By Chisum, Hawley, Walker,                               H.B. No. 7
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to creating the Office of Rural Community Affairs.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1. Subtitle F, Title 4, Government Code, is amended
 1-5     by adding Chapter 487 to read as follows:
 1-6               CHAPTER 487.  OFFICE OF RURAL COMMUNITY AFFAIRS
 1-7                      SUBCHAPTER A.  GENERAL PROVISIONS
 1-8           Sec. 487.001.  DEFINITIONS. In this chapter:
 1-9                 (1)  "Executive committee" means the executive
1-10     committee of the Office of Rural Community Affairs.
1-11                 (2)  "Office" means the Office of Rural Community
1-12     Affairs.
1-13           Sec. 487.002.  SUNSET PROVISION. The Office of Rural
1-14     Community Affairs is subject to Chapter 325 (Texas Sunset Act).
1-15     Unless continued in existence as provided by that chapter, the
1-16     office is abolished and this chapter expires September 1, 2007.
1-17              (Sections 487.003-487.020 reserved for expansion
1-18                  SUBCHAPTER B.  ADMINISTRATIVE PROVISIONS
1-19           Sec. 487.021.  EXECUTIVE COMMITTEE. (a)  The executive
1-20     committee is the governing body of the office.
1-21           (b)  The executive committee is composed of the following
1-22     nine members:
1-23                 (1)  three members appointed by the governor;
1-24                 (2)  three members appointed by the lieutenant
1-25     governor; and
 2-1                 (3)  three members appointed by the speaker of the
 2-2     house of representatives.
 2-3           (c)  The governor, the lieutenant governor, and the speaker
 2-4     of the house of representatives shall each appoint at least two
 2-5     members who possess a strong understanding of and commitment to
 2-6     rural interests based on the individual's personal history,
 2-7     including residency, occupation, and business or civic activities.
 2-8           (d)  Appointments to the executive committee shall be made
 2-9     without regard to the race, color, disability, sex, religion, age,
2-10     or national origin of the appointees.
2-11           (e)  The members of the executive committee serve for
2-12     staggered six-year terms, with the terms of three members expiring
2-13     February 1 of each odd-numbered year.
2-14           (f)  Executive committee members receive no compensation but
2-15     are entitled to reimbursement of actual and necessary expenses
2-16     incurred in the performance of their duties.
2-17           (g)  The members of the executive committee annually shall
2-18     elect a presiding officer from among the members of the executive
2-19     committee.
2-20           Sec. 487.022.  CONFLICTS OF INTEREST. (a)  In this section,
2-21     "Texas trade association" means a cooperative and voluntarily
2-22     joined association of business or professional competitors in this
2-23     state designed to assist its members and its industry or profession
2-24     in dealing with mutual business or professional problems and in
2-25     promoting their common interest.
2-26           (b)  A person may not be a member of the executive committee
2-27     and may not be an office employee employed in a "bona fide
 3-1     executive, administrative, or professional capacity," as that
 3-2     phrase is used for purposes of establishing an exemption to the
 3-3     overtime provisions of the federal Fair Labor Standards Act of 1938
 3-4     (29 U.S.C. Section 201 et seq.) and its subsequent amendments, if:
 3-5                 (1)  the person is an officer, employee, or paid
 3-6     consultant of a Texas trade association in the field of rural
 3-7     affairs; or
 3-8                 (2)  the person's spouse is an officer, manager, or
 3-9     paid consultant of a Texas trade association in the field of rural
3-10     affairs.
3-11           (c)  A person may not be a member of the executive committee
3-12     or act as the general counsel to the executive committee or the
3-13     office if the person is required to register as a lobbyist under
3-14     Chapter 305 because of the person's activities for compensation on
3-15     behalf of a profession related to the operation of the office.
3-16           Sec. 487.023.  TRAINING FOR MEMBERS OF EXECUTIVE COMMITTEE.
3-17     (a)  A person who is appointed to and qualifies for office as a
3-18     member of the executive committee may not vote, deliberate, or be
3-19     counted as a member in attendance at a meeting of the executive
3-20     committee until the person completes a training program that
3-21     complies with this section.
3-22           (b)  The training program must provide the person with
3-23     information regarding:
3-24                 (1)  the legislation that created the office and the
3-25     executive committee;
3-26                 (2)  the programs operated by the office;
3-27                 (3)  the role and functions of the office;
 4-1                 (4)  the rules of the office, with an emphasis on any
 4-2     rules that relate to disciplinary and investigatory authority;
 4-3                 (5)  the current budget for the office;
 4-4                 (6)  the results of the most recent formal audit of the
 4-5     office;
 4-6                 (7)  the requirements of:
 4-7                       (A)  the open meetings law, Chapter 551;
 4-8                       (B)  the public information law, Chapter 552;
 4-9                       (C)  the administrative procedure law, Chapter
4-10     2001; and
4-11                       (D)  other laws relating to public officials,
4-12     including conflict-of-interest laws; and
4-13                 (8)  any applicable ethics policies adopted by the
4-14     executive committee or the Texas Ethics Commission.
4-15           (c)  A person appointed to the executive committee is
4-16     entitled to reimbursement, as provided by general law and the
4-17     General Appropriations Act, for the travel expenses incurred in
4-18     attending the training program regardless of whether the attendance
4-19     at the program occurs before or after the person qualifies for
4-20     office.
4-21           Sec. 487.024.  REMOVAL. (a)  It is a ground for removal from
4-22     the executive committee that a member:
4-23                 (1)  does not have at the time of taking office the
4-24     qualifications required by Section 487.021;
4-25                 (2)  does not maintain during service on the executive
4-26     committee the qualifications required by Section 487.021;
4-27                 (3)  is ineligible for membership under Section
 5-1     487.022;
 5-2                 (4)  cannot, because of illness or disability,
 5-3     discharge the member's duties for a substantial part of the
 5-4     member's term; or
 5-5                 (5)  is absent from more than half of the regularly
 5-6     scheduled executive committee meetings that the member is eligible
 5-7     to attend during a calendar year without an excuse approved by a
 5-8     majority vote of the executive committee.
 5-9           (b)  The validity of an action of the executive committee is
5-10     not affected by the fact that it is taken when a ground for removal
5-11     of an executive committee member exists.
5-12           (c)  If the executive director has knowledge that a potential
5-13     ground for removal exists, the executive director shall notify the
5-14     presiding officer of the executive committee of the potential
5-15     ground.  The presiding officer shall then notify the governor and
5-16     the attorney general that a potential ground for removal exists. If
5-17     the potential ground for removal involves the presiding officer,
5-18     the executive director shall notify the next highest ranking
5-19     officer of the executive committee, who shall then notify the
5-20     governor and the attorney general that a potential ground for
5-21     removal exists.
5-22           Sec. 487.025.  DIVISION OF RESPONSIBILITY. The executive
5-23     committee shall develop and implement policies that clearly
5-24     separate the policy-making responsibilities of the executive
5-25     committee and the management responsibilities of the executive
5-26     director and staff of the office.
5-27           Sec. 487.026.  EXECUTIVE DIRECTOR. (a)  The executive
 6-1     committee may hire an executive director to serve as the chief
 6-2     executive officer of the office and to perform the administrative
 6-3     duties of the office.
 6-4           (b)  The executive director serves at the will of the
 6-5     executive committee.
 6-6           (c)  The executive director may hire staff within guidelines
 6-7     established by the executive committee.
 6-8           Sec. 487.027.  PUBLIC HEARINGS. The executive committee shall
 6-9     develop and implement policies that provide the public with a
6-10     reasonable opportunity to appear before the executive committee and
6-11     to speak on any issue under the jurisdiction of the office.
6-12           Sec. 487.028.  EQUAL EMPLOYMENT OPPORTUNITY POLICY STATEMENT.
