HBA-NLM C.S.H.B. 2616 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 2616 By: Counts County Affairs 4/16/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE The Garza County Hospital District no longer has a hospital in operation. Since the closing of the hospital, there has been concern that citizens are being taxed for services no longer provided and some question the need for the continuation of the district. However, the district's enabling legislation does not include provisions for the dissolution of the district. C.S.H.B. 2616 updates existing provisions of the enabling legislation for the district. In addition, this bill includes provisions for the dissolution of the district. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 1, Chapter 502, Acts of the 60th Legislature, Regular Session, 1967, to require this Act to be operative so as to authorize the creation , establishment, maintenance, and operation of a health care district, rather than hospital district, within the State of Texas, to be known as the Garza County Health Care District. Makes a conforming change. SECTION 2. Amends Section 3, Chapter 502, Acts of the 60th Legislature, Regular Session, 1967, as follows: Sec. 3. (a) Provides that each member of the board of directors (board), may be required to execute, rather than shall, to execute a good and sufficient bond for $1,000. Authorizes the board to pay for the bonds of the directors with district funds. Deletes existing text requiring a board member to be to a resident which owns land subject to taxation therein. Makes conforming changes. (b) Provides that the appointed administrator may be required to execute, rather than shall execute, a good and sufficient bond for $10,000. Authorizes the board to pay for the bond of the administrator with district funds. (c) Requires the board to organize by electing one of their number as president and by appointing one of their number as secretary. (d) Requires an election of directors to be held on the first Saturday in May, rather than in April. Requires any person desiring his name to be printed on the ballot as a candidate for director to file an application at least 45, rather than 25, days before the date of the election. SECTION 3. Amends Section 4, Chapter 502, Acts of the 60th Legislature, Regular Session, 1967, to make a conforming change. SECTION 4. Amends Section 5, Chapter 502, Acts of the 60th Legislature, Regular Session, 1967, as follows: Sec 5. (a) Requires the board to have the power and authority and duty to levy a tax on all property subject to health care district taxation for the benefit of the district, rather than a tax of not to exceed 25 cents on the $100 valuation of all taxable property. Requires all taxes to be assessed and collected as provided by Subsections (b) and (c). Makes a conforming change. (b) Authorizes the board to annually impose property taxes in an amount not to exceed the limit approved by the voters at the election authorizing the levy of taxes. Prohibits the tax rate for all purposes from exceeding 75 cents on each $100 valuation of all property in the district. Authorizes the taxes to be used for the purposes provided by Subsection (c). Prohibits the district from imposing taxes to pay the principal of or interest on revenue bonds. Provides that the Tax Code governs the appraisal, assessment, and collection of district taxes. Authorizes the board to provide for the appointment of a tax assessor-collector for the district or to contract for the assessment and collection of taxes as provided by the Tax Code. (c) Authorizes the taxes to be used for certain purposes. Deletes existing text from Subsection (c) requiring the board to levy the tax on certain taxable property, the collection of such tax, and the deposit and report of certain fees. (d) Redesignated from existing Subsection (c). Deletes text relating to the board's authority to levy the tax for the purpose of securing funds to initiate the operation of the hospital district. Makes conforming changes. SECTION 5. Amends Section 6, Chapter 502, Acts of the 60th Legislature, Regular Session, 1967, as follows: Sec. 6. (a) Authorizes the board to issue general obligation bonds to make certain purchases, improvements, and acquisitions. Deletes text requiring the board to have the power and authority to issue and sell bonds as the obligations of the district. (b) Requires a sufficient tax to be levied, at the time of the issuance of any general obligation bonds by the district, to create an interest and sinking fund to pay the interest and principal as the bonds mature, not to exceed the rate of tax approved by the voters at the election authorizing the levy of taxes. Authorizes the district to issue general obligation bonds only if the bonds are authorized by a majority of the qualified voters of the district voting at the election called and held for the purpose. Authorizes the board to order a bond election. Requires the order calling the election to state specified information. Requires the board to canvass the returns and declare the results of the election. Makes conforming changes. (c) Authorizes the district to issue