with the

12-27    General Appropriations Act, to purchase coverage under a health

 13-1    benefit plan provided through the program for children who are

 13-2    eligible for coverage for the program if:

 13-3                (1)  the children receive health care benefits under

 13-4    the chronically ill and disabled children's program or another

 13-5    federally funded or state-funded program, other than the state

 13-6    Medicaid program, that is administered by the department;

 13-7                (2)  provision of the benefits through a health benefit

 13-8    plan provided through the program is a more cost-effective means of

 13-9    providing some or all of the benefits described by Subdivision (1);

13-10    and

13-11                (3)  no benefit or service provided to the children is

13-12    eliminated or adversely affected as a result of the provision of

13-13    the benefits through the program.

13-14          (b)  Services provided to children under a federally funded

13-15    or state-funded program administered by the department, including

13-16    the chronically ill and disabled children's program, may not be

13-17    reduced or eliminated because some or all of the services are

13-18    provided through the program or otherwise provided because of the

13-19    establishment of the corporation or the program.

13-20             (Sections 109.067-109.100 reserved for expansion

13-21              SUBCHAPTER D.  COVERAGE UNDER ORDER OF MEDICAL

13-22                             SUPPORT FOR CHILD

13-23          Sec. 109.101.  APPLICATION.  A party ordered under Chapter

13-24    154, Family Code, to apply for coverage for a child under the

13-25    program shall provide to the corporation:

13-26                (1)  a copy of the order rendered under Chapter 154;

13-27    and

 14-1                (2)  the name and address of the obligor's employer.

 14-2          Sec. 109.102.  DUTIES OF CORPORATION OR DESIGNEE OF

 14-3    CORPORATION.  (a)  The corporation or the designee of the

 14-4    corporation shall review an application and, if the corporation or

 14-5    designee finds that the child is eligible for coverage under the

 14-6    program, shall:

 14-7                (1)  issue coverage to the child in accordance with the

 14-8    program; and

 14-9                (2)  notify the obligor's employer in accordance with

14-10    Subsection (b).

14-11          (b)  The notice provided under Subsection (a)(2) must:

14-12                (1)  explain the employer's obligations under Section

14-13    109.103;

14-14                (2)  state:

14-15                      (A)  the amount to be paid for coverage of the

14-16    child, including the amount of the premium and the premium

14-17    stabilization revolving account fee imposed under Subchapter E;

14-18                      (B)  whether the amount is to be paid to the

14-19    corporation or the corporation's designee; and

14-20                      (C)  the address to which the payment is to be

14-21    sent; and

14-22                (3)  include a copy of the medical child support order

14-23    rendered under Chapter 154, Family Code.

14-24          (c)  The corporation or the corporation's designee shall

14-25    notify the employer of an obligor of any increase in the amount to

14-26    be paid for coverage of the child under the program.

14-27          Sec. 109.103.  DUTY OF EMPLOYER.  (a)  An employer who

 15-1    receives notice under Section 109.102 shall withhold an appropriate

 15-2    amount from the obligor's earnings for the required payment and

 15-3    remit the amount as instructed on the notice.

 15-4          (b)  An employer who fails to withhold or remit payments as

 15-5    required by this section or who discriminates in hiring or

 15-6    employment on the basis of a medical support order is subject to

 15-7    the penalties and fines imposed under Subchapter C, Chapter 158,

 15-8    Family Code.

 15-9             (Sections 109.104-109.150 reserved for expansion

15-10              SUBCHAPTER E.  ELIGIBILITY OF CERTAIN CHILDREN;

15-11                            STABILIZATION FUND

15-12          Sec. 109.151.  TERMINATION FOR FAILURE TO PAY PREMIUMS.

15-13    Except as provided by this subchapter, the corporation shall

15-14    terminate the coverage of a child for failure to pay a premium as

15-15    required under Section 109.061(e).

15-16          Sec. 109.152.  PREMIUM STABILIZATION REVOLVING ACCOUNT.

15-17    (a)  The premium stabilization revolving account is an account

15-18    within the Texas healthy kids fund.

