78R11036 YDB-D
By: Solis, Raymond, et al. H.B. No. 770
Substitute the following for H.B. No. 770:
By: Coleman C.S.H.B. No. 770
A BILL TO BE ENTITLED
AN ACT
relating to a community health center revolving loan program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
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 [136]. TEXAS COMMUNITY HEALTH CENTER REVOLVING
LOAN PROGRAM [FUND]
Sec. 112.001 [136.001]. PURPOSE. The legislature finds
that:
(1) community health centers play a significant role
in the delivery of medical care and related services to the
residents of this state who cannot afford health insurance;
(2) community health centers are a cost-effective way
to provide primary and preventive health care to populations
lacking quality health care by reducing hospitalizations and the
inappropriate use of emergency rooms;
(3) the financing sources available for the capital
needs of community health centers, such as buildings and equipment,
are inadequate; and
(4) increasing community health centers' access to
capital would benefit residents of this state in poor and
underserved communities and foreign-born residents who are
uninsured, by providing greater access to primary care and
preventive health services and by targeting the common health
problems of these residents.
Sec. 112.002 [136.002]. DEFINITIONS. In this chapter:
(1) "Community health center" means a nonprofit
corporation in this state that:
(A) provides required primary health services,
including:
(i) basic health services;
(ii) referrals to providers of medical
services;
(iii) patient case management services;
(iv) outreach; and
(v) patient education; and
(B) has a governing board that:
(i) is composed of individuals, a majority
of whom are being served by the community health centers; and
(ii) represents the individuals being
served by the community health center.
(2) ["Commission" means the Health and Human Services
Commission.
[(3)] "Development corporation" means a nonprofit
corporation that:
(A) provides revolving loan funds to community
health centers;
(B) accepts gifts and grants;
(C) seeks funding from various government and
private sources; [and]
(D) associates with a broad-based organization
serving community health centers; and
(E) is certified by the United States Department
of Treasury as a Community Development Financial Institution.
(3) [(4) "Fund" means the community health center
revolving loan fund established by this chapter.
[(5)] "Program" means the loan program authorized by
this chapter.
[Sec. 136.003. TRUST FUND. (a) The community health center
revolving loan fund is a trust fund outside the state treasury held
by a financial institution and administered by the commission as
trustee on behalf of community health centers in this state.
[(b) The fund is composed of:
[(1) money appropriated to the fund by the
legislature;
[(2) gifts or grants received from public or private
sources; and
[(3) income from other money in the fund.
[(c) The commission may accept on behalf of the fund gifts
and grants for the use and benefit of the program.]
Sec. 112.003 [136.004]. DEVELOPMENT CORPORATION. The
department [commission] shall [contract with and] award a grant
[money] to a development corporation to carry out the purposes of
this chapter.
Sec. 112.004 [136.005]. INVESTMENT COMMITTEE. (a) Before
awarding a grant to [contracting with] a development corporation,
the department [commission] shall require the development
corporation to establish an investment committee to approve loan
requests of community health centers.
(b) The investment committee must consist of seven members
as follows:
(1) at least two members with lending experience;
(2) at least two members who receive health care
services from a community health center; and
(3) at least one member who represents the Texas
Association of Community Health Centers, Inc.
Sec. 112.005 [136.006]. LOANS TO COMMUNITY HEALTH CENTERS.
(a) The development corporation may make a loan to a community
health center only with the approval of the investment committee.
(b) The development corporation shall use at least 60
percent of the money received under the program for loans to
community health centers in existence for at least one year before
the loan date.
(c) A loan made by the development corporation may be
subordinated debt.
(d) The development corporation may make a loan under the
program through a partnership or joint investment with one or more
other lenders [financial institutions] or federal or state
programs.
(e) Payments on community health center loans shall be made
to the development corporation. The development corporation shall
use the loan payment money received from community health centers
to make new loans and cover the expenses of making and servicing
loans under [as provided by] this chapter.
(f) The development corporation may make a loan to fund a
joint project of two or more community health centers.
[Sec. 136.007. SELF-FUNDING. The commission shall develop
the fund program as a revolving loan fund that will become
self-funding over the life of the program.]
Sec. 112.006 [136.008]. INCOME FROM LOAN. All income
received on a loan made with money received under the program is the
property of the development corporation. Income received on a loan
includes the payment of interest by a borrower and the
administrative fees assessed by the development corporation.
Sec. 112.007 [136.009]. RULES. (a) The board [commission]
shall adopt rules necessary to administer this chapter and to
ensure a grant made under this chapter is used for the purposes
intended by the legislature[, including rules that require:
[(1) the commission to review the lending and
servicing practices of a development corporation to ensure the
practices conform to generally accepted accounting principles;
[(2) an eligible community health center to enter into
an agreement with the development corporation that states the terms
of the loan made to the center;
[(3) the development corporation to provide to the
commission semiannual reports giving details of the status of each
loan made under the program;
[(4) the development corporation to require annual
audits of community health centers receiving loans under the
program; and
[(5) the commission to provide oversight of the
development corporation as necessary to qualify the development
corporation for loan guarantees from federal and state programs].
(b) Under rules adopted by the board [commission], the
development corporation may:
(1) make grants to eligible community health centers
from money other than money [that is received from the fund and that
was] derived from a legislative appropriation; or
(2) seek funds from state or federal agencies or
private sources to supplement and complement the funds received
under the grant [program].
(c) The board [commission] may adopt other rules as
necessary to accomplish the purposes of this chapter.
SECTION 2. The Texas Board of Health shall adopt rules
necessary for the Texas Department of Health to administer Chapter
112, Health and Safety Code, as transferred and amended by this Act,
not later than December 1, 2003.
SECTION 3. This Act takes effect September 1, 2003.