By Berlanga H.B. No. 3 75R3850 DLF-F 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 Sec. 109.002. TEXAS HEALTHY KIDS FUND. (a) The Texas 1-24 healthy kids fund is a fund with the comptroller. The fund is 2-1 composed of money appropriated to the fund, and the comptroller 2-2 shall transfer to the fund money appropriated to the fund from the 2-3 state treasury. 2-4 (b) The comptroller may invest money in the fund in the same 2-5 manner as the comptroller may invest money in the state treasury. 2-6 (c) The comptroller shall draw warrants from the fund on 2-7 receipt of a voucher signed by an authorized representative of the 2-8 corporation. The board shall file with the comptroller a verified 2-9 copy of a board resolution that designates the authorized 2-10 representatives of the corporation who have authority to sign 2-11 vouchers for payment from the fund. 2-12 Sec. 109.003. BIENNIAL REPORT. Not later than January 1 of 2-13 each odd-numbered year, the corporation shall submit a written 2-14 report to the governor, the lieutenant governor, and the speaker of 2-15 the house of representatives. The report must state the program's 2-16 status and must include a statement of the corporation's financial 2-17 condition for the two years preceding the date of the report. 2-18 Sec. 109.004. IMMUNITY FROM LIABILITY. (a) The corporation 2-19 is immune from liability for damages that arise: 2-20 (1) in the course of the good faith execution of the 2-21 corporation's powers and duties under this chapter; or 2-22 (2) from an error or omission of: 2-23 (A) an eligible coverage provider; or 2-24 (B) a physician or other health services 2-25 provider under contract to the corporation or to an eligible 2-26 coverage provider. 2-27 (b) A member of the board, the executive director, an 3-1 employee of the corporation, or any consultant or advisor retained 3-2 by the corporation is immune from liability for damages that arise: 3-3 (1) in the course of the good faith execution of the 3-4 person's duties to the corporation; or 3-5 (2) from an error or omission of: 3-6 (A) an eligible coverage provider; or 3-7 (B) a physician or other health services 3-8 provider under contract to the corporation or to an eligible 3-9 coverage provider. 3-10 (c) This section does not apply to an act or omission of the 3-11 corporation or a member of the board, the executive director, an 3-12 employee, or a consultant or advisor that is intentional or 3-13 wilfully or wantonly negligent. 3-14 (Sections 109.005-109.030 reserved for expansion 3-15 SUBCHAPTER B. CORPORATE STRUCTURE 3-16 Sec. 109.031. TEXAS HEALTHY KIDS CORPORATION. (a) The 3-17 Texas Healthy Kids Corporation is created and has the powers that 3-18 are necessary and convenient to carry out its duties. The 3-19 corporation is a nonprofit corporation and shall comply with the 3-20 Texas Non-Profit Corporation Act (Article 1396-1.01 et seq., 3-21 Vernon's Texas Civil Statutes). 3-22 (b) The corporation is not subject to the franchise tax 3-23 imposed by Chapter 171, Tax Code. 3-24 (c) Subject to this chapter, the board shall take any step 3-25 necessary to maintain an exemption from federal income tax under 3-26 Section 501(a) of the Internal Revenue Code of 1986 (26 U.S.C. 3-27 Section 501(a)) by being listed as an exempt organization under 4-1 Section 501(c)(3) or 501(c)(4) of that code (26 U.S.C. Section 4-2 501(c)(3) or (c)(4)). 4-3 Sec. 109.032. BOARD OF DIRECTORS. (a) The corporation 4-4 shall operate subject to the general supervision of a board of 4-5 directors. Notwithstanding the Texas Non-Profit Corporation Act 4-6 (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes), the 4-7 board is composed of: 4-8 (1) six members appointed by the governor with the 4-9 advice and consent of the senate; 4-10 (2) the commissioner of health and human services or 4-11 the commissioner's designee, who serves as a nonvoting ex officio 4-12 member; and 4-13 (3) the commissioner of insurance or the 4-14 commissioner's designee, who serves as a nonvoting ex officio 4-15 member. 4-16 (b) Notwithstanding the Texas Non-Profit Corporation Act 4-17 (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes), the 4-18 appointed members of the board serve staggered six-year terms. The 4-19 terms of two appointed members expire on February 1 of each 4-20 odd-numbered year. 4-21 (c) A member of the board may not serve more than two terms, 4-22 without regard to whether the terms are consecutive. 