SRC-TJG S.B. 1028 78(R)   BILL ANALYSIS


Senate Research Center   S.B. 1028
78R3556 YDB-FBy: Gallegos
Health & Human Services
4/1/2003
As Filed


DIGEST AND PURPOSE 

The 77th Texas Legislature created the Texas Community Health Center
Revolving Loan Fund. This loan fund is administered by the Health and
Human Services Commission (HHSC) and is for the purpose of providing
capital loans to Federally Qualified Health Centers and similar
community-based non-profit primary health care providers.  The legislation
contained language referring to money appropriated by the state as a
"trust fund."  This created debate as to whether any money in such a fund
was outside the state treasury.  The attorney general released an opinion
at the request of HHSC stating that the legislation does not violate the
state constitution and that no trust fund exists outside the treasury.  As
proposed, S.B. 1028 changes the name to the Texas Community Health Center
Revolving Loan Program.  This bill also requires the development
corporation to be a certified Community Development Financial Institution,
clarifies that an "award" to the development corporation is a grant, that
interest payments received from loans may be used to pay the costs of loan
making and servicing, and provides that HHSC may adopt rules necessary to
carry out this legislation. 

RULEMAKING AUTHORITY

Grants rulemaking authority to the Health and Human Services Commission in
SECTION 8 of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends the heading to Chapter 136, Human Resources Code, to
read as follows: 

CHAPTER 136.  TEXAS COMMUNITY HEALTH CENTER REVOLVING LOAN PROGRAM

SECTION 2.  Amends Section 136.002(3), Human Resources Code, to add a
nonprofit corporation that is certified by the United States Department of
Treasury as a Community Development Financial Institution to the
definition of a "development corporation."  

SECTION 3.  Amends Section 136.004, Human Resources Code, to require the
Health and Human Services Commission (HHS) to award a grant, rather than
money, to a development corporation to carry out the purpose of this
chapter.  Deletes existing language related to HHS contracting with a
development corporation. 

SECTION 4.  Amends Section 136.005(a), Human Resources Code, to make a
conforming change. 

SECTION 5.  Amends Section 136.006, Human Resources Code, by amending
Subsections (d) and (e) and adding Subsection (f), as follows: 

(d) Authorizes the development corporation to make a loan under the
program through a partnership or joint investment with one or more other
lenders, rather than financial institutions, or federal or state programs. 

(e) Requires the development corporation to make new loans and cover the
expenses of making and servicing loans under, rather than as provided by,
this chapter. 
 
(f) Authorizes the development corporation to make a loan to fund a joint
project of two or more community health centers. 

SECTION 6.  Amends Sections 136.009(a) and (b), Human Resources Code, as
follows: 

(a) Requires HHS to adopt rules necessary to administer this chapter and
to ensure a grant made under this chapter is used for the purposes
intended by the legislation.  Deletes existing text related to rules that
require certain actions. 

(b) Authorizes the development corporation, under rules adopted by HHS, to
take certain actions.  Deletes existing text related to making grants to
eligible community health centers from money other than money that is
received from the fund.  Makes a conforming change.  

SECTION 7.  Repealer: Sections 136.002(4) (regarding the definition of
"fund"), 136.003 (Trust Fund), and 136.007 (Self-Funding), Human Resources
Code. 

SECTION 8.  Requires HHS to adopt rules to administer Chapter 136, Human
Resources Code, as amended by this Act, not later than December 1, 2003. 

SECTION 9.  Effective date: September 1, 2003.