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  S.B. No. 1623
 
 
 
 
AN ACT
  relating to the creation and operations of health care funding
  districts in certain counties located on the Texas-Mexico border.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  The heading to Chapter 288, Health and Safety
  Code, is amended to read as follows:
  CHAPTER 288.  HEALTH CARE FUNDING DISTRICTS IN CERTAIN COUNTIES
  LOCATED ON TEXAS-MEXICO BORDER [THAT ARE ADJACENT TO COUNTIES WITH
  POPULATION OF 50,000 OR MORE]
         SECTION 2.  Subdivisions (2) and (3), Section 288.001,
  Health and Safety Code, are amended to read as follows:
               (2)  "District" means a county health care funding
  district created under [by] this chapter.
               (3)  "Paying hospital [District taxpayer]" means an
  institutional health care provider required to make a mandatory
  payment [a person or entity who has paid a tax imposed] under this
  chapter.
         SECTION 3.  Section 288.002, Health and Safety Code, is
  amended to read as follows:
         Sec. 288.002.  CREATION OF DISTRICT. A district may be [is]
  created by order of the commissioners court of [in] each county
  located on the Texas-Mexico border that has a population of:
               (1)  500,000 or more and is adjacent to two or more
  counties each of which has a population of 50,000 or more;
               (2)  350,000 or more and is adjacent to a county
  described by Subdivision (1); or
               (3)  less than 300,000 and contains one or more
  municipalities with a population of 200,000 or more.
         SECTION 4.  Subchapter A, Chapter 288, Health and Safety
  Code, is amended by adding Sections 288.0031 and 288.0032 to read as
  follows:
         Sec. 288.0031.  DISSOLUTION.  A district created under this
  chapter may be dissolved in the manner provided for the dissolution
  of a hospital district under Subchapter E, Chapter 286.
         Sec. 288.0032.  EXPIRATION OF CHAPTER; DISTRIBUTION OF FUNDS
  ON EXPIRATION.  (a)  A district created under this chapter is
  abolished and this chapter expires on December 31, 2016.
         (b)  The commissioners court of a county in which a district
  is created shall refund to each paying hospital the proportionate
  share of any money remaining in the local provider participation
  fund created by the district under Section 288.155 at the time the
  district is abolished.
         SECTION 5.  The heading to Section 288.051, Health and
  Safety Code, is amended to read as follows:
         Sec. 288.051.  COMMISSION; DISTRICT GOVERNANCE
  [APPOINTMENT].
         SECTION 6.  Section 288.051, Health and Safety Code, is
  amended by amending Subsection (a) and adding Subsections (c) and
  (d) to read as follows:
         (a)  Each district created under Section 288.002 is governed
  by a commission consisting of the commissioners court of the county
  in which the district is created [of five members appointed as
  provided by this section].
         (c)  Service on the commission by a county commissioner or
  county judge is an additional duty of that person's office.
         (d)  A district is a component of county government and is
  not a separate political subdivision of this state.
         SECTION 7.  Section 288.101, Health and Safety Code, is
  amended to read as follows:
         Sec. 288.101.  LIMITATION ON [TAXING] AUTHORITY TO REQUIRE
  MANDATORY PAYMENT. Each district may require a mandatory payment
  [impose taxes] only in the manner provided by this chapter.
         SECTION 8.  Section 288.102, Health and Safety Code, is
  amended to read as follows:
         Sec. 288.102.  MAJORITY VOTE REQUIRED. (a)  A district may
  not require [impose] any mandatory payment [tax] authorized by this
  chapter, spend any money, including for the administrative expenses
  of the district, or conduct any other business of the commission
  without an affirmative vote of a majority of the members of the
  commission.
         (b)  Before requiring a mandatory payment [imposing a tax]
  under this chapter in any one year, the commission must obtain the
  affirmative vote required by Subsection (a).
         SECTION 9.  Subsection (a), Section 288.104, Health and
  Safety Code, is amended to read as follows:
         (a)  The commission may adopt rules governing the operation
  of the district, including rules relating to the administration of
  a mandatory payment [tax] authorized by this chapter.
         SECTION 10.  Section 288.151, Health and Safety Code, is
  amended to read as follows:
         Sec. 288.151.  HEARING [BUDGET].  (a)  Each year, the
  commission of a district shall hold a public hearing on [prepare a
  budget for the following fiscal year that includes:
               [(1)  proposed expenditures and disbursements;
               [(2)  estimated receipts and collections; and
               [(3)]  the [rates and] amounts of any mandatory
  payments [taxes] that the commission intends to require [impose]
  during the year and how the revenue derived from those payments is
  to be spent.
         (b)  [The commission shall hold a public hearing on the
  proposed budget.]  Not later than the 10th day before the date of
  the hearing, the commission shall publish at least once notice of
  the hearing in a newspaper of general circulation in the county in
  which the district is located.
         (c)  A representative of a paying hospital [Any district
  taxpayer] is entitled to appear at the time and place designated in
  the public notice and to be heard regarding any matter related to
  the mandatory payments required by the district under this chapter 
  [item shown in the proposed budget].
         SECTION 11.  Subsection (b), Section 288.154, Health and
  Safety Code, is amended to read as follows:
         (b)  All income received by a district, including the [tax]
  revenue from mandatory payments remaining after [deducting]
  discounts and fees for assessing and collecting the payments are
  deducted [taxes], shall be deposited with the district depository
  as provided by Section 288.203 and may be withdrawn only as provided
  by this chapter.
         SECTION 12.  Subchapter D, Chapter 288, Health and Safety
  Code, is amended by adding Sections 288.155 and 288.156 to read as
  follows:
         Sec. 288.155.  LOCAL PROVIDER PARTICIPATION FUND;
  AUTHORIZED USES OF MONEY. (a)  Each district shall create a local
  provider participation fund.
         (b)  The local provider participation fund consists of:
               (1)  all revenue from the mandatory payment required by
  this chapter, including any penalties and interest attributable to
  delinquent payments;
               (2)  money received from the Health and Human Services
  Commission as a refund of an intergovernmental transfer from the
  district to the state for the purpose of providing the nonfederal
  share of Medicaid supplemental payment program payments, provided
  that the intergovernmental transfer does not receive a federal
  matching payment; and
               (3)  the earnings of the fund.
         (c)  Money deposited to the local provider participation
  fund may be used only to:
               (1)  fund intergovernmental transfers from the
  district to the state to provide the nonfederal share of a Medicaid
  supplemental payment program authorized under the state Medicaid
  plan, the Texas Healthcare Transformation and Quality Improvement
  Program waiver issued under Section 1115 of the federal Social
  Security Act (42 U.S.C. Section 1315), or a successor waiver
  program authorizing similar Medicaid supplemental payment
  programs;
               (2)  subsidize indigent programs;
               (3)  pay the administrative expenses of the district;
               (4)  refund a portion of a mandatory payment collected
  in error from a paying hospital; and
               (5)  refund to paying hospitals the proportionate share
  of the money received by the district from the Health and Human
  Services Commission that is not used to fund the nonfederal share of
  Medicaid supplemental payment program payments.
         (d)  Money in the local provider participation fund may not
  be commingled with other county funds.
         (e)  An intergovernmental transfer of funds described by
  Subsection (c)(1) and any funds received by the district as a result
  of an intergovernmental transfer described by that subdivision may
  not be used by the district, the county in which the district is
  located, or any other entity to expand Medicaid eligibility under
  the Patient Protection and Affordable Care Act (Pub. L. No.
  111-148) as amended by the Health Care and Education Reconciliation
  Act of 2010 (Pub. L. No. 111-152).
         Sec. 288.156.  ALLOCATION OF CERTAIN FUNDS. Not later than
  the 15th day after the date the district receives a payment
  described by Section 288.155(c)(5), the district shall transfer to
  each paying hospital an amount equal to the proportionate share of
  those funds to which the hospital is entitled.
         SECTION 13.  The heading to Subchapter E, Chapter 288,
  Health and Safety Code, is amended to read as follows:
  SUBCHAPTER E.  MANDATORY PAYMENTS [TAXES]
         SECTION 14.  Section 288.201, Health and Safety Code, is
  amended to read as follows:
         Sec. 288.201.  MANDATORY PAYMENT BASED [TAX] ON [OUTPATIENT]
  HOSPITAL NET PATIENT REVENUE [SERVICES].  (a)  Except as provided
  by Subsection (e), the [The] commission of a district may require 
  [impose] an annual mandatory payment [tax] to be assessed quarterly
  on the net patient revenue of [all outpatient hospital visits to] an
  institutional health care provider located in the district.  In the
  first year in which the mandatory payment [tax] is required 
  [imposed], the mandatory payment [tax] is assessed on the net
  patient revenue [total number of outpatient hospital visits] of an
  institutional health care provider as determined by the data 
  reported to the Department of State Health Services under Sections
  311.032 and 311.033 in the fiscal year ending in 2010 [2003].  The
  district shall update the amount of the mandatory payment [this tax
  basis with the number of outpatient hospital visits reported] on a
  biennial basis.
         (b)  The amount of a mandatory payment required under this
  chapter must be uniformly proportionate with the amount of net
  patient revenue generated by each paying hospital in the district.  
  [A tax imposed under this section must be imposed uniformly on each
  institutional health care provider of outpatient hospital services
  located in the district.]  A mandatory payment required [tax
  imposed] under this section [also] may not hold harmless any
  institutional health care provider [of outpatient hospital
  services], as required under 42 U.S.C. Section 1396b(w).
         (c)  The commission of a district shall set the amount [rate]
  of the mandatory payment required [tax imposed] under this section.  
  The amount of the mandatory payment required of each paying
  hospital [rate] may not exceed an amount that, when added to the
  amount of the mandatory payments required from all other paying
  hospitals in the district, equals an amount of revenue that exceeds
  six percent of the aggregate net patient revenue of all paying
  hospitals in the district [$100 for each outpatient hospital
  visit].
         (d)  Subject to the maximum amount [tax rate] prescribed by
  Subsection (c), the commission shall set the mandatory payments in
  amounts [rate of the tax at a rate] that in the aggregate will
  generate sufficient revenue to cover the administrative expenses of
  the district, to fund the nonfederal share of a Medicaid
  supplemental payment program, and to pay for indigent programs,
  except that the amount of [tax] revenue from mandatory payments
  used for administrative expenses of the district in a year may not
  exceed the lesser of four percent of the total revenue generated
  from the mandatory payment [tax] or $20,000.
         (e)  An institutional health care provider may not add a
  mandatory payment required [tax imposed] under this section as a
  surcharge to a patient.
         SECTION 15.  Section 288.202, Health and Safety Code, is
  amended to read as follows:
         Sec. 288.202.  ASSESSMENT AND COLLECTION OF MANDATORY
  PAYMENTS [TAXES]. (a)  Except as provided by Subsection (b), the
  county tax assessor-collector shall collect a mandatory payment
  required [tax imposed] under this subchapter [unless the commission
  employs a tax assessor and collector for the district].  The county
  tax assessor-collector shall charge and deduct from mandatory
  payments [taxes] collected for the district a fee for collecting
  the mandatory payment [tax] in an amount determined by the
  commission, not to exceed the county tax assessor-collector's usual
  and customary charges [for the collection of similar taxes].
         (b)  If determined by the commission to be appropriate, the
  commission may contract for the assessment and collection of
  mandatory payments [taxes] in the manner provided by Title 1, Tax
  Code, for the assessment and collection of ad valorem taxes.
         (c)  Revenue from a fee charged by a county tax
  assessor-collector for collecting the mandatory payment [tax]
  shall be deposited in the county general fund and, if appropriate,
  shall be reported as fees of the county tax assessor-collector.
         SECTION 16.  Section 288.203, Health and Safety Code, is
  amended to read as follows:
         Sec. 288.203.  DEPOSIT [USE] OF [TAX] REVENUE FROM MANDATORY
  PAYMENTS. Revenue [generated by a district] from the mandatory
  payment required by [a tax imposed under] this chapter shall be
  deposited in the district's local provider participation fund 
  [subchapter may be used only to:
               [(1)     provide the nonfederal share of a Medicaid
  supplemental payment program;
               [(2)  subsidize indigent programs; and
               [(3)  pay administrative expenses of the district].
         SECTION 17.  Section 288.204, Health and Safety Code, is
  amended to read as follows:
         Sec. 288.204.  INTEREST, PENALTIES, AND DISCOUNTS.
  Interest, penalties, and discounts on mandatory payments required
  [taxes imposed] under this subchapter are governed by the law
  applicable to county ad valorem taxes.
         SECTION 18.  Section 288.205, Health and Safety Code, is
  amended to read as follows:
         Sec. 288.205.  PURPOSE; CORRECTION OF INVALID PROVISION OR
  PROCEDURE. (a)  The purpose of this chapter is to generate revenue
  from a mandatory payment required [tax imposed] by the district to
  provide the nonfederal share of a Medicaid supplemental payment
  program.
         (b)  To the extent any provision or procedure under this
  chapter causes a mandatory payment [tax] under this chapter to be
  ineligible for federal matching funds, the district may provide by
  rule for an alternative provision or procedure that conforms to the
  requirements of the federal Centers for Medicare and Medicaid
  Services.
         SECTION 19.  Sections 288.003 and 288.004; Subsection (b),
  Section 288.051; Sections 288.052, 288.053, 288.054, 288.055,
  288.056, 288.057, 288.058, and 288.103; Subsection (b), Section
  288.104; and Sections 288.105, 288.107, 288.153, and 288.206,
  Health and Safety Code, are repealed.
         SECTION 20.  If before implementing any provision of this
  Act a state agency determines that a waiver or authorization from a
  federal agency is necessary for implementation of that provision,
  the agency affected by the provision shall request the waiver or
  authorization and may delay implementing that provision until the
  waiver or authorization is granted.
         SECTION 21.  This Act takes effect immediately if it
  receives a vote of two-thirds of all the members elected to each
  house, as provided by Section 39, Article III, Texas Constitution.  
  If this Act does not receive the vote necessary for immediate
  effect, this Act takes effect September 1, 2013.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 1623 passed the Senate on
  April 11, 2013, by the following vote: Yeas 28, Nays 3; and that
  the Senate concurred in House amendments on May 24, 2013, by the
  following vote: Yeas 28, Nays 3.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 1623 passed the House, with
  amendments, on May 21, 2013, by the following vote: Yeas 142,
  Nays 4, two present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor