SRC-MKV, C.S.S.B. 115 77(R)BILL ANALYSIS


Senate Research CenterC.S.S.B. 115
77R6843 MCK-DBy: Madla
Health and Human Services
2/16/2001
Committee Report (Substituted)


DIGEST AND PURPOSE 

Currently, Texas ranks low, compared to other states with large rural
health populations, in the amount of funding and grants for rural health
programs.  The only entity designated as eligible by the state to apply for
such grants and funding is the Center for Rural Health Initiatives, but
funding from national, regional, and in-state foundations is often
unavailable, since governmental agencies are generally denied eligibility
for foundation grants.  C.S.S.B. 115 establishes a 501(c)(3) nonprofit
corporation to assist smaller communities to apply for grants and to assist
the Center for Rural Health Initiatives to apply for larger grants. 

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 Title 2E, Health and Safety Code, by adding Chapter 110,
as follows: 

CHAPTER 110. RURAL HEALTH FOUNDATION

Sec. 110.001. CREATION OF FOUNDATION. (a) Requires the Center for Rural
Health Initiatives (center) to establish the Rural Health Foundation
(foundation) as a nonprofit corporation that complies with the Texas
Non-Profit Corporation Act (Article 1396-1.01 et seq., V.T.C.S.), except as
otherwise provided by this chapter, and provides that it qualifies as an
organization exempt from federal income tax under Section 501(c)(3),
Internal Revenue Code of 1986, as amended.  

(b) Requires the center to ensure that the foundation operates
independently of any state agency or political subdivision of the state. 

Sec. 110.002. POWERS AND DUTIES. Requires the foundation to raise money
from foundations, governmental entities, and other sources to finance
health programs in the rural areas of the state.  Requires the foundation
to have the powers that are necessary and convenient to carry out its
duties.  Requires the foundation to develop and implement policies and
procedures that clearly separate the responsibilities and activities of the
foundation from the center. 

Sec. 110.003.  BOARD OF DIRECTORS. Provides that the foundation is governed
by a board of five directors (board) appointed by the executive committee
of the center from individuals recommended by the executive director of the
center.  Sets forth provisions and requirements regarding terms of board
membership, discrimination prohibitions and the board's responsibility to
ensure that the foundation remains eligible for an exemption from federal
income tax under Section 501(a), Internal Revenue Code of 1986, as amended,
by being listed as an exempt organization under Section 501(c)(3) of that
code, as amended. 

Sec. 110.004. RESTRICTIONS ON BOARD APPOINTMENT, MEMBERSHIP, AND
EMPLOYMENT. (a) Defines "Texas trade association." 

(b) Prohibits a person from being a member of the board and from being a
foundation employee employed in a "bona fide executive, administrative, or
professional capacity," as that phrase is used for purposes of establishing
an exemption to the overtime provisions of the federal Fair Labor Standards
Act of 1938 (29 U.S.C. Section 201 et seq.), as amended, if: 

     _the person is an officer, employee, or paid consultant of a Texas
trade association in the field of health care; or 

        _the person's spouse is an officer, manager, or paid consultant of
a Texas trade association in the field of health care. 

(c) Prohibits a person from being a member of the board or acting as the
general counsel to the board or the foundation if the person is required to
register as a lobbyist under Chapter 305 (Registration of Lobbyists),
Government Code, because of the person's activities for compensation on
behalf of a profession related to the operation of the foundation. 

Sec. 110.005. REMOVAL OF BOARD MEMBER. Sets forth provisions for the
removal of a board member. 

Sec. 110.006. VACANCY. Requires a vacancy on the board to be filled for the
remainder of the unexpired term in the same manner as the original
appointment.  

Sec. 110.007. OFFICERS.  Requires the board to elect from among its members
a presiding officer, an assistant presiding officer, and other officers the
board considers necessary.  Provides that the presiding and assistant
presiding officers serve for a period of one year.  Authorizes the
presiding and assistant presiding officers to be reelected.   

Sec. 110.008. MEETINGS. Authorizes the board to meet as often as necessary.
Requires the board to meet at least twice a year. 
         
Sec. 110.009. TAX EXEMPTION.  Provides that all income, property, and other
assets of the foundation are exempt from taxation by the state and
political subdivisions of the state. 

Sec. 110.010.  MEMORANDUM OF UNDERSTANDING. Requires the foundation and the
center to enter into a memorandum of understanding that: 

     _requires the board and staff of the foundation to report to the
executive director and executive committee of the center; 

    _allows the center to provide staff functions to the foundation;

     _allows the center to expend funds on the foundation; and

       _outlines the financial contributions to be made to the foundation
from funds obtained from grants and other sources. 

Sec. 110.011. RECORDS.  Requires the foundation to maintain financial
records and reports independently from those of the center.  Requires the
foundation to comply with all filing requirements of the secretary of state
and the Internal Revenue Service. 

Sec. 110.012.  REPORT TO CENTER FOR RURAL HEALTH INITIATIVES.  Requires the
foundation, not later than the 60th day after the last day of the fiscal
year, to submit to the Center for Rural Health Initiatives a report
itemizing all income and expenditures and describing all activities of the
foundation during the preceding fiscal year. 

SECTION 2.  Amends Section 106.026, Health and Safety Code, to add language
requiring the activities of the foundation to be included in the center's
biennial report to the legislature. 


SECTION 3. (a) Requires the center to create the foundation not later than
June 1, 2002. 

(b) Requires the executive committee of the center, in making the initial
appointments to the board of the foundation, to designate two members for
terms expiring February 1, 2003, two members for terms expiring February 1,
2005, and one member for a term expiring February 1, 2007. 

SECTION 4. Effective Date: September 1, 2001.


SUMMARY OF COMMITTEE CHANGES

Differs from original in SECTION 1 by adding Subsection (c) to Section
110.002, Health and Safety Code, regarding the development of policies and
procedures that separate the responsibilities and activities of the Rural
Health Foundation (foundation) from the Center for Rural Health Initiatives
(center).  Also differs from the original by adding Section 110.012, Health
and Safety Code, regarding a report the foundation is required to submit to
the center that itemizes all income and expenditures and describes all
activities of the foundation during the preceding fiscal year. 

Differs from original in SECTION 2 by amending Section 106.026, Health and
Safety Code, by requiring the center's biennial report to the legislature
to include the activities of the foundation. 

Redesignates SECTIONS 2 and 3 of the original as SECTIONS 3 and 4 in the
substitute.