1-1 AN ACT
1-2 relating to the establishment of a community health center
1-3 revolving loan fund program.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Title 9, Human Resources Code, is amended by
1-6 adding Chapter 136 to read as follows:
1-7 CHAPTER 136. TEXAS COMMUNITY HEALTH CENTER REVOLVING LOAN FUND
1-8 Sec. 136.001. PURPOSE. The legislature finds that:
1-9 (1) community health centers play a significant role
1-10 in the delivery of medical care and related services to the
1-11 residents of this state who cannot afford health insurance;
1-12 (2) community health centers are a cost-effective way
1-13 to provide primary and preventive health care to populations
1-14 lacking quality health care by reducing hospitalizations and the
1-15 inappropriate use of emergency rooms;
1-16 (3) the financing sources available for the capital
1-17 needs of community health centers, such as buildings and equipment,
1-18 are inadequate; and
1-19 (4) increasing community health centers' access to
1-20 capital would benefit residents of this state in poor and
1-21 underserved communities and foreign-born residents who are
1-22 uninsured, by providing greater access to primary care and
1-23 preventive health services and by targeting the common health
1-24 problems of these residents.
2-1 Sec. 136.002. DEFINITIONS. In this chapter:
2-2 (1) "Community health center" means a nonprofit
2-3 corporation in this state that:
2-4 (A) provides required primary health services,
2-5 including:
2-6 (i) basic health services;
2-7 (ii) referrals to providers of medical
2-8 services;
2-9 (iii) patient case management services;
2-10 (iv) outreach; and
2-11 (v) patient education; and
2-12 (B) has a governing board that:
2-13 (i) is composed of individuals, a majority
2-14 of whom are being served by the community health centers; and
2-15 (ii) represents the individuals being
2-16 served by the community health center.
2-17 (2) "Commission" means the Health and Human Services
2-18 Commission.
2-19 (3) "Development corporation" means a nonprofit
2-20 corporation that:
2-21 (A) provides revolving loan funds to community
2-22 health centers;
2-23 (B) accepts gifts and grants;
2-24 (C) seeks funding from various government and
2-25 private sources; and
2-26 (D) associates with a broad-based organization
2-27 serving community health centers.
3-1 (4) "Fund" means the community health center revolving
3-2 loan fund established by this chapter.
3-3 (5) "Program" means the loan program authorized by
3-4 this chapter.
3-5 Sec. 136.003. TRUST FUND. (a) The community health center
3-6 revolving loan fund is a trust fund outside the state treasury held
3-7 by a financial institution and administered by the commission as
3-8 trustee on behalf of community health centers in this state.
3-9 (b) The fund is composed of:
3-10 (1) money appropriated to the fund by the legislature;
3-11 (2) gifts or grants received from public or private
3-12 sources; and
3-13 (3) income from other money in the fund.
3-14 (c) The commission may accept on behalf of the fund gifts
3-15 and grants for the use and benefit of the program.
3-16 Sec. 136.004. DEVELOPMENT CORPORATION. The commission shall
3-17 contract with and award money to a development corporation to carry
3-18 out the purposes of this chapter.
3-19 Sec. 136.005. INVESTMENT COMMITTEE. (a) Before contracting
3-20 with a development corporation, the commission shall require the
3-21 development corporation to establish an investment committee to
3-22 approve loan requests of community health centers.
3-23 (b) The investment committee must consist of seven members
3-24 as follows:
3-25 (1) at least two members with lending experience;
3-26 (2) at least two members who receive health care
3-27 services from a community health center; and
4-1 (3) at least one member who represents the Texas
4-2 Association of Community Health Centers, Inc.
4-3 Sec. 136.006. LOANS TO COMMUNITY HEALTH CENTERS. (a) The
4-4 development corporation may make a loan to a community health
4-5 center only with the approval of the investment committee.
4-6 (b) The development corporation shall use at least 60
4-7 percent of the money received under the program for loans to
4-8 community health centers in existence for at least one year before
4-9 the loan date.
4-10 (c) A loan made by the development corporation may be
4-11 subordinated debt.
4-12 (d) The development corporation may make a loan under the
4-13 program through a partnership or joint investment with one or more
4-14 financial institutions or federal or state programs.
4-15 (e) Payments on community health center loans shall be made
4-16 to the development corporation. The development corporation shall
4-17 use the loan payment money received from community health centers
4-18 to make new loans as provided by this chapter.
4-19 Sec. 136.007. SELF-FUNDING. The commission shall develop the
4-20 fund program as a revolving loan fund that will become self-funding
4-21 over the life of the program.
4-22 Sec. 136.008. INCOME FROM LOAN. All income received on a
4-23 loan made with money received under the program is the property of
4-24 the development corporation. Income received on a loan includes the
4-25 payment of interest by a borrower and the administrative fees
4-26 assessed by the development corporation.
4-27 Sec. 136.009. RULES. (a) The commission shall adopt rules
5-1 to administer this chapter, including rules that require:
5-2 (1) the commission to review the lending and servicing
5-3 practices of a development corporation to ensure the practices
5-4 conform to generally accepted accounting principles;
5-5 (2) an eligible community health center to enter into
5-6 an agreement with the development corporation that states the terms
5-7 of the loan made to the center;
5-8 (3) the development corporation to provide to the
5-9 commission semiannual reports giving details of the status of each
5-10 loan made under the program;
5-11 (4) the development corporation to require annual
5-12 audits of community health centers receiving loans under the
5-13 program; and
5-14 (5) the commission to provide oversight of the
5-15 development corporation as necessary to qualify the development
5-16 corporation for loan guarantees from federal and state programs.
5-17 (b) Under rules adopted by the commission, the development
5-18 corporation may:
5-19 (1) make grants to eligible community health centers
5-20 from money other than money that is received from the fund and that
5-21 was derived from a legislative appropriation; or
5-22 (2) seek funds from state or federal agencies or
5-23 private sources to supplement and complement the funds received
5-24 under the program.
5-25 (c) The commission may adopt other rules as necessary to
5-26 accomplish the purposes of this chapter.
5-27 SECTION 2. This Act takes effect September 1, 2001.
6-1 SECTION 3. The Health and Human Services Commission shall
6-2 adopt rules to administer Chapter 136, Human Resources Code, as
6-3 added by this Act, not later than December 1, 2001.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2574 was passed by the House on
May 5, 2001, by a non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 2574 was passed by the Senate on
May 23, 2001, by the following vote: Yeas 30, Nays 0, 1 present,
not voting.
_______________________________
Secretary of the Senate
APPROVED: __________________________
Date
__________________________
Governor