HBA-DMD C.S.H.B. 2480 76(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 2480
By: Hardcastle
County Affairs
3/29/1999
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

The Chillicothe County Hospital District (district) was established in 1979
by the 66th Legislature to provide an entity to manage the affairs
pertaining to financing and providing health care resources for Chillicothe
Hospital in Hardeman County. Since the creation of the district, there has
been no legislation giving the board of directors of the district (board)
more flexibility to carry out its charge of providing health care services
to the community. 

C.S.H.B. 2480 authorizes the board to purchase or lease property, including
facilities and equipment, for the district to use in the hospital system.
This bill authorizes the board to enter into an interlocal agreement with a
political subdivision to operate the district and authorizes the board to
contract to provide administrative or other personnel for the operation of
the hospital facilities. This bill also authorizes contracts for
construction involving the expenditure of more than $15,000 to be made only
after advertising. It also authorizes the board to lease district
facilities and to provide retirement benefits for employees. C.S.H.B. 2480
authorizes the district to spend district funds for recruiting, to impose
property taxes, setting a rate for the taxes, and to institute a suit to
enforce the payment of taxes. This bill authorizes the board to borrow
money for district obligations and for the district to be dissolved upon
voter approval. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Sections 3(f) and (g), Chapter 74, Acts of the 66th
Legislature, Regular Session, 1979, to require any person desiring to have
his or her name printed on the ballot as a candidate for director to file
an application, rather than a petition signed by at least 15 qualified
electors, with the secretary of the board of directors at least 45, rather
than 25, days before the election. Sets forth that each member of the board
is required to qualify by executing the constitutional oath of office and
authorizes each member to be required to execute, rather than requiring the
member to execute, good and sufficient bond to be approved by the
commissioners court for $5,000 payable to the district, conditioned upon
the faithful performance of that director's duties as director. Makes a
nonsubstantive change. 

SECTION 2.  Amends Section 4, Chapter 74, Acts of the 66th Legislature,
Regular Session, 1979, as follows: 

Sec. 4.  POWERS AND DUTIES. (a) Updates a statutory reference. Authorizes,
rather than requires, the administrator of the hospital district
(administrator) to execute a bond that is payable to the hospital district
in an amount to be set by the board but not less than $5,000, with the
condition that he or she is required to perform the duties that are
required of him or her and containing such other conditions as the board
may require. Authorizes the board to pay for the bond with district funds. 

(b) Authorizes the board to purchase or lease property, including
facilities or equipment, for the district to use in the hospital system and
to mortgage or pledge the property as  security for the payment of the
purchase price.  

(c) Redesignated from Subsection (a).

(d) Authorizes the board to enter into an interlocal agreement with another
political subdivision to operate the hospital district. 
 
(e) Authorizes the board to contract to provide administrative or other
personnel for the operation of the hospital facilities. Prohibits the
contract entered from having a term longer than 25 years.  


(f) Authorizes the board to lease district hospital facilities to
individuals, corporations, or other legal entities and to sell or otherwise
dispose of the district's property.  

(g) Authorizes the board to provide retirement benefits for district
employees by establishing or administering a retirement program or electing
to participate in the Texas County and District Retirement System or any
other statewide retirement system for which the district is eligible.  

(h) Authorizes the board to spend district funds to recruit physicians,
nurses, and other trained medical personnel. Authorizes the board to
contract with one or more full-time medical students or other students in a
health occupation, each of whom is enrolled in and in good standing at an
accredited medical school, college, or university to pay the student's
tuition or other expenses in consideration of the student's agreement to
serve as an employee or independent contractor for the district.  

(i) Authorizes the board to institute a suit to enforce the payment of
taxes and to foreclose liens to secure the payment of taxes due to the
district.  

SECTION 3.  Amends Section 5, Chapter 74, Acts of the 66th Legislature,
Regular Session, 1979, to require a public hearing on the annual budget to
be held by the board after notice has been given in the manner provided by
Subchapter C (Notice of Meetings), Chapter 551 (Open Meetings), Government
Code, rather than after being published in a newspaper with general
circulation in the district one time 10 days before the hearing date.  

SECTION 4.  Amends Section 6(a), Chapter 74, Acts of the 66th Legislature,
Regular Session, 1979, to provide that at the time of the issuance of any
bonds payable from taxation, rather than by the district, a tax is required
to be levied by the board sufficient to create an interest and sinking fund
to pay the interest on and principal of the bonds as they mature, providing
that the tax together with any other taxes levied for the district is
prohibited from exceeding the limit approved by the voters at the election
authorizing the levy of taxes, rather than is prohibited from exceeding 75
cents on each $100 valuation of all taxable property located in the
district subject to hospital district taxation in any one year. Updates
statutory references. Makes nonsubstantive changes. 