certain revenue bonds. Requires the bonds to be payable from and secured by a pledge on all or part of the revenues derived from the operation of the district's health care system. Authorizes the bonds to be additionally secured as provided. Requires the bonds to be issued in the specified manner. (d) Deletes text prohibiting bonds from being issued by the district until authorized by a majority vote of the legally qualified property taxpaying electors. Deletes text relating to the bond election and notice of the election. Makes conforming changes. (e) Provides that the bonds of the district must mature by a specified date and must bear a specified rate of interest. (f) Redesignated from existing Subsection (b). Makes conforming changes. (g) Redesignated from existing Subsection (d). Prohibits the district from making any contract calling for or requiring the expenditure or payment of $15,000 or more, rather than $1,000 or more, out of any fund or funds of said district. Makes conforming changes. SECTION 6. Amends Section 7, Chapter 502, Acts of the 60th Legislature, Regular Session, 1967, to delete text requiring a tax increase election to be held in the same manner as the election for the creation of the district. Makes a conforming change. SECTION 7. Amends Section 8, Chapter 502, Acts of the 60th Legislature, Regular Session, 1967, by amending Subsection (a) and by adding Subsections (d) -(h), as follows: (a) Makes a conforming changes. (d) Authorizes the board to purchase or lease property, facilities, or equipment for the district to use in the health care system and to mortgage or pledge the property, facilities, or equipment as security for the payment of the purchase price. (e) Authorizes the board to enter into one or more contracts to provide administrative and other personnel for the operation of the health care facilities. Prohibits the term of a contract from exceeding 25 years from the date on which the contract is entered. Authorizes the board to transfer district health care facilities by lease to individuals, corporations, or other legal entities and to sell or otherwise dispose of the district's property, facilities, and equipment. (f) Authorizes the board to provide retirement benefits for the employees of the district by establishing or administering a retirement program or electing to participate in the Texas County and District Retirement System or any other statewide retirement system in which the district is eligible to participate. (g) Authorizes the board to spend district funds to recruit physicians, nurses, and other trained medical personnel. Authorizes the board to contract with certain medical students or other students in a health occupation to pay the student's tuition or other expenses. (h) Authorizes the board to institute a suit to enforce the payment of taxes and to foreclose liens to secure the payment of taxes due to the district. SECTION 8. Amends Section 9, Chapter 502, Acts of the 60th Legislature, Regular Session, 1967, as follows: Sec. 9. (a) Deletes text requiring an audit to be filed with the comptroller of public accounts and makes a conforming change. (b) Requires the board to hold a public hearing on the proposed budget after publication of a notice of hearing in a newspaper of general circulation in the county in accordance with Chapter 551, Government Code, rather than at least once not less than 10 days prior to the date set for the hearing. Makes conforming changes. SECTION 9. Amends Section 10, Chapter 502, Acts of the 60th Legislature, Regular Session, 1967, to make a conforming change. SECTION 10. Amends Section 11, Chapter 502, Acts of the 60th Legislature, Regular Session, 1967, to require the health care district to be subject to inspection by any duly authorized representative of the Texas Department of Health, rather than the State Board of Health or any State Board of Charities or (Public Welfare) that now exists or that may be hereafter created. Makes conforming changes. SECTION 11. Amends Section 12, Chapter 502, Acts of the 60th Legislature, Regular Session, 1967, to make conforming changes. SECTION 12. Amends Section 13, Chapter 502, Acts of the 60th Legislature, Regular Session, 1967, to make conforming changes. SECTION 13. Amends Section 14, Chapter 502, Acts of the 60th Legislature, Regular Session, 1967, to make conforming changes. SECTION 14. Amends Section 16, Chapter 502, Acts of the 60th Legislature, Regular Session, 1967, to make a conforming change. SECTION 15. Amends Chapter 502, Acts of the 60th Legislature, Regular Session, 1967, by adding Sections 16A and 16B, as follows: Sec. 16A. (a) Authorizes the board to borrow money at a rate not to exceed the maximum annual percentage rate allowed by law for the district obligations at the time of the loan. (b) Authorizes the board to pledge specified district revenues, taxes, and bonds to secure a loan. (c) Requires a loan for which taxes or bonds are pledged to mature not later than the first anniversary of the date on which the loan is made. Requires a loan for which district revenues are pledged to mature not later than the fifth anniversary of the date on which the loan is made. Sec. 16B. (a) Authorizes the district to be dissolved only if the dissolution and sale or transfer are approved by a majority of the qualified voters of the district voting in an election called and held for that purpose. (b) Authorizes the board to order an election on the question of dissolving the district and disposing of the district's assets and obligations. Requires the board of directors to order an election if the board receives a petition requesting an election that is signed by a number of residents of the district equal to at least 15 percent of the registered voters in the district. (c) Requires the election to be held not later than the 60th day after the date the election is ordered. Provides that Section 41.001(a), Election Code, does not apply to an election ordered under this section. Sets forth the required contents of the order calling the election. (d) Requires the board to give notice of the election by publishing a substantial copy of the election order in a newspaper with general circulation in the district once a week for two consecutive weeks. Provides that the first publication must appear at least 35 days before the date set for the election. Requires the ballot for the election to be printed to permit voting for or against the proposition, in the manner provided by this subsection. (e) Requires the board to find that the district is dissolved, if a majority of the votes in the election favor dissolution. Requires the board to continue to administer the district, and prohibits another election on the question of dissolution from being held before the first anniversary of the most recent election to dissolve the district, if a majority of the votes in the election do not favor dissolution. (f) Requires the board to perform certain procedures if the majority of the votes in the election favor dissolution. (g) Provides that if the district transfers the land, buildings, improvements, equipment, and other assets to a county or other governmental entity, the county or entity assumes all debts and obligations of the district at the time of the transfer, and the district is dissolved. (h) Requires the board to determine the debt owned by the district, and impose a tax that is in proportion of the debt to the property value, on the property included in the district's tax rolls, after the board finds that the district is dissolved. (i) Requires the board to order the secretary to return the pro rata share of all unused tax money to each district taxpayer, when all outstanding debts and obligations of the district are paid. (j) Authorizes a taxpayer to request that the taxpayer's share of surplus tax money be credited to the taxpayer's county taxes. Requires the board to direct the secretary to transmit the funds to the county tax assessor-collector, if the taxpayer requests the credit. (k) Requires the board to file a written report with the Commissioners Court of Garza County (commissioners court) setting forth a summary of the board's actions is dissolving the district, after the district has paid all its debts and has disposed of all its assets and funds. (l) Requires the commissioners court to enter an order dissolving the district and releasing the board from any further duty or obligation, not later than the 10th day after the date it receives the report and determines that the requirements of this section have been fulfilled. (m) Prohibits the district from being dissolved unless the board provides for the sale or transfer of the district's assets and liabilities to another entity or person, notwithstanding any other provision of this Act. Prohibits the dissolution of the district and the sale or transfer of the district's assets and liabilities from contravening a trust indenture or bond resolution relating to the outstanding bonds of the district, or from diminishing or impairing the rights of a holder of any outstanding bond, warrant, or other obligation of the district. (n) Provides that the sale or transfer of the district's assets and liabilities must satisfy the debt and bond obligations of the district in a manner that protects the interests of the residents of the district, including the residents' collective property rights in the district's assets. Provides that a grant from federal funds is an obligation that must be repaid in full. Prohibits the district from transferring or disposing the district's assets only for due compensation, unless the transfer or sale is made to another governmental agency serving the district and using the transferred or purchased assets for the benefit of the residents formerly in the district. SECTION 16. Effective date: September 1, 1999. SECTION 17. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 2616 modifies the original in SECTION 2 (Section 3, Chapter 502, Acts of the 60th Legislature, Regular Session, 1967) by amending Subsections (a)-(c), as follows: (a) Provides that each member of the board of directors (board) may be required to execute, rather than shall execute, a good and sufficient bond for $1,000. Authorizes the board to pay for the bonds of the directors with district funds. Deletes existing text conditioning board membership on ownership of land subject to taxation in the district. Makes conforming changes. (b) Provides that the appointed administrator may be required to execute, rather than shall execute, a good and sufficient bond for $10,000. Authorizes the board to pay for the bond of the administrator with district funds. (c) Requires the board to organize by electing one of their number as president and by appointing one of their number as secretary. The substitute modifies the original in Subsection (d) of this section to require any person desiring his name to be printed on the ballot as a candidate for director to file an application at least 45, rather than 25, days before the date of the election. C.S.H.B. 2616 modifies the original in SECTION 4 (Section 5, Chapter 502, Acts of the 60th Legislature, Regular Session, 1967), Subsection (a), by requiring the board to have the power, authority, and duty to levy a tax on all property subject to health care district taxation for the benefit of the district, rather than a tax of not to exceed 75 cents on the $100 valuation of all taxable property. The substitute includes new text requiring all taxes to be assessed and collected as provided by Subsections (b) and (c). The substitute adds new Subsections (b) and (c), as follows: (b) Authorizes the board to annually impose property taxes in an amount not to exceed the limit approved by the voters at the election authorizing the levy of taxes. Prohibits the tax rate for all purposes from exceeding 75 cents on each $100 valuation of all property in the district. Authorizes the taxes to be used for the purposes provided by Subsection (c). Prohibits the district from imposing taxes to pay the principal of or interest on revenue bonds. Provides that the Tax Code governs the appraisal, assessment, and collection of district taxes. Authorizes the board to provide for the appointment of a tax assessor-collector for the district or to contract for the assessment and collection of taxes as provided by the Tax Code. (c) Authorizes the taxes to be used for certain purposes. Deletes existing text from Subsection (b) requiring the board to levy the tax on certain taxable property, the collection of such tax, and the deposit and report of certain fees. The substitute redesignates existing Subsection (c) to Subsection (d). C.S.H.B. 2616 modifies the original in SECTION 5 (Section 6, Chapter 502, Acts of the 60th Legislature, Regular Session, 1967), Subsection (a), to authorize the board to issue general obligation bonds to make certain purchases, improvements, and acquisitions. The substitute deletes text requiring the board to have the power and authority to issue and sell bonds as the obligations of the district. The substitute modifies Subsection (b) to require a sufficient tax to be levied, at the time of the issuance of any general obligation bonds by the district, to create an interest and sinking fund to pay the interest and principal as matures, not to exceed the rate of tax approved by the voters at the election authorizing the levy of taxes. The substitute includes new text to authorize the district to issue general obligation bonds only if the bonds are authorized by a majority of the qualified voters of the district voting at the election called and held for the purpose; and to authorize the board to order a bond election. The substitute adds new Subsections (c) and (e), as follows: (c) Authorizes the district to issue certain revenue bonds. Requires the bonds to be payable from and secured by a pledge on all or part of the revenues derived from the operation of the district's health care system. Authorizes the bonds to be additionally secured as provided. Requires the bonds to be issued in the specified manner. (e) Provides that the bonds of the district must mature by a specified date and must bear a specified rate of interest. C.S.H.B. 2616 modifies the original in SECTION 7 (Section 8, Chapter 502, Acts of the 60th Legislature, Regular Session, 1967), by adding new Subsections (d)-(h), as follows: (d) Authorizes the board to purchase or lease property, facilities, or equipment for the district to use in the health care system and to mortgage or pledge the property, facilities, or equipment as security for the payment of the purchase price. (e) Authorizes the board to enter into one or more contracts to provide administrative and other personnel for the operation of the health care facilities. Prohibits the term of a contract from exceeding 25 years from the date on which the contract is entered. Authorizes the board to transfer district health care facilities by lease to individuals, corporations, or other legal entities and to sell or otherwise dispose of the district's property, facilities, and equipment. (f) Authorizes the board to provide retirement benefits for the employees of the district by establishing or administering a retirement program or electing to participate in the Texas County and District Retirement System or any other statewide retirement system in which the district is eligible to participate. (g) Authorizes the board to spend district funds to recruit physicians, nurses, and other trained medical personnel. Authorizes the board to contract with certain medical students or other students in a health occupation to pay the student's tuition or other expenses. (h) Authorizes the board to institute a suit to enforce the payment of taxes and to foreclose liens to secure the payment of taxes due to the district. C.S.H.B. 2616 modifies the original in SECTION 8 (Section 9(b), Chapter 502, Acts of the 60th Legislature, Regular Session, 1967) by requiring the board to hold a public hearing on the proposed budget after publication of a notice of hearing in a newspaper of general circulation in the county in accordance with Chapter 551 (Open Meetings), Government Code, rather than at least once not less than 10 days prior to the date set for the hearing. Makes conforming changes. C.S.H.B. 2616 modifies the original in SECTION 15 (Chapter 502, Acts of the 60th Legislature, Regular Session, 1967) by adding a new Section 16A, as follows: Sec. 16A. (a) Authorizes the board to borrow money at a rate not to exceed the maximum annual percentage rate allowed by law for the district obligations at the time of the loan. (b) Authorizes the board to pledge specified district revenues, taxes, and bonds to secure a loan. (c) Requires a loan for which taxes or bonds are pledged to mature not later than the first anniversary of the date on which the loan is made. Requires a loan for which district revenues are pledged to mature not later than the fifth anniversary of the date on which the loan is made. C.S.H.B. 2616 modifies the original in SECTION 15 (Chapter 502, Acts of the 60th Legislature, Regular Session, 1967), by redesignating proposed Section 16A to a new Section 16B. The substitute modifies proposed Subsection (b) to authorize the board to order an election on the question of dissolving the district and disposing of the district's assets and obligations, rather than liabilities. Redesignates proposed Subsections (d) and (f) to new Subsection (c). Redesignates proposed Subsections (e) and (g) to new Subsection (d) Adds new Subsections (e)-(l), as follows: (e) Requires the board to find that the district is dissolved, if a majority of the votes in the election favor dissolution. Requires the board to continue to administer the district, and prohibits another election on the question of dissolution from being held before the first anniversary of the most recent election to dissolve the district, if a majority of the votes in the election do not favor dissolution. (f) Requires the board to perform certain procedures if the majority of the votes in the election favor dissolution. (g) Provides that if the district transfers the land, buildings, improvements, equipment, and other assets to a county or other governmental entity, the county or entity assumes all debts and obligations of the district at the time of the transfer, and the district is dissolved. (h) Requires the board to determine the debt owned by the district, and impose a tax that is in proportion of the debt to the property value, on the property included in the district's tax rolls, after the board finds that the district is dissolved. (i) Requires the board to order the secretary to return the pro rata share of all unused tax money to each district taxpayer, when all outstanding debts and obligations of the district are paid. (j) Authorizes a taxpayer to request that the taxpayer's share of surplus tax money be credited to the taxpayer's county taxes. Requires the board to direct the secretary to transmit the funds to the county tax assessor-collector, if the taxpayer requests the credit. (k) Requires the board to file a written report with the Commissioners Court of Garza County (commissioners court) setting forth a summary of the board's actions is dissolving the district, after the district has paid all its debts and has disposed of all its assets and funds. (l) Requires the commissioners court to enter an order dissolving the district and releasing the board from any further duty or obligation, not later than the 10th day after the date it receives the report and determines that the requirements of this section have been fulfilled. Redesignates proposed Subsections (i) and (j) to new Subsection (m). Redesignates proposed Subsection (k) to new Subsection (n), to prohibit the district from transferring or disposing of the district's assets except for due compensation, unless the transfer or sale is made to another governmental agency that serves the district and uses the transferred or purchased assets for the benefit of the residents formerly in the district, rather than authorizing the district to transfer or sell the district's assets only for due compensation, with the specified requirements. The substitute deletes proposed Subsection (h) requiring the board of directors to order an election on the question of dissolving the district and disposing of the district's assets and liabilities if the board receives a petition requesting an election on the issue that is signed by at least 300 of the registered voters of the district, according to the most recent official list of registered voters.