15-19          (b)  The premium stabilization revolving account is composed

15-20    of money contributed to the account under this subchapter, any

15-21    money appropriated to the account by the legislature, and any gift

15-22    of money accepted by the board for the purposes of the account.

15-23          Sec. 109.153.  FEE; DEPOSIT TO ACCOUNT.  (a)  The corporation

15-24    shall charge for each child covered under the program a reasonable

15-25    premium stabilization revolving account fee, not to exceed $5 each

15-26    month.

15-27          (b)  The corporation shall remit money collected under this

 16-1    section to the comptroller, in accordance with rules adopted by the

 16-2    comptroller, for deposit to the credit of the premium stabilization

 16-3    revolving account.

 16-4          Sec. 109.154.  USE OF MONEY IN ACCOUNT.  (a)  Money in the

 16-5    premium stabilization revolving account may be used by the

 16-6    corporation only to pay a premium for coverage provided through the

 16-7    program for a child for whom a premium is not paid in accordance

 16-8    with Section 109.061(e).

 16-9          (b)  A premium may not be paid for a child who is covered by

16-10    a health benefit plan other than the plan offered by the

16-11    corporation.

16-12          (c)  The corporation shall determine the period for which

16-13    premiums may be paid from the fund and the circumstances under

16-14    which the premiums may be paid.

16-15          (d)  The parent, managing conservator, or guardian of a child

16-16    for whom a premium is paid from the premium stabilization revolving

16-17    account, or another person sponsoring coverage for the child,

16-18    remains responsible for reimbursing the account for the premium

16-19    paid.  The coverage for the child is subject to termination, in

16-20    accordance with criteria adopted by the board, if the parent,

16-21    managing conservator, guardian, or sponsor fails to reimburse the

16-22    account as required by this subsection.  The corporation shall

16-23    remit money collected under this subsection to the comptroller for

16-24    deposit to the credit of the account.

16-25          SECTION 2.  Section 154.182, Family Code, is amended by

16-26    amending Subsection (b) and adding Subsection (c) to read as

16-27    follows:

 17-1          (b)  In determining the manner in which health insurance for

 17-2    the child is to be ordered, the court shall render its order in

 17-3    accordance with the following priorities, unless a party shows good

 17-4    cause why a particular order would not be in the best interest of

 17-5    the child:

 17-6                (1)  if health insurance is available for the child

 17-7    through the obligor's employment or membership in a union, trade

 17-8    association, or other organization, the court shall order the

 17-9    obligor to include the child in the obligor's health insurance;

17-10                (2)  if health insurance is not available for the child

17-11    through the obligor's employment but is available for the child

17-12    through the obligee's employment or membership in a union, trade

17-13    association, or other organization, the court may order the obligee

17-14    to provide health insurance for the child, and, in such event,

17-15    shall order the obligor to pay additional child support to be

17-16    withheld from earnings under Chapter 158 to the obligee for the

17-17    actual cost of the health insurance for the child; [or]

17-18                (3)  if health insurance is not available for the child

17-19    under Subdivision (1) or (2), the court shall order the obligor to

17-20    provide health insurance for the child if the court finds that

17-21    health insurance is available for the child from another source and

17-22    that the obligor is financially able to provide it;

17-23                (4)  if health insurance is not available for the child

17-24    under Subdivision (1), (2), or (3), the court shall order the

17-25    obligor to apply for coverage through the Texas Healthy Kids

17-26    Corporation established under Chapter 109, Health and Safety Code;

17-27    or

 18-1                (5)  if health coverage is not available for the child

 18-2    under Subdivision (1), (2), (3), or (4), the court shall order the

 18-3    obligor to pay the obligee, in addition to any amount ordered under

 18-4    the guidelines for child support, a reasonable amount each month as

 18-5    medical support for the child to be withheld from earnings under

 18-6    Chapter 158.

 18-7          (c)  In establishing the amount of additional medical child

 18-8    support under Subsection (b)(5), the court shall presume that  $38

 18-9    each month is a reasonable amount for a child but may order a

18-10    greater or lesser amount as appropriate under the circumstances.

18-11    The Health and Human Services Commission may promulgate guidelines

18-12    for the dollar amounts of medical child support that the court may

18-13    presumptively apply in circumstances in which the obligor is

18-14    responsible for medical child support for more than one child.

