88R8186 SRA-F
By: Kolkhorst S.B. No. 2332
A BILL TO BE ENTITLED
AN ACT
relating to the operations of hospital districts in counties with a
population of at least 190,000 persons.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 281.021(d), Health and Safety Code, is
amended to read as follows:
(d) If a district is created under this chapter in a county
with a population of more than 1.2 million [800,000] that was not
included in the boundaries of a hospital district before September
1, 2003, the district shall be governed by a nine-member board of
hospital managers, appointed by [as follows:
[(1)] the commissioners court of the county [shall
appoint four members;
[(2) the governing body of the municipality with the
largest population in the county shall appoint four members; and
[(3) the commissioners court and the governing body of
the municipality described by Subdivision (2) shall jointly appoint
one member].
SECTION 2. Section 281.022(c), Health and Safety Code, is
amended to read as follows:
(c) A member [The members] of a board of hospital managers
appointed under Section 281.021(d) may not serve more than a total
of eight years on the board [serve staggered four-year terms, with
as near as possible to one-fourth of the members' terms expiring
each year. The terms of the members appointed under that section
are as follows:
[(1) the members appointed solely by the governing
body of the municipality with the largest population in the county
shall draw lots to determine which member serves a one-year term,
which member serves a two-year term, which member serves a
three-year term, and which member serves a four-year term;
[(2) the members appointed solely by the commissioners
court of the county shall draw lots to determine which member serves
a one-year term, which member serves a two-year term, which member
serves a three-year term, and which member serves a four-year term;
and
[(3) the member appointed jointly by the governing
body of the municipality described by Subdivision (1) and the
commissioners court serves a four-year term].
SECTION 3. Subchapter B, Chapter 281, Health and Safety
Code, is amended by adding Section 281.0221 to read as follows:
Sec. 281.0221. QUALIFICATIONS FOR SERVICE ON BOARD. (a) A
person may not serve on the board of hospital managers for a
district if the person:
(1) has not resided in the boundaries of the district
for at least three years preceding the date of the person's
appointment;
(2) is an employee of the district, or is related to an
employee of the district within two degrees of consanguinity or
affinity as determined under Chapter 573, Government Code;
(3) has served in a public elective office during any
of the four years preceding the date of the person's appointment; or
(4) is an employee or contractor of a vendor having a
contract the price of which is more than $250,000 with:
(A) the district; or
(B) any entity created by or affiliated with the
district.
(b) At least half of the members of the board of hospital
managers for a district serving at any one time must have at least
four years of work experience:
(1) in a hospital or other health care facility or as a
licensed health professional;
(2) in the financial services industry or accounting
profession or as a licensed financial professional, including a
certified public accountant or financial services advisor; or
(3) as an attorney licensed to practice law in this
state.
(c) Not more than one third of the members of the board of
hospital managers for a district serving at any one time may derive
more than 10 percent of their annual income from the health care
industry.
(d) Except as otherwise provided by this subsection, at
least one member of the board of hospital managers for a district
must be an indigent patient that has been served by the district or
a person who is related to an indigent patient that has been served
by the district within two degrees of consanguinity, as determined
under Chapter 573, Government Code. A board member described by
this subsection must represent the demographic factors of indigent
individuals generally served by the district, including geography,
race, ethnicity, and gender. This subsection does not apply to the
initial appointed board of hospital managers for a district.
SECTION 4. The heading to Section 281.0222, Health and
Safety Code, is amended to read as follows:
Sec. 281.0222. QUALIFICATIONS FOR OFFICE IN CERTAIN
DISTRICTS.
SECTION 5. Section 281.0222, Health and Safety Code, is
amended by adding Subsection (c) to read as follows:
(c) In the event of a conflict between Section 281.0221 and
this section, Section 281.0221 controls.
SECTION 6. Subchapter B, Chapter 281, Health and Safety
Code, is amended by adding Section 281.0223 to read as follows:
Sec. 281.0223. STANDARDS OF CONDUCT; CONFLICTS OF INTEREST;
RECUSAL. (a) A member of the board of hospital managers for a
district is subject to the conflict of interest and other
provisions applicable to the conduct of an appointed officer under
Chapter 572, Government Code.
(b) A member of the board of hospital managers for a
district shall recuse himself or herself from participating in the
deliberation regarding or voting on any district contract:
(1) involving the board member's employer as a
contractor or subcontractor; or
(2) in which the board member or the board member's
employer has a substantial interest as described by Section
572.005, Government Code.
SECTION 7. Section 281.031(a), Health and Safety Code, is
amended to read as follows:
(a) A member of the board of hospital managers of the El Paso
County Hospital District is considered to have resigned the
member's position if the member:
(1) is absent from all the regularly scheduled board
and committee meetings that the member is eligible to attend during
a 90-day period;
(2) is absent from more than half of the regularly
scheduled board and committee meetings that the member is eligible
to attend during a 12-month period;
(3) fails to pay a local tax, including an ad valorem
tax, when due; or
(4) would be ineligible to serve on the board as
provided by Section 281.0221 or 281.0222.
SECTION 8. Section 281.045(a), Health and Safety Code, is
amended to read as follows:
(a) On or after the creation of the district, the county or a
municipality located in the district may not levy taxes for
hospital purposes or to provide the services described by Section
61.028 or 61.0285. This subsection may not be construed to restrict
the ability of a county or municipality located in the district to
levy taxes for essential public health services, as that term is
defined by Section 121.002.
SECTION 9. Section 281.046, Health and Safety Code, is
amended to read as follows:
Sec. 281.046. DISTRICT RESPONSIBILITY FOR MEDICAL AID AND
HOSPITAL CARE. Beginning on the date on which taxes are collected
for the district, the district assumes full responsibility for
furnishing medical and hospital care, including the services
described by Sections 61.028 and 61.0285, for indigent and needy
persons residing in the district.
SECTION 10. Section 281.048, Health and Safety Code, is
amended to read as follows:
Sec. 281.048. DISTRICT RULES. Subject to any applicable
restriction provided by law, the [The] board may adopt rules
governing the operation of the hospital or hospital system.
SECTION 11. Section 281.049, Health and Safety Code, is
amended by amending Subsections (a) and (c) and adding Subsection
(e) to read as follows:
(a) The commissioners court shall [may] prescribe policies
and procedures to ensure efficiency, fiscal accountability,
financial controls, and transparency. The policies and procedures
must include:
(1) the method of making purchases and expenditures by
and for the district; and
(2) accounting and control procedures for the district
that ensure that district revenue is spent:
(A) in accordance with all applicable provisions
of law; and
(B) in a manner that is transparent to the
residents of the district.
(c) A county officer, employee, contractor, or agent shall
perform any function or service ordered [required] by the
commissioners court under this section.
(e) At least once every five years, the commissioners court
shall contract with an independent auditor to have performed a
comprehensive performance audit of the district's management,
accounting, financial controls, recordkeeping, and compliance with
applicable law. The audit must assess the performance of the
district and the district's vendors and determine whether the
district's management adheres to best practices and national
standards applicable to the administration of hospitals and
hospital systems. The auditor shall produce a written report
identifying any identified issues and recommendations to the
commissioners court and provide a copy of the report to the district
and the commissioners court. The district shall post the report in
a conspicuous location on the district's publicly accessible
Internet website. The commissioners court shall hold a public
hearing on the report.
SECTION 12. Section 281.051, Health and Safety Code, is
amended by adding Subsections (d) and (e) to read as follows:
(d) A contract entered into under this section:
(1) must be for fair and reasonable compensation;
(2) is subject to all legal restrictions on the use of
district money; and
(3) must include provisions that require district
money received by a party to the contract to be:
(A) subject to appropriate recordkeeping,
financial accounting, and financial control practices; and
(B) held in a separate account from other money
held by the party.
(e) Records of expenditures of district money and the
purposes of those expenditures are subject to Chapter 552,
Government Code.
SECTION 13. Section 281.053, Health and Safety Code, is
amended to read as follows:
Sec. 281.053. DISTRICT INSPECTIONS. (a) The district, or
the district's contractors or subcontractors, may be inspected by
an employee, agent, contractor, or [a] representative of the
commissioners court or the Department of State Health Services.
(b) A person subject to inspection under Subsection (a)
[district officer] shall:
(1) admit an inspector into the person's [district]
facilities to the extent those facilities relate to the district or
services provided to the district; and
(2) on demand give the inspector full access to
records, reports, books, papers, and accounts related to the
district, including, if applicable, records, reports, books,
papers, and accounts related to expenditures made with district
money received under a contract with the district.
(c) The district or commissioners court may terminate the
contract of a district vendor that fails to comply with this
section.
SECTION 14. Section 281.056, Health and Safety Code, is
amended by amending Subsection (b-1) and adding Subsection (e) to
read as follows:
(b-1) The county attorney, district attorney, or criminal
district attorney, as appropriate, with the duty to represent the
county in civil matters shall, in all legal matters, represent a
district located in:
(1) a county with a population of 800,000 or more that
borders the United Mexican States; or
(2) a county with a population of 3.4 million or more[;
or
[(3) a county with a population of more than 800,000
that was not included in the boundaries of a hospital district
before September 1, 2003].
(e) The county attorney, district attorney, or criminal
district attorney, as appropriate, with the duty to represent a
county in civil matters may not advise both the commissioners court
of the county and a district located in the county if there is a
potential conflict of interest between the county and the district.
The limitation provided by this subsection applies to advice
relating to the authority of the commissioners court to supervise
and oversee the district. The commissioners court shall hire
private legal counsel if there is a potential conflict of interest.
The county is responsible for the fee charged by private legal
counsel hired by the commissioners court under this subsection.
SECTION 15. Section 281.0565, Health and Safety Code, is
amended by amending Subsections (a), (b), (c), and (d) and adding
Subsections (g) and (h) to read as follows:
(a) In this section, "charitable organization" means an
organization that is exempt from federal income tax under Section
501(a) of the Internal Revenue Code of 1986 by being listed as an
exempt organization in Section 501(c)(3) [or 501(c)(4)] of that
[the] code.
(b) For the purpose of providing medical and hospital care
for the district's indigent residents, a [A] district may create a
charitable organization to facilitate the management of a district
health care program by providing or arranging health care services,
developing resources for health care services, or providing
ancillary support services for the district. The district is
responsible for the actions of a charitable organization created by
the district.
(c) A charitable organization created by a district under
this section is a unit of local government only for purposes of
Chapter 101, Civil Practice and Remedies Code. The charitable
organization is subject to Chapters 551 and 552, Government Code.
(d) For the purpose of providing medical and hospital care
for the district's indigent residents, a [A] district may make a
reasonable and necessary capital or other financial contribution to
a charitable organization created by the district to provide
regional administration and delivery of health care services to or
for the district.
(g) A charitable organization contract:
(1) is subject to all legal restrictions on the use of
district money; and
(2) must include standard requirements for
recordkeeping, financial accounting, and financial control
practices relating to district money.
(h) A charitable organization shall hold district money in a
separate account from other money held by the organization.
SECTION 16. Section 281.073(a), Health and Safety Code, is
amended to read as follows:
(a) The recordkeeping, preservation, microfilming,
destruction, or other disposition of the records of a district is
subject to all requirements applicable to a local government under
Subtitle C, Title 6, Local Government Code.
SECTION 17. Section 281.091, Health and Safety Code, is
amended to read as follows:
Sec. 281.091. BUDGET. (a) The administrator shall prepare
a comprehensive, detailed [an] annual budget under the board's
direction.
(b) The budget and budget revisions must be approved by the
board and then shall be presented to the commissioners court for
final approval. The commissioners court may approve the budget in
its entirety or may approve only a portion of the budget.
SECTION 18. Section 281.092, Health and Safety Code, is
amended by amending Subsection (b) and adding Subsections (c), (d),
and (e) to read as follows:
(b) The report must:
(1) consist of a sworn statement of all assets,
liabilities, obligations, money, and property rights [choses in
action] received by the administrator, the district, and, if
applicable, a charitable organization created by the district or
any another organization affiliated with the district, and their
disposition; and
(2) show in detail the operations of the district for
the fiscal year, including the revenue received and expenditures
made by the district in that fiscal year, in a manner that is clear
and concise and posted on the district's publicly accessible
Internet website or in an annual report posted on the district's
publicly accessible Internet website.
(c) In a manner consistent with federal and state privacy
laws, the administrator in the report required by Subsection (a)
shall list the medical services provided to individuals who qualify
as indigent, the actual cost of those services, and the provider of
the services, if the cost of the services was paid under a contract
with the district.
(d) The commissioners court shall review in a public hearing
the information reported under Subsection (c) and evaluate the
district's performance in providing medical and hospital care to
indigent residents of the district.
(e) The commissioners court may request at any time more
detailed information on an issue contained in or related to the
report and the district shall promptly provide the requested
information.
SECTION 19. Section 281.093(d), Health and Safety Code, is
amended to read as follows:
(d) All income of the district shall be deposited in the
district depository. Income attributable to taxes imposed by the
district must be kept in a separate account.
SECTION 20. Section 281.095(a), Health and Safety Code, is
amended to read as follows:
(a) In this section, "district" means the Bexar County
Hospital District, Nueces County Hospital District, El Paso County
Hospital District, or Harris County Hospital District. The term
includes a district to which Section 281.0475 applies.
SECTION 21. Subchapter E, Chapter 281, Health and Safety
Code, is amended by adding Sections 281.097 and 281.098 to read as
follows:
Sec. 281.097. USE OF DISTRICT TAX REVENUE. (a) Taxes
levied by a district and any money derived from those taxes,
including interest or other earnings, may be used only to provide
medical and hospital care for indigent and needy persons residing
in the district and to pay the costs described by Subsection (b).
(b) A district may use its tax levy to pay the reasonable and
necessary costs of:
(1) providing health care and health care support
services at teaching hospitals by physicians and resident
physicians if teaching physicians are physically present to provide
the service to the patient;
(2) administering and providing health services,
whether through the direct provision of services or as a payor; and
(3) providing necessary clinical patient education,
mental health services, and social work services, including primary
and preventative care.
(c) The district administrator, board of hospital managers
for the district, and commissioners court shall ensure compliance
with this section.
Sec. 281.098. MATCHING FEDERAL FUNDS FOR MENTAL HEALTH
CARE. This chapter may not be construed to prevent a district from
using district revenue to provide for the nonfederal share of
Medicaid payments for any reimbursement to a hospital for which
federal matching funds are available for mental health services
provided to the residents of the district.
SECTION 22. The following provisions of the Health and
Safety Code are repealed:
(1) Section 281.049(b);
(2) Section 281.0511; and
(3) Section 281.0565(e).
SECTION 23. Sections 281.022 and 281.0222, Health and
Safety Code, as amended by this Act, and Section 281.0221, Health
and Safety Code, as added by this Act, do not affect the entitlement
of a member serving on the board of managers of a hospital district
subject to those sections immediately before the effective date of
this Act to continue to serve for the remainder of the member's
term. As the terms of members expire, the appropriate
commissioners court shall appoint or reappoint members who have the
terms and qualifications required by Sections 281.022, 281.0221,
and 281.0222, Health and Safety Code, as applicable.
SECTION 24. The changes in law made by this Act with respect
to a contract or agreement, including an agreement under Chapter
311, Tax Code, apply only to a contract or agreement entered into on
or after the effective date of this Act. A contract or agreement
entered into before the effective date of this Act is governed by
the law in effect immediately before the effective date of this Act,
and the former law is continued in effect for that purpose.
SECTION 25. This Act takes effect September 1, 2023.