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  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