S.B. 1796 78(R)    BILL ANALYSIS


S.B. 1796
By: Barrientos
County Affairs
Committee Report (Unamended)



BACKGROUND AND PURPOSE 
Under current law using Chapter 281 of the Health and Safety Code, voters
in Travis County may call an election and create a hospital district in
Travis County.  However, the current statute does not recognize the unique
health care delivery system in Austin and Travis County.   

SB 1796 makes use of relevant provisions of Chapter 281 and Chapter 285 of
the Health and Safety Code, which also deals with hospital districts, and
creates a stand-alone statute, addressing the unique health care delivery
system in Austin and Travis County.  This would provide guidance to a
newly created governing board, and addresses the responsibilities of
health care delivery if an election is held and voters approve the
creation of a hospital district.  SB 1796 would also provide for a
multi-county district. 

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency, or
institution. 

ANALYSIS
Provides for the creation of a Central Texas Health Care District as
outlined by the Constitution to include Travis County and the City of
Austin. 

A creation election may be called by the Commissioners Court or by a
petition of voters within the area.   

Other areas or counties may petition and hold elections to join the
district after it is created, if the Travis County Commissioners Court
agrees and notifications are made to the Commissioners Court of the new
area.  Upon notification, those Courts shall order an election. 

A creation election must be held on the first uniform election day.  If
additional area is to be included at the time of the creation election in
other counties, the election shall be on the same day. 

The petition calling for the election may include a proposition for
election on whether the board can issue general revenue bonds or the
Commissioners Court may add this to the ballot.  It has to be on the
ballot in all areas where elections are held.  If voters approve by
majority vote, general obligation bonds may be issued.  If elections are
held both in Travis County/City of Austin and additional areas on the same
day, the issuance of bonds must be approved in each election. 

The bill describes the election order, notice of election, ballot
proposition and ballot language, both for creation and for bonding
authority.   

The district is created only if there is a majority vote in Travis
County/City of Austin.  If additional areas are also voting, it must pass
in the central area to be effective.  If it fails, another election cannot
be held for a year.  For any additional area election held on the same
day, it must pass in both the additional area and the central area. 

The Commissioners Court shall enter an order if the proposition passes.  

On the date the election is called, temporary directors are appointed,
four by Travis County Commissioners, four by Austin City Council, and one
jointly by both.  If additional territory is  included, each area appoints
one director.  The temporary directors serve until the election is
unsuccessful or until the permanent directors are appointed if creation is
approved.   These directors plan for transfer of functions to the new
district. 

The permanent directors will be appointed as follows: four by Travis
County Commissioners, four by Austin City Council, and one jointly by
both.   Two of the Travis County appointees must be residents of Austin. A
director must reside in the district.  All should have some level of
experience in matters related to health care.  If additional areas are
added, directors are allotted based on one per 100,000 population.  If the
additional area has less than 100,000 residents, the Commissioners Court
shall appoint one director for that area.  Permanent directors are to be
appointed within 30 days. Successor directors are appointed in the same
manner.  Terms of service are staggered over four years through a process
set out.   Board vacancies are filled by the appointed body.  The board
elects president and vice-president with a 2/3 vote.   Board members serve
without compensation, but may be reimbursed for actual expenses.  Process
for setting agenda is outlined. 

Provides for an oversight committee of two appointees of the
Commissioner's Court and two appointees of the City of Austin Council.
Any additional area outside of the central area is entitled to appoint one
member.  Officeholders may be appointed.  Members serve two year terms.
The oversight committee may call an election to dissolve the district or
veto any proposed tax increase rate.  They meet at least once a year and
must have a 2/3 vote to take action. 

The Board may appoint administrators and an attorney for the district.
They serve at the will of the board, are entitled to compensation, and
must execute a bond. 

The Board may appoint doctors to the staff and other employees may be
employed, as necessary. The administrator supervises and directs the
district.   

The Board may provide retirement benefits as outlined.

All entities providing health care on the date of creation must transfer
all related property and inventory to the district, including Brackenridge
Hospital and related buildings. 

Left optional for transfer through agreement between the local governments
and the new district are property used by utilities, jails, and buildings
under construction.  Multi-purpose buildings where clinics are co-located
with other functions do not transfer: equipment does, and space is leased
for a period of transition time.  A provision allows the transfer of
Federally Qualified Health Clinics upon the federal government's
authorization so as not to jeopardize the designation.  Public health
services remain with local governments unless transfer is agreed upon. 

Provisions spell out the timelines and requirements of the transfer of
money already appropriated for health care, and the conditions of its use. 

Transition language outlines the initial operation of the district.
Persons responsible for operation of facilities remain in place until a
date set by the board or the first anniversary of creation. Language
protects current longer term leases and contracts.  The district shall
continue the health care programs in place in Austin and Travis County to
a date set by the board or the first anniversary of creation.  Transition
funding and methodology for programs and facilities is set to continue to
a date set by the board or the first anniversary of creation. 

The transfer of EMS and rescue and similar services is permissive for
transfer to the district from local governments. 

Any property that transfers and is not used for health related purposes
must be returned. 

All outstanding contractual obligations are transferred.