18-15          SECTION 3.  Section 171.063(a), Tax Code, is amended to read

18-16    as follows:

18-17          (a)  The following corporations are exempt from the franchise

18-18    tax:

18-19                (1)  a nonprofit corporation exempted from the federal

18-20    income tax under Section 501(c)(3), (4), (5), (6), (7), (8), (10),

18-21    or (19), Internal Revenue Code which in the case of a nonprofit

18-22    hospital means a hospital providing charity care and community

18-23    benefits as set forth in Paragraph (A), (B), (C), (D), (E), (F), or

18-24    (G):

18-25                      (A)  charity care and government-sponsored

18-26    indigent health care are provided at a level which is reasonable in

18-27    relation to the community needs, as determined through the

 19-1    community needs assessment, the available resources of the hospital

 19-2    or hospital system, and the tax-exempt benefits received by the

 19-3    hospital or hospital system;

 19-4                      (B)  charity care and government-sponsored

 19-5    indigent health care are provided in an amount equal to at least

 19-6    four percent of the hospital's or hospital system's net patient

 19-7    revenue;

 19-8                      (C)  charity care and government-sponsored

 19-9    indigent health care are provided in an amount equal to at least

19-10    100 percent of the hospital's or hospital system's tax-exempt

19-11    benefits, excluding federal income tax;

19-12                      (D)  for tax periods beginning before January 1,

19-13    1996, charity care and community benefits are provided in a

19-14    combined amount equal to at least five percent of the hospital's

19-15    net patient revenue, provided that charity care and

19-16    government-sponsored indigent health care are provided in an amount

19-17    equal to at least three percent of net patient revenue;

19-18                      (E)  for tax periods beginning after December 31,

19-19    1995, charity care and community benefits are provided in a

19-20    combined amount equal to at least five percent of the hospital's or

19-21    hospital system's net patient revenue, provided that charity care

19-22    and government-sponsored indigent health care are provided in an

19-23    amount equal to at least four percent of net patient revenue;

19-24                      (F)  a nonprofit hospital that has been

19-25    designated as a disproportionate share hospital under the state

19-26    Medicaid program in the current year or in either of the previous

19-27    two fiscal years is considered to have provided a reasonable amount

 20-1    of charity care and government-sponsored indigent health care and

 20-2    is considered in compliance with the standards provided by this

 20-3    subsection; or

 20-4                      (G)  a hospital operated on a nonprofit basis

 20-5    that is located in a county with a population of less than 50,000

 20-6    and in which the entire county or the population of the entire

 20-7    county has been designated as a health professionals shortage area

 20-8    is considered in compliance with the standards provided by this

 20-9    subsection;

20-10                (2)  a corporation exempted under  Section 501(c)(2) or

20-11    (25), Internal Revenue Code, if the corporation or corporations for

20-12    which it holds title to property is either exempt from or not

20-13    subject to the franchise tax;

20-14                (3)  a corporation exempted from federal income tax

20-15    under  Section 501(c)(16), Internal Revenue Code;  and

20-16                (4)  a nonprofit corporation exempted from the federal

20-17    income tax under Section 501(c)(3), Internal Revenue Code, that

20-18    does not receive any payment for providing health care services to

20-19    inpatients or outpatients from any source including but not limited

20-20    to the patient or person legally obligated to support the patient,

20-21    third-party payors, Medicare, Medicaid, or any other state or local

20-22    indigent care program.  Payment for providing health care services

20-23    does not include charitable donations, legacies, bequests, or

20-24    grants or payments for research.

20-25          For purposes of satisfying Paragraph (E) of Subdivision (1),

20-26    a hospital or hospital system may not change its existing fiscal

20-27    year unless the hospital or hospital system changes its ownership

 21-1    or corporate structure as a result of a sale or merger.

 21-2          For purposes of this subsection, a hospital that satisfies

 21-3    Paragraph (A), (F), or (G) of Subdivision (1) shall be excluded in

 21-4    determining a hospital system's compliance with the standards

 21-5    provided by Paragraph (B), (C), (D), or (E) of Subdivision (1).