6-13     (a)  The executive director or the executive director's designee
6-14     shall prepare and maintain a written policy statement that
6-15     implements a program of equal employment opportunity to ensure that
6-16     all personnel decisions are made without regard to race, color,
6-17     disability, sex, religion, age, or national origin.
6-18           (b)  The policy statement must include:
6-19                 (1)  personnel policies, including policies relating to
6-20     recruitment, evaluation, selection, training, and promotion of
6-21     personnel, that show the intent of the office to avoid the unlawful
6-22     employment practices described by Chapter 21, Labor Code; and
6-23                 (2)  an analysis of the extent to which the composition
6-24     of the office's personnel is in accordance with state and federal
6-25     law and a description of reasonable methods to achieve compliance
6-26     with state and federal law.
6-27           (c)  The policy statement must be:
 7-1                 (1)  updated annually;
 7-2                 (2)  reviewed by the state Commission on Human Rights
 7-3     for compliance with Subsection (b)(1); and
 7-4                 (3)  filed with the governor's office.
 7-5           Sec. 487.029.  STANDARDS OF CONDUCT. The executive director
 7-6     or the executive director's designee shall provide to members of
 7-7     the executive committee and to agency employees, as often as
 7-8     necessary, information regarding the requirements for office or
 7-9     employment under this chapter, including information regarding a
7-10     person's responsibilities under applicable laws relating to
7-11     standards of conduct for state officers or employees.
7-12           Sec. 487.030.  COMPLAINTS. (a)  The office shall maintain a
7-13     file on each written complaint filed with the office. The file must
7-14     include:
7-15                 (1)  the name of the person who filed the complaint;
7-16                 (2)  the date the complaint is received by the office;
7-17                 (3)  the subject matter of the complaint;
7-18                 (4)  the name of each person contacted in relation to
7-19     the complaint;
7-20                 (5)  a summary of the results of the review or
7-21     investigation of the complaint; and
7-22                 (6)  an explanation of the reason the file was closed,
7-23     if the office closed the file without taking action other than to
7-24     investigate the complaint.
7-25           (b)  The office shall provide to the person filing the
7-26     complaint and to each person who is a subject of the complaint a
7-27     copy of the office's policies and procedures relating to complaint
 8-1     investigation and resolution.
 8-2           (c)  The office, at least quarterly until final disposition
 8-3     of the complaint, shall notify the person filing the complaint and
 8-4     each person who is a subject of the complaint of the status of the
 8-5     investigation unless the notice would jeopardize an undercover
 8-6     investigation.
 8-7              (Sections 487.031-487.050 reserved for expansion
 8-8                  SUBCHAPTER C.  GENERAL POWERS AND DUTIES
 8-9           Sec. 487.051.  POWERS AND DUTIES.  The office shall:
8-10                 (1)  develop a rural policy for the state in
8-11     consultation with local leaders representing all facets of rural
8-12     community life, academic and industry experts, and state elected
8-13     and appointed officials with interests in rural communities;
8-14                 (2)  work with other state agencies and officials to
8-15     improve the results and the cost-effectiveness of state programs
8-16     affecting rural communities through coordination of efforts;
8-17                 (3)  develop programs to improve the leadership
8-18     capacity of rural community leaders;
8-19                 (4)  monitor developments that have a substantial
8-20     effect on rural Texas communities, especially actions of state
8-21     government, and compile an annual report describing and evaluating
8-22     the condition of rural communities;
8-23                 (5)  administer the federal community development block
8-24     grant nonentitlement program;
8-25                 (6)  administer programs supporting rural health care
8-26     as provided by Subchapters D-H;
8-27                 (7)  perform research to determine the most beneficial
 9-1     and cost-effective ways to improve the welfare of rural
 9-2     communities;
 9-3                 (8)  ensure that the office qualifies as the state's
 9-4     office of rural health for the purpose of receiving grants from the
 9-5     Office of Rural Health Policy of the United States Department of
 9-6     Health and Human Services under 42 U.S.C. Section 254r; and
 9-7                 (9)  manage the state's Medicare rural hospital
 9-8     flexibility program under 42 U.S.C. Section 1395i-4.
 9-9           Sec. 487.052.  RULES. The executive committee may adopt rules
9-10     as necessary to implement this chapter.
9-11           Sec. 487.053.  GIFTS AND GRANTS. (a)  The office may accept
9-12     gifts, grants, and donations from any organization for the purpose
9-13     of funding any activity under this chapter, and the office shall
9-14     actively seek funding from appropriate nonprofit foundations.
9-15           (b)  All gifts, grants, and donations must be accepted in an
9-16     open meeting by a majority of the voting members of the executive
9-17     committee and reported in the public record of the meeting with the
9-18     name of the donor and purpose of the gift, grant, or donation.
9-19           Sec. 487.054.  ANNUAL MEETING ON RURAL ISSUES. (a)  At least
9-20     once each year, the following agency heads shall meet to discuss
9-21     rural issues:
9-22                 (1)  the commissioner of agriculture;
9-23                 (2)  the executive director of the Public Utility
9-24     Commission of Texas;
9-25                 (3)  the director of the Texas Agricultural Extension
9-26     Service;
9-27                 (4)  the presiding officer of the Telecommunications
 10-1    Infrastructure Fund Board;
 10-2                (5)  the executive director of the Texas Department of
 10-3    Housing and Community Affairs;
 10-4                (6)  the commissioner of health;
 10-5                (7)  the executive administrator of the Texas Water
 10-6    Development Board;
 10-7                (8)  the executive director of the Parks and Wildlife
 10-8    Department;
 10-9                (9)  the commissioner of human services;
10-10                (10)  the commissioner of higher education;
10-11                (11)  the comptroller; and
10-12                (12)  the executive director of the Texas Department of
10-13    Transportation.
10-14          (b)  The executive committee shall call the annual meeting.
10-15    The executive committee shall set the time and date of the meeting
10-16    after consulting with the agency heads listed in Subsection (a).
10-17          Sec. 487.055.  ADVISORY COMMITTEES. The executive committee
10-18    may appoint advisory committees as necessary to assist the
10-19    executive committee in performing its duties.  An advisory
10-20    committee may be composed of private citizens and representatives
10-21    from state and local governmental entities.  A state or local
10-22    governmental entity shall appoint a representative to an advisory
10-23    committee at the request of the executive committee.  Chapter 2110
10-24    does not apply to an advisory committee created under this section.
10-25          Sec. 487.056.  REPORT TO LEGISLATURE. Not later than January
10-26    1 of each odd-numbered year, the office shall submit a biennial
10-27    report to the legislature regarding the activities of the office
 11-1    and any findings and recommendations relating to rural issues.
 11-2          Sec. 487.057.  RURAL HEALTH WORK PLAN. (a)  The office shall
 11-3    develop, implement, and update a rural health work plan.
 11-4          (b)  The office shall submit the rural health work plan to
 11-5    the executive committee for approval.  The executive committee
 11-6    shall approve the rural health work plan not later than August 1 of
 11-7    each odd-numbered year.
 11-8          (c)  The office shall work with health care providers, rural
 11-9    communities, universities, and all health and human service related
11-10    state agencies to develop the rural health work plan.  The office
11-11    shall solicit public comment on the rural health work plan.
11-12          (d)  The rural health work plan must identify:
11-13                (1)  the mission, goals, and objectives of how the
11-14    office will work to assist rural communities in meeting rural
11-15    health care needs;
11-16                (2)  ways for the state to effectively and creatively
11-17    address the unmet health care needs of rural communities;
11-18                (3)  ways to coordinate the administration and delivery
11-19    of rural health care service with federal, state, and local public
11-20    and private programs that provide similar services; and
11-21                (4)  the office's priorities to accomplish the
11-22    objectives of the plan.
11-23          Sec. 487.058.  CONTRACT FOR ADMINISTRATIVE SERVICES. (a)  The
11-24    office shall enter into an interagency contract with another state
11-25    agency to provide routine administrative services for the office.
