1-1 By: Junell, et al. (Senate Sponsor - Ratliff) H.B. No. 1676 1-2 (In the Senate - Received from the House April 23, 1999; 1-3 April 26, 1999, read first time and referred to Committee on 1-4 Finance; May 6, 1999, reported adversely, with favorable Committee 1-5 Substitute by the following vote: Yeas 10, Nays 0; May 6, 1999, 1-6 sent to printer.) 1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 1676 By: Ratliff 1-8 A BILL TO BE ENTITLED 1-9 AN ACT 1-10 relating to permanent funds for certain public health purposes. 1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-12 SECTION 1. Subchapter G, Chapter 403, Government Code, is 1-13 amended by adding Sections 403.105, 403.1055, 403.106, 403.1065, 1-14 403.1066, 403.1067, and 403.1068 to read as follows: 1-15 Sec. 403.105. PERMANENT FUND FOR TOBACCO EDUCATION AND 1-16 ENFORCEMENT. (a) The permanent fund for tobacco education and 1-17 enforcement is a special fund in the state treasury outside the 1-18 general revenue fund. The fund is composed of: 1-19 (1) money transferred to the fund at the direction of 1-20 the legislature; 1-21 (2) gifts and grants contributed to the fund; and 1-22 (3) the available earnings of the fund determined in 1-23 accordance with Section 403.1067. 1-24 (b) Except as provided by Subsections (c), (e), and (f), 1-25 money in the fund may not be appropriated for any purpose. 1-26 (c) The available earnings of the fund may be appropriated 1-27 to the Texas Department of Health for programs to reduce the use of 1-28 cigarettes and tobacco products in this state, including: 1-29 (1) smoking cessation programs; 1-30 (2) enforcement of Subchapters H, K, and N, Chapter 1-31 161, Health and Safety Code, or other laws relating to distribution 1-32 of cigarettes or tobacco products to minors or use of cigarettes or 1-33 tobacco products by minors; 1-34 (3) public awareness programs relating to use of 1-35 cigarettes and tobacco products, including general educational 1-36 programs and programs directed toward youth; and 1-37 (4) specific programs for communities traditionally 1-38 targeted, by advertising and other means, by companies that sell 1-39 cigarettes or tobacco products. 1-40 (d) Subject to any applicable limit in the General 1-41 Appropriations Act, the Texas Department of Health may contract 1-42 with another entity to perform all or a part of the functions 1-43 described by Subsection (c) or may award grants to community 1-44 organizations, public institutions of higher education, as that 1-45 term is defined by Section 61.003, Education Code, or political 1-46 subdivisions to enable the organizations, institutions, or 1-47 political subdivisions to perform all or a part of those functions. 1-48 To ensure the most efficient, effective, and rapid delivery of 1-49 services, the Texas Board of Health shall give high priority and 1-50 preference to existing, effective state programs that do not 1-51 otherwise receive money from an endowment program funded by money 1-52 received under the Comprehensive Settlement Agreement and Release 1-53 filed in the case styled The State of Texas v. The American Tobacco 1-54 Co., et al., No. 5-96CV-91, in the United States District Court, 1-55 Eastern District of Texas. The board may adopt rules governing any 1-56 grant program established under this section. 1-57 (e) The comptroller may solicit and accept gifts and grants 1-58 to the fund. A gift or grant to the fund may be appropriated in 1-59 the same manner as available earnings of the fund, subject to any 1-60 limitation or requirement placed on the gift or grant by the donor 1-61 or granting entity. 1-62 (f) Money in the fund may also be appropriated to pay any 1-63 amount of money that the federal government determines that the 1-64 state should repay to the federal government or that the federal 2-1 government should recoup from the state in the event of national 2-2 legislation regarding the subject matter of the case styled The 2-3 State of Texas v. The American Tobacco Co., et al., No. 5-96CV-91, 2-4 in the United States District Court, Eastern District of Texas. 2-5 (g) Sections 403.095 and 404.071 do not apply to the fund. 2-6 Sec. 403.1055. PERMANENT FUND FOR CHILDREN AND PUBLIC 2-7 HEALTH. (a) The permanent fund for children and public health is 2-8 a special fund in the state treasury outside the general revenue 2-9 fund. The fund is composed of: 2-10 (1) money transferred to the fund at the direction of 2-11 the legislature; 2-12 (2) gifts and grants contributed to the fund; and 2-13 (3) the available earnings of the fund determined in 2-14 accordance with Section 403.1067. 