SRC-VRA H.B. 918 78(R)   BILL ANALYSIS


Senate Research Center   H.B. 918
By: Eiland (Gallegos)
Finance
5/21/2003
Engrossed


DIGEST AND PURPOSE 

In 1985, the 69th Texas Legislature enacted the Indigent Health Care and
Treatment Act to provide for a county to fund medically indigent health
care through the general revenue fund of the county, which is comprised of
property and sales and use taxes. If the county spends at least eight
percent of the general revenue fund on medically indigent health care, the
county is then eligible for state assistance. However, only counties with
a population of 50,000 or less are authorized to adopt or abolish the
sales and use tax for county health services by election and the rate of
these taxes can not exceed one-half percent.  

H.B. 918 creates an indigent health care pilot program to be adopted by a
county, on voter approval, and authorizes certain counties to fund the
pilot program by a sales and use tax for county health services at a rate
of one percent.  

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to
a state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter A, Chapter 324, Tax Code, by adding Section
324.002, as follows: 
 
Sec. 324.002.  APPLICATION OF CERTAIN PROVISIONS TO CERTAIN COUNTIES.
Provides that Sections 324.021, 324.022, 324.061, and 324.081 do not apply
to a county that implements an indigent health care pilot program and
adopts a sales and use tax under Subchapter E. 
 
SECTION 2.  Amends Chapter 324, Tax Code, by adding Subchapter E, as
follows: 

SUBCHAPTER E.  INDIGENT HEALTH CARE PILOT PROGRAM
 
Sec. 324.101.  APPLICATION. Provides that this subchapter applies only to
certain counties. 
  
Sec. 324.102.  PILOT PROGRAM FOR INDIGENT HEALTH CARE. (a)  Authorizes the
commissioners court of a county to implement a pilot program in the county
to provide for certain services. 
 
  (b)  Requires the services the county provides to include certain
medical services.  
 
(c)  Authorizes the county, as part of the pilot program, to provide for
case management services, utilization review, patient outreach services,
patient education, and patient transportation. 
 
(d)  Requires the county to prescribe appropriate goals and performance
measures for the program. 
 
 (e)  Authorizes the county to implement the pilot program only if certain
criteria exist. 
 
Sec. 324.103.  SALES AND USE TAX. (a)  Authorizes a county to adopt or
abolish a sales and use tax authorized by this subchapter to provide
funding for an indigent health care pilot program if imposition of the tax
is approved at an election called and held for that purpose as provided by
Section 324.104. 
 
(b)  Authorizes the tax authorized by this subchapter to be imposed in
increments of one-eighth of one percent, with a minimum tax rate of
one-eighth of one percent and a maximum tax rate of one percent. 
 
(c)  Provides that Sections 323.101(b), (d), and (e) do not apply to the
tax imposed under this subchapter. 
 
Sec. 324.104.  ELECTION PROCEDURE. (a)  Authorizes the commissioners court
of the county to call an election to adopt or abolish the tax under this
subchapter.  Requires the commissioners court to call an election to adopt
or abolish the tax if it receives a petition signed by a number of
petitioners equal to at least five percent of the number of registered
voters in the county. 
 
(b)  Provides that at the election to adopt the tax, the ballot must be
prepared to permit voting for or against the proposition:  "The adoption
of a local sales and use tax in (name of county) at the rate of ______
(insert rate) to provide revenue for an indigent health care pilot
program." 
 
(c)  Provides that at the election to abolish the tax, the ballot must be
prepared to permit voting for or against the proposition:  "The
abolishment of the local indigent health care pilot program sales and use
tax in (name of county)." 
 
Sec. 324.105.  REAUTHORIZATION OF PILOT PROGRAM AND TAX. (a)  Provides
that unless the imposition of the  sales and use tax authorized by this
subchapter is reauthorized as provided by this section, the tax and the
pilot program expire on the sixth anniversary of the date the tax
originally took effect. 
 
