SRC-ARR S.B. 1615 76(R) BILL ANALYSIS Senate Research Center S.B. 1615 76R8791 KLA-DBy: Lucio State Affairs 4/26/1999 As Filed DIGEST Currently, counties with a hospital district or public hospital provide care to indigent persons. These hospital districts may receive additional compensation for indigent health care services through the shared hospital program which is established under Medicaid and provides federal funds to match state and local expenditures. Counties without a hospital district or public hospital must provide care to indigent patients and pay the cost of this care from the general revenue. This can be problematic for counties with many low-income residents since the tax base is lower and the county has no opportunity to recoup any of the cost of indigent health care. S.B. 1615 would authorize county and hospital districts to pool resources in providing health care for indigent residents through the creation of a health services district. PURPOSE As proposed, S.B. 1615 creates health services districts and grants the power of eminent domain and the authority to issue bonds. RULEMAKING AUTHORITY Rulemaking authority is granted to the board of directors of a health services district in SECTION 1 (Section 287.074, Health and Safety Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Title 4D, Health and Safety Code, by adding Chapter 287, as follows: CHAPTER 287. HEALTH SERVICES DISTRICTS SUBCHAPTER A. GENERAL PROVISIONS Sec. 287.001. DEFINITIONS. Defines "board," "district," and director." Sec. 287.002. DISTRICT AUTHORIZATION. Authorizes a health services district (district) to be created and established and, if created, must be maintained, operated, and financed in the manner provided by this chapter. SUBCHAPTER B. CREATION OF DISTRICT Sec. 287.021. CREATION BY CONTRACT. Authorizes two or more political subdivisions of this state, including a hospital district, to create a district by adopting concurrent orders. Prohibits a county that is in the service area of a hospital district from being a party to the creation of a district or to a contract with a health services district. Authorizes the hospital district that serves the county to create and contract with the district for its service area. Requires a concurrent order to create a health services district to take certain action. Sec. 287.022. CONTRACT TERMS. Sets forth the terms of the contract for a district. Provides that Chapter 791, Government Code, does not apply to a contract made under this chapter. Sec. 287.023. PURPOSE AND DUTIES. Sets forth the purpose and powers of the district. Sec. 287.024. FUNDING. Requires each political subdivision that contracts with the district to contribute certain funds for its operation. Requires the district to maintain an accounting of the funds received from each political subdivision that contracts with the district. Authorizes the district to commingle and administer the financial contributions of all parties to the contract for district purposes. SUBCHAPTER C. DISTRICT ADMINISTRATION Sec. 287.041. BOARD OF DIRECTORS. Sets forth the board of directors of the district (board). Sec. 287.042. QUALIFICATIONS FOR OFFICE. Requires a person to have certain qualifications to be eligible to serve as a director. Prohibits an employee of the district from serving as a director. Sec. 287.043. BOND. Requires each director to execute a bond for $5,000 payable to the district, conditioned on the faithful performance of the person's duties as director, before assuming the duties of the office. Requires the bond to be kept in the permanent records of the district. Authorizes the board to pay for directors' bonds with district funds. Sec. 287.044. BOARD VACANCY. Requires a vacancy in the office of director to be filled for the unexpired term in the same manner as the original appointment. Sec. 287.045. OFFICERS. Requires the board to elect from among its members a president and a vice president. Requires the board to appoint a secretary who need not be a director. Sec. 287.046. OFFICERS' TERMS; VACANCY. Requires each officer of the board to serve for a term of one year. Requires the board to fill a vacancy in a board office for the unexpired term. Sec. 287.047. COMPENSATION. Provides that directors and officers serve without compensation but may be reimbursed for actual expenses incurred in the performance of official duties. Sets forth requirements for expenses reimbursed under this section. Sec. 287.048. VOTING REQUIREMENT. Requires a majority for the members of the board voting to concur in a matter relating to the business of the district. Sec. 287. 049. ADMINISTRATOR, ASSISTANT ADMINISTRATOR, AND ATTORNEY. Sets forth requirements for administrators, assistant administrators, and attorneys. Sec. 287.050. APPOINTMENT TO STAFF. Authorizes the board to appoint certain staff. Sec. 287.051. TECHNICIANS, NURSES, AND OTHER DISTRICT EMPLOYEES. Authorizes the district to employ technicians, nurses, and other necessary employees. Authorizes the board to delegate to the administrator the authority to employ persons for the district. Sec. 287.052. GENERAL DUTIES OF ADMINISTRATORS. Requires the administrator to supervise and direct the district. Sec. 287.053. RETIREMENT BENEFITS. Authorizes the board to provide retirement benefits for employees of the district by taking certain actions. SUBCHAPTER D. POWERS AND DUTIES Sec. 287.071. RESPONSIBILITY OF GOVERNMENTAL ENTITY. Provides that on creation of a district, a county, municipality, hospital district, or other governmental entity in which the district is located shall transfer to the district certain items. Sec. 287.072. DISTRICT RESPONSIBILITIES. Provides that the district assumes the duties required under Section 287.023 and any additional duties specified in the contract with the political subdivisions that created the district. Sec. 287.073. MANAGEMENT, CONTROL, AND ADMINISTRATION. Requires the board to manage, control, and administer the hospital system and the funds and resources of the district that are transferred under Section 287.071. Sec. 287.074. DISTRICT RULES. Authorizes the board to adopt rules governing the operation of the district and the duties, functions, and responsibilities of the district staff and employees. Sec. 287.075. METHODS AND PROCEDURES. Authorizes the board to prescribe certain methods and procedures for operation of the district. Sec. 287.076. HOSPITAL PROPERTY, FACILITIES, AND EQUIPMENT. Requires the board to determine certain information. Authorizes the board to take certain actions. Sec. 287.077. CONSTRUCTION CONTRACTS. Sets forth requirements for the board regarding construction contracts. Sec. 287.078. DISTRICT OPERATING AND MANAGEMENT CONTRACTS. Authorizes the board to enter into operating or management contracts relating to hospital facilities owned by the district or for which the district assumes responsibility for managing and operating under the terms of the contract with the political subdivisions that created the district. Sec. 287.079. EMINENT DOMAIN. Authorizes the district to exercise the power of eminent domain. Requires the district to exercise the power of eminent domain in the manner provided by Chapter 21, Property Code, but the district is not required to deposit in the trial court money or a bond as provided by Section 21.021(a), Property Code. Provides that the district is not required to take certain actions in a condemnation proceeding brought by a district. Sec. 287.080. EXPENSES FOR MOVING FACILITIES OF RAILROADS OR UTILITIES. Requires the district to bear the actual cost of certain items, if in exercising the power of eminent domain the board requires certain construction. Sec. 287. 081. PAYMENT FOR HEALTH CARE SERVICES. Requires the district without charge to supply to a patient residing in the district the care and treatment that the patient or a relative of the patient cannot pay. Requires the district to adopt an application procedure to determine eligibility for assistance that complies with Section 61.053. Authorizes the administrator of the district to have inquiry made into the financial circumstances of certain persons. Requires the administrator to report to the board if it finds that a patient or a relative of the patient can afford to pay for any part of the treatment. Requires the board to issue an order directing the patient or the relative to pay the district each week a specific amount that the individual is able to pay. Authorizes the board to adopt a sliding-fee scale for health care services provided to a patient who can pay for some, but not all, of the care and treatment provided by the district. Sets forth requirements for payment of health care services. Requires the board to call witnesses, hear and resolve the question, and issue a final order, if there is a dispute relating to an individual's ability to pay or if the administrator has any doubt concerning an individual's ability to pay. Sec. 287.082. REIMBURSEMENT FOR SERVICES. Sets forth requirements for the board to be reimbursed for certain services. Authorizes the board to contract with the state or federal government for reimbursement of the district for treatment of a sick, diseased, or injured person. Sec. 287.083. SERVICE CONTRACTS. Authorizes the board to contract with a municipality, county, special district, or other political subdivision of the state or with a state or federal agency for the district to take certain actions. Sec. 287.084. GIFTS AND ENDOWMENT. Authorizes the board to accept gifts and endowments to be held in trust for certain purposes. Sec. 287.085. AUTHORITY TO SUE AND BE SUED. Authorizes the board to sue and be sued on behalf of the district. SUBCHAPTER E. DISSOLUTION OF DISTRICT Sec. 287.101. DISSOLUTION. Authorizes the district to be dissolved if the contract with the political subdivision that created the district expires and is not renewed. Sec. 287.102. TRANSFER OF ASSETS AFTER DISSOLUTION. Requires the board to take certain actions if the district is dissolved. Provides that the county or entity assumes all debts and obligations of the district related to certain items, if the district transfers its land, buildings, improvements, equipment, and other assets to a county or other governmental entity. Sec. 