4-23 (d) Members of the board serve without compensation, but are 4-24 entitled to reimbursement of their travel expenses as provided for 4-25 in the General Appropriations Act for state board or commission 4-26 members. Money appropriated to the Texas Department of Insurance 4-27 or to the Health and Human Services Commission may be spent, 5-1 consistent with the General Appropriations Act, in connection with 5-2 the work or expenses of the ex officio members of the board. 5-3 (e) A person is not eligible for appointment to the board if 5-4 the person or the person's spouse is employed by, represents in any 5-5 capacity, owns, or controls any ownership interest in a business or 5-6 organization: 5-7 (1) that may obtain a pecuniary or another favorable 5-8 interest in the course of a business activity with the corporation; 5-9 or 5-10 (2) from whom the corporation receives funds. 5-11 (f) A person is not eligible for appointment to the board if 5-12 the person is or has been an adverse party in litigation against 5-13 the board. 5-14 Sec. 109.033. POWERS AND DUTIES OF BOARD. (a) The board is 5-15 the oversight and governing entity of the corporation and has any 5-16 power necessary and convenient to carry out its duties under this 5-17 chapter, including the power to adopt bylaws and rules governing 5-18 the operations of the board and the corporation. The board has 5-19 complete fiscal control over the corporation and is responsible for 5-20 all corporate operations. 5-21 (b) The board may request and accept grants and gifts of 5-22 money, property, or services. The corporation may use a grant or 5-23 gift for any purpose of the corporation, including paying the 5-24 corporation's business expenses and the salaries or wages of the 5-25 corporation's employees. 5-26 Sec. 109.034. EXECUTIVE DIRECTOR. (a) The board shall 5-27 employ an executive director to help the board perform its duties. 6-1 The executive director shall act on behalf of and subject to 6-2 authorization and consent of the board to carry out the duties of 6-3 the corporation. 6-4 (b) The corporation shall pay the executive director a 6-5 salary in an amount established by the board. 6-6 (c) The executive director must make and file a surety bond 6-7 in an amount determined by the board for the faithful performance 6-8 of the executive director's duties and the proper safekeeping and 6-9 disbursement of corporate money. 6-10 Sec. 109.035. EMPLOYEES; CONSULTANTS. The executive 6-11 director may employ employees and retain consultants as necessary 6-12 to administer the duties of the corporation. 6-13 Sec. 109.036. PUBLIC INPUT. The board shall develop and 6-14 implement policies that provide the public with a reasonable 6-15 opportunity to appear before the board and to speak on any issue 6-16 related to the corporation or the program. 6-17 Sec. 109.037. OPEN MEETINGS; OPEN RECORDS. The board and 6-18 the corporation are not subject to the open meetings law, Chapter 6-19 551, Government Code, or the open records law, Chapter 552, 6-20 Government Code. 6-21 Sec. 109.038. COOPERATION OF STATE AGENCIES. A health and 6-22 human services agency, as that term is defined by Section 531.001, 6-23 Government Code, the Texas Department of Insurance, and the 6-24 comptroller shall cooperate with the corporation to assist the 6-25 corporation in performing its duties. 6-26 (Sections 109.039-109.060 reserved for expansion 7-1 SUBCHAPTER C. HEALTH BENEFIT PROGRAM 7-2 Sec. 109.061. HEALTH BENEFIT PROGRAM. (a) The corporation 7-3 shall: 7-4 (1) establish a program to provide, through eligible 7-5 coverage providers, health benefits for eligible children in this 7-6 state who: 7-7 (A) are not covered by insurance or another type 7-8 of health benefit plan; 7-9 (B) are not covered by insurance or another type 7-10 of health benefit plan for a specified medical condition; or 7-11 (C) are not covered by insurance or another type 7-12 of health benefit plan that, in the opinion of the board, provides 7-13 adequate coverage; 7-14 (2) develop the design, actuarial, and benefits 7-15 structure of the health benefit program offered by the corporation 7-16 through eligible coverage providers; 7-17 (3) determine eligibility criteria that children and 7-18 their family members must meet before the children may participate 7-19 in the program; 7-20 (4) develop participation criteria for authorized 7-21 insurers, health