S.B. No. 1621
AN ACT
relating to certain rural medical facilities; requiring a license;
authorizing fees and taxes.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 241, Health and Safety Code, is amended
by adding Subchapter K to read as follows:
SUBCHAPTER K. LIMITED SERVICES RURAL HOSPITAL
Sec. 241.301. DEFINITION. In this subchapter, "limited
services rural hospital" means a general or special hospital that
is or was licensed under this chapter and that:
(1) is:
(A) located in a rural area, as defined by:
(i) commission rule; or
(ii) 42 U.S.C. Section 1395ww(d)(2)(D); or
(B) designated by the Centers for Medicare and
Medicaid Services as a critical access hospital, rural referral
center, or sole community hospital; and
(2) otherwise meets the requirements to be designated
as a limited services rural hospital or a similarly designated
hospital under federal law for purposes of a payment program
described by Section 241.302(a)(1).
Sec. 241.302. LICENSE REQUIRED. (a) A person may not
establish, conduct, or maintain a limited services rural hospital
unless:
(1) the United States Congress passes a bill creating
a payment program specifically for limited services rural hospitals
or similarly designated hospitals that becomes law; and
(2) the commission issues a license to the person to
establish, conduct, or maintain a limited services rural hospital
under this subchapter.
(b) If the United States Congress enacts a bill described by
Subsection (a)(1) that becomes law, the executive commissioner
shall adopt rules:
(1) establishing minimum standards for the
facilities; and
(2) implementing this section.
(c) The standards adopted under Subsection (b) must be at
least as stringent as the standards established in the law
described by Subsection (a) for eligibility to qualify for a
payment program established by the law.
(d) An applicant for a license under this section must:
(1) submit an application for the license to the
commission in a form and manner prescribed by the commission; and
(2) pay any required fee.
(e) The commission shall issue a license to act as a limited
services rural hospital under this subchapter if the applicant
complies with the rules and standards adopted under this section.
(f) The commission by order may waive or modify the
requirement of a particular provision of this chapter or a standard
adopted under this section if the commission determines that the
waiver or modification will facilitate the creation or operation of
the facility and that the waiver or modification is in the best
interests of the individuals served or to be served by the facility.
Sections 241.026(d) and (e) apply to a waiver or modification under
this section for a limited services rural hospital in the same
manner as the subsections apply to a waiver or modification for a
hospital.
(g) A provision of this chapter related to the enforcement
authority of the commission applies to a limited services rural
hospital.
Sec. 241.303. LICENSING FEE. (a) The executive
commissioner by rule shall establish and the commission shall
collect a fee for issuing and renewing a license under this
subchapter that is in an amount reasonable and necessary to cover
the costs of administering and enforcing this subchapter.
(b) All fees collected under this section shall be deposited
in the state treasury to the credit of the commission to administer
and enforce this subchapter.
SECTION 2. Chapter 531, Government Code, is amended by
adding Subchapter G to read as follows:
SUBCHAPTER G. RURAL HOSPITALS
Sec. 531.201. STRATEGIC PLAN; REPORT. (a) The commission
shall develop and implement a strategic plan to ensure that the
citizens of this state residing in rural areas have access to
hospital services.
(b) The strategic plan must include:
(1) a proposal for using at least one of the following
methods to ensure access to hospital services in the rural areas of
this state:
(A) an enhanced cost reimbursement methodology
for the payment of rural hospitals participating in the Medicaid
managed care program in conjunction with a supplemental payment
program for rural hospitals to cover costs incurred in providing
services to recipients;
(B) a hospital rate enhancement program that
applies only to rural hospitals;
(C) a reduction of punitive actions under the
Medicaid program that require reimbursement for Medicaid payments
made to the provider, if the provider is a rural hospital, a
reduction of the frequency of payment reductions under the Medicaid
program made to rural hospitals, and an enhancement of payments
made under merit-based programs or similar programs for rural
hospitals;
(D) a reduction of state regulatory-related
costs related to the commission's review of rural hospitals; or
(E) in accordance with rules adopted by the
Centers for Medicare and Medicaid Services, the establishment of a
minimum fee schedule that applies to payments made by managed care
organizations to rural hospitals; and
(2) target dates for achieving goals related to the
proposal described by Subdivision (1).
