SRC-JEC H.B. 2477 77(R)   BILL ANALYSIS


Senate Research Center   H.B. 2477
77R10641 YDB-DBy: Counts (Duncan)
Intergovernmental Relations
5/10/2001
Engrossed


DIGEST AND PURPOSE 

The Garza County Hospital District has been a source of controversy for the
citizens of the county. The hospital changed its mode of operation from a
hospital district to a health care center, which caused concern for the
citizens of Garza County because they were being taxed by a hospital
district but the hospital was not operating as a hospital. Some of the
people in the county would like the Garza County Hospital District
dissolved. To solve the controversy, a citizen advisory committee was
formed to make recommendations to the board of directors of the hospital
district. The committee submitted a list of recommendations to fix the
existing problems of the hospital district.  H.B. 2477 provides a means for
the dissolution of the Garza County Hospital District and amends enabling
legislation to meet current needs in the event that the vote to dissolve
the district fails.  

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency.  

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 1, Chapter 502, Acts of the 60th Legislature,
Regular Session, 1967, to rename the Garza Hospital District as the Garza
County Health Care District (district). 

SECTION 2.  Amends Section 3, Chapter 502, Acts of the 60th Legislature,
Regular Session, 1967, as follows: 

(a) Provides that to be eligible to serve as a member of the board of
directors of the district, a person is required to be at least 21 years of
age and a resident of the district.  Further requires a person to have
resided in the district for at least six months immediately preceding the
date on which the person files for election or is appointed or elected to
fill a vacancy in the office of director, as appropriate.  Deletes text
regarding eligibility for board service.  Authorizes a board member to be
required to execute a certain bond, rather than requiring the board member
to execute the bond.  Authorizes the board of directors to pay for the
bonds if required of the directors with district funds.   

 (b) Makes conforming changes regarding a bond required of a district
administrator. 

(c) Requires the appointment, rather than election, of a board secretary.
Requires notice of the time and place of any board meeting to be given to
all the directors at least 72 hours before, rather than not less than seven
days prior to, the time of the meeting.   

(d)  Requires a regular election of directors to be held on the first
Saturday in May, rather than April, of each year.  Requires the election to
be held in accordance with the Election Code. Requires a prospective board
member to file an application, rather than petition with a certain number
of signatures, with the secretary of the board, at least 45, rather than
25, days before the date of 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: 

(a) Requires all taxes of the district to be assessed and collected as
provided by Subsections (b) and (c).  Deletes text regarding taxes. 

(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 a
certain amount.  Authorizes the taxes to be used for certain purposes.
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 assessorcollector for the
district or to contract for the assessment and collection of taxes as
provided by the Tax Code. 

(c) Sets forth purposes for which the taxes may be used.  Deletes text
regarding levying and collecting the tax.  

(d) Makes a conforming change and deletes a reference regarding the purpose
of levying the tax. 

SECTION 5.  Amends Section 6, Chapter 502, Acts of the 60th Legislature,
Regular Session, 1967, as follows: 

(a) Sets forth purposes for which the board is authorized to issue general
obligation bonds. Makes conforming changes. 

(b) Requires voter approval before the issuance of general obligation
bonds.  Sets forth provisions regarding a bond election.  Makes conforming
changes. 

(c) Authorizes the district to issue revenue bonds for certain purposes,
contingent on voter approval.  Sets forth provisions regarding revenue
bonds.  Deletes text regarding bonds. Makes conforming changes. 

 (d) Deletes text regarding bond elections.  Makes a conforming change.

(e) Requires bonds of the district to mature not later than the 40th
anniversary of the date of issuance and to bear a rate of interest that
does not exceed the amount provided by Chapter 1204, Government Code. 

 (f) Makes conforming changes.  

(g) Deletes text regarding board powers and authority.  Prohibits the
district from making any contract calling for or requiring the expenditure
or payment of $15,000, rather than $1,000, or more out of any fund or funds
of the district creating or imposing an obligation or liability upon the
district without first submitting such contracts to competitive bids. 

SECTION 6.  Amends Section 7, Chapter 502, Acts of the 60th Legislature,
Regular Session, 1967, to make conforming changes. 

SECTION 7.  Amends Section 8, Chapter 502, Acts of the 60th Legislature,
Regular Session, 1967, by amending Subsection (a) and adding Subsections
(d) through (l), as follows: 
 
 (a) Makes a conforming change.

(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 for a term not to exceed five years. 
 
(f) Authorizes the board to transfer district health care facilities by
lease to individuals, corporations, or other legal entities for a term not
to exceed 20 years. 

(g) Authorizes the board to sell or otherwise dispose of the district's
property, facilities, and equipment. 

(h) Authorizes the board to provide retirement benefits for the employees
of the district by establishing or administering a retirement program or
participating in the Texas County and District Retirement System or any
other statewide retirement system in which the district is eligible to
participate. 

(i) Authorizes the board to spend district funds to recruit physicians,
nurses, and other trained medical personnel.  Authorizes the board to
contract with one or more full-time medical students or other students in a
health occupation, each of whom is enrolled in good standing in an
accredited medical school, college, or university, to pay the student's
tuition or other expenses in consideration of the student's contractual
agreement to serve as an employee or independent contractor for the
district under terms prescribed by the contract.  

(j) 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. 

(k) Authorizes the board to spend district funds to support emergency
medical services in the county. 

(l) Authorizes the board to provide access to medical care to nonindigent
residents of Garza County if the nonindigent residents are charged the
reasonable and customary cost of services. 

SECTION 8.  Amends Section 9, Chapter 502, Acts of the 60th Legislature,
Regular Session, 1967, as follows: 

(a) Deletes text regarding an audit being filed with the comptroller of
public accounts.  Makes a conforming change. 

(b) Adds a statutory reference.  Deletes text regarding notice of hearing
of the budget. Provides that any person who is a resident, rather than
taxpayer, of the district has the right to appear and be heard with
reference to any item shown in the proposed budget. 

SECTION 9.  Amends Section 10, Chapter 502, Acts of the 60th Legislature,
Regular Session, 1967, to make conforming changes. 

SECTION 10.  Amends Section 11, Chapter 502, Acts of the 60th Legislature,
Regular Session, 1967, to provide that the district is 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).  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 and nonsubstantive 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 of directors to borrow money at a rate
not to exceed the maximum annual percentage rate allowed by law for
district obligations at the time of the loan.  

(b)  Authorizes the board of directors, in order to secure a loan, to
pledge certain revenues. 
  
(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 is 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 of directors 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 registered voters of the district equal to at least 10 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.  Requires
the order calling the election to make certain statements. 
  
(d)  Requires the board of directors to give notice of the election by
publishing a substantial copy of the election order in a newspaper of
general circulation in the district once a week for two consecutive weeks.
Requires the first publication to appear not fewer than 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: "The dissolution
of the Garza County Health Care District." 

(e)  Requires the board, if a majority of the votes in the election favor
dissolution, to find that the district is dissolved.  Requires the board,
if a majority of the votes in the election do not favor dissolution, 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.  

(f)  Requires the board, if a majority of the votes in the election favor
dissolution, to: transfer the land, buildings, improvements, equipment, and
other assets that belong to  the district to Garza County or another
governmental entity in Garza County; sell the assets and liabilities to
another person or entity; or administer the property, assets, and debts
until all funds have been disposed of and all district debts have been paid
or settled.  

(g)  Provides that if the district transfers the land, buildings,
improvements, equipment, and other assets to Garza County or another
governmental entity in Garza County, the county or entity assumes all debts
and obligations of the district at the time of the transfer, at which time
the district is dissolved.  Provides that if the district does not transfer
the land, buildings, improvements, equipment, and other assets to Garza
County or another governmental entity in Garza County, or sell those assets
and the liabilities to another person or entity, the board of directors is
required to administer the property, assets, and debts of the district
until all funds have been disposed of and all district debts have been paid
or settled, at which time the district is dissolved.  

(h)  Requires the board, after it finds that the district is dissolved, to:
determine the debt owed by the district; and impose on the property
included in the district's tax rolls a tax that is in proportion of the
debt to the property value.  

(i)  Requires the board, when all outstanding debts and obligations of the
district are paid, to order the secretary to return the pro rata share of
all unused tax money to each district taxpayer.  

(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,
if a taxpayer requests the credit, to direct the secretary to transmit the
funds to the county tax assessor-collector.  

(k)  Requires the board, after the district has paid all its debts and has
disposed of all its assets and funds as prescribed by this section, to file
a written report with the Commissioners Court of Garza County setting forth
a summary of the board of directors' actions in dissolving the district.  

(l)  Requires the Commissioners Court of Garza County, not later than the
10th day after the date it receives the report and determines that the
requirements of this section have been fulfilled, to enter an order
dissolving the district and releasing the board of directors from any
further duty or obligation.  

(m)  Authorizes the district to provide for the sale or transfer of the
district's assets and liabilities to another person or entity and the
district's subsequent dissolution.  Prohibits the dissolution of the
district and the sale or transfer of the district's assets and liabilities
to another person or entity from contravening a trust indenture or bond
resolution relating to the outstanding bonds of the district.  Provides
that the dissolution and sale or transfer does not diminish or impair the
rights of a holder of an outstanding bond, warrant, or other obligation of
the district.  

(n)  Requires the sale or transfer of the district's assets and liabilities
to 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 to be repaid in
satisfaction.  Prohibits the district from transferring or disposing of the
district's assets except for due compensation unless the transfer is made
to another governmental entity that serves the district and the transferred
assets are to be used for the benefit of the residents of the district.  

SECTION 16.  Effective date: September 1, 2001.