11-26          (b)  The Legislative Budget Board and the Department of
11-27    Information Resources shall:
 12-1                (1)  evaluate and recommend the most efficient and
 12-2    appropriate ways to obtain the administrative services under
 12-3    Subsection (a); and
 12-4                (2)  assist the office with contracting and any other
 12-5    matters relating to obtaining the administrative services in the
 12-6    most efficient manner.
 12-7             (Sections 487.059-487.100 reserved for expansion
 12-8                  SUBCHAPTER D. OUTSTANDING RURAL SCHOLAR
 12-9            RECOGNITION AND LOAN PROGRAM FOR RURAL HEALTH CARE
12-10          Sec. 487.101.  DEFINITIONS. In this subchapter:
12-11                (1)  "Selection committee" means the Outstanding Rural
12-12    Scholar Selection Committee.
12-13                (2)  "Fund" means the outstanding rural scholar fund.
12-14                (3)  "Postsecondary educational institution" means:
12-15                      (A)  an institution of higher education, as
12-16    defined by Section 61.003, Education Code;
12-17                      (B)  a nonprofit, independent institution
12-18    approved under Section 61.222, Education Code; or
12-19                      (C)  a nonprofit, health-related school or
12-20    program accredited by the Southern Association of Colleges and
12-21    Schools, the Liaison Committee on Medical Education, the American
12-22    Osteopathic Association, the Board of Nurse Examiners, the Board of
12-23    Vocational Nurse Examiners, or, in the case of allied health, an
12-24    accrediting body recognized by the United States Department of
12-25    Education.
12-26                (4)  "Program" means the outstanding rural scholar
12-27    recognition and loan program for rural health care.
 13-1                (5)  "Rural community" means a municipality in a
 13-2    nonmetropolitan county as defined by the United States Census
 13-3    Bureau in its most recent census.
 13-4          Sec. 487.102.  ADMINISTRATION. The office shall administer or
 13-5    contract for the administration of the program.
 13-6          Sec. 487.103.  SELECTION COMMITTEE. (a)  The selection
 13-7    committee shall advise the executive committee on the progress of
 13-8    the program.
 13-9          (b)  The selection committee is composed of 12 members
13-10    appointed by the executive committee.
13-11          (c)  The executive committee shall consider geographical
13-12    representation in making appointments to the selection committee.
13-13          (d)  Selection committee members serve for staggered
13-14    three-year terms, with the terms of four members expiring August 31
13-15    of each year. A member is eligible for reappointment to consecutive
13-16    terms.
13-17          (e)  A member of the selection committee is not entitled to
13-18    reimbursement for expenses incurred in performing duties under this
13-19    subchapter.
13-20          Sec. 487.104.  SELECTION OF OUTSTANDING RURAL SCHOLARS. (a)
13-21    The selection committee shall select outstanding rural scholars
13-22    through a statewide competition.
13-23          (b)  The selection committee shall make selections based on
13-24    criteria approved by the executive committee and adopted as a rule
13-25    of the office.
13-26          (c)  The selection committee may not use the applicant's
13-27    performance on a standardized test as the sole criterion to
 14-1    determine the applicant's selection as an outstanding rural
 14-2    scholar.
 14-3          (d)  The selection committee shall recommend to the executive
 14-4    committee guidelines to be used by rural communities in the
 14-5    selection of students for nomination and sponsorship as outstanding
 14-6    rural scholars.
 14-7          (e)  An outstanding rural scholar receives public recognition
 14-8    and a certificate of award and is eligible for a forgivable loan
 14-9    under this subchapter.
14-10          Sec. 487.105.  ELIGIBILITY FOR OUTSTANDING RURAL SCHOLAR
14-11    COMPETITION.  (a)  To be eligible to participate in the competition
14-12    under Section 487.104, a high school student or an undergraduate
14-13    student at a postsecondary educational institution must:
14-14                (1)  be nominated and sponsored by a rural community,
14-15    which sponsorship must include financial support;
14-16                (2)  be a Texas resident under Subchapter B, Chapter
14-17    54, Education Code;
14-18                (3)  if the person is a high school student, be in the
14-19    upper 25 percent of the student's high school class, if the class
14-20    contains 48 or more students, and intend to enter a postsecondary
14-21    educational institution; and
14-22                (4)  if the person is an undergraduate student, be in
14-23    the upper 25 percent of the student's class or have a cumulative
14-24    grade average that is equal to or greater than the equivalent of a
14-25    3.0 on a 4.0 scale and be enrolled in a postsecondary educational
14-26    institution.
14-27          (b)  If a person is neither a high school student nor an
 15-1    undergraduate student, the person must be eligible for
 15-2    participation in the competition under rules adopted by the office.
 15-3          Sec. 487.106.  ELIGIBILITY FOR LOANS; RURAL COMMUNITY
 15-4    FINANCIAL SUPPORT.  (a)  For an outstanding rural scholar to be
 15-5    eligible for a forgivable loan, community sponsorship must include
 15-6    financial support.
 15-7          (b)  Community financial support consists of a commitment to
 15-8    fund 50 percent of the costs of a scholar's tuition, fees,
 15-9    educational materials, and living expenses.
15-10          (c)  The financial support under this section may be
15-11    satisfied wholly or partly by a grant, a scholarship, or private
15-12    foundation support.
15-13          (d)  Evidence of the financial support must be submitted with
15-14    a community's nomination.
15-15          Sec. 487.107.  AWARDING OF LOANS.  (a)  The selection
15-16    committee shall recommend to the executive committee guidelines for
15-17    the awarding of forgivable loans to outstanding rural scholars.
15-18          (b)  The executive committee, acting on the advice of the
15-19    selection committee, shall award forgivable loans to outstanding
15-20    rural scholars based on the availability of money in the fund.
15-21          (c)  If in any year the fund is inadequate to provide loans
15-22    to all eligible applicants, the executive committee shall award
15-23    forgivable loans on a priority basis according to the applicants'
15-24    academic performance, test scores, and other criteria of
15-25    eligibility.
15-26          Sec. 487.108.  AMOUNT OF LOAN.  (a)  On confirmation of an
15-27    outstanding rural scholar's admission to a postsecondary
 16-1    educational institution, or on receipt of an enrollment report of
 16-2    the scholar at a postsecondary educational institution, and a
 16-3    certification of the amount of financial support needed, the
 16-4    selection committee annually shall recommend to the executive
 16-5    committee that the committee award a forgivable loan to the scholar
 16-6    in the amount of 50 percent of the cost of the scholar's tuition,
 16-7    fees, educational materials, and living expenses.
 16-8          (b)  An outstanding rural scholar may receive another grant,
 16-9    loan, or scholarship for which the scholar is eligible in addition
16-10    to the receipt of a forgivable loan, except that the total amount
16-11    of funds received may not exceed the reasonable needs of the
16-12    scholar.
16-13          Sec. 487.109.  LOAN FORGIVENESS.  (a)  The principal balance
16-14    and interest for one year of a forgivable loan awarded to an
16-15    outstanding rural scholar must be forgiven for each year the
16-16    scholar practices as a health care professional in the sponsoring
16-17    community.
16-18          (b)  The sponsoring community shall report to the executive
16-19    committee the length of time the scholar practices as a health care
16-20    professional in the community.
16-21          (c)  If the executive committee finds that a sponsoring
16-22    community is not in need of the scholar's services and that the
16-23    community is willing to forgive repayment of the principal balance
16-24    and interest of the scholar's loan, the executive committee by rule
16-25    may provide for the principal balance and interest of one year of
16-26    the scholar's loan to be forgiven for each year the scholar
16-27    practices in another rural community in this state.
 17-1          (d)  Any amount of loan principal or interest that is not
 17-2    forgiven under this section shall be repaid to the office with
 17-3    reasonable collection fees in a timely manner as provided by
 17-4    executive committee rule.
 17-5          Sec. 487.110.  FUND.  (a)  The outstanding rural scholar fund
 17-6    is in the state treasury.
 17-7          (b)  The fund consists of legislative appropriations, gifts,
 17-8    grants, donations, the market value of in-kind contributions, and
 17-9    principal and interest payments on forgivable loans deposited to
17-10    the credit of the fund by the office.
17-11          (c)  The office shall administer the fund.
17-12          (d)  The office shall allocate the fund, as available, for
17-13    forgivable loans  under this subchapter.
17-14          (e)  The office shall deposit any principal and interest
17-15    payments on forgivable loans to the credit of the fund.
17-16          Sec. 487.111.  POSTSECONDARY EDUCATIONAL INSTITUTIONS;
17-17    MONITORING.  (a)  A postsecondary educational institution shall
17-18    provide to the selection committee a copy of the academic
17-19    transcript of each rural scholar for whom the institution has
17-20    received a release that complies with state and federal open
17-21    records laws and authorizes the provision of a transcript.
17-22          (b)  The office shall require reports from students and
17-23    postsecondary educational institutions as needed to monitor the
17-24    program.  After receiving any necessary releases as a condition of
17-25    providing assistance, the office shall distribute reports relating
17-26    to the progress of an outstanding rural scholar to the community
17-27    sponsoring the scholar.
 18-1          Sec. 487.112.  ADOPTION AND DISTRIBUTION OF RULES.  (a)  The
 18-2    executive committee shall adopt reasonable rules to enforce the
 18-3    requirements, conditions, and limitations under this subchapter.
 18-4          (b)  The executive committee shall set the rate of interest
 18-5    charged on a forgivable loan under this subchapter.
 18-6          (c)  The executive committee shall adopt rules necessary to
 18-7    ensure compliance with the federal Civil Rights Act of 1964 (42
 18-8    U.S.C. Section 2000a et seq.) concerning nondiscrimination in
 18-9    admissions.
18-10             (Sections 487.113-487.150 reserved for expansion
18-11       SUBCHAPTER E. HEALTH CAREERS PROMOTION AND EDUCATION PROGRAM
18-12          Sec. 487.151.  DEFINITIONS.  In this subchapter:
18-13                (1)  "Fund" means the health careers education fund.
18-14                (2)  "Postsecondary educational institution" means:
18-15                      (A)  an institution of higher education, as
18-16    defined by Section 61.003, Education Code;
18-17                      (B)  a nonprofit, independent institution
18-18    approved under Section 61.222, Education Code; or
18-19                      (C)  a nonprofit, health-related school or
18-20    program accredited by the Southern Association of Colleges and
18-21    Schools, the Liaison Committee on Medical Education, the American
18-22    Osteopathic Association, the Board of Nurse Examiners, the Board of
18-23    Vocational Nurse Examiners, or, in the case of allied health, an
18-24    accrediting body recognized by the United States Department of
18-25    Education.
18-26                (3)  "Program" means the health careers promotion and
18-27    education program.
 19-1                (4)  "Qualified area" means an area qualifying under
 19-2    the National Health Services Corps Community Scholarship Program or
 19-3    an area with similar characteristics as identified by the office.
 19-4          Sec. 487.152.  ADMINISTRATION.  (a)  The office shall
 19-5    administer or contract for the administration of the program.
 19-6          (b)  The office may solicit and accept gifts, grants,
 19-7    donations, and contributions to support the program.
 19-8          Sec. 487.153.  HEALTH CAREERS PROMOTION.  The office may
 19-9    establish a program to work with students, communities, and
19-10    community-based organizations to encourage high school students to
19-11    pursue health care professional careers. The office shall give
19-12    priority to working with communities and students in qualified
19-13    areas.
19-14          Sec. 487.154.  LOANS.  (a)  The executive committee may award
19-15    forgivable educational loans to eligible students under this
19-16    subchapter.
19-17          (b)  The executive committee may award forgivable loans to
19-18    eligible students based on the availability of money in the fund.
19-19          (c)  If in any year the fund is inadequate to provide loans
19-20    to all eligible students, the executive committee may award
19-21    forgivable loans on a priority basis according to the students'
19-22    academic performance, test scores, and other criteria of
19-23    eligibility.
19-24          Sec. 487.155.  STUDENT ELIGIBILITY. (a)  To be eligible to
19-25    receive a loan under this subchapter, a student must:
19-26                (1)  be sponsored by an eligible community;
19-27                (2)  at the time of the application for the loan, be
 20-1    enrolled in high school or enrolled or accepted for enrollment in a
 20-2    postsecondary educational institution in this state;
 20-3                (3)  meet academic requirements as established by the
 20-4    executive committee;
 20-5                (4)  plan to complete a health care professional degree
 20-6    or certificate program;
 20-7                (5)  plan to practice as a health care professional in
 20-8    a qualified area of the state; and
 20-9                (6)  meet other requirements as established by the
20-10    executive committee.
20-11          (b)  Other requirements for eligibility for a loan under this
20-12    subchapter must include:
20-13                (1)  one or more interviews with the student; and
20-14                (2)  a statement written by the student of the
20-15    student's reasons for:
20-16                      (A)  entering the health care profession; and
20-17                      (B)  wanting to provide health care services to a
20-18    qualified area in this state.
20-19          Sec. 487.156.  COMMUNITY ELIGIBILITY. (a)  To be eligible to
20-20    sponsor a student under this subchapter, a community must:
20-21                (1)  be located in a qualified area in this state; and
20-22                (2)  provide evidence of community sponsorship of the
20-23    student.
20-24          (b)  Community sponsorship consists of:
20-25                (1)  a commitment to pay for a percentage of the
20-26    student's postsecondary educational expenses, including tuition,
20-27    fees, educational materials, and living expenses; and
 21-1                (2)  a commitment to employ the student on a full-time
 21-2    basis as a health care professional on the student's completion of
 21-3    the academic program and licensure or certification in the health
 21-4    care profession for which the student is sponsored.
 21-5          (c)  The executive committee shall determine the percentage
 21-6    of educational expenses communities are required to provide under
 21-7    this section.
 21-8          (d)  Community financial support may be satisfied wholly or
 21-9    partly by a grant, a scholarship, or private foundation support.
21-10          Sec. 487.157.  AMOUNT OF LOAN.  (a)  On confirmation of an
21-11    eligible student's admission to a postsecondary educational
21-12    institution, or on receipt of an enrollment report of the student
21-13    at a postsecondary educational institution, and certification of
21-14    the amount of financial support needed, the executive committee may
21-15    award a forgivable loan to the student in the amount of not more
21-16    than the cost of the student's tuition, fees, educational
21-17    materials, and living expenses.
21-18          (b)  An eligible student may receive another grant, loan, or
21-19    scholarship for which the student is eligible in addition to the
21-20    receipt of a forgivable loan, except that the total amount of funds
21-21    received may not exceed the reasonable needs of the student as
21-22    determined by the postsecondary educational institution in which
21-23    the student is enrolled.
21-24          Sec. 487.158.  REQUIRED CONTRACT.  (a)  A student may receive
21-25    assistance under this subchapter only if the student signs a
21-26    contract agreeing to provide health care services to the sponsoring
21-27    community on completion of the academic program and licensure or
 22-1    certification in the health care profession for which the student
 22-2    is sponsored.
 22-3          (b)  The contract must provide that if the student does not
 22-4    provide the required services to the community or provides those
 22-5    services for less than the required time, the student is personally
 22-6    liable to the state for:
 22-7                (1)  the total amount of assistance the student
 22-8    receives from the office and the sponsoring community;
 22-9                (2)  interest on the total amount at a rate set by the
22-10    executive committee; and
22-11                (3)  the state's reasonable expenses incurred in
22-12    obtaining payment, including reasonable attorney's fees.
22-13          Sec. 487.159.  LOAN FORGIVENESS. (a)  A loan recipient shall
22-14    be forgiven the principal and interest of one year's loan for each
22-15    year the recipient practices as a health care professional
22-16    providing health care services in the sponsoring community, but
22-17    only if the loan recipient practices as a health care professional
22-18    providing health care services in the sponsoring community or in
22-19    another qualified area under Subsection (b) for a minimum of two
22-20    years.
22-21          (b)  If the executive committee finds that a sponsoring
22-22    community is not in need of the student's services and that the
22-23    community is willing to forgive repayment of the principal balance
22-24    and interest of the student's loan, the executive committee by rule
22-25    may provide for the principal balance and interest of the student's
22-26    loan to be forgiven if the student provides services in another
22-27    qualified area in this state.
 23-1          Sec. 487.160.  FUND.  (a)  The health careers education fund
 23-2    is established in the state treasury.
 23-3          (b)  The office shall administer the fund.
 23-4          (c)  The fund consists of gifts, grants, donations, the
 23-5    market value of in-kind contributions, and principal and interest
 23-6    payments on forgivable loans deposited to the credit of the fund by
 23-7    the office.
 23-8          (d)  The office shall deposit any principal and interest
 23-9    payments on forgivable loans to the credit of the fund.
23-10          (e)  The office shall allocate the fund, as available, for
23-11    forgivable loans and community repayment under this subchapter.
23-12          (f)  Unless otherwise provided by the General Appropriations
23-13    Act, the office may use money appropriated to the office to support
23-14    the fund.
23-15          Sec. 487.161.  REPORTING; MONITORING.  (a)  The office shall
23-16    require reports from students, communities, and postsecondary
23-17    educational institutions as needed to monitor the program.  After
23-18    receiving any necessary releases as a condition of providing
23-19    assistance, the office shall distribute reports relating to the
23-20    progress of a student to the community sponsoring the student.
23-21          (b)  The sponsoring community shall report to the executive
23-22    committee the length of time the student provides health care
23-23    services in the community in accordance with the guidelines
23-24    established by the executive committee.
23-25          (c)  A postsecondary educational institution shall provide to
23-26    the executive committee a copy of the academic transcript of each
23-27    student for whom the institution has received a release that
 24-1    complies with state and federal open records laws and that
 24-2    authorizes the provision of the transcript.
 24-3          Sec. 487.162.  PROGRAM PROMOTION.  The office shall provide
 24-4    postsecondary educational institutions and communities in qualified
 24-5    areas with information about health care careers and loan
 24-6    opportunities, including information on eligibility and
 24-7    availability of funds under this subchapter.
 24-8          Sec. 487.163.  ADOPTION OF RULES.  (a)  The executive
 24-9    committee shall adopt reasonable rules to enforce the requirements,
24-10    conditions, and limitations of this subchapter.
24-11          (b)  The executive committee shall set the rate of interest
24-12    charged on a forgivable loan under this subchapter.
24-13          (c)  The executive committee shall adopt rules necessary to
24-14    ensure compliance with the federal Civil Rights Act of 1964 (42
24-15    U.S.C. Section 2000a et seq.) concerning nondiscrimination in
24-16    admissions.
24-17             (Sections 487.164-487.200 reserved for expansion
24-18            SUBCHAPTER F. MEDICALLY UNDERSERVED COMMUNITY-STATE
24-19                        MATCHING INCENTIVE PROGRAM
24-20          Sec. 487.201.  DEFINITIONS. In this subchapter:
24-21                (1)  "Medically underserved community" means:
24-22                      (A)  a community located in an area in this state
24-23    with a medically underserved population;
24-24                      (B)  a community located in an area in this state
24-25    designated by the United States secretary of health and human
24-26    services as an area with a shortage of personal health services;
24-27                      (C)  a population group designated by the United
 25-1    States secretary of health and human services as having a shortage
 25-2    of personal health services;
 25-3                      (D)  a community designated under state or
 25-4    federal law as a medically underserved community; or
 25-5                      (E)  a community that the office considers to be
 25-6    medically underserved based on relevant demographic, geographic,
 25-7    and environmental factors.
 25-8                (2)  "Physician" means a person licensed to practice
 25-9    medicine in this state.
25-10                (3)  "Primary care" means physician services in family
25-11    practice, general practice, internal medicine, pediatrics,
25-12    obstetrics, or gynecology.
25-13                (4)  "Start-up money" means a payment made by a
25-14    medically underserved community for reasonable costs incurred by a
25-15    physician to establish a medical office and ancillary facilities
25-16    for diagnosing and treating patients.
25-17          Sec. 487.202.  PROGRAM. (a)  The executive committee shall
25-18    establish and administer a program under this subchapter to
25-19    increase the number of physicians providing primary care in
25-20    medically underserved communities.
25-21          (b)  A medically underserved community may sponsor a
25-22    physician who has completed a primary care residency program and
25-23    has agreed to provide primary care in the community by contributing
25-24    start-up money for the physician and having that contribution
25-25    matched wholly or partly by state money appropriated to the
25-26    executive committee for that purpose.
25-27          (c)  A participating medically underserved community may
 26-1    provide start-up money to an eligible physician over a two-year
 26-2    period.
 26-3          (d)  The executive committee may not pay more than $25,000 to
 26-4    a community in a fiscal year unless the executive committee makes a
 26-5    specific finding of need by the community.
 26-6          (e)  The executive committee shall establish priorities so
 26-7    that the neediest communities eligible for assistance under this
 26-8    subchapter are assured the receipt of a grant.
 26-9          Sec. 487.203.  ELIGIBILITY. To be eligible to receive money
26-10    from the executive committee, a medically underserved community
26-11    must:
26-12                (1)  apply for the money; and
26-13                (2)  provide evidence satisfactory to the executive
26-14    committee that it has entered into an agreement with a physician
26-15    for the physician to provide primary care in the community for at
26-16    least two years.
26-17          Sec. 487.204.  RULES. The executive committee shall adopt
26-18    rules necessary for the administration of this subchapter,
26-19    including rules addressing:
26-20                (1)  eligibility criteria for a medically underserved
26-21    community;
26-22                (2)  eligibility criteria for a physician;
26-23                (3)  minimum and maximum community contributions to the
26-24    start-up money for a physician to be matched with state money;
26-25                (4)  conditions under which state money must be repaid
26-26    by a community or physician;
26-27                (5)  procedures for disbursement of money by the
 27-1    executive committee;
 27-2                (6)  the form and manner in which a community must make
 27-3    its contribution to the start-up money; and
 27-4                (7)  the contents of an agreement to be entered into by
 27-5    the parties, which must include at least:
 27-6                      (A)  a credit check for an eligible physician;
 27-7    and
 27-8                      (B)  community retention of interest in any
 27-9    property, equipment, or durable goods for seven years.
27-10             (Sections 487.205-487.250 reserved for expansion)
27-11                 SUBCHAPTER G. TEXAS HEALTH SERVICE CORPS
27-12                  PROGRAM FOR MEDICALLY UNDERSERVED AREAS
27-13          Sec. 487.251.  DEFINITIONS. In this subchapter:
27-14                (1)  "Medically underserved area" means an area
27-15    designated by the United States secretary of health and human
27-16    services as having:
27-17                      (A)  a shortage of personal health services or a
27-18    population group that has such a shortage as provided by 42 U.S.C.
27-19    Section 300e-1(7); or
27-20                      (B)  a health professional shortage as provided
27-21    by 42 U.S.C. Section 254e(a)(1).
27-22                (2)  "Physician" means a resident physician who is
27-23    enrolled in an accredited residency training program in this state
27-24    in the specialty of:
27-25                      (A)  family practice;
27-26                      (B)  general internal medicine;
27-27                      (C)  general pediatric medicine; or
 28-1                      (D)  general obstetrics and gynecology.
 28-2          Sec. 487.252.  TEXAS HEALTH SERVICE CORPS PROGRAM. (a)  The
 28-3    executive committee shall establish a program in the office to
 28-4    assist communities in recruiting and retaining physicians to
 28-5    practice in medically underserved areas.
 28-6          (b)  The executive committee by rule shall establish:
 28-7                (1)  eligibility criteria for applicants;
 28-8                (2)  stipend application procedures;
 28-9                (3)  guidelines relating to stipend amounts;
28-10                (4)  procedures for evaluating stipend applications;
28-11    and
28-12                (5)  a system of priorities relating to the:
28-13                      (A)  geographic areas covered;
28-14                      (B)  medical specialties eligible to receive
28-15    funding under the program; and
28-16                      (C)  level of stipend support.
28-17          Sec. 487.253.  ADMINISTRATION. (a)  The executive committee
28-18    shall adopt rules necessary to administer this subchapter, and the
28-19    office shall administer the program in accordance with those rules.
28-20          (b)  The office may not spend for the office's administrative
28-21    costs in administering the program more than 10 percent of the
28-22    amount appropriated to implement this subchapter.
28-23          Sec. 487.254.  REQUIRED CONTRACT. (a)  The office may award a
28-24    stipend to a physician under this subchapter if the physician
28-25    enters into a written contract to provide services in a medically
28-26    underserved area for at least one year for each year that the
28-27    physician receives the stipend.
 29-1          (b)  The contract must provide that if the physician does not
 29-2    provide the required services in the medically underserved area or
 29-3    provides those services for less than the required term, the
 29-4    physician is personally liable to the state for:
 29-5                (1)  the total amount of the stipend the physician
 29-6    receives;
 29-7                (2)  interest on that total amount for the period
 29-8    beginning on the date the physician signs the contract and ending
 29-9    on the date the physician repays the amount of the stipend computed
29-10    at a rate equal to the sum of:
29-11                      (A)  the auction average rate quoted on a bank
29-12    discount basis for 26-week treasury bills issued by the United
29-13    States government, as published by the Federal Reserve Board, for
29-14    the week preceding the week in which the contract is signed; and
29-15                      (B)  five percent; and
29-16                (3)  the state's reasonable expenses incurred in
29-17    obtaining payment, including reasonable attorney's fees.
29-18          Sec. 487.255.  STIPENDS. (a)  The office shall award stipends
29-19    to physicians for one-year periods. A stipend awarded under this
29-20    subchapter may not exceed $15,000 each year.
29-21          (b)  The office may renew a stipend used to assist a
29-22    particular physician.
29-23          (c)  A physician is not eligible for a stipend under this
29-24    subchapter for a period longer than is ordinarily and customarily
29-25    required for the completion of residency training for first board
29-26    eligibility.
29-27          (d)  A physician who receives a stipend under this subchapter
 30-1    is not eligible to receive assistance under a state educational
 30-2    loan repayment program or other state incentive program.
 30-3          Sec. 487.256.  FUNDING. The office may seek, receive, and
 30-4    spend money received through an appropriation, grant, donation, or
 30-5    reimbursement from any public or private source to implement this
 30-6    subchapter.
 30-7             (Sections 487.257-487.300 reserved for expansion)
 30-8          SUBCHAPTER H. RURAL HEALTH FACILITY CAPITAL IMPROVEMENT
 30-9          Sec. 487.301.  DEFINITIONS. In this subchapter:
30-10                (1)  "Public hospital" means a general or special
30-11    hospital licensed under Chapter 241, Health and Safety Code, that
30-12    is owned or operated by a municipality, county, municipality and
30-13    county, hospital district, or hospital authority and that performs
30-14    inpatient or outpatient services.
30-15                (2)  "Rural county" means:
30-16                      (A)  a county that has a population of 150,000 or
30-17    less; or
30-18                      (B)  with respect to a county that has a
30-19    population of more than 150,000 and that contains a geographic area
30-20    that is not delineated as urbanized by the federal census bureau,
30-21    that part of the county that is not delineated as urbanized.
30-22          Sec. 487.302.  POWERS OF OFFICE. In administering this
30-23    subchapter, the office may:
30-24                (1)  enter into and enforce contracts and execute and
30-25    deliver conveyances and other instruments necessary to make and
30-26    administer grants, loans, and loan guarantees under this
30-27    subchapter;
 31-1                (2)  employ personnel and counsel necessary to
 31-2    implement this subchapter and pay them from money appropriated for
 31-3    that purpose;
 31-4                (3)  impose and collect reasonable fees and charges in
 31-5    connection with grants, loans, and loan guarantees made under this
 31-6    subchapter and provide reasonable penalties for delinquent payment
 31-7    of fees, charges, or loan repayments;
 31-8                (4)  take and enforce a mortgage or appropriate
 31-9    security interest in real or personal property that a loan
31-10    recipient acquires with the proceeds of a loan made under this
31-11    subchapter; and
31-12                (5)  adopt rules necessary to implement the grant,
31-13    loan, and loan guarantee program.
31-14          Sec. 487.303.  GRANT, LOAN, AND LOAN GUARANTEE PROGRAM. (a)
31-15    The office may use money appropriated to the office under Section
31-16    403.1065 to make a grant or low-interest loan to, or guarantee a
31-17    loan for, a public or nonprofit hospital located in a rural county.
31-18          (b)  A grant, loan, or loan guarantee recipient may use the
31-19    money only to make capital improvements to existing health
31-20    facilities located in a rural county, to construct new health
31-21    facilities in a rural county, or to purchase capital equipment,
31-22    including information systems hardware and software, for a health
31-23    facility located in a rural county.
31-24          Sec. 487.304.  ELIGIBILITY FOR GRANT, LOAN, OR LOAN
31-25    GUARANTEE; INTEREST RATE. (a)  The office shall adopt rules that
31-26    establish eligibility criteria for receiving a grant, loan, or loan
31-27    guarantee under this subchapter.
 32-1          (b)  The rules must state generally the factors the office
 32-2    will consider in determining whether an applicant should receive a
 32-3    grant, loan, or loan guarantee. The rules must consider at least
 32-4    the financial need of the applicant, the health care needs of the
 32-5    rural area served by the applicant, and the probability that the
 32-6    applicant will effectively and efficiently use the money obtained
 32-7    through the grant, loan, or loan guarantee to meet the health care
 32-8    needs of the rural area served by the applicant.
 32-9          (c)  The rules must state generally the factors the office
32-10    will consider in determining the extent to which the interest rate
32-11    on a loan should be below market rates.
32-12          SECTION 2. Sections 2306.098, 2306.099, and 2306.100,
32-13    Government Code, are transferred to Chapter 487, Government Code,
32-14    redesignated as Subchapter I, Chapter 487, Government Code, and
32-15    amended to read as follows:
32-16                SUBCHAPTER I.  COMMUNITY DEVELOPMENT BLOCK
32-17                       GRANT NONENTITLEMENT PROGRAM
32-18          Sec. 487.351 [2306.098].  ADMINISTRATION OF COMMUNITY
32-19    DEVELOPMENT BLOCK GRANT PROGRAM; ALLOCATION OF FUNDS. (a)  The
32-20    office [department] shall, under the Omnibus Budget Reconciliation
32-21    Act of 1981 (Pub.L. No. 97-35) and 24 CFR, Part 570, Subpart I,
32-22    administer the state's allocation of federal funds provided under
32-23    the community development block grant nonentitlement program
32-24    authorized by Title I of the Housing and Community Development Act
32-25    of 1974 (42 U.S.C. Section 5301 et seq.).
32-26          (b)  Community development block grant program funds shall be
32-27    allocated to eligible counties and municipalities under office
 33-1    [department] rules.
 33-2          Sec. 487.352 [2306.099].  TRANSFER OF FEDERAL FUNDS. (a)  The
 33-3    office [department] may enter into an interagency agreement with
 33-4    the Department of Agriculture [Texas Department of Commerce] to
 33-5    reimburse the Department of Agriculture [Texas Department of
 33-6    Commerce] for providing on behalf of the office [department]
 33-7    marketing, underwriting, and any other services on the portion of
 33-8    the federal community development block grant funds allocated by
 33-9    the office [department] for economic development activities.
