1-1     By:  Madla                                             S.B. No. 115
 1-2           (In the Senate - Filed November 16, 2000; January 11, 2001,
 1-3     read first time and referred to Committee on Health and Human
 1-4     Services; February 19, 2001, reported adversely, with favorable
 1-5     Committee Substitute by the following vote:  Yeas 7, Nays 0;
 1-6     February 19, 2001, sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 115                    By:  Madla
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to creating a foundation to finance health programs in the
1-11     rural areas of the state.
1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13           SECTION 1.  Subtitle E, Title 2, Health and Safety Code, is
1-14     amended by adding Chapter 110 to read as follows:
1-15                    CHAPTER 110.  RURAL HEALTH FOUNDATION
1-16           Sec. 110.001.  CREATION OF FOUNDATION.  (a)  The Center for
1-17     Rural Health Initiatives shall establish the Rural Health
1-18     Foundation as a nonprofit corporation that complies with the Texas
1-19     Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's
1-20     Texas Civil Statutes), except as otherwise provided by this
1-21     chapter, and qualifies as an organization exempt from federal
1-22     income tax under Section 501(c)(3), Internal Revenue Code of 1986,
1-23     as amended.
1-24           (b)  The Center for Rural Health Initiatives shall ensure
1-25     that the Rural Health Foundation operates independently of any
1-26     state agency or political subdivision of the state.
1-27           Sec. 110.002.  POWERS AND DUTIES.  (a)  The Rural Health
1-28     Foundation shall raise money from foundations, governmental
1-29     entities, and other sources to finance health programs in the rural
1-30     areas of the state.
1-31           (b)  The Rural Health Foundation shall have the powers that
1-32     are necessary and convenient to carry out its duties.
1-33           (c)  The Rural Health Foundation shall develop and implement
1-34     policies and procedures that clearly separate the responsibilities
1-35     and activities of the foundation from the Center for Rural Health
1-36     Initiatives.
1-37           Sec. 110.003.  BOARD OF DIRECTORS.  (a)  The Rural Health
1-38     Foundation is governed by a board of five directors appointed by
1-39     the executive committee of the Center for Rural Health Initiatives
1-40     from individuals recommended by the executive director of the
1-41     Center for Rural Health Initiatives.
1-42           (b)  Members of the board of directors of the Rural Health
1-43     Foundation serve for staggered terms of six years, with as near as
1-44     possible to one-third of the members' terms expiring February 1 of
1-45     each odd-numbered year.
1-46           (c)  Appointments to the board of directors of the Rural
1-47     Health Foundation shall be made without regard to the race, color,
1-48     disability, sex, religion, age, or national origin of the
1-49     appointees.
1-50           (d)  The board of directors of the Rural Health Foundation
1-51     shall ensure that the foundation remains eligible for an exemption
1-52     from federal income tax under Section 501(a), Internal Revenue Code
1-53     of 1986, as amended, by being listed as an exempt organization
1-54     under Section 501(c)(3) of that code, as amended.
1-55           Sec. 110.004.  RESTRICTIONS ON BOARD APPOINTMENT, MEMBERSHIP,
1-56     AND EMPLOYMENT.  (a)  In this section, "Texas trade association"
1-57     means a cooperative and voluntarily joined association of business
1-58     or professional competitors in this state designed to assist its
1-59     members and its industry or profession in dealing with mutual
1-60     business or professional problems and in promoting their common
1-61     interest.
1-62           (b)  A person may not be a member of the board of directors
1-63     of the Rural Health Foundation and may not be a foundation employee
1-64     employed in a "bona fide executive, administrative, or professional
 2-1     capacity," as that phrase is used for purposes of establishing an
 2-2     exemption to the overtime provisions of the federal Fair Labor
 2-3     Standards Act of 1938 (29 U.S.C. Section 201 et seq.), as amended,
 2-4     if:
 2-5                 (1)  the person is an officer, employee, or paid
 2-6     consultant of a Texas trade association in the field of health
 2-7     care; or
 2-8                 (2)  the person's spouse is an officer, manager, or
 2-9     paid consultant of a Texas trade association in the field of health
2-10     care.
2-11           (c)  A person may not be a member of the board of directors
2-12     of the Rural Health Foundation or act as the general counsel to the
2-13     board of directors or the foundation if the person is required to
2-14     register as a lobbyist under Chapter 305, Government Code, because
2-15     of the person's activities for compensation on behalf of a
2-16     profession related to the operation of the foundation.
2-17           Sec. 110.005.  REMOVAL OF BOARD MEMBER.  (a)  It is a ground
2-18     for removal from the board of directors of the Rural Health
2-19     Foundation that a member:
2-20                 (1)  is ineligible for membership under Section
2-21     110.004;
2-22                 (2)  cannot, because of illness or disability,
2-23     discharge the member's duties for a substantial part of the
2-24     member's term; or
2-25                 (3)  is absent from more than half of the regularly
2-26     scheduled board meetings that the member is eligible to attend
2-27     during a calendar year without an excuse approved by  a majority
2-28     vote of the board of directors.
2-29           (b)  The validity of an action of the board of directors of
2-30     the Rural Health Foundation is not affected by the fact that it is
2-31     taken when a ground for removal of a board member exists.
2-32           (c)  If the executive director of the Center for Rural Health
2-33     Initiatives has knowledge that a potential ground for removal
2-34     exists, the executive director shall notify the presiding officer
2-35     of the board of directors of the Rural Health Foundation of the
2-36     potential ground.  The presiding officer shall then notify the
2-37     governor and the attorney general that a potential ground for
2-38     removal exists.  If the potential ground for removal involves the
2-39     presiding officer, the  executive director shall notify the next
2-40     highest ranking officer of the board of directors, who shall then
2-41     notify the governor and the attorney general that a potential
2-42     ground for removal exists.
2-43           Sec. 110.006.  VACANCY.  A vacancy on the board of directors
2-44     of the Rural Health Foundation shall be filled for the remainder of
2-45     the unexpired term in the same manner as the original appointment.
2-46           Sec. 110.007.  OFFICERS.  The board of directors of the Rural
2-47     Health Foundation shall elect from among its members a presiding
2-48     officer, an assistant presiding officer, and other officers the
2-49     board considers necessary.  The presiding officer and assistant
2-50     presiding officer serve for a period of one year and may be
2-51     reelected.
2-52           Sec. 110.008.  MEETINGS.  The board of directors of the Rural
2-53     Health Foundation may meet as often as necessary, but shall meet at
2-54     least twice a year.
2-55           Sec. 110.009.  TAX EXEMPTION.  All income, property, and
2-56     other assets of the Rural Health Foundation are exempt from
2-57     taxation by the state and political subdivisions of the state.
2-58           Sec. 110.010.  MEMORANDUM OF UNDERSTANDING.  The Rural Health
2-59     Foundation and the Center for Rural Health Initiatives shall enter
2-60     into a memorandum of understanding that:
2-61                 (1)  requires the board of directors and staff of the
2-62     foundation to report to the executive director and executive
2-63     committee of the Center for Rural Health Initiatives;
2-64                 (2)  allows the Center for Rural Health Initiatives to
2-65     provide staff functions to the foundation;
2-66                 (3)  allows the Center for Rural Health Initiatives to
2-67     expend funds on the foundation; and
2-68                 (4)  outlines the financial contributions to be made to
2-69     the foundation from funds obtained from grants and other sources.
 3-1           Sec. 110.011.  RECORDS.  (a)  The Rural Health Foundation
 3-2     shall maintain financial records and reports independently from
 3-3     those of the Center for Rural Health Initiatives.
 3-4           (b)  The Rural Health Foundation shall comply with all filing
 3-5     requirements of the secretary of state and the Internal Revenue
 3-6     Service.
 3-7           Sec. 110.012.  REPORT TO CENTER FOR RURAL HEALTH INITIATIVES.
 3-8     Not later than the 60th day after the last day of the fiscal year,
 3-9     the Rural Health Foundation shall submit to the Center for Rural
3-10     Health Initiatives a report itemizing all income and expenditures
3-11     and describing all activities of the foundation during the
3-12     preceding fiscal year.
3-13           SECTION 2.  Section 106.026, Health and Safety Code, is
3-14     amended to read as follows:
3-15           Sec. 106.026.  REPORT TO LEGISLATURE.  No later than January
3-16     1 of each odd-numbered year, the center shall submit a biennial
3-17     report to the legislature regarding the activities of the center,
3-18     the activities of the Rural Health Foundation, and any findings and
3-19     recommendations relating to rural issues.
3-20           SECTION 3.  (a)  The Center for Rural Health Initiatives
3-21     shall create the Rural Health Foundation not later than June 1,
3-22     2002.
3-23           (b)  In making the initial appointments to the board of
3-24     directors of the Rural Health Foundation, the executive committee
3-25     of the Center for Rural Health Initiatives shall designate two
3-26     members for terms expiring February 1, 2003, two members for terms
3-27     expiring February 1, 2005, and one member for a term expiring
3-28     February 1, 2007.
3-29           SECTION 4.  This Act takes effect September 1, 2001.
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