Bill Caption

Fiscal Notes

No fiscal implication to the State is anticipated.

There could be costs to a local governmental entity that chose to establish a hospital project. However, it is assumed that a hospital would establish a project only if sufficient funds were available or it would not result in a negative fiscal impact; therefore, no significant fiscal impact is anticipated.

Bill Analysis

The legislation would expand the list of permissible projects under Chapter 223 of the Health and Safety Code that a public hospital, hospital district, or authority may acquire, construct, or improve to include a nursing facility, assisted living facility, or multi-unit senior housing facility. The bill would remove a provision that a hospital project has to be within an issuer’s geographic boundary. A hospital project would be able to be located anywhere in Texas, if the location of the project is consistent with the purpose of a hospital project and the project serves a legitimate public purpose of the issuer.

The bill would also remove a requirement that the bonds issued by a hospital, hospital district, or authority must be revenue bonds; the bill would authorize these entities to issue obligations, in addition to bonds and other notes, to acquire, construct, or improve a facility for the care of persons who are elderly or persons with a disability. 

Vote Recommendation Notes

The primary intention of the legislation is to update statutory language to clarify what entities can qualify for the new Health and Human Services Commission's (HHSC) voluntary Upper Payment Limit (UPL) Supplemental Payment Program. Participation in the UPL supplemental program is voluntary and is limited to non-state government-owned nursing facilities. Non-state government-owned nursing facilities are nursing facilities where a hospital authority, hospital district, healthcare district, city, or county holds the license and is party to the facility's Medicaid contract. The Texas HHSC website provides additional information regarding how a non-state government-owned nursing facility would receive funding.

Incorporating the nursing facility language into the Health and Safety Code is a measure intended to verify under state law that these facilities may participate in the UPL supplemental program. 

While the policy changes proposed in the bill would potentially benefit rural areas that have limited access to long-term care facilities, expanding a public hospital, hospital authority and hospital district's jurisdiction outside their geographic boundary is problematic. This could set up public health care entities to compete outside of their geographic boundaries with private sector long term care providers.

We are neutral on HB 3332 but strongly suggest that an amendment be adopted to bracket the provision allowing hospital projects to be located outside an issuer's geographic boundary to public hospitals serving not more than one million people.