service organizations, health maintenance 7-22 organizations, and other entities eligible to provide coverage 7-23 under the health benefit program; 7-24 (5) develop and implement a public awareness program 7-25 to educate the public about the program; 7-26 (6) establish participation objectives for the program 7-27 and develop a plan to require any participating eligible coverage 8-1 provider to market the program; 8-2 (7) contract for or otherwise obtain third-party 8-3 administration services for the corporation; 8-4 (8) negotiate premiums for coverage under the program 8-5 and applicable copayments, coinsurance, or deductibles to be paid 8-6 under Subsection (c) on behalf of a covered child; and 8-7 (9) contract for the provision of health benefit 8-8 coverage under the program. 8-9 (b) In developing the program, the corporation may consult 8-10 with appropriate professional organizations, coverage providers, 8-11 agency officials, and consultants. 8-12 (c) The parent, managing conservator, or guardian of a 8-13 child, or another person sponsoring coverage for the child, is 8-14 responsible for premiums for coverage under the program and for 8-15 applicable copayments, coinsurance, or deductibles, as determined 8-16 by the corporation. The corporation may develop a premium 8-17 structure that varies according to ability to pay and may require, 8-18 in accordance with the premium structure, that the parent, 8-19 conservator, guardian, or sponsor pay the full cost of the child's 8-20 coverage. If the child is eligible for medical assistance under 8-21 the state Medicaid program, the corporation shall require that the 8-22 parent, conservator, guardian, or sponsor pay the full cost of the 8-23 child's coverage. The corporation may terminate a child's coverage 8-24 if the required premium is not paid. 8-25 (d) The corporation may require that the parent, managing 8-26 conservator, or guardian of a child, or another person sponsoring 8-27 coverage for the child, pay to the corporation a reasonable 9-1 enrollment fee, in an amount set by the corporation, before the 9-2 child is enrolled in coverage under the program. 9-3 (e) The health benefit coverage provided under the 9-4 corporation's program is secondary to any other available private 9-5 coverage covering a child or a family member, and the corporation 9-6 shall ensure that benefits provided by the program are the payor of 9-7 last resort. 9-8 Sec. 109.062. CORPORATE OPERATIONS; LICENSING REQUIREMENTS. 9-9 (a) The corporation is not an insurer. The board and employees of 9-10 the corporation are not agents of an insurer. The corporation, the 9-11 board, and the employees of the corporation are not subject to any 9-12 licensing requirement imposed under the Insurance Code or another 9-13 insurance law of this state. 9-14 (b) The corporation shall use prudent business practices in 9-15 the procurement of goods and services. A law governing the 9-16 procurement of goods or services by a state agency, including 9-17 Chapter 2054 or 2254, Government Code, or Subtitle D, Title 10, 9-18 Government Code, does not apply to the procurement of goods or 9-19 services by the corporation. This subsection applies without 9-20 regard to whether the goods or services are procured with money 9-21 provided to the corporation under a state grant or under 9-22 appropriation. 9-23 Sec. 109.063. OPERATIONS OF ELIGIBLE COVERAGE PROVIDER. (a) 9-24 Except as provided by this section, an eligible coverage provider 9-25 must satisfy any applicable requirement of the Insurance Code or 9-26 another insurance law of this state. 9-27 (b) A health benefits plan provider under the program is not 10-1 subject to a law that requires coverage or the offer of coverage of 10-2 a health care service or benefit. 10-3 (c) An eligible coverage provider is not subject to the 10-4 premium tax imposed by Article 4.11, Insurance Code, or the tax on 10-5 revenues imposed under Section 33, Texas Health Maintenance 10-6 Organization Act (Section 20A.33, Vernon's Texas Insurance Code), 10-7 with respect to money received for coverage provided under this 10-8 chapter. 10-9 Sec. 109.064. ACCESS TO RECORDS; CONFIDENTIALITY. (a) 10-10 Notwithstanding any other law, the corporation may obtain the 10-11 medical records of a child covered by the program or applying to be 10-12 covered by the program on receipt of written consent executed by 10-13 the child's parent, managing conservator, or guardian. 