SECTION 5.  Amends Section 8, Chapter 74, Acts of the 66th Legislature,
Regular Session, 1979, to require the revenue bonds to be issued in the
manner and in accordance with the procedures and requirements specified for
the issuance of revenue bonds by county hospital authorities in Sections
264.042 (Form and Procedure), 264.043 (Terms), 264.046 (Junior Lien Bonds;
Parity Bonds), 264.047 (Bond Proceeds; Investment of Funds), 264.048
(Refunding Bonds), and 264.049 (Approval and Registration of Bonds), Health
and Safety Code, rather than Sections 8, 10, 11, 12, and 13 of Chapter 122,
Acts of the 58th Legislature, 1963, as amended (Article 4494r, V.T.C.S.),
which have been repealed.  Makes a nonsubstantive change. 

SECTION 6.  Amends Section 9(b), Chapter 74, Acts of the 66th Legislature,
Regular Session, 1979, to authorize contracts for construction involving
the expenditure of more than $15,000, rather than $10,000, to be made only
after advertising as provided by Subchapter B (Competitive Bidding on
Certain Public Works Contracts), Chapter 271 (Purchasing and Contracting
Authority of Municipalities, Counties, and Certain Other Local
Governments), Local Government Code, rather than Chapter 163, Article
2368a, V.T.C.S., General Laws, Acts of the 42nd Legislature, Regular
Session, 1931, as amended. Requires the provisions of Chapter 2253(Public
Work Performance and Payment Bonds), Government Code, rather than Article
5160 (Repealed), V.T.C.S., relating to performance and payment bonds to
apply to construction contracts let by the district. Updates statutory
references. 

SECTION 7.  Amends Section 13(a), Chapter 74, Acts of the 66th Legislature,
Regular Session, 1979, to prohibit the district from being required to make
deposits in the registry of the trial court of the sum required by Section
21.021 (Possession Pending Litigation), Property Code, rather than
Paragraph 2, Article 3268 (Repealed), V.T.C.S., or from making bond as
provided in that law.  

SECTION 8.  Amends Section 14, Chapter 74, Acts of the 66th Legislature,
Regular Session, 1979, as follows: 

Sec. 14.  TAX ASSESSMENT AND COLLECTION. (a) Makes a nonsubstantive change.

(b) Authorizes the board annually to impose property taxes in an amount not
to exceed the limit approved by the voters at the election authorizing the
levy of taxes. Prohibits the tax rate for all purposes from exceeding 75
cents on each $100 valuation of all taxable property in the district.
Deletes language charging the tax assessor collector of Hardeman County to
assess and collect all taxes levied by and on behalf of the district and
language referring to the compensation of the tax assessor collector. 

(c) Authorizes the property taxes to be used to pay the indebtedness issued
or assumed by the district and the maintenance and operating expenses of
the district. 

(d) Prohibits the district from imposing taxes to pay the principal of or
interest on revenue bonds.  

(e) Sets forth that the Tax Code governs the appraisal, assessment, and
collection of district taxes.  

(f) Authorizes the board to provide for the appointment of a tax
assessor-collector for the district or to contract for the assessment and
collection of taxes as provided by the Tax Code. Deletes language relating
to the appointment requirements, term of office, and compensation of a tax
assessor collector.  

SECTION 9.  Amends Chapter 74, Acts of the 66th Legislature, Regular
Session, 1979, by adding Section 14A, as follows: 

Sec. 14A. BORROWING. (a) Authorizes the board to borrow money for district
obligations at the time the loan is made.  

(b) Authorizes the board, in order to secure a loan, to pledge the revenues
of the district that are not pledged to pay bonded indebtedness of the
district, to pledge taxes to be levied by the district in the next 12-month
period that are not pledged to pay the principal of or interest on district
bonds, or to pledge district bonds that have been authorized but not sold.  

(c) Provides that a loan for which taxes or bonds are pledged must mature
no later than the first anniversary on which the loan is made. Provides
that a loan for which district revenues are pledged must mature no later
than the fifth anniversary on which the loan is made.  

SECTION 10.  Amends Chapter 74, Acts of the 66th Legislature, Regular
Session, 1979, by adding Section 21A, as follows: 

Sec. 21A. DISSOLUTION. (a) Authorizes the district to be dissolved only if
the dissolution is approved by a majority of the qualified voters of the
district voting in an election called and held for that purpose.  
 
(b) Authorizes the board to order an election on the question of dissolving
the district and disposing of the district's assets and obligations.
Requires the board to order an election if the board receives a petition
requesting an election that is signed by a number of residents of the
district equal to at least 15 percent of the registered voters in the
district.  

(c) Requires the election to be held no later than 60 days after the
election is ordered.  Sets forth that Section 41.001(a), Election Code,
does not apply to an election ordered under this section. Specifies
requirements for the order calling the election. Section 41.001(a)
specifies the dates for general and special elections. 

