1-1 AN ACT 1-2 relating to permanent funds for certain public health purposes. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Subchapter G, Chapter 403, Government Code, is 1-5 amended by adding Sections 403.105, 403.1055, 403.106, 403.1065, 1-6 403.1066, 403.1067, 403.1068, and 403.1069 to read as follows: 1-7 Sec. 403.105. PERMANENT FUND FOR TOBACCO EDUCATION AND 1-8 ENFORCEMENT. (a) The permanent fund for tobacco education and 1-9 enforcement is a dedicated account in the general revenue fund. 1-10 The fund is composed of: 1-11 (1) money transferred to the fund at the direction of 1-12 the legislature; 1-13 (2) gifts and grants contributed to the fund; and 1-14 (3) the available earnings of the fund determined in 1-15 accordance with Section 403.1068. 1-16 (b) Except as provided by Subsections (c), (e), and (f), 1-17 money in the fund may not be appropriated for any purpose. 1-18 (c) The available earnings of the fund may be appropriated 1-19 to the Texas Department of Health for programs to reduce the use of 1-20 cigarettes and tobacco products in this state, including: 1-21 (1) smoking cessation programs; 1-22 (2) enforcement of Subchapters H, K, and N, Chapter 1-23 161, Health and Safety Code, or other laws relating to distribution 1-24 of cigarettes or tobacco products to minors or use of cigarettes or 2-1 tobacco products by minors; 2-2 (3) public awareness programs relating to use of 2-3 cigarettes and tobacco products, including general educational 2-4 programs and programs directed toward youth; and 2-5 (4) specific programs for communities traditionally 2-6 targeted, by advertising and other means, by companies that sell 2-7 cigarettes or tobacco products. 2-8 (d) Subject to any applicable limit in the General 2-9 Appropriations Act, the Texas Department of Health may contract 2-10 with another entity to perform all or a part of the functions 2-11 described by Subsection (c) or may award grants to community 2-12 organizations, public institutions of higher education, as that 2-13 term is defined by Section 61.003, Education Code, or political 2-14 subdivisions to enable the organizations, institutions, or 2-15 political subdivisions to perform all or a part of those functions. 2-16 To ensure the most efficient, effective, and rapid delivery of 2-17 services, the Texas Board of Health shall give high priority and 2-18 preference to existing, effective state programs that do not 2-19 otherwise receive money from an endowment program funded by money 2-20 received under the Comprehensive Settlement Agreement and Release 2-21 filed in the case styled The State of Texas v. The American Tobacco 2-22 Co., et al., No. 5-96CV-91, in the United States District Court, 2-23 Eastern District of Texas. The board may adopt rules governing any 2-24 grant program established under this section. 2-25 (e) The comptroller may solicit and accept gifts and grants 2-26 to the fund. A gift or grant to the fund may be appropriated in 2-27 the same manner as available earnings of the fund, subject to any 3-1 limitation or requirement placed on the gift or grant by the donor 3-2 or granting entity. 3-3 (f) Money in the fund may also be appropriated to pay any 3-4 amount of money that the federal government determines that the 3-5 state should repay to the federal government or that the federal 3-6 government should recoup from the state in the event of national 3-7 legislation regarding the subject matter of the case styled The 3-8 State of Texas v. The American Tobacco Co., et al., No. 5-96CV-91, 3-9 in the United States District Court, Eastern District of Texas. 3-10 (g) Sections 403.095 and 404.071 do not apply to the fund. 3-11 Sec. 403.1055. PERMANENT FUND FOR CHILDREN AND PUBLIC 3-12 HEALTH. (a) The permanent fund for children and public health is 3-13 a dedicated account in the general revenue fund. The fund is 3-14 composed of: 3-15 (1) money transferred to the fund at the direction of 3-16 the legislature; 3-17 (2) gifts and grants contributed to the fund; and 3-18 (3) the available earnings of the fund determined in 3-19 accordance with Section 403.1068. 3-20 (b) Except as provided by Subsections (c), (e), and (f), 3-21 money in the fund may not be appropriated for any purpose. 