2-15 (b) Except as provided by Subsections (c), (e), and (f), 2-16 money in the fund may not be appropriated for any purpose. 2-17 (c) The available earnings of the fund may be appropriated 2-18 to the Texas Department of Health for the purpose of developing and 2-19 demonstrating cost-effective prevention and intervention strategies 2-20 for improving health outcomes for children and the public and for 2-21 providing grants to local communities to address public health 2-22 priorities. 2-23 (d) The Texas Board of Health 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 2-28 limitation or requirement placed on the gift or grant by the donor 2-29 or granting entity. 2-30 (f) Money in the fund may also be appropriated to pay any 2-31 amount of money that the federal government determines that the 2-32 state should repay to the federal government or that the federal 2-33 government should recoup from the state in the event of national 2-34 legislation regarding the subject matter of the case styled The 2-35 State of Texas v. The American Tobacco Co., et al., No. 5-96CV-91, 2-36 in the United States District Court, Eastern District of Texas. 2-37 (g) Sections 403.095 and 404.071 do not apply to the fund. 2-38 Sec. 403.106. PERMANENT FUND FOR EMERGENCY MEDICAL SERVICES 2-39 AND TRAUMA CARE. (a) The permanent fund for emergency medical 2-40 services and trauma care is a special fund in the state treasury 2-41 outside the general revenue fund. The fund is composed of: 2-42 (1) money transferred to the fund at the direction of 2-43 the legislature; 2-44 (2) gifts and grants contributed to the fund; and 2-45 (3) the available earnings of the fund determined in 2-46 accordance with Section 403.1067. 2-47 (b) Except as provided by Subsections (c), (e), and (f), 2-48 money in the fund may not be appropriated for any purpose. 2-49 (c) The available earnings of the fund may be appropriated 2-50 to the Texas Department of Health for programs to provide emergency 2-51 medical services and trauma care in this state as provided in 2-52 Sections 773.122 and 773.123, Health and Safety Code. 2-53 (d) Subject to any applicable limit in the General 2-54 Appropriations Act, the Texas Department of Health may establish 2-55 programs to provide emergency medical services and trauma care in 2-56 this state, as provided by Sections 773.122 and 773.123, Health and 2-57 Safety Code. 2-58 (e) The comptroller may solicit and accept gifts and grants 2-59 to the fund. A gift or grant to the fund may be appropriated in 2-60 the same manner as available earnings of the fund, subject to any 2-61 limitation or requirement placed on the gift or grant by the donor 2-62 or granting entity. 2-63 (f) Money in the fund may also be appropriated to pay any 2-64 amount of money that the federal government determines that the 2-65 state should repay to the federal government or that the federal 2-66 government should recoup from the state in the event of national 2-67 legislation regarding the subject matter of the case styled The 2-68 State of Texas v. The American Tobacco Co., et al., No. 5-96CV-91, 2-69 in the United States District Court, Eastern District of Texas. 3-1 (g) Sections 403.095 and 404.071 do not apply to the fund. 3-2 Sec. 403.1065. PERMANENT FUND FOR RURAL HEALTH FACILITY 3-3 CAPITAL IMPROVEMENT. (a) The permanent fund for rural health 3-4 facility capital improvement is a special fund in the state 3-5 treasury outside the general revenue fund. The fund is composed 3-6 of: 3-7 (1) money transferred to the fund at the direction of 3-8 the legislature; 3-9 (2) payments of interest and principal on loans made 3-10 under Subchapter G, Chapter 106, Health and Safety Code, and fees 3-11 collected under that subchapter; 3-12 (3) gifts and grants contributed to the fund; and 3-13 (4) the available earnings of the fund determined in 3-14 accordance with Section 403.1067. 3-15 (b) Except as provided by Subsections (c), (d), and (e), 3-16 money in the fund may not be appropriated for any purpose. 3-17 (c) The available earnings of the fund may be appropriated 3-18 to the Center for Rural Health Initiatives for the purposes of 3-19 Subchapter G, Chapter 106, Health and Safety Code. 3-20 (d) The comptroller may solicit and accept gifts and grants 3-21 to the fund. A gift or grant to the fund may be appropriated in 3-22 the same manner as the available earnings of the fund, subject to 3-23 any limitation or requirement placed on the gift or grant by the 3-24 donor or granting entity. 