(d) Requires the board to give notice of the election by publishing the
election order in a newspaper with general circulation in the district once
a week for two consecutive weeks. Provides that the first publication must
appear not less than 35 days before the date set for the election.
Specifies requirements for the printing of the ballot for the election.   

(e) Requires the board, if a majority of the votes in the election favor
dissolution, to find that the district is dissolved. Requires the board, if
a majority of the votes in the election do not favor dissolution, to
continue to administer the district, and prohibits another election on the
question of dissolution from being held before the first anniversary of the
most recent election to dissolve the district.  

(f) Specifies requirements for the board, if a majority of the votes in the
election favor dissolution.  

(g) Provides that if the district transfers the land, buildings,
improvements, equipment, and other assets to a county or other governmental
agency, the county or agency assumes all debts and obligations of the
district at the time of the transfer, and the district is dissolved.  
 
(h) Specifies requirements for the board after finding that the district is
dissolved. 

(i) Requires the board, when all outstanding debts and obligations of the
district are paid, to order the secretary to return the pro rata share of
all unused tax money to each district taxpayer.  

(j) Authorizes a taxpayer to request that the taxpayer's share of surplus
tax money be credited to the taxpayer's county taxes. Requires the board,
if a taxpayer requests the credit, to direct the secretary to transmit the
funds to the county tax assessor-collector.  

(k) Requires the board, after the district has paid all its debts and has
disposed of all its assets and funds as prescribed by this section, to file
a written report with the commissioners court of Hardeman County setting
forth a summary of the board's actions in dissolving the district.  

(l) Requires the commissioners court of Hardeman County, no later than 10th
days after the date it receives the report and determines that the
requirements of this section have been fulfilled, to enter an order
dissolving the district and releasing the board of directors of the
district from any further duty or obligation.  

(m) Prohibits the district from being dissolved, notwithstanding any other
provision of this section, unless the board provides for the sale or
transfer of the district's assets and liabilities to another person or
entity. Prohibits the dissolution of the district and the sale or transfer
of the district's assets or liabilities from contravening a trust indenture
or bond resolution relating to the outstanding bonds of the district. Sets
forth that the dissolution and sale or transfer does not diminish or impair
the rights of a holder of an outstanding bond, warrant, or other obligation
of the district.  

(n) Provides that the sale or transfer of the district's assets and
liabilities must satisfy the  debt and bond obligation of the district in a
manner that protects the interests of the residents of the district,
including the residents' collective property rights in the district's
assets. Provides that a grant from federal funds is an obligation to be
repaid in satisfaction. Prohibits the district from transferring or
disposing of the district's assets except for due compensation unless the
transfer is made to a governmental agency that serves the district and the
transferred assets are to be used for the benefit of the residents of the
district.  

SECTION 11.Effective date: September 1, 1999.

SECTION 12.Makes application of Section 9(b) of this Act prospective as it
applies to a request for competitive bids made by the board of directors of
the Chillicothe Hospital District.  

SECTION 13.Emergency clause.


COMPARISON OF ORIGINAL TO SUBSTITUTE

This substitute differs from the original bill in SECTION 1 by making a
nonsubstantive change. 

This substitute differs from the original bill in SECTION 2 (Section 4,
Chapter 74, Acts of the 66th Legislature, Regular Session, 1979) by
modifying proposed Subsection (b) to authorize facilities and equipment to
be purchased or leased for the Chillicothe County Hospital District
(district) to use in the hospital system.  SECTION 2 also authorizes the
board to enter into an interlocal agreement, rather than contract, with
another political subdivision in order to operate the hospital district.
Makes a nonsubstantive change. 

This substitute differs from the original bill in SECTION 6  (Section 9(b),
Chapter 74, Acts of the 66th Legislature, Regular Session, 1979) by
authorizing contracts for construction involving the expenditure of more
than $15,000, rather than $10,000, to be made only after advertising as
provided by Subchapter B (Competitive Bidding on Certain Public Works
Contracts), Chapter 271 (Purchasing and Contracting Authority of
Municipalities, Counties, and Certain Other Local Governments), Local
Government Code. The original bill sets forth that such advertising should
be done as provided by Chapter 252 (concerning the purchasing and
contracting authority of municipalities in the context of municipal
acquisition, sale, or lease of property), Local Government Code. 

C.S.H.B. 2480 differs from the original bill in SECTION 10 (Chapter 74,
Acts of the 66th Legislature, Regular Session, 1979) by adding
"notwithstanding any other provision of this section" in proposed Section
21A(m) to the prohibition of the district from being dissolved unless the
board provides for the sale or transfer of the district's assets and
liabilities to another person or entity. 

C.S.H.B. 2480 differs from the original bill by deleting the original
SECTION 11 which contained the effective date and emergency clause and
creating a new SECTION 11 with only the effective date. The substitute also
adds new SECTION 12, containing the prospective clause, and new SECTION 13,
containing the emergency clause.