(b)  Provides that an election to reauthorize the tax is called and held
in the same manner as an election to adopt the tax under Section 324.104,
except the ballot proposition must be prepared to permit voting for or
against the proposition:  "The reauthorization of the local sales and use
tax in (name of county) at the rate of ______ (insert rate) to continue
providing revenue for indigent health care." 
 
(c)  Provides that if an election to reauthorize the tax is not held
before the tax expires as provided by Subsection (a), or if a majority of
the votes cast in an election to reauthorize the tax do not favor
reauthorization, the county may not call an election on the question of
authorizing a new tax under this subchapter before the first anniversary
of the date on which the tax expired. 
 
(d)  Provides that not later than the 10th day after the date the county
determines that the tax will expire as provided by Subsection (a), the
county must notify the comptroller of the scheduled expiration. Authorizes
the comptroller to delay the scheduled expiration date if the comptroller
notifies the county that more time is required. Requires the comptroller
to provide a new expiration date  that is not later than the last day of
the first calendar quarter occurring after the notification to the
comptroller. 
 
Sec. 324.106.  EFFECT OF STATE TAX RATE INCREASE. Provides that
notwithstanding any other provision of this subchapter, if the rate of the
state sales and use tax imposed under Chapter 151 is increased over the
rate of the tax on January 1, 2003, the rate of a tax imposed under this
subchapter is automatically decreased on the  date the state rate increase
takes effect to the highest rate that will not result in a tax rate of
more than 7-1/4 percent when the state sales and use tax and a tax imposed
under this subchapter are combined. 
 
Sec. 324.107.  SUSPENSION OF TAX UNDER CERTAIN CIRCUMSTANCES. (a) Provides
that notwithstanding any other provision of this subchapter, a county must
suspend collection of the tax imposed under this subchapter during any
state fiscal year for which the state legislature appropriates at least $6
million to fund the indigent health care pilot program in that county. 
 
(b)  Requires the county to notify the comptroller if the tax will be
suspended under this section.  Provides that the suspension takes effect
on the first day of the fiscal year for which the legislature appropriates
money and ends on the last day of that fiscal year. 
 
Sec. 324.108.  STATE AUDITOR REVIEW.  Authorizes the state auditor to
review a pilot program created under this subchapter and report the
auditor's findings to the legislature.  Requires the review to be based on
risk assessment and is subject to the legislative audit committee's
approval of including the work described by this section in the audit plan
under Section 321.013(c), Government Code. 
 
Sec. 324.109.  USE OF TAX REVENUE. Authorizes revenue from the tax imposed
under this subchapter to be used only to provide funding for an indigent
health care pilot program created by the county as provided by this
subchapter. 
 
 Sec. 324.110.  EXPIRATION. Provides that this subchapter expires
September 1, 2009. 
 
SECTION 3.  Amends Chapter 26, Tax Code, by adding Section 26.0435, as
follows: 
 
Sec. 26.0435.  EFFECTIVE TAX RATE IN COUNTY IMPOSING INDIGENT HEALTH CARE
PILOT PROGRAM SALES AND USE TAX. (a)  Provides that except as provided by
Subsection (b), in the tax year in which a county has set an election on
the question of whether to impose a local sales and use tax under
Subchapter E, Chapter 324, the officer or employee designated to make the
calculations provided by Section 26.04 may not make those calculations
until the outcome of the election is determined. Provides that if the
election is determined in favor of the imposition of the tax, the
representative must subtract from the county's rollback and effective tax
rates the amount that, if applied to the county's current total value,
would impose an amount equal to 50 percent of the amount the county spent
on health care services under Sections 61.028 and 61.0285, Health and
Safety Code, during the previous tax year, as reported to the Texas
Department of Health under Section 61.041, Health and Safety Code. 
 
(b)  Provides that if the election to impose the local sales and use tax
under Subchapter E, Chapter 324, is scheduled to be held after October 1,
the county must apply the provisions of Subsection (a) during the next tax
year. 
 
(c)  Provides that in a tax year to which this section applies, a
reference in this chapter to the county's effective or rollback tax rate
refers to that rate as adjusted under this section. 
 
SECTION 4.   Effective date:  upon passage or September 1, 2003.