1-1     By:  Gallegos                                         S.B. No. 1246
 1-2           (In the Senate - Filed March 7, 2001; March 12, 2001, read
 1-3     first time and referred to Committee on Health and Human Services;
 1-4     April 23, 2001, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 7, Nays 0; April 23, 2001,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 1246               By:  Shapleigh
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to the establishment of a community health center
1-11     revolving loan fund program.
1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13           SECTION 1.  Title 9, Human Resources Code, is amended by
1-14     adding Chapter 136 to read as follows:
1-15       CHAPTER 136.  TEXAS COMMUNITY HEALTH CENTER REVOLVING LOAN FUND
1-16           Sec. 136.001.  PURPOSE.  The legislature finds that:
1-17                 (1)  community health centers play a significant role
1-18     in the delivery of medical care and related services to the
1-19     residents of this state who cannot afford health insurance;
1-20                 (2)  community health centers are a cost-effective way
1-21     to provide primary and preventive health care to populations
1-22     lacking quality health care by reducing hospitalizations and the
1-23     inappropriate use of emergency rooms;
1-24                 (3)  the financing sources available for the capital
1-25     needs of community health centers, such as buildings and equipment,
1-26     are inadequate; and
1-27                 (4)  increasing community health centers' access to
1-28     capital would benefit residents of this state in poor and
1-29     underserved communities and foreign-born residents who are
1-30     uninsured, by providing greater access to primary care and
1-31     preventive health services and by targeting the common health
1-32     problems of these residents.
1-33           Sec. 136.002.  DEFINITIONS.  In this chapter:
1-34                 (1)  "Community health center" means a nonprofit
1-35     corporation in this state that:
1-36                       (A)  provides required primary health services,
1-37     including:
1-38                             (i)  basic health services;
1-39                             (ii)  referrals to providers of medical
1-40     services;
1-41                             (iii)  patient case management services;
1-42                             (iv)  outreach; and
1-43                             (v)  patient education; and
1-44                       (B)  has a governing board that:
1-45                             (i)  is composed of individuals, a majority
1-46     of whom are being served by community health centers; and
1-47                             (ii)  represents the individuals being
1-48     served by the community health center.
1-49                 (2)  "Commission" means the Health and Human Services
1-50     Commission.
1-51                 (3)  "Development corporation" means a nonprofit
1-52     corporation that:
1-53                       (A)  provides revolving loan funds to community
1-54     health centers;
1-55                       (B)  accepts gifts and grants;
1-56                       (C)  seeks funding from various government and
1-57     private sources; and
1-58                       (D)  associates with a broad-based organization
1-59     serving community health centers.
1-60                 (4)  "Fund" means the community health center revolving
1-61     loan fund established by this chapter.
1-62                 (5)  "Program" means the loan program authorized by
1-63     this chapter.
1-64           Sec. 136.003.  TRUST FUND.  (a)  The community health center
 2-1     revolving loan fund is a trust fund outside the state treasury held
 2-2     by a financial institution and administered by the commission as
 2-3     trustee on behalf of community health centers in this state.
 2-4           (b)  The fund is composed of:
 2-5                 (1)  money appropriated to the fund by the legislature;
 2-6                 (2)  gifts or grants received from public or private
 2-7     sources; and
 2-8                 (3)  income from other money in the fund.
 2-9           (c)  The commission may accept on behalf of the fund gifts
2-10     and grants for the use and benefit of the program.
2-11           Sec. 136.004.  DEVELOPMENT CORPORATION.  The commission shall
2-12     contract with and award money to a development corporation to carry
2-13     out the purposes of this chapter.
2-14           Sec. 136.005.  INVESTMENT COMMITTEE.  (a)  Before contracting
2-15     with a development corporation, the commission shall require the
2-16     development corporation to establish an investment committee to
2-17     approve loan requests of community health centers.
2-18           (b)  The investment committee must consist of seven members
2-19     as follows:
2-20                 (1)  at least two members with lending experience;
2-21                 (2)  at least two members who receive health care
2-22     services from a community health center; and
2-23                 (3)  at least one member who represents the Texas
2-24     Association of Community Health Centers, Inc.
2-25           Sec. 136.006.  LOANS TO COMMUNITY HEALTH CENTERS.  (a)  The
2-26     development corporation may make a loan to a community health
2-27     center only with the approval of the investment committee.
2-28           (b)  The development corporation shall use at least 60
2-29     percent of the money received under the program for loans to
2-30     community health centers in existence for at least one year before
2-31     the loan date.
2-32           (c)  A loan made by the development corporation may be
2-33     subordinated debt.
2-34           (d)  The development corporation may make a loan under the
2-35     program through a partnership or joint investment with one or more
2-36     financial institutions or federal or state programs.
2-37           (e)  Payments on community health center loans shall be made
2-38     to the development corporation.  The development corporation shall
2-39     use the loan payment money received from community health centers
2-40     to make new loans as provided by this chapter.
2-41           Sec. 136.007.  SELF-FUNDING.  The commission shall develop
2-42     the fund as a revolving loan fund that will become self-funding
2-43     over the life of the program.
2-44           Sec. 136.008.  INCOME FROM LOAN.  All income received on a
2-45     loan made with money received under the program is the property of
2-46     the development corporation.  Income received on a loan includes
2-47     the payment of interest by a borrower and the administrative fees
2-48     assessed by the development corporation.
2-49           Sec. 136.009.  RULES.  (a)  The commission shall adopt rules
2-50     to administer this chapter, including rules that require:
2-51                 (1)  the commission to review the lending and servicing
2-52     practices of a development corporation to ensure that the practices
2-53     conform to generally accepted accounting principles;
2-54                 (2)  an eligible community health center to enter into
2-55     an agreement with the development corporation that states the terms
2-56     of the loan made to the center;
2-57                 (3)  the development corporation to provide to the
2-58     commission semiannual reports giving details of the status of each
2-59     loan made under the program;
2-60                 (4)  the development corporation to require annual
2-61     audits of community health centers receiving loans under the
2-62     program; and
2-63                 (5)  the commission to provide oversight of the
2-64     development corporation as necessary to qualify the development
2-65     corporation for loan guarantees from federal and state programs.
2-66           (b)  Under rules adopted by the commission, the development
2-67     corporation may:
2-68                 (1)  make grants to eligible community health centers
2-69     from money other than money that is received from the fund and that
 3-1     was derived from a legislative appropriation; or
 3-2                 (2)  seek funds from state or federal agencies or
 3-3     private sources to supplement and complement the funds received
 3-4     under the program.
 3-5           (c)  The commission may adopt other rules as necessary to
 3-6     accomplish the purposes of this chapter.
 3-7           SECTION 2.  This Act takes effect September 1, 2001.
 3-8           SECTION 3.  The Health and Human Services Commission shall
 3-9     adopt rules to administer Chapter 136, Human Resources Code, as
3-10     added by this Act, not later than December 1, 2001.
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