3-25 (e) Money in the fund may also be appropriated to pay any 3-26 amount of money that the federal government determines that the 3-27 state should repay to the federal government or that the federal 3-28 government should recoup from the state in the event of national 3-29 legislation regarding the subject matter of the case styled The 3-30 State of Texas v. The American Tobacco Co., et al., No. 5-96CV-91, 3-31 in the United States District Court, Eastern District of Texas. 3-32 (f) Sections 403.095 and 404.071 do not apply to the fund. 3-33 Sec. 403.1066. RESTRICTIONS ON LOBBYING EXPENDITURES. 3-34 (a) An organization, program, political subdivision, public 3-35 institution of higher education, local community organization, or 3-36 other entity receiving funds or grants from the permanent funds in 3-37 Sections 403.105, 403.1055, 403.106, or 403.1065 may not use the 3-38 funds or grants to pay: 3-39 (1) lobbying expenses incurred by the recipient; 3-40 (2) a person or entity that is required to register 3-41 with the Texas Ethics Commission under Chapter 305, Government 3-42 Code; 3-43 (3) any partner, employee, employer, relative, 3-44 contractor, consultant, or related entity of a person or entity 3-45 described by Subdivision (2); or 3-46 (4) a person or entity who has been hired to represent 3-47 associations or other entities for the purpose of affecting the 3-48 outcome of legislation, agency rules, ordinances, or other 3-49 government policies. 3-50 (b) The persons or entities described by Subsection (a) are 3-51 not eligible to receive the money or participate either directly or 3-52 indirectly in the contracts, funds, or grants awarded in Sections 3-53 403.105, 403.1055, 403.106, or 403.1065. 3-54 (c) Grants or awards made under Section 403.105, 403.1055, 3-55 403.106, or 403.1065 may not be conditioned on the enactment of 3-56 legislation, agency rules, or local ordinances. 3-57 Sec. 403.1067. MANAGEMENT OF CERTAIN FUNDS. (a) This 3-58 section applies only to management of the permanent funds 3-59 established under Sections 403.105, 403.1055, 403.106, and 3-60 403.1065. 3-61 (b) The comptroller shall manage the assets of each 3-62 permanent fund. In managing the assets of a fund, the comptroller 3-63 may acquire, exchange, sell, supervise, manage, or retain, through 3-64 procedures and subject to restrictions the comptroller considers 3-65 appropriate, any kind of investment that prudent investors, 3-66 exercising reasonable care, skill, and caution, would acquire or 3-67 retain in light of the purposes, terms, distribution requirements, 3-68 and other circumstances of the fund then prevailing, taking into 3-69 consideration the investment of all the assets of the fund rather 4-1 than a single investment. 4-2 (c) The available earnings of each permanent fund consist of 4-3 distributions made to the fund from the total return on all 4-4 investment assets of the fund, including net income attributable to 4-5 the surface of land held by the fund. 4-6 (d) The amount of any distributions to each fund under 4-7 Subsection (c) shall be determined by the comptroller in a manner 4-8 intended to provide a stable and predictable stream of annual 4-9 distributions and to maintain over time the purchasing power of 4-10 fund investments and annual distributions to the fund. If the 4-11 purchasing power of fund investments for any 10-year period is not 4-12 preserved, the comptroller may not increase annual distributions to 4-13 the available earnings of the fund until the purchasing power of 4-14 the fund investments is restored. 4-15 (e) An annual distribution made by the comptroller to the 4-16 available earnings of a fund during any fiscal year may not exceed 4-17 an amount equal to seven percent of the average net fair market 4-18 value of the investment assets of each fund as determined by the 4-19 comptroller. 4-20 (f) The expenses of managing land and investments of each 4-21 fund shall be paid from each fund. 4-22 (g) On request, the comptroller shall fully disclose all 4-23 details concerning the investments of each fund. 4-24 Sec. 403.1068. REPORTING REQUIREMENT. The department shall 4-25 provide a report on the permanent funds established under this 4-26 subchapter to the Legislative Budget Board no later than November 1 4-27 of each year. The report shall include the total amount of money 4-28 distributed from each fund, the purpose for which the money was 4-29 used, and any additional information that may be requested by the 4-30 Legislative Budget Board. 