HBA-MSH C.S.H.B. 1864 77(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 1864 By: Kuempel County Affairs 3/25/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, most public county hospitals operate as a part of a hospital district. The public hospitals of Guadalupe County and Medina County are run by a board of managers jointly funded by a municipality or the appropriate county and are unable to issue bonds like a hospital district. Guadalupe County is considering an expansion project to manage population growth in the area, but will be unable to finance the project through the issuance of bonds under the current system. C.S.H.B. 1864 authorizes a board of managers to issue revenue bonds in the name of a hospital. 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. ANALYSIS C.S.H.B. 1864 amends the Health and Safety Code to authorize a board of managers (board) to issue and sell revenue bonds in the name of a hospital to finance: _the acquisition of real property, equipment, or supplies; _the acquisition, construction, improvement, repair, or rehabilitation of hospital facilities and; _the installation of equipment. The bill provides that bonds issued must be approved by a resolution adopted by the board, the county commissioners court, and the governing body of the municipality that appointed the board. The bill authorizes the board to determine the title of the bonds and provide for the issuance of additional parity bonds or subordinate lien bonds. The board is also authorized to issue refunding bonds. The bill sets forth provisions relating to the sale, repayment, security, and maturity of bonds, as well as the use of earnings or assets for private purposes. C.S.H.B. 1864 authorizes the board to acquire, hold, or dispose of property and title to property to be held by the county or municipality or in the name of the hospital. The bill requires the board to transfer title to property held by the board to the county and municipality on the dissolution of the board as agreed to by the county and municipality. The bill applies only to a hospital located in a county with a population of 75,000 or more. EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B.1864 adds to the original bill by authorizing a hospital to issue and sell revenue bonds to finance the acquisition, improvement, repair, or rehabilitation of hospital facilities. The substitute adds the requirement that bonds issued be approved by resolutions adopted by the board, the county commissioners court, and the governing body of the municipality. The substitute also adds the authorization for the board to determine the title of the bonds, to prescribe procedures for the operation and maintenance of the hospital in the proceedings authorizing issuance of the bonds, and provide for the issuance of additional parity bonds or subordinate lien bonds. The substitute authorizes title to property held in the name of the hospital in addition to the county or municipality. The substitute applies only to a county with a population of 75,000 or more whereas the original applied to all counties.