33-10          (b)  The office [department] shall allocate not more than 20
33-11    percent of the federal funds received by the office [department] to
33-12    the Department of Agriculture [Texas Department of Commerce] to be
33-13    used for economic development activities.
33-14          (c)  The office shall allocate not more than five percent of
33-15    the funds allocated to the Department of Agriculture under
33-16    Subsection (b) to be used for county economic and management
33-17    development.
33-18          (d)  The office shall monitor the activities undertaken by
33-19    the Department of Agriculture [Texas Department of Commerce] under
33-20    this section [must be monitored by the department].
33-21          Sec. 487.353 [2306.100].  STATE COMMUNITY DEVELOPMENT REVIEW
33-22    COMMITTEE. (a)  The state community development review committee is
33-23    composed of 12 members appointed by the governor.
33-24          (b)  A committee member must be:
33-25                (1)  a member of the governing body of a county or
33-26    municipality eligible for funding under the community development
33-27    block grant program; or
 34-1                (2)  a county or municipal employee who is a supervisor
 34-2    and whose regular duties include involvement in community
 34-3    development activities.
 34-4          (c)  The ratio of county officials serving as committee
 34-5    members to all committee members may not exceed the ratio of all
 34-6    counties eligible for funding under the community development block
 34-7    grant program to all eligible applicants.
 34-8          (d)  The governor shall designate the presiding officer of
 34-9    the committee, who serves at the governor's pleasure.
34-10          (e)  Committee members serve two-year terms expiring February
34-11    1 of each odd-numbered year.
34-12          (f)  A committee member serves without compensation for
34-13    service on the committee, but is entitled to reimbursement for
34-14    reasonable and necessary expenses incurred in performing the
34-15    member's duties.
34-16          (g)  Service on the committee by an officer or employee of a
34-17    county or municipality is an additional duty of the individual's
34-18    office or employment and is not dual office holding.
34-19          (h)  The committee shall meet at least twice annually at the
34-20    executive director's call.
34-21          (i)  The committee shall:
34-22                (1)  consult with and advise the executive director on
34-23    the administration and enforcement of the community development
34-24    block grant program; and
34-25                (2)  review funding applications of eligible counties
34-26    and municipalities and advise and assist the executive director
34-27    regarding the allocation of program funds to those applicants.
 35-1          (j)  The committee may annually recommend to the executive
 35-2    director a formula for allocating funds to each geographic state
 35-3    planning region established by the governor under Chapter 391,
 35-4    Local Government Code.  The formula must give preference to regions
 35-5    according to the regions' needs.
 35-6          SECTION 3. Section 38.011(j), Education Code, as added by
 35-7    Chapter 1418, Acts of the 76th Legislature, Regular Session, 1999,
 35-8    is amended to read as follows:
 35-9          (j)  The requirements prescribed by Subsection (i) apply only
35-10    to a school-based health center serving an area that:
35-11                (1)  is located in a county with a population not
35-12    greater than 50,000; or
35-13                (2)  has been designated under state or federal law as:
35-14                      (A)  a health professional shortage area;
35-15                      (B)  a medically underserved area; or
35-16                      (C)  a medically underserved community by the
35-17    Office of Rural Community Affairs [Center for Rural Health
35-18    Initiatives].
35-19          SECTION 4. Section 51.918(a), Education Code, is amended to
35-20    read as follows:
35-21          (a)  The Texas Higher Education Coordinating Board, the
35-22    Office of Rural Community Affairs [Center for Rural Health
35-23    Initiatives in the Texas Department of Health], medical schools,
35-24    nursing schools, and schools of allied health sciences shall
35-25    cooperate to improve and expand programs for rural areas.
35-26          SECTION 5.  Section 51.918(c), Education Code, as amended by
35-27    Chapters 349 and 965, Acts of the 74th Legislature, Regular
 36-1    Session, 1995, is reenacted and amended to read as follows:
 36-2          (c)  The Office of Rural Community Affairs [Center for Rural
 36-3    Health Initiatives] shall develop relief service programs for rural
 36-4    physicians and allied health personnel to facilitate ready access
 36-5    to continuing medical education as well as to provide [or] practice
 36-6    coverage for purposes other than continuing medical education.
 36-7          SECTION 6. Section 58.007(b)(1), Education Code, is amended
 36-8    to read as follows:
 36-9                (1)  The Primary Care Residency Advisory Committee is
36-10    created and shall consist of 12 members as follows:
36-11                      (A)  seven members shall be licensed physicians,
36-12    one appointed by each of the following:
36-13                            (i)  the Texas Medical Association;
36-14                            (ii)  the Texas Osteopathic Medical
36-15    Association;
36-16                            (iii)  the Texas Academy of Family
36-17    Physicians;
36-18                            (iv)  the Texas Society of the American
36-19    College of Osteopathic Family Physicians;
36-20                            (v)  the Texas Society of Internal
36-21    Medicine;
36-22                            (vi)  the Texas Pediatric Society; and
36-23                            (vii)  the Texas Association of
36-24    Obstetricians and Gynecologists;
36-25                      (B)  one member shall be appointed by the Office
36-26    of Rural Community Affairs [Center for Rural Health Initiatives];
36-27                      (C)  one member shall be appointed by the Bureau
 37-1    of Community Oriented Primary Care at the Texas Department of
 37-2    Health; and
 37-3                      (D)  three members shall be members of the
 37-4    public, one appointed by each of the following:
 37-5                            (i)  the governor;
 37-6                            (ii)  the lieutenant governor; and
 37-7                            (iii)  the speaker of the house of
 37-8    representatives.
 37-9          SECTION 7. Section 403.1065(c), Government Code, is amended
37-10    to read as follows:
37-11          (c)  The available earnings of the fund may be appropriated
37-12    to the Office of Rural Community Affairs [Center for Rural Health
37-13    Initiatives] for the purposes of Subchapter H [G], Chapter 487
37-14    [106, Health and Safety Code].
37-15          SECTION 8. Section 86.011, Health and Safety Code, is amended
37-16    to read as follows:
37-17          Sec. 86.011.  BREAST CANCER SCREENING. (a)  The Office of
37-18    Rural Community Affairs [Center for Rural Health Initiatives] may
37-19    provide for breast cancer screening in counties with a population
37-20    of 50,000 or less.
37-21          (b)  The Office of Rural Community Affairs [Center for Rural
37-22    Health Initiatives] may provide the breast cancer screening through
37-23    contracts with public or private entities to provide mobile units
37-24    and on-site screening services.
37-25          (c)  The Office of Rural Community Affairs [Center for Rural
37-26    Health Initiatives] shall coordinate the breast cancer screening
37-27    with programs administered by the Texas Cancer Council.
 38-1          SECTION 9. Sections 204.104(b) and (c), Occupations Code, are
 38-2    amended to read as follows:
 38-3          (b)  The Office of Rural Community Affairs [Center for Rural
 38-4    Health Initiatives] shall establish policies for and adopt rules to
 38-5    administer the loan program.
 38-6          (c)  The physician assistant board shall authorize and the
 38-7    medical board shall transfer annually the funds designated under
 38-8    Subsection (a) to the Office of Rural Community Affairs [Center for
 38-9    Rural Health Initiatives] to administer the loan program.
38-10          SECTION 10. Chapter 106, Health and Safety Code, is repealed.
38-11          SECTION 11. (a)  Not later than November 1, 2001, the
38-12    governor, the lieutenant governor, and the speaker of the house of
38-13    representatives shall appoint the initial members of the executive
38-14    committee of the Office of Rural Community Affairs in accordance
38-15    with Chapter 487, Government Code, as added by this Act.  Each
38-16    appointing authority shall appoint one member for a term expiring
38-17    February 1, 2003, one member for a term expiring February 1, 2005,
38-18    and one member for a term expiring February 1, 2007.  The executive
38-19    committee may not take action until a majority of the members have
38-20    taken office.
38-21          (b)  The Office of Rural Community Affairs shall employ an
38-22    executive director in accordance with Chapter 487, Government Code,
38-23    as added by this Act, not later than December 1, 2001.
38-24          (c)  Not later than the 60th day after the date of the first
38-25    meeting of the executive committee of the Office of Rural Community
38-26    Affairs, the executive committee shall select a presiding officer.
38-27          SECTION 12. (a)  On the date by which a majority of the
 39-1    members of the executive committee of the Office of Rural Community
 39-2    Affairs have taken office, the Center for Rural Health Initiatives
 39-3    is abolished and all powers, duties, obligations, rights,
 39-4    contracts, leases, records, property, and unspent and unobligated
 39-5    appropriations and other funds of the Center for Rural Health
 39-6    Initiatives are transferred to the Office of Rural Community
 39-7    Affairs.
 39-8          (b)  The abolishment of the Center for Rural Health
 39-9    Initiatives does not affect the validity of a right, privilege, or
39-10    obligation accrued, a contract or acquisition made, any liability
39-11    incurred, a permit or license issued, any penalty, forfeiture, or
39-12    punishment assessed, a rule adopted, a proceeding, investigation,
39-13    or remedy begun, a decision made, or other action taken by or in
39-14    connection with the Center for Rural Health Initiatives.
39-15          (c)  All rules, policies, procedures, and decisions of the
39-16    Center for Rural Health Initiatives are continued in effect as
39-17    rules, policies, procedures, and decisions of the Office of Rural
39-18    Community Affairs until superseded by a rule or other appropriate
39-19    action of the Office of Rural Community Affairs.
39-20          (d)  Any action or proceeding before the Center for Rural
39-21    Health Initiatives is transferred without change in status to the
39-22    Office of Rural Community Affairs, and the Office of Rural
39-23    Community Affairs assumes, without a change in status, the position
39-24    of the Center for Rural Health Initiatives in any action or
39-25    proceeding to which the Center for Rural Health Initiatives is a
39-26    party.
39-27          (e)  The Office of Rural Community Affairs is authorized to
 40-1    employ the same number of full-time equivalent employees as the
 40-2    Center for Rural Health Initiatives.
 40-3          (f)  A fund or account administered by the Center for Rural
 40-4    Health Initiatives is not considered to be abolished and re-created
 40-5    by this Act but is considered to be transferred to the Office of
 40-6    Rural Community Affairs.
 40-7          (g)  Notwithstanding the changes in law made by this Act,
 40-8    until the date the Center for Rural Health Initiatives is abolished
 40-9    as provided by this Act, the Center for Rural Health Initiatives
40-10    shall continue to exercise the powers and duties assigned to the
40-11    Center for Rural Health Initiatives under the law as it existed
40-12    immediately before the effective date of this Act or as modified by
40-13    another Act of the 77th Legislature, Regular Session, 2001, that
40-14    becomes law, and the former law is continued in effect for that
40-15    purpose.
40-16          SECTION 13. (a)  On the date by which a majority of the
40-17    members of the executive committee of the Office of Rural Community
40-18    Affairs have taken office, all powers, duties, obligations, rights,
40-19    contracts, leases, records, personnel, property, and unspent and
40-20    unobligated appropriations and other funds of the Texas Department
40-21    of Housing and Community Affairs related to the federal community
40-22    development block grant nonentitlement program and to the community
40-23    affairs and community development program that provides
40-24    information, advice, and training to officials of communities of
40-25    less than 10,000 people, including appropriations relating to the
40-26    indirect costs and general administrative support of those
40-27    programs, are transferred to the Office of Rural Community Affairs.
 41-1          (b)  The transfer of the federal community development block
 41-2    grant nonentitlement program to the Office of Rural Community
 41-3    Affairs does not affect the validity of a right, privilege, or
 41-4    obligation accrued, a contract or acquisition made, any liability
 41-5    incurred, a permit or license issued, any penalty, forfeiture, or
 41-6    punishment assessed, a rule adopted, a proceeding, investigation,
 41-7    or remedy begun, a decision made, or other action taken by or in
 41-8    connection with the program by the Texas Department of Housing and
 41-9    Community Affairs.
41-10          (c)  All rules, policies, procedures, and decisions of the
41-11    Texas Department of Housing and Community Affairs related to the
41-12    federal community development block grant nonentitlement program
41-13    are continued in effect as rules, policies, procedures, and
41-14    decisions of the Office of Rural Community Affairs until superseded
41-15    by a rule or other appropriate action of the Office of Rural
41-16    Community Affairs.
41-17          (d)  Any action or proceeding before the Texas Department of
41-18    Housing and Community Affairs related to the federal community
41-19    development block grant nonentitlement program is transferred
41-20    without change in status to the Office of Rural Community Affairs,
41-21    and the Office of Rural Community Affairs assumes, without a change
41-22    in status, the position of the Texas Department of Housing and
41-23    Community Affairs in any action or proceeding related to the
41-24    program to which the Texas Department of Housing and Community
41-25    Affairs is a party.
41-26          (e)  A reference to the Texas Department of Economic
41-27    Development in a rule of the Texas Department of Housing and
 42-1    Community Affairs relating to the administration of the Texas
 42-2    Capital Fund means the Department of Agriculture.
 42-3          (f)  A fund or account administered by the Texas Department
 42-4    of Economic Development relating to the federal community
 42-5    development block grant nonentitlement program is not considered to
 42-6    be abolished and re-created by this Act but is considered to be
 42-7    transferred to the Office of Rural Community Affairs.
 42-8          (g)  Notwithstanding the changes in law made by this Act,
 42-9    until the date the federal community development block grant
42-10    nonentitlement program is transferred to the Office of Rural
42-11    Community Affairs as provided by this Act, the Texas Department of
42-12    Housing and Community Affairs and the Texas Department of Economic
42-13    Development shall continue to exercise the powers and duties
42-14    assigned to the Texas Department of Housing and Community Affairs
42-15    and the Texas Department of Economic Development, respectively,
42-16    under the law as it existed immediately before the effective date
42-17    of this Act or as modified by another Act of the 77th Legislature,
42-18    Regular Session, 2001, that becomes law, and the former law is
42-19    continued in effect for that purpose.
42-20          SECTION 14. Not later than September 1, 2002, the Office of
42-21    Rural Community Affairs shall evaluate the cost-effectiveness and
42-22    other benefits of moving at least one-half of its operations to a
42-23    location outside Travis County, Texas.  If the evaluation indicates
42-24    that the move would be beneficial and the Legislative Budget Office
42-25    concurs, the office shall undertake the move.
42-26          SECTION 15.  The executive director of the Office of Rural
42-27    Community Affairs may change the duties of any employee who is
 43-1    transferred to the Office of Rural Community Affairs.
 43-2          SECTION 16.  The Legislative Budget Board shall resolve any
 43-3    disputes about which obligations, rights, contracts, leases,
 43-4    records, personnel, property, and unspent and unobligated
 43-5    appropriations or other funds are entitled to be transferred to the
 43-6    Office of Rural Community Affairs.
 43-7          SECTION 17. Not later than December 1, 2002, the Office of
 43-8    Rural Community Affairs shall:
 43-9                (1)  evaluate the rural health programs under its
43-10    jurisdiction and propose changes, including statutory changes, to
43-11    combine, streamline, or coordinate the programs to improve their
43-12    flexibility and efficiency; and
43-13                (2)  report to the presiding officer of each house of
43-14    the legislature any proposed statutory changes.
43-15          SECTION 18. (a)  Except as provided by Subsection (b), this
43-16    Act takes effect September 1, 2001.
43-17          (b)  Section 487.023, Government Code, as added by this Act,
43-18    takes effect September 1, 2002.