4-31 SECTION 2. Chapter 106, Health and Safety Code, is amended 4-32 by adding Subchapter G to read as follows: 4-33 SUBCHAPTER G. RURAL HEALTH FACILITY CAPITAL IMPROVEMENT 4-34 Sec. 106.201. DEFINITIONS. In this subchapter: 4-35 (1) "Public hospital" means a general or special 4-36 hospital licensed under Chapter 241 that is owned or operated by a 4-37 municipality, county, municipality and county, hospital district, 4-38 or hospital authority and that performs inpatient or outpatient 4-39 services. 4-40 (2) "Rural county" means: 4-41 (A) a county that has a population of 50,000 or 4-42 less; or 4-43 (B) with respect to a county that has a 4-44 population of more than 50,000 and that contains a geographic area 4-45 that is not delineated as urbanized by the federal census bureau, 4-46 that part of the county that is not delineated as urbanized. 4-47 Sec. 106.202. POWERS OF CENTER. In administering this 4-48 subchapter, the center may: 4-49 (1) enter into and enforce contracts and execute and 4-50 deliver conveyances and other instruments necessary to make and 4-51 administer grants, loans, and loan guarantees under this 4-52 subchapter; 4-53 (2) employ personnel and counsel necessary to 4-54 implement this subchapter and pay them from money in the fund 4-55 appropriated for that purpose; 4-56 (3) impose and collect reasonable fees and charges in 4-57 connection with grants, loans, and loan guarantees made under this 4-58 subchapter and provide reasonable penalties for delinquent payment 4-59 of fees, charges, or loan repayments; 4-60 (4) take and enforce a mortgage or appropriate 4-61 security interest in real or personal property that a loan 4-62 recipient acquires with the proceeds of a loan made under this 4-63 subchapter; and 4-64 (5) adopt rules necessary to implement the grant, 4-65 loan, and loan guarantee program. 4-66 Sec. 106.203. GRANT, LOAN, AND LOAN GUARANTEE PROGRAM. 4-67 (a) The center may use money appropriated to the center under 4-68 Section 403.1065, Government Code, to make a grant or low interest 4-69 loan to, or guarantee a loan for, a public or nonprofit hospital 5-1 located in a rural county. 5-2 (b) A grant, loan, or loan guarantee recipient may use the 5-3 money only to make capital improvements to existing health 5-4 facilities located in a rural county, to construct new health 5-5 facilities in a rural county, or to purchase capital equipment, 5-6 including information systems hardware and software, for a health 5-7 facility located in a rural county. 5-8 Sec. 106.204. ELIGIBILITY FOR GRANT, LOAN, OR LOAN 5-9 GUARANTEE; INTEREST RATE. (a) The center shall adopt rules that 5-10 establish eligibility criteria for receiving a grant, loan, or loan 5-11 guarantee under this subchapter. 5-12 (b) The rules must state generally the factors the center 5-13 will consider in determining whether an applicant should receive a 5-14 grant, loan, or loan guarantee. The rules must allow the center to 5-15 give preferential consideration to public hospitals and to consider 5-16 at least the financial need of the applicant, the health care needs 5-17 of the rural area served by the applicant, and the probability that 5-18 the applicant will effectively and efficiently use the money 5-19 obtained through the grant, loan, or loan guarantee to meet the 5-20 health care needs of the rural area served by the applicant. 5-21 (c) The rules must state generally the factors the center 5-22 will consider in determining the extent to which the interest rate 5-23 on a loan should be below market rates. 5-24 SECTION 3. On the effective date of this Act, the 5-25 comptroller shall transfer: 5-26 (1) $200 million from the general revenue fund to the 5-27 permanent fund for tobacco education and enforcement established 5-28 by Section 403.105, Government Code, as added by this Act; 5-29 (2) $150 million from the general revenue fund to the 5-30 permanent fund for children and public health established by 5-31 Section 403.1055, Government Code, as added by this Act; 5-32 (3) $100 million from the general revenue fund to the 5-33 permanent fund for emergency medical services and trauma care 5-34 established by Section 403.106, Government Code, as added by this 5-35 Act; and 5-36 (4) $50 million from the general revenue fund to the 5-37 permanent fund for rural health facility capital improvement 5-38 established by Section 403.1065, Government Code, as added by this 5-39 Act. 5-40 SECTION 4. This Act takes effect August 31, 1999. 5-41 SECTION 5. The importance of this legislation and the 5-42 crowded condition of the calendars in both houses create an 5-43 emergency and an imperative public necessity that the 5-44 constitutional rule requiring bills to be read on three several 5-45 days in each house be suspended, and this rule is hereby suspended. 5-46 * * * * *