HB2586 - 452R - House Bill Summary

House of Representatives

HB 2586

public health services districts

Sponsors: Representatives Hanson, Weiers, Chase, Blendu, et al.

X	Committee on Counties & Municipalities
	Caucus and COW
	Third Read
	As Passed the House

HB 2586 makes various changes to statutes relating to Public Health Services Districts (PHSDs). The changes include authorizing the PHSD board of directors to acquire, operate, maintain, lease, encumber and dispose of real and personal property, requiring a public vote on PHSD taxation levies if the district owns or operates a hospital or plans to own or operate a hospital and authorizes a district to issue bonds upon approval by a majority of qualified electors.

History

Laws 2000, Chapter 11, established a procedure and requirements for forming a PHSD to provide public health services to all residents of a county. A PHSD may be formed by a majority vote of the public or through a unanimous vote by the county board of supervisors. Under current statute the district board of directors (board) may levy a transaction privilege tax of not more than 2% or, in lieu of a transaction privilege tax, the board may levy a secondary property tax of not more than $0.25 per $100 of assessed valuation. All revenues received by the district are statutorily required to be used for the purpose of providing public health services for the district.

According to the County Supervisors Association of Arizona, no counties have created a PHSD since the legislation was passed in 2000.

Provisions

· Defines county health system; health care institution; health system; health system assets; and public health services.

· Excludes expenditures related to the operation of a health system from the calculation of expenditures that a county is required to maintain if a PHSD is formed

· Designates a PHSD as a tax levying public improvement health care district for all purposes of Article 13, Section 7, of the Constitution of Arizona (Article 13, Section 7 relates to rights, privileges and benefits of political subdivisions).

· Clarifies that the board may enter into contracts with other entities, organizations, foundations or providers of services to carry out the purposes of the district.

· Authorizes the board to delegate any of the board’s powers concerning the operation and management of the PHSD to the public health director.

· Authorizes the board to acquire, operate, maintain, lease, encumber and dispose of real and personal property, including property held in trust or transferred by the county board of supervisors in which the district is created and any interests that property.

· Stipulates that on formation of a PHSD, the board assumes all of the powers and duties of the board of supervisors and the hospital board, if any, for the provision of public health services.

· Requires any tax levied by the district to be submitted by the Board to the qualified electors of the county if the district owns or operates or intends to own or operate a hospital. States that if a majority of the persons voting approve the tax, then the Board shall impose the tax immediately.

· Stipulates that if a majority of the persons voting fail to approve the tax, then any district that maintains or operates a hospital or has a contract for the operation of a hospital, may close the hospital or any portion of the hospital. Requires the district to give the Arizona Health Care Cost Containment System at least 12 months notice before closing a hospital.

· Authorizes the district, upon voter approval, to issue bonds to carry out any duties of the district. Outlines guidelines regarding the issuing of bonds.

· States that a reserve may be created on bonds that are issued in an amount that does not exceed the requirements of principal and interest payments for the two years during the life of the bonds requiring the largest amount of principal and interest payments. Outlines guidelines for use of the reserves.

· Outlines other guidelines and provisions regarding bonds issued.

· Stipulates the state pledges to and agrees with the holders of the bonds that the state will not limit, alter or impair the rights of the district to receive necessary monies to repay the bonds.

· Outlines a process for the dissolution of a PHSD.

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· 45th Legislature