287.103. ADMINISTRATION OF PROPERTY, DEBTS, AND ASSETS AFTER DISSOLUTION. Sets forth requirements for the administration of property, debts, and assets after dissolution. Sec. 287.104. ACCOUNTING. Requires the board to provide an accounting to each political subdivision that created and contracted with the district, after the district has paid all its debts and has disposed of all its funds. SUBCHAPTER F. DISTRICT FINANCES Sec. 287.121. FISCAL YEAR. Provides that the district operates on the fiscal year established by the board. Prohibits the fiscal year from being changed if revenue bonds of the district are outstanding or more than once in a 24-month period. Sec. 287.122. ANNUAL AUDIT. Requires the board annually to have an audit made of the financial condition of the district. Requires a copy of the audit to be provided to each political subdivision that created and contracted with the district. Sec. 287.123. DISTRICT AUDIT AND RECORDS. Provides that the annual audit and other district records are open to inspection during regular business hours at the principal office of the district. Sec. 287.124. ANNUAL BUDGET. Requires the administrator of the district to prepare a proposed annual budget for the district. Requires the proposed budget to contain a complete financial statement, including certain items. Sec. 287.125. NOTICE; HEARING; ADOPTION OF BUDGET. Set forth requirements for a notice, hearing, and adoption of budget. Sec. 287.126. AMENDING BUDGET. Authorizes the annual budget to be amended on the board's approval, after adoption. Sec. 287.127. LIMITATION OF EXPENDITURES. Prohibits money from being spent for an expense not included in the annual budget or an amendment to it. Sec. 287.128. SWORN STATEMENT. Requires the administrator to prepare for the board a sworn statement of the amount of money that belongs to the district and an account of the disbursements of that money, as soon as practicable after the close of the fiscal year. Sec. 287.129. SPENDING AND INVESTMENT LIMITATIONS. Sets forth certain limitations on district spending and investments.. Sec. 287.130. DEPOSITORY. Requires the board to name at least one bank to serve as depository for district funds. Sets forth requirements for depositing funds. Sec. 287.131. AD VALOREM TAXATION. Prohibits the district from imposing an ad valorem tax. SUBCHAPTER G. BONDS Sec. 287.141. GENERAL OBLIGATION BONDS. Prohibits a district from issuing general obligation bonds. Sec. 287.142. REVENUE BONDS. Authorizes the board to issue revenue bonds. Sets forth requirements for the bonds. Sec. 287.143. REFUNDING BONDS. Authorizes the refunding bonds of the district to be issued to refund an outstanding indebtedness the district has issued or assumed. Requires the bonds to be issued in the manner provided by Chapter 784, Acts of the 61st Legislature, Regular Session, 1969. Authorizes the refunding bonds to be sold and the proceeds applied to the payment of outstanding indebtedness or may be exchanged in whole or in part for not less than a similar principal amount of outstanding indebtedness. Requires the refunding bonds to be issued and payments made in a manner provided by Chapter 503, Acts of the 54th Legislature, Regular Session, 1955. Sec. 287.144. INTEREST AND MATURITY. Requires district bonds to mature not later than a certain date and to bear interest at a rate not to exceed that provided by Chapter 3, Acts of the 61st Legislature, Regular Session, 1969. Sec. 287.145. EXECUTION OF BONDS. Requires the president of the board to execute the bonds in the name of the district, and the secretary of the board to countersign the bonds in the manner provided by the Texas Uniform Facsimile Signature of Public Officials Act. Sec. 287.146. APPROVAL AND REGISTRATION OF BONDS. Provides that district bonds are subject to the same requirements with regard to approval by the attorney general and registration by the comptroller as the law provides for approval and registration of bonds issued by counties. Provides that the bonds are incontestable for any cause, on approval by the attorney general and registration by the comptroller. Sec. 287.147. BONDS AND INVESTMENTS. Provides that district bonds and indebtedness assumed by the district are legal and authorized for certain investments. Sec. 287.148. BONDS AS SECURITY FOR DEPOSITS. Provides that district bonds are eligible to secure deposits of public funds of the state and of municipalities, counties, school districts, and other political subdivisions of the state. Provides that the bonds are lawful and sufficient security for deposits to the extent of their value if accompanied by all unmatured coupons. Sec. 287.149. TAX STATUS OF BONDS. Provides that because the district created under this chapter is a public entity performing an essential public function, bonds issued by the district, any transaction relating to the bonds, and profits made in the sale of the bonds are free from taxation by the state or by any municipality, county, special district, or other political subdivision of the state. SECTION 2. Effective date: September 1, 1999. SECTION 3. Emergency clause.