HBA-TBM S.B. 1246 77(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 1246 By: Gallegos Public Health 5/10/2001 Engrossed BACKGROUND AND PURPOSE Community health centers, often funded by public and private grants, provide health care services to uninsured and underinsured residents. These centers may find it difficult to acquire commercial loans, because their revenue source is not stable and consistent. A precarious financial situation contributes to the centers neglect of building repairs and other nonmedical services, including meeting building code and Americans with Disabilities Act requirements. Senate Bill 1246 establishes the community health center revolving loan fund to be administered by a development corporation on behalf of the Health and Human Services Commission to increase community health centers' access to loan money. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Health and Human Service Commission in SECTION 1 (Section 136.009, Human Resources Code) and SECTION 3 of this bill. ANALYSIS Senate Bill 1246 amends the Human Resources Code to establish the community health center revolving loan fund (fund) composed of money appropriated to the fund by the legislature, gifts or grants received from public or private sources, and income from other money in the fund. The bill provides that the fund is a trust fund outside the state treasury held by a financial institution and administered by the Health and Human Services Commission (HHSC) as trustee on behalf of community health centers in this state. The bill authorizes HHSC to accept gifts and grants on behalf of the fund for the use and benefit of the loan program for community health centers (program). The bill requires HHSC to contract with and award money to a development corporation to assist in financing the needs of community health centers. Before contracting with a development corporation, the bill requires HHSC to require the development corporation to establish an investment committee (committee) to approve loan requests of community health centers. The bill sets forth the composition of the committee. The bill authorizes a development corporation to make a loan to a community health center only with the approval of the committee, and requires the development corporation to use at least 60 percent of the money received under the program for loans to community health centers in existence for at least one year before the loan date. The bill authorizes a loan made by the development corporation to be subordinated debt, and authorizes the development corporation to make a loan under the program through a partnership or joint investment with one or more financial institutions or federal or state programs. The bill requires payments on community health center loans to be made to the development corporation, and requires the development corporation to use the loan payment money received from community health centers to make new loans. All income received on a loan made with money received under the program is the property of the development corporation, including the payment of interest by a borrower and the administrative fees assessed by the development corporation. The bill requires HHSC to develop the fund as a revolving loan fund that will become self-funding over the life of the program. The bill requires HHSC to adopt rules, no later than December 1, 2001, to administer these provisions and specifies certain rules. Under rules adopted by HHSC, the bill authorizes the development corporation to make grants to eligible community health centers from money other than money that is received from the fund and that was derived from a legislative appropriation or to seek funds from state or federal agencies or private sources to supplement and complement program funds. The bill authorizes HHSC to adopt other rules as necessary to accomplish the purposes of the program. EFFECTIVE DATE September 1, 2001.