BILL ANALYSIS

H.B. 3788

By: Spiller

Intergovernmental Affairs

Committee Report (Unamended)

BACKGROUND AND PURPOSE

Under current law, municipal hospital authorities that no longer own or operate a hospital have limited flexibility in using their assets for public health initiatives. The bill author has informed the committee that these hospital authorities play a crucial role in providing health care services, but these limitations and a lack of clear statutory authority may cause these entities to struggle to fund or support public health initiatives that could benefit their communities. H.B. 3788 seeks to address this issue by providing for certain municipal hospital authorities to use their assets for public health and general welfare initiatives and to issue revenue bonds for these purposes.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

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

H.B. 3788 amends the Health and Safety Code to revise provisions relating to the appointment and terms of office of a municipal hospital authority's board of directors as follows:

·authorizes the number of directors to be changed by amendment of the ordinance or ordinances creating the authority unless prohibited by a resolution or trust indenture described by statutory provisions relating to the appointment and terms of office of a municipal hospital authority's board of directors;

·removes the authorization for the resolution authorizing the issuance of revenue bonds or the trust indenture securing the bonds to prescribe the method of selecting directors and their term of office, and instead authorizes the board to prescribe the method and term in such a resolution, in an agreement securing notes of any kind issued by the authority, or in another resolution;

·prohibits the method of selecting the directors and their term of office prescribed by the board from being changed except by a subsequent resolution adopted by the board; and

·makes an employee of the authority ineligible for appointment as a director.

H.B. 3788 expands the authorization for the board, if, after the sale or closing of a hospital, the authority does not own or operate a hospital, to use the authority's available assets to promote public health and general welfare initiatives that the board determines will benefit the residents served by the authority to include owning, operating, or funding an administrative office, a fitness or physical health center, or a medical training or education facility. The bill authorizes the authority to issue revenue bonds and other notes in accordance with the Hospital Authority Act to undertake any initiative authorized by provisions relating to the expenditure of funds for public health initiatives after the sale or closing of a hospital.

H.B. 3788 changes the applicability of provisions authorizing an authority that has assets that exceed the amount of any outstanding bond and that does not own or operate a hospital to invest authority funds in a specified manner from an authority that is located in a county of 2.4 million or more or located in a municipality of less than 15,000, to an authority that is located in a county with a population of 2.4 million or more or located in a municipality with a population of less than 30,000.

H.B. 3788 extends the applicability of provisions authorizing the authority to issue revenue bonds to provide funds for any of the hospital authority's purposes to include the purposes relating to the expenditure of funds for public health initiatives after the sale or closing of a hospital and purposes relating to facilities and services for the elderly and disabled, regardless of whether the authority owns or operates a hospital. Accordingly, the bill requires revenue bonds to be payable from, and secured by a pledge of, revenues from any initiatives or facility described by those provisions.

H.B. 3788 repeals the following Health and Safety Code provisions relating to the authority of a municipal hospital authority to constrict, acquire, own, operate, enlarge, improve, furnish, or equip certain facilities or services for the care of the elderly and disabled:

·the provision establishing that such a facility or service is considered to be a hospital project under the Hospital Project Financing Act;

·the provision establishing the applicability of such provisions to an authority that owns or operates a hospital licensed under the Health and Safety Code and that is located in:

oa county with a population of 225,000 or less;

othose portions of extended municipalities that the federal census bureau has determined to be rural;

oan area that is not delineated as an urbanized area by the federal census bureau; or

oa municipality with a population of less than 12,000 and a county with a population of 3.3 million or more at the time the authority begins operating a facility or providing a service;

·the provision establishing that such provisions do not authorize the authority to issue revenue bonds or other notes in accordance with the Hospital Authority Act to construct, acquire, own, enlarge, improve, furnish, or equip such a facility or service if a private provider of the facility or service is available and accessible in the service area of the authority; and

·the provision that prohibits an authority from owning or operating more than 50 licensed nursing home beds and excepting the authority from being able to issue revenue bonds if it is located in a municipality with a population of less than 12,000 and a county with a population of 3.3 million or more at the time the authority begins operating a facility or providing a service.

H.B. 3788 repeals Sections 262.034(d), (e), (f), and (g), Health and Safety Code.

EFFECTIVE DATE

September 1, 2025.