HBA-TBM H.B. 645 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 645 By: Jones, Delwin County Affairs 3/5/2001 Introduced BACKGROUND AND PURPOSE University Medical Center is unique with respect to its funds it that it has an excess of $100 million in surplus. This surplus was generated by a one time windfall distribution of federal grants for charitable hospitals. The board of directors of the Lubbock County Hospital District (district) has handled those funds in a very responsible manner and has generated $6 to $7 million of revenue per year to benefit the district. There are now some concerns that future boards may use the funds for current expenses, thereby damaging the long-term income possibilities of the district. House Bill 645 establishes a permanent endowment fund for the perpetuation of income for the district. 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 House Bill 645 amends law to require the Lubbock County Hospital District (district) to create a surplus endowment account (account) with the district depository. The bill requires the board of hospital managers (board) to transfer to the account 20 percent of the district's surplus annually, not to exceed $100 million. The bill authorizes use of the interest earned on the account for the benefit or welfare of the district and prohibits the distribution of the corpus of the account. Before the district deposits funds in excess of the maximum amount secured by the Federal Deposit Insurance Corporation (FDIC), the depository must execute a bond or other security in an amount sufficient to secure from loss the district funds that exceed the amount secured by FDIC. EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001.