(c) Not later than January 1, 2020, the commission shall
submit the strategic plan developed under Subsection (b) to the
Legislative Budget Board for review and comment. The commission
may not begin implementation of the proposal contained in the
strategic plan until the strategic plan is approved by the
Legislative Budget Board.
(d) Not later than November 1 of each even-numbered year,
the commission shall submit a report regarding the commission's
development and implementation of the strategic plan described by
Subsection (b) to:
(1) the legislature;
(2) the governor; and
(3) the Legislative Budget Board.
Sec. 531.202. ADVISORY COMMITTEE ON RURAL HOSPITALS.
(a) The commission shall establish the Rural Hospital Advisory
Committee, either as another advisory committee or as a
subcommittee of the Hospital Payment Advisory Committee, to advise
the commission on issues relating specifically to rural hospitals.
(b) The Rural Hospital Advisory Committee is composed of
interested persons appointed by the executive commissioner.
Section 2110.002 does not apply to the advisory committee.
(c) A member of the advisory committee serves without
compensation.
Sec. 531.203. COLLABORATION WITH OFFICE OF RURAL AFFAIRS.
The commission shall collaborate with the Office of Rural Affairs
to ensure that this state is pursuing to the fullest extent possible
federal grants, funding opportunities, and support programs
available to rural hospitals as administered by the Health
Resources and Services Administration and the Office of Minority
Health in the United States Department of Health and Human
Services.
SECTION 3. The heading to Subchapter F, Chapter 1061,
Special District Local Laws Code, is amended to read as follows:
SUBCHAPTER F. AD VALOREM TAXES
SECTION 4. Chapter 1061, Special District Local Laws Code,
is amended by adding Subchapter G to read as follows:
SUBCHAPTER G. SALES AND USE TAX
Sec. 1061.301. TAX AUTHORIZED. (a) The district may
adopt, change the rate of, or abolish a sales and use tax at an
election held in the district.
(b) The district may not adopt a tax under this subchapter
or increase the rate of the tax if as a result of the adoption of the
tax or the tax increase the combined rate of all sales and use taxes
imposed by the district and all other political subdivisions of
this state having territory in the district would exceed two
percent in any location in the district.
Sec. 1061.302. APPLICABILITY OF OTHER LAW. Except to the
extent that a provision of this subchapter applies, Chapter 323,
Tax Code, applies to a tax authorized by this subchapter in the same
manner as that chapter applies to the tax authorized by that
chapter.
Sec. 1061.303. TAX RATE; CHANGE IN RATE. (a) The district
may impose a tax authorized by this subchapter in increments of
one-eighth of one percent, with a minimum rate of one-eighth of one
percent and a maximum rate of two percent.
(b) The district may increase the rate of a tax authorized
by this subchapter to a maximum of two percent or decrease the rate
of the tax to a minimum of one-eighth of one percent if the change is
approved by a majority of the voters of the district at an election
called for that purpose.
Sec. 1061.304. ELECTION PROCEDURE. An election to adopt,
change the rate of, or abolish a tax authorized by this subchapter
is called by the adoption of an order of the board. The board may
call an election on its own motion and shall call an election if a
number of qualified voters in the district equal to at least five
percent of the number of registered voters in the district
petitions the board to call the election.
Sec. 1061.305. ELECTION IN OTHER TAXING AUTHORITY. (a) In
this section, "taxing authority" means any entity authorized to
impose a local sales and use tax.
