C.S.H.B. 770 78(R)    BILL ANALYSIS


C.S.H.B. 770
By: Solis
Public Health
Committee Report (Substituted)
      


BACKGROUND AND PURPOSE 

Community health centers, often funded by public and private grants,
provide health care services to uninsured and under insured residents.
These community health centers are, by law, located only in medically
undeserved areas and primarily serve low-income and uninsured clients,
taking a huge burden off of hospital emergency rooms and other providers.
There are thirty-two such community health centers in Texas providing care
through almost 200 community sites.   

These centers may find it difficult to acquire commercial loans, because
their revenue source is not stable and consistent.  This precarious
financial situation contributes to the centers neglect of building repairs
and other nonmedical services, including meeting building code
requirements and purchasing equipment.  The 77th Texas Legislature created
the statutory framework for making state funding available to provide seed
capital for a perpetual revolving loan fund to finance the capital needs
(building and equipment) of community health centers.  However,  the
Legislature did not make an appropriation for this initiative last
session.   

This bill would clarify that a joint project by two or more community
health centers is eligible for financing.  It requires the non-profit
entity which administers the program to be a Certified Community
Development Financial Institution (CDFI) in order to be eligible for the
program with federal dollars.   Furthermore, it deletes references to
"fund" or "trust fund" in order to eliminate any constitutional  questions
and confusion in regard to other state fund balances.  It clarifies that
the state funding is a grant , in order to meet both state  constitutional
requirements and federal CDFI 
matching requirements.  The bill also clarifies that any lender which
wishes to help finance Community health center projects, not just
financial institutions, is eligible to do so. 


RULEMAKING AUTHORITY

It is the committee's opinion that rulemaking authority is expressly
granted to the Board of Health in SECTION  1 (Section 112.007, Health and
Safety Code) of this bill. 

ANALYSIS
SECTION 1.  Chapter 136, Human Resources Code, is transferred to Subtitle
E. Title 2, Health and Safety Code, renumbered as Chapter 112, Health and
Safety Code, and amended to read as follows: 

Chapter 112. Health and Safety Code,  renames the loan fund as the Texas
Community Health Center Loan Program. 

Sec. 112.001.  Purpose. Establishes the purpose of the Chapter.

Sec. 112.002.  Definitions.  Removes the Health and Human Services
Commission as definition of "Commission".  Adds that  the a development
corporation means a nonprofit corporation that is by the United States
Department of Treasury as a Community Development Financial Institution.
Deletes the definition of "Fund" and  references to "Trust Fund". 

Sec. 112.003.  Development Corporation.  Authorizes the Texas Department
of Health  to award grants to development corporations to fulfill the
purpose of this chapter. 

Sec. 112.004.  Investment Committee.  Requires a  development corporation
to establish an  investment committee before it can receive a grant from
the Health and Human Services Commission. 

Sec. 112.005.  Loans to Community Health Centers. Clarifies that a loan
can made through a partnership or joint investment of one or more lenders,
and by  allowing loan payment money to be used to cover the expense of
making and servicing loans. 

Sec. 112.006.  Income From Loan.  Establishes that income received from
the loan is the property of the development Corporation. 

Sec. 112.007. Rules. Authorizes the Texas Board of Health  to adopt
necessary rules to ensure a grant made under this chapter is used for the
purposes intended by the legislature. 

SECTION 2.  The Texas Board of Health shall adopt rules to administer
Chapter 112. 

SECTION 3.  Effective Date: September 1, 2003.


EFFECTIVE DATE
September 1, 2003. 

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 770  differs form the original bill in that the substitute
transfers Chapter 136 of the  Human Resources Code to Subtitle E Title 2,
of the Health and Safety Code and is  renumbered as Chapter 112, of the
Health and Safety Code.