3-22 (c) The available earnings of the fund may be appropriated 3-23 to the Texas Department of Health for the purpose of developing and 3-24 demonstrating cost-effective prevention and intervention strategies 3-25 for improving health outcomes for children and the public and for 3-26 providing grants to local communities to address specific public 3-27 health priorities, including sickle cell anemia, diabetes, high 4-1 blood pressure, cancer, heart attack, stroke, keloid tissue and 4-2 scarring, and respiratory disease, and for providing grants to 4-3 local communities for essential public health services as defined 4-4 in the Health and Safety Code. 4-5 (d) The Texas Board of Health may adopt rules governing any 4-6 grant program established under this section. 4-7 (e) The comptroller may solicit and accept gifts and grants 4-8 to the fund. A gift or grant to the fund may be appropriated in 4-9 the same manner as available earnings of the fund, subject to any 4-10 limitation or requirement placed on the gift or grant by the donor 4-11 or granting entity. 4-12 (f) Money in the fund may also be appropriated to pay any 4-13 amount of money that the federal government determines that the 4-14 state should repay to the federal government or that the federal 4-15 government should recoup from the state in the event of national 4-16 legislation regarding the subject matter of the case styled The 4-17 State of Texas v. The American Tobacco Co., et al., No. 5-96CV-91, 4-18 in the United States District Court, Eastern District of Texas. 4-19 (g) Sections 403.095 and 404.071 do not apply to the fund. 4-20 Sec. 403.106. PERMANENT FUND FOR EMERGENCY MEDICAL SERVICES 4-21 AND TRAUMA CARE. (a) The permanent fund for emergency medical 4-22 services and trauma care is a dedicated account in the general 4-23 revenue fund. The fund is composed of: 4-24 (1) money transferred to the fund at the direction of 4-25 the legislature; 4-26 (2) gifts and grants contributed to the fund; and 4-27 (3) the available earnings of the fund determined in 5-1 accordance with Section 403.1068. 5-2 (b) Except as provided by Subsections (c), (e), and (f), 5-3 money in the fund may not be appropriated for any purpose. 5-4 (c) The available earnings of the fund may be appropriated 5-5 to the Texas Department of Health for programs to provide emergency 5-6 medical services and trauma care in this state. 5-7 (d) Subject to any applicable limit in the General 5-8 Appropriations Act, the Texas Department of Health may establish 5-9 programs to provide emergency medical services and trauma care in 5-10 this state, may contract with another entity to establish those 5-11 programs, or may award grants to political subdivisions to 5-12 establish or support those programs. The department may 5-13 consolidate any grant program established under this section with 5-14 other grant programs relating to the provision of emergency medical 5-15 services and trauma care. The Texas Board of Health may adopt 5-16 rules governing the grant program. 5-17 (e) The comptroller may solicit and accept gifts and grants 5-18 to the fund. A gift or grant to the fund may be appropriated in 5-19 the same manner as available earnings of the fund, subject to any 5-20 limitation or requirement placed on the gift or grant by the donor 5-21 or granting entity. 5-22 (f) Money in the fund may also be appropriated to pay any 5-23 amount of money that the federal government determines that the 5-24 state should repay to the federal government or that the federal 5-25 government should recoup from the state in the event of national 5-26 legislation regarding the subject matter of the case styled The 5-27 State of Texas v. The American Tobacco Co., et al., No. 5-96CV-91, 6-1 in the United States District Court, Eastern District of Texas. 6-2 (g) Sections 403.095 and 404.071 do not apply to the fund. 6-3 Sec. 403.1065. PERMANENT FUND FOR RURAL HEALTH FACILITY 6-4 CAPITAL IMPROVEMENT. (a) The permanent fund for rural health 6-5 facility capital improvement is a dedicated account in the general 6-6 revenue fund. The fund is composed of: 6-7 (1) money transferred to the fund at the direction of 6-8 the legislature; 6-9 (2) payments of interest and principal on loans made 6-10 under Subchapter G, Chapter 106, Health and Safety Code, and fees 6-11 collected under that subchapter; 6-12 (3) gifts and grants contributed to the fund; and 6-13 (4) the available earnings of the fund determined in 6-14 accordance with Section 403.1068. 6-15 (b) Except as provided by Subsections (c), (d), and (e), 6-16 money in the fund may not be appropriated for any purpose. 6-17 (c) The available earnings of the fund may be appropriated 6-18 to the Center for Rural Health Initiatives for the purposes of 6-19 Subchapter G, Chapter 106, Health and Safety Code. 6-20 (d) The comptroller may solicit and accept gifts and grants 6-21 to the fund. A gift or grant to the fund may be appropriated in 6-22 the same manner as the available earnings of the fund, subject to 6-23 any limitation or requirement placed on the gift or grant by the 6-24 donor or granting entity. 6-25 (e) Money in the fund may also be appropriated to pay any 6-26 amount of money that the federal government determines that the 6-27 state should repay to the federal government or that the federal 7-1 government should recoup from the state in the event of national 7-2 legislation regarding the subject matter of the case styled The 7-3 State of Texas v. The American Tobacco Co., et al., No. 5-96CV-91, 7-4 in the United States District Court, Eastern District of Texas. 7-5 (f) Sections 403.095 and 404.071 do not apply to the fund. 7-6 Sec. 403.1066. COMMUNITY HOSPITAL CAPITAL IMPROVEMENT FUND. 7-7 (a) The community hospital capital improvement fund is a dedicated 7-8 account in the general revenue fund. The fund is composed of: 7-9 (1) money transferred to the fund at the direction of 7-10 the legislature; 7-11 (2) payments of interest and principal on loans and 7-12 fees collected under this section; 7-13 (3) gifts and grants contributed to the fund; and 7-14 (4) the available earnings of the fund determined in 7-15 accordance with Section 403.1068. 7-16 (b) Except as provided by Subsections (c), (d), and (e), the 7-17 money in the fund may not be appropriated for any purpose. 7-18 (c) The available earnings of the fund may be appropriated 7-19 to the Texas Department of Health for the purpose of providing 7-20 grants, loans, or loan guarantees to public or nonprofit community 7-21 hospitals with 125 beds or fewer located in an urban area of the 7-22 state. 7-23 (d) The comptroller may solicit and accept gifts and grants 7-24 to the fund. A gift or grant to the fund may be appropriated in 7-25 the same manner as available earnings of the fund, subject to any 7-26 limitation or requirement placed on the gift or grant by the donor 7-27 or granting entity. 8-1 (e) Money in the fund may also be appropriated to pay any 8-2 amount of money that the federal government determines that the 8-3 state should repay to the federal government or that the federal 8-4 government should recoup from the state in the event of national 8-5 legislation regarding the subject matter of the case styled The 8-6 State of Texas v. The American Tobacco Co., et al., No. 5-96CV-91, 8-7 in the United States District Court, Eastern District of Texas. 8-8 (f) The Texas Board of Health may adopt rules governing any 8-9 grant, loan, or loan guarantee program established under this 8-10 section. 8-11 (g) A hospital eligible to receive a grant, loan, or loan 8-12 guarantee under Subchapter G, Chapter 106, Health and Safety Code, 8-13 is not eligible to receive a grant, loan, or loan guarantee under 8-14 this section. 8-15 (h) Sections 403.095 and 404.071 do not apply to the fund. 8-16 Sec. 403.1067. RESTRICTIONS ON LOBBYING EXPENDITURES. (a) 8-17 An organization, program, political subdivision, public institution 8-18 of higher education, local community organization, or other entity 8-19 receiving funds or grants from the permanent funds in Section 8-20 403.105, 403.1055, 403.106, 403.1065, or 403.1066 may not use the 8-21 funds or grants to pay: 8-22 (1) lobbying expenses incurred by the recipient; 8-23 (2) a person or entity that is required to register 8-24 with the Texas Ethics Commission under Chapter 305, Government 8-25 Code; 8-26 (3) any partner, employee, employer, relative, 8-27 contractor, consultant, or related entity of a person or entity 9-1 described by Subdivision (2); or 9-2 (4) a person or entity who has been hired to represent 9-3 associations or other entities for the purpose of affecting the 9-4 outcome of legislation, agency rules, ordinances, or other 9-5 government policies. 9-6 (b) The persons or entities described by Subsection (a) are 9-7 not eligible to receive the money or participate either directly or 9-8 indirectly in the contracts, funds, or grants awarded in Section 9-9 403.105, 403.1055, 403.106, 403.1065, or 403.1066. 9-10 (c) Grants or awards made under Section 403.105, 403.1055, 9-11 403.106, 403.1065, or 403.1066 may not be conditioned on the 9-12 enactment of legislation, agency rules, or local ordinances. 9-13 Sec. 403.1068. MANAGEMENT OF CERTAIN FUNDS. (a) This 9-14 section applies only to management of the permanent funds 9-15 established under Sections 403.105, 403.1055, 403.106, 403.1065, 9-16 and 403.1066. 9-17 (b) The comptroller shall manage the assets of each 9-18 permanent fund. In managing the assets of a fund, the comptroller 9-19 may acquire, exchange, sell, supervise, manage, or retain, through 9-20 procedures and subject to restrictions the comptroller considers 9-21 appropriate, any kind of investment that prudent investors, 9-22 exercising reasonable care, skill, and caution, would acquire or 9-23 retain in light of the purposes, terms, distribution requirements, 9-24 and other circumstances of the fund then prevailing, taking into 9-25 consideration the investment of all the assets of the fund rather 9-26 than a single investment. 9-27 (c) The available earnings of each permanent fund consist of 10-1 distributions made to the fund from the total return on all 10-2 investment assets of the fund, including net income attributable to 10-3 the surface of land held by the fund. 10-4 (d) The amount of any distributions to each fund under 10-5 Subsection (c) shall be determined by the comptroller in a manner 10-6 intended to provide a stable and predictable stream of annual 10-7 distributions and to maintain over time the purchasing power of 10-8 fund investments and annual distributions to the fund. If the 10-9 purchasing power of fund investments for any 10-year period is not 10-10 preserved, the comptroller may not increase annual distributions to 10-11 the available earnings of the fund until the purchasing power of 10-12 the fund investments is restored. 10-13 (e) An annual distribution made by the comptroller to the 10-14 available earnings of a fund during any fiscal year may not exceed 10-15 an amount equal to seven percent of the average net fair market 10-16 value of the investment assets of each fund as determined by the 10-17 comptroller. 10-18 (f) The expenses of managing land and investments of each 10-19 fund shall be paid from each fund. 10-20 (g) On request, the comptroller shall fully disclose all 10-21 details concerning the investments of each fund. 10-22 Sec. 403.1069. REPORTING REQUIREMENT. The department shall 10-23 provide a report on the permanent funds established under this 10-24 subchapter to the Legislative Budget Board no later than November 1 10-25 of each year. The report shall include the total amount of money 10-26 distributed from each fund, the purpose for which the money was 10-27 used, and any additional information that may be requested by the 11-1 Legislative Budget Board. 11-2 SECTION 2. Chapter 106, Health and Safety Code, is amended 11-3 by adding Subchapter G to read as follows: 11-4 SUBCHAPTER G. RURAL HEALTH FACILITY CAPITAL IMPROVEMENT 11-5 Sec. 106.201. DEFINITIONS. In this subchapter: 11-6 (1) "Public hospital" means a general or special 11-7 hospital licensed under Chapter 241 that is owned or operated by a 11-8 municipality, county, municipality and county, hospital district, 11-9 or hospital authority and that performs inpatient or outpatient 11-10 services. 11-11 (2) "Rural county" means: 11-12 (A) a county that has a population of 150,000 or 11-13 less; or 11-14 (B) with respect to a county that has a 11-15 population of more than 150,000 and that contains a geographic area 11-16 that is not delineated as urbanized by the federal census bureau, 11-17 that part of the county that is not delineated as urbanized. 11-18 Sec. 106.202. POWERS OF CENTER. In administering this 11-19 subchapter, the center may: 11-20 (1) enter into and enforce contracts and execute and 11-21 deliver conveyances and other instruments necessary to make and 11-22 administer grants, loans, and loan guarantees under this 11-23 subchapter; 11-24 (2) employ personnel and counsel necessary to 11-25 implement this subchapter and pay them from money in the fund 11-26 appropriated for that purpose; 11-27 (3) impose and collect reasonable fees and charges in 12-1 connection with grants, loans, and loan guarantees made under this 12-2 subchapter and provide reasonable penalties for delinquent payment 12-3 of fees, charges, or loan repayments; 12-4 (4) take and enforce a mortgage or appropriate 12-5 security interest in real or personal property that a loan 12-6 recipient acquires with the proceeds of a loan made under this 12-7 subchapter; and 12-8 (5) adopt rules necessary to implement the grant, 12-9 loan, and loan guarantee program. 