25 TAC §§500.401-500.411
The Center for Rural Health Initiatives (center) proposes
new §§500.401-500.411, relating to grants, loans and loan guarantees
for capital improvements in rural health facilities, specifically rural hospitals.
These rules are proposed to implement a portion of Acts 1999, 76th Legislature,
Chapter 1391 (HB 1676), which creates the Permanent Fund for Rural Health
Facility Capital Improvement.
HB 1676 enacts the Government Code, §403.1065, which creates the Permanent
Fund for Rural Health Facility Capital Improvement. HB 1676 allows the earnings
of this fund to be appropriated to the center for providing grants, loans
and loan guarantees to a public or nonprofit hospital located in a rural county.
HB 1676 also enacts the Health and Safety Code, §§106.201-106.204
relating to the center's use of the earnings. These sections address grants,
loans, and loan guarantees; however, the center proposes that grants and no
interest loans be awarded, at least initially, because of the projected higher
administrative cost of providing loans with interest rates or loan guarantees.
The sections are needed to accomplish the following: define terms in the
legislation; provide the center's philosophy in making the grants, loans and
loan guarantees; discuss the sources and allocation of funds; establish who
is eligible to receive the grants, loans and loan guarantees; provide the
requirements for receiving the grants, loans and loan guarantees; establish
the procedures for grant announcements; establish the procedures for grant,
loan and loan guarantee applications; describe the competitive review process;
and outline the selection criteria for awarding grants, loans and loan guarantees.
The center's proposed definition for a rural county is derived from HB
1676 where it enacts Government Code §106.201. Grants, loans and loan
guarantees for capital improvements will be made to a public or nonprofit
hospital located in a rural county that has a population of 150,000 or less
or with respect to a county that has a population of more than 150,000 and
contains a geographic area that is not delineated as urbanized by the federal
census bureau, that part of the county that is not delineated as urbanized.
The center would like comments on its proposal to award only grants and
no interest loans initially and exclude loans with interest rates greater
than 0 percent and loan guarantees because of the higher costs associated
with administering the latter two mechanisms. The center would also like comments
on the proposed definition of capital improvements. The center would like
comments on the selection criteria. The center would like comments on whether
the preferred criteria should be required or if there are additional criteria
that should be preferred.
Robt. J. "Sam" Tessen, MS, Executive Director of the Center for Rural Health
Initiatives, has determined that for the first five years the sections are
in effect, there will be fiscal implications to state and local governments
as a result of administering the sections as proposed.
The legislature directed that $50 million be placed in the Permanent Fund
for Rural Health Facility Capital Improvement. The legislature appropriated
the available earnings of the fund determined in accordance with the Government
Code, §403.1068 for this biennium and allowed for the fund to include
monies transferred at the direction of the legislature, payments of interest
and principal on loans made under Health and Safety Code, Chapter 106, Subchapter
G, fees collected under that subchapter, and gifts and grants to the fund.
The estimated earnings for this biennium are $2.5 million per year. Based
on appropriations for the first two years, the center estimates that for the
next five years, the center will be appropriated $2.5 million per year.
In the General Appropriations Act, Article XII, Section 6, the legislature
stated that the administrative costs to implement the provisions of HB 1676
may not exceed 3.0%, and grants and program costs must compose at least 97%
of the expenditures to implement the provisions of the bill. Therefore, during
this biennium, the center will spend no more than 3.0% of the appropriations
from the fund ($75,000 for the Permanent Fund for Rural Health Facility Capital
Improvement) for administrative costs of implementation.
It is estimated that all appropriations will be expended in grants, loans,
program costs, and administrative costs each biennium. Note that, particularly
in the first biennium, less than the total appropriation of $2.5 million for
the Permanent Fund for Rural Health Facility Capital Improvement may be spend
in one fiscal year of the biennium but the entire appropriation for the fund
for the biennium will be spent by the end of the biennium.
It is estimated that there will be a positive impact on local governments
in an amount equal to the amount of grants and loans local governments receive.
Public or nonprofit hospitals located in a rural county are eligible to receive
grants, loans and loan guarantees under the Permanent Fund for Rural Health
Facility Capital Improvement, therefore some portion of the $2.5 million appropriated
may be granted to hospital districts or counties or municipalities which own
public hospitals.
Robt. J. "Sam" Tessen, MS, Executive Director of the Center for Rural Health
Initiatives, has determined that for the first five years the sections are
in effect, the public benefit anticipated is an increase in the capacity of
these hospitals to be vital links in the health care safety net by providing
them with funds to make innovative and/or necessary capital improvements directed
toward increasing and/or maintaining availability of services in their communities.
The anticipated cost to small businesses or micro-businesses (which are nonprofit
hospitals) is the minimal costs to apply for a grant, loan, or loan guarantee
on capital improvement projects proposed by the nonprofit hospital. There
will be no anticipated impact on local employment.
Comments on the proposal may be submitted to Robt. J. "Sam" Tessen, MS,
Executive Director, Center for Rural Health Initiatives, P.O. Drawer 1708,
Austin, TX 78767-1708. (512) 479-8891. Comments will be accepted for 30 days
following the date of publication of this proposal in the
Texas Register
.
The new sections are proposed under the Health and Safety Code, §106.202
which provides the center with the authority to adopt rules concerning the
Permanent Fund for Rural Health Facility Capital Improvement; Health and Safety
Code, §106.021 (j) which provides the center with the authority to adopt
rules to implement chapter 106.
These new sections affect the Government Code, §403.1065 and the Health
and Safety Code, §§106.201-106.204.
§500.401.Purpose.
(a)
As authorized by the Government Code, §403.1065, and
the Health and Safety Code, §106.201-106.204 relating to the Permanent
Fund for Rural Health Facility Capital Improvement, the center shall institute
and administer grants, loans, and loan guarantees under this subchapter.
(b)
This subchapter governs the administration of the grants,
loans, and loan guarantees; the submission and review of grant, loan and loan
guarantee applications; and the award of the grants, loans and loan guarantees.
§500.402.Definitions.
The following words and terms, when used in this subchapter, shall
have the following meanings unless the context clearly indicates otherwise.
(1)
Closing date - Dates specified in the request for proposals
as the dates on which applications must be received.
(2)
Director - Executive Director of the Center for Rural
Health Initiatives or his or her designee.
(3)
Capital improvement - The acquisition, construction,
or improvement of a facility, equipment, or real property for use in providing
health services. The term includes designing, engineering, supervising, inspecting,
surveying, and other expenses incidental to the acquisition, construction
, or improvements, or the purchase of capital equipment, including information
systems hardware and software, for a health facility.
(4)
Public hospital - A general or special hospital licensed
under the Health and Safety Code, Chapter 241 that is owned or operated by
a municipality, county, municipality and county, hospital district, or hospital
authority and that performs inpatient or outpatient services.
(5)
Center - Center for Rural Health Initiatives.
(6)
Capital equipment- Equipment of a value defined as
capital by the rules of the Health Care Financing Administration for implementation
of the Medicare program, or $500.00 single item cost, whichever is less.
(7)
Rural county - A county that has a population in the
most recent decennial United States census of 150,000 or less, or with respect
to a county that has a population of more than 150,000 and contains a geographic
area that is not delineated as urbanized by the federal census bureau, that
part of the county that is not delineated as urbanized.
§500.403.Sources and Allocation of Funds.
(a)
Funds for the grants, loans, and loan guarantees shall
be provided in accordance with the Government Code, §403.1065, relating
to the Permanent Fund for Rural Health Facility Capital Improvement and the
Health and Safety Code, §106.201-106.204.
(b)
All grants, loans and loan guarantees shall be awarded
competitively according to the provisions of this subchapter. For each competitive
process the Executive Director shall decide whether that particular process
will result in the awards of grants, loans, loan guarantees, or a combination
of these programs.
(c)
Grants, loans and loan guarantees shall be made only to
the extent that funds are appropriated and available.
(d)
The center shall have the authority and discretion to:
(1)
determine the purpose(s) of the grants, loans and loan
guarantees pursuant to law and this subchapter;
(2)
approve or deny grant, loan and loan guarantee applications;
(3)
determine the number, size and duration of grants,
loans and loan guarantees; and
(4)
modify or terminate grants, loans, and loan guarantees.
(e)
The center shall not be liable, nor shall grant, loan and
loan guarantee funds be used, for any costs incurred by applicants in the
development, preparation, submission, or review of applications.
§500.404.Eligibility for Grants, Loans and Loan Guarantees.
(a)
A public or nonprofit hospital located in a rural county
is eligible to apply for a grant, loan or loan guarantee.
(b)
A hospital eligible to receive a grant, loan, or loan guarantee
under this subchapter is not eligible to receive a grant from the Texas Department
of Health from its Community Hospital Capital Improvement Fund.
§500.405.Requirements for Grants, Loans and Loan Guarantees.
(a)
The center shall specify reasonable requirements for grant,
loan and loan guarantee applications.
(b)
Use of grant, loan and loan guarantee funds shall be restricted
to capital improvements and shall not be used for operating expenses, debt
retirement of the hospital or the owner of the hospital, or recruitment or
retention of providers.