 21-6          For purposes of this subsection, the terms "charity care,"

 21-7    "government-sponsored indigent health care," "health care

 21-8    organization," "hospital system," "net patient revenue," "nonprofit

 21-9    hospital," and "tax-exempt benefits" have the meanings set forth in

21-10    Sections 311.031 and  311.042, Health and Safety Code.  A

21-11    determination of the amount of community benefits and charity care

21-12    and government-sponsored indigent health care provided by a

21-13    hospital or hospital system and the hospital's or hospital system's

21-14    compliance with the requirements of  Section 311.045, Health and

21-15    Safety Code, shall be based on the most recently completed and

21-16    audited prior fiscal year of the hospital or hospital system.

21-17          For purposes of this subsection, "community benefits"

21-18    includes a donation of money to the Texas Healthy Kids Corporation

21-19    established by Chapter 109, Health and Safety Code, to be used for

21-20    a purpose described by Section 109.033(c), Health and Safety Code.

21-21          The providing of charity care and government-sponsored

21-22    indigent health care in accordance with Paragraph (A) of

21-23    Subdivision (1) shall be guided by the prudent business judgment of

21-24    the hospital which will ultimately determine the appropriate level

21-25    of charity care and government-sponsored indigent health care based

21-26    on the community needs, the available resources of the hospital,

21-27    the tax-exempt benefits received by the hospital, and other factors

 22-1    that may be unique to the hospital, such as the hospital's volume

 22-2    of Medicare and Medicaid patients.  These criteria shall not be

 22-3    determinative factors, but shall be guidelines contributing to the

 22-4    hospital's decision along with other factors which may be unique to

 22-5    the hospital.  The formulas contained in Paragraphs (B), (C), (D),

 22-6    and (E) of Subdivision (1) shall also not be considered

 22-7    determinative of a reasonable amount of charity care and

 22-8    government-sponsored indigent health care.

 22-9          The requirements of this subsection shall not apply to the

22-10    extent a hospital or hospital system demonstrates that reductions

22-11    in the amount of community benefits, charity care, and

22-12    government-sponsored indigent health care are necessary to maintain

22-13    financial reserves at a level required by a bond covenant, are

22-14    necessary to prevent the hospital or hospital system from

22-15    endangering its ability to continue operations, or if the hospital,

22-16    as a result of a natural or other disaster, is required

22-17    substantially to curtail its operations.

22-18          In any fiscal year that a hospital or hospital system,

22-19    through unintended miscalculation, fails to meet any of the

22-20    standards in Subdivision (1), the hospital or hospital system shall

22-21    not lose its tax-exempt status without the opportunity to cure the

22-22    miscalculation in the fiscal year following the fiscal year the

22-23    failure is discovered by both meeting one of the standards and

22-24    providing an additional amount of charity care and

22-25    government-sponsored indigent health care that is equal to the

22-26    shortfall from the previous fiscal year.  A hospital or hospital

22-27    system may apply this provision only once every five years.

 23-1          SECTION 4.  As soon as practicable after the effective date

 23-2    of this Act, the governor shall appoint the initial board of

 23-3    directors of the Texas Healthy Kids Corporation.  In appointing the

 23-4    initial board of directors, the governor shall appoint two persons

 23-5    to terms expiring on February 1, 1999, two persons to terms

 23-6    expiring on February 1, 2001, and two persons to terms expiring on

 23-7    February 1, 2003.

 23-8          SECTION 5.  (a)  Not later than the 60th day after the

 23-9    effective date of this Act, the commissioner of insurance, acting

23-10    as incorporator, shall take the steps necessary to create the Texas

23-11    Healthy Kids Corporation as a nonprofit corporation under the Texas

23-12    Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's

23-13    Texas Civil Statutes).

23-14          (b)  Not later than the 90th day after the effective date of

23-15    this Act, the commissioner of insurance, acting on behalf of the

23-16    Texas Healthy Kids Corporation, shall employ an acting executive

23-17    director for the corporation.  The  acting executive director may:

23-18                (1)  develop a proposed business plan for the

23-19    corporation;

23-20                (2)  solicit alternative funding for the corporation

23-21    and for the health benefit plan program to be established by the

23-22    corporation; and

23-23                (3)  develop, to the extent possible, a proposed health

23-24    benefit plan program for the consideration of the board of

23-25    directors of the Texas Healthy Kids Corporation.