12-10 Sec. 106.203. GRANT, LOAN, AND LOAN GUARANTEE PROGRAM. (a) 12-11 The center may use money appropriated to the center under Section 12-12 403.1065, Government Code, to make a grant or low interest loan to, 12-13 or guarantee a loan for, a public or nonprofit hospital located in 12-14 a rural county. 12-15 (b) A grant, loan, or loan guarantee recipient may use the 12-16 money only to make capital improvements to existing health 12-17 facilities located in a rural county, to construct new health 12-18 facilities in a rural county, or to purchase capital equipment, 12-19 including information systems hardware and software, for a health 12-20 facility located in a rural county. 12-21 Sec. 106.204. ELIGIBILITY FOR GRANT, LOAN, OR LOAN 12-22 GUARANTEE; INTEREST RATE. (a) The center shall adopt rules that 12-23 establish eligibility criteria for receiving a grant, loan, or loan 12-24 guarantee under this subchapter. 12-25 (b) The rules must state generally the factors the center 12-26 will consider in determining whether an applicant should receive a 12-27 grant, loan, or loan guarantee. The rules must allow the center to 13-1 give preferential consideration to public hospitals and to consider 13-2 at least the financial need of the applicant, the health care needs 13-3 of the rural area served by the applicant, and the probability that 13-4 the applicant will effectively and efficiently use the money 13-5 obtained through the grant, loan, or loan guarantee to meet the 13-6 health care needs of the rural area served by the applicant. 13-7 (c) The rules must state generally the factors the center 13-8 will consider in determining the extent to which the interest rate 13-9 on a loan should be below market rates. 13-10 SECTION 3. On the effective date of this Act, the 13-11 comptroller shall transfer: 13-12 (1) $200 million from tobacco proceeds in the general 13-13 revenue fund to the permanent fund for tobacco education and 13-14 enforcement established by Section 403.105, Government Code, as 13-15 added by this Act; 13-16 (2) $100 million from tobacco proceeds in the general 13-17 revenue fund to the permanent fund for children and public health 13-18 established by Section 403.1055, Government Code, as added by this 13-19 Act; 13-20 (3) $100 million from tobacco proceeds in the general 13-21 revenue fund to the permanent fund for emergency medical services 13-22 and trauma care established by Section 403.106, Government Code, 13-23 as added by this Act; 13-24 (4) $50 million from tobacco proceeds in the general 13-25 revenue fund to the permanent fund for rural health facility 13-26 capital improvement established by Section 403.1065, Government 13-27 Code, as added by this Act; and 14-1 (5) $25 million from tobacco proceeds in the general 14-2 revenue fund to the community hospital capital improvement fund 14-3 established by Section 403.1066, Government Code, as added by this 14-4 Act. 14-5 SECTION 4. This Act takes effect August 31, 1999. 14-6 SECTION 5. The importance of this legislation and the 14-7 crowded condition of the calendars in both houses create an 14-8 emergency and an imperative public necessity that the 14-9 constitutional rule requiring bills to be read on three several 14-10 days in each house be suspended, and this rule is hereby suspended. _______________________________ _______________________________ President of the Senate Speaker of the House I certify that H.B. No. 1676 was passed by the House on April 22, 1999, by a non-record vote; that the House refused to concur in Senate amendments to H.B. No. 1676 on May 13, 1999, and requested the appointment of a conference committee to consider the differences between the two houses; and that the House adopted the conference committee report on H.B. No. 1676 on May 27, 1999, by a non-record vote. _______________________________ Chief Clerk of the House I certify that H.B. No. 1676 was passed by the Senate, with amendments, on May 11, 1999, by a viva-voce vote; at the request of the House, the Senate appointed a conference committee to consider the differences between the two houses; and that the Senate adopted the conference committee report on H.B. No. 1676 on May 29, 1999, by a viva-voce vote. _______________________________ Secretary of the Senate APPROVED: _____________________ Date _____________________ Governor