(c)
Loans awarded will be made with an interest rate below
the current market rate and may be made at no interest at the discretion of
the center.
(d)
Grant, loan and loan guarantee recipients shall submit
periodic reports to the center, with content, form and time determined by
the center.
§500.406.Procedures for Grant, Loan and Loan Guarantee Announcements.
(a)
Before applications are requested, the department shall
publish one or more notices of grant, loan and loan guarantee availability
in the Texas Register. These notices shall also be distributed throughout
the state through mail and electronic means. The notices will include details
about the grants, loans, and loan guarantees, instructions for obtaining a
request for proposals, and the names of persons to contact in the center for
further information.
(b)
The center shall maintain a list of persons to be notified
of requests for proposals. Any person wanting to be placed on the list should
contact: Executive Director, center for Rural Health Initiatives, Attention:
Capital Improvement Fund Program Administrator, 211 E. 7th Street, Suite 915,
Austin, TX 78701.
(c)
The center shall develop and publish a request for proposals,
which shall contain details concerning, but not limited to, the following:
(1)
the nature and purpose(s) of the grant, loan or loan guarantee;
(2)
the total amount of funds available for the grant,
loan, and loan guarantee;
(3)
the maximum and minimum dollar amounts that will be
awarded for individual grantees, loan recipients or loan guarantee recipients;
(4)
the information and format required for grant, loan,
and loan guarantee applications;
(5)
information about the criteria used to judge grant,
loan and loan guarantee applications; and
(6)
the closing date or dates.
§500.407.Procedures for Grant, Loan and Loan Guarantee Applications.
(a)
The center may specify any reasonable requirements for
grant, loan and loan guarantee applications, including, but not limited to,
length, format, authentication, and supporting documentation.
(b)
Applications that are incomplete or substantially inconsistent
with the requirements of this subchapter may be rejected without further consideration
at the discretion of the center.
(c)
Applications received after the closing date will not be
considered, unless the closing date is extended by the center.
(d)
Applicants will be given a minimum of 60 calendar days
to file applications after a request for proposals is published. Applications
must be received by the center on or before the closing date specified in
the request for proposals.
§500.408.Competitive Review Process.
(a)
Each application shall be reviewed by the center for completeness,
relevance to the published request for proposals, adherence to center policies,
general quality, technical merit, and budget appropriateness.
(b)
The center may invite an advisor or advisors to provide
review and make recommendations concerning the grant process. Such advisor(s)
may include any number of members from inside or outside the center, at the
discretion of the director. Advisor(s) from outside the center shall receive
no compensation or reimbursement for expenses. No advisor(s) shall be a current
or potential applicant for a grant, loan, or loan guarantees on which the
advisor(s) would be making recommendations, unless provision for independent
review is made by the director.
(c)
The center's review process shall be completed within 45
days after the closing date.
§500.409.Selection Criteria.
(a)
No grant, loan or loan guarantee shall be approved unless,
in the opinion of the center, it addresses only capital improvements and does
not propose to expend funds for operating expenses, debt retirement, or recruitment
or retention of practitioners.
(b)
A grant, loan or loan guarantee application from a public
hospital will be given preference over an application from a nonprofit hospital.
(c)
Evaluation of a grant, loan or loan guarantee application
will consider applicant information relating to criteria delineating the health
care needs of the rural area and community served by the applicant, the financial
need of the applicant related to the specific project, and the probability
that the applicant will effectively and efficiently use the money obtained
through the grant, loan or loan guarantee.
§500.410.Project Approval.
(a)
Grant, loan and loan guarantee recipients shall execute
a contract with the center. The contract shall detail items such as budget,
reporting requirements, general provisions for center contracts, and any other
specifics that might apply to the award.
(b)
Grant, loan and loan guarantee recipients shall cooperate
with the center in preparing reports to the Legislature as required by the
Government Code, §403.1069.
§500.411.Continuation Funding.
(a)
Grant, loan and loan guarantee recipients may be eligible
for future funding and/or funding of a second or third type, under the program
funding options. The center will consider the grant, loan and loan guarantee
recipient's accomplishments, progress toward stated goals and objectives,
award of past grants, and development of alternative funding. Applications
shall be submitted in accordance with this subchapter.
(b)
The center will award future or alternative grants, loans
and loan guarantees after a review of applications in accordance with the
provisions of this subchapter.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State, on
December 21, 1999.
TRD-9908926
Robt. J. "Sam" Tessen
Executive Director
Center for Rural Health Initiatives
Earliest possible date of adoption: February 6, 2000
For further information, please call: (512) 479-8891