23-26          (c)  The commissioner of insurance, on behalf of the

23-27    corporation, may accept grants and gifts of money, property, or

 24-1    services to assist the acting executive director appointed under

 24-2    Subsection (b) of this section in carrying out the acting executive

 24-3    director's powers.  The commissioner's authority under this section

 24-4    expires on the date all of the appointed members of the board of

 24-5    directors of the Texas Healthy Kids Corporation have been appointed

 24-6    by the governor and have qualified for office.

 24-7          (d)  The acting executive director appointed under this

 24-8    section serves until the earlier of:

 24-9                (1)  the date the acting executive director is

24-10    dismissed by the commissioner of insurance;

24-11                (2)  the date the acting executive director is

24-12    dismissed by the board of directors of the Texas Healthy Kids

24-13    Corporation; or

24-14                (3)  the date the board of directors of the corporation

24-15    employs an executive director for the corporation.

24-16          (e)  Notwithstanding Subsection (b) of this section, the

24-17    commissioner of insurance may not employ an acting executive

24-18    director on or after the date all of the appointed members of the

24-19    board of directors of the Texas Healthy Kids Corporation have been

24-20    appointed and have qualified for office.

24-21          SECTION 6.  (a)  The Texas Healthy Kids Corporation shall

24-22    offer a health benefit plan under Chapter 109, Health and Safety

24-23    Code, as added by this Act, not later than the first anniversary of

24-24    the effective date of this Act.

24-25          (b)  Not later than the date the Texas Healthy Kids

24-26    Corporation first offers a health benefit plan in accordance with

24-27    Subsection (a) of this section, the board of directors of the Texas

 25-1    Healthy Kids Corporation shall:

 25-2                (1)  establish general administrative and accounting

 25-3    procedures for the corporation;

 25-4                (2)  develop the design and benefits structure of any

 25-5    health benefit plan that may be offered by the corporation through

 25-6    eligible coverage providers in accordance with Chapter 109, Health

 25-7    and Safety Code, as added by this Act; and

 25-8                (3)  develop a plan for the receipt and consideration

 25-9    of complaints as required by Section 109.065, Health and Safety

25-10    Code, as added by this Act.

25-11          (c)  The board of directors of the Texas Healthy Kids

25-12    Corporation shall determine whether it is feasible, considering the

25-13    resources available, to initially offer the health benefit plan

25-14    required under Chapter 109, Health and Safety Code, as added by

25-15    this Act, in each region of the state.  If the board determines

25-16    that it is not feasible to initially offer the health benefit plan

25-17    on a statewide basis, the board shall develop and the corporation

25-18    shall implement a schedule to stagger implementation of the health

25-19    benefit program in different regions of the state.

25-20          SECTION 7.  A court may not order that coverage be provided

25-21    to a child through the Texas Healthy Kids Corporation under Section

25-22    154.182, Family Code, as amended by this Act, before the date that

25-23    corporation first offers coverage under a health benefit plan.

25-24          SECTION 8.  As soon as practicable after the effective date

25-25    of this Act, the Title IV-D agency shall seek the modification of

25-26    child support orders that are enforced by the agency and to which

25-27    Section 154.182(b)(5), Family Code, as added by this Act, applies

 26-1    to obtain additional medical child support under that subdivision.

 26-2          SECTION 9.  (a)  Except as provided by Subsection (b) of this

 26-3    section, this Act takes effect immediately.

 26-4          (b)  Section 3 of this Act takes effect January 1, 1998, and

 26-5    applies to a report originally due on or after that date.

 26-6          SECTION 10.  The importance of this legislation and the

 26-7    crowded condition of the calendars in both houses create an

 26-8    emergency and an imperative public necessity that the

 26-9    constitutional rule requiring bills to be read on three several

26-10    days in each house be suspended, and this rule is hereby suspended,

26-11    and that this Act take effect and be in force according to its

26-12    terms, and it is so enacted.