All outstanding bonded indebtedness on property transferred is also
transferred to the district. Provisions outline this transfer. 

 No unit of government in the area of the new district may impose any tax
or issue any bonds for hospital purposes, or for providing medical care
for residents of the district after the creation of the district.  The
district assumes full responsibility for mandated indigent care. 

The board shall manage and control the district and can impose property
tax or other taxes allowed by law. 

The board may rename the district.  It may adopt rules governing operation
and staff duties.  It may set up purchase and expenditure procedures and
accounting processes. 

The board shall inventory what it has upon creation and what type and
quantity of services are needed in the district. 

The board is given permission to acquire equipment, facilities, etc., to
lease its property, to sell property, to provide for inpatient and
outpatient care; and ability to own and operate a myriad of health care
operations, to do mobile services, and to contract with school districts
for health services. 

The board may own and operate facilities and may set rates, charges and
discounts for services.   

The board may enter into construction contracts.  They contract for
operation and management of facilities. 

The district has eminent domain powers.  Limitations to that power are
outlined.  If this power is used, costs of moving utilities is borne by
district. 

The district assumes indigent health care responsibilities and must set up
an eligibility process.  The board must require reimbursement from
governmental units outside the district for the care of patients from
those areas.  Care for prisoners from outside the district must be
reimbursed by the responsible governmental unit.      

The board may issue service contracts for mobile emergency services or
eligibility determinations. 

The board may accept gifts and endowments.  The board may sue and be sued.

The district may set up a health maintenance organization as set out in
law. 

An integrated health care system between the district and a medical school
is authorized to provide health services in the district.  Such a system
can own or contract for assets, enter contracts, enter into reimbursement
agreements and other necessary things to provide comprehensive health
care. All laws applicable to the system are outlined.  Guidelines for
operations and transaction of business, including requirements for
meetings is outlined. 

The district may create a charitable organization to provide services or
resources and support. 

The district may loan or grant money for the economic development purposes
such as medical education and research and provision of indigent health
care in the district.   

After the district is created, a defined territory may petition to join
the district.  Provisions for this application are outlined, including:
election procedures, ballot language, election dates, election notices,
and election results.  If passed by a majority vote, provisions outline
how new directors and oversight committee members are appointed. 

The district may be dissolved by the board ordering an election or
receiving petitions from citizens. Process for this election to be called
and conducted are outlined.  Provisions for the distribution of assets if
dissolution is approved must be outlined.  Timelines and process for the
dissolution and transfer of assets are listed, as well as guidelines for
unspent money dispersals.  When all is done, the district reports
dissolution to the commissioners courts within the area. 

The board may set its fiscal year and an annual audit is required, and is
a public record. 
 
The administrator is required to prepare an annual budget with complete
financial statement containing specific items listed.  Notice and hearings
are required on the budget before the adoption by the board.  Budgets can
be amended; no expenditure may be done unless it is in the budget.   

Spending and investment limitation are set, including not spending any
money not on hand or coming in the immediate or next fiscal year. 

The board may borrow money through revenue anticipation notes for a term
less than 18 months.  
Depository requirements are set.

The district is prohibited from participating in tax increment financing.

The board may issue and sell general obligation bonds authorized by the
voters.  When selling the bonds, a tax sufficient to cover the bonds must
be issued.  The process for authorizing a bond election is described.
Bonds must be approved by a majority vote. 

Revenue  bonds may be issued and secured by revenue from the district's
operations. 

Refunding bonds may be issued to refund outstanding general obligation
bonds and may impose a tax to pay the bonds. 

Bonds must mature before the 50th anniversary and be within interest rates
set by Government Code. 

Process for bond execution is described.  Bonds are not taxable.  General
obligation and revenue bonds may be issued for:  any  capital
expenditures; working capital for construction; capitalized interest;
issuance costs; liquidity or credit enhancement for the bonds; and debt
service for the bonds. Bond proceeds may be used for upkeep and
enhancement of property of the district.  The district has all the powers
granted to an "issuer" as set out in the Government Code. 

The board may impose a property tax annually not to exceed level set by
voters at the time of creation of the district.  Taxes may be used to pay
indebtedness and maintenance and operations. These taxes may not pay for
revenue bond costs. 

Tax rate cannot exceed one-third of the maximum rate authorized by the
Texas Constitution.  Income from all sources must be considered before
rate is set.  When proposed, the rate proposal must go to the oversight
committee, and the oversight committee has veto authority only if the
proposed rate is greater than the rate adopted for the preceding year.
The process for the oversight committee to veto is described. 

The Tax Code governs appraisal, assessment, and collection of district
taxes.  The board may provide for appointment of an assessor-collector.   

The board may impose a sales and use tax as outlined in Chapter 285 of the
Health and Safety Code. 

The state may not become obligated for the support or maintenance of the
district and the legislature may not make a direct appropriation to it. 

Publication requirement for this legislation is outlined.  Powers granted
to the board are cumulative.  

Effective date: Takes effect September 1, 2003, or immediately if receives
2/3 vote, as required by Texas Constitution. 

EFFECTIVE DATE
Takes effect September 1, 2003, or immediately if receives 2/3 vote, as
required by Texas Constitution.