(b) If the district is included within the boundaries of
another taxing authority and the adoption or increase in the rate of
a tax under this subchapter would result in a combined tax rate by
the district and other political subdivisions of this state of more
than two percent at any location in the district, an election to
approve or increase the rate of the tax has no effect unless:
(1) one or more of the other taxing authorities holds
an election in accordance with the law governing that authority on
the same date as the election under this subchapter to reduce the
tax rate of that authority to a rate that will result in a combined
tax rate by the district and other political subdivisions of not
more than two percent at any location in the district; and
(2) the combined tax rate is reduced to not more than
two percent as a result of that election.
(c) This section does not permit a taxing authority to
impose taxes at differential tax rates within the territory of the
authority.
Sec. 1061.306. TAX EFFECTIVE DATE. (a) The adoption,
change in the rate of, or abolition of a tax under this subchapter
takes effect on the first day of the first calendar quarter
occurring after the expiration of the first complete calendar
quarter occurring after the date on which the comptroller receives
notice of the results of an election to adopt, change the rate of,
or abolish the tax.
(b) If the comptroller determines that an effective date
provided by Subsection (a) will occur before the comptroller can
reasonably take the action required to begin collecting the tax or
to implement the change in the rate of the tax or the abolition of
the tax, the effective date may be extended by the comptroller until
the first day of the next calendar quarter.
Sec. 1061.307. USE OF TAX REVENUE. Revenue from a tax
imposed under this subchapter may be used by the district for any
purpose of the district authorized by law.
SECTION 5. Section 1061.151(b), Special District Local Laws
Code, is amended to read as follows:
(b) The proposed budget must contain a complete financial
statement of:
(1) the outstanding obligations of the district;
(2) the cash on hand in each district fund;
(3) the money received by the district from all
sources during the previous year;
(4) the money available to the district from all
sources during the ensuing year;
(5) the balances expected at the end of the year in
which the budget is being prepared;
(6) the estimated revenue and balances available to
cover the proposed budget;
(7) the estimated ad valorem tax rate required; and
(8) the proposed expenditures and disbursements and
the estimated receipts and collections for the following fiscal
year.
SECTION 6. Section 1088.104, Special District Local Laws
Code, is amended by amending Subsection (c) and adding Subsection
(d) to read as follows:
(c) The hospital system may include:
(1) facilities for domiciliary care of the sick,
injured, or geriatric;
(2) outpatient clinics;
(3) dispensaries;
(4) convalescent home facilities;
(5) necessary nurses;
(6) domiciliaries and training centers;
(7) blood banks;
(8) community mental health centers;
(9) research centers or laboratories; and
(10) any other facilities the board considers
necessary for medical care, [and] hospital care, and public safety
and health.
(d) A facility for public safety and health described by
Subsection (c)(10) may only be:
(1) constructed by the district using private money;
and
(2) used by the district, or any governmental entity
to which the district leases the facility, for public safety and
health purposes.
SECTION 7. Section 26.012(1), Tax Code, is amended to read
as follows:
(1) "Additional sales and use tax" means an additional
sales and use tax imposed by:
(A) a city under Section 321.101(b);
(B) a county under Chapter 323; or
(C) a hospital district, other than a hospital
district:
(i) created on or after September 1, 2001,
that:
(a) [(i)] imposes the sales and use
tax under Subchapter I, Chapter 286, Health and Safety Code; or
(b) [(ii)] imposes the sales and use
tax under Subchapter L, Chapter 285, Health and Safety Code; or
(ii) that imposes the sales and use tax
under Subchapter G, Chapter 1061, Special District Local Laws Code.
SECTION 8. This Act takes effect September 1, 2019.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1621 passed the Senate on
April 11, 2019, by the following vote: Yeas 31, Nays 0; and that
the Senate concurred in House amendments on May 24, 2019, by the
following vote: Yeas 28, Nays 3.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1621 passed the House, with
amendments, on May 21, 2019, by the following vote: Yeas 140,
Nays 6, one present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor