1-1     By:  Solis, et al. (Senate Sponsor - Gallegos)        H.B. No. 2574
 1-2           (In the Senate - Received from the House May 7, 2001;
 1-3     May 7, 2001, read first time and referred to Committee on Health
 1-4     and Human Services; May 11, 2001, reported favorably by the
 1-5     following vote:  Yeas 7, Nays 0; May 11, 2001, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to the establishment of a community health center
 1-9     revolving loan fund program.
1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11           SECTION 1. Title 9, Human Resources Code, is amended by
1-12     adding Chapter 136 to read as follows:
1-13       CHAPTER 136.  TEXAS COMMUNITY HEALTH CENTER REVOLVING LOAN FUND
1-14           Sec. 136.001.  PURPOSE. The legislature finds that:
1-15                 (1)  community health centers play a significant role
1-16     in the delivery of medical care and related services to the
1-17     residents of this state who cannot afford health insurance;
1-18                 (2)  community health centers are a cost-effective way
1-19     to provide primary and preventive health care to populations
1-20     lacking quality health care by reducing hospitalizations and the
1-21     inappropriate use of emergency rooms;
1-22                 (3)  the financing sources available for the capital
1-23     needs of community health centers, such as buildings and equipment,
1-24     are inadequate; and
1-25                 (4)  increasing community health centers' access to
1-26     capital would benefit residents of this state in poor and
1-27     underserved communities and foreign-born residents who are
1-28     uninsured, by providing greater access to primary care and
1-29     preventive health services and by targeting the common health
1-30     problems of these residents.
1-31           Sec. 136.002.  DEFINITIONS. In this chapter:
1-32                 (1)  "Community health center" means a nonprofit
1-33     corporation in this state that:
1-34                       (A)  provides required primary health services,
1-35     including:
1-36                             (i)  basic health services;
1-37                             (ii)  referrals to providers of medical
1-38     services;
1-39                             (iii)  patient case management services;
1-40                             (iv)  outreach; and
1-41                             (v)  patient education; and
1-42                       (B)  has a governing board that:
1-43                             (i)  is composed of individuals, a majority
1-44     of whom are being served by the community health centers; and
1-45                             (ii)  represents the individuals being
1-46     served by the community health center.
1-47                 (2)  "Commission" means the Health and Human Services
1-48     Commission.
1-49                 (3)  "Development corporation" means a nonprofit
1-50     corporation that:
1-51                       (A)  provides revolving loan funds to community
1-52     health centers;
1-53                       (B)  accepts gifts and grants;
1-54                       (C)  seeks funding from various government and
1-55     private sources; and
1-56                       (D)  associates with a broad-based organization
1-57     serving community health centers.
1-58                 (4)  "Fund" means the community health center revolving
1-59     loan fund established by this chapter.
1-60                 (5)  "Program" means the loan program authorized by
1-61     this chapter.
1-62           Sec. 136.003.  TRUST FUND. (a)  The community health center
1-63     revolving loan fund is a trust fund outside the state treasury held
1-64     by a financial institution and administered by the commission as
 2-1     trustee on behalf of community health centers in this state.
 2-2           (b)  The fund is composed of:
 2-3                 (1)  money appropriated to the fund by the legislature;
 2-4                 (2)  gifts or grants received from public or private
 2-5     sources; and
 2-6                 (3)  income from other money in the fund.
 2-7           (c)  The commission may accept on behalf of the fund gifts
 2-8     and grants for the use and benefit of the program.
 2-9           Sec. 136.004.  DEVELOPMENT CORPORATION. The commission shall
2-10     contract with and award money to a development corporation to carry
2-11     out the purposes of this chapter.
2-12           Sec. 136.005.  INVESTMENT COMMITTEE. (a)  Before contracting
2-13     with a development corporation, the commission shall require the
2-14     development corporation to establish an investment committee to
2-15     approve loan requests of community health centers.
2-16           (b)  The investment committee must consist of seven members
2-17     as follows:
2-18                 (1)  at least two members with lending experience;
2-19                 (2)  at least two members who receive health care
2-20     services from a community health center; and
2-21                 (3)  at least one member who represents the Texas
2-22     Association of Community Health Centers, Inc.
2-23           Sec. 136.006.  LOANS TO COMMUNITY HEALTH CENTERS. (a)  The
2-24     development corporation may make a loan to a community health
2-25     center only with the approval of the investment committee.
2-26           (b)  The development corporation shall use at least 60
2-27     percent of the money received under the program for loans to
2-28     community health centers in existence for at least one year before
2-29     the loan date.
2-30           (c)  A loan made by the development corporation may be
2-31     subordinated debt.
2-32           (d)  The development corporation may make a loan under the
2-33     program through a partnership or joint investment with one or more
2-34     financial institutions or federal or state programs.
2-35           (e)  Payments on community health center loans shall be made
2-36     to the development corporation.  The development corporation shall
2-37     use the loan payment money received from community health centers
2-38     to make new loans as provided by this chapter.
2-39           Sec. 136.007.  SELF-FUNDING. The commission shall develop the
2-40     fund program as a revolving loan fund that will become self-funding
2-41     over the life of the program.
2-42           Sec. 136.008.  INCOME FROM LOAN. All income received on a
2-43     loan made with money received under the program is the property of
2-44     the development corporation. Income received on a loan includes the
2-45     payment of interest by a borrower and the administrative fees
2-46     assessed by the development corporation.
2-47           Sec. 136.009.  RULES. (a)  The commission shall adopt rules
2-48     to administer this chapter, including rules that require:
2-49                 (1)  the commission to review the lending and servicing
2-50     practices of a development corporation to ensure the practices
2-51     conform to generally accepted accounting principles;
2-52                 (2)  an eligible community health center to enter into
2-53     an agreement with the development corporation that states the terms
2-54     of the loan made to the center;
2-55                 (3)  the development corporation to provide to the
2-56     commission semiannual reports giving details of the status of each
2-57     loan made under the program;
2-58                 (4)  the development corporation to require annual
2-59     audits of community health centers receiving loans under the
2-60     program; and
2-61                 (5)  the commission to provide oversight of the
2-62     development corporation as necessary to qualify the development
2-63     corporation for loan guarantees from federal and state programs.
2-64           (b)  Under rules adopted by the commission, the development
2-65     corporation may:
2-66                 (1)  make grants to eligible community health centers
2-67     from money other than money that is received from the fund and that
2-68     was derived from a legislative appropriation; or
2-69                 (2)  seek funds from state or federal agencies or
 3-1     private sources to supplement and complement the funds received
 3-2     under the program.
 3-3           (c)  The commission may adopt other rules as necessary to
 3-4     accomplish the purposes of this chapter.
 3-5           SECTION 2. This Act takes effect September 1, 2001.
 3-6           SECTION 3. The Health and Human Services Commission shall
 3-7     adopt rules to administer Chapter 136, Human Resources Code, as
 3-8     added by this Act, not later than December 1, 2001.
 3-9                                  * * * * *