10-14 (b) Information in the possession of the corporation that 10-15 identifies an individual, including medical records and family 10-16 financial information, is confidential and exempt from disclosure 10-17 and discovery in a civil action. Subject to any requirement of 10-18 federal law, the corporation or an employee or agent of the 10-19 corporation may not release confidential information to any person, 10-20 including a state or federal agency, without the written consent of 10-21 a parent, managing conservator, or guardian of the participating 10-22 child. 10-23 Sec. 109.065. GRIEVANCES AND APPEALS. The corporation shall 10-24 develop a plan for the receipt and disposition of complaints 10-25 regarding participating eligible coverage providers to ensure 10-26 appropriate delivery of health care services to participating 10-27 children. 11-1 (Sections 109.066-109.100 reserved for expansion 11-2 SUBCHAPTER D. COVERAGE UNDER ORDER OF MEDICAL SUPPORT FOR CHILD 11-3 Sec. 109.101. APPLICATION. (a) A parent of a child who is 11-4 the subject of an order issued under Section 154.182(c), Family 11-5 Code, shall apply for coverage for the child under the health 11-6 benefit plan provided through the corporation. 11-7 (b) As part of the application made under Subsection (a), 11-8 the corporation may require that the parent provide: 11-9 (1) a copy of an order issued under Section 158.0065, 11-10 Family Code; and 11-11 (2) the name and address of the employer of an obligor 11-12 under an order described by Subdivision (1). 11-13 Sec. 109.102. DUTIES OF CORPORATION OR DESIGNEE. (a) The 11-14 corporation, or an eligible provider designated by the corporation, 11-15 shall review the application and, if the corporation or the 11-16 designee finds that the child is eligible for coverage under the 11-17 health benefit plan, the corporation or designee shall: 11-18 (1) issue coverage to the child in accordance with the 11-19 program; and 11-20 (2) if an order for withholding of the amount of 11-21 premium has been issued under Section 158.0065, Family Code, notify 11-22 the employer of the obligor of: 11-23 (A) the amount of premium to be paid; 11-24 (B) whether the premium is to be paid to the 11-25 corporation or the corporation's designee; and 11-26 (C) the address of the corporation, or the 11-27 corporation's designee, as appropriate. 12-1 (b) The corporation or the corporation's designee shall 12-2 notify the employer of an obligor of any increase in the premium 12-3 for coverage of the child under the health benefit plan. 12-4 SECTION 2. Section 154.182, Family Code, is amended by 12-5 adding Subsection (c) to read as follows: 12-6 (c) A court that orders health insurance under Subsection 12-7 (b)(3) may order that health insurance or substantially equivalent 12-8 coverage be provided through the Texas Healthy Kids Corporation 12-9 established by Chapter 109, Health and Safety Code, if it appears 12-10 that the child is eligible for coverage through the corporation. 12-11 SECTION 3. Subchapter A, Chapter 158, Family Code, is 12-12 amended by adding Section 158.0065 to read as follows: 12-13 Sec. 158.0065. WITHHOLDING FOR HEALTH BENEFIT PLAN COVERAGE 12-14 PROVIDED THROUGH TEXAS HEALTHY KIDS CORPORATION. In a case in 12-15 which the court orders that income be withheld under this chapter 12-16 and in which the court orders that health insurance or 12-17 substantially similar coverage be provided for a child through the 12-18 Texas Healthy Kids Corporation under Section 154.182(c), the court 12-19 shall order that the amount of premium required for any coverage 12-20 issued through the corporation be withheld from the disposable 12-21 earnings of the obligor. 12-22 SECTION 4. Sections 158.103 and 158.203, Family Code, are 12-23 amended to read as follows: 12-24 Sec. 158.103. CONTENTS OF ORDER OF WITHHOLDING. (a) An 12-25 order of withholding shall state: 12-26 (1) the style, cause number, and court having 12-27 continuing jurisdiction of the suit; 13-1 (2) the name, address, and, if available, the social 13-2 security number of the obligor; 13-3 (3) the amount and duration of the child support 13-4 payments; 13-5 (4) the name, address, and, if available, the social 13-6 security numbers of the child and the obligee; 13-7 (5) the name and address of the person or agency to 13-8 whom the payments shall be made; 13-9 (6) that the obligor is required to notify the court 13-10 promptly of any change affecting the order; and 13-11 (7) that the ordered amount shall be paid to a local 13-12 registry or the Title IV-D agency. 13-13 (b) If the order applies to the amount of premium under 13-14 Section 158.0065, the order must also state that the payment for 13-15 the premium must be paid to the Texas Healthy Kids Corporation or 13-16 the designee of the corporation, in the amount and as required by 13-17 the corporation. 13-18 Sec. 158.203. REMITTING WITHHELD PAYMENTS. (a) The 13-19 employer shall remit the amount to be withheld to the person or 13-20 office named in the order or writ on each pay date. The payment 13-21 must include the date on which the withholding occurred. 13-22 (b) If the order or writ applies to the amount of premium 13-23 under Section 158.0065, the employer shall remit the amount of 13-24 premium to be withheld to the Texas Healthy Kids Corporation or the 13-25 corporation's designee, as directed by the corporation. 13-26 SECTION 5. Section 171.063(a), Tax Code, is amended to read 13-27 as follows: 14-1 (a) The following corporations are exempt from the franchise 14-2 tax: 14-3 (1) a nonprofit corporation exempted from the federal 14-4 income tax under Section 501(c)(3), (4), (5), (6), (7), (8), (10), 14-5 or (19), Internal Revenue Code, which in the case of a nonprofit 14-6 hospital means a hospital providing charity care and community 14-7 benefits as set forth in Paragraph (A), (B), (C), (D), (E), (F), or 14-8 (G): 14-9 (A) charity care and government-sponsored 14-10 indigent health care are provided at a level which is reasonable in 14-11 relation to the community needs, as determined through the 14-12 community needs assessment, the available resources of the hospital 14-13 or hospital system, and the tax-exempt benefits received by the 14-14 hospital or hospital system; 14-15 (B) charity care and government-sponsored 14-16 indigent health care are provided in an amount equal to at least 14-17 four percent of the hospital's or hospital system's net patient 14-18 revenue; 14-19 (C) charity care and government-sponsored 14-20 indigent health care are provided in an amount equal to at least 14-21 100 percent of the hospital's or hospital system's tax-exempt 14-22 benefits, excluding federal income tax; 14-23 (D) for tax periods beginning before January 1, 14-24 1996, charity care and community benefits are provided in a 14-25 combined amount equal to at least five percent of the hospital's 14-26 net patient revenue, provided that charity care and 14-27 government-sponsored indigent health care are provided in an amount 15-1 equal to at least three percent of net patient revenue; 15-2 (E) for tax periods beginning after December 31, 15-3 1995, charity care and community benefits are provided in a 15-4 combined amount equal to at least five percent of the hospital's or 15-5 hospital system's net patient revenue, provided that charity care 15-6 and government-sponsored indigent health care are provided in an 15-7 amount equal to at least four percent of net patient revenue; 15-8 (F) a nonprofit hospital that has been 15-9 designated as a disproportionate share hospital under the state 15-10 Medicaid program in the current year or in either of the previous 15-11 two fiscal years is considered to have provided a reasonable amount 15-12 of charity care and government-sponsored indigent health care and 15-13 is considered in compliance with the standards provided by this 15-14 subsection; or 15-15 (G) a hospital operated on a nonprofit basis 15-16 that is located in a county with a population of less than 50,000 15-17 and in which the entire county or the population of the entire 15-18 county has been designated as a health professionals shortage area 15-19 is considered in compliance with the standards provided by this 15-20 subsection; 15-21 (2) a corporation exempted under Section 501(c)(2) or 15-22 (25), Internal Revenue Code, if the corporation or corporations for 15-23 which it holds title to property is either exempt from or not 15-24 subject to the franchise tax; 15-25 (3) a corporation exempted from federal income tax 15-26 under Section 501(c)(16), Internal Revenue Code; and 15-27 (4) a nonprofit corporation exempted from the federal 16-1 income tax under Section 501(c)(3), Internal Revenue Code, that 16-2 does not receive any payment for providing health care services to 16-3 inpatients or outpatients from any source including but not limited 16-4 to the patient or person legally obligated to support the patient, 16-5 third-party payors, Medicare, Medicaid, or any other state or local 16-6 indigent care program. Payment for providing health care services 16-7 does not include charitable donations, legacies, bequests, or 16-8 grants or payments for research. 16-9 For purposes of satisfying Paragraph (E) of Subdivision (1), 16-10 a hospital or hospital system may not change its existing fiscal 16-11 year unless the hospital or hospital system changes its ownership 16-12 or corporate structure as a result of a sale or merger. 16-13 For purposes of this subsection, a hospital that satisfies 16-14 Paragraph (A), (F), or (G) of Subdivision (1) shall be excluded in 16-15 determining a hospital system's compliance with the standards 16-16 provided by Paragraph (B), (C), (D), or (E) of Subdivision (1). 16-17 For purposes of this subsection, the terms "charity care," 16-18 "government-sponsored indigent health care," "health care 16-19 organization," "hospital system," "net patient revenue," "nonprofit 16-20 hospital," and "tax-exempt benefits" have the meanings set forth in 16-21 Sections 311.031 and 311.042, Health and Safety Code. A 16-22 determination of the amount of community benefits and charity care 16-23 and government-sponsored indigent health care provided by a 16-24 hospital or hospital system and the hospital's or hospital system's 16-25 compliance with the requirements of Section 311.045, Health and 16-26 Safety Code, shall be based on the most recently completed and 16-27 audited prior fiscal year of the hospital or hospital system. 17-1 For purposes of this subsection, "community benefits" 17-2 includes a donation of money to the Texas Healthy Kids Corporation 17-3 established by Chapter 109, Health and Safety Code, to be used for 17-4 any purpose of the corporation. 17-5 The providing of charity care and government-sponsored 17-6 indigent health care in accordance with Paragraph (A) of 17-7 Subdivision (1) shall be guided by the prudent business judgment of 17-8 the hospital which will ultimately determine the appropriate level 17-9 of charity care and government-sponsored indigent health care based 17-10 on the community needs, the available resources of the hospital, 17-11 the tax-exempt benefits received by the hospital, and other factors 17-12 that may be unique to the hospital, such as the hospital's volume 17-13 of Medicare and Medicaid patients. These criteria shall not be 17-14 determinative factors, but shall be guidelines contributing to the 17-15 hospital's decision along with other factors which may be unique to 17-16 the hospital. The formulas contained in Paragraphs (B), (C), (D), 17-17 and (E) of Subdivision (1) shall also not be considered 17-18 determinative of a reasonable amount of charity care and 17-19 government-sponsored indigent health care. 17-20 The requirements of this subsection shall not apply to the 17-21 extent a hospital or hospital system demonstrates that reductions 17-22 in the amount of community benefits, charity care, and 17-23 government-sponsored indigent health care are necessary to maintain 17-24 financial reserves at a level required by a bond covenant, are 17-25 necessary to prevent the hospital or hospital system from 17-26 endangering its ability to continue operations, or if the hospital, 17-27 as a result of a natural or other disaster, is required 18-1 substantially to curtail its operations. 18-2 In any fiscal year that a hospital or hospital system, 18-3 through unintended miscalculation, fails to meet any of the 18-4 standards in Subdivision (1), the hospital or hospital system shall 18-5 not lose its tax-exempt status without the opportunity to cure the 18-6 miscalculation in the fiscal year following the fiscal year the 18-7 failure is discovered by both meeting one of the standards and 18-8 providing an additional amount of charity care and 18-9 government-sponsored indigent health care that is equal to the 18-10 shortfall from the previous fiscal year. A hospital or hospital 18-11 system may apply this provision only once every five years. 18-12 SECTION 6. As soon as practicable after the effective date 18-13 of this Act, the governor shall appoint the initial board of 18-14 directors of the Texas Healthy Kids Corporation. In appointing the 18-15 initial board of directors, the governor shall appoint two persons 18-16 to terms expiring on February 1, 1999, two persons to terms 18-17 expiring on February 1, 2001, and two persons to terms expiring on 18-18 February 1, 2003. 18-19 SECTION 7. (a) Not later than November 1, 1997, the 18-20 commissioner of insurance, acting as incorporator, shall take the 18-21 steps necessary to create the Texas Healthy Kids Corporation as a 18-22 nonprofit corporation under the Texas Non-Profit Corporation Act 18-23 (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes). 18-24 (b) Not later than December 1, 1997, the commissioner of 18-25 insurance, acting on behalf of the Texas Healthy Kids Corporation, 18-26 shall employ an acting executive director for the corporation. The 18-27 acting executive director may: 19-1 (1) develop a proposed business plan for the 19-2 corporation; 19-3 (2) solicit alternative funding for the corporation 19-4 and for the health benefit plan program to be established by the 19-5 corporation; and 19-6 (3) develop, to the extent possible, a proposed health 19-7 benefit plan program for the consideration of the board. 19-8 (c) The commissioner of insurance, on behalf of the 19-9 corporation, may accept grants and gifts of money, property, or 19-10 services to assist the acting executive director appointed under 19-11 Subsection (b) of this section in carrying out the acting executive 19-12 director's powers. The commissioner's authority under this section 19-13 expires on the date all of the appointed members of the board of 19-14 directors have been appointed by the governor and have qualified 19-15 for office. 19-16 (d) The acting executive director appointed under this 19-17 section serves until the earlier of: 19-18 (1) the date the acting executive director is 19-19 dismissed by the commissioner of insurance; 19-20 (2) the date the acting executive director is 19-21 dismissed by the board of directors of the Texas Healthy Kids 19-22 Corporation; or 19-23 (3) the date the board of directors of the corporation 19-24 employs an executive director for the corporation. 19-25 (e) Notwithstanding Subsection (b) of this section, the 19-26 commissioner of insurance may not employ an acting executive 19-27 director on or after the date all of the appointed members of the 20-1 board of directors of the Texas Healthy Kids Corporation have been 20-2 appointed and have qualified for office. 20-3 SECTION 8. (a) The Texas Healthy Kids Corporation may not 20-4 offer a health benefit plan under Chapter 109, Health and Safety 20-5 Code, as added by this Act, before January 1, 1999. 20-6 (b) Not later than January 1, 1999, the board of directors 20-7 of the Texas Healthy Kids Corporation shall: 20-8 (1) establish general administrative and accounting 20-9 procedures for the corporation; 20-10 (2) develop the design, actuarial, and benefits 20-11 structure of any health benefit plan that may be offered by the 20-12 corporation through eligible coverage providers in accordance with 20-13 Chapter 109, Health and Safety Code, as added by this Act; and 20-14 (3) develop a plan for the receipt and disposition of 20-15 complaints as required by Section 109.065, Health and Safety Code, 20-16 as added by this Act. 20-17 (c) The board of directors of the Texas Healthy Kids 20-18 Corporation shall determine whether it is feasible, considering the 20-19 resources available, to initially offer the health benefit plan 20-20 required under Chapter 109, Health and Safety Code, as added by 20-21 this Act, in each region of the state. If the board determines 20-22 that it is not feasible to initially offer the health benefit plan 20-23 on a statewide basis, the board shall develop and the corporation 20-24 shall implement a schedule to stagger implementation of the health 20-25 benefit program in different regions of the state. 20-26 SECTION 9. (a) Except as provided by Subsections (b) and 20-27 (c) of this section, this Act takes effect September 1, 1997. 21-1 (b) Sections 2, 3, and 4 of this Act take effect January 1, 21-2 1999. 21-3 (c) Section 5 of this Act takes effect January 1, 1998, and 21-4 applies to a report originally due on or after that date. 21-5 SECTION 10. The importance of this legislation and the 21-6 crowded condition of the calendars in both houses create an 21-7 emergency and an imperative public necessity that the 21-8 constitutional rule requiring bills to be read on three several 21-9 days in each house be suspended, and this rule is hereby suspended.